Cuba Sanctions

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After the November 8, 2016 elections, Washington is preparing for a new Congress and the transition of power from eight years of the Democratic Obama administration to the Republican administration of President-elect Donald Trump.  As the incoming president builds his transition team and sets out his policy priorities, Steptoe will examine what these changes may mean for international trade and economic sanctions regimes, global businesses and their compliance obligations, and the international regulatory community.

On January 20, 2017, President-elect Trump will be sworn in as the 45th president of the United States. One of his first responsibilities will be appointing Cabinet officials and nominating other senior government leaders to implement his policy priorities.  The transition team reportedly is specifically seeking officials with business experience, which could be a boon for businesses that must comply with a sometimes-dizzying array of international trade regulations promulgated by the Departments of Commerce, Treasury, and State.  However, these licensing and enforcement agencies may struggle with “brain drain” if a number of political appointees and career bureaucrats – who are responsible for implementing complex export controls and economic sanctions regulations – are replaced with newcomers lacking regulatory experience.
Continue Reading What a Trump Administration Could Mean for International Regulatory Compliance

On October 17, the Treasury Department’s Office of Foreign Assets Control (OFAC) and the Commerce Department’s Bureau of Industry and Security (BIS) published amendments to the Cuban Assets Control Regulations (CACR) and the Export Administration Regulations (EAR).  These amendments took further steps to ease economic sanctions and export control restrictions on Cuba.  Along with…

The conventional wisdom in Washington’s legal and policy circles is that the core aspects of the US economic sanctions embargo on Cuba are mandated by statute, and therefore all the President can do is tinker around the edges, that is, in areas where Congress has been silent, or at least has not specifically addressed a particular question.  Despite the great fanfare that has accompanied President Obama’s efforts to relax the embargo, since the reestablishment of diplomatic relations with Cuba, the reality has been quite modest: primarily, the moves have made basic business operations simpler in a narrow group of sectors such as transportation, telecommunications, education and non-profits, and in areas like travel and family remittances, along with a few others.  For many industries, the remaining legal restrictions continue to deter market entry.  Obama Administration officials have stated that they would like for the embargo to be lifted entirely, to allow a normal level of commerce with Cuba, while acknowledging continuing obstacles on the Cuban side.  The Administration has indicated that the reason they have moved so cautiously in lifting some of the restrictions over the past few years is because of the statutes that remain on the books that they do not have the power to overturn by executive action.

However, on October 17, 2016, the Treasury Department’s Office of Foreign Assets Control (OFAC) published a new general license at Section 515.534 of the Cuban Assets Control Regulations (CACR) that appears to show a crack in the Administration’s public position about why it cannot do more to lift the embargo. 
Continue Reading How Much of the Cuba Embargo Could the President Unilaterally Lift?

Sunday’s presidential town hall debate was the second of three opportunities for candidates Donald Trump and Hillary Clinton to make their case to the American electorate.  In addition to the discussion of personal and character issues, the candidates touched on a range of policy issues, including tax policy, financial services, energy, and international trade.  The …

On February 25, 2016, the US Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) announced that it concluded an enforcement action against Halliburton Atlantic Limited (“HAL”) and its affiliate Halliburton Overseas Limited (“HOL”) for alleged violations of the Cuban Assets Control Regulations (“CACR”).

HAL and HOL are both Cayman Islands-headquartered subsidiaries of US company Halliburton Energy Services, Inc. (collectively, “Halliburton”).  Combined, they exported $1,189,752 worth of goods and services in support of oil and gas exploration and drilling activities in Angola’s Cabinda Onshore South Block oil concession, which is controlled by an oil and gas exploration joint venture consisting of five energy companies.  None of the companies has a 50 percent or greater ownership stake, and the largest minority owner – Pluspetrol Angola Corporation (45 percent stake) – is the operator, to whom HAL issued nineteen invoices and for whom HOL primarily performed the invoiced services.

Most importantly, in late 2009 the original majority shareholder of the consortium – Roc Oil (Cabinda) Company – assigned a 5 percent participating interest to Cuba Petroleo (“Cupet”), which is Cuba’s state-owned oil company.  This participating interest in the consortium also gave Cupet a beneficial interest in the concession and any oil or gas procured from it.
Continue Reading Halliburton Settlement Shows Risks of Dealing with Entities Partially Owned by Sanctioned Entities

On March 16, 2016, the Obama administration issued another round of amendments to the Cuban sanctions program. The Treasury Department’s Office of Foreign Assets Control and the Commerce Department’s Bureau of Industry and Security released revisions to the Cuban Assets Control Regulations and the Export Administration Regulations, respectively, that further ease sanctions and export restrictions…

As previously mentioned, more changes to the regulations governing the US embargo against Cuba were announced by the US Department of Treasury’s Office of Foreign Assets Control (OFAC) and the US Department of Commerce’s Bureau of Industry and Security (BIS) on January 27, 2016. The OFAC and BIS measures continue to ease the decades-old…

On January 26, 2015, the US Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) and the US Department of Commerce’s Bureau of Industry and Security (“BIS”) each announced continued relaxation of the US embargo of Cuba in furtherance of the Obama Administration’s new Cuba policy (more information here).

OFAC revised the Cuban…