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Overview

In December of last year, President Obama announced that the United States would embark on an effort to re-establish diplomatic ties with the communist island of Cuba. Just 90 miles off the coast of Florida, official relations had more or less ceased since the revolution in 1959. This policy was cemented when the United States trade embargo on Cuba went into place in 1960.

The White House’s action is a historic shift in American foreign policy. This document outlines some of the main components of that policy shift.

Embassies Open in Washington and Havana

When the announcement was made in December, both countries agreed to embark on a process to better engage one another in order to “normalize” relations. The United States and Cuba took a major symbolic and practical step to achieve normalization by opening embassies in Washington and Havana. Cuba opened its embassy in July and the United States in August. Having an embassy means many things but most importantly establishes an official diplomatic presence in the respective country.

However, Trade Embargo Not Lifted

While there is now a re-establishment of diplomatic ties with Cuba the trade embargo still remains in effect. Only Congress can change this. There are numerous bills in Congress right now aiming to end the embargo.

While the President cannot end the embargo, he is using his executive powers to allow some limited trade activity. Most of this is intended to spur private sector growth in Cuba. Telecommunications is a key part of this and American providers are allowed to establish infrastructure to provide services, especially Internet, to Cuba. Also, the sale of certain building materials to help rebuild many of Cuba’s crumbling buildings is permitted, as is certain agricultural equipment and “items” to be used by Cuban entrepreneurs. The White House actions also make it easier for American banks to work with Cuban banks and eventually allow for U.S. credit and debit cards to be used by U.S. travelers.

American Travel to Cuba

One of the most misunderstood pieces of the new rules is American travel to Cuba. Americans are still not permitted to go to Cuba for purely tourist purposes (e.g., going to an all-inclusive resort solely for the purpose of relaxation or touring different cities on a self-guided trip) and are subject to steep fines if caught. That being said, the White House expanded the reasons why some Americans can go visit Cuba, including educational programs, professional research, public performances, athletic competitions, humanitarian and religious missions and activities of private research or educational institutes. This type of travel must be generally done in organized groups (often called “people to people” exchanges) and procured through travel agents and other service providers that are authorized by the U.S. Treasury’s Office of Foreign Assets Control (OFAC). Cuban Americans are already allowed to visit their family members. That policy remains unchanged and those individuals are not subject to the specific rules on travel, which other Americans must comply.

There are currently no direct commercial flights to Cuba from the United States and any other flights must be booked through a charter company. Some airlines, like JetBlue and American Airlines, are now flying these charter flights on their jets, and since the announcement, there is increased interest from the airline industry for direct commercial and additional charter flights to Cuba.

Because of its close proximity to the United States, various ferry companies are in talks to provide services. Also, Carnival Corporation just announced that it received approval from the United States to do cruises to Cuba under the current travel guidelines.

Remittances to Cuba

Many Cuban American families in the United States send funds, also known as remittances, to their families in Cuba. Now, remittance levels have been raised from $500.00 to $2,000.00 per quarter. People who send remittances used to be required to obtain a specific license but this is no longer required. Similarly, no license is required for remittances made to humanitarian projects or for private business development.

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Cuba Removed from the State Sponsor of Terrorism List

A controversial piece of the re-establishment of relations is the removal of Cuba from the United States’ official State Sponsor of Terrorism list. This is a key concession the Castro government wanted in these negotiations. Being off the list is not only symbolic for the Cuban government but theoretically allows the country to eventually receive foreign aid. Other countries on this list include Iran, Sudan and Syria.

Growing Support

While once a hot button issue, support for closer relations with Cuba seems to be strong. In a recent poll by the Pew Research Center 73% of Americans favor reestablishing relations with Cuba. In fact, a 2014 Florida International University poll found that 68% of Cuban Americans support re-establishing diplomatic relations. Business groups are also adamant supporters, seeing a possible new market so close to America’s borders.

Critics

Renewed relations with Cuba, however, does not come without critics. Many cite the Castro regime’s poor record on human rights and persecution of political opponents as a key reason for America to be wary. Others are also saying that the White House is giving away too much without getting much in return from the Castros in terms of commitment to democratic reforms. Also, some point out that Cuba owes many American companies compensation for when it nationalized all privately owned companies after the revolution.

Key Facts

  • In December 2014, President Obama announced that the United States would embark on an effort to re-establish diplomatic ties with Cuba.
  • This summer both the United States and Cuban governments re-opened embassies in each other’s capitals.
  • Cuba, an island nation about 90 miles off the coast of Florida, has approximately 11 million residents. About 2 million live in Havana.
  • Fidel Castro came to power in 1959, ultimately ushering in a one-party communist government.
  • The United States imposed a trade embargo in 1960. This embargo is still in effect and can only be reversed by Congress.

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