New Travel And Business Rules Issued For Trade With Cuba

New Travel And Business Rules Issued For Trade With Cuba

The U.S. government has eased rules that govern business and travel regulations with Cuba, another step in normalizing relations with the island just 90 miles from Key West. The amendments to existing regulations were issued by the Department of Treasury's Office of Foreign Asset Control (OFAC) and the Department of Commerce's Bureau of Industry and Security (BIS). The rules are another step toward resumption of ties between the two countries, a goal that President Barack Obama announced December 2014 after more than 50 years of hostilities.

"These changes are significant," says John Kavulich, president of the U.S. Trade and Economic Council. "The Obama administration is attempting to increase pressures upon the government of Cuba by creating fewer political and commercial impediments to the initiatives first announced in December 2014."

Julia Sweig, the co-founder of D17 Strategies, a firm offering advisory services in Cuba, says that the new rules are a "good step forward," but they still do not deal with some of the fundamental problems that prevent Cuban enterprises from doing business with the American companies.

For the most part, the new rules also do not affect the individual traveler going to Cuba legally as part of the licensed People-to-People tours, a U.S. government sanctioned program that has seen a dramatic increase in travelers and tours since President Obama's announcement. That announcement led to the reopening last July of the two nations' embassies in Havana and Washington D.C., the first time in more than 50 years that either nation had full diplomatic offices in each other's capitals.

In the announcement, Treasury Secretary Jacob J. Lew says, "[the] amendments to the Cuban Assets Control Regulations (CARC) build on successive actions over the last year and send a clear message to the world: The United States is committed to empowering and enabling economic advancements for the Cuban people."

Commerce Secretary Penny Pritzker adds that following a bilateral Cuban–U.S. meeting and "my fact-finding trip to Cuba in October, we have been working tirelessly to maximize the beneficial impact of U.S. regulatory changes on the Cuban people." She says the new rules will authorize additional exports for areas like disaster preparedness, education, agricultural production, artistic endeavors, food processing and public transportation.

The new rules, according to the press release, also "remove existing restrictions on payment and financing terms for authorized exports and re-exports to Cuba of items other than agricultural items or commodities." But according to Sweig, those transactions must still be vetted to be sure they are not dealing with Cuban government enterprises, a requirement that makes many U.S. companies—and U.S. financial institutions—leery of getting involved in Cuba.

The one element of new rules that may eventually affect individual travellers regards travel related business and practices. The new rules allow blocked space, code-sharing and leasing arrangements with Cuban airlines, and "authorize additional travel related and other transactions directly incidental to the temporary sojourn of aircraft and vessels."

"This may have an impact on general aviation," says Kavulich, but for now, there are no specifics on how private air travel might be permitted.

The rules also ease transactions related to professional meetings and other events, as well as making it easier for professional media or artistic productions in Cuba.

While there has been no official Cuban government reaction, the government newspaper, Granma,says this is "the first time that the participation of the Cuban state has been accepted in this type of negotiations."

"read to hit the beach" —February 10, 2016 10:28 AM