Wednesday, September 30, 2009

Summary of legal changes by OFAC and BIS

OFAC and BIS Ease Certain Travel and Trade Restrictions Concerning Cuba

Summary from the law firm of Kelley Drye


The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) and the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) made regulatory amendments that relax the trade and travel restrictions involving Cuba. To comply with President Obama’s April 13, 2009 directive, the agencies have eased restrictions regarding family travel and remittances, the sending of gifts, the donation of consumer communications devices, as well as restrictions related to the telecommunications industry.

Some of the major provisions include the following:

Travel and Remittances

OFAC has eased restrictions for U.S. citizens who are either traveling to visit Cuba, or sending remittances to “close relatives” who are nationals of Cuba. A “close relative” includes immediate family members, cousins, and second cousins. Anyone who shares a common dwelling with the U.S. traveler may accompany him/her. There are no limits on the duration or frequency of these visits.

BIS has lifted the 44-pound limit on personal baggage previously in place for travelers to Cuba. OFAC has increased the amount that travelers currently can spend in Cuba to $179 per day.

Persons subject to U.S. jurisdiction may now send remittances (including from inherited blocked accounts) to any close relative who is not a “prohibited official of the Government of Cuba” or a “prohibited member of the Cuban Communist Party.” There are no limits on the amounts of remittances or frequency with which they may be sent. Additionally, authorized travelers may carry up to $3,000 worth of such remittances with them when traveling to Cuba. Restrictions for remittances for emigration purposes still apply. Remittances may be made from depository institutions, and OFAC will now allow such institutions to set up testing arrangements and exchange authenticator keys with Cuban financial officials.


BIS has eased restrictions on gifts sent to Cuba. Generally, donors may send one gift parcel valued at less than $800 to any eligible donee each month. The types of eligible items that can be included in such parcels have also been expanded. Gifts may be sent to individuals, other than certain Cuban Government and Cuban Communist Party officials. They may also be sent to any charitable, educational, or religious organization that is not controlled by or administered by the Cuban Government or Cuban Communist Party.

Consumer Communication Devices

BIS has also created a license exception that authorizes, under certain circumstances, the export or reexport of commodities and software, excluding encryption source code. Such commodities and software must be used to exchange information and facilitate interpersonal communications, must be donated, and must be widely available for retail purchase in the United States. Specifically, the items include mobile phones, SIM cards, personal digital assistants, laptop and desktop computers and peripherals (monitors, keyboards, mice, etc.), internet connectivity devices, satellite-based television and radio receivers, digital music and video players and recorders, personal two-way radios and digital cameras. The exports or reexports may be to anyone except certain Cuban Government or Communist Party officials, or organizations administered by them. The exception imposes no limits upon the frequency or value of these shipments.


OFAC and BIS have eased in several ways the regulations concerning telecommunications transactions and the travel related to those transactions.

First, persons subject to U.S. jurisdiction may now contract with and pay non-Cuban telecommunications services providers to provide services to any Cuban individuals other than certain Cuban Government or Communist Party officials.

Second, telecommunications service providers may now (a) make payments incident to the provision of telecommunications services between the U.S. and Cuba and the provision of satellite radio or satellite television services to Cuba; and (b) enter into and perform under roaming services agreements with telecommunications service providers in Cuba.

Third, transactions incident to establishing facilities to provide telecommunications services linking the U.S. and Cuba are now authorized by license.

In addition to these three changes, travel-related transactions incident to the commercial export of telecommunications-related items and participating in telecommunications-related professional meetings are now permitted, with some restrictions.

Agricultural and Medical Sales

Finally, OFAC created a new general license that authorizes, with some conditions, travel-related transactions that are directly incident to the commercial marketing, sales, negotiation, accompanied delivery, or servicing in Cuba of agricultural commodities, medicine, or medical devices that appear to be consistent with BIS’s export or reexport licensing policy. Certain employees may rely upon this general license, which also requires that travelers submit a report regarding those transactions to OFAC at least 14 days before departure for Cuba and within 14 days of return.

For help with applying for any of these new licenses or with questions regarding any of the new regulations, please contact:

Darryl W. Jackson
(202) 342-8478

David H. Laufman
(202) 342-8803

Brian Churney
(202) 342-8434

AP and NY Times on extended visit of US official to Cuba

US, Cuba held unannounced talks


NEW YORK — A senior American diplomat has held unannounced, high-level talks in Havana with the Cuban government, three State Department officials told The Associated Press on Tuesday, raising hopes for a thaw in long-icy relations.

The talks were the first of their kind in years between representatives of the U.S. and Cuban governments, the bitter Cold War rivals among whom trust appears to be gradually building.

Bisa Williams, the U.S. deputy assistant secretary of state for Western Hemisphere affairs, met with Cuban Deputy Foreign Minister Dagoberto Rodriguez, visited an area affected by hurricanes in the Western province of Pinar del Rio and toured a government agricultural facility during a six-day trip to Cuba this month, the officials told AP.

The meetings came on the heels of Sept. 17 talks on the possibility of restarting direct mail service between the countries, suspended since 1963. Those discussions had been public, but neither country had previously revealed that Williams remained in Havana for five extra days.

One U.S. official described the talks as "respectful" and said they were more significant for having taken place, than for any substantive breakthroughs between the two sides, which have been at odds since shortly after former Cuban leader Fidel Castro marched into Havana on New Year's Day 1959.

"We were going over ground we haven't gone over for a long time," said the official. "Each side was taking advantage of the opportunity to size each other up."

The official was not authorized to publicly discuss details of Williams' visit and spoke on condition of anonymity. The Cuban government did not immediately respond to a request for comment.

State Department spokesman Ian Kelly confirmed Williams remained in Cuba and met with officials after the postal talks, but offered few details.

"Williams met with host government officials and a wide range of representatives from civil society to gain a full appreciation of the political and economic situation on the ground," he told AP.

Kelly said Williams followed up on ongoing U.S.-Cuba migration talks, the next round of which he said are tentatively scheduled to take place in December. One of the officials said those talks were likely to be held in Havana.

The last time a senior U.S. official traveled to Cuba for talks of any kind was in 2002, but Williams' extended, wide-ranging and unpublicized trip here this month was different.

U.S.-Cuban relations have improved considerably since President Barack Obama took office in January, saying he was ready to extend a hand of friendship to America's traditional foes. In addition to the mail talks, Obama has loosened financial and travel restrictions on Americans with relatives on the island.

The Americans have also made other small but significant gestures — like turning off an electronic sign that had streamed anti-Castro messages from the windows of the U.S. Interests Section, which Washington maintains in Cuba instead of an embassy. The Cubans then took down dozens of large black flags they had set up nearby to block the view.

Cuban President Raul Castro and his brother, Fidel, have both had warm words for the American leader, with Fidel Castro last week praising Obama as courageous for taking on climate change.

Cuban Foreign Minister Bruno Rodriguez said Monday in a speech at the United Nations that the communist government is ready to normalize relations with its larger neighbor and will work with Washington in the meantime on other issues such as fighting drug smuggling.

He said Cuba has sought full diplomatic relations with the U.S. for decades and repeated Raul Castro's offer to sit down with Obama for a "respectful, arm's length dialogue with the United States, without overshadowing our independence, sovereignty and self-determination."

Cuba experts say it remains to be seen whether the diplomacy of small measures is a path to ultimately reaching agreement on core issues, though diplomats on both sides have privately voiced optimism.

Obama has left intact the 47-year trade embargo on the island, and U.S. officials have said for months that they would like to see the single-party state accept some political, economic and social changes.

Associated Press writer Paul Haven reported from Havana, Cuba.


September 30, 2009

U.S. Official Meets With Cuban Authorities


WASHINGTON — In another sign of improving relations between Cuba and the United States, a senior State Department official has talked with high-level Cuban officials in Havana about a variety of issues, including ways to improve cooperation on migration and the fight against drug trafficking.

State Department officials said the main purpose of a trip two weeks ago by the official, Bisa Williams, was to discuss restarting mail service between the United States and the Communist-ruled country.

But a State Department spokesman, Charles Luoma-Overstreet, said Tuesday that Ms. Williams was also able to meet with a senior member of Cuba’s Foreign Ministry for broader talks and was given the opportunity to tour a Cuban agricultural facility and areas affected by hurricanes in the Western province of Pinar del Río.

The talks were first reported by The Associated Press.

Mr. Luoma-Overstreet said Ms. Williams, an acting deputy assistant secretary of state for Western Hemisphere affairs, was the highest-ranking State Department official to visit Cuba since 2002; in 2004, the Bush administration ended twice-a-year migration talks with Havana.

The Obama administration restarted those talks this year, hosting a Cuban delegation in New York. President Obama has also lifted Bush administration limits on remittances and travel for Cuban-Americans with relatives on the island.

Among other small but significant gestures, United States officials turned off an electronic sign that streamed anti-Castro messages on the windows of the United States Interests Section, the diplomatic complex Washington maintains in Havana. In return, Cuban officials lowered dozens of large black flags they had raised to block the view of the sign.

“Look at the momentum; look at the pace of these steps,” said Julia E. Sweig, a Cuba expert at the Council on Foreign Relations. “It’s a departure from many, many years of practice.”

State Department officials offered few details of Ms. Williams’s talks with Cuban authorities. And some played down the significance of the talks, in a nod to the political problems that changes in Cuban relations can create both here and in Havana.

Just before Ms. Williams traveled to Cuba, President Obama signed a one-year extension of the Trading With the Enemy Act, which is the law used to impose a trade embargo against Cuba.

And administration officials have repeatedly said they would not make any moves to ease the embargo until the Cuban government adopted democratic reforms.

“While neither side is saying what was discussed,” said Sarah Stephens, executive director of the Center for Democracy in the Americas, “I believe that the president has authorized these talks because he has a plan for bridging the chasm between Cuba and the United States that has existed for 50 years.

“This did not have to happen,” she added. “These talks are taking place because the president decided it’s the right thing to do.”

Saturday, September 19, 2009

Punishment of Colorado Company for Embargo Violation

Department of Justice Press Release

For Immediate Release
September 17, 2009 United States Attorney's Office
District of Colorado
Contact: (303) 454-0100

Boulder Company Sentenced for "Trading with the Enemy"

DENVER—Platte River Associates, a Boulder company, was sentenced last week by Chief U.S. District Court Judge Wiley Y. Daniel to a fine of $14,500, for trading with the enemy, the U.S. Attorney’s Office, U.S. Immigration and Customs Enforcement, and the FBI announced. Platte River Associates was also ordered to pay a $400 special assessment to a victims of crime fund. The company had pled guilty through its corporate counsel to the trading with the enemy charge on October 3, 2008. They were originally charged by Information on July 15, 2008. They were sentenced on September 9, 2009.

In an unrelated case, the President of Platte River Associates, Jay E. Leonard, was sentenced to serve 12 months of supervised probation for unauthorized access of a protected computer. Leonard pled guilty on October 2, 2008, and was sentenced on December 16, 2008. He was originally charged with a misdemeanor in a separate Information on July 15, 2008.

According to the Information, as well as the stipulated facts contained in the plea agreements, Platte River Associates (PRA) sells software that aides in oil and gas exploration. On October 13, 1998, federal agents visited the Boulder office of PRA, putting them on notice that dealing either directly or indirectly with embargoed countries, including Cuba, is prohibited.

On August 1, 2000, a Spanish oil company called Repsol purchased PRA software. In October of 2000, a Repsol employee traveled to PRA’s Boulder office for software training. The Repsol representative brought with him data to be used in creating a model for oil and gas exploration on a laptop computer. PRA assigned a geologist to work with the Repsol employee. The Repsol employee told the geologist that the data being used for training was for a Cuban project. During the course of the training the president of PRA, Jay Leonard, learned that the data being used involved Cuban waters. There was no attempt on the part of PRA to stop providing the training. As the Repsol employee was leaving the United States, Customs seized his laptop computer. An analysis of the laptop revealed materials related to a potential Cuban project.

The Information charged the defendant corporation with providing specialized technical computer software and computer training, which was then used to create a model for the potential exploration and development of oil and gas within the territorial waters of Cuba, without first having obtained a license from the Secretary of the Treasury.

According to the Information charging Platte River Associates’ President Jay E. Leonard, as well as the stipulated facts in that plea agreement, on October 30, 2005, Leonard illegally accessed the website of Zetaware, an oil and gas exploration software company that is a direct competitor of Platte River Associates. During the intrusion, Zetaware’s password protected files were downloaded via a wireless computer network in the Houston, Texas International Airport. Subsequent analysis by the FBI confirmed that Leonard used PRA assets and resources to intentionally access Zetaware’s password-protected website without authorization, in an attempt to obtain confidential information.

On November 7, 2008, Leonard chaired a PRA staff meeting where he led a discussion about a tentative plan to exploit and unlawfully utilize the downloaded Zetaware files for economic gain.

The Information charged the defendant with using a wireless network connection to access a password protected computer website.

The Platte River Associates case was investigated by Immigration and Customs Enforcement (ICE). The Jay Leonard case was investigated by the Federal Bureau of Investigation (FBI).

“Trading with the enemy is a serious crime, and in this case, a Colorado company has been rightfully held accountable for committing that crime,” said United States Attorney David Gaouette.

“Preventing sensitive technologies and information from being exported to prohibited countries is a primary mission area for ICE,” said Jeffrey Copp, special agent in charge of the ICE Office of Investigations in Denver. “ICE uses its unique customs law enforcement authorities and investigation skills to ensure that these sensitive technologies don’t fall into the wrong hands.” Copp oversees a four-state area, which includes Colorado.

Both cases were prosecuted by Assistant U.S. Attorney Bob Mydans.