BIS/OFAC Revise Cuba Sanctions

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September 8, 2009

The Bureau of Industry and Security (BIS) and Office of Foreign Asset Controls (OFAC) have both recently issued final rules easing restrictions on U.S.-Cuban trade and travel. Pursuant to both a Congressional and Presidential mandate, these rules are limited to certain telecommunications transactions and certain agricultural and medical device travel related transactions; the U.S. still maintains an embargo against most U.S.-Cuban trade and travel.

However, the BIS and OFAC final rules, effective September 3 and September 8, 2009, respectively, create notable new exceptions to the general embargo for exporters of telecommunications, agricultural and medical products.

Telecommunications

Under OFAC’s new rules, all transactions, including but not limited to payments incident to the provision of telecommunications services between the U.S. and Cuba, the provision of satellite radio or satellite television services to Cuba, or entry ino and performance under roaming service agreements with telecommunications service providers in Cuba, by a telecommunications service provider that is a person subject to U.S. jurisdiction.

Additionally, OFAC’s new rules authorize all persons subject to U.S. Jurisdiction to enter into, and make payments under, contracts with non-Cuban telecommunications services providers, or particular individuals in Cuba, for services provided to particular individuals in Cuba, such as contract for cellular telephone service for a phone owned and used in Cuba, provided that the individual using the phone is not a prohibited official of the Government of Cuba or a prohibited member of the Cuban Communist Party.

The OFAC rule also contains a general license authorizing transactions incident to the establishment of facilities to provide telecommunications services linking the U.S. and Cuba, including but not limited to fiber-optic cable and satellite telecommunications facilities.

BIS’ final rule revises the scope of existing licensing policy as it pertains to certain telecommunications links. Items now eligible for export and reexport now includes any item necessary to provide efficient and adequate telecommunications links between the U.S. and Cuba, including links through third countries, and including links to provide satellite radio or satellite television services to Cuba.

Travel Related Transactions

OFAC’s new final rule also authorizes certain travel-related transactions, with certain conditions, and additional 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 export or reexport licensing policy of the Department of Commerce. However, all travel to Cuba pursuant to these general licenses must be arranged and provided by OFAC authorized providers of air and travel services.