Stringent Cuba Regulations Released to Implement Trump Policy

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By Cheryl Bolen

A restrictive new set of regulations released by three federal agencies will implement the changes to Cuba sanctions announced by President Donald Trump in June, a White House official said on a conference call.

Among the changes, people subject to U.S. jurisdiction will be prohibited from engaging in certain direct financial transactions with entities—including holding companies, 83 hotels throughout the island, marinas, and stores—identified by the State Department in an expansive Cuba Restricted List.

In June, Trump issued a memorandum restricting certain financial transactions and travel in an effort to encourage the Cuban government to address abuses of its people.

“My Administration will continue to evaluate its policies so as to improve human rights, encourage the rule of law, foster free markets and free enterprise, and promote democracy in Cuba,” the memorandum said.

Taking Effect Immediately

The Treasury Department’s Office of Foreign Assets Control and the Commerce Department’s Bureau of Industry and Security are amending their Cuban Assets Control Regulations and Export Administration Regulations.

The changes are to take effect Nov. 9, when the regulations are published in the Federal Register.

Under one amendment, Commerce’s BIS is establishing a general policy of denial for license applications to export items for use by entities on the Cuba Restricted List, unless the transaction is otherwise consistent with the president’s memorandum.

At the same time, BIS is simplifying and expanding its license exception that authorizes certain license-free exports to the Cuban private sector, such as kitchen appliances for use in privately owned homes or vehicles for use by private-sector taxi operators.

Adding Difficulties

These additional regulations on U.S. companies will simply make it harder to do business in Cuba, said James Williams, president of Engage Cuba, a coalition of private companies and organizations working to end the travel and trade embargo on Cuba.

“Given the intertwinement of Cuba’s economy, these new restrictions on U.S. businesses could hinder that progress, which could cost the U.S. economy billions and affect thousands of jobs,” Williams said in a statement.

The new regulations are intended to support compliance with U.S. law, including the embargo on Cuba and the statutory ban on tourism, a White House official told reporters on a conference call Nov. 8.

One of the goals of the new rules is to lay the groundwork to empower the Cuban people to develop economic and political liberties, the official said.

Restricted List

In developing its Cuba Restricted List, which includes 180 entities, the State Department identified those under the control of or acting on behalf of the Cuban military, intelligence, or security services, a State Department official said.

The list will be updated periodically, as the need arises, the official said.

At Commerce, BIS will amend its export regulations in three general categories:

  •  licensing policy for items requiring individual licenses for export to Cuba;
  •  changes to parties who may be eligible for license exceptions; and
  •  changes to exports to the Cuban private sector.
Specifically, the regulations will be amended to reference the Cuba Restricted List for licensing policy, so potential exporters know that if they have a transaction they would like to undertake with one of those entities, it probably will be denied, the official said.

Exports consistent with the president’s memorandum, such as agricultural commodities, medicine, medical devices, and items for use by the Cuban private sector, will probably still be approved, the official said.

To contact the reporter on this story: Cheryl Bolen in Washington at cbolen@bgov.com

To contact the editor responsible for this story: Paul Hendrie at pHendrie@bna.com

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