A final rule issued on October 30, 2015 removes Cuba from the definition of “state sponsor of terrorism” in two DFARS clauses. The new rule implements the State Department’s action to remove Cuba from the List of State Sponsors of Terrorism. The new rule affects DFARS 252.255-7049, Prohibition on Acquisition of Commercial Satellite Services from Certain Foreign Entities – Representations; and DFARS 252.255-7050, Disclosure of Ownership or Control by the Government of a Country that is a State Sponsor of Terrorism.

Firms in which Cuba has an ownership interest are now eligible to provide commercial satellite services to the United States government. Contractors are also no longer required to disclose ownership or control by the Cuban government in a firm or its subsidiary, and such firm is no longer prohibited from receiving an award (previously, a waiver from the Secretary of Defense was necessary to overcome this prohibition).

These actions stem the President’s December 2014 direction to the State Department to review and report on Cuba’s designation as a State Sponsor of Terrorism in an effort to continue the new path for U.S.-Cuba relations. As mentioned in our April 14 blog post, the State Department recommended rescinding Cuba’s designation, and the Administration submitted its intent to Congress to do so on April 14, 2015.

Read more on what this means for future business in Cuba in our April 14 and August 10 updates.