After more than a half-century, the U.S. has finally taken steps toward normalizing its relations with Cuba. In a series of executive actions on December 17, 2014, President Obama announced changes to existing regulations that will ease sanctions against Cuba.
U.S. and Cuban officials will meet on February 27, 2015 at the State Department to continue talks of restoring ties and ending the embargo. Likely sticking points will be the opening of a U.S. Embassy in Havana, Cuba’s continuing appearance on the U.S. list of countries that support and sponsor terrorism, the potential return of Guantanamo Bay to Cuba, and U.S. support for Cuban political dissidents.
The executive actions alone however offer various opportunities for U.S. and Cuban businesses. This is particularly true in industries such as telecommunications and agriculture where technological and scientific advances could lead to improved infrastructure and increased production.
Key impacts to U.S.-Cuban policy resulting from these actions include:
- Travel. Although tourist travel to Cuba remains prohibited, individuals may now travel to Cuba under a number of general license categories including family visits, journalism, professional research, education, religious activities, public performances, athletic competitions, humanitarian projects, transmission of informational materials, and certain authorized export transactions.
- Imports. While most commercial imports remain barred under the embargo, certain imports of goods and services produced by independent Cuban entrepreneurs will be permitted. (The Office of Foreign Assets Control (OFAC) has not yet released the specific list.) Authorized travelers to Cuba may also import up to $400 worth of goods acquired in Cuba for personal use.
- Exports. Certain exports of items to support the Cuban people are now permitted, including those items that seek to improve living conditions, support independent economic activity, strengthen civil society, and improve communications.
- Authorized exports include building materials, equipment and tools for the private sector to construct or renovate buildings including residences, businesses, places of worship, and recreational facilities; tools and equipment for private agricultural activity; and tools, equipment, supplies and instruments for private sector entrepreneurs.
- Finance. U.S. financial institutions may enroll merchants and process debit and credit card transactions that are consistent with one of the approved travel categories (noted above) and may open corresponding accounts at Cuban financial institutions to facilitate this process.
- Telecommunications. The OFAC has expanded the general license for telecommunications providers to authorize transactions related to the establishment of commercial telecommunications services and related infrastructure in Cuba.
In response to the administration’s activities, Congress has put U.S./Cuba relations near the top of its agenda. Both the House and Senate have held hearings to discuss the administration’s policy changes and potential steps moving forward. The hearings have been somewhat contentious, as this is clearly more complex than a simple liberal-conservative distinction, with members from both parties on each side of the issue.
Several bills have already been introduced in the House and Senate by members from both parties to further ease trade restrictions and end the embargo:
- Jeff Flake (R-AZ) introduced the Freedom to Travel to Cuba Act of 2015 to end all travel restrictions to Cuba. The bill currently has a bipartisan group of 14 cosponsors. Companion legislation in the House has a bipartisan group of 12 cosponsors.
- Charles Rangel (D-NY) introduced the Free Trade with Cuba Act to end the trade embargo. It currently has a bipartisan group of 28 cosponsors.
- In the Senate, Amy Klobuchar (D-MN) has also introduced a bill to lift the trade embargo and has so far amassed a team of six cosponsors. She, along with Mark Warner and Claire McCaskill recently conducted a four-day visit to Cuba and expressed support for ending the embargo. McCaskill opined that Republican agricultural interests will also likely support ending the embargo.
In addition to considering formal actions to end the embargo, Congress is also likely to feel pressure from the U.S. Chamber of Commerce – who has long opposed the embargo – as well as from corporations, trade associations and individuals seeking to conduct business in Cuba.
We are closely monitoring the unfolding changes to U.S. Cuba relations. Our Cuba Team includes attorneys across legal areas, including policy, trade, immigration and intellectual property; who are addressing the impacts of the loosened sanctions to industries including agriculture, transportation and travel, technology, telecommunications, banking and finance. Please contact David Agee with any particular client needs or questions.