WASHINGTON — The Obama administration said Tuesday it is further easing trade and travel restrictions with Cuba, marking another step forward in potentially opening new export opportunities for brands and retailers in the future.
The new measures, revealed by the Commerce and Treasury Departments, will remove existing restrictions on payment and financing terms for a limited amount of “authorized” exports and reexports to Cuba, and establish a new licensing policy for certain exports. They will take effect on Wednesday.
Payment and financing terms for authorized exports are restricted to cash-in-advance or third-country financing. Under the new rules, financing for authorized nonagricultural exports and reexports will be expanded to include sales on an open account and financing by U.S. financial institutions.
“Today’s Commerce rule builds on previous changes by authorizing additional exports including for such purposes as disaster preparedness; education; agricultural production; artistic endeavors; food processing, and public transportation. These regulatory changes will also facilitate exports that will help strengthen civil society in Cuba and enhance communications to, from and among the Cuban people,” said Commerce Secretary Penny Pritzker. “Looking ahead, we will continue to support greater economic independence and increased prosperity for the Cuban people, as we take another step toward building a more open and mutually beneficial relationship between our two nations.”
Treasury Secretary Jacob J. Lew said the new measures “build on successive actions over the last year and send a clear message to the world: the United States is committed to empowering and enabling economic advancements for the Cuban people.”
“We have been working to enable the free flow of information between Cubans and Americans and will continue to take the steps necessary to help the Cuban people achieve the political and economic freedom that they deserve,” Lew said.
The two agencies cited several examples of exports that will be eligible under the licensing policy including items that are for agricultural production, artistic endeavor (including the creation of public content, historic and cultural works and preservation), education and food processing.
While the administration’s steps to reestablish economic and travel ties with Cuba, first announced in December 2014, are seen as a positive by many in the business community, the Cuban market will remain largely closed to U.S. exports until the American trade embargo is lifted.
The sweeping policy changes outlined by President Obama at the time are the first since 1961, when the U.S. severed diplomatic ties with Cuba and, subsequently, placed an economic embargo on the country during the Cold War.
The president does not have the authority to lift the embargo. That will take an act of Congress, which remains divided on the issue.
But industry officials have said the easing of restrictions and restoration of diplomatic ties with Cuba could eventually help pave the way for more exports to the island nation as well as a broader discussion on the embargo on Capitol Hill.