WASHINGTON/HAVANA (Reuters) -The U.S. Treasury Department on Tuesday announced regulatory changes to allow more American financial support for Cuba’s nascent private sector and bolster access to U.S. internet-based services, modest but timely measures that officials said would help give the island’s budding small businesses a leg up.
The U.S. said it would permit small entrepreneurs on the Communist-run island to open and access U.S. bank accounts from Cuba for the first time in decades, following prohibitions put in place shortly after Fidel Castro’s 1959 revolution.
Cuban entrepreneurs would be allowed to use U.S.-based social media platforms, online payment sites, video conferencing and authentication services, previously unavailable to the sector and a major hurdle facing small businesses on the island.
The moves aim to fulfill a long-delayed pledge by President Joe Biden’s administration to help Cuba’s budding entrepreneurs, giving its small but fast-growing private sector deference despite the Cold War-era U.S. embargo that has for decades complicated financial transactions by the Cuban government.
“Today we’re taking an important step to support the expansion of free enterprise and the expansion of the entrepreneurial business sector in Cuba,” a senior U.S. official told reporters.
Johana Tablada, Cuba’s deputy director of U.S. affairs, told reporters late on Tuesday that an initial read suggested the measures to be “very limited” and difficult to implement.
The U.S. has designated Cuba as a state sponsor of terrorism, together with Syria, Iran, and North Korea, a label that further complicates financial transactions for listed nations.
“The presence of Cuba on the list of state sponsors of terrorism will probably prevent the measures announced today from becoming a reality for the (private) sector that the United States government wants to favor,” she said.
But she said Cuba would not stand in the way of the measures aimed at bolstering the private sector.
U.S. officials, who briefed reporters on condition of anonymity, signaled they had sought to balance the goal of bolstering the private sector with a desire to avoid benefit to Cuban authorities.
The measures would exclude Cuban officials, military officers and other government “insiders,” aiming to minimize resources that could benefit the Cuban government, the officials said.
The U.S. officials declined to say whether the administration was conducting a formal review of Cuba’s continuing presence on the State Department’s list of state sponsors of terrorism.
Republican U.S. Representative Maria Elvira Salazar, a Cuban American lawmaker from South Florida, quickly criticized the Democratic administration’s announcement.
“The Biden Admin is now giving the ‘Cuban private sector’ access to the U.S. financial system,” she said in a post on X. “This would make a mockery of American law, considering no progress has been made toward freedom on the Island and repression has intensified.”
OPEN FOR BUSINESS
Cuba has long blamed the U.S. embargo and associated sanctions for decades of economic crisis that have left it with little choice recently but to open its economy to small private business.
Such businesses – for decades taboo in Communist-run Cuba – are now booming on the island.
New Cuban laws put in place in 2021 have seen the establishment of upwards of 11,000 small businesses as of May, the government has said, ranging from corner grocers to plumbing, transportation and construction businesses.
The regulations announced by the U.S. on Tuesday appear aimed at easing some of the complications faced by the growing private sector.
They authorize U.S. banks to once again process so-called “U-Turn” fund transfers, allowing them to move money for Cuban nationals – including payments and remittances – so long as senders and recipients are not subject to U.S. law.
Such measures are a step in the right direction, said John Kavulich, president of the U.S.-Cuba Trade and Economic Council, but he noted a “glaring omission” in the policy: Cuban businesses are still handicapped by a requirement that they use banks in third countries to move their money.
“As long as financing, investment, and payments need to be routed through third countries, the Biden-Harris Administration will be constraining precisely the activity it professes to support,” Kavulich said in an email.
There was no sign that Tuesday’s announcement could foreshadow a more significant easing of U.S. sanctions and other restrictions on Cuba, beyond the modest steps that Biden has already taken since he became president.
Some analysts have attributed Biden’s cautious handling of Cuba issues to his concern that a softened approach to Havana could hurt him politically among strongly anti-communist Cuban American voters in Florida, a key swing state that he lost to Trump in the 2020 election.
Source: Economy - investing.com
