Obama chips away at Cuba embargo, easing business and travel rules
Reuters – The Obama administration announced wide-ranging new rules on Friday to ease trade, travel and investment restrictions with Cuba, the latest effort to chip away at the long-standing U.S. economic embargo amid a diplomatic thaw between the two former Cold War foes.
The regulatory changes will allow certain U.S. companies to establish offices on Cuba for the first time in decades, expand banking activities and eliminate limits on the amount of money that can be taken to the Communist-ruled island, U.S. officials said.
Washington touted the moves as a way to boost business and to support more economic and political freedom in Cuba. The changes, while significant, stop short of allowing across-the-board investment or general U.S. tourism, activities banned under the embargo.
The action comes as Washington and Havana move toward normal relations after more than half a century of hostility. The two countries restored diplomatic ties and reopened embassies earlier this summer.
Set to take effect on Monday, the new regulations, which President Barack Obama is implementing with his executive powers, build on others he announced in January to begin lowering economic barriers with Cuba.
But only Congress has the power to fully lift the 53-year-old economic embargo against Cuba, the main stumbling block to full normalization of ties with Havana. And Republicans who control Congress are considered unlikely to do so despite Obama’s appeals. The president also faces resistance some fellow Democrats, although most support rapprochement.
Critics of Obama’s detente with the island slammed the move as another reward to Cuba given with no concessions from Havana, especially on the human rights front.
The announcement came just as Pope Francis, who played an instrumental role in the diplomatic opening late last year, prepares to visit Cuba this weekend before heading to the United State next week. The Vatican has long condemned the embargo against Cuba.
U.S officials said the changes aim to expand business and also boost “people-to-people” contact between the two countries.
“A stronger, more open U.S.-Cuba relationship has the potential to create economic opportunities for both Americans and Cubans alike,” U.S. Treasury Secretary Jacob Lew said in a statement.
“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,” he said.
THE BALL IN CUBA’S COURT
Officials noted that the full impact of the latest easing of Cuba restrictions will depend on whether the Cuban government makes economic reforms of its own, including on imports.
Some White House aides have privately accused Havana of dragging its feet on such changes for fear of losing its grip on the state-run economy and Cuban society. Some U.S. corporate executives have also been wary of the risks of doing business in Cuba.
There was no word yet from the Cuban government on the changes. President Raul Castro’s government has welcomed Obama’s efforts to normalize relations while calling for a full, unilateral lifting of the embargo.
“The Obama administration continues to naively fuel expectations of a non-existent new Cuba,” said U.S. Rep. Ileana Ros-Lehtinen, a Cuban-American lawmaker from south Florida who has long opposed any easing of the embargo without political change on the island.
“These new regulations are another desperate attempt to ignore the iron grip that the Castro regime maintains on the island’s economy and will only serve to benefit the coffers of the regime,” she said.
Ric Herrero, director of CubaNow, an anti-embargo group said: “This latest set of regulatory changes represents another momentous step by the Obama administration to support the Cuban people through greater engagement with the American private sector.”
Under the rules released by the U.S. Treasury and Commerce Departments, companies can establish subsidiaries or joint ventures as well as open offices, stores and warehouses in Cuba. They also allow for telecommunications and Internet services between the nations.
Although they do not change who can travel to Cuba – meaning general tourism is still not allowed – the rules do ease movement of authorized travelers by licensing transportation providers.
The regulations also abolish the cap on remittances and allow the travelers to open and maintain bank accounts there. But it keeps in place prohibitions on any of those funds going to the Cuban government or Communist Party officials.
Previously, people had been able to send only $2,000 per quarter to Cuban nationals or carry $10,000 there, according to the Treasury Department. Cuban nationals were limited to carrying $3,000.
In addition to building on commercial enterprises, the changes “have the potential to stimulate long overdue economic reform across the country,” Commerce Secretary Penny Pritzker said.
The rules address traveler safety by allowing the export of civil aviation equipment to Cuba to ensure aircraft safety, officials said.
The regulations increase educational opportunities by allowing Internet-based courses and further expand humanitarian efforts by allowing disaster relief.
Source Reuters – (Reporting by Susan Heavey; Additional reporting by Patricia Zengerle in Washington, David Adams in Miami and Dan Trotta and Marc Frank in Havana; Editing by Steve Orlofsky and Frances Kerry)