Exporting to Cuba - Important Information You Need to Know

Q: Can I export to Cuba?

A: Virtually all commercial transactions between US entities and Cuban entities are prohibited, except when an export item will advance US diplomatic, political, or other interests. A licensed customs broker can help you to determine whether your potential export item can be exported and guide you through the exporting process.

The Current State of US - Cuban Relations

After a period of modest "thawing" in US - Cuban relations under the previous Administration, the current US Administration has shifted back to a more "hawkish" attitude, especially toward business transactions between the two countries.  Instead of continuing to reduce trade restrictions, the US has officially reversed course, reinstituting several previous restrictions, and adding new ones.

US - Cuba Trade Federal Regulatory Agencies

Primary responsibility for managing restrictions on US - Cuba trade is shared by two relatively obscure Federal regulatory agencies:

  •   The Bureau of Industry and Security (BIS) – part of the Commerce Department – administers export restrictions on most types of goods subject to US export control.  (Munitions and other defense items are administered by the State Department’s Directorate of Defense Trade Controls.)

  •   The Office of Foreign Assets Control (OFAC) – part of the Treasury Department – administers economic and trade sanctions.  These include financial restrictions on doing business with individuals, countries, and other entities that have been designated as threats to the national security, foreign policy, or economy of the United States.

In general, virtually all commercial transactions between US entities and Cuban entities are prohibited, unless either BIS or OFAC has issued either a general or a specific license authorizing a particular transaction, or type of transaction.

Most types of "general licenses" authorizing US entities to do various types of business with Cuba are issued by OFAC, and apply primarily to individuals traveling to Cuba.  A useful brief summary of recent changes is available on the Treasury Department website.

As summarized on the BIS website, "The United States maintains a comprehensive embargo on trade with Cuba. The export and reexport to Cuba of items subject to the Export Administration Regulations (EAR) require a BIS license unless authorized by a license exception specified in section 746.2(a)(1) of the EAR or exempted from license requirements in section 746.2(a)(2). The EAR sets forth licensing policy for exports and reexports that generally will be approved, exports and reexports that will be reviewed on a case-by-case basis and exports and reexports that will generally be denied."

On the same web page, the BIS licensing policy is summarized as: "There is a general policy of denial for exports and reexports to Cuba of items subject to the Export Administration Regulations (EAR), as described in Section 746.2(b) of the EAR. However, there are exceptions to the general policy of denial, some of which are listed below:

  • Medicines and medical devices, whether sold or donated, are generally approved. 

  • Items to ensure the safety of civil aviation and the safe operation of commercial aircraft engaged in international air transportation are generally approved.

  • Items necessary for the environmental protection of U.S. and international air quality, waters and coastlines, including items related to renewable energy or energy efficiency, are generally approved.

  • Telecommunications items that would improve communications to, from, and among the Cuban people are generally approved.

  • Items to meet the needs of the Cuban people, including items for export or reexport to state-owned enterprises, agencies, and other organizations of the Cuban government that provide goods and services for the use and benefit of the Cuban people, are reviewed on a case-by-case basis."

Unless there is reason to expect that the export of a particular item from the US to Cuba will advance US diplomatic, political, or other interests, as seen by BIS or OFAC, it does not seem likely that an export licensing request from a US exporter would be viewed favorably.  However, if there is a specific basis for expecting that the export of a specific item to a specific end-user in Cuba would sufficiently advance US interests to justify granting an export license, that could justify the time and effort required for a formal inquiry and application.  

Formal Export Inquiry and Application

Such an inquiry and application should be supported by (at a minimum):

  • a detailed explanation of the nature, purpose, and function(s) of the item, including as installed and used by the proposed end-user in Cuba;

  • confirmation that the proposed end-user, and any other parties to the transaction (specifically including banks and other financial institutions) are not currently listed on any applicable "blocked parties" or "denied parties" lists maintained by either BIS or OFAC; and

  • a detailed explanation of the manner in which the exportation of the item to the proposed end-user in Cuba would advance specific US interests, in accordance with stated BIS and OFAC policy guidance.

Potential Risks From Attempting to Export to Cuba

Because the topic of exports to Cuba is so sensitive to the current Administration and the various agencies which administer sanctions against Cuba and various Cuban entities, any attempt to export goods from the US to Cuba without either a:

  •  license; or

  •  an appropriate exemption or exception to a general licensing requirement; 

is likely to expose the exporter to potentially very significant financial and other penalties.  In particularly serious cases, both individuals and companies may be subject to both criminal penalties, and to civil penalties including denial of export privileges for varying periods, as well as what can be very large financial penalties.

Exporting to Cuba

Accordingly, I recommend that companies which have opportunities to do business with Cuba, or with customers located in Cuba, very carefully review the potential business benefit, and determine if the opportunity appears sufficient to justify an export license inquiry and application.  If so, an experienced international freight forwarder, who is familiar with the specific export control issues and procedures involved, can provide valuable guidance throughout the process.

Citations

Bureau of Industry and Security: https://www.bis.doc.gov/index.php

Office of Foreign Assets Control: https://www.treasury.gov/about/organizational-structure/offices/Pages/Office-of-Foreign-Assets-Control.aspx

Summary: https://www.treasury.gov/resource-center/sanctions/Programs/Documents/cuba_fact_sheet_11082017.pdf

Summarized: https://www.bis.doc.gov/index.php/policy-guidance/country-guidance/sanctioned-destinations/cuba