Ten ways “lame duck” President Obama continues to ease the Cuban embargo
The USA’s relationship with Cuba has seen worse days now that Obama’s second term in office is coming to an end, as he continues to ease restrictions through the implementation of a new series of amendments to the USA’s commercial, economic, and financial embargo on Cuba – known as CACR, the Cuban Assets Control Regulations. Although these new amendments aim to soften the restrictive measures imposed on Cuba – generally referred to as an “embargo” –, which have been condemned by the General Assembly of the United Nations since 1992, the new provisions which entered into force on Monday merely clarify confusing aspects of other previous provisions implemented by Obama´s administration since the reboot of the diplomatic relations between the USA and Cuba in 2014.
Our Cuban practice has seen the uncertainty faced by North-American businessmen or foreign businessmen with dealings in the United States, due to the unclear scope of the amended measures and, in turn, the concern of the possibility of being sanctioned. Additionally, it appears to be evident that the fast-approaching presidential elections allow the outgoing President, in the home stretch of his presidency, or his “lame duck” phase, to make decisions with more liberty. In any case, Obama has proceeded with caution in the slow yet progressive lifting of restrictions against Cuba. These changes lead us to believe that the bringing together of both countries will create irreversible change for the US as well as the Cuban government, as confirmed by the latter in multiple forums.
The Treasury Department, through its Office of Foreign Assets Control (OFAC) and Department of Commerce, announced the following new set of measures last Friday, which will possibly be the highlight of the improved diplomatic relations between Obama and Cuba during his presidency:
- Medical Cooperation and Pharmaceutical Products
US persons will be authorised to participate in commercial and non-commercial medical research projects with Cuban citizens. They will also be allowed to open bank accounts in Cuba for these purposes. Additionally, the OFAC, who regards this to be a major milestone, also demanded by Cuba for many years, will permit the sale and distribution in the USA of Cuban pharmaceutical products that have been approved by the American administration.
US firms can now provide services to develop, repair and to maintain Cuban infrastructure as long as it benefits the Cuban people, excluding infrastructure work for military purposes.
- Export trade
OFAC has modified its licence to authorise exports and re-exports, and to remove any references or requirements relating to products of “100% of US Origin”. If these changes make it simpler for Cuba to import US technologies, it would clarify, at least for now, the circumstances surrounding the authorisation of exports or re-exports which require additional licences granted by OFAC. It would also allow for the importation of certain products into the US which had previously been exported to Cuba from the latter or even re-exported from Cuba under licence, along with maintenance and repairs.
- Marine transportation and airfare
The restriction on foreign ships entering US ports for the duration of 6 months after having docked in Cuba will be lifted. Additionally, the transport of goods by air services with a stopover in Cuba and coming from the US will be generally authorised.
- Imports of rum and tobacco
Limitations on monetary value on the import of rum and tobacco from Cuba to US soil will be removed, provided these products are for personal use.
- Travel and remittances
Persons subject to U.S. jurisdiction are now authorised to make remittances to third-country nationals for travel by such nationals to, from, or within Cuba.
A general licence to carry out operations derived from a preauthorized contract will be granted for contracts between Cuban and US entities.
- Safety-related aircraftservices
US businesses will be permitted to provide safety-related aircraft services for airlines travelling to Cuba, so as to incentivise Cuban business to provide the same services in return for flights heading to the US.
- Agricultural products
The US Trade Sanctions Reform and Export Enhancement Act of 2000 imposed limitations on forms of payment of goods, and in some cases required payments to be made in advance and in cash, particularly in relation to agricultural goods coming from the US and being imported into Cuba. This new set of measures will allow for the exportation of certain agricultural products, such as pesticides and tractors, without any payment limitations imposed.
10. Awards for humanitarian services
The US Administration will start offering grants, internships and awards for outstanding Cuban researchers and scientists.