Three Experts Anticipate Little Change in U.S. Policies Regarding Cuba

Three partners in Washington, D.C. offices of major law firms expect little change in U.S. policies regarding Cuba.[1]

Harry Clark, a partner at Orrick Herrington & Sutcliffe LLP and chair of the firm’s international trade and compliance group, sees “the new administration leaving things where they are, by and large. It could roll back some liberalization, and I wouldn’t be surprised if it does so in incremental ways. But the political factors of keeping a harder-line sanctions policy on Cuba is often over-estimated. There won’t be a lot of political cost for sort of keeping things where they are. The fact that Fidel Castro has died made it less likely that there will be a dramatic re-imposition of sanctions.”

“The fact is, we still have an embargo on Cuba. The liberalization hasn’t been that far-reaching. There isn’t a lot of business you can do in Cuba; you can see the changes more in licensing policy. The current administration has adopted a relatively forgiving licensing policy, where it has been willing to license some activity forbidden by the embargo. I can see the administration not changing the rule very much, but they won’t be nearly as willing to give out licenses.”

Adam M. Smith, an attorney at Gibson Dunn & Crutcher LLP who previously served as a senior adviser at the U.S. Treasury Department’s Office of Foreign Assets Control, said, “Before the death of Fidel, there was already a low likelihood [Trump would] . . . change the reality. The downside is too great and the upside is unclear. Companies have invested significant money there. Rollback is now a no-go, because of the clear downside to the companies that have already invested. Now that Fidel has died, Raul is trying to establish his authority in the absence of his brother. There could be an argument to reduce some [U.S.] relief if the [Cuban] human rights situation gets worse. But there are few concerns about the geopolitics here [in Washington].”

Richard L. Matheny, III, a partner at the law firm Goodwin and the head of its National Security & Foreign Trade Regulation Practice, referred to Trump’s stated approach of seeking to make a “better deal” with Cuba. “Ultimately, it may matter little what this means substantively, because I don’t think Trump cares much for substance, so long as Trump is able to sell it as evidence of his alleged deal-making ability.” Moreover, there is

Substantial “momentum within the U.S. business community to build economic ties with Cuba . . . and will ultimately win out; we might not take steps forward on Cuba, but I don’t think we’ll go backwards either.”

==============================

[1] Rubenfeld, Trump Will Continue Using Behavioral Sanctions, Unlikely to Change Cuba Very Much, W.S.J. (Jan. 6, 2017).