RABINOWITZ, BOUDIN, STANDARD, KRINSKY & LIEBERMAN, P.C.
ATTORNEYS AT LAW
45 BROADWAY, SUITE 1700
NEW YORK, NY 10006-3791
___
TELEPHONE (212) 254-1111
MICHAEL KRINSKY
212 254 1111 Ext. 102
mkrinsky@rbskl.com
February 3, 2011
Re: Amendments to the Cuban Assets Control Regulations – January 28, 2011
At the request of the Christopher Reynolds Foundation, we provide this preliminary
analysis of the Obama Administration’s new amendments to the U.S.’s embargo regulations, the
Cuban Assets Control Regulations, published in the Federal Register on January 28, 2011.
The Obama Administration is working on potentially important Guidelines to the
amendments, which it hopes to issue within the next two weeks or so. We will supplement this
memorandum after the Guidelines are issued.
The new amendments principally concern:
Educational activities in Cuba for U.S. college and university students (I, p. 3
below)
Academic seminars, conferences and workshops in Cuba sponsored or cosponsored
by U.S. colleges and universities (I, p. 7 below)
“People-to-people” educational exchanges in Cuba (II, p. 8 below);
Clinics and workshops in Cuba (III, p. 9 below);
Travel for religious activities in Cuba (IV, p. 10 below);
Remittances to religious organizations in Cuba (IV, p. 11 below);
Free-lance journalism projects in Cuba (V, p. 12 below);
Remittances to Cuban nationals in addition to family relatives (VI, p. 12 below);
and
Cuban nationals permanently resident in third-countries (VII, p. 13 below).
The January 28, 2011 amendments may be found on the website of the U.S. Treasury
Department’s Office of Foreign Assets Control, which administers the Cuban Assets Control
Regulations. Go to http://www.treas.gov/ofac.
OFAC’s Forthcoming “Guidelines”
The Obama Administration intends to issue Guidelines to the new amendments within the
next two weeks or so. The Guidelines are likely to determine in important respects whether the
amendments are applied broadly or narrowly. This is particularly so for the amendments
concerning “people-to-people” educational exchanges, clinics and workshops, and religious
activities. Similarly, and also critically, the Guidelines can establish either a streamlined or a
cumbersome application process.
In the following analysis, we flag with underlines some of the more important issues that
the Obama Administration may address in formulating the Guidelines. We would expect that
those in favor of expanded travel to Cuba, and perhaps those opposed, will attempt to engage the
Administration over those issues, among others.
In addition to making substantive policy decisions on the scope of several provisions, the
Obama Administration will have to take into account OFAC’s severely limited staffing. A
bottleneck, severely limiting the efficacy of the new amendments, would be created were the
Guidelines to establish an elaborate application process for the issuance of specific licenses, or
limit specific licenses in their duration or frequency of use.
The United States Department of Treasury’s Office of Foreign Assets Control (“OFAC”)
administers the Cuban Assets Control Regulations (“CACR”), with guidance from the State
Department and, on occasion, from the National Security Council and the White House as well.
OFAC will draft and issue the Guidelines.
Major Changes
The January 28 amendments include both new “general licenses” and new provisions
authorizing OFAC to issue “specific licenses.” “General licenses” are provisions in the CACR
that, in and of themselves, authorize the described activity. “Specific licenses,” in contrast, are
issued by OFAC on application, and authorize the applicant to engage in the activity described in
the license.
Among the major changes made by the January 28 amendments are the following:
Adoption of a general license authorizing U.S. colleges and universities to have their
students engage in educational activities in Cuba, with no minimum length of the
student’s stay in Cuba.
o Previously, U.S. colleges and universities were required to apply for specific
licenses, and approval was given only for programs involving a minimum stay
in Cuba of ten weeks;
Addition of a provision authorizing OFAC to grant specific licenses to U.S. colleges
and universities to sponsor or co-sponsor academic seminars, conferences and
workshops in Cuba, and for their faculty and students to participate in the licensed
events;
Restoration of a provision authorizing OFAC to grant specific licenses to organize
and participate in “people-to-people” educational exchanges in Cuba;
Restoration of a provision authorizing OFAC to grant specific licenses to organize
and participate in “clinics” and “workshops” in Cuba;
Adoption of a general license authorizing “religious organizations” and its members
and staff to engage in “religious activities” in Cuba;
Adoption of a general license authorizing remittances to “religious organizations” in
Cuba;
Adoption of a general license authorizing remittances up to $500 every three months
to any Cuban “national,” and a supplemental provision authorizing OFAC to issue
specific licenses to remit additional sums to support the development of private
businesses.
I. U.S. College and University Educational Activities
1. General License for U.S. College and University Educational Activities -§ 515.565(a)
The six categories of educational activities authorized by general license:
The amendments add a general license authorizing colleges and universities, and their
students and faculty, to carry on the same six categories of educational activities that had been
previously authorized by specific licenses. The authorized activities are:
(1) Structured educational programs in Cuba that are part of a course offered for credit by
an accredited U.S. undergraduate and graduate degree-granting academic institution
(hereafter “ U.S. college or university”);
(2) Academic research specifically related to Cuba for the purpose of obtaining a
graduate degree at a U.S. university, provided that the research in Cuba will be
accepted for credit toward that degree;
(3) Formal courses of study at a Cuban academic institution, provided that the formal
course of study will be accepted for credit towards the student’s undergraduate or
graduate degree;
(4) Teaching at a Cuban academic institution, provided the teacher is regularly employed
in a teaching capacity at a U.S. college or university and will teach at the Cuban
academic institution for a period of no less than 10 weeks;
(5) A Cuban “scholar” teaching or engaging in other scholarly activity at a U.S. college
or university, and payment of a stipend or salary to the scholar. Note that a visa must
still be granted by the State Department;
(6) The organization and preparation of the above five activities by faculty or staff
(including adjunct faculty and part-time staff) of the U.S. college or university.
Structured Educational Programs in Cuba, and Formal Courses of Study at Cuban
Academic Institutions
Duration Requirement:
The amendments eliminate the 10-week minimum duration requirement imposed by the
Bush Administration on two categories of educational activities: structured educational programs
in Cuba that are part of a course offered for credit by a U.S. college or university, and formal
courses of study at a Cuban academic institution.
The general license imposes no requirements at all as to the length of stay in Cuba for
these two categories.
Credit Requirement:
The general license requires that, with respect to these two categories of educational
activities, the student’s work in Cuba must be accepted by the U.S. college or university at which
the student is enrolled for credit toward his or her undergraduate or graduate degree.
The “credit” requirement may limit the ability of some U.S. academic institutions, on
account of their own constraints, to organize short-term programs in Cuba under the general
license. However, OFAC has the authority to grant specific licenses authorizing a U.S. college
or university’s educational program even if credit is not earned. It remains to be seen whether
OFAC will exercise that authority, and in what circumstances.
In contrast to the Obama Administration’s “credit” requirement, the Clinton-era
provision, until later amended, authorized colleges and universities to organize structured
educational programs in Cuba for their students without any requirement that the student receive
credit; the program in Cuba only had to be part of a “course” offered by the U.S. college or
university.
A student’s participation in another U.S. college or university’s program:
The general license permits a student enrolled at one U.S. college or university to
participate in educational activities in Cuba through another U.S. college or university, provided
that the student will receive credit at his or her own college or university. The Bush
Administration prohibited this practice.
In the case of structured educational programs in Cuba, the general license imposes a
double credit requirement when a student at one college or university is participating in a
program sponsored by another college or university. As noted, the student must receive credit
toward his or her degree at the student’s own institution. In addition, the program must be part
of a course offered at the second institution for credit to its own students.
Graduate research:
In a highly questionable development, OFAC recently construed specific licenses for
graduate research to authorize only research for the student’s masters or doctoral thesis. We see
no basis for this limitation in the text of the newly adopted general license, and would consider
OFAC’s imposition of such a limitation on the general license to be legally untenable.
Adjunct faculty and part-time staff:
The general license allows a U.S. college or university to use adjunct faculty or part-time
staff to organize and run structured educational programs in Cuba, and assist students enrolled in
formal courses of study at Cuban academic institutions. The Bush Administration required that
U.S. colleges and universities utilize only “full-time permanent employees.”
U.S. faculty teaching at a Cuban academic institution:
The general license, like the specific licenses previously issued to college and universities
under the superseded provision, authorizes faculty to teach at a Cuban academic institution, but
retains the limitations of the superseded provision: (a) that the teacher be “regularly employed”
in a teaching capacity at the sponsoring U.S. college or university; and (b) that the teaching “be
no shorter than 10 weeks.”
The general license does not define “regularly employed.” As confirmed by OFAC’s
interpretation of that term in comparable context (such as the general license for journalists),
“regularly employed” includes persons who are not full-time employees.
No dollar limitation on payment of fees and other transactions directly incident to
the educational activity:
The general license authorizes not only travel-related transactions (for example, housing
and meals) but also “additional transactions that are directly incident” to the licensed activity,
such as payment of fees or tuition to the University of Havana. The travel-related transactions
are currently limited to $179 per day but there is no limit on what can be spent on “additional
transactions directly incident” to the licensed activity.
Letter from sponsoring U.S. college or university:
To travel under the general license, the U.S. person must carry a letter from the
sponsoring U.S. college or university signed by the person designated as the official responsible
for overseeing the institution’s Cuba travel program by relevant dean, academic vice-president,
provost or president of the institution.
In the instance of a student enrolled at one U.S. college or university participating in an
educational activity sponsored by another college or university, it is the latter that provides the
required letter. The letter must state that the student will receive credit at his or her own college
or university.
Cuban scholars teaching or engaging in other scholarly activity at U.S. colleges or
universities:
The general license authorizes a Cuban “scholar,” not simply a Cuban academic, to teach
or engage in other “scholarly” activity at U.S. colleges and universities, and to be paid stipends
and salaries. The CACR does not define “scholar” or “scholarly” activity; both terms may
reasonably be construed broadly.
Note that the general license does not obviate the need to obtain a visa issued by the U.S.
State Department.
2. Specific Licenses for Three Categories of Educational Activities -§ 515.565(b)(1)
In addition to the above general license, the new amendments permit OFAC to issue
specific licenses authorizing three of the educational activities otherwise authorized by the
general license in instances when the general license does not apply for some reason. The three
activities are research for a graduate degree; participation in a formal course of study at a Cuban
academic institution; and teaching at a Cuban academic institution.
OFAC could use this provision to license, for example: structured educational programs
run by a U.S. college or university even though credit toward a degree is not offered; teaching at
a Cuban university for less than 10 weeks; or U.S. experts teaching at a Cuban university even
though they are not regularly employed by a U.S. college or university.
In our view, there is good reason for the Guidelines to establish clear criteria for its grant
of specific licenses under this provision, rather than make ad hoc and potentially arbitrary or
inconsistent licensing decisions on individual applications.
3. Specific Licenses for U.S. Academic Institutions to Sponsor or Co-Sponsor
Academic Seminars, Conferences and Workshops Related to Cuba or Global
Issues Involving Cuba - § 515.567(b)(3)
The amendments authorize OFAC to grant specific licenses to U.S. colleges and
universities (a) for “sponsorship or co-sponsorship” of “academic seminars, conferences, and
workshops” in Cuba “related to Cuba or global issues involving Cuba,” and (b) attendance at the
sponsored or co-sponsored event by “faculty, staff, and students” of the licensed U.S. institution.
Those attending would be able to pay a fee, directly or indirectly, to the Cuban co-sponsor or
host of the event.
Unless OFAC indicates to the contrary in the Guidelines or specific licenses, it may be
assumed that “sponsorship or co-sponsorship” includes organizing and running the event, either
with or without the participation of a Cuban counterpart.
The Obama Administration’s adoption of a specific license regime for these categories of
activities rather a general license is fraught with potential difficulties, including OFAC’s possible
intrusion on academic freedom and autonomy. Why would some U.S.-sponsored academic
events be licensed and others not, except for OFAC’s approval or disapproval of their academic
content or viewpoint? In our view, OFAC would do well to establish objective criteria unrelated
to content and viewpoint.
4. Banking Transactions by U.S. Academic Institutions
The new amendments include an explanatory “Note” that accredited U.S. colleges or
universities are permitted to open and maintain accounts at Cuban financial institutions, in order
to have funds available for the travel-related transactions and other transactions directly incident
to the licensed activities. For example, a U.S. college can open an account at a Cuban bank
sufficient to cover the anticipated expenses of its students’ studying in Cuba.
In our view, this has always been authorized, but the explanatory “Note” in the
amendments is nonetheless helpful. As is often done for other licensed transactions, funds could
be transferred to Cuban banks by wire transfer from U.S. banks through third-country banks.
5. General License for Remittances to Students in Cuba Pursuant to an
Educational License – § 515.570(d)
The amendments add a general license that authorizes remittances to close relatives who
are U.S. college or university students licensed to be in Cuba for educational activities. The
student is limited to $ 179 per day for travel-related expenses (hotel or other accommodations
and meals, for example); there is no limitation on other expenditures directly incident to the
licensed activity, for example, payment of fees or tuition to the University of Havana.
II. Specific Licenses for “People-to-People” Educational Exchanges – § 515.565(b)(2)
The new amendments authorize OFAC to issue specific licenses for “educational
exchanges” that “take place under the auspices of an organization that sponsors and organizes
such programs to promote people-to-people contact.”
Businesses as well as not-for-profits and academic institutions may qualify as an
“organization that sponsors and organizes” programs to promote people-to-people contact.
The provision is identical in its wording to the Clinton Administration’s 1999 “people-topeople”
provision. We do not know yet whether the Obama Administration intends to utilize this
provision in the same expansive way that the Clinton Administration used the 1999 provision;
the amendments permit but do not require a comparably robust approach. Much will depend on
the Guidelines.
When the identical provision was in effect during the Clinton Administration, OFAC
granted numerous specific licenses that permitted a wide-range of businesses and institutions to
carry out successful programs in Cuba.
Among the many different types of organizations that operated programs under “peopleto-
people” specific licenses were:
For-Profit Businesses
Alumni Associations
Museums
Professional Associations
Civic Associations
Cultural Institutions
Business Associations
Religious Institutions (for activities not deemed “religious activities”)
Advocacy Organizations
Student Associations
Other Not-for-Profits
Groups organized on an ad hoc basis for purposes of traveling to Cuba
Often, participation in their programs was not limited to members but was offered more broadly.
Although “people-to-people” educational exchanges were robust under the Clinton
Administration, the Bush Administration moved to narrow the exchanges through restrictive
“Guidelines.” The Bush Administration also moved to limit these exchanges by taking the
position that licensees could not organize programs in Cuba led by others, or enter into certain
other types of arrangements that OFAC considered improper “lending” of their licenses. After
sharply curtailing “people-to-people” educational exchanges in these ways, the Bush
Administration finally eliminated this category of travel altogether in March 2003.
It remains to be seen whether the Obama Administration will adopt Guidelines that give
“people-to-people” educational exchanges an expansive reach or impose the crippling
restrictions of the Bush Administration.
Unless removed by the Obama Administration, OFAC’s limitations on licensed Travel
Service Providers (“TSPs”) may constrict “people-to-people” educational exchanges. TSPs are
businesses that are licensed by OFAC to provide services related to travel to Cuba. Under
OFAC’s current rules, OFAC will not issue “people-to-people” specific licenses to TSPs.
Rather, TSPs may only service organizations or individuals that have themselves obtained
people-to-people licenses.
The specific licenses issued under this provision will grant authority not only to engage in
travel-related transactions (limited to $179 per day) but also other transactions directly incident
to the licensed activity, for example, payment to a Cuban institution or business for helping
arrange the educational exchanges.
III. Specific Licenses for Public Performances, Clinics, Workshops, Athletic and Other
Competitions and Exhibits – § 515.567
1. Clinics and Workshops
The amendments restore OFAC’s authority to grant specific licenses authorizing
participation in a “clinic” or “workshop” in Cuba, provided that that the clinic or workshop in
Cuba is “organized and run, at least in part, by the licensee.”
There was no limitation in the Clinton-era provision that the clinic or workshop be
“organized and run,” even in part, by the U.S. licensee. That restriction was added by the Bush
Administration.
The event must “be open for attendance, and, in relevant situations, participation, by the
Cuban public.”
The provision is devoid of any indication as to what types of “clinics” or “workshops”
OFAC will license. It is possible that the Obama Administration will use the Guidelines to
provide broad criteria and paradigms, but OFAC’s past Guidelines on “clinics” and “workshops”
left much to guesswork and ad hoc licensing decisions.
Before the Bush Administration’s repeal of the predecessor provision, OFAC licensed a
wide-range of clinics and workshops. Amateurs and enthusiasts, as well as professionals and
students in the field, often were able to participate. OFAC used the following example to
illustrate at least one aspect of its licensing policy: OFAC would license “a group of ballet
dancers wish[ing] to travel to Cuba to hold workshops with the Cuban ballet where they will,
using hands-on techniques, exchange lessons on Cuban and American ballet techniques.”
“Clinics” and “workshops” do not necessarily involve an exchange between more or less
equals. A “clinic” might involve, for example, Cuban professional dancers instructing U.S.
amateurs or enthusiasts on Cuban forms of social dancing.
The specific licenses authorized by the provision will license not only travel-related
transactions (up to $179 per day) but “other transactions directly incident” to the licensed
activity. A typical example of the latter would be payment of a fee to the Cuban counterpart of
the licensed U.S. entity for helping organize and run the clinic or workshop.
2. Profits
The prior provision (which authorized the grant of specific licenses for participation in
public performances, certain athletic events and exhibitions) required that all “U.S. profits from
the event after costs [be] donated to an independent non-governmental organization in Cuba or a
U.S.-based charity, with the objective, to the extent possible, of benefiting the Cuban people.”
The new provision (which covers clinics and workshops as well) expands the permissible
objectives to include “promoting people-to-people contact.”
3. Athletic Competitions
The new provision does not change the existing provision authorizing OFAC to issue
specific licenses for participation under the auspices of an international sports federation. The
Clinton-era, 1999 regulations provided a general license for those activities.
IV. Religious Activities
1. General License to Engage in Religious Activities – § 515.566(a)
The previous regulations authorized OFAC to issue specific licenses to “religious
organizations” to engage in “religious activities” in Cuba. The new amendments replace this
specific license provision with a general license.
The general license applies not only to the religious organization but to its “members and
staff.” The religious organization must provide a letter confirming that they are traveling to
engage in religious activities “under the auspices of the organization.”
The general license authorizes both travel-related transactions (with a limit of $179 per
day) and other transactions that are directly incident to religious activities in Cuba. The latter
would include, for example, U.S. persons providing services.
The general license does not cover financial or material donations. However, financial
donations may be authorized either by the new general license for remittances to “religious
organizations in Cuba,” discussed below, or by specific license. Material donations of U.S.-
origin commodities must be authorized by the Commerce Department; and material donations of
third-country commodities must be authorized by specific OFAC license.
The general license permitting “religious organizations” to engage in “religious
activities” essentially mirrors the previous provision for the grant of specific licenses. OFAC
generated substantial controversy by how it defined “religious organizations” and “religious
activities” for purposes of that now superseded provision. There is no legal impediment to
OFAC agreeing that “religious organizations” and “religious activities” have a broader scope in
the general license.
Under its Guidelines to the now superseded provision, OFAC considered entities to be
“religious organizations” only if (a) they had an “established congregation served by an
organized ministry,” provided “regular religious services,” provided “religious education of the
young,” disseminated a formal religious doctrine, and had a membership not associated with any
other denomination; or (b) the IRS had determined that they were “churches, their integrated
auxiliaries or conventions or associations of churches.”
Those Guidelines defined the “religious activities” that a “religious organization” might
pursue under a specific license as including, but not being limited to, attendance at religious
services or activities that contribute to the development of a Cuban counterpart’s religious or
institutional development such as: ministerial training, education, or licensing; religious school
development; youth outreach; training in or the conducting of marriage seminars; construction of
places of worship or other facilities for full-time use by a Cuban counterpart; production and
distribution of religious materials; assistance in holding religious services; religious preaching or
training; and training or assistance in church administration.
2. General License for Remittances to “Religious Organizations” - § 515.570(c)
The amendments provide a general license for remittances to “religious organizations” in
Cuba in support of “religious activities,” without any limitations as to amount or frequency.
The remittance may be made by any U.S. individual, partnership, association, corporation,
or other organization.
The same issues as to what will be considered “religious organizations” and “religious
activities” arise under this general license as arise under the general license for “religious
organizations” to carry out “religious activities” in Cuba.
3. Specific License for Religious Activities - § 515.566(b)
The amendments authorize OFAC to issue specific licenses in its discretion authorizing
“religious activities” not authorized by the above two general licenses. For example, OFAC, in
its discretion, could license entities that do not qualify as “religious organizations” within the
meaning of the general licenses to engage in religious activities in Cuba; or license financial
donations to Cuban entities that do not qualify as “religious organizations” to support their
“religious activities.”
Unless OFAC establishes broad and objective criteria in the new Guidelines, there will be
substantial difficulties, constitutional and otherwise, in OFAC drawing distinctions in its
licensing decisions between different forms of “religious organizations” and “religious
activities.”
4. Banking Transactions by Religious Organizations
The new regulations include an explanatory “Note” that religious organizations are
permitted to open and maintain accounts at Cuban financial institutions, in order to cover
transactions authorized by the general or specific licenses discussed above.
In our view, this was always authorized, but the explanatory “Note” is helpful. As is
done for other licensed transactions, funds could be transferred to Cuban banks by wire transfer
from U.S. banks through third-country banks.
V. Specific Licenses for Free-Lance Journalistic Activities - § 515.563
The CACR provides a general license authorizing travel for journalistic activities by
persons “regularly employed” as journalists by news gathering organizations. The CACR also
used to authorize OFAC to issue specific licenses for travel to do “research in Cuba for a freelance
article.” The amendments expand the scope of the provision for specific licenses by
modifying it to cover “free-lance journalistic projects,” not simply “articles.” The amendment
should make it easier, for example, to obtain specific licenses to engage in journalistic activities
in media in addition to print media, such as making a documentary film.
VI. Remittances
1. General License for Remittances to Any Cuban “National” – § 515.570(b)
The amendments add a new general license that authorizes remittances to Cuban
“nationals.” The remitter may send funds to an unlimited number of Cuban “nationals.” The
total remittances to any one Cuban “national” cannot exceed $500 in any consecutive threemonth
period.
The potential recipients, Cuban “nationals,” are defined by the CACR to mean not only
individuals but any partnership, association, corporation or other organization in Cuba. The only
exclusions are officials of the Cuban Government and members of the Cuban Communist Party
at a certain level.
The remitter sending funds to Cuban “nationals” can be an individual, partnership,
association, corporation or other organization. The new amendments authorize remittances by
“persons,” which the CACR define to mean an individual and each of these entities.
The general license states that remittances may be made “to support the development of
private businesses,” but do not confine remittances to that or any other purpose.
The general license for remittances does not authorize U.S. persons to make investments
in or loans to Cuban businesses or to become partners or participants in those businesses, or to
enter into agreements with the recipients that they will receive something in return for the
remittances at a future date (even on the condition that the return will not be made until
permitted by U.S. law).
The new regulations do not make any changes to the general license for family remittances
adopted by the Obama Administration in September 2009. That general license authorizes
remittances to “close relatives” in Cuba without any limitation as to amount or frequency, and
defines “close relatives” extremely broadly to include any individual related by blood, marriage
or adoption who is no more than three generations removed from the recipient or from a common
ancestor with that person.
2. Specific Licenses for Remittances to “Non-Governmental Entities” and
Individuals to Support the Development of Private Businesses – § 515.570(g)
The amendments supplement the general license for remittances up to $500 every three
months to “Cuban nationals” with a provision authorizing OFAC to issue specific licenses
permitting remittances to “individuals or independent non-government entities to support the
development of private businesses,” including specifically but not limited to “small farms.”
The provision does not define “independent non-government entities.”
Under this provision, OFAC can issue specific licenses that set whatever limits as to
amount and frequency that OFAC wishes, or without any limits.
3. Carrying General License Remittances – § 515.560(c)(4)(i)
The new amendments authorize persons authorized by general or specific license to travel
to Cuba to bring with them remittances authorized by general licenses (except for the general
license for emigration purposes), but only in an aggregate amount not to exceed $3,000 on any
one trip. The CACR previously provided this authorization for family remittances only.
VII. Cuban Nationals Permanently Resident in Third-Countries – § 515.505
Prior to the amendments, Cuban nationals taking up permanent residence in a thirdcountry
would have to apply to OFAC to become unblocked nationals. Until that application
was granted, they would remain fully subject to the CACR, with the consequence that persons
subject to U.S. jurisdiction could not engage in unlicensed transactions with them, and their
property in the U.S. remained blocked.
The amendments retain the requirement of applying for and obtaining status as an
unblocked national for the unblocking of blocked property in the U.S. However, the
amendments provide a general license authorizing persons subject to U.S. jurisdiction to engage
in any other transaction with a Cuban national who is a permanent resident in a third-country. To
do so, the U.S. person must obtain copies of at least two documents indicating “permanent
residence” issued by the third-country, “such as a passport, voter registration card, permanent
resident alien card, or national identity card.”
Prohibition on TSPs Maintaining Offices in Cuba
OFAC prohibits TSPs – that is, businesses licensed by OFAC to provide services related
to travel to Cuba – from maintaining their own offices in Cuba, or engaging Cuban businesses to
act as agents. This prohibition will necessarily limit the impact of Obama Administration’s
amendments, given what is required to service travel of the nature and scope contemplated by the
amendments.
Correspondent Banking Relations
The CACR prohibits U.S. and Cuban banks from establishing correspondent banking
relations. While the transfer of funds is possible through third-country banks, the absence of
correspondent banking relations will drive up the costs and burden of making the necessary
transfers for travel and remittances authorized by the new amendments, as it does for family
travel and remittances.
Michael Krinsky
The foregoing does not constitute, and should not be construed as, legal advice. Anyone seeking
legal advice about the subjects of this memorandum, or about the United States embargo
regulations generally, should consult an attorney.
