New OFAC, BIS Rules Continue US-Cuba Trade Policy Reforms
The Office of Foreign Assets Control and Bureau of Industry and Security are again amending their regulations to allow more trade with Cuba. OFAC's final rule (here) will allow U.S. citizens living outside the U.S. to buy Cuban-origin goods for personal consumption. The rule, which makes changes to Cuban Assets Control Regulations, will also allow greater involvement by U.S. nationals and companies in Cuba, in line with reforms President Barack Obama announced in December 2014 to build closer ties between Washington and Havana, OFAC said. The new rule also will allow for more American companies, including cargo transportation services, to establish a business presence in Cuba, it said.
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The OFAC rule will allow for U.S. exporters of U.S.-origin goods authorized for export to Cuba to maintain a business presence in the country, it said. Some parcel services and cargo transportation providers related to Cuban trade will also be allowed, it said. OFAC is also amending Cuban sanctions regulations to allow Cuban-origin software imports, and will permit people-to-people educational travel to be conducted without the involvement of an organization that sponsors such exchanges, the agency said.
Meanwhile, the Bureau of Industry and Security's final rule allows vessels departing the U.S. for a non-Cuba country to temporarily visit Cuba under a license exception instead of having to obtain a license to permit transit through Cuba, BIS said (here). The regulation will also allow exports of certain items to persons authorized by Treasury to set up and maintain a physical or business presence in Cuba. Finally, the rule would adopt a case-by-case licensing review policy for exports and reexports of items that would enable or foster Cuban private-sector exports, “subject to certain limitations,” BIS said. Coast Guard regulations on unauthorized entry into Cuban territorial waters could still be in play, BIS said.
BIS is making more flexible the Dec. 17, 2014-issued License Exception Support for the Cuban People (SCP), to authorize the export and reexport of EAR99 items and anti-terrorism-related Commerce Control List (CCL) items for use by all people authorized to establish and maintain a physical or business presence in Cuba. Case-by-case licensing reviews of U.S. exports and reexports that could boost Cuban private sector exports will be consistent with BIS’ general policy to deny applications to ship goods for use by Cuban state-owned enterprises, agencies, military, police, intelligence and security services, and “other organizations that primarily generate revenue for the state,” BIS said.
There's also some appetite in Congress for a more open approach to U.S. trade with and to Cuba. Sen. John Boozman, R-Ark., who in 2015 introduced legislation that would lift a ban on Americans’ ability to finance sales of agricultural goods to Cuba, during a hearing of the Senate Appropriations Committee last week said that Arkansas, for instance, could add $80 million annually to its economy by exporting to Cuba. Testifying at the hearing, Treasury Secretary Jack Lew said the Administration has gone “as far as we can” to open connections between Americans and Cubans “within laws that constrain our ability to go all the way to normal trade relations.” Lew said the Administration is still accepting suggestions about how it might even further expand bilateral relations under the current regulatory framework. “[T]he broader issue of the embargo is something that Congress would have to address for us to truly have any full normalization of relations,” Lew said.
(Federal Register 03/16/16)