As tensions between Cuba and the United States continue to thaw, President Obama made a historic announcement today – the U.S. and Cuba will reopen embassies in each other’s capitals. This could prove a watershed moment in the push to normalize relationships between the two countries. Estimates are that the embassies will open by month end, with Secretary of State John Kerry traveling to Cuba for the official opening. This development echoes White House Press Secretary Josh Earnest’s response to his first ever question taken from a Cuban reporter last May – that the White House hoped the two countries would reopen embassies.

However, several large roadblocks still remain if the Administration is to achieve its goal of normalized relations. As noted in our earlier posts regarding Cuba, any end to the current embargo would still require congressional authorization. The recent expiration of the Export-Import Bank’s charter could also prove an obstacle to those looking to conduct business in Cuba. The Ex-Im Bank helps finance the foreign purchase of U.S. goods; without such financing, it is possible that even permitted areas of trade such as agriculture, could be hindered.

High-profile opponents of normalized relations in the Senate, such as Senators Marco Rubio (R-FL) and Ted Cruz (R-TX), could also take various actions. Senator Rubio has pledged to block whomever President Obama nominates for ambassador from being confirmed in the Senate. It is possible, however, that the embassy could simply function without an ambassador. In addition, the State Department has stated that making the dilapidated interests section (the current limited diplomatic outpost in Havana) suitable as a functioning embassy, would require a substantial amount of money. It is entirely conceivable that opponents will try to block this funding via an appropriations rider.

Despite the aforementioned issues, for those supporting expanded relations between the countries, the opening of embassies is an extremely positive development. Cuba has already taken actions to upgrade its interests section in the Adams Morgan area of Washington, D.C., erecting a large flagpole for the formal raising of its flag. Cuba had previously announced that banking services for its interests section had been restored, which was seen as a precondition for opening an embassy. President Obama may also consider a trip to Cuba before his term ends, which would constitute another significant milestone.

Our multidisciplinary Cuba Team continues to monitor evolving changes to U.S.-Cuba relations. Please contact Partner David Agee with any specific needs.