US loosens payment rules for food sales to Cuba
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- 03 / 11 / 2010
The move is at least a temporary victory for US farmers whose trade with Cuba was complicated by payment rules issued by Treasury's Office of Foreign Asset Control (OFAC) during the administration of President George Bush.
The loosening was approved by Congress in December in a provision added to a spending bill funding federal agencies for the rest of the 2010 fiscal year.
The rule change can be found on OFAC's website at and is labeled a final rule, although the effective date is not given.
Farm sales were exempted in 2000 from the long-standing US embargo on Cuba so long as Havana pays in advance for the goods and the money is handled by a third-country bank.
The Bush administration interpreted payment of cash in advance to mean Cuban buyers had to pay for the US farm goods before they left port for Cuba.
OFAC's new regulations, which it said only covered the remainder of fiscal 2010, reinterprets payment of cash in advance to mean before title and control of the farm goods are transferred to the Cuban buyer.
That would allow Cuban buyers to pay for the goods just before they are unloaded in Cuba, lowering the financial cost of the transactions that are paid through third-country banks.
John Kavulich, a senior policy advisor at the US-Cuban Trade and Economic Council, said he doubted the rule change would lead to a bigincrease in US farm exports to Cuba.
The House of Representatives Agriculture Committee has scheduled a hearing on Thursday on farm trade with Cuba.
Committee Chairman Collin Peterson, a Republican from Minnesota, has offered legislation to further ease food sales by allowing direct payments between US and Cuban banks and lifting restrictions on travel to Cuba by US citizens.
Source: Reuters
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