Regulations continue to throw wrench in commerce between U.S., Cuba

Regulations continue to throw wrench in commerce between U.S., Cuba
By LIZETTE ALVAREZ, The New York Times
Posted: June 21, 2015 at 3:47 a.m.

MIAMI -- Six months after President Barack Obama cracked open a more
than five-decade Cold War stalemate with Cuba, U.S. money, travelers and
business executives are streaming onto the island, and a U.S. flag is
poised to fly over the de facto embassy in Havana any week now.

Tourism-related companies, including hotels and cruise lines, have their
Cuba plans ready. Airbnb is helping travelers find private rooms in Cuba
-- a growing cottage industry there. JetBlue is offering flights to the
island. And for the first time in a long while, Americans are free to
import a small number of goods from Cuba made by Cuban entrepreneurs.

But myriad laws and regulations, most important the U.S. trade embargo
against Cuba, continue to restrict commerce between the two countries.

The U.S. government now allows U.S. banks to open accounts in Cuba, but
the Cuban government has not detailed how. U.S. credit cards are
permitted, but no one can use them because Cuba has not authorized them.
At the same time, Cuba is banned from using U.S. dollars for
international transactions.

Netflix is available to everyone, and to no one, because Internet access
on the island is expensive, slow and unavailable in almost all homes.
U.S. companies can now ship goods to private-sector businesses --
shampoo to hair salons or refrigerators to restaurants, for example --
but Cuba will not yet allow its entrepreneurs to receive them.

Ferries got approval from the United States to sail to Cuba this year,
but Cuba has not granted its permission. And under U.S. rules, American
executives can venture to Cuba to research investment opportunities, but
they are still prohibited from opening a Marriott, a CVS or any other
business there, even under a partnership with the Cuban government, as
some foreign companies have done.

There is enormous enthusiasm among Cubans on the island, who are
energized by the possibilities, and entrepreneurs in the United States
who are eager to open businesses in Cuba. But many are now tempering the
enthusiasm with recognition of how long the process of normalization may be.

"My new title is manager of expectations," said Ariel Pereda, who, under
a congressional exemption for some food and medical products, has since
2002 legally exported U.S. goods like Hershey chocolates and Pringles
potato chips to Cuba. He also advises business leaders on Cuba.

"For any real investment that has a return, for that to happen, the
embargo has to be lifted," he said.

Removing the embargo requires a vote from Congress, which is unlikely at
the moment, analysts said.

This month, House Republicans, joined by several Democrats, approved two
measures to roll back Obama's new rules. One measure would toughen
restrictions on Cuba, including flights and sea travel, a blow to those
pushing for more change. The bills are attached to must-pass
appropriations legislation.

John Kavulich, the president of the U.S.-Cuba Trade and Economic
Council, said any major shift toward Cuba would be unlikely in a
Republican Congress and with an election looming.

"Nothing is going to happen in Congress during President Obama's time in
office," Kavulich said.

This is why some advocates want Obama to continue to use his
presidential power. Obama, for example, could allow U.S. companies to
finance the sale of construction material that can now flow to Cuba. At
the moment, the transactions are cash only.

But critics in Congress point to the fact that, so far, this has been a
one-sided dance.

"There is a perception, even by some Democrats, that Obama has given a
lot and not gotten much," Kavulich said. "People want to see us get
something."

Cuban officials counter that as long as the U.S. embargo exists and a
U.S. naval base sits at Guantanamo Bay without Cuba's consent, genuine
normalcy will be out of reach.

A Section on 06/21/2015

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