Cash payment required before shipping U.S. agriculture goods to Cuba

Cash payment required before shipping U.S. agriculture goods to Cuba    The U.S. Treasury Department’s Office of Foreign Assets Control has reaffirmed that cash payment is required prior to shipment of licensed American agricultural shipments to Cuba.
   “This payment policy conforms to the common understanding of the term in international trade finance,” OFAC said in a statement. “In addition, it balances OFAC’s responsibility to administer effective sanctions against Cuba while ensuring the island can continue to receive food shipments, medicine and medical supplies from U.S. exporters.”
   Some U.S. financial institutions had asked OFAC to clarify whether payments of cash in advance permits the shipment of goods to Cuba prior to receipt of the payment by U.S. exporters.
   The 2002 Trade Sanctions Reform and Export Enhancement Act allows agricultural and medical goods to be exported to Cuba as long as they are paid through a letter of credit from a third country financial institution or by payment of cash in advance.
   “Cash in advance of shipment is a widely held interpretation of the terminology, notably by other agencies in the U.S. government,” OFAC said.
   OFAC officials met with the Bush administration and Congress before issuing this guidance.
   The final rule on the payment policy was submitted to the Federal Register Tuesday and became effective immediately. The final rule provides a 30-day window for exporters to continue to make transactions under financing terms resembling cash against documents, but requires payment for such transactions to be completed within the 30-day period. The exporter will still need a Commerce Department license.
   “The purpose of this 30-day window is to provide a transition period,” OFAC said.