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OFAC Rolls Back Financial Sanctions to Ease Trade with Cuba
By Colby Adams
printThe U.S. Treasury Department's sanctions enforcer issued regulations Thursday permitting American banks to transact directly with their Cuban counterparts for the first time in decades. Under a general license that takes effect this week, U.S. banks can open correspondent accounts with Cuban institutions to process payments for authorized exports. In a complementary move, the U.S. Commerce Department expanded its list of permitted trade to include supplies for telecom and Internet services, certain construction projects and agricultural equipment, among other products. The measures also permit U.S. financial institutions to "enroll merchants" and process debit and credit payments for travel to Cuba...
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To see how carefully the White House must craft its rollback of sanctions targeting the Castro regime, consider this week's amendments to the 56-year-old Cuba embargo.
U.S. Treasury Department officials on Tuesday lifted banking and export restrictions against Cuba they say have stymied yearlong efforts to normalize economic and diplomatic ties with the island-nation.
The Obama administration on Friday further eased U.S. economic and trade sanctions against Cuba, ending certain prohibitions on banking relationships and limits on wire transfers to the nation.
American depository institutions' hesitancy to establish links with banks in Cuba is likely to impede newly authorized trade with the country, according to U.S. officials.
The White House announced Tuesday plans to excise Cuba from a list of countries that support terrorism, a step that would remove one of the largest hurdles to U.S. financial ties to the nation.
The partial lifting of U.S. sanctions against Cuba is raising new questions for American banks that have issued credit cards to clients traveling to the island-nation, according to compliance experts.
Thursday's partial easing of U.S. sanctions against Cuba will do much to bring money to the island nation, but even a full rollback of economic restrictions won't soon resolve the biggest barriers to entry for American banks: low profit margins and high regulatory risk.
President Obama announced plans Wednesday to significantly ease commercial and economic sanctions targeting Cuba, dismantling key elements of the 54-year U.S. embargo against the Caribbean nation.
Some South Florida-based travel agencies are at risk of incurring state and federal penalties despite having received approval to send money to Cuba from one U.S. Treasury Department agency.
New U.S. Treasury Department regulations easing economic sanctions against Cuba and the compliance burden of financial institutions could make it easier for money remitters to break the rules, say analysts.
The U.S. Treasury Department officially loosened restrictions on money sent to Cuba Thursday, lifting caps on dollar amounts remitted and expanding the number of individuals who can receive the funds.
The U.S. Treasury Department will likely move quickly in drafting regulations that loosen most restrictions on money remitted from the United States to Cuba, say banking professionals.
The Obama administration said Monday that it would lift restrictions on how much money Cuban Americans can send to Cuba, easing financial constraints first established in the 1960s.
The U.S. Senate passed a bill Tuesday that would allow businesses to travel to Cuba for the sale of agricultural and medical products, the first rollback of economic sanctions against the country in over eight years.
U.S. and European banks are dropping their direct and correspondent relationships "and any other ties" with Cuba in an effort to protect themselves from any possible fines or actions they anticipate could be levied by U.S. regulators.