US lowers de minimis threshold for Cuba and restricts
leasing of aircraft to the country

The US sanctions space is very active and changes are made frequently. This publication is current as of October 21, 2019.

The United States Department of Commerce, Bureau of Industry and Security (BIS) published a final rule on October 21, 2019 that, in response to Cuba's continued support for the Maduro regime in Venezuela, lowers the de minimis threshold for exports of foreign items containing US-origin content to Cuba and imposes restrictions on the leasing of aircraft to the country. In particular, the new rule:

• de minimis threshold: Lowers the de minimis threshold for exports of foreign-origin products or software containing US-origin content to Cuba from 25 percent to 10 percent. Thus, any products or software containing more than 10 percent US-origin content are now prohibited for export to Cuba (as they were prior to the threshold being raised from 10 percent to 25 percent in 2015). License applications for export or re-export of such items will be subject to a general policy of denial;
• Aircraft leases: Establishes a general policy of denial for applications to lease aircraft (including foreign aircraft containing more than 10 percent US-origin content) to Cuban state-owned airlines. BIS will also revoke currently issued licenses for such leases within seven days; and
• Temporary sojourn: Amends license exception AVS (aircraft, vessels and spacecraft) to clarify that aircraft and vessels are not eligible for the temporary sojourn exception if they are leased to or chartered by a national of Cuba or a state sponsor of terrorism. License applications for exports of such vessels or aircraft will be subject to a general policy of denial.

The new rule also revises license exception SCP (support for the Cuban people) to: (i) prohibit the use of SCP to export donated items to the Cuban government or communist party (or entities that they own or control) for use in scientific, archaeological, cultural, ecological, educational, historic preservation, or sporting activities; (ii) clarify that, with regards to telecommunications items, SCP is limited to items for the creation and upgrade of telecommunications infrastructure to improve the free flow of information to, from, and among the Cuban people. For infrastructure items that would be used to connect specific end-users (i.e., non-backbone items), those items may only be used to connect individual Cubans or the Cuban private sector, and not any Cuban state-owned entities; and (iii) eliminate the authorization for the export of free promotional items to Cuban state-owned entities.

Foreign entities exporting products or software containing US-origin content, or leasing aircraft, to Cuba should review the impact of these changes carefully and modify their compliance programs accordingly. We will continue to monitor changes to the Cuban export restrictions and publish additional updates, as appropriate.

The US sanctions space is very active and changes are made frequently. This publication is current as of October 21, 2019.