OFAC Enforcement

ll U.S. citizens and permanent residents wherever they are located,
all people and organizations physically in the United States, and all
branches and subsidiaries of U.S. organizations throughout the world.
Recent changes to the Cuban Assets Control Regulations, 31 C.F.R. Part
515 (the "Regulations"), administered and enforced by the Office of
Foreign Assets Control ("OFAC"), have prompted OFAC to revise the
Cuban Cigar Update previously issued on June 19, 1998. This notice
provides important information to the public on Cuban-origin tobacco
products.Importation of Cuban-Origin Cigars Into the United States.
There is now an across the board ban on the importationin to the
United States of Cuban-origin cigars and other Cuban-origin tobacco
products, as well as most other products of Cuban origin. This
prohibition extends to such products acquired in Cuba, irrespective of
whether a traveler is licensed by OFAC to engage in Cuba travel-
related transactions, and to such products acquired in third countries
by any U.S. traveler, including purchases at duty free shops.
Importation of these Cuban goods is prohibited whether the goods are
purchased directly by the importer or given to the importer as a gift.
Similarly, the import ban extends to Cuban-origin tobacco products
offered for sale over the Internet or through the catalog mail
purchases. Prior to August 1, 2004, persons returning to the United
States who were licensed under the Regulations to engage in Cuba
travel-related transactions were authorized by general license to
import up to $100 worth of Cuban merchandise as accompanied baggage.
Cuban tobacco and alcohol products were included in that general
license. That general license was removed from the
Regulations.Transactions Involving Cuban-Origin Goods in Third
Countries The question is often asked whether United States citizens
or permanent resident aliens of the United States may legally purchase
Cuban origin goods, including tobacco and alcohol products, in a third
country for personal use outside the United States. The answer is no.
The Regulations prohibit persons subject to the jurisdiction of the
United States from purchasing, transporting, importing, or otherwise
dealing in or engaging in any transactions with respect to any
merchandise outside the United States if such merchandise (1) is of
Cuban origin; or (2) is or has been located in or transported from or
through Cuba; or (3) is made or derived in whole or in part of any
article which is the growth, produce or manufacture of Cuba. Thus, in
the case of cigars, the prohibition extends to cigars manufactured in
Cuba and sold in a third country and to cigars manufactured in a third
country from tobacco grown in Cuba. Cigars Produced from Cuban Tobacco
Seed OFAC does not consider cigars produced from tobacco grown and
harvested in a third country from Cuban seeds to constitute a growth
or product of Cuba. Therefore, the Regulations do not prevent
transactions or dealing in those products by persons subject to the
jurisdiction of the United States,as long as there is no interest of
Cuba or a Cuban national, direct or indirect, in the sale of such
cigars. Criminal penalties for violation of the Regulations range up
to $1,000,000 in fines for corporations, $250,000 for individuals and
up to 10 years in prison. Civil penaltiesof up to $65,000 per
violation may be imposed by OFAC. Suspected embargo violations may be
reported telephonically to OFAC's Enforcement Division at
(202)622-2430 or via facsimile at 202 622-1657.
Date 09/30/2004