Trade Compliance Flash: U.S. Tightens Cuba Embargo, Further Restricts Cuba Travel
Back in April, the administration previewed coming changes to the Cuba embargo, suggesting that it would further restrict travel between the U.S. and Cuba. Today it did so, taking two major actions.
First, effective June 5, 2019 (today), the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) is amending the Cuban Assets Control Regulations (CACR) to entirely eliminate the general license that previously applied to people-to-people travel. This general license was previously narrowed in June 2017, when the president announced that people-to-people travel to Cuba would be prohibited for individuals and could instead be conducted only under the auspices of an organized group. Today's change eliminates the general license entirely. This is important because U.S. persons are generally prohibited by the embargo in almost all activities with respect to Cuba and may travel there only when a general or specific license authorizes them to do so. Before today, there were 12 general licenses authorizing such travel, but now there are 11. The general license for people-to-people travel was one of the most, if not the most, widely used Cuba general licenses, making travel to Cuba after today much more restricted. While the changes are effective today, they do not apply to trips for which at least one travel-related transaction – such as the purchase of a ticket – occurred before today.
Second, also effective today, the U.S. Department of Commerce's Bureau of Industry and Security (BIS) restricted the license exception that allows temporary export of U.S. vessels and aircraft to Cuba. This license exception for Aircraft, Vessels and Spacecraft (AVS) removed from its scope most-non-commercial aircraft and all passenger and recreational vehicles, which had previously been allowed to be "exported" to Cuba temporarily – i.e., as part of a voyage to Cuba, so long as a return voyage occurred relatively quickly. This means that private and corporate aircraft, cruise ships, sailboats, fishing boats, and other similar aircraft and vessels generally will be generally prohibited from going to Cuba. Cargo vessels and commercial airlines remain eligible to travel to Cuba from the U.S. under AVS, so long as all of the terms and conditions of the license exception are met.
Today's actions greatly complicate lawful travel to Cuba from the U.S., and the speedy effective date of the changes will create considerable compliance challenges.
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