OFAC Alert: OFAC Expands Its Cuba-Related Sanctions

On June 4, 2019, the Office of Foreign Assets Control (“OFAC”), in coordination with the Department of Commerce’s Bureau of Industry and Security, amended its Cuba-related regulations to establish a general policy of denial for license applications involving passenger and recreational vessels and private and corporate aircrafts.

OFAC made this amendment to further implement the U.S. President’s foreign policy on Cuba, and cut potential sources of funds for the Cuban military, intelligence, and security services. In this regard, Treasury Secretary Steven Mnuchin explained that “Cuba continues to play a destabilizing role in the Western Hemisphere, providing a communist foothold in the region and propping up U.S. adversaries in places like Venezuela and Nicaragua by fomenting instability, undermining the rule of law, and suppressing democratic processes.”

Under these same foreign policy considerations, OFAC also amended its regulations to remove the general authorization that they established for the educational and cultural trips to Cuba known as “people to people.” Specifically, U.S. travelers will only be able to visit Cuba under this format, if they had completed at least one travel-related transaction (such as purchasing a flight or reserving accommodation) prior to June 5, 2019.

Companies, financial institutions, and their representatives should take great care to understand OFAC’s amendments to its Sanctions on Cuba and update their compliance programs in accordance with them to prevent enforcement actions by the U.S. Government. For example, in this year’s cases of UniCredit Bank AG and Acteon Group Ltd. the subject companies agreed to pay significant monetary penalties and enhance their compliance programs for certain violations of OFAC Sanctions related to Cuba.

Contact:
Michael Diaz, Jr., Javier Coronado
Tel: +1 (305) 375-9220
mdiaz@diazreus.comjcoronado@diazreus.com
www.diazreus.com