WASHINGTON – The U.S. Treasury Department announced Tuesday regulatory changes to expand U.S. financial support for Cuba’s emerging private sector and strengthen access to U.S. internet-based services. This is a limited but timely measure that officials said will benefit Cuba’s emerging small and medium-sized businesses. .
For decades, the United States has barred small entrepreneurs on the communist-ruled island from opening and accessing U.S. bank accounts from Cuba, following a ban put in place shortly after Fidel Castro’s 1959 revolution. They announced that they would allow this for the first time.
This measure gives Cuban entrepreneurs access to U.S.-based social media platforms, online payment sites, video conferencing and authentication, which were previously unavailable and represent a major hurdle currently facing small and medium-sized businesses in Cuba. service becomes available.
The move comes despite a Cold War-era U.S. embargo and decades of complicated financial dealings by the Cuban government. The move aims to fulfill the Biden administration’s long-overdue commitment to respect Cuba’s private sector and support up-and-coming Cuban entrepreneurs.
“Today, we are taking an important step to support the expansion of free enterprise and the expansion of the entrepreneurial business sector in Cuba,” a senior U.S. official told reporters on Tuesday.
The Cuban government did not immediately respond to a request for comment on the policy change.
U.S. officials, who briefed reporters on condition of anonymity, suggested that the measure was designed to balance the goal of strengthening the private sector with the goal of avoiding benefits to Cuban authorities. did.
President Joe Biden took office in January 2021, and there were high hopes for a change in Cuba from the harsh approach of the Trump administration, but after Cuba cracked down on protests in the summer of the same year, the administration moved to Havana. It was decided that the pressure would continue.
The new measures will exclude Cuban officials, military personnel and other government “insiders” with the aim of minimizing the resources available from benefits to the Cuban government, officials said.
Republican U.S. Rep. Maria Elvira Salazar, a Cuban-American lawmaker from South Florida, was quick to criticize the Democratic administration’s announcement.
“The Biden administration is now giving the ‘Cuban private sector’ access to the US financial system,” she said in a post on X. “Given that no progress has been made toward freedom on the island of Cuba, this would make a mockery of U.S. law,” and the repression intensified. ”
Cuba has long blamed the decades-long economic crisis on an embargo intertwined with U.S. laws and regulations that complicate financial transactions by the Cuban government, and in recent years there have been no plans to do anything other than open up the economy to small businesses. There are almost no options left.
The business, which was taboo for decades in communist Cuba, is now booming on the island.
As of May, more than 11,000 small and medium-sized businesses have been established under Cuba’s new law that took effect in 2021, ranging from corner grocery stores to plumbing, transportation and construction. announced the government.
According to Ministry of Economy statistics for the second half of 2023, these companies employ more than 15% of Cuban workers and account for about 14% of the country’s gross domestic product.
The regulations announced Tuesday also again allow U.S. banks to process so-called “U-turn” funds transfers, including payments and remittances to Cuba, as long as the sender and recipient are not subject to U.S. law. Enable remittances to citizens. .
John Cavulich, president of the U.S.-Cuba Trade and Economic Council, said the measures were a step in the right direction, but said there were “glaring gaps” in the policy. He said Cuban businesses remain at a disadvantage due to the terms of access to banks. A third country moves the funds.
“To the extent that financing, investments, and payments must go through third countries, the Biden-Harris administration will be restricting the very activities it professes to support,” Cavulich said in an email.
There was no indication that Tuesday’s announcement signaled a more significant easing of U.S. sanctions and other restrictions on Cuba beyond the modest steps Biden has already taken since taking office.
Some analysts say Biden will approach the Cuba issue cautiously if he softens his approach to Havana, including Florida, a key battleground state where Biden lost to Trump in the 2020 presidential election. Analysts believe that this may be due to concerns that it could be politically damaging to Cuban-American voters, who are strongly anti-communist.
U.S. officials declined to say whether the administration is conducting a formal investigation into Cuba’s continued presence on the State Department’s list of state sponsors of terrorism.
