Biden Administration Eases Some Trump-Era Cuba Restrictions

The U.S. Department of State announced on May 16, 2022, a series of measures aimed at supporting the Cuban people and independent Cuban entrepreneurs and loosening Trump-era restrictions that largely isolated the island and its people from the United States by "cancelling" much of the Obama Administration's work to engage and increase authorized activity in Cuba.

The Biden Administration's actions, though limited in scope, represent the most significant change in U.S. policy regarding Cuba since June 2019, when the Trump Administration banned cruise operations to the island. In a background press call on May 16, 2022, senior Biden Administration officials explained that the measures are the result of the White House's year-long efforts to review existing Cuba policy, focusing particularly on human rights and empowering the Cuba people.

Summary of New Measures

Specifically, the Biden Administration intends to:

• reinstate the Cuban Family Reunification Parole (CFRP) Program and expand visa processing and consular services by gradually increasing the immigrant visa processing out of Havana while continuing to process visas out of Georgetown, Guyana, thus enabling more Cubans to visit or join their families in the U.S.
• loosen restrictions on authorized travel to Cuba by 1) allowing charter and commercial flights to Cuban airports outside of Havana and 2) reinstating group people-to-people educational travel, as well as travel related to certain professional meetings and research, to the island
• increase support for and encourage commercial opportunities with Cuban entrepreneurs who operate outside of the government sector by authorizing access to expanded cloud technology, application programming interfaces, e-commerce platforms, microfinancing and training
• remove the current limit on family remittances of $1,000 per quarter and per sender-receiver pair and re-instate donative (i.e., non-family) remittances, which may facilitate the provision of funding to private business ventures in the island

In announcing the above-described measures, the U.S. Department of State also confirmed that the Biden Administration will effectuate the measures through steps and regulatory changes across several federal agencies. These agencies are likely to include, at a minimum, the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC), the U.S. Department of Commerce's Bureau of Industry and Security (BIS), and the U.S. Department of Transportation's Federal Aviation Administration (FAA). By expanding visa processing and consular services opportunities, the Biden Administration will also likely need to increase the number of U.S. embassy personnel in Havana, many of whom were removed during the Trump Administration as a result of mysterious health incidents referred to as "Havana Syndrome."

Conclusion and Considerations

These measures reflect the Biden Administration's initial, but limited, effort to re-engage with Cuba and the Cuban private sector. Post-implementation, the Biden Administration will likely, as the Obama Administration did, take time to assess the public reaction to and effectiveness of its measures and then determine whether additional changes are in line with the United States' national security interests. Past experiences, however, indicate that the measures' success will depend on the Cuban government's reaction; particularly, its interest and willingness to create the domestic conditions necessary to facilitate the Cuban peoples' ability to take advantage of and benefit from the U.S. measures. The Cuban government's willingness to create such an environment will likely depend on whether it sees such efforts as benefiting its own agenda and interests.

As noted above, the proposed measures will encourage and support commercial opportunities with the Cuban private sector by authorizing access to expanded cloud technology, e-commerce and microfinancing, and by reauthorizing donative remittances to non-family members. This initial widening of U.S. opportunities to interact with the Cuban private sector may suggest a future interest in authorizing U.S. direct investment in Cuban private businesses that have no state participation. Again, the Biden Administration may be testing the waters here to gauge both the public's and Cuban government's responses to and acceptance of the measures; if positive, the Biden Administration may then consider more concrete reforms.

Regarding "group" people-to-people educational travel to Cuba, the Obama Administration had issued so-called general licenses for individual and group people-to-people educational travel to Cuba.¹ The distinction between the two categories of people-to-people travel is that the "group" people-to-people travel required an organization that is a U.S. entity to organize and sponsor the trip; under the "individual" people-to-people travel, the individual traveler could self-certify himself or herself in compliance with the regulations and travel to Cuba independently. The Trump Administration eliminated both of the general licenses.

Although the Biden Administration did not outline how the group people-to-people travel exception will be reinstated, it is expected to be implemented pursuant to a general license. In the past, tour operators, universities and other private organizations organized group people-to-people travel. Notably, the Biden Administration chose not to reinstate individual people-to-people travel to Cuba; opponents of the Cuba opening see this exception as a means for individuals to engage in prohibited tourist travel to Cuba.

Lastly, during the background press call, senior Biden Administration officials revealed that, at this time, the U.S. would not remove any entities from the State Department's List of Restricted Entities and Subentities Associated With Cuba (Cuba Restricted List). The Cuba Restricted List, published in 2017, identifies entities controlled by the Cuban military, intelligence or security services that U.S. persons cannot transact with on account of the U.S. government concluding that direct financial transactions therewith would disproportionately benefit those entities at the expense of the Cuban people or private enterprise. Consequently, direct financial transactions to and/or from FINCIMEX (state-owned financial investment and remittance-company) and Banco Financiero Internacional, S.A. (state-owned bank), as with all the other entities on the Cuba Restricted List, will remain prohibited.

It remains to be seen whether the Biden Administration's actions are an opening for the U.S. to reinstate the widened economic opportunities for engaging with Cuba that was seen during the Obama Administration, or just a tinkering along the edges. Certainly, the re-opening of group people-to-people travel and the opening of airports beyond Havana appear to portend further expansion. As with the Obama opening, Biden may be taking an incremental approach in order to judge the political reaction – both domestically and by the Cuban government. Only time will tell.

Holland & Knight continues to monitor closely the Biden Administration's policy on Cuba. If you have questions on how the developments discussed in this alert or other U.S. government restrictions on Cuba may affect you or your organization, please contact any of the authors or another member of Holland & Knight's International Trade Group or Cuba Action Team.

Notes

¹ A general license authorizes a particular set of transactions and activities, without the need to apply for an individualized license or wait for a license to be granted, so long as the regulatory requirements are satisfied.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.