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US Jurisdiction and OFAC - how to make sense of OFAC rules


#1

What does “US jurisdiction” mean for travellers and why is it important?
Because, if you are under US jurisdiction, then travel to Cuba through the US is always governed by US Laws.
Check here if you are unsure, because while this applies to all US citizens, it also applies all travel initiated from the USA irrespective of your nationality :
https://www.law.cornell.edu/cfr/text/31/515.329
The USA has the “Trading With the Enemy” Act and names Cuba, along with other countries, for particular attention under its legislative powers which are carried out under Regulations.
The Office of Foreign Asset Control (OFAC) is tasked with administering and enforcing the Regulations via economic and trade sanctions against Cuba, and this includes travel related activities, but not immigration.
OFAC prohibits travel to Cuba for "tourism".
However, Cuba allows tourists from the US, and to enter the country a traveller must have a valid Cuban Visa. Your chosen carrier will usually advise you how to obtain your visa, which in most cases will actually be called a Tourist Card.
OFAC’s Regulations and Cuban immigration laws must never be confused - they exist in different universes!
So that’s the context.
Despite the Regulations, going to Cuba for most people is actually now much easier to navigate, because the rules have been clarified.
OFAC allows any traveller to “self certify” that they meet a category of authorised travel to Cuba. See the thread in this forum about travelling to Cuba from 9 November as it links to the details underpinning each category of travel.
Whoever carries you to Cuba will ask what category you chose, and must retain that record for at least 5 years, because that is what OFAC requires of carriers.
Is it that easy?
Not quite.
You made a lawful undertaking to satisfy an OFAC category of authorised travel. So there’s one more step you should take if you want that peace of mind that you are “compliant”, and it’s to be prepared to develop an itinerary. That’s relatively easy if, for example, you self certify under the “support for the Cuban people” category. We intend to post further guidance in this forum, but in the meantime consult OFAC, particularly their linked Q&As. The key to your itinerary is that it reads to show a schedule of activities which does not include free time or recreation in excess of that consistent with a full-time schedule.
So, I am now in Cuba. I know I have to comply with Cuban law, but am I still under US Jurisdiction?
Yes.
You made lawful undertakings, and while they allowed you to travel, OFAC also introduced a new Regulation about direct financial transactions with entities and subentities on the Cuba Restricted List. They are also identified elsewhere in this forum, and below we will explain why this is unlikely to affect the majority of travellers to Cuba, unless they choose to make an accommodation booking direct with a named entity/subentity.


#2

Thanks for all your work and research, Rob.


#3

Spunky
I have done a further edit to try and simplify it, without compromising the embodied information.
If there are errors, please edit and/or let me know and I will.
Many other sites provide information on how to get to Cuba, but few provide the context while also simply explaining that if you aware of your obligations (if you come under US jurisdiction) then it’s a pretty simple process.
I hope that message has been conveyed and welcome input which can improve it further.


#4

Here’s the link to Cuba’s Restricted List (CRL): https://www.state.gov/e/eb/tfs/spi/cuba/cubarestrictedlist/287349.htm
There are two key points to bear in mind:

  1. Entities or subentities owned or controlled by another entity or subentity on this list are not treated as restricted unless also specified by name on the list; and
  2. A person engages in a direct financial transaction by acting as the originator on a transfer of funds whose ultimate beneficiary is an entity or subentity on the State Department’s List of Restricted Entities and Subentities Associated with Cuba (“Cuba Restricted List”).
    So, if you know you are NOT transacting with a named entity you have nothing to worry about.
    Are there grey areas?
    Not really, but there are tricky considerations.
    First, some think that any dealing with a CRL Entity is prohibited. But you can actually interact with the CRL Entity so long as you do not participate in a direct financial transaction.
    Examples:
    1. You want to go window shopping and visit Manzana de Gomez (Shopping Mall), which is on the CRL. That’s fine, so long as you never bought anything.
    But my Cuban friend bought something you liked and gave it to you. What then?
    Did you participate in the direct financial transaction? Well, no; you received a gift so your “dealings” in this case seem fine.
    2. You buy a bottle of Ron Caney rum and Ron Caney (Rum Production) is on the CRL. Ok, but did you buy it at the place named exactly on the CRL. No, you most likely just bought it from one of the hundreds of stockists that deal with Ron Caney (Rum Production).
    Ok, but the definition talks about the “ultimate beneficiary”, so surely that will be Ron Caney?
    No.
    The definition is clear, and mentions the “originator”. In your case the store was the originator, and anyone could have bought the rum off the shelves. Just remember that there can only ever be one completed transaction for each originator.
    Another way to think about it is to consider where ownership lies after a completed transaction. So if the store owns the rum you buy, you certainly cannot be transacting with Ron Caney (Rum Production).
    3. What about when I buy a holiday package from Airyfairy Airlines out of the USA and it puts us up at Gran Hotel Manzana Kempinski (Gaviota), which is on the CRL.
    Aha, I do not know for sure. So let’s revisit the rules.
    You originated a transaction with Airyfairy Airlines, and we know they are not on the CRL. So did you ask Airyfairy Airlines to act as your intermediary because you wanted to stay at Gran Hotel Manzana Kempinski and they could arrange to purchase your holiday package accordingly?
    If the answer is no, then Airyfairy Airlines must have originated the direct financial transaction with Hotel Manzana Kempinski and become beneficial owners of the property rights for the duration of your intended holiday. It seems fine to me because you bought a holiday package from an airline, and certainly never originated in any way a transaction with the CRL Entity. If readers have a different view, please contribute.
    But isn’t this all a load of nonsense because OFAC won’t be enforcing it, will they?
    You are most probably right, and even if they did they would need solid evidence. Cuba is largely a cash economy so how would they tell you bought anything from any CRL Entity?
    Unless you used a credit card and OFAC had reason and ability to check Cuba originated transactions, you probably have nothing to worry about.
    Summing up, it’s not difficult to work out if you might be doing the wrong thing. But even then there seem to be so many ways around the rules affecting CRL Entities that the restrictions are next to useless IMHO.

#5

This article is relevant, and says a lot of the same - https://www.cubatrade.org/blog/2018/3/10/2b05qodxrf4d2m8qego70oflydtezl


#6

If one attempts to understand the article beardo referenced or try to understand rederob’s attempted analysis of the regulations while also realizing there are also zero examples of enforcement / non-enforcement, they will eventually realize more effort expended results only in more confusion with no conclusion.

After having tried unsuccessfully to reach some viable conclusions periodically over the last ten years, I give up and go to Cuba to clear my mind of all this.


#7

Bob
What you personally choose to do is entirely up to you.
In the bigger world there are heavily invested organisations who need to ensure they cannot be prosecuted now or in the future because they have taken the necessary steps to determined they are OFAC compliant.
You seem to want to continue your mantra that because OFAC is not visibly enforcing its Cuba travel regulations, that it somehow absolves organisations from worrying. Nothing could be further from the truth.
Most travellers like to know that when they are subject to the rules of others countries, they act in accordance with them.
I certainly do not share your lack of concern for doing the right thing, merely because you think you can always get away with it, and regard it as very poor travel advice.


#8

justRobme: Sorry for any confusion by referring to you as “rederob”. I was thinking of the name you go by on another forum.

It seems our major difference in opinion is that you believe you can be in Australia believing you can advise people by your belief that you can accurately interpret the OFAC regulations which have no case law as a result of never being enforced. Meanwhile attorneys licensed to practice law in the US that I speak with contend no realistic interpretation is possible until there is some attempt to enforce the law and some case law exists.

Everyone traveling from the US to Cuba should do some basic research and reach their own conclusions about risk.


#9

Bob
It does not matter where I live. As a traveller, I am bound by the laws prevailing my journey.
I certainly know how to interpret regulations, because I spent a fair bit of my time writing them in support of government legislation as a senior bureaucrat.
Your points about case law are completely irrelevant.
You seem to have an idea that what OFAC intend is not clear, and that the regulations are prone to significant interpretation.
I have yet to find that is the case and have subjected many scenarios to mooting. Instead, I find OFAC has painted itself into a legal corner which make it easy for travellers to be compliant if they understand what the law is actually saying and, more importantly, what is omitted (extending “reach” can be a slippery slope with unintended consequences).
What I find curious is that you say “Everyone traveling from the US to Cuba should do some basic research and reach their own conclusions about risk”. Yet the principal risks relate to ignoring what OFAC stipulate, and this is where you, personally, promote the view that it can be simply ignored. Your basis is that there is no enforcement, and I agree that this practicality exists for independant travellers. Unfortunately corporations cannot take such risks, and are actually bound by a greater range of statutes than OFAC, so they perform “due diligence”.
The nature of that diligence was conveyed in beardo’s link.
If you disagree with the linked information, please state why.


#10

Rob: We have been down this road before. You believe you can interpret what OFAC requires in specific detail. I believe such cannot be done. We should just agree to disagree and let it go at that.

Bob


#11

Bob
On the contrary.
I cannot see there to be any problems with OFAC, but you do.
Exactly what is being “interpreted”?
Yet you have yet to show where there are issues with the examples offered.
Perhaps try to make your comments relevant to what OFAC presents and leave other matters out of this.


#12

So no one is mislead by justRobme’s comment: I cannot see any problems with OFAC. I have had zero problems with OFAC in almost 60 trips to Cuba. I simply check the box and go. That’s it. Could not be simpler or less hassle free.


#13

Bob
Not sure how that helps people who actually respect a country’s laws and try to abide by them as best they can.
Also not sure why you are not capable of keeping “on topic”.
Beardo’s link was not about personal travel arrangements. You willingly chose to ignore that and jump on your soapbox.
I note you do not respond to my questions about the information provided.
But I have realised from your many contributions here that you have no interest in doing the right thing.
So long as you, personally, are comfortable, then that’s all that seems to matter.


#14

justRobme: I have previously said you and I simply disagree on the ability to determine what the OFAC regulations mean.

I challenge anyone to determine what the OFAC regulations actually mean or what Cuban law actually is so they can comply with them. An analogy to jello is appropriate.

I have dealt with OFAC back in the days when specific licenses were required for some exemptions. I have had OFAC explain why my request for a specific license was going to be denied. I had a good idea of which licenses required what for approval. All of that became jello when “interpretations” of regulations that have not changed in 12 years went out the window with “self certification” which is essentially “don’t ask, don’t tell”. I have read much OFAC published guidance in prior years which conflicts with current interpretation simply be “unpublished” without any clue if it still applied or not. I remain convinced that the current OFAC regulations cannot be interpreted. I also believe the Obama administration made then vague and ambiguous on purpose so they could never be enforced. I understand some other have differing opinions.

One indication of the misunderstanding is all the focus on internet travel forums on the “support of the Cuban people” exemption. It seems that is all everyone talks about in the belief that is common. A frequent traveler to Cuba realizes that alone is such a small minority of travelers that it becomes a red flag itself. If one were concerned about OFAC, that would be the last exemption one should select to not attract attention to themselves. But that is what one gets from internet logic.


#15

Bob
OFAC regulations are really pretty easy to work out.
And you have no intention of challenging anyone - you merely choose to repeatedly ignore what is presented and jump onto your bandwagon.
Cuban law is not relevant to this topic.
Frankly, what happened to you in the past is also not relevant - self certification is the new normal and OFAC has been transparent in presenting examples for travellers so they can understand what is intended.
The reason internet forums focus on “support for the Cuban people” is that it appears to be one of the few areas available for self certification unless you clearly fall into one of the other areas. The fact that many travellers to Cuba have Cuban “family” connections makes that a simple OFAC choice, and it’s doubtful they will go onto an internet forum for more advice!
How about staying on topic, or open a thread which meets what you want to present.


#16

That’s an interesting thought, Bob. I hadn’t thought of it that way. I suspect that, based on some of your comments about the historical lack of enforcement, and the reasons you have mentioned to expect continued lack of enforcement, that it really doesn’t matter which excuse someone might select. For example, someone with absolutely no family in Cuba might select “family visit” and nobody will ever check, and there will never be an audit or prosecution of the false claim.
But on the other hand, most travelers want to at least feel they are complying with the rules, and “support for the Cuban people” probably is the easiest one to seem to comply with. Or, in fact, depending on how one interprets that “support,” it might even be relatively easy to actually comply.
But then I’ve made the analogy before to driving down a highway in Wyoming, and you are at the top of a hill, where you can see several miles ahead and behind and there is nothing there but the prairie. You also know that the only highway patrolman in the area is at home, sleeping, and you decide to drive a bit over the speed limit.


#17

CubaJack:

While I would never make a public blanket statement to ignore OFAC regulations as they relate to Cuba travel because they have not been enforced for at least 15 years, I do think that is a risk mitigation factor worthy of consideration.

Many would be surprised to realize that the actual Cuban travel regulations including the 12 exemptions have changed only insignificantly for at least 10 years (my era) I do believe they are much older than that. Realistically the only change has been in the traveler’s required documentation.

Until some 3-4 years ago, about half of the exemptions qualified for a general license (i.e. “self certification”) These were for family visits, government employees on official business, and others. The other half, which included all of those relating to casual travel (i.e. “person to person” & “support for the Cuban people”) required a specific license. A specific license was an actual piece of paper obtained after OFAC reviewed your specific schedule and all activities and approved such. I once traveled with one of those in 2009. The requirements to obtain OFAC approval were rigid. I was also once denied one of these specific licenses.

About 3 years ago, Obama changed the requirement to obtain the written specific license and made all travel permissible under a general license. This is the infamous “self certification”. None of the actual requirements changed, travelers were simply no longer required to obtain pre-approval. This was generally but incorrectly interpreted to mean “Cuba is open” or “no more stringent rules”. Again, the regulations and legalities never changed.

Back when a specific license (i.e. written pre-approval) there was clear detailed documentation with examples published by OFAC as to what would meet the requirements for approval and what would not. Additionally, everyone was aware of such from informal public information about licensed granted and licenses denied. BTW, “full time schedule” meant there was no time for anything else.

But when the need for specific licenses went away, all the official OFAC guidance just disappeared. They all simply became dead web links. No indication if what once was allowable had changed, been rescinded, or remained in effect. Just silence from OFAC. My personal belief is that Obama made everything so undefined and convoluted that no regulations could ever be enforced. Trump never tighten this as he never cared or had resources to do so. All Trump wanted was some lip service to get Senator Marco Rubio off his back.

Looking at the regulations which have remained unchanged for many years and OFAC current limited published interpretations, they appear simple. But if one goes back 3-4 years and see what was once published but then unpublished with no notification that OFAC posture had changed, everything becomes convoluted and contradictory.

That is the basis of my opinion why the OFAC regulations cannot be interpreted or enforced. But I have no problems with those who lacking information create some mental scenario that they are perfectly legitimate. Nor do I worry about them because of non enforcement.

BTW, it would be great to start a list of popular internet myths about Cuban travel from the US. Things like “now you can fly direct to Cuba from the US” when in reality that has existed since 1990.


#18

Post #4 has been edited with the new link for the State Department’s list of businesses that US citizens may not have direct financial transactions with:
https://www.state.gov/e/eb/tfs/spi/cuba/cubarestrictedlist/287349.htm