United States: The US Revises Commercial And Travel Sanctions Against Cuba

On November 9, 2017, the US Departments of the Treasury and Commerce implemented President Trump's June 2017 National Security Presidential Memorandum (NSPM) that was designed to tighten restrictions on individual travel to Cuba and on dealings with Cuban military-related entities. The changes by the US Departments of the Treasury and Commerce formalize a shift from the Obama Administration's policy of easing sanctions as part of an effort to normalize US relations with Cuba, yet many of the prior authorizations generally remain intact.

Significant Limits on Financial Transactions

As part of the regulatory changes, the US Department of the Treasury Office of Foreign Assets Control (OFA) added a new section to the Cuban Assets Control Regulations (CACR) prohibiting "direct financial transactions" with entities that the Secretary of State determines to be "under the control of, or act for or on behalf of, the Cuban military, intelligence, or security service or personnel" and that would disproportionately benefit from such direct financial transactions at the expense of the Cuban people or private enterprise in Cuba.1

Concurrently, the State Department published its List of Restricted Entities and Subentities Associated with Cuba (Cuba Restricted List) that initially identifies 180 restricted entities.2,3 The list includes 84 hotels, two tourist agencies, five holding companies, five marinas, and 10 stores, among other entities. However, businesses may continue existing commercial transactions with a listed entity if their transactions were agreed to before any such entity was added to the Cuba Restricted List (i.e., prior to November 9, 2017).4 Because entities on the Cuba Restricted List can play important roles in many sectors of the Cuban economy, these new prohibitions on direct financial transactions with such entities can lead to complicated compliance issues for US companies that do business in Cuba. US companies should also exercise due diligence in conducting business with non-listed counterparties, particularly those that may have some connection to the Cuban military, intelligence, or security service, because the Secretary of State has the authority to expand the Cuba Restricted List without advance notice.

Tougher Licensing Policy

In addition, the Department of Commerce's Bureau of Industry and Security (BIS) has established a general policy of denial for export applications to export or re-export goods to the entities on the Cuba Restricted List unless the transactions are determined to be consistent with the NSPM.5 The NSPM sets forth six policy objectives6 and states that the new sanctions do not prohibit transactions that the Secretary of the Treasury or the Secretary of Commerce, in coordination with the Secretary of State, determines are consistent with these policy objectives. Thus far, the extent to which the Secretaries will exempt otherwise prohibited transactions based on policy objectives is unclear.

In a change that may provide US companies greater commercial opportunities to engage with Cuba's private sector, BIS has also expanded the preexisting License Exception Support for the Cuban People (SCP).7 Prior to the latest amendments, the SCP identified certain types of items that were eligible for export or re-export to private-sector actors in Cuba. In contrast, the amended regulations create a single provision authorizing the export and re-export to Cuba of items, without specifying types, for use by the Cuban private sector for privat- sector economic activities,8 so long as the items are not used to primarily generate revenue for the state or to contribute to the operation of the state, including through the construction or renovation of state-owned buildings. Navigating this exception may be challenging due to difficulties in determining who the ultimate source of US exports will be.

New Travel Restrictions

The CACR has also been amended to limit the Obama-era authorizations concerning individual "people-to-people" travel. Individuals traveling to Cuba pursuant to the people-to-people general license for educational exchange activities must now do so under the auspices of an organization that is subject to US jurisdiction and be accompanied by an employee, paid consultant or agent of that organization.9 Further, travelers relying on the general license for support of the Cuban people must engage in a full-time schedule of activities related to enhancing Cuban civil society and independence from the Cuban authorities.

These travel restrictions limit, rather than eliminate altogether, two of the 12 general licenses for travel put in place under the Obama Administration: those for "educational travel" and "travel for support for the Cuban people."10 The two affected general licenses for travel continue to exist in a narrower form. The other 10 preexisting general licenses for travel, which remain intact, relate to (1) family visits; (2) official business of the US government, foreign governments, and certain intergovernmental organizations; (3) journalistic activity; (4) professional research and professional meetings; (5) religious activities; (6) public performances, clinics, workshops, athletic and other competitions, and exhibitions; (7) humanitarian projects; (8) activities of private foundations or research or educational institutes; (9) exportation, importation, or transmission of information or information materials; and (10) certain authorized export transactions.

Miscellaneous Changes

On October 17, 2016, the Obama Administration amended the CACR to exclude certain categories of individuals from the definition of "prohibited officials of the Government of Cuba" under the CACR.11 The new regulations again define "prohibited officials" to include all individuals who were subject to the definition prior to October 17, 2016.12 BIS has made corresponding revisions to exclude these individuals from several license exceptions.13 The "prohibited officials" represent a broad range of individuals, including ministers, members of the national and provincial assemblies, employees of the Ministry of Interior and Ministry of Defense, editors of state-run media organizations, and members of the Supreme Court. US companies are prohibited from conducting business with "prohibited officials" and these individuals are outside the scope of existing general licenses, such as the above-mentioned SCP general license. Notably, neither the new regulations nor the corresponding FAQs specify whether US companies already engaged in transactions with now "prohibited officials" will be allowed any "grace period" to wind down their transactions.

Consequences and Compliance Challenges for US Companies

The shifting Cuba sanctions regime, as the administration implements the NSPM, creates significant compliance challenges for US companies that participate in Cuba-related transactions. We stand ready to provide advice on these and other sanction-related issues.


1 "Direct Financial Transactions" are defined as transactions in which a person acts as the originator on a transfer of funds—including through wire transfer, credit card, check, or payment of cash—whose ultimate beneficiary is on the Cuba Restricted List, or acts as the ultimate beneficiary on a transfer of funds whose originator is on the Cuba Restricted List. 82 Fed. Reg. at 51,999 (§ 515.209(a)).
Department of State, Cuba Restricted List.
Fact Sheet: Treasury, Commerce, and State Implement Changes to the Cuba Sanctions Rules.
4 Section 515.209(c) of the CACR provides that the prohibition on financial transactions "does not apply to any transactions related to commercial engagements that involve direct financial transactions with an entity or subentity on the Cuba Restricted List, provided those commercial engagements were in place prior to the date that entity or subentity was added to the Cuba Restricted List as published in the Federal Register."
5 Before November 9, 2017, BIS evaluated export license applications based on a presumption of approval with respect to certain products, including certain medicine and agricultural commodities. The new regulations amend Section 746.2(b)(3)(i) of the Export Administration Regulations (EAR) by adding Note 2, which provides that "BIS generally will deny applications to export or reexport items for use by entities or subentities identified by the Department of . . . unless such transactions are determined to be consistent with sections 2 and 3(a)(iii) of the NSPM."
6 NSPM, Sections 2 and 3(a)(iii) (June 16, 2017). The policy objectives are: "(a) End economic practices that disproportionately benefit the Cuban government or its military, intelligence, or security agencies or personnel at the expense of the Cuban people. (b) Ensure adherence to the statutory ban on tourism to Cuba. (c) Support the economic embargo of Cuba described in section 4(7) of the Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of 1996 (the embargo), including by opposing measures that call for an end to the embargo at the United Nations and other international forums and through regular reporting on whether the conditions of a transition government exist in Cuba. (d) Amplify efforts to support the Cuban people through the expansion of internet services, free press, free enterprise, free association, and lawful travel. (e) Not reinstate the "Wet Foot, Dry Foot" policy, which encouraged untold thousands of Cuban nationals to risk their lives to travel unlawfully to the United States. (f) Ensure that engagement between the United States and Cuba advances the interests of the United States and the Cuban people. These interests include: advancing Cuban human rights; encouraging the growth of a Cuban private sector independent of government control; enforcing final orders of removal against Cuban nationals in the United States; protecting the national security and public health and safety of the United States, including through proper engagement on criminal cases and working to ensure the return of fugitives from American justice living in Cuba or being harbored by the Cuban government; supporting United States agriculture and protecting plant and animal health; advancing the understanding of the United States regarding scientific and environmental challenges; and facilitating safe civil aviation." 
7See Section 740.21 of the EAR.
8 However, eligible items are limited to those that are designated as EAR99 or controlled only for anti-terrorism reasons on the Commerce Control List.
9 The prior authorization for individual "people-to-people" travel involving educational exchange activities will only continue in instances where the traveler has already completed at least one travel-related transaction before the President's June 9, 2017, announcement.
10See §§515.565, 515.574
11 81 Fed. Reg. 71372.
12 "Prohibited Officials" 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). 82 Fed. Reg. at 51,999-52,000 (§ 515.337).
13See §§ 740.12(a)(2)(v)(A), 740.19(c)(2)(i), and 740.21(d)(4)(ii) of the EAR.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions