South Florida companies hoping to preserve Cuba gains await new Trump rules

South Florida companies hoping to preserve Cuba gains await new Trump rules
Arlene Satchell
Sun Sentinel

When U.S.-based airlines and cruise lines flew or sailed through former
President Barack Obama's historic opening to Cuba, few expected that the
door might be slammed shut or partially closed by his successor in the
White House.

But that's the prospect those and other American companies are likely to
face this week as President Donald J. Trump prepares to announce
policies that could reimpose curbs on travel and business with the
Communist island.

Citing little progress by the Cuban government to improve human rights,
Florida lawmakers such as U.S. Sen. Marco Rubio and Rep. Mario
Diaz-Balart have urged Trump to restore travel restraints under the
long-standing U.S. trade embargo against Havana.

South Florida could be the epicenter for fallout as the majority of
commercial flights and cruises that launched from the U.S. originate
from Florida airports and seaports.

A recent economic impact study by the advocacy group Engage Cuba
concluded that a complete rollback of the current policy on Cuba could
cost the American economy $6.6 billion and affect 12,295 jobs nationwide
during Trump's first term in office, according to a recent economic
impact study by the advocacy group Engage Cuba. Of that amount, airlines
and cruise lines would lose $3.5 billion with 10,154 jobs impacted. The
Washington, D.C.-based nonprofit is seeking an end to the embargo.

After restoring diplomatic relations with Cuba in 2014, Obama signed a
series of executive orders that gave U.S. businesses a small beach head
for doing business in Cuba.

Their reversal could have a "significant impact" in South Florida since
the region became a "jumping off place to Cuba," said John Thomas, an
associate professor of hospitality law at Florida International
University. Business from visitors in transit to and from Cuba could
also be at risk if flights and cruises sharply declined or disappeared,
Thomas said.

In a blog post Sunday, John Kavulich, president of the U.S.-Cuba Trade
and Economic Council in New York, said the Trump administration is
weighing "ending self-directed travel and returning to group-only travel
for educational and people-to-people programs."

A snapshot of locally based services and other commerce with Cuba includes:

Airlines: JetBlue and Southwest offer regular nonstop service to select
Cuban cities including Havana from Fort Lauderdale-Hollywood
International Airport. Delta and American fly from Miami International
Airport.

Cruise lines: South Florida-based Carnival Corp., Norwegian Cruise Line
Holdings and Royal Caribbean Cruises Ltd. offer Caribbean itineraries
with one or more Cuba stops from Port Everglades, PortMiami or Tampa.

Pearl Seas Cruises of Connecticut operated a series of 10-night voyages
to Cuba earlier this year from Port Everglades and has plans for more.

Finance: Since 2015, Stonegate Bank of Pompano Beach has maintained a
relationship with Banco Internacional de Comercio to provide money
transfer services for companies operating in Cuba. It also offers a
Cuba-enabled U.S. credit card to travelers visiting the country.

Freight: Since 2001, Crowley Maritime Corp. has provided container
freight service to Cuba from Port Everglades, transporting mostly
poultry and other food products.

Under Obama's liberalized rules, Americans are allowed to visit the
island without a license and need not travel in organized groups
provided the purpose of their trips falls under one of 12 categories.
They include family visits, research, or educational activities for
"people-to-people" exchanges.

Since the diplomatic rapprochement, many companies used the rules as
leeway to set up businesses in Cuba and establish contacts with
government agencies.

"Our new relationship with Cuba has led to tangible results for American
companies, created U.S. jobs, and strengthened Cuba's growing private
sector," said James Williams, Engage Cuba's president. "If President
Trump rolled back our Cuba policy, he would add job-killing government
regulations on U.S. businesses. Reimposing restrictions on traveling to
Cuba would force Americans to jump through even more bureaucratic hoops
to exercise their right to travel freely."

Most local company representatives and South Florida legal advisers were
hesitant to discuss any damage tighter regulations might bring.

"We really don't know what's going to happen at this point," said David
Seleski, CEO of Stonegate Bank. He said the bank does not maintain
physical storefronts in Cuba and has no concerns about getting its money
out. Still, if U.S.-Cuba financial regulations were to change, fewer
money transfers and less spending on those credit cards might be the result

While Cuba represents a small percentage of the cruise operators'
business, trips have resonated well with consumers and represent a
long-term growth potential, cruise executives have said.

But the companies indicated they have the flexibility to stage a retreat.

"Because our assets are mobile, our ships can be rerouted as needed to
alternate destinations if there is ever an issue that arises with any of
our itineraries," said Roger Frizzell, a Carnival Corp. spokesman

For some American interests, the uncertainty has caused them to place
future Cuba business plans on hold, said Hector Chichoni, partner at the
Duane Morris law firm in Miami.

Chichoni said he is advising clients to tread carefully and ensure they
follow existing rules. But he said some are "going for it," enticed by
the prospects for profits in telecommunications, healthcare and hospitality.

Peter Quinter, a Miami lawyer at GrayRobinson who also counsels clients
on Cuba, agreed caution is merited.

"I remain concerned about the enforcement of contracts under Cuban law,
but executives and entrepreneurs interested in doing business with the
Cuban government already know that doing so is not for the timid," he said.

Source: South Florida companies hoping to preserve Cuba gains await new
Trump rules - Sun Sentinel -
http://www.sun-sentinel.com/business/fl-bz-trump-us-cuba-travel-changes-20170609-story.html