Yesterday, the Obama administration announced a series of changes to U.S.-Cuba policy and directed the Secretaries of State, Treasury, and Commerce to make the necessary regulatory updates. The announcement should be of particular interest to the financial services and telecommunication industries, among others.

Announced during the White House Daily Press Briefing by National Security Council personnel, the new approach to Cuba involves minor changes to the overall approach toward Cuba. The comprehensive-sanctions regime remains in full force. Furthermore, until formal regulatory guidance has been issued by the relevant agencies, clients are cautioned that the current restrictions related to travel, remittances, and the sale of telecommunication services remain in full force.

The targeted policy-shifts involve easing travel restrictions by Americans or Cuban nationals wishing to visit relatives in Cuba; easing restrictions on remittances; and increasing the flow of information and humanitarian resources to the island by, among other things, adding certain humanitarian items to the list of items eligible for export through licensing exceptions.

The one area where it appears there will be a possible opening of new economic relations with Cuba involves telecommunications. According to administration officials, the new approach will authorize U.S. telecommunications network providers to enter into agreements to establish fiber-optic cable and satellite telecommunications facilities linking the United States and Cuba; such agreements will include:

Easing Restrictions on Remittances to Cuba

The Obama administration plans to remove restrictions on remittances to a person's family member in Cuba to increase Cubans' access to resources by:

  • Authorizing remittances to individuals within three degrees of family relationship (e.g., second cousins), provided that no remittances shall be authorized to currently prohibited members of the government of Cuba, or currently prohibited members of the Cuban Communist Party
  • Removing limits on frequency of remittances
  • Removing limits on the amount of remittances
  • Authorizing travelers to carry up to $3,000 in remittances
  • Establishing general license for banks and other depository institutions to forward remittances

Authorizing Greater Telecommunications Services

According to White House officials, the changes will also authorize greater telecommunications links with Cuba to advance "people-to-people" interaction. At this juncture, it is not clear if the Cuban government will allow for these increased services. Previous efforts to increase telecommunications between the United States and Cuba have been rejected by Cuban officials. That said, the proposed measures by White House officials would:

  • Authorize U.S. telecommunications network providers to enter into agreements to establish fiber-optic cable and satellite telecommunications facilities linking the United States and Cuba
  • License U.S. telecommunications service providers to enter into and operate under roaming service agreements with Cuba's telecommunications service providers
  • License U.S. satellite radio and satellite television service providers to engage in transactions necessary to provide services to customers in Cuba
  • License persons subject to U.S. jurisdiction to activate and pay U.S. and third-country service providers for telecommunications, satellite radio, and satellite television services provided to individuals in Cuba, except certain senior Communist Party and Cuban government officials
  • Authorize—consistent with national security concerns—the export or re-export to Cuba of donated personal communications devices, such as mobile phone systems, computers and software, and satellite receivers, through a license exception