Shipping restrictions were one target of the Cuba amendments announced on October 14, 2016. Treasury described a conditional waiver of a rule barring foreign vessels from U.S. ports for freight loading or unloading for 180 days after trading at a Cuban port. The waiver concerned what a vessel had carried, not simply its operator’s interest in serving both markets. [cuba-facts]

Eligibility depended on whether the goods carried to Cuba would, if subject to U.S. Export Administration Regulations, fall in the EAR99 category or be controlled only for anti-terrorism reasons. Commerce also announced general authorization for air cargo to transit Cuba, complementing an existing vessel-cargo transit authorization. The departments’ fact sheet gave October 17 as the amendments’ effective date. It did not report a resulting decline in freight rates. [cuba-facts]

The market opportunity had a demand-side limit as well. In his October 14 normalization directive, President Obama said Cuba lacked adequate foreign exchange to purchase the U.S. exports that easing could permit. The directive also identified Cuban regulation and opaque procurement as obstacles to otherwise lawful transactions. Easier routing would not, by itself, settle whether customers could pay or purchases could clear those barriers. [cuba-policy]

The analytical distinction is between another transport option and a larger realized market. The same administration promoted expanded trade while describing constraints on its uptake; these were complementary policy documents, not separate market surveys. Neither established new shipping volumes, lower prices or stronger competition from the announced changes. The embargo remained, and the commercial case still depended on more than the removal of one logistics restriction. [cuba-facts][cuba-policy]

Source documents

  1. TREASURY AND COMMERCE ANNOUNCE FURTHER AMENDMENTS TO CUBA SANCTIONS REGULATIONShttps://ofac.treasury.gov/system/files/126/cuba_fact_sheet_10142016.pdf
  2. Presidential Policy Directive -- United States-Cuba Normalizationhttps://obamawhitehouse.archives.gov/the-press-office/2016/10/14/presidential-policy-directive-united-states-cuba-normalization