For Cuba, a real-estate revolution


The New York Times:

José is an eager almost-entrepreneur with big plans for Cuban real estate. Right now he works illegally on trades, linking families that want to swap homes and pay a little extra for an upgrade.

But when Cuba legalizes buying and selling by the end of the year — as the government promised again this week — José and many others expect a cascade of changes: higher prices, mass relocation, property taxes and a flood of money from Cubans in the United States and throughout the world.

“There’s going to be huge demand,” said José, 36, who declined to give his last name. “It’s been prohibited for so long.”

Private property is the nucleus of capitalism, so the plan to legitimize it in Cuba, a country of slogans such as “socialism or death,” strikes many Cubans as jaw-dropping. Indeed, most people expect onerous regulations and, already, the plan outlined by the state media would suppress the market by limiting Cubans to one home or apartment and requiring full-time residency.

Yet even with state control, experts say, property sales could transform Cuba more than any of the economic changes announced by President Raúl Castro’s government, some of which were outlined in the National Assembly on Monday.

Compared with the changes already passed — more self-employment and cellphone ownership — or proposed — car sales and looser emigration rules — “nothing is as big as this,” said Philip Peters, an analyst with the Lexington Institute, a think tank in Arlington, Va.

Back to the old days

The opportunities for profits and loans would be far larger than what Cuba’s small businesses offer, experts say, potentially creating the disparities of wealth that have accompanied property ownership in places such as Eastern Europe and China.

Havana in particular may be in for a move back in time, to when it was a city more segregated by class.

“There will be a huge rearrangement,” said Mario Coyula, Havana’s director of urbanism and architecture in the ’70s and ’80s. “Gentrification will happen.”

Broader effects could follow. Sales would encourage much-needed renovation, creating jobs. Banking would expand because, under newly announced rules, payments would come from buyers’ accounts.

Meanwhile, the government, which owns all property now, would hand over homes and apartments to their occupants in exchange for taxes on sales, impossible in the current swapping market where money passes under the table.

And then there is the role of Cuban emigrants. While the plan seems to prohibit foreign ownership, Cuban Americans could take advantage of Obama administration rules letting them send as much money as they like to relatives on the island, fueling purchases and giving them a stake in Cuba’s economic success.

“That is politically an extremely powerful development,” Peters said, adding that it could spur policy changes by both nations.

Unique complications

The rate of change, however, will likely depend on complications peculiar to Cuba. The so-called Pearl of the Antilles struggled with poor housing even before the 1959 revolution, but deterioration, rigid rules and creative workarounds have created today’s warren of oddities.

There are no vacancies in Havana, Coyula, the urban designer, pointed out. Every dwelling has someone living in it. Most Cubans are essentially stuck where they are.

On the waterfront of central Havana, children peek out from buildings that should be condemned, with a third of the facades missing.

The housing stock, already run down before the revolution, continued to deteriorate, the U.S. embargo choked off the supply of building materials, and new construction failed to keep pace with demand.

Empty lots dot the capital’s seaside Malecon Boulevard as once-stately mansions regularly collapse after heavy rains. Many of those still standing are merely facades or are propped up by scaffolding and wooden beams.

Blocks inland, Cubans such as Elena Acea have subdivided apartments to Alice in Wonderland proportions. Her two-bedroom is now a four-bedroom, with a plywood mezzanine where two stepsons live one atop another, barely able to stand in their own rooms.

Like many Cubans, she hopes to move: trade her apartment for three smaller places so the elder son, 29, can start a family.

“He’s getting married,” she said. “He has to move out.”

Despite reassurances — on Monday, Marino Murillo, the country’s economic czar, said selling would not need government approval — Acea and many neighbors seemed wary of the government’s promise to let go. Some Cubans expect rules forcing buyers to hold properties for five or 10 years. Others say the government will make it hard to take profits off the island, through exorbitant taxes or limits on currency exchange.

Still more, like Ernesto Benítez, 37, an artist, cannot imagine a real open market.

“They’re going to set one price, per square foot, and that’s it,” he said.

He added, Cubans would respond by setting their own prices, and that might be enough to stimulate movement, he said.

He hopes so. Benítez and the woman he has lived with for nearly a decade broke up 18 months ago. Each is dating someone new and there are nights, they admit, that get a little awkward. Only a narrow bathroom separates their bedrooms.

Katia González, 48, whose parents passed down her apartment before they died (which Cuba allows), said she would consider selling for a fair price. What did she think her two-bedroom just blocks from the ocean, in Havana’s best neighborhood, could command?

“Oh, $25,000,” she said. “A little more, maybe $30,000.”

In Miami, a similar apartment might cost nearly 10 times that, which is what many Cuban Americans seem to be thinking. José and several other brokers in Havana said real-estate transactions on the black market routinely involved money from Cubans overseas, especially Florida.

“There’s always money coming in from Miami,” said Gerardo, a broker who withheld his full name. “The Cuban in Miami buys a house for his cousin in Cuba, and when he comes here in the summer for a couple of months, he stays in that house.”

Murky rules

Technically, this is a violation of the trade embargo that began under President Eisenhower. According to the U.S. Treasury Department, deals or investments with Cubans are prohibited. Receiving money or profit from Cuba is also illegal.

But the rules are muddy in practice. Family transactions — mainly involving recent emigrants — seem to be expanding with a wink from the Obama administration.

Supporting private business is now encouraged under the general license that lets Cuban Americans visit relatives, and in 2009, President Obama established a policy of letting Cuban Americans visit the island whenever they want and send unlimited remittances to relatives.

Beyond that, enforcement against individuals, as opposed to businesses, is practically nonexistent. In the past 18 months, one American was penalized for violating the sanctions, with a fine of $525, according to a congressional report published last month.

One thing that isn’t expected to be a topic of debate in Cuba is exile claims on homes.

Over time, said Antonio Zamora, a Miami lawyer who specializes in foreign investment, families that occupied the homes of Cubans who left the island have essentially become the owners of the dwellings.

Experts say the Cuban diaspora has begun to create a tiered social system in Cuba. Cuban emigrants sent back about $1 billion in remittances last year, studies show, with an increasing proportion of that money financing budding capitalists in need of pizza ovens or other equipment to work privately. Homes would simply expand the bond, experts say, and offers are already arriving.

Ilda, 69, lives alone in a five-bedroom, ninth-floor apartment with views of the sea. A visiting Cuban-American couple — “chic, very well dressed,” she said — recently asked to buy her apartment for $150,000, with little care for any bans on foreign ownership.

“I told them I can’t,” Ilda said. “We’re waiting for the law.”

Even when the law changes, she said, she would prefer a “permuta,” a trade, because she would be guaranteed a place to live.

Nowhere to go

Her fear of having nowhere to go is common. One recent study, by Sergio Díaz-Briquets, a Washington-based demography expert, found that Cuba has a housing deficit of 1.6 million units. The government says the number is closer to 500,000, still a serious problem.

Coyula said money from sales might not be enough to fix the shortage, since there is almost no construction industry, permitting process or materials to build with.

Other thorny issues might have to be revisited.

“Evictions haven’t happened here since 1939,” he said. “There’s a law forbidding them.”

For now, Cubans are trying to grasp basic details. How will the mortgage system work? How high will taxes be? What’s a fair price?

There is even a question of how buyers and sellers will come together.

Classified listings are illegal in Cuba, which explains why brokers such as José, known as corredores, spend their days moving through open-air bazaars with notebooks listing apartments offered or desired.

He already has two employees, and when the new law arrives, whether his services are legal or not, he expects to hire more.

“We have to get coordinated,” he said. “It’s coming.”

www.cubaluxuryrent.com

U.S. approves eight more airports for Cuba flights


HAVANA (Reuters) – The government has given permission to eight more airports to offer direct charter flights to and from Cuba in the latest small opening in the 49-year-long trade embargo against the communist island.

Customs and Border Protection said on Tuesday Cuba flights would now be allowed from airports in Atlanta, Baltimore, Dallas/Fort Worth, New Orleans, Chicago, Pittsburgh, Tampa and San Juan, Puerto Rico.

Previously, Cuba flights could be flown only from Miami, New York and Los Angeles. It was not yet known when flights would begin from the new cities.

President Barack Obama said in January Cuba charter service would be expanded. At the same time, he announced a loosening of restrictions for some groups on U.S. travel to Cuba.

The embargo, imposed since 1962 with the aim of toppling the communist government put in place after a 1959 revolution, prevents most Americans from going to Cuba. Only charter flights, not regular air service, are allowed to operate on U.S.-Cuba routes.

Obama has said he wants to recast U.S.-Cuba relations. He previously removed limits on Cuban American travel to the island located 90 miles from Florida and on the sending of remittances.

Cuban Americans have flooded into the country, packing the flights available and making Americans among the top nationalities numerically to visit Cuba.

Under Obama and President Raul Castro, the longtime ideological foes also have initiated talks on migration issues and the possible resumption of direct mail service.

Some Cuban American leaders and groups have opposed Obama’s measures, saying they help the Cuban government that was run by Fidel Castro for 49 years before his younger brother Raul Castro succeeded him in 2008.

Progress in the long-hostile relations came to a halt in December 2009 when Cuba arrested U.S. aid contractor Alan Gross for working in a U.S.-funded program to promote political change on the island.

The approval of the new airports comes as a Cuban court decides Gross’s fate following a two-day trial last week for what prosecutors said was his involvement in “subversive projects” to “defeat the Revolution.”

He faces up to 20 years in prison if convicted.

www.particularcuba.com

Cuba, Now: Viva la Commercial Revolución


Jaunted:

With President Obama working to lessen Cuba Travel restrictions, the focus on future trips to the country is growing wildly. A Jaunted special secret correspondent just returned from a period in Cuba, and she’ll be sharing her impressions of the country, the people and their hopes all this week.

What struck me most powerfully on arriving in Havana was the complete absence of advertising.

Traveling to Cuba from the world’s commercial super-center—the USA—is like diving from a hot, sweaty and crowded monkey cage into a refreshingly vast and empty pool. There is nothing in most Cuban shops beyond a packet of dried black beans and some powdered custard—the same brand, always the same brand. You can’t buy or sell a car made after Castro’s 1959 communist revolution. Toasters and other domestic essentials were until recently banned. Decadent, capitalist toasters!

So the question is: are Cubans ready for the commercial revolution that will sweep through the island like a rainy-season hurricane the moment the US embargo falls?

The answer: a qualified yes. Havana’s streets buzz with the first signs of commercialism, appearing like spring daffodils out of hard, barren soil. Privately-owned restaurants (paladares) and guesthouses (casas particulares) are reaching a critical mass; there are art and photo galleries, mobile phone stores, the odd shop (with uniformed guard) selling Adidas sneakers. You can even, in some places, get hold of a can of real Coke.

The delicate sensibilities of tourists are increasingly being understood, particularly in the tourist haven of Habana Vieja (Old Havana). Gleaming hotels part-owned by Spanish investors serve pumpkin ravioli and pungent French wines, and crumbling mansions are being scrubbed clean and brought back to life with the help of tourist dollars and a sprightly, visionary City Historian named Eusebio Leal.

Cubans have already developed a taste for tourism, thanks to the 2.5 million or so Canadians and Europeans who already visit the island each year. Which is lucky, because apart from nickel, cigars, Ché memorabilia and medicines made from sugar cane and placenta (not lying), there isn’t much else sustaining the stagnant Cuban economy.

Anti-American sentiment is still rife in propaganda—George Dubya and Ronald Reagan share a ‘Cretins’ Corner’ in the Revolution Museum—but on the streets people talk enthusiastically about a possible influx of American tourists. Standing in a shaft of sunlight on Plaza Vieja, a bookseller with a neatly pressed necktie and eyes burning with revolutionary zeal told me how, thanks to socialism, he could read, write, feed his family and last October have a much-needed hernia operation. “I’m socialist hasta las entrañas,” he said—right to my entrails (perhaps, I thought, due to the hernia operation). “Viva la revolución! But you know, I’d love to sell these books to Americans.” The fire in his pupils turned to a glint.

The moral of the story:

If you like your beaches to come with clean toilets, ice, window-shopping and all the other trappings of a fully developed commercial culture, then wait at least ten years after the embargo is dropped.

If you want a glimpse of another world—twisted, surreal and colorful as a Picasso painting, where people still eat to live and wear clothes for warmth—then come now, or just as the Cuban people break down their wall. In between will be chaos.

www.particularcuba.com

New OFAC 2011 Cuba travel regulations


Havana Journal:

DEPARTMENT OF THE TREASURY
Office of Foreign Assets Control
31 CFR Part 515
CUBAN ASSETS CONTROL REGULATIONS
ACTION: Final rule

The Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) is amending the Cuban Assets Control Regulations to continue efforts to reach out to the Cuban people in support of their desire to freely determine their country’s future.

These amendments implement policy changes announced by the President on January 14, 2011, designed to increase people to people contact, support civil society in Cuba, enhance the free flow of information to, from, and among the Cuban people, and help promote their independence from Cuban authorities.

To implement these policy changes, OFAC is taking steps that build upon the President’s April 2009 initiative to, among other things, allow for greater licensing of travel to Cuba for educational, cultural, religious, and journalistic activities and expand licensing of remittances to Cuba. These amendments also modify regulations regarding authorization of transactions with Cuban national individuals who have taken up permanent residence outside of Cuba, as well as implement certain technical and conforming changes.

Background

The U.S. Government 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. App. 5 et seq.). On September 3, 2009, OFAC amended the Regulations to implement measures announced by the President in April 2009 to promote democracy and human rights in Cuba by easing travel restrictions to facilitate greater contact between separated family members in the United States and Cuba and by increasing the flow of remittances and information to the Cuban people.

OFAC is now amending the Regulations to implement certain policy changes announced by the President on January 14, 2011, to continue efforts to reach out to the Cuban people in support of their desire to freely determine their country’s future. These amendments allow for greater licensing of travel to Cuba for educational, cultural, religious, and journalistic activities and expand licensing of remittances to Cuba. These amendments also modify regulations regarding authorization of transactions with Cuban national individuals who have taken up permanent residence outside of Cuba, as well as implement certain technical and conforming changes.

Travel to Cuba for educational activities

Section 515.565 is amended to implement policy changes for travel-related transactions incident to educational activities. A new general license authorizing accredited U.S. graduate and undergraduate degree-granting academic institutions to engage in Cuba travel related transactions incident to certain educational activities replaces the former statement of specific licensing policy in paragraph (a) of section 515.565. Specific licenses issued pursuant to former paragraph (a) were limited to one year in duration and covered only “full-time permanent” employees of, and students enrolled “at,” a particular licensed institution.

The new general license authorizes transactions incident to the educational activities described in paragraph (a) of section 515.565 by all members of the faculty and staff (including but not limited to adjunct faculty and part-time staff) of a sponsoring U.S. academic institution. The new general license also authorizes students to participate in academic activities in Cuba through any sponsoring U.S. academic institution, not only through the accredited U.S. academic institution at which the student is pursuing a degree. The requirement that participation in a structured educational program in Cuba or participation in a formal course of study at a Cuban academic institution be no shorter than 10 weeks in duration is removed, and the new general license instead requires that the study in Cuba be accepted for credit toward the student’s degree.

Revised paragraph (b) of section 515.565 sets forth specific licensing policies. Paragraph (b)(1) provides that specific licenses may be issued to authorize travel-related transactions incident to an individual’s educational activities of certain types described in but that are not authorized by the new general license contained in revised paragraph (a). New paragraph (b)(3) allows accredited U.S. graduate or undergraduate degree-granting academic institutions, by specific license, to sponsor or co-sponsor academic seminars, conferences, and workshops related to Cuba or global issues involving Cuba, and it allows faculty, staff, and students of such institutions to attend those events. A new note to section 515.565 explains that U.S. academic institutions may open accounts at Cuban financial institutions for the purpose of accessing funds in Cuba for transactions authorized pursuant to that section. Nothing in these amendments authorizes U.S. financial institutions to open or use direct correspondent accounts of their own at Cuban financial institutions.

People-to-people exchanges

OFAC also is adding new paragraph (b)(2) to section 515.565 to restore a statement of specific licensing policy for “people-to-people” exchanges. This travel category provides for specific licenses authorizing educational exchanges not involving academic study pursuant to a degree program when those exchanges take place under the auspices of an organization that sponsors and organizes such programs to promote people-to-people contact.

Travel to Cuba for religious activities

Section 515.566 is amended to implement policy changes for travel-related transactions incident to religious activities. A new general license authorizing religious organizations located in the United States to engage in Cuba travel-related transactions incident to religious activities replaces the former statement of specific licensing policy in paragraph (a) of section 515.566. Revised paragraph (b) provides that specific licenses may be issued to authorize travel-related transactions incident to religious activities that are not authorized by the new general license contained in revised paragraph (a). A new note to section 515.566 explains that religious organizations may open accounts at Cuban financial institutions for the purpose of accessing funds in Cuba for transactions authorized pursuant to that section. Nothing in these amendments authorizes U.S. financial institutions to open or use direct correspondent accounts of their own at Cuban financial institutions.

Other travel to Cuba

Section 515.567, including its heading, is revised to restore a statement of specific licensing policy for travel-related transactions incident to participation in clinics or workshops. New paragraph (b)(3) of section 515.567 includes a condition that any clinics or workshops in Cuba must be organized and run, at least in part, by the licensee.

Paragraph (b) of section 515.563 is amended to increase the scope of the statement of specific licensing policy for journalistic activities in Cuba to include free-lance journalistic projects other than “articles.”

Remittances

OFAC also is amending section 515.570 to implement several policy changes regarding remittances to Cuba. New paragraph (b) contains a general license authorizing persons subject to U.S. jurisdiction to remit up to $500 per quarter to any Cuban national, except prohibited officials of the Government of Cuba or prohibited members of the Cuban Communist Party, to support the development of private businesses, among other purposes. A second general license has been added in new paragraph (c), authorizing unlimited remittances to religious organizations in Cuba in support of religious activities. Prior to this amendment, remittances to religious organizations in Cuba were authorized by specific license. New paragraph (d) contains a third new general license, authorizing remittances to close relatives who are students in Cuba pursuant to an educational license for the purpose of funding transactions authorized by the license under which the student is traveling. Former paragraphs (b), (c), and (d) have been redesignated as paragraphs (e), (f), and (g), respectively. Newly redesignated paragraph (g)(1) of section 515.570 has been revised to clarify that specific licenses may be issued to authorize remittances to individuals or independent non-governmental entities to support the development of private businesses, including small farms.

Certain transactions with Cuban nationals who have taken up permanent residence outside of Cuba

Section 515.505, including its heading, is revised to add a general license in new paragraph (d) authorizing certain transactions with individual nationals of Cuba who have taken up permanent residence outside of Cuba (former paragraphs (d) and (e) have been redesignated as paragraphs (e) and (f), respectively). Persons subject to U.S. jurisdiction may engage in transactions with such individuals, prospectively, as if they were unblocked Cuban nationals as defined in section 515.307 of this part. All property in which such Cuban nationals have an interest that was blocked pursuant to this part prior to the later of the date on which the individual took up permanent residence outside of Cuba or—INSERT DATE OF PUBLICATION IN THE FEDERAL REGISTER—however, remains blocked. To determine whether an individual Cuban national has taken up permanent residence outside of Cuba, persons subject to U.S. jurisdiction are required to collect copies of at least two documents issued to the individual by the government authorities of the new country of permanent residence. An example illustrating the application of this general license is found in new paragraph (f)(4).

Public Participation

Because the amendments of the Regulations involve a foreign affairs function, Executive Order 12866 and the provisions of 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”). 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 number 1505-0164. 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, Banking, Blocking of Assets, Cuba, Remittances, Reporting and recordkeeping requirements, Travel restrictions.

For the reasons set forth in the preamble, the Department of the Treasury’s Office of Foreign Assets Control amends 31 CFR part 515 as set forth below:

PART 515—CUBAN ASSETS CONTROL REGULATIONS

1. The authority citation for part 515 is revised to read as follows:

Authority: 18 U.S.C. 2332d; 22 U.S.C. 2370(a), 6001-6010, 7201-7211; 31 U.S.C. 321(b); 50 U.S.C. App 1-44; Pub. L. 101-410, 104 Stat. 890 (28 U.S.C. 2461 note); Pub. L. 104-114, 110 Stat. 785 (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. 9193, 7 FR 5205, 3 CFR, 1938-1943 Comp., p. 1174; 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 E—Licenses, Authorizations, and Statements of Licensing Policy

2. Amend § 515.505 by revising the section heading and paragraph (b), by redesignating paragraphs (d) and (e) as paragraphs (e) and (f), respectively, by adding new paragraph (d), and by adding new paragraph (f)(4) to read as follows:

§ 515.505 Certain Cuban nationals unblocked; transactions of certain other Cuban nationals lawfully present in the United States; transactions with Cuban nationals who have taken up permanent residence outside of Cuba.

* * * * *

(b) Specific licenses unblocking certain individuals who have taken up permanent residence outside of Cuba. Individual nationals of Cuba who have taken up permanent residence outside of Cuba may apply to the Office of Foreign Assets Control to be specifically licensed as unblocked nationals. Applications for specific licenses under this paragraph should include copies of at least two documents indicating permanent residence issued by the government authorities of the new country of permanent residence, such as a passport, voter registration card, permanent resident alien card, or national identity card. In cases where two of such documents are not available, other information will be considered, such as evidence that the individual has been resident for the past two years without interruption in a single country outside of Cuba or evidence that the individual does not intend to, or would not be welcome to, return to Cuba.

* * * * *

(d) General license authorizing certain transactions with individuals who have taken up permanent residence outside of Cuba.

Persons subject to U.S. jurisdiction are authorized to engage in any transaction with an individual national of Cuba who has taken up permanent residence outside of Cuba as if the individual national of Cuba were an unblocked national, as defined in § 515.307 of this part, except that all property in which the individual national of Cuba has an interest that was blocked pursuant to this part prior to the later of the date on which the individual took up permanent residence outside of Cuba or [INSERT DATE OF PUBLICATION IN THE FEDERAL REGISTER] shall remain blocked.

In determining whether an individual national of Cuba has taken up permanent residence outside of Cuba, persons subject to U.S. jurisdiction must obtain from the individual copies of at least two documents indicating permanent residence issued by the government authorities of the new country of permanent residence, such as a passport, voter registration card, permanent resident alien card, or national identity card.

(f) * * *

(4) Example 4: An individual national of Cuba who has taken up permanent residence outside of Cuba wishes to open a bank account at a branch of a U.S. bank in Spain and then withdraw a portion of her previously blocked funds held by the same U.S. bank’s New York branch. The individual provides the Spanish branch with a copy of her third-country passport and voter registration card demonstrating her permanent residence status in the third country. The Spanish branch may open an account for the individual and provide her with banking services. The New York branch may also handle any transactions related to this new account processed through the United States but may not unblock her funds that had been blocked prior to the later of the date on which the individual took up permanent residence outside of Cuba or [INSERT DATE OF PUBLICATION IN THE FEDERAL REGISTER]. Those funds remain blocked unless and until the individual is licensed as an unblocked national pursuant to paragraph (a) or (b) of this section or the funds are otherwise unblocked by a separate Office of Foreign Assets Control authorization.

§ 515.560 Travel-related transactions to, from, and within Cuba by persons subject to U.S. jurisdiction

3. Amend § 515.560 by revising paragraphs (a)(5) through (7), (c)(4)(i) and (ii), and (f) and by adding new paragraph (d)(3) to read as follows:

(a) * * *
(5) Educational activities (general and specific licenses) (see § 515.565);
(6) Religious activities (general and specific licenses) (see § 515.566);
(7) Public performances, clinics, workshops, athletic and other competitions, and exhibitions (specific licenses) (see § 515.567);
(c) * * *
(4) * * *
(i) The total of all remittances authorized by § 515.570(a) through (d) does not exceed $3,000
(ii) No emigration remittances authorized by § 515.570(e)
are carried to Cuba unless a U.S. immigration visa has been issued for each payee and the licensed traveler can produce the visa recipients’ full names, dates of birth, visa numbers, and visa dates of issuance.

(d) * * *
(3) Compensation earned by a Cuban national from a U.S. academic institution up to any amount that can be substantiated through payment receipts from such institution as authorized pursuant to § 515.565(a)(5).

* * * * *

(f) Nothing in this section authorizes transactions in connection with tourist travel to Cuba.

§ 515.563 Journalistic activities in Cuba

4. Amend § 515.563 by revising paragraph (b) to read as follows:

(b) Specific licenses. (1) Specific licenses may be issued on a case-by-case basis authorizing the travel-related transactions set forth in § 515.560(c) and other transactions that are directly incident to journalistic activities in Cuba for a free-lance journalistic project upon submission of an adequate written application including the following documentation:

(i) A detailed itinerary and a detailed description of the proposed journalistic activities

(ii) A resume or similar document showing a record of journalism.

(2) To qualify for a specific license pursuant to this section, the itinerary in Cuba for a free-lance journalistic project must demonstrate that the journalistic activities constitute a full work schedule that could not be accomplished in a shorter period of time.

(3) Specific licenses may be issued pursuant to this section authorizing transactions for multiple trips to Cuba over an extended period of time by applicants demonstrating a significant record of journalism.

§ 515.565 Educational activities

5. Revise § 515.565 to read as follows:

(a) General license

Accredited U.S. graduate and undergraduate degree-granting academic institutions, including faculty, staff, and students of such institutions, are authorized to engage in the travel-related transactions set forth in § 515.560(c) and such additional transactions that are directly incident to:

(1) Participation in a structured educational program in Cuba as part of a course offered for credit by the sponsoring U.S. academic institution. An individual traveling to engage in such transactions must carry a letter on official letterhead, signed by a designated representative of the sponsoring U.S. academic institution, stating that the Cuba-related travel is part of a structured educational program of the sponsoring U.S. academic institution, and stating that the individual is a member of the faculty or staff of that institution or is a student currently enrolled in a graduate or undergraduate degree program at an accredited U.S. academic institution and that the study in Cuba will be accepted for credit toward that degree;

(2) Noncommercial academic research in Cuba specifically related to Cuba and for the purpose of obtaining a graduate degree. A student traveling to engage in such transactions must carry a letter on official letterhead, signed by a designated representative of the sponsoring U.S. academic institution, stating that the individual is a student currently enrolled in a graduate degree program at an accredited U.S. academic institution, and stating that the research in Cuba will be accepted for credit toward that degree;

(3) Participation in a formal course of study at a Cuban academic institution, provided the formal course of study in Cuba will be accepted for credit toward the student’s graduate or undergraduate degree. An individual traveling to engage in such transactions must carry a letter on official letterhead, signed by a designated representative of the sponsoring U.S. academic institution, stating that the individual is a student currently enrolled in a graduate or undergraduate degree program at an accredited U.S. academic institution and that the study in Cuba will be accepted for credit toward that degree;

(4) Teaching at a Cuban academic institution by an individual regularly employed in a teaching capacity at the sponsoring U.S. academic institution, provided the teaching activities are related to an academic program at the Cuban institution and provided that the duration of the teaching will be no shorter than 10 weeks. An individual traveling to engage in such transactions must carry a letter on official letterhead, signed by a designated representative of the sponsoring U.S. academic institution, stating that the individual is regularly employed in a teaching capacity at that institution;

(5) Sponsorship, including the payment of a stipend or salary, of a Cuban scholar to teach or engage in other scholarly activity at the sponsoring U.S. academic institution (in addition to those transactions authorized by the general license contained in § 515.571). Such earnings may be remitted to Cuba as provided in § 515.570 or carried on the person of the Cuban scholar returning to Cuba as provided in § 515.560(d)(3)

(6) The organization of, and preparation for, activities described in paragraphs (a)(1) through (a)(5) of this section by members of the faculty and staff of the sponsoring U.S. academic institution. An individual engaging in such transactions must carry a letter on official letterhead, signed by a designated representative of the sponsoring U.S. academic institution, stating that the individual is a member of the faculty or staff of that institution, and is traveling to engage in the transactions authorized by this paragraph on behalf of that institution.

Note 1 to paragraph (a):

U.S. academic institutions and individual travelers must retain records related to the travel transactions authorized pursuant to this paragraph. See §§ 501.601 and 501.602 of this chapter for applicable recordkeeping and reporting requirements. Exportation of equipment and other items, including the transfer of technology or software to foreign persons (“deemed exportation”), may require separate authorization from the Department of Commerce.

Note 2 to paragraph (a):

This paragraph authorizes all members of the faculty and staff (including but not limited to adjunct faculty and part-time staff) of the sponsoring U.S. academic institution to participate in the activities described in this paragraph. A student currently enrolled in a graduate or undergraduate degree program at any accredited U.S. academic institution is authorized pursuant to this paragraph to participate in the academic activities in Cuba described above through any sponsoring U.S. academic institution, not only through the institution at which the student is pursuing a degree.

(b) Specific licenses. Specific licenses may be issued on a case-by-case basis authorizing the travel-related transactions set forth in § 515.560(c) and other transactions directly incident to:

(1) An individual’s educational activities of the types described in paragraphs (a)(2) through (a)(4) of this section but not authorized by the general license contained in paragraph (a) of this section;

(2) Educational exchanges not involving academic study pursuant to a degree program when those exchanges take place under the auspices of an organization that sponsors and organizes such programs to promote people-to-people contact (3) Sponsorship or co-sponsorship by an accredited U.S. graduate or undergraduate degree-granting academic institution of academic seminars, conferences, and workshops related to Cuba or global issues involving Cuba and attendance at such events by faculty, staff, and students of the licensed institution.

(c) Transactions related to activities that are primarily tourist-oriented, including self-directed educational activities that are intended only for personal enrichment, will not be authorized pursuant to this section.

(d) For the purposes of this section, the term designated representative of the sponsoring U.S. academic institution means a person designated by the relevant dean or the academic vice president, provost, or president of the institution as the official responsible for overseeing the institution’s Cuba travel program.

Note to § 515.565:

Accredited U.S. academic institutions engaging in activities authorized pursuant to this section are permitted to open and maintain accounts at Cuban financial institutions for the purpose of accessing funds in Cuba for transactions authorized pursuant to this section.

§ 515.566 Religious activities in Cuba

6. Revise § 515.566 to read as follows:

(a) General license

Religious organizations located in the United States, including members and staff of such organizations, are authorized to engage in the travel-related transactions set forth in § 515.560(c) and such additional transactions as are directly incident to religious activities in Cuba under the auspices of the organization. Travel related transactions pursuant to this authorization must be for the purpose of engaging, while in Cuba, in a full-time program of religious activities. Financial and material donations to Cuba or Cuban nationals are not authorized by this paragraph (a).

All individuals who engage in transactions in which Cuba or Cuban nationals have an interest (including travel-related transactions) pursuant to this paragraph (a) must carry with them a letter on official letterhead, signed by a designated representative of the U.S. religious organization, confirming that they are members or staff of the organization and are traveling to Cuba to engage in religious activities under the auspices of the organization.

Note to paragraph (a):

U.S. religious organizations and individual travelers must retain records related to the travel transactions authorized pursuant to this paragraph. See §§ 501.601 and 501.602 of this chapter for applicable recordkeeping and reporting requirements. Financial donations require separate authorization under § 515.570. See § 515.533 for an authorization of the exportation of items from the United States to Cuba. Exportation of items to be used in Cuba may require separate licensing by the Department of Commerce.

(b) Specific licenses

Specific licenses may be issued on a case-by-case basis authorizing the travel-related transactions set forth in § 515.560(c) and other transactions that are directly incident to religious activities not authorized by the general license contained in paragraph (a) of this section. The application for the specific license must set forth examples of religious activities to be undertaken in Cuba. Specific licenses may be issued pursuant to this section authorizing transactions for multiple trips over an extended period of time to engage in a full-time program of religious activities in Cuba.

(c) For the purposes of this section, the term designated representative of the U.S. religious organization means a person designated as the official responsible for overseeing the organization’s Cuba travel program.

Note to § 515.566:

Religious organizations engaging in activities authorized pursuant to this section are permitted to open and maintain accounts at Cuban financial institutions for the purpose of accessing funds in Cuba for transactions authorized pursuant to this section.

§ 515.567 Public performances, clinics, workshops, athletic and other competitions, and exhibitions

7. Amend § 515.567 by revising the section heading and paragraph (b) to read as follows:

(b) Public performances, clinics, workshops, other athletic or non-athletic competitions, and exhibitions. Specific licenses, including for multiple trips to Cuba over an extended period of time, may be issued on a case-by-case basis authorizing the travel-related transactions set forth in § 515.560(c) and other transactions that are directly incident to participation in a public performance, clinic, workshop, athletic competition not covered by paragraph (a) of this section, non-athletic competition, or exhibition in Cuba by participants in such activities, provided that:

(1) The event is open for attendance, and in relevant situations participation, by the Cuban public;

(2) All U.S. profits from the event after costs are donated to an independent nongovernmental organization in Cuba or a U.S.-based charity, with the objective, to the extent possible, of promoting people-to-people contacts or otherwise benefiting the Cuban people (3) Any clinics or workshops in Cuba must be organized and run, at least in part, by the licensee.

* * * * *

§ 515.570 Remittances

8. Revise § 515.570 to read as follows:

(a) Family remittances authorized.

Persons subject to the jurisdiction of the United States who are 18 years of age or older are authorized to make remittances to nationals of Cuba who are close relatives, as defined in § 515.339 of this part, of the remitter, provided that:

(1) The remittances are not made from a blocked source. Certain remittances from blocked accounts are authorized pursuant to paragraph (f) of this section;

(2) The recipient is not a prohibited official of the Government of Cuba, as defined in § 515.337 of this part, or a prohibited member of the Cuban Communist Party, as defined in § 515.338 of this part

(3) The remittances are not made for emigration-related purposes. Remittances for emigration-related purposes are addressed by paragraph (e) of this section.

(b) Periodic $500 remittances authorized.

Persons subject to the jurisdiction of the United States are authorized to make remittances to Cuban nationals, including, but not limited to, remittances to support the development of private businesses, provided that:

(1) The remitter’s total remittances pursuant to paragraph (b) of this section to any one Cuban national do not exceed $500 in any consecutive three-month period

(2) The remittances are not made from a blocked source

(3) The recipient is not a prohibited official of the Government of Cuba, as defined in § 515.337 of this part, or a prohibited member of the Cuban Communist Party, as defined in § 515.338 of this part;

(4) The remittances are not made for emigration-related purposes. Remittances for emigration-related purposes are addressed by paragraph (e) of this section

(5) The remitter, if an individual, is 18 years of age or older

(c) Remittances to religious organizations in Cuba authorized

Persons subject to the jurisdiction of the United States are authorized to make remittances to religious organizations in Cuba in support of religious activities, provided that the remittances are not made from a blocked source and that the remitter, if an individual, is 18 years of age or older.

(d) Remittances to students in Cuba pursuant to an educational license authorized.

Persons subject to the jurisdiction of the United States who are 18 years of age or older are authorized to make remittances to close relatives, as defined in § 515.339 of this part, who are students in Cuba pursuant to the general license authorizing certain educational activities in § 515.565(a) of this part or a specific license issued pursuant to § 515.565(b) of this part, provided that the remittances are not made from a blocked source and are for the purpose of funding transactions authorized by the general license in § 515.565(a) of this part or the specific license issued pursuant to § 515.565(b) of this part under which the student is traveling.

(e) Two one-time $1,000 emigration-related remittances authorized.

Persons subject to the jurisdiction of the United States are authorized to remit the following amounts:

(1) Up to $1,000 per payee on a one-time basis to Cuban nationals for the purpose of covering the payees’ preliminary expenses associated with emigrating from Cuba to the United States. These remittances may be sent before the payees have received valid visas issued by the State Department or other approved U.S. immigration documents, but may not be carried by a licensed traveler to Cuba until the payees have received valid visas issued by the State Department or other approved U.S. immigration documents. See § 515.560(c)(4) of this part for the rules regarding the carrying of authorized remittances to Cuba. These remittances may not be made from a blocked source unless authorized pursuant to paragraph (f) of this section.

(2) Up to an additional $1,000 per payee on a one-time basis to Cuban nationals for the purpose of enabling the payees to emigrate from Cuba to the United States, including for the purchase of airline tickets and payment of exit or third-country visa fees or other travel-related fees. These remittances may be sent only once the payees have received valid visas issued by the State Department or other approved U.S. immigration documents. A remitter must be able to provide the visa recipients’ full names, dates of birth, visa numbers, and visa dates of issuance. See § 515.560(c)(4) of this part for the rules regarding the carrying of authorized remittances to Cuba. These remittances may not be made from a blocked source unless authorized pursuant to paragraph (f) of this section.

(f) Certain remittances from blocked sources authorized.

Provided the recipient is not a prohibited official of the Government of Cuba, as defined in § 515.337 of this part, or a prohibited member of the Cuban Communist Party, as defined in § 515.338 of this part, certain remittances from blocked sources are authorized as follows:

(1) Funds deposited in a blocked account in a banking institution in the United States held in the name of, or in which the beneficial interest is held by, a national of Cuba as a result of a valid testamentary disposition, intestate succession, or payment from a life insurance policy or annuity contract triggered by the death of the policy or contract holder may be remitted:

(i) To that national of Cuba, provided that s/he is a close relative, as defined in § 515.339 of this part, of the decedent

(ii) To that national of Cuba as emigration-related remittances in the amounts and consistent with the criteria set forth in paragraph (e) of this section.

(2) Up to $300 in any consecutive three-month period may be remitted from any blocked account in a banking institution in the United States to a Cuban national in a third country who is an individual in whose name, or for whose beneficial interest, the account is held.

(g) Specific licenses.

Specific licenses may be issued on a case-by-case basis authorizing the following:

(1) Remittances by persons subject to U.S. jurisdiction to independent non-governmental entities in Cuba, including but not limited to pro-democracy groups and civil society groups, and to members of such groups or organizations, or to individuals or independent non-governmental entities to support the development of private businesses, including small farms;

(2) Remittances from a blocked account to a Cuban national in excess of the amount specified in paragraph (f)(2) of this section

(3) Remittances by persons subject to U.S. jurisdiction to a person in Cuba, directly or indirectly, for transactions to facilitate non-immigrant travel by an individual in Cuba to the United States under circumstances where humanitarian need is demonstrated, including but not limited to illness or other medical emergency.

Note to §515.570:

For the rules relating to the carrying of remittances to Cuba, see § 515.560(c)(4) of this part. Persons subject to U.S. jurisdiction are prohibited from engaging in the collection or forwarding of remittances to Cuba unless authorized pursuant to § 515.572. For a list of authorized U.S. remittance service providers other than depository institutions, see the “List of Authorized Providers of Air, Travel and Remittance Forwarding Services to Cuba” available from OFAC’s Web site.

§ 515.571 Certain transactions incident to travel to, from, and within the United States by Cuban nationals

9. Amend § 515.571 by revising paragraph (a)(5)(i) and the note to § 515.571 to read as follows:

(a) * * *
(5) * * *

(i) This paragraph (a)(5) does not authorize receipt of compensation in excess of amounts covering living expenses and the acquisition of goods for personal consumption. See § 515.565(a)(5) of this part for an authorization of payments to certain Cuban scholars of stipends or salaries that exceed this limit.

Note to § 515.571:

For the authorization of certain transactions by Cuban nationals who become U.S. citizens, apply for or receive U.S. permanent resident alien status, or are lawfully present in the United States in a non-visitor status, see § 515.505 of this part.

§ 515.577 Authorized transactions necessary and ordinarily incident to publishing

10. Amend § 515.577 by revising the paragraph (a) introductory text to read as follows:

(a) To the extent that such activities are not exempt from this part, and subject to the restrictions set forth in paragraphs (b) through (d) of this section, persons subject to the jurisdiction of the United States are authorized to engage in all transactions necessary and ordinarily incident to the publishing and marketing of manuscripts, books, journals, and newspapers in paper or electronic format (collectively, “written publications”). This section does not apply if the parties to the transactions described in this paragraph include the Government of Cuba. For the purposes of this section, the term “Government of Cuba” includes the state and the Government of Cuba, as well as any political subdivision, agency, or instrumentality thereof, including the Central Bank of Cuba; prohibited officials of the Government of Cuba, as defined in § 515.337 of this part; prohibited members of the Cuban Communist Party, as defined in § 515.338 of this part; employees of the Ministry of Justice; and any person acting or purporting to act directly or indirectly on behalf of any of the foregoing with respect to the transactions described in this paragraph.

For the purposes of this section, the term “Government of Cuba” does not include any academic and research institutions and their personnel. Pursuant to this section, the following activities are authorized, provided that persons subject to the jurisdiction of the United States ensure that they are not engaging, without separate authorization, in the activities identified in paragraphs (b) through (d) of this section.

January 25, 2011

Adam J. Szubin,
Director, Office of Foreign Assets Control
BILLING CODE 4810-AL [FR Doc. 2011-1969 Filed 01/27/2011 at 8:45 am
Publication Date: 01/28/2011

www.particularcuba.com – Travel to Cuba

U.S. Colleges look toward Cuba


Capital News Connection:

WASHINGTON – Most Americans are barred from traveling to Cuba, but the nation’s college students may soon be packing their bags to visit the island.

President Barack Obama’s recent decision to ease travel restrictions for academics and church groups prompted many of the nation’s colleges to plan new programs for study in Cuba.

Janis Perkins, assistant dean of the University of Iowa’s international studies program, said her school has been waiting for Obama to ease travel rules since the president was sworn into office. “We’re ready to go to Cuba as soon as we can,” Perkins said.

The University of Iowa hopes to sponsor a culture and language program in Havana during the school’s next winter break. There are also discussions about holding an Afro-Cuban drum and dance workshop in Cuba and perhaps a global health program.

“Over time students have asked to go and I’ve had to say ‘no, we can’t do it.’ Now we’re poised and ready,” Perkins said.

The University of Iowa sponsored trips to Cuba under former President Clinton’s “people-to-people” policy that encouraged “purposeful” contacts between Cubans and Americans while keeping a ban on tourism travel. But former President Bush tightened travel rules to Cuba in 2004, and most academic trips to the island stopped.

Indiana’s Butler University sent hundreds of American students to the University of Havana to study advanced Spanish before it was forced to end its program in 2004.

The school is now hoping to start up its Cuba program again.

“It falls within our mission, which is to provide meaningful academic and cultural opportunities abroad,” said Joanna Holvey-Bowles, executive vice president of the university’s study abroad program.

Trevor Nelson, director of the study abroad program at Iowa State University, said Americans should travel to Cuba to learn more about the island.

“There’s a lot of misinformation about the country and it’s just 90 miles away from us,” Nelson said. “We need to know a great deal more about our neighbor.”

Obama seems to agree. On Jan. 14 the White House announced that accredited universities could sponsor trips to Cuba without asking the government’s permission. So could religious organizations.

Other proposed changes include:

-Universities will be able to sponsor workshops and conferences in Cuba

-Non-academic groups will be able to sponsor Cuban conferences, but will have to apply to the Treasury Department for a license to do so.

-Americans will be able to send up to $2,000 a year to Cubans who aren’t government officials

-Airports will be able to apply to host direct charter flights to Cuba. Currently, only airports in New York, Miami and Los Angeles are authorized to do so.

Regulations detailing the White House’s changes to the embargo are expected to be announced in the Federal Register in the next few weeks.

“We see these changes, in combination with the continuation of the embargo, as a way to enhance civil society in Cuba,” said an administration official, who spoke on condition of anonymity.

He said increased contact between Cubans and Americans would make the Cuban people less dependent on their government.

But Rep. Ileana Ros-Lehtinen, R-Fla., a Cuban American lawmaker who supports the embargo, said Obama’s changes “will not help foster a pro-democracy environment in Cuba.”

“These changes will not aid in ushering in respect for human rights. And they certainly will not help the Cuban people free themselves from the tyranny that engulfs them,” she said.

Before Obama announced his changes, only certain groups of Americans could freely travel to Cuba. Those include journalists, government officials and farmers seeking sales of food or agricultural products to Cuba. Food sales to Cuba are allowed under a 2000 law.

www.cubaluxuryrent.com

USCCB backs Obama on easing travel to Cuba


Catholic Culture:

The US Conference of Catholic Bishops has praised President Barack Obama for his executive order easing restrictions on travel to Cuba.

Bishop Howard Hubbard of Albany, New York, the chairman of the US bishops’ committee on justice and peace, said that the executive order took “modest but important steps” in allowing for greater travel and direct assistance to the people of Cuba. He predicted that “greater people-to-people assistance to Cubans will be another step toward supporting the people of Cuba in achieving greater freedom, human rights, and religious liberty.”

The US bishops, along with the Vatican, have frequently called for an end to the 50-year-old embargo on Cuba, arguing that restrictions on trade and travel have harmed the country’s people rather than the Castro regime.

www.cubaluxuryrent.com

Easing of Cuba travel restrictions opens door to more U.S. visits


USA Today: President Obama recently announced plans to let student, church and cultural groups legally visit Cuba. And while falling short of now-stalled legislation that would have lifted a nearly five decade-old travel ban, it could pave the way for more U.S. tourism to the communist country.

Obama eased restrictions on U.S. travel, visas and remittance of money from Americans to Cubans last Friday, and the orders are expected to take effect within two weeks. The actions still preclude trips by ordinary tourists who now slip in illegally via Canada, Mexico and other Caribbean countries. An estimated 400,000 U.S. citizens (including legal Cuban Americans) traveled to the island last year. That’s five times more than in 2008, the year before the Obama administration lifted travel restrictions for those with family on the island, and a number not seen since before the Cuban revolution, reports NPR.

But the new measures “more or less return things to where they were under the Clinton administration, with the addition of exciting new openings,” says Cuba travel expert Christopher P. Baker, author of the guidebook Moon Cuba.

“Academics and students have been unshackled to travel to Cuba more freely. But the changes also potentially open the door for every U.S. citizen to legally travel to Cuba as a participant in cultural programs, (and) the licensing process should be much more friendly,” says Baker.

“I anticipate a surge in applications by a broad range of travel companies and cultural organizations for licenses to operate cultural tours that involve interactions with Cubans,” he adds. “In the Clinton era, this included everything from bicycling to ornithology groups and… well, you name it. In fact, my first visit to Havana, in 1993, was as a participant in a tour to the Havana International Jazz Festival licensed under the ‘people-to-people provision.'”

At a U.S.-Cuba Travel Summit in Cancun last spring, executives of such companies as Tauck, Isram, and Travel Impressions “all expressed interest in operating cultural tours,” Baker says.

While a White House statement pointed out that it is maintaining the economic embargo against Cuba instituted in 1962, it said the new measures “will increase people-to-people contact; support civil society in Cuba; enhance the free flow of information to, from, and among the Cuban people; and help promote their independence from Cuban authorities.”

Among the changes: More U.S. airports will be allowed to offer charter flights to serve delegations that travel to Cuba under the expanded rules.

“For the U.S. travel sector, this will undoubtedly open new routes and new revenues for charters and other businesses that provide services for Americans visiting the Cuban market,” says Sarah Stephens, executive director of the Center for Democracy in the Americas. “At a time when Cubans are changing their system in fundamental ways, it is a good idea to have greater engagement, more Americans traveling to Cuba, and more opportunities to learn from each other as everyday Cubans reshape their lives and their country.”

But the new policies are being criticized by some Cuban-Americans, including new U.S. Sen. Marco Rubio, R-Fla.

“It is unthinkable that the administration would enable the enrichment of a Cuban regime that routinely violates the basic human rights and dignity of its people,” says Rubio, born in Miami to Cuban-American parents who had fled Fidel Castro’s regime.

www.particularcuba.com