Commerce Still Educating US Industry on Authorized Cuban End-Users, Says Export Official
Nearly eight months after the Obama administration unveiled new measures to ease trade and travel with Cuba, the Commerce Department is continuing to inform U.S. industry on approved private sector end-users in the country, said Matt Borman, deputy assistant secretary at Commerce’s Bureau of Industry and Security, at a Sept. 9 hearing. The administration, as a policy, denies authorization for exports to the Cuban military or the Communist party, Borman told a House Foreign Affairs subcommittee.
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The Commerce and Treasury Departments released the new Cuban trade regulations in mid-January (see 1501150031). BIS created a license exception, dubbed the Support for the Cuban People, in those changes. The exception covers building materials for private sector construction, agricultural tools and equipment and supplies for private sector entrepreneurs, such as restaurant owners and mechanics. The Cuban government legally permits 200 categories of employment in the private sector, Borman said.
Several lawmakers challenged Borman and other panelists on the possibility of diversion or confiscation by the Cuban military and government. Borman said Commerce is largely deferring to industry and Cuban recipients to determine if the goods ultimately make it to approved end-users. “Once items are in Cuba, I think it’s very likely that if they don’t go to the intended recipient, the U.S. exporter will let us know, particularly if it’s someone who’s selling something to a relative, who say is running an auto repair shop. And they send them a tool kit. And that tool kit doesn’t make it,” said Borman. “I’m confident that the intended recipient will let their relative know that. So that’s kind of the way we look at it.”
Borman stressed that Commerce would place the Cuban government and military on the Denied Person’s List if diversion or confiscation takes place. U.S. exporters that deliberately circumvent U.S. regulations to send products to banned end-users, such as the government or military, are subject to restrictions on export privileges. The new rules for trade with Cuba also carefully ensure no weapons or military items are authorized for export, Borman said. “The items that are eligible for these license exceptions or general authorizations … they are very low-level items,” he said. “They’re not items controlled by the multilateral, non-proliferation regime. Those still all need a license.”
The vast majority of trade is still prohibited under the ongoing embargo on Cuba, said panelist John Smith, acting director at Treasury’s Office of Foreign Assets Control. But authorized U.S. agricultural exports to Cuba have sharply declined in recent years, said Foreign Agricultural Service Administrator Phil Karsting, another panelist at the hearing. Those officials largely placed the blame for that decline on the decision-making at Alimport, the Cuban state corporation that handles all U.S. agriculture exports. Smith and Karsting urged congressional activity to ease financial and export promotion restrictions for trade with Cuba.