September 21, 2015 - Export Controls & Sanctions

BIS and OFAC Issue Additional Updates to Cuba Sanctions Regimes

export-2The Bureau of Industry and Security (BIS) and the Office of Foreign Assets Control (OFAC) today announced and issued coordinated regulations aimed at further easing Cuban sanctions and export restrictions.

Some changes in the BIS’s regulations:

(a) allow the use of certain Export Administration Regulation (EAR) license exceptions in exports to Cuba;

(b) allow entities to apply for licenses to export to Cuba items related to civil aviation safety; and

(c) normalize the deemed export rules for Cuban nationals, such that a license is no longer required to provide Cuban nationals with certain sorts of technology and source code  not specifically covered by the Export Administration Regulations (referred to as “EAR99” items).

Some changes in the OFAC’s regulations:

(a) ease travel restrictions and license requirements (but still only for travel authorized under the regulations, which generally does not include travel purely for tourism);

(b) expand general licenses for telecom and communication services; and

(c) loosen some financial restrictions, including allowing travelers to open bank accounts, unblocking certain remittances, etc.

The BIS and OFAC are taking these additional steps to loosen Cuban sanctions and export restrictions as part of the president’s strategy to increase bilateral relations with Cuba. Despite these changes, however, Cuba is still an embargoed country, and is subject to a variety of restrictions on travel and the flow of goods.  Additionally, under existing law, the BIS and OFAC can only go so far in loosening restrictions, as Section 204 of the Helms Burton Act requires that a Cuban transitional government be in place before the president completely suspends the embargo.  Thus, individuals and businesses should carefully check OFAC and BIS regulations before doing business with Cuban entities or traveling to Cuba, to make certain they are in full compliance with the law.