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From Banking and Finance Law Daily, September 21, 2015

Treasury further eases restrictions on Cuban trade, travel

By Lisa M. Goolik, J.D.

The Treasury Department and the Department of Commerce have announced additional revisions to the Cuban Assets Control Regulations and Export Administration Regulations. According to Treasury Secretary Jacob J. Lew, the regulatory changes build on the revisions implemented in January and further ease sanctions related to travel, telecommunications and internet-based services, business operations in Cuba, and remittances. “A stronger, more open U.S.-Cuba relationship has the potential to create economic opportunities for both Americans and Cubans alike,” said Lew. The revised rules take effect today, Sept. 21, 2015.

Background. On Jan. 15, 2015, Treasury’s Office of Foreign Assets Control (OFAC) issued revised regulations relating to the flow of Cuban assets. The revised regulations were intended to implement the relaxed policies regarding authorized travel to Cuba by U.S. citizens, certain authorized commerce, and the flow of information to, from, and within Cuba. To provide additional guidance, OFAC also published a number of Frequently Asked Questions (see Banking and Finance Law Daily, Jan. 15, 2015).

The revised rules build upon those changes, further easing the flow of persons and commerce between the two countries. Among other changes, the revisions continue to facilitate travel to Cuba for authorized purposes, expand telecommunications and internet-based services, allow certain persons to establish a physical presence, allow certain persons to open and maintain bank accounts in Cuba, authorize additional financial transactions, and authorize all persons subject to U.S. jurisdiction to provide goods and services to Cuban nationals located outside of Cuba. As with the earlier revisions, OFAC provided an updated FAQ.

Accounts. Banking institutions will be able to open and maintain accounts for Cuban individuals for use while the Cuban national is located outside of Cuba and will no longer be required to block such accounts if not closed before the Cuban national’s departure. The changes also allow U.S. travelers to Cuba to open and maintain bank accounts in Cuba in order to access funds for authorized transactions while in Cuba.

In addition, persons subject to U.S. jurisdiction engaging in authorized activities will be allowed to establish and maintain a physical presence, such as an office, retail outlet, or warehouse, in Cuba. Those individuals and entities will also be authorized to open and maintain bank accounts in Cuba.

Lastly, the revisions remove the $250 cap on payments from blocked accounts held by Cuban nationals in the United States in a non-immigrant status to use for living expenses to more adequately allow Cuban nationals lawfully present in the United States to access sufficient funds for living expenses.

Remittances. The revisions also lift the $2,000 per quarter limit on authorized periodic remittances to Cuban nationals, other than prohibited Cuban Government or Cuban Communist Party officials, as well as lift limits on authorized remittances that individuals may carry to Cuba. Accordingly, the revisions also permit and unblock remittances that were previously blocked because they exceeded the then-applicable caps on periodic remittances.

The revisions also authorize by general license remittances from Cuba and from Cuban nationals in third countries to the United States and allow financial institutions to provide related services, and authorize an expanded general license for additional remittances to Cuban nationals in connection with the administration of estates.

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