[Federal Register Volume 63, Number 95 (Monday, May 18, 1998)]
[Rules and Regulations]
[Pages 27349-27351]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-13120]


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DEPARTMENT OF THE TREASURY

Office of Foreign Assets Control

31 CFR Part 515


Cuban Assets Control Regulations: Fully-Hosted or Fully-Sponsored 
Travel and Restrictions on Travel Transactions

AGENCY: Office of Foreign Assets Control, Treasury.

ACTION: Final rule; amendments.

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SUMMARY: In order to ensure effective enforcement of the prohibitions 
on travel-related transactions in Cuba, any person subject to U.S. 
jurisdiction determined to have traveled to Cuba without the authority 
of a general or specific license is subject to a rebuttable presumption 
that the traveler has

[[Page 27350]]

engaged in prohibited travel-related transactions. In order to overcome 
this presumption, any traveler to Cuba who claims to have been fully 
hosted or fully sponsored, or not to have engaged in any travel-related 
transactions, may be asked by Federal enforcement agencies to provide a 
signed explanatory statement, accompanied by any relevant supporting 
documentation.

EFFECTIVE DATE: May 13, 1998.

FOR FURTHER INFORMATION: Steven I. Pinter, Chief of Licensing (tel.: 
202/622-2480); David H. Harmon, Chief of Enforcement (tel.: 202/622-
2430); or William B. Hoffman, Chief Counsel (tel.: 202/622-2410); 
Office of Foreign Assets Control, Department of the Treasury, 
Washington, D.C. 20220.

SUPPLEMENTARY INFORMATION:

Electronic Availability:

    This document is available as an electronic file on The Federal 
Bulletin Board the day of publication in the Federal Register. By 
modem, dial 202/512-1387 and type ``/GO FAC,'' or call 202/512-1530 for 
disk or paper copies. This file is available for downloading without 
charge in WordPerfect 5.1, ASCII, and Adobe AcrobatR 
readable (*.PDF) formats. For Internet access, the address for use with 
the World Wide Web (Home Page), Telnet, or FTP protocol is: 
fedbbs.access.gpo.gov. The document is also accessible for downloading 
in ASCII format without charge from Treasury's Electronic Library 
(``TEL'') in the ``Business, Trade and Labor Mall'' of the FedWorld 
bulletin board. By modem, dial 703/321-3339, and select self-expanding 
file ``T11FR00.EXE'' in TEL. For Internet access, use one of the 
following protocols: Telnet = fedworld.gov (192.239.93.3); World Wide 
Web (Home Page) = http://www.fedworld.gov; FTP = ftp.fedworld.gov 
(192.239.92.205). Additional information concerning the programs of the 
Office of Foreign Assets Control is available for downloading from the 
Office's Internet Home Page: http://www.ustreas.gov/treasury/services/
fac/fac.html, or in fax form through the Office's 24-hour fax-on-demand 
service: call 202/622-0077 using a fax machine, fax modem, or (within 
the United States) a touch-tone telephone.

Background

    The Office of Foreign Assets Control (``OFAC'') is amending 
Sec. 515.560 of the Cuban Assets Control Regulations, 31 CFR part 515 
(the ``Regulations''), to establish a presumption that persons subject 
to U.S. jurisdiction who have traveled to Cuba without the authority of 
a general or specific license have engaged in prohibited travel-related 
transactions. This presumption is subject to rebuttal upon presentation 
of a statement, signed by the traveler and accompanied by appropriate 
supporting documentation, that (1) no transactions were entered into, 
or (2) the travel was fully hosted or fully sponsored by a person or 
persons not subject to the jurisdiction of the United States and was 
not in exchange for services provided in Cuba or elsewhere. The 
statement shall give a full accounting of either (1) how it was 
possible to engage in travel without engaging in travel-related 
transactions, or (2) who hosted or sponsored the visit, why it was 
hosted or sponsored, and what travel-related transactions were paid for 
by a third party. In the case of fully hosted or fully sponsored 
travel, appropriate supporting documentation includes, but is not 
limited to, an original letter of invitation signed by the person or 
persons hosting or sponsoring the travel, specific to that traveler, 
and an explanation of the purpose of the travel, or other appropriate 
evidence documenting that the travel was not in exchange for services 
provided in Cuba or elsewhere.
    Persons planning to travel to Cuba under this provision are 
encouraged to obtain two brochures from OFAC prior to their departure 
to ensure that their travel plans conform with the requirements for 
fully hosted or fully sponsored travel: Cuba: Travel Restrictions 
(available in Spanish as Cuba: Restricciones de Viajes a Cuba), and 
Cuba: What You Need to Know About the U.S. Embargo. Travel to Cuba is 
not fully hosted or fully sponsored if a person subject to U.S. 
jurisdiction, as defined in Sec. 515.329 of the Regulations prepays or 
reimburses expenses for travel in Cuba or on a Cuban carrier through a 
foreign travel service provider not subject to the jurisdiction of the 
United States. Nor is travel to Cuba fully hosted or fully sponsored if 
a person subject to U.S. jurisdiction pays -- before, during, or after 
the travel -- any expenses for travel in Cuba, or on a Cuban carrier, 
even if the payment is made to a third-country person or entity.
    OFAC has determined that persons traveling to and within Cuba 
normally incur expenses that are routinely and customarily associated 
with travel to and within any country. Therefore, absent evidence to 
the contrary, it will be presumed that a person who traveled to Cuba 
did engage in transactions related to his or her travel.
    OFAC bases its presumption that travelers to and within Cuba engage 
in travel-related transactions on information developed during the 
course of OFAC investigations demonstrating that it is normally 
necessary for such travelers to incur expenditures. Information on 
travel fees and costs has also been documented in publications 
concerning travel to Cuba. Following are descriptions of some of the 
costs commonly incurred by travelers to and in Cuba.
    The Cuban Government routinely charges a fee for a tourist visa or 
tourist card. This fee may be paid directly by the traveler or it may 
be included in the amount paid by the traveler to a third country 
travel agent who arranges travel to Cuba. A departure tax is required 
of air travelers departing Cuba. This fee may be paid directly by the 
traveler or indirectly through a third-country travel agent.
    Travelers in Cuba often encounter significant room and board 
charges at major hotels and restaurants frequented by foreign tourists. 
Accommodations and meals may also be found in private Cuban residences 
for a fee.
    Pleasure boaters encounter several fees that are required by Cuban 
authorities for sailing in Cuban waters and visiting Cuban ports. These 
include separate fees for a tourist visa, inward clearance, cruising 
permits, and exit fees. The Marina Hemingway and other marinas in Cuba 
charge docking fees that vary according to vessel length and duration 
of stay. Since Marina Hemingway is not within walking distance of the 
center of Havana, paid ground transportation by taxi or private vehicle 
is essential for boaters wishing to explore the city. The International 
Yacht Club (Club Nautico) charges fees for permanent and temporary 
membership. Members receive discounts on mooring fees and at bars and 
restaurants within the Marina Hemingway complex. Persons flying 
aircraft to Cuba are normally required to pay charges for landing, 
refueling, storage, and maintenance.
    In general, Cuba actively promotes foreign tourism as a means of 
acquiring foreign currency to stimulate its economy. Foreign tourism 
has become a major industry within Cuba, and is identified in press 
reports as the country's leading source of hard currency. While OFAC 
recognizes that unique situations may arise wherein the Cuban 
Government or a third party not subject to U.S. jurisdiction may find 
it in its interest to pay or waive all travel fees and costs required 
of a traveler who is subject to the jurisdiction of the United States, 
it is highly unlikely that such is the case with most travelers to 
Cuba.

[[Page 27351]]

    In the absence of the presumption established by this regulation, 
it is often a practical impossibility for OFAC to prove that persons 
traveling to Cuba without a general or specific license have engaged in 
travel-related transactions in Cuba. Unlicensed travelers do not 
routinely return to the United States with receipts documenting their 
expenditures in Cuba. Moreover, OFAC often cannot compel documentary 
evidence of expenditures from the recipients of payments for travel in 
Cuba, because many of those recipients are nationals of Cuba or third 
countries who are not subject to U.S. jurisdiction. Because the Cuban 
government is generally unwilling to permit travel to Cuba by federal 
enforcement personnel, they cannot travel to Cuba in order to 
investigate traveler's claims that they had no expenses.
    The presumption established by this regulation only shifts the 
burden of producing evidence. It does not shift the ultimate burden of 
proof from OFAC to the traveler.
    Because the Regulations involve a foreign affairs function, 
Executive Order 12866 and provisions of the Administrative Procedure 
Act, 5 U.S.C. 553, requiring notice of proposed rulemaking, opportunity 
for public participation, and delay in effective date are inapplicable. 
Because no notice of proposed rulemaking is required for this rule, the 
Regulatory Flexibility Act, 5 U.S.C. 601-612, does not apply.

List of Subjects in 31 CFR Part 515

    Administrative practice and procedure, Air carriers, Banks, 
banking, Blocking of assets, Cuba, Currency, Estates, Exports, Foreign 
investment in the United States, Foreign trade, Imports, Informational 
materials, Penalties, Publications, Reporting and recordkeeping 
requirements, Securities, Shipping, Specially designated nationals, 
Terrorism, Travel restrictions, Trusts and trustees, Vessels.

    For the reasons set forth in the preamble, 31 CFR part 515 is 
amended as set forth below:

PART 515--CUBAN ASSETS CONTROL REGULATIONS

    1. The authority citation for part 515 continues to read as 
follows:

    Authority: 18 U.S.C. 2332d; 22 U.S.C. 2370(a), 6001-6010; 31 
U.S.C. 321(b); 50 U.S.C. App. 1-44; Pub. L. 101-410, 104 Stat. 890 
(28 U.S.C. 2461 note); E.O. 9193, 7 FR 5205, 3 CFR, 1938-1943 Comp., 
p. 1147; E.O. 9989, 13 FR 4891, 3 CFR, 1943-48 Comp., p. 748; Proc. 
3447, 27 FR 1085, 3 CFR 1959-1963 Comp., p. 157; E.O. 12854, 58 FR 
36587, 3 CFR, 1993 Comp., p. 614.

Subpart E--Licenses, Authorizations, and Statements of Licensing 
Policy

    2. Section 515.560 is revised to read as follows:


Sec. 515.560   Certain transactions incident to travel to and within 
Cuba.

* * * * *

    (g)(1) Unless otherwise authorized to engage in travel-related 
transactions pursuant to this part, any person subject to the 
jurisdiction of the United States, as defined in Sec. 515.329, who has 
traveled to Cuba shall be presumed to have engaged in travel-related 
transactions prohibited by this part. This presumption may be rebutted 
by a statement signed by the traveler providing specific supporting 
documentation that no transactions were engaged in by the traveler or 
on the traveler's behalf by any other person subject to U.S. 
jurisdiction, or that the traveler was fully sponsored or fully hosted 
by a third party not subject to the jurisdiction of the United States 
and that any sponsorship or waiver of fees was not in exchange for 
services provided to Cuba or a Cuban national. The statement may be 
requested by any Federal law enforcement agency authorized to enforce 
the prohibitions of this Part, including the Office of Foreign Assets 
Control. The statement shall describe the circumstances of the travel 
and explain how it was possible to avoid entering into travel-related 
transactions such as payments for meals, lodging, transportation, 
bunkering of vessels or aircraft, visas, entry or exit fees, and 
gratuities. If the travel was fully sponsored or fully hosted, the 
statement shall state what party hosted or sponsored the travel and 
why. The statement shall also provide a day-to-day account of financial 
transactions entered into on behalf of the traveler by the host or 
sponsor, including but not limited to visa fees, room and board, local 
or international transportation costs and Cuban airport departure 
taxes. In the case of pleasure craft calling at Cuban marinas, the 
statement shall also address related refueling costs, mooring fees, 
club membership fees, provisions, cruising permits, local land 
transportation, and departure fees. In preparing the statement, 
travelers should be aware that the authorization contained in paragraph 
(c)(3) of this section concerning the purchase and importation of up to 
$100 of Cuban merchandise for personal use does not apply to fully 
sponsored or fully hosted travelers. Travelers fully hosted or fully 
sponsored by a person or persons not subject to the jurisdiction of the 
United States shall also provide appropriate supporting documentation 
demonstrating that they were fully hosted or fully sponsored, such as 
an original signed statement from their sponsor or host, specific to 
that traveler, confirming that the travel was fully hosted or fully 
sponsored and the reasons for the travel. All documentation described 
in this section is subject to the recordkeeping requirements, including 
the period during which records shall be available for examination, in 
Sec. 501.601 of this chapter.
    (2) If the traveler can establish that all necessary transactions 
involved fully sponsored or fully hosted travel within Cuba, such 
transactions do not violate the prohibitions of this part, provided 
that, except as provided in paragraph (g)(3) of this section:
    (i) No person subject to the jurisdiction of the United States has 
made any payments or transferred any property or provided any service 
in connection with such travel, including prepayment of or 
reimbursement for travel expenses, to any person or entity not subject 
to U.S. jurisdiction; and
    (ii) The travel is not aboard a direct flight between the United 
States and Cuba authorized pursuant to Sec. 515.566.
    (3) Travel shall be considered fully sponsored or fully hosted for 
purposes of this section notwithstanding a payment by a person subject 
to the jurisdiction of the United States for transportation to and from 
Cuba, provided that the carrier furnishing the transportation is not a 
Cuban national.
    (4) Persons planning to travel to Cuba consistent with this 
paragraph (g) may contact the Compliance Programs Division, Office of 
Foreign Assets Control, prior to their departure to ensure that their 
travel plans conform with the requirements for fully hosted or 
sponsored travel. Other inquiries concerning travel-related 
transactions should be addressed to the Licensing Division, Office of 
Foreign Assets Control, U.S. Department of the Treasury, 1500 
Pennsylvania Avenue, NW--Annex, Washington, DC 20220.

    Dated: May 4, 1998.
R. Richard Newcomb,
Director, Office of Foreign Assets Control.
    Approved: May 11, 1998.
James E. Johnson,
Assistant Secretary (Enforcement), Department of the Treasury.
[FR Doc. 98-13120 Filed 5-13-98; 2:31 pm]
BILLING CODE 4810-25-F