On November 15, 2018, the U.S. State Department added several new Cuban hotels to its List of Restricted Entities and Subentities Associated with Cuba (“Cuba Restricted List”). The recent update includes the additional of 16 hotels, with 26 newly identified entities in total. The State Department also made five amendments to previously listed entities, including three name-changes, one new alias, and one typographical correction. The new hotels are being added to the Cuba Restricted List because they have been identified as entities that are under the control of the Cuban military, intelligence, or security services.
Persons subject to U.S. jurisdiction are prohibited from engaging in direct financial transactions with entities on the Cuba Restricted List. For purposes of this prohibition, a person engages in a direct financial transaction by acting as the originator on a transfer of funds whose ultimate beneficiary is on the Cuba Restricted List or as the ultimate beneficiary on a transfer of funds whose originator is on the Cuba Restricted List. Importantly, the Cuba Restricted List is not a blocking or services denial list like the SDN List.
The restriction on direct financial transactions only applies to listed entities and there is no “50% rule” as is applied in other contexts to capture unnamed subsidies, such as with respect to entities on OFAC’s SDN List. Accordingly, subsidiaries of entities on the Cuba Restricted List are not subject to the restriction.
The updated Cuba Restricted List is available at https://www.state.gov/e/eb/tfs/spi/cuba/cubarestrictedlist/287349.htm.