Cuba Fact Sheets Published By BIS And OFAC Encourage Exports To Support The Cuban People, But Challenges To Carrying Out Those Exports Remain
To print this article, all you need is to be registered or login on Mondaq.com.
On August 11, 2021, The Department of the Treasury and the
Department of Commerce published a Fact Sheet reminding U.S. persons and
exporters/re-exporters of certain U.S.-origin goods that the United
States Government remains committed to promoting the ability of the
Cuban people to seek, receive, or import. This fact sheet is a
reaction to the protests on the island and some government measures
taken to limit the flow of information and internet access in Cuba.
The agencies also provided readers with a list of some of the most
relevant exemptions and authorizations in order to carry out the
Administration’s goals. We have provided a summary of the fact
sheet below, but note that exports or re-exports to Cuba remain
fraught with at least three significant challenges: Helms-Burton
Title III litigation; the practical issues relating to remittances
to and from Cuba; and Cuban import and Customs laws.
Title III of Helms-Burton
First, Title III of Helms-Burton remains active,
meaning that any persons “trafficking” in property in
Cuba that was expropriated as a result of the 1959 Cuban Revolution
remain vulnerable to plaintiffs’ litigation in the United
States. Operating under an OFAC or BIS license or exemption does
not provide immunity from these cases and hopes that the Biden
Administration would reinstitute the waiver remain merely
Remittances to Cuba
Second, restrictions on remittances to Cuba – and those parties in
Cuba who are eligible to process the transactions – remain in
place, triggering the practical matter of how to accept payments or
remit funding to or from parties in Cuba. In practice, remittances
still flow to Cuba, but typically through non-U.S. financial
institutions that maintain correspondent banking relationships with
Cuba Import Authorities
Finally, exports to Cuba must go through the U.S. licensing
process but also are subject to the Cuban Government’s import
and customs process. An overt statement by the Biden Administration
promoting certain exports to support the Cuban people almost
certainly will be met with suspicion by the Cuban Government’s
import authorities. There are reports that COVID-19-related medical supplies
have successfully made it to Cuba, but it is unclear whether the
same would apply to telecommunications equipment meant to assist
the Cuban people in accessing the internet and communications
Summary of the Fact Sheet
The Administration published a joint fact sheet to emphasize the
Government’s commitment to promoting the ability of the Cuban
people to seek, receive, and impart information. The Administration
expresses this commitment by highlighting certain authorizations
and exemptions present in the Export Administration Regulations and
the Cuban Asset Control Regulations.
They are as follows:
- The software and services for Cuban internet
users, which includes the provision of fee-based internet
and services related to the export and re-export of certain
communication items. It also covers: (1) services including but not
limited to the provision of e-mail, messaging platforms, social
networking, VOIP, web hosting, and domain name registration; (2)
software used on personal computers and phones and certain services
including software design, business consulting, and IT management,
and (3) hardware and software pursuant to the BIS License Exception
Consumer Communications Device (CCD) and License Exception Support
for the Cuban People (SCP).
- The provision of telecommunications services and
establishment of telecommunications facilities. Under the
CACR, OFAC has authorized transactions including payments incident
to the provision of telecommunications and transactions related to
the establishment of facilities and provision of telecommunications
in Cuba. The CACR defines telecommunications services to include
internet connectivity, data, telephone, telegraph, radio,
television, news wire feeds, and similar services, regardless of
medium of transmission, including transmission by satellite.
See 31 C.F.R. § 515.542 and FAQ 784.
- In-country presence of internet and telecommunications
providers. The CACR Section 515.573 authorizes providers
of certain telecommunications or internet-based services to engage
in transactions necessary to establish and maintain a physical
presence (including leasing of physical premises such as an office,
warehouse, classroom, or retail outlet space), or a business
presence in Cuba to engage in transactions authorized by or exempt
from the CACR.
- Internet-based distance learning and educational
training. The CACR Section 515.565 authorizes certain
undergraduate-level and below internet-based courses, including
distance learning and Massive Open Online Courses, to Cuban
nationals, wherever located.
- Information and informational materials. As
with most of OFAC’s sanctions programs, the CACR does not
restrict the trade in pre-existing information and informational
materials. In addition, the CACR authorizes the creation,
dissemination, artistic or other substantive alteration, or
enhancement of informational materials, as well as travel-related
transactions and other transactions that are directly incident to
the exportation, importation, or transmission of information or
informational materials, subject to certain conditions.
- BIS License Exceptions. In addition to the
OFAC licenses and exemptions, the Fact Sheet specifically
references two License Exceptions: Consumer Communications Devices
(CDD) and Support for the Cuban People (SCP). These Exceptions have
been in place since 2009 and 2015, respectively. The eligible
devices for export to individuals and independent NGOs in Cuba, who
are not certain Cuban Government and Communist Party officials, are
identified within the EAR at Section 740.19(b).
While it may be useful to remind U.S. persons of the most
relevant exemptions and authorizations they have available to
contribute solving the situation in Cuba relating to the lack of
information and internet access, it is still impractical for U.S.
persons to offer satisfactory solutions given the practical
challenges we mentioned above.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
POPULAR ARTICLES ON: International Law from United States