International Law Advisory - Cuban Assets Regs

The Treasury Department’s Office of Foreign Assets Control (OFAC) today issued new regulations tightening restrictions on Cuban travel, imports, and remittances. The new regulations have an effective date of  June 30, 2004.  The new regulations are issued in interim form, and OFAC has invited interested parties to submit comments within 60 days.  The new regulations include the following:

1.         “Fully-Hosted” Travel

The former regulations authorized “fully-hosted travel” to  Cuba, which referred to travel to, from, or within  Cuba for which all costs were paid by a third party national who was not subject to  U.S. jurisdiction or were covered or waived by  Cuba or a Cuban national.  These provisions have now been eliminated and replaced by the presumption that  U.S. travelers to  Cuba will be paying at least some of their expenses.

2.         Receipt of Cuban Goods / Services

The former general license authorizing licensed travelers to  Cuba to return to the  United States with up to $100 worth of Cuban merchandise for personal consumption has been eliminated.  The amended rules now prohibit the acquisition in  Cuba and return to the  United States of any merchandise, other than “informational materials” (as defined in the Cuba Assets Control Regulations).

3.         Accompanied Baggage

Authorized travelers to Cuba are now restricted to carrying no more than 44 pounds of baggage, unless a higher amount is authorized by a specific license from OFAC (for non-U.S. origin baggage) or permission from the Commerce Department’s Bureau of Industry and Security (BIS) (for U.S.-origin baggage).

4.         Travel to Visit Relatives in  Cuba

The new rules represent a significant constriction of  U.S. travelers ability to visit relatives in  Cuba.  Under the former rules, U.S. travelers could engage in travel-related transactions incident to visiting a Cuban national “close relative” (defined as up to second cousins) once every year under a general OFAC license and more often pursuant to specific licenses if requested.  Travelers under the old rules could spend up to the U.S. State Department per diem (currently $167) for living expenses while in  Cuba, plus any other expenses directly related to visiting the specified relatives.

The new rules now restrict such visits to a “member of a person’s immediate family” (defined as a spouse, child, grandchild, parent, grandparent, or sibling of that person or that person’s spouse, as well as any spouse, widow, or widower of the foregoing).  Further, OFAC will now only issue specific licenses for such family-related travel to once every three years and each visit may not last more than 14 days (the three-year period is counted from the date of last presence in  Cuba).  No requests for additional visits will be granted.  Moreover, the amount of money that may be spent by a person on such a family visit is now limited to $50 per day, plus one additional $50, if needed, to pay for transportation-related expenses within  Cuba that exceed the normal daily limit.

Travelers may obtain an OFAC license to visit an immediate family member who is not a Cuban national (such as a student in Cuba under a university educational activity license) in exigent circumstances, provided that the particular exigency has been reported to the US Interests Section in Havana and the issuance of the license would "support the mission of the US Interests Section."

5.         Educational Travel and Experiences in  Cuba

The new rules now limit educational travel to  Europe to undergraduate and graduate institutions (secondary school trips are no longer permitted) that have obtained specific OFAC licenses.  The duration of these institutional licenses is shortened from two years to one year.  There is a new requirement that any students who use an institution's license must be enrolled in an undergraduate or graduate degree program at that licensed institution, and the course of study must be at least ten weeks long. Students may no longer engage in  Cuba travel-related transactions under the license of an educational institution other than their own even if their own institution will accept the licensed institution's program for credit toward the student's degree.  Employees who travel under an institution's license must be full-time permanent employees of the licensed institution.

Previously licensed travel that no longer falls within the new requirements may still proceed as long as the trips and all associated transactions are completed by  August 15, 2004.

6.         International Sports Competitions; Clinics and Workshops

OFAC will no longer issue general licenses for transactions related to amateur and semi-professional athletic competitions sponsored by an international sports federation.  Only specific licenses will now be issued on a case-by-case basis.  OFAC has further eliminated its previous policy of issuing specific licenses for any clinics or workshops, whether sports-related or otherwise, in  Cuba.

7.         Quarterly Remittances to Cuban Nationals

Formerly, persons over 18 and subject to  U.S. jurisdiction could send up to $300 to any Cuban household or national, as permitted by a general OFAC license.  Under the new rules, such remittances may only be sent to a member of the sender’s “immediate family” (as defined, supra).  Further, such remittances may not be sent to government officials and certain members of the Cuban Communist Party.

8.         Remittance-Related Transactions

The former provisions allowing a general license for depository institutions to act as forwarders for quarterly remittances is eliminated.  Depository institutions may only continue to provide such forwarding services if they apply for and receive a specific OFAC license.  Depository institutions continue to be authorized by general license, however, to provide services related to other authorized financial transactions (e.g., a banking institution does not need separate  authorization from OFAC to transfer to Cuba funds covered by a specific license allowing overflight payments or remittances other than quarterly family or emigration-related remittances.

Please contact  Edward  Krauland (202-429-8083) or  David  Lorello (202-429-6757) if you would like to discuss any of these specific issues.