OFAC Restrictions on US Based Telecommunication Businesses Seeking to do Business in Cuba

An overview of OFAC's Cuban Assets Control Regulations as it relates to US based companies seeking to engage in telecommunications services in Cuba.

Title 31 Part 515 of the US Code of Federal Regulations - Updated September 3, 2009

Certain telecommunications services, contracts, related payments, and travel-related transactions are authorized by general licenses, pursuant to sections 515.533, 515.542, and 515.564 of the Regulations.

Persons subject to U.S. jurisdiction may contract with and pay non-Cuban telecommunications services providers to provide services to particular individuals in Cuba other than prohibited officials of the Government of Cuba or prohibited members of the Cuban Communist Party (as defined in sections 515.337 and 515.338 of the Regulations).

For example, an individual in the United States may contract with and pay a U.S. or third-country telecommunications company to provide cellular telephone service for a phone owned and used by that individual’s friend in Cuba. Moreover, a U.S. telecommunications services provider may enter into a contract with a particular individual in Cuba to provide telecommunications services to that individual.

Telecommunications services providers that are persons subject to U.S. jurisdiction are authorized by general license

1. To make payments incident to the provision of telecommunications services between the United States and Cuba and the provision of satellite radio or satellite television services to Cuba.

2. To enter into and perform under (including making payments) roaming services agreements with telecommunications services providers in Cuba.

Any entity subject to U.S. jurisdiction relying on these general licenses must notify OFAC in writing within 30 days after commencing or ceasing to offer such services, as well as furnish semiannual reports providing the total amount of all payments made to Cuba or a third country related to telecommunications services authorized pursuant to section 515.542.

These reports must include funds paid to third-country carriers for telecommunications transmissions routed from the United States through third countries under transit, refile, or other alternate routing agreements. These reports are due no later than January 15 of each calendar year (for payments made between July 1 and December 31 of the prior year) and July 15 of each calendar year (for payments made between January 1 and June 30).

Transactions incident to establishing facilities to provide telecommunications services linking the United States and Cuba, including fiber-optic cable and satellite facilities, are authorized by general license. The Bureau of Industry and Security of the Department of Commerce must authorize the exportation and re-exportation of goods and technology for the establishment of telecommunications facilities linking the United States and Cuba must be separately authorized by the Bureau of Industry and Security of the Department of Commerce and OFAC (but see section VII.A. above for a discussion of OFAC's general authorization for exports from the United States and 100 percent U.S. origin exports from third countries to Cuba that have been authorized by Commerce).

Federal Register - Vol. 75, No. 46 - Wednesday, March 10, 2010 - Rules and Regulations - page 10999

§ 515.578 Exportation of certain services incident to Internet-based communications

(a) Except as provided in paragraph (b) of this section, the exportation from the United States or by persons subject to U.S. jurisdiction to persons in Cuba of services incident to the exchange of personal communications over the Internet, such as instant messaging, chat and email, social networking, sharing of photos and movies, web browsing, and blogging, is authorized, provided that such services are publicly available at no cost to the user.

(b) This section does not authorize:

(1) The direct or indirect exportation of services with knowledge or reason to know that such services are intended for 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.

(2) The direct or indirect exportation of Internet connectivity services or telecommunications transmission facilities (such as satellite links or dedicated lines).

Note to § 515.578(b)(2): For general licenses related to the provision of telecommunications services between the United States and Cuba and contracts for telecommunications services provided to particular individuals in Cuba, see § 515.542(b) and § 515.542(c), respectively, of this part. For a general license and a statement of specific licensing policy related to the establishment of telecommunications facilities linking the United States or third countries and Cuba, see § 515.542(d) of this part.

(3) The direct or indirect exportation of web-hosting services that are for purposes other than personal communications (e.g., web-hosting services for commercial endeavors) or of domain name registration services.

(4) The direct or indirect exportation of any items to Cuba.

Note to § 515.578(b)(4): For the rules related to transactions ordinarily incident to the exportation or reexportation of items, including software, to Cuba, see §§ 515.533 and 515.559 of this part.

(c) Specific licenses may be issued on a case-by-case basis for the exportation of other services incident to the sharing of information over the Internet.

This web page is only an overview and should not be relied upon for complete details of relevant restrictions and authorizations. Anyone considering transactions that may be restricted by the sanctions against Cuba should consult 31 CFR Part 515 and seek competent legal advice.

OFFICE OF FOREIGN ASSETS CONTROL
U.S. Department of the Treasury
Washington, D.C. 800/540-6322
Miami, Florida 786/845-2829
www.treas.gov/ofac

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