US releases regulations to ease embargoes on Cuba

US announces regulations to ease embargoes on Cuba but Cuban President Raul Castro tells President Barack Obama that restrictions should be lifted completely

Photo by: Reuters
Photo by: Reuters

US President Barack Obama

The White House released new guidelines on Friday to further ease trade, travel and investment with Cuba. However, Cuban President Raul Castro told US President, Barack Obama over a phone call to go even further and completely remove the economic embargo on the communist-ruled island.

This marks one of the very few conversations the two presidents have had in the past, but an important one which could bring changes that could allow certain US companies to establish offices in Cuba, develope banking and internet activities and wipe out restrictions on the amount of money that can be taken to the island, according to US officials.

Obama and Castro considered ways to promote the normalization process, including steps they "can take together and individually," the White House stated.

In a different statement published almost simultaneously in Havana, the Cuban government said: "President Raul Castro stressed the need to deepen the reach (of the new regulations) and to eliminate definitively the blockade policy, for the benefit of both countries."

The new US regulations which are scheduled to begin on Monday, will be instrumental in lowering economic barriers with Cuba.

"A stronger, more open US-Cuba relationship has the potential to create economic opportunities for both Americans and Cubans alike," US Treasury Secretary, Jacob Lew said.

The Cuban government, as it works on improving ties, has continuously made it clear that complete normalization will need the complete lifting of the embargo and the return of the US naval base at Guantanamo Bay located on the eastern tip of the island.

In spite of Castro’s request, the 53 year old US embargo will stay in its place, since only the US congress can vote on removing it, which is something the majority of the Republicans claim is highly unlikely to happen.

Even though the changes might seem significant, across-the-board investments by US companies and general US tourism activities are still banned under the embargo itself.

Especially with the reopening of the embassies earlier this summer, the two countries are on the verge of restoring diplomatic ties, which have been put off for more than half a century of animosity that ignited following Cuba’s 1959 revolution.

As Obama’s term comes to an end at the start of 2017, his unilateral steps to chip away at the embargo appears to be aimed at promoting normalisation with Cuba far enough that no future Republican president would be able to reverse it.

US Senator Marco Rubio, a Cuban-American congressman and a Republican hopeful for next year's presidential election, stated "President Obama's eagerness to please the Castro regime knows no bounds."

On the other hand, Republican Senator Jeff Flake, who is known to have publicly backed the restoration of ties with Cuba, told Reuters: "Anything that makes it easier to do business in Cuba and to assist Cubans who are trying to work outside the state structure is a good thing."

According to the rules released by the US Treasury and Commerce Departments, certain companies can set up subsidiaries or joint ventures, including the opening of offices, stores and warehouses in Cuba.

They also authorise for telecommunications and Internet services between the two nations.

Although the rules do not change who is permitted to travel to Cuba, they facilitate the movement of the authorized travelers by licensing transportation providers.

The regulations also annul the cap on remittances and authorise the travelers to open and maintain bank accounts there, but still maintain that any of those funds going to the Cuban government or Communist Party officials is completely prohibited.

The full influence of the eased restrictions, according to US officials, will depend on whether Cuba makes economic reforms within its own people and government.

The first reaction that appeared from the American corporation community was an interest in exploring their oppurtunities in Cuba, but they were also very careful and aware of the potential risks.

Both US and Cubas’ striking legal claims against one another remain a key factor of uncertainty.


TRTWorld and agencies