U.S. Allows Additional Trade and Business with Cuba

Posted in Foreign Trade, US-Cuba relations

Cuban FlagAmendments Implement Additional Changes Laid Out by President Obama on Dec. 17, 2014

On Sept. 21, 2015, the U.S. Government further amended the existing Cuba-related regulations to allow for certain additional types of travel and the establishment of physical business premises in Cuba. The amendments also remove certain restrictions on remittances, financial transactions, and exports to Cuba.

The regulations are effective immediately upon publication on Sept. 21, 2015, and serve to further implement President Obama’s Dec. 17, 2014 announcement of a policy change with respect to Cuba, which included the official opening of the U.S. Embassy in Havana on Aug. 14, 2015.

While the amended regulations will expand business and other transactions in which U.S. persons can engage with Cuba, the United States nevertheless maintains a nearly comprehensive embargo on trade with Cuba. U.S. persons are reminded that they may only engage in transactions that are licensed or otherwise specifically authorized.

Summary of the Amendments

The U.S. Department of the Treasury Office of Foreign Assets Control (OFAC) has implemented new measures in the following areas, among others:

1. Continued Easing of Travel Restrictions

The amended regulations ease travel to Cuba for authorized purposes, specifically by authorizing U.S. persons to provide carrier services by vessel (e.g., cruise ships) without the need for specific licenses, and allowing authorized travelers to open, maintain, and close bank accounts in Cuba.

Despite these changes, tourism-related travel is still not permissible so travel to Cuba by U.S. persons continues to be restricted to authorized travel categories only. U.S. persons should take note that, while certain authorized travel categories appear broad (e.g., travel related to “support for the Cuban people”), specific requirements apply to each permitted category of travel. Continue Reading.


Franchising in Cuba – The Next Frontier?

Posted in Foreign Investment, Foreign Trade, Uncategorized, US-Cuba relations

On Jan. 16, 2015,Cuban Flag following an announcement made by President Obama on Dec. 17, 2014 of a plan to ease the U.S. trade embargo and restore diplomatic relations between the U.S. and Cuba, the U.S. Department of Commerce’s Bureau of Industry and Security (the Commerce Department) and the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) amended the existing U.S. sanctions on trade with Cuba. The amendments revise the Cuban Assets Control Regulations (CACR), and Export Administration Regulations (EAR), administered by OFAC and the Commerce Department, respectively. Further, effective May 29, 2015, Cuba was officially removed from the list of State Sponsors of Terrorism (SSOT) by the U.S. Secretary of State, and on July 20, 2015, the embassies in Washington and Havana were re-established after more than 50 years, following an announcement by President Obama in early July that the United States will restore formal diplomatic relations with Cuba. Secretary of State John Kerry is currently expected to visit the U.S. embassy in Cuba on Aug. 14, 2015, and his visit will mark the first visit to Cuba by a U.S. Secretary of State in over 50 years. These recent developments signal a new direction for diplomatic and economic relations between the nations.

At first glance, the potential business opportunities seem limitless: Cuba is already a popular Caribbean destination for travelers from Canada and the European Union, and if travel restrictions are further lifted, U.S. tourists are certain to be drawn to Cuba’s beaches and rich culture. Franchisors are among the many types of businesses starting to envision how they might expand into Cuba in hope of attracting both tourists and Cuban consumers alike. Industries of particular interest include hospitality, restaurants (including quick-service and fast casual), and personal care services. As the easing of the economic sanctions on Cuba is still limited and very new, uncertainty about franchising and other business opportunities remains under the current U.S. trade restrictions and the laws of Cuba. While Cuba currently does not have any published laws specifically regulating franchising, as a communist state, the economy is effectively entirely run by the government and not by private individuals or entities. Furthermore, even activities that might be permissible or specifically authorized from the U.S. perspective will likely face hurdles on market entry on the Cuban side, such as operating permits, business licenses, and import regulations. Continue Reading.


Iran Deal Delivered to U.S. Congress and U.N. Resolution Issued

Posted in Iran, Sanctions

Middle East MapOn July 19, 2015, the U.S. State Department transmitted the Iran nuclear deal to Congress, commencing Congress’ 60-day review period. In addition, as required under the JCPOA, the U.N. Security Council passed a resolution endorsing the Iran nuclear deal on July 20, 2015. In this GT Alert, the authors discuss the impact of the moves on those conducting business in or with Iran.

Read the full GT Alert.


Iran Nuclear Deal Reached – Prospects for Sanctions Relief

Posted in Iran, Sanctions

Middle East MapOn July 14, 2015, the five permanent members of the U.N. Security Council (China, France, Russia, the United Kingdom, and the United States) plus Germany and Iran announced that they had reached a final deal regarding Iran’s nuclear program. In this GT Alert, the authors discuss the impact of the deal on those conducting business in or with Iran.

Read the full GT Alert.


U.S. and EU Extend Deadline for Deal in Iran Nuclear Talks

Posted in United Nations Actions

On June 30, 2015, the five permanent members of the U.N. Security Council (China, France, Russia, the United Kingdom, and the United States) plus Germany, the European Union, and Iran agreed to extend by seven days their self-imposed deadline for finalizing a deal regarding Iran’s nuclear program. The so-called Joint Comprehensive Plan of Action (JCPOA) is now expected to be finalized by July 7, 2015.

The parties to the negotiations reached an agreement on a framework for a final deal on April 2, 2015, with the expectation that the details would be finalized by the end of June. Under the framework, it is expected that Iran would receive limited sanctions relief if it abides by its nuclear-related commitments. Specifically, U.S. and EU nuclear-related sanctions would be suspended once the International Atomic Energy Agency (IAEA) has verified that Iran has complied with all of its nuclear-related obligations. How the parties (particularly the United States) will differentiate nuclear-related sanctions from all others currently applied against Iran (such as human rights, weapons of mass destruction, and terrorism-related sanctions) remains to be seen. The full details of any deal are speculative until a formal agreement is reached and made public by the parties to the negotiation.

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U.S. and Cuba to Re-establish Diplomatic Relations

Posted in US-Cuba relations

Further to President Obama’s initial announcement in December 2014 of planned restoration of diplomatic ties on July 1, 2015, President Obama and Secretary of State John Kerry announced that the United States will restore formal diplomatic relations with Cuba and specifically that embassies will be re-established in Washington and Havana after more than 50 years. Uncertainty remains about the Congressional authorizations that will likely be required to fund refurbishing and reopening the embassy in Havana, as well as any appointment of a U.S. ambassador to Cuba.

The move reflects a significant change in U.S.-Cuba relations, but is unlikely to result in any immediate, significant easing of the U.S. sanctions and exports controls now imposed on Cuba. Most of the U.S. sanctions and export controls against Cuba are mandated by a statutory embargo and various related statutes that Congress has so far declined to lift or amend. As a result, most Cuba-related transactions remain prohibited under U.S. law at this time.

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President Obama Overcomes Domestic Political Obstacles to Advance Trade Agenda

Posted in Foreign Trade

Following the House’s lead, the Senate passed trade promotion authority (TPA) legislation late yesterday afternoon. Passage of this legislation – also known as fast-track authority – is a significant victory for President Obama’s trade agenda. In short, TPA provides the president with the authority to negotiate trade agreements with other nations while also denying Congress the ability to amend any agreement brought before the body for approval. The legislation is considered a prerequisite to completion of the Trans-Pacific Partnership (TPP). Supporters of free trade argue that trading partners are more likely to make concessions if they know the agreement cannot be changed.

The road to victory was not an easy one. From the start, TPA faced strong opposition from President Obama’s own party and several interest groups. The strongest opposition came from labor groups. The largest labor group in the U.S. – AFL-CIO – infamously warned that any members voting for TPA would receive no future contributions from the organization. The group went so far as to threaten the funding of challenger-candidates for any member of Congress who voted for TPA. The debate, however, has not been one-sided. Agriculture groups have matched the efforts of labor groups and other opponents on Capitol Hill.

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The US-EAC Cooperation Agreement and Expanded Opportunities in Africa

Posted in Foreign Investment

shutterstock_167044940The following post was originally published on Greenberg Traurig’s Doing Business in Africa blog, which includes a number of posts about the investment potential and pitfalls awaiting those who are interested in doing business in Africa.

The United States and the East African Community (EAC), a regional trade bloc, recently signed theU.S.-EAC Cooperation Agreement, which seeks to improve trade through customs facilitation between the United States and the five member countries of the EAC: Burundi, Kenya, Rwanda, Tanzania, and Uganda. This agreement represents the commitment of both the United States and the EAC to deepen their ties through trade along three objectives:

  • Implement the World Trade Organization Trade Facilitation Agreement
  • Enhance food safety, and plant and animal health
  • Improve technical regulations, standards, testing, and certification

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Cuba Removed from U.S. State Sponsors of Terrorism List

Posted in US-Cuba relations

Further to our previous Alert summarizing the President’s April notification to Congress of his intent to remove Cuba from the list of State Sponsors of Terrorism (SSOT), the required 45-day period for Congressional notice expired on May 29, 2015, and, as a result, Cuba’s SSOT designation was officially rescinded. President Obama had formally submitted the statutorily required delisting notification to Congress, certifying that Cuba had not provided support for international terrorism in the past six months and would not in the future. Congress raised no formal opposition to the President’s notification, clearing the way for the Secretary of State to remove Cuba from the list effective May 29, 2015.

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U.S. Treasury & Commerce Departments Issue New Crimea Authorizations and Clarifications

Posted in Sanctions

shutterstock_181093370_CarouselThe U.S. Government has amended the Crimea sanctions, in part, to foster and support the free flow of information to individual citizens in the Crimea region of Ukraine (Crimea) and to ensure that the sanctions against Crimea do not have the unintended effect of preventing companies from providing personal communications tools to individuals in Crimea. In 2010, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) made similar amendments to the sanctions programs for Iran, Sudan, and Cuba to ensure that individuals in these countries can exercise their universal right to free speech and information to the greatest extent possible. Specifically, on May 22, 2015, OFAC issued General License (GL) No. 9 authorizing the export or reexport of software and services related to Internet-based communications (e.g., email, instant messaging, chat, social networking, or blogging) to Crimea, with certain restrictions. This would permit, for example, U.S. software or app developers to allow users in Crimea to purchase and/or download products that support and enable Internet-based communications.

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