United States: US Sanctions Against Cuba: The Outlook Under President Trump

The results of the recent US presidential election cast a shadow of uncertainty over the future of US-Cuba relations. President-elect Donald J. Trump's stance regarding this historically fraught relationship has varied over the years.

However, despite inconsistencies, Mr. Trump has repeatedly stated that an agreement with the Castro regime is "fine," albeit on terms different from those reached by the Obama administration thus far. The regulatory changes that have propelled increasing cultural and economic engagement with Cuba for the past two years have been made through executive action. With a Republican Congress seemingly lacking the political will to ease or strengthen the Cuba embargo, the Trump administration's initiatives on Cuba will be decisive for US business interests in Cuba.

The President-Elect's Past Statements Regarding Cuba

On November 11, 1999, in a speech at the Cuban American National Foundation, Mr. Trump called then Cuban president Fidel Castro "a murderer" and expressed his belief in the effectiveness of the embargo as a means to overthrow the communist regime.1 Almost 16 years later, in September 2015, when asked his opinion of President Obama's Cuba policy, Mr. Trump said that 50 years were enough and added that "[t]he concept of opening with Cuba is fine," although the United States "should have made a stronger deal."2

In March 2016, during a presidential primary debate in Miami, Mr. Trump reiterated that he "would want to make a strong, solid good deal, because right now everything is in Cuba's favor." Specifically, Mr. Trump referred to Cuba's reparations claims of several hundred billion dollars against the United States for human and economic damages caused by the US embargo as one of the terms he would negotiate to prevent Cuba from suing the United States "after the deal is made."3

A "stronger deal" purging Cuba's reparations claims was the voiced backbone idea of Mr. Trump's Cuba policy throughout his campaign until September 16, 2016. Then, at a rally in Miami, Mr. Trump told a cheering crowd that he would reverse President Obama's executive orders unless the Castro regime met the Cuban American community's demands of religious and political freedom for the Cuban people, as well as freed political prisoners. Mr. Trump shouted, "We'll do it, with democracy."4 At a subsequent rally in Miami, a few days before the election, Mr. Trump threatened to "cancel Obama's one- sided Cuban deal" if the Cuban people and the Cuban-Americans did not get the deal they deserved, "including protecting religious and political freedom."5 Vice-presidential candidate Mike Pence went so far as to say, also in Miami, "Let me make you a promise: When Donald Trump is president of the United States, we will repeal Obama's executive orders on Cuba."6

As fate would have it, Fidel Castro died a little over two weeks after Donald Trump became president-elect of the United States. Mr. Trump responded to the news with exclamation points and stark condemnation of Fidel Castro's regime. Mr. Trump subsequently promised that his "administration will do all it can to ensure the Cuban people can finally begin their journey toward prosperity and liberty."7 The word "hope" was repeatedly used by Mr. Trump and Mr. Pence in their statements regarding Castro's demise.

Is There "Hope" for US-Cuba Relations?

Since President Obama announced on December 17, 2014, that his administration would chart a new course with Cuba, the United States and Cuba have re-established diplomatic relations.8 Furthermore, five sets of regulatory changes have been issued by the US Department of the Treasury and the US Department of Commerce. These regulatory changes have allowed increased travel between the United States and Cuba and have authorized business activities across numerous sectors, including telecommunications, technology, health and pharmaceutical, travel and cargo, and construction and infrastructure. They have also made it easier for US companies to export their products to Cuba.9

If Mr. Trump maintains his campaign vows, no further loopholes will be carved out to the Cuba embargo. Instead, the existing pathways to engagement opened by the Obama administration will be shuttered unless the Cuban government acknowledges the political and religious rights of the Cuban people and forgoes its reparations claims against the United States. How likely the Cuban government is to accommodate the United States on these core issues remains to be seen.

However, there are several factors that raise some hope for the future of US-Cuba relations. On the US side, despite some pro-embargo hardliners joining his team, Mr. Trump is a pragmatist and, from a pragmatic standpoint, neither has the Cuba embargo benefited the US business community nor has it fulfilled its stated purpose of bringing democracy to the Cuban people.

Furthermore, numerous US companies of all sizes and across multiple sectors have made investments to enter the Cuban market, relying on the warmer relations between the two countries. Notably, the main US commercial airlines are flying from American cities to Cuba; US telecommunications companies have entered into direct voice and roaming agreements with Cuba; Marriott has begun managing various hotels in Havana;10 and Cuba has become Airbnb's fastest growing market.11 Rosswell Park, a prominent cancer institute in Buffalo, New York, is set to begin clinical trials of a groundbreaking Cuban lung cancer vaccine.12 General Electric has signed MOUs with Cuba to sell aviation, healthcare and energy equipment to Cuba.13 A Florida-based bank has begun offering credit cards for use in Cuba.14 Three American cruise ship companies have included Cuban ports in their itineraries.15 Just a few days ago, Google reached an agreement with the Cuban government to provide faster access to Google content in Cuba.16

Reportedly, nine more deals are in the works and should be inked before Mr. Trump moves into the White House. All of these American companies are likely to press the new administration to preserve or expand their investments.

On the Cuban side, improved relations with the United States and the new opportunities they could bring have likely been a fundamental premise in most agreements and investments made in Cuba by foreign and national companies since December 2014. With a struggling economy increasingly controlled by a business- oriented military; the decline of Venezuela, Cuba's top business partner; a younger generation of Cubans alienated from the ideals of the Cuban Revolution; and Cuban President Raul Castro purportedly relinquishing power in 2018, domestic pressures may soften the Cuban government's historic intransigence. Moreover, the recent demise of Fidel Castro arguably rids the Cuban political elite of the country's most staunch anti-American symbol.

It is relevant to note that, despite Mr. Trump's campaign rhetoric, Raul Castro sent congratulations to the president-elect the day after the election.17 Also, surprisingly, even after Mr. Trump's harsh comments in the aftermath of Fidel Castro's death, Granma—the official voice of the Cuban Communist Party—has not yet published responsive remarks. Therefore, an agreement somewhere in the middle is within the realm of possibility.

What If Things Go South?

Despite several statutory limitations, US commercial relations with Cuba—the only country currently restricted under the Trading with the Enemy Act of 1917—rest broadly within the authority of the president, mainly pursuant to the delegation made by Congress under Section 5 of said Act.

While Congress sits and watches, Mr. Trump could roll back some or all of the changes made by the Obama administration by issuing one or a series of executive orders if the Trump administration and the Cuban government do not reach a "better deal." Subsequent implementation by the relevant federal agencies would follow as a matter of course without major obstacles.

If Mr. Trump were to undertake a blanket reversal of President Obama's executive actions on Cuba, only a few commercial activities previously authorized by Congress would remain available. These limited categories of activities include provision of telecommunications services,18 exportation of medicines and medical supplies19 and exportation of agricultural commodities.20 The president is given, however, the power to restrict such activities under certain conditions.21 Other statutorily authorized activities, such as donating food to nongovernmental organizations in Cuba, are non-commercial in nature. Furthermore, a potential reinstatement of Cuba as a state sponsor of terrorism would add an additional layer of export, financial, and other restrictions that would further obstruct commercial engagement.

It is also possible that, as president, Mr. Trump could decide to make more aggressive use of the Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of 1996, commonly known as the Helms-Burton Act. The Helms-Burton Act authorizes the Department of State to bar from the United States the foreign executives of companies using property in Cuba that was expropriated from US nationals (including from certain Cuban nationals who have become US citizens). This provision has been sparingly and sporadically applied by the Department of State under Presidents Clinton, Bush and Obama, but President-elect Trump could wield this sanction more actively. Furthermore, the prior three presidents have all suspended, for consecutive six-month periods, the application of another Helms-Burton Act provision that authorizes claimants to expropriated property to sue in US federal court those foreign companies currently using that property. It is expected that President Obama will suspend this provision one last time before he leaves office in mid-January, but in mid-July President-elect Trump will have to decide whether to suspend it again or to let the lawsuits begin.

If the new administration chooses a more restrictive approach to Cuba, most business opportunities with Cuba would be impaired, and those companies that have already spent time and money in their efforts to enter the Cuban market would stand to lose all or part of their investments. Given the uncertainty regarding the future of US-Cuba relations, US companies doing business in Cuba, or planning to do so within the current regulatory framework, must closely follow the dynamics of upcoming negotiations between the representatives of the Trump administration and the Cuban government and proceed with extreme caution.

Footnotes

1 Kurt Eichenwald, How Donald Trump's Company Violated the United States Embargo Against Cuba, Newsweek Magazine, available at: http://www.newsweek.com/2016/10/14/donald-trump-cuban-embargo-castro-violated-florida-504059.html (last visited November 17, 2016).

2 Jeremy Diamonds, Trump Shifts on Cuba, Says He Would Reverse Obama's Deal, Daily Caller, available at: http://www.cnn.com/2016/09/16/politics/donald-trump-cuba/ (last visited December 16, 2016).

3 Capitol Hill Cubans, Point of Clarification: Donald Trump on Cuba Policy, available at: http://www.capitolhillcubans.com/2016/07/point-of-clarification-donald-trump-on.html (last visited November 17, 2016).

4 Donald Trump, Rally in Miami, September 16, 2016, available at: www.youtube.com/watch?v=mZRdTBcGbJc (last visited November 17, 2016).

5 Ramon Espinosa, Cloud of Uncertainty Hangs Over US- Cuba Relations With a Trump Presidency, Miami Herald, available at: http://www.miamiherald.com/news/nation-world/world/americas/cuba/article113898263.html (last visited November 17, 2016).

6 Joseph Weber, Trump, Pence Seek Cuban American Vote, Vow to Repeal Obama's Cuba Deal, Fox News, available at: http://www.foxnews.com/politics/2016/11/05/trump-pence-seek-cuban-american-vote-vow-to-repeal-obamas-cuba-deal.html (last visited November 17, 2016). Note that President Obama has not issued executive orders on Cuba, except for the Presidential Policy Directive of October 14, 2016, which is a form of executive order.

7 Cleve R. Wootson, Jr, How Donald Trump Responded to the Death of Fidel Castro, 'a Brutal Dictator,' The Washington Post, available at: https://www.washingtonpost.com/news/the-fix/wp/2016/11/26/here-is-donald-trumps-reaction-to- fidel-castros-death/?utm_term=.53c94e0dce61 (last visited December 12, 2016).

8 The White House, Presidential Policy Directive – United States – Cuba Normalization, available at: https://www.whitehouse.gov/the-press-office/2016/10/14/presidential-policy-directive-united-states-cuba-normalization (last visited November 17, 2016).

9 US Department of the Treasury, Resource Center, available at: https://www.treasury.gov/resource- center/sanctions/Programs/Pages/cuba.aspx (last visited November 17, 2016).

10 Alan Gomez, What's Changed in 2 Years Since Cuba Opening, USA TODAY, available at: http://www.usatoday.com/story/news/world/2016/12/15/c uba-two-year-anniversary-whats-changed/95438430/ (last visited December 19, 2016).

11 Mimi Whitefield, A Trump Attempt to Reverse Obama's Cuba Policies Could Be Complicated and Costly, The Miami Herald, available at: http://www.miamiherald.com/news/nation-world/world/americas/cuba/article114076713.html (last visited November 18, 2016); The White House, Presidential Policy Directive – United States – Cuba Normalization, available at: https://www.whitehouse.gov/the-press- office/2016/10/14/presidential-policy-directive-united- states-cuba-normalization (last visited November 17, 2016).

12 Stephanie Barnes, FDA Approves 'CimaVax' Trial at Roswell Park, WGRZ, available at: http://www.wgrz.com/news/local/buffalo/cuomo-in-wny- for-roswell-park-announcement/342116074 (last visited November 18, 2016).

13 Paul Davidson, GE Aims to Sell Power, Medical Gear to Cuba, USA Today, available at: http://www.usatoday.com/story/money/2016/03/22/ge- aims-sell-power-medical-gear-cuba/82113456/ (last visited November 18, 2016).

14 Mimi Whitefield, Stonegate Bank Begins Offering Credit Cards That Will Work in Cuba, The Miami Herald, available at: http://www.miamiherald.com/news/nation- world/world/americas/cuba/article83936817.html (last visited November 18, 2016).

15 Gene Sloan, Approved! Royal Caribbean, Norwegian Are Going to Cuba, USA TODAY, available at: http://www.usatoday.com/story/travel/cruises/2016/12/07/royal-caribbean-cuba-cruises/95096336/ (last visited December 19, 2016).

16 Brian Latimer, Google Signs Internet Deal with Cuba, NBCnews.com, available at: http://www.nbcnews.com/news/latino/google-signs-internet-deal-cuba-n695056 (last visited December 19, 2016).

17 Granma, Raul Sends Message of Congratulations to President-Elect Trump, available at: http://en.granma.cu/mundo/2016-11-10/raul-sends-message-of-congratulations-to-president-elect-trump (last visited November 17, 2016).

18 Cuban Democracy Act of 1992 (CDA), 22 U.S.C. § 6004(e).

19 Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA), 22 U.S.C. § 7202; CDA, 22 U.S.C. § 6004(c).

20 TSRA, 22 U.S.C. § 7202.

21 TSRA, 22 U.S.C. § 7202; CDA, 22 U.S.C. § 6004(c).

Originally published 19 December 2016

Learn more about our Government Relations, International Trade and Cuba practices.

Visit us at mayerbrown.com

Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the "Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe – Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.

© Copyright 2016. The Mayer Brown Practices. All rights reserved.

This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.