U.S. Eases Some Limits on Cuban Travel and Commerce

New York Times

By: Julie Hirschfield Davis

WASHINGTON — The White House on Friday announced wide-ranging changes to loosen travel, commerce and investment restrictions on Cuba, moving to fulfill President Obama’s goal of breaking down barriers between Washington and Havana even as the American embargo remains in place.

The rules will allow American companies, including telecommunications and Internet providers, to open locations and hire workers in Cuba, facilitate financial transactions between the two nations and remove limits on the sums that can be taken to the island nation. They are to take effect on Monday on the eve of the visit to Washington by Pope Francis, a proponent of the reconciliation who quietly helped broker the agreement between Mr. Obama and President Raúl Castro last year.

Mr. Obama spoke to Mr. Castro by telephone on Friday to discuss the normalization process before the pope traveled to Cuba on Saturday and then to the United States on Tuesday, the White House said. In addition to praising the pope’s role in their rapprochement, the two presidents “discussed steps that the United States and Cuba can take, together and individually, to advance bilateral cooperation,” an official said, even as they continue to have differences on important issues and “will address those differences candidly.”

Administration officials said Mr. Obama was still hoping that Congress would take action to lift the travel and trade embargo, although senior aides to the president offered a grim assessment of the chances that it would happen in the short term.

“I don’t think we’ve seen a whole lot of evidence to indicate that those prospects have significantly improved,” said Josh Earnest, the White House press secretary. Still, he said, the rules would deepen connections among Cubans and Americans in the interim and expose Cuba’s citizens to American values while helping United States businesses.

Jacob J. Lew, the Treasury secretary, said the rules, issued by his agency and the Commerce Department, could lead to “constructive change for the Cuban people.”

“A stronger, more open U.S.-Cuba relationship has the potential to create economic opportunities for both Americans and Cubans alike,” Mr. Lew said in a statement. “By further easing these sanctions, the United States is helping to support the Cuban people in their effort to achieve the political and economic freedom necessary to build a democratic, prosperous, and stable Cuba.”

They also hold out the prospect of new business opportunities for American companies in Cuba, which some observers said was intended to increase pressure on Havana to take corresponding action to open its economy.

The White House is working to show momentum in the rapprochement with Cuba before Dec. 17, the first anniversary of when it was announced.

“In addition to expanding our commercial engagement with the Cuban people, these additional adjustments have the potential to stimulate long overdue economic reform across the country,” Penny Pritzker, the secretary of commerce, said in a statement.

American corporations have been working behind the scenes with the Obama administration for months to bring about the normalization the president promised, which began with an initial set of regulatory changes in January. But the new rules exceeded the expectations of some business leaders, who said they had sent a clear message to Cuba that it must do more on its end.

Administration officials acknowledged on Friday that the scope of the changes that can be brought about by lifting sanctions and loosening commercial rules would depend to a degree on Cuba’s willingness to facilitate the new cooperation and make reforms in its state-run economy.

“In part, this depends on the government of Cuba,” said a senior official who worked on the rules, “and we don’t have control there.”

For example, the lifting of some United States export restrictions, such as those on certain electronic equipment and civilian aviation safety goods, may have limited effect if Cuba does not change the way it handles imports, which now must go through a government agency.

But officials said they foresaw many potential areas of cooperation, including a venture between Etecsa, Cuba’s government-owned telecommunications provider, and an American firm that could improve service on the island.

The regulations will for the first time in decades allow United States companies to do business directly in Cuba, setting up subsidiaries or opening offices or warehouses there, and allowing Americans to have bank accounts and Cubans to maintain bank accounts outside of their country. Cruise ships will be able to travel between the United States and Cuba without making a stop in a third nation. And close relatives will be able to visit family members in Cuba for a wider array of purposes.

They will also allow American telecommunications and Internet companies to locate in Cuba and market their services there, as well as to import mobile applications made in Cuba for development in the United States.

Senator Amy Klobuchar, Democrat of Minnesota, said allowing companies to have a physical presence in Cuba was a major step, making it far easier, for example, for the agricultural exporters from her state that provide $20 million in food aid to streamline their operations.

“All of the machinations that they had to go through to get to these provisions just shows the crying need for lifting the embargo, because while all of this is really good, it is so obvious that it would be so much simpler to lift the embargo,” Ms. Klobuchar, a sponsor of legislation that would remove the trade and travel ban, said in an interview. “While it is a very positive step, it just shows the absurdity” of keeping the embargo in place, she added.

James A. Williams, the president of Engage Cuba, a bipartisan public policy group pushing for normalization, cheered the changes but said there was “more the Obama Administration can and should do, such as allowing individuals to participate in people-to-people travel without third-party brokers.” He also said Congress must “do its job” and lift the embargo.

Opponents of Mr. Obama’s policy argued that the rules were one-sided concessions to a brutal government that has done nothing to change its behavior.

“The Obama policy of pouring more American money into the Castro regime’s coffers won’t make America safer or the Cuban people freer,” said Senator Marco Rubio, a Florida Republican and presidential hopeful of Cuban descent. “Not only do these measures harm the cause of a free Cuba, they also raise serious questions about the legality of the Obama administration’s regulations.”

Mr. Earnest said the administration would “continue to press the Cuban government to implement the kinds of reforms that we believe are long overdue.”

In the meantime, he said, relaxing commerce and travel rules would give leaders there “an incentive that they didn’t have before to start implementing those reforms, so that they can take advantage of the opportunity that the United States has extended to them.”