Educational Opportunities in Cuba

Educational Opportunities in CubaCompliance, Legalities +Preparations for Travel

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December 3, 20152:00 – 3:30 PM ET

Panelist

The opinions expressed during today’s event are not necessarily those of PaperClip Communications

Luis Manuel AlcaldeGlobal Business AttorneyKegler Brown Hill + [email protected]

Vinita Bahri-Mehra

Panelist

The opinions expressed during today’s event are not necessarily those of PaperClip Communications

Global Business AttorneyKegler Brown Hill + [email protected]

Let’s Define the PROBLEM

Cuba is subject to a U.S. Embargo

So how can U.S. academic institutions, faculty, staff + students legally and safely take advantage of available

educational opportunities involving Cuba?

Progress in U.S.-Cuba RelationsExchanged prisoners

Relaxed/expanded U.S. authorized travel categories

to Cuba

Expanded list of U.S. authorized exports to Cuba

and Cuban nationals

Expanded list of Cuban origin exports to U.S.

Removed Cuba from the U.S. list of state sponsors

of terrorism

Corresponding banking relationship established

Diplomatic relations established + embassies

opened

Despite all the Progress…U.S.-Cuba relations are not normal U.S. maintains embargo on Cuba

U.S. companies cannot invest in Cuba or sell goods to Cuba except for agricultural products, some

communications equipment or direct business to small private sector (which Cuba has not yet allowed)

U.S. persons cannot freely travel to Cuba outside of designated licensed categories

As some progress is made the complexities of the embargo become more evident

What is the Cuban Embargo?

U.S. policy to isolate Cuba which commenced in the early 1960s

Comprehensive economic sanctions that include an embargo on travel, trade and financial transactions

Legal underpinning of the embargo is executive orders + series of laws and regulations

Legislative/Regulatory Basis of Cuban Embargo

Legislative/Regulatory Basis of Cuban Embargo

Trading with the Enemy Act (1917)Allows President to restrict trade

with countries hostile to U.S. in time of war

Foreign Assistance Act of 1961 Allows President to deny assistance to

Cuba and impose trade embargo.

U.S. Treasury Cuban Import Regulations and subsequent Cuban Asset Control

Regulations (“CACR”) prohibit imports from and exports to Cuba and restrict travel to

and financial transactions with Cuba

Department of Commerce Regulations

prohibit or restrict exports to Cuba

Cuban Democracy Act of 1992 Prohibits U.S. subsidiaries from trading with Cuba and entry of vessels that have been to

Cuba for trade to come to U.S. for 6 mos.

Cuban Liberty and Democratic Solidarity Act of 1996 (Helms-Burton) – codified

embargo and CACR Regs., but President retains broad power to modify CACR. Prohibits President from eliminating

embargo until specified conditions are met.

Principal Agencies Enforcing Embargo

U.S. Department of the Treasury, Office of Foreign Assets Controls (“OFAC”)

issues and enforces the Cuban Assets Control Regulations (“CACR”) –

authorized travel, activities and financial transactions

U.S. Department of Commerce, Bureau of

Industry and Security (“BIS”) authorized exports to Cuba

CACR + Licenses

What is a License?

CACR + Licenses

What is a License?

The term license shall mean any license or

authorization contained in or issued pursuant to this part –

31 CFR 515.316

A general license is any license or

authorization the terms of which are set forth in this part – 31

CFR 515.317

General licenses are described in the

regulations. This means that the travel, activity and/or transaction is

authorized as described without any need to seek

further permission

A specific license is any license or

authorization issued pursuant to this part

but not set forth in this part 31 CFR 515.318

Travel/activities/transactions not generally licensed

require application and issuance of a specific

license granting permission and describing what is

authorized

General License for Accredited Degree Granting

Academic Institutions

accredited U.S. graduate and

undergraduate degree-granting

academic institutions

including faculty, staff + students

of such institutions

available to:

1Participating in a structured educational program in Cuba that is part of a course offered for credit by the U.S. institution;

2Engaging in non-commercial academic research in Cuba specifically related to Cuba for purpose of obtaining undergraduate or graduate degree from a U.S. institution (Note: Prior to January 2015, only applied to graduate students)

Educational Activities Subject to General License


3Participation in formal course of study at a Cuban academic institution provided U.S. institution will accept formal course of study for credit towards student’s graduate or undergraduate degree

4Teaching at Cuban academic institution for any length of time, academic program related to Cuban institution provided teacher is regularly employed by a U.S. or non-Cuban academic institution (Note: Prior to January 2015, teaching engagement had to be at least 10 weeks)


5Sponsoring (including paying stipend/salary) to Cuban scholar to teach or engage in other scholarly activity at U.S. academic institution Such earnings may be remitted to Cuba as provided in §515.570 or carried on the person of Cuban scholar returning to Cuba as provided in §515.560(d)(3)

6Cuban or U.S. sponsored secondary school academic exchanges for secondary school students participating in structured study or program led by teacher or other official + adult chaperones


7Sponsorships of non-commercial academic seminars, conference + attendance at such events by faculty, staff, and students of a participating U.S. academic institution and workshops in Cuba related to Cuba or global issues involving Cuba

8Establishment of academic exchanges and joint non-commercial academic research projects with universities or academic institutions in Cuba


9Providing standardized testing services, including professional certificate examinations, university entrance examinations, and language examinations, and related preparatory services for such exams to Cuban nationals, wherever located

10Providing internet based courses, including distance learning and Massive Open Online Courses (“MOOC”), to Cuban Nationals, wherever located, provided course content is at undergraduate level or below

11Organization of, and preparation for, activities described in paragraphs (a)(1) through (10) of this section by employees or contractors of the sponsoring organization that is a person subject to U.S. jurisdiction

12Facilitation by an organization that is a person subject to U.S. jurisdiction, or a member of the staff of such an organization, of licensed educational activities in Cuba on behalf of U.S. academic institutions or secondary schools, provided that:

Organization is directly affiliated with one or more U.S. academic institutions or secondary schools

Organization facilitates educational activities that meet requirements of 1 or more of the general licenses set forth in

§515.565(a)(1), (2), (3), and (6).

1Hosting a public performance, clinic, workshop, or athletic competition; provided the event is open for attendance and in relevant situations participation by the Cuban public; and provided further that all profits after costs are donated to an independent non-governmental organization in Cuba or a U.S. based charity. The goal of such events should be to promote people to people contacts or benefit the Cuban people, to the extent possible. Any clinics or workshop in Cuba must be organized and run at least in part by authorized travelers.

Other Related Activities Subject to General License

General License Professional Research

Purpose of the research directly relates to the traveler's profession, professional background, or area of expertise, including area of graduate-level full-time study

Traveler does not engage in recreational travel, tourist travel, travel in pursuit of a hobby, or research for personal satisfaction only

Traveler's schedule of activities does not include free time or recreation in excess of that consistent with a full-time schedule of professional research

General License Attendance at Professional Meetings

Purpose of the meeting or conference is not promotion of tourism in Cuba

Purpose of the meeting directly relates to traveler's profession, professional background, or area of expertise, including area of graduate-level full-time study

Traveler does not engage in recreational travel, tourist travel, or travel in pursuit of a hobby

Traveler's schedule of activities doesn’t include free time or recreation in excess of that consistent with a full-time schedule of attendance at professional meetings or conferences

Every person engaging in any transaction subject to the provisions of this chapter shall keep a full and accurate record of each such transaction engaged in, regardless of whether such transaction is effected pursuant to license or otherwise, and such record shall be available for examination for at least 5 years after the date of such transaction.

Reports under oath may be required at anytime before or after a transaction including the production of any books of account, contracts, letters or other papers connected with any such transaction or property, in the custody or control of the persons required to make such reports.

Record Keeping – 515.561 + .562

Ease of Other RestrictionsJanuary + September 2015 eased

restrictions regarding:

Opening bank accounts in CubaU.S. academic institutions can open bank accounts to support

educational activities authorized under educational

activities general license

Directly travelling to Cuba from U.S.

2015 regulations no longer requires U.S. citizens to book through pre-authorized travel agencies and travel only on

charter planes

However, as of now, there is still no scheduled airline service between U.S. and Cuba, as a

U.S.-Cuban aviation deal must be reached first

Penalties for Violation of Cuba Regulations

Can lead to criminal + civil penalties

CriminalImprisonment of up to 10 years and fines of $1,000,000 dollars for entities and up to $250,000

for individuals

CivilFines of up to $65,000 per

violation; Attempts to conceal violations are separate offenses that can lead to imprisonment

for up to 5 years + other consequences

Penalties for Violation of Cuba Regulations

Can lead to criminal + civil penalties

CriminalImprisonment of up to 10 years and fines of $1,000,000 dollars for entities and up to $250,000

for individuals

CivilFines of up to $65,000 per

violation; Attempts to conceal violations are separate offenses that can lead to imprisonment

for up to 5 years + other consequences

Corporations and entities can face many other federal government sanctions such as loss of federal

contracts and grants

Living Expenses + Remittances All transactions ordinarily incident to travel within Cuba, including

payment of living expenses and the acquisition in Cuba of goods for personal consumption there, are authorized. 31 C.F.R. 515.560 (a)(12)(c)(2).

Subject to some restrictions (i.e. blocked sources) family members can send remittances to close relatives in Cuba who are students in Cuba participating in generally licensed activities and funds are used solely to fund those activities. 31 C.F.R. 515.570(d)

There are authorized entities to send remittances to Cuba including Western Union. Payment in Cuba is made in CUCs and the dollar is subject to a tax of 10% in addition to any exchange rate fluctuations and fees.

Business Travel To Cuba Verify legality of travel

under U.S. law Identify what is needed

pursuant to Cuban law (i.e. business visa, student visa, event visa, tourist visa)

OFAC authorized travel providers are often able to assist in obtaining visas from the Cuban Embassy if all required information is provided to them

Business visas required to travel to Cuba to engage in formal business meetings + discussions with Cuban officials

Cuban Business VisaInitial request to

Commercial Attaché at Cuban Embassy in D.C.

who must authorize Consular Officials

Valid passportOne passport-type photo Letter of invitation from

Cuban institutions (sponsoring institution)

Completed visa application form

Payment of consular fees for this service

Cuba Travel: Crime + Safety Ensure Compliance with Institution’s International Travel Policy

Check State Department Travel Advisories & Current Events

Most crime involves non-confrontational petit thefts, pickpocketing, scams involving counterfeit items

Sex trade is open and obvious in certain tourist areas

Violent crime is not common

Illegal drugs severely penalized

Vehicular accidents: a leading source of injuries Leave the driving to Cubans!

Cuba Travel: Health Issues

There are no specific Health Notices for Cuba Health concerns focus on contaminated drinking water,

food washed with contaminated water and sexual activity with strangers

Travelers to Cuba must purchase health insurance from Cuba but should have U.S. based insurance

cdc.gov/travel/destinations/traveler/none/cuba

Medical Emergencies

Although there are numerous hospitals in Havana, Americans generally use the Cira Garcia Hospital, which is operated

specifically for foreigners and provides better quality care,

although still below U.S. standards.

Cira Garcia Hospital41st Ave + 18th Street, Miramar

(53)7-204-2811Ambulance Service: (53)7-204-4300

Export Control Issues

The export and reexport to Cuba of all items subject to the Export Administration Regulations (EAR) require a BIS license, unless authorized by a license exception in Section 746.2(a)(1) of the EAR.

A license exception is an authorization to export or reexport under stated conditions certain items without a license that would otherwise require a license.

So if an item is not described in Section 746.2(a)(1), it cannot be taken to Cuba without first applying for and being granted a license. Check with counsel for any item not described therein.

What can be taken to Cuba traveling

on educational license?

EAR 740.14 BAGPersonal + household effects

Tools of trade such as computers + software owned by person

and for personal use

Must take reasonable security precautions with technology

EAR 740.14(g)Use secure connections, passwords,

firewalls, etc.

All items must come back to U.S. unless consumed/destroyed

Agreements with Cuban Universities

Macro Agreement

CollaborationAgreement

an umbrella or master agreement to be followed

by specific project agreements

agreement to collaborate on specific areas in the

future

Specific AgreementsVisiting Student

Agreements

Joint Research

Agreements

Faculty Exchange

Agreements

Student Recruitment Agreements

Educational Services

AgreementTesting, Certification Programs, Preparatory Services

Important Terms + Conditions

Financing Housing Language

Generally paid 100% by U.S. party

In country expenses to be paid by or for

students/faculty; advised to carry cash

Assistance from host school in finding

housing or hosting students

Financial responsibility for housing –likely by

host university

Required language skills to participate

in program

Language governing the parties agreement


Calendar Admission Expectations

Dates of program

Milestone for completion, grades,

etc.

Eligibility criteria to participate

Criteria for choosing and permissible

numbers of students

Expected level of participation by students/faculty

Applicable academic and national law

jurisdictions


Intellectual Property Dispute ResolutionData + Personal

Information Protection

• Ownership of IP Provided

• Ownership of IP Developed

• Registration of IP in Cuba

• Resolving disputes as to students and faculty

• Resolving disputes between schools?

• Mediation will be a better first step to resolve disputes

Data + privacy in Cuba is very different than U.S., so to the

extent this is an issue, it should be

considered/addressed in agreement

Intellectual Property Protection in Cuba

OCPI (Oficina Cubana Propiedad Industrial)Cuban Office for Intellectual Property

(Ministry of Science, Technology 7 Environment)

Grants and Registers rights in industrial property: patents + trademarks

CENDA (Centro Nacional de Derecho de Autor) Under Ministry of Culture for copyright

legislation, policy +registration

Types of IP ProtectedPatents for inventions

+ industrial designs

Protectable plant

varieties

Marks + slogans

Integrated circuits Copyrights

Types of IP ProtectedPatents for inventions

+ industrial designs

Protectable plant

varieties

Marks + slogans

Integrated circuits Copyrights

Cuba is signatory to the major international agreements for the

protection of intellectual property

Best Practices

7

Best Practices7

Have Cuba-focused (OFAC) compliance policy + procedures

Have a successful training program

Financial and accounting systems: flagging + screening

Third parties: due diligence + contract clauses

Reporting a violation: voluntary disclosure

Monitoring compliance

Most important: mechanism for solving problems abroad

1234567

Thank You

Vinita Bahri-MehraGlobal Business AttorneyKegler Brown Hill + [email protected]

Luis Manuel AlcaldeGlobal Business AttorneyKegler Brown Hill + [email protected]

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