Cuba Policy Shift: Administration Eases Restrictions on Small Businesses

On May 28, 2024, the Biden administration announced new measures easing restrictions on independent small businesses in Cuba. The announcement follows a recent decision by the State Department to remove Cuba from the list of countries deemed uncooperative on counterterrorism. 

The Administration criticized the Cuban government in the announcement, saying: “We know the Cuban economy is in dire straits amid recurring shortages of fuel, electricity, increasingly even food. It’s clear the communist experiment of Cuba has failed, the government is no longer able to provide for its citizens’ most basic needs.” 

The new measures implemented by the Department of Treasury’s Office of Foreign Assets Control (OFAC) include four main parts:

1. Authorized Internet-Based Services and Software.

Cuban small businesses will now be able to access additional internet-based services such as video conferencing, social media, maps, e-learning, automated translation, and other online services. 

U.S.-based entities will be allowed to provide cloud-based services to these small businesses. OFAC is also authorizing the export or reexport of Cuban-origin software and mobile applications from the United States to third countries.

2. Re-defining “Self-Employment.”

OFAC is scrapping the term “self-employed individual” and replacing it with a new term: “independent private sector entrepreneur.” The new term will still cover traditional self-employed individuals such as business owners, but it will also cover private cooperatives or small businesses that are wholly owned by such individuals. 

Doing Business With Cuba: What You Need to Know

Cuba is home to 11 million consumers and a growing private sector. Its proximity to the United States (the Port of Havana is only 198 nautical miles from the Port of Miami) makes the country a natural trade partner. While changes in policy over the last several years have unlocked new business opportunities in Cuba, there are still regulatory barriers that individuals and companies should be aware of.

U.S. Embargo

The United States imposed a comprehensive economic embargo on Cuba in the 1960’s which restricts most trade between the two countries. It also includes restrictions on travel and investment.

Although the U.S. faced pressure to end the embargo, the state of affairs remained largely unchanged until 2014.

In December 2014, President Obama made a historic announcement: “Today, the United States is taking historic steps to chart a new course in our relations with Cuba and to further engage and empower the Cuban people.” By January 16, 2015, both the U.S. Treasury Department, Office of Foreign Assets Control (OFAC) amended its Cuban Assets Control Regulations, and the U.S. Department of Commerce’s, Bureau of Industry and Security (BIS) amended the Export Administration Regulations with a “Support for the Cuban People” license exception. The license exception was most significant for travel, telecom, building materials and agricultural equipment, financial services, and personal importations.

OFAC and BIS issued additional new rules on January 16, 2015, September 21, 2015, January 27, 2016, March 15, 2016, October 14, 2016, November 9, 2017, and […]

By |2023-07-18T08:19:31-04:00July 18, 2023|Countries, Cuba|0 Comments

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