The U.S. Departments of the Treasury and Commerce announced yesterday, January 26, new measures related to Cuba, including several regarding financial transactions, U.S. exports to the country, and travel.
The most important element of the Obama administration’s new package is the authorization of credit to Cuba by U.S. banks, based both within and outside of the country, as well as other countries’ banks operating in the United States, for the purchase of approved exports or re-exports, with the exception of agricultural sales, which by law require payment in cash, in advance.
Measures previously approved, in January and September of 2015, opened the door, ever so slightly, for the export of U.S. products to Cuba, specifically construction materials, as well as equipment and tools for private businesses and non-state agricultural producers. Additionally approved was the re-export from third countries of U.S. made items used in activities of a scientific, archaeological, cultural, ecological, educational, athletic, research, historical preservation, or professional nature.
On this most recent occasion, in terms of exports, the measures imply a new general policy of licensing for some agricultural products, such as insecticides, and herbicides, as well as equipment necessary to the security of civil aviation and the operation of commercial international flights, including those on aircrafts rented to state-owned companies. This last item is important to the implementation of a preliminary agreement reached in December of last year, to establish commercial flights between the two countries.
Likewise included in this new licensing policy are exports and re-exports of U.S. made goods and software for non-governmental human rights organizations promoting independent activity in Cuba, as well as telecommunications equipment and devices.
One aspect of the latest measures is the decision to award licenses on a case by case basis, for exports and re-exports of products which meet the needs of the Cuban people, including purchases made for this purpose by state-owned enterprises, agencies and organizations. Cited as examples of license eligible products are those related to disaster preparedness; education; agricultural production; artistic endeavors; food processing; public transportation; public heath; home construction and repair; and construction of infrastructure which would directly benefit the Cuban people (such as water treatment and supply systems, for example.)
It is noteworthy that this is the first time the participation of Cuba’s government in these types of relations has been authorized – albeit in a limited, conditioned, case by case manner – an issue repeatedly raised by Cuban negotiating teams in talks between the two countries.
Nevertheless, it is important to point out that prohibitions remain in effect on the export of U.S. made products to state enterprises, agencies, or other institutions affiliated with the Cuban government which might generate income for the state, as is the case for the mining industry and tourism, as well as the armed forces, police, intelligence and security services.
CHANGES IN TRAVEL POLICY
As for travel to Cuba, also included in the announced changes were some modifications, such as the authorization of visits related to approved exports and re-exports, including trips made to conduct market studies, promotion, or contract negotiations, and to provide accompanied deliveries, installation, or services.
Additionally now permitted are temporary stays by personnel operating or providing services to ships and aircrafts transporting passengers between the two countries, meant to complement the abovementioned agreement on commercial flights between Cuba and the United States.
Also authorized in the new regulations were travel and other transactions linked to professional media or artistic production – including the filming or production of media reports, films, and television programs; musical recordings; and the creation of artworks. The changes also allow for the employment of Cubans and the transmission of royalties or other payments.
General licensing for participation in events organized in Cuba was broadened to now include professional meetings and conferences, in addition to travel and transactions related to the organization of international professional and amateur sporting events; public performances; clinics; workshops; other types of non-athletic competitions; and expositions. Likewise eliminated were requirements that earnings from such events be donated to specific organizations, and that activities be directed, at least partially, by U.S. citizens.
ON THE RIGHT PATH…
The new changes announced by the Obama administration represent another step forward in relations between the two countries, and confirm the fact that much can be done to dismantle the blockade by eliminating restrictions which are not codified in law and require Congressional action.
This authorization of credit to Cuba for purchases in the U.S. appeared to be a distant possibility when the process of reestablishing relations began, just a year ago.
Yet, there is still a long way to go. A glaring omission in this most recent package of modifications is authorization for Cuba’s use of the dollar in international financial transactions, which remains prohibited and undoubtedly makes the country’s commercial relations more expensive and difficult around the world.
Likewise, exports to Cuban state enterprises remain limited to specific areas, and require case by case evaluation and licensing. Nor are policies approved for the telecommunications industry – including investment and sales of basic equipment, software and devises – applicable to other sectors.
Other elements of the blockade which have yet to be addressed include those related to Cuban exports to the United States, and the authorization of individual travel to Cuba in the category of people-to-people exchanges.
Nonetheless, if anything is made clear by this new initiative, it is that the opportunity exists to continue moving forward on this path, and gut the regulations which sustain the blockade. Perhaps this is the most expeditious route to promoting debate within the U.S. Congress, so that this body finally makes the decision demanded by 191 countries in the United Nations General Assembly, and advocated by President Obama himself, to definitively end the blockade.