Document ID: BIS-2017-0030-0001
Agency: bis
Document Type: Rule
Title: Amendments to Implement United States Policy toward Cuba
Posted Date: 2017-11-09T05:00Z

[Federal Register Volume 82, Number 216 (Thursday, November 9, 2017)]
[Rules and Regulations]
[Pages 51983-51986]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-24448]

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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Parts 740 and 746

[Docket No. 171013999-7999-01]
RIN 0694-AH47

Amendments To Implement United States Policy Toward Cuba

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Final rule.

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SUMMARY: This rule amends the licensing policy for Cuba and portions of 
three license exceptions available for exports and reexports to Cuba: 
License Exceptions Gift Parcels and Humanitarian Donations (``GFT''), 
Consumer Communications Devices (``CCD''), and Support for the Cuban 
People (``SCP''). The Bureau of Industry and Security is publishing 
this rule to implement portions of the National Security Presidential 
Memorandum on Strengthening the Policy of the United States Toward 
Cuba, dated June 16, 2017.

DATES: This rule is effective November 9, 2017.

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

SUPPLEMENTARY INFORMATION:

Background

    On June 16, 2017, President Trump announced changes to U.S. policy 
toward Cuba that are intended to enhance compliance with United States 
law; hold the Cuban regime accountable for oppression and human rights 
abuses; further the national security and foreign policy interests of 
the United States and the interests of the Cuban people; and lay the 
groundwork for empowering the Cuban people to develop greater economic 
and political liberty. The President's policy is stated in the National 
Security Presidential Memorandum on Strengthening the Policy of the 
United States Toward Cuba (``Cuba NSPM''), dated June 16, 2017. The 
Cuba NSPM also directs the Secretary of Commerce, as well as the 
Secretaries of State and the Treasury, to take certain actions to 
implement the President's Cuba policy.
    The Department of Commerce's Bureau of Industry and Security 
(``BIS'') is issuing this final rule to implement portions of the Cuba 
NSPM. The Department of the Treasury's Office of Foreign Assets Control 
(``OFAC'') and the Department of State are simultaneously publishing 
related actions in the Federal Register.

[[Page 51984]]

Specific Changes Made by This Rule

Cuba Licensing Policy

    In accordance with the statutory embargo of Cuba, license 
applications for the export or reexport to Cuba of items subject to the 
Export Administration Regulations (``EAR'') currently are subject to a 
general policy of denial unless the transactions are eligible for 
another review policy stated in Sec.  746.2(b). License applications 
for certain export or reexport transactions are reviewed on a case-by-
case basis or under a general policy of approval, depending upon the 
types of items, end uses, and end users involved, as described in the 
EAR.
    On January 27, 2016, BIS created a case-by-case licensing policy in 
paragraph (b)(3)(i) of Sec.  746.2 of the EAR for applications to 
export or reexport items to meet the needs of the Cuban people, 
including exports and reexports of such items to state-owned 
enterprises, agencies, and other organizations of the Cuban government 
that provide goods and services for the use and benefit of the Cuban 
people (81 FR 4580). Note 2 to paragraph (b)(3)(i) explains that BIS 
generally will deny applications to export or reexport items for use by 
state-owned enterprises, agencies, and other organizations that 
primarily generate revenue for the state, including those engaged in 
tourism and those engaged in the extraction or production of minerals 
or other raw materials. Note 2 to paragraph (b)(3)(i) also explains 
that BIS generally will deny applications for the export or reexport of 
items destined to the Cuban military, police, intelligence, or security 
services.
    Pursuant to section 3(a) of the Cuba NSPM, this rule amends note 2 
to paragraph (b)(3)(i) of Sec.  746.2 of the EAR to clarify that BIS 
also generally will deny applications for the export or reexport of 
items for use by certain entities or subentities the State Department 
identifies on its List of Restricted Entities and Subentities 
associated with Cuba (``Cuba Restricted List''), unless such 
transactions are determined to be consistent with the Cuba NSPM. 
Section 3(a)(i) of the Cuba NSPM directs the Secretary of State to 
publish a list of entities and subentities that it has determined (1) 
are under the control of, or act for or on behalf of, the Cuban 
military, intelligence, or security services or personnel and (2) with 
which direct financial transactions would disproportionately benefit 
such services or personnel at the expense of the Cuban people or 
private enterprise in Cuba (Cuba Restricted List). Today the Department 
of State is publishing that list in the Federal Register and posting it 
on its Web site at https://www.state.gov/e/eb/tfs/spi/cuba/cubarestrictedlist/index.htm.
    Section 3(a)(ii) of the Cuba NSPM states that regulatory changes 
made pursuant to section 3(a) shall prohibit direct financial 
transactions with entities or subentities identified by the Department 
of State's Cuba Restricted List unless the transactions are determined 
by the Secretary of Commerce or the Secretary of the Treasury, in 
coordination with the Secretary of State, to be consistent with the 
policy in section 2 and the criteria specified in section 3(a)(iii)(A)-
(I) of the Cuba NSPM. Consequently, license applications submitted to 
BIS that involve one or more parties on the Department of State's Cuba 
Restricted List generally will be denied unless the transactions are 
determined by BIS, in coordination with the Department of State, to be 
consistent with the aforementioned sections of the Cuba NSPM.

Prohibited Cuban Government Officials

    License exceptions authorize certain exports and reexports pursuant 
to specified terms and conditions. Only the license exceptions 
specified in Sec.  746.2(a)(1) of the EAR are available for exports and 
reexports to Cuba. License Exceptions Gift Parcels and Humanitarian 
Donations (``GFT''), Consumer Communications Devices (``CCD''), and 
Support for the Cuban People (``SCP'') (Sec. Sec.  740.12, 740.19, and 
740.21 of the EAR, respectively) specify certain eligible and 
ineligible Cuban transaction parties. On October 17, 2016, BIS revised 
its list of ineligible Cuban government officials in Sec. Sec.  
740.12(a)(2)(v)(A), 740.19(c)(2)(i), and 740.21(d)(4)(ii) of the EAR to 
correspond to amendments OFAC made to its definition of prohibited 
officials of the Government of Cuba in Sec.  515.337 of the Cuban 
Assets Control Regulations (``CACR'') (31 CFR part 515) (81 FR 71365).
    In accordance with section 3(d) of the Cuba NSPM, today OFAC is 
amending its definition of prohibited officials of the Government of 
Cuba to include certain additional individuals. This rule amends the 
list of ineligible Cuban government officials in Sec. Sec.  
740.12(a)(2)(v)(A), 740.19(c)(2)(i), and 740.21(d)(4)(ii) of the EAR to 
conform with OFAC's amendment.

Cuban Private Sector

    On January 16, 2015, BIS created License Exception Support for the 
Cuban People (SCP) in Sec.  740.21 of the EAR to authorize the export 
and reexport of certain items to Cuba that are intended to improve the 
living conditions of the Cuban people; support independent economic 
activity and strengthen civil society in Cuba; and improve the free 
flow of information to, from, and among the Cuban people (80 FR 2286). 
On September 21, 2015, March 16, 2016, and October 17, 2016, BIS 
amended License Exception SCP to authorize additional categories of 
exports and reexports intended to further benefit the Cuban people (80 
FR 56898, 81 FR 13972, and 81 FR 71365, respectively).
    Consistent with section 2(d) of the Cuba NSPM, this rule revises 
Sec.  740.21(b) to further support free enterprise in Cuba. Prior to 
this rule, the text in Sec.  740.21(b)(1)-(3) identified certain types 
of items, such as tools and equipment, that were eligible for export or 
reexport to Cuba for (1) use by the private sector to construct or 
renovate privately-owned buildings, (2) private sector agricultural 
activities, or (3) use by private sector entrepreneurs. This rule 
simplifies and expands Sec.  740.21(b) by creating a single provision 
authorizing the export and reexport to Cuba of items, without 
specifying types, for use by the Cuban private sector for private 
sector economic activities. To be eligible for this provision, the 
items may not be used to primarily generate revenue for the state or 
used to contribute to the operation of the state, including through the 
construction or renovation of state-owned buildings. Additionally, 
eligible items are limited to those that are designated as EAR99 or 
controlled only for anti-terrorism reasons on the Commerce Control List 
(``CCL''). Of note, medicines, medical devices, and agricultural 
commodities are not eligible for any provision of License Exception SCP 
due to limitations in the Cuban Democracy Act of 1992, as amended (22 
U.S.C. 6001-6010) and the Trade Sanctions Reform and Export Enhancement 
Act of 2000, as amended (22 U.S.C. 7201-7211).

Export Administration Act

    Although the Export Administration Act of 1979 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 15, 2017, 82 FR 39005 (August 16, 2017), 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 of 1979, as

[[Page 51985]]

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). This rule is not subject to the 
requirements of E.O. 13771 (82 FR 9339, February 3, 2017) because it is 
issued with respect to a foreign affairs function of the United States.
    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. Although this rule makes certain additional Cuban 
government officials ineligible for specified license exceptions, BIS 
believes that this change will result in the submission of very few, if 
any, additional license applications.
    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 [email protected] or by fax to (202) 395-7285.
    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 implements 
portions of the President Trump's policy toward Cuba, as directed by 
the National Security Presidential Memorandum on Strengthening the 
Policy of the United States Toward Cuba, dated June 16, 2017. 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 15, 2017, 82 FR 39005 (August 16, 2017).

0
2. Section 740.12 is amended by revising paragraph (a)(2)(v)(A) 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 of the following 
officials of the Cuban government: Ministers and Vice-Ministers; 
members of the Council of State; members of the Council of Ministers; 
members and employees of the National Assembly of People's Power; 
members of any provincial assembly; local sector chiefs of the 
Committees for the Defense of the Revolution; Director Generals and 
sub-Director Generals and higher of all Cuban ministries and state 
agencies; employees of the Ministry of the Interior (MININT); employees 
of the Ministry of Defense (MINFAR); secretaries and first secretaries 
of the Confederation of Labor of Cuba (CTC) and its component unions; 
chief editors, editors and deputy editors of Cuban state-run media 
organizations and programs, including newspapers, television, and 
radio; or members and employees of the Supreme Court (Tribuno Supremo 
Nacional).
* * * * *

0
3. Section 740.19 is amended by revising paragraph (c)(2)(i) to read as 
follows:

Sec.  740.19  Consumer Communications Devices (CCD).

* * * * *
    (c) * * *
    (2) * * *
    (i) Ineligible Cuban Government Officials. Ministers and Vice-
Ministers; members of the Council of State; members of the Council of 
Ministers; members and employees of the National Assembly of People's 
Power; members of any provincial assembly; local sector chiefs of the 
Committees for the Defense of the Revolution; Director Generals and 
sub-Director Generals and higher of all Cuban ministries and state 
agencies; employees of the Ministry of the Interior (MININT); employees 
of the Ministry of Defense (MINFAR); secretaries and first secretaries 
of the Confederation of Labor of Cuba (CTC) and its component unions; 
chief editors, editors and deputy editors of Cuban state-run media 
organizations and programs, including newspapers, television, and 
radio; or members and employees of the Supreme Court (Tribuno Supremo 
Nacional).
* * * * *

0
4. Section 740.21 is amended by:
0
a. Revising paragraph (b)(1);
0
b. Removing paragraphs (b)(2) and (3);
0
c. Redesignating paragraph (b)(4) as new paragraph (b)(2); and
0
d. Revising paragraph (d)(4)(ii) to read as follows:

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

* * * * *

[[Page 51986]]

    (b) * * *
    (1) Items for use by the Cuban private sector for private sector 
economic activities, except for items that would be used to:
    (i) Primarily generate revenue for the state; or
    (ii) Contribute to the operation of the state, including through 
the construction or renovation of state-owned buildings.
    (2) 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) Ministers and Vice-Ministers; members of the Council of State; 
members of the Council of Ministers; members and employees of the 
National Assembly of People's Power; members of any provincial 
assembly; local sector chiefs of the Committees for the Defense of the 
Revolution; Director Generals and sub-Director Generals and higher of 
all Cuban ministries and state agencies; employees of the Ministry of 
the Interior (MININT); employees of the Ministry of Defense (MINFAR); 
secretaries and first secretaries of the Confederation of Labor of Cuba 
(CTC) and its component unions; chief editors, editors and deputy 
editors of Cuban state-run media organizations and programs, including 
newspapers, television, and radio; or members and employees of the 
Supreme Court (Tribuno Supremo Nacional); and
* * * * *

PART 746--[AMENDED]

0
5. The authority citation for part 746 continues to read as follows:

    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 9, 2017, 82 FR 21909 (May 10, 2017); Notice of 
August 15, 2017, 82 FR 39005 (August 16, 2017).

0
6. Section 746.2 is amended by revising Note 2 to Paragraph (b)(3)(i) 
to read as follows:

Sec.  746.2   Cuba.

* * * * *
    (b) * * *
    (3) * * *
    (i) * * *

    Note 2 to paragraph (b)(3)(i): The policy of case-by-case review 
in this paragraph is intended to facilitate exports and reexports to 
meet the needs of the Cuban people. Accordingly, BIS generally will 
deny applications to export or reexport items for use by state-owned 
enterprises, agencies, and other organizations that primarily 
generate revenue for the state, including those engaged in tourism 
and those engaged in the extraction or production of minerals or 
other raw materials. Applications for export or reexport of items 
destined to the Cuban military, police, intelligence or security 
services also generally will be denied. Additionally, pursuant to 
section 3(a) of the National Security Presidential Memorandum on 
Strengthening the Policy of the United States Toward Cuba (NSPM), 
dated June 16, 2017, BIS generally will deny applications to export 
or reexport items for use by entities or subentities identified by 
the Department of State in the Federal Register or at https://www.state.gov/e/eb/tfs/spi/cuba/cubarestrictedlist/index.htm, unless 
such transactions are determined to be consistent with sections 2 
and 3(a)(iii) of the NSPM.

* * * * *

     Dated: November 6, 2017.
Richard E. Ashooh,
Assistant Secretary for Export Administration.
[FR Doc. 2017-24448 Filed 11-8-17; 8:45 am]
 BILLING CODE 3510-33-P