Treasury, State And Commerce Implement Regulations Pursuant To The Trump Administration's Cuba Policy

Key Points

On November 9, 2017, the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC), the U.S. Department of State, and the U.S. Department of Commerce's Bureau of Industry and Security (BIS) took coordinated actions to tighten U.S. sanctions against Cuba, pursuant to President Trump's “National Security Presidential Memorandum on Strengthening the Policy of the United States Toward Cuba” (the “Presidential Memorandum”) issued on June 16, 2017. Opportunities for commercial engagement remain available to U.S. companies with interests and strategic opportunities in Cuba. However, new restrictions on certain entities and persons in the country imposed by the Trump administration will require persons subject to U.S. jurisdiction to engage in enhanced diligence to ensure compliance with these measures. OFAC amended the Cuban Assets Control Regulations (CACR) to prohibit persons subject to U.S. jurisdiction1 from engaging in direct financial transactions with entities and sub-entities identified on a new list—the Cuba Restricted List. OFAC also tightened restrictions on some areas of generally authorized travel and expanded the scope of individuals deemed to be “prohibited officials of the Government of Cuba.” BIS issued related amendments implementing a general policy of denial for license applications to export items subject to the Export Administration Regulations (EAR) for use by entities and sub-entities on the Cuba Restricted List. Additionally, BIS expanded the scope of License Exception Support for the Cuban People (SCP) to encourage exports to Cuba for use in Cuban private-sector economic activities. The Cuba Restricted List

The Cuba Restricted List identifies entities and sub-entities that the Department of State has determined to be “under the control of, or act for or on behalf of, the Cuban military, intelligence, or security services or personnel” and with whom direct financial transactions would “disproportionately benefit such services or personnel at the expense of the Cuban people or private enterprise in Cuba.”

Listed entities include the ZEDM, two Cuban ministries, more than 80 hotels in districts across the island, two tourist agencies, five marinas, 10 stores in Old Havana, and more than 30 entities that directly serve the Cuban defense and security sectors. Also on the list are five major Cuban holding companies—GAESA, Grupo de Turismo Gaviota, Compañía Turística Habaguanex S.A., UIM and Corporación CIMEX—as well as several of their subsidiaries in industries ranging from fashion to beverage manufacturing. The hotels included on the Cuba Restricted List do not include the Cubanacan and GranCaribe hotels or hotels for which U.S. persons previously received licenses from OFAC. The Department of State has stated that it will update the Cuba Restricted List periodically.

Limitation on Scope of Affected Entities: Unlike the OFAC list of Specially Designated Nationals and Blocked Persons and other sanctions lists maintained by OFAC, entities or sub-entities that are owned or controlled by an entity or sub-entity on the Cuba Restricted List maintained by the Department of State are not treated as restricted, unless they are also specifically named on the Cuba Restricted List. This limitation is...

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