The U.S. Department of State announced on May 16, 2022 a series of measures aimed at supporting the Cuban people and independent Cuban entrepreneurs and easing Trump-era restrictions that largely isolated the island and its people from the United States. by “undoing” much of the work of the Obama administration to initiate and increase authorized activities in Cuba.
The Biden administration’s actions, while limited in scope, represent the most significant shift in U.S. policy toward Cuba since June 2019, when the Trump administration banned cruises to the island. In a May 16, 2022, background press appeal, senior Biden administration officials explained that the measures are the result of the White House’s year-long effort to review existing Cuba policy, with a particular focus on human rights and the empowerment of the Cuban people.
Summary of new measures
Specifically, the Biden administration intends to:
- reinstate the Cuban Family Reunification Parole Program (CFRP) and expand visa processing and consular services by gradually increasing processing of immigrant visas from Havana while continuing to process visas from Georgetown , Guyana, allowing more Cubans to visit or join family in the US
- easing restrictions on authorized travel to Cuba by 1) allowing charter and commercial flights to Cuban airports outside of Havana and 2) reinstating group educational travel between people, as well as travel related to certain professional meetings and looking, towards the island
- increase support and encourage business opportunities with Cuban entrepreneurs who operate outside the government sector by allowing access to extended cloud technology, application programming interfaces, e-commerce platforms, microfinance and training
- remove the current family remittance limit of $1,000 per quarter per sender-receiver pair and reinstate remittances as gifts (i.e. non-family), which could facilitate the provision of financing for private companies on the island
In announcing the measures outlined above, the US State Department also confirmed that the Biden administration will implement the measures in stages and regulatory changes across multiple federal agencies. These agencies are likely to include, at a minimum, the Office of Foreign Assets Control (OFAC) of the United States Department of Treasury, the Bureau of Industry and Security (BIS) of the United States Department of Commerce and the Federal Aviation Administration of the United States Department of Transportation (FAA). By expanding opportunities for visa processing and consular services, the Biden administration will also likely need to increase the number of US embassy staff in Havana, many of whom were fired under the Trump administration following Mysterious Health Incidents Called “Havana Syndrome”. “
Conclusion and considerations
These steps reflect initial, but limited, efforts by the Biden administration to reconnect with Cuba and the Cuban private sector. After implementation, the Biden administration will likely take the time, as the Obama administration did, to gauge public reaction and the effectiveness of its measures, and then determine whether additional changes are consistent with national security interests of the United States. Past experiences, however, indicate that the success of the measures will depend on the reaction of the Cuban government; in particular, its interest and willingness to create the domestic conditions necessary to facilitate the ability of the Cuban people to take advantage of and benefit from US measures. The Cuban government’s willingness to create such an environment will likely depend on whether it sees these efforts as benefiting its own agenda and interests.
As noted above, the proposed measures will encourage and support business opportunities with Cuba’s private sector by allowing access to expanded cloud technology, e-commerce and microfinance, and by re-allowing remittances to non-citizens. -family members. This initial expansion of U.S. opportunities to interact with the Cuban private sector may suggest future interest in allowing U.S. direct investments in private Cuban companies that have no state ownership. Again, the Biden administration can test the waters here to gauge both public and Cuban government responses and acceptance of the measures; if positive, the Biden administration could then consider more concrete reforms.
With respect to person-to-person “group” educational travel to Cuba, the Obama Administration had issued so-called blanket licenses for person-to-person and group educational travel to Cuba.1 The distinction between the two categories of person-to-person travel is that person-to-person “group” travel required an organization that was a US entity to arrange and sponsor the travel; under “individual” person-to-person travel, the individual traveler could self-certify according to regulations and travel to Cuba independently. The Trump administration eliminated the two general licenses.
While the Biden administration has not specified how the person-to-person group travel exception will be reinstated, it is expected to be implemented under a blanket license. In the past, tour operators, universities and other private organizations organized person-to-person trips in groups. Notably, the Biden administration chose not to restore individual person-to-person travel to Cuba; opponents of Cuba’s opening see this exception as a way for individuals to engage in prohibited tourist travel in Cuba.
Finally, during the press call in the background, Senior Biden administration officials have disclosed that at this time the United States will not remove any entity from the State Department’s list of Restricted Entities and Sub-Entities Associated with Cuba (Cuba Restricted List) . Cuba’s Restricted List, published in 2017, identifies entities controlled by the Cuban military, intelligence, or security services with which U.S. persons may not transact because the U.S. government has determined that direct financial transactions with they would disproportionately benefit these entities to the detriment of Cubans. people or private company. Therefore, direct financial transactions to and/or from FINCIMEX (public financial investment and funds transfer company) and Banco Financiero Internacional, SA (public bank), as with all other entities on Cuba’s restricted list , will remain prohibited. .
It remains to be seen whether the actions of the Biden administration are an opening for the United States to restore the expanded economic opportunities to engage with Cuba that were seen under the Obama administration, or simply a tinkering around the edges. Certainly, the reopening of group travel between people and the opening of airports beyond Havana seem to portend further expansion. As with Obama’s opening, Biden can take a step-by-step approach in order to judge the political reaction – both domestically and by the Cuban government. Only time will tell.
Holland & Knight continues to closely monitor the Biden administration’s policy toward Cuba. If you have questions about how the developments discussed in this alert or other U.S. government restrictions on Cuba may affect you or your organization, please contact one of the authors or another member of the International Trade Group of Holland & Knight or Cuba Action Team.
Remarks
1 A blanket license authorizes a particular set of transactions and activities, without the need to apply for an individualized license or wait for a license to be granted, as long as regulatory requirements are met.
