Yesterday, the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) and the U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”) released new rules easing the remaining travel and export financing restrictions on Cuba, offering new opportunities for U.S. businesses to engage with Cuba. As part of the new rules, BIS will begin generally approving licenses for exports and reexports of certain items that previously required a case-by-case review for licensing, including licenses for:
- Telecommunication items that would improve communications for the Cuban people
- Commodities and software to human rights organizations and other non-governmental organizations that strengthen civil society
- Commodities and software to U.S. news bureaus in Cuba
- Certain agricultural items
- Items necessary to ensure the safety of commercial and civil aircraft travel
On a case-by-case basis, BIS will also review exports and reexports of items previously prohibited, to meet the needs of the Cuban people. Items including equipment needed for agricultural production, artistic endeavors, education, food processing, disaster preparedness and response, public health, residential construction, and public transportation will be reviewed. This will allow U.S. companies to be involved in infrastructure projects designed to benefit the Cuban people.
In relaxing restrictions related to air travel, the new rules pave the way for U.S. airlines to offer regularly scheduled flights to Cuba and opportunities to partner with the Cuban aviation industry. Specifically, the new rules authorize entry into blocked space, code-sharing, and leasing arrangements to facilitate authorized air carrier services. Transactions related to an aircraft’s temporary travel to and from Cuba are also permitted. Further, the new rules have expanded the scope of authorized travel purposes to permit travel for the purpose of professional media or artistic productions in Cuba, such as the production of movies and television programs, music recordings, and the creation of artwork. Travel related to organizing professional meetings or conferences and amateur and semi-professional competitions, events, and performances in Cuba also is permissible. General tourism, however, is still not a permissible purpose for travel to Cuba.
OFAC has also amended the Cuban Asset Control Regulations to remove restrictions on payment and financing terms for all exports from the U.S. or reexports of 100% U.S.-origin items from a third country, except exports of food products and agricultural items. The amended rules allow for financing through U.S. banks or through sales on an open account and will allow U.S. businesses to better compete with products from other countries that permit similar financing.
Since the President’s December 2014 announcement of efforts to normalize relations with Cuba, the President has continually eased economic sanctions against Cuba. Lifting the trade embargo completely, however, will require action from Congress. We are closely monitoring the unfolding changes to U.S.-Cuba relations. Please contact David Agee, Cortney Morgan or Kelli Stout with any particular client needs or questions concerning trade with Cuba.