2016: The Year of Cuba

2016 has kicked off with some big changes, many of which pertain to the United State’s relationship with Cuba.  On January 27th, 2016, the Bureau of Industry and Security (BIS) and the Office of Foreign Assets Control (OFAC) announced new regulations that further reduce U.S. sanctions on Cuba.  Translation: things are looking up in terms of repairing a long-term strained relationship between the two.  These modifications  relate to financing, exportation, and travel; they further liberalize bilateral access and promote improved relations between the United States and Cuba.  Since January, regulations have  steadily been chipped away at an effort to slowly dilute the embargo; these include regulations eased as recently as March 15th.

Previously, there were very strict regulations regarding payment and financing terms for non-agricultural exports to Cuba.  C.O.D. was the only means of payment allowed: credit was forbidden. However, many of these terms have now been reduced or repealed, allowing for payments of cash in advance, sales on an open account, and financing by a third-party country or the U.S.  In support of this, a regulation was promulgated on March 15th to ease the transfer of money between Cuban and American banks. Establishing expanded methods and means of financing helps encourage trade and exchange between the U.S. and Cuba, and it is an important step in growing the relationship between the two.

In addition, regulations regarding U.S. exports were altered.  Licenses for exports of food and services which are deemed to aid Cuba have been expanded; this category now includes telecommunications, agricultural, civil aviation safety, and news gathering software items.  This expansion allows a larger variety of items to be sent to Cuba, and a case-by-case basis licensing policy has been introduced for even more additional items.

The most drastic  changes are those regarding travel.  OFAC (the Office of Foreign Assets Control, which regulates embargos) has now approved an expanded number of business-related travel reasons; these include professional conferences, sports competitions, artistic expeditions, humanitarian projects, market research, and sales/contract negotiation.  It is important to note that travel blatantly for tourism alone is still banned, but there are an increasing number of ways to circumvent this.  As of March 15th individual travel is permitted for “people-to-people missions”; this includes any trip which involves a meaningful cultural exchange with Cuban people. This is a big development, as previously this category was limited to tour groups only.  Since commercial flights to Cuba are scheduled to resume in the Fall, it is an appropriate time for these more lenient travel regulations to be taking form.    Given these new  “people-to-people ” rules, it seems a foregone conclusion that individuals who make, let’s say,  culturally driven sojourns with enjoyable side trips are very unlikely to find themselves under threat of prosecution at this time.

President Obama announced in February his plans to make a trip to Cuba in this month; it will be the first time an American President has visited Cuba in 88 years.  The goal to repair and expand relations with Cuba through enhanced communication and travel was originally announced by Obama in December 2014, and this seems to be a big step in that direction.  It is sure to be worthwhile keeping  an eye out for regulatory chanages regarding import, export, trade, financing, and more as relations between the U.S. and Cuba continue to warm.