The Obama administration will make it cheaper and easier for Americans to visit Cuba, while paving the way for more arrangements allowing Cuban athletes and entertainers to work and be paid in the U.S. without defecting.
U.S. citizens traveling to Cuba for “people-to-people exchanges” will be permitted to go as individuals, rather than with third-party groups, under regulatory changes that take effect Wednesday. Combined with new commercial flights between the U.S. and Cuba, Americans will be able to plan their own trips to Cuba so long as they can show they aim to support civil society and independence and have meaningful interactions with Cubans.
“This is what historic change looks like,” James Williams, president of Engage Cuba, a U.S. nonprofit that supports normalized relations with Cuba and an end to the U.S. trade embargo, said in a statement. “The new regulations will speed up a process that is now all but inevitable.”
The easing of travel and financial restrictions, announced Tuesday by the Treasury Department, precedes President Barack Obama’s planned trip to Cuba on March 20, the first by a sitting U.S. president in 88 years. The administration has relaxed other sanctions against the Communist state since Obama and Cuban President Raul Castro said in December 2014 that they would restore diplomatic ties after a freeze of more than five decades dating back to the Cold War.
The changes announced by the Treasury and Commerce Departments also will allow “U-turn” payments through the U.S. financial system, letting funds pass through U.S. financial institutions if they start and end in banks outside the country, which is expected to help Cuban businesses. U.S. banks also will be allowed to open accounts for Cuban nationals.
‘Nothing in Return’
The Obama administration’s relaxation of Cuba trade restrictions has angered some Republicans. Representative Mario Diaz-Balart of Florida challenged Treasury Secretary Jacob J. Lew during a congressional hearing on Tuesday.
“You now have given more sanctions relief to the Castro regime, but we ask nothing in return,” Diaz-Balart said. “Your new regulations effectively authorize the Castro regime dictatorship to use the U.S. financial system as a flow-through for their international transactions.”
“The purpose of our relief of the Cuba sanctions is to, within the law, try to increase contact between the United States and Cuba because the policy of the last 50 years hasn’t worked,” Lew responded.
The U.S. trade embargo against Cuba, which can only be lifted by Congress, “is an impediment” for fuller economic ties between the countries, White House deputy national security adviser Ben Rhodes told reporters on a conference call.
“We are making it easier for the Cuban economy to open up to the global economy,” Rhodes said. “There’s going to be more dollars on the island, and we wanted to find a practical way for those dollars to be processed.”
While Tuesday’s announcement doesn’t in itself authorize a proposal by Major League Baseball for Cuban players to sign directly with teams, it clears one major hurdle by letting Cuban athletes, artists and performers who receive visas earn salaries or fees that exceed basic living expenses. Rhodes said “ongoing discussions” between MLB and Cuba must resolve further issues for Cuban players.
The regulatory changes also allow Americans to legally buy Cuban cigars and alcohol while visiting other countries.
Rhodes said the Cuban government should consider its own legal changes “to increase the impact” of the relaxed U.S. restrictions, including ending a 10 percent penalty on dollar conversions in Cuba, an “irritant” for Americans. He also said the Cuban government should let foreign firms hire Cubans directly.
Rhodes said the U.S. is discussing with the Cuban government claims for reparations from U.S. individuals and businesses. “We do believe we can make progress on this over time,” he said, though no resolution is expected during Obama’s trip.
By Scott Lanman and Margaret Talev for Bloomberg