The Hill: How Trump's Cuba policy impacts US travelers

The Hill

http://thehill.com/policy/transportation/338211-how-trumps-cuba-policy-impacts-us-travelers?mc_cid=8009ba7275&mc_eid=5c57dc9deb

Americans may need to rethink their travel plans to Cuba in the wake of President Trump's effort to crack down on the communist regime.

The White House announced a slew of new restrictions on Friday aimed at tightening travel and commercial ties between the U.S. and Cuba, which comes after a nearly five-month policy review of former President Obama’s historic opening with the island nation.

Trump didn’t fully reverse the rapprochement with Cuba.  But the significant policy shift will curtail Americans’ ability to travel freely to Cuba, even as numerous U.S. airlines, hotels and travel sites like AirBnb have begun offering services there.

Here’s how Trump’s new Cuba policy impacts U.S. visitors.

Legal types of travel

One of the biggest changes is what constitutes a legal form of travel to Cuba.

Under Trump’s new restrictions, Americans will only be able to visit Cuba as part of a tour group if they want to go to the island for educational purposes.

Obama allowed U.S. visitors to travel to the country under 12 different license categories, including for educational purposes, religious reasons, journalistic activities and family visits. There was also a general license. Tourism was still prohibited, however.

Trump is eliminating the so-called people-to-people trips, a sub-category of education that enables Americans to design their own trips and go to Cuba on their own. That method has been one of the more popular ways that U.S. travelers have been seeing the island since Obama announced his changes.

White House officials also said it’s the category most ripe for abuse, with Americans using it to skirt the tourism ban.

Visitors will still be able to self-certify under a general license that they are traveling to Cuba for one of the remaining legitimate reasons. And Cuban-Americans will be able to continue to visit their family in Cuba and send them remittances, according to a fact sheet.

But those going for educational purposes will now need to apply with the Treasury Department and go with a licensed tour group – a process than can be far more lengthy and expensive, according to anti-embargo advocates.

“By requiring Americans to travel in tour groups, the administration is not only making it more expensive for everyday Americans to travel to the island, but pushing them away from staying in private homes – which are unable to accommodate large tour groups – and into state run hotels,” said James Williams, president of Engage Cuba.

Spending restrictions

Another major crux of Trump’s Cuba policy is prohibiting any financial transactions that benefit the Cuban military’s business arm, Grupo de Administración Empresarial (GAESA), in an effort to restrict the flow of money to the oppressive elements of Raúl Castro's regime.

That means Americans will be largely restricted in where they can spend their money, given the Cuban government’s control of a large swath of the travel and tourist economy, including hotels, restaurants and other entities. 

The administration hopes that the ban on financial transactions with companies linked to the Cuban military will help funnel more money towards free and private Cuban businesses.

White House officials also noted that Americans can still bring back Cuban cigars from their trips.

Stronger enforcement

U.S. visitors may face more questioning from authorities when they return home from Cuba.

Part of Trump’s policy focuses on enforcing the existing ban on tourism, which means travelers can expect to see stepped up enforcement, either from customs agents at the airport or through audits later on.

“Our policy begins with strictly enforcing U.S. law,” Trump said during his speech in Miami, unveiling the new policy. “We will enforce the ban on tourism.”

All visitors are required to maintain full schedules while in Cuba and keep detailed logs for five years  – something that has been rarely checked.

The White House is now directing the Treasury Department to conduct regular audits of travelers and calling on the Inspector General to keep tabs on the agency's effort.

Those who are caught violating Cuban sanctions could face civil or criminal penalties, with individual civil fines that could reach up to $65,000 per violation, according to the Treasury Department.

Commercial flights

Commercial flights, which resumed between the U.S. and Cuba for the first time in over 50 years last summer, will be allowed to continue uninterrupted under Trump’s Cuba policy.

Seven U.S. airlines now fly nonstop to Cuba, following an intense effort to win a direct flight route to the island last year.

But facing lower than expected travel demand, a number of carriers have already begun to scale back their Cuba operations.

If demand continues to decline once people-to-people trips are banned, and with tour groups more likely to book charter flights, travelers may see higher ticket prices and less commercial flight options.

“There was already a sense that there were way too many flights. I do think you’re likely to see a fewer number of flights and higher fares,” said Stephen Propst, a partner at Hogan Lovells focusing on international trade and investment. “You may well see more of the airlines pulling out, if it’s just not worth it.”

Timeline

The Treasury and Commerce departments will now have 30 days to start drafting new rules that fulfill Trump’s directive, but “then the process takes as long as it takes,” said one senior official.

That means that travelers who have already scheduled a trip to Cuba can still move ahead with their plans, as long as the new regulations have not taken effect yet.

In writing new rules, the Treasury Department is expected to spell out exactly what will happen to people who book trips before the new rules, but travel after their release.