Another Round of Deregulation: Opportunities Abound for Business with Cuba
(This Article was first published in March of 2016 on the website of Breazeale, Sachse & Wilson, L.L.P.)
President Obama is now in Cuba. He is the first president to visit Cuba since Calvin Coolidge, 88 years ago. His trip is the culmination of continued efforts to engage the people of Cuba. Last week, in anticipation of the presdient's trip, the Departments of Commerce and Treasury further eased restriction for U.S. and Cuban entrepreneurs. Because of these decreased regulations, U.S. commercial airlines can now operate daily flights to Cuba; U.S. companies have signed agreements to manage Cuban hotels; exporters have set up subsidiaries on the island, and in one case, an Alabama copmany was authorized to build a factory in the Mariel Special Development Zone. Here is a look at the latest authorized transactions:
Exports from the United States (except for agricultural items or commodities) can now be sold on credit. The financing can even be provided by a U.S. bank. Effectively, the former policy of "cash in advance" now only applies to agricultural commodities.
Transactions relating to the creation, dissemination, of artistic or other informational materials, such as music and art, is now authorized. This includes employment of Cuban nationals and the remittance of royalties.
Transactions related to humanitarian projects now includes disaster preparednes and response activities.
Entities authorized under Humanitarian license exception are now authorized to establish a physical presence in Cuba. Establishing a physical presence can include leasing physical premises, marketing, and employing both Cuban nationals and person subject to U.S. jurisdiction in Cuba.
Entities authorized under Support of the Cuban People license exception can now establish a business presence in Cuba (Establishing a business presence includes forming subsidiaries, branches, offices, joint ventures, franchises, and other business arrangements with Cuban nationals.)
People-to-people travel to Cuba no longer requires a sponsoring organization. Individuals can now travel independently, provided that one's schedule is devoted to "meaningful interraction" with individuals in Cuba and intended to enhance contact with Cubans, support civil society, or promote the Cuban people's independence from Cuban authorities.
Importing Cuban-origin software is now allowed.
The Department of Commerce is adopting a "case-by-case" review policy regarding licenses for exports or reexports to Cuba that will in turn enable exports from Cuba, or by the Cuban private sector.
For the industrious and innovative, opportunities abound. The Cuban private sector is still in need of substantial support and services from the United States. These authorizations coupled with previous authorizations,create significant opportunities for Louisiana companies looking to access the Cuban market. However, there are still a number of important restrictions on U.S. persons and companies. Breazeale, Sachse & Wilson, can help you ensure your business complies with both U.S. and Cuban law.
Saul Reinaldo Newsome practices in the areas of international trade, foreign direct investment, and export controls. Saul is an attorney in the Baton Rouge, Louisiana office of the law firm Newsome International Law, L.L.C. For more information, please contact Saul Reinaldo Newsome at info@newsomeinternational.com or (225) 384-0204.