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Trump administration announces new Cuba travel sanctions

Almost five months after President Trump announced he was ending President Obama's warming with Cuba, the White House announced its new regulations on Wednesday morning. But experts say enforcement will be tough. The changes also come in the midst of a return to frosty diplomatic relations between the two countries over alleged "sonic attacks" against U.S. diplomats.
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8 Nov 2017 – 09:45 AM EST
A cruise ship entering the port of Havana. Crédito: Adalberto Roque/Getty Images

After a two month delay, the White House on Wednesday announced details of new regulations to implement its policy towards Cuba, curtailing three years of closer relations between the two former Cold War foes.

Under the new rules, Americans will be banned from doing business with a "Restricted List" of 180 entities tied to the Cuban military, mostly tied to the tourism sector, including hotels, marinas, and several store chains, according to the new regulations published Wednesday.

It also includes two rum makers, Ron Caney and Ron Varadero, as well a local soda Tropicola. But there was no sanction on Cuba's top two rums, Havana Club and Santiago de Cuba.

The new policy imposes restrictions on Americans going to Cuba as tourists, and seeks to prevent U.S. dollars from falling into the hands of the Cuban military, which runs much of the island’s tourism sector, officials told reporters in a White House conference call.

"We have strengthened our Cuba policies to channel economic activity away from the Cuban military and to encourage the government to move toward greater political and economic freedom for the Cuban people," said Treasury Secretary Steven Mnuchin.

The new rules were met with anger from travel firms doing business with Cuba, as well as supporters of better relations with Cuba. Opponents of the Cuban government were also "disaapointed," the measures weren't tougher.

Others were simply left scratching their heads wondering how the "Restricted List" would be enforced.

"It meets the threshold of creating anxiety for the Cuban government, which is the overwhelming goal," said John Kavulich, with the US-Cuba Trade and Economic Council. "But the next stages of this will be how it's enforced," he added.

In June, President Donald Trump visited Miami to announce his new Cuba policy to great fanfare, offering harsh words about the island's communist leadership and the militarization of its government, as well as what he considered to be President Barack Obama's foolishly "one-sided" policy of closer engagement.

However, for all Trump's bluster, the new policy keeps in place almost all of Obama's legacy-making policy of normalization with Cuba, which began in December 2014.

That includes the restoration of diplomatic relations after 54 years, the removal of Cuba from a list of state sponsors of terrorism, as well as the resumption of regular airline operations and allowing cruise ships to sail to the once forbidden island.

'Mojitos' not affected

The new policy mostly targets Cuba's Ministry of Interior, which owns a wide range of companies, and the Armed Forces Business Enterprises Group, GAESA, a Cuban conglomerate involved in all sectors of the economy including tourism.

But, most of Havana's bars and restaurants belong to Cuba's Ministry of Tourism, which is not affected by the new rules. That means that fans of Ernest Hemingway's famous Havana watering holes will still be able to sip their mojitos in La Bodeguita and daiquiris in El Floridita.

The new rules, which take effect Thursday, won’t limit visits to the island by Cuban Americans. Nor does it affect air and sea travel, allowing U.S. airlines and cruise lines to continue operating services to the island.

As a result some hotels will now be off-limits to Americans, though others run by Cuba's Ministry of Tourism, will be permitted, potentially creating a major headache for visitors, and the Treasury Department.

The White House should create an app to help U.S. tourists stay away from 180 banned hotels and other entities on the 'Restricted List,' Kavulich suggested.

The so-called "Cuba Restricted List" will be kept updated by the State Department, and monitored by the Treasury Department's Office of Foreign Assets Control (OFAC), which handles U.S. sanctions.

Travelers to Cuba who violate the list could face penalities, including criminal prosecution in cases of "wilful violations," according to one senior U.S. official briefing reporters. They will also be required to keep detailed records of their itinerary as well as receipts.

U.S. companies will also be barred from investing in a new Mariel port development zone crucial to Cuba's economic plans to attract foreign investment.

A Cuba expert in Miami, Emilio Morales, said the new rules "will definitely cool the enthusiasm of many people to visit the island." While that would hurt the government it would also negatively impact Cuba's private sector as well, he said.

"It's not as simple as Trump seems to think. There is a double hurt," Morales said, noting that some U.S. travel agencies specializing in Cuba would likely be forced to close as well.

U.S. flights to Cuba have already been affected this year due to Hurricane Irma and a diplomatic row over alleged "sonic attacks" against U.S. diplomats that led to Washington issuing a travel warning for visitors to the island.

Even so, the number of flights was way up on a year ago.

One of the largest licensed tour operators issued a statement blasting the Trump administration for "hypocrisy."

“At a time that President Trump is meeting with communist leaders in China and Vietnam, these regulations show the absolute hypocrisy and political pandering of the Trump Administration on Cuba," said Cuba Educational Travel President Collin Laverty.

The new policy rules are widely considered as payback by Trump to Cuban Americans who supported his candidacy, notably Florida Senator Marco Rubio, and were announced on the anniversary of the Nov 8 vote.

However, Rubio and others had hoped Trump would take much stronger actions, and sever all diplomatic relations with Cuba.

"Today’s announced regulations include some positive first steps," Cuban-American congressman Mario Diaz-Balart (Rep-Mia) said in a statement. "I am disappointed, however, that the regulations do not fully implement what the President ordered. It is clear that individuals within the bureaucracy who support the former administration’s Cuba policy continue to undermine President Trump."

Frosty relations

Since Trump’s Miami speech in June outlining his new Cuba policy, relations between the two countries have plummeted to their lowest point in almost a decade.

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Last month the U.S. State Department expelled more than half of Cuba's diplomatic and embassy staff in Washington in response to alleged "sonic attacks" on diplomats in Cuba that have affected at least 22 Americans, in some cases with serious health effects on their hearing, balance and vision.

The Trump administration has also drastically cut its own embassy staff in Havana, suspending visa processing for Cubans. Both embassies are now left effectively running emergency services only.

Cuba’s foreign ministry initially protested the expulsion calling it "unfounded and unacceptable," denying it had not done enough to prevent "the alleged incidents." It has since described the so-called sonic attacks as “totally” false and “a political manipulation aimed at damaging bilateral relations.”

So far, none of the affected persons have come forward, fueling reports that they may have been U.S. spies.

The diplomatic cuts have brought the two countries closer to the chilly state of relations they endured for decades until 2015, when they restored formal ties and reopened embassies in Havana and Washington.

The U.S. also last month issued a travel warning to Americans to stay away from Cuba due to concerns that civilians in hotels may also have been affected by the sonic incidents.

Cuba relaxes immigration rules

Clearly concerned over the potential damage to its fast-growing tourism industry, late last month Cuba’s foreign minister announced minor changes to the island’s immigration policies, seeking to strengthen ties with the 800,000 Cubans living outside the country.

The changes removed one $25 immigration fee and allows children of Cubans residing outside the country and those born in foreign countries to obtain Cuban citizenship and identification documents.

But, many Cuban Americans say the Cuban government's measures do not go far enough and complain that its immigration rules still impose onerous costs on travel to the island, while discriminating against its own citizens in exile.

Experts question if Trump's new Cuba policy is enforceable, and could create a backlash against the island's private businesses.

While GAESA has a major stake in the tourism industry, it's hard to see how it can be effectively targeted by U.S. travel regulations. Cuba could simply opt to play a shell game and move some of the hotels or military-run tourist companies, such as Gaviota, out of the military orbit, giving them new civilian corporate identities.

Cuba could also simply place all non-American tourists in its military-run hotels and reserve the civilian ones for U.S. visitors.

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