Hotels And Hospitality In Cuba: OFAC And Obama Paving The Way

With more flights, relaxing regulations, a historic presidential trip to Cuba, and news of hospitality services expanding into Cuba, the pathway into Cuba for hotels and hospitality companies seems smooth. But businesses should look out for the potential hurdles and compliance risks. Don't fret - we can help you welcome your guests.

Reserve Your Room: Regulatory Background. Since President Obama announced the intent to improve our country's relationship with Cuba and its people a year and a half ago, several revisions to the sanctions regime have focused on easing restrictions related to travel between the two nations. In February 2016, Cuba and the United States agreed to reestablish commercial air travel between the two countries. According to media reports, this agreement means the potential for 110 daily round-trip flights in and out of Cuba, including 20 daily flights to Havana.

Soon after the agreement was announced, major U.S. airlines submitted applications to fly commercial flights to Cuba. Though tourist travel is still prohibited, twelve fairly broad categories of travel are authorized, including family visits, travel for government work, journalism, professional research, humanitarian work and educational activities, and "people-to-people" educational travel.

In mid-March of this year, the U.S. Department of Treasury's Office of Foreign Assets Control (OFAC) again revised the Cuban Asset Control Regulations (CACR), permitting more travel-related transactions. According to OFAC, the steps "expand opportunities for economic engagement between the Cuban people and the American business community." The agency announced the changes in preparation for President Obama's historic trip to Cuba.

People-to-people educational travel. Previously, the general authorization for educational travel required that trips took place under the sponsorship of an organization and required that a representative from the organization accompany the travelers. The regulations no longer require booking through an authorized organization when going to Cuba under the people-to-people educational travel general license. This means that U.S. persons can freely travel to Cuba to engage in educational exchange activities that enhance contact with the Cuban people, support civil society in Cuba, or promote Cubans' independence from their government, as long as they keep records of the travel transactions and full-time schedule of activities. Financial...