U.S. Eases Cuba Sanctions

The U.S. has further eased its Cuba sanctions in keeping with President Obama’s policy announced in December 2014 to support economic activity in Cuba and improve living conditions for the Cuban people. The amendments are the third in an incremental series of changes to the sanctions regulations permissible within the president’s authority. A more substantial scaling back of the U.S. trade embargo of Cuba will require Congressional action. 

What You Need To Know

  • Authorized exports and re-exports to Cuba can now be financed.
  • The categories of authorized exports and re-exports have been expanded.
  • Despite the incremental relaxation of sanctions by presidential order, the U.S. trade embargo of Cuba remains in place subject to action by Congress.

Prior to the amendments, payment and financing terms for authorized exports and re-exports were restricted to cash-in-advance or third-country financing. Under the revised regulations, financing for authorized exports now includes sales on open account, financing by U.S. financial institutions and letters of credit. Items that can be exported to Cuba without obtaining a license—and are facilitated by the new financing provision—include:

  • building materials, equipment, and tools for use by the private sector to build or renovate privately owned buildings;
  • tools and equipment for private sector agricultural activity;
  • tools, equipment, supplied and instruments for use by private-sector entrepreneurs; and
  • telecommunications items and infrastructure equipment.

The amendments expand the categories of items for which a license to export or re-export may be granted on a case-by-case basis (including to state-owned enterprises, agencies and other organizations of the Cuban government that provide goods and services for the use and benefit of the Cuban people) and include the following: agricultural production; construction of public facilities and infrastructure; artistic endeavors; education; food processing; disaster preparedness, relief and response; public health and sanitation; residential construction and renovation; public transportation; and items to wholesalers and retailers for domestic consumption.

The new regulations are also expected to increase air travel between the U.S. and Cuba by permitting code sharing and similar arrangements with Cuban airlines. Sales of aircraft and related equipment to Cuba are enabled by a new general policy of approval for exports and re-exports of items necessary to ensure the safety of civil aviation and the safe operation of commercial aircraft engaged in international air travel, including the export and re-export of such aircraft to state-owned enterprises.

To discuss these issues, please contact the author(s).

This publication is a general discussion of certain legal and related developments and should not be relied upon as legal advice. If you require legal advice, we would be pleased to discuss the issues in this publication with you, in the context of your particular circumstances.

For permission to republish this or any other publication, contact Janelle Weed.

© 2017 by Torys LLP.
All rights reserved.

Tags: