U.S. Secretary of Commerce Penny Pritzker

Effective today, January 27, 2016, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) and the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) have further reduced sanctions affecting U.S. relations with Cuba.  The amendments to the Cuban Assets Control Regulations (CACR) and Export Administration Regulations (EAR) represent significant steps toward the liberalization of commerce and travel which were first announced by the Obama administration in December 2014.

Cuba's flag
Copyright: mishchenko / 123RF Stock Photo

Among the reductions in current regulations are new allowances for financing, exportation, and travel.

  • Financing  – Restrictions on payment and financing terms for authorized non-agricultural exports and reexports have been removed and U.S. banking institutions are now permitted to provide financing for such transactions.  The U.S. Department of Commerce has indicated that payments of cash in advance; sales on an open account; and financing by third-country financial institutions or U.S. financial institutions will all permissible under the newly revised regulations.
  • Exports – OFAC and BIS have expanded general licenses for goods and services which aid the Cuban people.  General licenses related to the export and reexport of telecommunications items, agricultural items, civil aviation safety items, and news gathering software and technology items have all be expanded.  OFAC and BIS have also announced a case-by-case licensing policy which will facilitate the exportation of goods (including artistic and cultural endeavors as well as education, infrastructure, public health, and sanitation items) which will benefit the Cuban people even if their exportation necessarily involves the Cuban government or other state-owned enterprises with whom commercial interaction is generally prohibited under current U.S. regulations.
  • Travel – OFAC authorized travel for additional business-related reasons as well as authorizing additional transactions which are incident to authorized travel.  Among the newly authorized reasons for travel are the production of media and artistic programs (including, television programs, films, music recordings, the creation of artworks by Cuban artists), and the organization of professional conferences, sports competitions, artistic exhibitions, and public performances, as well as additional types of humanitarian projects such as disaster preparedness projects. It is now also permissible to travel to Cuba and engage in market research, marketing, sales and contract negotiation, delivery, installation, and leasing of items which are incident to otherwise authorized activities in Cuba.

Although relations between the U.S. and Cuban continue to take strides toward liberalization, numerous sanctions regulations remain in full effect and can carry significant penalties if violated.  Accordingly, companies looking for opportunities in Cuba must, with the the help knowledgeable counsel, remain vigilant in their adherence to existing regulations despite the progress of the past year and the promising trend of rapid deregulation.

The Trans-Pacific Partnership

The Trans-Pacific Partnership (TPP) is a trade agreement between 12 Pacific Rim countries (Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States, and Vietnam), which among other things, contains measures to lower trade barriers such as tariffs.

For more information about the TPP see our previous post, Fox Guide to the Trans-Pacific Partnership.

The Report

U.S. Secretary of Commerce Penny Pritzker released the Opportunities for the U.S. Service Sector Report, which highlights the positive impact of the TPP.

Secretary Pritzker’s report emphasized that the TPP will expand investment opportunities for U.S. services, including those in the telecommunications, software, retail, entertainment and delivery.

“The Trans-Pacific Partnership strengthens our nation’s standing as the world’s leading services exporter,” Secretary Pritzker said.  She further emphasized the positive impact on the service sector, by stating: “With TPP, we can grow our $233.1 billion trade surplus in services and support even more high-paying American jobs.”

Benefit for U.S. Service Suppliers

According to the Office of the United States Trade Representative, services industries account for four out of five U.S. jobs and also represent a significant and growing share of jobs in other TPP countries (Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States, and Vietnam).  The TPP will benefit U.S. service suppliers, both small and large, seeking to do business in TPP markets.

The report lists TPP commitments that will directly benefit U.S. services suppliers, including removing unnecessary barriers that reduce efficiency of trade in the global supply chain and increased transparency in licensing and qualification regulations and procedures for service suppliers.

To learn more about the opportunities for the U.S. service sector related to the TPP, visit http://trade.gov/fta/tpp/industries/pdfs/service.pdf.