1986

22.08.86 Charles Redman, State Department official, said in a statement that the President had adopted a number of measures aimed at making the “embargo” on Cuba more effective, arguing that such measures would make it more difficult for the Cuban government to get U.S. dollars and goods by illegal means. Among the measures adopted by the President are: a crackdown on firms identified by the U.S. government as “Cuban front companies” based in Panama and elsewhere trying to violate the American trade embargo; tighter controls on entities organizing or promoting trips to Cuba, and on money remittances and sending goods to Cuba.

A Presidential Proclamation was issued to prevent the Cuban government from charging U.S. citizens or residents thousands of dollars to finance indirect trips of their Cuban relatives through third countries. One of the objectives pursued with this measure was to deny the Cuban regime the benefits derived from the migration accords of December 1984. The Proclamation prohibited issuing preferential visas to persons leaving Cuba for the United States through third countries. (State Dept. Bulleting)

10.12.86 The Treasury Department’s OFAC published a partial list of 167 Specially Designated persons and companies of Cuba, with whom U.S. nationals cannot engage in trade. (FR, Vol.51, No.237, 10 Dec. 1986)
The Department of Commerce issued the “Parts and Components Rule”, CFR 376.12. This new regulation allowed foreign subsidiaries and companies to export goods to Cuba without requiring a license, if the goods contain under 10% American-origin components and are priced under US$ 10,000. According to Mindell de la Torre, Department of Commerce Legal Advisor, the new regulation was implemented because “extraterritorial restrictions on exports to Cuba were so tight that it was ridiculous and irritated our allies.”

1987

29.04.87 The House of Representatives passed an amendment to the Trade Act, introduced by Florida Representative Claude Pepper, urging a reinforcement of the blockade against Cuba. The amendment, according to this member of Congress, was meant to authorize the U.S. Trade Representative to request that all executive agencies involved in the Cuban issue submit to Congress appropriate recommendations to be adopted by the legislative branch in order to reinforce and make more effective the embargo on Cuba. In his remarks he said that initially there was a proposal to introduce a specific amendment banning vessels calling on Cuban ports to engage in trade with Cuba from American ports and trade. (Congressional Record-House, 29 April 1987).

1988

23.08.88 Enactment of Omnibus Bill on Trade and Competitiveness of 19988, (Public Law No.100-418), whose section 1911 “Reinforcement of Restrictions on Cuban Imports” was introduced by Representative Claude Pepper during congressional debates prior to the passage of the bill.

It provided that “USTR shall require all major agencies to prepare appropriate recommendations to improve the effectiveness of restrictions on Cuban goods imports. Such recommendations would include, but not be limited to, appropriate measures to prevent indirect shipments or other evasive means. USTR, after considering such recommendations, had to report to Congress – not later than 90 days after the enactment of this Act – any administrative or legislative actions that USTR deemed necessary and appropriate to reinforce the restrictions on imports from Cuba.”

03.11.88 OFAC published an additional list of 32 shipping companies identified as Specially Designated Nationals (SDN) of Cuba, with whom U.S. nationals are forbidden to engage in trade. (FR, 3 Nov. 1988).

21.11.88 USTR Clayton Yeutter sent letters to James C. Wright, House of Representatives spokesperson, and John C. Stennis, Acting President of the Senate, attaching the Report to Congress on the measures to enforce the restrictions on American imports from Cuba, under Omnibus Bill on Trade and Competitiveness of 19988.

In these letters, he described the four recommendations contained in the Report, namely: 1) civil penalty provisions under the Trading with the Enemy Act, as has been done under the International Emergency Economic Powers Act and the Comprehensive Anti-Apartheid Act; 2) OFAC’s actions to expand training and direct assistance for other Federal staff; 3) OFAC’s actions to work with other government agencies to collect all available information on Cuba’s international trade network, which would allow a more effective identification of Cuban-controlled entities and monitoring of their transactions, and 4) intensifying OFAC and other federal agencies’ efforts to develop joint and integrated programs to achieve the most effective possible enforcement of the embargo.

22.11.88 OFAC amended its Cuban Assets Control Regulations by introducing further requirements and modifying existing restrictions applicable to persons rendering services related to traveling to Cuba or sending remittances to Cuban citizens on the island. Likewise, the Office reviewed its regulations regarding telecommunications transactions and foreign subsidiaries with Cuba; and the use of credit cards to pay for transactions with respect to traveling to Cuba.

For the first time, it established the prohibition for persons traveling to Cuba to use credit cards to pay for their expenses incurred on the island; such prohibition until then was applicable to credit card companies and banks that processed and made payments for credit card transactions.

These amendments include the elimination of general licenses issued to Cuba travel organizers, in favor of specific licenses valid for one year and subject to renewal. OFAC established that such licenses would be granted after these travel service providers had proven that they did not participate in the Cuban government’s discriminatory practices against U.S. citizens or residents; and showed in their request that they have adopted the model and procedures to ensure that each client qualifies to obtain one of the general licenses allowing them to travel to Cuba or has been given a specific license.

It also required specific licenses, valid for one year and subject to renewal, for persons under U.S. jurisdiction, to provide services of collection and sending money remittances to close relatives in Cuba. Likewise, it required that the applicant showed the models and procedures to be used to determine whether each client has exceeded the yearly remittance cap for any beneficiary or has sent remittances to other persons who are not close relatives.

As for transactions of telephone and telegraph communications with Cuba, OFAC eliminated the established practice thus far of generally granting specific licenses, because the Department of the Treasury would review such requests on a case-by-case basis and in light of the policy being pursued by the Executive Branch at the moment the requests are filed.

As for dealings with Cuba by U.S. subsidiaries abroad, OFAC struck down the provision that for these branches to be granted a license authorizing them to conduct business with Cuba, they had to have only a minority of American officers or directors. The specific licenses granted did not authorize any person in the United States to participate or be involved in licensed transactions with Cuba or Cuban nationals. Such compromise included the negotiation or execution of a transaction subject to license, but it was not limited to the assistance or participation of a U.S. company main office or any U.S. citizen or employee. Such participation could be the basis for the denial of a license request or for revoking a granted license. In order to obtain a license the partner should be generally independent in the handling of the transactions for whom the license is being sought, with regards to decision-making, risk-taking, negotiation, financing, and financing management and execution. (FR, Vol. 53, No. 226, 23 Nov. 1988).