President Obama has created a lot of buzz about opening the Cuban market to Americans, but it is a long way from buzz to profits. On December 17, 2014, the President and various members of his administration announced sweeping changes in the 50-plus year economic embargo against Cuba. Normalization of diplomatic relations, increased travel, the ability to use U.S. debit and credit cards, increased commerce, and a number of other changes almost makes one want to break out a Cuban cigar right here in the nation’s capital and start ginning (or rumming, to create a word) up advertisements for the Cuban market.
But that would be premature given what the “buzz” currently allows. Lighting up the Cubano is still illegal (indeed, even having it in the U.S. is illegal). Although U.S. law currently allows limited commercial exports to Cuba (mostly agricultural goods and medicines), and the President has proposed expanding trade, a number of major hurdles stand in the way of full scale trade:
- The administration must issue new regulations. These will come from the Office of Foreign Assets Control (“OFAC”), part of the U.S. Treasury. Not only must OFAC draft the regulations, but they must then be approved by the Department of State, the National Security Council (well, maybe not officially), and the Office of Management and Budget.
- Next, there is the problem of the Helms-Burton Act. This 1996 act (Pub.L. 104–114, 110 Stat. 785, 22 U.S.C. §§ 6021–6091) codified the Cuban Asset Control Regulations (31 C.F.R. Part 515) into law. So, there is considerable doubt as to the ability of the President, without Congress’ changing the law, to make more than cosmetic alterations to the present embargo, not to mention other major conditions the law placed on normalizing relations.
- The large — and valuable — number of claims filed by U.S. persons against Cuba for land and property expropriated during the Castro-led revolution need to be resolved. The U.S. Foreign Claims Settlement Commission has adjudicated these claims for submission, in the normal course, to the Cuban government for payment. This tender may not be met with a smile and an abrazo by the Cubans.
- This brings us to the last major hurdle – the Cuban Government, still run by the Castro brothers. What makes us think they are going to throw open the doors to U.S. commerce and capitalism? Let’s recall that it was, in part, U.S. domination that helped create the revolution.
So, plan all you want, but the proposed changes will not happen overnight. And until the changes take place, Treasury, Customs, and the Department of Justice will continue to enforce the embargo.