The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) published sweeping amendments to the Export Administration Regulations (EAR), implementing the changes first announced by the President on December 17, 2014 and paving the way for increased trade and engagement with Cuba.  A license is required to export and reexport to Cuba any item subject to the EAR, including EAR99 items, unless certain limited license exceptions apply.  BIS’s amendments generally are designed to ease these export restrictions in order to help improve living conditions, empower private sector economic activity, strengthen civil society, and promote the free flow of information in Cuba, as well as to simplify the donation process and protect the environment.

One of the most significant changes is the creation of new License Exception Support for the Cuban People (SCP).  This authorizes exports and reexports of certain items subject to low-level export controls (i.e., EAR99 items or items controlled for export only for anti-terrorism reasons) to improve living conditions and promote economic activity in Cuba.  In this regard, License Exception SCP authorizes exports and reexports, whether sold commercially or donated, of building materials, equipment, and tools for use by the private sector to construct or renovate privately-owned buildings; tools and equipment for private sector agricultural activity; and tools, equipment, supplies, and instruments for use by private sector entrepreneurs.

To help strengthen civil society in Cuba, License Exception SCP also authorizes certain exports and reexports of donated items subject to low-level controls to be used in scientific, archaeological, cultural, ecological, educational, historic preservation, or sporting activities, along with the temporary export (for a two-year period) of certain items by persons departing the United States for their use in such activities or for professional research.  The activities generally cannot relate to military items or items controlled for export purposes for reasons other than anti-terrorism controls.  In addition, items subject to low-level controls are authorized for export and reexport to human rights organizations, individuals, and non-government organizations that promote independent activity intended to strengthen Cuba’s civil society.

Finally, to improve and support the free flow of information in Cuba, License Exception SCP permits the export and reexport of items subject to low-level controls for telecommunications, such as access to the Internet, use of Internet services, and the creation and upgrade of telecommunications infrastructure, and items for use by news media personnel and U.S. news bureaus.  Note that the commercial sale of certain consumer communications devices to eligible individuals and independent non-governmental organizations in Cuba is also permitted pursuant to another exception to the EAR’s licensing requirements, License Exception CCD.

BIS’s new authorizations, along with OFAC’s amendments to its Cuba sanctions regulations, not only chart a new course in U.S. relations with Cuba, but also significantly loosen trade restrictions and effectively open a market that has long been closed to U.S. manufacturers and exporters.

A comprehensive analysis of the changes to U.S. export controls and sanctions applicable to Cuba can be found here and here.