New rules from the Office of Foreign Assets Control and Bureau of Industry and Security make it easier for importers, exporters, transportation providers and banks to conduct commercial transactions with Cubans.
One week before President Obama’s historic visit to Havana, the U.S. government announced several regulatory changes to make it easier for Americans to travel to Cuba and engage in trade with the island nation.
The changes come on the heels of recent agreement to reestablish scheduled air service between the United States and Cuba with up to 110 non-stop flights daily, part of the ongoing effort to normalize relations between countries that have been estranged for 60 years over Cold War politics and human rights.
Shipping and banking provisions are among key changes to the Cuban Assets Control Regulations announced by the Office of Foreign Assets Control (OFAC) in the Treasury Department and the Commerce Department’s Bureau of Industry and Security (BIS).
BIS said it will generally authorize vessels to transport authorized cargo from the United States to Cuba and then sail to other countries with any remaining cargo that was loaded in the United States. A year ago, the U.S. government changed its policy to allow foreign vessels to enter the United States after transporting certain permissible goods from Cuba. Previously, vessels that called Cuban ports were prevented from entering U.S. ports for six months.
BIS also said it will adopt a licensing policy of case-by-case review for exports and re-exports of items that would enable or facilitate exports from Cuba of items produced by the Cuban private sector.
OFAC said will expand the existing authorization for “physical presence” (such as an office, retail outlet, or warehouse) to include entities that engage in authorized humanitarian projects, entities that engage in authorized non-commercial activities intended to provide support for the Cuban people, and private foundations or research or educational institutes engaging in certain authorized activities. OFAC will also expand the existing authorization for “business presence” (such as a joint venture) to include exporters of goods that are authorized for export or re-export to Cuba or that are exempt, entities providing mail or parcel transmission services or cargo transportation services, and providers of carrier and travel services to facilitate authorized transactions.
The revised regulations will also clarify that the physical and business presence authorizations permit exporters and re-exporters of authorized or exempt goods to assemble such goods in Cuba. BIS will make conforming changes to the Export Administration Regulations to generally authorize exports and re-exports of eligible items to establish and maintain a physical or business presence that is authorized by OFAC.
Last September, the U.S. government allowed companies to establish and maintain offices, retail outlets or warehouses in Cuba. Authorized exporters are now able to ship agricultural products and materials for renovating privately owned buildings.
Provisions were also made to set up operations in Cuba to provide certain parcel and general cargo transportation services.
Although tourism is technically still banned under the U.S. embargo of Cuba, the Obama administration said individuals are now authorized to travel to Cuba for educational purposes and won’t need to travel under the auspices of a sponsoring organization subject to U.S. jurisdiction. Individuals will also be able to buy Cuban products, such as cigars, in third-party countries as part of normal tourist purchases.
The changes also expand Cuba and Cuban nationals’ access to U.S. financial institutions and the U.S. dollar from Cuba, and expand the ability for Cubans legally present in the United States to earn stipends and salaries beyond living expenses.
The U.S. Chamber of Commerce and other business groups welcomed the Obama administration announcement on Cuba.
“By lifting restrictions in a number of areas – from allowing dollar transactions to putting in place measures to facilitate commerce, including new shipping and importation rules – the administration is taking important steps to move the U.S.-Cuba relationship forward,” Richard Sawaya, vice president of USA*Engage, a coalition of business groups, said in a statement.
“The new trade and travel rules announced today will go a long way in helping to remove unnecessary roadblocks to the flow of commerce and people between Cuba and the United States. We have long advocated for lifting the U.S. embargo, and the new rules address some of its most onerous restrictions,” Jake Colvin, vice president for global trade at the National Foreign Trade Council, said.
In the past year, the U.S. and Cuba have opened embassies in their respective capitals, established direct postal service and relaxed other commercial restrictions. Full-blown trade between the nations cannot take place until Congress decides to lift the 55-year-old trade embargo with Cuba.
Minnesota Sen. Amy Klobuchar’s Freedom to Export to Cuba Act, which has 23 cosponsors, would lift the current embargo. Last week, Klobuchar called on the Treasury and Commerce departments to allow American hotels to operate in Cuba.
U.S. takes more steps to open trade, travel with Cuba
