RECENT CHANGES TO U.S. CUBA AND IRAN SANCTIONS REGIME

April 5, 2016

Aviation-related commercial trade liberalized between U.S. and Iran

On March 24, 2016 the Office of Foreign Assets Control (OFAC) took an incremental step towards liberalizing aviation-related commercial trade between the U.S. and Iran by issuing a General License GL-1 intended to provide U.S. citizens greater flexibility to enter into certain preliminary contractual agreements related to the export or re-export to Iran of commercial passenger aircraft and related parts and services. The General License does not authorize U.S. entities to export aviation-related materials to Iran. Under current law, OFAC requires a specific license to contract with Iran and the General License also does not permit U.S. citizens to contract with persons or entities on the Specially Designated Nationals list. The General License does however authorize U.S. citizens to negotiate “executory contracts, executory pro forma invoices, agreements in principle, executory offers capable of acceptance such as bids or proposals in response to public tenders, binding memoranda of understanding, or any other similar agreement” that are preliminary in nature and do not consummate any particular transaction.

U.S. sanctions on Cuba eased again

On March 15, 2016, OFAC amended the Cuban Assets Control Regulations, 31 C.F.R. part 515, to ease certain sanctions related to, among others, travel between the United States and Cuba. The easing of these sanctions, which coincides with the Department of Transportation’s current proceeding to select U.S. carriers to provide scheduled service between the United States and Cuba, include the following:

• Educational Travel – Individuals will be authorized to travel to Cuba for individual people-to-people educational travel and will no longer be required to undertake such travel under the auspices of a U.S. educational organization and/or be accompanied by a representative of the sponsoring organization.
• Payment of Salaries to Cuban Nationals – U.S. companies are authorized to engage in transactions related to the sponsorship or hiring of Cuban nationals to work or perform in the United States similar to nationals from other countries with a focus on Cuban athletes, artists, performers.
• Trade in Cuban-Origin Merchandise – authorizes certain dealings in Cuban-origin merchandise by individuals for personal consumption while in a third-country, and allows individuals to receive or obtain services from Cuba or a Cuban national that are ordinarily incident to travel and maintenance within a third country.

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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