Three Members Of The United States Senate Advocate For Regulatory Changes To Commercial Relationship With Cuba

A Significant Part Of What They Seek In Washington Await Decisions In Havana

Part Of What They Seek Is Already Authorized By The OFAC

Part Of What They Seek Is Not The Responsibility Of The USDA- It Is The Responsibility Of Those Who Advocated For It And Have Not Used It. Whose Fault Is That?

They Should Also Send A Letter To Miguel Diaz-Canel, President Of The Republic Of Cuba

On 15 March 2023, three members of the United States Senate sent a three-page letter to Joseph Biden, 46th President of the United States: Chris Van Hollen (D-Maryland), Ron Wyden (D- Oregon), Chairman of the Finance Committee, and Cynthia Lummis (R-Wyoming). LINK To Letter

Excerpt

“Small, private sector Cuban entrepreneurs have been clamoring for access to capital that could help their businesses thrive, support private sector employment, and make it less likely Cubans seek to migrate to the United States due to lack of hope for a better future. Rather than continue the failed policy of broad-based sanctions, your Administration should undertake efforts to increase economic exchange between the United States and the Cuban people. This should include risk-based, targeted efforts, including narrow changes to U.S. licensing and regulations, to support Cuba’s small and medium-sized private enterprises in accessing U.S. financial services to legitimate the Cuban private sector and facilitate its growth.”

On 10 May 2022 the Biden-Harris Administration (2021- ) authorized the first direct investment in and direct financing to a privately-owned company in the Republic of Cuba owned by a Republic of Cuba national.

Unfortunately, the government of the Republic of Cuba has yet- two years and counting, to specifically authorize and publish regulations for the delivery of direct investment in and direct financing to a privately-owned company in the Republic of Cuba owned by a Republic of Cuba national.

Excerpt

“Establish a targeted Office of Foreign Assets Control (OFAC) license to allow U.S. banks to provide financial services to small, private sector Cuban businesses, potentially through Cuban banks, with appropriate risk management controls to prevent the flow of funds to entities controlled by the Cuban government. The licensing regime should include both payments activity and microfinancing of the private sector in Cuba, including agricultural cooperatives;”

The senators are correct that the absence of efficient banking for micro, small, and medium-size enterprises (MSMEs) constrains their operational efficiencies and their potential.

The Biden-Harris Administration continues to refuse to authorize direct correspondent banking. Incredulously, the Obama-Biden Administration (2009-2017) had authorized United States-based financial institutions to have correspondent accounts at financial institutions located in the Republic of Cuba, but did not authorize Republic of Cuba-based financial institutions to have correspondent accounts with financial institutions located in the United States.

Absent direct correspondent banking and re-establishment of U-turn transactions for financial institutions located in the United States and in the Republic of Cuba, transactions relating to the export from the United States of authorized agricultural commodities, food products, healthcare products, and for authorized services- including the delivery when authorized by the government of the Republic of Cuba of MSME investment and financing, continue to require use of a financial institution located in a third country which adds time, cost, and lacks transparency.

Helpful if the three senators would advocate to the government of the Republic of Cuba about the lack of MSME investment/financing regulations which, if issued, would address items referenced in the letter to President Biden Implementing MSME investment/financing regulations would provide an incentive for the Biden-Harris Administration to authorize direct correspondent banking and U-turn transactions.

Excerpt

“Work with stakeholders to encourage the use of USDA’s Market Access Program (MAP) and Foreign Market Development (FMD) Program funds, authorized by the 2018 Farm Bill, to educate U.S. farmers and ranchers and facilitate the export of U.S. agricultural commodities to the Cuban market;”

LINK Defining Anemic: In Five Years, 2018 Farm Bill USDA Provision For Cuba Had No Use Of FMD And Two Uses Of MAP. Approximately 90 U.S.-Based Entities Could Have Participated. That’s A 2.2% Use Rate. Feb 3, 2023

In 2018, legislative advocates maintained that inserting a Market Access Program (MAP) and Foreign Market Development (FMD) provision in H.R. 2, the five-year Agriculture Improvement Act, known as the Farm Bill signed into law on 20 December 2018 by Donald Trump, 45th President of the United States was critical to “laying the groundwork” for increasing exports of agricultural commodities and food products to the Republic of Cuba. Statements from members of the United States Congress included: “… an important first step to regaining our presence in Cuba.”

Approximately seventy United States-based entities (primarily trade promotion organizations) annually are identified by the United States Department of Agriculture (USDA) as receiving funding for MAP and approximately twenty entities are identified as receiving funding for FMD.

Leading to the enactment of the 2018 Farm Bill, most observers reasonably concluded that legislative advocates- within the United States Congress and organizations in Washington DC and outside of the beltway would have prominently teed-up at least one high-profile applicant to publicize in advance they would use the provision if it became law or at least one high-profile applicant to immediately and publicly request funding when the 2018 Farm Bill became law on 21 December 2018.

The most significant impact of an anemic number of MAP/FMD requests and usage in 2018, 2019, 2020, 2021, 2022, and 2023 is what the lack of interest portends for other legislative efforts in the United States Congress relating to the Republic of Cuba, particularly those focused upon changes to cash-in-advance payment terms for agricultural commodity and food product exports from the United States to the Republic of Cuba required by the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSREEA). The question opponents will ask: “If authorizing MAP/FMD for Cuba was so important, why have so few organizations used it?”

The cash-in-advance terms were supported by United States-based exporters while opposed by United States-based agricultural commodity and food product trade promotion organizations. United States-based exporters were concerned in 2000 and remain concerned in 2023 that with Republic of Cuba government-operated entities maintaining a chronic inability to abide by payment terms other than cash-in-advance, more prudent to retain a perhaps smaller market share with no payment issues rather than a larger market share with endemic, and necessarily publicly-disclosed payment issues.

LINK TO COMPLETE ANALYSIS IN PDF FORMAT

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