BIS Amends Cuban de Minimis Level, License Exceptions to Further Restrict US Exports
The Commerce Department's Bureau of Industry and Security is amending the Export Administration Regulations to further restrict exports and re-exports to Cuba, BIS said in a notice. The amendments change BIS licensing policies and exceptions for certain aircrafts and vessels, establish a 10 percent de minimis level for Cuba, make the Cuban government ineligible for certain donations and clarify the scope of unlicensed telecommunication items the Cuban government can receive. The Office of Information and Regulatory Affairs recently said it completed its review of the rule (see 1910150041)
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Cuba will now be subject to a 10 percent de minimis rule, BIS said, requiring export licenses for all exports or re-exports to Cuba of foreign made items that contain more than 10 percent of U.S.-origin content. License applications for those exports are subject to a general policy of denial “unless eligible for another licensing policy,” BIS said. BIS said it made the change because the Cuban government can “generate revenue or otherwise benefit” from importing goods containing more than 10 percent U.S. origin content.
BIS is removing the general policy of approval for licenses to export or re-export aircrafts leased to Cuban state-owned airlines, the agency said. Those licenses will instead be subject to a general policy of denial, BIS said, and the agency will revoke licenses within seven days through “individual notification” to licensees. BIS said the license policy is being changed because the Cuban government is being funded from “tourists that it transports on leased aircraft.”
BIS is also amending the EAR to clarify that aircrafts leased to a Cuban national or a national of a country in Country Group E:1 are not eligible for the license exception for Aircraft, Vessels and Spacecraft (AVS). License Exception AVS authorizes exports of aircraft “on temporary sojourn” as long as certain conditions are met, BIS said. BIS also made several related technical changes for clarity and consistency, including changes to references to Cuba in License Exception AVS.
License exception Support for the Cuban People (SCP) -- which authorizes certain exports and re-exports intended to support Cuban people through improved living conditions -- is being amended to exclude exports of donations to organizations controlled by the Cuban government, BIS said. Exporters or re-exporters who intend to donate items to organizations controlled by the Cuban government must apply for a license application, which will be subject to a general policy of denial. The License Exception SCP will still be available for “eligible donations … provided the items would be used to support activities independent of the Cuban government and communist party,” BIS said. The change will give the U.S. “the opportunity to determine whether donations to those entities would benefit the Cuban people.”
BIS is amending another part of License Exception SCP to clarify that its authorization of certain items for telecommunications infrastructure upgrades is limited to infrastructure that improves “the free flow of information to, from, and among the Cuban people.” A license is required for exports and re-exports that would be used to connect specific end-users, BIS said. The rule also eliminates an authorization for items to be given away “for free for promotional purposes,” the notice said.
“BIS is making these changes to License Exception SCP to ensure that the Cuban people, not the Cuban government or communist party, benefit from items exported or reexported pursuant to the license exception,” the agency said.
BIS said the changes will “further restrict” the government's access to items subject to the EAR and support the Trump administration's aim to hold Cuba accountable for its support of the Nicolas Maduro-led regime in Venezuela.
“This action by the Commerce Department sends another clear message to the Cuban regime -- that they must immediately cease their destructive behavior at home and abroad,” Commerce Secretary Wilbur Ross said in a statement. “The Trump administration will continue to act against the Cuban regime for its misdeeds, while continuing to support the Cuban people and their aspirations for freedom and prosperity."