Cuban Regulations and Recent Easing of Activities in Cuba

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1 Cuban Regulations and Recent Easing of Activities in Cuba As you are aware, the President has implemented several initiatives to ease the 50-year-old US embargo with Cuba. This was announced on December 17 th, A. Agencies The Cuban Regulations are primarily administered by the US Treasury Department, Office of Foreign Assets Control (OFAC). This agency s regulations control funding and the authorizes types of activities that are permitted through General Licenses, which limit approved activities to academic research and exchanges, sporting competitions, cultural activities, and humanitarian efforts. A new focus, less applicable to SI, is support for activities related to entrepreneurship, energy efficiency, environmental programs, and support for democracy initiatives. These activities are approved under Support for the Cuban People. OFAC also debars parties by placing them on government denial lists and our activities cannot benefit government agencies directly. For groups that do not fit into specific categories, OFAC issues specific licenses. The US Department of Commerce, Bureau of Industry and Security (BIS) shares responsibility for approving the export of items that is eligible without a license under the new rules, such as building materials and telecommunications equipment, whether donated or sold commercially. B. Activities that are permitted without a specific license Both agencies have expanded provisions where an export license is not required. OFAC calls them General Licenses and BIS calls them License Exceptions. The embargo is technically still in effect. It is through the addition of new General Licenses and License Exceptions that the President eased the embargo without requiring legislation by Congress. C. SI Approval of Activities with Sanctioned Countries What this means for SI-affiliated person is that it is necessary to formally assess that the proposed SI activity in Cuba to ensure it qualifies for one of the General Licenses under OFAC rules or that export of equipment meets BIS license exceptions. How to Determine if My Activity Qualifies? The SI-affiliated person should contact the ECO and prepare a brief description of the activity in writing to be detailed on our Export Compliance checklist. This description should include the dates of travel, the activities, and if the traveler is bringing or returning with funds or items.. The ECO then makes a determination whether the activity can be classified as eligible for a General License or License Exception or if a specific license is required. The new regulations mandate that persons engaging with Cuba keep a written record, which is accomplished at SI on the Export Compliance Checklist. The ECO can make a determination in writing Cuba FAQs 1

2 that an activity or export meets a General License or License Exception, or if a specific license is required. D. Goals of New Easing The regulations encourage people-to-people contact when organized by formal settings through academic, cultural, sporting and religious organizations. The new General Licenses have eased the types of qualifying activities, the type and amount of funding, the ability to export and import items, etc. These are explained below: General Licenses for Approved Travel OFAC no longer requires travel to be arranged by specifically approved travel companies. A traveler may use their US passport and may make travel arrangements with any travel company offering services. A visa from Cuba is required. Travelers are no longer prohibited from using US funds and may use US-issued credit cards when traveling. Bringing items for Research Support for Cuban People Specific activities related to cultural and research organizations have been broadened. Researchers may bring items tools of the trade needed for their research and leave the items in Cuba for up to 2 years. NOTE: Items that are export controlled require a specific license from BIS and might not be approved. Tools for building and agricultural activities are permitted when benefitting Cuban People, not any government organizations. Types of Groups that are authorized Cultural, religious, academic and sporting groups may travel. Conferences Open conferences that have international in participation qualify for a general license. Personal communication devices General License CCD (Part of EAR) permits the import of 17 categories of communication devices (cell phones, laptops, routers, digital cameras, security software, etc.) into Cuba either for donation or for sale that enhance access to internet, upgrades current communication and provides access to news bureaus to general public. The item must be an Export Control Classification Number of EAR99 or controlled at Anti Terrorism level. No items on the Commerce Control List or US Munitions List can be exported to Cuba. Imports from Cuba to the US: Cuba FAQs 2

3 Travelers may bring up to $400 worth of items back from Cuba, not to exceed $100 in alcohol and cigars. Gift parcels to Cuba Multiple packages can now be consolidated into a bulk shipment. Q: How much money may I spend in Cuba? A: There is a limit of $10,000 per family group. FAQs Q: Can I use US credit cards? A: Yes. Q: Can I leave equipment in Cuba for several months? A: You can bring items related to your research that are not export controlled and leave them for up to two years. Q: Can I add a few days vacation to my research visit? A: Any extra days need to be approved by OFAC. Only normal downtime likes a weekend between two weeks is permitted. Q: When a US researcher is visiting, can he/she bring microphones? A: As long as EAR99 or Anti-Terrorism controlled only and the equipment stays no more than 2 years. Q: Can we pay Cubans for related services? A: The ECO would have to know what the services are and consult with OFAC. Q: How much can we pay Cubans for services? Cuba FAQs 3

4 A: It is limited to $2000 per quarter. Q: Can we bring tools? A: As long as they are used for private sector hammers, tools or to support your research and they are not on any export control list. Q: Assuming an item is EAR99 how do we prove that item is sold to private sector? A: The regulations have no specifics, use normal due diligence. Q: Can we import items from a third country into Cuba? A: Reexports from a 3 rd country of more than 10% US origin items, exports of items on CCL, and items with more than a de minimis require an export license. Q: Will personal computer product be eligible: i.e. tablets, pcs for import into Cuba? A: US regulations permit the export. You need to check Cuban regulations for the import. License Exception CCD authorizes computers and mobile phones for non-government end-users. Q: What is permitted under temporary sojourn? A: The sojourn must meet FAA requirements. Unlikely they would approve other than a temporary sojourn. Q: There is not a lot of information about permitted carriers for passenger or charter vessels. Can US flagged vessels be permitted for travel to Cuba? A: Please direct this question to OFAC. Q: Are all mass market encryption items considered a consumer product? Are they okay for License Exception CCD? A: Not automatically, License Exception CCD specifies 17 categories of items. Cuba FAQs 4

5 Q: Can we export malware software and items? A: They are eligible for License Exception CCD if the software is going to individuals. Q: What changed for exports? A: Personal Communication Devices do not need to be donated. Gift parcels can be consolidated into bulk shipments. Q: Is there a hot line for questions about Cuba? A: There is not a specific hotline, call Exporter Services in DC and CA. Q: Can we make payments directly to a Cuban person? A: If the payment is directly related to an activity that is approvable under a General License, yes. If it is not directly related, the ECO will have to check with OFAC to confirm if a license is required, such as paying an employee of an academic institution to do side work to assist with research to determine if the activity is approvable for funds transfer and if the person is not a member of the Cuban government. 17 Items that can be exported to Cuba without an export license (license exception CCD : CONSUMER COMMUNICATIONS DEVICES (CCD) (a) Authorizations This section authorizes the export or reexport of commodities and software, either sold or donated, to Cuba or Sudan subject to the requirements stated herein. This section does not authorize U.S.-owned or - controlled entities in third countries to engage in reexports of foreign produced commodities to Cuba for which no license would be issued by the Department of the Treasury pursuant to 31 CFR (b) Eligible commodities and software Commodities and software in paragraphs (b)(1) through (17) of this section are eligible for export or reexport under this section to Cuba or Sudan. Commodities in paragraph (b)(18) of this section are eligible for export or reexport under this section to Sudan only. (1) Consumer computers designated EAR99 or classified under Export Control Classification Numbers (ECCN) 5A992.c or 4A994.b; (2) Consumer disk drives and solid state storage equipment classified under ECCN 5A992 or designated EAR99; Cuba FAQs 5

6 (3) Input/output control units (other than industrial controllers designed for chemical processing) designated EAR99; (4) Graphics accelerators and graphics coprocessors designated EAR99; (5) Monitors classified under ECCN 5A992.c or designated EAR99; (6) Printers classified under ECCN 5A992.c or designated EAR99; (7) Modems classified under ECCNs 5A991.b.2, 5A991.b.4., or 5A992.c or designated EAR99; (8) Network access controllers and communications channel controllers classified under ECCN 5A991.b.4 or designated EAR99; (9) Keyboards, mice and similar devices designated EAR99; (10) Mobile phones, including cellular and satellite telephones, personal digital assistants, and subscriber information module (SIM) cards and similar devices classified under ECCNs 5A992.c or 5A991 or designated EAR99; (11) Memory devices classified under ECCN 5A992.c or designated EAR99; (12) Consumer information security equipment, software (except encryption source code ) and peripherals classified under ECCNs 5A992.c or 5D992.c or designated EAR99; (13) Digital cameras and memory cards classified under ECCN 5A992 or designated EAR99; (14) Television and radio receivers classified under ECCN 5A992 or designated EAR99; (15) Recording devices classified under ECCN 5A992 or designated EAR99; (16) Batteries, chargers, carrying cases and accessories for the equipment described in this paragraph that are designated EAR99; (17) Consumer software (except encryption source code ) classified under ECCNs 4D994, 5D991 or 5D992.c or designated EAR99 to be used for equipment described in paragraphs (b)(1) through (b)(16) of this section; (c) Eligible and ineligible end-users (1) Organizations. (i) This license exception may be used to export or reexport eligible commodities and software to and for the use of independent non-governmental organizations in Cuba or Sudan. (ii) The Cuban Government or the Cuban Communist Party and organizations they administer or control are not eligible end-users. (iii) The Government of Sudan is not an eligible end-user for any item exported or reexported pursuant to this license exception except for consumer software that is authorized under paragraph (b)(12) or (b)(17) of this section and that is distributed free of charge. Cuba FAQs 6

7 (2) Individuals. This License Exception may be used to export eligible commodities and software to and for the use of individuals other than the following: (i) Ineligible Cuban Government Officials. Ministers and vice-ministers; members of the Council of State; members of the Council of Ministers; members and employees of the National Assembly of People's Power; members of any provincial assembly; local sector chiefs of the Committees for the Defense of the Revolution; Director Generals and sub-director Generals and higher of all Cuban ministries and state agencies; employees of the Ministry of the Interior (MININT); employees of the Ministry of Defense (MINFAR); secretaries and first secretaries of the Confederation of Labor of Cuba (CTC) and its component unions; chief editors, editors and deputy editors of Cuban state-run media organizations and programs, including newspapers, television, and radio; or members and employees of the Supreme Court (Tribuno Supremo Nacional). (ii) Ineligible Cuban Communist Party Officials. Members of the Politburo; the Central Committee; Department Heads of the Central Committee; employees of the Central Committee; and the secretaries and first secretaries of provincial Party central committees. Cuba FAQs 7