Senator Rubio Takes Credit for More Hostile U.S. Policies Regarding Cuba 

On December 22, Senator Marco Rubio (Rep., FL) released a “summary of his 2017 accomplishments.”[1]

Second on this list was “Shaping U.S. Policy Toward Cuba.” It stated, “Rubio worked closely with President Trump and his Administration to develop a new U.S. policy toward Cuba that rolls back the Obama Administration’s one-sided concessions to the Castro regime, and instead works to economically and politically empower private Cuban citizens and entrepreneurs.”

The hyperlinked article for Rubio’s working closely with President Trump was written in Politico by Marc Caputo, formerly of the Miami Herald.[2] It asserts that on May 5 Rubio along with his fellow Miami Republican and Cuban-American, Representative Mario Diaz-Balart, met at the White House with President Trump, Secretary of State Rex Tillerson, National Security Adviser H.R. McMaster, then White House Chief of Staff Reince Priebus and Advisor Jared Kushner. Rubio and Diaz-Balart warned the President not to rely upon career service people in the State and Treasury Departments because they did not favor abandoning President Obama’s policy of normalization with the island. Instead, it was suggested, the President himself and his close advisors should develop the new policy themselves.

Trump immediately accepted the suggestion and McMaster volunteered to implement the decision to change U.S. policy towards Cuba, which was announced in the President’s speech in Miami on June 16  and formalized in the National Security Presidential Memorandum on Strengthening the Policy of the United States Toward Cuba, which he signed immediately after the speech.[3]

This blogger already has expressed his opposition to this reversal of U.S. policy and rhetoric regarding Cuba and suggested instead on overturning the new ban on individual person-to-person travel and emphasizing the ban’s adverse impact on Cuba’s emerging entrepreneurs while continuing to advocate for implementation of other normalization measures.[4]

Although Rubio is a Cuban-American, he has never lived there or even visited the island. Thus, he is subject to legitimate criticism for having a distorted view of what U.S. policy should be. Addressing this glaring gap in his knowledge, a group of Cuban businesswomen have invited him to visit Cuba to learn about Cuba, the island’s emerging private sector and the adverse impact on those new businesses from the U.S. policies advocated by the Senator and President Trump. The Senator, however, has not accepted the invitation or even acknowledged this graceful gesture by the women.[5]

The Senator also could learn from Living Waters for the World, a project of the Synod of Living Waters of the Presbyterian Church (U.S.A.) that has installed nearly 900 clean water systems in 25 countries, including nearly 50 in Cuba. A recent U.S. volunteer group visited 10 such clean water sites in Cuba and said there was a sense of God whispering, “Pay attention, I have something important to show you—our inherent connectedness. Clearly, God does extraordinary things when we reach beyond our boundaries to know, be with, and pay attention to our brothers and sisters in Christ.”[6]

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[1] Press Release: Rubio Highlights 2017 Accomplishments (Dec. 22, 2017).

[2] Caputo, Inside Marco Rubio’s campaign to shape Trump’s Cuba crackdown, Politico (June 15, 2017).

[3] See these posts to dwkcommentaries.com: President Trump Announces Reversal of Some Cuba Normalization Policies (June 19, 2017); U.S. Reactions to Trump Reversal of Some U.S.-Cuba Normalization Policies (June 21, 2017); Cuban Reactions to Trump Reversal of Some U.S.-Cuba Normalization Policies (June 22, 2107).

[4] This Blogger’s Reactions to Trump Reversal of Some U.S.-Cuba Normalization Policies, dwkcommentaries.com (June 23, 2017).

[5]  Reuters, Cuban businesswomen seek Rubio meeting as U.S. policy bites (Nov. 17, 2017).

[6] Zehnder, Changing Subjectivity, Waters of Life (Nov.-Dec. 2017).

Trump’s New Regulations Adversely Affect Cuban Entrepreneurs

The new travel regulations and anti-Cuba rhetoric of President Trump already are hurting ordinary Cubans, especially those who have become entrepreneurs and who employ 600,000 of the island’s 11 million people.  The “self-employed” sector, a euphemism used by the Cuban government to avoid the words “private” or “entrepreneur,” already is encumbered by Cuban regulations that leave little room for development.[1]

Now an “association of Cuban businesswomen has asked to meet with Senator Marco Rubio (Rep., FL), a Cuban-American who has never been to the island and who is believed to be a major influencer on the Trump Administration’s Cuba policies. These women want to explain ” the impact on the country’s nascent private sector of rolling back a detente in U.S. relations.” They say, “The current situation has us very worried and we would like to share our personal histories and perspective from Cuba.”

One of these women, Niuris Higueras, the owner of the Atelier restaurant in Havana, said her  “business is down 60 percent from a year ago.” Another woman, Julia de la Rosa, who runs a 10-room bed and breakfast, said rentals were down 20 percent in October and she expected a further decline as new U.S. regulations on individual travel kick in this month.

The Trump Administration’s evident hostility toward Cuba also has caused U.S. businesses to reduce their interest in trying to create and build business in Cuba. At this year’s Cuba trade fair only 13 U.S. companies had booths compared with 33 last year. Another cause of this reduction is growing awareness of the difficulty of doing business in Cuba.[2]

Former U.S. Secretary of Commerce Carlos Gutierrez, the Cuban-born head of the U.S.-Cuba Business Council, said, “This is a huge step backwards. We had made so much progress.”

U.S. airlines with licenses for flights to Cuba also are seeing the reduction in U.S. demand for visiting Cuba. As a result, five airlines have cancelled all flights to the island while others have reduced the number of their flights.[3]

A caveat to this negative reaction is the opinion of some that the new regulations on business dealings “produce brighter lines that may make it easier for companies to identify who exactly they can do business with when trying to operate on the island.”

One who expressed this view is Peter Harrell, an adjunct senior fellow at the Center for a New American Security who previously served as a deputy assistant secretary for counter-threat finance and sanctions in the U.S. State Department, said that the new regulations “made trade easier with the country’s private sector.” A significant point in this regard was the State Department’s FAQ document stating that “entities not on its restricted list, even if they’re subsidiaries of those on the list, are [not] restricted until they themselves appear on the blacklist.”[4]

Another caveat is “the new regulations limiting “disruption to pre-existing commercial activities, ensuring that U.S. companies can continue to do business with Cuba’s nascent private sector.” Examples of such preexisting deals are Deere & Co. and Caterpillar Inc.’s arrangements for distribution of their products on the island.[5]

Myron Brilliant, the head of international affairs at the U.S. chamber of Commerce, urged the administration “to continue to keep business in mind and avoid further steps to restrict the economic relationship between the U.S. and Cuba.”

Nevertheless, the U.S. regime of Cuba sanctions presents risks to U.S. companies. The latest example is the November 17 announcement by the U.S. Treasury of an OFAC settlement with American Express Co. for $204,000 for its 50%-owned Belgian credit-card issuer’s corporate customers’ 1,818 transactions in Cuba between 2009 and 2014.[6]

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[1] Reuters, Cuban Businesswomen Seek Rubio Meeting as U.S. Policies Bite, N.Y. Times (Nov. 17, 2017). The above topics and others are the subjects of earlier posts listed in the “Cuban Economy” section of List of Posts to dwkcommentaries—Topical: CUBA.

[2] Reuters, Blooming U.S. Business Interest in Cuba Wilts Under Trump, N.Y. Times (Nov. 10, 2017).

[3] Reuters, Alaska Airline Discontinues Los Angeles-Havana Daily Flight, N.Y. Times (Nov. 14, 2017); Assoc. Press, Alaska Airlines to Halt Flights to Cuba, N.Y. Times (Nov. 14, 2017).

[4] Rubenfeld, New U.S. Cuba Regulations May Make Compliance There Easier, W.S.J. (Nov. 9, 2017).

[5] Schwartz & Radnofsky, New Trump Rules Pare Back Obama’s Opening to Cuba, W.S.J. (Nov. 8, 2017).

[6] Rubenfeld, American Express Unit Fined Over Cuba Sanctions Violations, W.S>J. (Nov. 17, 2017).

Additional Reactions to New U.S. Regulations Regarding  Cuba         

As noted in a prior post, on November 8, new U.S. regulations on travel to Cuba and business with Cubans were issued while another post discussed initial reactions thereto.  Already additional reactions have surfaced: impact on what Americans drink in Cuba and the adverse impact on U.S. interests.

Americans Drinks in Cuba[1]

The new Cuba Restricted List bans U.S. businesses and individuals from doing business with the Cuba companies that produce two rum brands—Ron Varadero and Ron Caney—and three soft drinks—Tropicola Cachito, Jupiña and Nahita. That has raised concern that Americans in Cuba would have to be careful about what they drink.

Two days after the issuance of the new regulations, the U.S. Treasury issued a clarification. The List only bans direct financial transactions with the entities on the List. Therefore, says the Treasury, “Americans may still consume those soft drinks and rums” — as long as they don’t buy them directly from the companies on the List. They can buy a Tropicola from a street vendor, for example, and they won’t have to tell a bartender: ‘No Varadero or Caney rum, please.’”

But the Americans may not buy “a rum and coke at . . . one of the 83 hotels that are run by Gaviota or Habaguanex, two tourism brands controlled by the military [and, therefore, on the List]. It’s off limits for not only drinks but also lodging.”

Adverse Impact on U.S. Interests[2]

A Miami Herald journalist, Fabiola Santiago, has identified at least five ways the new regulations harm U.S. interests.

“First, by doing away with the independent people-to-people travel by Americans, . . . [the regulations] are actually helping the Cuban government control what travelers do, whom they meet, and how their perceptions of the country are shaped, thus becoming enablers of the dictatorship. Yet, tours are the mode of travel endorsed by Trump’s policy — and propagandistic historical tours are one of the activities that prove to the Treasury Department that your travel to Cuba is ‘educational.’”

Second, the new regulations put “the trips back in the hands of babysitters . . . [i.e.,] loyal government employees who shuttle around visitors. . . . Trump just expanded their ranks. Jobs!”

Third, the new regulations thereby harm “Cuba’s fledgling entrepreneurial class,” who will lose customers to the state-owned businesses.

Fourth, the new regulations do not adversely affect U.S. cruise ship operators even though their “passengers are a captive audience of government stores filled with Che Guevara paraphernalia and peddlers who offer government services to people disembarking.”

Fifth, the regulations and the Trumpian rhetoric about Cuba are helping the Russians enhance their relationship with Cuba, which includes “aggressively pursuing establishing a military base in Cuba, 90 miles from the USA.”

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[1] Whitefield, Do new rules on Cuba travel mean no rum in cocktails for American travelers? Miami Herald (Nov. 10, 2017). (I was unable to find the Treasury Department clarification on its website.)

[2] Santiago, It’s your Cuba policy, Miami republicans. You can’t blame Obama now, Miami Herald (Nov. 10, 2017)

New Restrictions on U.S. Travel to Cuba and Transactions with Certain Cuban Entities                                     

On November 8, the U.S. Treasury, Commerce and State departments released regulations imposing new restrictions on U.S. citizens travel to Cuba. Taking effect on November 9, they “are aimed at preventing U.S. trade and travelers from benefiting its military, intelligences and security arms of the Communist-ruled country.” In addition, they require U.S. travelers on “person-to-person” trips “to use a U.S.-based organization and be accompanied by a U.S. representative of the group.”[1]

This blog post will first provide a list of the Treasury Department’s 12 categories of general licenses for approved travel to Cuba, only two of which are directly affected by the new regulations. These two categories will be discussed followed by the new regulations ban on transactions with certain Cuban entities that affects all 12 categories.

Categories of Approved Travel[2]

“Travel-related transactions are permitted by [OFAC’s] general license for certain travel related to the following activities, subject to the criteria and conditions in each general license: (1) family visits; (2) official business of the U.S. government, foreign governments, and certain intergovernmental organizations; (3) journalistic activity; (4) professional research and professional meetings; (5) educational activities; (6) religious activities; (7) public performances, clinics, workshops, athletic and other competitions, and exhibitions; (8) support for the Cuban people; (9) humanitarian projects; (10) activities of private foundations or research or educational institutes; (11) exportation, importation, or transmission of information or information materials; and (12) certain authorized export transactions.”

Only the two categories in bold are affected by the new regulations—travel for “educational” reasons (organized and people-to-people) and “support for the Cuban people.”

Formal Educational Travel[3]

OFAC states, “Among other things, this general license authorizes, subject to conditions, faculty, staff, and students at U.S. academic institutions . . . to engage in certain educational activities, including study abroad programs, in Cuba, Cuban scholars to engage in certain educational activities in the United States, and certain activities to facilitate licensed educational programs. U.S. and Cuban universities may engage in academic exchanges and joint non- commercial academic research under the general license. This provision also authorizes persons subject to U.S. jurisdiction to provide standardized testing services and certain internet-based courses to Cuban nationals.

In addition, “educational exchanges, including study abroad programs, sponsored by Cuban or U.S. secondary schools involving secondary school students’ participation in a formal course of study or in a structured educational program offered by a secondary school or other academic institution, and led by a teacher or other secondary school official are authorized. Such exchanges must take place under the auspices of an organization that is a person subject to U.S. jurisdiction, and a person subject to U.S. jurisdiction who is an employee, paid consultant, agent, or other representative of the sponsoring organization (including the leading teacher or secondary school official) must accompany each group traveling to Cuba. For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.565(a)(2)(vi). This authorization allows for participation of a reasonable number of adult chaperones to accompany the secondary school students to Cuba.”

“People-to-People” Educational Travel[4]

“OFAC is amending the general license for people-to-people educational activities in Cuba to remove the authorization for individual people-to-people educational travel. This general license now authorizes, subject to conditions, persons subject to U.S. jurisdiction to engage in certain educational exchanges in Cuba under the auspices of an organization that is a person subject to U.S. jurisdiction and sponsors such exchanges to promote people-to-people contact. Travelers utilizing this general license must ensure they maintain a full-time schedule of educational exchange activities intended to enhance contact with the Cuban people, support civil society in Cuba, or promote the Cuban people’s independence from Cuban authorities, and that will result in meaningful interaction between the traveler and individuals in Cuba.”

“The predominant portion of the activities must not be with a prohibited official of the Government of Cuba, as defined in 31 CFR § 515.337, or a prohibited member of the Cuban Communist Party, as defined in 31 CFR § 515.338.”

“A person subject to U.S. jurisdiction who is an employee, paid consultant, agent, or other representative of the sponsoring organization must accompany each people-to-people educational group traveling to Cuba to ensure that each traveler has a full-time schedule of educational exchange activities. Individuals traveling under the auspices of an organization that is a person subject to U.S. jurisdiction and that sponsors such exchanges to promote people-to-people contact may rely on the entity sponsoring the travel to satisfy his or her recordkeeping obligations with respect to the requirements described above. OFAC is amending this general license to exclude from the authorization direct financial transactions with entities and subentities identified on the State Department’s Cuba Restricted List.”

Support for the Cuban People” Travel[5]

“This general license authorizes, subject to conditions, travel-related transactions and other transactions that are intended to provide support for the Cuban people, which include activities of recognized human rights organizations; independent organizations designed to promote a rapid, peaceful transition to democracy; and individuals and non-governmental organizations that promote independent activity intended to strengthen civil society in Cuba. OFAC is amending this general license to require that each traveler utilizing this authorization engage in a full-time schedule of activities that enhance contact with the Cuban people, support civil society in Cuba, or promote the Cuban people’s independence from Cuban authorities and that result in meaningful interactions with individuals in Cuba. OFAC is also amending this general license to exclude from the authorization certain direct financial transactions with entities and subentities identified on the State Department’s Cuba Restricted List. The traveler’s schedule of activities must not include free time or recreation in excess of that consistent with a full-time schedule in Cuba. For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.574.”

“ 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 examples of 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.”

Ban on Transactions with Certain Cuban Entities[6]

The new regulations also ban U.S. travelers and businesses from transactions with “the large military-run corporations that dominate the Cuban economy. These include GAESA and CIMEX, the holding companies that control most retail business on the island; Gaviota, the largest tourism company; and Habaguanex, the firm that runs Old Havana.” The regulations include a list of forbidden hotels, including Havana’s “Manzana Kempinski, which opened with great fanfare this year as Cuba’s first hotel to meet the international five-star standard.”

This “Cuba Restricted List,” which will be maintained and updated by the State Department, has the following categories of organizations (and the number of entities in each category): Cuban Ministries (2) ; Cuban Holding Companies (including CIMEX,GAESA, Gavotte and Companies Touristic Habituate S.A.) (5) ; Hotels in Havana and Old Havana (27); Hotels in Santiago de Cuba (1); Hotels in Varadero (13); Hotels in Pinar del Rio (2); Hotels in Baracoa (7); Hotels in Cayos de Villa Clara (15); Hotels in Holguín (11); Hotels in Jardine’s del Rey (5); Hotels in Topes de Collates (3); Tourist Agencies (2); Marinas (5); Stores in Old Havana (10);  Entities Directly Serving the Defense and Security Sectors (38); Additional Subentries of CIMEX (16); Additional Subentities of GAESA (13); Additional Subentries of GAVIOTA (4); and Additional Subentries of HABAGUANEX (1).

Conclusion

All of these new regulations are meant to implement President Trump’s National Security Presidential Memorandum on Strengthening the Policy of the United States Toward Cuba, which he signed on June 16, 2017, at an event in Miami Florida.[7]

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[1] U.S. Treasury Dep’t, Treasury, Commerce, and State Implement Changes to the Cuba Sanctions Rules (Nov. 8, 2017); U.S. Treasury Dep’t (Office of Foreign Assets Control), Frequently Asked Questions Related to Cuba (updated Nov. 8, 2017); Reuters, Trump Administration Tightens Sanctions Against Cuba, N.Y. Times (Nov. 8, 2018); Assoc. Press, US Takes Steps to Make It Harder for Americans to Visit Cuba, N.Y. times (Nov. 8, 2017); DeYoung, White House implements new Cuba policy restricting travel and trade, Wash. Post (Nov. 8, 2017).

[2] U.S. Treasury Dep’t (Office of Foreign Assets Control), Frequently Asked Questions Related to Cuba (updated Nov. 8, 2017).

[3] Id.

[4] Id.

[5] Id.

[6] U.S. State Dep’t, List of Restricted Entities and Subentities Associated With Cuba as of November 9, 2017 (Nov. 8, 2017); U.S. State Dep’t, Frequently Asked Questions on the Cuba Restricted List (Nov. 8, 2017).

[7]  White House, Trump’s National Security Presidential Memorandum on Strengthening the Policy of the United States Toward Cuba (June 16, 2017). This Memorandum and the Miami event were discussed in a prior post.

 

Cuban Entrepreneurs Issue Policy Recommendations to Trump Administration  

On July 18, a group of eight Cuban entrepreneurs held a press conference in Washington, D.C. to announce that they had written to the U.S. Secretaries of State, Treasury and Commerce saying that they were “encouraged to read in President Trump’s June 16 National Security Memorandum on Strengthening the Policy of the United States Toward Cuba that the President wishes to encourage the growth of the Cuban private sector.” Therefore, these entrepreneurs asked the Trump Administration to consider and adopt recommendations regarding U.S. travel to the island, U.S. remittances to Cubans, U.S. banking services for such Cuban enterprises and continued U.S.-Cuba discussions and negotiations.[1]

U.S. Travel to Cuba

The group first asserted: “U.S. travel to Cuba directly benefits private entrepreneurs. The vast majority of U.S. individual travelers (vs. groups) frequent private restaurants and lodging. Fewer travelers will have a direct negative impact on businesses in the hospitality sector as well an indirect negative impact on both forward and backward linkage enterprises.” Therefore, the group recommended the following:

  • “Restore the ability of individuals to engage in self-directed People-to-People educational travel.”
  • “Issue guidance to clarify that individuals who support the Cuban private sector by using private lodging or restaurants are eligible, by general license, for individual travel under the Support for the Cuban People category by virtue of supporting civil society.”
  • “Clearly define new regulations so as not to deter would-be travelers; produce informational materials for public.”

U.S. Remittances to Cubans

Again the group started with a factual background: “Remittances are essential to Cuba’s private sector, providing the financing to begin, and the working capital to sustain, businesses. Remittances also provide Cuban consumers with the ability to patronize private businesses. A U.S. policy of not restricting remittances is therefore critical to the health of the private sector.” The following were the recommendations:

  • “The Department of Commerce should adopt a favorable disposition to approving those exports to Cuba likely to benefit Cuban private sector individuals and/or companies
  • “Allow maximum remittance flows to increase liquidity for private sector and Cuban families; exempt remittance from the prohibition on payments to ‘prohibited officials’ of the Cuban government.”

Banking

The following was the factual background: “Many Cuban entrepreneurs purchase goods and services in the [U.S.] to help run their businesses. Cubans are legally permitted to open bank accounts in the U.S., but there are restrictions on the allowable transactions, and limited and uncertain account services, impairing businesses in both countries.” Therefore, these were the recommendations:

  • “Expand the allowable transactions for Cubans holding bank accounts in the U.S. to include business-related transactions including the acquisition of goods for business use.”
  • “Do not close, and allow access to, U.S. bank accounts held by Cubans when the Cuban individual is not present in the U.S.”
  • “Make public statements clarifying the intent of the Administration to allow Cubans to open bank accounts in the U.S. (limiting risk for banks).”

Bilateral Dialogue and Cooperation

 “Most Cuban entrepreneurs view improved relations between the U.S. and Cuba as a net positive for their businesses, and many developed their business model on this premise.” Therefore, the following recommendations were made:

  • “Continue bilateral engagement on issues of mutual interest to build respect and confidence.”
  • “Continue outreach to U.S. banks and businesses to clarify regulations so allowable engagement continues and expands.”
  • “Engage directly with the Cuban private sector; [Cuban sector] leaders have written two letters to the Administration (one to the President-elect, another to Ivanka Trump Kushner) with no response.”

Conclusion

This letter and its recommendations are wholeheartedly endorsed by this blogger. Cuba’s private sector is a positive development for the Cubans directly involved in that sector, all other Cubans and the U.S., and President Trump’s June 16 announcement already is having negative effects on that sector and needs to be reversed.[2]

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[1] Letter, Acosta, et al. to Secretaries Tillerson, Ross and Minuchin (July 18, 2017); Policy Recommendations [to Trump Administration]: Support to Cuba’s Private Sector (July 18, 2017).

[2] Here is another report of those negative effects: Zanona, In Cuba, Trump’s policy shift casts dark shadow, The Hill (July 19, 2017).

President Trump Announces Reversal of Some Cuba Normalization Policies

On June 16 in the Little Havana district of Miami, Florida, President Donald Trump announced a reversal of some aspects of the Cuba normalization policies that had been instituted by his predecessor, President Barack Obama. With a flourish at the end of his speech, Trump signed the National Security Presidential Memorandum on Strengthening the Policy of the United States Toward Cuba to document the new policy. Back in Washington, D.C. the White House issued a Fact Sheet and a Background Briefing and the U.S. Department of the Treasury issued Frequently Asked Questions and Answers About the New Policy.

An examination of these documents, however, reveals that there is more smoke than fire to the changes. Most of the preexisting normalization policies and actions are not affected, and the changes that were made by executive action can be overturned by federal legislation.

Subsequent posts will review U.S. and Cuban reactions to these changes before providing this blogger’s reactions and recommendations.

National Security Presidential Memorandum[1]

The Memorandum’s purpose in grandiose language is “to promote a stable, prosperous, and free country for the Cuban people. . . . [to] channel funds toward the Cuban people and away from a regime that has failed to meet the most basic requirements of a free and just society [and to condemn abuses by the Cuban regime]. . . . [The] Administration will continue to evaluate its policies so as to improve human rights, encourage the rule of law, foster free markets and free enterprise, and promote democracy in Cuba.” (Section 1)

The Memorandum in section 2 then states the Administration’s policy shall be to:

  • “(a) End economic practices that disproportionately benefit the Cuban government or its military, intelligence, or security agencies or personnel at the expense of the Cuban people.
  • (b) Ensure adherence to the statutory ban on tourism to Cuba.
  • (c) Support the economic embargo of Cuba described in [federal statutes] . . . (d) Amplify efforts to support the Cuban people through the expansion of internet services, free press, free enterprise, free association, and lawful travel.
  • (e) Not reinstate the ‘Wet Foot, Dry Foot’ policy, which encouraged untold thousands of Cuban nationals to risk their lives to travel unlawfully to the [U.S.].
  • (f) Ensure that engagement between the [U.S.] and Cuba advances the interests of the [U.S.] and the Cuban people. . . . [including] advancing Cuban human rights; encouraging the growth of a Cuban private sector independent of government control; enforcing final orders of removal against Cuban         nationals in the [U.S.]; protecting the national security and public health and safety of the [U.S.], including through proper engagement on criminal cases and working to ensure the return of fugitives from American justice living in Cuba     or being harbored by the Cuban government; supporting [U.S.] agriculture and protecting plant and animal health; advancing the understanding of the [U.S.] regarding scientific and environmental challenges; and facilitating safe civil  aviation.”

The Memorandum in section 3 concludes with detailed directions for implementation.

White House Fact Sheet[2]

The White House Fact Sheet on this policy change stated the following as its objectives: (1) “Enhance compliance with United States law—in particular the provisions that govern the embargo of Cuba and the ban on tourism; (2) Hold the Cuban regime accountable for oppression and human rights abuses ignored under the Obama policy; (3) Further the national security and foreign policy interests of the United States and those of the Cuban people; and (4) Lay the groundwork for empowering the Cuban people to develop greater economic and political liberty.”

The Fact Sheet then stated the following “Summary of Key Policy Changes:”

  • “The new policy channels economic activities away from the Cuban military monopoly, Grupo de Administración Empresarial (GAESA), including most travel-related transactions, while allowing American individuals and entities to develop economic ties to the private, small business sector in Cuba. The new policy makes clear that the primary obstacle to the Cuban people’s prosperity and economic freedom is the Cuban military’s practice of controlling virtually every profitable sector of the economy. President Trump’s policy changes will encourage American commerce with free Cuban businesses and pressure the Cuban government to allow the Cuban people to expand the private sector.”
  • “The policy enhances travel restrictions to better enforce the statutory ban on United States tourism to Cuba.  Among other changes, travel for non-academic educational purposes will be limited to group travel.  The self-directed, individual travel permitted by the Obama administration will be prohibited.  Cuban-Americans will be able to continue to visit their family in Cuba and send them remittances.”
  • “The policy reaffirms the United States statutory embargo of Cuba and opposes calls in the United Nations and other international forums for its termination. The policy also mandates regular reporting on Cuba’s progress—if any—toward greater political and economic freedom.”
  • “The policy clarifies that any further improvements in the United States-Cuba relationship will depend entirely on the Cuban government’s willingness to improve the lives of the Cuban people, including through promoting the rule of law, respecting human rights, and taking concrete steps to foster political and economic freedoms.”

Significantly this Fact Sheet did not contain actual new regulations to implement the policy changes. Instead, “the Treasury and Commerce Departments [were directed] to begin the process of issuing new regulations within 30 days.  The policy changes will not take effect until those Departments have finalized their new regulations, a process that may take several months.  The Treasury Department has issued Q&As that provide additional detail on the impact of the policy changes on American travelers and businesses.”

White House Background Briefing[3]

The prior day the White House conducted a background briefing on this policy change for journalists.

In addition to presaging the chances noted above, it stated that the new policy was the result of “a full review of U.S. policy toward Cuba [led by the] National Security Council . . . [under the leadership of] General McMaster, [that] engaged in a thorough interagency review process, including more than a dozen working-level meetings, multiple deputies meetings, and principal meetings.  This interagency process included . . . the Treasury Department, the State Department, Commerce Department, the Department of Agriculture, the Department of Homeland Security, and the Department of Transportation. . . .”

“Additionally, during this process, the President met with members of Congress who are experts on Cuba policy and have been leaders in formulating Cuba policy, from a legislative perspective, for years.  These members also worked with us hand-in-glove in providing technical guidance and policy suggestions as we continued to formulate the policy and went through multiple drafts.”

“The President and other principals also met with members on both sides of the aisle in this process, and even, additionally, were sharing thoughts with those who have, I think, been advocates — in particular, agricultural trade with Cuba.”

U.S. Treasury Department FAQs[4]

The June 16th FAQs emphasize that the Department’s changes will become effective only upon its issuance of amendments to its Cuban Assets Control Regulation, which are expected in a couple of months.

The upcoming amendments will end individual people-to-people travel. But still permissible will be group people to-people travel: “educational travel not involving academic study pursuant to a degree program that takes place under the auspices of an organization that is subject to U.S. jurisdiction that sponsors such exchanges to promote people-to-people contact. Travelers utilizing this travel authorization must maintain a full-time schedule of educational exchange activities that are intended to enhance contact with the Cuban people, support civil society in Cuba, or promote the Cuban people’s independence from Cuban authorities, and that will result in meaningful interaction between the traveler and individuals in Cuba. An employee, consultant, or agent of the group must accompany each group to ensure that each traveler maintains a full-time schedule of educational exchange activities.”

“The announced policy changes will not change the authorizations for sending remittances to Cuba.”

Vice President Pence and President Trump’s Speeches Announcing the Change[5]

Trump’s speech was a full-blown condemnation of many Cuban policies and practices and U.S. past and current efforts to change those policies and practices that went far beyond the limited changes previously mentioned. He was introduced by Vice President Pence, who reiterated some of the same rhetorical devices regarding Cuba.

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[1] White House, National Security Presidential Memorandum on Strengthening the Policy of the United States Toward Cuba (June 16, 2017).

[2] White House, Fact Sheet on Cuba Policy (June 16, 2017).

[3] White House, Background Briefing on the President’s Cuba Policy (June 15, 2017).

[4] U.S. Treasury Dep’t, Frequently Asked Questions on President Trump’s Cuba Announcement (June 16m 2017); U.S. Treasury Dep’t, Frequently Asked Questions Related to Cuba (Jan. 6, 2017).

[5] White House, Remarks by the Vice President on the Policy of the United States Toward Cuba (June 16, 2017); White House, Remarks by President Trump on the Policy of the United States Towards Cuba (June 16, 2017); DeYoung & Wagner, Trump announces revisions to parts of Obama’s Cuba policy, Wash. Post (June 16, 2017); Davis, Trump Reverses Pieces of Obama-Era Engagement with Cuba, N.Y. Times (June 16, 2017); Schwartz, Trump Announces Rollback of Obama’s Cuba Policy, W.S.J. (June 16, 2017).

 

 

U.S. Secretaries of Commerce and of Treasury Comment on Developments Regarding Cuba   

At the request of President Obama, the outgoing heads of various federal government departments and agencies have submitted “exit memos” to review progress over the last eight years of his administration and to provide roadmaps to the future. A previous post reviewed the comments about Cuba in the exit memo by Secretary of State John Kerry.

Here are the comments about Cuba in the exit memos from U.S. Secretary of Commerce Penny Pritzker and U.S. Secretary of Commerce Jacob J. Lew. [1]

Secretary of Commerce

“The Department has taken a lead role to fundamentally change U.S. policy toward Cuba. We launched the U.S.-Cuba Regulatory Dialogue and, in coordination with the Department of the Treasury’s Office of Foreign Assets Control, the Department has published six sets of regulatory changes aimed at empowering the Cuban people through increased economic engagement. From January 2015 through September 2016, we issued 738 licenses for proposed exports and re-exports to Cuba valued at $9.4 billion. In addition, we worked with the private sector to identify the most effective ways to increase economic engagement and ultimately benefit the Cuban people.”

Secretary of Treasury

“And, as we chart new courses with other countries, such as Cuba, we should be mindful of how we can use our economic tools to create the conditions for a changed relationship.”

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[1] White House, Exit Memo, Department of Commerce (Jan. 5, 2017); White House, Exit Memo, Department of The Treasury (Jan. 5, 2017).