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Educational Opportunities in Cuba

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Luis Alcalde and Vinita Bahri-Mehra presented "Educational Opportunities in Cuba" as a webinar on December 3, 2015.

The presentation provided a comprehensive understanding of business and legal issues to consider when entering into an educational agreement with Cuban educational institutions, common OFAC and export control issues, travel tips and steps in developing international collaboration agreements between U.S. and Cuban educational institutions.

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Educational Opportunities in Cuba

  1. 1. Educational Opportunities in Cuba Compliance, Legalities + Preparations for Travel This presentation is copyrighted by PaperClip Communications 2015. This presentation may not be reproduced without permission from PaperClip Communications and its presenters. This presentation and all materials provided during the presentation may not be altered. This presentation is not intended as legal advice and should be considered general information only. The answers to legal questions generally hinge upon the specific facts and circumstances of an institution. Individuals with specific questions should contact their institution’s legal counsel. Follow on Twitter: #ppclpwebinar December 3, 2015 2:00 – 3:30 PM ET
  2. 2. Panelist The opinions expressed during today’s event are not necessarily those of PaperClip Communications Luis Manuel Alcalde Global Business Attorney Kegler Brown Hill + Ritter
  3. 3. Vinita Bahri-Mehra Panelist The opinions expressed during today’s event are not necessarily those of PaperClip Communications Global Business Attorney Kegler Brown Hill + Ritter
  4. 4. Let’s Define the PROBLEM
  5. 5. Cuba is subject to a U.S. Embargo So how can U.S. academic institutions, faculty, staff + students legally and safely take advantage of available educational opportunities involving Cuba?
  6. 6. Progress in U.S.- Cuba RelationsExchanged prisoners Relaxed/expanded U.S. authorized travel categories to Cuba Expanded list of U.S. authorized exports to Cuba and Cuban nationals Expanded list of Cuban origin exports to U.S. Removed Cuba from the U.S. list of state sponsors of terrorism Corresponding banking relationship established Diplomatic relations established + embassies opened
  7. 7. Despite all the Progress… U.S.-Cuba relations are not normal U.S. maintains embargo on Cuba U.S. companies cannot invest in Cuba or sell goods to Cuba except for agricultural products, some communications equipment or direct business to small private sector (which Cuba has not yet allowed) U.S. persons cannot freely travel to Cuba outside of designated licensed categories As some progress is made the complexities of the embargo become more evident
  8. 8. What is the Cuban Embargo? U.S. policy to isolate Cuba which commenced in the early 1960s Comprehensive economic sanctions that include an embargo on travel, trade and financial transactions Legal underpinning of the embargo is executive orders + series of laws and regulations
  9. 9. Legislative/Regulatory Basis of Cuban Embargo
  10. 10. Legislative/Regulatory Basis of Cuban Embargo Trading with the Enemy Act (1917) Allows President to restrict trade with countries hostile to U.S. in time of war Foreign Assistance Act of 1961 Allows President to deny assistance to Cuba and impose trade embargo. U.S. Treasury Cuban Import Regulations and subsequent Cuban Asset Control Regulations (“CACR”) prohibit imports from and exports to Cuba and restrict travel to and financial transactions with Cuba Department of Commerce Regulations prohibit or restrict exports to Cuba Cuban Democracy Act of 1992 Prohibits U.S. subsidiaries from trading with Cuba and entry of vessels that have been to Cuba for trade to come to U.S. for 6 mos. Cuban Liberty and Democratic Solidarity Act of 1996 (Helms-Burton) – codified embargo and CACR Regs., but President retains broad power to modify CACR. Prohibits President from eliminating embargo until specified conditions are met.
  11. 11. Principal Agencies Enforcing Embargo
  12. 12. U.S. Department of the Treasury, Office of Foreign Assets Controls (“OFAC”) issues and enforces the Cuban Assets Control Regulations (“CACR”) – authorized travel, activities and financial transactions U.S. Department of Commerce, Bureau of Industry and Security (“BIS”) authorized exports to Cuba
  13. 13. CACR + Licenses What is a License?
  14. 14. CACR + Licenses What is a License? The term license shall mean any license or authorization contained in or issued pursuant to this part – 31 CFR 515.316
  15. 15. A general license is any license or authorization the terms of which are set forth in this part – 31 CFR 515.317
  16. 16. General licenses are described in the regulations. This means that the travel, activity and/or transaction is authorized as described without any need to seek further permission
  17. 17. A specific license is any license or authorization issued pursuant to this part but not set forth in this part 31 CFR 515.318
  18. 18. Travel/activities/transactions not generally licensed require application and issuance of a specific license granting permission and describing what is authorized
  19. 19. General License for Accredited Degree Granting Academic Institutions accredited U.S. graduate and undergraduate degree-granting academic institutions including faculty, staff + students of such institutions available to:
  20. 20. 1 Participating in a structured educational program in Cuba that is part of a course offered for credit by the U.S. institution; 2 Engaging in non-commercial academic research in Cuba specifically related to Cuba for purpose of obtaining undergraduate or graduate degree from a U.S. institution (Note: Prior to January 2015, only applied to graduate students) Educational Activities Subject to General License
  21. 21. Educational Activities Subject to General License 3 Participation in formal course of study at a Cuban academic institution provided U.S. institution will accept formal course of study for credit towards student’s graduate or undergraduate degree 4 Teaching at Cuban academic institution for any length of time, academic program related to Cuban institution provided teacher is regularly employed by a U.S. or non-Cuban academic institution (Note: Prior to January 2015, teaching engagement had to be at least 10 weeks)
  22. 22. Educational Activities Subject to General License 5 Sponsoring (including paying stipend/salary) to Cuban scholar to teach or engage in other scholarly activity at U.S. academic institution Such earnings may be remitted to Cuba as provided in §515.570 or carried on the person of Cuban scholar returning to Cuba as provided in §515.560(d)(3) 6 Cuban or U.S. sponsored secondary school academic exchanges for secondary school students participating in structured study or program led by teacher or other official + adult chaperones
  23. 23. Educational Activities Subject to General License 7 Sponsorships of non-commercial academic seminars, conference + attendance at such events by faculty, staff, and students of a participating U.S. academic institution and workshops in Cuba related to Cuba or global issues involving Cuba 8 Establishment of academic exchanges and joint non-commercial academic research projects with universities or academic institutions in Cuba
  24. 24. Educational Activities Subject to General License 9 Providing standardized testing services, including professional certificate examinations, university entrance examinations, and language examinations, and related preparatory services for such exams to Cuban nationals, wherever located 10 Providing internet based courses, including distance learning and Massive Open Online Courses (“MOOC”), to Cuban Nationals, wherever located, provided course content is at undergraduate level or below
  25. 25. 11 Organization of, and preparation for, activities described in paragraphs (a)(1) through (10) of this section by employees or contractors of the sponsoring organization that is a person subject to U.S. jurisdiction 12 Facilitation by an organization that is a person subject to U.S. jurisdiction, or a member of the staff of such an organization, of licensed educational activities in Cuba on behalf of U.S. academic institutions or secondary schools, provided that: Organization is directly affiliated with one or more U.S. academic institutions or secondary schools Organization facilitates educational activities that meet requirements of 1 or more of the general licenses set forth in §515.565(a)(1), (2), (3), and (6).
  26. 26. 1 Hosting a public performance, clinic, workshop, or athletic competition; provided the event is open for attendance and in relevant situations participation by the Cuban public; and provided further that all profits after costs are donated to an independent non-governmental organization in Cuba or a U.S. based charity. The goal of such events should be to promote people to people contacts or benefit the Cuban people, to the extent possible. Any clinics or workshop in Cuba must be organized and run at least in part by authorized travelers. Other Related Activities Subject to General License
  27. 27. General License Professional Research  Purpose of the research directly relates to the traveler's profession, professional background, or area of expertise, including area of graduate-level full-time study  Traveler does not engage in recreational travel, tourist travel, travel in pursuit of a hobby, or research for personal satisfaction only  Traveler's schedule of activities does not include free time or recreation in excess of that consistent with a full-time schedule of professional research
  28. 28. General License Attendance at Professional Meetings  Purpose of the meeting or conference is not promotion of tourism in Cuba  Purpose of the meeting directly relates to traveler's profession, professional background, or area of expertise, including area of graduate-level full-time study  Traveler does not engage in recreational travel, tourist travel, or travel in pursuit of a hobby  Traveler's schedule of activities doesn’t include free time or recreation in excess of that consistent with a full-time schedule of attendance at professional meetings or conferences
  29. 29.  Every person engaging in any transaction subject to the provisions of this chapter shall keep a full and accurate record of each such transaction engaged in, regardless of whether such transaction is effected pursuant to license or otherwise, and such record shall be available for examination for at least 5 years after the date of such transaction.  Reports under oath may be required at anytime before or after a transaction including the production of any books of account, contracts, letters or other papers connected with any such transaction or property, in the custody or control of the persons required to make such reports. Record Keeping – 515.561 + .562
  30. 30. Ease of Other Restrictions January + September 2015 eased restrictions regarding: Opening bank accounts in Cuba U.S. academic institutions can open bank accounts to support educational activities authorized under educational activities general license Directly travelling to Cuba from U.S. 2015 regulations no longer requires U.S. citizens to book through pre-authorized travel agencies and travel only on charter planes However, as of now, there is still no scheduled airline service between U.S. and Cuba, as a U.S.-Cuban aviation deal must be reached first
  31. 31. Penalties for Violation of Cuba Regulations Can lead to criminal + civil penalties Criminal Imprisonment of up to 10 years and fines of $1,000,000 dollars for entities and up to $250,000 for individuals Civil Fines of up to $65,000 per violation; Attempts to conceal violations are separate offenses that can lead to imprisonment for up to 5 years + other consequences
  32. 32. Penalties for Violation of Cuba Regulations Can lead to criminal + civil penalties Criminal Imprisonment of up to 10 years and fines of $1,000,000 dollars for entities and up to $250,000 for individuals Civil Fines of up to $65,000 per violation; Attempts to conceal violations are separate offenses that can lead to imprisonment for up to 5 years + other consequences Corporations and entities can face many other federal government sanctions such as loss of federal contracts and grants
  33. 33. Living Expenses + Remittances  All transactions ordinarily incident to travel within Cuba, including payment of living expenses and the acquisition in Cuba of goods for personal consumption there, are authorized. 31 C.F.R. 515.560 (a)(12)(c)(2).  Subject to some restrictions (i.e. blocked sources) family members can send remittances to close relatives in Cuba who are students in Cuba participating in generally licensed activities and funds are used solely to fund those activities. 31 C.F.R. 515.570(d)  There are authorized entities to send remittances to Cuba including Western Union. Payment in Cuba is made in CUCs and the dollar is subject to a tax of 10% in addition to any exchange rate fluctuations and fees.
  34. 34. Business Travel To Cuba  Verify legality of travel under U.S. law  Identify what is needed pursuant to Cuban law (i.e. business visa, student visa, event visa, tourist visa)  OFAC authorized travel providers are often able to assist in obtaining visas from the Cuban Embassy if all required information is provided to them  Business visas required to travel to Cuba to engage in formal business meetings + discussions with Cuban officials
  35. 35. Cuban Business Visa Initial request to Commercial Attaché at Cuban Embassy in D.C. who must authorize Consular Officials  Valid passport  One passport-type photo  Letter of invitation from Cuban institutions (sponsoring institution)  Completed visa application form  Payment of consular fees for this service
  36. 36. Cuba Travel: Crime + Safety  Ensure Compliance with Institution’s International Travel Policy  Check State Department Travel Advisories & Current Events  Most crime involves non-confrontational petit thefts, pickpocketing, scams involving counterfeit items  Sex trade is open and obvious in certain tourist areas  Violent crime is not common  Illegal drugs severely penalized
  37. 37. Vehicular accidents: a leading source of injuries Leave the driving to Cubans!
  38. 38. Cuba Travel: Health Issues  There are no specific Health Notices for Cuba  Health concerns focus on contaminated drinking water, food washed with contaminated water and sexual activity with strangers  Travelers to Cuba must purchase health insurance from Cuba but should have U.S. based insurance
  39. 39. Medical Emergencies
  40. 40. Although there are numerous hospitals in Havana, Americans generally use the Cira Garcia Hospital, which is operated specifically for foreigners and provides better quality care, although still below U.S. standards. Cira Garcia Hospital 41st Ave + 18th Street, Miramar (53)7-204-2811 Ambulance Service: (53)7-204-4300
  41. 41. Export Control Issues  The export and reexport to Cuba of all items subject to the Export Administration Regulations (EAR) require a BIS license, unless authorized by a license exception in Section 746.2(a)(1) of the EAR.  A license exception is an authorization to export or reexport under stated conditions certain items without a license that would otherwise require a license.  So if an item is not described in Section 746.2(a)(1), it cannot be taken to Cuba without first applying for and being granted a license. Check with counsel for any item not described therein.
  42. 42. What can be taken to Cuba traveling on educational license?
  43. 43. EAR 740.14 BAG Personal + household effects Tools of trade such as computers + software owned by person and for personal use Must take reasonable security precautions with technology EAR 740.14(g) Use secure connections, passwords, firewalls, etc. All items must come back to U.S. unless consumed/destroyed
  44. 44. Agreements with Cuban Universities Macro Agreement Collaboration Agreement an umbrella or master agreement to be followed by specific project agreements agreement to collaborate on specific areas in the future
  45. 45. Specific Agreements Visiting Student Agreements Joint Research Agreements Faculty Exchange Agreements Student Recruitment Agreements Educational Services Agreement Testing, Certification Programs, Preparatory Services
  46. 46. Important Terms + Conditions Financing Housing Language Generally paid 100% by U.S. party In country expenses to be paid by or for students/faculty; advised to carry cash Assistance from host school in finding housing or hosting students Financial responsibility for housing –likely by host university Required language skills to participate in program Language governing the parties agreement
  47. 47. Important Terms + Conditions Calendar Admission Expectations Dates of program Milestone for completion, grades, etc. Eligibility criteria to participate Criteria for choosing and permissible numbers of students Expected level of participation by students/faculty Applicable academic and national law jurisdictions
  48. 48. Important Terms + Conditions Intellectual Property Dispute Resolution Data + Personal Information Protection • Ownership of IP Provided • Ownership of IP Developed • Registration of IP in Cuba • Resolving disputes as to students and faculty • Resolving disputes between schools? • Mediation will be a better first step to resolve disputes Data + privacy in Cuba is very different than U.S., so to the extent this is an issue, it should be considered/addressed in agreement
  49. 49. Intellectual Property Protection in Cuba OCPI (Oficina Cubana Propiedad Industrial) Cuban Office for Intellectual Property (Ministry of Science, Technology 7 Environment) Grants and Registers rights in industrial property: patents + trademarks CENDA (Centro Nacional de Derecho de Autor) Under Ministry of Culture for copyright legislation, policy +registration
  50. 50. Types of IP Protected Patents for inventions + industrial designs Protectable plant varieties Marks + slogans Integrated circuits Copyrights
  51. 51. Types of IP Protected Patents for inventions + industrial designs Protectable plant varieties Marks + slogans Integrated circuits Copyrights Cuba is signatory to the major international agreements for the protection of intellectual property
  52. 52. Best Practices 7
  53. 53. Best Practices7 Have Cuba-focused (OFAC) compliance policy + procedures Have a successful training program Financial and accounting systems: flagging + screening Third parties: due diligence + contract clauses Reporting a violation: voluntary disclosure Monitoring compliance Most important: mechanism for solving problems abroad 1 2 3 4 5 6 7
  54. 54. Thank You Vinita Bahri-Mehra Global Business Attorney Kegler Brown Hill + Ritter Luis Manuel Alcalde Global Business Attorney Kegler Brown Hill + Ritter
  55. 55. Q+A How Do I Call-in with a Question? If you would like to ask a question of our panelist(s) please press *1 and you will be put in a call queue until it is your turn to ask your question. OR You can write in a question or comment anytime during the event by clicking on the “Chat” Bubble in the left hand corner of your screen. For Questions that Arise After the Conference If you have a question that you were unable to ask of our presenter(s), please feel free to email us at: …and we will be happy to forward it to our panelists!
  56. 56. We want your feedback on today’s event! If you would like to provide suggestions for improvement and/or ideas for future event topics, please email us at: and she will send you the link to our brief online survey. Thank you for your participation, PaperClip Communications Feedback
  57. 57. Thank you for your participation in today's webinar. Please note that we do offer certificates of completion to our webinar participants. If you and/or your colleagues would like to a certificate, please go to the link below and complete the information requested – by selecting the webinar you are seeking a certificate for and using the password provided in your registration information – then simply click submit and your certificate will arrive shortly. Certificate of Completion
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