Cuba: OFAC-Approved Commercial Payment Terms Are Largely Unchanged
While celebrating recent relaxations of Export Administration Regulations on certain exports and reexports to Cuba, US persons must remain mindful that commercial payment restrictions administered by the Treasury Department’s Office of Foreign Assets Control (“OFAC”) remain in force. As a general rule, this means that, when invoking the Commerce Department’s authorizations for certain commercial activities under the EAR’s new License Exception SCP, payments must be either:
- “cash in advance”, albeit now relaxed to mean “cash before transfer of title or control” instead of “cash before shipment”; or
- financing through a third-country (i.e., non-Cuban) banking institution that is not a designated national or organized under US law (including foreign branches of such US banks).