US sanctions
The nature of the relationship between Cuba and the US dates back to the some of the most intense periods of the cold war era. A thaw in relations under the Obama administration has led to some liberalisation of existing sanctions, but the Trump administration has adopted a more restrictive policy and in June 2017 introduced limitations on travel and transactions with entities related to the Cuban military, intelligence, or security services, including the Grupo de Administración Empresarial (GAESA). Members are well advised to consider the full picture before deciding to develop their trade in this direction.
On 31 January 2025 the US Department of State has announced the re-creation of the Cuba Restricted List, which restricts transactions with some military and government-linked Cuban entities. The original list was created in the issued by President Trump in 2017 and was rescinded by President Biden in January 2025.
On 7 February 2025 a list of 237 entities is added to the Cuba Restricted List. The entities include:
- ministries
- holding companies
- hotels
- tourist agencies
- marinas
- stores
- entities serving the defence and security sectors
The Bureau of Industry and Security (BIS) generally will deny applications to export or reexport items for use by entities on the Cuba Restricted List.
On 8 June 2022 OFAC amended the Cuban Assets Control Regulations, 31 C.F.R. Part 515 (CACR) to increase support to people in Cuba. OFAC is also published a number of updated Frequently Asked Questions.
The amended CACR:
- authorises group people-to-people educational travel to Cuba,
- removes restrictions on authorized academic educational activities,
- authorises travel to attend or organize professional meetings or conferences in Cuba,
- removes the $1,000 quarterly limit on family remittances, and
- authorizes donative remittances to Cuba.
In addition to the above, the US has had, for over 50 years, a number of restrictions in place that mainly affected the interaction between the US and Cuba including significant travel and other economic restrictions.
Most importantly, US persons are prohibited from engaging in virtually any transaction when there is a Cuban nexus. While the Cuban sanctions program does not have a secondary sanctions component, non-US persons with a US-nexus, including transactions conducted via US banking system or in US currency, should exercise caution.
180 Day Rule
Of importance to our industry is the 180 Day Rule prohibiting vessels from calling at US ports for 180 days after leaving a Cuban port. If a foreign vessel calls at Cuba with cargo from a third country which would not be subject to the US Export Administration Regulations or Commercial Control List for anti-terrorism reasons, that vessel is not prohibited from thereafter calling at a US port.
However, there are certain limitations to the rule and a vessel is exempt from the 180-day rule if, for example if it is:
- Engaging or has engaged in trade with Cuba authorized under the CACR, such as a vessel carrying goods from the United States that are licensed or otherwise authorized for export or reexport to Cuba by the US Department of Commerce pursuant to the EAR;
- Engaging or has engaged in trade with Cuba that is exempt from the prohibitions of the CACR, such as a vessel carrying exclusively informational materials;
- Engaging or has engaged in the export or reexport from a third country to Cuba of agricultural commodities, medicine, or medical devices that, were they subject to the EAR, would be designated as EAR99;
- Carrying or has carried persons between the United States and Cuba or within Cuba pursuant to the general license for the provision of carrier services under the CACR or, in the case of a vessel used solely for personal travel (and not transporting passengers), pursuant to a license or other authorization issued by the Department of Commerce for the exportation or reexportation of the vessel to Cuba; or
A foreign vessel that has entered a port or place in Cuba while carrying students, faculty, and staff that are authorized to travel to Cuba pursuant to the general license for educational activities under the CACR.
Vessels carrying Cuban goods or passengers may not enter a US port, unless also expressly authorised to do so.
EU and UK sanctions
The EU and UK do not impose sanctions on Cuba. On the contrary, the EU has implemented EU blocking statute and UK has implemented the UK Protection of Trading Interests legislation aiming to protect EU and UK persons engaging in lawful trade with Cuba from to the extraterritorial application of US law.
Cover
Members and clients must do their own due diligence and the position remains that while Skuld can give guidance, the ultimate responsibility for compliance rests with members and clients.
Our Rules contain exclusion of liability for costs, liabilities or expenses where payment by the Association or the provision of cover in respect thereof may expose the Association to the risk of being subject to a sanction, prohibition or any adverse action (Rule 30.4.6).
We also remind that we exclude the liability of the Association towards the member or assured when there is a shortfall due to an inability to recover reinsurance or pool contributions from other insurers or P&I Clubs which are themselves unable to pay due to sanctions legislation (Rule 32.6). In addition, we have a provision giving the Association the right to terminate cover where, in the opinion of the Association, the member has exposed or may expose the Association to the risk of being or becoming subject to a sanction, prohibition, restriction or other adverse action by a state or international organisation or competent authority (Rule 3.3.2 e). The same provisions are also included in the Terms & Conditions governing Skuld's fixed premium covers.
We also continue to experience difficulties in executing payments to Cuba due to ongoing banking restrictions and compliance challenges. These issues may affect the availability and reliability of payment channels and provision of security. We advise members and clients to anticipate potential challenges and to consult with their financial institutions for guidance on transaction feasibility.