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The United States-Cuba Trade Act Of 2021

| Publications | Cuban Desk

The bill aims to reestablish normal trade relations between Cuba and the U.S.

On Friday 5th February, Senate Finance Committee Chairman Ron Wyden, a Democrat, introduced a bill to repeal the Helms-Burton Act, the Cuban Democracy Act and other legal provisions affecting trade, investment and travel with Cuba. The bill is the United States-Cuba Trade Act of 2021 ("the United States-Cuba Trade Act of 2021").

The bill aims to restore normal trade relations with Cuba and instruct the US president to take all necessary steps to advance negotiations to resolve claims by US citizens against Cuba for the taking of property.

The following are just some of the rules to be repealed by the bill that has to go through the parliamentary process. Most analysts agree that the Biden administration will take gradual and conditional action on Cuba, and that it is unlikely to move quickly given the US Senate's heavy agenda in the coming months.

SUMMARY OF THE BILL

SECT. REMOVAL OF PROVISIONS RESTRICTING TRADE AND OTHER RELATIONS WITH CUBA

  1. AUTHORITY FOR THE EMBARGO AND SUGAR QUOTA

Section 620A. of the Foreign Assistance Act of 1961 ("Foreign Assistance Act of 1961") entitled "Prohibition of Assistance to Governments Supporting International Terrorism" is repealed. The purpose of the Act is "to promote the foreign policy, security, and general welfare of the United States by assisting the peoples of the world in their efforts toward economic development and internal and external security".

Section 620A provides that the United States shall not provide any assistance under this Act, the Food for Peace Act, the Peace Corps Act, or the Export-Import Bank Act of 1945 to any country if the Secretary of State determines that the government of that country has repeatedly provided support for acts of international terrorism.

It also provides for the consequential amendment of Section 1610(f)(1)(A) of Title 28 of the United States Code, entitled "Exceptions to immunity from seizure or execution".

  1. TRADING WITH THE ENEMY ACT  1917

The authority to exercise, with respect to Cuba, the powers conferred on the President under section 5(b) of the Trading With the Enemy Act, which were being applied with respect to Cuba since 1st July 1977, as a result of a national emergency declared by the President prior to that date, is revoked.

By virtue of these powers, in times of war the president could (i) investigate, regulate or prohibit transactions in foreign exchange, credit transfers or payments through any banking institution, and the import or export of gold or silver bullion, currency or securities; and (ii) investigate, regulate or prohibit transactions involving any property or interests of a particular foreign country or person originating therein,

Similarly, any regulations for the time being in force which have their origin in the exercise of the foregoing powers conferred by the Foreign Assistance Act 1961 are hereby repealed.

(c) EXERCISE OF POWERS UNDER OTHER LEGAL PROVISIONS

Any prohibition on exports to Cuba in effect under the Export Administration Act of 1979 ("Export Administration Act of 1979") and the Export Control Reform Act of 2018 ("Export Control Reform Act of 2018") is repealed.

However, the bill gives the president the following new powers:

  1.  to impose export controls with respect to Cuba under the Export Control Reform Act of 2018; and
  2. exercise, with respect to Cuba, the powers under the International Emergency Economic Powers Act in the event of a declaration of a national emergency due to an unusual and extraordinary threat to the national security, foreign policy, or economy of the United States that did not exist prior to the date of enactment of the US-Cuba Trade Act of 2021.

(d) REPEAL OF THE 1992 CUBAN DEMOCRACY LAW

The Cuban Democracy Act of 1992, also known as the Torricelli Act, whose main objective was to toughen economic measures against Cuba, establishing the regulatory basis for the extraterritorial scope of the embargo, was repealed. To this end, several restrictions were implemented, such as the prohibition for foreign subsidiaries of US companies to trade with Cuba or with Cuban nationals, as well as the prohibition of entry into US territory for a period of 180 days for any foreign ship that had previously disembarked in a Cuban port.

e) REPEAL OF CUBA'S 1996 LAW OF FREEDOM AND DEMOCRATIC SOLIDARITY

The Cuban Liberty and Democratic Solidarity Act (LIBERTAD) of 1996, also known as the Helms-Burton Act, is repealed. This law recognises the right to sue in US territory companies and individuals who are using an asset confiscated by the Cuban State (Title III), whose owner has not received compensation, and authorises the US State Department to restrict the entry into the United States of persons related to unresolved claims (Title IV).

Accordingly, references to that law contained in: (i) the Homeland Security Act of 2002 ("Homeland Security Act of 2002") (Section 428(c)(2)(K); (ii) the llegal Immigration Reform and Immigrant Responsibility Act of 1996 (Section 606, on the conditional repeal of the Cuban Adjustment Act, until the President determines that Cuba is governed by a democratically elected political party, in accordance with the provisions of the Helms-Burton Act); (iii) the United States Code (Section 1611(c) of Title 28); and (iv) the International Claims Settlement Act of 1949 (Sections 514 and 515).

f) REPEAL OF THE PROVISIONS IMPOSING CERTAIN RESTRICTIONS ON AID TO THE FORMER SOVIET COUNTRIES

The bill seeks to amend Section 498A of the Foreign Assistance Act of 1961, which regulates the criteria that states must meet in order to receive US aid.

This law authorises the President of the United States to establish and maintain a total embargo on trade with Cuba and prohibits the granting of any aid to the Cuban government. It also establishes that US government funds destined for international aid and given to international organisations cannot be used for programmes related to Cuba.

This Act also prohibits the granting of any aid or benefits to Cuba until the President determines that the country has taken steps to return to US citizens and companies not less than 50% of the value or just compensation of the properties nationalised by the Cuban government after the triumph of the Revolution.

Among others, it removes the condition that the state in question is acting to end support for Cuba's communist regime, which includes the withdrawal of troops, the closure of military and intelligence facilities, including the military and intelligence facilities at Lourdes and Cienfuegos, and the cessation of commercial subsidies and ecological, nuclear or other assistance.

g) TRADE SANCTIONS REFORM AND EXPORT ENHANCEMENT ACT OF 2000

The Trade Sanctions Reform and Export Enhancement Act of 2000 are amended. This Act authorised the export of agricultural products and medical devices to Cuba, subject to cash payment, in advance and without US financing. It also prohibits Americans from travelling to Cuba for tourism purposes.

In particular, the following points are modified:

(i) Express reference to Cuba as a state sponsor of terrorism is eliminated.

(ii) The prohibition on importing goods that: (1) is of Cuban origin; (2) has been transported from or through Cuba; or (3) is made or derived in whole or in part from any product produced in Cuba.

(iii) The requirement to obtain authorisation to travel to or from Cuba for the sale of agricultural products is eliminated.

(iv) The prohibition on travel to Cuba as a tourist is eliminated.

(h) DEROGATION FROM THE PROHIBITION ON MAKING TRANSACTIONS OR PAYMENTS WITH RESPECT TO CERTAIN UNITED STATES INTELLECTUAL PROPERTY

Section 211 of the Department of Commerce and Related Agencies Appropriations Act of 1999, which prohibits the registration in the United States of trademarks relating to nationalised property and denies recognition by US courts of any rights to such trademarks in favour of Cuban companies, is repealed.

(i) SUGAR QUOTA BAN UNDER THE FOOD SAFETY ACT 1985

Section 902(c) of the Food Security Act of 1985 ("Food Security Act of 1985"), on the prevention of loan seizures in the sugar sector, which prohibits the importation of sugar of Cuban origin, is repealed.

SECT. 3. TELECOMMUNICATION EQUIPMENT AND INFRASTRUCTURE

Common carriers are authorised to install, upgrade, maintain and repair telecommunications equipment and infrastructure in Cuba, and to provide telecommunications services between the United States and Cuba.

SECT. 4. TRAVEL

It is determined that travel to and from Cuba by US citizens or residents, as well as any transactions ordinarily incidental to such travel, including, specifically, lodging and subsistence, normal banking transactions involving foreign currency drafts, travellers' cheques or other negotiable instruments, may not be restricted or prohibited.

SECT. 5. NEGOTIATIONS WITH CUBA

The US President should take all necessary steps to advance negotiations with the Government of Cuba for the purpose of: (i) resolving claims by US entities or individuals against the Government of Cuba for the confiscation of property; and (ii) ensuring the protection of internationally recognised human rights.

SECT. 6. EXTENSION OF NON-DISCRIMINATORY TRADE TREATMENT

Congress believes that the United States should promote democratic change and economic reform by normalising trade relations with Cuba; and upon enactment of the U.S.-Cuba Trade Act of 2021, it will no longer be necessary for the U.S. to continue to use Article XXI of GATT 1994 - the "General Agreement on Tariffs and Trade" - with respect to Cuba, with the understanding that the President retains full authority to invoke Article XXI of GATT 1994 - the "General Agreement on Tariffs and Trade". continue to use Article XXI of GATT 1994 - the "General Agreement on Tariffs and Trade" - with respect to Cuba, with the understanding that the President retains full authority to invoke Article XXI of GATT 1994 and comparable provisions of other Uruguay Round Agreements in the future in all appropriate circumstances. Article XXI of the GATT authorises WTO Members to take measures or to act in a manner that would be inconsistent with their obligations under the Agreement, but only when the measures or actions taken are intended to protect their essential security interests.

(b) EXTENSION OF NON-DISCRIMINATORY TREATMENT TO PRODUCTS FROM CUBA

Non-discriminatory treatment is extended to products of Cuban origin by: (i) amending the U.S. Harmonized Tariff Schedule; (ii) amending the Tariff Classification Act of 1962; and (iii) terminating the application of Title IV of the Trade Act of 1974 to Cuba. These amendments shall apply with respect to goods entered, or withdrawn from warehouse for consumption, on or after the 15th day after the date of enactment of the Act.

(c) REPORT TO CONGRESS

The president shall submit to Congress, no later than 18 months after the date of enactment of the US-Cuba Trade Act of 2021, a report on US-Cuba trade relations.

SECT. 7. BAN ON LIMITING ANNUAL REMITTANCES

The Secretary of the Treasury may not limit remittances to Cuba by any person subject to U.S. jurisdiction, and shall repeal any existing regulations that limit such remittances.

SECT. 8. REQUIREMENT TO REPORT TO CONGRESS PRIOR TO DENIAL OF FOREIGN TAX CREDIT WITH RESPECT TO CERTAIN FOREIGN COUNTRIES

Introduces a requirement that the President report to Congress that a determination has been made that section 901(j) of the Internal Revenue Code of 1986, concerning the denial of foreign tax credit with respect to certain foreign countries, applies to a country. This amendment will apply to any ruling made after the date of enactment of the U.S.-Cuba Trade Act of 2021.

SECT. 9. EFFECTIVE DATE

Except as provided in sections 6 and 8, the U.S.-Cuba Trade Act of 2021 and the amendments made by it shall take effect 60 days after the date of enactment of the Act.

You can download the full PDF file here.

For further information please contact:
Ignacio Aparicio
 

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