LEGAL
The new regulations allow American
firms to export to Cuba construction
materials, equipment, and tools – although
these may only be exported for use
by the private sector to construct or
renovate privately-owned buildings.
Easing of the Cuba Embargo
Impact, opportunities and challenges
By C. Ryan Maloney and W. Bradley Russell, Foley & Lardner LLP
The press is full of articles about the opening of Cuba following
President Obama’s historic speech on the matter
late last year. An informed person might reasonably think
Cuba is open for business, but that is far from accurate. In fact,
the Cuba embargo remains in effect today. The president’s changes
to the embargo regime create real, but limited, opportunities for
American construction firms to do business in Cuba, and these
opportunities are fraught with legal challenges and risk.
Since 1963, Americans have been generally prohibited from
doing business with Cuba. However, on Dec. 17, 2014, President
Obama announced he was taking steps to increase travel and commerce
between the United States and Cuba. President Obama
directed Secretary of State John Kerry to seek to re-establish diplomatic
relations with Cuba and to review Cuba’s designation as
a state sponsor of terrorism. President Obama also directed the
Treasury and Commerce Departments to revise their regulations to
allow limited trade with Cuba.
The new regulations came out on Jan. 16, 2015, and they provide
three types of opportunities for American construction firms.
First, they allow American contractors to support the official business
of the U.S. government or of any intergovernmental organization of
which the United States is a member. The re-establishment of diplomatic
relations will likely mean the construction of a new embassy,
and American construction firms should be able to compete for the
contract to build it. Moreover, American construction firms should
also now be able to compete for work on United Nations facilities
and the facilities of other qualified intergovernmental organizations.
Second, the new regulations allow American firms to work on
projects to benefit the Cuban people. American construction firms
may build “construction projects intended to benefit legitimately
independent civil society groups.”1 They may also build “environmental
projects,” certain educational projects, “community-based
grassroots projects,” “projects suitable to the development of smallscale
private enterprise,” “projects that are related to agricultural
and rural development that promote independent activity,” certain
micro-financing projects, and “projects to meet basic human needs.”2
And third, the new regulations allow American firms to export
to Cuba construction materials, equipment, and tools – although
these may only be exported “for use by the private sector to construct
or renovate privately-owned buildings.”3 American firms may
also export certain items for agricultural and entrepreneurial activity
in the private sector.
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