Reed Smith Client Alerts

Auteurs: Leigh T. Hansson

The Department of the Treasury's Office of Foreign Assets Control ("OFAC") this afternoon announced various amendments to the amending the Cuban Assets Control Regulations ("CACR"), implementing a previously announced policy initiative by President Barack Obama. These amendments to the CACR change the rules in three major areas, family visits, family remittances, and telecommunications.

Family Travel Restrictions Eased

OFAC has issued a general license authorizing travel-related transactions for visits to "close relatives" (close relatives include, for example, aunts, uncles, cousins, and second cousins) who are nationals of Cuba. There is no limit on the frequency or duration such visits to "close relatives." OFAC has issued a general license easing restrictions on remittances (including from inherited blocked accounts) to "close relatives" who are nationals of Cuba.

Significant Changes for Travel Related to Agriculture or Medical Sales

The new TSRA general license authorizes, with certain conditions, "travel-related transactions that are directly incident to the commercial marketing, sales negotiation, accompanied delivery, or servicing in Cuba of agricultural commodities, medicine, or medical devices that appear consistent with the Department of Commerce's export or reexport licensing policy."

An individual may rely on this general this general license "if he or she is regularly employed by a producer or distributor of the agricultural or medical items or by an entity duly appointed to represent such a producer or distributor, and if that traveler's schedule of activities is consistent with a full work schedule. Under the new general license, written reports must be submitted to OFAC at least 14 days before departure for Cuba and within 14 days of return."

Significant Changes for Telecommunications Industry

Under the new regulations, "Persons subject to U.S. jurisdiction may contract with and pay non-Cuban telecommunications services providers to provide services to particular individuals in Cuba (other than prohibited officials of the Government of Cuba or prohibited members of the Cuban Communist Party, as defined in the CACR). For example, an individual in the United States may contract with and pay a U.S. or third-country telecommunications company to provide cellular telephone service for a phone owned and used by that individual's friend in Cuba. Moreover, a U.S. telecommunications services provider may enter into a contract with a particular individual in Cuba to provide telecommunications services to that individual."

"Telecommunications services providers that are persons subject to U.S. jurisdiction are generally licensed (1) to make payments incident to the provision of telecommunications services between the United States and Cuba and the provision of satellite radio or satellite television services to Cuba and (2) to enter into and perform (including making payments) under roaming services agreements with telecommunications services providers in Cuba.

"Transactions incident to establishing facilities to provide telecommunications services linking the United States and Cuba, including fiber-optic cable and satellite facilities, are authorized by general license. The Bureau of Industry and Security of the U.S. Department of Commerce licenses the exportation and re-exportation of goods and technology for the establishment of telecommunications facilities linking the United States and Cuba."

Finally, "two general licenses have been added authorizing, with certain conditions, travel-related transactions incident to authorized telecommunications transactions. One of these licenses authorizes, with certain conditions, travel transactions incident to the commercial export of telecommunications-related items that have been authorized by the Department of Commerce. The second license authorizes travel transactions incident to participation in telecommunications-related professional meetings."