For those of you wondering if Cuba’s now open for business, the answer is “well … not quite yet.” While there has been some ease of the restrictions placed on Cuba, travel is not permitted without a general or specific license from the U.S. Department of the Treasury.
As everyone is aware, Cuba was removed from the U.S. list of state sponsors of terrorism on May 29. Per U.S. Secretary of State John Kerry, “The State Department announced last month it had completed a review of Cuba's place on the list, determining the nation's government had not assisted terrorist organizations in the preceding six months and had made assurances it would not do so in the future. Under federal law, the State Department was required to provide a 45-day review period, which ended Friday, May 29.”
Steps toward Reviving Cuba’s Economy
The removal of Cuba from this list is a major step in reviving the Cuban economy. It allows banks and other businesses to feel more comfortable in conducting business in the country, although trade embargoes still exist.
The most recent guidance from the Treasury concerning Cuba was published on May 5, and it was titled “Publication of Guidance Related to Travel between the United States and Cuba.” This guidance covers travel from the U.S. to Cuba and vice versa. Per the Treasury, “Persons subject to U.S. jurisdiction who are traveling to/from Cuba under one of the twelve categories of travel may be transported via aircraft or commercial passenger vessel between the U.S. and Cuba.”
12 Categories of Travel
The 12 categories of travel are as follows: family visits; official government business (domestic and foreign); journalistic activity; professional research and professional meetings; educational activities; religious activities; public performances and other exhibitions; humanitarian projects; support for the Cuban people; activities of private foundations; exportation, importation or transmission of information; and lastly, certain authorized export transactions.
These 12 categories of travel all fall within the scope of the general license. That essentially means that if an individual is traveling to Cuba and the travel falls within any of the 12 categories, no other permission from OFAC is required. However, any intended travel classified outside of those categories requires either a general or specific license. According to OFAC, a specific license is an authorization from OFAC to engage in a transaction that otherwise would be prohibited. Specific licenses are issued on a case-by-case basis after an application is submitted.
What’s on the Horizon?
It’ll be interesting to see how the totality of Cuban sanctions unravels. As OFAC and the Department of Commerce begin to issue amendments to Cuba-related regulations, more transactions to Cuba will begin to take place and organizations will be forced to make amendments to their screening policies and procedures.
As our new relationship with Cuba continues to unfold, financial institutions and businesses should continue to monitor Cuba-related sanctions as part of their ongoing compliance efforts, paying special attention to any watch list updates that are issued in the coming months.
Ronnie Wylie is the data services manager with CSI Regulatory Compliance, where he oversees the company’s watch lists, list update process and the Data Services department. Ronnie has been with the regulatory compliance team for more than seven years, and he also is a member of ACAMS.