Today the Treasury Department’s Office of Foreign Assets Control (“OFAC”) issued new restrictions on remittances and “U-turn” transactions to Cuba, which will come into effect on October 9, 2019.  These restrictions are intended to further implement President Trump’s June 2017 National Security Presidential Memorandum, in which he outlined US policy toward Cuba under his administration and various policy actions to be taken by a number of agencies and departments.

These new restrictions build upon those announced on June 4, 2019, in which the US government prohibited US travelers from going to Cuba under the previous ‘group people-to-people educational’ travel authorization and further restricted travel by no longer permitting visits to Cuba via passenger and recreational vessels, including cruise ships and yachts, and private and corporate aircraft.

In addition to amending the Cuban Assets Control Regulations, OFAC issued 46 updated or new FAQs on Cuba. Although many of the changes were either cosmetic or to provide the relevant regulatory citations, some are worth noting.  In particular, FAQs 1, 40, 44, and 65 provide guidance on today’s amendments.  Additionally, FAQ 12 provides guidance on OFAC’s June 5 amendments related to “people-to-people travel.”

The amendments to OFAC regulations on remittances and U-turn transactions to Cuba represent the reinstatement of certain restrictions that were eased under the Obama administration as we described in our 2016 advisory.
Continue Reading Treasury tightens remittances to Cuba and prohibits “U-turn” transactions

Effective tomorrow the State Department is updating its Cuba Restricted List (press release here) to add 26 new subentities (along with amending the entries for 5 previously-listed subentities).  National Security Advisor John Bolton had previewed this action in a speech in Miami in which he labeled Cuba, Venezuela and Nicaragua the “Troika of Tyranny” and said the US government would be designating “over two dozen additional entities owned or controlled by the Cuban military and intelligence services to the restricted list of entities with which financial transactions by US persons are prohibited.”  Bolton had ominously warned that this “Troika” had “finally met its match” and that all three countries “will feel the full weight of America’s robust sanctions” under this new policy.  Bolton suggested that the Administration would implement a tough new sanctions policy against Cuba, quipping, in contrast to the Obama Administration, that “Our concern is with sanctions, not selfies.”

So what has been the follow up to this strident policy pronouncement?  So far, it has been to add several hotels and other seemingly minor entities to a sanctions list that itself has little practical impact in many cases.  What this list does under the US sanctions regulations, as we’ve previously advised, is limit the ability of US persons to use certain carve-outs from the Cuba embargo but only when engaging in “direct financial transactions” with one of the listed entities, including “by acting as the originator on a transfer of funds whose ultimate beneficiary is” on the list “or as the ultimate beneficiary on a transfer of funds whose originator is” on the list.  Because the Cuban embargo already prohibits US persons from engaging in most types of activity with Cuba, in many instances being on this list does not give rise to additional sanctions restrictions.  There is also an impact under US export controls, and these listed entities will generally not be eligible to receive goods, software or technology subject to US jurisdiction.     
Continue Reading New “Troika of Tyranny” Cuba Sanctions – More Bark Than Bite

Effective November 9, 2017, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) and the Department of Commerce’s Bureau of Industry and Security (BIS) amended the Cuban Assets Control Regulations (CACR) and Export Administration Regulations (EAR), respectively, to implement US Cuba sanctions policy changes President Trump announced in a presidential memorandum issued

On Wednesday, November 15 at 12:00 PM EST, Anthony Rapa will be presenting “Recent Developments in Economic Sanctions: Russia, Iran, Venezuela, North Korea, and Cuba,” a webinar hosted by Federal Publications.  As described on the Federal Publications website:

From “decertifying” the Iran deal to disputes with “Rocket Man,” the economic sanctions world has seen dizzying

On Friday, July 14, 2017, the Trump administration joined the administrations of Presidents Clinton, Bush, and Obama in suspending Title III of the Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of 1996, also known as the Helms-Burton Act, a controversial provision that would authorize lawsuits in US courts to recover damages related to confiscated property in Cuba.

When the Castro regime came to power in Cuba in the late 1950s, it confiscated property from thousands of US and other foreign individuals and companies. The US Foreign Claims Settlement Commission (FCSC) evaluated the validity of claims for losses resulting from the expropriation and nationalization of property owned by US nationals.  In total, the Commission considered 8,821 claims and certified 5,913 claims to be compensable for a value of $1.9 billion (most, but not all, claims related to confiscated property).

Cuba has resolved claims for confiscated property with several other countries, including Canada, France, Italy, Mexico, Spain, Switzerland, and the United Kingdom, but it has not resolved claims with the United States. After July 2015, when the United States re-established diplomatic relations with Cuba, both governments have held information-sharing discussions regarding the outstanding claims.  However, no funds have yet been made available for the claims, nor has a settlement with the Cuban government been reached.
Continue Reading Lawsuits for Cuban Confiscated Property Still Suspended, For Now

Sanctions, sanctions, and more sanctions– everyone’s favorite tool of foreign policy sure has been making a lot of news lately.  Here’s a round-up of the latest sanctions analysis here at the International Compliance Blog:

President Trump announced, on June 16, 2017, that, “effective immediately, I am canceling the last administration’s completely one-sided deal with Cuba.” However, with two primary exceptions, the Presidential Memorandum setting out the new policy may leave in place most of the steps to ease the embargo that the Obama Administration and previous administrations had taken.

In a much-anticipated speech on Cuba policy today, President Trump announced that, “effective immediately, I am canceling the last administration’s completely one-sided deal with Cuba.”

That pronouncement notwithstanding, it appears that the Trump Administration’s new policy on Cuba (as set out in a Presidential Memorandum) will leave intact most of the changes made by the Obama Administration and previous administrations, with one important new limitation: a prohibition on certain dealings with a specific list of military-linked entities that will be published by the US Department of State in the near future.  Additionally, the new policy will require so-called “people-to-people” travel to be conducted under the auspices of a sponsoring organization, a requirement that the Obama Administration had lifted.

The new policy also:

  • Maintains the US Embassy in Havana;
  • States that any future liberalization of US trade restrictions on Cuba will be dependent on significant domestic reform in Cuba;
  • Reaffirms the US ban on tourism to Cuba;
  • Calls on OFAC to audit travel to Cuba to ensure that travelers are in compliance with applicable restrictions; and
  • Declines to reinstate the “Wet Foot, Dry Foot” immigration policy, which the Obama Administration had terminated.

Continue Reading Cuba Policy Changes Will Complicate New Business But Grandfather Existing Deals

This month, Congress is considering an array of new sanctions-related legislation, and, in recent days, bipartisan support has grown for a bill that would potentially direct significant measures against Russia and Iran. Congress has also debated bills proposing new sanctions against North Korea, Hamas, Hezbollah, and both chambers have put forth multiple bills that would

President-elect Trump has made bold and surprising pronouncements about what he may do after January 20 in the field of international affairs, and these foreign policy choices are likely to have a significant impact on the future course of US economic sanctions programs targeting Iran, Cuba, Russia and other areas. Mr. Trump has said he would terminate the Iran nuclear deal, and with it the sanctions rollback that has taken place over the past year, although actually convincing the rest of the world to re-impose sanctions on Iran would be a monumental feat of diplomacy.  On Cuba, Mr. Trump has given reasonably clear signals both that he would support the recent easing of sanctions and that he would reverse it, so the actual policy of the incoming Administration is hardly better than a 50/50 guess at this stage, though with the odds slightly favoring some tightening of sanctions.  Russia may be different.  That is one area in which Mr. Trump’s statements and actions point to a real possibility of a wholesale change in US policy, although bipartisan congressional concerns with Russia may present a major obstacle to radically changing the current state of affairs, at least without significant concessions by Russia.

What we can say at this stage is that President Trump will have the power to undo all or nearly all of the changes that President Obama has enacted in these economic sanctions programs. But, taking a step back, any moves on sanctions are likely to get caught up in a broader set of discussions about trade policy and diplomacy that will start to take form early next year.  Any aggressive moves on trade policy could, for example, scuttle chances of revisiting the global consensus on Iran sanctions, and could complicate efforts to enforce recent UN sanctions on North Korea.  Cuba is something that the US could change unilaterally, without facing the likelihood of any major blowback.  But Russia will be a complicated topic – the incoming Administration will do a great deal to shape it, but it may ultimately be influenced in significant part by the storms on the horizon in European politics, and, most importantly, by the US Congress.

While significant change is possible, the process is likely to be considerably more drawn-out and complex than observers have suggested.  
Continue Reading What to Expect for Economic Sanctions Under President Trump?