On March 16, 2016 and just before President Obama’s planned visit to Cuba, the Commerce Department’s Bureau of Industry and Security (BIS) and the Treasury Department’s Office of Foreign Assets Control (OFAC) issued another round of rules liberalizing U.S. trade relations with Cuba. Consistent with the Administration’s policy toward Cuba, BIS’s rule aims to improve the lives of and encourage engagement with the Cuban people, while at the same time limiting any benefits to the Cuban government-run economy and Cuban military, police, security, and intelligence entities.

Almost 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. Among the more significant changes to U.S. policy, the new rule permits a case-by-case review, rather than the general policy of denial, of license applications for items that will enable or facilitate the export of items produced by Cuba’s private sector. Prior to this rule, BIS’s license exceptions and beneficial licensing policies generally have been limited to activities in Cuba. This change recognizes that enabling or facilitating exports of items by private businesses and entrepreneurs in Cuba can empower the Cuban people and foster growth of the private sector. BIS will continue to deny applications to export or reexport items for use by state-owned enterprises, agencies, and other organizations that primarily generate revenue for the state, as well as applications to export or reexport items destined to the Cuban military, police, intelligence, or security services.

The new rule also revises License Exception Aircraft, Vessels and Spacecraft (AVS) in the EAR to permit vessels departing the United States on temporary sojourn to Cuba to carry cargo bound for other destinations without the need to obtain a BIS license. To be eligible for this license exception, the cargo must depart with the vessel at the end of its temporary sojourn, cannot enter the Cuban economy (i.e., be removed from the vessel for use in Cuba), and cannot be transferred to another vessel while in Cuba. This relaxation allows for more effective use of vessels and the selection of efficient shipping routes.

Additionally, the EAR’s License Exception Support for the Cuban People (SCP) permits exports and reexports to Cuba of certain items subject to low-level export controls for use by eligible end-users to establish, maintain, or operate a physical or business presence in Cuba. BIS’s rule updates this exception to account for OFAC’s newly authorized end-users. For example, exporters of authorized or exempt goods, which are now permitted to establish and maintain a business presence in Cuba, can take advantage of License Exception SCP to export certain items that are necessary for their business use in Cuba.

Although the Cuba embargo remains in place, the Administration continues to find creative ways to chip away at the restrictions in an effort to build a stronger and more open relationship with the Cuban people.