The story of Cuba and the United States is headed for yet another historic chapter in its history. When President Barack Obama gave his final State of the Union Address on January 12, 2016, he announced his plans to lift the 50-year embargo on Cuba. President Obama has worked to improve relations with Cuba since December 2014. On January 27, 2016, new regulations that expanded the list of exports to Cuba were issued by the Office of Foreign Assets Controls (OFAC) and the Department of Commerce’s Bureau of Industry and Security (BIS). In addition, there were also amendments to how U.S. entities can finance its exports to Cuba, air carrier services, and travel to the island. These are part of the Cuban Assets Control Regulations (CACR) and Export Administration Regulations (EAR).
FINANCING
The new amendment will lift the current restrictions on financing for most types of authorized U.S. exports to Cuba. This includes payments and financing terms for all authorized exports. However, restrictions on agricultural commodities and related agricultural items will remain in place as required by current statutes. U.S. financial institutions will be permitted to provide financing and letters of credit for U.S. exports to Cuba as well as on re-exports, which are the shipments of an item subject to the EAR from one foreign country (i.e., a country other than the United States) to another foreign country.
EXPORTS
This new amendment was created with the intent to support Cuban people and expedite authorized U.S exports to Cuba. Additional travel to Cuba will be permitted to conduct market research, commercial marketing, sales or contract negotiations and other similar activities. Applications for licensing for exports and re-exports that will assist human rights organizations such as software and commodities will generally be approved. Licensing will also be approved for software and commodities for U.S. news bureaus in Cuba with the principal purpose of gathering news and distributing it to the public. Applications with regard to telecommunication items that will improve communications with the Cuban population will also be approved. Licensing for items that are necessary to guarantee the safety of civil aviation and also the safe operations of transportation that is involved in international transportation is included as well.
AIR CARRIER SERVICES
The new amendment will lift many of the current restrictions currently in place on carrier air services such as entry in to Cuba, using currently blocked air space and code sharing.
TRAVEL
Authorization will be expanded to allow travel into Cuba for additional purposes than are currently available. These areas of industry will include personnel who are authorized to service or operate vessels or aircraft. They will be permitted to participate in travel related transactions in Cuba. Travel will be allowed for persons who are employed or have a direct involvement with media or artistic productions. These include the right for those who will participate in music recordings, film production, television and creating artwork. Professional meetings and conferences will also be issued licenses to organize and attend in Cuba. Public performances, athletic events, clinics, workshops, competitions and exhibitions will now be eligible for licensing. Humanitarian projects will be expanded to include disaster preparation and response.
If you would like more information on exporting, financing or travel to Cuba or any other type of business transaction involving Cuba, a qualified business attorney can advise and assist you. Then you can determine what the necessary requirements are for filing an application and acquiring the essential licensing that is needed.
References
- Department of Commerce. “Commerce and Treasury Announce Further Amendments to the Cuba Sanctions Regulations.” Department of Commerce. Office of Public Affairs, 26 Jan. 2016. Web. 10 Feb. 2016. <https://www.commerce.gov/news/press-releases/2016/01/commerce-and-treasury-announce-further-amendments-cuba-sanctions>.
- Mosendz, Polly. “PRESIDENT OBAMA CALLS FOR LIFTING CUBAN EMBARGO IN STATE OF THE UNION ADDRESS.” Newsweek, 12 Jan. 2016. Web. 10 Feb. 2016. <http://www.newsweek.com/cuba-embargo-president-obama-state-union-414972>.
