While a new rule that took effect last Wednesday now allows U.S. banks to provide direct financing for exporting products to Cuba – the Obama administration’s latest action in normalizing relations with the island nation – agricultural commodities still must be paid by cash-in-advance or through third-country financing.
The export financing changes allow U.S. companies to sell goods directly to Cuban state-run enterprises.
Under the revised rule, the U.S. Commerce Department’s Bureau of Industry and Security can approve license applications for exports and re-exports of commodities and software to Cuban human rights or non-governmental organizations or to individuals “that promote independent activity intended to strengthen civil society in Cuba.”
The bureau also can approve license applications for certain agricultural items such as commodities not eligible for a license exception, insecticides, pesticides and herbicides. Applications for exports and re-exports of items for use by state-owned enterprises, agencies or other organizations of the Cuban government that primarily generate revenue for the state generally will be denied.
Most agricultural commodity exports to Cuba are covered under a general license, but the Commerce Department will look at any proposed sale that would contribute to the Cuban government, such as sugar.
Other parts of the rule ease travel restrictions to Cuba.