An overview of the Cuban Assets Control Regulations Title 31 Part 515 of the U.S. Code of Federal Regulations.
! INTRODUCTION - The Cuban Assets Control Regulations, 31 CFR Part 515 (the “Regulations”) were issued by the U.S. Government on 8 July 1963 under the Trading With the Enemy Act in response to certain hostile actions by the Cuban government. They are still in force today and affect all U.S. citizens and permanent residents wherever they are
located, all people and organizations physically in the United States, and all branches and subsidiaries of U.S. organizations throughout the world. The Regulations are administered by the U.S. Treasury Department's
Office of Foreign Assets Control. The basic goal of the sanctions is to isolate the Cuban government economically and deprive it of U.S. dollars. Criminal penalties for violating the sanctions range up to 10 years in prison, $1,000,000 in corporate fines, and $250,000 in individual fines. Civil penalties up to $55,000 per violation may also be imposed. Please
note that the Regulations require those dealing with Cuba to maintain records and, upon request from the U.S. Treasury Department, to furnish information regarding such dealings.
! EXPORTING TO CUBA - Except for publications, other informational materials (such as CDs and works of art), certain donated food, and certain goods licensed for export or re-export by the U.S. Department of Commerce (such as medicine and medical supplies, food, and agricultural commodities), no products, technology, or services may be exported
from the United States to Cuba, either directly or through third countries, such as Canada or Mexico. This prohibition includes dealing in or assisting the sale of goods or commodities to or from Cuba, even if done entirely offshore. Such brokering is considered to be dealing in property in which Cuba has an interest. Provision of consulting services is also prohibited. Thus, no U.S. citizen or permanent resident alien, wherever located, and no foreign subsidiary or branch of a U.S. organization may export products, technology, or services to Cuba or to any Cuban national, wherever they may be located, or broker the sale of goods or commodities to or from Cuba or any Cuban national. Pursuant to provisions of the Cuban Democracy Act of 1992 (the "CDA") and the Trade Sanctions and Export Enhancement Act of 2000 (the "TSRA"), the Commerce Department authorizes the sale and export or re-export of medicine and medical supplies, food and agricultural commodities to Cuba. Those interested in engaging in such exports or reexports must first obtain authorization from the Commerce Department's Bureau of Export Administration. All licensed sales may be financed by cash in advance or by third-country banks that are not Specially Designated Nationals. Foreign subsidiaries of U.S. banks are authorized to directly finance licensed sales of agricultural products. All U.S. banks may advise or confirm any of the above.
Section 1705(b) of the CDA provides for donations of food to independent non-governmental organizations or individuals in Cuba. Shipments of food can be donated to non-governmental organizations from the U.S. or from third countries without the need for a license from the U.S. government. The CDA specifically provides that payments to Cuba involving telecommunications may be made pursuant to specific license. In the mid-1970s, Section 515.559 was added to the Regulations to allow OFAC to license foreign subsidiaries of U.S. firms to conduct trade in commodities with Cuba so long as several specific criteria were met. Section 1706(a) of the CDA, however, prohibits the issuance of a license that would have been issued pursuant to § 515.559, except where a contract was entered into prior to enactment of the CDA or where the exports at issue are medicines or medical supplies. Unless otherwise authorized, no vessel carrying goods or passengers to or from Cuba or carrying goods in which Cuba or a Cuban national has any interest may enter a U.S. port. The prohibition also applies to vessels which enter only to take on fuel and supplies (bunker), whether from U.S. fuel providers within the port limits or at offshore points, as well as vessels discharging or loading merchandise offshore, by lighter or otherwise. In addition, vessels which enter a port or place in Cuba to engage in the trade of goods or services are prohibited from loading or unloading any freight at any place in the U.S. for 180 days. Prohibited entry does not apply to vessels engaging solely in trade with Cuba authorized by license or exempt from the Regulations (e.g., vessels carrying authorized exports of agricultural products or donations of food to nongovernmental organizations or individuals).
! IMPORTING CUBAN-ORIGIN GOODS OR SERVICES - Goods or services of Cuban origin may not be imported into the United States either directly or through third countries, such as Canada or Mexico. The only exceptions are publications, artwork, or other informational materials. !
TRANSACTIONS INVOLVING PROPERTY IN WHICH CUBA OR A CUBAN NATIONAL HAS AN INTEREST - In addition to the prohibitions on exports to and imports from Cuba, the Regulations prohibit any person subject to U.S. jurisdiction from dealing in any property in which Cuba or a Cuban national has an interest. Under the Regulations, “property” includes but is not limited to contracts and services. For example, unless otherwise authorized, persons subject to U.S. jurisdiction (including U.S. overseas subsidiaries) may not purchase Cuban cigars in Mexico; may not sign a contract with a U.K. firm if the contract terms include Cuba-related provisions (even if those provisions are contingent upon the lifting of the embargo); and may not provide accounting, marketing, sales, or insurance services to a Cuban company or to a foreign company with respect to the foreign company’s Cubarelated business.
! SPECIALLY DESIGNATED NATIONALS - The Regulations prohibit buying from or selling to Cuban nationals whether they are physically located on the island of Cuba or doing business elsewhere on behalf of Cuba. Individuals or organizations who act on behalf of Cuba anywhere in the world are considered by the U.S. Treasury Department to be “Specially Designated Nationals” of Cuba. A non-exhaustive list of their names is published in the Federal Register, an official publication of the U.S. Government. This list may be obtained by calling the Office of Foreign Assets Control at 202/622-2490. The listing, however, is a partial one and any individual or organization subject to U.S. jurisdiction engaging in transactions with foreign nationals must take reasonable care to make certain that such foreign nationals are not acting on behalf of Cuba. Individuals and organizations subject to U.S. jurisdiction who violate the Regulations by transacting business with Specially Designated Nationals of Cuba are subject to criminal prosecution or civil monetary penalties.
! ACCOUNTS AND ASSETS - There is a total freeze on Cuban assets, both governmental and private, and on financial dealings with Cuba; all property of Cuba, of Cuban nationals, and of Specially Designated Nationals of Cuba in the possession or control of persons subject to U.S. jurisdiction is “blocked.” Any property in which Cuba has an interest which comes into the United States or into the possession or control of persons subject to U.S. jurisdiction is automatically blocked by operation of law. Banks receiving unlicensed wire transfer instructions in which there is a Cuban interest, or any instrument in which there is a Cuban interest, must freeze the funds on their own books or block the instrument, regardless of origin or destination. “Suspense accounts” are not permitted. Blocking imposes a complete prohibition against transfers or transactions of any kind. No payments, transfers, withdrawals, or other dealings may take place with regard to blocked property unless authorized by the Treasury Department. Banks are permitted to take normal service charges. Blocked deposits of funds must be interest-bearing. “Set-offs” are not allowed. Persons subject to U.S. jurisdiction are required to exercise extreme caution in order not to knowingly involve themselves in unlicensed transactions in which Cuba has an interest. Except as authorized, no bank in the U.S. or overseas branch or subsidiary of a U.S. bank may advise a letter of credit involving Cuba nor may it process documents referencing Cuba. All such “property” must be blocked as soon as it comes within the bank's possession or control. All persons in possession of blocked property are required to register with the Office of Foreign Assets Control. Persons subject to U.S. jurisdiction who engage in any commercial dealings that involve unauthorized trade with Cuba, either directly or indirectly, risk substantial monetary penalties and criminal prosecution.
! SENDING GIFTS - Gift parcels may be sent or carried by an authorized traveler to an individual or to a religious, charitable, or educational organization in Cuba for the use of the recipient or of the recipient's immediate family (and not for resale), subject to the following limitations: the combined total domestic retail value of all items in the parcel must not exceed $200 (with the exception of donations of food, which are not so restricted); not more than one parcel may be sent or given by the same person in the U.S. to the same recipient in Cuba in any one calendar month; and the content must be limited to food, vitamins, seeds, medicines, medical supplies and devices, hospital supplies and equipment, equipment for the handicapped, clothing, personal hygiene items, veterinary medicines and supplies, fishing equipment and supplies, soap-making equipment, or certain radio equipment and batteries for such equipment. Organizations that consolidate and send multiple gift parcels in single shipments must obtain a validated license from the U.S. Department of Commerce. Each gift parcel in the single shipment must meet commodity, dollar-value, and frequency limitations. If a parcel being shipped or carried to Cuba fails to meet these standards, it is subject to seizure by the U.S. Government.
! CUBA-RELATED TRAVEL TRANSACTIONS - Only persons whose travel falls into the categories discussed below may be authorized to spend money related to travel to, from, or within Cuba. Persons travelling to Cuba to visit immediate family members* pursuant to a specific license may spend no more than $50 per day on non-transportation-related expenses in Cuba, and up to an additional $50 per trip to pay for transportation-related expenses in Cuba. Persons licensed to engage in other travel-related transactions in Cuba may spend up to the State Department Travel Per Diem Allowance for Havana, Cuba for purchases directly related to travel in Cuba, such as hotel accommodations, meals, local transportation, and goods personally used by the traveler in Cuba (travelers can check the current per diem rate on the Internet at <<http://www.state.gov/www/perdiems/index.html>>). Most licensed travellers may also spend additional money for transactions directly related to the activities for which they received their license. For example, journalists traveling in Cuba under the journalism general license (described below) may spend money over and above the current per diem for extensive local transportation, the hiring of cable layers, and other costs that are directly related to covering a story in Cuba. Purchases of services unrelated to travel or a licensed activity, such as non-emergency medical services, are prohibited. The purchase of publications and other informational materials is not restricted.
! WHO CAN GO - The following travelers are authorized, under OFAC general license, to engage in travel transactions while in Cuba:
• Journalists and supporting broadcasting or technical personnel (regularly employed in that capacity by a news reporting organization and traveling for journalistic activities).
• Official government travelers (traveling on official business).
• Members of international organizations of which the United States is also a member (traveling on official business).
• Full-time professionals whose travel transactions are directly related to professional research in their professional areas,
provided that their research 1) is of a noncommercial, academic nature; 2) comprises a full work schedule in Cuba; and 3) has a substantial likelihood of public dissemination.
• Full-time professionals whose travel transactions are directly related to attendance at professional meetings or conferences in Cuba organized by an international professional organization, institution, or association hat regularly sponsors such meetings or conferences in other countries. The organization, institution, or association sponsoring the meeting or conference may not be headquartered in the United States unless it has been specifically licensed to sponsor the meeting. The purpose of the meeting or conference cannot be the promotion of tourism in Cuba or other commercial activities involving Cuba, or to foster production of any bio-technological products.
• Travelers who have received specific licenses from OFAC prior to going. Specific licenses are described below.
Specific licenses to visit immediate family members* in Cuba:
OFAC may issue specific licenses authorizing travel-related transactions incident to one visit lasting no more than 14 days to immediate family members* who are nationals of Cuba per three-year period. For those
who emigrated to the United States from Cuba, and have not since that time visited a family member in Cuba, the three year period will be counted from the date they left Cuba. For all others, the three year period will be counted from the date they last left Cuba pursuant to the pre-existing family visit general license, or from the date their family visit specific license was issued. Travelers wishing to visit an immediate family member in Cuba who is authorized to be in Cuba but not a national of
Cuba may be granted a specific license in exigent circumstances provided that the U.S. Interests Section in Havana concurs in the issuance of such a license. Applications for these specific licenses should be mailed to OFAC's Miami Office at:
Office of Foreign Assets Control U.S. Department of Treasury P.O. Box 229008 Miami, FL 33122-9008 *a "member of the immediate family" is defined as a spouse, child, grandchild, parent, grandparent, or sibling of the traveler of that traveler's spouse, as well as any spouse, widow or widower of any of the foregoing.
Specific licenses for educational institutions: Specific licenses may be issued by OFAC to authorize travel transactions related to certain educational activities by students or employees at U.S. undergraduate or graduate institutions. Such licenses must be renewed after a period of one year. Once an academic institution has applied for and received such a specific license, the following categories of travelers affiliated with that academic institution are authorized to engage in travel-related transactions incident to the following activities without seeking further authorization from the Office of Foreign Assets Control:
• Undergraduate or graduate students participating in a structured educational program lasting at least 10 weeks as part of a course offered at a U.S. undergraduate or graduate institution. Students planning to engage in such transactions must carry a letter from the licensed institution stating 1) the institution’s license number,
2) that the student is enrolled in an undergraduate or graduate degree program at the institution, and 3) that the travel is part of an educational program of the institution.
• Persons doing noncommercial Cuba-related academic research in Cuba for the purpose of qualifying academically as a professional (e.g., research toward a graduate degree). Students planning to engage in such transactions must carry a letter from the licensed institution stating 1) the institution’s license number, 2) that the student is enrolled in a graduate degree program at the institution, and 3) that the Cuba research will be accepted for credit toward that graduate degree.
• Undergraduate or graduate students participating in a formal course of study lasting at least 10 weeks at a Cuban academic institution, provided the Cuban study will be accepted for credit toward a degree at the licensed U.S. institution. A student planning to engage in such transactions must carry a letter from the licensed U.S. institution stating 1) that the individual is a student currently enrolled in an undergraduate or graduate degree program, or a full time permanent employee at the institution, 2) that the Cuba-related travel is part of a structured educational program of that institution that will last at least 10 weeks, and 3) citing the institution's license number.
• Persons regularly employed in a teaching capacity at a licensed U.S. undergraduate or graduate institution who plan to teach part or all of an academic program at a Cuban academic institution for at least 10 weeks. An individual planning to engage in such transactions must carry a letter from the licensed institution stating 1) the institution’s license number, and 2) that the individual is regularly employed by the licensed institution in a teaching capacity.
• Cuban scholars teaching or engaging in other scholarly activities at a licensed college or university in the United States. Licensed institutionsmay sponsor such Cuban scholars, including payment of a stipend or salary. The Cuban scholar may remit all such stipends or salary payments back to Cuba.
• Full-time employees of a licensed institution organizing or preparing for the educational activities described above. An individual engaging in such transactions must carry a letter from the licensed institution stating 1) the institution’s license number, and 2) that the individual is regularly employed there.
Status of current educational institution licenses: Licensed educational institutions that have already planned Cuba trips that will not meet the new requirements issued in June 2004 may still engage in all transactions incident to such trips provided that the trips and all associated transactions are completed by August 15, 2004.
Specific licenses for religious organizations: Specific licenses may be issued by OFAC to religious organizations to authorize individuals affiliated with the organization to engage in travel transactions under the auspices of the religious organization. Applications by religious organizations for such licenses should include examples of the religious activities to be undertaken in Cuba. All individuals traveling pursuant to a religious organization's license must carry with them a letter from the licensed organization citing the number of the license and confirming that they are affiliated with the organization and that they are traveling to Cuba to engage in religious activities under the auspices of the organization.
Other specific licenses: Specific licenses may be issued by the Office of Foreign Assets Control on a case-by-case basis authorizing travel transactions by the following categories of persons in connection with the following activities:
• Humanitarian Projects and Support for the Cuban people - 1) Persons traveling in connection with activities that are intended to provide support for the Cuban people, such as activities of recognized human rights organizations; 2) Persons whose travel transactions are directly related to certain humanitarian projects in or related to Cuba that are designed to directly benefit the Cuban people. Licenses authorizing transactions for multiple trips over an extended period of time are available.
• Free-Lance Journalism - Persons with a suitable record of publication who are traveling to Cuba to do research for a freelance article. Licenses authorizing transactions for multiple trips over an extended period of time are available for applicants demonstrating a significant record of free-lance journalism.
• Professional Research and Professional Meetings – Persons traveling to Cuba to do professional research or to attend a professional meeting that does not meet the requirements of the relevant general license (described above). Licenses authorizing transactions for multiple trips over an extended period of time are available.
• Religious Activities - Persons traveling to Cuba to engage in religious activities that are not authorized pursuant to a religious organization’s specific license. Licenses authorizing transactions for multiple trips over an extended period of time are available.
• Public Performances, Athletic or Other Competitions, and Exhibitions - Persons traveling to participate in a public performance, athletic or other competition (that does not meet the requirements of the specific license described below), or exhibition. The event must be open for attendance, and in relevant situations participation, by the Cuban public, and all profits from the event after costs must be donated to an independent nongovernmental organization in Cuba or a U.S.- based charity, with the objective, to the extent possible, of benefitting the Cuban people.
• Amateur or semi-professional athletes or teams traveling to participate in Cuba in an athletic competition held under the auspices of the relevant international sports federation. The athletes must have been selected for the competition by the relevant U.S. sports federation, and the competition must be one that is open for attendance, and in relevant situations participation, by the Cuban public.
• Activities of Private Foundations or Research or Educational Institutions- Persons traveling to Cuba on behalf of private foundations or research or educational institutes that have an established interest in international relations to collect information related to Cuba for noncommercial purposes. Licenses authorizing transactions for multiple trips over an extended period of time are available.
• Exportation, Importation, or Transmission of Information or Informational Materials - Persons traveling to engage in activities directly related to the exportation, importation, or transmission of information or informational materials.
• Licensed Exportation - Persons traveling to Cuba to engage in activities directly related to marketing, sales negotiation,
accompanied delivery,or servicing of exports of health care products or other exports that may be considered for authorization under existing Department of Commerce regulations and guidelines with respect to Cuba or engaged in by U.S.-owned or - controlled foreign firms.
Applying for a specific license: Except with regard to applications pertaining to family travel and the provision of travel, carrier and remittance forwarding services, persons wishing to travel to Cuba under a specific license should send a letter specifying the details of the proposed travel, including any accompanying documentation, to the Licensing Division, Office of Foreign Assets Control, U.S. Department of the Treasury, 1500 Pennsylvania Ave., NW, Washington, DC 20220. Applications for transactions referenced above should be submitted directly to OFAC's Miami office.
Provision of travel services: U.S. travel service providers, such as travel agents, who handle travel arrangements to, from, or within Cuba must hold special authorizations from the Office of Foreign Assets Control to engage in such activities. These authorizations are issued based on written applications from the service providers, subject to appropriate checks by the Treasury Department. A "traveler" should not use any travel agent or tour operator in the United States that does not hold valid Treasury authorization. If in doubt about the status of a company's authorization, travelers should call the Office of Foreign Assets Control at 305/810-5140. Only carrier service providers that have been authorized by OFAC may operate direct charter flights between the United States and Cuba. To find a licensed travel service provider, consult OFAC's website.
Unauthorized travel-related transactions: Unless otherwise exempted or authorized, any person subject to U.S. jurisdiction who engages in any travel-related transaction in Cuba violates the Regulations.
! EXPORTATION OF ACCOMPANIED BAGGAGE - Authorized travellers to Cuba are limited to 44 pounds of accompanied baggage per traveler unless a specific license from OFAC or the Department of Commerce's Bureau of Industry and Security authorizes a higher amount.
! WHAT CAN BE BROUGHT BACK - If U.S. travelers return from Cuba with Cuban origin goods, such goods, with the exception of informational materials, may be seized at Customs' discretion. [Section 515.204 of the Regulations]. There are no limits on the import or export of informational materials [Section 515,206 of the Regulations]. Such materials are statutorily exempt from regulation under the embargo and such items as books, films, tapes and CDs may be transported freely. However, blank tapes and CDs are not considered informational materials and may be seized.
! VESSELS - All persons on board vessels, including the owner, must be authorized travelers, as listed above, to engage in travel-related transactions in Cuba. If you are not an authorized traveler, you may not purchase meals, pay for transportation, lodging, dockage or mooring fees, cruising fees, visas, entry or exit fees and you may not bring any Cuban origin goods back to the United States. Any payment to the Marina Hemingway International Yacht Club is considered a prohibited payment to a Cuban national and therefore in violation of the Regulations. Vessel owners are prohibited from carrying passengers to Cuba because OFAC does not authorize vessel owners as service providers!.
EMERGENCIES - In case of emergencies requiring financial transactions such as emergency repair of vessels or medical treatment, travellers are urged to contact OFAC at 202/622-2480 to discuss necessary authorizations.
! HUMANITARIAN DONATIONS - There is a joint OFAC and Commerce Department ("USDOC") administration over export of gift parcels and humanitarian goods to Cuba to meet basic human needs. If an export is licensed by USDOC, OFAC authorizes certain financial and other transactions related to that export. [See part 746 of the USDOC's Export Administration Regulations (15 C.F.R. Chapter 7), which are available on-line at http://w3.access.gpo.gov/bis/ear/ ear_date.html, for relevant USDOC regulations]. Please note that travel-related transactions incident to humanitarian donations must be separately licensed by OFAC.
! SENDING OR CARRYING MONEY TO CUBA - U.S. persons aged 18 or older may send to members of the remitter's immediate family in Cuba or to a Cuban national in a third country "family" cash remittances of up to $300 per household in any consecutive three-month period, provided that no member of the household is a prohibited official of the Government of Cuba or a prohibited member of the Cuban Communist Party.*
No more than a combined total of $300 of family remittances may be sent by a remitter to any one household in any consecutive three-month period, regardless of the number of members of the remitter's immediate family residing in that household. A license traveler may carry up to $300 of his own family remittances to Cuba.
U.S. persons also may send up to $1,000 per payee on a one-time basis as an “emigration-related” remittance to a Cuban national to enable the payee to emigrate from Cuba to the United States. Specifically, up to $500 may be remitted to a Cuban national prior to the payee's receipt of a valid U.S. visa or other U.S. immigration document, and up to $500 may be remitted to the Cuban national after the payee receives a valid U.S. visa or other U.S. immigration document. A licensed traveler may only carry immigration remittances to Cuba if the visa has already been issued.
Remittances must be transferred through an OFAC-licensed depository institution or remittance forwarder. These OFAC-licensed entities originating transfers on behalf of non-aggregating customers must obtain an
affidavit from the remitter certifying that each family remittance does not exceed $300 in any consecutive three month period and that each emigration-related remittance meets the requirements of the Regulations (see TDF 90-22.52 on last page of brochure). Remitters can expect to have their identity, date of birth, address, and telephone number verified. Specific licenses may be issued on a case-by-case basis authorizing remittances:
• to independent nongovernmental organizations in Cuba; • to households of Cuban nationals living outside of Cuba in excess of $300 per quarter from blocked accounts; or • to individuals in Cuba to facilitate their non-immigrant travel to the United States under circumstances where humanitarian need is demonstrated, including illness or medical emergency.
! FAIR BUSINESS PRACTICES - Anyone authorized by the U.S. Department of the Treasury to provide Cuban travel services or services in connection with sending money to Cuba is prohibited from participating in discriminatory practices of the Cuban government against individuals or particular classes of travelers. The assessment of consular fees by the Cuban government, which are applicable worldwide, is not considered to be a discriminatory practice. However, requiring the purchase of services not desired by the traveler is not permitted. Persons wishing to provide information on such activities should call 305/810-5170. All information regarding arbitrary fees, payments for unauthorized purposes, or other possible violations furnished to the U.S. Treasury Department will be handled confidentially.
! ESTATES AND SAFE DEPOSIT BOXES - An estate becomes blocked whenever a Cuban national is an heir or is the deceased; money from a life insurance policy is blocked whenever the deceased is a Cuban resident. The heir of a person who died in Cuba, or the beneficiary of a life insurance policy of a person who died in Cuba, may apply for a license from the Office of Foreign Assets Control to unblock the estate or insurance proceeds. Persons administering or interested in a blocked estate should contact the Office of Foreign Assets Control at 202/ 622-2480 for more information. A safe-deposit box is blocked whenever a Cuban has an interest in the property contained in the box. Access to a blocked safe deposit box for inventory purposes may be granted under certain conditions, but the contents of the box remain blocked and may not
be removed without the permission of the Office of Foreign Assets Control. Authorized remittances may be made from blocked estates.
! PAYMENTS FOR OVERFLIGHTS - Private and commercial aviators must obtain a specific license authorizing payments for overflight charges to Cuba. Banks will ask to see the originals of such licenses before executing transfers and keep a copy for their files. If you have information regarding possible violations of the Cuban Assets Control Regulations, please call the Office of Foreign Assets Control at 305/810-5170. Your call will be handled confidentially.
* The term “prohibited official of the Government of Cuba” means: Ministers and Vice-ministers, members of the Council of State, and the Council of Ministers; members and employees of the National Assembly of People’s Power; members of any provincial assembly; local sector chiefs of the Committees for the Defense of the Revolution; Director Generals and sub-Director Generals and higher of all Cuban ministries and state agencies; employees of the Ministry of the Interior (MININT); employees of the Ministry of Defense (MINFAR); secretaries and first secretaries of the Confederation of Labor of Cuba (CTC) and its component unions; chief editors, editors and deputy editors of Cuban state-run media organizations and programs, including newspapers, television, and radio; and members and employees of the Supreme Court (Tribuno Supremo Nacional). The term “prohibited members of the Cuban Communist Party” means: members of the Politburo; the Central Committee; Department Heads of the Central Committee; employees of the Central Committee; and secretary and first secretary of the provincial Party central committees.