A 6th round of regulatory changes in the US – Cuba thaw was announced by two key U.S. agencies on October 16, 2016. Along with President Obama’s Policy Directive on US-Cuba Normalization pronounced two days before, these changes continue to carve out exemptions to the US embargo against Cuba.
US Treasury’s Office of Foreign Assets Control (OFAC) further amended its regulations implementing the embargo to: (1) authorize limited transactions related to Cuban-origin pharmaceuticals and US-Cuban medical research; (2) update prior authorizations on commerce, trade, and travel; (3) authorize some civil aviation safety-related services; and (4) expand the authorizations for grants and humanitarian-related services to the Cuban people.
Bureau of Industry & Security (BIS) further amended its regulations to add trade transactions that are exempted from the embargo and no longer require a special license – direct sale of items directly to Cubans for personal use, entry into US ports of cargo transiting Cuba on aircraft, and the re-entry into the United States from Cuba of some items for repair.
Here is a summary of the latest changes:
- Pharmaceutical Transactions: It is now possible to seek approval from the S. Food and Drug Administration (FDA) for Cuban-made pharmaceuticals. FDA-approved Cuban-made pharmaceuticals may be imported, marketed, sold, and distributed in the United States.
- Joint Medical Research:S. persons may now engage in joint medical research commercial and non-commercial projects with Cuban nationals.
- Commerce, Trade & Travel: The following transactions are now also generally authorized and do not require a license:
Sale and export to Cuba of consumer goods purchased online or through other means for personal use by non-government officials in Cuba. Restrictions apply.
Re-entry into the United States of items previously exported to Cuba with a BIS or OFAC authorization, allowing U.S. persons to service and repair these items. However, the re-export of replacements or serviced items will need to be authorized by BIS or OFAC, as appropriate.
Entry into contracts for transactions currently prohibited by the sanctions so long as performance of its provisions is made expressly contingent on receiving prior authorization from the relevant US agency(s) or on such authorization no longer being required.
Transit of air cargo via Cuba; cargo transiting Cuba aboard vessels was previously authorized.
Entry of foreign vessels into a U.S. port to load or unload after calling on a Cuban port for trade purposes without having to wait for 180 days, so long as the items the cargo carried to Cuba meet specific conditions.
Normal limits now apply to importation of Cuban goods for personal use placed in accompanying baggage of authorized travelers from Cuba and third countries. Accompanying goods, including tobacco and alcohol, valued at less than US$800.00 will be exempted from U.S. duty and tax.
- Financing: OFAC has clarified that agricultural items, such as pesticides and tractors, authorized for export or re-export to Cuba may be financed. Authorized exports and re-exports to Cuba of agricultural commodities, such as poultry and corn, remain subject to the limited payment and financing terms of cash in advance or third country financing.
- Civil Aviation Safety-related Services: S. persons are authorized to provide civil aviation safety-related services to Cuba and Cuban nationals, wherever located, to ensure safety in civil aviation and the safe operation of commercial aircraft.
- Grants & Humanitarian-related Transactions: S. persons are authorized to provide the following to Cuban nationals:
Grants, scholarships, and awards related to scientific research and religious activities.
Services related to Cuban infrastructure to develop, repair, maintain, and enhance Cuban infrastructure to directly benefit the Cuban people.
The changes took effect on October 17, 2016.
For details on these and prior changes visit our previous posts on this topic or to explore how you can use them to further your business operations, contact us.
