New U.S. government rules restrict travel and trade with Cuba

[November 09, 2017]  By Roberta Rampton and Sarah Marsh

WASHINGTON/HAVANA (Reuters) - The U.S. government made it tougher on Wednesday for Americans to visit Cuba and do business in the country, making good on a pledge by President Donald Trump to roll back his Democratic predecessor's move toward warmer ties with Havana.

The restrictions, which take effect on Thursday, are aimed at preventing the military, intelligence and security arms of Cuba's Communist government from benefiting from American tourists and trade, the White House said.

They fill in the regulatory detail on a Trump policy speech in June, in which the Republican president called for a tightening of restrictions. He said then that the Cuban government continued to oppress its people and former President Barack Obama had made too many concessions in his 2014 diplomatic breakthrough with Washington's former Cold War foe.

The regulations include a ban on Americans doing business with some 180 Cuban government entities, holding companies, and tourism companies. The list includes 83 state-owned hotels, including famous hotels in Old Havana such as Ernest Hemingway's erstwhile favorite haunt the Hotel Ambos Mundos, as well as the city's new luxury shopping mall.

"All these measures hurt the Cuban people," said Cuba's Foreign Ministry chief for U.S. Affairs Josefina Vidal. She said that government revenue funds Cuba's free education and healthcare systems.

Speaking to reporters in Havana, she called the list "arbitrary" and the regulations a further "setback" in U.S.-Cuban relations.

The new rules were criticized as too lax by Republican leaders who favor a hard line, but as counterproductive by those who agreed with Obama's rationale for the detente: that Washington's many decades of isolating the Caribbean island failed to force change.

The Cuban hotels listed included those run by military-linked chains Gaviota and Habaguanex. Republican Senator Marco Rubio of Florida, a Cuban-American, said the list failed to go far enough because it omitted companies like Gran Caribe Hotel Group and Cubanacan that have ties to the Cuban government.

Democratic Senator Patrick Leahy said the regulations were unfair to Cuba, coming as Trump was being "feted in Beijing" by a Communist government "in a country to which Americans can travel freely."

"The hypocrisy of the White House ideologues is glaring," Leahy said in a statement.

'MEANINGFUL INTERACTION'

While U.S. travelers will still be able to make authorized trips to Cuba with a U.S.-based organization and accompanied by a U.S. representative of the group, it will be harder for them to travel individually, according to the new regulations. Before Obama's opening, travel by many Americans was similarly restricted to such organized trips.

Travelers need to be able to show a "full-time schedule" with activities that support Cuban people and show "meaningful interaction," going beyond merely staying in rooms in private homes, eating in private restaurants, or shopping in private stores, a U.S. official told reporters on a conference call.

A car with tourists drives past the U.S. Embassy in Havana, Cuba, October 24, 2017. REUTERS/Alexandre Meneghini

The administration says it is keen to support such small private enterprises that have sprung up around the country under President Raul Castro's reforms to the largely state-controlled economy.

"Staying or eating or shopping in some of those privately owned places is something that we wanted to encourage. But what we wanted to say is, that alone is not enough," the official said.

However, Cubans in the fledgling private sector say the Trump administration's more hostile stance toward Havana has already hurt their business.

"He is putting us in serious danger by frightening away American visitors looking to rent our properties," said Norma Hernandez, who rents out rooms on Airbnb and who said her business flourished over the last year thanks to a surge in U.S. visitors.

EXISTING PLANS

Trump's rollback of Obama's opening has not affected a centerpiece of the detente, the restoration of diplomatic ties and the opening of embassies in Havana and Washington.

Business contracts and travel arrangements already in place will be allowed to go ahead and will not be subject to the restrictions, officials told reporters.

The list of entities that Americans cannot do business with includes a special development zone at Cuba's Mariel port, which Cuba hopes to develop into a major Caribbean industrial and shipping hub with tax and customs breaks.

The National Foreign Trade Council, a business lobby group in Washington, called the Mariel restriction "counterproductive" because it would hurt a Cuban government initiative that could potentially benefit Cuban workers.

The head of an educational travel company said there were still many legal avenues - as well as commercial flights, cruise ships, U.S.-owned hotels, and tour providers - to enable Americans to visit Cuba. But he said the new restrictions would hurt Cuba's private sector, at a time when the economy is already struggling.

"U.S. backtracking on Cuba could not come at a worse time," said Collin Laverty, president of Cuba Educational Travel.

(Reporting by Roberta Rampton in Washington and Sarah Marsh in Havana; Additional reporting by Patricia Zengerle and Susan Heavey in Washington; Editing by Susan Thomas and Frances Kerry)

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