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Web alert: OFAC updates its FAQ on US sanctions against Cuba and the '180-day rule'

12 January 2017

As previously reported by the club here, in October 2016 the US Treasury Department of Foreign Assets Control (OFAC) announced amendments to the Cuban Assets Control Regulations (CACR) to create more economic opportunity for Cubans and Americans. These amendments affected the ‘180 day rule’ which prohibits any vessel that enters a port or place in Cuba with the purpose of trading in goods or services from loading or unloading freight at a US port for 180 days after it leaves Cuba.

The '180 day' rule is separate from a second statutory restriction – the goods/passengers on-board rule which prohibits any vessel carrying goods or passengers to or from Cuba from entering a U.S. port with such goods or passengers on board, unless authorized or exempt.

OFAC has updated its FAQs on US sanctions against Cuba to provide guidance on the ‘180 day rule’ and the goods/passengers-on-board rule.

OFAC has authorised by general licence certain exceptions to these rules. If a vessel engages in one or more of the following activities with Cuba, it will qualify for the general license and will not be subject ‘180-day rule’ or the goods/passengers-on-board rule:

  • Engaging or has engaged in trade with Cuba authorised under the CACR, such as a vessel carrying goods from the United States that are licensed or otherwise authorized for export or re-export to Cuba by the U.S. Department of Commerce pursuant to the Export Administration Regulations (EAR);
  • Engaging or has engaged in trade with Cuba that is exempt from the prohibitions of the CACR, such as a vessel carrying exclusively informational materials;
  • Engaging or has engaged in the export or re-export from a third country to Cuba of agricultural commodities, medicine, or medical devices that, were they subject to the EAR, would be designated as EAR99;
  • Carrying or has carried persons between the United States and Cuba or within Cuba pursuant to the general license for the provision of carrier services under the CACR or, in the case of a vessel used solely for personal travel (and not transporting passengers), pursuant to a license or other authorization issued by the Department of Commerce for the exportation or re-exportation of the vessel to Cuba; or
  • A foreign vessel that has entered a port or place in Cuba while carrying students, faculty, and staff that are authorized to travel to Cuba pursuant to the general license for educational activities under the CACR.

The above exceptions to the '180 day' rule do not apply to a vessel that:

  • Carries for export to Cuba any additional goods that, were they subject to the EAR, would not be designated as EAR99 or controlled on the Commerce Control List only for anti-terrorism reasons;
  • Picks up any goods in Cuba, unless the transactions involving those goods are authorized by OFAC or exempt from the prohibitions of the CACR; or
  • Purchases or provides services in Cuba, other than docking, unloading, or other services associated with normal shipping transactions.

A full copy of OFAC’s FAQs can be found here.

Members are reminded that the U.S. trade embargo against Cuba remains in place. Most transactions between the U.S., or persons subject to U.S. jurisdiction, and Cuba continue to be prohibited and OFAC continue to enforce the prohibitions of the CACR. Members are advised to carefully review the scope of permitted activities under these regulations before trading to or from Cuba.