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Cuba Removed from U.S. State Sponsors of Terrorism List

Further to our previous Alert summarizing the President’s April notification to Congress of his intent to remove Cuba from the list of State Sponsors of Terrorism (SSOT), the required 45-day period for Congressional notice expired on May 29, 2015, and, as a result, Cuba’s SSOT designation was officially rescinded. President Obama had formally submitted the statutorily required delisting notification to Congress, certifying that Cuba had not provided support for international terrorism in the past six months and would not in the future. Congress raised no formal opposition to the President’s notification, clearing the way for the Secretary of State to remove Cuba from the list effective May 29, 2015.

While the move reflects a changing mood in U.S.-Cuba relations, the delisting itself is unlikely to result in an immediate, significant easing of the U.S. sanctions and exports controls now imposed on Cuba, in part because Congress has so far declined to lift the existing statutory embargo on Cuba. As a result, most Cuba-related transactions remain prohibited under U.S. law at this time. In addition, although the lifting of the SSOT designation appears to provide the Administration increased latitude to license the export from the United States to Cuba of a broad variety of commercial items, additional regulatory steps would be required (by, for example, the U.S. Department of Commerce) to impact current U.S. restrictions. Cuba’s removal from the SSOT list may, however, reduce the reluctance of U.S. and non-U.S. individuals and entities to engage in already lawful Cuba-related transactions, including certain financial transactions. The move also obviates the laws of certain U.S. states that prohibit some activities with respect to SSOTs. Additionally, the lifting of the SSOT designation is indicative of the general momentum toward the restoration of diplomatic ties between the United States and Cuba, including the re-establishment of the two countries’ respective embassies.