The Office of Foreign Assets Control and Bureau of Industry and Security have implemented another set of liberalizing changes to the United States trade embargo against Cuba. Like the four previous revisions, these keep the embargo in place but extend the scope of permissible activities, mostly in incremental ways.
Permissible Medical Research and Health-Related Activities
OFAC has issued a general license under which “persons subject to U.S. jurisdiction” may conduct medical research activities with Cuban nationals, and has clarified that both commercial and non-commercial programs are covered. The term “persons subject to U.S. jurisdiction” includes individuals who are United States citizens or permanent resident aliens, business enterprises organized under U.S. law and foreign companies owned or controlled by the preceding. The authorization therefore extends to foreign-based subsidiaries of American companies.
Also authorized are activities relating to Cuban-origin pharmaceuticals, including participation in U.S. government regulatory approvals and importation into the United States. A complementary general license permits establishment of bank accounts used for these activities.
Imports of Items for Repair and Servicing
Another OFAC general license permits importation into the United States or third countries of articles for repair and servicing, when such articles were previously exported to Cuba. The repair and servicing activities may be conducted by any person in the U.S., not just the importer. This provision does not, however, cover the subsequent export of the article to Cuba. Such authorization, with limitations, is found elsewhere in OFAC’s Cuban Sanctions Regulations, and must also comport with the BIS Export Administration Regulations. Accordingly, anyone interested in using the general license to import goods for repair and servicing must determine beforehand whether the subsequent exportation is authorized.
General and Clarifying Provisions
A previous revision permitted foreign subsidiaries of U.S. firms to reexport to Cuba articles that are 100 percent of United States origin. That phrasing caused some confusion, so OFAC has clarified that the general license covers only products of U.S. or Cuban origin, and that foreign “persons subject to the jurisdiction of the United States” require a specific license to export products made elsewhere. Also permitted is entry into contracts for which performance is contingent on the transaction being authorized by OFAC and any other U.S. government agency from which a license may be required.
Persons subject to the jurisdiction of the United States also are now permitted to provide services for “developing, repairing, maintaining, and enhancing Cuban infrastructure” (i.e., public transportation, utilities, and medical and educational activities).
The general licenses expanding trade authorizations are unavailable for transactions in which Cuban government and Communist Party officials are involved. OFAC has significantly narrowed the extent of this exception; now, only “members of the Council of Ministers and flag officers of the Revolutionary Armed Forces” and “members of the Politburo” are excluded.
While previous BIS regulations greatly expanded permissible exports to Cuban business enterprises under license exceptions, they did not cover most direct shipments to individual persons. The most recent change expands coverage of License Exception SCP (Support for the Cuban People) to include “items sold directly to eligible individuals in Cuba for their personal use or their immediate family’s personal use.” Eligible items are limited to those designated as EAR99 (i.e., not on the Commerce Control List) or controlled only for Anti-terrorism reasons. Note that exports to government and party officials, as defined above, are not covered by this expansion.
Travel-Related Activities
The value limit on Cuban merchandise for personal use that travelers may import into the United States with their baggage has been removed, with Cuba now subject to the same standard as that applicable to all other countries: a returning traveler may now carry up to one liter of alcohol, 200 cigarettes and 100 cigars. Foreign persons may now avail themselves of this general license too; previously, they were prohibited from entering the United States with Cuban-origin alcohol or tobacco products. In addition, returning U.S. travelers may now bring into the United States Cuban-origin goods purchased in third countries. The previous prohibition on travel to Cuba for professional research or meetings relating to promotion of tourism on the island has been lifted, with such activities now covered by the existing general license for professional meetings and conferences.
Go ahead, have a cigar. In fact, have two. OFAC won’t mind.
The OFAC notice is published here https://www.gpo.gov/fdsys/pkg/FR-2016-10-17/pdf/2016-25032.pdf, and that of BIS here https://www.gpo.gov/fdsys/pkg/FR-2016-10-17/pdf/2016-25034.pdf.
