On June 16, the president announced the Trump administration's policy toward Cuba. The policy, among other things, seeks to “end economic practices that disproportionately benefit the Cuban government or its military, intelligence, security agencies or personnel at the expense of the Cuban people” by, with some exceptions, prohibiting direct financial transactions with entities that are under the control of or act for or on behalf of the Cuban military, intelligence or security services or personnel (such as Grupo de Administración Empresarial S.A. (GAESA)). In the coming weeks, the Department of the Treasury's Office of Foreign Assets Control (OFAC) and the Department of Commerce will identify, and the Department of State will publish a list of, such “prohibited” entities.

The Trump administration's prohibition of most transactions with a subset of Cuban persons or entities is not a novel idea with respect to the Cuban Assets Control Regulations (CACR), but it is one that adds additional complexity and transaction costs to an already Byzantine regulatory regime, as U.S. persons now need to undertake additional diligence before being able to undertake a transaction in Cuba.

The CACR generally prohibits all transactions in which Cuba or a national thereof has a direct or indirect interest, unless such transaction is licensed by OFAC or is otherwise exempt. Licenses could be in the form of (1) “general licenses,” exceptions to the CACR's general prohibitions, which exceptions are an express part of the CACR or (2) “specific licenses,” tailored licenses requested by a party whose proposed transaction does not meet the specifications of a general license.