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CUBA: The Race May Be On, But U.S. Companies Shouldn't Assume "All Clear" to Go
June 10, 2015
It is good news of President Obama’s efforts to thaw the decades-old U.S./Cuba diplomatic ice bridge. In May 2015, the Obama Administration’s efforts took real form with the U.S. Department of Treasury’s Office of Foreign Asset Control's (OFAC) issuance of new guidelines for travel to Cuba along with the U.S. State Department's removal of Cuba from its list of State Sponsors of Terrorism.
On a pragmatic level, the reasons for sudden diplomacy is a two-way street.
Cuba’s desire to work towards real change may be a growing economic instability as a result of Venezuela’s economic largesse all but stopping since the 2014 plunge in world oil prices. At home, Cuba is experiencing a growing restiveness amongst its populace for broader economic opportunities as small, micro-financed businesses are becoming more commonplace. Lastly, the U.S. may be quietly trying “better offer” Russia’s alleged agreement to write off its approximately $32 billion in Soviet-era debt in exchange to re-open its Lourdes Signal Intelligence (SIGINT) spy post. Obviously, the U.S. would prefer not to revert to Cold War-era tactics.
Whatever the reason(s), Cuba is one of the new darlings for overseas investment.
A recent British Trade Mission circular helps to set the stage. "Normalisation of economic relations with the US is now a matter of time and leading US business organisations are already in the process of exploring future investment and trade opportunities. There may be only a relatively short period during which UK companies wishing to enter the market can position themselves before their US competitors arrive.” (More detail available at: http://www.caribbean-council.org/british-trade-investment-mission-cuba-led-cuba-initiatives-chairman-rt-hon-lord-hutton-furness/).
Since the recent U.S. government announcements, LGI has received a number of recent inquiries from its clients regarding their ability to travel to Cuba for both business and tourism. The short answer is “It’s complex”. First, U.S. companies should bear in mind there is an official “embargo” on most commercial trade with Cuba that comes with very specific opportunities for travel.
STAKEHOLDERS: The stakeholders most affected by this embargo are defined by OFAC as "U.S. citizens and permanent residents wherever they are located, all people and organizations physically located in the United States, and all branches and subsidiaries of U.S. organizations throughout the world." Therefore, company HR and Global Mobility professionals should not assume that a British national, U.S. Permanent Resident employee working in France is all set to go to Cuba on business, let alone on behalf of a U.S. employer.
NATURE OF ACTIVITIES: In addition to stakeholders, the nature of visiting has been “loosened” by the U.S. Government where 12 categories of activities no longer require written permission from OFAC prior to travel Cuba.
These 12 categories are referred to under the “General License” provisions in Section II, Question 5 of Treasury Department’s FAQ’s:
Of note for the General Licenses is the privilege for freedom of travel without prior authorization is assumed that travelers can meet ALL CRITERIA required in each General License. Therefore, prior to departure to Cuba, General License travelers should anticipate strong questioning and/or request for proof of nature of visit by U.S. and Cuban port of entry officers.
The remaining sanctions for U.S.-owned or controlled entities may not engage in transactions that involves commercial exportation, directly or indirectly, of goods or services to or from Cuba. For traditional tourism, U.S. citizens and permanent residents are prohibited from traveling to Cuba.
KNOW YOUR CUBAN SPONSOR: For visa purposes, travelers must have an official “sponsor” inviting them to Cuba. Whilst the U.S. has removed Cuba from the state-sponsored terrorism list, the Department of Treasury does maintain a Specially Designated National (SDN) list where certain Cuban individuals and/or companies have their assets blocked in the U.S. and U.S. persons are generally prohibited from dealing with them. More details can be accessed at the SDN list at: https://sdnsearch.ofac.treas.gov.
To access the general listings, you can choose “Type” (Individual or Entity) and “Program” (Cuba).
CUBAN VISAS: As noted above, formal Cuban/U.S. relations are getting better for their own reasons. However, to have “normal" relationships between both countries is to establish full Embassies, complete with comprehensive consular services to include visa processing, overseas citizens assistance services, trade missions and press offices. At present, neither country maintains normal consular representation in the other’s country. Therefore, applications for visas either to Cuba or to the U.S. are filed with that country’s Consular Section of the Interests Section.
Prior to travel to Cuba, travelers must confirm if they are to file a visa application with the Cuba Interests Section: http://www.cubadiplomatica.cu/sicw/EN/ConsularServices.aspx#OtherVisas
Please note that this link is not definitive immigration advice for Cuba and Cuban visa requirements are discretionary and subject to change with little or no advance public notice.
GETTING THERE: With thawing relations, commercial air travel between Cuba and the U.S. is becoming less onerous. However, travel to Cuba by air and sea must be through approved by the U.S. Department of Treasury for air or boat charter services. Direct charter flights from Miami, Orlando and Tampa are the usual method of transportation. However, on May 5th, for the first time in 50 years, the U.S. Government approved ferryboat services to at least two U.S.-based ferry operators (http://www.reuters.com/article/2015/05/06/us-cuba-usa-ferry-idUSKBN0NQ2CE20150506).
U.S. companies are strongly advised to work with an approved and qualified travel agent familiar with arranging transportation, hotel and any other destination services in Cuba.
Travelers should bear in mind that while certain credit cards may be accepted in Cuba (http://www.bloomberg.com/news/articles/2015-01-23/mastercard-to-lift-transaction-block-on-u-s-cards-in-cuba-1-?utm_source=January+23+Blast&utm_campaign=August+29+Blast&utm_medium=email), Cuba is still a cash-driven economy and acceptance of cards may be difficult outside of resorts, major shopping venues and hotels. Also, it is worth noting of feedback that credit cards issued by U.S. banking institutions may be refused in Cuba.
WHAT DOES THIS ALL MEAN?
First, all or some of the above could change by the time this is posted. But, for the immediate future, U.S. Companies and U.S. Citizen/USPR travelers should be cognizant that certain instances for travel to Cuba are allowed, but are very limited to specific reasons and activities. In addition, everything from securing hotel reservations, securing appropriate travel by air or water carrier and ability to function in Cuba should be considered well in advance of proposed travel to Cuba.
It is LGI’s hope that freedom of travel and trade to Cuba will come much sooner than later. Until that time, the above is for guidance only and to ensure that those of us in the U.S. are aware of the sanctions that still exist between our two countries.
Disclaimer: The LGI news library postings are of a general nature and for informational purposes only. Information posted does not constitute legal advice, nor should it be construed to serve as a substitute for legal advice. LGI Library postings are based upon information obtained through various public news resources, industry affiliates, and through LGI’s global alliance network. Content may be reused or reproduced either with posted credit to both LGI and authors, or through written permission granted by LGI and/or parties holding copyright or other intellectual property rights for specific content. For more information, please contact LGI at firstname.lastname@example.org.