These regulations, which form the backbone of domestic enforcement of the U.S. embargo against Cuba, apply to any individual or entity that is subject to US jurisdiction. The regulations are maintained by OFAC and stipulate that those dealing with Cuba maintain records for five years. In addition, OFAC has the right to request records regarding an entity’s activity with Cuba.
A breach of the sanctions imposed on Cuba can result in a 10 year prison sentence, a $1,000,000 corporate fine and a $250,000 individual fine. Furthermore, a civil penalty of up to $65,000 for each violation may be imposed.
Following the shift in President Obama’s policy toward Cuba in 2014, OFAC amended the Cuban Assets Control Regulations.
Changes include allowing certain additional persons subject to US jurisdiction to open bank accounts in Cuba and permitting additional financial transactions with Cuba, including previously blocked remittances and funds transfers.
US-based financial institutions can now open correspondent accounts at Cuban financial institutions to facilitate transaction processing.
Financial institutions may also take advantage of reduced restrictions on remittances and other transfers to introduce transfer services that do not rely on a license from OFAC.
These new amendments, however, are far from signifying a complete reversal of the US embargo on Cuba and they are unpopular with many politicians in the US.
Therefore, regulations may change again under future administrations. As such, the difficulty of maintaining compliance with changing regulations might discourage businesses from venturing into Cuba until the political climate is more stable.
Effective from October 9 2019, the Cuban Assets Control Regulations amended certain authorizations for remittances to Cuba.
One of the amendments included the elimination of U.S. banking institutes to require authorization to process “U-turn” transactions – transactions that originate and terminate outside the U.S. and neither the sender nor receiver is subject to U.S. jurisdiction.
The second amendment was on remittances, which now allows family remittances to one Cuban family member of up to $1000 per quarter.
Close relatives of Cuban PEPs are not allowed to receive the family remittance.
Remittances to certain individuals and independent non-governmental organizations in Cuba are permitted. Organizations that are eligible to receive remittances include civil society groups, humanitarian projects, and any other projects that aims to directly benefit Cuba.
However, the Cuba embargo still remains in place, and most transactions between the U.S. and Cuba are prohibited.