Monthly Archives: January 2016

01.29.16
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Cuban Asset Control Regulations, Part 3

§ 515.567 Public performances, clinics, workshops, athletic and other competitions, and
exhibitions.

(a) General license for amateur and semi-professional international sports federation
competitions. The travel-related transactions set forth in § 515.560(c) and such other
transactions as are directly incident to participation in athletic competitions in Cuba by amateur
or semi-professional athletes or athletic teams, or organization of such competitions, are
authorized, provided that:

**** *

(b) General license for public performances, clinics, workshops, other athletic or non-
athletic competitions, and exhibitions. The travel-related transactions set forth in § 515.560(c)
and such other transactions as are directly incident to participation in or organization of a public performance, clinic, workshop, athletic competition not covered by paragraph (a) of this section,
non-athletic competition, or exhibition in Cuba by participants in or organizers of such activities
are authorized, provided that the event is open for attendance, and in relevant situations
participation, by the Cuban public.

Example 1 to § 515.567(a) and (b): An amateur baseball team wishes to travel to Cuba to
compete against a Cuban team in a baseball game in Cuba. The game will not be held under the
auspices of the international sports federation for baseball. The baseball team's activities
therefore would not qualify for the general license in paragraph (a). The game will, however, be
open to the Cuban public. The baseball team's activities would qualify for the general license in
paragraph (b).

Example 2 to § 515.567(a) and (b): A U.S. concert promoter wishes to organize a
musical event in Cuba that would be open to the public and feature U.S. musical groups. The
organizing of the musical event in Cuba by the U.S. concert promoter and the participation by
U.S. musical groups in the event would qualify for the general license in paragraph (b).

**** *

Note 2 to § 515.567(a) and (b): Transactions incident to the organization of amateur and
semi-professional international sports federation competitions and public performances, clinics,
workshops, other athletic or non-athletic competitions, and exhibitions include marketing related
to such events in Cuba.

and

§ 515.572 Authorization to provide travel services, carrier services, and remittance
forwarding services.

(a) * * *

(2) Authorization to provide carrier services. (i) Persons subject to U.S. jurisdiction are
authorized to provide carrier services to, from, or within Cuba in connection with travel or
transportation, directly or indirectly, between the United States and Cuba of persons, baggage, or
cargo authorized pursuant to this part.

(ii) The entry into blocked space, code-sharing, or leasing arrangements to facilitate the
provision of carrier services by air authorized pursuant to section 515.572(a)(2) is authorized,
including the entry into such arrangements with a national of Cuba.

and

§ 515.575 Humanitarian projects.

**** *

(b) Authorized humanitarian projects. The following projects are authorized by
paragraph (a) of this section: medical and health-related projects; construction projects intended
to benefit legitimately independent civil society groups; disaster preparedness, relief, and
response; historical preservation; environmental projects; projects involving formal or non-
formal educational training, within Cuba or off-island, on the following topics: entrepreneurship
and business, civil education, journalism, advocacy and organizing, adult literacy, or vocational
skills; community-based grassroots projects; projects suitable to the development of small-scale
private enterprise; projects that are related to agricultural and rural development that promote
independent activity; microfinancing projects, except for loans, extensions of credit, or other
financing prohibited by § 515.208; and projects to meet basic human needs.

and finally:

§ 515.584 Certain financial transactions involving Cuba.

**** *

(f) Depository institutions, as defined in § 515.333, are authorized to provide financing
for exports or reexports of items, other than agricultural items or commodities, authorized
pursuant to § 515.533, including issuing, advising, negotiating, paying, or confirming letters of
credit (including letters of credit issued by a financial institution that is a national of Cuba),
accepting collateral for issuing or confirming letters of credit, and processing documentary
collections.

Again, I have left out sections that cannot be read out of context (e.g. Items that then refer to a list of items not in the amendment).

01.29.16
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Notice to Exporters 2016/06: License updates, including dual-use licenses

Following changes to the EU dual-use list, the following Open General Export Licences have been amended and republished:

Open general export licence (export for repair/replacement under warranty: dual-use items)

Open general export licence (export after repair/replacement under warranty: dual-use items)

Open general export licence (dual-use items: Hong Kong Special Administrative Region)

Open general export licence (technology for dual-use items)

Open general export licence (X)

Open general export licence (Turkey)

Open general export licence (export after exhibition: dual-use items)

For more details see Notice to Exporters: 2015/30.

Additionally, The Open General Trade Control Licence (Trade and Transportation: Small Arms and Light Weapons) has been updated to reflect the expansion of the list of items subject to Category B of the trade controls (trafficking and brokering):

Open general trade control licence (trade and transportation: small arms and light weapons)

The OGEL (Vintage Aircraft) has been updated to remove ML10b from the goods schedule, to update the text to refer to the Arts Council and to extend the time-period by which goods must be exported under this licence to six months (rather than three months) for consistency purposes.

Open general export licence (vintage aircraft)

Link:

Notice to Exporters 2016/06

 

01.29.16
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JCPOA Implementation Day Guidance: General Notes (Section 1)

I. General Notes

In reviewing the JCPOA and this guidance, members of the regulated public should be aware of
the following:

The sanctions-related commitments described in the JCPOA are directed towards non-
U.S. persons,7 and except for the commitments described in section 5 of Annex II of the
JCPOA, do not apply to U.S. persons.8
The sanctions commitments described in the JCPOA and this guidance do not apply to
transactions that involve persons who remain or are placed on the SDN List.
Transactions involving such persons remain sanctionable after Implementation Day.
The USG commitment to lift sanctions described in the JCPOA is without prejudice to
sanctions that may apply under legal provisions not included within the scope of section
4 of Annex II of the JCPOA. As further detailed in section VII below, the USG retains the
authority to continue imposing sanctions under authorities not included within the scope
of section 4 of Annex II, including those used to address Iran’s: support for terrorism,
support for persons involved in human rights abuses in Syria or for the Government of
Syria, support for persons threatening the peace, security, or stability of Yemen, human
rights abuses, and ballistic missile program.9

01.28.16
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Cuban Asset Control Regulation Amendments, Part 2

Some flavor from the amendments document, in relatively clear English:

(d) General license for travel-related transactions incident to exportation or reexportation
of certain items. (1) The travel-related transactions set forth in § 515.560(c) and such additional
transactions as are directly incident to the conduct of market research, commercial marketing,
sales or contract negotiation, accompanied delivery, installation, leasing, or servicing in Cuba of
items consistent with the export or reexport licensing policy of the Department of Commerce are
authorized, provided that the traveler’s schedule of activities does not include free time or
recreation in excess of that consistent with a full-time schedule.

(2) The travel-related transactions set forth in § 515.560(c) and such additional
transactions as are directly incident to the facilitation of the temporary sojourn of aircraft and
vessels as authorized by 15 CFR 740.15 (License Exception Aircraft, Vessels and Spacecraft) or
pursuant to other authorization by the Department of Commerce for travel between the United
States and Cuba authorized pursuant to this part, including travel-related transactions by
personnel who are persons subject to U.S. jurisdiction and who are required for normal operation
and service on board a vessel or aircraft, as well as personnel who are persons subject to U.S.
jurisdiction and who are required to provide services to a vessel in port or aircraft on the ground,
provided that:

(i) The aircraft or vessel must be transporting individuals whose travel between the
United States and Cuba is authorized pursuant to any section of this part other than paragraph
(d)(2) of this section; and

(ii) Such travel-related transactions by such personnel are limited to the duration and
scope of their duties in relation to the particular authorized temporary sojourn.

and:

§ 515.545 Transactions related to information and informational materials.

(a) Transactions relating to the creation, dissemination, artistic or other substantive
alteration, or enhancement of informational materials are authorized, including employment of
Cuban nationals and remittance of royalties or other payments in connection with such
transactions. This section authorizes marketing related to the dissemination of such
informational materials but does not authorize other marketing or business consulting services.

(b) General license. (1) The travel-related transactions set forth in § 515.560(c) and such
additional transactions as are directly incident to the exportation, importation, or transmission of
information or informational materials as defined in § 515.332 are authorized, provided that the
traveler’s schedule of activities does not include free time or recreation in excess of that
consistent with a full-time schedule.

(2) The travel-related transactions set forth in § 515.560(c) and such additional
transactions as are directly incident to professional media or artistic productions of information
or informational materials for exportation, importation, or transmission, including the filming or
production of media programs (such as movies and television programs), the recording of music,
and the creation of artworks in Cuba, are authorized, provided that the traveler is regularly
employed in or has demonstrated professional experience in a field relevant to such professional
media or artistic productions, and that the traveler’s schedule of activities does not include free
time or recreation in excess of that consistent with a full-time schedule.

and:

§ 515.564 Professional research and professional meetings in Cuba.

(2) Professional meetings. The travel-related transactions set forth in § 515.560(c) and
such additional transactions as are directly incident to travel to Cuba to attend or organize
professional meetings or conferences in Cuba are authorized, provided that:

**** *

(ii) For a traveler:

(A) Attending a professional meeting or conference, the purpose of the meeting or
conference directly relates to the traveler’s profession, professional background, or area of
expertise, including area of graduate-level full-time study;

(B) Organizing a professional meeting or conference on behalf of an entity, either the
traveler’s profession must be related to the organization of professional meetings or conferences
or the traveler must be an employee or contractor of an entity that is organizing the professional
meeting or conference.

**** *

(iv) The traveler’s schedule of activities does not include free time or recreation in
excess of that consistent with a full-time schedule of attendance at, or organization of,
professional meetings or conferences.

Note to § 515.564(a)(2): Transactions incident to the organization of professional
meetings or conferences include marketing related to such meetings or conferences in Cuba.

01.28.16
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JCPOA Implementation Day Guidance: Background

The JCPOA Implementation Day Guidance document consists of a background section, then 7 specialized sections. The whole is a 42 page PDF, so we'll break it up into those 8 pieces (and possibly more for Section II, which is particularly lengthy). For brevity, I'm leaving out the footnotes.

Here's the background:

On July 14, 2015, the P5+1 (China, France, Germany, Russia, the United Kingdom, and theUnited States), the European Union (EU), and Iran reached a Joint Comprehensive Plan ofAction (JCPOA) to ensure that Iran’s nuclear program will be exclusively peaceful. The JCPOAbuilds on the foundation of the Joint Plan of Action (JPOA) of November 24, 2013, and thepolitical framework announced in Lausanne on April 2, 2015.

On January 16, 2016, upon confirmation by the Secretary of State that the International AtomicEnergy Agency (IAEA) had verified that Iran had implemented the nuclear-related measuresdescribed in sections 15.1 to 15.11 of Annex V of the JCPOA, the United States lifted the U.S.nuclear-related sanctions described in sections 17.1 to 17.2 of Annex V of the JCPOA.1Consequently, January 16, 2016 is the day referred to as “Implementation Day” in paragraph34.iii of the Main Text of the JCPOA.2 The U.S. Department of the Treasury’s Office of ForeignAssets Control (OFAC) has updated its website to notify the public of certain steps the UnitedStates has taken to fulfill Implementation Day sanctions commitments.

As set out in sections 4.1 to 4.7 of Annex II and section 17.1 to 17.2 of Annex V of the JCPOA,the United States government (USG) has lifted nuclear-related secondary sanctions3 on: Iran’sfinancial, banking, energy, petrochemical, shipping, shipbuilding, and automotive sectors; Iran’sport operators; the provision of insurance, re-insurance and underwriting services in connectionwith activities that are consistent with the JCPOA; Iran’s trade in gold and other precious metals;trade with Iran in graphite, raw or semi-finished metals such as aluminum and steel, coal, andcertain software in connection with activities that are consistent with the JCPOA; and theprovision of associated services for each of the categories above. As set out in section 4.8.1 ofAnnex II and section 17.3 of Annex V of the JCPOA, the USG also removed the individuals andentities listed in Attachment 3 to Annex II of the JCPOA from OFAC’s List of SpeciallyDesignated Nationals and Blocked Persons (SDN List), Foreign Sanctions Evaders List (FSEList), and/or Non-SDN Iran Sanctions Act List (NS-ISA List), as appropriate.

In addition, as set out in section 5 of Annex II and section 17.5 of Annex V of the JCPOA, onImplementation Day, the USG took steps to: (i) allow for the export, reexport, sale, lease ortransfer of commercial passenger aircraft and related parts and services to Iran for exclusivelycivil, commercial passenger aviation end-use; (ii) license non-U.S. entities that are owned orcontrolled by a U.S. person (“U.S.-owned or -controlled foreign entities”) to engage in activities that are consistent with the JCPOA and applicable U.S. laws and regulations; and (iii) license theimportation into the United States of Iranian-origin carpets and foodstuffs, including pistachiosand caviar. With the exception of the three categories of activities described above, none of thesanctions-related commitments outlined in this guidance apply to U.S. persons, and U.S. persons,including U.S. companies, continue to be broadly prohibited from engaging in transactions ordealings with Iran and the Government of Iran unless such activities are exempt from regulationor authorized by OFAC.4

To implement the commitments under sections 17.1 to 17.5 of Annex V of the JCPOA, the USG:(i) issued, on Adoption Day,5 waivers of relevant statutory sanctions authorities, which becameeffective on Implementation Day; (ii) removed, on Implementation Day, the individuals andentities set out in Attachment 3 to Annex II of the JCPOA from the SDN List, FSE List, and/orNS-ISA List, as appropriate; (iii) issued, on Implementation Day, an Executive order (E.O.) thatrevoked E.O.s 13574, 13590, 13622 and 13645, and sections 5-7 and 15 of E.O. 13628; and (iv)issued, on Implementation Day, a Statement of Licensing Policy and two general licenses.

After Implementation Day, the next major milestone in the JCPOA is Transition Day. TransitionDay will occur 8 years from Adoption Day or upon a report from the Director General of theIAEA to the IAEA Board of Governors and in parallel to the United Nations Security Council(UNSC) stating that the IAEA has reached the Broader Conclusion that all nuclear material inIran remains in peaceful activities, whichever is earlier. As set out in section 21 of Annex V ofthe JCPOA, on Transition Day, the USG will seek to terminate, or modify to effectuate thetermination of, relevant statutory provisions set forth in sections 4.1 to 4.7 and 4.9 of Annex IIand will remove the individuals and entities set forth in Attachment 4 to Annex II of the JCPOAfrom the SDN List and/or FSE List.6 The USG will issue additional guidance related to thesecommitments prior to Transition Day.

For additional information, please see section A of OFAC’s Frequently Asked Questions Relatingto the Lifting of Certain U.S. Sanctions Under the JCPOA on Implementation Day (JCPOAFAQs).

This guidance document is organized into seven sections. Section I contains introductory notesregarding the sanctions lifting under the JCPOA. Section II reviews the various nuclear-relatedsecondary sanctions that were lifted on Implementation Day, explains how those sanctions werelifted, and describes the effect of the sanctions lifting. Section III addresses the sanctions listremovals that occurred on Implementation Day, and what it means for parties engaging intransactions or activities with individuals and entities that were removed from the relevant sanctions lists. Section IV describes other U.S. commitments under the JCPOA, includingcommitments with respect to (i) exports of commercial passenger aircraft and related parts andservices for commercial passenger aviation, (ii) the ability of U.S.-owned or -controlled foreignentities to engage in activities that are consistent with the JCPOA and U.S. law, and (iii) importsof Iranian-origin carpets and foodstuffs into the United States. Section V addresses the U.S.commitment to terminate four E.O.s and part of a fifth. Section VI provides an overview of thewaiver determinations and findings with respect to certain statutory sanctions issued toimplement U.S. Implementation Day sanctions commitments under the JCPOA. Finally, SectionVII provides a list of key legal authorities that are outside the scope of the JCPOA and thatremain in place after Implementation Day.

Link:

JCPOA Implementaton Day Guidance document

 

01.28.16
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OFAC Enforcement Action: WATG Holdings & subsidiary run afoul of Cuban sanctions

The firm provided architectural design services for a Cuban hotel between 2009 and 2010, for which it was paid $284,515. The settlement? Roughly half – $140,000, for a non self-disclosed, non-egregious case. The base penalty, which was the statutory maximum, was $265,000.

Here is what OFAC considered in making its decision:

  • Senior managers at WATG-UK performed the primary work related to
    the project;
  • The apparent violations caused significant harm to the Cuba sanctions program
    objectives because WATG-UK provided more than $350,000 in architecture and design services
    in support of Cuba’s tourism industry;
  • WATG is a relatively large and sophisticated
    multinational architectural design company;
  • WATG has no prior sanctions history, including
    receipt of a penalty notice or Finding of Violation in the five years preceding the earliest date of
    these transactions;
  • WATG had no OFAC compliance program at the time of the apparent
    violations;
  • WATG took remedial action by conducting a global, comprehensive compliance
    review, submitting a disclosure of other transactions to OFAC, appointing a compliance officer,
    conducting global training of its personnel, and instituting a compliance program to prevent
    future apparent violations; and
  • WATG agreed to toll the statute of limitations for a total of 877
    days.

Link:

OFAC Enforcement Information

 

01.27.16
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Amendments to Cuban Asset Control Regulations: The Layman Section

Breaking this up because it's an 18 page PDF. This will make it easier to digest…. And I'm going to skip the sections that non-lawyers will not understand with the current CACR in front of them.

Non-Agricultural Export Trade Financing

OFAC is amending section 515.533(a) to remove the former limitations on payment and
financing terms for all exports from the United States or reexports of 100 percent U.S.-origin items from a third country that are licensed or otherwise authorized by the Department of
Commerce, other than exports of agricultural items or commodities. As required by the Trade
Sanctions Reform and Export Enhancement Act of 2000, 22 U.S.C. 7207(b)(1), such agricultural
exports continue to be authorized only if one of the payment and financing terms specified in the
statute are used. OFAC also is amending section 515.584 to add an authorization for depository
institutions to provide financing for such authorized exports and making a conforming change to
section 515.421.

Travel and Related Services

Carrier services by air. In parallel with the Department of Commerce’s amendments
relating to the safety of civil aviation, OFAC is amending section 515.572 to authorize the entry
into blocked space, code-sharing, and leasing arrangements to facilitate the provision of carrier
services by air authorized pursuant to section 515.572(a)(2), including the entry into such
arrangements with a national of Cuba.

Temporary sojourn. OFAC is amending section 515.533 to authorize travel-related and
other transactions directly incident to the facilitation of the temporary sojourn of aircraft and
vessels as authorized by the Department of Commerce for travel between the United States and
Cuba, including by certain personnel required for normal operation and service on board a vessel
or aircraft or to provide services to a vessel in port or aircraft on the ground.

Public performances, clinics, workshops, athletic and other competitions, and exhibitions.
OFAC is amending section 515.567 to authorize travel-related and other transactions to organize
amateur and semi-professional international sports federation competitions and public
performances, clinics, workshops, other athletic or non-athletic competitions, and exhibitions in
Cuba. OFAC is also removing the existing requirements for certain events that all U.S. profits
from the event after costs be donated to an independent nongovernmental organization in Cuba
or a U.S.-based charity and that workshops and clinics be organized and run, at least in part, by
the authorized traveler.

Humanitarian projects. OFAC is amending section 515.575 to expand the list of
authorized humanitarian projects to include disaster preparedness and response.

Link:

CACR Amendments