US rules on Cuba poke new holes in embargo

WASHINGTON - Reuters

The Obama administration puts a large dent in the US embargo against Cuba on Jan 16, significantly loosening restrictions on American trade and investment.

The United States announced sweeping new rules on late Jan. 16 that will significantly ease sanctions on Cuba, opening up the communist-ruled island to expanded U.S. travel, trade and financial activities.

Defying critics in Congress, President Obama made good on his commitment last month to loosen restrictions on dealings with Cuba as part of an historic effort to end decades of hostility. The U.S. embargo on Cuba, in place for 54 years, will remain. Only Congress can lift it. But the package of regulations issued by the Treasury and Commerce Departments, which would take effect on Jan. 16, will allow U.S. exports of telecommunications, agricultural and construction equipment, permit more travel by Americans to the island and open banking relations.

U.S. airlines will also be permitted to expand flights to the Caribbean island, beyond the existing chartered flights that connect Cuba and the United States. United Airlines said on Jan. 15 it planned to serve Cuba from Houston and Newark, New Jersey, subject to government approvals.

First tangible steps by US after years

The moves were the first tangible U.S. steps to implement economic changes Obama pledged on Dec. 17, 2014 when he and Cuban President Raul Castro announced plans to restore diplomatic relations.

“Today’s announcement takes us one step closer to replacing out-of-date policies that were not working, and puts in place a policy that helps promote political and economic freedom for the Cuban people,” said U.S. Treasury Secretary Jacob Lew.

While Castro has welcomed last month’s deal, he has made clear that Havana does not intend to abandon single-party rule or the state-controlled economy. Congressional critics of Obama’s shift say that Washington should not be rewarding Cuba. The new regulations will allow Americans to travel to Cuba for any of a dozen specific reasons, including family visits, education and religion, without first obtaining a special license from the U.S. government as was previously the case.

But tourism will still be banned.  Still, U.S. travelers will be allowed to bring home small numbers of the Cuban cigars that are highly rated by aficionados. It will also be easier for U.S. companies to export mobile phone devices and software as well as to provide Internet services in Cuba. Americans will now be able to send up to $8,000 to Cuba a year, up from $2,000 previously, and bring $10,000 with them when they travel to the country.