On 16 June 2017, President Trump announced, that the United States would be rolling back Obama-era Cuba sanctions relaxations, which he has called a “terrible and misguided deal.” As a consequence, the Trump Administration will reinstate travel and commercial restrictions eased by the Obama administration in an attempt to obtain additional concessions from the Cuban government.
The signed Executive Order by President Trump, has not yet been published, but OFAC has posted FAQs on the new policy on it’s website. The current Obama-era relaxations will remain until OFAC has published the new Trump-era Cuba sanctions. If necessary, the Commerce Department will also amend the EAR to implement the new policy.
Despite President Trump’s fanfare announcement, which we have all come to expect, his intended reversals are a middle of the road approach towards Cuban sanctions. They have been condemned by everyone; not going far enough or reversing some parts of Obama-era relaxations.
The biggest change will be with respect to individual people-to-people travel that was permitted starting March 15, 2016.
According to the OFAC FAQs, individual people-to-people travel is educational travel that:
- does not involve academic study pursuant to a degree program; and
- does not take place under the auspices of an organization that is subject to U.S. jurisdiction that sponsors such exchanges to promote people-to-people contact.
Therefore, as part of the new policy, Americans might no longer be able to plan their own private trips to Cuba, and those who go as part of authorized educational tours will be subject to strict new rules and audits to ensure that they are not going just as tourists.
The new policy is also directing a comprehensive prohibition against Americans doing business with companies controlled by the Cuban military, intelligence or security services, which own large segments of the economy through the military’s business arm known as Grupo de Administración Empresarial S.A. (GAESA).
The prohibition to deal with GAESA owned/controlled firms is a logical step – given that there are many similarities of such prohibitions in other U.S. sanctions programs, e.g. the IRGC in Iran. There is some logic in not wanting U.S. dollars to benefit sections of the Cuba regime which still operate undemocratically.
However, its questionable whether the yo-yo U.S. policy towards Cuba is still worth pursuing.
The U.S. embargo is a classic example of a sanctions policy not working to achieve it’s objectives. Despite the massive economic damage caused by the embargo, especially since the end of the Cold War, this has not brought the downfall of the Castro regime.
Whether isolationism is the answer, remains to be seen. The U.S. and Cuba still co-operate in anti-terrorism related fields. Exposure to more capitalism and more tourists can also bring more exposure to human rights compliance and demands regarding democratic reforms. Engagement might be better than isolationism…
Let’s wait and see.