Obama takes ‘a sledgehammer’ to Cuba embargo

Obama takes 'a sledgehammer' to Cuba embargo

New rules allow for business presence on island, more travel, more
remittances
Treasury Secretary Lew: U.S. 'helping to support the Cuban people'
Sen. Marco Rubio: Moves 'raise serious questions about the legality' of
Obama regulations
Sept. 18, 2015. AL DIAZ adiaz@miamiherald.com
BY CHRIS ADAMS
McClatchy National Staff

WASHINGTON
What's commonly known as the trade embargo on Cuba is still on the
books, as it has been for some five decades.

But for businesses from around the United States — whether a cruise
linein Miami or rice producers from Arkansas — the barriers to trade
with the untapped market 90 miles from Florida are getting lower and lower.

The Obama administration on Friday announced it was moving to further
change U.S.-Cuba trade rules, ushering in what experts called a major
development that would significantly open the door to expanded business
on the island.

It's a continuation of the actions President Barack Obama and his
administration have taken since December, when he announced a major thaw
in the decades-long freeze with Cuba. But for American companies and the
trade experts who work with them, the announced moves are a big boost in
their hopes to — someday — have full and free trade with Cuba.

"There remains much of the embargo to be dismantled," said John S.
Kavulich, president of the U.S.-Cuba Trade and Economic Council, who
estimated that maybe 40 percent of the embargo has been disrupted by the
president's regulatory actions.

Obama did not merely chip away at the embargo, Kavulich added. "He used
a sledgehammer," he said.

Kavulich considers the changes announced Friday to be "the most
comprehensive trade and investment changes to the United States
relationship with the Republic of Cuba in decades."

The rules will be formally published and take effect Monday. Treasury
Secretary Jacob J. Lew said they underscore "the administration's
commitment to promote constructive change for the Cuban people."

"A stronger, more open U.S.-Cuba relationship has the potential to
create economic opportunities for both Americans and Cubans alike," he
added in a statement. "By further easing these sanctions, the United
States is helping to support the Cuban people in their effort to achieve
the political and economic freedom necessary to build a democratic,
prosperous and stable Cuba."

The rules were greeted warmly by many business interests, who see
greater leeway to boost sales and travel to Cuba. But they were
instantly lambasted by some lawmakers, particularly those in South
Florida who both represent and come from the Cuban-American community.

Rep. Ileana Ros-Lehtinen, a Republican from Miami who also sits on the
House Foreign Affairs Committee, said in a statement that the rule
changes announced Friday "naively fuel expectations of a non-existent
new Cuba."

"These new regulations are another desperate attempt to ignore the iron
grip that the Castro regime maintains on the island's economy and will
only serve to benefit the coffers of the regime," she added. "By
repeating the lie that Cuba has a private sector, the administration is
using U.S. regulations to advance the regime's political agenda in the
United States."

Added Sen. Marco Rubio, a Republican from West Miami who sits on the
Senate Foreign Relations Committee and is also a 2016 presidential
candidate: "President Obama's eagerness to please the Castro regime
knows no bounds, as he keeps offering one-sided concessions that will
strengthen the brutal dictatorship at the expense of the Cuban people. …
Not only do these measures harm the cause of a free Cuba, they also
raise serious questions about the legality of the Obama administration's
regulations."

In addition to the new trade rules announced Friday, Obama also spoke by
phone with Cuban leader Raúl Castro to discuss the process of
normalization. According to the White House, the two presidents
commended the role Pope Francis has played advancing relations between
the two nations; the pope lands in Cuba on Saturday at the start of a
visit to both countries. The Cuban Foreign Ministry said in a statement
that Castro stressed the need to expand the measures and to eliminate
the embargo.

While experts on both sides of the issue say the embargo as now on the
books is politically safe in the short term, there are administrative
actions the president can — and has — taken to further his goals.

Among the most significant of Friday's changes, as announced by the
Treasury and Commerce departments, are those involving personal travel,
personal remittances and business activity.

The Associated Press reported that authorized American citizens now will
be able to travel by cruise ship or ferry to Cuba without seeking
specific authorization from the U.S. government, though a U.S. official
told the AP earlier this week that a direct maritime route probably
won't be established until next year.

Miami-based cruise companies were poring over the latest government news
but had no announcements of their own as a result.

"We're studying it closely, but we're not ready to offer comment yet," a
spokesman at Royal Caribbean Cruises said.

Norwegian Cruise Line Holdings also had nothing to say Friday, but CEO
Frank Del Rio said during an earnings call last month that the company
had applied for approval from the U.S. and Cuban governments to sail to
Cuba.

Carnival Corp., the world's largest cruise ship company, has already
announced plans to operate sailings to Cuba through its social impact
brand Fathom. While the U.S. government has granted approval, the
company is still awaiting permission from Cuba.

"We are in active discussions with Cuban officials and we remain very
optimistic that we will receive approval in the short term for Fathom to
begin sailing to Cuba starting in May 2016," spokesman Roger Frizzell
said in a statement.

On Friday, the company reiterated its interest in visiting the island
with its nine other cruise brands.

On travel: Earlier changes had permitted official government business
and some educational and other activities. Now, a close relative also
will be allowed to visit or accompany authorized travelers for
additional educational activities, journalistic activity, professional
research, religious activities and humanitarian projects.

On remittances to Cubans: Current rules say they can be no more than
$2,000 per quarter. That limit will be removed entirely.

Easing restrictions on business activity by U.S. firms is among the most
significant changes.

"The rules in January were important — they established the precedent,"
said Robert L. Muse, a Washington-based lawyer and expert on Cuba trade.
"But it was more of a beachhead, and it was a bit murky. Now they are
engaging the business community in a way that's going to be interesting
and important to them. It begins to give them some real commercial
traction."

Muse said that companies engaged in exporting authorized items to Cuba
will be able to establish, maintain and operate physical premises in Cuba.

"Maintaining a presence is brand new — that's the big further step they
have taken here," Muse said. "The intention is to bring American
businesses to the island."

An example, he said, would be an agricultural company allowed to export
to Cuba that would now be able to establish a sales office on the island.

Miami Herald Staff Writer Hannah Sampson and el Nuevo Herald Staff
Writer Nora Gámez Torres contributed to this report.

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