Economic development in the wake of President Obama’s regulatory changes on exports and travel to Cuba

On December 17, 2014, President Obama announced that the United States would change its policies toward Cuba and move toward normalizing relations between the two countries. Since that announcement, departments and agencies have made a series of regulatory changes to allow for increased economic development in Cuba that will continue to empower the Cuban people and advance our enduring objectives of supporting human rights, improving the lives of the Cuban people, and promoting closer ties between our countries.

In October 2015, the Departments of Commerce and the Treasury launched the U.S.-Cuba Regulatory Dialogue. We have made several significant regulatory updates, including: eliminating certain restrictions on remittances, easing limits on exports to and certain imports from the Cuban private sector, facilitating trade in the telecommunication and agriculture sectors, making changes to facilitate authorized travel to the island, and authorizing certain U.S. companies to establish and maintain a business and/or physical presence in Cuba.

With the Administration’s new regulatory updates, the American business community is now permitted in certain areas to work directly with the Cuban private sector, empowering Cuban entrepreneurs on the island.

The following economic development is ongoing, in part, as a result of the Administration’s new regulatory framework and policy toward Cuba:

Examples of Ongoing Economic Development:

Airline expansion: The United States and Cuba in December 2015 reached an arrangement to re-establish regular, direct flights between the United States and Cuba for the first time in more than 50 years. U.S. carriers have applied to the Department of Transportation for an allocation of the new opportunities to provide scheduled flights, which will begin later this year. Thirteen U.S. carriers have applied to provide direct flights to Havana from 20 U.S. gateway cities, as well as one-stop flights from three additional U.S. cities. In addition, seven U.S. carriers have applied to provide scheduled flights to the other nine international airports in Cuba from five U.S. gateway cities.

Airbnb: Through the new regulatory framework, Airbnb set up service for authorized U.S. travelers to stay in the homes of private Cuban hostel owners – in a year, listings have grown from 1,000 to well over 4,000. Airbnb’s operation empowers Cuban private homeowners and provides an opportunity for authorized US travelers to directly connect with the Cuban people.
Carnival: Carnival signed a deal that will allow its cruise ships to dock in Cuban ports and disembark authorized travelers. Carnival has begun selling tickets to authorized travelers for a May 1, 2016 cruise that will stop in Havana, Santiago, and Cienfuegos. The announcement will be made in the next two weeks.
Cisco: Cisco plans to open a Networking Academy in Cuba, in which Cuban students will learn how to set up IT networks and improve their technology skills with the aim of improving the development of a strong Information and Communications Technology (ICT) sector in Cuba.
Caterpillar: Caterpillar announced a $500,000 donation to the Finca Vigía Foundation, a U.S. non-profit working in collaboration with Cuban cultural preservationists and other donors to restore and preserve Ernest Hemingway’s home, documents, and historical artifacts in Cuba.
Cleber: Through the new regulatory framework, Cleber plans to set up a tractor manufacturing facility in Cuba. This would directly employ Cuban workers and produce much needed tractor equipment for agricultural production.
Colgate-Palmolive: Colgate-Palmolive implements its Bright Smiles program, which provides free dental care and dental hygiene products to children in Havana.
General Electric: GE plans to cooperate with the Cuban government on providing products related to aviation, healthcare, and energy products in Cuba.
Marriott: Marriott is seeking to establish a brand presence in the Cuban hospitality sector, while providing supportive career training for Cuban nationals and opportunities for emerging Cuban entrepreneurs to cater to hotel supply needs.
Norwegian Cruise Lines Ltd.: Norwegian Cruise Lines is working closely with the Cuban government to allow passengers to disembark at Cuban ports for educational and cultural excursions; under the new regulations, Norwegian plans to directly employ Cuban workers to assist with the excursions once approved by the Cuban government.
Starwood: Starwood Hotels & Resorts has signed two deals to operate luxury hotels in Havana and a third hotel catering to business travelers. These deals will provide comprehensive hospitality training to Cuban employees working in the hotels.
Stonegate Bank: In November 2015, Stonegate offered a Debit MasterCard card that can be used at the Point of Sale terminal at any of Cuba’s 10,000 hotels, restaurants, and other card-accepting merchants, relieving a significant burden for U.S. travelers.
Stripe: Stripe announced on Friday, March 18, 2016 that Stripe Atlas can now be accessed by Cuban entrepreneurs. This means access to an incorporated U.S. business entity; a U.S. bank account; and a Stripe account to receive payments from customers around the world and basic services they will need to start a business, including tax services from PwC and legal guidance from Orrick, Herrington & Sutcliffe LLP.
Roswell Park Cancer Institute: Roswell Park Cancer Institute in Buffalo, New York has a long-standing academic relationship with the Center for Molecular Immunology (CIM) in Cuba. Roswell Park plans to conduct preclinical research and clinical trials of a lung cancer vaccine developed in Cuba. The institute is about to open a clinical trial in the U.S. for the vaccine this summer.
Royal Caribbean: Royal Caribbean expects to receive official approval from the Cuban government to dock ships in Cuban ports; under the new regulatory framework, Royal Caribbean may allow authorized passengers to disembark and visit Cuba.
Weber Shandwick: Weber Shandwick is pursuing opening operations on-the-ground in Cuba and will proceed with discussions with the Cuban government about how to secure the permissions necessary to be among the first marketing services and global public relations firms to establish an office in Havana.
Wheels Up: Wheels Up operates a commercial airline service between the United States and Cuba for authorized travelers.
US Agricultural Coalition for Cuba (USACC):
The USACC intends to advance a Cooperative Food and Agricultural Industry Agreement (CFAIA) between food producers, processors, and supply chain participants both in the U.S. and Cuba.
Verizon: The U.S.-based carrier Verizon and ETECSA, the Cuban telecommunications company, finalized an agreement for the direct exchange of wireline voice services between the two countries to enhance options for consumers and businesses of both countries.
Western Union: The Western Union Company, a leader in global payments services, announced on March 21, 2016 that it will launch remittance services from across the world into Cuba following U.S. regulatory and policy changes that allow Cubans and non-Cubans to send remittances via Western Union to this island nation.