On 4 June 2019 the Trump administration implemented certain regulatory changes first announced on 17 April 2019 by National Security Advisor Ambassador John Bolton in a foreign policy address regarding the Trump administration's intention to scale back policies that liberalized U.S. economic relations with Cuba.
In accordance with the administration's announcement, the U.S. Department of Commerce's Bureau of Industry and Security (BIS) and the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) took the first actions to implement these policy changes, primarily focusing on restrictions on travel to Cuba.
As a result of these actions, beginning 5 June 2019, many aircraft and vessels that are subject to BIS' Export Administration Regulations (EAR) will require a BIS license to travel to Cuba. Furthermore, U.S. persons will no longer be authorized to travel to Cuba under the general license for "people-to-people" exchanges set forth in the Cuban Assets Control Regulations (CACR). The new BIS amendments can be found here, and the amendments to the CACR can be found here.
Restrictions on noncommercial aircraft and recreational and passenger vessels
BIS limited the scope of License Exception Aircraft, Vessels, and Spacecraft (AVS) by removing the authorization for the export or reexport to Cuba of most noncommercial aircraft and all passenger and recreational vessels (e.g., most private and corporate aircrafts, cruise ships, fishing boats, and sailboats) destined for Cuba. Cargo vessels remain eligible for AVS to the extent that they are used in the transportation of separately authorized items (i.e., their cargo) to Cuba. As a result of the changes, a BIS license will now be required for temporary exports or reexports to Cuba of most noncommercial aircraft or vessels that are subject to the EAR, even if the operator of such aircraft or vessel is a non-U.S. person (as BIS restrictions apply to the aircraft or vessel subject to the EAR, irrespective of the owner/operator).
These amendments do not affect commercial aircraft operating under Air Carrier and OperatorCertificates or certain other Federal Aviation Administration certificates. BIS slightly expanded AVS by making air ambulances operating under 14 Code of Federal Regulations Part 135 eligible for AVS.
In addition, BIS has amended its Cuba licensing policy by establishing a general policy of denial for aircraft or vessels subject to the EAR on temporary sojourn other than aircraft operated by certificated air carriers or cargo vessels for hire, absent any foreign policy or national security interest. Applications for exports or reexports of aircraft subject to the EAR operated by certificated air carriers or cargo vessels for hire will be reviewed on a case-by-case basis.
Elimination of people-to-people travel to Cuba
In conjunction with BIS, OFAC has amended the CACR to restrict people-to-people travel, which was one of the most commonly used avenues for Americans to obtain authorization for travel to Cuba. OFAC previously narrowed this general license on 9 November 2017 pursuant to President Trump's National Security Presidential Memorandum titled "Strengthening the Policy of the United States Toward Cuba" to require that people-to-people educational travel be conducted under the auspices of an organization subject to U.S. jurisdiction and that the traveler be accompanied by a representative of that organization who is subject to U.S. jurisdiction. Prior to 9 November 2017 individual people-to-people travel not undertaken as part of an organized group was authorized.
OFAC's 5 June 2019 amendments rescind this authorization for people-to-people travel to Cuba. This means that U.S persons will no longer be authorized to use this exemption as a basis to travel to Cuba. The new amendments include a grandfather provision permitting previously authorized travel where the traveler has completed at least one travel-related transaction, such as purchasing a flight or reserving accommodations, prior to 5 June 2019.
Who will be impacted?
The new restrictions may also impose significant burdens on insurance companies currently insuring any aircraft or recreational and passenger vessels used for travel to Cuba. Companies should review any of their ongoing activities involving Cuba to assess whether their activities now require BIS or OFAC authorization where none was previously required.
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