“As negotiations between the P5plus1 and the government of Iran to prevent Iran from acquiring nuclear weapons continue, some key members of Congress appear intent on legislating more punitive sanctions on Iran’s economy. They argue that Congress has a clear role in charting U.S. foreign policy and that additional sanctions pressure will strengthen the U.S. negotiating position.

“The efficacy of the byzantine sanctions that burden Iran’s economy inevitably depend on their multilateral character, a fact underscored by President Obama’s repeated announcement he will veto any sanctions legislation passed while negotiations continue. The Administration does not want to give the Iranian government any opportunity to separate the United States and the European Union.

“The NFTC and USA*Engage believe that the Administration should be given the chance to see whether the negotiations can produce a constructive and substantial agreement. The major components of such an agreement have been well discussed in the policy community, as have its benefits for the region in which Iran is a critical actor.

“The question remains, however, regarding Congress’s role, since much of the sanctions regime is statutory. In the event of a workable agreement, eventual congressional action will be required.

“For these reasons, some congressional review of an agreement seems inevitable, but we continue to believe that the best course Congress can take is to wait until the negotiations either conclude successfully or fail before acting. At that point, if the agreement is deemed constructive and substantial, then the Congress should grant the Administration full authority to suspend and/or repeal the sanctions tied to the nuclear issue.

“Such a course presumably will give the nuclear negotiations maximum space to conclude free of political pressures and presumptive scapegoats and allow the United States and its allies a landscape on which to make rational policy decisions, whatever the outcome of the negotiations.”

“These regulations solidify a fundamental change in U.S. Cuba policy,” noted USA*Engage Vice President Richard Sawaya. “It is to be hoped that Congress will support the Administration’s initiative, which augurs well for the future of U.S. relations with Cuba and throughout the region.”

“These rules signal a new day for U.S. Cuba relations. They will permit U.S. businesses to begin getting to know Cuba and also enable businesses and private citizens to engage directly with the Cuban people,” said NFTC Vice President for Global Trade Issues Jake Colvin. “We look forward to working with the Obama Administration, Congress, the U.S. business community and the Cuban people to begin to reestablish the commercial relationship over the months and years to come.”

NFTC and USA*Engage highlighted several provisions of the regulations announced by Treasury and Commerce, which are particularly relevant to U.S. businesses:

Treasury

1. Travel to Cuba for authorized purposes without the need for case-by-case specific licensing – Arguably the change with the most meaningful near-term impact.

Combined with the regulation to permit the use of credit and debit cards in Cuba, this will facilitate the entry of additional thousands of Americans into Cuba for “purposeful” travel and permit businesses and entrepreneurs to begin exploring Cuba.

2. Credit and debit cards, per diem, and importation of certain goods and services.

The decision by OFAC also to amend section 515.560 to eliminate the per diem limitation on authorized travelers’ spending in Cuba, and to permit authorized travelers to import no more than $400 worth of goods from Cuba (including up to $100 in alcohol or tobacco products) is significant from a licensing perspective, as it demonstrates the ability of the President to authorize imports from Cuba. Permitting credit card use will also facilitate day-to-day transactions for U.S. travelers, including businesses, to Cuba.

3. Micro-financing, business, and commercial import activities.

These amendments permit microfinancing and will enable U.S. entities to support entrepreneurs and businesses in Cuba. OFAC is adding new section 515.582 to authorize commercial imports of certain specified goods and services produced by independent Cuban entrepreneurs based on a list to be determined by the State Department. That is a potentially meaningful license and could help Cubans engage directly in the American marketplace.

4. Telecommunications.

OFAC will generally authorize transactions that establish mechanisms to provide commercial telecommunications services linking third countries and Cuba and in Cuba. OFAC is amending section 515.578 to authorize persons subject to U.S. jurisdiction to provide additional services incident to Internet-based communications and related to certain exportations and reexportations of communications items.

5. Certain transactions with Cuban nationals located outside of Cuba.

OFAC is adding new section 515.585 to authorize U.S.-owned or -controlled entities in third countries to provide, with some limitations, goods and services to Cuban nationals in third countries. OFAC is amending section 515.505 to unblock accounts of Cuban nationals who have permanently relocated outside of Cuba, among other provisions. This has been a major pain point for banks, and is welcome news.

6. Insurance.

OFAC is adding new section 515.580 to authorize insurance companies to offer global insurance policies that cover third-country nationals traveling to Cuba.

7. Shipping.

OFAC is amending section 515.550 to authorize foreign vessels to enter the United States after engaging in certain trade with Cuba.

Commerce

Commerce is authorizing the export of commercially sold or donated:
• Building materials, equipment, and tools for use by the private sector
• Tools and equipment for private sector agricultural activity; and Tools, equipment, supplies and instruments for use by private sector entrepreneurs – this will allow the export of such items to private sector entrepreneurs, such as auto mechanics, barbers and hairstylists and restaurateurs.
• Authorizes the export and reexport to Cuba of certain donated items for use in scientific, archaeological, cultural, ecological, educational, historic preservation or sporting activities.