WASHINGTON – The US lifted some financial restrictions against Cuba on Tuesday in a move aimed at boosting private businesses on the island.
The measures will allow independent entrepreneurs to open and access US bank accounts online to support their businesses. Other measures include measures to open up more Internet-based services and expand the ability of private companies to use certain financial transactions.
“These regulatory changes update and clarify authorizations to support Internet-based services to promote Internet freedom in Cuba, support independent entrepreneurs in the Cuban private sector, and expand access to certain financial services for the Cuban people,” the Department said. from the Treasury in a press release. .
One of the main changes would allow private Cuban businesspeople to open bank accounts in the United States and then access them online when they return to Cuba – something they could not do previously. The US is also again allowing something called U-turn transactions, where money is transferred from one country to another but is routed through the United States.
“This reestablished authorization is intended to help the Cuban people, including independent entrepreneurs in the private sector, by facilitating remittances and payments for transactions in the Cuban private sector,” the statement said.
The Trump administration withdrew permission for U-turn transactions in 2019.
The Treasury Department’s updated guidance on Tuesday also changed the terminology the agency uses to make clear that Cuban officials or banned members of the Cuban Communist Party were not benefiting from changes targeting the country’s emerging private sector.
About 11,000 private companies in Cuba are responsible for about a third of employment on the island, Cuban officials said.
The changes occur at a time when Cuba is facing one of the worst economic and energy crises in its history. Cuban citizens are facing waves of blackouts that have worsened in recent weeks and are frustrated by food shortages and inflation. Hundreds of thousands of people migrated, many of them heading to the United States.
In Cuba, caution prevailed about what the changes would mean.
“It is a generally positive measure, but there are many hows and whys that will have to be answered in the coming days,” Oniel Díaz, manager of AUGE, a Cuban corporate services company, told the Associated Press.
Díaz said this could open up avenues for Cuban businesspeople who import everything from food to cars, and help them make payments to suppliers, for example. But he questioned whether banks would want to do operations with businesspeople on the island due to the perception of risks.
Díaz recalled that during the Obama administration there was a provision that allowed – albeit in a more limited way – Cubans to open accounts in the US, but banks did not show “great enthusiasm” for this.
Tuesday’s announcement comes a few weeks after the U.S. removed Cuba from the State Department’s short list of countries it considers uncooperative against violent groups. However, the US still lists Cuba as a state sponsor of terrorism – a description that often scares banks because they don’t want to become the target of lawsuits in US courts.
Ties between the US and Cuba were essentially frozen after the 1959 revolution, which saw Fidel Castro rise to power and install a communist government. There was a wave of nationalizations of large companies, although some small private companies were allowed to remain open until 1968.
The US implemented a large-scale economic embargo on Cuba in 1962 under President John F. Kennedy.
Only when former President Barack Obama was elected did relations begin to thaw somewhat, with some restrictions lifted in 2017. After Obama, then-President Donald Trump largely ended Obama’s bilateral cooperation. In the final days of the Trump administration, his administration redesignated Cuba as a “state sponsor of terrorism” and hit the country with new sanctions.
Cuba has also slowly opened its economy to more private companies.
In 2010, President Raúl Castro initiated reforms that expanded independent work to individuals but not companies. In 2021, Cuban authorities allowed the creation of the first small and medium-sized companies – called Pymes in Spanish.
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Rodriguez contributed from Havana, Cuba.
This story originally appeared on ABCNews.go.com read the full story
