Monday, March 8, 2010

New OFAC rules on export of Internet services to Cuba

OFAC also is amending the Cuban Assets Control Regulations,
31 CFR part 515 (the “CACR”), to add a similar general license
authorizing the exportation to persons in Cuba of certain
services incident to the exchange of personal communications
over the Internet. Unless authorized by a general or specific
license, the exportation of such services from the United States
or by persons subject to U.S. jurisdiction to Cuba is
prohibited. Section 515.201 of the CACR prohibits all dealings
in, including, without limitation, transfers, withdrawals, or
exportations of, any property in which Cuba or a Cuban national
has any interest of any nature whatsoever, direct or indirect,
by any person subject to the jurisdiction of the United States.
The term property, as defined in § 515.311 of the CACR,
specifically includes services.

On April 13, 2009, the President stated that the promotion
of democracy and human rights in Cuba is in the national
interest of the United States and is a key component of U.S.
foreign policy in the Americas. The President announced an
initiative to pursue these goals by, among other things,
increasing the flow of information to the Cuban people.
Consistent with that initiative, OFAC is adding new § 515.578 to
the CACR to authorize the exportation from the United States or
by persons subject to U.S. jurisdiction to persons in Cuba of
certain services incident to the exchange of personal
communications over the Internet, such as instant messaging,
chat and email, social networking, sharing of photos and movies,
web browsing, and blogging. To qualify for this authorization,
the services must be publicly available at no cost to the user.
New § 515.578 does not authorize the direct or indirect
exportation of services with knowledge or reason to know that
such services are intended for a prohibited official of the
Government of Cuba, as defined in § 515.337 of the CACR, or a
prohibited member of the Cuban Communist Party, as defined in §
515.338.
Like the new authorization sections added to the SSR and
ITR, new § 515.578 contains a statement of licensing policy in
addition to the general license authorizing the exportation of
certain Internet-based personal communications services.
Paragraph (c) of § 515.578 provides that specific licenses may
be issued on a case-by-case basis for the exportation of
services not covered by the general license that are incident to
the sharing of information over the Internet.
The new general license for Cuba, unlike those for Sudan
and Iran, does not include an authorization for the exportation
of software, because the exportation of goods and technology,
including software, to Cuba is separately licensed or otherwise
authorized by Commerce under the EAR. Section 515.533 of the
CACR generally licenses all transactions ordinarily incident to
the exportation of items from the United States, or the
reexportation of 100% U.S.-origin items from a third country, to
any person in Cuba, provided the exportation or reexportation is
licensed or otherwise authorized by Commerce under the EAR, and
provided further that only certain specified payment and
financing terms may be used.

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