Overview
On July 1, President Obama announced that the United States and Cuba have agreed to reestablish diplomatic relations and open embassies in each other’s countries. According to statements from the Obama Administration and the Cuban government, the respective embassies will open shortly after July 20.
One interesting aspect of President Obama’s announcement was his call for congressional action on the embargo against Cuba:
Americans and Cubans alike are ready to move forward. I believe it’s time for Congress to do the same, and I’ve called on Congress to take steps to lift the embargo that prevents Americans from traveling or doing business in Cuba. We’ve already seen members from both parties begin that work. . . . Of course, nobody expects Cuba to be transformed overnight, but I believe that American engagement through our embassy, our businesses, and most of all, through our people, is the best way to advance our interests and support for democracy and human rights.This is perhaps President Obama’s strongest statement to date regarding the lifting of the embargo, if not the strongest statement any sitting US president has made on the subject. That said, Congress is unlikely to lift the embargo anytime soon. Shortly after the President’s announcement, Speaker of the House John Boehner said in a statement that the President is “handing the Castros a lifetime dream of legitimacy” and that “relations with the Castro regime should not be revisited, let alone normalized, until Cubans enjoy freedom — and not one second sooner.” This sentiment is reflected in the Helms-Burton Act of 1996, which provides that the President may “take steps to suspend” the embargo only after determining that a “transition government in Cuba is in power.” Even then, the statute provides that Congress can enact a disapproval resolution overriding the President’s actions. So a full lifting of the embargo will take time, and delicate political negotiations that may continue into the next administration (which may or may not be inclined to lift the embargo). In the absence of congressional action to lift the embargo, what could be next? The President could continue with a limited easing of the embargo, as he did in January. The focus of the Administration in this area appears to be engagement with the nascent Cuban private sector and promotion of cultural exchanges with, and the free flow of information to, the Cuban people. This may point towards future expanded authorization for dealing with Cuban small businesses and for activity related to telecommunications and internet freedom. The focus on Cuban small businesses is particularly notable. The Administration’s easing of the embargo in January included an amendment to the Cuban Asset Control Regulations (CACR) to authorize remittances to individuals and independent non-governmental organizations (NGOs) in Cuba to support, among other things, the development of private business (including small farms) in Cuba. See 31 C.F.R. § 515.570(g). Unlike other remittances, these remittances do not appear to be subject to any quarterly, annual, or per-visit limitation. The US Treasury Department, Office of Foreign Assets Control (OFAC) has not issued any guidance regarding this particular authorization for remittances to support private business. Specific OFAC guidance or continued easing of restrictions in this area could spur significant activity. Of course, overlaying all of these considerations are the views of the Cuban government, which may be reluctant to fully reopen to the United States after decades of estrangement.
