Allowing Exports to Cuban SOEs Is Major Policy Change, BIS Says
The new policy allowing for case-by-case exports and re-exports for Cuban state-owned enterprises is among the most significant of changes to trade relations between the U.S. and Cuba, said Tony Christino, Bureau of Industry and Security Foreign Policy Division Director, on Feb. 23 during a conference call focusing on the ongoing rollback. “In order to meet the needs of the Cuban people, we couldn’t ignore the state sector,” Christino said. Effective Jan. 27, the latest sanction rollbacks involved the lifting of certain payment and financing restrictions for approved exports and re-exports of non-agricultural items to Cuba, and the authorization of the use of leasing arrangements, code-sharing, and blocked airspace by Cuban airlines to facilitate U.S. travel to the country. Christino added that the Cuban government has shown interest in opening up poultry, fruit and vegetable trade with the U.S. News of the rule sparked a mixed reaction from Senate Republicans, with Jeff Flake, Ariz., urging the Obama Administration to adopt legislation that would more permanently ease travel of U.S. citizens to Cuba (here), and presidential candidate Marco Rubio, Fla., speaking out against the regulation (see 1601270004).
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To streamline the Cuban sanctions rollbacks, BIS is working with the Federal Aviation and Transportation Security administrations, as well as the State Department’s Office of Transportation Policy, Christino said. Yet despite the government’s coordination to remove sanctions, banks have been reluctant to process authorized transactions, and will likely be wary of financing Cuba-affiliated commerce until the U.S. and Cuban economies become better integrated, Office of Foreign Assets Control Assistant Director for Regulatory Affairs Susan Demske said on the call. Despite this, Christino encouraged listeners to submit license applications for exporting and/or re-exporting those items that moved from a general policy of license denial to a case-by-case review process, including sanitation products, educational items, and artistic goods. Demske indicated an open approach in the Administration’s evaluation of export and re-export applications, saying OFAC is taking into account that the president’s sanction removal policy is “very forward-looking.”