ILMA Compoundings December 2016 - 31
LEGAL EASE
Doing Business in Cuba
Jeffrey L. Leiter
I
had several members ask me at the recent Annual Meeting
about their ability to do business in Cuba. They heard that
the Treasury Department's Office of Foreign Assets Control
(OFAC) and the Commerce Department's Bureau of Industry
and Security (BIS) had announced steps in mid-October to ease
further the economic sanctions and export control restrictions
on Cuba. At the same time, the White House released a
"Presidential Policy Directive" setting out the next steps on the
path for normalization of relations between the United States
and Cuba.
OFAC amended its Cuban Assets Control Regulations (CACR)
to allow U.S. businesses to enter into "executory contracts" for
goods and services, provided that these contracts are made
expressly contingent on obtaining prior OFAC authorization or
if such authorization is no longer required. This change allows
ILMA members, subject to CACR restrictions, to seek potential
business opportunities in Cuba in anticipation of continued
liberalization of the trade embargo.
Regulatory amendments by OFAC and BIS also, in part,
authorized additional trade activity between third countries and
Cuba, as well as the direct sales to Cuba of consumer goods for
personal use, transit of air cargo and travel.
While the changes represent a significant expansion of the
scope of authorized activity with Cuba, some companies
might want to wait until sometime in 2017 before making
an investment of time and resources. Because the Obama
administration leaves office on Jan. 20, it may be prudent to see
the future path of U.S.-Cuban relations after the new president
is sworn in.
OFAC has made subtle changes to the CACR's restrictions on
the ability of third-country companies, especially those that
are not owned or controlled by Americans, to trade with Cuba.
OFAC intends for its changes to minimize the circumstances
under which people authorized by BIS to export or re-export
items to Cuba are required to obtain a specific license from
OFAC. This change to the CACR does not affect BIS' licensing
authority under the export regulations, which covers re-exports
of items from third countries, including items with 25 percent
or more U.S.-origin controlled content.
BIS expanded "License Exception Support to the Cuban People"
(SCP) to cover exports and re-exports of certain less-sensitive
types of items that can be characterized as consumer goods
and are sold directly (e.g., online) to eligible individuals in Cuba
for personal use.
So, let's look at executory contracts. OFAC's
new general license authorizes American
people to negotiate and enter into contingent
contracts for transactions that are prohibited
by the CACR, provided that the performance
of such contracts - that is, providing goods
or services and receiving payments - is
made contingent on OFAC authorizing
the underlying transactions or if such
authorization is no longer required because of
a future amendment to the CACR. In addition
to contracts, the new CACR provision covers
executory pro forma invoices, agreements
in principle, executory offers capable
of acceptance, binding memoranda of
understanding and similar agreements.
Compoundings December 2016 * 31 * Vol. 66 No. 12
Table of Contents for the Digital Edition of ILMA Compoundings December 2016
ILMA Compoundings December 2016 - 1
ILMA Compoundings December 2016 - 2
ILMA Compoundings December 2016 - 3
ILMA Compoundings December 2016 - 4
ILMA Compoundings December 2016 - 5
ILMA Compoundings December 2016 - 6
ILMA Compoundings December 2016 - 7
ILMA Compoundings December 2016 - 8
ILMA Compoundings December 2016 - 9
ILMA Compoundings December 2016 - 10
ILMA Compoundings December 2016 - 11
ILMA Compoundings December 2016 - 12
ILMA Compoundings December 2016 - 13
ILMA Compoundings December 2016 - 14
ILMA Compoundings December 2016 - 15
ILMA Compoundings December 2016 - 16
ILMA Compoundings December 2016 - 17
ILMA Compoundings December 2016 - 18
ILMA Compoundings December 2016 - 19
ILMA Compoundings December 2016 - 20
ILMA Compoundings December 2016 - 21
ILMA Compoundings December 2016 - 22
ILMA Compoundings December 2016 - 23
ILMA Compoundings December 2016 - 24
ILMA Compoundings December 2016 - 25
ILMA Compoundings December 2016 - 26
ILMA Compoundings December 2016 - 27
ILMA Compoundings December 2016 - 28
ILMA Compoundings December 2016 - 29
ILMA Compoundings December 2016 - 30
ILMA Compoundings December 2016 - 31
ILMA Compoundings December 2016 - 32
ILMA Compoundings December 2016 - 33
ILMA Compoundings December 2016 - 34
ILMA Compoundings December 2016 - 35
ILMA Compoundings December 2016 - 36
ILMA Compoundings December 2016 - 37
ILMA Compoundings December 2016 - 38
ILMA Compoundings December 2016 - 39
ILMA Compoundings December 2016 - 40
ILMA Compoundings December 2016 - 41
ILMA Compoundings December 2016 - 42
ILMA Compoundings December 2016 - 43
ILMA Compoundings December 2016 - 44
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