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OFAC Updates Cuba-Related FAQs

The Office of Foreign Assets Control ("OFAC") updated its Cuba-Related "Frequently Asked Questions" in order to address issues related to the increasing commercial and non-commercial connections between the United States and Cuba. The updated questions concern a range of practical topics, including the provision of health and cargo insurance for authorized travel and trade, the leasing of property and other real estate transactions, and the re-exportation and repair of goods originating from the United States.

The updated questions clarify the application of an OFAC General License authorizing so-called "U-turn" fund transfers that pass through U.S. financial institutions but originate and terminate outside of the United States. The new responses specify that the General License authorizes "U-turn" transfers when they involve Cuban nationals and originate and terminate in accounts maintained at the foreign branches and subsidiaries of U.S. banking institutions. Under the General License, neither the originator nor the beneficiary of the fund transfer may be a person who is subject to U.S. jurisdiction.

The Cuba trade embargo remains in place, and U.S. business opportunities on the island continue to be highly restricted. Nevertheless, as evidenced by OFAC's updated FAQs, even the limited openings authorized to date raise a number of questions about the applicability of various aspects of the Cuba sanctions program. If the cautious rekindling of relations between Cuba and the United States continues along its current trajectory, these questions will only continue to multiply.

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