Effective on October 9, 2019
Treasury and Commerce Announced Further Amendments to Cuba Sanctions Regulations
The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is amending the Cuban Assets Control Regulations to further implement portions of the President’s foreign policy toward Cuba. This rule amends and, in one case, removes certain authorizations for remittances to Cuba, and the rule also amends the general license relating to “U-turn”financial transactions to eliminate the authorization to process such transactions and instead only allow the rejection of such transactions.
OFAC took the June 5, 2019 action in order to further implement NSPM-5 and the President’s foreign policy toward Cuba, as announced inan April 17, 2019 foreign policy address (April 2019 Address).
The April 2019 Address also announced forthcoming regulatory changes to impose new limits on remittances and to end the use of “U-turn” transactions. Today, OFAC, in consultation with State, is taking additional action to implement those announced changes, as set forth in more detail below. This rule provides for a 30-day implementation period before it is effective in order to allow for technical implementation of these additional restrictions.
In accordance with the April 2019 Address, OFAC is amending several authorizations related to remittances set forth in § 515.570. OFAC is amending § 515.570(a), which authorizes family remittances, to place a cap of $1,000 as the maximum amount that one remitter can send per quarter to one Cuban national as a family remittance. Section 515.570(a) provides that the recipient of family remittances may not be a prohibited official of the Government of Cuba, as defined in § 515.337, or a prohibited member of the Cuban Communist Party, as defined in
§ 515.338. OFAC is now amending § 515.570(a) to prohibit remitters from sending remittances to close family members, as defined in § 515.339, of prohibited officials of the Government of Cuba or prohibited members of the Cuban Communist Party. OFAC also is making a conforming change in § 515.570(f), which authorizes certain remittances from blocked sources.
In further accordance with the policy to limit remittances, OFAC is eliminating the authorization in § 515.570(b) for donative remittances. In light of the removal of this authorization, OFAC also is making a conforming change by removing and reserving the unblocking authorization in paragraph (h) for previously blocked remittances that would have been authorized by paragraph (b). At the same time, in light of NSPM-5’s policy to encourage the growth of a Cuban private sector independent of government control, OFAC is amending § 515.570(g), which authorizes unlimited remittances to certain individuals and independent non-governmental organizations in Cuba, to add a provision to authorize unlimited remittances to certain additional self-employed individuals. OFAC is adding a definition for qualifying self- employed individuals in § 515.340.
Ending “U-turn” transactions
OFAC previously authorized, pursuant to § 515.584(d), any banking institution, as defined in § 515.314, that is a person subject to U.S. jurisdiction, to process funds transfers originating and terminating outside the United States, provided that neither the originator nor the beneficiary is a person subject to U.S. jurisdiction. The April 2019 Address announced that the Department of the Treasury would implement changes to eliminate the authorization for banking institutions subject to U.S. jurisdiction to process “U-turn” transactions found in § 515.584(d). In accordance with that policy, OFAC is amending § 515.584(d) which previously authorized such transactions, to remove the authorization to process such transactions and to replace it with an authorization to reject such transactions.
What does all this means and what types of remittances are allowed to be made by persons subject to U.S. jurisdiction to persons in Cuba? What are the applicable conditions and requirements?
OFAC currently authorizes a number of categories of remittances from persons subject to U.S. jurisdiction to persons in Cuba. As previously noted, the September 9, 2019 rule amended certain general licenses related to specific remittance categories, including family remittances. The September 9, 2019 rule also eliminated the general license for donative remittances that was previously located at 31 CFR § 515.570(b).
Additional details related to the September 9, 2019 changes are set forth below.
Family remittances. Effective October 9, 2019 OFAC placed a cap on family remittances of $1,000 in any consecutive three-month period. Accordingly, persons subject to U.S. jurisdiction are authorized to make remittances to nationals of Cuba who are close relatives of the remitter, provided that the remitter’s total family remittances to any one Cuban national do not exceed $1,000 in any consecutive three-month period. In addition, the recipient may not be a prohibited official of the Government of Cuba, as defined in § 515.337 or a prohibited member of the Cuban Communist Party, as defined in § 515.338, or a close relative of such persons, as defined in
§ 515.339. See 31 CFR § 515.570(a) for additional applicable conditions.
Remittances to certain individuals and independent non-governmental organizations in Cuba. Effective October 9, 2019, OFAC amended the general license that authorizes remittances to certain individuals and independent non-governmental organizations in Cuba to further authorize remittances that encourage the development and operation of private businesses by self-employed individuals. Section 515.340 of the CACR defines “self-employed individual” to mean a Cuban national who satisfies one or more of the following conditions: (a) is an owner or employee of a small private business or a sole proprietorship, including restaurants (paladares), taxis, and bed- and-breakfasts (casas particulares); (b) is an independent contractor or consultant; (c) is a small farmer who owns his or her own land; or (d) is a small usufruct farmer who cultivates state- owned land to sell products on the open market. Persons subject to U.S. jurisdiction are authorized to make remittances to individuals and independent non-governmental entities in Cuba, including pro-democracy groups and civil society groups, and to members of such groups or organizations, to support: humanitarian projects in or related to Cuba that are designed to directly benefit the Cuban people and the Cuban people through activities of recognized human rights organizations, independent organizations designed to promote a rapid, peaceful transition to democracy, and activities of individuals and non-governmental organizations that promote independent activity intended to strengthen civil society. See 31 CFR § 515.570(g) for additional applicable conditions.
Finally, effective October 9, 2019, OFAC removed the general license that authorized persons subject to U.S. jurisdiction to make donative remittances to persons in Cuba, and such remittances are no longer authorized.
See 31 CFR § 515.570 for a complete description of what the OFAC general licenses related to remittances authorize and the restrictions that apply, as well as statements of specific licensing policy.
For remittances from Cuban nationals to persons subject to U.S. jurisdiction, see 31 CFR § 515.587. [09-06-2019] For more information and Q&A click HERE
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