WASHINGTON/HAVANA (Reuters) -The U.S. Treasury Department on Tuesday announced regulatory changes to allow greater U.S. financial support for Cuba’s nascent private sector and bolster access to U.S. Internet-based services, measures limited but timely actions that, according to officials, would help give the island a budding future. small businesses an advantage.
The United States said it would allow small business owners on the communist island to open and access American bank accounts from Cuba for the first time in decades, following bans imposed shortly after Fidel Castro’s 1959 revolution.
The measures would also allow Cuban entrepreneurs to use US-based social media platforms, online payment sites, video conferencing and authentication services, which were previously unavailable to the sector and are a major obstacle currently facing small businesses. on the island.
The measures are aimed at fulfilling the Biden administration’s long-delayed promise to help Cuba’s budding entrepreneurs, giving deference to its small but rapidly growing private sector despite the Cold War-era U.S. embargo that for decades has complicated the financial transactions of the Cuban government.
“Today we are taking an important step to support the expansion of free enterprise and the expansion of the business sector in Cuba,” a senior US official told reporters on Tuesday.
The Cuban government did not immediately respond to a request for comment on the policy changes.
In crafting the measures, U.S. officials, who briefed reporters on condition of anonymity, noted that they had tried to balance the goal of bolstering the private sector with the desire to avoid profits for Cuban authorities.
President Joe Biden took office in January 2021 with high hopes for Cuba to reverse the harsh approach of the Trump era, but the crackdown on protests in Cuba during the summer of that year led the administration to maintain pressure on La Havana.
The new measures would exclude Cuban officials, military officers and other government “insiders,” with the goal of minimizing the resources available from benefits to the Cuban government, the officials said.
Republican U.S. Rep. María Elvira Salazar, a Cuban-American lawmaker from South Florida, quickly criticized the Democratic administration’s announcement.
“The Biden administration is now giving the ‘Cuban private sector’ access to the US financial system,” he said in a post on the island”. and repression has intensified.”
OPEN FOR BUSINESS
Cuba has long blamed the embargo – a tangle of US laws and regulations that complicates the Cuban government’s financial transactions – for decades of economic crisis that have recently left it with no choice but to open its economy to small private businesses.
This type of business, taboo for decades in communist Cuba, is now booming on the island.
New Cuban laws implemented in 2021 have seen the establishment of more than 11,000 small businesses as of May, the government has said, ranging from grocery stores to plumbing, transportation and construction companies.
These companies employ more than 15% of Cuban workers and represented around 14% of the gross domestic product, according to statistics from the Ministry of Economy from the end of 2023.
The regulations announced Tuesday also authorize U.S. banks to once again process so-called “U-turn” fund transfers, allowing them to move money for Cuban citizens – including payments and remittances – as long as senders and recipients are not subject to the regulations. American laws. .
Such measures are a step in the right direction, said John Kavulich, president of the United States-Cuba Economic and Trade Council, but he noted a “glaring omission” in the policy: Cuban businesses are still hampered by the requirement to use banks in third countries to move your money.
“As long as financing, investment and payments have to be channeled through third countries, the Biden-Harris Administration will limit precisely the activity it claims to support,” Kavulich said in an email.
There were no signs that Tuesday’s announcement could herald a more significant easing of U.S. sanctions and other restrictions on Cuba, beyond the modest steps Biden has already taken since taking office.
Some analysts have attributed Biden’s cautious handling of Cuba issues to his concern that a softened approach toward Havana could hurt him politically among strongly anti-communist Cuban-American voters in Florida, a key state he lost to Trump in the 2020 election.
U.S. officials declined to say whether the administration was conducting a formal review of Cuba’s continued presence on the State Department’s list of state sponsors of terrorism.
(Reporting by Matt Spetalnick and Daphne Psaledakis in Washington, and Dave Sherwood in Havana; additional reporting by Susan Heavey; editing by Doina Chiacu and Jonathan Oatis)
By Matt Spetalnick, Daphne Psaledakis and Dave Sherwood