US Announces New Measures to Broaden Trade with Cuba and Circumvent the Embargo

By Café Fuerte

The US Commerce Department
The US Commerce Department

HAVANA TIMES — This Friday, the Obama administration launched a series of measures to broaden trade, travel and investments by US companies in Cuba as part of a new policy initiative by Washington aimed at skirting embargo restrictions.

The norms appear in a 27-page document drawn up by the US Department of Trade’s Bureau of Industry and Security. They represent a major leap forward in terms of commercial operations, banking transactions, airline flights, cruise and ferry operations and access to US products by Cuban citizens.

The announcement was made this morning, advancing the steps Obama promised in January to relax embargo restrictions by exercising his executive powers.

A Challenge for Cuba

“These are the most important changes to the regulations on trade an investment with respect to Cuba that have been made in decades,” said John S. Kavulich, chair of the US-Cuba Trade and Economic Council (USTEC) based in New York.

Needless to say, many of the opportunities opened to US companies and businesspeople will have to wait for approval from the Cuban government.

Kavulich believes these measures will have a powerful impact on the legacy of the Obama administration and will create a kind of pressure that the Cuban government will find difficult to handle.

“As of now, Cuba will have to reciprocate Washington’s initiative or risk a loss of interest by the US business community,” he added.

Skirting the Embargo

The measures implemented by the Department of Trade will allow for:

– US companies to enter joint ventures with Cuban State companies.

– US companies to provide loans and extend payment terms for the sale of authorized products.

-The hiring of Cubans residing on the island by US companies.

-The opening of product distribution points in places such as the Mariel Development Zone.

-The establishment of mail delivery points in Cuba by companies such as FedEx and UPS.

– The sale of building materials and supplies, as well as sanitary items.

– The sale of aviation technology and pieces, as well as passenger control equipment used at airports.

– Supplying food products to private restaurants.

The implementation of this package of measures comes at a unique moment in the history of relations between the two countries, following the hoisting of the Cuban and US flags in Washington and Havana.

This Wednesday, Obama received Cuba’s new ambassador, Jose Ramos Cabañas, in the White House. Ramos presented his credentials on the eve of President Raul Castro’s visit to Washington. Castro is to speak at the UN General Assembly on September 28.

Raul Castro and Barack Obama are expected to meet during the Cuban leader’s visit to the United States. Castro will be present at the United Nations during Pope Francis’ speech on September 25.
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The following is a statement issued by the US Treasury and Commerce Departments.

U.S. Treasury Department

Office of Public Affairs

TREASURY AND COMMERCE ANNOUNCE

FURTHER AMENDMENTS TO THE CUBA SANCTIONS REGULATIONS

Amendments Further Implement President Obama’s 2014 Announcement

Related to the Easing of Cuba Sanctions

WASHINGTON – Today, the Department of the Treasury and the Department of Commerce are announcing additional revisions to the Cuban Assets Control Regulations (CACR) and Export Administration Regulations (EAR), building off the changes put into place by Treasury and Commerce on January 16, 2015 and further delivering on the new direction toward U.S. relations with Cuba that President Obama laid out last December. The changes, consistent with the President’s December announcement, will take effect on Monday, September 21, 2015, when the regulations are published in the Federal Register. A fact sheet detailing the revisions, which will be administered by Treasury’s Office of Foreign Assets Control (OFAC) and Commerce’s Bureau of Industry and Security (BIS), is below.

Treasury Secretary Jacob J. Lew said, “Today’s announcement underscores the Administration’s commitment to promote constructive change for the Cuban people. These regulatory changes build on the revisions implemented earlier this year and will further ease sanctions related to travel, telecommunications and internet-based services, business operations in Cuba, and remittances. A stronger, more open U.S.-Cuba relationship has the potential to create economic opportunities for both Americans and Cubans alike. By further easing these sanctions, the United States is helping to support the Cuban people in their effort to achieve the political and economic freedom necessary to build a democratic, prosperous, and stable Cuba.”

Commerce Secretary Penny Pritzker said, “The regulations published today are designed to support the emerging Cuban private sector and bring us one step closer to achieving President Obama’s historic policy goals. These actions build upon previous Commerce regulatory changes, and will ease travel restrictions, enhance the safety of Americans visiting the country, and promote more business opportunities between U.S. and Cuban companies. In addition to expanding our commercial engagement with the Cuban people, these additional adjustments have the potential to stimulate long overdue economic reform across the country.”

These measures will further facilitate travel to Cuba for authorized purposes; expand the telecommunications and internet-based services general licenses, including by authorizing certain persons subject to U.S. jurisdiction (which includes individuals and entities) to establish a business presence in Cuba, such as through subsidiaries or joint ventures; allow certain persons to establish a physical presence, such as an office or other facility, in Cuba to facilitate authorized transactions; allow certain persons to open and maintain bank accounts in Cuba to use for authorized purposes; authorize additional financial transactions, including those related to remittances; authorize all persons subject to U.S. jurisdiction to provide goods and services to Cuban nationals located outside of Cuba; and allow a number of other activities, including those related to legal services, imports of gifts, and educational activities. These amendments also implement certain technical and conforming changes.

To see the Treasury regulations, which can be found at 31 Code of Federal Regulations (CFR), part 515, please see here. To see the Commerce regulations, which can be found at 15 CFR parts 740, 746, and 772, please see here. Major elements of the changes in the revised regulations include:

Travel –

Facilitating authorized travel and commerce, increasing contact between Americans and Cubans, and supporting civil society in Cuba:

  • Transportation by vessel of authorized travelers – between the United States and Cuba only and without stops in third countries – will be authorized by general license. Certain related lodging services aboard vessels used for such travel will also be authorized.
  • License Exception Aircraft, Vessels, and Spacecraft (AVS) will authorize temporary sojourns to Cuba of certain categories of vessels. Eligible categories of vessels are cargo vessels for hire for use in the transportation of items; passenger vessels for hire for use in the transportation of passengers and/or items; and recreational vessels that are used in connection with travel authorized by the Treasury.
  • License Exception AVS will authorize aircraft on temporary sojourn to remain in Cuba for up to 7 consecutive days and authorizes vessels on temporary sojourn to remain in Cuba for up to 14 consecutive days.
  • Close relatives will be allowed to visit or accompany authorized travelers for certain additional activities. In the January changes, OFAC permitted close relatives to join visits related to official government business and certain educational activities, and to visit additional family members residing in Cuba. Close relatives now also will be allowed to visit or accompany authorized travelers for additional educational activities, journalistic activity, professional research, and religious activities, as well as activities related to humanitarian projects and activities of private foundations or certain research or educational institutes. For purposes of this provision, a close relative is defined as someone related to a person by blood, marriage, or adoption – and who is no more than three generations removed from that person or a common ancestor with that person.
  • All authorized travelers will be allowed to open and maintain bank accounts in Cuba in order to access funds for authorized transactions while in Cuba.

Telecommunications & Internet-Based Services –

Enhancing the free flow of information to, from, and within Cuba, and better providing efficient and adequate telecommunications services between the United States and Cuba:

  • Persons subject to U.S. jurisdiction will be allowed to establish a business presence in Cuba, including through joint ventures with Cuban entities, to provide certain telecommunications and internet-based services, as well as to enter into licensing agreements related to, and to market, such services.
  • Persons subject to U.S. jurisdiction will be allowed to import Cuban-origin mobile applications into the United States and to hire Cuban nationals to develop them.
  • An existing authorization for the provision of services related to certain consumer communications devices exported to Cuba will be expanded to authorize services related to additional types of items authorized by Commerce, and to add training related to the installation, repair, or replacement of those items.
  • License Exception Consumer Communications Devices (CCD) will no longer be limited to sales or donations. This change to License Exception CCD is intended to support other types of transactions, such as leases and loans of eligible items for use by eligible end-users.

Commercial and Financial Transactions –

Refocusing sanctions so they do not prevent day-to-day transactions by Cuban individuals who are outside of Cuba:

  • All persons subject to U.S. jurisdiction will be allowed to provide goods and services to individual Cuban nationals located outside of Cuba, provided there is no commercial exportation of goods or services to or from Cuba.
  • Banking institutions will be able to open and maintain accounts for Cuban individuals for use while the Cuban national is located outside of Cuba, and to close such accounts.

Physical Presence and Operations in Cuba –

Facilitating certain authorized activities involving Cuba:

  • Persons subject to U.S. jurisdiction engaging in the following categories of authorized activities will be allowed to establish and maintain a physical presence, such as an office, retail outlet, or warehouse, in Cuba: news bureaus; exporters of certain goods authorized for export or reexport to Cuba by Commerce and OFAC, such as agricultural products and materials for construction or renovation of privately-owned buildings; entities providing mail or parcel transmission services or certain cargo transportation services; providers of telecommunications or internet-based services; entities organizing or conducting educational activities; religious organizations; and providers of carrier and certain travel services. These individuals and entities will also be authorized to employ Cuban nationals, open and maintain bank accounts in Cuba, and employ persons subject to U.S. jurisdiction in Cuba.

Support for the Cuban People –

Improving living conditions, strengthening civil society, and supporting independent economic activity by the Cuban people:

  • License Exception Support for the Cuban People (SCP) will authorize certain exports and reexports of items to Cuba for use in establishing, maintaining, and operating a physical presence in Cuba. Eligible end-users of the items include certain persons providing telecommunications or internet-based services; establishing telecommunications facilities; providing travel or carrier services; organizing or conducting educational activities; or transporting authorized items between the United States and Cuba.
  • License Exception SCP will no longer be limited to sales or donations. This change to License Exception SCP is intended to support other types of transactions, such as leases and loans of eligible items for use by eligible end-users.
  • Certain temporary reexports from a foreign country to Cuba will be authorized by License Exception SCP when the items are for use in scientific, archeological, cultural, ecological, educational, historic preservation, sporting activities, or in the traveler’s professional research and meetings. Previously, this provision was limited to temporary exports by persons departing the United States.
  • Certain commodities and software for use in software development may be exported or reexported to eligible end-users in Cuba pursuant to License Exception SCP.
  • License Exception SCP will authorize temporary exports and reexports to Cuba of additional categories of items, including certain tools of trade to install, service, or repair items; and certain commodities and software for exhibition or demonstration.

Remittances –

Empowering Cubans with opportunities for self-employment, and in turn strengthening independent civil society:

  • The limits on donative remittances to Cuban nationals other than prohibited Cuban Government or Cuban Communist Party officials, currently set at $2,000 per quarter, will be removed entirely. The limits on authorized remittances that individuals may carry to Cuba, previously $10,000 for persons subject to U.S. jurisdiction and $3,000 for Cuban nationals, will also be removed entirely.
  • The unblocking and return of remittances that were previously blocked because they exceeded the then-applicable caps on periodic remittances, and of certain previously blocked funds transfers, will be allowed.
  • Depository institutions will be allowed to maintain accounts for certain Cuban nationals present in the United States in a non-immigrant status, and will no longer be required to block such accounts if not closed before the Cuban national’s departure. Access to such accounts will be limited to while the Cuban national is lawfully present in the United States, although the account may remain open while the Cuban national is not in the United States. The $250 monthly limit on payments from previously blocked accounts held in the name of such Cuban nationals will be removed to more adequately allow access to funds for living expenses.
  • Remittances from Cuba and from Cuban nationals in third countries to the United States will be authorized by general license, and financial institutions will be allowed to provide related services.
  • An expanded general license also will authorize additional remittances to Cuban nationals in connection with the administration of estates. This provision complements another general license authorizing all transactions incident to the administration and distribution of the assets of estates in which a Cuban national has an interest.

Legal Services –

Updating the legal services provisions:

  • OFAC’s existing general license authorizing the provision of certain legal services to Cuba and Cuban nationals will be expanded to allow the receipt of payment for such services. Certain limitations will apply, related to payments from prohibited Cuban Government or Cuban Communist Party officials. Additionally, a new general license will authorize persons subject to U.S. jurisdiction to receive, and make payment for, certain legal services from Cuba or Cuban nationals.

Civil Aviation Safety –

Supporting international aviation and passenger safety:

  • A case-by-case review policy will apply to license applications for exports and reexports to Cuba of items to help ensure the safety of civil aviation and the safe operation of commercial passenger aircraft. Items that are to be reviewed pursuant to this policy include aircraft parts and components; software and technology related to safety of flight; air traffic control, aviation communications, and aviation weather related equipment; airport safety equipment; and devices used for security screening of passengers and baggage.

Gift Imports –

Allowing certain gifts:

  • Imports of merchandise from Cuba or Cuban-origin merchandise from a third country intended as gifts, excluding alcohol and tobacco products, will be allowed to be sent to the United States provided that the merchandise is not carried by a traveler, the value of the merchandise is not more than $100, and the item is a type and in quantities normally given as a gift.

Educational Activities –

Increasing contact between American and Cubans and enhancing the free flow of information to, from, and among the Cuban people:

  • Under an expanded general license, additional educational activities involving Cuba and Cuban nationals, including the provision of standardized testing services and internet-based courses, will be authorized.
  • Academic exchanges and joint non-commercial academic research with universities or academic institutions in Cuba will also be authorized.
  • Travel-related transactions in connection with these activities will also be authorized.

Ordinarily Incident Transactions –

Clarifying the scope of authorized transactions:

  • OFAC is clarifying that the Cuba sanctions provisions that are already in place allow most transactions that are ordinarily incident and necessary to give effect to a licensed transaction. For example, certain payments made using online payment platforms are permitted for authorized transactions.

Air Ambulances and Emergency Medical Services –

Facilitating access to emergency medical services:

  • The provision of air ambulance and other related emergency medical services to travelers in Cuba will be authorized by general license, and a general license will clarify that the provision of nonscheduled emergency medical services to Cuban nationals in the United States is authorized.

Humanitarian Projects –

Facilitating aid to the Cuban people in times of need and preserving Cuban history:

  • The general license authorizing transactions related to specified humanitarian projects will be expanded to include disaster relief and historical preservation.

Supporting Diplomatic Relations –

Supporting the reestablishment of diplomatic relations with Cuba in accordance with the President’s announcement:

  • OFAC is expanding the general license authorizing transactions with official missions of Cuba to the United States to include international funds transfers.

 

 


52 thoughts on “US Announces New Measures to Broaden Trade with Cuba and Circumvent the Embargo

  • September 23, 2015 at 3:15 pm
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    The embargo does not include medicines. That is why a Cuban doctor explained to me in a hospital in Cuba, that he was unable to obtain medicines which he wished to prescribe to his patients, because of the obduracy of the sole importers – the regime!
    Talking about that hospital and its medical staff illustrates the conundrum of Cuba’s medical services for it’s people. The staff are excellent both doctors and nursing staff. But, the hospitals – I have been at three – are in a deplorable state. Broken windows, missing door handles, broken toilet cisterns and a total lack of bedding, the patients have to supply it.
    Violent crime rates in this world are interesting and particularly horrifying in Latin American countries:
    Murders per 100,000 per year:
    Honduras 82.1
    El Salvador 66.0
    Cote d’Ivoire 56.9
    Jamaica 52.1
    Venezuela 49.0
    Belize 41.7
    Guatemala 41.4
    Virgin Islands 39.2
    Zambia 38.0
    Robberies are also interesting:
    Belgium 1,762
    Spain 1,188
    Argentina 1,003
    Mexico 507
    Dominican R. 573
    Costa Rica 529
    Chile 456
    Trinidad &Tobago 452
    Nicaragua 443
    Equador 386
    Uruguay 277
    Panama 235
    The Belgian police are famed in Europe for their incompetence, in all my personal travels it is the only country in which I have been robbed and that was on arrival on the Eurostar in Brussels station. Not much wonder that the most famous statue is of a small boy obviously pissed off.
    But clearly, the Caribbean and South America are rife with violent crime and robbery.
    But nidal, the fact that I can give you these statistics is indicative of concern about crime. Cuba has a simple answer – what’s to steal?

  • September 23, 2015 at 11:19 am
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    All this talk about imports and exports. Cuba, like the majority of Caribbean Islands, will derive the majority of their income from Tourism. It is also the case in Florida.

  • September 23, 2015 at 9:15 am
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    what part did the Embargo play and making sure this medication is not present ?
    Try and imagine a situation in which somebody needs a life-saving medication for himself or for his loved ones , in one place that medication does not exist , and in the other place medication does exist except he does not have the money to buy it .
    what do you think this person should do , should he say to himself “I don’t have the money for it “or should he go and steal so he could pay for it and save the life of a love ones? what is worse Doctors that don’t have what it takes to do something or Dr that have no conscious .
    United States have the best medicine and medical facilities in the world as long as you have the money , if you don’t have the money you’re going to get better treatment in Zimbabwe .
    I don’t here you think about all the problems in Central America from the high crime rate in Honduras to hunger and starvation you find in some of these countries , next door to Cuba in Haiti they eat mud cakes for crying out loud ,

  • September 22, 2015 at 4:32 pm
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    The English language which is a combination of various tongues is not in the charge of anyone, that is one of its advantages and why it has ever expanding use in the world at large – the advantage is flexibility! I have at times in these columns, quoted the Oxford English Dictionary in order to correct misconceptions or to explain phraseology I have used like “dead cat’.
    Where you are not unusually incorrect, is in writing about Cuba possessing “all the room they have to play with and what they can do with the immense leeway they have in reserve(d).
    Cubans are not even allowed to move freely within their own country even if due to remittances they can afford to do so. If by writing about “immense leeway” you are referring to under-utilised assets such as agricultural land, you are correct. But, as those under-utilised assets are ever increasing, it is more than unlikely that the communist dictatorship will reverse its failed policies to improve matters.
    As for Cuba changing overnight, that would require the sudden deaths of both the current and past dictators and of the family of Raul Castro Ruz, coupled with the leaders of the Communist Party of Cuba. That is unlikely to occur.
    The invasion of South Korea by North Korea aided by hundreds of thousands of Chinese caused the Korean War and resulted in action by the United Nations a body which you apparently scorn.
    The difficulty of medications in Cuba was explained to me by a Cuban doctor in our local hospital. He could define the medicines required to treat conditions in his patients, but could not prescribe them as the regime does not import them. Not doing so, has nothing to do with the embargo, it is due in his view (who are either of us to argue with him) to incompetence of the purchasing agent: ie: the government of Cuba.
    You nidal forget that I commented previously that I consider English a difficult language to learn as it unlike Spanish, is not logical. You even thanked me!
    As for someone getting off the pot, your world wide political illogical ramblings do not really qualify you to decide who should get off a pot and when. Better for you to watch your own backside!

  • September 22, 2015 at 11:57 am
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    thank you for your kind words.
    question who the heck died and left you in charge of the English language , are you one of them self-appointed righteous those whom give themselves the right to judge everybody else , remember what the Bible says judge not lest be judged .
    I am sure the readers out there understood what I had in mind , anyway for the sake of clarity I will try to explain it to you , I was trying to point out the positives about Cuba and all the room they have to play with and what they can do with the immense leeway they have in reserved .
    In evolution they say survival of the fittest , that being said it does not mean the strong or smart , evolution favors those who have what it take to adapt to a new situation and succeed , all off the issues that you talked about in a negative way about Cuba could change overnight .
    Correction the Korean War was carried out by American for the sake of the sake of so-called national interest , United Nation is nothing more than a puppet of Western culture , you talk about United Nation resolution how many of the resolutions against Israel have been implemented ,
    about your so called capitalist system that you are infatuated wind this headline was in the morning news ,
    ( drug company raises the price by five thousand percent rt tv http://youtu.be/qB29eYLyE1I )
    last month I paid $65 off copay on my diabetes medication this month it went up to $146 , and that’s only one of the medications I’m on .
    can you tell me how many you know of in Cuba have to make a choice between buying food or medication don’t forget the rent now ? yes they make little money keep in mind the flip side of the coin they don’t have to get mugged every time they go to pharmacy for life-saving medications .
    do yourself and all of as a favor get off your pot.
    I wish I had more time on my hand to show you how screwed up the capitalist system .

  • September 22, 2015 at 12:09 am
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    Once seen IC the valley of Vinales remains a mental picture being in my experience a unique vista and I have travelled in well over thirty countries and being an enthusiastic walker. One could add that as I spend most of my time at home in Cuba, that is an advantage as there is little alternative unless I borrow my wife’s bicycle.
    You are accustomed to reading my contributions, but one day they will cease and you will know I have gone home again.
    Thank you for the compliment bjmack, yes, I could organize tours, but prefer to spend my time at home.

  • September 22, 2015 at 12:00 am
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    You nidal are quite obviously ignorant of the reality of Cuba. But one thing you got right, At $20.68 US equivalent, “Cuba has the most competitive wages of anywhere in the Americas.”
    So nidal you are suggesting as a good capitalist, that the poverty of the Cuban worker should be exploited for the benefit of the Castro family regime?
    Regarding Hyundai, the franchise for the whole of Cuba was held by a Canadian. It was obviously attractive to the regime, so they made the customary charge against foreign businessmen of “corruption” jailed him for fourteen years and confiscated his business along with the franchise.
    When you say that both Japan and South Korea (you wrote Korea which is a peninsula not a country, North Korea is under a communist family dictatorship like Cuba) have “barely stepped out of war”, you are in a time warp. The United Nations forces which fought on the Korean peninsula, ceased military action 62 years ago and Japan 70 years ago.
    The noteworthy difference between North and South Korea, is that the first is a communist family dictatorship imposing starvation upon its people in order to develop nuclear bombs in disregard to United Nations resolution and the latter is a successful free capitalist democracy.
    So in North Korea, the people can say: GRACIAS PARA LA FAMILIA KIM.
    As for the Cubans, they have had a bellyful of fear for fifty six years with the CDR ever looming over their every meeting with their fellows. They have plenty to fear – so don’t worry yourself!

  • September 21, 2015 at 9:05 pm
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    Hell Carlyle, you and the relatives and family should seriously consider getting into the tourist business! I’d be your first customer! Good work!

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