New U.S. Policy Towards Cuba Put In Motion By Construction Of Church

The construction of Cuba’s first Roman Catholic Church since Castro came to power in 1959 may well be the first test of the new U.S. policy towards Cuba. The new church, with an expected capacity to accommodate at least 200 worshipers, is set to be built in Sandino, a small, secluded town in the province of Pinar del Rio. Most of the money for the church’s construction was raised by the St. Lawrence Catholic Church in Tampa, Florida. Father Tom Morgan, the vicar of St. Lawrence’s parish, told CNN that he was optimistic that recent changes in U.S. policy towards Cuba would permit his parish to send supplies and building materials to Cuba to help construct the new church.

The changes in Cuba policy mentioned by Father Morgan were put into effect by amending the Commerce Department’s Export Administration Regulations (EAR). On January 16, 2015, the EAR were amended to authorize the export and re-export of certain items to Cuba that are intended to improve the living conditions of the Cuban people. The new regulations permit the export of building materials, equipment and tools for use by the private sector to construct or renovate privately-owned buildings, including places of worship such as the proposed church being built in Sandino. Hence, the efforts of Tampa parishioners to build a church in an out-of the-way village in Cuba could be an early test of the President’s strategy of strengthening civil society in Cuba by supporting independent economic activity.

The new regulations also permit the sending of building materials to Cuba to build privately-owned residences, businesses and buildings for private sector social or recreational use. The U.S. Department of Commerce’s EAR, found at 15 CFR parts 730-774, can be read by clicking here.

Bill Introduced In Senate To End Travel Restrictions To Cuba

On January 29, 2015, a coalition of four Republican and four Democrat senators introduced legislation to restore freedom to travel to Cuba.[1] While President Obama has announced normalization of some relations between the two countries and relaxed travel restrictions to Cuba such that Americans traveling to Cuba no longer have to obtain specific licenses or get permission from the government, Americans are required to certify that their trip falls under one of the twelve categories of permitted travel.[2] Congressional action is necessary to permanently lift all restrictions on travel to the island nation. Bipartisan bill, S. 299, the Freedom to Travel to Cuba Act of 2015, would end restrictions in laws enacted in 1996 and 2000 on travel by American citizens and legal residents to Cuba. The bill would also end restrictions on related transactions incident to such travel, including banking transactions.

Several of the bill’s sponsors expressed their enthusiasm. Senator Jeff Flake said: “We have tried this current policy — we have prohibited travel for about 50 years, and it hasn’t worked . . . It’s time to allow Americans to travel freely to Cuba.” Senator Dick Durbin said: “It’s time for a new policy. . . I think we’re going to see dramatic change in Cuba if there’s more travel, exchange and business between our two countries.”

Zane Kerby, President and CEO of the American Society of Travel Agents (ASTA), expressed the industry’s support for the proposed legislation: “While the Administration’s recent actions on Cuba were a step in the right direction, it is Congress that needs to step up to the plate on travel freedom. We are seeing that leadership now from Senators Flake, Leahy and their bipartisan coalition, and we will do everything in our power to get this bill across the finish line.”

A companion bill to S. 299 is expected to be introduced in the House of Representatives next week by Reps. Jim McGovern (D-MA) and Mark Sanford (R-SC).

To read a draft of S. 299, the Freedom to Travel to Cuba Act of 2015, click here.

[1] The four Republican senators are: Jeff Flake (R-AZ), Jerry Moran (R-KS), Mike Enzi (R-WY), and John Boozman (R-AR). The four Democrat senators: Patrick Leahy (D-VT), Dick Durbin (D-IL), Tom Udall (D-NM), and Sheldon Whitehouse (D-RI).

[2] The categories of permitted travel to Cuba are: (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 export transactions that may be considered for authorization under existing regulations and guidelines.

Easing Of Restrictions On Travel To Cuba Goes Into Effect

On December 17, 2014, the Obama Administration announced new regulations governing travel to and trade with Cuba. Today, the U.S. Department of the Treasury and the U.S. Department of Commerce published in the Federal Register the revised Cuban Assets Control Regulations and Export Administration Regulations, which put into effect changes to the sanctions against Cuba administered by Treasury’s Office of Foreign Assets Control and Commerce’s Bureau of Industry and Security.[1] The regulations are effective as of January 16, 2015.

The new regulations will immediately impact travel to Cuba. Although travel to Cuba for general tourist activity is still prohibited, under the new regulations, Americans will face fewer obstacles when traveling to Cuba, effectively ending the travel ban to the island. The administration’s new rules on travel and trade further the President’s goal of normalizing relations with Cuba by easing restrictions on travel, business and remittances. Under the previous rules, Americans traveling to Cuba had to justify their trips under 12 categories of permitted travel and in most cases obtain a specific license from the Treasury Department.[2] Although travel to Cuba will still be limited to the twelve existing categories, the new regulations are drafted in such a way that allow most Americans to travel to Cuba without obtaining a specific license from the U.S. government. Travel previously authorized by specific license will be authorized by general license, subject to appropriate conditions. This means that individuals who certify that meet the conditions laid out in the regulations will not need to apply for a license to travel to Cuba.

Airlines and travel agents will also be allowed to provide service to Cuba without a specific license. Americans may now book travel directly with airlines and travel agents instead of through government authorized agencies. The new regulations will significantly affect the travel, hospitality and leisure sector, including airlines, cruise lines, hotels and travel agencies.

Travelers will be allowed to spend as much money as they want on travel-related expenses while in Cuba, which was previously limited. Additionally, travelers will be allowed to engage in transactions related to travel within Cuba, including paying for costs of living expenses and purchasing goods for personal use while in Cuba. Travelers will also be allowed to use U.S. credit and debit cards in Cuba.

U.S. insurers will be allowed to provide coverage for global health, life, or travel insurance policies for individuals ordinarily resident in a third country who travel to or within Cuba. Health, life, and travel insurance-related services will continue to be permitted for authorized U.S. travelers to Cuba.

[1] U.S. Department of the Treasury regulations can be found at 31 Code of Federal Regulations (CFR), part 515, see here. U.S. Department of Commerce regulations can be found at 15 CFR parts 730-774, see here.

[2] The twelve categories of permitted travel to Cuba are: (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 export transactions that may be considered for authorization under existing regulations and guidelines.

US Agriculture Coalition for Cuba Takes Off With the Goal of Normalizing Relations Between the United States and Cuba

On December 17, 2014, President Barack Obama announced that the United States would restore diplomatic relations with Cuba and reverse a more than 50-year policy of isolation. President Obama’s move to establish relations and ease sanctions against Cuba stirred the interest of U.S. business. In particular, the American agricultural industry, which is anxious to increase its market share of the Cuban food market, has led the support for President Obama’s decision to normalize relations with Cuba.[1]

On January 8, 2015, more than 25 companies and farm trade associations joined together at the National Press Club in Washington, D.C. to launch the U.S. Agriculture Coalition for Cuba.  The goal of the Coalition is to promote collaborative action for improved agricultural trade relations with Cuba. The Coalition believes that the improvement of agricultural trade between the U.S. and Cuba is the foundation for building successful and enduring relations between both countries.  Continue reading “US Agriculture Coalition for Cuba Takes Off With the Goal of Normalizing Relations Between the United States and Cuba”

U.S. Business Embraces President’s Plan For A New Course On Cuba

Yesterday, President Obama announced wide-ranging adjustments of US policy towards Cuba including opening an embassy in Havana. The Obama Plan involves a series of measures aimed at increasing trade between the two countries. The basic premise of the plan is to permit certain exports to Cuba, relax restrictions on financial transactions and repeal limits on remittances to the island. Secretary of State, John Kerry, will begin to implement the initiative. He is to “immediately initiate discussions with Cuba on the re-establishment of diplomatic relations with Cuba.”

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Puerto Rico And Peru Sign Memorandum To Reinforce Commercial Interactions

In a ceremony attended by President Ollanta Humala and Governor Alejandro García Padilla, on June 11th, the governments of Peru and Puerto Rico signed a memorandum of understanding aimed at promoting their commercial and educational dealings. Among other things, the memorandum indicates that they intend to “strengthen and promote business development, knowledge transfer and cooperation in medical services, education and infrastructure.” Further, Puerto Rico is looking to Peru to help it to expand medical tourism, agricultural trade and cultural projects. As part of the memorandum they will create a working group that will look to follow up on the agreements.

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Cuba Prepares For Its First Free-Trade Manufacturing Zone

The Cuban government recently issued rules and regulations for companies that will operate in the first free-trade manufacturing zone in Cuba. Located in the Port of Mariel, thirty miles west of Havana, the Mariel Special Development Zone will house manufacturing plants that assemble and make products for both domestic and international markets, as well as a megaport designed to eventually replace freight operations at the Port of Havana which cannot accommodate large ships. A highway and railroad infrastructure is also being built to provide access to the zone.

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Puerto Rico’s Public Energy Policy Continues To Seek Solutions To The High Cost Of Powering The Island

High energy costs has long been recognized as one of the biggest obstacles to doing business in Puerto Rico. The cost of energy on the island is almost twice as much as in the U.S. mainland. Mindful that Puerto Rico’s energy policy is a critical component of the island’s successful economic future, the government set in motion the certain steps to diversify power production by fostering renewable energy projects on the island. In July 2010, then governor Luis Fortuño signed into law the Act for a Public Policy for Energy Diversification Through Sustainable and Alternative Renewable Energy (the “Energy Diversification Act”) and the Green Energy Incentives Act (the “Incentives Act”) which firmed up Puerto Rico’s position regarding the need for clean renewable energy. The legislation set specific renewable energy production goals and established economic incentives to enable the island to meet those goals.

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