81 FR 4580 - Cuba Licensing Policy Revisions

DEPARTMENT OF COMMERCE
Bureau of Industry and Security

Federal Register Volume 81, Issue 17 (January 27, 2016)

This rule amends the exceptions to the general policy of denial in the Export Administration Regulations (EAR) for exports and reexports to Cuba by identifying additional types of exports and reexports that are subject to a general policy of approval: items for safety of civil aviation and safe operation of commercial aircraft engaged in international air transportation, certain telecommunications and agricultural items, items to human rights organizations or individuals and non-governmental organizations that promote independent activity intended to strengthen civil society in Cuba, and items for use by U.S. news bureaus. This rule also amends the exceptions to the general policy of denial in the EAR for exports and reexports to Cuba by identifying types of exports and reexports that will be reviewed to determine, on a case-by-case basis, whether such transactions meet the needs of the Cuban people, including exports and reexports for this purpose made to state-owned enterprises and agencies and organizations of the Cuban government that provide goods and services to the Cuban people. BIS is making these changes to further implement the Administration's policy of empowering and engaging the Cuban people. This rule retains the prohibition on the export or reexport of items subject to the EAR to Cuba without a license or applicable license exception.

[Federal Register Volume 81, Number 17 (Wednesday, January 27, 2016)]
[Rules and Regulations]
[Pages 4580-4583]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-01557]


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DEPARTMENT OF COMMERCE

Bureau of Industry and Security

15 CFR Part 746

[Docket No. 151208999-5999-01]
RIN 0694-AG79


Cuba Licensing Policy Revisions

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Final rule.

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SUMMARY: This rule amends the exceptions to the general policy of 
denial in the Export Administration Regulations (EAR) for exports and 
reexports to Cuba by identifying additional types of exports and 
reexports that are subject to a general policy of approval: items for 
safety of civil aviation and safe operation of commercial aircraft 
engaged in international air transportation, certain telecommunications 
and agricultural items, items to human rights organizations or 
individuals and non-governmental organizations that promote independent 
activity intended to strengthen civil society in Cuba, and items for 
use by U.S. news bureaus. This rule also amends the exceptions to the 
general policy of denial in the EAR for exports and reexports to Cuba 
by identifying types of exports and reexports that will be reviewed to 
determine, on a case-by-case basis, whether such transactions meet the 
needs of the Cuban people, including exports and reexports for this 
purpose made to state-owned enterprises and agencies and organizations 
of the Cuban government that provide goods and services to the Cuban 
people. BIS is making these changes to further implement the 
Administration's policy

[[Page 4581]]

of empowering and engaging the Cuban people. This rule retains the 
prohibition on the export or reexport of items subject to the EAR to 
Cuba without a license or applicable license exception.

DATES: This rule is effective January 27, 2016.

FOR FURTHER INFORMATION CONTACT: Foreign Policy Division, Office of 
Nonproliferation and Treaty Compliance, Bureau of Industry and 
Security, Phone: (202) 482-4252.

SUPPLEMENTARY INFORMATION: 

Background

    On December 17, 2014, the President announced a historic new 
approach in U.S. policy toward Cuba. This approach recognized that 
increased commerce benefits the American and Cuban people, and sought 
to make the lives of ordinary Cubans easier and more prosperous. On 
January 16, 2015, the Bureau of Industry and Security (BIS) amended the 
Export Administration Regulations (EAR) to create License Exception 
Support for the Cuban People (SCP), which authorizes the export and 
reexport, without a license, of certain items to, among other 
objectives, improve the living conditions of the Cuban people (see 80 
FR 2286). That rule also established a licensing policy of case-by-case 
review of license applications for the export and reexport to Cuba of 
telecommunications items to contribute to the ability of the Cuban 
people to communicate with one another and with people in the United 
States and the rest of the world.
    On July 22, 2015, BIS published a rule implementing the May 29, 
2015, rescission of Cuba's designation as a state sponsor of terrorism 
(see 80 FR 43314). That rule expanded certain license exception 
availability for exports and reexports to Cuba, including making 
general aviation aircraft eligible for temporary sojourns to Cuba.
    On September 21, 2015, BIS published a rule to enhance support for 
the Cuban people (see 80 FR 56898). This rule expanded the scope of 
transactions that are eligible for License Exception SCP and made 
certain vessels on temporary sojourn to Cuba eligible for a license 
exception.
    To further engage and empower the Cuban people, this rule amends 
the licensing policy in Sec.  746.2 of the EAR to add a general policy 
of approval for certain exports and reexports previously subject to 
case-by case review and a policy of case-by-case review for exports and 
reexports of items not eligible for License Exception SCP to meet the 
needs of the Cuban people, including exports and reexports for this 
purpose made to state-owned enterprises and agencies and organizations 
of the Cuban government that provide goods and services to the Cuban 
people. BIS is taking this action in coordination with the Department 
of the Treasury, Office of Foreign Assets Control, which is amending 
the Cuban Assets Control Regulations (31 CFR part 515). The specific 
terms and limitations of this policy are more fully discussed below.

Specific Changes Made by This Rule

    This rule revises the licensing policy from possible approval on a 
case-by-case basis to a general policy of approval for exports and 
reexports of:
     Telecommunications items that would improve communications 
to, from, and among the Cuban people;
     Certain commodities and software to human rights 
organizations or to individuals and non-governmental organizations that 
promote independent activity intended to strengthen civil society in 
Cuba;
     Commodities and software to U.S. news bureaus in Cuba 
whose primary purpose is the gathering and dissemination of news to the 
general public; and
     Agricultural items that are outside the scope of 
``agricultural commodities'' as defined in part 772 of the EAR (such as 
insecticides, pesticides and herbicides) as well as agricultural 
commodities not eligible for License Exception Agricultural commodities 
(AGR) (such as those that are specified in an entry on the Commerce 
Control List, i.e., are not designated EAR99).
     Items that are necessary to ensure the safety of civil 
aviation and the safe operation of commercial aircraft engaged in 
international air transportation, including the export or reexport of 
such aircraft leased to state-owned enterprises. Given a substantial 
increase in air travel to and from Cuba, BIS is making the change to 
emphasize the importance of civil aviation safety and to recognize that 
access to aircraft used in international air transportation that meet 
U.S. Federal Aviation Administration and European Aviation Safety 
Agency operating standards by Cuban state-owned enterprises contributes 
to that safety.
    These revisions are consistent with long-standing licensing 
practice for such exports and reexports.
    This rule also amends the exceptions to the general policy of 
denial by adopting a case-by-case review policy for exports and 
reexports of certain items to meet the needs of the Cuban people, 
including exports and reexports to state-owned enterprises, agencies, 
and other organizations of the Cuban government that provide goods and 
services for the use and benefit of the Cuban people. This case-by-case 
review policy includes exports and reexports of items for agricultural 
production, artistic endeavors (including the creation of public 
content, historic and cultural works and preservation), education, food 
processing, disaster preparedness, relief and response, public health 
and sanitation, residential construction and renovation and public 
transportation. The policy also includes exports and reexports of items 
for use in construction of: facilities for treating public water 
supplies, facilities for supplying electricity or other energy to the 
Cuban people, sports and recreation facilities, and other 
infrastructure that directly benefits the Cuban people. Additionally, 
it includes exports and reexports to wholesalers and retailers of items 
for domestic consumption by the Cuban people.
    BIS is implementing this policy to further facilitate exports and 
reexports to meet the needs of the Cuban people. This licensing policy 
is consistent with long-standing policy to support the Cuban people. 
Accordingly, BIS will continue to apply a general policy of denial for 
applications to export or reexport items for use by state-owned 
enterprises, agencies, or other organizations of the Cuban government 
that primarily generate revenue for the state, including those engaged 
in tourism and those engaged in the extraction or production of 
minerals or other raw materials. Additionally, applications to export 
or reexport items destined to the Cuban military, police, intelligence 
and security services remain subject to a general policy of denial. 
Licenses issued under this case-by-case review licensing policy 
generally will have a condition prohibiting both reexports from Cuba to 
any other destination and uses that enable or facilitate the export of 
goods or services from Cuba to third countries. BIS anticipates these 
revisions will significantly benefit the Cuban people, while not 
significantly increasing overall exports to Cuba's state-run economy.
    This rule also adds the term ``reexport'' to the existing statement 
of a policy of case-by-case review of applications for aircraft or 
vessels on temporary sojourn to Cuba. The change reflects BIS's 
practice of generally applying the same licensing policy to exports and 
reexports of a given item.
    Finally, this rule consolidates the statements of licensing policy 
for exports and reexports to Cuba. Prior to this rule, the policies 
were described in six paragraphs and like policies existed

[[Page 4582]]

in several non-adjacent paragraphs with slightly different wording. 
Under this rule, the policies will be stated in three paragraphs based 
upon licensing policy. One paragraph applies to medicine and medical 
devices, which are subject to certain statutorily mandated policies. 
This rule makes no changes to the text of that paragraph. A second 
paragraph describes transactions that are subject to a general policy 
of approval, including transactions for which the general policy of 
approval predates this rule. A third paragraph describes transactions 
that may be authorized on a case-by-case basis, including transactions 
for which the policy of case-by-case review predates this rule. 
Additionally, the rule adopts uniform terminology to describe case-by-
case review of license applications and removes some superfluous text. 
All of the changes described in this paragraph are intended to improve 
clarity and readability of the EAR, and none of them are substantive 
changes to licensing policy.

Export Administration Act

    Although the Export Administration Act expired on August 20, 2001, 
the President, through Executive Order 13222 of August 17, 2001, 3 CFR, 
2001 Comp., p. 783 (2002), as amended by Executive Order 13637 of March 
8, 2013, 78 FR 16129 (March 13, 2013), and as extended by the Notice of 
August 7, 2015, 80 FR 48233 (August 11, 2015), has continued the Export 
Administration Regulations in effect under the International Emergency 
Economic Powers Act. BIS continues to carry out the provisions of the 
Export Administration Act, as appropriate and to the extent permitted 
by law, pursuant to Executive Order 13222 as amended by Executive Order 
13637.

Rulemaking Requirements

    1. Executive Orders 13563 and 12866 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. This rule has been designated a ``significant regulatory 
action,'' although not economically significant, under section 3(f) of 
Executive Order 12866. Accordingly, the rule has been reviewed by the 
Office of Management and Budget (OMB).
    2. Notwithstanding any other provision of law, no person is 
required to respond to, nor shall any person be subject to a penalty 
for failure to comply with, a collection of information subject to the 
requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et 
seq.) (PRA), unless that collection of information displays a currently 
valid Office of Management and Budget (OMB) control number. This rule 
involves a collection of information approved under OMB control number 
0694-0088--Simplified Network Application Processing+ System (SNAP+) 
and the Multipurpose Export License Application, which carries an 
annual estimated burden of 31,833 hours. BIS believes that this rule 
will have no material impact on that burden. To the extent that it has 
any impact, BIS believes that the benefits of this rule justify any 
additional burden it creates. This rule does not impose any new license 
requirements, it creates less restrictive licensing policies (i.e., the 
policies under which the decision to approve or deny a license 
application is made) for exports and reexports to Cuba. These less 
restrictive policies might increase the number of license applications 
submitted to BIS because applicants might be more optimistic about 
obtaining approval. However, the benefit to license applicants in the 
form of greater likelihood of approval justifies any additional burden. 
Send comments regarding this burden estimate or any other aspect of 
this collection of information, including suggestions for reducing the 
burden, to Jasmeet K. Seehra, Office of Management and Budget, by email 
at [email protected] or by fax to (202) 395-7285 and to William Arvin 
at [email protected].
    3. This rule does not contain policies with Federalism implications 
as that term is defined under Executive Order 13132.
    4. The provisions of the Administrative Procedure Act (5 U.S.C. 
553) requiring notice of proposed rulemaking and the opportunity for 
public participation, and a delay in effective date, are inapplicable 
because this regulation involves a military or foreign affairs function 
of the United States (see 5 U.S.C. 553(a)(1)). This rule is a part of a 
foreign policy initiative to change the nature of the relationship 
between Cuba and the United States announced by the President on 
December 17, 2014. Delay in implementing this rule to obtain public 
comment would undermine the foreign policy objectives that the rule is 
intended to implement. Further, no other law requires that a notice of 
proposed rulemaking and an opportunity for public comment be given for 
this rule. Because a notice of proposed rulemaking and an opportunity 
for public comment are not required to be given for this rule under 5 
U.S.C. 553, or by any other law, the requirements of the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.) are not applicable.

List of Subjects in 15 CFR Part 746

    Exports, Reporting and recordkeeping requirements.

    For the reasons set forth in the preamble, 15 CFR Chapter VII, 
Subchapter C is amended as follows:

PART 746--[AMENDED]

0
1. The authority citation for 15 CFR part 746 continues to read as 
follows:

    Authority:  50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 
22 U.S.C. 287c; Sec 1503, Pub. L. 108-11, 117 Stat. 559; 22 U.S.C. 
6004; 22 U.S.C. 7201 et seq.; 22 U.S.C. 7210; E.O. 12854, 58 FR 
36587, 3 CFR, 1993 Comp., p. 614; E.O. 12918, 59 FR 28205, 3 CFR, 
1994 Comp., p. 899; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 
783; E.O. 13338, 69 FR 26751, 3 CFR, 2004 Comp., p 168; Presidential 
Determination 2003-23 of May 7, 2003, 68 FR 26459, May 16, 2003; 
Presidential Determination 2007-7 of December 7, 2006, 72 FR 1899 
(January 16, 2007); Notice of May 6, 2015, 80 FR 26815 (May 8, 
2015); Notice of August 7, 2015, 80 FR 48233 (August 11, 2015).


0
2. Section 746.2 is amended by revising paragraphs (b)(2) and (b)(3) 
and removing paragraphs (b)(4), (b)(5) and (b)(6) to read as follows:


Sec.  746.2  Cuba.

* * * * *
    (b) * * *
    (2) Exports and reexports that generally will be approved. 
Applications for licenses to export or reexport the following generally 
will be approved:
    (i) Telecommunications items that would improve communications to, 
from, and among the Cuban people;
    (ii) Commodities and software to human rights organizations or to 
individuals and non-governmental organizations that promote independent 
activity intended to strengthen civil society in Cuba;
    (iii) Commodities and software to U.S. news bureaus in Cuba whose 
primary purpose is the gathering and dissemination of news to the 
general public;
    (iv) Agricultural items that are outside the scope of agricultural 
commodities as defined in part 772 of the EAR, such as insecticides, 
pesticides and herbicides, and agricultural commodities not eligible 
for License Exception AGR;

[[Page 4583]]

    (v) Items necessary to ensure the safety of civil aviation and the 
safe operation of commercial aircraft engaged in international air 
transportation, including the export or reexport of such aircraft 
leased to state-owned enterprises; and
    (vi) Items necessary for the environmental protection of U.S. and 
international air quality, waters, or coastlines (including items 
related to renewable energy or energy efficiency).
    (3) Exports and reexports that may be authorized on a case-by-case 
basis. (i) Applications for licenses to export or reexport items to 
meet the needs of the Cuban people, including exports and reexports of 
such items to state-owned enterprises, agencies, and other 
organizations of the Cuban government that provide goods and services 
for the use and benefit of the Cuban people may be authorized on a 
case-by-case basis. This policy of case-by-case review includes 
applications for licenses to export or reexport items for:
    (A) Agricultural production, artistic endeavors (including the 
creation of public content, historic and cultural works and 
preservation), education, food processing, disaster preparedness, 
relief and response, public health and sanitation, residential 
construction and renovation and public transportation;
    (B) Wholesale and retail distribution for domestic consumption by 
the Cuban people; and
    (C) Construction of facilities for treating public water supplies, 
facilities for supplying electricity or other energy to the Cuban 
people, sports and recreation facilities, and other infrastructure that 
directly benefits the Cuban people.

    Note 1 to paragraph (b)(3)(i): Licenses issued pursuant to the 
policy set forth in this paragraph generally will have a condition 
prohibiting both reexports from Cuba to any other destination and 
uses that enable or facilitate the export of goods or services from 
Cuba to third countries.


    Note 2 to paragraph (b)(3)(i): The policy of case-by-case review 
in this paragraph is intended to facilitate exports and reexports to 
meet the needs of the Cuban people. Accordingly, BIS generally will 
deny applications to export or reexport items for use by state-owned 
enterprises, agencies, and other organizations that primarily 
generate revenue for the state, including those engaged in tourism 
and those engaged in the extraction or production of minerals or 
other raw materials. Applications for export or reexport of items 
destined to the Cuban military, police, intelligence or security 
services also generally will be denied.

    (ii) Applications for exports or reexports of aircraft or vessels 
on temporary sojourn to Cuba either to deliver humanitarian goods or 
services, or consistent with the foreign policy interests of the United 
States, may be authorized on a case-by-case basis.
* * * * *

     Dated: January 21, 2016.
Penny Pritzker,
Secretary of Commerce.
[FR Doc. 2016-01557 Filed 1-26-16; 8:45 am]
 BILLING CODE 3510-33-P