New Cuba Travel Rules: No Place to Stay, No Place to Eat, Nothing to Do While There

Posted by at 3:41 pm on June 16, 2017
Category: Cuba SanctionsOFAC

Women with Cigar by Daniele Febei [CC-BY-SA-2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Flickr https://flic.kr/p/7cPMmY [cropped and processed]

President Trump today announced new sanctions on Cuba, effectively rolling back many, if not most, of the changes made by the Obama administration to loosen the sanctions.  The most significant changes will make travel to Cuba by U.S. citizens to Cuba more difficult, if not virtually impossible.

The executive order signed by Trump has not yet been released, but FAQs on the new policy have been posted to OFAC’s website. The biggest change will be with respect to individual people-to-people travel that was permitted starting March 15, 2016. Under the new rules, educational travel under the people-to-people exception will only be permitted if organized “under the auspices of an organization that is subject to U.S. jurisdiction that sponsors such exchanges.” What organizations will meet this test is not clarified in the new FAQs.

OFAC says that the individual people-to-people license remains in effect until OFAC issues new regulations, but there is a wrinkle, actually more a tectonic fault than a wrinkle. If you  purchased a ticket or hotel room before today, you can rely on the old license even after the new rules are formally adopted by OFAC. The flip side of this, however, is that you make individual travel arrangements after today at your own risk.  This is because in that case if the new rules are adopted before you complete your travel to Cuba, you’re out of luck and the individual general license no longer applies. In the worst case scenario, if the rules are changed while you’re in Cuba and you have made your travel arrangements after today, you will be in violation of the new rules unless you can instantly teleport yourself off the island.

The other change that will significantly impact travel is the prohibition on all transactions by U.S. travelers in Cuba with “entities related to the Cuban military, intelligence, or security services.” This is directed at Grupo de Administración Empresarial, S.A. (“GAESA”) which controls a large portion, probably around 60 percent, of the Cuban economy and most of the tourist sector. Almost all of the shops, hotels and restaurants in Old Havana are run by GAESA, as are most of the hotels elsewhere in Cuba. U.S. tourists who buy a bottle of cold water from a supermarket run by GAESA anywhere on the island will risk getting in hot water with OFAC when they return home.

This obviously poses problems for every traveler in Cuba whether they are on a specific license or are traveling under any of the twelve general license categories. Certainly one cannot expect GAESA to warn U.S. tourists or to plaster its name over all of its properties, hotels, restaurants, gas stations, supermarkets and stores. Never fear, however — the FAQs say that when the new regulations are adopted the State Department will publish a list of GAESA entities. So, all tourists will have to do is carry the twenty-page list around with them and check the list before ordering a dacquiri, buying a cigar, checking into a hotel, or eating in a restaurant, or doing anything else on their travels. (That sounds like fun.)

You might think that private rentals, like those handled by AirBNB, will be spared the GAESA taint. But you would be wrong. VaCuba, which handles remittances for AirBNB, is owned by GAESA.

The good news is this: if you can somehow manage to get to Cuba under the new rules and find a legal place to stay, you can still buy cigars and bring them back with you. At least, if you haven’t bought them from a store owned by GAESA.

Photo Credit: Women with Cigar by Daniele Febei [CC-BY-SA-2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Flickr https://flic.kr/p/7cPMmY [cropped and processed]. Copyright 2009 Daniele Febei


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Copyright © 2017 Clif Burns. All Rights Reserved.
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You said that using Airbnb is problematic because of the GAESA connection but Marco Rubio who was an architect of the new policy tweeted this morning that using Airbnb is fine. See https://twitter.com/marcorubio/status/875666795763511296

Can we sue Rubio for legal malpractice if he is wrong and booking Airbnb is not OK?

Comment by Daniel Zim on June 16th, 2017 @ 6:53 pm

    Maybe the final rules will exempt VaCuba from the GAESA ban, but it’s too early to tell.

    Comment by Clif Burns on June 17th, 2017 @ 10:29 am

Here’s the text of the Presidential Memorandum signed on Friday (not an E.O., for some reason): https://www.whitehouse.gov/the-press-office/2017/06/16/national-security-presidential-memorandum-strengthening-policy-united

Comment by Pat on June 19th, 2017 @ 9:59 am

    Thanks, Pat. I went through the Memorandum earlier today and it leaves many of the big issues unaddressed. For example, there has been much talk of certain GAESA activities being exempted from the prohibition, but I couldn’t see any evidence of that in the Memorandum. We’ve heard that carriers could deal with ports and terminals without worrying about a military connection and that maybe VaCuba would be exempted to permit AirBNB payments. But until we see the rules we won’t know for certain.

    Comment by Clif Burns on June 19th, 2017 @ 2:27 pm

Agreed. My provisional reading is that 3(a)(ii) offers the possibility of exceptions/exemptions/GLs for GAESA-related transactions that fall within the categories listed in 3(a)(iii). But the details aren’t clear, and we’ll need to live with considerable uncertainty until the amended regs are published in a few months. Which ain’t fun, when trying to plan now for programs in winter/spring.

Comment by Pat on June 20th, 2017 @ 9:53 am