[1]The following guest post is from Timothy O’Toole [2], a Member of Miller & Chevalier who focuses on sanctions, export controls, and other international regulatory and compliance issues.
Sixteen months ago, the President first announced a change in Cuba sanctions policy, one that attempted to move from a complete U.S. embargo of Cuba to a policy of limited engagement between the two countries. FCPAméricas has previously published about this historic development here [3].
In the time since, embassies have been opened in the United States and in Cuba, and both the U.S. Secretary of State and the President have visited the Island. U.S. regulators have also taken substantial steps to encourage increased travel by U.S. citizens to Cuba and increased trade between the United States and Cuba. The new policies have now permitted virtually all travel by U.S. persons to Cuba – except travel for tourism purposes – so long as the criteria set forth by the regulations are met and records supporting eligibility are maintained.
U.S. regulators have also created a more favorable environment for certain types of exports to Cuba, especially those that increase the information flow between the two countries or otherwise provide support for the Cuban people. Finally, U.S. regulators have sought to encourage increased trade and travel by allowing the U.S. financial system to participate in a limited (but growing) fashion by providing financing to support the increased travel and trade, discussed here [4].
Two recent revisions to policy exemplify how these changes are working. In January 2016, U.S. regulators built on earlier reforms by (1) removing and easing some financing restrictions for many authorized exports, (2) adding to the list of authorized or presumptively approved exports, and (3) further loosening some restrictions on airlines and vessels making trips to Cuba. Changes in March 2016 increased yet again the types of permitted travel to Cuba (while still excluding tourist travel), allowed “U-turn” financial transactions that pass through the United States on their way to or from Cuba and a third country, and expanded the existing authorization that permits U.S. companies to establish a physical and business presence in Cuba in certain circumstances.
The bottom line regarding these changes is that the Cuba embargo is being gradually, but steadily, loosened. Additional engagement is occurring. When and if the next round of changes will come is known only to U.S. regulators. But based on the past 16 months, it is safe to assume it will come, and that it will focus on increased engagement in the travel, exports and financial sectors.
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