On June 16, 2017, the President released a National Security Presidential Memorandum, which outlines the Trump Administration’s national security and economic policy towards Cuba. The Presidential Directive lays out the framework for rolling back certain Obama-era regulations that eased travel and trade restrictions between the United States and Cuba. The White House has released a fact sheet related to today’s Presidential Directive, and the Office of Foreign Assets Control (“OFAC”) has released a list of frequently asked questions.

What you need to know about today’s Presidential Directive on Cuba:

  • It does not directly change Cuba regulations. Rather, it directs the Treasury and Commerce Departments to “initiate a process of adjusting current regulations” within 30 days. OFAC indicates that it intends to complete such revisions “in the coming months.”
  • Details and timing of implementation are therefore unclear, but it appears that the changes will include the following:
    • A prohibition on transacting directly with the military, intelligence, and security services, including entities owned by Grupo de Administración Empresarial (“GAESA”), a holding company linked to the military and the Castro family that controls a significant fraction of the hotels and retail outlets in Cuba, where such direct transactions “would disproportionately benefit such services or personnel at the expense of the Cuban people or private enterprise in Cuba.
    • The State Department will issue a list of prohibited entities.
    • The prohibitions above will exclude transactions determined to support:
      • Federal Government operations
      • Democracy-building programs in Cuba
      • Air and sea operations that support permissible travel, cargo, or trade
      • The acquisition of visas for permissible travel
      • The expansion of direct telecommunications and internet access for the Cuban people
      • The sale of agricultural commodities, medicines, and medical devices
      • Sending, processing, or receiving authorized remittances
    • Commercial agreements that may relate to the military, intelligence, and security services will be permitted so long as they are entered into prior to the issuance of the new regulations and permissible under current law.
    • New regulations will reinstate the requirement that travelers to Cuba under so-called “people-to-people” educational exchanges pursuant to 31 CFR 515.565(b) participate in an organized group sponsored by a U.S. organization with a full-time schedule of activities enhancing contact with the Cuban people, supporting civil society in Cuba, or promoting the Cuban people’s independence from Cuban authorities, with meaningful interaction with Cuban individuals. Individual educational travel will no longer be permitted.
    • Cuban migration policy will not change.
  • The Trump Administration also announced that it intends to increase auditing and enforcement of existing restrictions on the reasons for travel to Cuba (which prohibit travel for tourism and require U.S. persons to certify that they qualify for one of a fixed number of exceptions) and re-emphasized the five-year recordkeeping requirement; however, self-certification by the traveler will still be allowed (i.e., carriers will not be responsible for policing the reasons for travel). For a list of the twelve current categories of authorized travel to Cuba, please refer to our alert memorandum, “S. Continues Incremental Easing of Cuban Sanctions.”
  • Existing regulations affecting airlines and cruise lines will be unchanged, though tightening of the conditions of travel may affect demand and assembling package travel could be more difficult given GAESA’s prominence in the hospitality sector.
    • As noted, restrictions on dealings with military, security, and intelligence services will not apply to air and sea operations that support permissible travel, cargo, or trade.
    • Travel plans consistent with current regulation will also be authorized so long as at least one travel-related transaction for the trip was completed prior to June 16, 2017.