Following last week’s announcement that the United States will re-open its embassy in Havana, Cuba later this month, I have received calls and e-mail messages from small and large business owners as to what opportunities exist for them in Cuba.
Here is a brief synopsis of what type of trade is allowed and figures for U.S. exports to Cuba in the first part of 2015.
The United States anticipates the re-opening of its embassy in Havana on July 20th. Although the United States and Cuba are taking key steps to normalize relations, it is important to remember that restrictions are currently still in place and must be followed.
President Obama’s December 2014 announcement to normalize relations with Cuba loosened restrictions in the following manner:
- “Remittance levels will be raised from $500 to $2,000 per quarter for general donative remittances to Cuban nationals (except to certain officials of the government or the Communist party); and donative remittances for humanitarian projects, support for the Cuban people, and support for the development of private businesses in Cuba will no longer require a specific licenses. Remittance forwarders will no longer require a specific license.”
- “The expansion will seek to empower the nascent Cuban private sector. Items that will be authorized for export include certain building materials for private residential construction, goods for use by private sector Cuban entrepreneurs, and agricultural equipment for small farmers. This change will make it easier for Cuban citizens to have access to certain lower-priced goods to improve their living standards and gain greater economic independence from the state.”
- “Licensed U.S. travelers to Cuba will be authorized to import $400 worth of goods from Cuba, of which no more than $100 can consist of tobacco products and alcohol combined.”
- “U.S. institutions will be permitted to open correspondent accounts at Cuban financial institutions to facilitate the processing of authorized transactions.”
- “The regulatory definition of the statutory term “cash in advance” will be revised to specify that it means “cash before transfer of title”; this will provide more efficient financing of authorized trade with Cuba.”
- “U.S. credit and debit cards will be permitted for use by travelers to Cuba.” (See original post with this information)
A number of large companies are taking advantage of these looser restrictions such as Netflix, Airbnb and MasterCard. Airline and cruise companies, such as JetBlue and Carnival Corp., have announced offering travel services from the United States to Cuba.
From January to May 2015, the United States exported US$112.5 million worth of goods, according to data collected from the U.S. Census Bureau. This is a decrease from the value of US$178.5 million worth of goods from the U.S. to Cuba during the same period a year earlier. Meanwhile, U.S. service providers are expanding to the Cuban market.
To learn more about what type of business is allowed and still prohibited, visit the Office of Foreign Assets Control’s website at:
Are you interested in a trade mission to Cuba? Click here.
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.