As many have noted, President Obama’s opening to Cuba has not lifted most prohibitions on doing business with Cuba.  But the Commerce Department has added a new License Exception SCP, “Support for the Cuban People”, to its Export Administration Regulations (the “EAR”) that authorizes US persons to export and reexport certain items to Cuba without the Department-issued licenses heretofore required for such transactions.

Prominent among these items are materials and equipment whose use in private activities could improve living conditions in Cuba.  These include:

• building materials for use by Cuba’s private sector in construction or renovation of privately-owned buildings, including residences, businesses, churches, gymnasia and the like; and

• related tools, equipment and supplies for use in private-sector building and agricultural activities, as well as efforts by small entrepreneurs such as auto mechanics, barbers/hairstylists and restaurateurs.

A potential headache for exports is the level of due diligence required to determine whether end-users in Cuba are indeed “private sector”.  The Commerce Department did state, however, that:  “Cuban government import agencies and other government owned, operated or controlled companies and corporations may act as consignees to receive and effect delivery of eligible items to the private sector.”

Eligible items must also be EAR99 or controlled solely for anti-terrorism reasons.