The U.S. Treasury Department has amended the Cuban Assets Control Regulations as of January 27, 2016. The changes are meant to further facilitate authorized travel to Cuba by persons subject to U.S. jurisdiction; certain authorized commerce; and the flow of information to, from, and within Cuba. The existing Cuba embargo remains in place—that can only be lifted by an act of Congress—and therefore most transactions between the U.S., or persons subject to U.S. jurisdiction, and Cuba continue to be prohibited.
The Department of Commerce’s Bureau of Industry and Security is coordinating with the Treasury’s Office of Foreign Asset Control (OFAC) to add a general policy of approval for certain exports rather than requiring a case-by-case review. At this time, however, the approval will not extend to the provision of professional design services or construction activities. Persons subject to U.S. jurisdiction are prohibited from doing business or investing in Cuba unless licensed by OFAC.
OFAC has issued general licenses within 12 categories of authorized travel-related transactions to, from, or within Cuba that previously required a specific license. Travel-related transactions are permitted by general license for activities involving professional research and professional meetings. Among other things, this general license authorizes (subject to conditions) professional research in Cuba relating to a traveler’s profession, professional background, or area of expertise. This could be argued to include prospecting visits for representatives of design firms. The traveler’s schedule of activities must not include free time or recreation in excess of that consistent with a full-time schedule. Basically, tourist activities are prohibited.
Trade delegations are authorized to travel to Cuba if each member of the delegation meets the criteria of an applicable general license authorizing such travel or has obtained a specific license from OFAC. Authorized trade delegations generally fall under one of two general licenses for travel authorization, including transactions incident to the exportation of certain authorized goods; specifically, the conduct of “market research, commercial marketing, sales or contract negotiation.”
U.S. insurers and their subsidiaries are not permitted to issue policies, provide reinsurance coverage, or pay insurance or reinsurance claims related to non-U.S. persons or companies providing services in Cuba. If a design firm subject to U.S. jurisdiction provides design services for a project in Cuba for a private, non-Cuban entity, such as a Chinese or European developer, the firm’s professional liability insurance would cover them for claims from the client brought outside of Cuba, but could not cover them for any claims brought in Cuba, by the Cuban government, or by a Cuban commercial entity or private individual because of existing sanctions. Right now, despite the loosening of some restrictions, it is still illegal for firms subject to U.S. jurisdiction to provide services in Cuba and it is illegal for insurance companies to provide coverage for such activities.