Dec

17

Don’t Light Up Those Cubans Just Yet

Posted by at 8:35 pm on December 17, 2014
Category: Cuba Sanctions

Obama Announces Changes in Cuba Regulations from White House Youtube account [Public Domain]President Obama today announced his intention to make some changes in U.S. sanctions on Cuba. Although these changes fall far short of lifting the embargo completely, the usual suspects on the Hill have already started the wailing and gnashing of teeth, vowing to do whatever they can to thwart these changes, convinced that forcing Cubans to drive 60-year-old cars will cause them, sooner or later, to rise up and throw out the current regime.

The changes, as described in this White House fact sheet, however, hardly seem to justify the fit that Marco Rubio is pitching right now.

  • Remittance levels will raised from $500 to $2000 and the remittance forwarders no longer will require a license to forward money to Cuba
  • Exports of “building materials for private residential construction, goods for use by private sector Cuban entrepreneurs, and agricultural equipment” will be permitted
  • General licenses will be issued for travelers in the 12 current categories of authorized travel (which do not include going to Cuba for the fun of it or for the daiquiris)
  • Travelers can come back with $400 in goods, of which only $100 can be alcohol or tobacco products
  • Banks can open correspondent accounts in Cuban financial institutions to facilitate authorized transactions
  • The rules will be revised to make clear that sales of cash against documents of title (e.g., bills of lading) are permitted for authorized exports and to remove the old rule that cash had to be paid prior to the shipment of the goods.

The question posed by all the noise from Congress is, of course, how far can the President go on his own?  For example, the fact sheet states that the U.S. will permit foreign vessels that enter Cuban ports to engage in humanitarian trade may immediately thereafter enter U.S. ports.  However, section 6005(b) of the Cuba Democracy Act states that vessels that enter into Cuban ports to engage in “trade in goods or services” may not enter a U.S. port for 180 days without a license.  Apparently, the change in vessel policy appears to depend on the argument that vessels that enter Cuban ports for humanitarian trade are not involved in the trade of goods or services.

Of course, the 800-pound gorilla here is section 204 of the Helms-Burton Act which purports to prohibit the President from suspending the economic embargo on Cuba unless a “transitional government” is in place in Cuba.  The Act, however, never defines what constitutes suspending the embargo.  So, in theory, the President can remain in compliance with section 204 if he lifts all restrictions on Cuba other than a ban on exporting Chia Pets and Whoopee Cushions to Cuba.

Needless to say, the ink on the fact sheet was scarcely dry before OFAC released a statement that none of these changes will be effective until OFAC revises its regulations to implement these changes.  No indication was given as to how long this would take, other than that it would occur in the “coming weeks.” But given the agency’s often sluggish pace, the “coming weeks” might be quite far off.  Don’t expect any Cohibas under your Christmas tree this year.

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