Document ID: BIS-2016-0034-0001
Agency: bis
Document Type: Rule
Title: License Exceptions; Revisions: Cuba
Posted Date: 2016-10-17T04:00Z

[Federal Register Volume 81, Number 200 (Monday, October 17, 2016)]
[Rules and Regulations]
[Pages 71365-71367]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-25034]

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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Parts 740 and 746

[Docket No. 160915848-6952-01]
RIN 0694-AH12

Cuba: Revisions to License Exceptions

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Final rule.

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SUMMARY: This rule amends a license exception to allow cargo aboard 
aircraft to transit Cuba when that cargo is bound for destinations 
other than Cuba. This rule also authorizes export and reexport of 
certain items sold directly to individuals in Cuba under a license 
exception. Finally, this rule revises the lists of ineligible Cuban 
officials for purposes of certain license exceptions. BIS is publishing 
this rule to further implement the administration's policy of 
increasing engagement and commerce that benefits the Cuban people.

DATES: Effective: October 17, 2016.

FOR FURTHER INFORMATION CONTACT: Foreign Policy Division, Bureau of 
Industry and Security, Phone: (202) 482-4252.

SUPPLEMENTARY INFORMATION:

Background

    On December 17, 2014, the President announced a new approach in 
U.S. policy toward Cuba. This approach recognized that increased 
engagement and commerce benefits the American and Cuban people, and 
sought to make the lives of ordinary Cubans easier and more prosperous. 
In furtherance of that policy, and in coordination with the Department 
of the Treasury's Office of Foreign Assets Control (OFAC), the Bureau 
of Industry and Security published five rules amending the Export 
Administration Regulation (EAR) between January 16, 2015, and March 16, 
2016 (see 80 FR 2286, 80 FR 43314, 80 FR 56898, 81 FR 4580, and 81 FR 
13972). Collectively these rules established License Exception Support 
for the Cuban People (SCP) (Sec.  740.21 of the EAR) and revised 
existing license exceptions and licensing policy in the EAR for Cuba.
    Today, BIS is taking this action in coordination with OFAC, which 
is amending the Cuban Assets Control Regulations (CACR) (31 CFR part 
515).
    This rule continues the President's policy of increasing engagement 
and commerce between the United States and Cuba by making cargo 
transiting Cuba via aircraft on temporary sojourn eligible for License 
Exception Aircraft, Vessels and Spacecraft (AVS) (Sec.  740.15 of the 
EAR), placing it on par with such cargo aboard vessels on temporary 
sojourn to Cuba. This rule also makes a non-substantive clarifying edit 
in describing the limits that apply to the transiting cargo. 
Previously, one of those limits read: ``The cargo . . . does not enter 
the Cuban economy. . . .'' This rule revises that limit to read: ``The 
cargo . . . is not removed from the aircraft or vessel for use in Cuba. 
. . .'' BIS believes that the latter more clearly expresses the 
underlying concept, i.e., that the cargo must truly be in transit to be 
eligible for this license exception. This final rule continues to apply 
the other limits of License Exception AVS (that the cargo must not be 
transferred to another vessel and must leave with the same vessel when 
it departs) to aircraft as well as vessels without any substantive 
change.
    In furtherance of the President's policy to support the Cuban 
people, this rule also makes exports or reexports of eligible items 
sold directly to eligible individuals in Cuba for their personal use or 
their immediate family's personal use eligible for License Exception 
SCP. To be eligible, the items must be designated as EAR99 or 
controlled on the Commerce Control List (CCL) (Supplement No. 1 to Part 
774 of the EAR) only for anti-terrorism reasons. Additionally, the 
purchasers and end users must not be members of the Council of 
Ministers, flag officers of the Revolutionary Armed Forces, or members 
of the Politburo. This amendment to License Exception SCP facilitates 
direct sales to individuals in Cuba by online retailers and others that 
sell eligible consumer products directly to end users. This new 
provision of License Exception SCP complements existing authorizations 
in the EAR. License Exception SCP already authorizes the export or 
reexport to Cuba of certain items for use by the Cuban private sector. 
There is an existing case-by-case licensing policy for the export or 
reexport to Cuba of items that would meet the needs of the Cuban 
people, including items for wholesale and retail distribution for 
domestic consumption by the Cuban people. Additionally, certain 
donations to the Cuban people have been authorized pursuant to License 
Exceptions Gift Parcels and Humanitarian Donations (GFT) (Sec.  740.12 
of the EAR), Consumer Communications

[[Page 71366]]

Devices (CCD) (Sec.  740.19 of the EAR), and SCP.
    Finally, this rule revises the lists of Cuban government and Cuban 
Communist Party officials that are ineligible for provisions of three 
license exceptions: individual gift parcels (GFT, Sec.  740.12(a) of 
the EAR), consumer communications devices (CCD, Sec.  740.19 of the 
EAR), and software and commodities that will be used by the private 
sector or by individuals to improve the free flow of communications or 
support certain private sector activities in Cuba (SCP, Sec.  
740.21(d)(4) of the EAR). Under this rule, ineligible recipients are 
limited to members of the Council of Ministers, flag officers of the 
Revolutionary Armed Forces, and members of the Politburo. BIS is 
revising these lists to correspond to amendments that OFAC is making to 
its definitions of prohibited officials of the Government of Cuba and 
prohibited members of the Cuban Communist Party in Sec. Sec.  515.337 
and 515.338 of the CACR, respectively.

Export Administration Act

    Although the Export Administration Act expired on August 20, 2001, 
the President, through Executive Order 13222 of August 17, 2001, 3 CFR, 
2001 Comp., p. 783 (2002), as amended by Executive Order 13637 of March 
8, 2013, 78 FR 16129 (March 13, 2013), and as extended by the Notice of 
August 4, 2016, 81 FR 52587 (August 8, 2016), has continued the Export 
Administration Regulations in effect under the International Emergency 
Economic Powers Act. BIS continues to carry out the provisions of the 
Export Administration Act, as appropriate and to the extent permitted 
by law, pursuant to Executive Order 13222 as amended by Executive Order 
13637.

Rulemaking Requirements

    1. Executive Orders 13563 and 12866 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. This rule has been designated a ``significant regulatory 
action,'' although not economically significant, under section 3(f) of 
Executive Order 12866. Accordingly, the rule has been reviewed by the 
Office of Management and Budget (OMB).
    2. Notwithstanding any other provision of law, no person is 
required to respond to, nor shall any person be subject to a penalty 
for failure to comply with, a collection of information subject to the 
requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et 
seq.) (PRA), unless that collection of information displays a currently 
valid OMB control number. This rule involves a collection of 
information approved under OMB control number 0694-0088--Simplified 
Network Application Processing+ System (SNAP+) and the Multipurpose 
Export License Application, which carries an annual estimated burden of 
31,833 hours. BIS believes that this rule will have no significant 
impact on that burden. To the extent that it has any impact, BIS 
believes that this rule will reduce the paperwork burden to the public 
because it will make some transactions that currently require a license 
from BIS eligible for a license exception. In those instances, 
exporters and reexporters will be relieved of the burden of applying 
for a license.
    Send comments regarding this burden estimate or any other aspect of 
this collection of information, including suggestions for reducing the 
burden, to Jasmeet K. Seehra, Office of Management and Budget, by email 
at jseehra@omb.eop.gov or by fax to (202) 395-7285 and to William Arvin 
at william.arvin@bis.doc.gov.
    3. This rule does not contain policies with Federalism implications 
as that term is defined under Executive Order 13132.
    4. The provisions of the Administrative Procedure Act (5 U.S.C. 
553) requiring notice of proposed rulemaking and the opportunity for 
public participation, and a delay in effective date, are inapplicable 
because this regulation involves a military or foreign affairs function 
of the United States (see 5 U.S.C. 553(a)(1)). This rule is a part of a 
foreign policy initiative to change the nature of the relationship 
between Cuba and the United States announced by the President on 
December 17, 2014. Delay in implementing this rule to obtain public 
comment would undermine the foreign policy objectives that the rule is 
intended to implement. Further, no other law requires that a notice of 
proposed rulemaking and an opportunity for public comment be given for 
this rule. Because a notice of proposed rulemaking and an opportunity 
for public comment are not required to be given for this rule under 5 
U.S.C. 553, or by any other law, the requirements of the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.) are not applicable.

List of Subjects

15 CFR Part 740

    Administrative practice and procedure, Exports, Reporting and 
recordkeeping requirements.

15 CFR Part 746

    Exports, Reporting and recordkeeping requirements.

    For the reasons set forth in the preamble, 15 CFR Chapter VII, 
Subchapter C is amended as follows:

PART 740--[AMENDED]

0
1. The authority citation for part 740 continues to read as follows:

    Authority: 50 U.S.C. 4601 et seq.; 50 U.S.C. 1701 et seq.; 22 
U.S.C. 7201 et seq.; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 
228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; Notice of 
August 4, 2016, 81 FR 52587 (August 8, 2016).

0
2. Section 740.12 is amended by revising paragraphs (a)(2)(v)(A) and 
(B) to read as follows:

Sec.  740.12   Gift parcels and humanitarian donations (GFT).

    (a) * * *
    (2) * * *
    (v) * * *
    (A) No gift parcel may be sent to any member of the Council of 
Ministers or flag officer of the Revolutionary Armed Forces.
    (B) No gift parcel may be sent to any member of the Politburo.
* * * * *

0
3. Section 740.15 is amended by revising the introductory text and 
paragraph (d)(6), removing the second (duplicate) ``note to paragraph 
(d),'' redesignating paragraph (e) as paragraph (f), and adding a new 
paragraph (e) to read as follows:

Sec.  740.15  Aircraft, vessels and spacecraft (AVS).

    This License Exception authorizes departure from the United States 
of foreign registry civil aircraft on temporary sojourn in the United 
States and of U.S. civil aircraft for temporary sojourn abroad; the 
export of equipment and spare parts for permanent use on a vessel or 
aircraft; exports to vessels or planes of U.S. or Canadian registry and 
U.S. or Canadian Airlines' installations or agents; the export or 
reexport of cargo that will transit Cuba on an aircraft or vessel on 
temporary sojourn; and the export of spacecraft and components for 
fundamental research. Generally, no License Exception symbol is 
necessary

[[Page 71367]]

for export clearance purposes; however, when necessary, the symbol 
``AVS'' may be used.
* * * * *
    (d) * * *
    (6) Cuba, eligible vessels and purposes. Only the types of vessels 
listed in this paragraph (d)(6) departing for Cuba for the purposes 
listed in this paragraph (d)(6) may depart for Cuba pursuant to this 
paragraph (d). Vessels used to transport both passengers and items to 
Cuba may transport automobiles only if the export or reexport of the 
automobiles to Cuba has been authorized by a separate license issued by 
BIS (i.e., not authorized by license exception).
    (i) Cargo vessels for hire for use in the transportation of items;
    (ii) Passenger vessels for hire for use in the transportation of 
passengers and/or items; and
    (iii) Recreational vessels that are used in connection with travel 
authorized by the Department of the Treasury, Office of Foreign Assets 
Control (OFAC).

    Note to paragraph (d)(6)(iii):  Readers should also consult U.S. 
Coast Guard regulations at 33 CFR part 107 Subpart B--Unauthorized 
Entry into Cuban Territorial Waters.

* * * * *
    (e) Intransit cargo. Cargo laden on board an aircraft or vessel may 
transit Cuba provided:
    (1) The aircraft or vessel is exported or reexported on temporary 
sojourn to Cuba pursuant to paragraph (a) or (d) of this section or a 
license from BIS; and
    (2) The cargo departs with the aircraft or vessel at the end of its 
temporary sojourn to Cuba, is not removed from the aircraft or vessel 
for use in Cuba and is not transferred to another aircraft or vessel 
while in Cuba.
* * * * *

0
4. Section 740.19 is amended by revising paragraphs (c)(2)(i) and (ii) 
to read as follows:

Sec.  740.19  Consumer communications devices (CCD).

* * * * *
    (c) * * *
    (2) * * *
    (i) Ineligible Cuban Government Officials. Members of the Council 
of Ministers and flag officers of the Revolutionary Armed Forces.
    (ii) Ineligible Cuban Communist Party Officials. Members of the 
Politburo.

0
5. Section 740.21 is amended by:
0
a. Removing the word ``or'' from the end of paragraph (b)(2);
0
b. Removing the period from the end of paragraph (b)(3) and adding in 
its place ``; or'';
0
c. Adding paragraph (b)(4) and;
0
d. Revising paragraphs (d)(4)(ii) and (iii).
    The addition and revisions read as follows:

Sec.  740.21  Support for the Cuban People (SCP).

* * * * *
    (b) * * *
    (4) Items sold directly to individuals in Cuba for their personal 
use or their immediate family's personal use, other than officials 
identified in paragraphs (d)(4)(ii) or (iii) of this section.
* * * * *
    (d) * * *
    (4) * * *
    (ii) Members of the Council of Ministers and flag officers of the 
Revolutionary Armed Forces; and
    (iii) Members of the Politburo.
* * * * *

PART 746--[AMENDED]

0
6. The authority citation for part 746 continues to read:

    Authority:  50 U.S.C. 4601 et seq.; 50 U.S.C. 1701 et seq.; 22 
U.S.C. 287c; Sec 1503, Pub. L. 108-11, 117 Stat. 559; 22 U.S.C. 
6004; 22 U.S.C. 7201 et seq.; 22 U.S.C. 7210; E.O. 12854, 58 FR 
36587, 3 CFR, 1993 Comp., p. 614; E.O. 12918, 59 FR 28205, 3 CFR, 
1994 Comp., p. 899; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 
783; E.O. 13338, 69 FR 26751, 3 CFR, 2004 Comp., p 168; Presidential 
Determination 2003-23, 68 FR 26459, 3 CFR, 2004 Comp., p. 320; 
Presidential Determination 2007-7, 72 FR 1899, 3 CFR, 2006 Comp., p. 
325; Notice of May 3, 2016, 81 FR 27293 (May 5, 2016); Notice of 
August 4, 2016, 81 FR 52587 (August 8, 2016).

0
7. Section 746.2 is amended by revising paragraph (a)(1)(x) to read as 
follows:

Sec.  746.2  Cuba.

    (a) * * *
    (1) * * *
    (x) Aircraft, vessels and spacecraft (AVS) for certain aircraft on 
temporary sojourn; equipment and spare parts for permanent use on a 
vessel or aircraft, and ship and plane stores; vessels on temporary 
sojourn; or cargo transiting Cuba on aircraft or vessels on temporary 
sojourn (see Sec.  740.15(a), (b), (d), and (e) of the EAR).
* * * * *

    Dated: October 11, 2016.
Matthew S. Borman,
Deputy Assistant Secretary for Export Administration.
[FR Doc. 2016-25034 Filed 10-14-16; 8:45 am]
 BILLING CODE 3510-33-P