PRESIDENT TRUMP ANNOUNCES DEPARTURE FROM OBAMA CUBA POLICY
July 7, 2017
on June 16, 2017, President Trump announced a new initiative that would pare down former President Obama’s business and travel policies with Cuba. The most significant change removes “individual people-to-people travel” between the U.S. and Cuba. The Office of Foreign Asset Control (OFAC), which enforces and administers economic and trade sanctions, announced that licenses instead will be issued for “group travel” “under the auspices of an organization… that sponsors such exchanges to promote people-to-people contact.” There are not currently any other planned changes to the other 11 general licenses authorizing travel to Cuba.
A second proposed change is that persons subject to U.S. jurisdiction who travel to Cuba will be prohibited from engaging in transactions with “certain identified Cuban military, intelligence, or security services.” To assist in implementing this requirement, the State Department will issue a list of military affiliated entities, such those owned by the Grupo de Administración Empresarial S.A. (GAESA), with which direct transactions are generally prohibited; this is expected to include many of the military owned-hotels and other tourism-related businesses in Cuba. It is being reported that airlines will be exempt from this restriction.
It should be noted that none of the above restrictions will take effect until the new OFAC regulations are issued, which are not expected before September. Additionally, according to the FAQ’s issued by OFAC on the issue, any travel-related transaction including direct transactions with entities related to the “Cuban military, intelligence, or security services” that may be implicated by the new Cuba policy will be permitted, provided that the transaction was initiated prior to the issuance of the forthcoming regulations although it remains to be seen how OFAC will address airlines’ ability to enter into future contracts with military entities.
If you have any questions, please contact Evelyn Sahr (esahr@eckertseamans.com, 202-659-6622) or Drew Derco (dderco@eckertseamans.com, 202-659-6665).
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