With President Obama’s recent historic trip to Cuba, there has been a lot of focus on the future of the longstanding US embargo on Cuba. Obama’s trip capped off an 18 month period during which the US Government amended some of the embargo rules in an effort to begin charting a new course in US-Cuba relations. Although some of these rules have been revised to allow certain types of interactions between the US and Cuba, these opportunities are fairly limited and are subject to significant restrictions. Given the potential for criminal penalties for violating the Cuba embargo, as well as the overall complexity of the Cuban Sanctions Regulations, it is important for US citizens, residents and companies to tread carefully with respect to any activities involving Cuba. Although it may appear that times are changing, the US embargo on Cuba — at least for now — remains in place. The following is a brief overview of the current US rules governing travel to Cuba, and business transactions involving Cuba.
Many Americans are fascinated with Cuba, and there has been a surge of interest in traveling there (no doubt in part to see firsthand the many vintage cars lining the streets). If you are contemplating a trip to Cuba, the most important thing to know is that the US Cuba Sanctions Regulations still prohibit US citizens and residents from traveling to Cuba solely for tourism purposes. There are, however, 12 categories of travel to Cuba that are now allowed under the Cuba Sanctions. These include, for example, travel for “people to people” educational purposes, professional research and professional meetings, family visits, religious activities, public performances or athletic competitions, humanitarian projects, activities of private foundations or institutes, and transmission of information materials.
If you want to consider taking advantage of any of these authorized opportunities to travel to Cuba, be prepared for the fact that each category of authorized travel is subject to specific requirements and record-keeping obligations. As an example, “people to people” educational travel is permitted provided that the traveler maintains records demonstrating a full-time schedule of educational exchange activities specifically intended to enhance contact with the Cuban people. Before March 16, 2016, the regulations required all “people to people” travelers to be accompanied by a sponsoring organization. Now, you are allowed to travel on your own for people-to-people exchanges, but a full-time schedule of educational activities is still required, and you are also still required to maintain records demonstrating that schedule. If you want to go to Cuba, but don’t want to deal with these requirements, travel with an authorized tour company that will take care of it all for you.
In addition, professionals are permitted to travel to Cuba for professional research or meetings, but their schedule cannot include free time in excess of that consistent with a full-time professional schedule, the purpose of their meetings cannot be to promote tourism, and the research or meetings must be related to the traveler’s professional background or area of expertise. Also, it does not appear that travelers going to Cuba for professional meetings can bring the family along, because the rules specify that each traveler must meet these specific requirements in order for the travel to be allowed.
The other 10 categories of permitted travel are subject to similar restrictions, so be sure you know what specific rules apply before arranging any travel plans. From a practical standpoint, also be aware that arranging travel to Cuba on your own may be difficult, given that direct commercial flights from the US are not yet allowed, and many Cuban businesses do not accept US credit and debit cards. Finally, if you do make it to Cuba, take into account restrictions on the total value of Cuban goods you are allowed to bring back into the United States.
Doing Business In/With Cuba
If you or your company is considering doing business in or with Cuba, the most important thing to know is that US citizens, residents and companies are still generally prohibited from doing business with Cuba without a US Government license. However, since early 2015, the US authorities have expressed a willingness to grant licenses for certain types of US exports destined to support the development of civil society in Cuba.
For example, US authorities will consider, on a case-by-case basis, licensing US exports to “meet the needs of the Cuban people” (including things like building materials, tools, and equipment for private sector use, and items intended for artistic endeavors, education, public health, and public transportation). This case-by-case review policy also applies to exports of items that would enable future exports from Cuba of items produced by the Cuban private sector.
Also, the US Government has expressed a general intent to approve license requests for exports of telecommunications equipment, items for human rights organizations or other organizations promoting civil society in Cuba, items destined for US news bureaus in Cuba, and certain agricultural items, medicines and medical devices. Finally, educational grants and awards for educational and philanthropic efforts in Cuba will be authorized. US authorities have made it clear, however, that there is a general policy of denial for the export of items destined for use by state owned enterprises/organizations in Cuba.
The US Government will allow some limited business with Cuba, but only for certain specific items intended for certain types of end users, and in most cases you first must obtain an export license from US authorities.
Although it may appear that the door to Cuba is beginning to open, most activities involving Cuba are still subject to significant restrictions for US citizens, residents and companies. Those intending to take advantage of limited permissible travel and business opportunities in Cuba must ensure that they do so in full compliance with the detailed requirements set forth in the US Cuban Sanctions regulations.
Lori Manca is a Washington, DC based corporate compliance consultant, helping clients develop compliance programs and resolve compliance questions and issues. For additional information about the doing business or traveling to cuba, or for assistance with other compliance matters, please contact Lori directly at firstname.lastname@example.org. Linked-in Article
The post above reflects the opinions of the author but does not constitute legal advice. Persons seeking legal advice should consult the attorney of their choice.