In March 1998, the President announced (1) the restoration of direct charter flights between the United States and Cuba for authorized U.S. travelers, (2) a plan to streamline and expedite licensing procedures for medical exports, and (3) the reinstitution of family remittances up to $300 per quarter from persons in the United States to their families in Cuba. Indirect and Direct Flights to Cuba Are Consistent With U.S. Law

We believe that OFAC’s decision to permit U.S.-licensed air carrier service providers to charter foreign aircraft that landed in a third country, changed flight numbers, and then flew on to Cuba independent of the U.S. carrier service provider was consistent with its legal authority. We also believe that the executive branch’s decisions to restore direct U.S. flights to Cuba of both persons and cargo and to further monitor fully hosted travel to Cuba were consistent with the existing law. Agreement on Use of Confiscated Property Is Consistent With U.S. Law

A number of provisions in the 1996 Helms-Burton Act relate to U.S. property confiscated by the Cuban government. The agreement would appear to preclude STET from being considered a trafficker in ITT’s confiscated property, at least for the 10-year period covered by the agreement. Exports may also reach Cuba illegally if businesses deliberately circumvent the embargo restrictions. New Guidelines Intended to Streamline Medical Exports Are Consistent With U.S. Law

On May 14, 1998, BXA issued guidelines describing expedited procedures for licensing medical exports to Cuba. This furthers the specific provision in the CDA authorizing medical exports to Cuba. Roles in Implementation and Monitoring

Although the State Department plays a pivotal role in policy matters, OFAC is primarily responsible for implementing the embargo and BXA licenses exports. Customs refers criminal violations to the Justice Department or civil violations to OFAC if warranted. The U.S. Attorneys’ offices have brought few prosecutions for violations of restrictions on travel and exports to Cuba over the 36 years of the embargo’s history. They also told us that the lack of significant monetary impact of Cuban embargo cases and jury appeal where humanitarian issues may be present are factors to be considered in these cases. However, the President’s broad authority over the conduct of foreign affairs as well as that under section 5(b) of the Trading With the Enemy Act allows the executive branch a great deal of discretion in making changes to embargo restrictions. We believe that OFAC has the authority to make the family remittance changes under its general licensing authority, which was included in the codification of the embargo under section 102(h). It is difficult for U.S. enforcement agencies to monitor people and goods once they leave U.S. borders, and most foreign countries do not cooperate with U.S. embargo restrictions. Scope and Methodology

In order to assess the consistency of executive branch policy with U.S. laws and regulations, we met with U.S. officials at the Departments of State, Commerce’s Bureau of Export Administration, Justice, and the Department of the Treasury’s Office of Foreign Assets Control. In order to describe how U.S. goods can be available in Cuba, we consulted specialists, including the U.S. Customs Service and the U.S. Attorney’s Office. Comments From the Departments of State and the Treasury

Scope and Methodology

To determine whether the Department of the Treasury’s July 1996 travel procedures used for indirect flights by lawful U.S. travelers were consistent with the law, we researched and reviewed the laws that deal with the embargo against Cuba, including their legislative histories, applicable federal court decisions, the CACRs and official OFAC circulars.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed the implementation and monitoring of certain Cuban embargo provisions affecting travel, telecommunications, and trade, focusing on: (1) whether the Department of the Treasury, Office of Foreign Asset Control's (OFAC) decision to allow authorized U.S. travelers to fly indirectly to Cuba was consistent with the law; (2) whether a telecommunications agreement between International Telephone and Telegraph (ITT) and STET International was consistent with U.S. law; (3) how U.S. products can be available in Cuba; (4) how U.S. agencies license and monitor U.S. travelers and companies, including licensed air carrier providers, and exports that are affected by the embargo's restrictions; and (5) whether the executive branch's changes to the embargo in 1998 were consistent with U.S. law.

What GAO Found

GAO noted that: (1) the President's broad authority under section 5(b) of the Trading With the Enemy Act allows the executive branch a great deal of discretion in making changes to embargo restrictions; (2) both flight procedures used by Treasury and the Department of Commerce were consistent with existing U.S. law; (3) the executive branch's 1998 change that further monitors fully hosted travel is also consistent with U.S. law; (4) GAO also believes that the agreement between ITT and STET International regarding ITT's confiscated property in Cuba is consistent with the applicable statutory language of Helms-Burton Act; (5) ITT has agreed to let STET use ITT's confiscated property in Cuba over the 10-year period of the agreement, and STET provided substantial compensation to ITT; (6) some U.S. goods can legally be exported to Cuba; (7) in most instances, U.S. goods can also be legally exported to Cuba by non-U.S. firms in third countries if the U.S. supplier has no knowledge that the buyer intends to sell them to Cuba; (8) exports may also reach Cuba illegally if businesses deliberately circumvent the embargo restrictions; (9) according to U.S. officials, few countries cooperate with U.S. enforcement of the embargo; (10) the executive branch's 1998 changes that expedite procedures for medical exports to Cuba and permit licensed medical and pharmaceutical sales representatives to travel to Cuba are consistent with the 1992 Cuban Democracy Act, which specifically authorizes medical exports, and OFAC's licensing authority under the Cuban Asset Control Regulations; (11) OFAC is primarily responsible for implementing the Cuba embargo, the Bureau of Export Administration licenses exports, and the Customs Service enforces the embargo at U.S. borders; (12) Customs seizes contraband and refers potential civil violations to OFAC and potential criminal violations to the Department of Justice (DOJ); (13) DOJ officials told GAO they have not prosecuted many Cuba embargo cases partly due to the difficulty of proving specific intent to violate the law; (14) they also indicated that the lack of significant monetary impact of Cuban embargo cases and jury appeal where humanitarian issues may be present are factors to be considered in these cases; (15) in 1998, the executive branch changed family remittance procedures to allow U.S. persons to send general family remittances of up to $300 per quarter to relatives in Cuba; and (16) based on GAO's review of all the applicable statutory language, GAO believes OFAC had the authority to make the family remittance changes under its general legislative authority.