Recent OFAC Actions
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The following changes to the Cuban Assets Control
Regulations were published in the Federal Register today and
will be effective June 30, 2004:
On October 10, 2003, the President announced the establishment
of a Commission for Assistance to a Free Cuba (the "Commission"),
an interagency commission tasked with identifying ways to
hasten Cuba's transition to a free and open society and identifying
U.S. Government programs that could assist the Cuban people
during such a transition. On May 1, 2004, the Commission delivered
its Report to the President, recommending, among other things,
a number of proposed changes to the U.S. sanctions with respect
to Cuba. On May 6, 2004, the President directed the implementation
of certain of the Report's recommendations. In an interim
final rule, the Office of Foreign Assets Control ("OFAC")
is amending the Cuban Assets Control Regulations, 31 C.F.R.
part 515 (the "CACR"), to implement these recommendations,
to make additional changes consistent with the President's
policy with respect to Cuba, and to make certain technical
and clarifying changes.
Fully-hosted travel. Section 515.420, the note to paragraph
(c) and paragraph (f) of Section 515.560, and paragraph (c)(4)(i)
of Section 515.572 are amended to remove discussion of and
references to fully-hosted travel and the presumption that
travelers to Cuba pay expenses for Cuba travel-related transactions.
The term "fully-hosted travel" refers to travel
to, from, or within Cuba for which all costs and fees either
are paid for by a third-country national who is not subject
to U.S. jurisdiction or are covered or waived by Cuba or a
national of Cuba. The term was first introduced into the CACR
on July 22, 1982, in Section 515.560 of the "Licenses,
Authorizations, and Statements of Licensing Policy" subpart.
See 47 Fed. Reg. 32060. Paragraph (j) of Section 515.560 provided
that all transactions incident to fully-hosted travel were
"authorized." On May 13, 1999, OFAC removed this
provision from Section 515.560, amended it, and placed it
in a new Section 515.420, which is in the "Interpretations"
subpart of the CACR. See 64 Fed. Reg. 24808. Under Section
515.420 fully-hosted travelers are not considered to be engaging
in any transactions that violate the prohibitions of the CACR.
In the years since the May 13, 1999 amendments, OFAC has
found that persons who claimed their travel was fully-hosted
routinely engaged in prohibited money transactions (e.g.,
payment of entry and exit and docking fees). OFAC also has
come to the position that even a person who accepts goods
or services in Cuba without paying for them is in fact engaging
in a prohibited dealing in property in which Cuba or a Cuban
national has an interest. Therefore, OFAC is removing the
language regarding fully-hosted travel from the CACR and is
thereby eliminating any authorization of fully-hosted travel.
Amended Section 515.420 now explains that OFAC interprets
the prohibition in Section 515.201(b)(1) on dealing in property
to include a prohibition on the receipt of goods or services
in Cuba when those goods or services are provided free-of-charge,
whether received as a gift from the Government of Cuba, a
national of Cuba, or a third-country national, unless otherwise
authorized by an OFAC general or specific license. See, e.g.,
Section 515.560(a) of the CACR. Amended Section 515.420 also
explains that payment for air travel to Cuba on a third-country
carrier, which involves property in which Cuba has an interest
(for example, because the carrier will pass a portion of the
payment on to Cuba), is now prohibited unless the travel is
pursuant to an OFAC general or specific license.
In the process of removing references to fully-hosted travel,
OFAC is also removing the companion language in Section 515.420
stating that any person who travels to Cuba without OFAC authorization
is presumed to have engaged in prohibited travel-related transactions
there. Notwithstanding the removal of this language, OFAC
may still argue, either within the Treasury Department civil
penalties process or before a United States court, that the
receipt of services or other dealings in property in which
Cuba has an interest, such as a stay at a Cuban hotel or the
purchase of food in Cuba, can be inferred from evidence of
multi-day travel in Cuba.
Importation of Cuban merchandise. Paragraph (c)(3) of Section
515.560 is amended to eliminate the general license authorizing
licensed travelers to Cuba to purchase in Cuba and return
to the United States with up to $100 worth of Cuban merchandise
for personal consumption. The amended paragraph (c) now explains
that, with the exception noted below, no merchandise may be
purchased or otherwise acquired in Cuba and then brought back
to the United States. OFAC has added a note to paragraph (c)
explaining that this rule does not apply to the purchase in
Cuba and importation into the United States of informational
materials, which continue to be exempt from the prohibitions
of the CACR, as described in Section 515.206.
Exportation of accompanied baggage. Former paragraph (f)
of Section 515.560, which discussed the carrying of currency
by fully-hosted travelers, is replaced with a new paragraph
(f) limiting the amount of accompanied baggage carried by
authorized travelers to Cuba to 44 pounds per traveler, unless
a higher amount is authorized pursuant to a specific license
from OFAC or by the Bureau of Industry and Security of the
Department of Commerce.
Travel to visit relatives in Cuba. Sections 515.560 and
515.561 are amended to make a number of changes to the rules
regarding travel-related transactions incident to visiting
relatives in Cuba.
Prior to these amendments, a person with a Cuban national
close relative (defined to include second cousins) in Cuba
could engage in travel-related transactions incident to visiting
that relative once every 12 months under a general license
and more often pursuant to specific licenses if requested.
There was no stated limit to the duration of the first visit,
and the traveler could spend up to the State Department per
diem (currently $167) for living expenses in Cuba plus any
additional funds needed for transactions that were directly
incident to visiting that relative.
These amendments narrow the category of relatives who can
be visited in Cuba. The definition of "close relative"
set forth in former paragraph (d) of Section 515.561, is replaced
by the term "member of a person's immediate family,"
which is defined in new paragraph (c). Under the new rule,
a member of a person's immediate family is 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 any of the foregoing. Relevant portions of Section
515.561 also are amended to eliminate the policy of authorizing
those who share a common dwelling as a family with the traveler
to accompany the traveler, unless they are themselves members
of the immediate family of the person to be visited.
The once-per-twelve-months general license contained in
former paragraph (a) of Section 515.561 is eliminated. In
its place, new paragraph (a) states that OFAC will issue specific
licenses authorizing travel-related transactions incident
to visits to members of a person's immediate family who are
nationals of Cuba once per three-year period and for no more
than 14 days. A person subject to U.S. jurisdiction who wishes
to engage in travel-related transactions to visit a member
of his or her immediate family who is a national of Cuba will
need to request and receive specific permission from OFAC
before engaging in those transactions. For those who emigrated
to the United States from Cuba and have not since that time
visited a family member in Cuba, the three-year period will
be counted from the date they left Cuba. For all others, the
three year period will be counted from the date they last
left Cuba pursuant to the pre-existing family visit general
license or, if they traveled under a family visit specific
license, the date that license was issued. Former paragraph
(b), under which OFAC issued specific licenses for additional
visits, is eliminated. No additional visits will be authorized.
Former paragraph (c) of Section 515.561 stated a different
rule for travelers wishing to visit relatives who are not
nationals of Cuba but who instead are in Cuba pursuant to
an OFAC authorization (such as a student who is in Cuba under
her university's educational activities license). This rule
has been moved to paragraph (b) and modified to provide for
the issuance of a specific license to visit a member of a
person's immediate family in exigent circumstances provided
the person to be visited is in Cuba pursuant to an OFAC authorization,
the particular exigency has been reported to the U.S. Interests
Section in Havana, and issuance of the license would support
the mission of the U.S. Interests Section in Havana. Licenses
would be issued under this paragraph, after consultation with
the Department of State, in true emergent situations, such
as serious illness accompanied by an inability to travel,
and in order to support services normally provided in such
circumstances by the U.S. Interests Section in Havana.
A number of individuals have outstanding specific licenses
that were issued pursuant to former Section 515.561(b) and
(c). Those licenses will remain valid only until June 30,
2004, after which they are revoked. Accordingly, individuals
who have such specific licenses may not use them to engage
in any Cuba travel-related transaction occurring on or after
June 30, 2004.
These amendments also reduce the amount of money travelers
visiting members of their immediate family may spend for their
living expenses in Cuba. The new limit, set forth in amended
paragraph (c)(2) of Section 515.560, is $50 per day plus up
to an additional $50 per trip, if needed, to pay for transportation-related
expenses in Cuba that exceed the $50 per day limit. For example,
a traveler whose five-day trip to visit her father in Camaguey
includes roundtrip ground transportation between Havana and
Camaguey may expend $50 per day for her living expenses in
Cuba plus up to an additional $50, if needed, to pay for the
costs of transportation between Havana and Camaguey, for a
total of $250 of in-Cuba costs (airfare to and from Cuba is
not included in this limit). The per diem amount for all other
categories of OFAC-authorized travel-related transactions
in Cuba remains unchanged.
Attendance at certain professional meetings in Cuba. A note
is added to paragraph (a)(1) of Section 515.564 to clarify
that the general license in paragraph (a) authorizing travel-related
transactions incident to certain professional research in
Cuba does not extend to transactions incident to attendance
at professional meetings or conferences in Cuba. Attendance
at certain professional meetings and conferences in Cuba already
is addressed by a separate general license set forth in paragraph
(a)(2). To the extent a professional researcher believes that
attendance at a particular meeting or conference in Cuba is
important to his or her research and the meeting or conference
does not qualify under the general license set forth in paragraph
(a)(2), the researcher may request a specific license from
OFAC under paragraph (b).
Educational activities in Cuba. OFAC is amending Section
515.565 to reflect new policy with respect to specific licensing
of certain educational activities in Cuba. These amendments
restrict the availability under paragraph (a) of specific
licenses to institutions to undergraduate and graduate institutions.
Accordingly, former paragraph (a)(2)(vi), which covered certain
activities by secondary schools, has been eliminated. The
duration of these institutional licenses is shortened from
two years to one year.
Paragraph (a) of Section 515.565 is further amended by adding
a requirement that any students who use an institution's license
must be enrolled in an undergraduate or graduate degree program
at that licensed institution. 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. Paragraph (a) also
is amended to clarify that employees who travel under an institution's
license must be full-time permanent employees of the licensed
institution. Temporary employees and contractors do not qualify
as full-time permanent employees of an institution.
Three of the six educational activities listed in paragraph
(a) of Section 515.565 that are available to licensed educational
institutions and their students and staff are subject to a
new requirement that those educational activities in Cuba
be no shorter than 10 weeks. The three affected activities
are: structured educational programs in Cuba offered as part
of a course at the licensed institution; formal courses of
study at a Cuban academic institution; and teaching at a Cuban
academic institution. The remaining three educational activities
may still be engaged in for a period of less than 10 weeks.
These activities are: graduate research in Cuba; sponsorship
of a Cuban national to teach or engage in other scholarly
activities in the United States; and organization of and preparation
for licensed educational activities. OFAC is also amending
the requirements in paragraph (a) with respect to letters
from the licensed institution that must be carried by each
authorized traveler.
Some current holders of educational institution licenses
may have already planned Cuba travel-related activities that
would not be authorized under amended paragraph (a) of Section
515.565. Those licensed institutions that, prior to the effective
date of this Notice, have already planned Cuba trips that
will not meet the new requirements may still engage in all
transactions incident to such trips provided that the trips
and all associated transactions are completed by August 15,
2004.
Paragraph (b) of Section 515.565 is amended to clarify that
its statement of specific licensing policy applies only to
individuals seeking to engage in certain educational activities
in Cuba if their educational institution does not have an
institutional license under paragraph (a). The licensing policies
set forth in paragraphs (a) and (b) are not available to individuals
or entities that purport to arrange, facilitate, or coordinate
educational programs in Cuba for U.S. academic institutions.
Participation in international sports federation competitions;
clinics and workshops licensing policy. OFAC is eliminating
the general license set forth in paragraph (a) of Section
515.567 for travel-related transactions incident to participation
in amateur and semi-professional athletic competitions that
take place in Cuba under the auspices of an international
sports federation. In its place, revised paragraph (a) states
a specific licensing policy under which OFAC will authorize
those same activities on a case-by-case basis. OFAC also in
amending paragraph (b) of the same section to eliminate the
policy of specifically licensing travel-related transactions
incident to participation in clinics and workshops, whether
sports-related or otherwise, in Cuba.
Quarterly remittances to nationals of Cuba. OFAC is amending
the general license in paragraph (a) of Section 515.570 to
eliminate the authorization of quarterly $300 remittances
sent from any person subject to U.S. jurisdiction who is 18
years of age or older to any household of a national of Cuba.
The amended general license authorizes such remittances only
when they are sent to members of the remitter's immediate
family. The term "member of the remitter's immediate
family" is defined to include only a spouse, child, grandchild,
parent, grandparent, or sibling of the remitter or that remitter's
spouse, as well as any spouse, widow, or widower of any of
the foregoing. Paragraph (a) is further amended to provide
that the quarterly $300 remittance cannot be remitted to certain
government officials and certain members of the Cuban Communist
Party.
Paragraph (c)(4)(i) of Section 515.560 is also amended to
reduce the total amount of quarterly $300 remittances that
an authorized traveler may carry to Cuba from $3,000 to $300.
NGO remittances to Cuba. Paragraph (d)(1) of Section 515.570
is revised to clarify the specific licensing policy of authorizing
remittances from nongovernmental organizations and individuals
subject to U.S. jurisdiction to Cuban pro-democracy groups,
independent civil society groups, and religious organizations
as well as to individual members of such Cuban groups and
organizations.
Remittance-related transactions by banks and other depository
institutions. Paragraph (a)(3) of Section 515.572 is amended
to eliminate the general license authorizing depository institutions
to act as forwarders for the quarterly family household remittances
or emigration-related remittances authorized in paragraphs
(a), (b), and (c) of Section 515.570. Depository institutions,
as defined in Section 515.333, are now required to apply to
OFAC and receive specific authorization as remittance forwarders
before providing such services. Depository institutions continue
to be authorized by general license, however, to provide services
related to other authorized financial transactions. For example,
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.
All of OFAC's information materials, including its
country brochure on Cuba, will be updated as soon
as possible before June 30. For a complete set of today's
amendments to the Cuban Assets Control Regulations visit this
link.
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