Commerce And Treasury Further Ease Restrictions On Cuba

On March 16, 2016, the Obama Administration took another step towards normalizing trade relations with Cuba (a policy first announced by the Administration in December 2014), through new regulations published by the Departments of Commerce (see 81 Fed. Reg. 13972) and Treasury (81 Fed. Reg. 13989). These new regulations are the latest in a series of authorizations related to consumer communications, the operation of U.S. companies in Cuba, and travel, among others.

These new regulations focus on four main areas. First, they ease travel restrictions on Americans seeking to engage with the Cuban people through people-to-people educational travel. Second, they increase the access of Cuban nationals to the U.S. financial system by allowing certain transactions processed through U.S. institutions and the maintenance of bank accounts in the U.S. Third, the regulations expand current authorizations related to trade and commerce (such as easing of shipping restrictions, and expanding authorizations for U.S. persons engaged in certain activities to establish a presence in Cuba). Finally, U.S. companies may now sponsor nonimmigrant Cuban nationals for visas to work in the U.S. and to pay their salaries.

Below is a brief summary of some of the new authorizations:

Travel restrictions:

People-to-people educational travel. Until now, the authorization for educational travel required that trips be organized by an entity subject to U.S. jurisdiction and that all travelers be accompanied by a sponsor from that organization during the travel. These new regulations authorize travel to Cuba for educational "individual people-to-people" travel, subject to certain conditions. For example, the individual traveler must have a full schedule of educational activities that results in meaningful interaction between the U.S. traveler and Cuban individuals, and: 1) enhance contact with the Cuban public; 2) support Cuban civil society; or 3) promote the Cuban people's independence from Cuban authorities. U.S. travelers must continue to keep records of their activities while on the travel, or if traveling with an organization, they may allow that organization to keep records on their behalf. 31 C.F.R. § 515.565(b). These regulatory changes do not affect the statutory ban on tourism. Access to U.S. Financial System:

U-turn transactions. OFAC is amending its regulations to authorize "U-turn" transactions through the U.S. financial system in which Cuba or a Cuban national...