The Department of the Treasury's Office of Foreign Assets Control (OFAC) has amended the Cuban Assets Control Regulations (CACR) (the CACR Amendments).
According to Treasury Secretary Jacob J. Lew, the amendments:
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… 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.
The Department of Commerce’s Bureau of Industry and Security (BIS) also has amended the Export Administration Regulations (EAR) to reflect this continuing policy shift.
The amendments took effect on March 16, 2016 and generally cover three areas: travel, banking and trade.
The CACR Amendments address the following travel and related transactions:
- People-to-people educational travel: Individuals now are 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.
Individuals traveling pursuant to this authorization must retain records related to the authorized travel transactions. The predominant portion of the activities must not be with certain Government of Cuba or Cuban Communist Party officials. It is important to note that the statutory prohibition on travel for tourist activities remains in place.
- Payment of salaries: Certain Cuban nationals in the United States now are 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.
- Cuban-origin merchandise: OFAC has authorized 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. The authorization does not allow for the importation into the United States of any such items, even in accompanied baggage.
The CACR Amendments address the following banking and financial transactions:
- U-turn payments through the US. financial system: US banking institutions now are authorized to process U-turn transactions for money from Cuba or in which a Cuban national has an interest. This provision authorizes funds transfers between foreign banks through a US bank, where neither the originator nor the beneficiary is a person subject to US jurisdiction.
- Processing of US dollar monetary instruments: US banking institutions now are authorized to process US dollar monetary instruments, including cash and travelers' checks, presented indirectly by Cuban financial institutions.
- US bank accounts for Cuban nationals: US banking institutions now are authorized to open and maintain bank accounts in the United States for Cuban nationals in Cuba for certain limited purposes.
The CACR and EAR Amendments address the following trade and commerce transactions:
- Physical and business presence: OFAC has expanded the existing authorization for "physical presence" in Cuba (such as an office, retail outlet, or warehouse) to include entities that engage in certain enumerated authorized transactions and the existing authorization for "business presence" in Cuba to include certain exporters of goods.
The EAR Amendments generally authorize exports and re-exports of eligible items to allow for the establishment and maintenance of a physical/business presence in Cuba as authorized by OFAC.
- Importation of software: OFAC has expanded the authorization to allow the importation of Cuban-origin software beyond only mobile applications.
- Shipping: BIS has generally authorized 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 has adopted 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.