The US – Cuba Initiative


President Obama’s Initiative Towards Cuba Seeks Changes that will Result In Increased Travel And Economic Activity Between The Countries. by Marco A. Gonzalez, Jr., Esq.

On December 17, 2014, the President announced a change in policy that will allow for significant modifications to the economic sanctions with Cuba. While many of the initiatives outlined by the Administration will require legislative action to completely eliminate barriers to full trade with Cuba under the embargo, the executive steps being taken by the Administration, via amendments to existing regulations of the Departments of Treasury and Commerce, will allow for increase travel to the island by American citizens, limited imports of Cuban goods to the U.S., authorized telecommunications sales and services, and an expansion of licensed exports to the Island to improve the living standards of Cubans and support the nascent entrepreneurial sector in the Island.

Steps to Improve Travel to Cuba

The Administration is taking steps, via executive action, to improve travel and remittances policies to further increase people-to-people contact and enhance the free flow of information to, from and among the Cuban people. General OFAC licenses will become available to all authorized travelers in the 12 existing travel categories:

  1. family visits;
  2. official business of the U.S. government, foreign governments, and certain intergovernmental organizations;
  3. journalistic activity;
  4. professional research and professional meetings;
  5. educational activities;
  6. religious activities;
  7. public performances, clinics, workshops, athletic and other competitions, and exhibitions;
  8. support for the Cuban people;
  9. humanitarian projects;
  10. activities of private foundations or research or educational institutes; and
  11. the exportation, importation, or transmission of information or information materials; and
  12. certain export transactions that may be considered for authorization under existing regulations and guidelines.

U.S. travelers in these authorized categories of travel to Cuba will be able to make arrangements through any service provider that complies with the regulations governing travel services to Cuba, and general licenses will authorize provision of such services. The change in policy also makes it easier for Americans to provide business training for private Cuban businesses and small farmers and provide other support for the growth of Cuba’s nascent private sector. Additional options for promoting the growth of entrepreneurship and the private sector in Cuba will also be explored.

Expansion of Sales and Exports and Limited Imports

The President’s initiative also seeks to expand the sales and exports of certain goods and services to Cuba so that the Cuban people have access to lower-priced goods to improve living standards. The planned amendments to OFAC’s Cuban Asset Control Regulations (CACRs) and the Department of Commerce’s Export Administration Regulations (EARs) include expanded commercial sales and exports from the U.S. of particular building materials for private residential construction, goods for use by the private sector Cuban entrepreneurs, and agricultural equipment for small farmers. The Administration hopes that this change will make it easier for Cuba citizens to improve their living standards and gain greater economic independence from the state. In addition, licensed U.S. travelers to Cuba will be authorized to import $400 worth of goods from Cuba, of which no more than $100 can consist of tobacco products and alcohol combined.

Financial Considerations

Because current law limits the terms of licensed exports to “cash in advance,” the regulatory definition of this phrase will be revised to specify that it means “cash before transfer of title.” This amendment is expected to provide more efficient financing of authorized trade with Cuba. Moreover, in connection with the facilitation of authorized, licensed transactions between the countries, additional amendments will permit U.S. institutions to open correspondent accounts at Cuban financial institutions to facilitate the processing of authorized transactions. The Administration also seeks to change regulations to allow U.S. credit and debit cards to be permitted for use by U.S. travelers to Cuba.


In the telecommunications area, the changes being made by the Administration will contain expanded capabilities for Cubans to communicate with people in the United States and the rest of the world. This would include the commercial sale of certain consumer communications devices, related software, applications, hardware, and services, and items for the establishment and update of communications-related systems. The changes would also allow telecommunications providers to establish the necessary mechanisms, including infrastructure, in Cuba to provide and improve commercial telecommunications and internet services between the countries.

Third Countries

Another key component in the Administration’s plans include updating the application of the Cuban sanctions in third countries. The upcoming amendments will allow U.S. owned or controlled entities in third countries to be generally licensed to provide services to, and engage in financial transactions with, Cuban individuals in third countries. In addition, general licenses will unblock the accounts at U.S. banks of Cuban nationals who have relocated outside of Cuba, permit U.S. persons to participate in third-country professional meetings and conferences related to Cuba, and allow foreign vessels to enter the United States after engaging in certain humanitarian trade with Cuba.

The Administration expects to publish its amendments in the coming weeks. Until then, the announced changes will not be effective. While these modifications do not eliminate the need for obtaining licenses from the U.S. government for authorized transitions, the anticipated amendments will stimulate added travel to and economic activity with the Cuban people.

The article’s author, Marco A. Gonzalez, Jr., Esq. is  Partner at Nicoll, Davis & Spinella, LLP.  Mr. Gonzalez has over 15 years’ experience representing and counseling clients in Puerto Rico, the Virgin Islands and throughout the Caribbean.

We thank The Statewide Hispanic Chamber of Commerce of New Jersey for sharing this article and authorizing its redistribution throughout our channels. The SHCC-NJ plans on holding an event with Marco Gonzalez to discuss the various business issues the amendments present once the amendments are published.

We will keep you posted on this important matters.

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