Exports to Cuba

DEPARTMENT OF COMMERCE

Bureau of Export Administration

15 CFR Part 746

[Docket No. 990427108-9108-01]

RIN 0694-AB93

Exports to Cuba

AGENCY: Bureau of Export Administration, Commerce.

ACTION: Final rule.

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SUMMARY: The Department of Commerce, Bureau of Export Administration is

amending the Export Administration Regulations to implement a part of

the January 5, 1999, Presidential initiative to enhance the United

States' support of the Cuban people to promote a transition to

democracy. This final rule authorizes the issuance of licenses for

exports of food and certain agricultural commodities sold to

individuals and independent non-governmental entities in Cuba. This

rule will increase the number of license applications submitted to the

Department of Commerce for exports to Cuba.

DATES: This rule is effective May 10, 1999.

FOR FURTHER INFORMATION CONTACT: James Lewis, Director, Office of

Strategic Trade and Foreign Policy, Bureau of Export Administration,

Telephone: (202) 482-0092.

SUPPLEMENTARY INFORMATION:

Background

On January 5, 1999, the President announced that the United States

will initiate certain actions to enhance support of the Cuban people to

promote transition to democracy. In doing this, the U.S. seeks to

assist and support the Cuban people without strengthening the current

Cuban government. The objective is to promote the development and

evolution of an independent civil society to help promote a transition

to a free, independent, and prosperous nation.

These measures are consistent with the Cuban Democracy Act of 1992,

as amended, and the Cuban Liberty and Democratic Solidarity (LIBERTAD)

Act of 1996. The President is authorized to furnish assistance and

provide other support for individuals and independent non-governmental

organizations in Cuba.

Under the President's initiative, the Department of Commerce,

Bureau of Export Administration (BXA) may approve, on a case-by-case

basis, applications for exports of food (both solids and liquids) and

certain agricultural commodities for sale to independent non-

governmental entities (i.e., individuals and other entities that are

not controlled, owned or operated by the Cuban government) in Cuba. For

purposes of the new initiative, ``independent non-governmental

entities'' is defined to include religious groups, private farmers, and

private sector undertakings such as family restaurants. When submitting

applications, applicants must demonstrate on the license application

that the prospective end-user or class of end-users is independent from

the Cuban government. Include such information in Block 24, Additional

Information, on Form BXA-748P. The U.S. Government will review this

information within 30 days. Agricultural commodities that may be

authorized for sale under the new policy include, but are not limited

to, insecticides, pesticides, herbicides, seeds and fertilizer.

Agricultural equipment is not eligible for consideration under this

policy.

Consistent with existing practice, the Department of Treasury,

Office of Foreign Assets Control (OFAC) will generally authorize

financial transactions (e.g., purchase price, shipping and handling

charges) related to export sales of food or agricultural commodities

specifically authorized by BXA. Therefore, an export sale of food

authorized by Commerce will not require additional specific

authorization from OFAC for shipping, obtaining payments or other

financial transactions. Licenses may be authorized to pay for local

warehousing and transportation services provided that charges and fees

levied for delivery are customary and reasonable.

Exporters are advised to indicate on their license applications for

the export of food and agricultural commodities whether they plan to

deliver such commodities to Cuba by vessel or aircraft. An export

license must be obtained from BXA for vessels to transport licensed

commodities to Cuba. Authorization for the vessel and for necessary

ship stores may be requested at the time of application for the export

of food or agricultural commodities for sale in Cuba under the new

policy. However, note that authorization must be obtained from OFAC for

the return of such vessels to the United States within 180 days of

leaving Cuba. OFAC is publishing elsewhere in this issue of the Federal

Register a separate regulation that allows the return of such vessels

under a General License, provided that all items have been authorized

via applicable Federal regulations. Aircraft flying to Cuba to deliver

commodities licensed under this policy must be eligible for License

Exception AVS (see Sec. 740.15 of the EAR) or must be specifically

licensed by BXA.

The President also called for expansion of people-to-people

contacts between the United States and Cuba by facilitating travel of

persons from the United States to Cuba and from Cuba to the United

States, and streamlining licensing procedures for authorizing such

travel. Pursuant to the President's initiative, BXA will also review,

on a case-by-case basis, license applications requesting authorization

to use private aircraft for temporary sojourn for travel to Cuba

involving educational, cultural, journalistic, religious, or athletic

exchanges and other people-to-people contacts. This policy furthers the

President's March 1998 initiative, under which BXA is already

reviewing, with a presumption of approval, applications for temporary

exports of private aircraft involving humanitarian aid and assistance

programs. This policy is applicable to temporary sojourn flights from

the U.S. to Cuba of aircraft not eligible for BXA License Exception AVS

(see Sec. 740.15 of the EAR), and that require specific authorization

from BXA. Note that aircraft may fly on regularly scheduled charter

flights to Cuba generally under License Exception AVS. OFAC must

authorize travel by U.S. persons associated with such flights. Any

commodities included on the aircraft that do not qualify for License

Exception BAG (see Sec. 740.14 of the EAR) or License Exception TMP

(see Sec. 740.9 of the EAR) require a specific Commerce license

authorizing the export of such items to Cuba.

As another part of this initiative, other agencies will authorize

direct charter flights to Cuba departing from U.S. cities other than

Miami by separate notice. The United States is also seeking to

reestablish direct mail between the United States and Cuba. This

measure requires the agreement of the Cuban

[[Page 25808]]

government. BXA reminds exporters that the mailing of gift packages

through U.S. mail still constitutes an export and must meet the

content, frequency and dollar value requirements of

Secs. 746.2(a)(1)(viii) and 740.12 of the EAR, or be specifically

licensed by BXA.

Although the Export Administration Act (EAA) expired on August 20,

1994, the President invoked the International Emergency Economic Powers

Act and continued in effect the EAR, and, to the extent permitted by

law, the provisions of the EAA in Executive Order 12924 of August 19,

1994, extended by Presidential notice of August 13, 1998 (63 FR 44121,

August 17, 1998).

Rulemaking Requirements

1. This interim rule has been determined to be not significant for

purposes of E.O. 12866.

2. Notwithstanding any other provision of law, no person is

required to, nor shall any person be subject to a penalty for failure

to comply with a collection of information, subject to the Paperwork

Reduction Act (PRA), unless that collection of information displays a

currently valid OMB Control Number. This rule involves a collection of

information previously approved by the Office of Management and Budget

under control number 0694-0088, ``Multi-Purpose Application,'' which

carries a burden hour estimate of 45 minutes per manual submission and

40 minutes per electronic submission. In addition, miscellaneous and

recordkeeping activities account for 12 minutes per submission. As a

result of this rule, the paper work burden on the public is increased

by 22 hours on an annual basis.

3. This rule does not contain policies with Federalism implications

sufficient to warrant preparation of a Federalism assessment under E.O.

12612.

4. The provisions of the Administrative Procedure Act (5 U.S.C.

553) requiring notice of proposed rulemaking, the opportunity for

public participation, and a delay in effective date, are inapplicable

because this regulation involves a military and foreign affairs

function of the United States (Sec. 5 U.S.C. 553(a)(1)). Further, no

other law requires that a notice of proposed rulemaking and an

opportunity for public comment be given for this interim final 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. 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, Foreign trade, Reporting and recordkeeping requirements.

Accordingly, 15 CFR chapter VII, subchapter C, is amended as

follows:

PART 746--[AMENDED]

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, 6004; E.O. 12918, 59 FR 28205, 3 CFR, 1994 Comp., p.

899; E.O. 12924, 3 CFR, 1994 Comp., p. 917; Notice of August 13,

1997 (62 FR 43629, August 15, 1997); Notice of August 13, 1998 (63

FR 44121, August 13, 1998).

2. Section 746.2 is amended by adding a new paragraph (b)(4)(iii)

to read as follows:

Sec. 746.2 Cuba.

* * * * *

(b) * * *

(4) * * *

(iii) Exports of food (both solids and liquids) and agricultural

commodities may be approved, on case-by-case basis, for use by

independent non-government entities in Cuba. Such entities may not be

controlled, owned or operated by the Cuban government. Applicants must

demonstrate on the license application in Block 24, Additional

Information, that the prospective class or classes of end-users are

independent from the Cuban government.

(A) Agricultural commodities that will be considered for approval

include, but are not limited to, insecticides, herbicides, pesticides,

seeds and fertilizer. Agricultural equipment is not eligible under this

paragraph (b)(4)(iii) for sale to Cuba.

(B) For purposes of this paragraph (b), independent non-government

entities include, but are not limited to, religious groups, private

farmers, and private sector undertakings such as family restaurants.

* * * * *

Dated: May 10, 1999.

R. Roger Majak,

Assistant Secretary for Export Administration.

[FR Doc. 99-12132 Filed 5-10-99; 3:39 pm]

BILLING CODE 3510-33-P