In a moment of historic significance, the Obama administration announced in December 2014 its intention to work toward the normalization of relations with Cuba. Within months, the two countries re-established formal diplomatic relations and re-opened embassies in Washington, D.C. and Havana. These and other first steps toward dismantling a policy of isolation have the potential to dramatically improve diplomatic and economic relations between the two countries. These policy changes will also have an immediate impact on a number of sectors of the economy, including hospitality, transportation, communications, health care, agriculture, mining, financial services, building supplies and renewable energy, with broader significance in the longer term.
The degree to which U.S. enterprises can benefit from recent developments remains to be seen, but it is clear that Cuba is looking for opportunities to attract foreign investment and promote private enterprise consistent with efforts to revitalize the country’s economy. Akin Gump Strauss Hauer & Feld LLP has a long history of counseling businesses engaging in authorized trade with Cuba, as well as involvement in nongovernmental organizations with a particular interest in promoting change in U.S. policy and economic engagement with the country.
Cuba’s relationship with the United States is unique and, in the context of the current global trade environment, increasingly complex. Even routine business transactions can run afoul of U.S. sanctions and export laws if not properly structured and authorized. Should enforcement actions occur, companies would face not only substantial penalties and harm to their relations with U.S. and Cuban government agencies, but also potentially serious impacts on their relations with investors and other stakeholders, as well as their reputation with U.S. customers and business partners.
Akin Gump routinely advises companies on entry into emerging markets. We can assist on anticipating, adapting to, and profiting from recent and further transformation of Cuba’s rapidly changing business and political landscape. Many of our team members have experience traveling to Cuba, and they know how to open the right doors for clients. Our team also includes a board member of the U.S. Chamber of Commerce’s U.S.-Cuba Business Council, which was created to forge strong ties between the United States and Cuba. Akin Gump is the only law firm with board involvement.
Akin Gump has extensive experience assisting companies with market entry in Cuba, as well as relevant experience in connection with the relaxing of other sanctions programs that have generated similar commercial opportunities. For example, we procured a license from the U.S. Department of the Treasury Office of Foreign Assets Control (OFAC) authorizing the return of $1.5 million to an oil and gas exploration company that had been blocked under the Burma (Myanmar) sanctions program. We also assisted a U.S. oil and gas company in the release of funds previously blocked under the Libya sanctions program. Moreover, our work in these areas is supported by the full strength of our broader sanctions and international policy practices.
Members of our Cuba practice have decades of experience guiding clients through the regulatory maze involved in conducting business in Cuba. We have extensive experience developing compliance policies and procedures, voluntary disclosures, license applications, reports and other submissions to relevant U.S. government agencies, including OFAC, the Department of State Directorate of Defense Trade Controls, the Department of Commerce Bureau of Industry and Security (BIS), and Customs and Border Protection. Our team’s experience working with the U.S. Department of Transportation and the Department of Homeland Security also enables us to provide valuable assistance to clients seeking approvals related to transportation between the United States and Cuba.
We have assisted companies in dozens of matters related to Cuba, including:
- advising companies in the building supply, construction, electronics, freight-forwarding and health sectors with respect to market entry strategies in the wake of the recent relaxation of sanctions against Cuba
- conducting an internal investigation and submitting a voluntary self-disclosure on behalf of a multinational telecommunications equipment provider regarding hundreds of transactions whereby equipment lawfully sold to Cuba was subsequently repaired and serviced in the company’s U.S. service center without proper authorization; negotiating a settlement of the charges brought by the BIS and facilitating a post-settlement audit of the company’s Cuba business and de minimis U.S. content calculations
- assisting a leading U.S. entertainment company in obtaining OFAC licenses authorizing travel to Cuba and business activities associated with the production of sound and visual recordings of renowned Cuban musicians in Cuba and the United States
- representing a nongovernmental policy organization in obtaining multiple OFAC licenses authorizing research activities in, and “people to people” travel to, Cuba
- assisting in the negotiation of a memorandum of understanding for the sale of U.S. agriculture products to Cuba, which included participation in congressional delegations traveling to Cuba to meet with Cuban government officials (including then-President Fidel Castro)
- assisting a U.S.-based agricultural products company to engage with executive branch policy makers regarding negotiations with sanctioned parties in Myanmar and obtaining OFAC licenses for transitional market entry following suspension of U.S. sanctions on Burma
- conducting an internal review and analysis and preparing and filing voluntary disclosures with BIS regarding Cuban transactions conducted by several subsidiaries of a European-based mobile phone equipment maker
- assisting a European multinational pharmaceutical company in relation to an international internal investigation related to violations of U.S. sanctions programs around Cuba, Iran and Syria
- serving as risk advisory counsel to a major U.S.-based global financial institution, providing policy and compliance support on issues around U.S. sanctions affecting regimes, including Cuba, Iran, Iraq, Libya and Sudan
- conducting an investigation covering more than 200 import-, export- and warehousing-related transactions for a global logistics and freight management company; matter involved compliance with U.S. sanctions laws against Cuba, Syria and Iran regarding activities in the clients’ offices in France, Germany, Italy, United Kingdom, Netherlands, Hungary, Malaysia and the United Arab Emirates; team advised on OFAC voluntary self-disclosure and regulatory risk and the development of targeted corrective actions affecting multiple key business units; also conducted a comprehensive sanctions-focused due diligence review of more than 100,000 transactional documents during the issuance of a $300 million corporate bond
- obtaining an OFAC license authorizing a U.S. company to import a pharmaceutical product made in Cuba and to conduct clinical trials for its potential use to treat high cholesterol in humans
- advising a major U.S. agriculture processor on exporting agricultural products to Cuba in compliance with U.S. sanctions, traveling to Cuba with the client to negotiate contracts and payment terms, and obtaining related authorizations and licenses from the BIS and OFAC
- negotiating entry into the Cuban marketplace for one of the world’s largest meat processors.