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10 July 2019
On 5 June 2019 the Department of Treasury's Office of Foreign Assets Control (OFAC) and the Department of Commerce's Bureau of Industry and Security (BIS) announced rules designed to further restrict travel to Cuba. Specifically, the OFAC announced that, effective immediately, it was eliminating a sub-category of authorised travel to Cuba entitled "people-to-people educational travel". Simultaneously, BIS promulgated a rule that eliminated authorisation for the export or re-export of most non-commercial (ie, private and corporate) aircraft on "temporary sojourn" to Cuba. These changes significantly restrict non-commercial aviation traffic to Cuba going forward for all persons subject to the OFAC's jurisdiction.
The OFAC maintains jurisdiction over any 'US person', which is broadly defined as "any United States citizen, permanent resident alien… or any person in the United States". Foreign nationals are deemed US persons under the OFAC's jurisdiction so long as they enter the United States, regardless of the duration or purpose of their visit. Thus, for example, foreign nationals who transit or connect at US airports for travel to Cuba are subject to the OFAC's rules.
As part of the Cuban sanctions programme, OFAC provides 12 general licences that authorise travel to Cuba by US persons for the following purposes:
The recently announced OFAC rules affect only the general licence for educational activities and alter no other general licence areas. Specifically, the new actions by OFAC target a sub-category of the general licence for educational activities entitled 'people-to-people educational travel'. This sub-category has frequently been viewed as a means for many parties to visit Cuba for tourism on the basis that their trip has an educational purpose. Prior to the most recent actions, the sub-category for people-to-people travel permitted travel-related transactions "directly incident to educational exchanges not involving academic study pursuant to a degree program".
The new restrictions significantly limit the scope of the educational activities authorisation, which now provides only for travel-related transactions relating to "accredited U.S. undergraduate or graduate degree-granting academic institutions, their students enrolled in an undergraduate or graduate degree program at the institution, and their full-time permanent employees".
As a result, the amended rules and regulations will continue to curb tourism to Cuba by persons subject to the OFAC's jurisdiction.
Although the OFAC has eliminated the authorisation for people-to-people travel going forward, it has included a grandfather clause to the regulations. This clause permits certain group people-to-people educational travel, as was previously authorised, so long as the traveller completed their travel-related transactions (ie, purchased a ticket) prior to 5 June 2019. Thus, as long as travel was purchased before 5 June 2019, that passenger can proceed with travel to Cuba under the people-to-people educational travel category, even if that trip does not occur for weeks or months after 5 June 2019.
Under the OFAC's regulations, authorised carriers that transport passengers to Cuba must maintain records indicating the specific provision of the Cuba Assets Control Regulations that authorises travel to Cuba. As stated above, this applies to all individuals travelling from the United States, regardless of citizenship. Carriers must maintain these records, including the names and addresses of individual travellers, for five years from the date of the transaction. In the event that a traveller is authorised to enter Cuba under a specific licence from the OFAC, the carrier must retain either the specific licence number or a copy of the license itself for five years.
For further information on this topic please contact Matthew J Howell at Cozen O'Connor by telephone (+1 202 912 4800) or email (firstname.lastname@example.org). The Cozen O'Connor's website can be accessed at www.cozen.com.
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