OFAC Clarifies: "Support For The Cuban People" Travel Category Visitors May Use Hotels

The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington DC has confirmed that individuals subject to United States jurisdiction may use a non-restricted hotel and/or a private residence when visiting the Republic of Cuba using the “Support for the Cuban People” authorized travel category. 

There had been questions from United States-based travel agents and tour operators as the “Frequently Asked Questions Related To Cuba” and information contained in the regulations (CFR 515.574) published by the OFAC on 4 June 2019 in providing examples of itineraries that would be in compliance with traveling to the Republic of Cuba using the “Support for the Cuban People” authorized travel category did not specifically reference the use of a hotel.   

The lack of specificity suggested that travelers using the “Support for the Cuban People” authorized travel category would be required to use only a private residence (casa particular) rather than have a choice among casa particulars and hotels not included on the Cuba Restricted List (CRL) published by the United States Department of State. 

A prohibition upon the use of a hotel would result in a mismatch of supply and demand; as there would be far too many individuals and groups seeking accommodations at private residences than would be the number of available private residences.  Prices at private residences would increase.  There would be, however, reticence by private residence owners (and their financial providers) to invest further in the development of properties due to uncertainty as to changes to United States policies and regulations and statutes. 

San Francisco, California-based Airbnb, Inc., reportedly represents more than 22,000 properties in the Republic of Cuba; and the properties reportedly generated combined gross revenues of approximately US$47 million annually from 2015 thus far through 2019. LINK To Airbnb: https://www.airbnb.com/s/Cuba/all?refinement_paths%5B%5D=%2Ffor_you&query=Cuba&adults=0&children=0&infants=0&guests=0&place_id=ChIJtUx6DwdJzYgRGqQQkVL3jHk&search_type=UNKNOWN

Bellevue, Washington-based Expedia Group previously reported approximately 50% of reservations to the Republic of Cuba made using www.expedia.com originated from the United States. 

In 2017, 2018 and in 2019 there were recommendations from members of the United States Congress to the Trump Administration for further expansion of requirements for travelers using the “Support for the Cuban People” category to include that a hotel in the Republic of Cuba may only be used where Republic of Cuba national employees of the hotel are paid directly and in convertible currency by management (whether Republic of Cuba government-managed or non-Republic of Cuba government-managed). 

From The OFAC (7 June 2019): Good evening. Thank you for your patience. Assuming that the person traveling to Cuba is doing so in accordance with all of the various requirements of the general license found in section 515.574 (Support for the Cuban People) of the CACR, the terms of this general license do not prohibit travelers from staying in hotels, so long as the traveler’s stay in a hotel does not involve any transactions prohibited by 515.209 of the CACR. Have a nice weekend.”  

Sincerely,

Sanctions Compliance & Evaluation

Office of Foreign Assets Control (OFAC)

U.S. Department of the Treasury

1500 Pennsylvania Ave. NW

Washington, DC 20220

Toll Free: 1-800-540-6322

Local: 1-202-622-2490

Email: OFAC_Feedback@treasury.gov

Website: www.treasury.gov/ofac 

Link To CRL:  

https://www.state.gov/cuba-sanctions/cuba-restricted-list/list-of-restricted-entities-and-subentities-associated-with-cuba-as-of-march-12-2019/ 

From The OFAC: 

What constitutes “support for the Cuban people” for generally authorized travel and other transactions?  

This general license authorizes, subject to conditions, travel-related transactions and other transactions that are intended to provide support for the Cuban people, which include activities of recognized human rights organizations; independent organizations designed to promote a rapid, peaceful transition to democracy; and individuals and non-governmental organizations that promote independent activity intended to strengthen civil society in Cuba. In accordance with the NSPM, OFAC is amending this general license to require that each traveler utilizing this authorization engage in a full-time schedule of activities that enhance contact with the Cuban people, support civil society in Cuba, or promote the Cuban people’s independence from Cuban authorities and that result in meaningful interactions with individuals in Cuba. OFAC is also amending this general license to exclude from the authorization certain direct financial transactions with entities and subentities identified on the State Department’s Cuba Restricted List. The traveler’s schedule of activities must not include free time or recreation in excess of that consistent with a full-time schedule in Cuba. For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.574. [11-08-2017] UPDATED June 4, 2019.  

§515.574   Support for the Cuban People.

(a) General license. The travel-related transactions set forth in §515.560(c) and other transactions that are intended to provide support for the Cuban people are authorized, provided that:

(1) The activities are of:

(i) Recognized human rights organizations;

(ii) Independent organizations designed to promote a rapid, peaceful transition to democracy; or

(iii) Individuals and non-governmental organizations that promote independent activity intended to strengthen civil society in Cuba; and

(2) Each traveler engages in a full-time schedule of activities that:

(i) Enhance contact with the Cuban people, support civil society in Cuba, or promote the Cuban people's independence from Cuban authorities; and

(ii) Result in meaningful interaction with individuals in Cuba.

(3) The traveler's schedule of activities does not include free time or recreation in excess of that consistent with a full-time schedule.

Note 1 to paragraph (a): Each person relying on the general authorization in this paragraph must retain specific records related to the authorized travel transactions. See §§501.601 and 501.602 of this chapter for applicable recordkeeping and reporting requirements.

Note 2 to paragraph (a): Staying in a room at a rented accommodation in a private Cuban residence (casa particular), eating at privately-owned Cuban restaurants (paladares), and shopping at privately-owned stores run by self-employed Cubans (cuentapropista) are examples of activities that qualify for this general license. However, in order to meet the requirement for a full-time schedule, a traveler must engage in additional authorized Support for the Cuban People activities.

(b) An entire group does not qualify for the general license in paragraph (a) of this section merely because some members of the group qualify individually.

(c) Certain direct financial transactions restricted. Nothing in paragraph (a)(1)(iii) of this section authorizes a direct financial transaction prohibited by §515.209, with the exception of transactions on behalf of a non-governmental organization.

(d) Specific licenses. Specific licenses may be issued on a case-by-case basis authorizing the travel-related transactions set forth in §515.560(c) and such other transactions as are related to support for the Cuban people that do not qualify for the general license under paragraph (a) of this section. 

Example 1 to §515.574: An individual plans to travel to Cuba, stay in a room at a rented accommodation in a private Cuban residence (casa particular), eat at privately-owned Cuban restaurants (paladares), and shop at privately-owned stores run by self-employed Cubans (cuentapropista) during his or her four-day trip. While at the casa particular, the individual will have breakfast each morning with the Cuban host and engage with the Cuban host to learn about Cuban culture. In addition, the traveler will complete his or her full-time schedule by supporting Cuban entrepreneurs launching their privately-owned businesses. The traveler's activities promote independent activity intended to strengthen civil society in Cuba. Because the individual's qualifying activities are not limited to staying in a room at a rented accommodation in a private Cuban residence (casa particular), eating at privately-owned Cuban restaurants (paladares), and shopping at privately owned stores run by self-employed Cubans (cuentapropista) and the traveler maintains a full-time schedule that enhances contact with the Cuban people, supports civil society in Cuba, and promotes the Cuban people's independence from Cuban authorities, and that results in meaningful interaction between the traveler and Cuban individuals, the individual's travel qualifies for the general license. 

Example 2 to §515.574: A group of friends plans to travel and maintain a full-time schedule throughout their trip by volunteering with a recognized non-governmental organization to build a school for underserved Cuban children with the local community. In their free time, the travelers plan to rent bicycles to explore the streets of Havana and visit an art museum. The travelers' trip would qualify for the general license because the volunteer activities promote independent activity intended to strengthen civil society in Cuba and constitute a full-time schedule that enhances contact with the Cuban people and supports civil society in Cuba, and results in meaningful interaction between the travelers and individuals in Cuba. 

Example 3 to §515.574: An individual plans to travel to Cuba, rent a bicycle to explore the neighborhoods and beaches, and engage in brief exchanges with local beach vendors. The individual intends to stay at a hotel that does not appear on the Cuba Restricted List (see §515.209). The traveler's trip does not qualify for this general license because none of these activities promote independent activity intended to strengthen civil society in Cuba.  [80 FR 2299, Jan. 16, 2015, as amended at 82 FR 52003, Nov. 9, 2017] 

LINK: https://www.ecfr.gov/cgi-bin/text-idx?SID=1f8572cb449cf3e757eebd7f3b568bf3&mc=true&node=se31.3.515_1574&rgn=div8

LINK To Complete Analysis

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