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 Defying hardline critics in Congress, President Barack Obama made
good on his commitment last month to loosen restrictions on dealings
with Cuba as part of an historic effort to end decades of hostility.
The U.S. embargo on Cuba, in place for 54 years, will remain. Only
Congress can lift it.
But the package of regulations issued by the Treasury and Commerce
Departments, which will take effect on Friday, will allow U.S.
exports of telecommunications, agricultural and construction
equipment, permit more travel by Americans to the island and open
banking relations.
U.S. airlines will also be permitted to expand flights to the
Caribbean island, beyond the existing chartered flights that connect
Cuba and the United States. United Airlines Inc [UALCO.UL] said on
Thursday it planned to serve Cuba from Houston and Newark, New
Jersey, subject to government approvals. Delta Air Lines <DAL.N> and
JetBlue Airways <JBLU.O> said they would look into adding services.
Thursday's moves were the first tangible U.S. steps to implement
economic changes Obama pledged on Dec. 17 when he and Cuban
President Raul Castro announced plans to restore diplomatic
relations between the old Cold War foes.
"Today’s announcement takes us one step closer to replacing
out-of-date policies that were not working, and puts in place a
policy that helps promote political and economic freedom for the
Cuban people," said U.S. Treasury Secretary Jacob Lew.
While Castro has welcomed last month's deal, he has made clear that
Havana does not intend to abandon single-party rule or the
state-controlled economy. Congressional critics of Obama's shift say
that Washington should not be rewarding Cuba.
The new regulations will allow Americans to travel to Cuba for any
of a dozen specific reasons, including family visits, education and
religion, without first obtaining a special license from the U.S.
government as was previously the case.
But general tourism will still be banned.
John McAuliff, executive Director of the Fund for Reconciliation and
Development, which has organized trips to Cuba, said that apart from
Cuban-Americans visiting relatives, most other Americans would still
be corralled into escorted group tours.
Still, U.S. travelers will be allowed to bring home small numbers of
the Cuban cigars that are highly rated by aficionados.
It will also be easier for U.S. companies to export mobile phone
devices and software as well as to provide Internet services in
Cuba.
In an expansion of remittances allowed, Americans will now be able
to send up to $8,000 to Cuba a year, up from $2,000 previously, and
bring $10,000 with them when they travel to the country. They will
also be able to use credit and debit cards.
In addition, a changed definition of “cash in advance” payments
required by Cuban buyers could help businesses, most notably U.S.
agriculture, gain greater access to Cuban markets. The largest U.S.
meat processor, Tyson Foods Inc <TSN.N>, which already does some
business with Cuba, hailed the changes.
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The announcement came after the Obama administration said Cuba had
fulfilled its promise to free 53 political prisoners and a week
before high-level U.S.-Cuba talks in Havana aimed at normalizing
ties, including discussions on when to reopen embassies.
'SIGNIFICANT STEP'
Obama's spokesman, Josh Earnest, called it a "significant step" in
delivering on Obama's new Cuba strategy. The president declared last
month that decades of trying to force change by isolating the island
had not worked.
But Republican Senator Marco Rubio, a Cuban-American who has been
strongly critical of the policy shift, called the announcement "a
windfall for the Castro regime that will be used to fund its
repression against Cubans, as well as its activities against U.S.
national interests."
While Obama is using executive powers to poke holes in trade
barriers, Republicans who control Congress have made clear they will
not let him entirely dismantle the embargo. Washington imposed
economic sanctions as Fidel Castro steered the island along a
socialist path that made it a close ally of the Soviet Union, and
severed diplomatic ties with Cuba in 1961.
U.S. officials made clear the new measures do not mean Cuba is now
open for business, stressing that while investments in Cuba’s
limited array of small businesses are permitted, general investment
will still be prohibited.
And while telecommunications firms can export devices, U.S.
companies still have to reach an agreement with the Cuban
government, which controls all imports and maintains a firm grip on
Internet access.
Reaction from the U.S. business community, which had pressed the
administration to open up Cuban markets, was positive but tempered
with caution.
“The regulations were welcome and they went even farther than was
articulated in the president's announcement," said Jake Colvin, vice
president at the National Foreign Trade Council. "But now it will
depend on the reality on the ground in Cuba."
There was no immediate official reaction from Havana, but some
ordinary Cubans welcomed the changes.
“If more Americans can come here, that means more customers, and
this will be good for the economy,” said Orlando Veliz, a cook for a
private restaurant in Havana.
(Additional reporting by Dan Trotta in Havana and Patricia Zengerle
in Washington; Writing by Matt Spetalnick; Editing by Doina Chiacu,
Frances Kerry and Gunna Dickson)
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