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OFAC Allows Joint Medical Research with Cuba

The Department of the Treasury, Office of Foreign Assets Control (OFAC), has modified the Cuban Assets Control Regulations (CACR) (31 C.F.R. Part 515) to allow joint medical research between persons subject to U.S. jurisdiction and Cuban nationals. In the context of the CACR, a “person subject to U.S. jurisdiction” includes any non-U.S. entity owned or controlled by a U.S. person or company directly or indirectly.

It is important to note that the focus of this rule is the development and sale of Cuban origin pharmaceutical products into the United Sates and not the sale of U.S. origin products into Cuba. The changes published today have no impact on the sale of U.S. origin pharmaceutical products into Cuba, and the modified rules do not eliminate the need for sales into Cuba to be licensed by the U.S. Department of Commerce and/or the Department of the Treasury.

As a result of this rule change, effective October 17, 2016, U.S. pharmaceutical companies and their foreign subsidiaries, as well as U.S. nationals, are authorized to engage in various types of transactions “incident to obtaining approval from the U.S. Food and Drug Administration (FDA) of Cuban origin pharmaceuticals, including discovery and development, pre-clinical research, clinical research, regulatory review, regulatory approval and licensing, regulatory post-market activities, and the importation into the United States of Cuban-origin pharmaceuticals,” as well as the “marketing, sale, or other distribution in the United States of FDA-approved Cuban-origin pharmaceuticals, including the importation into the United States of Cuban-origin pharmaceuticals.”

In its most recent Portfolio of Opportunities for Foreign Investment, Cuba identified the biotechnology and pharmaceutical sector, where BioCubaFarma has been producing vaccines and drug products for years, as one of the targets of foreign investment through strategic partnerships. Specifically, the Cuban government stated that it was promoting joint R&D projects, distribution and representation arrangements and technology transfer arrangements that complemented domestic projects in the sector. This week’s changes to the CACR will facilitate participation in these types of investments and activities in Cuba by U.S. companies.

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About this Author

Joan Koenig, Export Compliance Lawyer, Customs Trade attorney, Drinker biddle
Counsel

Joan Koenig is counsel in the Customs & Trade team.  She possesses substantial experience in international trade regulations, particularly those relating to U.S. export controls (ITAR, EAR, FACR, FTR) and customs regulations. 

Joan has considerable experience applying U.S. export controls, customs and international trade laws and regulations to various situations and business transactions for both U.S. and non-U.S. companies.  She has extensive experience representing clients before administrative agencies involved in international trade,...

312-569-1163
Mollie D. Sitkowski, Drinker Biddle Law Firm, International Trade Lawyer
Associate

Mollie regularly assists clients with ensuring their internal processes meet Customs' "reasonable care" standard. She has assisted clients with various aspects of trade law, including valuation, classification, free trade agreements, country of origin determinations, and obtaining export licenses. She also regularly assists clients with auditing their import documentation to identify potential issues and risk areas. She has worked with clients to obtain beneficial outcomes from Customs' administrative processes by filing PEAs and Protests, and submitting ruling requests.

In General. Mollie earned her law degree from Chicago-Kent College of Law, where she was a Chicago-Kent Honors Scholar and on the Dean’s List. While in law school, Mollie was a paralegal with the firm’s Customs & Trade practice. She earned her bachelor’s degree cum laude from University of San Diego.

312-569-1502