MLB, Not OFAC, Is Why Yoan Moncada Can’t Sign

what is an ofac report

January 27, 2015 by Ben Badler

Major League Baseball, not the United States government, is the reason that Yoan Moncada and several other Cuban players have yet to begin their careers.

The U.S. has an embargo against Cuba, which means Cuban nationals must be regarded as “unblocked” by the Department of the Treasury’s Office of Foreign Assets Control (OFAC) before they can work for a U.S. company.

Moncada, though, has already met the government’s requirements to be able to begin his career. Moncada has permanent residence in Guatemala. Any Cuban national who presents documents showing permanent residence in a country outside of Cuba qualifies for OFAC’s “general license,” which is not a written document. As far as OFAC is concerned, that should make him unblocked, and that’s good enough for the government to allow him to sign.

The holdup is that MLB won’t let Moncada—or any Cuban player, for that matter—use the general license any more. That wasn’t always the case. Yasiel Puig. for example, signed using the general license. It’s not clear what exactly changed, but at some point in 2012 after Puig signed in June that year, MLB no longer allowed Cuban players to sign using the general license and instead required them to apply for the specific license, which is a written document from OFAC. That goes beyond what the government requires from Cuban players to be able to begin their careers, and with some players waiting six months to receive their licenses, MLB’s policy has added a significant bottleneck for those players.

MLB issued the following statement to Baseball America on Sunday: “MLB is confident with the current plan we have in place regarding signing foreign born players and will abide by the guidelines of the OFAC requirements.”

Except, by the OFAC guidelines, Moncada has met the criteria of the general license to be considered unblocked, and he is not alone. Cuban second basemen Hector Olivera and Andy Ibanez have both obtained residency in a third country. Yet none of them has signed yet because they

are still awaiting response from the government on their application for the specific license that MLB requires. Several other less-noteworthy Cuban players are in the same situation.

While MLB didn’t elaborate, the league’s stance appears to be a conservative one to limit its own liability in the event that a player uses false residency papers. Under the general license, the player doesn’t have to formally submit anything to OFAC. But through the specific license, if a player uses false residency papers and OFAC were able to discover that, those who submitted false documents to the government could face federal felony charges.

If a team ever wanted to fight MLB on its own rules, though, it could present an interesting dilemma. Five teams, including the Yankees and Red Sox. are already in the maximum penalty range for the current international signing period, which ends on June 15. After that, they won’t be able to sign any pool-eligible players—including Moncada and Ibanez—for more than $300,000 for the next two years. What would happen if the Yankees went to Moncada tomorrow (or on June 15, if it came down to that) and convinced him to sign a contract with them? They could say to MLB, “We have a signed contract with Moncada. He is cleared to sign by the government as an unblocked Cuban national under the general license, and therefore should not be legally prevented from beginning his career.” Who knows what would happen if a team forced the issue? Teams have fought MLB on issues before and won, and MLB’s international rules are hardly known for their consistency. The MLB Players’ Association, in theory, could also stick up for Cuban players. They did not respond to a request for comment.

So it may take a little longer for Moncada to sign. Nobody knows for certain how long that process will take. Ultimately, though, it’s not OFAC that’s slowing down the process for Moncada and other Cuban players from being eligible to sign. The reason they can’t sign is because of the commissioner’s office.


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