Saturday, November 11, 2017

The United States Tightens Cuba Travel and Trade Restrictions

Hotel Nacional du Cuba

      The U.S. Departments of Treasury, Commerce and State jointly announced amendments to the Cuba sanctions program that the president announced in June, putting stricter controls on individual American tourist travel to Cuba and barring Americans from doing business, meaning any direct financial transactions, with any business or entity controlled by the island nation's military.


Havana Club Rums
"We have strengthened our Cuba policies to channel economic activity away from the Cuban military and to encourage the government to move toward greater political and economic freedom for the Cuban people," Treasury Secretary Steven Mnuchin said in a statement Wednesday.  The administration has blacklisted approximately 180 Cuban businesses and entities it identified as being under the control of, or acting on behalf of, the Cuban military, intelligence or security services or personnel.  They include a number of hotels, rum producers, beverage manufacturers, fashion companies, real estate firms, marinas and stores in Old Havana, according to the State Department's so-called Cuba restricted list.

    Americans will have to jump through more hoops to travel to Cuba under the expanded restrictions. Individual tourism to Cuba has long been banned by federal law, but the Obama administration had been more relaxed in granting travelers certain categories of exemptions that allowed them to travel. There are a dozen categories under which Americans are authorized to travel to Cuba, including for family visits, religious activities, professional research and professional meetings, humanitarian activities, etc.

Hotel Inglaterra
     Among the latest updates to the restrictions, Americans will no longer be able to go on what the administration calls individual people-to-people travel to Cuba. They'll be required to travel with a sponsoring organization subject to U.S. jurisdiction, for example, like a tour group operated by a U.S. company.   And the same would apply for educational travel to Cuba, meaning an American group or university would have to be involved as the sponsoring organization. In both situations, a representative from the sponsoring U.S. organization would have to accompany the travelers on the Cuba trip.  Such activities must also enhance contact with the Cuban people, support civil society in Cuba, or promote the Cuban people's independence from Cuban authorities.   For example, renting a room in a private Cuban residence (casa particular), eating at privately owned Cuban restaurants (paladares), and shopping at privately owned stores run by self-employed Cubans (cuentapropistas) are among the authorized activities. However, in order to meet the requirement of a full-time schedule, a traveler must engage in additional authorized "support for the Cuban people" activities, the Treasury Department said.

     "The new rules are a welcome development because they remove uncertainty and afford predictability for businesses, and they allow for robust transactions to continue on the island," said Pedro Freyre, a partner and chair of the international practice at Akerman LLP.  However, critics of the sanctions policy have slammed it as counterproductive, saying it makes it harder for U.S. companies to do business in Cuba and could actually end up costing the American economy billions and affect thousands of jobs.

     "These new regulations create a more convoluted, confusing and counterproductive approach to Cuba policy," James Williams, president of Engage Cuba, a coalition of private companies and organizations working to end the travel and trade embargo on Cuba, said in a statement. "This 'Keystone Cops' Cuba policy hurts those it claims to help and helps those it claims to hurt."