BIS, OFAC Ease Restrictions on Trade w/Cuba for Certain Telecommunications, Agriculture/Medical Device Transactions

(On April 13, 2009, the President directed that steps be taken to authorize U.S. telecommunications network providers to enter into agreements to establish fiber-optic cable and satellite telecommunications facilities linking the U.S. and Cuba, license U.S. satellite radio and satellite television service providers to engage in transactions necessary to provide services to customers in Cuba, authorize the donation of certain consumer telecommunication devices without a license, etc. See ITT's Online Archives or 04/15/09 news, 09041599 1, for BP summary.

Note that these final rules do not suspend or terminate the U.S. embargo of Cuba.)

Highlights of OFAC and BIS Amendments Affecting Commercial Trade

Highlights of commercial trade-related regulatory amendments made by OFAC and BIS are as follows:

OFAC Amendments

U.S.-Cuba telecommunications transactions authorized. OFAC's final rule amends 31 CFR 515.542(b) to authorize all transactions, including but not limited to payments, incident to the provision of telecommunications services between the U.S. and Cuba, the provision of satellite radio or satellite television services to Cuba, or the entry into and performance under roaming service agreements with telecommunications services providers in Cuba, by a telecommunications services provider that is a person subject to U.S. jurisdiction.

New 31 CFR 515.542(c) authorizes all persons subject to U.S. jurisdiction to enter into, and make payments under, contracts with non-Cuban telecommunications services providers, or particular individuals in Cuba, for services provided to particular individuals in Cuba, such as a contract for cellular telephone service for a phone owned and used by a particular individual in Cuba, provided that the individual is not a prohibited official of the Government of Cuba or a prohibited member of the Cuban Communist Party.

(The authorization in 31 CFR 515.542(c) includes, but is not limited to, payment for activation, installation, usage (monthly, pre-paid, intermittent, or other), roaming, maintenance, and termination fees.)

OFAC license policies for telecommunications facilities. New 31 CFR 515.542(d)(1) contains a general license authorizing transactions incident to the establishment of facilities to provide telecommunications services linking the U.S. and Cuba, including but not limited to fiber-optic cable and satellite telecommunications facilities.

New 31 CFR 515.542(d)(2) provides a statement of specific licensing policy with respect to transactions incident to the establishment of facilities to provide telecommunications services linking third countries and Cuba, including but not limited to fiber-optic cable and satellite facilities, provided that such facilities are necessary to provide efficient and adequate telecommunications services between the U.S. and Cuba.

Travel-related transactions for agricultural, medical devices, etc. OFAC's final rule also adds a new 31 CFR 515.533(e) which authorizes certain travel-related transactions, with certain conditions, and additional transactions that are directly incident to the commercial marketing, sales negotiation, accompanied delivery, or servicing in Cuba of agricultural commodities, medicine, or medical devices that appear consistent with the export or re-export licensing policy of the Commerce Department.

BIS Amendments

BIS' license policy expanded for U.S.-Cuba telecommunications. BIS' final rule revises the scope of existing licensing policy regarding certain telecommunications links. The scope of items eligible for export or reexport under 15 CFR 746.2(b)(2) now includes any item (commodity, technology, or software) necessary to provide efficient and adequate telecommunications links between the U.S. and Cuba, including links established through third countries, and including links to provide satellite radio or satellite television services to Cuba.

New License Exception CCD. BIS' final rule also adds a new License Exception Consumer Communications Devices (CCD) as 15 CFR 740.19, which authorizes the export and reexport to Cuba of certain donated consumer communications devices, including certain computers and software, mobile phones, and satellite receivers that are necessary to provide efficient and adequate telecommunications services between the U.S. and Cuba.

OFAC final rule (FR Pub 09/08/09) available at http://edocket.access.gpo.gov/2009/pdf/E9-21440.pdf

BIS final rule (D/N 090414648-9652-01, FR Pub 09/08/09) available at http://edocket.access.gpo.gov/2009/pdf/E9-21402.pdf

Fact Sheet on OFAC's final rule (dated 09/03/09) available at http://www.treas.gov/press/releases/tg273.htm