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The United States eases sanctions on Cuban private companies

The United States eases sanctions on Cuban private companies

Washington/Havana. The government of US President Joe Biden announced a new easing of the trade embargo imposed on Cuba for the first time in two years. On Tuesday, the Office of Foreign Assets Control (Ofac) announced the lifting of a series of bans to give private companies “better access to the Internet and financial services.”

In the future, private Cuban companies will be allowed to open and maintain accounts with American banks in Cuba. It is also possible to conduct “remittance” transactions with Cuban involvement, that is, money transfers that begin and end outside the United States. It was banned by then US President Donald Trump in September 2019.

In addition, entrepreneurs are allowed to use Internet services from the USA. This means that for the first time, the private sector in Cuba can legally use video conferencing tools, cloud services, e-learning platforms and other Internet services as well as their corresponding installation and maintenance services.

“The export or re-export of software and mobile applications of Cuban origin from the United States to third countries” is now explicitly permitted. The US Treasury said this was intended to give Cuban private companies the opportunity to display software in global app stores.

In contrast to previous regulations, which always referred to “self-employed individuals,” the latest relaxations apply to the private sector in its current form. This includes both self-employed people and small and medium-sized enterprises, which were introduced in September 2021, as well as non-governmental cooperatives with up to 100 employees. Government representatives and sanctioned Communist Party members remain excluded.

Cuban Foreign Minister Bruno Rodriguez described the measures as “limited” in scope. Rodriguez said that they “will do nothing to change the harsh effects and economic suffocation” caused in particular by Cuba's continued inclusion on the list of “state sponsors of terrorism” which aims to “divide Cuban society.”

Johanna Tablada, deputy head of the United States Department in the Cuban Foreign Ministry, made similar comments at a news conference Tuesday evening. These measures will not address the essence of the blockade and will not change the extreme measures and regulations used by the Trump and Biden administrations in recent years. It is incomprehensible that “basic sectors such as education, health, culture, sports and other services from which the entire population benefits were excluded from mitigation.” As long as Cuba remains on the US list of state sponsors of terrorism, it will be “extremely difficult” to fully implement the announced measures. However, the Cuban government will not stand in the way of this.

This is the first relaxation since May 2022. At that time, Biden withdrew the almost complete restrictions on family transfers imposed during the Trump era and announced more measures for the private sector.