OFAC change for money transfers to Cuba.

[El Presidente]

 

“U-turn” Transactions and Bank Accounts

Previously, 515.584(d) authorized banking institutions (including money services business and other financial institutions) to “reject funds transfers originating and terminating outside the United States, provided that neither the originator nor the beneficiary is a person subject to U.S. jurisdiction.” The new rule updated 515.584(d) to authorize banking institutions to process, rather than reject such “u-turn” transactions. 

OFAC also updated the related FAQ 757, which now says that:

Effective May 29, 2024, banking institutions subject to U.S. jurisdiction are authorized to process “U-turn” transactions, i.e., funds transfers originating and terminating outside the United States, where neither the originator nor the beneficiary nor their respective banking institution is a person subject to U.S. jurisdiction.

The requirement that the respective banking institution of the originator and beneficiary cannot be a person subject to U.S. jurisdiction is new. It is not found in either the regulatory text or the prior version of this FAQ, but reflects the intent of this rule to process u-turn transactions in which U.S. financial institutions provide an intermediary role.

Additionally, the rule added a new paragraph (h) which authorizes banking institutions to open and maintain bank accounts in the U.S. for independent private sector entrepreneurs in Cuba. Such accounts can be used to conduct authorized or exempt transactions under the CACR.

For more information on these updates to the Cuba sanctions, see OFAC’s Recent Actions announcement here.