On January 27, 2016, the Commerce Department’s Bureau of Industry and Security (BIS) published yet another new rule liberalizing U.S. trade relations with Cuba. The rule adds new categories of activities that BIS will license and is intended to engage and empower the Cuban people, while also maintaining stringent restrictions on and limiting the benefits to the Cuban government-run economy and Cuban military, police, security, and intelligence entities. As with other recent amendments to its Cuba-related export controls, BIS’s rule is being issued in conjunction with changes made to the Treasury Department, Office of Foreign Assets Control’s Cuba sanctions program.
Nearly all exports of U.S. items to Cuba require a BIS license, and with few exceptions, license applications are subject to a policy of denial. BIS’s rule explicitly states that the following categories of licenses are now subject to a general policy of approval:
- Items that are necessary to ensure the safety of civil aviation and the safe operation of commercial aircraft engaging in international air transportation;
- Telecommunications items that would improve communications to, from, and among the Cuban people;
- Items to human rights organizations or to individuals and non-governmental organizations that promote independent activities designed to strengthen civil society in Cuba;
- Commodities and software for use by U.S. news bureaus in Cuba whose primary purpose is gathering and disseminating news to the general public; and
- Agricultural items and agricultural commodities that are not eligible for a license exception (g., insecticides, pesticides, herbicides, and agricultural commodities classified above the EAR99 level).
Additionally, BIS’s rule permits a case-by-case review, rather than the general policy of denial, of license applications for items intended to meet the needs of the Cuban people, providing several new avenues for companies to do business in Cuba. Notably, the case-by-case review policy applies to commodities exported or reexported to state-owned enterprises and Cuban government organizations that ultimately provide the goods for the use and benefit of the Cuban people. The new case-by-case licensing policy covers items for agricultural production, artistic endeavors, education, food processing, disaster preparedness, relief and response, public health and sanitation, residential construction and renovation, and public transportation. Further, the new policy includes exports and reexports of items for construction of water treatment, electricity/energy, sports and recreation, and other facilities that directly benefit the Cuban people. Finally, the new policy applies to exports and reexports to wholesalers and retailers of items for domestic consumption by the Cuban people.
The Cuba embargo remains in place, but it is clear that the U.S. government is making strides to significantly ease trade restrictions on Cuba and build a stronger and more open relationship with the Cuban people.