On June 16th, 2017 the Trump Administration issued a memorandum on Strengthening The Policy of the United States Towards Cuba. Today the administration followed up on that policy shift with simultaneous Final Rules issued by the Departments of State, Treasury and Commerce, Bureau of Industry and Security. During the Obama era, there had been significant movement towards liberalizing and opening limited trade relations as well as travel opportunities with the island nation. Today’s regulatory changes represent a partial rollback of that liberalization effort and will enhance the commercial risk of entering legal trade relationships in Cuba. While the details of today’s regulatory changes are too wide in scope to fully cover within a short blog posting, just a few of the key changes to the regulations are as follows:

  • Prohibited Entities [The Cuban Military, Security and Intelligence Agencies/State Officials] The Department of State has issued a list of restricted entities to which direct financial transactions are now prohibited under the Cuban Assets Control Regulations which are administered by the Department of the Treasury. It is important to note that the list of restricted entities includes numerous hotels, restaurants and retail outlets in old Havana, as well as throughout Cuba which are under the control of or act on behalf of the Cuban military, intelligence and State security services. And because the definition of Direct Financial Transactions is very broadly defined within the regulations to include any transaction made by wire, cash, credit card or check, what this all boils down to is a potential $250,000 civil fine from the Department of the Treasury Office of Foreign Assets Control (OFAC) for unknowingly booking a hotel room or patronizing a store in Havana that is on the prohibited list.


  • Travel: Traveling to Cuba under the People-to-People general OFAC license also just got a bit harder. While the Obama Administration allowed individuals to self-book trips to Cuba provided they maintained a full-time schedule (and maintained records) of substantive cultural exchange with the Cuban people, effective as of today such travel needs to be under the sponsorship of an organization that specializes in cultural exchange and more importantly travelers must be accompanied by a US person who is an employee, paid consultant, agent or other representative of the sponsoring organization. Looks like the good ole sponsored tour bus routine is the only truly viable way of booking trips to Havana post November 8, 2017.


  • Trade with Cuba: The BIS final rule includes some minor amendments to license exceptions Support for the Cuban People (SCP), Consumer Communications Devices (CCD) and Gift Parcels and Humanitarian Donations (GFT). Most importantly BIS will generally deny applications for the export or re-export of items for use by entities listed on the State Department prohibited list. Also notable in today’s BIS Final Rule is Note 2 to the BIS “case by case” licensing policy outlined in Part 746.2(b)(3)(i) which now states that BIS will generally deny applications for export or re-export of items for use by State owned enterprises, agencies or other organizations that primarily generate revenue for the State including those engaged in tourism. Materials used to renovate State owned buildings and facilities are also subject to a BIS general policy of licensing denial.


The above changes are just a few of the new amendments to US-Cuba travel and trade policies. Overall, at TSI Global Consulting our general assessment of the New Cuba Rules is that while some limited business and export market development opportunities still exist, the risk profile of doing business in Cuba has been significantly raised by the Trump Administration. Today’s Final Rule does represent a “walking back” of what was an ongoing Obama Era liberalization effort and it makes doing business in Cuba a significant challenge from an export compliance perspective. Today’s Final Rulings in essence make Cuba best characterized as a mine field from a risk based US export compliance perspective. Please contact our office for a comprehensive, detailed, regulatory assessment of how the New Cuba Rules impact your company’s ongoing or planned business activities in Cuba.

Department of State Final Rule

Department of Commerce, Bureau of Industry and Security (BIS) Final Rule

Department of the Treasury, Office of Foreign Assets Control (OFAC) Final Rule

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