Cuba…subject to certain limitations

Although these changes revise the licensing policy for certain types of exports, the United States continues to maintain a comprehensive embargo on trade with Cuba. The export and reexport to Cuba of all items subject to the EAR still requires a BIS license, unless authorized by a license exception or exempted from license requirements.

Licensing Policy

There is a general policy of denial for exports and reexports to Cuba of items subject to the Export Administration Regulations (EAR). However, there are exceptions to the general policy of denial, some of which are listed below:

•    Medicines and medical devices, whether sold or donated, are generally approved.
•    Items to ensure the safety of civil aviation and the safe operation of commercial aircraft engaged in international air transportation are generally approved.
•    Items necessary for the environmental protection of U.S. and international air quality, waters and coastlines, including items related to renewable energy or energy efficiency, are generally approved.
•    Telecommunications items that would improve communications to, from, and among the Cuban people are generally approved.
•    Items to meet the needs of the Cuban people, including items for export or reexport to state-owned enterprises, agencies, and other organizations of the Cuban government that provide goods and services for the use and benefit of the Cuban people, are reviewed on a case-by-case basis.

In addition to authorization provided under licenses, there is authorization provided by license exception, some of which are described below.

License Exceptions
A license exception is an authorization to export or reexport under stated conditions certain items without a license that would otherwise require a license. Only some of the license exceptions or a portion thereof, are available for Cuba.

You may export or reexport to Cuba without an individual validated license if your transaction meets all the applicable terms and conditions of the available license exceptions. To determine the scope and eligibility requirements, you must review the sections or specific paragraphs of the EAR. Read each license exception carefully, as the provisions available for sanctioned countries are generally narrow.
This would be time consuming but certainly something we could offer as a service to clients for a consulting fee.

Agricultural Commodities

License Exception Agricultural Commodities (AGR) authorizes the export or reexport of U.S.-origin agricultural commodities to Cuba, provided that your transaction meets all of the criteria of the EAR. Please note that the commodities must meet the definition of "agricultural commodities" and must be designated as EAR99 (No license required exports). To supplement the definition of "agricultural commodities" in the EAR, the U.S. Department of Agriculture maintains a list of specific commodities that fall within the definition.

Note: You must notify the Bureau of Industry and Security prior to any export or reexport (or prior to the first of multiple shipments) under License Exception AGR. Notifications are submitted through the Simplified Network Application Processing Redesign (SNAP-R). The U.S. Government has up to 11 business days to review your transaction prior to shipment. Exporters are required to check SNAP-R or the System for Tracking Export License Applications (STELA) prior to shipment to ensure that the U.S. Government has no objections to your proposed transaction.
This would be something we could guide the exporters with, in the years past this was only available to exporters to utilize, but again for a fee and with some further review we could offer this service as well.

Pursuant to the Trade Sanctions Reform and Export Enhancement Act of 2000, you must sign the contract within 12 months of receiving authorization from the Bureau of Industry and Security (BIS) to export agricultural commodities to Cuba.  You have an additional 12 months from the signing of the contract to export the agricultural commodities to Cuba.  Alternatively, you may sign the contract before receiving export authorization from BIS, but you are still required to obtain BIS authorization prior to exporting the agricultural commodities and must export them within 12 months of the signing of the contract.  However, you are not required to sign a contract for exports to Cuba of agricultural commodities that are donated or commercial samples, but you must still obtain BIS authorization to export them and must do so within 12 months of receiving BIS authorization.

Consumer Communications Devices
License Exception Consumer Communications Devices (CCD) authorizes the export and reexport of certain commodities and software to eligible recipients in Cuba. A list of the eligible items is located in the EAR. Eligible recipients are individuals in Cuba, other than certain Cuban Government and Communist Party officials, and independent non-governmental organizations in Cuba. Organizations administered or controlled by the Cuban Government or the Cuban Communist Party, including schools and hospitals, are not eligible recipients. Note that there are some restrictions on reexports of foreign-produced commodities by U.S.-owned or -controlled entities in third countries.

Gift Parcels
License Exception Gift Parcels and Humanitarian Donations (GFT) authorizes the export and reexport of certain donated items by an individual (donor), or a forwarding service acting on behalf of the donor, to an eligible recipient (donee). Gift parcels may contain a variety of items, including food, most medicines, medical supplies and devices, certain consumer communications devices, and other items of a type normally exchanged as gifts between individuals, subject to restrictions of the EAR. Eligible recipients (donees) are individuals, other than certain Cuban Government or Cuban Communist Party officials, and charitable, educational, and religious organizations in Cuba that are not administered or controlled by the Cuban Government or the Cuban Communist Party. For example, hospitals or schools administered or controlled by the Cuban Government are not eligible recipients.

Donors may send one gift parcel per month per eligible recipient. The combined total domestic retail value of eligible items may not exceed $800 per gift parcel. However, the frequency and value limits do not apply to food donated in gift parcels. Items contained in gift parcels must also be in quantities normally given as gifts between individuals.

Aircraft and Vessels
Flying an aircraft or sailing a vessel to Cuba, even temporarily, constitutes an export or reexport to Cuba. If the aircraft or vessel is subject to the EAR (e.g., those departing from the United States),then BIS authorization is required, either through a license or license exception, to fly/sail to Cuba. Most aircraft and vessels on temporary sojourn to Cuba are eligible for License Exception Aircraft, Vessels, and Spacecraft (AVS) of the EAR. Note that all corresponding requirements and criteria must be met in order to be eligible.

When ineligible for the License Exception AVS, license applications for exports and reexports of aircraft and vessels on temporary sojourn to Cuba are reviewed on a case-by-case basis when they are used to deliver humanitarian goods or services or when their use is consistent with the foreign policy interests of the United States.

Other U.S. Government Agencies
Please be aware that other U.S. Government agencies administer regulations that could also impact your export or reexport transaction. For example, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) maintains certain Cuba-related sanctions. Exporters and reexporters are responsible for complying with all applicable regulatory requirements.

Foreign-Made Items
Both BIS and OFAC administer Cuba sanctions pursuant to the EAR and the Cuban Assets Control Regulations (CACR) respectively. Most export or reexport transactions require general or specific authorizations from both BIS and OFAC. OFAC has issued a general license authorizing all transactions ordinarily incident to the exportation of items from the United States, or the reexportation of 100 percent U.S.-origin items from a third country, to any person in Cuba, provided that the exportation is licensed or otherwise authorized by BIS. Accordingly, for those BIS-licensed exports or reexports, further OFAC authorization generally is not needed. However, in some cases, a specific license from OFAC may be required in connection with BIS-authorized exports or reexports. For example, although BIS may authorize the export to Cuba of foreign-made items from the United States, persons may require a specific license from OFAC for the initial importation into the United States of items specifically intended for export to Cuba. Additionally, even if BIS has authorized the reexport of items that are not 100 percent U.S.-origin to Cuba, persons subject to U.S. jurisdiction would also require a specific license from OFAC to reexport the items, and OFAC’s consideration of applications for such licenses may be subject to statutory restrictions.

From Department of Commerce :
Trade and commerce –
•Physical and business presence.  OFAC will expand the existing authorization for “physical presence” (such as an office, retail outlet, or warehouse) to include entities that engage in authorized humanitarian projects, entities that engage in authorized non-commercial activities intended to provide support for the Cuban people, and private foundations or research or educational institutes engaging in certain authorized activities pursuant to sections. OFAC will also expand the existing authorization for “business presence” (such as a joint venture) to include exporters of goods that are authorized for export or re-export to Cuba or that are exempt, entities providing mail or parcel transmission services or cargo transportation services, and providers of carrier and travel services to facilitate authorized transactions.  The revised regulations will also clarify that the physical and business presence authorizations permit exporters and re-exporters of authorized or exempt goods to assemble such goods in Cuba.  BIS will make conforming changes to the EAR to generally authorize exports and re-exports of eligible items to establish and maintain a physical or business presence that is authorized by OFAC.

•Importation of software.  The CACR currently authorizes the importation of Cuban-origin mobile applications.  OFAC will expand this authorization to allow the importation of Cuban-origin software.
•Shipping.  BIS will generally authorize vessels to transport authorized cargo from the United States to Cuba and then sail to other countries with any remaining cargo that was onloaded in the United States.
•Cuban private sector.  BIS will adopt a licensing policy of case-by-case review for exports and re-exports of items that would enable or facilitate exports from Cuba of items produced by the Cuban private sector.

From Bureau of Industry and Security :
What types of items are now generally approved for export to Cuba?
The January 27, 2016 rule revised the licensing policy from possible approval on a case by-case basis to a general policy of approval for exports and reexports of telecommunications items that would improve communications to, from, and among the Cuban people; certain commodities and software to human rights organizations or to individuals and non-governmental organizations that promote independent activity intended to strengthen civil society in Cuba; commodities and software to U.S. news bureaus in Cuba whose primary purpose is the gathering and dissemination of news to the general public, and agricultural items that are outside the scope of “agricultural commodities” as defined in the Export Administration Regulations (EAR) (such as insecticides, pesticides and herbicides) as well as agricultural commodities not eligible for License Exception Agricultural Commodities (such as those that are specified in an entry on the Commerce Control List (CCL), i.e., are not designated EAR99).  Additionally, exports of medicines and medical devices to Cuba continue to be generally approved, with certain exceptions specified of the EAR.

Did the January 27, 2016 rule make fundamental changes to U.S. trade policy towards Cuba?
No.  The rule retained the prohibition on the export or reexport to Cuba of items subject to the Export Administration Regulations (EAR) (15 CFR Parts 730-774) without a license or applicable license exception.  Consistent with long-standing policy to support the Cuban people, the rule amended the licensing policy in § 746.2 of the EAR to add a general policy of approval for certain exports and reexports previously subject to case-by-case review and a policy of case-by-case review for exports and reexports of items not eligible for license exception to meet the needs of the Cuban people.

This in a nutshell  is what we have at this time for Cuba.  So any exports to Cuba will have to be reviewed and verified with the different agencies involved to get clearance for shipping.

SCS BlogVanessa Frye