748. May U.S. banks open and operate accounts for Cuban nationals present in Cuba?
Yes. Section 515.584(h)(1) of the CACR contains a general license that allows banking institutions to open and maintain bank accounts in the United States solely in the name of a Cuban national located in Cuba, to receive payments in the United States for transactions authorized pursuant to, or exempt from the prohibitions of, the CACR and to remit such payments back to Cuba, including through an online payment platform. For example, an author who is a Cuban national located in Cuba may open an account with a bank in the United States to receive payments for sales of their book. Additionally, pursuant to 31 CFR § 515.584(h)(2), a U.S. banking institution may open and maintain an account solely in the name of a Cuban national who is an independent private sector entrepreneur (as defined in 31 CFR § 515.340) for the purpose of conducting authorized or exempt transactions (e.g., receipt of payment for the importation to the United States of certain goods and services produced by independent Cuban entrepreneurs pursuant to 31 CFR § 515.582 or payment related to authorized exports to Cuba under 31 CFR § 515.533), including through an online payment platform. Pursuant to this authorization, independent private sector entrepreneurs — whether located in the United States, Cuba, or another country — can open and remotely access their account at a U.S. banking institution and conduct remote transfers, including to Cuba, as long as the underlying transaction is authorized or exempt. For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.584(h)(2).
Updated: May 28, 2024
Date Released
September 6, 2019
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748. May U.S. banks open and operate accounts for Cuban nationals present in Cuba?
Section 515.584(h) of the CACR contains a general license that allows banking institutions to open and maintain bank accounts in the United States for Cuban nationals in Cuba to receive payments in the United States for transactions authorized pursuant to, or exempt from the prohibitions of, the CACR and to remit such payments back to Cuba. For example, an author who is a Cuban national located in Cuba may open an account with a bank or online payment platform in the United States to receive payments for sales of her book. For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.584(h). [09-06-2019]
1) The status of “online payment platforms” under 515.584(h)(1) and 515.314
515.584(h)(1) of the CACR authorizes “[a]ny banking institution, as defined in § 515.314, that is a person subject to U.S. jurisdiction…to open and maintain accounts solely in the name of a Cuban national located in Cuba for the purposes only of receiving payments in the United States in connection with transactions authorized pursuant to, or exempt from the prohibitions of, [the CACR] and remitting such payments to Cuba”. Prior to 5-28-24, this FAQ provided guidance on what is (as of 5-28-24) now 515.584(h)(1) of the CACR. The prior version of the FAQ, giving an example of a transaction eligible for 515.584(h)(1), used the example of “an author who is a Cuban national located in Cuba [who] may open an account with a bank or online payment platform in the United States to receive payments for sales of her book”. The FAQ was amended on 5-28-24 such that it includes the example, but talks about payments being remitted to Cuba “through an online payment platform” from a “bank account” in the U.S., with no mention of actually opening an account with an “online payment platform”.
Query: does OFAC intend to suggest that Cuban nationals cannot open accounts with “online payment platforms” run by entities that qualify for the broad definition of “banking institution” (as defined at 515.314 of the CACR)? Probably not. Instead, the change appears to reflect the fact that the question asked is whether “U.S. banks [may] open and operate accounts,” and a “bank” is generally understood to refer to a smaller range of entities than a “banking institution, as defined in § 515.314”. All this is to say that the prior version of this FAQ strongly suggested that what is now 515.584(h)(1) covers the opening of accounts with online payment platforms, and if OFAC intended on effectively revoking that portion of the GL with the 5-28-24 amendment of this FAQ, one might have expected a clear statement on that point.
2) Where applicable, OFAC interprets the Berman Amendment as exempting transactions incident to the commercial import and export of informational materials, including payment for those materials (see e.g. Case No. IA-2012-299245-1). However, the opening and/or maintaining of U.S. bank accounts by sanctioned persons for those purposes is not considered within the scope of transactions incident to the sale of the exempt items, such as payment processing. This GL is specific to Cuba.
3) The version of the FAQ revised as of 5-28-24 adds language—beginning with “Additionally, pursuant to 31 CFR § 515.584(h)(2)”—to account for the addition of the GL at 515.584(h)(2).That GL provides that:
“Any banking institution, as defined in § 515.314, that is a person subject to U.S. jurisdiction is authorized to open and maintain accounts solely in the name of a Cuban national who is an independent private sector entrepreneur, as defined in § 515.340, for the purposes of conducting transactions authorized pursuant to, or exempt from the prohibitions of [the CACR].”
The FAQ provides guidance giving examples of “authorized” transactions for which the accounts could be used (certain imports of goods from Cuba (515.582) or exports of goods to Cuba (515.533)). The FAQ also specifies that accounts opened for “independent private sector entrepreneurs” can, unlike accounts authorized pursuant to 515.571(a)(5), be maintained and accessed for “independent private sector entrepreneurs” irrespective of whether such persons are “located in the United States, Cuba, or another country”. This is important because many persons meeting the definition of “independent private sector entrepreneurs” may not be physically located in Cuba, even if they own an entity that is located in Cuba. See 515.340.