OFAC targets small-business communications in loosening Cuba controls

The US Department of the Treasury’s Office of Foreign Assets Control (‘OFAC’) has amended its Cuban Assets Control Regulations, 31 CFR part 515 (‘CACR’).

OFAC said the 28 May amendments ‘promote internet freedom in Cuba, support independent Cuban private sector entrepreneurs, and expand access to certain financial services for the Cuban people.’

Small business operators in Cuba will now be able to access ‘authorised internet-based services’ such as ‘social media platforms, collaboration platforms, video conferencing, e-gaming and e-learning platforms, automated translation, web maps, and user authentication services’. The amendments also authorise US persons to 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’ within Cuba.

The changes will allow 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’.

The export or reexport of ‘Cuban-origin software and mobile applications from the United States to third countries’ is authorised, allowing Cuban entrepreneurs to sell software and apps on global platforms.

With the changes, OFAC has expanded its definition of a ‘self-employed individual’ working in Cuba to include ‘independent private sector entrepreneur’. Included in the new definition are companies, cooperatives and sole proprietorships of up to 100 employees, without partners who are government officials or Communist Party members.

These companies will now be able to access US bank accounts and payment platforms, ‘including for “U-turn” transactions, or operations through the US financial system where neither party is under US jurisdiction’.

In a press briefing on the changes, an unnamed Biden administration official said the new measures will apply to around 11,000 registered small businesses which employ around one-third of Cuba’s workforce.

Another official emphasised that the new rules ‘will work in the United States’ interest, as providing this support for Cuba’s private sector will help to stem irregular migration from the island by creating more economic opportunity on the island. … Furthermore, we believe that engaging in support of Cuba’s independent private sector will ensure that these important entrepreneurial actors are supported by the United States and make it more difficult for other state actors who wish to engage economically in Cuba only in support of the government and without supporting this private entrepreneurial sector.’