Monday, September 28, 2009

Bills could transform U.S./Cuba business

Posted on Monday, 09.28.09
Bills could transform U.S./Cuba business

When it comes to crafting Cuba policy, Congress has been in the back
seat of late. The sweeping new rules released last month that loosen the
49-year-old U.S. embargo against the island came from the executive
branch and the Office of Foreign Assets Control.

Among those measures were rules that allow Cuban-Americans to make
unlimited visits and send an unlimited amount of remittances.

In addition, the regulations also give U.S. telecommunication companies
the green light to offer fiber-optic cable, roaming cellular service,
and satellite TV and radio in Cuba. But it's up to Cuba to decide
whether it wants to do business with the U.S. companies.

As deep as the changes are, free-trade advocates want more. There are a
handful of bills that have been filed that propose completely
dismantling the embargo -- though few believe the measures have the
political backing to pass.

More realistic, perhaps, are a handful of bills designed to take
strategic bites out of the embargo. Whether they will gain traction,
only time will tell.

Here are some of the proposals made during the current congressional
session that could change the way business is done between the U.S. and

Freedom to Travel to Cuba Act

Sponsor: Sen. Byron Dorgan, D-N.D., and Sen. Michael Enzi, R-Wyo.

Summary: This bill is one of several that propose making it legal for
all U.S. citizens to visit Cuba. It also drops travel-related
restrictions, including limits on baggage, living expenses and the
purchase of personal-use goods on the island.

Impact: Analysts believe this bill, or the House version, which has 160
sponsors, could pass during this congressional session. Many travel
experts believe that lifting the travel ban would nearly double the 2.3
million visitors the island receives per year. The promise of broader
travel would also spark a rush of tour and cruise operators and
revitalize the charter industry. For business ``this is the bill that
outweighs all others,'' said Cuba trade advocate Kirby Jones.

By allowing executives from all industries to meet their counterparts on
the island, it would deepen ties and could be a boon for exporters.

Western Hemisphere Energy Security Act of 2009

Sponsor: Rep. Jeff Flake, R-Ariz.

Summary: This House bill, along with a more extensive Senate bill, would
allow U.S. companies to explore and drill for oil off the coast of Cuba.
In particular, it would allow companies to export equipment necessary
for exploration and extraction without a special license. Just as
important, it would also make it legal to send the oil back to the
United States.

Impact: The U.S. Geological Survey estimates there are 4.6 billion
barrels of untapped oil off northern Cuba. With some deposits just 50
miles off Florida's coast, U.S. energy companies are eager to have a
crack at them. Opening up the U.S. market to Cuban oil could also light
a fire under some of the international firms that are already exploring
in the region but have few local markets to supply.

Agricultural Export Facilitation Act of 2009

Sponsor: Rep. Jerry Moran, R-Kan.

Summary: This bill, along with other similar pieces of legislation,
would allow Cuban financial institutions to make direct transfers to
U.S. banks to pay for agricultural commodities, medicine and medical

Impact: U.S. farmers and pharmaceutical companies are currently allowed
to export these items under existing carve-outs to the embargo. However,
trade has been stifled by rules that require Cuba to pay for U.S.
imports in advance and send the funds through third-country banks. This
bill would streamline the process, strip away transaction costs and
potentially boost U.S. exports.

Bills could transform U.S./Cuba business - Economy - (28
September 2009)

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