Despite opposition from the Republican-controlled Congress, the Obama administration applauded new amendments to Cuban sanctions adopted by both the U.S. Treasury and the U.S. Commerce Department this week.
The White House announced in December, 2014, that the administration would pursue a path toward normalizing relations with Cuba. In a joint statement this week officials at both Treasury and Commerce Departments announced changes to Cuban sanctions, including lifting of payment and financing restrictions on authorized exports to the island nation, as well as measures that will ease travel restrictions to Cuba.
"These amendments will remove existing restrictions on payment and financing terms for authorized exports and re-exports to Cuba of items other than agricultural items or commodities, and establish a case-by-case licensing policy for exports and re-exports of items to meet the needs of the Cuban people, including those made to Cuban state-owned enterprises," said the joint Treasury-Commerce statement.
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Concerning payment and financial terms, permissible terms will include payment of cash in advance, sales on an open account, and financing by third-country financial institutions or U.S. financial institutions. The changes will also facilitate travel to Cuba by allowing blocked space, code-sharing, and leasing arrangements with Cuban airlines.
It also noted that the U.S. will also authorize additional transactions dealing with professional meetings, disaster preparedness, information and informational materials, and transactions incident to professional media or artistic productions in Cuba.
One of major changes — and possibly the first to be implemented, according to Washington analysts — is that, effective immediately, the U.S. will allow all country’s telecommunication carriers to provide services between the United States and Cuba.
U.S. officials are warning that in spite of these new amendments, the practical impact of the latest round of sanctions relief for Cuba will depend largely on actions the Cuban government may take to liberalize its economy.
"The impact of those will depend to a great extent on the steps the Cuban government takes," said an Obama administration official, who asked not to be identified. The official said U.S. companies had raised issues, including Cuban currency reform and allowing foreign companies to hire Cubans, which would depend greatly on Cuba's political response to normalization.
While the two countries moved closer toward normalizing relations last summer, after a half century of hostilities following Fidel Castro's 1959 revolution, normalization will require more than diplomatic ties and reopening of embassies. A White House official said both the U.S. and Cuban officials must continue to take positive steps toward trust and good will in order for any permanent plan of lifting the U.S. embargo could be considered by Congress.
Some members of both congressional chambers have vocally opposed normalization, and so far lawmakers have failed to take action on the long-standing embargo issue. But Treasury Secretary Jack Lew says this week's actions are a step in the right direction.
A CLEAR MESSAGE
"Today's amendments to the Cuban Assets Control Regulations build on successive actions over the last year,” Lew said, “and send a clear message to the world: The United States is committed to empowering and enabling economic advancements for the Cuban people."
Of particular interest to the agricultural industry are the changes in travel requirements to and from Cuba. Farm and trade groups have been asking for more efficient ways to travel and will see some relief under the new amendments as follows:
• In all 12 existing categories of authorized travel, travel previously authorized by specific license will be authorized by general license, subject to appropriate conditions. This means that individuals who meet the conditions laid out in the regulations will not need to apply for a license to travel to Cuba.
These categories include family visits; official business of the U.S. government, foreign governments, and certain intergovernmental organizations; journalistic activity; professional research and professional meetings; educational activities; religious activities; public performances, clinics, workshops, athletic and other competitions, and exhibitions; support for the Cuban people; humanitarian projects; activities of private foundations or research or educational institutes; exportation, importation, or transmission of information or information materials; and certain authorized export transactions.
• The per diem rate previously imposed on authorized travelers will no longer apply, and there is no specific dollar limit on authorized expenses. Authorized travelers will be allowed to engage in transactions ordinarily incident to travel within Cuba, including payment of living expenses and the acquisition in Cuba of goods for personal consumption there.
• Travelers will now be allowed to use U.S. credit and debit cards in Cuba. Also, travel agents and airlines will be authorized to provide authorized travel and air carrier services without the need for a specific license from OFAC.