OFAC ISSUES FIVE NEW FAQS REGARDING VESSEL TRANSACTIONS WITH CUBA
February 9, 2017
On January 6, 2017, the Office of Foreign Assets Control (OFAC) of the U.S. Department of Treasury updated the Trade/Business section of its Frequently Asked Questions Related to Cuba (FAQs) document to add five questions and answers regarding vessel transactions with Cuba. The update specifically addressed the “180-day Rule” which is a statutory restriction prohibiting “any vessel that enters a port or place in Cuba to engage in the trade of goods or the purchase or provision of services there from entering any U.S. port for the purpose of loading or unloading freight for 180 days after leaving Cuba, unless otherwise authorized by OFAC.”
Some of the new FAQs pertain to exceptions to the 180-day rule, and OFAC has expanded its explanation regarding vessels that qualify for general licenses and that are not be subject to the 180-day rule or the goods/passengers-on-board rule. Among the vessels that qualify for general license are those involved in transactions incident to “exportations from the US and re-exportations of 100% US-origin items to Cuba”. The “goods/passengers-on-board rule” prohibits any vessel carrying “goods or passengers to or from Cuba or carrying goods in which Cuba or a Cuban national has an interest from entering a U.S. port with such goods or passengers on board, unless authorized or exempt.”
The FAQs related to Cuba are questions 86 – 90, and they read as follows:
- What are the “180-day rule” and the “goods/passengers-on-board rule?”
- Are there any exceptions to the 180-day rule and the goods/passengers-on-board rule?
- Do the exceptions to the 180-day rule authorize shipments to or from Cuba?
- If a foreign vessel is traveling to the United States via Cuba with cargo destined for the United States, may goods remain aboard the vessel for delivery to the United States while the vessel is docked in a Cuban port, and may that vessel and its cargo then enter the United States without being subject to the 180-day rule or the goods/passengers-on-board rule?
- May companies that use different ocean carriers as part of a broader shipping service utilizing code-sharing agreements take advantage of the exceptions to the “180-day rule? ”
Please note that the OFAC’s Cuba FAQs is an explanatory document, and does not have the force of law. It also does not supplement or modify Executive Orders, statutes, or regulations relating to Cuba. Should you have any specific questions regarding Cuba regulations, please don’t hesitate to contact us for legal counsel. The updated document is available at: https://www.treasury.gov/resource-center/sanctions/Programs/Documents/cuba_faqs_new.pdf.
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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