The U.S. Treasury Department recently announced a series of regulatory changes aimed at supporting Cuba’s private sector entrepreneurs.
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0:00 0:03:48 0:00 Direct linkThe U.S. Treasury Department recently announced a series of regulatory changes aimed at supporting Cuba’s private sector entrepreneurs.
The measures include expanding access to U.S.- based internet services -- among them, payment sites and social media platforms -- and to U.S. financial services. For the first time in decades, Cuban entrepreneurs will be able to open and access U.S. bank accounts. U.S. banks will also be allowed once again to process what are called “U-Turn” fund transfers. Those are transfers that originate and terminate outside the United States, where neither the originator nor beneficiary is subject to U.S. jurisdiction. Processing U-Turn fund transfers will facilitate remittances and payments in the Cuban private sector.
The Biden Administration is taking these steps at a time when the Cuban economy is in dire straits. There are recurring shortages of fuel, electricity, and food. “It’s clear,” said a State Department official, “the communist experiment in Cuba has failed and the government is no longer able to provide for its citizens’ most basic needs.” Consequently, the Cuban government has grudgingly opened space to a nascent private sector. Self-employed proprietorships have been legal for some years, and in 2021 the Cuban government also legalized the creation of small and medium-sized enterprises. Today there are some 11,000 such businesses in Cuba.
“The private sector,” said the State Department official, “serves as a life preserver for the Cuban people without which they could not stay afloat. We believe the organic expansion of the private sector and evolution of the digital economy on the island – led by the Cuban people themselves and not by any foreign government - is critical.”
The United States is determined to help the Cuban people while limiting benefits to the Cuban government. For that reason, the U.S. regulatory changes make clear that expanded access to U.S. internet and financial services for Cuba’s independent private sector entrepreneurs excludes officials of the Cuban government, such as the national assembly members, Cuban military officers, regime propagandists, and prohibited members of the Cuban Communist party. In other words, no government insiders.
“We are focused,” said the State Department official, “on taking measures that inject a real sense of hope among the Cuban people and stem the tide of worsening humanitarian and migration conditions – all while remaining steadfast and promoting accountability for the Cuban Government’s continued abuses.”
