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Cuba: U.S. Restrictions on Travel and Remittances


The whole debate and history as provided by the US Congressional Research Service.
There’s a lot to read with timelines, facts, and figures that are the most current information used by the US Congress when debating measures related to Cuba.

Enforcement of Travel Rules - Cuba - Will History Repeat?

I’ve quoted and pasted from this a few times lately so I’m bumping it up.


More info on remittances and the complications involved in US companies doing business with Cuba through 3rd party countries like Panama. Thanks again to member justRobme for digging this up:


Not sure if this is the best thread, but Spunky will no doubt fix it -
as he does.
Yesterday’s update - ie 25 July 2017 - to OFAC FAQs is here: https://static1.squarespace.com/static/563a4585e4b00d0211e8dd7e/t/5977ac54e45a7c0d24a701c4/1501015125599/cuba_faqs_20170725.pdf


What does FAQ to OFAC 25 July 2017 mean?
In the short term not much changes from what we have already learnt about the Donald’s 16 June announcement.
However, once new regulations are announced the principal impact on travel will relate to Cuban transactions which have previously been exempt, but will be progressively restricted by the State Department (which will begin to publish lists of entities and sub-entities with which direct transactions will not be authorised ).
The intention is that direct transactions with entities and sub-entities related to the Cuban military, intelligence, or security services shall be prohibited.
While the intent is clear, without enforcement the proposed regulations may prove as ineffective as the present OFAC declarations.
The difference will be, however, that if you are a US citizen you could be caught out without ever knowing your travel to Cuba was being scrutinised.
How so?
Technology and information sharing:
US Treasury needs only develop algorithms which match your passport to travel to Cuba, then match your bank account transactions against the account numbers of Cuban entities/sub-entities which have been proscribed.
It’s not a foolproof methodology from Treasury by any means, but it is incredibly efficient and equally difficult for the traveller to refute.
“Cash is king” in Cuba, but the motto may also become the saviour for American travellers worried about technological incursions into their personal arrangements.


The wonderful thing about not being able to easily use plastic/credit/debit in Cuba helps most Americans mask their spending. Indeed, a saviour for many who might otherwise leave an easily followed audit trail of bread crumbs.


I am not sure what changes have been made.

As you say, until the actual regulations and the list of proscribed businesses are published we don’t know much more.

Since the “people to people” travel will have to be in groups, I would think that there would be an expectation taht groups will have more records than individuals. But a lot will depend on whether Marco Rubio’s interpretation (that anything owned by the Ministry of Tourism would be banned) is correct.

Or perhaps the US embassy will set up spy cameras on the entrance to Sloppy Joe’s to see if any Americans go there.

Comparing this with the previous version, the biggest change seems to be a new FAQ:

"8. How do the changes announced by the President on June 16, 2017 affect authorized
travelers to Cuba whose travel arrangements may include direct transactions with
entities related to the Cuban military, intelligence, or security services that may be
implicated by the new Cuba policy?
The announced changes do not take effect until OFAC issues new regulations.
Consistent with the Administration’s interest to avoid negatively impacting Americans
for arranging lawful travel to Cuba, any travel-related arrangements that include direct
transactions with entities related to the Cuban military, intelligence, or security services
that may be implicated by the new Cuba policy will be permitted provided that those
travel arrangements were initiated prior to the State Department listing of the entity or
subentity. Once the State Department adds an entity or subentity to the list, new direct
financial transactions with the entity or subentity will not be permitted, unless authorized
by OFAC. "

Plus several references to that.


As I see it, Treasury’s trick with its regulations is is to create a thing which is being called a subentity in order to workaround what really is an entity in the real world. Therefore US transactions with whosoever Treasury deems a part of the Cuban military, intelligence, or security services may be prohibited (unless otherwise authorised).
It will be interesting to see how far Treasury is willing to go with respect to thousands of businesses in Cuba associated with arms of its government and which US travel and tour operators rely on to sustain their activities.


Miami Herald is also talking about the new FAQ:


How far US Treasury goes wrt to listing prohibited entities and subentities remains to be seen so this link provides an idea of the business structures under the Ministry of Revolutionary Armed Forces (FAR): http://foresightcuba.com/grupos-empresariales-del-minfar/
While cash is king in Cuba and receipts for transactions are few and far between, it will be possible to travel below the radar and be creative with story telling should Treasury be resourced at borders (which they presently are not) to enact an enforcement regime.
However, as I posted elsewhere, Treasury could merely adopt technological enforcement and rely on data matching algorithms, thereby focussing its resources on extracting penalties and putting the fear of Donald in US citizens.


USCBP could simply make referrals to Treasury for followup and actual enforcement. OFAC declarations under individual travel (if it remains) could trigger automatic requests for proof that the individual qualified. Failure to comply would be a violation of the regulations. Pick a few examples and issue penalties and the desired effect would be achieved in short order.

Again, this assumes that they are actually serious about it. It would cost money but it wouldn’t be difficult.


I know we are speculating here, but “prohibited” transactions won’t be limited to the odd travel category as I read it, because it may be applied to all of the 12 OFAC categories (see OFAC FAQ#7 “Once the State Department publishes its list of entities and subentities with which direct transactions will not be authorized and OFAC issues its regulations, no new transactions may be initiated with these identified entities and subentities.”).
If maximum penalties were imposed, and collected, could actually turn the enforcement process into a cash cow.


I’m pretty sure the entities and sub entities and their connections to the military or the government may well be moot as Cuba might license all of those services to a 3rd party.
Remember, the Rubio and anti-Castros want to ban payments to military organisations while still pushing clients to the newly, Cuban-American financed, Casas, Paladars, Tour Operators and private taxis.
The other side of this is: Where does an American Tour Group offering People to People tours find 30 or 40 rooms for their tours? Even 10-20 rooms?
Probably, they can’t without contracting with the Cuban Military who control all of the hotels.


This emphasis on distancing US travelers from the military is a bit odd. I’m wondering if they understand how a Communist system of government works. The desire to support private entrepreneurship is a laudable goal but this a rather new development in Cuba and while supported by the government, any business that gets big enough is likely to be under the control of the government and by extension the military. The Cuban experiment with encouraging small businesses is a good thing but as soon as they attempt to sign contracts with US corporations I think they may be crossing a line.


jRm - I am not really sure what point you were making about entities and sub-entities. I would assume an entity is something like Gaviota whilst a subentity would be each of the hotels that the own.

griz - indeed, back when OFAC was pursuing unlicensed travel a decade ago, I assume CDP passed details to them then.

jRm - I can see it might be hard to prove. There has also been discussion about the use of the word “direct”.

Spunky - I doubt that Cuba will change things to avoid these rules. They would probably see that as giving in to the bullying. Though we don’t yet know whether OFAC will say that the Cuban military control all hotels.

griz - again, the wording does not say anything controlled by the Cuban government just the military and security services. Does the military contol the government or the government control the military ? Just because Raul was head of the military before he became president does that make him still part of the military ?


I think the line between the military and the government is blurred enough in a western style democracy. Attempting to draw that line in a system of government like Cuba’s is a fool’s errand but if the US want’s to attempt it, so be it. It just seems that drawing that line runs contrary to 70 years of history. Nuance such as this seems beyond the grasp of the current POTUS but naivete certainly is not, especially when it comes to communist dictatorships.


Typically an “entity” is a person, partnership, organization, or business that would pay taxes or exists in such a manner that a court could make a finding for/against it.
In a communist state the tax regime is not transparent, and I am not up on Cuban law to know how they define an entity, or if they define an entity. So when US Treasury invents a category - the “subentity” - for classification which does not exist in the USA that I am aware, it can include in that category whoever it deems to “fit” the association they intend to make. If the USA wants to attach enterprises associated with the Cuban Military, then we know FAR has GAESA under its umbrella. GAESA owns and controls a large slab of the tourism industry, owns banks and has tentacles into ETECSA. So how far is Treasury likely to go, because they seem to have given themselves scope to list a phone-book’s worth of prohibitions.
We can only speculate for now.


Rob - as far as I understand, the Cuban legal structure is similar - with limited companies (S.A. or Sociedad Anónima) which are separate legal entities. I had assumed that the reference to sub-entity was to allow them to list businesses that are not separate legal entities. (So they could list Sloppy Joe’s not just Habaguanex S.A.). But you may be right.
I was more interested to see how they interpret “control”.


Thanks - and you would be right in that a trading unit or business unit of the legal entity would be needed on the list for Sloppy Joes to be prohibited. Maybe the connotation of prohibiting “businesses” didn’t sit well with the US administration.
Did you mean “direct” and not “control” as the FAQ of 25 July does not mention “control”.
Effectively, Cuba-related commercial engagement that includes direct transactions with entities and subentities related to the Cuban military, intelligence, or security services may be implicated by the new Cuba policy.
In this sense, “direct” means that there is no intermediary. Treasury will need to rethink this wording or we will have casa owners becoming de facto tour companies and Treasury would be powerless.
The other key word is “related”. Related not only potentially means any business unit of an entity, but also any business unit with which it does business, thereby casting an even wider net.
Irrespective of the US Administration’s intent, unless they manage to define “direct” differently they will have no chance of excluding the Cuban military from third party transactions.


So, does it look like US airlines will let you fly from Cuba to the US without declaring an OFAC category, if you are a non-US citizen?