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The OFAC Book of Why: Cuba sanctions (Part 3)

Disclaimer: The information in this post comes from the documents on OFAC’s website and may not reflect current program details. The sanctions flyer for this program is dated January 24, 2012.

Now, for the nitty-gritty – if the previous 2 posts weren’t gritty enough…

First, transactions involving property of Cuba or Cuban nationals (i.e. they have some interest in – doesn’t have to be solely theirs) are prohibited. That includes services…

Secondly, exports to Cuba are verboten, with the following exceptions:

  • Publications and other informational materials (such as compact disks and artwork)
  • Donated food
  • Goods licensed for export or re-export by the Department of Commerce (such as medicine and medical devices, food, agricultural commodities, and gift parcels)
  • Generally licensed legal services
  • Generally licensed telecommunications services
  • Generally licensed services incident to Internet-based communications

Transactions incident to licensed exports from the US to Cuba and reexports of 100% US goods from third party countries to Cuba (e.g. payment for the exports) are generally authorized. These exports and reexports require authorization from the Bureau of Industry and Security (BIS – part of the Commerce Department). These sales need to paid for in advance in cash, financed by a third country bank other than Cuban banks, or by foreign subsidiaries of US banks. Transactions incident to food donations to individuals or non-governmental organizations are authorized.

Generally, trade of foreign goods by foreign subsidiaries of US firms with Cuba is prohibited except in “limited circumstances.”

Vessels carrying goods in which Cuba or Cuban nationals have interest, or carrying goods or passengers to or from Cuba, are prohibited from US ports unless specifically authorized by OFAC. This includes refueling in the US port. Also, any ship that stops in Cuba for trade purposes is barred from loading or unloading freight in US ports for 180 days, unless licensed by OFAC.

Next, other than information or informational materials, imports of goods of Cuban origin, that contain Cuban origin materials, or goods that have been in Cuba or transported through it, are prohibited (unless licensed, of course).

Transactions with Cuban nationals outside of Cuba are prohibited, except in these circumstances:

  • Transactions with Cuban nationals who are resident in the US in a non-visitor status (e.g. citizens, permanent residents) are authorized
  • Cuban nationals who have relocated their permanent residence to third party countries can apply to become “unblocked nationals”, which then authorizes all transactions with them
  • New transactions with Cuban nationals who have relocated their permanent residence to third party countries who are not “unblocked nationals” are authorized, but property previously blocked remains blocked. The authorized transactions are those which occur after the establishment of the permanent residence outside Cuba or January 28, 2011, whichever is later.

Of course, all property is blocked. Bank accounts have to earn interest, and banks can collect service fees on the blocked accounts.

Interestingly enough, access to safety deposit boxes in which Cuban nationals have an interest is, under circumstances, authorized.

Lastly, donations and gift parcels….

  • Humanitarian donations are authorized but travel related to the donation requires a license.
  • Gift parcels can be carried or sent by authorized travelers to individuals, or educational, religious or charitable organizations, although there are limitations.
  • Organizations that aggregate and ship multiple gift parcels require a license from the Commerce Department, and each parcel is subject to various limitations.

Installment 4 of this series (the last one, I hope) will cover mail and telecommunications services, fair business practices, payments for overflights, and estates.

Categories: Cuba Sanctions


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