Following the expiration of the 45-day Congressional pre-notification period, effective May 29, 2015, the State Department officially rescinded Cuba’s designation as a State Sponsor of Terrorism. The decision comes after President Obama’s April announcement of plans to remove Cuba from the list of nations that support terrorism, a decision that was based on the State Department’s certification that Cuba has not provided any support for international terrorism during the previous six months and Cuba’s provision of assurances that it will not support acts of international terrorism in the future. There was no attempt by Congress to stop this action.

Cuba has been on the U.S. terrorism list (which currently includes Iran, Sudan and Syria) for more than 30 years, following a determination by the United States that the Cuban government promoted destabilizing actions throughout the region and harbored fugitives accused of terrorist acts. Cuba’s inclusion on this list, along with the comprehensive U.S. economic embargo, has served to isolate Cuba from the global financial system for decades.

While the United States has had, and continues to have, significant concerns and disagreements with a wide range of Cuba’s policies and actions, these concerns and disagreements fall outside the criteria for designation as a State Sponsor of Terrorism. The State Department’s review included consultation with the intelligence community as well as unspecified “high-level” assurances from the Cuban government.

Ordinary trade and investment with Cuba will still be subject to restriction under the U.S. embargo, and complete normalization will take years. Indeed, the de-listing is likely to have the greatest impact on non-U.S. businesses and financial institutions. Lifting the embargo will require legislation, and there is no indication that Congress intends to confront the issue any time soon, with the highly polarized political environment now supercharged by the presidential ambitions of no fewer than three sitting Republican senators. The decision to de-list Cuba also comes amid signs of difficulty in negotiations between American and Cuban officials as officials last week failed to reach an accord on re-establishing diplomatic relations and opening embassies in both countries’ capitals.

Our clients in the banking, telecommunications, infrastructure, consumer products, life sciences and resorts and leisure industries remain highly focused on the regulatory and legislative changes taking place in response to the U.S. shift in policy toward Cuba, but U.S.-owned companies continue to be subject to comprehensive restrictions. We will continue to monitor these developments, and continue to caution that, until Congress acts to rescind the embargo, the U.S. opening will consist of small and incremental steps, and any decision to expand economic ties with Cuba will require careful evaluation of the legal risks involved.