Want To Plan For The Impact Of Trump Administration Decision About Cuba? Understand GAESA.

The Trump Administration is expected to discourage, restrict and perhaps prohibit transactions with entities (companies) within the Republic of Cuba that are affiliated with and/or controlled by the Revolutionary Armed Forces of the Republic of Cuba (FAR).  The most important entity is the Enterprise Administration Group (GAESA). 

LINK: http://foresightcuba.com/grupos-empresariales-del-minfar/

United States-based companies and individuals subject to United States jurisdiction should plan to avoid transactions with FAR/GAESA-related entities (companies). 

Can an individual subject to United States jurisdiction visit the Republic of Cuba and not connect in some manner with an entity controlled by and/or affiliated with FAR/GAESA?  Unlikely.

The United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) is expected to publish a list of entities (companies) in the Republic of Cuba that are controlled by the FAR.  These entities may be added to the OFAC’s Specially Designated Nationals And Blocked Persons (SDN) List, which could have multilateral financial transactions implications.

“If you are traveling to the Republic of Cuba, and only those who are authorized should do so, then choose carefully and direct your money directly to the Cuban people.”

The Trump Administration continues to weigh ending self-directed travel and returning to group-only travel for educational and people-to-people programs; there is also consideration to end people-to-people programs.  An end to self-directed programs would impact airlines more than cruise lines.

The airlines have benefitted from individuals traveling to the Republic of Cuba while the cruise lines prefer providing group experiences as they are more controlled and profitable.

“Too many people are hopping on planes, staying in government-owned hotels, eating in government-owned restaurants, using government-owned transportation… for a vacation.  Folks, tourism is illegal.  It’s the law.”

Expect increased enforcement by Customs and Border Protection (CBP) of the United States Department of Homeland Security. 

Travelers returning to the United States from the Republic of Cuba should be prepared to provide and have inspected all documents required by the OFAC. 

“Check the OFAC’s web site.  If you don’t have what you are supposed to have, don’t be shocked if you are delayed and miss your connecting flight.”

If a traveler is returning to the United States from the Republic of Cuba with cigars and rum, those purchases might require an additional inspection by representatives of the United States Department of Agriculture (USDA).

United States companies will be discouraged from transactions with FAR/GAESA-related entities (companies). 

If a United States-based company wants to engage a FAR/GAESA-related entity (company) in the Republic of Cuba, the United States-based company will have to demonstrate to the OFAC, United States Department of State, and Bureau of Industry and Security (BIS) of the United States Department of Commerce that the deal will benefit the people of the Republic of Cuba rather than entrench the FAR within the commercial sectors of the Republic of Cuba.

“If a United States-based company wants to get into bed with the Cuban military, then be prepared to demonstrate how that will result in more freedom for the Cuban people rather than more prosperity for generals in Cuba.”

Some stakeholders will have to settle for less than they wanted and some stakeholders will have to settle for more than they wanted.

Both groups will have to accept what is initially enacted and then seek ways to make further changes. Thus, all stake holders will be disappointed that they didn't receive what they wanted.