As widely reported, President Obama announced on December 17, 2014, significant changes to U.S. policy relating to Cuba. The broad policy revisions include the following:
- Re-establishing diplomatic relations with Cuba
- Reviewing Cuba’s designation as a state sponsor of terrorism
- Relaxing current restrictions on travel, commerce, and the flow of information to and from Cuba
With respect to the last of these items—liberalizing the broad U.S. embargo that has restricted virtually all transactions with Cuba since 1963—the policy changes announced by President Obama will not become legally effective until the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) and the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) “in coming weeks” enact amendments to the Cuban Assets Control Regulations (CACR) and the Export Administration Regulations (EAR), respectively. Until the new regulations are published, the longstanding Cuba sanctions and export restrictions will remain firmly in place.
Once enacted, the amendments to the CACR and the EAR are expected to ease sanctions and export constraints in the following key areas.
- OFAC will allow by “general license” (i.e., no application required) travel in 12 particular circumstances for which “specific licenses” are currently required:
- Family visits
- Official government travel
- Journalistic activities
- Professional research and professional meetings
- Educational activities
- Religious activities
- Public performances, workshops, athletic and other competitions, and exhibitions
- Support for Cuban people
- Humanitarian projects
- Activities of private foundations or research or educational institutes
- Exportation, importation or transmission of information or informational materials
- Licensed exportations
- Normal tourism will not yet be authorized.
Certain U.S. Financial Transactions
- U.S. financial institutions will be authorized to open correspondent accounts at Cuban financial institutions to support processing of authorized transactions.
- U.S. credit and debit card transactions will be generally authorized for U.S. travelers to Cuba.
- Cash-in-advance payments will be redefined to allow for payment before title transfer.
- Remittances will be liberalized to allow U.S. persons to send up to $2,000 per quarter to persons in Cuba, including for humanitarian projects or in support of private business, and remittance forwarders will no longer require a specific OFAC license.
Expanded Commercial U.S. Transactions to and from Cuba
- U.S. exports will be allowed for items supporting Cuban private sector businesses, including certain building materials, goods for Cuban entrepreneurs and equipment for small farmers.
- Telecom providers will be allowed to establish and update communications-related systems, and exports of certain consumer communications devices, equipment, technology and services will be allowed.
- Licensed U.S. travelers will be allowed to import goods from Cuba valued up to $400, including up to $100 worth of tobacco or alcohol products.
Third-Country Trade with Cuba
- OFAC will allow by general license U.S.-owned or -controlled entities outside the United States to provide services to, and to engage in certain transactions with, Cuban nationals outside of Cuba.
- U.S. banks will be authorized to unblock bank accounts of Cuban nationals who have relocated outside of Cuba.
Until OFAC and BIS announce the specific amendments to their respective regulations, the Cuba sanctions and export restrictions will remain fully in place, and U.S. persons and businesses (including foreign subsidiaries of U.S. businesses) are advised to continue to comply strictly with the CACR and the EAR. Note also that the U.S. policy changes will not—indeed, cannot—overturn many other restrictions on dealing with Cuba, because significant elements of the embargo are mandated by legislation that would require acts of U.S. Congress to reverse.