OFAC, BIS Issue Guidance Relating to Telecommunications Exports Destined for Cuba

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Aug. 24, 2021

    On August 11, 2021, the US Office of Foreign Asset Control (OFAC) and the Bureau of Industry and Security (BIS) released a joint fact sheet aimed at emphasizing and clarifying what they described as the US government’s commitment to promoting the ability of the Cuban people to seek, receive, and impart information. The guidance was released only a few days after the US imposed expanded targeted sanctions on Cuba in response to a series of government crackdowns on pro-democracy protestors across the island.

    While it should be noted that the majority of transactions between persons subject to US jurisdiction and Cuba are prohibited, both OFAC and BIS have now reaffirmed that despite the recent escalation in sanctions, the US will continue to authorize certain activities that “support the Cuban people’s access to information on the internet.”

    Pursuant to the Cuban Assets Control Regulations (CACR) found at 31 CFR part 515, several OFAC general licenses related to the provision of internet-based services in Cuba are available to exporters. Each general license allows, in various ways, for the provision of digital information and data to the Cuban people. While several of the available general licenses relate specifically to the export of information, other available general licenses cover items required for the development and maintenance of telecommunications operations in Cuba. The OFAC general licenses available for exports of telecommunications and internet services to Cuba are as follows:

• Software and services for Cuban internet users (31 CFR 515.578, 515.533)
• Provision of telecommunications services and establishment of telecommunications facilities (31 CFR 515.542)
• In-country presence of internet and telecommunications providers (31 CFR 515.573)
• Internet-based distance learning and educational training (31 CFR 515.565)
• Information and informational materials (31 CFR 515.206(a), 515.545)

    OFAC has now stated that those interested in engaging in transactions with Cuba should seek to “avail themselves of these exemptions and authorizations to the extent applicable.” Interestingly, the guidance further states if upon review of all general license requirements none are available, OFAC will consider specific license requests on a case-by-case basis and will prioritize license applications which concern internet freedom in Cuba.

    The guidance also highlights the availability of BIS export license exceptions pursuant to 15 CFR parts 730-774 of the Export Administration Regulations (EAR). Although nearly all items subject to the EAR, as defined in 15 CFR 734.3, face an export license requirement when destined for Cuba, the EAR contains two license exceptions that in certain instances may negate the need for an exporter to apply for and ultimately obtain a BIS license. Under both license exceptions, certain telecommunications and internet-related items may be exported and/or reexported to Cuba if the items are intended to improve the free flow of information to, from, and among the Cuban people. Both license exceptions define the scope of their applicability through a list of export control classification numbers (ECCNs). The BIS license exceptions available for exports of telecommunications and internet services to Cuba are as follows:  

• Consumer Communications Devices (15 CFR 740.19)
• Items in Support of the Cuban People (15 CFR 740.21)

    In similar fashion to the stated OFAC licensing policy, the new joint guidance states that when a license exception is not available under the EAR, “A general policy of approval applies to [BIS] license applications for telecommunications items and internet-related items intended to improve communications to, from, and among the Cuban people.”

    It should be noted that each of the above mentioned OFAC general licenses and BIS license exceptions impose specific limitations, terms and conditions which must be carefully reviewed and complied with. If you have any questions regarding the applicability of OFAC general licenses or license exceptions under the EAR do not hesitate to contact an attorney at Barnes, Richardson & Colburn LLP.