Cuba Practice Group

Cuba is beleaguered by the aging dictatorship of the Castro brothers, which have controlled virtually every aspect of life on the island nation for well over 50 years. The Castro regime's rule over the 12 million Cubans on the island, and its tired anti-Americanism mantra, is expected to soften, if not collapse similar to what took place in the former Soviet Union in 1991.

Cuba represents the largest potential consumer market in the Caribbean and the Cuban people are well aware of most American brand names and demand for them is strong, though purchasing power is anemic given the economic realities of the vast majority of Cuba's population.  The U.S. embargo against bilateral trade with Cuba imposed in 1960 has forced American businesses to wait on the sidelines while other countries have been doing business on the island for decades.  However, in the most significant changes in United States policy toward Cuba in more than fifty years, on December 17, 2014, President Barack Obama announced that the U.S. will begin to normalize relations with Cuba to create more opportunities for the American and Cuban people, and begin a new chapter among the nations of the Americas.  The exact nature of the changes and the result they will yield remains open to debate, but it seems clear that the status quo will substantially shift in the coming years.

Cuba represents a market with robust long-term growth potential that hinges on what happens with Cuba's government institutions and economic engine going forward, presumably after Raul Castro steps down as Cuba’s head of state. Without a dramatic change in Cuba's current socialist system and a transition where the rule of law prevails and is steadfast, any investments made in Cuba may remain at the whim of a powerful few. And given the well-documented history of stripping away private property rights, confiscation of assets, publicly proclaiming contempt against free-market capitalism and abusing the rights of workers and basic human rights of the Cuban people, the Cuban government must embrace serious changes if it intends to create conditions for American foreign investment and to improve conditions for its people. The hope is that Cuba's dismal state of affairs will change for the better in the foreseeable future, leading to the end of or substantial changes to the embargo, enabling free trade and commerce with the island, and ultimately, improved conditions and opportunities for the Cuban people.

Lawyers in our Cuba Practice Group are familiar with the history of laws relating to U.S. policy on Cuba, including the long-standing U.S. embargo, The Cuban Democracy Act of 1992, The Cuban Liberty and Democratic Solidarity (Libertad) Act of 1996 (commonly known as the Helms-Burton Act), rules, regulations and amendments promulgated by the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) and the most recent changes beginning to take place after President Obama’s announcement on changes to Cuba policy on December 17, 2014. We are also familiar with applicable laws and processes relating to the U.S. export exceptions and the various plans in place or being developed by local, state and national government authorities and quasi public-private organizations monitoring on-going political and economic developments in Cuba.

We closely monitor changes to U.S. policy, new legislation and amendments to existing laws that impact U.S.-Cuba relations. We can advise clients regarding obtaining U.S. Treasury and Commerce Department licenses, negotiating contracts and facilitating complex transactions. We can assist individuals and companies to position themselves to enter the full Cuban market at the moment the trade embargo is lifted. Our Firm can assist with strategic planning and positioning for success after U.S.-Cuba relations are normalized. Our Cuba Practice Group can also assist those with viable claims associated with property that may have been unlawfully confiscated by Fidel Castro's communist government, properly documenting such losses and claims and, to the extent allowable by law, filing or registering legitimate claims with the appropriate government agencies.

Furthermore, several of our lawyers are the sons and daughters of Cuban-born parents. These lawyers are fluent in Spanish, intimately familiar with Cuban history, culture and traditions, and look forward to serving as an effective professional bridge between companies, businesses and individuals from the U.S. and elsewhere, on the one hand, and a more open and free future Cuba, on the other.

For more information regarding our Cuba Practice Group, please contact the Managing Partner of the Cuba Practice Group, Peter A. González.

DECEMBER 2014

PRESIDENT OBAMA'S ANNOUNCEMENT

ON U.S. CHANGES TO CUBA POLICY 


In the most significant changes in United States policy toward Cuba in more than fifty years, on December 17, 2014, President Barack Obama announced that the U.S. will begin to normalize relations with Cuba to create more opportunities for the American and Cuban people, and begin a new chapter among the nations of the Americas.

As part of U.S. changes to Cuba policy, the President highlighted several specific steps.

First, President Obama instructed Secretary of State John Kerry to begin discussions with Cuba to reestablish diplomatic relations that have been severed since January of 1961, with the immediate aim of reestablishing an embassy in Havana and having high-ranking officials visit

Second, Secretary Kerry was instructed to review Cuba’s designation as a State Sponsor of Terrorism to determine if Cuba’s designation should change. 

Third, the U.S. will implement measures to increase travel, commerce, and the flow of information to and from Cuba, making it easier for Americans to travel to Cuba, and to have Americans able to use American credit and debit cards on the island.  Also, there will be a significant increase in the amount of money that can be sent to Cuba, and limits on remittances that support humanitarian projects, the Cuban people, and the emerging Cuban private sector will be removed. The U.S. will facilitate authorized transactions between the United States and Cuba.  U.S. financial institutions will be allowed to open accounts at Cuban financial institutions, making it easier for U.S. exporters to sell goods in Cuba.  The President also announced that he has authorized increased telecommunications connections between the United States and Cuba.

The U.S. embargo of Cuba imposed by congressional legislation remains in place, but as the changes President Obama announced and is empowered to implement take place, the President intends to engage Congress in an honest and serious debate about lifting the embargo.

To read President Barack Obama’s entire statement, please visit the following link:
https://www.whitehouse.gov/the-press-office/2014/12/17/statement-president-cuba-policy-changes

SMGQ will continue to monitor and study U.S. changes in Cuba policy to keep its clients informed of all significant developments relating to greater engagement with the Cuban people to better build bridges in travel, commerce, technology, education, healthcare, agriculture, construction, insurance and other areas that may benefit the Cuban people while providing growing opportunities for SMGQ clients.

 

MARCH 2013

DEVELOPMENTS IN OFAC RULES AMENDING CACR


The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) recently issued a final rule amending the Cuban Assets Control Regulations, 31 C.F.R. Part 515 (CACR), to implement President Obama's initiative of April 13, 2009, to reach out to the Cuban people in support of their desire to freely determine their country's future, promote greater contact between separated family members in the United States and Cuba, and increase the flow of remittances and information to the Cuban people. The amendments to the CACR change the rules in three major areas: (1) family visits; (2) family remittances; and (3) telecommunications. These amendments also make certain technical and conforming changes to the CACR. SMGQ can provide guidance to its clients on the details of these recent changes in the law.

Furthermore, the new amendments to the CACR also implement provisions of the Omnibus Appropriations Act, 2009. Pursuant to section 620 of the Omnibus Appropriations Act, 2009, which amended the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA), there is a new general license for travel-related transactions incident to agricultural and medical sales under TSRA. This new general license authorizes, with certain conditions, travel-related transactions that are directly incident to the commercial marketing, sales negotiation, accompanied delivery, or servicing in Cuba of agricultural commodities, medicine, or medical devices that appear consistent with the Department of Commerce's export or re-export licensing policy.