On December 17, 2014, the U.S. and Cuban governments announced efforts to normalize relations. On January 16, 2015, the U.S. Office of Foreign Assets Control (OFAC) issued final regulations amending the Cuban Assets Control Regulations (CACR) and the U.S. Department of Commerce issued Export Administration Regulations (EAR), liberalizing transactions with Cuba.

The OFAC regulations authorize travel-related transactions and other transactions incident to activities within the 12 existing travel categories in OFAC’s regulations without the need for case-by-case specific licensing, while continuing to not authorize travel for purely tourist activities, which U.S. law forbids. The 12 categories of authorized travel include the following activities: family visits; official business of the U.S. government, foreign governments, and certain intergovernmental organizations; journalistic activity; professional research and professional meetings; educational activities; religious activities; public performances, clinics, workshops, athletic and other competitions, and exhibitions; support for the Cuban people; humanitarian projects; activities of private foundations or research or educational institutes; exportation; importation, or transmissions of information or information materials; and certain authorized export transactions.

U.S. persons, including travel agents and airlines, can provide authorized travel and carrier services and certain entities can forward remittances without requiring specific licenses from OFAC.

U.S. persons will be able to use U.S. credit and debit cards in Cuba for travel-related and other transactions. The per diem limitation on authorized travels spending in Cuba is eliminated.

Certain micro-financing activities and entrepreneurial and business training, such as for private business and agricultural operations, are authorized

U.S. depository institutions can open correspondent accounts at Cuban financial institutions.

U.S. persons can establish mechanisms to provide commercial telecommunication services linking third countries and Cuba and within Cuba.

U.S. persons will be able to export some agricultural items, medicines, and medical devices. U.S. persons will be able to export and re-export commercially sold or donated: building materials, equipment, and tools for use by the Cuban private sector to construct or renovate privately owned buildings, including privately owned residences, businesses, places of worship and buildings for private sector social or recreational use; tools and equipment for private sector agricultural activity; and tools, equipment, supplies, and instruments for use by private sector entrepreneurs (e.g., auto mechanics, barbers and hair stylists and restauranteurs).

To strengthen civil society in Cuba, the U.S. now authorizes the export and re-export to Cuba of certain donated items for use in scientific, archaeological, cultural, ecological, educational, historic preservation, or sporting activities.

U.S. persons will be able to export and re-export to Cuba certain items to human rights organizations, individuals, or non-governmental organizations that promote independent activity intended to strengthen civil society.

U.S. persons can export and re-export certain items for telecommunications, including access to the Internet, use of Internet services, infrastructure creation and upgrades. U.S. persons can export and re-export consumer communications devices (commodities such as communications equipment and related items, including personal computers, mobile phones, televisions, radios and digital cameras), as well as certain telecommunications and information security-related software.

Barbados can take advantage of the new opportunities if its government takes advantage of the opportunities for joint ventures under the Community of Latin American and Caribbean States (CELAC).   In this regard Barbados can develop ventures with Cuba in health, human resource development, construction and sports, as called for in the Declaration of Havana on the occasion of the Fifth CARICOM-Cuba Summit in December 2014.

Opportunities For Barbados

Barbados can take advantage of the fact that it is one of a few countries that has a double tax and bilateral treaty with Cuba, from which foreign investors can invest. However, unless Barbados can successfully assert competent authority provisions for Canadians and others using the tax treaty when Cuba does not comply with the treaty provisions, the advantage will be one on paper only. The Barbados government and private sector will need to work with civil society to educate the Cuban government about the benefits of adhering to the provisions of its treaty network, especially with a longtime friend, such as Barbados.

The Barbados government and private sector (e.g., the Chamber of Commerce, BIBA, the bar association, STEP, the Barbados Entrepreneurship Foundation, and the Barbados Museum), in collaboration with other CARICOM organizations, will want to develop connections with the parts of the U.S. community which will look to expand their presence in Cuba as well as with the Cuban government and private sector, so it can help develop meaningful relationships. Some civil society groups in the U.S. have been active in Cuba. These tend to be small and medium-size philanthropies. In addition, U.S. firms investing and/or exporting to Cuba will be exporting construction and communications equipment.  Barbados is not the only CARICOM country which will try to serve as an intermediary for U.S. investors to Cuba. Already Jamaica is making a push to do this work.

About the Author

Bruce Zagaris
Bruce Zagaris - Partner - Berliner, Corcoran & Rowe

Attorney in Washington, DC . A former lecturer at the University of the West Indies Law Faculty, he testified in Congress on the Caribbean Basin Initiative, and his practice has focused on Caribbean financial services and investment.