The Obama administration announced the lifting of major trade and travel restrictions on Cuba on Tuesday, permitting U.S. banks to finance exports to the island and clearing obstacles to a resumption of commercial air travel between the two countries.
Tourist travel to Cuba and certain exports remain prohibited. But the new provisions broaden categories of allowed travel and the range of U.S. goods that can be sold, including to Cuban government entities.
The changes bring the administration closer to the limit of what President Obama has the power to do unless Congress lifts the embargo on Cuba imposed more than a half-century ago. They also indicate his resolve to eliminate as many barriers as possible before the end of his term.
The measures “send a clear message to the world,” said Treasury Secretary Jacob J. Lew, whose department polices many of the regulations. “The United States is committed to empowering and enabling economic advancements for the Cuban people.”
The new regulations take effect Wednesday.
Presidential candidate Sen. Marco Rubio (R-Fla.) called the moves “one-sided concessions” that provide an “economic windfall” and further empower Cuba’s communist government.
Cuban American lawmakers such as Rubio and some others have sharply opposed Obama’s opening to Cuba, begun when he announced more than a year ago that he would reestablish diplomatic relations with the island’s government, a step that took place in July. Obama has repeatedly called for an end to the embargo.
Public opinion surveys indicate a majority of Americans of both parties favor lifting all remaining trade and travel restrictions. A number of bills, with bipartisan support, have been introduced to do so, but the Republican leadership in Congress has not allowed any to move forward.
The administration has argued that the decades-long freeze on relations and bans on trade and travel failed in their stated purpose of bringing the Cuban regime to its knees and served only to harm the Cuban people. It has said that it expects the new openings will benefit Cuba’s small but growing private sector and press the government toward more political and other freedoms.
So far, evidence of progress has been slight. Although long-term political detentions are increasingly rare, opposition demonstrations are regularly broken up by security services. While there has been some growth in permitted private business, including restaurants and lodging, government licensing provisions and import controls severely hamper expansion. New public hotspots permit some Internet connectivity, but private connections are still sharply restricted.
“We recognize that in allowing some exports . . . there may also be some ancillary benefits to the [Cuban] government,” said a senior administration officials, one of several who briefed reporters on the condition of anonymity set by the administration.
But the changes “are really focused on things that benefit everyday Cubans.” Trading through state enterprises, the official said, is necessary “in order to get benefits . . . to people.”
The administration has maintained that, despite the embargo, its rule changes fall within the president’s executive authority and are permissible because they are directed toward fostering economic and political freedom.
The measures are the third round of Treasury Department changes on Cuba, and the fourth from the Commerce Department, over the past year. Previous actions loosened licensing provisions for U.S. citizen travel to Cuba for 12 approved purposes, such as humanitarian and educational visits, and facilitated exports of construction materials and other goods to private businesses.
Some of the rules announced Tuesday, including access to U.S. credit, were requested by U.S. businesses hoping to trade with Cuba. U.S. companies have complained they were losing out to higher-priced competitors from other countries because of “cash-only” and other restrictions for allowed exports.
Many of those complaints, however, have come from agricultural producers, whose sales to Cuba remain ineligible for U.S. financing. Congress long ago permitted agricultural and medical exports to Cuba, but for cash only. Because this was done via legislation, Obama cannot change it.
Sectors affected by the newly authorized transactions include agricultural production, education, food processing, public health and sanitation, residential construction, public transportation and “the development of infrastructure that directly benefits the Cuban people,” according to an administration fact sheet.
A “general policy of denial” of licenses will remain on items for use by government agencies “that primarily generate revenue for the state,” including tourism and mining, the fact sheet said.
“Additionally, applications to export or re-export items destined to the Cuban military, police, intelligence and security services remain subject to a general policy of denial,” the document states.
To facilitate a civil aviation agreement signed between the two governments last month, the new rules authorize airline code sharing as well as airplane-leasing deals for Cuba. Administration officials said that despite the eased restrictions, U.S. investment and trade will continue to lag behind as long as Cuba funnels all imports and exports through a state body, maintains a dual-currency system and insists that all Cuban hires by foreign companies there be made through a state agency.
Over the years, travel restrictions have been eased to allow Cuban Americans to travel freely to the island and others to obtain a Treasury license under the 12 categories of permitted travel, not including tourism.
This month, Obama lifted a requirement that Americans must travel in groups under approved licenses granted to complying organizations. U.S. citizens can “self-declare” that their travel is in an allowed category. The Treasury Department retains authority, rarely exercised, to investigate and prosecute those who cannot prove compliance after the fact.
The 12 categories remain under the new regulations but have been expanded to include those on temporary visits to facilitate allowable travel, such as airline crews or organizers of professional conferences or sporting events.
Brian Murphy contributed to this report.