[Federal Register Volume 68, Number 56 (Monday, March 24, 2003)]
[Rules and Regulations]
[Pages 14141-14148]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-6808]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF THE TREASURY

Office of Foreign Assets Control

31 CFR Part 515


Cuban Assets Control Regulations: Family and Educational Travel-
Related Transactions, Remittances of Inherited Funds, Activities of 
Cuban Nationals in the United States, Support for the Cuban People, 
Humanitarian Projects, and Technical Amendments

AGENCY: Office of Foreign Assets Control, Treasury.

ACTION: Interim final rule; amendments.

-----------------------------------------------------------------------

SUMMARY: The Office of Foreign Assets Control of the U.S. Department of 
the Treasury is amending the Cuban Assets Control Regulations, part 515 
of chapter V of 31 CFR, to implement the President's Initiative for a 
New Cuba and to make certain technical changes and clarifications.

DATES: Effective Date: March 24, 2003.
    Comments: Written comments must be received no later than May 23, 
2003.

ADDRESSES: Comments may be sent either via regular mail to the Chief of 
Records, ATTN Request for Comments, Office of Foreign Assets Control, 
Department of the Treasury, 1500 Pennsylvania Ave. NW., Washington, DC 
20220, or via OFAC's Web site (http://www.treas.gov/ofac).

FOR FURTHER INFORMATION CONTACT: Chief of Licensing, tel.: 202/622-
2480, or Chief Counsel, tel.: 202/622-2410, Office of Foreign Assets 
Control, Department of the Treasury, Washington, DC 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 ASCII and Adobe Acrobat7 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. This document 
and additional information concerning the programs of the Office of 
Foreign Assets Control are available for downloading from the Office's 
Internet Home Page: http://www.treas.gov/ofac, 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

    On May 20, 2002, President Bush announced his Initiative for a New 
Cuba to encourage freedom within Cuba, make life better for the Cuban 
people, and give the Cuban people greater control of their economic and 
political destiny. Among other steps, the President announced that the 
United States would ease restrictions on humanitarian assistance that 
directly serves the needs of the Cuban people and helps build Cuban 
civil society and would offer scholarships for Cuban professionals and 
students who are trying to build independent civil institutions in 
Cuba. The Office of Foreign Assets Control (``OFAC'') of the U.S. 
Department of the Treasury is publishing this interim final rule 
amending the Cuban Assets Control Regulations, 31 CFR part 515 (the 
``Regulations''), to assist in implementing these and other steps in 
the President's Initiative for a New Cuba. These amendments also make 
certain corrections to and provide certain clarifications of the 
Regulations.
    Clarification and expansion of visits to close relatives in Cuba. 
These amendments clarify and expand the authorization of travel-related 
transactions incident to visiting close relatives in Cuba. 
Specifically, the general license in paragraph (a) of Sec.  515.561 
authorizing such transactions on an annual basis is amended to clarify 
that it may be used to visit only those close relatives who qualify as 
nationals of Cuba and not to visit those who are engaging in 
transactions in Cuba pursuant to an OFAC license (such as U.S. students 
authorized to engage in coursework in Cuba). Visits to persons in Cuba 
who are not Cuban nationals are now addressed in amended paragraph (c), 
discussed below.
    Paragraph (a) of Sec.  515.561 is also modified to authorize 
``additional travel-related transactions that are

[[Page 14142]]

directly incident to the purpose of'' visiting close relatives in Cuba. 
Prior to this amendment, travelers visiting close relatives were 
restricted to those travel-related transactions set forth in Sec.  
515.560(c). These amendments allow travelers to exceed the per diem set 
forth in Sec.  515.560(c) when such additional expenditures are for 
travel-related transactions that are directly incident to the purpose 
of visiting close relatives. For example, a traveler can now exceed the 
per diem in order to purchase transportation within Cuba to visit close 
relatives who live great distances from each other. Other changes are 
made to paragraph (a) to make the paragraph more readable. Paragraph 
(b) of Sec.  515.561, which states OFAC's policy with respect to 
licensing transactions related to family visits that exceed the once-
per-year limitation, also is amended to state that ``additional travel-
related transactions'' may be authorized.
    Former paragraph (c) has been moved to a new paragraph (d) and a 
new paragraph (c) is added to state OFAC's policy of issuing specific 
licenses on a case-by-case basis authorizing travel-related 
transactions incident to visiting close relatives in Cuba who are not 
nationals of Cuba. For example, the parents of a U.S. student who is 
authorized to attend classes for one year in Cuba can apply under new 
paragraph (c) for a license to engage in transactions incident to 
visiting their child. New paragraph (c) now contains this example.
    The definition of ``close relative,'' now in new paragraph (d) of 
Sec.  515.561, is expanded to include all relatives, whether by blood, 
marriage, or adoption, who are within three degrees of relationship 
with the traveler (e.g., great-grandparents and second cousins). Prior 
to this amendment, the definition of ``close relative'' was restricted 
to two degrees of relationship (e.g., grandparents and first cousins). 
Several examples are provided to assist the reader. Finally, the 
heading of Sec.  515.561 is amended to refer to visits of ``close 
relatives'' instead of the more generic term ``family.''
    Removal of people-to-people educational exchanges. These amendments 
eliminate the statement of licensing policy regarding case-by-case 
authorization of certain people-to-people educational exchanges. 
Pursuant to paragraph (b)(2) of Sec.  515.565, OFAC has issued specific 
licenses to organizations that sponsor people-to-people educational 
exchanges to take individuals under their auspices on educational trips 
to Cuba unrelated to academic coursework. Specific licenses no longer 
will be granted for this purpose. In order to address the equities of 
those who already may have committed funds for future travel to Cuba 
pursuant to a specific license issued under this subparagraph, existing 
licensees will be allowed to engage in the transactions set forth in 
their licenses for the duration of those licenses, but no renewals or 
new licenses will be issued under this paragraph.
    Changes to remittances rules. These amendments authorize licensed 
remittances to be made from blocked inherited funds, increase the limit 
on the number of remittances that can be carried to Cuba by an 
authorized traveler, restrict quarterly remittances from being sent to 
senior-level Cuban government or Cuban Communist Party officials, and 
simplify the remittance rules, located primarily in Sec.  515.570 and, 
to a lesser extent, in Sec.  515.560(c).
    Former paragraphs (a) and (b) of Sec.  515.570 authorized quarterly 
remittances of $300 per Cuban household, but only remitters who were 
close relatives of senior-level Cuban government officials or senior-
level Cuban Communist Party officials were authorized to send the 
quarterly remittances to those officials' households. These amendments 
remove this distinction by making the households of senior-level Cuban 
government officials or senior-level Cuban Communist Party officials 
ineligible to receive quarterly remittances from any remitters. 
Accordingly, former paragraphs (a) and (b) are combined into one 
amended paragraph (a) to simplify the section. The new combined 
authorization is entitled ``Periodic $300 household remittances.''
    Additional changes are made in the process of combining former 
paragraphs (a) and (b) into amended paragraph (a). First, the 
definition of the term ``close relative,'' which is no longer used in 
this section, is removed. Second, a reference is added directing the 
reader to new paragraph (c) of this section (discussed below), which 
authorizes licensed remittances to be made from certain blocked 
accounts containing inherited funds. These amendments also remove the 
discussion of remittances that may be carried to Cuba by authorized 
travelers because those rules are now set forth in their entirety in 
amended Sec.  515.560(c) (discussed below).
    Former paragraph (c) of Sec.  515.570, which authorizes certain 
emigration-related remittances, is moved to new paragraph (b) and is 
shortened and simplified.
    A new paragraph (c) is added to Sec.  515.570 setting forth a new 
general license authorizing the periodic household and one-time 
emigration-related remittances authorized in amended paragraphs (a) and 
(b) to be made from certain inherited funds blocked in U.S. banking 
institutions. To qualify for this new general license, the blocked 
funds must be held in the name or for the benefit of the Cuban national 
payee and the payee's interest in those funds must have been created as 
a result of a valid testamentary disposition, intestate succession, or 
a life insurance policy or annuity contract triggered by the death of 
the policy or contract holder. OFAC is making this change in part to 
remedy the result that occurs when a U.S. remitter who regularly sends 
funds to a Cuban national dies and leaves part of his or her estate to 
that Cuban national. Prior to these amendments, those funds became 
inaccessible, eliminating the otherwise authorized flow of remittances 
to the Cuban national.
    At the end of Sec.  515.570, a new note is added referring the 
reader to amended paragraph (c)(4) of Sec.  515.560 (discussed below) 
for the rules relating to the carrying of authorized remittances to 
Cuba by persons authorized to engage in travel-related transactions in 
Cuba. This note also advises that the provision of remittance 
forwarding services is prohibited without OFAC authorization, explains 
that banking institutions are authorized to provide these services, and 
references OFAC's Website list of all other authorized remittance 
forwarding service providers.
    Section 515.560 is amended to address rules regarding the carrying 
of authorized remittances to Cuba. Paragraph (c)(4) of Sec.  515.560 is 
amended to raise the amount of authorized $300 quarterly household 
remittances a licensed traveler may carry to Cuba from a total of $300 
to $3,000. Thus, a licensed traveler may now carry up to ten $300 
household remittances to Cuba (provided that he or she meets all of the 
remittance authorization requirements set forth in Sec.  515.570(a)). 
Amended Sec.  515.560(c)(4) continues to state that all remittances 
carried to Cuba by an authorized traveler must be the traveler's own 
authorized remittances.
    Activities in the United States by visiting Cuban nationals. These 
amendments streamline the authorization of transactions in the United 
States by visiting Cuban nationals who are issued U.S. visas for the 
purpose of engaging in certain activities, such as academic or 
vocational study, teaching, or performing. Currently, section 515.571

[[Page 14143]]

authorizes Cuban nationals visiting the United States to engage in 
transactions such as paying living expenses, engaging in normal banking 
transactions incident to travel in the United States, and withdrawing 
limited amounts of funds from blocked accounts for these purposes. 
These amendments add a new paragraph (a)(5) to Sec.  515.571 to provide 
a general license authorizing all transactions by Cuban nationals 
visiting the United States that are ordinarily incident to the 
activities for which their visas were issued. This license does not 
authorize receipt of compensation in excess of that needed to cover 
living expenses and the acquisition of goods for personal consumption 
in the United States, although a reference is made to Sec.  
515.565(a)(2)(v), under which OFAC may authorize the payment to certain 
Cuban scholars of stipends or salaries that exceed this limit. Examples 
are provided to assist the reader. This new general license will 
automatically authorize a Cuban performer's transactions, such as 
renting a stage, signing a contract to perform, and hiring sound and 
lighting technicians, if that performer is issued a P (performance) 
visa. Similarly, Cuban nationals issued student visas are authorized to 
register and enroll in courses at a U.S. university. Persons in the 
United States who need to transact with such Cuban nationals will need 
only to confirm the visa status of the Cuban nationals to determine 
whether certain transactions are authorized.
    Status of Cuban nationals who leave Cuba. These amendments clarify 
the authorization of certain transactions with Cuban nationals who 
permanently leave Cuba by making various changes to Sec.  515.505. OFAC 
is amending Sec.  515.505 to identify three different categories of 
Cuban national individuals who have left Cuba. As amended, paragraph 
(a)(1) applies to Cuban national individuals who have taken up 
residence in the United States, have an adjustment of status 
application pending or have become permanent resident aliens or 
citizens of the United States, and who are not specially designated 
nationals of Cuba; paragraph (b) continues to apply to Cuban national 
individuals who have taken up permanent residence in a third country; 
and paragraph (c) addresses Cuban national individuals who have been 
paroled into the United States.
    Paragraph (a) of Sec.  515.505 licenses as unblocked nationals any 
Cuban nationals who have taken up residence in the United States, have 
become U.S. citizens or permanent resident aliens of the United States 
(or have pending applications for adjustment of status), and are not 
specially designated nationals of Cuba. All transactions with such 
individuals are authorized, and such individuals can apply to and 
receive authorization from OFAC to have unblocked any assets in which 
they have an interest. Cuban national individuals who do not meet these 
requirements are not licensed as unblocked nationals, even if such 
persons otherwise appear to be ``resident in'' the United States.
    Paragraph (b) of Sec.  515.505 continues to provide that Cuban 
national individuals who have taken up permanent residence in a third 
country can apply to OFAC to be specifically licensed as unblocked 
nationals. This paragraph is amended to include a list of documents 
that should be provided in such license applications. Persons subject 
to U.S. jurisdiction who are considering engaging in transactions in a 
third county with a Cuban national individual who is not a U.S. 
national or permanent resident alien should first confirm that that 
Cuban national has been issued a specific letter from OFAC licensing 
the Cuban national as an unblocked national. Absent such a license, 
transactions with that Cuban national are prohibited.
    A note is added to paragraphs (a) and (b) explaining that an 
individual who is unblocked pursuant to either of those paragraphs does 
not become blocked again simply by ending his or her residence in the 
United States unless he or she becomes domiciled or a permanent 
national of Cuba.
    Former paragraph (c) of Sec.  515.505 is moved to new paragraph (d) 
and a new paragraph (c) is added providing a new general license 
authorizing most transactions with Cuban national individuals who are 
paroled into the United States and remain in the United States pursuant 
to that grant of parole. The only difference in embargo status between 
Cuban nationals licensed as unblocked nationals and those in the United 
States pursuant to a grant of parole is that the later generally will 
not be able to obtain specific licenses unblocking any of their 
property that was blocked in the United States prior to the grant of 
parole. Such unblocking licenses normally are granted only once a Cuban 
national is licensed as an unblocked national. Paragraph (c) provides 
an authorization, however, for individuals in the United States on a 
grant of parole to withdraw a total of not more than $250 each month 
from their blocked accounts.
    A new paragraph (e) is added to provide examples that illustrate 
the application of Sec.  515.505. A note is added at the end of Sec.  
515.505 to provide a cross-reference to Sec.  515.571 (discussed 
above), which authorizes certain transactions incident to travel to, 
from, and within the United States by blocked Cuban nationals who are 
temporarily visiting the United States.
    Expansion of Support for the Cuban People and Humanitarian 
Programs. These amendments expand the statements of specific licensing 
policy regarding transactions that provide support for the Cuban people 
(Sec.  515.574) and transactions incident to Cuba-related humanitarian 
projects (Sec.  515.575). In Sec.  515.574, paragraph (a) is enlarged 
to include as licensable those activities of independent organizations 
designed to promote a rapid, peaceful transition to democracy. In Sec.  
515.575, the list of licensable humanitarian activities is enlarged to 
include construction projects intended to benefit legitimately 
independent civil society groups and formal (as well as non-formal) 
educational training within Cuba and elsewhere on topics including 
civic education, journalism, advocacy, and organizing.
    Section 515.575 no longer addresses projects that involve only the 
donation of goods to meet basic humanitarian needs. Applicants wishing 
to engage in such transactions should apply under Sec.  515.533(e), 
which already provides a statement of licensing policy regarding travel 
transactions related to exports to Cuba. Applicants whose projects 
include humanitarian activities in Cuba beyond mere exportation, 
delivery, and servicing of donated goods should still apply under Sec.  
515.575.
    Technical Corrections and Clarifications. These amendments make 
various technical corrections and clarifications to the Regulations. 
The definition of the term ``national'' contained in Sec.  515.302 is 
amended to clarify that persons whose transactions in Cuba are 
authorized by OFAC are not considered nationals of Cuba and that any 
Cuba-located office or sub-unit of an organization is considered a 
national of Cuba, whether or not the entire organization of which the 
office or sub-unit is a part is a national of Cuba. The definition of 
the terms ``person subject to the jurisdiction of the United States'' 
and ``person within the United States,'' found in Sec. Sec.  515.329 
and 515.330 respectively, are amended to clarify that non-corporate 
entities may also be subject to U.S. jurisdiction.
    Section 515.420 is amended to clarify that ``fully-hosted'' status 
only removes liability for travel-related transactions and not for 
transactions that are not directly incident to travel, such as services 
provided in Cuba to a third-country entity.

[[Page 14144]]

    New Sec.  515.512 formalizes existing practice with respect to 
provision of legal services. Persons subject to U.S. jurisdiction are 
authorized to provide certain legal services to Cuba or Cuban nationals 
but must be licensed to receive payment.
    Section 515.533 is amended by adding a new general license to 
paragraph (b) authorizing persons subject to U.S. jurisdiction to 
negotiate and sign contracts with Cuban nationals for sales of products 
from the United States or 100% U.S.-origin products from overseas 
subsidiaries provided such exports are consistent with current 
Department of Commerce licensing policy and provided performance of 
such contracts is expressly made contingent upon the prior 
authorization by the Department of Commerce. This change further 
implements the Trade Sanctions Reform and Export Enhancement Act of 
2000. Various other technical correction and clarifications are made to 
Sec.  515.533.
    Section 515.559 is clarified to better explain the effects of the 
Cuban Democracy Act of 1992 (the ``CDA''). A note is added to paragraph 
(b) explaining how the CDA prohibited all but certain specific classes 
of licenses from being issued under this section. Paragraph (d) of 
Sec.  515.559 is deleted to clarify that persons within the United 
States can be involved with the licensed export activities of foreign 
subsidiaries that receive authorization pursuant to Sec.  515.559.
    A new paragraph is added to Sec.  515.567 to clarify that travel-
related transactions for attendance at and participation in clinics and 
workshops in Cuba will only be given if the clinic or workshop is 
organized and run, at least in part, by the licensee. This section is 
not meant to be used by individuals wishing to travel to Cuba to engage 
in such activities when they are organized solely by Cuban entities.
    Finally, Sec.  515.572 is amended to reflect that the current 
licenses for carrier, travel, and remittance forwarding service 
providers only require annual instead of quarterly reports.

Request for Comments; Procedural Requirements

    Because the Regulations involve a foreign affairs function, the 
provisions of Executive Order 12866 and the Administrative Procedure 
Act (5 U.S.C. 553) (the ``APA'') requiring notice of proposed 
rulemaking, opportunity for public participation, and delay in 
effective date are inapplicable. However, because of the importance of 
the issues addressed in these regulations, this rule is being issued in 
interim form and comments will be considered in the development of 
final regulations. Accordingly, the Department encourages interested 
persons who wish to comment to do so at the earliest possible time to 
permit the fullest consideration of their views. Comments may address 
the impact of the Regulations on the submitter's activities, whether of 
a commercial, non-commercial or humanitarian nature, as well as changes 
that would improve the clarity and organization of the Regulations.
    The period for submission of comments will close May 23, 2003. The 
Department will consider all comments received before the close of the 
comment period in developing final regulations. Comments received after 
the end of the comment period will be considered if possible, but their 
consideration cannot be assured. The Department will not accept public 
comments accompanied by a request that a part or all of the submission 
be treated confidentially because of its business proprietary nature or 
for any other reason. The Department will return such submission to the 
originator without considering them in the development of final 
regulations. In the interest of accuracy and completeness, the 
Department requires comments in written form.
    All public comments on these Regulations will be a matter of public 
record. Copies of the public record concerning these Regulations will 
be made available not sooner than June 23, 2003 and will be obtainable 
from OFAC's Web site (http://www.treas.gov/ofac). If persons are not 
able to use that service, written requests for copies may be sent to: 
Office of Foreign Assets Control, U.S. Department of the Treasury, 1500 
Pennsylvania Ave. NW., Washington, DC 20220, Attn: Chief, Records 
Division.
    Because no notice of proposed rulemaking is required for this rule, 
the Regulatory Flexibility Act (5 U.S.C. 601-612) does not apply.

Paperwork Reduction Act

    The collections of information related to the Regulations are 
contained in 31 CFR part 501 (the ``Reporting and Procedures 
Regulations''). Pursuant to the Paperwork Reduction Act of 1995 (44 
U.S.C. 3507), those collections of information have been previously 
approved by the Office of Management and Budget under control number 
1505-0164. An agency may not conduct or sponsor, and a person is not 
required to respond to, a collection of information unless the 
collection of information displays a valid control number.

List of Subjects in 31 CFR Part 515

    Administrative practice and procedure, Air carriers, Banks, 
Banking, Blocking of assets, Cuba, Currency, Estates, Exports, Foreign 
trade, Imports, Reporting and recordkeeping requirements, Securities, 
Shipping, Specially designated nationals, Travel restrictions, Vessels.


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

PART 515--CUBAN ASSETS CONTROL REGULATIONS

    1. The authority citation for 31 CFR 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); Pub. L. 106-387, 114 Stat. 1549; E.O. 9193, 7 
FR 5205, 3 CFR, 1938-1943 Comp., p. 1147; E.O. 9989, 13 FR 4891, 3 
CFR, 1943-1948 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 C--General Definitions

    2. Amend Sec.  515.302 by revising paragraph (a) to read as 
follows:


Sec.  515.302  National.

    (a) The term national when used with respect to a country shall 
include:
    (1) A subject or citizen of that country or any person who has been 
domiciled in or a permanent resident of that country at any time on or 
since the ``effective date,'' except persons who were permanent 
residents of or domiciled in that country in the service of the U.S. 
Government and persons whose transactions in that country were 
authorized by the Office of Foreign Assets Control.
    (2) Any partnership, association, corporation, or other 
organization that, on or since the effective date:
    (i) Was or has been organized under the laws of that country;
    (ii) Had or has had its principal place of business in that 
country; or
    (iii) Was or has been controlled by, or a substantial part of the 
stocks, share, bonds, debentures, notes, drafts, or other securities or 
obligations of which was or has been controlled by, directly or 
indirectly, that country and/or one or more nationals thereof.
    (3) Any organization's office or other sub-unit that is located 
within that country.
    (4) Any person to the extent that such person, on or since the 
``effective date''

[[Page 14145]]

was or has been acting or purporting to act directly or indirectly for 
the benefit or on behalf of any national of that country.
    (5) Any other person who there is reasonable cause to believe is a 
``national'' as defined in this section.
* * * * *

    3. Amend Sec.  515.329 by revising paragraphs (c) and (d) to read 
as follows:


Sec.  515.329  Person subject to the jurisdiction of the United States.

* * * * *
    (c) Any corporation, partnership, association, or other 
organization organized under the laws of the United States or of any 
State, territory, possession, or district of the United States; and
    (d) Any corporation, partnership, association, or other 
organization, wherever organized or doing business, that is owned or 
controlled by persons specified in paragraphs (a) or (c) of this 
section.

    4. Amend Sec.  515.330 by revising paragraphs (a)(3) and (a)(4) to 
read as follows:


Sec.  515.330  Person within the United States.

    (a) * * *
    (3) Any corporation, partnership, association, or other 
organization organized under the laws of the United States or of any 
State, territory, possession, or district of the United States; and
    (4) Any corporation, partnership, association, or other 
organization, wherever organized or doing business, which is owned or 
controlled by any person or persons specified in paragraphs (a)(1) or 
(a)(3) of this section.
* * * * *

Subpart D--Interpretations

    5. Amend Sec.  515.420 by revising the introductory text of 
paragraph (a) and adding a note to paragraph (a) to read as follows:


Sec.  515.420  Fully-hosted travel to Cuba.

    (a) A person subject to the jurisdiction of the United States will 
not be considered to violate the prohibition on engaging in travel-
related transactions in which Cuba has an interest when all costs of, 
and all transactions related to, the travel of that person (the 
``fully-hosted'' traveler) are covered or entered into by a person not 
subject to the jurisdiction of the United States, provided that:
* * * * *

    Note to paragraph (a): The interpretation set forth in this 
paragraph applies only to a fully-hosted traveler's travel-related 
transactions and not to other transactions in Cuba. For example, a 
fully-hosted traveler is still prohibited from providing services in 
Cuba to a third-country national.

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

    6. Revise Sec.  515.505 to read as follows:


Sec.  515.505  Certain Cuban nationals unblocked; transactions of Cuban 
nationals paroled into the United States.

    (a) General license unblocking certain persons. The following 
persons are licensed as unblocked nationals, as that term is defined in 
Sec.  515.307 of this part:
    (1) Any individual who:
    (i) Has taken up residence in the United States;
    (ii) Is a United States citizen, a permanent resident alien of the 
United States, or has applied to become a permanent resident alien of 
the United States and has an adjustment of status application pending; 
and
    (iii) Is not a specially designated national; and
    (2) Any entity that otherwise would be a national of Cuba solely 
because of the interest therein of an individual licensed in paragraph 
(a)(1) of this section as an unblocked national.

    Note to paragraph (a): An individual unblocked pursuant to this 
paragraph does not become blocked again by leaving the United States 
unless he or she becomes domiciled or a permanent national of Cuba 
or otherwise becomes a specially designated national.

    (b) Specific licenses unblocking individuals permanently resident 
in third countries. Individual nationals of Cuba who have taken up 
permanent residence in the authorized trade territory may apply to the 
Office of Foreign Assets Control to be specifically licensed as 
unblocked nationals. Applications for specific licenses under this 
paragraph should include at least two of the following documents issued 
by the government authorities of the new country of permanent 
residence: Passport; voter registration card; permanent resident alien 
card; or national identity card. Other documents tending to show 
residency, such as income tax returns, also may be submitted in support 
of government documentation, but are not themselves sufficient.

    Note to paragraph (b): An individual unblocked pursuant to this 
paragraph does not become blocked again by leaving the United States 
unless he or she becomes domiciled or a permanent national of Cuba 
or otherwise becomes a specially designated national.

    (c) General license authorizing certain transactions of individuals 
paroled into the United States. An individual national of Cuba who has 
been paroled into the United States is authorized to engage in all 
transactions available to unblocked nationals, as that term is defined 
in Sec.  515.307 of this part, except that all property in which the 
individual has an interest and that was blocked pursuant to this part 
prior to the date on which parole was granted shall remain blocked. 
Such an individual is further authorized to withdraw a total amount not 
to exceed $250 in any one calendar month from any blocked accounts held 
in the individual's name.
    (d) The licensing of any person pursuant to this section shall not 
suspend the requirements of any section of this chapter relating to the 
maintenance or production of records.
    (e) The following examples illustrate the application of this 
section:

    (1) Example 1: A national of Cuba with a blocked U.S. bank 
account receives a U.S immigration visa. Upon arrival in the United 
States, she is issued a permanent resident alien card and thereby is 
licensed as an unblocked national pursuant to paragraph (a) of this 
section. She can apply immediately to OFAC for a specific license to 
have her bank account unblocked.
    (2) Example 2: A national of Cuba with a blocked U.S. bank 
account arrives in the United States without a valid visa and is 
paroled into the United States. One year later, he applies for and 
receives permanent resident alien status. From the date he is 
paroled into the United States until the date he applies for 
permanent resident alien status, he qualifies for the general 
license contained in paragraph (c) of this section. During this time 
he can engage in all transactions as if he is an unblocked national, 
but he cannot gain access to his blocked bank account other than to 
withdraw $250 each month. Beginning with his application to become a 
permanent resident alien, he is licensed as an unblocked national 
pursuant to paragraph (a) of this section. At this time, he can 
apply to OFAC for a specific license to have his bank account 
unblocked.
    (3) Example 3: A national of Cuba with a blocked U.S. bank 
account arrives in the United States on a temporary visa valid for 
six months. After her visa expires, she remains in the United States 
for an additional six months and then applies to become a permanent 
resident alien. She has an adjustment of status application pending 
until she receives permanent resident alien status one year later. 
From her arrival in the United States until her application for 
permanent resident alien status, she does not qualify for any of the 
authorizations contained in this section. Instead, she is authorized 
by Sec.  515.571 only to engage in transactions ordinarily incident 
to her travel and maintenance in the United States and to withdraw 
$250 each month from her blocked account to cover her living 
expenses. Beginning with her application to become a permanent 
resident alien, she is licensed as an unblocked national pursuant to 
paragraph

[[Page 14146]]

(a) of this section. At this time, she can apply to OFAC for a 
specific license to have her bank account unblocked.

    Note to Sec.  515.505: See Sec.  515.571 for the authorization 
of certain limited transactions incident to travel to, from, and 
within the United States by Cuban nationals who enter the United 
States on a non-immigrant visa or other non-immigrant travel 
authorization issued by the State Department.



    7. Section 515.512 is added read as follows:


Sec.  515.512  Provision of certain legal services authorized.

    (a) The provision of the following legal services to or on behalf 
of Cuba or a Cuban national is authorized, provided that all receipts 
of payment of professional fees and reimbursement of incurred expenses 
must be specifically licensed:
    (1) Provision of legal advice and counseling on the requirements of 
and compliance with the laws of any jurisdiction within the United 
States, provided that such advice and counseling are not provided to 
facilitate transactions in violation of this part;
    (2) Representation of persons when named as defendants in or 
otherwise made parties to domestic U.S. legal, arbitration, or 
administrative proceedings;
    (3) Initiation and conduct of domestic U.S. legal, arbitration, or 
administrative proceedings in defense of property interests subject to 
U.S. jurisdiction;
    (4) Representation of persons before any federal or state agency 
with respect to the imposition, administration, or enforcement of U.S. 
sanctions against such persons; and
    (5) Provision of legal services in any other context in which 
prevailing U.S. law requires access to legal counsel at public expense.
    (b) The provision of any other legal services to Cuba or a Cuban 
national, not otherwise authorized in this part, requires the issuance 
of a specific license.
    (c) Entry into a settlement agreement affecting property or 
interests in property or the enforcement of any lien, judgment, 
arbitral award, decree, or other order through execution, garnishment, 
or other judicial process purporting to transfer or otherwise alter or 
affect property in which Cuba or a Cuban national has had an interest 
at any time on or since 12:01 a.m., e.s.t., July 8, 1963, is prohibited 
except to the extent otherwise provided by law or unless otherwise 
authorized by or pursuant to this part.

    8. Revise Sec.  515.533 to read as follows:


Sec.  515.533  Transactions incident to exportations from the United 
States and reexportations of U.S.-origin items to Cuba; negotiation of 
executory contracts.

    (a) All transactions ordinarily incident to the exportation of 
items from the United States, or the reexportation of U.S.-origin items 
from a third country, to any person within Cuba are authorized, 
provided that:
    (1) The exportation or reexportation is licensed or otherwise 
authorized by the Department of Commerce under the provisions of the 
Export Administration Act of 1979, as amended (50 U.S.C. app. 2401-
0420) (see the Export Administration Regulations, 15 CFR 730-774); and
    (2) Only the following payment and financing terms may be used:
    (i) Payment of cash in advance;
    (ii) For authorized sales of agricultural items, financing by a 
banking institution located in a third country provided the banking 
institution is not a designated national, U.S. citizen, U.S. permanent 
resident alien, or an entity organized under the laws of the United 
States or any jurisdiction within the United States (including foreign 
branches). Such financing may be confirmed or advised by a U.S. banking 
institution; or
    (iii) For all other authorized sales, financing by a banking 
institution located in a third country provided the banking institution 
is not a designated national or a person subject to the jurisdiction of 
the United States. Such financing may be confirmed or advised by a U.S. 
banking institution.

    Note to paragraph (a): The transactions authorized by this 
paragraph include, but are not limited to, all transactions that are 
directly incident to the shipping of specific exports or reexports 
(e.g., insurance and transportation of the exports to Cuba). 
Transactions that are not tied to specific exports or reexports, 
such as transactions involving future (non-specific) shipments, must 
be separately licensed by OFAC. For the waiver of the prohibitions 
on entry into U.S. ports contained in Sec.  515.207 for vessels 
transporting shipments of items between the United States and Cuba 
pursuant to this section, see Sec.  515.550.

    (b) Persons subject to the jurisdiction of the United States are 
authorized to engage in all transactions ordinarily incident to 
negotiation of and entry into executory contracts for the sale of items 
that may be exported from the United States to Cuba or 100% U.S.-origin 
items that may be reexported from a third country to Cuba consistent 
with the export licensing policy of the Department of Commerce, 
provided that performance of such executory contracts is expressly made 
contingent on the prior authorization by the Department of Commerce.

    Note to paragraph (b): This paragraph does not authorize 
transactions related to travel to, from, or within Cuba. See 
paragraph (e) for a statement of specific licensing policy with 
respect to such transactions.

    (c) This section does not authorize:
    (1) The financing of any transactions from any blocked account.
    (2) Any transaction involving, directly or indirectly, property in 
which any designated national, other than a person located in the 
country to which the exportation or reexportation is consigned, has an 
interest or has had an interest since the effective date set forth in 
Sec.  515.201 of this part.
    (d) [Reserved]
    (e) Specific licenses may be issued on a case-by-case basis 
authorizing the travel-related transactions set forth in Sec.  
515.560(c) and other transactions that are directly incident to the 
marketing, sales negotiation, accompanied delivery, or servicing of 
exports that appear consistent with the export or re-export licensing 
policy of the Department of Commerce.

    9. Amend Sec.  515.559 by removing paragraph (d) and adding a note 
to the end of the paragraph (b) to read as follows:


Sec.  515.559  Transactions by U.S.-owned or controlled foreign firms 
with Cuba.

* * * * *
    (b) * * *

    Note to paragraph (b): On October 23, 1992, sections 1705 and 
1706 of the Cuban Democracy Act of 1992, Pub. L. 102-484 (Oct. 23, 
1992) (codified at 22 U.S.C. 6004 and 6005, respectively), 
prohibited OFAC from issuing licenses for any transaction described 
in this paragraph other than those transactions currently set forth 
in paragraph (a).

* * * * *

    10. Amend Sec.  515.560 by revising paragraph (c)(4) and by adding 
a note to paragraph (c)(4) to read as follows:


Sec.  515.560  Travel-related transactions to, from, and within Cuba by 
persons subject to U.S. jurisdiction.

* * * * *
    (c) * * *
    (4) Carrying remittances to Cuba. The carrying to Cuba of any 
remittances that the licensed traveler is authorized to remit pursuant 
to Sec.  515.570 provided that:
    (i) The total of all household remittances authorized by Sec.  
515.570(a) does not exceed $3,000, and
    (ii) No emigration remittances authorized by Sec.  515.570(b) are 
carried to Cuba unless a U.S. immigration visa has been issued for each 
payee and the licensed traveler can produce the visa recipients' full 
names, dates of birth,

[[Page 14147]]

visa numbers, and visa dates of issuance.

    Note to paragraph (c)(4): This paragraph does not authorize a 
traveler to carry remittances on behalf of other remitters.

* * * * *

    11. Revise Sec.  515.561 to read as follows:


Sec.  515.561  Persons visiting close relatives in Cuba.

    (a) General license for visiting a close relative who is a national 
of Cuba once in any 12-month period. Persons subject to the 
jurisdiction of the United States and persons traveling with them who 
share a common dwelling as a family with them are authorized to engage 
in the travel-related transactions set forth in Sec.  515.560(c) and 
additional travel-related transactions that are directly incident to 
the purpose of visiting a close relative who is a national of Cuba, as 
that term is defined in Sec.  515.302 of this part. The authorization 
contained in this paragraph may be used only once in any 12-month 
period. Any transactions related to additional family visits must be 
specifically licensed pursuant to paragraph (b) of this section.
    (b) Specific licenses for visiting a close relative who is a 
national of Cuba more than once in any 12-month period. Specific 
licenses may be issued on a case-by-case basis authorizing persons 
subject to the jurisdiction of the United States and persons traveling 
with them who share a common dwelling as a family with them to engage 
in the travel-related transactions set forth in Sec.  515.560(c) and 
additional travel-related transactions that are directly incident to 
the purpose of visiting a close relative who is a national of Cuba, as 
that term is defined in Sec.  515.302 of this part, more than once in 
any 12-month period.
    (c) Specific licenses for visiting a close relative who is not a 
national of Cuba. Specific licenses may be issued on a case-by-case 
basis authorizing persons subject to the jurisdiction of the United 
States and persons traveling with them who share a common dwelling as a 
family with them to engage in the travel-related transactions set forth 
in Sec.  515.560(c) and additional travel-related transactions that are 
directly incident to the purpose of visiting a close relative who is 
not a national of Cuba, as that term is defined in Sec.  515.302 of 
this part.

    Example to paragraph (c): If your daughter is a U.S. national 
engaging in a year-long course of study in Cuba, you need a specific 
license issued pursuant to this paragraph (c) to engage in 
transactions incident to traveling to Cuba to visit her.

    (d) For the purpose of this section, the term close relative used 
with respect to any person means any individual related to that person 
by blood, marriage, or adoption who is no more than three generations 
removed from that person or from a common ancestor with that person.

    Example to paragraph (d): Your mother's cousin is your close 
relative for the purposes of this section, because you are both no 
more than three generations removed from your great-grandparents, 
who are the ancestors you have in common. Similarly, your husband's 
great-grandson is your close relative for the purposes of this 
section, because he is no more than three generations removed from 
you. Your daughter's father-in-law is not your close relative for 
the purposes of this section, because you have no common ancestor.


Sec.  515.565  [Amended]

    12. Amend Sec.  515.565 by removing the word ``or'' and the 
semicolon at the end of paragraph (b)(1) and adding a period in its 
place, and by removing and reserving paragraph (b)(2).

    13. Amend Sec.  515.567 by revising paragraphs (b) and (c) and 
adding a note to the section to read as follows:


Sec.  515.567  Public performances, clinics, workshops, athletic and 
other competitions, and exhibitions.

* * * * *
    (b) Specific licenses, including for multiple trips to Cuba over an 
extended period of time, may be issued on a case-by-case basis 
authorizing the travel-related transactions set forth in Sec.  
515.560(c) and other transactions that are directly incident to 
participation in a public performance, clinic, workshop, athletic or 
other competition, or exhibition in Cuba by participants in such 
activities, provided that:
    (1) The event is open for attendance, and in relevant situations 
participation, by the Cuban public;
    (2) All U.S. profits from the event after costs are donated to an 
independent nongovernmental organization in Cuba or a U.S.-based 
charity, with the objective, to the extent possible, of promoting 
people-to-people contacts or otherwise benefiting the Cuban people; and
    (3) Any clinics or workshops in Cuba must be organized and run, at 
least in part, by the licensee. In general, an individual's attendance 
at a purely Cuba-organized clinic or workshop will not be authorized 
pursuant to this paragraph.
    (c) Specific licenses will not be issued pursuant to this section 
authorizing any debit to a blocked account.

    Note to Sec.  515.567: See Sec.  515.571 for the authorization 
of certain transactions related to the activities of nationals of 
Cuba traveling in the United States.



    14. Revise Sec.  515.570 to read as follows:


Sec.  515.570  Remittances to nationals of Cuba.

    (a) Periodic $300 household remittances authorized. Persons subject 
to the jurisdiction of the United States who are 18 years of age or 
older are authorized to make remittances to Cuban households (including 
to Cuban individuals living alone) located in Cuba or in the authorized 
trade territory provided that:
    (1) The remitter's total remittances do not exceed $300 per Cuban 
household in any consecutive 3-month period, regardless of the number 
of individuals comprising that household;
    (2) The remittances are not made from a blocked source unless:
    (i) The remittances are authorized pursuant to paragraph (c) of 
this section; or
    (ii) The remittances are made to a Cuban household in a third 
country and are made from a blocked account in a banking institution in 
the United States held in the name of, or in which the beneficial 
interest is held by, the payee.
    (3) No member of the payee's household is a senior-level Cuban 
government official or senior-level communist party official.

    Note to paragraph (a): The maximum amount set forth in this 
paragraph does not apply to remittances to a Cuban individual who 
has been unblocked or whose current transactions are otherwise 
authorized pursuant to Sec.  515.505, because remittances to such 
persons do not require separate authorization.

    (b) Two one-time $500 emigration-related remittances authorized. 
Persons subject to the jurisdiction of the United States are authorized 
to remit the following amounts:
    (1) Up to $500 per payee on a one-time basis to any Cuban nationals 
for the purpose of covering the payees' preliminary expenses associated 
with emigrating from Cuba to the United States. These remittances may 
be sent before the payees have received valid visas issued by the State 
Department or other approved U.S.-immigration documents, but may not be 
carried by a licensed traveler to Cuba until the payees have received 
valid visas issued by the State Department or other approved U.S.-
immigration documents. See Sec.  515.560(c)(4) of this part for the 
rules regarding the carrying of authorized remittances to Cuba. These 
remittances may not be made from a blocked source unless authorized 
pursuant to paragraph (c) of this section.

[[Page 14148]]

    (2) Up to an additional $500 per payee on a one-time basis to any 
Cuban nationals for the purpose of enabling the payees to emigrate from 
Cuba to the United States, including for the purchase of airline 
tickets and payment of exit or third-country visa fees or other travel-
related fees. These remittances may be sent only once the payees have 
received valid visas issued by the State Department or other approved 
U.S.-immigration documents. A remitter must be able to provide the visa 
recipients' full names, dates of birth, visa numbers, and visa dates of 
issuance. See Sec.  515.560(c)(4) of this part for the rules regarding 
the carrying of authorized remittances to Cuba. These remittances may 
not be made from a blocked source unless authorized pursuant to 
paragraph (c) of this section.
    (c) Certain remittances from inherited blocked sources authorized. 
The remittances authorized in paragraphs (a) and (b) of this section 
may be made from a blocked account in a banking institution in the 
United States held in the name of, or in which the beneficial interest 
is held by, the payee, provided that the funds were deposited in the 
blocked account as a result of a valid testamentary disposition, 
intestate succession, or payment from a life insurance policy or 
annuity contract triggered by the death of the policy or contract 
holder.
    (d) Specific licenses. Specific licenses may be issued on a case-
by-case basis authorizing the following:
    (1) Remittances by persons subject to U.S. jurisdiction to 
independent non-governmental entities in Cuba.
    (2) Remittances by persons subject to U.S. jurisdiction from 
blocked accounts to Cuban households in third countries in excess of 
the amount specified in paragraph (a) of this section; or
    (3) Remittances by persons subject to U.S. jurisdiction to a person 
in Cuba, directly or indirectly, for transactions to facilitate non-
immigrant travel by an individual in Cuba to the United States under 
circumstances where humanitarian need is demonstrated, including but 
not limited to illness or other medical emergency.

    Note to Sec.  515.570: For the rules relating to the carrying of 
remittances to Cuba by licensed travelers to Cuba, see paragraph 
(c)(4) of Sec.  515.560. Persons subject to the jurisdiction of the 
United States are prohibited from engaging in the collection or 
forwarding of remittances to Cuba unless authorized pursuant to 
Sec.  515.572 of this part. Pursuant to Sec.  515.572, all 
depository institutions (e.g., banks) are authorized to provide such 
services. For a list of other authorized U.S. remittance service 
providers, see the following Web site: http://www.treas.gov/offices/enforcement/ofac/sanctions/cuba_tsp.pdf.



    15. Amend Sec.  515.571 by revising the introductory text of 
paragraph (a) and by adding a new paragraph (a)(5) and note to the 
section to read as follows:


Sec.  515.571  Certain transactions incident to travel to, from, and 
within the United States by Cuban nationals.

    (a) Except as provided in paragraph (c) of this section, the 
following transactions by or on behalf of a Cuban national who enters 
the United States on a non-immigrant visa or other non-immigrant travel 
authorization issued by the State Department are authorized:
* * * * *
    (5) All transactions ordinarily incident to the activities for 
which a visa or other travel authorization was issued.
    (i) This paragraph (a)(5) does not authorize receipt of 
compensation in excess of amounts covering living expenses and the 
acquisition of goods for personal consumption. See Sec.  
515.565(a)(2)(v) of this part for the case-by-case authorization of 
payments to certain Cuban scholars of stipends or salaries that exceed 
this limit.
    (ii) Examples of transactions authorized by this paragraph (a)(5) 
include: the payment of tuition to a U.S. educational institution by a 
national of Cuba issued a student visa; the payment of compensation 
covering only living expenses and the purchase of goods for personal 
consumption to a national of Cuba issued a performance-related visa; 
and the rental of a stage by a Cuban group issued a performance visa.
* * * * *

    Note to Sec.  515.571: For the authorization of certain 
transactions by Cuba nationals who become U.S. citizens, apply for 
or receive U.S. permanent resident alien status, or are paroled into 
the United States, see Sec.  515.505 of this part.

Sec.  515.572  [Amended]

    16. Amend paragraph (d) of Sec.  515.572 by replacing the word 
``quarterly'' each time it appears with the word ``annual'' and by 
replacing the words ``three-month'' with the words ``one-year.''

    17. Revise Sec.  515.574 to read as follows:


Sec.  515.574  Support for the Cuban People.

    (a) Specific licenses may be issued on a case-by-case basis 
authorizing the travel-related transactions set forth in Sec.  
515.560(c) and other transactions that are intended to provide support 
for the Cuban people including, but not limited to, the following:
    (1) Activities of recognized human rights organizations,
    (2) Activities of independent organizations designed to promote a 
rapid, peaceful transition to democracy, and
    (3) Activities of individuals and non-governmental organizations 
that promote independent activity intended to strengthen civil society 
in Cuba.
    (b) Licenses will be issued pursuant to this section once the 
applicant shows that the proposed transactions are consistent with the 
purposes of this section and provides an explanation that no 
significant accumulation of funds or financial benefit will accrue to 
the government of Cuba.

    18. Revise Sec.  515.575 to read as follows:


Sec.  515.575  Humanitarian projects.

    Specific licenses may be issued on a case-by-case basis authorizing 
the travel-related transactions set forth in Sec.  515.560(c) and such 
additional transactions as are directly incident to certain 
humanitarian projects in or related to Cuba not otherwise covered by 
this part that are designed to directly benefit the Cuban people. Such 
projects may include, but are not limited to: medical and health-
related projects; construction projects intended to benefit 
legitimately independent civil society groups; environmental projects; 
projects involving formal or non-formal educational training, within 
Cuba or off-island, on topics including civil education, journalism, 
advocacy and organizing, adult literacy, and vocational skills; 
community-based grassroots projects; projects suitable to the 
development of small scale private enterprise; projects that are 
related to agricultural and rural development that promote independent 
activity; and projects to meet basic human needs. Specific licenses may 
be issued authorizing transactions for multiple visits for the same 
project over an extended period of time by applicants demonstrating a 
significant record of overseas humanitarian projects.

    Dated: March 5, 2003.
R. Richard Newcomb,
Director, Office of Foreign Assets Control.

    Approved: March 5, 2003.
Kenneth E. Lawson,
Assistant Secretary (Enforcement), Department of the Treasury.
[FR Doc. 03-6808 Filed 3-19-03; 11:25 am]
BILLING CODE 4810-25-P