Cuban currency

Limited Access to Cuba but it is a Start for U.S. Businesses

Baker Donelson Red Logo1

by Doreen Edelman, a shareholder in the Washington, D.C. office of Baker Donelson and co-leader of the Firm’s Global Business Team.  This article was originally published in Baker Donelson’s “Export Compliance Matters” blog.

Doreen Edelman
Doreen Edelman

As you know there are ongoing changes to the Cuba export regulations.  President Obama announced the reopening of the U.S. embassy in Havana and a Cuban embassy in Washington. The Commerce Department will remove Cuba from list of countries subject to anti-terrorism (AT) controls, and Cuba has been removed from the list of state sponsors of terrorism (SSOT).  Our January blog is still the state of play for permissible business.

However, the Commerce Department issued a Final Rule on  July 22, 2015 to implement regulator changes consistent with the above changes. Here are the highlights:

  • Foreign made items with up to 25% U.S. content can now be re-exported to Cuba without the need for a re-export license from the Commerce Department.
  • Replacement parts can be exported for items legally exported to Cuba.
  • General Aviation flights, such as corporate jets, may now apply for and use license exceptions for trips to Cuba.
  • AVS limitations that operated on Cuba no longer apply.  This means that more options are available for aircraft to use the AVS exception for temporary sojourn for aircraft leaving the U.S.
  • Airlines can engage in transactions incident to approved travel to Cuba without obtaining specific licenses from Treasury’s Office of Foreign Assets Control   (“OFAC”). Note that no other OFAC prohibition has been altered.
  • The scope of sanctions against Cuba is now limited so that U.S. owned or controlled entities in third countries will be allowed to transact with Cuban individuals in third countries.

So far these changes do not alter the longstanding comprehensive trade embargo.  Consistent with the embargo, a license will still be required to export or reexport to Cuba any item subject to Export Administration Regulations unless a license exception is available.

Limited Access to Cuba but it is a Start for U.S. Businesses was last modified: October 10th, 2015 by Contributor