Archive for the ‘Cuba Sanctions’ Category


May

6

On a Slow Boat to Cuba


Posted by at 8:48 pm on May 6, 2015
Category: Cuba SanctionsOFAC

Cuba Capitole by y.becart(Own work) [CC-BY-SA-2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Flickr https://www.flickr.com/photos/yoh_59/13697566663Yesterday, the Office of Foreign Assets Control issued “guidance” on the new Cuba travel regulations. In fact, the “guidance” says little that isn’t already in the regulations, but it does serve as a reminder of at least one of the quirks in the Cuba sanctions that persists despite recent reforms.

In particular, the guidance points out that the regulations only provide for the transport of authorized travel between the United States by aircraft. No cruises allowed, unless the boat gets a specific license to provide service to Cuba for persons authorized to go to Cuba.

Now let’s dive down the rabbit hole into the “Wonderland” of export control, where if OFAC and the Bureau of Industry and Security (“BIS”) “had a world of [their] own, everything would be nonsense.”

You might think that once the boat got a license to provide service to Cuba, that would be the end of it, right?

(“‘You don’t know much,’ said the Duchess, ‘And that’s a fact.’”)

No, because OFAC licenses providing the travel service to Cuba and BIS licenses the export of the boat to Cuba.

(“At last the Dodo said, ‘everybody has won, and all must have prizes.’”)

And, yes, once the boat crosses into Cuban waters, you’ve “exported” the boat to Cuba, even if the boat turns around and heads straight back for the United States.

(“‘When I use a word,’ Humpty Dumpty said, in rather a scornful tone, ‘it means just what I choose it to mean — neither more nor less.’”)

If travel is provided by an airplane “of U.S. registry operating under an Air Carrier Operating Certificate” instead of a boat, then the short little foray into Cuban territory is covered by License Exception AVS, and no license is required.

(“When I used to read fairy-tales, I fancied that kind of thing never happened, and now here I am in the middle of one!”)

So what is the difference, for any conceivable policy purposes, between an airplane and a boat?

(“The Hatter opened his eyes very wide on hearing this; but all he said was, ‘Why is a raven like a writing-desk?’”)

All I can figure, is that a boat is more comfortable and has better food than the coach cabin of an airplane and the U.S. doesn’t want to make it all that easy to get to Cuba.

(“No, I give it up,” Alice replied: “What’s the answer?” “I haven’t the slightest idea,” said the Hatter.)

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Apr

16

Thursday Grab Bag


Posted by at 8:05 am on April 16, 2015
Category: Crimea SanctionsCriminal PenaltiesCuba SanctionsIran SanctionsOFACSudanSyria

Grab BagHere are a few recent developments that you may have missed:

  • Last month we criticized the Department of Justice for conspiring with foreign luxury car makers to jail U.S. citizens who exported luxury cars to China to arbitrage the difference between U.S. and Chinese prices for these vehicles. Apparently, the DoJ now is having second thoughts about wasting taxpayer money and its resources on this nonsense. According to the  New York Times, settlements have recently been reached in nine states where prosecutors have agreed to return seized cars to, and drop charges against, luxury car exporters. Good.
  • On Monday we reported that Obama was going to drop Cuba from the list of state sponsors of terrorism, a move we thought was largely symbolic. Yesterday he did just that, and provided the 45-day notice required under the three acts that provide the basis for the list: § 6(j)(4)(A)(i)-(iii) of the Export Administration Act of 1979; § 40(f)(1)(A)(i)-(iii) of the Arms Export Control Act; and § 620A(c)(1)(A)-(C) of the Foreign Assistance Act of 1961. The linked New York Times article wrongly states that Congress can block this action with a joint resolution. Only the Arms Export Control Act provides for this blocking mechanism, and, as we noted, there’s no way that the White House will remove Cuba from the current arms embargo. So a joint resolution under the AECA would be, like the removal itself, largely symbolic
  • The Office of Foreign Assets Control (“OFAC”) revised its rules on Monday to amend the Syrian Sanctions Regulations to permit certain activities with respect to written publications, including the ability to pay advances and royalties, to substantively edit manuscripts and to create marketing campaigns. These activities have been permitted for Cuba, Sudan and Iran since 2004. Don’t try this yet in Crimea which remains, bizarrely and incomprehensibly, the most heavily sanctioned place on the face of the planet
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Apr

13

White House May Take Cuba off Terrorism List


Posted by at 8:35 pm on April 13, 2015
Category: BISCuba SanctionsDDTC

Cuba - Havana - Car by Didier Baertschiger [CC-BY-SA-2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Flickr https://www.flickr.com/photos/didierbaertschiger/11785935544[cropped]

There have been news reports suggesting that Obama is contemplating, as part of the thaw in U.S.-Cuba relations, to remove Cuba from the list of countries that are state sponsors of terrorism. Beyond the symbolic significant of such a move, what would be the real consequences?

Of course, one consequence of being on the list is that, under section 40 of the Arms Export Control Act, 22 U.S.C. § 2780, any country put on the list of state sponsors of terrorism is automatically subject to an arms embargo. Of course, even if Cuba is removed from the list, I would not count on arms shipments from the U.S. to Havana in the foreseeable future.

Second, section 6(j) of the defunct Export Administration Act, 50 App § 2405, requires a license for exports to state sponsors if the export could make a “significant contribution to the military potential of such country” or if it could “enhance the ability of such country to support acts of international terrorism.” And, in those instances, Congress must be given notice of such exports thirty days in advance. Of course, the Export Administration Act is no longer in force and is only even in the appendix to Title 50 of the U.S.C. because the President breathes life into it every year using the superpowers bestowed on him by the International Economic Emergency Economic Powers Act. So the White House could end any license requirement for Cuba and end the notification requirement using the same superpowers that resurrected those provisions in the first place.

You might also think that removing Cuba from the list might make it easier to ship agricultural products, medicine and medical devices to Cuba under the Trade Sanctions Reform and Export Enhancement Act of 2000. After all, the Act, in section 7205, imposes a license requirement for shipping those goods to a sanctioned country if that country is also on the state sponsor of terrorism list. However, that section specifically identifies Cuba as a state sponsor of terrorism and imposes the license requirement on exports of agricultural products, medicines and medical products to Cuba. So, removing Cuba from the terrorism list will not eliminate the need for exporters to Cuba to continue to file the export notifications required to utilize License Exception AGR for TSRA exports to Cuba.

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Apr

3

Airbnb, Man, in Havana (Apologies to Graham Greene)


Posted by at 3:11 pm on April 3, 2015
Category: Cuba SanctionsOFAC

Casa Espada airbnb listing via https://www.airbnb.com/rooms/5701299?s=yz00 [Fair Use]The revised Cuba sanctions created a general license for those providing travel services to authorized U.S. travelers to Cuba. The ink on the Federal Register notice was scarcely dry before room sharing service Airbnb had listings in Cuba up and running.

Of course, the remaining sanctions impose some unusual restrictions on Airbnb’s activities in Cuba. First, U.S. travelers still cannot go to Cuba for fun and mojitos; they must qualify for one of the existing general licenses, e.g., to visit family or do professional research in Cuba. Airbnb needs to get from each of its customers booking a stay in Cuba a certification of the particular section of the OFAC rules which authorizes them to travel to Cuba. These records must be maintained by Airbnb for five years.

Second, Airbnb may only provide these services to U.S. persons because the general license covers travel services for travel authorized by the Cuba sanctions. Those sanctions only authorize travel by U.S. persons, so Airbnb cannot book rooms for Canadians or Italians. (There’s an argument that “authorized” might also mean “not forbidden” which would allow Airbnb to serve non-U.S. customers, but, for the moment, Airbnb is taking the conservative position.)

Third, the new sanctions do not permit Airbnb to provide non-travel related services in connection with these bookings. So, Airbnb cannot help the Cuban “hosts” design their listing or edit their photographs. Even so, many of the listings look like interesting places to stay, even though hot water, Internet, and other ordinary amenities may well be missing. I could, for one, happily stay in the Havana apartment shown in the picture to the right — particularly at its listed price of $56 per night.  And sometimes I think that not having access to the Internet on vacation might actually be a good thing!

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Mar

25

Dead Cubans Removed from SDN List; Fictional Daniel Garcia Stays On


Posted by at 10:02 pm on March 25, 2015
Category: Cuba SanctionsOFACSDN List

Cuba Capitole by y.becart(Own work) [CC-BY-SA-2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Flickr https://www.flickr.com/photos/yoh_59/13697566663Yesterday the Office of Foreign Assets Control (“OFAC”) quietly removed a number of Cuba-related listings from its Specially Designated Nationals and Blocked Persons list. These delistings included dissolved companies, dead people and Cuban ships that had either sunk or were out of commission. For example, Amado Padron Trujillo, designated in 1986,was executed in 1989. By Cuba. For treason. Talk about a guy who couldn’t get a break.

Also delisted was the late Alfred Stern, who was once accused of spying for the Soviet Union. He fled the United States, lived in Cuba from 1963 to 1970 and died in Prague in 1986. Another dead man taken off the SDN List was Carlos Duque, a business partner of Manuel Noriega, who stopped threatening the United States when he died last October.

Even though OFAC delisted dead people and sunken ships from the SDN List, it still could not bring itself to delist the probably fictional Daniel Garcia, who allegedly threatens the United States by running a non-existent talent agency, Promociones Artisticas (PROARTE), in Mexico City. The problem with designating a non-existent Daniel Garcia is that there are plenty of real people named Daniel Garcia who, as a result, cannot open bank accounts, get loans, buy automobiles, or get on an airplane without getting searched. We wrote about the curse of being named Daniel Garcia here.

I have been told, off the record, that no one at OFAC knows who Daniel Garcia is or was, if he ever was, and why he was put on the list in the first place. That, I’m told, is part of the reason that Daniel Garcia is fated to remain on the SDN List in perpetuity.

In short, since imaginary people never die, the real Daniel Garcias of the world are just going to have to live with it.

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