U.S. eases restrictions on financing exports to Cuba
Julie Hirschfeld Davisjan, The New York Times
WASHINGTON.- The Obama administration announced Tuesday that it was removing major impediments to contact between the United States and Cuba by lifting restrictions on American financing of exports to the island nation and relaxing limits on the shipping of an array of products, from tractors to art supplies.
The revised rules that will take effect on Wednesday will allow United States banks to provide direct financing for the export of any product other than agricultural commodities, still walled off under the trade embargo.
Until now, American products sent to Cuba had to be paid for in advance in cash or routed through a third country, a costly and burdensome process. Items that have been banned for decades because they might benefit the Cuban government, such as textbooks, construction cranes or sanitation equipment, can now be approved by the American government case by case.
Mr. Obama is pushing to do as much as possible to normalize relations with Cuba before he leaves office next year. He would like to travel to Cuba before his term ends, a visit that senior officials said would “highlight progress” in the relationship.
But each incremental move underscores the steep obstacles facing two countries with fundamentally different governments and economies. American officials said they continued to have concerns about Cuba’s human rights record, including limits on political expression. And they conceded that exports to Cuba would have to be approved and distributed by a state-run ministry.
“Just as the United States is doing its part to remove impediments that have been holding Cubans back, we urge the Cuban government to make it easier for its citizens to start businesses, engage in trade and access information online,” Ned Price, a spokesman for the National Security Council, said in a statement on Tuesday.
Critics contended that Mr. Obama was skirting Congress and rewarding a dangerous regime. Senator Robert Menendez, Democrat of New Jersey and a son of Cuban immigrants, said the moves would “do nothing to empower the Cuban people” and would instead provide “their oppressors the resources they need to tighten their grip.”
“Today’s action by the administration is a contravention of the law — the will of Congress, and the people who elected us, and a betrayal to those brave Cubans who have raised their voices in support of freedom, only to be silenced by a regime we are now helping,” he said in a statement.
Administration officials said the revised rules would help open Cuba’s economy and government by exposing the country to more American goods, people and ideas.
Treasury Secretary Jacob J. Lew said the changes “build on successive actions over the last year and send a clear message to the world: The United States is committed to empowering and enabling economic advancements for the Cuban people.”
The regulations were released jointly by the Treasury Department’s Office of Foreign Assets Control, which imposes and enforces sanctions, and the Commerce Department’s Bureau of Industry and Security, which oversees export controls. The rules also loosen limits on travel between the United States and Cuba and make it simpler to re-establish direct flights under a civil aviation agreement reached late last year.
Commerce Secretary Penny Pritzker said the action would ease exports for such purposes as disaster preparedness, educational and artistic pursuits, agricultural production and public transportation.
“We will continue to support greater economic independence and increased prosperity for the Cuban people as we take another step toward building a more open and mutually beneficial relationship,” she said in a statement.
The rules build on three rounds of regulatory changes that the Obama administration has enacted unilaterally since Mr. Obama and President Raúl Castro of Cuba announced in December 2014 that their countries would reverse over a half-century of official hostility. Since then, American and Cuban officials have struck agreements to reopen embassies -a step achieved last summer- and environmental and civil aviation pacts.
Like those announced a year ago, the latest changes relax travel restrictions, although tourism is still prohibited by statute. Americans traveling to Cuba to make films or record music, to organize professional meetings, or to work on cruise ships or airliners will be authorized to make the trips and spend money.
The export financing changes will allow American companies for the first time in decades to sell goods directly to Cuban state-run enterprises and to use credit to do so. When Ms. Pritzker led a delegation to Cuba in October, officials there explained that if they needed to buy tractors from a foreign supplier, they would rather purchase them on credit from Brazil, for instance, than pay cash to a United States company, a senior administration official said, speaking on the condition of anonymity to describe private discussions.
“We recognize that in allowing some exports that primarily benefit the Cuban people, there may also be some ancillary benefits to the government,” the official said. “But we’re really focused on those sorts of things that benefit the everyday Cuban.”
The administration said the prohibitions would still apply to exports that would go directly to the Cuban military, the police, or intelligence or security services, or that would generate revenue primarily for the state, such as sugar production.
Proponents of the opening with Cuba commended the White House and renewed calls for Congress to lift the embargo, which tightly restricts most trade and commerce and discourages American companies from pursuing even the limited activities that the Obama administration has authorized.
“I hope to see further progress in the months ahead toward eliminating the remnants of a policy that has failed miserably, while it has harmed the citizens of both countries,” Senator Patrick J. Leahy, Democrat of Vermont, said in a statement.
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