Since President Obama’s announcement in December 2014 of a change in policy towards Cuba, we have been a wild, legal ride.
Both the Office of Foreign Assets Control (OFAC) and the Bureau of Industry and Security (BIS), plus the U.S. Department of State, have amended their regulations several times to remove many bureaucratic requirements that had made it extremely challenging for most people and companies to trade with, travel to, or invest in Cuba. We have come a long way since December 2014, but we have much further go in more changes in the U.S. embargo of Cuba. Moreover, the optimistic promises of the Obama Administration will only be effective with changes in the laws and policies of Cuba.
Without getting into the details of each and every change of the U.S. embargo of Cuba, suffice it to say that the embargo remains fully in effect, however, there are now many exceptions. For example, before December 2014, the typical American could not have traveled to Cuba without first submitting a license application to OFAC detailing where, when, with whom, and why the travel was to take place. Now, the license application process no longer exists, and travelers can travel directly to Cuba without even a ‘people-to-people’ license. Prior to December 2014, unless granted a special license by OFAC, it was almost always illegal for a U.S. company to rent office space in Cuba, hire a Cuban lawyer, or import cargo from Cuba. Hefty monetary penalties remain for those persons or companies which the OFAC has determined violated the Cuban Assets Control Regulations (CACR) at 31 CFR Part 515.
Soon, commercial, scheduled airline service will take place between many U.S. cities and many cities in Cuba, including Havana. American Airlines is expected to be the major carrier from its hub at Miami International Airport. JetBlue, Southwest, and Delta are expected to participate as well. Rather than have to book through a travel agent and a special charter aircraft, as early as this summer, passengers will be able to book directly on the airline website to book a flight to Cuba just as they do to any other country.
Law firms, especially in Miami, Florida, are now more than ever creating a “Cuba Practice” and developing relationships with lawyers in Cuba. In May 2015, as Chair of the Florida Bar’s International Law Section, I led the largest delegation of lawyers ever to travel from the United States to Cuba. Comparing and contrasting the legal codes and judicial system of the United States with that of Cuba was an eye-opening experience for all involved. U.S. lawyers should not attempt to interpret the laws of another country, including Cuba, and business contracts must accurately take into account the different legal systems that now exist to best protect the interest of the U.S. person or company involved in any business venture with a Cuban national, including what the Obama Administration has designated as “private entrepreneurs” in Cuba.
The changes in the U.S. regulations has led to a significant increase in U.S. businesses towards Cuba. Cruise lines have now announced itineraries from the United States to Cuba. Athletes and entertainers, educational scholars and religious groups regularly visit Cuba which was once known as the “Pearl of the Caribbean” before the 1959 Revolution. Most U.S. business activity remains prohibited with Cuba, except with the approval of the U.S. Government through a specific license issued by OFAC. The exuberance of U.S. businesses should be tempered with a very careful reading and understanding of the OFAC and BIS regulations. Although the enforcement of the U.S. embargo certainly seems to have decreased, business activities including most trade and investment are still prohibited, and violators may receive a questionnaire, summons, or subpoena from OFAC which leads to a monetary penalty. Promptly seek legal advice from an experienced and knowledgeable attorney before engaging in any business transaction with Cuba, and in the event such activities are questioned by the U.S. Government.
Peter Quinter, Chair
Customs and International Trade Law Group
333 SE 2nd Ave.
Miami, FL 33131