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COMMERCE AND TREASURY ANNOUNCE SIGNIFICANT AMENDMENTS TO THE CUBA SANCTIONS REGULATIONS Ahead of President Obama’s Historic Trip to Cuba

Amendments Expand the Ability of Americans to Visit Cuba, Bolster Trade and Commercial Opportunities, and Reduce Barriers to Financial Transactions by Cuban Nationals

Original Document:  Amendments to to the Cuba Regulations

Tuesday, March 15, 2016

Office of Public Affairs, 202-482-4883, publicaffairs@doc.gov

Today, the Department ofthe Treasury’s Office of Foreign Assets Control (OFAC) and the Department of Commerce’s Bureau of Industry and Security (BIS) announced significant amendments to the Cuban Assets Control Regulations (CACR) and Export Administration Regulations (EAR).  These changes, coupled with the arrangement recently announced by the Departments of State and Transportation allowing scheduled air service between the United States and Cuba, will significantly increase the ability of U.S.  citizens to travel to Cuba to directly engage with the Cuban people.  Additionally, these regulations expand Cuba and Cuban nationals’ access to U.S. financial institutions and the U.S. dollar from Cuba, and will expand the ability for Cubans legally present in the United States to earn stipends and salaries beyond living expenses.  These amendments further the new direction toward Cuba that President Obama laid out in December 2014.  The changes are outlined below and will take effect on March 16, 2016, when the regulations are published in the Federal Register.

“Today’s amendments build upon President Obama’s historic actions to improve our country’s relationship with Cuba and its people. These steps not only expand opportunities for economic engagement between the Cuban people and the American business community, but will also improve the lives of millions of Cuba’s citizens,” said U.S. Commerce Secretary Penny Pritzker.

“Today’s steps build on the actions of the last 15 months as we continue to break down economic barriers, empower the Cuban people and advance their financial freedoms, and chart a new course in U.S.-Cuba relations.  Since December 2014, the Treasury Department and our partners across the Administration have progressively reshaped our regulations in order to empower the Cuban people and enable economic advancements for Cubans and Americans,” said Treasury Secretary Jacob J. Lew.  “Today we are building on this progress by facilitating travel for additional Americans looking to engage with Cubans; allowing Cuban citizens to earn a salary in the United States; and expanding access to the U.S. financial system as well as trade and commercial opportunities.”

To see the Treasury regulations, which can be found at 31 Code of Federal Regulations (CFR), part 515, please see here.  To see the Commerce regulations, which can be found at 15 CFR parts 730-774, please see here.  Major elements of the changes in the revised Treasury and Commerce regulations include:

Travel and Related Transactions–

  • People-to-people educational travel.  Individuals will be authorized to travel to Cuba for individual people-to-people educational travel, provided that the traveler engages in a full-time schedule of educational exchange activities intended to enhance contact with the Cuban people, support civil society in Cuba, or promote the Cuban people’s independence from Cuban authorities and that will result in a meaningful interaction between the traveler and individuals in Cuba.  Previously, the general license authorizing educational travel required such trips to take place under the auspices of an organization that was subject to U.S. jurisdiction and required all travelers to be accompanied by a representative of the sponsoring organization.  This change is intended to make authorized educational travel to Cuba more accessible and less expensive for U.S. citizens, and will increase opportunities for direct engagement between Cubans and Americans.  Persons relying upon this authorization must retain records related to the authorized travel transactions, including records demonstrating a full-time schedule of authorized activities.  In the case of an individual traveling under the auspices of an organization that is a person subject to U.S. jurisdiction and that sponsors such exchanges to promote people-to-people contact, the individual may rely on the entity sponsoring the travel to satisfy those recordkeeping requirements.
  • Payment of salaries.  Cuban nationals in the United States in a non-immigrant status or pursuant to other non-immigrant travel authorization will be authorized to earn a salary or compensation, consistent with the terms of the particular visa, provided that the recipient is not subject to any special tax assessments in Cuba.  U.S. companies will be authorized to engage in transactions related to the sponsorship or hiring of Cuban nationals to work or perform in the United States similar to nationals from other countries, provided that no additional payments are made to the Cuban government in connection with such sponsorship or hiring.  For example, Cuban athletes, artists, performers, and others who obtain the requisite visas will be able to travel to the United States and earn salaries and stipends in excess of basic living expenses.  Transactions in connection with the filing of an application for non-immigrant travel authorizations will also be authorized.
  • Cuban-origin merchandise. OFAC will authorize certain dealings in Cuban-origin merchandise by individuals for personal consumption while in a third-country, and to receive or obtain services from Cuba or a Cuban national that are ordinarily incident to travel and maintenance within a third country.  This authorization will allow, for example, Americans traveling in Europe to purchase and consume Cuban-origin alcohol and tobacco products while abroad similar to the travel exemptions in other sanctions programs.

Banking and financial services –

  • U-turn payments through the U.S. financial system.  U.S. banking institutions will be authorized to process U-turn transactions in which Cuba or a Cuban national has an interest.  This provision will authorize funds transfers from a bank outside the United States that pass through one or more U.S. financial institutions before being transferred to a bank outside the United States, where neither the originator nor the beneficiary is a person subject to U.S. jurisdiction.
  • Processing of U.S. dollar monetary instruments.  U.S. banking institutions will be authorized to process U.S. dollar monetary instruments, including cash and travelers’ checks, presented indirectly by Cuban financial institutions.  Correspondent accounts at third-country financial institutions used for such transactions may be denominated in U.S. dollars.
  • U.S. bank accounts for Cuban nationals.  U.S. banking institutions will be authorized to open and maintain bank accounts in the United States for Cuban nationals in Cuba to receive payments in the United States for authorized or exempt transactions and to remit such payments back to Cuba.

Trade and commerce –

  • Physical and business presence.  OFAC will expand the existing authorization for “physical presence” (such as an office, retail outlet, or warehouse) to include entities that engage in authorized humanitarian projects, entities that engage in authorized non-commercial activities intended to provide support for the Cuban people, and private foundations or research or educational institutes engaging in certain authorized activities pursuant to sections 515.575, 515.574, and 515.576 of the CACR, respectively.  OFAC will also expand the existing authorization for “business presence” (such as a joint venture) to include exporters of goods that are authorized for export or re-export to Cuba or that are exempt, entities providing mail or parcel transmission services or cargo transportation services, and providers of carrier and travel services to facilitate authorized transactions.  The revised regulations will also clarify that the physical and business presence authorizations permit exporters and re-exporters of authorized or exempt goods to assemble such goods in Cuba.  BIS will make conforming changes to the EAR to generally authorize exports and re-exports of eligible items to establish and maintain a physical or business presence that is authorized by OFAC.
  • Importation of software.  The CACR currently authorizes the importation of Cuban-origin mobile applications.  OFAC will expand this authorization to allow the importation of Cuban-origin software.
  • Shipping.  BIS will generally authorize vessels to transport authorized cargo from the United States to Cuba and then sail to other countries with any remaining cargo that was onloaded in the United States.
  • Cuban private sector.  BIS will adopt a licensing policy of case-by-case review for exports and re-exports of items that would enable or facilitate exports from Cuba of items produced by the Cuban private sector.

Grants and awards –

  • OFAC will authorize the provision of educational grants and awards, and clarify that an existing authorization applies to the provision of grants and awards for the humanitarian projects authorized in OFAC’s regulations.  This step will further enable U.S. support for educational projects in Cuba and U.S. participation in philanthropic efforts.
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FACT SHEET: TREASURY AND COMMERCE ANNOUNCEMENT OF REGULATORY AMENDMENTS TO THE CUBA SANCTIONS

U.S. Treasury Department, Office of Public Affairs

EMBARGOED FOR 9:00 AM EST:  January 15, 2015

CONTACT:  Hagar Chemali, Treasury Public Affairs (202) 622-2960                  

FACT SHEET: TREASURY AND COMMERCE ANNOUNCEMENT OF REGULATORY AMENDMENTS TO THE CUBA SANCTIONS

 Amendments Implement Changes Announced by the President on December 17 Related to the Easing of Cuba Sanctions

WASHINGTON – On December 17, 2014 the President announced a set of diplomatic and economic changes to chart a new course in U.S. relations with Cuba and to further engage and empower the Cuban people.  The U.S. Department of the Treasury and the U.S. Department of Commerce today are announcing the forthcoming publication of the revised Cuban Assets Control Regulations (CACR) and Export Administration Regulations (EAR), which implement the changes announced on December 17 to the sanctions administered by Treasury’s Office of Foreign Assets Control (OFAC) and Commerce’s Bureau of Industry and Security (BIS).  The changes take effect tomorrow, when the regulations are published in the Federal Register.

 These measures will facilitate travel to Cuba for authorized purposes, facilitate the provision by travel agents and airlines of authorized travel services and the forwarding by certain entities of authorized remittances, raise the limits on and generally authorize certain categories of remittances to Cuba, allow U.S. financial institutions to open correspondent accounts at Cuban financial institutions to facilitate the processing of authorized transactions, authorize certain transactions with Cuban nationals located outside of Cuba, and allow a number of other activities related to, among other areas, telecommunications, financial services, trade, and shipping.  Persons must comply with all provisions of the revised regulations; violations of the terms and conditions could result in penalties under U.S. law.

To see the Treasury regulations, which can be found at 31 Code of Federal Regulations (CFR), part 515, please see here.  To see the Commerce regulations, which can be found at 15 CFR parts 730-774, please see here.  The regulations will be effective as of Friday, January 16. Major elements of the changes in the revised regulations include:

Travel –

  • In all 12 existing categories of authorized travel, travel previously authorized by specific license will be authorized by general license, subject to appropriate conditions.  This means that individuals who meet the conditions laid out in the regulations will not need to apply for a license to travel to Cuba.
  • These categories are: family visits; official business of the U.S. government, foreign governments, and certain intergovernmental organizations; journalistic activity; professional research and professional meetings; educational activities; religious activities; public performances, clinics, workshops, athletic and other competitions, and exhibitions; support for the Cuban people; humanitarian projects; activities of private foundations or research or educational institutes; exportation, importation, or transmission of information or information materials; and certain authorized export transactions.
  • The per diem rate previously imposed on authorized travelers will no longer apply, and there is no specific dollar limit on authorized expenses.  Authorized travelers will be allowed to engage in transactions ordinarily incident to travel within Cuba, including payment of living expenses and the acquisition in Cuba of goods for personal consumption there.
  • Additionally, travelers will now be allowed to use U.S. credit and debit cards in Cuba.

 Travel and Carrier Services

  • Travel agents and airlines will be authorized to provide authorized travel and air carrier services without the need for a specific license from OFAC.

Insurance –

  • U.S. insurerswill be authorized to provide coverage for global health, life, or travel insurance policies for individuals ordinarily resident in a third country who travel to or within Cuba.  Health, life, and travel insurance-related services will continue to be permitted for authorized U.S. travelers to Cuba.

 Importation of Goods

  • Authorized U.S. travelers to Cuba will be allowed to import up to $400 worth of  goods acquired in Cuba for personal use.  This includes no more than $100 of alcohol or tobacco products.

Telecommunications –

  • In order to better provide efficient and adequate telecommunications services between the United States and Cuba, a new OFAC general license will facilitate the establishment of commercial telecommunications facilities linking third countries and Cuba and in Cuba.
  • The commercial export of certain items that will contribute to the ability of the Cuban people to communicate with people within Cuba, in the United States, and the rest of the world will be authorized under a new Commerce license exception (Support for the Cuban People (SCP)) without requiring a license.  This will include the commercial sale of certain consumer communications devices, related software, applications, hardware, and services, and items for the establishment and update of communications-related systems.
  • Additional services incident to internet-based communications and related to certain exportations and reexportations of communications items will also be authorized by OFAC general license.

 Consumer Communications Devices –

  • Commercial sales, as well as donations, of the export and reexport of consumer communications devices that enable the flow of information to from and among the Cuban peoplesuch as personal computers, mobile phones, televisions, memory devices, recording devices, and consumer software – will be authorized under Commerce’s Consumer Communication Devices (CCD) license exception instead of requiring licenses.

 Financial Services

  • Depository institutions will be permitted to open and maintain correspondent accounts at a financial institution that is a national of Cuba to facilitate the processing of authorized transactions.
  • U.S. financial institutions will be authorized to enroll merchants and process credit and debit card transactions for travel-related and other transactions consistent with section 515.560 of the CACR.  These measures will improve the speed and efficiency of authorized payments between the United States and Cuba.

 Remittances –

  • The limits on generally licensed remittances to Cuban nationals other than certain prohibited Cuban Government and Cuban Communist Party officials will be increased from $500 to $2,000 per quarter.
  • Certain remittances to Cuban nationals for humanitarian projects, support for the Cuban people, or development of private businesses will be generally authorized without limitation.  These general licenses will allow remittances for humanitarian projects in or related to Cuba that are designed to directly benefit the Cuban people; to support the Cuban people through activities of recognized human rights organizations, independent organizations designed to promote a rapid, peaceful transition to democracy, and activities of individuals and non-governmental organizations that promote independent activity intended to strengthen civil society in Cuba; and to support the development of private businesses, including small farms.
  • Authorized travelers will be allowed to carry with them to Cuba $10,000 in total family remittances, periodic remittances, remittances to religious organizations in Cuba, and remittances to students in Cuba pursuant to an educational license.
  • Under an expanded general license, banking institutions, including U.S.-registered brokers or dealers in securities and U.S.-registered money transmitters, will be permitted to process authorized remittances to Cuba without having to apply for a specific license.

Third-Country Effects

  • U.S.-owned or -controlled entities in third countries, including banks, will be authorized to provide goods and services to an individual Cuban national located outside of Cuba, provided the transaction does not involve a commercial exportation of goods or services to or from Cuba.
  • OFAC will generally authorize the unblocking of accounts of Cuban nationals who have permanently relocated outside of Cuba.
  • OFAC is issuing a general license that will authorize transactions related to third-country conferences attended by Cuban nationals.
  • In addition, a general license will authorize foreign vessels to enter the United States after engaging in certain trade with Cuba.

Small Business Growth –

  • Certain micro-financing projects and entrepreneurial and business training, such as for private business and agricultural operations, will be authorized.
  • Also, commercial imports of certain independent Cuban entrepreneur-produced goods and services, as determined by the State Department on a list to be published on its website, will be authorized.

 “Cash in Advance” –

  • The regulatory interpretation of “cash in advance” is being redefined from “cash before shipment” to “cash before transfer of title to, and control of,” the exported items to allow expanded financing of authorized trade with Cuba.

 Supporting Diplomatic Relations and USG Official Business –

  • The President announced the reestablishment of diplomatic relations with Cuba.  To facilitate that process, OFAC is adding a general license authorizing transactions with Cuban official missions and their employees in the United States.
  • In addition, in an effort to support important U.S. government interests, an expanded general license will authorize Cuba-related transactions by employees, grantees, and contractors of the U.S. government, foreign governments, and certain international organizations in their official capacities.

Support for the Cuban People –

  • Exports and reexports to provide support for the Cuban people in three areas:  improving living conditions and supporting independent economic activity; strengthening civil society; and improving communications – will be eligible under Commerce’s SCP license exception.
  • To improve living conditions and support independent economic activity, SCP will authorize: (1) building materials, equipment, and tools for use by the private sector to construct or renovate privately-owned buildings, including privately-owned residences, businesses, places of worship, and building for private sector social or recreational use; (2) tools and equipment for private agricultural activity; and (3) tools, equipment, supplies, and instruments for use by private sector entrepreneurs.
  • To strengthen civil society, SCP will authorize export and reexport of donated items and temporary export and reexport by travelers to Cuba of items for use in scientific, archaeological, cultural, ecological, educational, historic preservation, or sporting activities.  SCP will also authorize exports and reexports to human rights organizations, individuals, or non-governmental organizations that promote independent activity intended to strengthen civil society.
  • Travelers will also be able to export temporarily items for use in professional research in the traveler’s profession or full time field of study under SCP.  The activities or research must not be related to items on the United States Munitions List or items controlled for sensitive reasons on the Commerce Control List.
  • To improve communications, SCP will authorize exports and reexports of items for use by news media personnel and U.S. news bureaus.
  • SCP will not authorize the export of items on the Commerce Control List for sensitive reasons such as national security, nuclear proliferation, regional stability, missile technology, and other reasons of similar sensitivity.

Gift Parcels –

  • Consolidated shipments of gift parcels will be eligible for the same Commerce license exception that authorizes individual gift parcels.

Liberalizing License Application Review Policy –

  • Commerce will set forth a general policy of approval for applications to export or reexport items necessary for the environmental protection or enhancement of U.S. and international air and water quality or coastlines (including items that enhance environmental quality through energy efficiency).
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