Treasury Amends Regulations to Increase Support for the Cuban People and Independent Private Sector Entrepreneurs

WASHINGTON — Today, the Department of the Treasury’s (Treasury) Office of Foreign Assets Control (OFAC) amended the Cuban Assets Control Regulations, 31 CFR part 515, (CACR) to further implement the policy announced by the Biden-Harris Administration on May 16, 2022 to increase support for the Cuban people.  These regulatory amendments update and clarify authorizations in support of internet-based services to promote internet freedom in Cuba, support independent Cuban private sector entrepreneurs, and expand access to certain financial services for the Cuban people.  These regulatory amendments will become effective upon publication in the Federal Register on May 28, 2024.

The latest changes to the CACR are available here.  OFAC also updated Frequently Asked Questions (FAQs) on its website related to Cuba.  Major elements of the revisions in the CACR include:

Authorized Internet-Based Services and Software

OFAC is amending the CACR to update and clarify the scope of authorized internet-based services, including by adding examples of authorized services incident to the exchange of communications over the internet and updating the authorization for services in support of such communication.  Additional examples of authorized services include social media platforms, collaboration platforms, video conferencing, e-gaming and e-learning platforms, automated translation, web maps, and user authentication services.  OFAC is also clarifying that persons subject to U.S. jurisdiction may provide cloud-based services (including remote data storage, data transport service, content distribution networks, virtual machines, software-as-a-service, and infrastructure-as-a-service) to support services incident to the exchange of communications over the internet.  

In addition, OFAC is amending the CACR to expand the authorization for services, including training, to install, repair, or replace items related to communication, or items used to develop software that improves the free flow of information or that will support private sector activities in Cuba consistent with the export or reexport licensing policy of the Department of Commerce, including by removing the requirement that referenced items fall within specific export control classification parameters.  OFAC is further authorizing the export or reexport of Cuban-origin software and mobile applications from the United States to third countries, which will expand the ability for independent Cuban entrepreneurs to offer their software and mobile applications on global application stores.  

Independent Private Sector Entrepreneurs

OFAC is replacing the defined term “self-employed individual” with the new term “independent private sector entrepreneur.”  The new term continues to include self-employed individuals, such as owners or employees of private businesses or sole proprietorships, but the amended definition now also includes private cooperatives or small private businesses that are wholly owned by or consisting solely of such individuals.  In each case, the new term is limited to private cooperatives, small private businesses, and sole proprietorships located in Cuba of up to 100 employees.  The amended definition better reflects Cuba’s non-state sector, as Cuba now authorizes the establishment of small- and medium-sized private enterprises.  Finally, OFAC is excluding prohibited Cuban officials and prohibited Cuban Communist Party members from the new term to ensure they do not take advantage of U.S. actions intended to benefit independent private sector entrepreneurs.

U.S. Bank Account

OFAC is authorizing independent private sector entrepreneurs who are Cuban nationals to open, maintain, and remotely use U.S. bank accounts, including through online payment platforms, to conduct authorized or exempt transactions, whether the independent private sector entrepreneur is physically located in the United States, Cuba, or another country.   

U-Turn Transactions

OFAC is reinstating an authorization for “U-turn” transactions, which are funds transfers that originate and terminate outside the United States where neither the originator nor beneficiary is subject to U.S. jurisdiction.  OFAC previously removed the authorization for “U-turn” transactions in September 2019.  This reinstated authorization is intended to help the Cuban people, including independent private sector entrepreneurs, by facilitating remittances and payments for transactions in the Cuban private sector that are authorized by various provisions of the CACR.  Under this reinstated authorization, U.S banks are authorized to process “U-turn” funds transfers in which Cuba or a Cuban national has an interest, provided that neither the originator nor the beneficiary is a person subject to U.S. jurisdiction.   

OFAC is also authorizing the unblocking and return of any “U-turn” funds transfer that was blocked prior to this reinstatement of the “U-turn” authorization.  For more information on Cuba sanctions, see here.

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