New import rules for Cuba represent historic change

New import rules for Cuba represent historic change
BY MIMI WHITEFIELD MWHITEFIELD@MIAMIHERALD.COM
02/13/2015 4:00 PM 02/13/2015 10:28 PM

For the first time in more than a half-century, a U.S. company will be
allowed to hire private Cuban workers to provide services and to import
some products from independent Cuban entrepreneurs.

As part of its evolving Cuba policy, the United States released rules
Friday on the types of goods and services that may be imported from
Cuba's selft-employed sector. The new rules went into effect immediately.

"This is another measure intended to support the ability of the Cuban
people to gain greater control over their own lives and determine their
country's future," the State Department said.

As part of the move by the United States and Cuba to renew diplomatic
ties, the Obama administration announced new trade and travel rules last
month to make it easier to do business with Cuba. The release of the
import regulations by the State Department was the latest step in that
direction.

But forget the artisanal cigars, home brew or even refurbished vintage
cars. Tobacco, spirits and machinery are among the exceptions not
eligible for import under the new rules.

Prepared food and beverages, textile and textile articles and animal
products also aren't eligible for import, cutting out important
potential sales opportunities for Cuba's cuentapropistas, the
self-employed. For the record, imports of live animals, vegetables,
chemical and mineral products, electrical equipment, telecom parts,
articles made from nickel, zinc, copper and other non-precious metals
and mechanical appliances aren't permitted either.

Items that aren't on the list of exceptions may be imported.

"I was a lot underwhelmed by the new rules for goods," said Ted Henken,
a professor at Baruch College who is co-author of the book
"Entrepreneurial Cuba: The Changing Policy Landscape."

"But services have more potential — especially services provided by
translators and computer programers," he said. "I could see
Cuban-Americans in Miami farming out certain services and having Cubans
on the island do them."

While the goods eligible for importation are "disappointing," Augusto
Maxwell, who heads the Cuban practice at the Akerman law firm, said the
change was still historic.

And he is much more enthusiastic about the services provisions, which he
called "the highlight" of the new rules. Essentially, the United States
imposes no restrictions on the type of services that independent Cuban
entrepreneurs may provide — although the Cuban government may.

"There are now opportunities for Cubans to work for U.S. companies,"
Maxwell said. "The beauty of this is that it signifies to the Cuban
people that it is no longer the United States that is standing in their
way of being employed by U.S. companies."

He said he foresees a day when young, tech-savvy Cubans might be able to
provide their services to Google or Microsoft.

Americans who import goods or services from Cuba, however, must get
proof that shows a Cuban entrepreneur or a worker-run cooperative is
truly independent. That could be a Cuban-government-issued
self-employment license or in the case of a private entity, proof that
it is not controlled or owned by the Cuban government.

In the future, the State Department said, third party verification by an
independent organization may be sufficient to prove an entrepreneur or
cooperative is private.

Some three years ago, the government began turning some state-owned
businesses over to workers who run them as cooperatives. But so far,
Cuba has approved only around 500 such cooperatives.

The Cuban government allows self-employment in around 200 categories and
now more than 383,000 Cubans are in business for themselves, but at this
point almost all professional activities aren't eligible for
self-employment licenses.

Many of the self-employment service categories are low-tech and aren't
necessarily of interest to American companies. Jobs that fall into that
category are entrepreneurs who repair household goods, watches,
eyeglasses, jewelry and shoes as well as workers who make pushcart
deliveries, sharpen knives and fill or repair cigarette lighters.

But Cuban entrepreneurs are also allowed to program computers, translate
documents, provide sports training (with the exception of martial arts),
teach languages, book private bed and breakfasts, and provide
bookkeeping — but not accounting services. Such service jobs might pique
the interest of U.S. companies.

Although Cuba's cuentapropistas offer all manner of homemade food from
candy and jams to wine, those items will not be allowed in under the new
rules.

While cloth and clothes made of textiles are excluded, it appears
clothing or shoes made from non-textile products might be allowed. Items
made from wood aren't excluded, either.

That sends a message to Cuban entrepreneurs that they should use their
imaginations and be creative, said Henken. "You know how entrepreneurial
Cubans are. You give them an inch and they take a mile."

But he said they'll have to ask themselves whether their products can
compete in the United States and whether there is a market for them.

"While important in making a crack in the wall of the embargo and
facilitating some trade with Cuba's private sector, this is still quite
a small step that will have little impact on the ground in Cuba," Henken
said.

U.S. importers also will have to pay duties on imports valued at more
than $400, or more than $800 if they bring in $400 worth of Cuban
merchandise as accompanied baggage and more than $400 as imports from
private entrepreneurs.

Limits on Cuban goods that American travelers can bring back in their
luggage were announced last month: $400 worth of merchandise, which may
include up to $100 worth of tobacco and alcohol products, for personal
use only.

As part of the Obama administration's new Cuba policy, the door also has
been opened to American investment in private Cuban enterprises and that
also could create new opportunities. Remittances for development of
private businesses and projects that "directly benefit the Cuban people"
no longer have limits.

The State Department also has indicated that it plans to expand eligible
imports over time as it gets feedback from Cuba's budding
entrepreneurial class.

Cuba has gradually added new categories of permissible self-employment
activities and that, too, could spur more imports.

"I'm sure Cubans will start finding the items they can sell [under the
new rules]," Maxwell said. "The bigger thing is that now the United
States has established the architecture for imports."

Source: New import rules for Cuba represent historic change | The Miami
Herald The Miami Herald -
http://www.miamiherald.com/news/nation-world/world/americas/cuba/article10111730.html