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HavanaJournal.com: Cuba Business

Senators propose bill to ease restrictions on doing business with Cuba

Posted February 08, 2005 by publisher in Cuba Business.
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BY VANESSA BAUZA AND RAFAEL LORENTE | South Florida Sun-Sentinel

A bipartisan group of U.S. senators wants to keep the Bush administration from making sales of food to Cuba more difficult.

Democratic Sen. Max Baucus of Montana and Republican senators Larry Craig of Idaho, Pat Roberts of Kansas and Richard Lugar of Indiana are to introduce legislation Wednesday that would ease restrictions on doing business with Cuba. In part, the legislation is a response to efforts by the Bush administration to change the way Cuba pays American farmers for food.

The administration has been considering forcing Cuba to pay cash in advance of shipment for any food the island purchases from U.S. companies. Such a move, critics say, would jeopardize millions of dollars a year in food sales. In the first 11 months of last year, Cuba purchased $362.7 million in agricultural products from the United States, according to the U.S.-Cuba Trade and Economic Council, which monitors trade between the two countries.

Until late last year, the practice had been for Cuba to pay for agricultural shipments in transit or after they arrived at a Cuban port, but before formal title for the goods exchanged hands. But some opponents of commerce with Cuba argue that the 2000 law allowing food sales called for cash in advance, and not credit, which some administration officials interpret as payment before the goods leave the United States.

The legislation being introduced Wednesday would define cash in advance as payment upon transfer of title - the accepted practice until late last year.

The Treasury Department’s Office of Foreign Assets Control, which enforces trade and travel restrictions with Cuba, held up several sales in November as it looked at the rules. As an interim fix, OFAC then began issuing individual licenses for each transaction.

New regulations are expected soon, said Treasury Department spokeswoman Molly Millerwise on Tuesday.

The proposed legislation also is expected to allow direct transactions between Cuban and U.S. banks, something that has been illegal for decades. Currently U.S. food exporters must wait about 72 hours to be paid through a third country bank. The legislation would allow them to be paid through an American bank in a matter of hours.

But in order to prevent money laundering, the law would require Cuban banks to provide banking records and other information on sources of revenue, said John Kavulich, president of the U.S.-Cuba Trade and Economic Council.

“Cuban banks would be forced to provide a substantial amount of information that normally the Cuban government desperately tries to keep secret,” Kavulich said.

The legislation also would make it easier for U.S.-company representatives to get a license to fly to Havana, a process that has slowed considerably in recent years, Kavulich said.

“Two years ago it was possible to obtain a travel license for a business representative to visit Cuba in 24 hours, today it take one to three months,” he said.

The legislation will once again pit farm state Republicans eager to do business with Cuba against the Bush White House, which has tried to stall commercial sales.

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