Today, in anticipation of President Obama’s visit to Havana next week, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced significant amendments to the Cuban Assets Control Regulations (CACR) that will further ease U.S. sanctions on Cuba. The changes will take effect tomorrow, March 16, 2016. U.S. dollars may now be used to conduct transactions in Cuba or with Cuban nationals, and U.S. citizens will now be permitted to travel individually to Cuba for educational purposes, instead of in groups. The most significant updates relating to U.S. banking institutions and educational travel are highlighted below.
- U.S. dollars may now be used to conduct transactions in Cuba or with Cuban nationals that are authorized pursuant to the CACR, such as payments for authorized telecommunication services.
- U.S. banks may now open and maintain bank accounts in the United States for Cuban nationals present in Cuba. For example, an author who is a Cuban national located in Cuba may open an account with a bank or online payment platform in the United States to receive payments for sales of her book. Upon receiving the payment, the U.S. bank will remit the payment to Cuba.
- U.S. banks may now process so-called “U-turn” transactions in which Cuba or a Cuban national has an interest. This means that U.S. banks may process funds transfers involving Cuban nationals that both originate and terminate in banks outside of the United States, where neither the originator nor the beneficiary is a U.S. person.
- Individuals may travel to Cuba individually for educational purposes, rather than only as a group with a U.S. organization. This change is intended to make authorized educational travel to Cuba more accessible and affordable. However, just as before, travelers will be required to engage in a full-time schedule of educational exchange activities. Tourism travel is still not permitted because lifting that prohibition would require an act of Congress.
Other areas of interest to U.S. exporters, such as the limited exemptions for exports of medicine, basic medical devices and agricultural commodities, have not been further expanded because most of these would require legislative action.
The full amendment to the CACR can be found here. Additionally, OFAC has published Frequently Asked Questions pertaining to the updated regulations and a Fact Sheet summarizing the changes.
The foregoing has been prepared for the general information of clients and friends of the firm. It is not meant to provide legal advice with respect to any specific matter and should not be acted upon without professional counsel. If you have any questions or require any further information regarding these or other related matters, please contact your regular Nixon Peabody LLP representative. This material may be considered advertising under certain rules of professional conduct.