Thu. Jun 13th, 2024

U.S. announces changes to give private sector, small businesses in Cuba more financial support

By 37ci3 May28,2024



WASHINGTON/HAVANA – The U.S. Treasury Department on Tuesday announced regulatory changes to allow more American financial support for Cuba’s fledgling private sector and increase access to U.S. Internet-based services, limited but timely measures that officials said would help the island’s small start-up businesses. he said he would. leg up.

The United States said it would allow small business owners on the communist-ruled island to open and access U.S. bank accounts from Cuba for the first time in decades, following bans imposed shortly after Fidel Castro’s 1959 revolution.

The measures will also allow Cuban entrepreneurs to use US-based social media platforms, online payment sites, video conferencing and authentication services, previously inaccessible to the sector and currently a major obstacle facing small businesses on the island.

The moves are aimed at fulfilling a long-delayed promise by the Biden administration to help Cuba’s fledgling entrepreneurs while respecting the small but fast-growing private sector, despite a Cold War-era US embargo that has made financial transactions difficult for the Cuban government for decades.

“Today we are taking an important step to support the expansion of free enterprise and the expansion of the entrepreneurial 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 preparing the measures, U.S. officials, who spoke to reporters on condition of anonymity, said they were trying to balance the goal of strengthening the private sector with a desire not to benefit Cuban authorities.

President Joe Biden He took office in January 2021 with high hopes of reversing the Trump-era crackdown on Cuba, but Cuba’s crackdown on protests that summer prompted the administration to keep up the pressure on Havana.

Officials said the new measures would exclude Cuban officials, military officers and other government “insiders” in an effort to minimize resources from Cuban government benefits.

Republican U.S. Rep. Maria Elvira Salazar, a Cuban-American lawmaker from South Florida, was quick to criticize the Democratic administration’s announcement.

“Biden Admin now gives ‘Cuban private sector’ access to US financial system,” he wrote on X. “It would make a mockery of American law, given that there has been no progress towards freedom on the island. and repressions intensified.”

OPEN FOR BUSINESS

Cuba has long blamed the embargo — a tangled web of U.S. laws and regulations that make financial transactions difficult for the Cuban government — for an economic crisis that has left it with no choice but to open its economy to small private businesses in recent decades.

Such businesses, taboo for decades in communist-ruled Cuba, are now thriving on the island.

New Cuban laws that take effect in 2021 have seen more than 11,000 small businesses set up since May, the government said, from corner grocers to plumbing, transportation and construction businesses.

According to Ministry of Economy statistics at the end of 2023, these enterprises employ more than 15% of Cuban workers and account for about 14% of the gross domestic product.

The rules announced Tuesday also allow U.S. banks to once again process funds transfers, called U-Turns, which allow Cuban citizens to transfer funds, including payments and remittances, as long as the senders and recipients are U.S. citizens. does not obey the laws. .

John Kavulich, president of the US-Cuba Trade and Economic Council, said such measures are a step in the right direction, but he noted a “glaring flaw” in the policy: Cuban businesses are still handicapped by the requirement that they use banks. third countries must transfer their money.

“As long as funding, investment and payments must be channeled through third countries, the Biden-Harris Administration will fully curtail the activities it claims to support,” Kavulich said in an email.

Tuesday’s announcement was no sign of a more significant easing of U.S. sanctions and other restrictions on Cuba, other than the modest steps Biden has taken since becoming president.

Some analysts have attributed Biden’s cautious approach to Cuba to his concern that a soft approach to Havana could be politically damaging among strongly anti-communist Cuban American voters in Florida, where Trump lost the 2020 election.

US officials have declined to say whether the administration has launched a formal investigation into whether Cuba remains on the State Department’s list of state sponsors of terrorism.



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