From The Wall Street Journal:
Little Change For Companies Seeking Cuba Business After De-Listing
Companies face essentially the same landscape in Cuba as they did when it was listed by the U.S. as a state sponsor of terrorism, legal experts told Risk & Compliance Journal.
The U.S. on Friday formally removed Cuba from its list of state terrorism sponsors, the latest step toward normalizing relations between the two countries. President Barack Obama recommended the de-listing to Congress last month, triggering a 45-day period for lawmakers to oppose it, but they didn’t make any effort to do so. However, experts said, the decision has little effect on companies seeking to do business in Cuba.
“For the U.S. business community to get what it wants regarding Cuba, it has to be done legislatively,” said Richard Matheny, a partner at Goodwin Procter LLP, who was referring to the embargo, parts of which date back to the early 1960s.
Cuba was placed on the state-terror sponsor list in 1982. Countries on the list, which as of Friday only include Iran, Sudan and Syria, are barred from receiving U.S. economic aid and arms, and other restrictions.
“The act [of de-listing] is largely symbolic domino. It may soften up folks in Congress and embolden them to revisit the embargo,” said Mr. Matheny.
Mr. Obama announced in December he would seek to normalize relations with Cuba; Havana had said its listing as a state terrorism sponsor was a major hindrance toward that goal. The two countries have held four rounds of talks, and U.S. and Cuban officials said last week, according to a Wall Street Journal report, that re-establishing embassies could be completed soon.
In the months since Mr. Obama’s announcement, the U.S. has removed dozens of Cubans from its sanctions blacklist and, last week, the Cuban government found a bank — Pompano Beach, Fla.-based Stonegate Bank, that agreed to open an account for it.
But from a U.S. business perspective, any restrictions that come from being listed as a state sponsor of terrorism overlap with the Trading With the Enemy Act, which is still in effect, noted Samuel Cutler, a policy adviser for Ferrari & Associates PLLC, a firm that represents people and companies before the U.S. Department of Treasury on sanctions matters.
“Anyone who thinks ‘Aha! This changes everything!’ in response to the removal of Cuba’s [state sponsor of terrorism] designation is either kidding themselves or hasn’t read the laws,” said Mr. Cutler.
Sanctions experts had warned Risk & Compliance Journal in February about “irrational exuberance” by companies seeking business in Cuba, and they continue to express caution.
Thad McBride, an international trade lawyer with Bass Berry & Sims PLC, said people and companies are authorized, for a variety of reasons, to go to Cuba to explore doing business, but they cannot sign deals yet.
“You’re a step closer to doing business, but it ultimately doesn’t change the calculus about making it any easier to do business in Cuba now,” said Mr. McBride.
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