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Nina Mohseni: Treasury amends Cuba sanctions again, but embargo remains

Secretary of State John Kerry in a vintage Chevy Impala in Old Havana on August 15, 2015 (State Department photo)The Treasury Department’s Office of Foreign Assets Control (OFAC) has amended the Cuba sanctions regulations for the second time this year. 

While many of the amendments, which went into effect last Monday September 21, reflect nothing more than some fine-tuning and expansion of the January 16 amendments, here is a glimpse of the changes that affect business and trade. 

Americans and those located in the U.S. are still prohibited from doing business or investing in Cuba unless authorized by a license from OFAC or the Commerce Department, or unless a license exception applies (For example, there have long been license exceptions in place for the export of things like “agricultural commodities” and “consumer communication devices”). 

What has changed, however, is that certain U.S. persons are now allowed to open offices, warehouses, and retail outlets in Cuba. The following types of groups, among others, may take advantage of this new authorization to establish a “physical presence” in Cuba:

  • exporters of authorized goods (e.g., agricultural commodities, construction materials and equipment for the renovation of privately-owned buildings, and tools and equipment for private sector agricultural activity),
  • telecommunications or internet-based service providers, and
  • news bureaus.

This means that Starbucks is allowed to set up shop in Cuba (from a U.S. standpoint at least) – but only for the purpose of selling packaged coffee, as an agricultural commodity.  Starbucks would not be allowed to sell its prepared drinks. 

Similarly, U.S. telecommunications and internet-based service providers, as of September 21, are allowed to establish a “business presence” in Cuba, whether by means of establishing a subsidiary, branch, franchise, agency, or even a joint venture — with any Cuban individual or entity. This includes the authorization to enter into arrangements with Cuban state-owned entities like ETECSA.  

OFAC has clarified that such U.S. entities are allowed to market their services and are allowed to enter into licensing agreements connected to such services. 

Also related to telecom, U.S. persons can now import Cuban-origin mobile applications and hire Cuban nationals to help develop these applications. 

To provide a recap of some of the existing travel-related amendments, not much has changed since the January amendments when 12 categories of travel were authorized pursuant to a “general license” (i.e., no application/approval process is necessary, as opposed to a “specific license,” for which travelers previously had to apply to travel). 

One of the categories authorizes travel to Cuba for the purpose of attending professional meetings or conferences. Such meetings or conferences must be related to the traveler’s profession or area of expertise (so long as it has nothing to do with Cuban tourism).  If you have doubts as to whether you may qualify under any of the general licenses for travel, you can always apply for a specific license. 

As provided in January, authorized travelers may carry back with them up to $400 of merchandise for personal use, but only up to $100 of alcohol or tobacco.  This limitation on value does not apply to certain goods identified by the State Department so long as the goods are produced by independent Cuban entrepreneurs. 

Despite the lasting trade and travel embargo, these regulatory changes represent the first time in decades that U.S. companies can do business directly in Cuba. President Obama supports lifting the embargo, but it will take new legislation to do so, and the administration is not holding its breath. 

And beyond Congress, there is a second hurdle. It remains to be seen how quickly the Cuban government and its agencies will amend their own laws and policies with regard to U.S. companies that wish to enter the Cuban market.   


Nina Mohseni is an associate attorney at Sandler, Travis & Rosenberg in Chicago where she practices customs and international trade law.  She is the vice president of the Chicago chapter of the Organization of Women in International Trade (OWIT Chicago) and vice chair of the Chicago Bar Association’s International Corporate and Trade Law Committee.

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