The U.S. Department of State rescinded Cuba’s designation as a State Sponsor of Terrorism today. While the rescission of Cuba’s designation eliminates a major hurdle in restoring diplomatic ties with Cuba, the U.S. trade embargo against Cuba remains in effect, including its restrictions on investment, trade, and travel with Cuba. Congress has the sole authority to lift the trade embargo.
Rescission of Cuba’s designation as a State Sponsor of Terrorism, however, will affect companies and individuals the following ways:
- Permit the U.S. Commerce Department to authorize certain exports to Cuba, consistent with current U.S. law and policy, without notifying Congress;
- Ease disclosure requirements for publicly traded companies regarding their activities with Cuba to the U.S. Securities and Exchange Commission;
- Grant relief from state laws affecting companies who do business with Cuba; and
- Give Cuba additional access to foreign aid.
The United States and Cuba have not yet come to an agreement on re-establishing diplomatic ties and re-opening the U.S. Embassy in Cuba. The rescission of Cuba’s designation comes after a 45-day congressional pre-notification period, which ended without issue. Cuba was designated as a State Sponsor of Terrorism in 1982. Bernadette Meehan, Spokesperson for the National Security Council writes, “Our new direction [in engaging with Cuba] provides new opportunities for Americans to travel to Cuba, and for U.S. businesses, which for too long have been unable to compete in Cuba or to bring U.S. products and services to improve the lives and living standards of the Cuban population.”
Companies and individuals interested in transactions with Cuba or traveling to Cuba should consult with counsel prior to engaging in these activities.