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Continued from …US-Cuba Commercial Thaw Progresses

While the visit to Cuba of the first sitting US President since Calvin Coolidge (1923-1929) and the Rolling Stones free open-air concert were the undoubted highlights of President Obama’s visit to Cuba (March 21-22, 2016), to get a picture of how the US-Cuba commercial thaw progresses we need to look at who accompanied President Obama on his trip to Cuba.

In addition to the three Cabinet Secretaries in his delegation, President Obama was also accompanied by:

US Company Executives, including:

Saul Berenthal, Partner with CleBer which manufactures small tractors for family farmers and in February received US approval to begin manufacturing in Cuba. The company still needs approval from the Cuban government.

Brian Chesky, President and Founder of Airbnb, has been one of the first companies to take advantage of the loosened travel restrictions to Cuba. As of March, 2016, the company already had 4,000 listings in Cuba.

Arne Sorenson, President & CEO of Marriott and Ken Siegel, General Counsel of Starwood plan on being the first US company (the two companies are in merger talks) to open hotels in Cuba as the thaw progresses. In March (2016), Starwood signed an agreement allowing it to open three hotels.

In general, travel to Cuba is going to be big business. With the new rule announced in March that allows individual travel, Airbnb and Marriott/Starwood are betting that visitors will exceed Cuba’s limited hotel space. The other travel company that has gotten in on the action is Carnival Cruise Lines. The company has already received permission from the Cuban government and initiates service to Cuba on May 1, 2016.

Daniel Schulman, CEO of PayPal, which operates Xoom -, a global money transfer service that the company expects to be available in Cuba by the end of 2016 – US residents send $2 billion to Cuba annually.

Other executives on the trip were from sectors that are still prohibited from operating in Cuba. U.S. companies can establish a physical presence only to conduct certain allowed business activities:

  • Jose Andres, Chef/Entrepreneur with Think Food Group which has opened restaurants across the US
  • Julie Hanna, CEO of Kiva, which disburses loans averaging US$500 to US and international businesses
  • Daymond John, CEO of Fubu, a clothing brand, and a Presidential Ambassador for Global Entrepreneurship
  • Sheel Tyle, New Enterprise Associates, an angel investor in consumer technology and emerging markets
  • Ursula Burns, CEO of Xerox

Bi-Partisan Congressional Delegation

A confusing array of do’s and don’ts persists even as the US-Cuba commercial thaw progresses. This confusion exists because President Obama is chipping away at the edges of the primary restriction to doing business in Cuba – the law establishing and enforcing the US embargo against Cuba. So, it is important that President Obama was accompanied by a bi-partisan delegation of 40 Members of Congress.

Removing the embargo requires legislation from the U.S. Congress. Bills to this effect have been introduced, including by two Congressional members from Minnesota who also traveled to Cuba with the President. Opposition to lifting the embargo rests primarily with Republicans in Congress. This is why it was important that the delegation included the following four (4) Republican congressmen who support lifting the embargo:

The most optimistic timeline among these Republicans still leaves the embargo in place for at least another year. The embargo also remains an obstacle to efforts by US authorities to have the Cuban authorities lift their restrictions on doing business in Cuba.

While persons interested in doing business in Cuba should be encouraged as the US-Cuba commercial thaw progresses, they should proceed cautiously and with legal advice. Contact us to learn more about doing business in Cuba.

Andrea

Andrea