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NEW U.S. POLICY TOWARDS CUBA BEING CLOSELY FOLLOWED IN PUERTO RICO
Last week’s announcement by president Obama of the onset of major changes in the political and commercial relationship between the United States and Cuba is being very closely monitored in Puerto Rico; a country with a close geographical proximity and historical ties to this Caribbean island nation.
This new course in U.S. – Cuba relations is seen by some as both as cause for concern, due to the expected increase in competition for tourism and other economic sectors in Puerto Rico, as well as a source of new commercial opportunities opening up for Puerto Rico manufacturing and service businesses interested in offering their products and services in Cuba in the near future.
Initially, the U.S. – Cuba agreement contemplates the restoration of diplomatic relations between both countries. To this end, high level discussions between both countries are expected to begin sometime during the end of January, 2015. These conversations should result in the termination of the agreement both countries had maintained with the Swiss Government as the representative of their respective interests, and of new bi-lateral agreements paving the way, among other things, for the opening of a U.S. embassy in Havana sometime during the following months.
On the economic front, the new U.S. policy towards Cuba contemplates the immediate approval of new agency regulations –principally on the part of the U.S. Department of the Treasury (Office of Foreign Assets Control) and the U.S. Department of Commerce (Bureau of Industry and Security) – that should result on a further easing of travel by U.S. persons to Cuba and purchases of Cuban goods during such visits, increases in remittances from U.S. persons to Cuban nationals, and sales and exports from the U.S. of certain goods and services (primarily, building materials for private residential construction, goods for use by private Cuban entrepreneurs and agricultural equipment for small farmers).
In addition, on the matter of telecommunications between both countries, and as part of the normalization of U.S – Cuba relations, the U.S. Government intends to allow telecommunication providers to establish mechanisms and infrastructure to allow commercial telecommunication and internet services to be offered in Cuba. Moreover, the commercial exportation to Cuba of consumer communication devices, software, applications, hardware and related services will be included in the new regulations that will be adopted in the U.S.
Finally, this new U.S policy on Cuba will also include a number of initial measures affecting financial transactions and relationships with commercial banks in Cuba which have been affected by U.S sanctions in third countries. Thus, U.S financial institutions will be allowed to open correspondent accounts with Cuban financial institutions to facilitate the processing of authorized transactions. For example, U.S travelers to Cuba will be allowed to use U.S. credit and debit cards while in Cuba. Additionally, U.S. owned or controlled entities in third countries will be able to be licensed to engage in financial transactions and provide services to Cubans residing in third countries. Further, U.S. bank accounts of Cuban nationals living outside Cuba will be unblocked as part of the initial measures announced by president Obama.
The easing of other commercial sanctions and restrictions on doing business with Cuba will also be impacted by the president’s request to the U.S. State Department to review and render a report within the next six months on whether Cuba should be removed from the list of states that are considered sponsors of terrorism. The report with its conclusions and recommendations will need to be sent to the president and the U.S. Congress where it should remain for an additional period of 45 days. The final report is sent to Congress for informational purposes only but is not otherwise subject to congressional approval.
Fiddler González & Rodríguez maintains a multi-disciplinary law practice group that is familiar with U.S – Cuba commercial relations, and intends to continue assisting and keeping its clients and friends abreast of the ongoing developments and commercial opportunities in Cuba.
The Corporate Group at Fiddler, Gonzalez & Rodriguez, PSC, attorneys and counselors at law, will keep you posted of new developments. If you know anyone that would like to receive the FGR corporate updates, please feel free to forward this newsletter or reply to this email in order to be added as recipient. Stay tuned for further updates of FGR CORPORATE WATCH.
©2014 Fiddler, González & Rodríguez, P.S.C. This Watch has been prepared by Fiddler, González & Rodríguez, P.S.C. for informational purposes only and does not constitute legal advice. This information does not create, and receipt of it does not constitute, a lawyer-client relationship. Readers should not act upon this without seeking advice from professional advisers. Fiddler, González & Rodríguez, P.S.C. and its members assume no responsibility to inform you of additional changes in law or any other legal issues related to the matters advised in this e-mail.