Alert
Alert
01.20.15
The Obama administration implemented its promised changes to U.S. sanctions and export controls for Cuba effective January 16, 2015. Although most trade and transactions still are prohibited, the revisions to the Cuban Assets Control Regulations (CACR) and Export Administration Regulations (EAR) ease licensing requirements in a number of areas, including exports to and imports from Cuba of certain types of goods and services, telecommunications and Internet services, travel and travel services, financial services, remittances, and treatment of Cuban nationals in third countries.
Presidential Action to Relax the U.S. Cuba Embargo
The CACR, administered by the U.S. Department of Treasury, Office of Foreign Assets Control (OFAC) implements a comprehensive trade, investment, financial and travel embargo on Cuba prohibiting U.S. persons, including owned or controlled foreign subsidiaries of U.S. companies, from engaging in transactions in which Cuba or a Cuban national has a property interest. The EAR, administered by the Commerce Department’s Bureau of Industry and Security (BIS), control the export or reexport of goods, software and technology that are U.S. origin or contain more than de minimis U.S. content. Like the CACR, the EAR broadly prohibit trade with Cuba.
The CACR were first implemented in July 1963 under the authority of the Trading with the Enemy Act (TWEA). The sanctions were strengthened by the Cuba Democracy Act of 1992 which, among other things, prohibited the issuance of licenses for U.S.-owned foreign companies to trade with Cuba. The Cuban Liberty and Democratic Solidarity Act of 1996 (Helms/Burton) codified the CACR, requiring the President to instruct the Treasury and Justice Departments to enforce fully the CACR and prescribing conditions for the termination of the embargo including a determination that a transition government in Cuba is in power.
Both OFAC and BIS have retained licensing authority to permit certain types of transactions on a case-by-case basis. Also, the CACR incorporate exceptions that allow certain types of transactions, such as limited remittances to family members in Cuba, without requiring specific approval. OFAC and BIS have previously used their discretion to allow certain travel transactions, temporary sojourns of aircraft, agricultural exports and telecommunications services for Cuba, among other activities.
On December 17, 2015, President Obama made an unexpected announcement signaling a “new course” for Cuba after more than fifty years of comprehensive U.S. sanctions. Because of the statutory framework of the Cuba embargo, the changes are restricted to those the administration can implement within its executive discretion. Larger changes will require Congressional approval.
Download: Treasury and Commerce Departments Issue Regulations to Implement New Cuba Policy