U.S. Embargo on Cuba
Recent Regulatory Changes and Potential Presidential or Congressional Actions Gao ID: GAO-09-951R September 17, 2009Since the early 1960s, the United States has maintained an embargo on Cuba through various laws, regulations, and presidential proclamations regarding trade, travel, and financial transactions. A stated purpose of the embargo--the most comprehensive set of U.S. economic sanctions on any country--is to deny hard currency to the Cuban government. The embargo, which the President has broad authority to modify, is implemented primarily by the Department of the Treasury (Treasury) through regulation of financial transactions with Cuba and by the Department of Commerce (Commerce) through regulation of the export of commodities, software, and technology to Cuba. Modifications to the embargo by legislation and presidential policy directives in the 1990s and early 2000s alternately eased and tightened restrictions on travel, remittances, gifts, and exports to Cuba. In September 2009, responding to legislation passed in March and presidential policy directives issued in April, Treasury and Commerce published regulatory changes that further ease some embargo restrictions.
The amended regulations that Treasury and Commerce published in September 2009 further ease restrictions on travel, remittances, gifts, and exports to Cuba in response to recent legislation and presidential policy directives. The Omnibus Appropriations Act of 2009, enacted in March, mandates the easing of restrictions on travel and exports to Cuba; the presidential directives issued in April call for the easing or removal of restrictions on family travel, cash remittances, and gift parcels and to authorize expanded telecommunications services between the United States and Cuba. Examples of the September 2009 regulatory changes include the authorization of family travel under a general license rather than a specific license; removal of limitations on the amount and frequency of family remittances; expansion of the types of items that can be included in gift parcels and the scope of individuals eligible to receive them; and authorization of licensed of U.S. telecommunications service providers to enter into agreements with Cuban telecommunications providers. The President has discretion to further ease regulatory restrictions such as those on travel, remittances, gift parcels, and trade with Cuba. For instance, the President can authorize travel under a general license for non-family travelers--such as freelance journalists, professional researchers, and full-time students--who currently must obtain specific license; further increase the amount of cash remittances that travelers may carry to Cuba; and further expand the list of items eligible for gift parcels. The President is authorized to suspend or end the embargo in the event of certain political changes in Cuba. Under the Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of 1996, on determining that a transition Cuban government is in power, the President may take steps to suspend the embargo, including its implementing regulations restricting financial transactions related to travel, trade, and remittances. He may also suspend enforcement of several legislative measures related to the embargo. LIBERTAD also requires that on determining that a democratically elected Cuban government is in power, the President must take steps to end the embargo, including the implementing regulations, and that once he has made such a determination, certain listed embargo-related legislative measures are automatically repealed. Absent a presidential determination of a democratically elected Cuban government, the President could end the embargo only if Congress were to amend or repeal LIBERTAD and various other embargo-related statutes, including provisions in the Foreign Assistance Act of 1961, the Food Security Act of 1985, the Cuban Democracy Act of 1992, the Omnibus Appropriations Act of 1999, and the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA). Such provisions include, for example, section 908(b)(1) and 910(b) of TSRA that require payment of cash in advance or third country financing for agricultural exports to Cuba and prohibit Treasury from authorizing travel to Cuba for tourist activities by persons subject to U.S. jurisdiction.
GAO-09-951R, U.S. Embargo on Cuba: Recent Regulatory Changes and Potential Presidential or Congressional Actions
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GAO-09-952R:
United States Government Accountability Office:
Washington, DC 20548:
September 17, 2009:
The Honorable Charles B. Rangel
Chairman:
Committee on Ways and Means:
House of Representatives:
The Honorable Jeff Flake:
House of Representatives:
The Honorable Barbara Lee:
House of Representatives:
Subject: U.S. Embargo on Cuba: Recent Regulatory Changes and Potential
Presidential or Congressional Actions:
Since the early 1960s, the United States has maintained an embargo on
Cuba through various laws, regulations, and presidential proclamations
regarding trade, travel, and financial transactions. A stated purpose
of the embargo--the most comprehensive set of U.S. economic sanctions
on any country--is to deny hard currency to the Cuban government. The
embargo, which the President has broad authority to modify, is
implemented primarily by the Department of the Treasury (Treasury)
through regulation of financial transactions with Cuba and by the
Department of Commerce (Commerce) through regulation of the export of
commodities, software, and technology to Cuba.[Footnote 1]
Modifications to the embargo by legislation and presidential policy
directives in the 1990s and early 2000s alternately eased and tightened
restrictions on travel, remittances,[Footnote 2] gifts, and exports to
Cuba. In September 2009, responding to legislation passed in March and
presidential policy directives issued in April, Treasury and Commerce
published regulatory changes that further ease some embargo
restrictions.
This correspondence describes (1) the September 2009 changes to the
embargo, (2) options available to the President to further modify the
embargo, (3) actions that the President can or must take in the event
of certain changes in the Cuban government, and (4) possible
congressional actions to end the embargo.
To develop this information and to identify laws and regulations
establishing the embargo, we reviewed congressional reports and
authoritative reports and studies by academic and policy research
institutes addressing the legal framework establishing the embargo. We
analyzed these laws and regulations to identify measures that the
President and Congress could undertake to modify or end the embargo. We
also interviewed attorneys and policy staff at the Departments of
Commerce, Homeland Security, State, and the Treasury and asked them to
review and verify our analysis regarding the laws and regulations
governing the embargo. Each agency provided technical comments, which
we incorporated as appropriate. We did not review agency performance or
provide recommendations to the agencies. We conducted our work from
January to September 2009 and in accordance with all sections of GAO's
Quality Assurance Framework that are relevant to our objectives. The
framework requires that we plan and perform the engagement to obtain
sufficient and appropriate evidence to meet our stated objectives and
to discuss any limitations in our work. We believe that the information
and data we obtained, and the analysis we conducted, provide a
reasonable basis for any findings and conclusions in this product. (See
enclosure I for further details of our scope and methodology.)
Results in Brief:
The amended regulations that Treasury and Commerce published in
September 2009 further ease restrictions on travel, remittances, gifts,
and exports to Cuba in response to recent legislation and presidential
policy directives. The Omnibus Appropriations Act of 2009, enacted in
March, mandates the easing of restrictions on travel and exports to
Cuba; the presidential directives issued in April call for the easing
or removal of restrictions on family travel, cash remittances, and gift
parcels and to authorize expanded telecommunications services between
the United States and Cuba. Examples of the September 2009 regulatory
changes include the authorization of family travel under a general
license rather than a specific license;[Footnote 3] removal of
limitations on the amount and frequency of family remittances;
expansion of the types of items that can be included in gift parcels
and the scope of individuals eligible to receive them; and
authorization of licensed of U.S. telecommunications service providers
to enter into agreements with Cuban telecommunications providers.
The President has discretion to further ease regulatory restrictions
such as those on travel, remittances, gift parcels, and trade with
Cuba. For instance, the President can authorize travel under a general
license for non-family travelers--such as freelance journalists,
professional researchers, and full-time students--who currently must
obtain a specific license; further increase the amount of cash
remittances that travelers may carry to Cuba; and further expand the
list of items eligible for gift parcels.
The President is authorized to suspend or end the embargo in the event
of certain political changes in Cuba. Under the Cuban Liberty and
Democratic Solidarity (LIBERTAD) Act of 1996, on determining that a
transition Cuban government is in power, the President may take steps
to suspend the embargo, including its implementing regulations
restricting financial transactions related to travel, trade, and
remittances. He may also suspend enforcement of several legislative
measures related to the embargo. LIBERTAD also requires that on
determining that a democratically elected Cuban government is in power,
the President must take steps to end the embargo, including the
implementing regulations, and that once he has made such a
determination, certain listed embargo-related legislative measures are
automatically repealed.
Absent a presidential determination of a democratically elected Cuban
government, the President could end the embargo only if Congress were
to amend or repeal LIBERTAD and various other embargo-related statutes,
including provisions in the Foreign Assistance Act of 1961, the Food
Security Act of 1985, the Cuban Democracy Act of 1992, the Omnibus
Appropriations Act of 1999, and the Trade Sanctions Reform and Export
Enhancement Act of 2000 (TSRA). Such provisions include, for example,
section 908(b)(1) and 910(b) of TSRA that require payment of cash in
advance or third country financing for agricultural exports to Cuba and
prohibit Treasury from authorizing travel to Cuba for tourist
activities by persons subject to U.S. jurisdiction.
Background:
Key Measures Establishing the Embargo:
The following laws, administrative regulations, and presidential
proclamation are among the key measures establishing the embargo on
Cuba and the President's broad authority to modify the embargo (see
enclosure II for more details of the embargo's legal and regulatory
authorities).
* Trading With the Enemy Act of 1917 (TWEA), section 5(b). TWEA granted
the President broad authority to impose embargoes on foreign countries
during times of war and was amended in 1933 to also grant this
authority during times of a presidentially declared national emergency.
The International Emergency Economic Powers Act of 1977 (IEEPA) amended
section 5(b) of TWEA, again limiting the President's authority to times
of war but allowing the President's continued exercise of his national
emergency authority with respect to the ongoing Cuba embargo.
* Foreign Assistance Act of 1961. This act contains provisions barring
any assistance to Cuba and authorizing the President to establish and
maintain an economic embargo on Cuba. Section 620(a) prohibits any U.S.
foreign assistance to the "present" government of Cuba and authorizes
the President to establish and maintain a total embargo on all trade
between the United States and Cuba as a means of carrying out the
assistance prohibition.
* Proclamation 3447. Issued by President Kennedy in 1962, Proclamation
3447 declared a total economic embargo on Cuba, authorizing and
directing Treasury to carry out the President's prohibition on
importation of Cuban goods and of goods imported through Cuba. The
proclamation also directed Commerce to continue an existing prohibition
on exports to Cuba that had been imposed under the Export Control Act
of 1949, and it authorized Commerce to "continue, make, modify or
revoke exceptions" to the export prohibition. The proclamation was
declared under authority of section 620(a) of the Foreign Assistance
Act of 1961.
* Cuban Assets Control Regulations (CACR). The CACR, which Treasury
issued in 1963 under the President's broad authority in section 5(b) of
TWEA and the Foreign Assistance Act, prohibit persons subject to U.S.
jurisdiction from engaging in transactions involving property in which
Cuba or a Cuban national has an interest, including transactions
related to travel, trade, and remittances, without authorization, that
is, a government license from Treasury. Administered by Treasury's
Office of Foreign Assets Control (OFAC), the CACR provide the Secretary
of the Treasury with the ability to modify the restrictions "by means
of regulations, rulings, instructions, licenses, or otherwise." The
CACR established 12 categories of activities with respect to which
Treasury authorizes travel-related transactions, including travel for
family visits, journalistic activities, and professional research in
Cuba but excluding travel for tourism. The CACR also provide for
licensing of trade with Cuba[Footnote 4] and for authorized remittances
to Cuban nationals.
* Export Administration Regulations (EAR). The EAR are issued by
Commerce under authority of the Export Administration Act of 1979 (EAA)
and the International Emergency Economic Powers Act.[Footnote 5]
Applications for licenses for export to Cuba of items subject to the
EAR fall mostly under a general policy of denial,[Footnote 6] although
some items, such as certain medical items, are exempt from this policy.
(See discussion of the Trade Sanctions Reform and Export Enhancement
Act below.) All exports to Cuba under Commerce jurisdiction require a
specific license,[Footnote 7] unless the export qualifies for one of 12
license exceptions published in the EAR. One such license exception
allows agricultural exports to Cuba, including food for people and
animals as well as items such as livestock, beverages, wood and wood
products, and tobacco.[Footnote 8]
* Cuban Democracy Act of 1992 (CDA). The CDA was intended to support
democracy in Cuba by modifying aspects of the restrictions on trade
between the United States and Cuba and encouraging other countries to
limit their trade with Cuba as well as their extension of credit and
assistance to Cuba. Among its other provisions, the law restricts
prohibitions that may be placed on humanitarian exports to Cuba and
authorizes telecommunications facilities to provide efficient and
adequate telecommunications services between the United States and
Cuba. The CDA permits, with certain exceptions, U.S. exports of
medicine and medical supplies to Cuba. However, such exports must be
authorized through specific licenses, and the U.S. government must be
able to verify through onsite inspection and other appropriate means
that the items are used for their intended purposes and for the benefit
and use of the Cuban people. The CDA restricts trade with Cuba by U.S.
foreign subsidiaries and prohibits any vessel unlicensed by Treasury
from (1) loading or unloading freight in a U.S. port within 180 days
after leaving a Cuban port where it engaged in trade of goods or
services or (2) entering a U.S. port while carrying goods or passengers
to or from Cuba or goods in which Cuba or a Cuban national has an
interest. In addition, the CDA requires the President to establish
strict limits on remittances to Cuba for purposes of emigration by
Cubans to the United States. The CDA also provides that various
restrictions under the law--including those regarding U.S. foreign
subsidiaries, vessels, and remittances--can be waived by the President
if he determines, and reports to Congress, that the Cuban government
has undertaken a series of major reforms.
* Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of 1996.
Commonly known as the Helms-Burton Act, LIBERTAD defined and codified
the embargo as it was in effect on March 1, 1996, including the CACR
restrictions and various embargo-related statutes. LIBERTAD authorizes
the President to suspend the embargo only if he determines that a
transition Cuban government is in power. Furthermore, LIBERTAD requires
the President to terminate the embargo if he determines that a
democratically elected Cuban government is in power. In addition, the
law prohibits U.S. persons, permanent resident aliens, and agencies
from indirectly financing any transactions involving property of U.S.
nationals confiscated by the Cuban government; permits U.S. nationals
to sue in U.S. courts persons trafficking in such confiscated property
(this authority has been suspended by the President since enactment);
and provides for denying entry into the United States to aliens
determined by the Secretary of State to be involved in such
trafficking.
* Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA).
TSRA requires the President to end any unilateral agricultural and
medical sanctions. In addition, TSRA requires Commerce to authorize the
export of agricultural commodities (including food) to Cuba.[Footnote
9] TSRA prohibits U.S. government assistance for financing exports to
Cuba and prohibits U.S. private financing or payment of agricultural
commercial sales to Cuba, except where payment is made with cash in
advance or financing is from third-country financial institutions. TSRA
also prohibits the licensing of travel to Cuba for tourist activities
by persons subject to U.S. jurisdiction.
Prior Administrations' Changes to the Embargo:
Using the President's authority to modify the embargo on Cuba,
administrations in the late 1990s and early 2000s made a number of
changes to the embargo's restrictions on U.S. travel, remittances,
gifts, and exports to Cuba. Examples of these changes to the embargo
include the following:
* In 1996, the Clinton administration suspended all direct flights
between the United States and Cuba after the Cuban military shot down
two U.S. civilian aircraft in the Florida Straits.[Footnote 10]
Treasury implemented travel procedures allowing authorized carrier
service providers to arrange indirect flights, provided that U.S.
responsibility for such flights ended in a country other than the
United States or Cuba.
* In 1998, implementing Clinton administration policy, Treasury issued
revised procedures allowing U.S.-licensed carrier service providers to
arrange direct flights from the United States to Cuba, using either
U.S. or non-U.S. aircraft and flight crews. Treasury also restored
direct humanitarian flights between the United States and Cuba and
imposed additional monitoring procedures on fully hosted flights.
* In 1998, the Clinton administration changed family remittance
procedures, citing humanitarian reasons, to allow persons subject to
U.S. jurisdiction to send family remittances of up to $300 per quarter
to relatives in Cuba pursuant to a general license.
* In 1999, implementing Clinton administration policy, Treasury amended
the CACR to expand remittances to support Cuban families and
organizations independent of the Cuban government and to expand "people-
to-people" contact through two-way exchanges among academics, athletes,
scientists, and others.
* In 2003, implementing Bush administration policy, Treasury modified
some restrictions on travel and remittances by expanding the definition
of close relatives who may be visited; announcing that licenses would
no longer be granted for people-to-people educational exchanges; and
authorizing certain remittances from blocked inherited accounts.
[Footnote 11]
* In 2003, the Bush administration directed the Department of Homeland
Security to strengthen enforcement of the embargo by increasing
inspections of travelers and shipments to and from Cuba and to target
illegal travel via third countries or on private vessels.
* In 2004, implementing Bush administration policy, Treasury tightened
restrictions on travel by reducing the permitted frequency of family
visits from once every 12 months to once every 3 years; narrowing the
category of relatives eligible for such visits, from "close relative"
to "immediate family";[Footnote 12] lowering the allowed daily
expenditure per family traveler from $167 to $50 per day; requiring a
specific, rather than a general, license for each family traveler;
eliminating the license for additional family visits in cases of
humanitarian need; and increasing restrictions on educational and
religious travel.
* In 2004, Treasury and Commerce tightened restrictions on sending cash
remittances and gift parcels to Cuba by restricting remittance
recipients to include only immediate family; expanding the ban on
remittances or gifts to senior Cuban government and Communist Party
officials; drastically reducing the value of family remittances that
travelers could carry to Cuba, from $3,000 to $300; and restricting the
recipients and contents of gift parcels.
* In 2005, responding to a 2004 request by U.S. financial institutions,
Treasury amended the CACR to clarify TSRA's requirement of payment of
cash in advance as meaning that payment for agricultural exports to
Cuba must be made prior to shipment.
Figure 1 illustrates major events related to the embargo from its
inception though 2008, including key administrative changes.
Figure 1: Major Events in the Development of the U.S. Economic Embargo
on Cuba, 1960-2008:
[Refer to PDF for image: timeline]
Major U.S. policy actions:
1960:
President Eisenhower imposes embargo on exports to Cuba except for food
and medicines.
1962:
President Kennedy declares almost total embargo on Cuba in Presidential
Proclamation 3447.
1982:
United States declares Cuba a state sponsor of terrorism.
Enforcement agency implementation efforts:
1962:
Treasury issues the Cuban Import Regulations.
1963:
Treasury issues Cuban Assets Control Regulations (CACR).
1975 to 1992:
Treasury executes changes to CACR, tightening or easing restrictions on
travel, trades, and remittances to Cuba.
1998:
Treasury relaxes restrictions on travel and remittances.
1999: Treasury amends CACR to expand remittances and people-to-people
contact.
2001:
Treasury and Commerce introduce rule changes to implement TSRA.
2003:
Treasury eases some restrictions on family travel and remittances;
later, President directs DHS to enforce embargo strictly.
2004:
Treasury and Commerce tighten restrictions on travel, remittances, and
gifts.
2005:
Treasury issues clarification of cash-in-advance rule.
Major congressional actions:
1961:
Congress enacts Foreign Assistance Act of 1961, authorizing, among
other things, a total embargo of Cuba.
1992:
Congress enacts the Cuban Democracy Act.
1996:
Congress enacts the LIBERTAD Act.
2000:
Congress enacts Trade Sanctions and Export Enhancement Act of 2000
(TSRA).
Source GAO analysis.
[End of figure]
Recent Regulatory Changes Have Eased Embargo Restrictions on Travel,
Remittances, Gifts, and Exports:
In September 2009, Treasury and Commerce issued amended regulations for
the Cuba embargo, implementing the Omnibus Appropriations Act of 2009,
enacted in March, and policy directives that the President announced in
April.[Footnote 13] Several sections of the 2009 Omnibus Appropriations
Act mandate the easing of restrictions on travel and exports to
Cuba.[Footnote 14] The presidential policy directives were intended to
ease or remove restrictions on family travel, cash remittances, and
gift parcels and to authorize expanded telecommunications services
between the United States and Cuba. (See appendix II for more details.)
Family travel:
Responding to section 621 of the 2009 Omnibus Appropriations Act
[Footnote 15] and to the presidential directive to remove all
restrictions on family travel to Cuba, Treasury made the following
changes, among others, in the CACR:
* Authorized family travel under a general license.
* Redefined family travel as including visits to close relatives--that
is, related by blood, family, or marriage and no more than three
generations removed from the traveler--who are nationals of Cuba.
* Removed limitations on the frequency and duration of visits to close
relatives.
* Increased family travelers' allowed daily expenditures to the amount
allowed for all other licensed travelers in Cuba.[Footnote 16]
* Authorized any individual who shares, as a family, a common dwelling
with an authorized traveler to accompany such traveler.
In addition, implementing the presidential directive regarding family
travel to Cuba, Commerce made the following change in the EAR:
* Removed a 44-pound limit on personal baggage that travelers may carry
to Cuba.
Remittances:
Implementing presidential directives to remove restrictions on
remittances to family members in Cuba, Treasury made the following
changes, among others, in the CACR:
* Authorized remittances to close relatives, provided no remittances
are authorized to prohibited Cuban government officials or Cuban
Communist Party officials.
* Removed limitations on the amount and frequency of remittances.
* Authorized family travelers to Cuba to carry up to $3,000 in
remittances.
* Authorized banks and other depository institutions to forward
remittances under a general license.
* Increased emigration-related remittances[Footnote 17] to Cuban
citizens for travel to the United States to a total of $2,000.
Gift parcels:
Implementing presidential directives to expand the scope of
humanitarian donations eligible for export to Cuba through license
exceptions, Commerce made the following changes, among others, in the
EAR:
* Restored to the list of items eligible for inclusion in gift parcel
donations: clothing, personal hygiene items, seeds, veterinary
medicines and supplies, fishing equipment and supplies, soap-making
equipment, and items normally exchanged as gifts by individuals in
"usual and reasonable" quantities.
* Allowed any individual to donate gift parcels.
* Expanded the scope of eligible gift parcel recipients to include (1)
individuals other than Cuban government or Communist Party officials
already prohibited from receiving gift parcels and (2) charitable,
educational, or religious organizations not administered or controlled
by the Cuban government.
* Increased gift parcels' value limit for nonfood items to $800 (food
sent in a gift parcel continues to have no value limit).
Telecommunications:
Implementing presidential directives to authorize greater
telecommunications links with Cuba, Treasury made the following changes
in the CACR:
* Authorized licensed persons subject to U.S. jurisdiction to activate
and pay U.S. and third-country service providers for
telecommunications, satellite radio, and satellite television services
provided to individuals in Cuba, so long as these services are not
provided to certain Cuban government or Communist Party officials.
* Authorized licensed U.S. telecommunications service providers to
enter into, and operate under, roaming service agreements with Cuba's
telecommunications service providers.
* Authorized licensed U.S. satellite radio and satellite television
service providers to engage in transactions necessary to provide
services to customers in Cuba.
* Authorized telecommunications network providers to enter into
agreements to establish fiber-optic cable and satellite
telecommunications facilities linking the United States and Cuba.
* Authorized, with certain conditions, travel-related transactions
needed to implement licensed telecommunications transactions or to
facilitate participation in telecommunications-related professional
meetings.
Also implementing the presidential directives regarding
telecommunications links with Cuba, Commerce made the following change
in the EAR:
* Created a license exception authorizing, consistent with national
security concerns, the export or re-export of donated personal
communications devices such as mobile phone systems, computers and
software, and satellite receivers.
Travel-related transactions incident to TSRA sales:
Implementing section 620 of the Omnibus Appropriations Act of 2009,
which amended section 910(a) of TSRA, Treasury made the following
change in the CACR regarding travel-related transactions incident to
agricultural and medical sales under TSRA.
* Authorized, under a general license, with certain conditions, travel-
related transactions directly incident to the commercial marketing,
sales negotiation, accompanied delivery, or servicing in Cuba of
agricultural commodities, medicine, or medical devices that appear
consistent with Commerce's export or reexport licensing policy.
President Has Discretion to Further Ease Embargo Restrictions:
The President has discretion to further ease CACR and EAR restrictions
implementing the embargo. For example, the President can further ease
restrictions on travel, remittances, and gift parcels beyond the
changes recently implemented and can ease embargo restrictions on
agricultural exports and vessels engaging in trade by taking the
following actions:
Travel:
* Authorize travel to Cuba under a general license for travelers
currently permitted to travel only under a specific license. Such
travelers include, for example, freelance journalists; professional
researchers undertaking research or professionals attending
professional meetings and not qualifying for a general license; and
enrolled students and full-time employees of academic institutions
participating in educational activities.
* Authorize a further increase in allowed daily expenditures for
travelers visiting family in Cuba.
Remittances:
* Authorize a further increase in family remittances beyond the $3,000
that travelers may now carry to Cuba.
* Authorize a further increase in emigration-related remittances to
Cuban citizens for travel to the United States, to the extent that any
such increases reflect, in compliance with section 1706(c) of the CDA,
"reasonable costs" associated with travel by Cubans to the United
States.
Gift parcels:
* Further expand the list of items eligible for inclusion in gift
parcels sent to Cuba.
* Further increase the value of gift parcels.
Vessels engaging in trade:
* Authorize, under a general license, entry into a U.S. port by vessels
that have entered a Cuban port within the previous 180 days to load or
unload approved freight.[Footnote 18]
President Can Suspend, or Must End, the Embargo if Cuba Makes Certain
Political Reforms:
Although the President is able to further ease the CACR and EAR embargo
restrictions, under LIBERTAD he cannot suspend or completely eliminate
the CACR and EAR restrictions without determining that a transition
government or a democratically elected government is in power in Cuba.
Section 204(a) of LIBERTAD authorizes the President to suspend the
embargo, including the CACR and EAR restrictions as well as certain
embargo-related statutory provisions, if he determines that a
transition government is in place in Cuba. In addition, section 204(c)
of the act requires the President to end the embargo and provides
generally for automatic termination of embargo-related statutory
provisions if the President determines that a democratically elected
Cuban government is in power.[Footnote 19]
* Determination of a transition government. Section 204(a) of LIBERTAD
provides that if the President determines that a transition Cuban
government is in power, he is authorized to take steps to suspend the
economic embargo, including suspending enforcement of the CACR
restrictions. In taking steps to suspend the embargo, he also may
suspend enforcement of the following provisions:
- Sections 620(a) and (f) of the Foreign Assistance Act, which prohibit
U.S. assistance to the "present" Cuban government and also to Cuba as a
Communist country.
- Sections 1704, 1705(d), and 1706 of the CDA, which authorize
sanctions against countries providing assistance to Cuba; require
verification by onsite inspection and other appropriate means that
exports of medicines and medical supplies to Cuba are used for the
purposes intended and only for the benefit of the Cuban people;
restrict the licensing of trade between U.S. foreign subsidiaries and
Cuba; restrict entry into U.S. ports of vessels trading with Cuba; and
restrict remittances for financing travel by Cuban nationals to the
United States.
- Section 902(c) of the Food Security Act of 1985, which disallows any
U.S. sugar import quota to any country that cannot verify that it does
not import Cuban sugar for re-export to the United States.
Under section 204(a) of LIBERTAD, the President is not required to
suspend the embargo, the CACR restrictions, or the specified statutes;
he also is not required to adhere to a specified time frame if he
chooses to make any such suspensions. In this regard, it appears that
the President has considerable discretion under section 204(a) to
suspend the embargo in a phased, incremental manner as he so
determines, if he makes the requisite findings.
* Determination of a democratically elected government. Section 204(c)
of LIBERTAD provides that if the President determines that a
democratically elected Cuban government is in power, he "shall take
steps to terminate the economic embargo," including the CACR
restrictions. Once he makes such a determination, the previously
mentioned provisions of the Foreign Assistance Act, the CDA, and the
Food Security Act of 1985 are automatically repealed or
amended.[Footnote 20] Although a presidential determination under
section 204(c) requires the President to begin ending the embargo,
section 204(c) leaves to his discretion the specific actions to be
taken (other than the automatic repeal of certain statutory provisions)
and the timing of the embargo's termination.
It should be noted that none of the provisions of TSRA, which was
enacted after LIBERTAD, are among the specified statutes that the
President is authorized to suspend or that are automatically repealed
upon a presidential determination of a transition Cuban government or a
democratically elected Cuban government. Therefore, TSRA and other
statutory provisions not specifically mentioned in sections 204(a) and
(c) of LIBERTAD would presumably not be affected by any such
presidential determinations.
Absent Presidential Determination, Congressional Actions Are Required
to End the Embargo:
Absent a presidential determination of a democratically elected Cuban
government, as provided under section 204(c) of LIBERTAD, the President
could end the embargo only if Congress were to amend or repeal LIBERTAD
and other embargo-related statutes, including the following key
provisions in the Foreign Assistance Act, the Food Security Act of
1985, the CDA, the Omnibus Appropriations Act of 1999, and TSRA.
Foreign Assistance Act:
* Section 620(a)(1), which prohibits the furnishing of U.S. assistance
to the "present government" of Cuba, and authorizes the President to
establish a total embargo on trade with Cuba as a means of carrying out
the assistance prohibition.
* Section 620(a)(2), which denies Cuba's right to a quota for importing
sugar into the U.S. or any other benefit under U.S. law until the
President determines that Cuba has taken appropriate steps under
international law standards to return confiscated property to U.S.
persons or provide equitable compensation.
* Section 620(f), which specifically lists Cuba as a Communist country
prohibited from receiving U.S. assistance.[Footnote 21]
Food Security Act of 1985:
* Section 902(c), which prohibits any sugar import quota to a country
that cannot verify that it does not import Cuban sugar for re-export to
the United States.
Cuban Democracy Act of 1992:
* Sections 1705(c) and (d), which require that exports of medicines or
medical supplies, instruments, or equipment to Cuba meet the following
conditions:
(1)they must be made under a specific license;
(2)they must not be restricted except to the extent permitted under
Section 5(m) of the Export Administration Act or Section 203(b)(2) of
the International Emergencies Economic Powers Act (IEEPA);[Footnote 22]
(3)there must be no reasonable likelihood that they will be used for
torture or other human rights abuses or be re-exported;
(4)they cannot be used in the production of any biotechnological
product; and:
(5) the U.S. government must be able to verify, by onsite inspection
and other appropriate means, their use for intended purposes and for
the benefit of the Cuban people (except humanitarian donations of
medicines to nongovernmental organizations in Cuba).
* Section 1705(e), which authorizes telecommunications facilities of a
quantity and quality as may be necessary to provide "efficient and
adequate" telecommunications services between the United States and
Cuba and clarifies that CDA does not authorize any U.S. person to
invest, either directly or indirectly, in the domestic
telecommunications network in Cuba.
* Section 1706(a), which prohibits the issuance of licenses for certain
transactions involving foreign produced goods being sent to Cuba from
abroad by foreign companies that are U.S. owned or controlled (except
donations of food, exports of medicines and medical supplies,
instruments, or equipment, and the exportation of telecommunications
equipment necessary for efficient and adequate telecommunications
services between the United States and Cuba under sections 1705 and
1707).
* Sections 1706(b),[Footnote 23] which prohibits a vessel trading with
Cuba from entering a U.S. port to load or unload freight for 180 days
after leaving a Cuban port and prohibits a vessel carrying goods or
passengers to or from Cuba from entering a U.S. port, unless either
such vessel is authorized by a specific license.
* Section 1706(c), which requires the President to establish strict
limits on emigration remittances to ensure that they reflect the
"reasonable costs" associated with travel by Cubans to the United
States.
Omnibus Appropriations Act of 1999:
* Section 211, which prohibits U.S. courts from considering or
enforcing trademark claims of Cuban nationals or their successors in
interest regarding property confiscated by the Cuban government.
Trade Sanctions Reform and Export Enhancement Act of 2000:
* Section 906, which allows the export of agricultural commodities to
Cuba as a state sponsor of terrorism, but only where such exports are
authorized under 1-year licenses for contracts entered into during the
1-year period of the contract and shipped within the 12-month period
beginning on the date the contract is signed.
* Section 908(b)(1), which requires "payment of cash in advance"
[Footnote 24] or third-country financing for exports to Cuba of
agricultural commodities.
* Section 910(b), which prohibits persons subject to U.S. jurisdiction
from traveling to Cuba for tourist activities.
Enclosure II provides a detailed listing of the key legal and
regulatory authorities for the U.S. embargo on Cuba. Enclosure III
lists selected GAO and Congressional Research Service products related
to the U.S. embargo on Cuba.
Agency Comments and Our Evaluation:
We provided a draft of this correspondence to the Departments of
Commerce, Homeland Security, State, and the Treasury, which provided
legal and technical corrections. We incorporated these corrections as
appropriate.
As agreed with your offices, unless you publicly announce its contents
earlier, we plan no further distribution of this correspondence until
30 days after the date of this correspondence. At that time, we will
send copies of this correspondence to the Secretaries of Commerce,
Homeland Security, State, and the Treasury and interested congressional
committees. This correspondence will be available at no charge on the
GAO Web site at [hyperlink, http://www.gao.gov].
If you or your staff have any questions about this correspondence,
please contact me at (202) 512-3149 or gootnickd@gao.gov. Contact
points for our offices of Congressional Relations and Public Affairs
may be found on the last page of this correspondence. GAO staff who
made significant contributions to this correspondence are listed in
enclosure IV.
Signed by:
David Gootnick:
Director, International Affairs and Trade:
[End of section]
Enclosure I: Scope and Methodology:
To help identify laws and regulations establishing the embargo, we
reviewed congressional reports as well as studies by academic and
policy research institutes addressing the legal framework of the
embargo. Based on this review, as well as our past work and independent
research, we compiled a list of key laws, proclamations, and
regulations that form the legal basis of the embargo. We presented this
list to the Departments of Commerce, Homeland Security, State, and the
Treasury for verification and for discussion with the agencies'
attorneys and policy staff regarding the agencies' respective roles in
implementing the embargo. We also conducted a legal analysis of the key
statutes and regulations to identify further actions that the President
may take to ease the embargo and actions that Congress may take to
terminate the embargo absent certain statutorily required presidential
determinations. We asked each agency to identify any gaps in our
discussion of the embargo and to raise any concerns about our analysis
of potential presidential and congressional actions. The agencies
provided legal and technical corrections to a draft version of this
document, which we incorporated in the document as appropriate.
In conducting our work, we recognized that the U.S. embargo on Cuba
encompasses legal and regulatory restraints on a wide range of U.S.-
Cuba relations, including trade, diplomacy, foreign assistance, and
immigration. We also recognized that the Cuban Liberty and Democratic
Solidarity (LIBERTAD) Act of 1996 defines the term "economic embargo of
Cuba" as referring to all restrictions on trade or transactions with
Cuba; travel to or from Cuba; and transactions in property in which
Cuba or Cuban nationals have an interest, that were in effect as of
March 1, 1996, and imposed under various statutes. Based on these
considerations and discussions with congressional staff, our
correspondence focuses on specific statutes, regulations, and executive
actions imposing comprehensive restrictions on trade, travel, and
financial transactions between persons subject to U.S. jurisdiction and
Cuba or Cuban nationals. We did not review agency performance or
provide recommendations to the agencies.
We conducted our work from January to September 2009 and in accordance
with all sections of GAO's Quality Assurance Framework that are
relevant to our objectives. The framework requires that we plan and
perform the engagement to obtain sufficient and appropriate evidence to
meet our stated objectives and to discuss any limitations in our work.
We believe that the information and data we obtained, and the analysis
we conducted, provide a reasonable basis for any findings and
conclusions in this product.
[End of section]
Enclosure II: Key Legal and Regulatory Authorities for U.S. Embargo on
Cuba:
Legal and regulatory authority: Trading With the Enemy Act of 1917
(TWEA), section 5(b);
Sanctions or restrictions: Conferred broad authority on the President
to impose comprehensive embargoes on foreign countries during states of
war (as originally enacted) or presidentially declared national
emergency (as subsequently amended); allows the President great
discretion in making changes to embargo restrictions; Section 5(b) of
TWEA was further amended in 1977 by the International Emergency
Economic Powers Act (IEEPA) to again limit the President's authority to
impose embargo only in times of war, but allowed continuation of
President's national emergency authority as exercised with respect to
the current embargo of Cuba (i.e., "grandfathered" in). (50 USC App.
5(b)).
Legal and regulatory authority: Foreign Assistance Act of 1961 (FAA),
as amended, section 620(a);
Sanctions or restrictions: Prohibited furnishing any U.S. foreign
assistance to the "present government" of Cuba and authorized the
President to establish a total embargo on trade with Cuba as a means of
carrying out assistance prohibition. (22 USC 2370(a)(1)); Except as
deemed necessary by the President in the interests of the United
States, prohibited assistance to "any government" of Cuba and denied
Cuba's right to quota for importing sugar into the United States or any
other benefit under U.S. law until the President determines Cuba has
taken appropriate steps under international law standards to return
confiscated property to U.S. persons or provide equitable compensation.
(22 USC 2370(a)(2)).
Legal and regulatory authority: Presidential Proclamation 3447, issued
pursuant to section 620(a) of FAA;
Sanctions or restrictions: Proclaimed an embargo on trade between the
United States and Cuba by:
* prohibiting the import of Cuban goods and goods imported through Cuba
into the United States and directing the Treasury Secretary to
implement the prohibition; and;
* directing the Secretary of Commerce, under the Export Control Act, to
continue carrying out the prohibition on U.S. exports to Cuba, and
continue making, modifying, or revoking exceptions to the prohibition.
Legal and regulatory authority: Food Security Act of 1985, section
902(c);
Sanctions or restrictions: Required the President to not allocate any
sugar import quota to a country unless it verifies to the President
that it does not import Cuban sugar for re-export to the United States.
(7 USC 1446 note).
Legal and regulatory authority: Cuban Democracy Act of 1992 (CDA);
Sanctions or restrictions:
* Allowed sanctions to be imposed against countries that provide
assistance to Cuba. (Section 1704(b), 22 USC 6003(b));
* Allowed exports of medicines or medical supplies, instruments, or
equipment under specific licenses to Cuba, and requires the ability for
U.S. verification, through on-site inspection and other means, that
such items are used for purposes intended and for the benefit and use
of the Cuban people. (Section 1705(c) and (d); 22 USC 6004(c) and (d)).
* Prohibited restrictions on exports to Cuba of donations of food to
nongovernmental organizations (NGOs) or individuals and lifted on-site
verification requirements for licenses authorizing the export of
donated medicines to NGOs for humanitarian purposes. (Section 1705(b)
and (d); 22 USC 6004(b) and (d)).
* Authorized telecommunications services between the United States and
Cuba, and telecommunications facilities as necessary to provide
efficient and adequate telecommunications services between United
States and Cuba (but as of 1996, clarified that this was not an
authorization for U.S. persons to invest in the Cuban domestic
telecommunications network); allowed the licensing of payments to Cuban
government for such services. (Section 1705(e); 22 USC 6004(e), as
amended by section 102(g) of Public Law 104-114 (03/12/96) and
implemented by 15 CFR 746.2(b)(2));
* Prohibited the issuance of licenses for certain transactions
involving foreign produced goods being sent to Cuba from abroad by
foreign companies that are U.S. owned or controlled (except for
donations of food, exports of medicines and medical supplies, and the
exportation of telecommunications equipment necessary for efficient and
adequate telecommunications services between the United States and Cuba
under sections 1705 and 1707). (Section 1706(a); 22 USC 6005(a), and
implemented by 31 CFR 515.559);
* Prohibited, unless licensed by Treasury, any vessels trading with
Cuba from loading or unloading freight at U.S. ports for 180 days after
leaving a Cuban port. (Section 1706(b)(1); 22 USC 6005(b)(1));
* Prohibited, unless licensed by Treasury, any vessels from entering
U.S. ports if carrying goods or passengers to or from Cuba or if
carrying goods in which Cuba otherwise has an interest. (Section
1706(b)(2); 22 USC 6005(b)(2));
* Prohibited use of ship stores general license to export commodities
to vessels carrying goods or passengers to and from Cuba, or carrying
goods in which Cuba or a Cuban national has an interest. (Section
1706(b)(3); 22 USC 6005(b)(3));
* Required the President to establish strict limits on remittances to
Cuba for purposes of financing travel by Cuban nationals to the United
States. (Section 1706(c); 22 USC 6005(c));
* Allowed food, medicine, and medical supplies to be available for Cuba
for humanitarian purposes under FAA and the Agricultural Trade
Development and Assistance Act of 1954, if the President determines and
certifies to certain congressional committees that the government in
power in Cuba (1) has made public commitment to free elections for a
new government within 6 months and is proceeding to implementation; (2)
has made public commitment to respect, and is respecting,
internationally recognized human rights and basic democratic freedoms;
and (3) is not providing weapons or funds to any group in another
country seeking violent overthrow of that country's government.
(Section 1707; 22 USC 6006);
* Provided that the President may waive requirements in Section 1706
(22 USC 6005) concerning prohibitions on exports by U.S. foreign
subsidiaries, entry of vessels, and amounts of emigration-related
remittances, if he determines and reports to Congress that Cuban
government (1) has held internationally observed free and fair
elections, (2) permitted ample time for opposition parties to organize
and campaign, and permitted all candidates full access to media, (3) is
showing respect for Cuban citizens' basic civil liberties and human
rights, (4) is moving toward establishing free market economic system,
and (5) has committed to constitutional change that ensures regular
free and fair elections. (Section 1708(a); 22 USC 6007(a));
* Provided that where the President makes a determination under Section
1708(a), the President shall, with respect to a freely and fairly
elected Cuban government, (1) encourage admission or re-entry of such
government to international organizations and international financial
institutions; (2) provide emergency relief to Cuba during its
transition to a viable economic system; and (3) "take steps to end the
United States trade embargo of Cuba." (Section 1708(b); 22 USC
6007(b));
* Required the Treasury Secretary to exercise TWEA authorities in
enforcing the CDA, and authorizes the Secretary to impose civil
penalties on TWEA violators. (Section 1710; 22 USC 6009).
Legal and regulatory authority: The Cuban Liberty and Democratic
Solidarity (LIBERTAD) Act of 1996 or Helms-Burton Act);
Sanctions or restrictions:
* Defined and codified the embargo as including all restrictions on
trade and transactions with Cuba imposed by the Cuban Assets Control
Regulations (CACR), section 620(a) of the FAA, section 5(b) of TWEA,
CDA, and section 902(c) of the Food Security Act. (Section 4(7) and
102(h); 22 USC 6023(7) and 6032(h));
* Increased civil penalties under the TWEA for violations of licenses,
orders, rules, or regulations implementing the embargo. (Section
102(d); 22 USC 6032(d));
* Clarified that the CDA's authorization for telecommunication
facilities was not an authorization for U.S. persons to invest in the
domestic telecommunications network within Cuba. (Section 102(g),
amending section 1705(e) of the CDA (22USC 6004(e)(5));
* Allowed U.S. nationals whose property was confiscated by the Cuban
government a right of action to seek compensation in federal court from
those who "traffic" in such property. (Title III, sections 301-306; 22
USC 6081-6085) The President may suspend the right to bring such suits
for a successive 6 month periods if he determines such suspensions to
be in the U.S. national interest and will expedite Cuba's transition to
democracy (the President has exercised this suspension since LIBERTAD's
enactment). (Section 306; 22 USC 6085);
* Authorized the Secretary of State to deny any visas to, and the
Attorney General to exclude from the United States, any alien the
Secretary determines has confiscated or "trafficked" in property owned
by a U.S. national. (Section 401; 22 USC 6091);
* Codified the embargo, directing that it should remain in effect,
subject to Section 204, which authorized the President to take steps to
suspend the embargo after making a determination that a transition
government is in power in Cuba. Also requires the President to take
steps to terminate the embargo after determining that there is a
democratically elected Cuban government. (Section 102(h); 22 USC
6032(h));
* Prohibited U.S. citizens, permanent residents, and agencies from
financing any transaction in Cuba involving confiscated property of a
U.S. national. This prohibition (1) may be suspended by the President
upon determination that a Cuban transition government is in power or
(2) terminates when the embargo is terminated as provided in Section
204. (Section 103; 22 USC 6033);
* Authorized the President to take steps to suspend the embargo only
after making determinations to appropriate congressional committees
that a transition government (which does not include either Fidel or
Raul Castro) is in power; such steps include suspending enforcement of
sections 620(a) and (f) of the FAA and sections 1704, 1705(d), and 1706
of the CDA, as well as the CACR restrictions; Congress retained right
to overturn the President's suspension by passing a joint-resolution.
(Section 204(a), (b), (e); 22 USC 6064(a), (b), (e). See also Section
205(a)(7); 22 USC 6065(a)(7));
* Required the President to take steps to terminate the embargo after
making determinations to appropriate congressional committees that a
democratically elected Cuban government is in power; steps to terminate
the embargo include: terminating CACR restrictions; upon such
determination, section 620(a) of the FAA; sections 1704, 1705(d), and
1706 of the CDA; and section 902(c) of Food Security Act of 1985 are
automatically repealed; and section 620(f) of the FAA is automatically
amended to remove Cuba from list of communist countries prohibited from
receiving U.S. assistance. (Section 204(c) and (d), 22 USC 6064(c) and
(d)).
Legal and regulatory authority: Omnibus Appropriations Act, 1999,
Section 211;
Sanctions or restrictions:
* Prohibited U.S. courts from considering or enforcing trademark claims
of Cuban national, or their successors in interest, regarding property
confiscated by the Cuban government;
* CACR provides general license authorizing transactions related to
registration and renewal of patents, trademarks, and copyrights in
which the Cuban government or a Cuban national has interest. The scope
of general license is limited, and Treasury's Office of Foreign Assets
Control (OFAC) retains authority to issue specific license should facts
and circumstances and current U.S. policy militate in favor of
authorizing a transaction that does not qualify for general license.
(31 CFR 515.527(a),(b)).
Legal and regulatory authority: The Trade Sanctions Reform and Export
Enhancement Act of 2000 (TSRA);
Sanctions or restrictions:
* Prohibited the President, by its terms, from imposing new unilateral
agricultural and medical sanctions against Cuba unless approved by a
congressional joint resolution, and required termination of existing
unilateral agricultural or medical sanctions (but leaving the CDA
medical export requirements in place) unless continued by a
congressional joint resolution, as requested by President. (Sections
903, 905; 22 USC 7202,7204);
* Authorized, by its terms, exports of agricultural commodities,
medicine, and medical devices to Cuba and to other countries designated
as state sponsors of terrorism, pursuant to one-year license and other
licensing requirements. (Section 906(a)(1), 22 USC 7205(a)(1), as
implemented by 31 CFR 515.533 and 15 CFR 740.12, 740.18 and
746.2(b)(1),(4)); [Note: According to Treasury and Commerce, due to
phrasing of TSRA, it does not affect medical exports to Cuba under the
CDA since it did not amend or supersede the CDA's export licensing
requirements. Therefore, medical exports are not eligible for export or
re-export to Cuba under TSRA procedures and require licenses authorized
under the CDA. See 66 Federal Register 36678, July 12, 2001];
* Prohibited U.S. government assistance for financing exports to Cuba.
(Sections 908(a)(1), 22 USC 7207(a)(1));
* Prohibited U.S. private commercial payments or financing for sale of
agricultural commodities or products to Cuba, except where payment is
cash-in-advance (before shipment leaves U.S. port) or financing is from
3[RD] country financing institutions (where financing may be confirmed
or advised by U.S. financing institution). (Section 908(b)(1), 22 USC
7207(b)(1); 31 CFR 515.533(a)(2)). Regulation implementing cash-in-
advance requirement remains unchanged, notwithstanding section 622 of
the Omnibus Appropriations Act, 2009, which was intended to prohibit
enforcement of regulatory requirement. According to Treasury, section
622, while prohibiting Treasury enforcement of regulation during fiscal
year 2009, did not change TSRA's statutory language requiring cash-in-
advance;
* Required the Treasury Secretary to authorize travel by specific
license to, from, and within Cuba for commercial export sale of
agricultural commodities. (Section 910(a), 22 USC 7209(a), as
implemented by 31 CFR 515.533(e)). Section 620 of the 2009 Omnibus
Appropriations Act amended TSRA by requiring the Treasury Secretary to
promulgate regulations authorizing such travel and travel-related
transactions by general license;
* Prohibited licensing of travel to, from, and within Cuba for tourist
activities, defined as any activity not expressly authorized in the 12
travel categories specified in section 515.560(a) of CACR. (Section
910(b), 22 USC 7209(b)).
Legal and regulatory authority: Cuban Assets Control Regulations, 31
CFR Part 515, regarding all transactions, including travel, trade, and
financial transactions, related to Cuba (issued under authority of
TWEA);
Sanctions or restrictions: Travel;
Family travel:
Section 621 of the Omnibus Appropriations Act, 2009, prohibits funds
made available under the act from being used to administer, implement,
or enforce certain CACR provisions implemented in 2004 that, among
other things, required a specific license for travel to Cuba by persons
subject to U.S. jurisdiction to visit "immediate family" members who
are nationals of Cuba. On April 13, 2009, the President issued a policy
directive to remove all restrictions on family travel to Cuba. On
September 3, 2009, OFAC issued a final rule amending the CACR
provisions to implement section 621 and the President's directive.
Under these regulatory changes, travel to Cuba is authorized under a
general license for persons subject to U.S. jurisdiction to visit a
"close relative" (defined as any individual related to the traveler by
blood, marriage or adoption, who is no more than three generations
removed from a common ancestor with the traveler) who is (1) a Cuban
national or (2) a U.S. government employee assigned to the U.S.
Interest Section in Havana. (31 CFR 515.61(a)(1),(2)).
Under the general license for a licensed family traveler or any
individual accompanying a licensed traveler all transportation-related
expenses incident to travel to and from (not within) Cuba are
authorized; and the authorized expenditures within Cuba are the same as
for a non-family traveler, which is the State Department per diem rate
for Havana (currently $179 as of June 1, 2009. (31 CFR 515.560(c
)(1),(2) and 515.56(a)(1),(2)).
Travel is authorized by specific license on a case by case basis for a
person subject to U.S. jurisdiction who shares a common dwelling with
the licensed traveler to visit a "close relative" who is neither a
Cuban national nor a U.S. government employee assigned to the U.S.
interest section in Havana. All transportation-related expenses to and
from Cuba are authorized, and expenditures in Cuba are the same as for
a non-family traveler, which is the Department of State per diem rate
for Havana. (31 CFR 515.561(b)).
Official government business:
Travel authorized under general license for officials of the U.S.
Government, foreign governments, and certain intergovernmental
organizations traveling to, from, and within Cuba on official business;
travel-related expenditures at State Department per diem rate. (31 CFR
§§ 515.560(a)(2) and (c) and 515.562).
Journalistic activities:
Travel authorized under general license for persons regularly employed
as journalists by a news reporting organization or by persons regularly
employed as supporting broadcast or technical personnel; travel-related
expenditures at State Department per diem rate; Travel under specific
license allowed for freelance journalists; travel-related expenditures
at State Department per diem rate. (31 CFR §§ 515.560(a)(3) and (c) and
515.563).
Professional research and meetings:
Travel authorized under general license for full-time professionals
conducting noncommercial, academic research in their professional areas
that have substantial likelihood of public dissemination; full-time
professionals attending professional meetings or conferences organized
by international professional organizations that regularly sponsor such
events in other countries; or employees of telecommunications service
providers subject to U.S. jurisdiction, attending professional meetings
for commercial telecommunications transactions. Travel under specific
license allowed for professional researchers undertaking research or
for professionals attending professional meetings and not qualifying
for the general license. (31 CFR §§ 515.560(a)(4) and 515.564).
Educational activities:
Travel under specific institutional license issued for up to a one-year
period allowed for enrolled students and full-time employees of
academic institutions to participate in educational activities,
including structured educational programs (not less than 10 weeks in
duration), noncommercial research regarding Cuba, participating in a
formal course of study in Cuba for credit towards a degree at the
licensed institution, or teaching. (31 CFR §§ 515.560(a)(5) and
515.565).
Religious activities:
Travel under specific license allowed for members of U.S. religious
organizations undertaking religious activities. For congregational
organizations, the number of travelers or frequency of trips is not
limited; non-congregational organizations are limited to 25 individuals
per trip and one trip per calendar quarter. (31 CFR §§ 515.560(a)(6)
and 515.566; OFAC Comprehensive Guidelines for License Applications to
Engage in Travel-Related Transactions Involving Cuba, p. 40, as amended
March 31, 2005.)
Public performances, athletic and other competitions, and exhibitions:
Travel under specific license allowed for amateur and semi-professional
athletes selected by U.S. sports federations to participate in
competitions under the auspices of international sports federations,
where the competition is open for attendance and, where relevant,
participation by the Cuban public; for participation in public
performances, athletic, and other competitions and exhibitions, which
must be open for attendance and, in relevant situations, participation
by the Cuban public and any profits must be donated to independent
Cuban NGOs or U.S.-based charities. (31 CFR §§ 515.560(a)(7) &
515.567).
Support for the Cuban people:
Travel under specific license allowed for activities of recognized
human rights organizations; activities of independent organizations
designed to promote the transition to democracy; and activities of
individuals and NGOs that promote independent activity intended to
strengthen civil society in Cuba. (31 CFR §§ 515.560(a)(8) and
515.574).
Humanitarian projects:
Travel under specific license allowed to engage in humanitarian
projects in or related to Cuba (and not otherwise covered by the CACR),
such as medical and health-related projects, environmental projects,
projects involving nonformal educational training, community-based
grassroots projects, projects suitable for development of small-scale
enterprise, projects related to agriculture and rural development, and
projects to meet basic human needs. (31 CFR §§ 515.560(a)(9) &
515.575).
Activities of private foundations or research or educational
institutes:
Travel under specific license allowed for activities of private
foundations and research or educational institutes with established
interest in international relations to collect information related to
Cuba for noncommercial purposes. (31 CFR §§ 515.560(a)(10) & 515.576).
Exportation, importation, or transmission of information or
informational materials:
Informational materials includes items such as publications, films,
posters, photograph records, photographs, microfilm, microfiche, tapes,
computer discs, CD ROMs, artworks, and newswire feeds. (31 CFR
515.332). Travel transactions related to the exportation, importation,
or transmission of information or informational materials are allowed
under specific license. Payments owed to Cuba resulting from
telecommunications services also require authorization by specific
license. (31 CFR §§ 515.560(a)(11) & 515.545), implementing sec.
5(b)(4) of TWEA, 50 USC App. 5(b)(4)).
Certain export transactions licensed under existing Department of
Commerce regulations with respect to Cuba or engaged in by U.S.-owned
or controlled foreign firms:
Travel allowed under specific license for persons involved in
activities related to marketing, sales, negotiation accompanied by
delivery, or servicing of exports to Cuba authorized by Commerce, or
such activities allowed by U.S.-owned or controlled foreign firms. (31
CFR §§ 515.560(a)(12), 515.533 & 515.559).
Section 620 of the 2009 Omnibus Appropriations Act, which amended
section 910(a) of TSRA, required OFAC to authorize by general license
travel to, from, and within Cuba for the marketing and sale of U.S.
agricultural and medical goods. To implement section 620, Treasury
amended the CACR at 31 CFR 515.533(e).
Based on these changes, travel-related transactions directly incident
to the commercial marketing, sales negotiation, accompanied delivery,
or servicing in Cuba of agricultural commodities, medicine, or medical
devices that appear consistent with the export or re-export licensing
policy of Commerce are authorized by general license under certain
conditions. (31 CFR 515.533(e); see also 31 CFR 515.560(c)).
Travel-related transactions incident to the provision of
telecommunications services:
Treasury amended various provisions of the CACR to implement the
President's April 3, 2009, directives related to increasing the flow of
information to the Cuban people by authorizing certain
telecommunications services, contracts, related payments, and travel-
related transactions.
All transactions by a telecommunications service provider subject to
U.S. jurisdiction are authorized by general license. Such transactions
include payments incident to (1) the provision of telecommunications
between the United States and Cuba; (2) the provision of satellite
television services to Cuba; and (3) entry into, and performance under,
roaming service agreements with telecommunications service providers in
Cuba. (31 CFR 515.543(b)).
All persons subject to U.S. jurisdiction are authorized by general
license to enter into, and make payments under, contracts (including
contracts for cellular telephone services) with non-Cuban
telecommunications service providers or particular individuals in Cuba,
provided such individual owning and using a phone subject to the
service contract is not a Cuban government or Communist Party official.
(31 CFR 515.543(c)).
Transactions incident to the establishment of facilities to provide
telecommunications services linking the United States and Cuba,
including fiber-optic cable and satellite telecommunications service
are authorized by general license. (31 CFR 515.542(d)(1)).
Transactions incident to the establishment of facilities to provide
telecommunications services linking third countries to Cuba may be
authorized by specific license, provided such facilities are necessary
to provide efficient and effective telecommunications services between
the United States and Cuba. (31 CFR 515.542(d)(2)).
Travel-related transactions directly incident to participation in
professional meetings for the commercial marketing of sales
negotiations for, or performance under contracts for the provision of
telecommunications services or the establishment of facilities to
provide such services, is authorized under general license. (31 CFR
515.564(a)(3)).
Travel-related transactions directly incident to the commercial
marketing, sales negotiation, accompanied delivery, or servicing in
Cuba of telecommunications-related items authorized for commercial
export or re-import to Cuba by Commerce, are authorized by general
license under certain conditions. (31 CFR 515.533(f)).
See also Commerce's recently revised licensing policy regarding
telecommunications, implemented to carry out the President's April 13,
2009 directive to increase the flow of information between the United
States and Cuba through satellite radio and television services to
customers in Cuba. (15 CFR 746.2(b)(2).
Tourism:
Prohibited by law, under section 910(b) of TSRA, and defined as any
activity not expressly authorized in the travel categories specified in
section 515.560(a) of CACR. (31 CFR 515.201 contains a general
prohibition which implements the ban on engaging in tourist-related
travel activities).
Legal and regulatory authority: Cuban Assets Control Regulations (31
CFR 515 et seq.);
Sanctions or restrictions:
Remittances:
The President's memorandum of April 3, 2009 directed the Secretary of
the Treasury to take necessary steps to remove restrictions on
remittance in a number of ways to implement the President's directive.
The Secretary amended various provisions of the CACR affecting the
amount and frequency of household remittances, emigration-related
remittances, and remittance forwarders.
Family and household remittances:
Persons subject to U.S. jurisdiction are authorized under a general
license to make remittances without limitations on amount or frequency
to Cuban nationals who are "close relatives," if such remittances are
not made (1) from blocked accounts, (2) to prohibited Cuban government
or Communist Party officials, or (3) for immigration-related purposes.
(31 CFR 515.570(d).
The total of all family household remittances that a licensed traveler
is authorized to carry to Cuba may not exceed $3000. (31 CFR
515.560(a)(4)(i)).
Emigration-related remittances:
Two one-time emigration-related remittances of up to $2,000 in total
are authorized:
* $1,000 to cover preliminary expenses for emigrating from Cuba to the
United States before receiving an approved visa;
* $1,000 to cover expenses for emigrating from Cuba to the United
States after receiving a valid visa, including for the purchase of
airline tickets and payment of exit or third-country visa fees or other
travel-related fees. These remittances may be sent only after the payee
has received a valid visa or other approved U.S. immigration documents.
(31 CFR 515.570(b)).
Remittances from blocked accounts:
Unlimited remittances from inherited blocked accounts in banking
institutions in the United States are authorized if the account holder
is a "close relative" of the deceased individual from whom the account
was inherited (decedent). (31 CFR 515.570(c)(1)(i)).
Emigration-related remittances may be made from inherited blocked
accounts in banking institutions in the United States to a Cuban
national if that person is an account holder and is not a prohibited
Cuban government or Communist Party official. Such remittances must be
consistent with the criteria governing the two one-time emigration-
related remittances in 31 CFR 515.570(b), noted above. (31 CFR
515.570(c)(1)(ii)).
Remittances of up to $300 in any consecutive 3-month period may be made
from any blocked account to a Cuban national in a third country in
whose name, or for whose beneficial interest, the account is held (31
CFR 515.570(c)(2)). Such remittances exceeding the $300 limit may be
authorized by specific license on a case-by-case basis (31 CFR
515.570(d)(2)).
Remittances for humanitarian purposes:
Remittances by persons subject to U.S. jurisdiction to persons in Cuba
may be authorized by specific license for nonimmigrant travel to the
United States where humanitarian need is demonstrated. (31 CFR
515.570(d)(3)).
Remittances by other U.S. persons:
U.S. nongovernmental organizations and individuals without family
connections in Cuba may send remittances under specific license to
independent nongovernmental entities in Cuba (i.e., pro-democracy
groups, civil society groups, and religious organizations) and to
members of such entities. (31 CFR 515.570(d)(1)).
Remittances carried by Cuban nationals from the United States:
The amount of funds received as remittance that a Cuban national
departing the United States may carry to Cuba may not exceed $3,000.
(31 CFR 515.560(d)(2)).
Remittance forwarders:
Banks and other depository institutions are authorized under general
license to collect and forward remittances. Such licensed remittance
forwarders are required to collect from users of their services
information showing compliance with relevant provisions of the CACR.
(31 CFR 515.572(a)(3)).
Baggage:
No Limitation: The President's memorandum of April 13, 2009, directed
the Secretaries of the Treasury and Commerce to remove the 44-pound
limitation on accompanied baggage per traveler to Cuba, as referred to
in 31 CFR 515.560(f). Commerce revised 15 CFR 740.14(g) to implement
President's directive.
Trade: Import activities:
Generally prohibited:
Prohibits importation into the United States of (1) goods of Cuban
origin, (2) goods located in or transferred through Cuba, or (3) goods
made or derived in whole or in part of any article which is the growth,
produce, or manufacture of Cuba, except as specifically authorized
otherwise by the Secretary of the Treasury "by...regulations, rulings,
instructions, licenses, or otherwise." (31 CFR 515.204).
Authorized travelers prohibited from importing into the United States
any merchandise purchased or otherwise acquired in Cuba--including
cigars and alcohol--whether as accompanied baggage or otherwise. An
"across the board ban," whether items acquired in Cuba or third
countries, given as gift, or offered for sale over Internet or through
catalogue mail purchase. (31 CFR 515.204, 515.560(c)(3); OFAC
Comprehensive Guidelines for License Applications to Engage in Travel-
Related Transactions Involving Cuba, p.8 (Rev.09/30/04); and OFAC
"Cuban Cigar Update" (09/30/04)).
Exceptions (importation into the United States allowed):
Information and informational materials--publications, films, posters,
phonograph records, photographs, tapes, compact discs, and certain art
works. (31 CFR 515.206 and 515.332, implementing section 525 of Free
Trade in Ideas Act (50 USC App. 5(b)(4)), which amended TWEA to
restrict President's authority to regulate import and export of certain
informational materials).
Goods/commodities, under specific license, including:
* goods claimed by importer as a bona fide gift;
* goods brought from Cuba by a person entering U.S., as a bona fide
gift, if goods are of small value and there is no reason to believe
there is or has been since July 8, 1963, any direct or indirect benefit
to Cuba or Cuban national from the importation (31 CFR 515.544(b));
* Cuban-origin commodities for bona fide research in sample quantities
only (31 CFR 515.547).
Legal and regulatory authority: Export Administration Regulations
(EAR), 15 CFR 746.1, 746.2, and Part 740;
Sanctions or restrictions:
Export Activities:
General prohibition:
Prohibition on export from the United States to Cuba of goods,
technology, or services. Certain items allowed to be exported to Cuba
without a license (under License Exceptions of the EAR) where certain
terms and conditions are met; and certain items allowed to be exported
under specific licenses. Most items requiring license are subject to
general policy of denial. (15 CFR 746.1(a)(1), 746.2(a)(1),(2); See
also 31 CFR 515.201, which contains a general prohibition that also
prohibits such exports).
The following categories of items may be exported to Cuba without a
license:
Gift parcels:
The President's memorandum of April 13, 2009, directed the Secretary of
Commerce to make certain changes to the EAR regarding gift parcels and
humanitarian donations. To implement the President's directive,
Commerce revised 15 CFR 740.12(a).
Based on these changes, gift parcels are allowed to be sent to Cuba by
U.S. individuals where the following criteria are met:
* Eligible items include food (including vitamins); medicine; medical
supplies and devices (including hospital supplies and equipment and
equipment for the handicapped); receive-only equipment for
commercial/civil AM/FM and short wave publicly available frequency
bands and batteries for such equipment; clothing; personal hygiene
items; seeds; veterinary medicines and medical supplies; fishing
equipment and supplies; soap-making equipment; and nonsensitive items
normally sent as gifts between individuals, including certain consumer
communications devices, computers, and software listed in 15 CFR
740.19(b);
* Limit of one gift parcel a month per donor per eligible donee;
* The value of non-food items in the parcel is limited to $800;
* Eligible donors include any individual;
* Eligible donees (recipients) include (1) individuals other than
prohibited Cuban government or Communist Party officials or (2)
charitable, educational or religious organizations not administered or
controlled by Cuban government;
* A donor may send one gift parcel per month to any eligible donee,
although there is no frequency limit on gift parcels of food;
* Parties seeking authorization to exceed the gift parcel frequency
limit for compelling humanitarian concerns must submit appropriate
license applications with complete justification.(15 CFR 740.12(a).
Humanitarian donations by recognized U.S. charities to meet basic human
needs; charities must have established record of involvement in
donation programs and experience in maintaining verifiable system of
distribution.
Eligible items include health-related items, food, clothes, household
goods, shelter, educational items, and basic support equipment and
supplies to operate and administer the donor program.
Ineligible items include medicines and medical devices if there is a
reasonable likelihood they will be use for torture or other human
rights abuses or that they will be re-exported, or used in the
production of bio-technological products. (15 CFR 740.12(b)).
Baggage:
No limitation. The President's April 13, 2009 memorandum directed the
Treasury and Commerce Secretaries to remove the 44-pound limitation on
accompanied baggage to Cuba. Commerce revised the EAR at 15 CFR
740.14(g) to implement the directive. (See also 31 CFR 515.560(f)).
Consumer communication devices:
The President's April 13, 2009 memorandum directed the Commerce
Secretary to authorize, through a license exception and consistent with
national security concerns, the export and re-export of donated
personal telecommunications devices such as mobile phone systems,
computers and software, and satellite receivers. To implement the
directive, Commerce created a new license exception in 15 CFR 740.19
that authorizes the export and re-export to Cuba of donated consumers
communications devices that are widely available for retail purchase
and commonly used to exchange information and facilitate interpersonal
communications.
Under this license exception, consumer communications devices may be
exported to Cuba where the following criteria are met:
* eligible items include certain computers, disk drives, input/output
control units, monitors, printers, modems, network access controllers
and communications channel controllers, keyboard and similar devices,
mobile phones (including cellular and satellite phones, memory devices,
digital cameras and memory cards, television and radio receivers,
batteries and chargers;
* exports or reexports must be to Cuba;
* items exported or reexported must be donated;
* eligible recipients must be (1) individual in Cuba other than
prohibited Cuban government or Communist Party officials, or (2)
independent NGOs in Cuba;
* donations may not be made to organizations administered or controlled
by the Cuban government;
* U.S.-owned or -controlled entities in a third country are not
authorized by the license exception to engage in reexports of
commodities for which no license would be issued by Treasury under 31
CFR 515.559; and;
* there is no limit on the value or frequency of the exports. (15 CFR
740.19).
Items in transit from Canada to the United States:
15 CFR 740.9(b)(1)(iv), 746.2(a)(1)(ix)).
Certain aircraft on temporary sojourn to Cuba are authorized to depart
the United States. (15 CFR 740.15(a), 746.2(a)(1)(x)).
Agricultural commodities (as defined in 15 CFR 772.1) and certain re-
exports of U.S.-origin agricultural commodities, classified as EAR 99.
Export or re-export must be made under written contract, within 12
months of contract signing or 12 months of notification that no
objections raised where no contract required (donations and commercial
samples), and prior notification made to Commerce and its Bureau of
Industry and Security (BIS).
This regulation implements section 906(a) of TSRA requiring such
exports to be made within 12 months of the signing of the contract. (15
CFR 740.18, 746.2(a)(1)(xii)).
Other items that may be exported to Cuba without a license include:
* temporary exports and re-exports by news media (15 CFR
740.9(a)(2)(viii));
* operation technology and software (15 CFR 740.13(a));
* sales technology (15 CFR 740.13(b));
* software updates for legally exported software (15 CFR 740.13(c));
* parts for one-on-one replacement in certain legally exported
commodities (15 CFR 740.10(a));
* certain exports to governments and international organizations (15
CFR 740.11); and;
* permissive re-exports of spare parts in foreign-made equipment (15
CFR 740.16(h)).
The following items must be exported by specific license and are not
subject to policy of general denial:
Medicines and medical devices (as defined in 15 CFR 772):
Applications to export such items will generally be approved, except
where (1) restricted under certain provisions of EAA or IEEPA, (2)
reasonable likelihood that the item will be used for torture or other
human rights abuses, (3) the item will be re-exported, (4) item could
be used in production of biotechnological product, or (5) the U.S.
government is unable to verify by onsite inspection or otherwise that
the item will be used for purposes intended and to benefit the Cuban
people (excluding humanitarian medical donations to NGO's in Cuba).
This regulation implements section 1705(c) of CDA. (15 CFR
746.2(b)(1)).
Nonstrategic foreign-made products exported from third countries:
Products containing an insubstantial proportion of U.S.-origin
material, parts, or components will generally be considered favorably
on a case-by-case basis if (1) local law or policy favors trade with
Cuba, (2) the U.S.-origin content does not exceed 20 percent of the
product's value, and (3) the exporter is not a U.S. owned or controlled
entity in a third country. (15 CFR746.2(b)(3)).
Support for the Cuban people:
Including certain commodities and software to human rights
organizations, or to individuals and NGOs promoting activities to
strengthen Cuban civil society. Items must not give rise to U.S.
national security or counter-terrorism concerns. Eligible items include
fax machines, copiers, computers, software document scanning equipment,
printers, typewriters, and other office communications equipment. (15
CFR 746.2(b)(4)(i)).
Aircraft or vessel on temporary sojourn:
Such vessels traveling to Cuba for delivery of humanitarian goods or
services, or consistent with U.S. foreign policy interests. (15 CFR
746.2(b)(5); see also 15 CFR 740.15).
Licensing Policy Regarding Telecommunications:
To implement the President's April 13, 2009, policy directive to
increase the flow of information between the United States and Cuba
through satellite radio and television services to customers in Cuba,
Commerce amended the EAR at 15 CFR 746.2(b) to revise the scope of its
licensing policy regarding telecommunications.
Based on this revision, Commerce's licensing policy now provides that
the export of telecommunications commodities may be authorized on a
case-by-case basis provided the commodities are part of an FCC-approved
project and necessary to provide efficient and adequate
telecommunications between the United States and Cuba, including links
established through third countries, and including the provision of
satellite radio and satellite television services to Cuba. (15 CFR
746.2(b)(2). See also 31 CFR 515.533(f), 515.542(d)(1) and (2),
515.543(b) and (c), and 515.546(a)(3)).
Activities of U.S. foreign subsidiaries:
Exceptions exist to statutory prohibition in section 1706(a) of CDA
against licensing of certain transactions involving foreign produced
goods being sent to Cuba from abroad by foreign companies that are U.S.
owned or controlled (U.S. foreign subsidiaries). These exceptions
permit trade with Cuba by allowing specific licenses for exports from a
third country by such subsidiaries of (1) medicines or medical supplies
or (2) certain telecommunications equipment. Donated food to
individuals or nongovernmental organizations is exempt under section
1705(b).
* For medicines and medical supplies, exports cannot be restricted
except (1) to the extent permitted under section 5(m) of Export
Administration Act of 1979 or section 203(b)(2) of IEEPA if they are
subject to these provisions; (2) where there is a reasonable likelihood
that the item will be used for torture or other human rights abuses;
(3) where there is a reasonable likelihood that the item to be exported
will be re-exported; (4) where there is a reasonable likelihood that
the item could be used in production of biotechnological products; and
(5) where it is determined that the U.S. government is unable to
verify, by on-site inspection or other means, that item will be used
for the purpose for which it is intended and only for use and benefit
of the Cuban people, except medicines and medical supplies donated for
humanitarian purposes to NGOs in Cuba;
* For telecommunications equipment, exports must be necessary for
efficient and adequate telecommunications service between the United
States and Cuba; [Note: The license exception in 15 CFR 740.19
authorizing exports or re-exports of certain consumer communications
devices does not authorize U.S. foreign subsidiaries to engage in re-
exports of foreign-produced commodities to Cuba for which no license
would be issued by Treasury under 31 CFR 515.559];
* For donated food, the transaction must not qualify as a humanitarian
donation under license exceptions in 15 CFR 740.12 or 740.18. (31 CFR
515.559(a); 15 CFR 746.2(b)(3)(iii)(D)).
[End of table]
[End of section]
Enclosure III: Selected GAO and CRS Reports Related to the U.S. Embargo
on Cuba:
Selected GAO Reports:
Product title: Broadcasting to Cuba: Observations Regarding TV Marti's
Strategy and Operations;
Product number: [hyperlink, http://www.gao.gov/products/GAO-09-758T];
Publication date: June 17, 2009.
Product title: Broadcasting to Cuba: Actions Are Needed to Improve
Strategy and Operations;
Product number: [hyperlink, http://www.gao.gov/products/GAO-09-127];
Publication date: Jan. 22, 2009.
Product title: Foreign Assistance: Continued Efforts Needed to
Strengthen USAID's Oversight of U.S. Democracy Assistance for Cuba;
Product number: [hyperlink, http://www.gao.gov/products/GAO-09-165];
Publication date: Nov. 24, 2008.
Product title: Broadcasting to Cuba: Weaknesses in Contracting
Practices Reduced Visibility into Selected Award Decisions;
Product number: [hyperlink, http://www.gao.gov/products/GAO-08-764];
Publication date: July 11, 2008.
Product title: Economic Sanctions: Agencies Face Competing Priorities
in Enforcing the U.S. Embargo on Cuba;
Product number: [hyperlink, http://www.gao.gov/products/GAO-08-80];
Publication date: Nov. 30, 2007.
Product title: Foreign Assistance: U.S. Democracy Assistance for Cuba
Needs Better Management and Oversight;
Product number: [hyperlink, http://www.gao.gov/products/GAO-07-147];
Publication date: Nov. 15, 2006.
Product title: Cuban Embargo: Selected Issues Relating to Travel,
Exports, and Telecommunications;
Product number: [hyperlink, http://www.gao.gov/products/NSIAD-99-10];
Publication date: Dec. 1, 1998.
Selected CRS Products:
Product title (author): Cuba: Issues for the 111th Congress (Mark P.
Sullivan);
Product number: R40193;
Publication date: June 24, 2009.
Product title (author): Cuba: U.S. Restrictions on Travel and
Remittances (Mark P. Sullivan);
Product number: RL31139;
Publication date: Mar. 31, 2009.
Product title (author): Cuban Migration to the United States: Policy
and Trends (Ruth Ellen Wasem);
Product number: R40566;
Publication date: June 2, 2009.
[End of section]
Enclosure IV: GAO Contact and Staff Acknowledgments:
GAO Contact:
David Gootnick at (202) 512-3149 or gootnickd@gao.gov:
Staff Acknowledgments:
The following staff made significant contributions to this report:
Ernie Jackson, Senior Attorney; Mark Speight, Assistant General
Counsel; Emil Friberg and Michael Rohrback, Assistant Directors; Avrum
Ashery and Etana Finkler, Visual Communications Analysts; Reid Lowe,
Communications Analyst; Brian Egger, Analyst; and Eugene Beye, Analyst-
in-Charge.
[End of section]
Footnotes:
[1] The Department of Homeland Security (DHS), acting through U.S.
Customs and Border Protection (CBP), U.S. Immigration and Customs
Enforcement, and the U.S. Coast Guard, also has a primary role in
enforcing the embargo. For example, CBP enforces the Air Commerce
Regulations (19 CFR Part 122.151 et seq.), which govern aircraft travel
to Cuba, restricting it to certain points of arrival and departure
under specified circumstances and conditions. The Coast Guard enforces
the Unauthorized Entry Into Cuban Territorial Waters Regulations (UEC
Regulations) (33 CFR Part 107), which restricts vessels traveling to
Cuba. These Coast Guard regulations were issued under authority of
Presidential Proclamation 6867 (Mar. 1, 1996) and Presidential
Proclamation 7757 (Feb. 26, 2004). However, this report does not focus
on enforcement of the embargo from the perspective of DHS or its
component agencies.
[2] A remittance is a payment of money sent to a person in another
place. Generally recognized forms of remittances include international
transfers of funds sent by immigrants or migrant workers from the
country where they live and work to individuals (typically family
members) in the immigrants' or migrant workers' country of origin.
[3] A general license constitutes blanket authorization for
transactions set forth in the relevant regulations; if certain stated
conditions are met, no further permission from the U.S. government is
required. A specific license is any license or authorization issued for
a specific transaction; the U.S. government considers the issuance of
specific licenses on a case-by-case basis.
[4] Consistent with the embargo, OFAC permits exports from the United
States to Cuba and exports of 100 percent U.S.-origin items from third
countries to Cuba if they are licensed by Commerce's Bureau of Industry
and Security (BIS), which requires a license for the export or re-
export of almost all U.S. goods to Cuba.
[5] The authorization for the EAA was allowed to lapse in 2001. The
president has used his emergency powers under IEEPA to continue the
regulations created under the EAA.
[6] Under a policy of denial, agencies review export licensing
applications with "a presumption of denial." To obtain a license for
export, applicants must provide sufficient justification and evidence
to overcome this presumption.
[7] Treasury and Commerce issue licenses for transactions involving
property in which Cuba or a national of Cuba has an interest. Treasury
issues general and specific licenses. Commerce issues specific licenses
for export but does not issue general licenses; instead, Commerce uses
license exceptions. A license exception is an authorization that allows
the export or re-export without a license, under stated conditions, of
items subject to the EAR that would otherwise require a specific
license.
[8] After the enactment of Trade Sanctions Reform and Export
Enhancement Act of 2000, Commerce implemented a license exception for
exporting certain agricultural goods to Cuba.
[9] Commerce implemented this requirement through a license exception
in the EAR. According to Treasury and Commerce, TSRA did not amend or
supersede the export licensing requirements for medicine and medical
supplies in the CDA. Therefore, medicines and medical devices are not
eligible for export or re-export to Cuba under TSRA procedures and
require licenses authorized under the CDA. See 66 Federal Register
36678, July 12, 2001.
[10] The two U.S. private airplanes, operated by a U.S. nongovernmental
organization called Brothers to the Rescue, were shot down in the
Florida Straits. U.S. officials asserted that the incident occurred
over international waters. Four of the private planes' crew members
were killed in the attack.
[11] "Close relative" is defined as any individual related to the
traveler by blood, marriage, or adoption who is no more than three
generations removed from the traveler or from a common ancestor of the
traveler (e.g., the traveler's mother's first cousin or the traveler's
husband's great-grandson). Treasury's definition of the term was the
broadest definition to that date.
[12] "Immediate family" is defined as a spouse, child, grandchild,
parent, grandparent, or sibling of the traveler or the traveler's
spouse, as well as any spouse, widow, or widower of any of the
foregoing.
[13] Treasury and Commerce issued final rules implementing the relevant
provisions of the 2009 legislation and the presidential directives on
September 3, 2009, and published the final rules on September 8, 2009.
See 74 Federal Register 46000, September 8, 2009; and 74 Federal
Register, 45985, September 8, 2009.
[14] Section 620 of the Omnibus Appropriations Act of 2009 amends TSRA
to require Treasury to issue regulations authorizing by general license
certain travel-related transactions for travel to, from, or within Cuba
for the marketing and sale of agricultural and medical products; since
2004, the CACR had required a specific license for such transactions.
Section 621 of the act prohibits funds made available under the act
from being used to administer, implement, or enforce certain CACR
provisions implemented in 2004 that, among other things, required a
specific license for travel to Cuba by persons subject to U.S.
jurisdiction to visit "immediate family" members who are nationals of
Cuba. In addition, section 622 of the act prohibits funds made
available under the act from being used to administer, implement, or
enforce Treasury's 2005 amendment of the CACR, in which Treasury
clarified the TSRA requirement of payment of cash in advance for
agricultural exports to Cuba as meaning that such payments must be made
prior to shipment.
[15] Treasury's regulatory changes issued on September 3, 2009,
supersede changes that Treasury made in March 2009 to implement section
621 of the Omnibus Appropriations Act of 2009.
[16] The limit on authorized expenditures for family travelers in Cuba
was changed from $50 per day to the Department of State's maximum per
diem for licensed travelers in Havana, which was $179 per day as of
June 1, 2009.
[17] Emigration-related remittances are remittances sent to Cuban
nationals to enable the payees to emigrate from Cuba to the United
States. Coverage of these remittances includes any preliminary expenses
associated with such emigration, purchase of airline tickets, and
payment of exit or third-country visa fees or other travel-related
fees.
[18] This change would be consistent with section 1706(b) of the CDA,
which prohibits a vessel trading with Cuba from entering a U.S. port to
load or unload freight for 180 days after leaving a Cuban port except
under a Treasury license (without specifying whether the license should
be general or specific).
[19] The CDA also contains provisions, similar in certain respects to
those in LIBERTAD, concerning presidential determinations and
assistance regarding Cuba. However, these CDA provisions may have been
superseded by the more explicit provisions of sections 202, 203, and
204 of LIBERTAD, which authorize U.S. assistance to Cuba and specify
the reforms that Cuba must undertake to have in place a transition or
democratically elected government before the embargo can be lifted and
Cuba can receive such assistance. According to Commerce, none of these
measures would result in the complete elimination of EAR restrictions
on Cuba, since EAR restrictions apply in some manner to all countries
in the world.
[20] Section 620(f) of the Foreign Assistance Act is not repealed but
amended, by removing Cuba from the list of Communist countries
prohibited from receiving U.S. assistance.
[21] Other examples of restrictions on foreign assistance to Cuba in
the Foreign Assistance Act can be found in sections 620(e), 620(t), and
620A. According to State, other authorities in the Foreign Assistance
Act that could permit some forms of assistance to Cuba include sections
104(c)(4), 481(a)(4), and 491(b).
[22] The Export Administration Act of 1979, as amended, controls dual-
use exports that may be used for either civilian or military purposes
and is administered by Commerce. The act authorizes export controls to
be used only after full consideration of the impact on the economy and
only to the extent necessary to, among other things, restrict the
export of goods and technology where necessary to further U.S. foreign
policy. Although the Export Administration Act was allowed to expire on
August 21, 2001, its provisions and the EAR issued under the act have
been maintained in force under the IEEPA by Executive Order 13222 of
August 17, 2001.
[23] According to Treasury, the amendment or repeal of this section
could remove any ambiguity regarding the restrictions intended by
Congress related to vessel transactions. Treasury believes, however,
that because section 1706(b) explicitly grants Treasury licensing
authority, as a technical legal matter, these transactions could be
authorized without congressional action.
[24] TSRA does not define "payment of cash in advance," and both the
Bush and Obama administrations have interpreted the phrase to mean that
payment of sales of agricultural commodities to Cuba must be received
by the seller or the seller's agent prior to shipment of the goods from
the port at which they are loaded. During the Bush administration,
Treasury amended the CACR in 2005 to clarify the meaning of the term in
response to a 2004 request by U.S. financial institutions for Treasury
guidance on the meaning of "payment of cash in advance" under TSRA.
(See 70 Federal Register 9225, February 25, 2005.) Congress attempted
to prevent further implementation of Treasury's 2005 regulatory
clarification by enacting section 622 of the 2009 Omnibus
Appropriations Act, which prohibited any funds made available under the
act from being "used to administer, implement, or enforce" the 2005
regulatory clarification. However, in March 2009, Treasury took the
position that section 622 referred only to the regulatory clarification
and did not amend TSRA's statutory language requiring cash in advance.
On March 16, 2009, H.R. 1531 was introduced in the 111TH Cong. 1ST
Sess., to clarify the meaning of "payment of cash in advance" under
TSRA by defining that phrase to mean "the payment by the purchaser of
an agricultural commodity or product and the receipt of such payment by
the seller prior to (i) the transfer of title of such commodity or
product to the purchaser; and (ii) the release of control of such
commodity or product to the purchaser."
[End of section]
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