[Federal Register Volume 89, Number 104 (Wednesday, May 29, 2024)]
[Rules and Regulations]
[Pages 46323-46325]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-11618]
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DEPARTMENT OF THE TREASURY
Office of Foreign Assets Control
31 CFR Part 515
Cuban Assets Control Regulations
AGENCY: Office of Foreign Assets Control, Treasury.
ACTION: Final rule.
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SUMMARY: The Department of the Treasury's Office of Foreign Assets
Control (OFAC) is amending the Cuban Assets Control Regulations (the
``Regulations'') to further implement elements of the policy announced
by the Administration on May 16, 2022, to increase support for the
Cuban people. Among other things, these amendments increase support for
internet freedom for the Cuban people and independent Cuban private
sector entrepreneurs by expanding authorizations for internet-based
services and a range of financial transactions. These amendments also
include several additional or updated cross references and one updated
definition.
DATES: This rule is effective May 29, 2024.
FOR FURTHER INFORMATION CONTACT: OFAC: Assistant Director for
Licensing, 202-622-2480; Assistant Director for Regulatory Affairs,
202-622-4855; or Assistant Director for Sanctions Compliance &
Evaluation, 202-622-2490.
SUPPLEMENTARY INFORMATION:
Electronic Availability
This document and additional information concerning OFAC are
available on OFAC's website: www.treas.gov/ofac.
Background
The Department of the Treasury issued the Cuban Assets Control
Regulations, 31 CFR part 515 (the ``Regulations''), on July 8, 1963
under the Trading With the Enemy Act (50 U.S.C. 4301-41). OFAC has
amended the Regulations on numerous occasions. As with prior
amendments, OFAC has ensured that these amendments are consistent with
the Cuban Liberty and Democracy Solidarity (LIBERTAD) Act of 1996, 22
U.S.C. 6021-6091 and other applicable authorities. Most recently, on
June 9, 2022, OFAC amended the Regulations to implement certain policy
measures announced by the Administration on May 16, 2022 to increase
support for the Cuban people. In this document, OFAC, in consultation
with the Department of State, is taking additional actions to further
implement the Administration's Cuba policy measures announced on May
16, 2022, as set forth in more detail below.
Internet-Based Services. OFAC is amending Sec. 515.578(a)(1) to
provide additional examples of authorized services incident to the
exchange of communications over the internet and to include and expand
certain services to support the exchange of such communications. For
example, OFAC's amendment to Sec. 515.578(a)(1) clarifies that cloud-
based services may be exported to Cuba to support the exchange of
communications over the internet. OFAC is amending Sec. 515.578(a)(2)
to expand the authorization for services (including training) to
install, repair, or replace certain items, including by removing the
requirement that referenced items fall within specific export control
classification parameters. OFAC is retaining the requirement in Sec.
515.578(a)(2) that for services (including training) related to any
items subject to the Export Administration Regulations, 15 CFR parts
730 through 774, such items must be licensed or otherwise authorized by
the Department of Commerce for exportation or reexportation to Cuba.
OFAC is also amending Sec. 515.578(d) and (e) to authorize the export
or reexport of Cuban-origin software and mobile applications,
respectively, from the United States to third countries.
Definition of Independent Private Sector Entrepreneurs. OFAC is
amending Sec. 515.340 by replacing the term ``self-employed
individual'' with the term ``independent private sector entrepreneur''
and limiting the term to exclude a Cuban national who is a prohibited
official of the Government of Cuba, as defined in Sec. 515.337, or a
member of the Cuban Communist Party, as defined in Sec. 515.338. The
term continues to include self-employed individuals (cuentapropistas),
such as owners or employees of a private business or a sole
proprietorship, but the amended definition now also includes
cooperatives and other private businesses wholly owned by or consisting
solely of such individuals. OFAC is also amending Sec. 515.340 to
specify that private businesses or sole proprietorships of up to 100
employees are covered by the term ``independent private sector
entrepreneur.'' OFAC is also replacing the term ``independent Cuban
entrepreneurs'' with ``independent private sector entrepreneurs'' in
Sec. 515.582, replacing the term ``self-employed individuals'' with
``independent private sector entrepreneurs'' and adding farms of up to
100 employees as an example of
[[Page 46324]]
private businesses in Sec. 515.570, and making conforming changes to
Sec. 515.421.
U.S. Bank Accounts for Independent Private Sector Entrepreneurs.
OFAC is amending Sec. 515.584(h) to authorize independent private
sector entrepreneurs in Cuba, as defined in Sec. 515.340, to maintain
and use a U.S. bank account to conduct authorized or exempt
transactions.
``U-Turn'' Transactions. OFAC is amending Sec. 515.584(d) to
reinstate an authorization for ``U-turn'' transactions to help the
Cuban people, including independent private sector entrepreneurs, by
facilitating remittances and payments for authorized transactions in
the Cuban private sector. This amendment allows any banking
institution, as defined in Sec. 515.314, that is a person subject to
U.S. jurisdiction to process funds transfers in which Cuba or a Cuban
national has an interest if the funds transfers originate and terminate
outside the United States, provided that neither the originator nor the
beneficiary is a person subject to U.S. jurisdiction. Transactions
through the U.S. financial system that do not meet these criteria,
including all transactions where the originator or beneficiary is a
person subject to U.S. jurisdiction, remain prohibited unless otherwise
authorized or exempt under the Regulations. OFAC is also amending Sec.
515.584(e) to authorize the unblocking and return of any transfer that
would have been authorized pursuant to the reinstated authorization.
OFAC is making a conforming change by adding a reference to Sec.
515.584(d) in the note to Sec. 515.209.
Telecommunications-Related Transactions Reporting Requirements.
OFAC is amending Sec. 515.542(g) to replace the current fax or mail
reporting requirement with a requirement to email reports to
[email protected]. OFAC is also adding a sentence to Sec.
515.542(g) to clarify that the reporting requirement in paragraph (g)
applies to entities engaging in transactions to provide
telecommunication services pursuant to paragraph (b), (c), or (d), and
not banking institutions, as defined in Sec. 515.314, processing
payments on behalf of such providers.
Educational Activities. OFAC is amending Sec. 515.565(a) to
correct a typographical error in the June 9, 2022 amendment to the
Regulations and restore language in the general license in Sec.
515.565(a) authorizing transactions beyond the travel-related
transactions set forth in Sec. 515.560(c).
Public Participation
Because the Regulations involve a foreign affairs function, the
provisions of Executive Order 12866 of September 30, 1993, ``Regulatory
Planning and Review'' (58 FR 51735, October 4, 1993), and 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.
Paperwork Reduction Act
The collections of information related to the Regulations are
contained in 31 CFR part 501 (the ``Reporting, Procedures and Penalties
Regulations'') and Sec. 515.572. Pursuant to the Paperwork Reduction
Act of 1995 (44 U.S.C. 3507), those collections of information have
been approved by the Office of Management and Budget under control
numbers 1505-0164, 1505-0167, and 1505-0168. 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, Banks, banking, Blocking of
assets, Cuba, Credit, Foreign trade, internet, Penalties, Reporting and
recordkeeping requirements, Sanctions, Services.
For the reasons set forth in the preamble, OFAC amends 31 CFR part
515 as follows:
PART 515--CUBAN ASSETS CONTROL REGULATIONS
0
1. The authority citation for part 515 continues to read as follows:
Authority: 22 U.S.C. 2370(a), 6001-6010, 7201-7211; 31 U.S.C.
321(b); 50 U.S.C. 4301-4341; Pub. L. 101-410, 104 Stat. 890 (28
U.S.C. 2461 note); 22 U.S.C. 6021-6091; Pub. L. 105-277, 112 Stat.
2681; Pub. L. 111-8, 123 Stat. 524; Pub. L. 111-117, 123 Stat. 3034;
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 B--Prohibitions
Sec. 515.209 [Amended]
0
2. Amend Sec. 515.209 in note 1 to the section by adding ``Sec.
515.584(d) relating to funds transfers or'' before the text ``Sec.
515.584(g)''.
Subpart C--General Definitions
0
3. Amend Sec. 515.340 by:
0
a. Revising the section heading;
0
b. In the introductory text, removing ``self-employed individual means
a Cuban national who is'' and adding in its place ``independent private
sector entrepreneur means a Cuban national who is not a prohibited
official of the Government of Cuba, as defined in Sec. 515.337, or a
prohibited member of the Cuban Communist Party, as defined in Sec.
515.338, and is'';
0
c. Revising and republishing paragraph (a);
0
d. In paragraph (c), removing the word ``or'' after the semicolon;
0
e. In paragraph (d), removing the period and adding in its place ``;
or''; and
0
f. Adding paragraph (e).
The revisions and addition read as follows:
Sec. 515.340 Independent private sector entrepreneur.
* * * * *
(a) An owner, including a self-employed individual
(cuentapropista), or employee of a small private business entity,
private cooperative, or a sole proprietorship located in Cuba, in each
case of up to 100 employees;
* * * * *
(e) A private cooperative or small private business entity located
in Cuba of up to 100 employees that is owned only by individuals
described in paragraphs (a) through (d) of this section.
Subpart D--Interpretations
Sec. 515.421 [Amended]
0
4. Amend Sec. 515.421 in paragraph (b)(2) by removing ``Cuban'' and
adding in its place ``private sector''.
Subpart E--Licenses, Authorizations, and Statements of Licensing
Policy
0
5. Amend Sec. 515.542 in paragraph (g) by:
0
a. Removing ``faxed to 202/622-6931 or mailed to the Office of Foreign
Assets Control, Attn: Regulatory Affairs Division, 1500 Pennsylvania
Avenue NW, Annex, Washington, DC 20220'' and adding in its place
``emailed to [email protected]''; and
0
b. Adding a sentence at the end of the paragraph.
The addition reads as follows:
Sec. 515.542 Mail and telecommunications-related transactions.
* * * * *
(g) * * * The reporting requirement in this paragraph (g) applies
only to the
[[Page 46325]]
non-banking institution entity subject to U.S. jurisdiction relying
upon paragraph (b), (c), or (d) of this section to provide
telecommunications services.
* * * * *
Sec. 515.565 [Amended]
0
6. Amend Sec. 515.565 in paragraph (a) introductory text by adding
``transactions, including'' after ``engage in''.
Sec. 515.570 [Amended]
0
7. Amend Sec. 515.570 in paragraph (g)(3) by:
0
a. Adding ``in Cuba, including farms of up to 100 employees'' after
``businesses''; and
0
b. Removing ``by self-employed individuals'' and adding in its place
``of Cuba by independent private sector entrepreneurs''.
0
8. Amend Sec. 515.578 by:
0
a. Revising paragraphs (a)(1) and (2);
0
b. In paragraph (a)(3):
0
i. Removing ``The'' at the beginning of the sentence and add in its
place ``To the extent not authorized by Sec. 515.533 or Sec. 515.560,
the''; and
0
ii. Removing ``(2)(i)-(iii)'' and add in its place ``(a)(2)''.
0
c. Redesignating Note to Sec. 515.578(b)(2) as Note 3 to Sec.
515.578(b)(2);
0
d. Revising paragraphs (d) and (e); and
0
e. Redesignating the note at the end of the section as Note 5 to Sec.
515.578.
The revisions read as follows:
Sec. 515.578 Exportation, reexportation, and importation of certain
internet-based services; importation of software.
(a) * * *
(1) Certain internet-based services. The exportation or
reexportation, directly or indirectly, from the United States or by a
person subject to U.S. jurisdiction to Cuba of the following services:
(i) Services incident to the exchange of communications over the
internet, such as instant messaging, chat and email, social networking,
sharing of photos and movies, web browsing, blogging, web hosting
provided that it is not for the promotion of tourism, domain name
registration services, social media platforms, collaboration platforms,
video conferencing, e-gaming and e-learning platforms, automated
translation, web maps, and user authentication services; and
(ii) Services to support the exchange of communications over the
internet, such as software design, business consulting, information
technology management services, and cloud-based services, to support
services described in paragraph (a)(1)(i) of this section.
(2) Services related to certain exportations and reexportations. To
the extent not authorized by Sec. 515.533, the exportation or
reexportation of services, including training, to install, repair, or
replace items related to communications, 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, provided that
any such item subject to the Export Administration Regulations, 15 CFR
parts 730 through 774, is licensed or otherwise authorized by the
Department of Commerce for exportation or reexportation to Cuba.
* * * * *
(d) Software. The importation into the United States, and the
exportation or reexportation from the United States to third countries,
of Cuban-origin software is authorized.
(e) Mobile applications. (1) The importation into the United
States, and the exportation or reexportation from the United States to
third countries, of Cuban-origin mobile applications is authorized.
Note 4 to Sec. 515.578(e)(1): This paragraph (e)(1) does not
authorize U.S.-owned or -controlled firms in third countries to
import goods of Cuban origin into the authorized trade zone. See
Sec. 515.559.
(2) The employment of Cuban nationals to develop mobile
applications is authorized.
* * * * *
Sec. 515.582 [Amended]
0
9. Amend Sec. 515.582 by:
0
a. In the section heading and introductory text, removing ``Cuban'' and
adding in its place ``private sector''; and
0
b. In the introductory text, removing ``entrepreneurs as'' and adding
in its place ``entrepreneurs, as defined in Sec. 515.340. The list of
goods and services eligible for importation under this section is''.
0
10. Amend Sec. 515.584 by:
0
a. In paragraph (d), removing ``reject'' and adding in its place
``process'';
0
b. In paragraph (e), in the first sentence, adding ``paragraph (d) of
this section,'' after ``processed pursuant to'' and adding a comma
after ``Sec. 515.562(b)'';
0
c. Adding a heading to paragraph (h) and redesignating the text of
paragraph (h) as paragraph (h)(1); and
0
d. Adding paragraph (h)(2).
The additions read as follows:
Sec. 515.584 Certain financial transactions involving Cuba.
* * * * *
(h) Opening and maintaining bank accounts for certain Cuban
nationals. * * *
(2) Any banking institution, as defined in Sec. 515.314, that is a
person subject to U.S. jurisdiction is authorized to open and maintain
accounts solely in the name of a Cuban national who is an independent
private sector entrepreneur, as defined in Sec. 515.340, for the
purposes of conducting transactions authorized pursuant to, or exempt
from the prohibitions of, this part.
Bradley T. Smith,
Director, Office of Foreign Assets Control.
[FR Doc. 2024-11618 Filed 5-28-24; 8:45 am]
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