Trump’s Cuba Policy Leaves Businesses in Limbo
AUGUST 10, 2017
President Trump’s recent Memorandum that revises portions of the “thawed” U.S.-Cuba policy implemented by President Obama is forcing U.S. businesses to hit the “pause button” on plans to operate, transact, or expand business on the island.
Many companies welcomed the news that the Obama administration would ease restrictions for American companies and began to devise plans to sell products and services into the newly-opened Cuban market.
However, President Trump’s about-face has thrust many companies, and their suppliers, into a holding pattern as it is unclear if the originally conceived plans will be permissible moving forward.
President Trump stated in the Memorandum, “The United States recognizes the need for more freedom and democracy, improved respect for human rights, and increased free enterprise in Cuba. The Cuban people have long suffered under a Communist regime that suppresses their legitimate aspirations for freedom and prosperity and fails to respect their essential human dignity.”
The Memorandum seeks to end economic practices that benefit the Cuban government and military, and it supports efforts to expand free speech, free enterprise, and free association in Cuba.
As a result of those goals, the Memorandum instructed the Treasury Department’s Office of Foreign Asset Control and the Commerce Department’s Bureau of Industry and Security to draft new regulations that will define the permissible parameters for business relations in Cuba. The draft regulations are expected to be released in September.
The Secretary of State is also required to publish a “black list” of entities and individuals associated with the military or their affiliates in Cuba with whom U.S. companies may not transact business.
The forthcoming regulation will have ramifications for U.S. companies currently conducting business on the island or looking to expand there, as the list of permissible activities and lawful Cuban business partners is likely to shrink in the months ahead.