OFAC's Cuba Cash in Advance Regulation Published in Today's Federal Register
The Office of Foreign Assets Control's (OFAC) controversial new regulation clarifying that the term "payment of cash in advance" as it applies to sales of agricultural products, medicine and medical supplies to Cuba was published in today's edition of the Federal Register. The regulation amends paragraph (a)(2) of 31 CFR § 515.533 (the Cuban Assets Control Regulation s) by stating that the term "payment of cash in advance" means that "payment is received by the seller or the seller's agent prior to shipment of the goods from the port at which they are loaded." In order to provide a transition period, the regulation provides a general license authorizing the processing of payments received for certain exports to Cuba that are shipped prior to receipt of payment before March 24, 2005.
The following is the amended text of 31 CFR § 515.533:
Transactions incident to exportations from the United States to Cuba and reexportations of U.S.-origin items to Cuba; negotiation of executory contracts.
(a) * * *
(2) Only the following payment and financing terms may be used:
(i) Payment of cash in advance. For the purposes of this section, the term "payment of cash in advance" means that payment is received by the seller or the seller's agent prior to shipment of the goods from the port at which they are loaded;
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(d) In addition to those transactions authorized pursuant to paragraph (a) of this section, all transactions ordinarily incident to the processing of payments received for items exported from the United States to any person within Cuba are authorized, provided that:
(1) The exportation is licensed or otherwise authorized by the Department of Commerce under the provisions of the Export Administration Act of 1979, as amended (50 U.S.C. App. 2401–2420) (see the Export Administration Regulations, 15 CFR 730–774);
(2) The items are shipped from the port at which they are loaded on or before March 24, 2005; and
(3) Payment is received by a U.S. banking institution on or before March 24, 2005, and prior to the transfer of title to, and control of, the exported items to the Cuban purchaser.
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The text of the Federal Register notice can be viewed at the following link: