Reuters: U.S. Might Take More Steps To Relax Embargo, Official Says

By Daniel Trotta

HAVANA Nov 3 (Reuters) - U.S. President Barack Obama could further relax the U.S. trade embargo of Cuba, a senior State Department official said on Tuesday, adding that Washington would not first demand human rights progress from Havana.

Obama has twice used executive authority to ease the embargo as part of his opening to Cuba, and more such regulatory changes could come if Cuba can absorb those made to date, said David Thorne, a senior adviser to Secretary of State John Kerry.

"We are making progress. We are making regulatory changes. We'll make more," Thorne told Reuters in an interview.

Obama has eased travel restrictions on Americans, authorized telecommunications companies to operate in Cuba, and permitted trade with Cuba's small but growing private sector, among other measures.

But Cuba has been slow to embrace U.S. business, citing its inability to use dollars or receive U.S. credits under the embargo. In one notable exception, Cuban state telecommunications monopoly Etecsa on Monday signed a roaming agreement with U.S. carrier Sprint Corp.

"The pace is really going to be set by the Cubans and we are satisfied with how they want to do this," said Thorne, who did not specify what changes might come.

Obama reversed the course of 10 previous presidents last December when he agreed with Cuban President Raul Castro to end Cold War-era animosity and restore diplomatic relations.

Obama has also called on the Republican-controlled U.S. Congress to end the trade embargo, in place since 1962, but legislation to lift it has stalled.

Opponents of detente say the United States should continue to pressure Cuba over its one-party political system and repression of political opponents.

Thorne said Washington was not expecting rapid change on human rights.

"As in other parts of the world, we are really trying to also say: Let's find out how we can work together and not always say that human rights are the first things that we have to fix before anything else," Thorne said.

"We have to figure out how we can help each other, work together, create a sense of shared prosperity. And then we think that what comes along with that is an increasingly open environment for the discussion on human rights," he added.

Cuban police held 1,093 political activists in short-term detention in October, the highest monthly total this year, according to the dissident Cuban Commission of Human Rights and National Reconciliation.

Thorne, on a three-day visit to Havana, met with Foreign Trade Minister Rodrigo Malmierca and Cubans working in the private sector as small business owners or in cooperatives. He also attended the inaugural meeting of the U.S.-Cuba Business Council, an initiative of the U.S. Chamber of Commerce.

What To Watch For Next

Cuentapropista/Private Cooperative-Only Stores In Cuba?

United States companies potentially benefiting: Illinois-based Grainger, Wisconsin-based ABC Supply, Georgia-based Home Depot, North Carolina-based Lowe’s, Texas-based Sysco, Ohio-based Sherwin-Williams, New York-based Restaurant Depot, Texas-based Sally Beauty Supply, Tennessee-based Tractor Supply Company, Virginia-based Advance Auto Parts, Wisconsin-based SC Johnson, Missouri-based Graybar and California-based Square amongst others. 

Republic of Cuba nationals have one of the highest awareness and highest preference for United States brands of any country.

To accommodate one of President Obama’s regulatory initiatives, the government of the Republic of Cuba would establish stores, owned and managed by a Republic of Cuba government-operated company, which would sell products on a wholesale basis exclusively to Republic of Cuba nationals registered within the (current) 201 categories of cuentapropistas and to members of private cooperatives.  To access the stores, a cuentapropista/private cooperative representative would present his/her license when entering and again at check-out.

The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury and Bureau of Industry and Security (BIS) of the United States Department of Commerce currently authorize United States-based companies to export directly products to cuentapropistas and to private cooperatives. 

The government of the Republic of Cuba does not permit cuentapropistas and private cooperatives to directly import products; requiring products be purchased through Republic of Cuba government-operated wholesale/retail channels. 

With wholesale-only cuentapropista/private cooperative-only stores, the OFAC and BIS might authorize direct exports to the Republic of Cuba government-operated company managing the wholesale-only cuentapropista/private cooperative-only stores because the products sold would be solely destined for use by the Cuentapropistas/private cooperatives.  The government of the Republic of Cuba would maintain its requirement to manage product imports.

Creation of the stores would provide opportunities for another Obama Administration initiative, United States-based companies engaging in, depending upon credit worthiness, payment terms, loans and leases to cuentapropistas/private cooperatives because there will exist specific products to match with opportunities.

Since the products offered by wholesale-only cuentapropista/private cooperative-only stores would be restricted, perhaps the OFAC and BIS would also permit United States-based companies to provide payment terms (including consignment), loans and leases directly to the Republic of Cuba government-operated company that is managing the wholesale-only cuentapropista/private cooperative-only stores provided that the products are sold exclusively to cuentapropistas/private cooperatives.

The Republic of Cuba government-operated company managing the wholesale-only cuentapropista/private cooperative-only stores should have an account with Republic of Cuba government-operated Banco Internacional de Comercio SA (BICSA), a member of Republic of Cuba government-operated Grupo Nuevo Banca SA.

Pompano Beach, Florida-based Stonegate Bank has a Direct Correspondent Banking Agreement with BICSA permitting a more cost-effective and efficient means of receiving payments for, payments from and payments to United States-based companies.  To enable greater transactional efficiencies, BICSA should have OFAC authorization to establish an operating account with Stonegate Bank.

Currently, many products for cuentapropistas/private cooperatives are imported to the Republic of Cuba by individuals traveling on the charter flights operating from the United States to the Republic of Cuba; the government of the Republic of Cuba is not preventing these deliveries.

With wholesale-only cuentapropista/private cooperative-only stores, friends and relatives of Republic of Cuba nationals who reside outside of the Republic of Cuba, particularly within the United States, will have an efficient means of directing remittances and loans in support of cuentapropistas/private cooperatives.