Cuba: Issues and Actions in the 114th Congress

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Cuba: Issues and Actions in the 114th Congress

Summary

Cuba remains a one-party communist state with a poor record on human rights. The country’s

political succession in 2006 from the long-ruling Fidel Castro to his brother Raúl was

characterized by a remarkable degree of stability. In 2013, Raúl began his second and final fiveyear term, which is scheduled to end in February 2018, when he would be 86 years of age. Castro

has implemented a number of market-oriented economic policy changes over the past several

years. An April 2016 Cuban Communist Party congress endorsed the current gradual pace of

Cuban economic reform. Few observers expect the government to ease its tight control over the

political system. While the government has released most long-term political prisoners, shortterm detentions and harassment have increased significantly over the past several years.

U.S. Policy

Congress has played an active role in shaping policy toward Cuba, including the enactment of

legislation strengthening and at times easing various U.S. economic sanctions. U.S. policy over

the years has consisted largely of isolating Cuba through economic sanctions, while a second

policy component has consisted of support measures for the Cuban people, including U.S.

government-sponsored broadcasting and support for human rights and democracy projects.

In December 2014, President Obama announced a major shift in U.S. policy toward Cuba,

moving away from a sanctions-based policy toward one of engagement and a normalization of

relations. The President maintained that the United States would continue to raise concerns about

democracy and human rights in Cuba, but he emphasized that the United States could do more

through engagement than isolation. The policy change included the restoration of diplomatic

relations (July 2015); the rescission of Cuba’s designation as a state sponsor of international

terrorism (May 2015); and an increase in travel, commerce, and the flow of information to Cuba.

In order to implement this third step, the Treasury and Commerce Departments eased the

embargo regulations five times (most recently in October 2016) in such areas as travel,

remittances, trade, telecommunications, and financial services. The overall embargo, however,

remains in place, and can only be lifted with congressional action or if certain conditions in Cuba

are met, including that a democratically elected government is in place. With the goal of

advancing the normalization process, President Obama visited Cuba in March 2016, the first visit

of a U.S. President to Cuba in almost 90 years. On January 12, 2017, President Obama announced

a change in U.S. immigration policy by ending the special treatment for undocumented Cuban

migrants entering the United States.

Legislative Activity

The Obama Administration’s shift in Cuba policy has spurred strong interest in Congress. Some

Members lauded the initiative as in the best interest of the United States and a better way to

support change in Cuba, while others criticized the President for not obtaining more concessions

from Cuba to advance human rights and protect U.S. interests. In the 114th Congress, numerous

legislative initiatives were introduced on both sides of the policy debate.

In 2015, five FY2016 House appropriations bills had Cuba provisions that would have blocked

some of the Administration’s policy changes and introduced new economic sanctions, and one

Senate appropriations bill had provisions that would have eased certain economic sanctions.

Ultimately, none of these provisions were included in the FY2016 omnibus appropriations

measure, P.L. 114-113.

In 2016, three FY2017 House appropriations measures (Commerce, H.R. 5393; Financial

Services, H.R. 5485; and Homeland Security, H.R. 5634) had provisions that would have blocked

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Cuba: Issues and Actions in the 114th Congress

some of the Cuba policy changes, and one FY2017 Senate appropriations measure (Financial

Services, S. 3067) had provisions lifting restrictions on travel and financing for agricultural

exports. In addition, the Senate version of the FY2017 State Department and Foreign Operations

appropriations bill, S. 3117, would have funded U.S. diplomatic facilities in Cuba and additional

personnel costs and would have fully funded the $15 million request for democracy programs. In

contrast, the House version of the bill, H.R. 5912, would have prohibited assistance for expanding

the U.S. diplomatic presence in Cuba and provided $30 million for democracy programs. The

114th Congress did not complete action on FY2017 appropriations, but it did approve a continuing

resolution (P.L. 114-254) in December 2016 funding most programs at the FY2016 level, minus

an across-the-board reduction of almost 0.2% through April 28, 2017. The 115th Congress will

face completing action on FY2017 appropriations.

With regard to the U.S. Naval Station at Guantánamo Bay, both the FY2016 and the FY2017

military construction appropriations measures, P.L. 114-113 and P.L. 114-223, have provisions

prohibiting funding for the station’s closure. Both the FY2016 National Defense Authorization

Act (NDAA), P.L. 114-92, and the FY2017 NDAA, P.L. 114-328, also have prohibitions on

funding for the closure of the U.S. Naval Station at Guantanamo Bay, Cuba. P.L. 114-328 also

restricts FY2017 funding for Cuba’s participation in certain joint or multilateral exercises or

related security conferences. (See Appendix A.)

Several other bills introduced in the 114th Congress would have lifted or eased sanctions: H.R.

274, H.R. 403, and H.R. 735 (overall embargo); H.R. 634, H.R. 664, and S. 299 (travel); H.R.

635 (agricultural and medical exports and travel); S. 491 and S. 1543/H.R. 3238 (some embargo

restrictions); S. 1049 (financing of agricultural sales); S. 1389/H.R. 3055 (telecommunications);

H.R. 3306 (energy resources and technologies); H.R. 3687 (agricultural exports and investment);

and S. 2990 (foreign carriers traveling to or from Cuba). Other bills would have increased

restrictions on engagement with Cuba: S. 1388/H.R. 2466 (travel and trade); S. 1489/ H.R. 2937

(Cuban military and intelligence); and H.R. 4772 and H.R. 5728/S. 3289 (U.S. flights). For more

on these on other bills and resolutions, see Appendix C.

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Contents

Recent Developments ...................................................................................................................... 1

Introduction ..................................................................................................................................... 2

Cuba’s Political and Economic Environment .................................................................................. 5

Brief Historical Background ..................................................................................................... 5

Political Conditions ................................................................................................................... 6

April 2016 Communist Party Congress .............................................................................. 8

Death of Fidel Castro .......................................................................................................... 9

Human Rights ..................................................................................................................... 9

Economic Conditions .............................................................................................................. 13

Cuba’s Foreign Relations ........................................................................................................ 17

U.S. Policy Toward Cuba .............................................................................................................. 22

Background on U.S.-Cuban Relations .................................................................................... 22

Obama Administration Policy ................................................................................................. 24

President Obama Unveils a New Policy Approach Toward Cuba .................................... 25

Reestablishment of Diplomatic Relations ......................................................................... 26

Rescission of Cuba’s Designation as a State Sponsor of International Terrorism ............ 27

Increase in Travel, Commerce, and the Flow of Information ........................................... 27

Embargo Remains in Place ............................................................................................... 30

March 2016 Presidential Visit ........................................................................................... 30

Advancing Engagement .................................................................................................... 32

Debate on the Direction of U.S. Policy ................................................................................... 34

Incoming Trump Administration ............................................................................................. 36

Selected Issues in U.S.-Cuban Relations ....................................................................................... 36

Diplomatic and Military Engagement ..................................................................................... 37

Restrictions on Travel and Remittances .................................................................................. 39

U.S. Exports and Sanctions ..................................................................................................... 44

State Sponsor of Terrorism Designation ................................................................................. 50

Trademark Sanction ................................................................................................................ 55

U.S. Funding to Support Democracy and Human Rights ....................................................... 57

Oversight of U.S. Democracy Assistance to Cuba ............................................................ 59

Radio and TV Martí ................................................................................................................ 60

Migration Issues ...................................................................................................................... 63

Antidrug Cooperation.............................................................................................................. 70

U.S. Property Claims............................................................................................................... 72

Outlook .......................................................................................................................................... 73

Figures

Figure 1. Provincial Map of Cuba ................................................................................................... 4

Figure 2. Cuba: Real GDP Growth (%) 2005-20016 .................................................................... 14

Figure 3. U.S. Exports to Cuba, 2001-2015 .................................................................................. 45

Figure 4. Maritime Interdictions of Cubans by the U.S. Coast Guard, FY2002-FY2016 ............ 65

Figure 5. Cuban Migration, from Ecuador to the United States .................................................... 67

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Tables

Table 1. Undocumented Cuban Migrants, FY2010-FY2017......................................................... 66

Appendixes

Appendix A. Enacted Measures and Approved Resolutions in the 114th Congress....................... 75

Appendix B. Other Actions in 2015 and 2016............................................................................... 78

Appendix C. Additional Bills and Resolutions in the 114th Congress ........................................... 89

Contacts

Author Contact Information .......................................................................................................... 93

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Recent Developments

On January 16, 2017, U.S. and Cuban officials signed a memorandum of understanding to deepen

bilateral law enforcement cooperation and information sharing. (See “Advancing Engagement,”

below.)

On January 12, 2017, the Obama Administration announced a major change in U.S. immigration

policy by ending the so-called wet foot/dry foot policy in which thousands of undocumented

Cuban migrants have entered the United States in recent years. The Administration also

announced it was ending the 10-year-old Cuban Medical Professional Parole program, which

allowed Cuban medical professionals in third countries to be approved for admittance into the

United States. (See “Migration Issues,” below.)

On January 9, 2017, U.S. and Cuban officials signed an oil spill preparedness and response

agreement for cooperation and coordination to prevent, contain, and clean up marine oil and other

hazardous pollution. (See “Advancing Engagement,” below.)

On January 5, 2017, the Cuban Commission for Human Rights and National Reconciliation

(CCDHRN) reported that there were at least 9,940 short-term detentions for political reasons in

2016, higher than annual levels over the past several years. (See “Human Rights,” below.)

On December 23, 2016, President Obama signed into law the National Defense Authorization Act

for FY2017 (P.L. 114-328), which continued prohibitions on funding for the closure of the U.S.

Naval Station at Guantanamo Bay, Cuba, and restricted FY2017 funding for Cuba’s participation

in certain joint or multilateral exercises or related security conferences. (See “Diplomatic and

Military Engagement” and Appendix A, below.)

On December 10, 2016, President Obama signed into law a continuing resolution (P.L. 114-254)

providing FY2017 appropriations for most programs at the FY2016 level, minus an across-theboard reduction of almost 0.2% through April 28, 2017. This law affects human rights and

democracy funding for Cuba, as well as funding for the Office of Cuba Broadcasting, both of

which are funded through Department of State, Foreign Operations, and Related Programs

appropriations. The 115th Congress will face completing action on FY2017 appropriations. (See

“U.S. Funding to Support Democracy and Human Rights” and “Radio and TV Martí,” below.)

On December 7, 2016, the United States and Cuba held a fifth Bilateral Commission meeting in

Havana, with the objective of advancing the normalization process. (See “Advancing

Engagement,” below.)

On November 25, 2016, Cuba’s former long-time ruler Fidel Castro died at 90 years of age. (See

“Death of Fidel Castro,” below, and CRS Insight IN10616, Fidel Castro’s Death: Implications for

Cuba and U.S. Policy.)

On October 26, 2016, the U.N. General Assembly approved (as it has since 1991) a resolution

urging the United States to lift the embargo on Cuba. For the first time, the United States

abstained (along with Israel) and 191 other nations voted in favor. (See “Cuba’s Foreign

Relations,” below.)

On October 14, 2016, President Obama issued a presidential policy directive on the normalization

of relations with Cuba, which set forth medium-term objectives and the roles and responsibilities

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for various U.S. departments and agencies to move forward in the normalization process.1 (See

“Advancing Engagement,” below.)

On October 14, 2016, the Treasury and Commerce Departments announced a sixth round of

regulatory changes to the Cuban Assets Control Regulations and the Export Administration

Regulations that further eased certain economic sanctions. Among the changes were removal of

the value limit for the importation of Cuban products (including cigars and rum) by authorized

travelers as accompanied baggage for personal use; general authorization waiving the restriction

prohibiting foreign vessels from entering a U.S. port for trade for 180 days after calling on a

Cuban port for trade purposes; general authorizations for transactions incident to obtaining U.S.

Food and Drug Administration (FDA) approval of Cuban-origin pharmaceuticals and for the

importation of such pharmaceuticals into the United States; and general authorization to enter into

contingent contracts for transactions currently prohibited by the embargo. (See “Increase in

Travel, Commerce, and the Flow of Information,” below.)

On September 14, 2016, the House Committee on Agriculture held a hearing on “American

Agricultural Trade with Cuba.”2 (See “U.S. Exports and Sanctions,” below).

On September 29, 2016, President Obama signed into law a full-year FY2017 military

construction appropriations measure (Division A of P.L. 114-223, H.R. 5325, approved by the

Senate and House on September 28, 2016) with a provision continuing a prohibition against

funding to carry out the closure or realignment of the United States Naval Station at Guantánamo

Bay, Cuba. (See Appendix A.)

On September 27, 2016, President Obama nominated Jeffrey DeLaurentis, the current chargé

d’affaires of the U.S. Embassy in Havana, to be U.S. ambassador to Cuba. (See “Diplomatic and

Military Engagement,” below.)

On August 31, 2016, the Department of Transportation finalized a decision for eight U.S. airlines

to provide up to 20 regularly scheduled roundtrip flights between Havana and 10 U.S. cities.

Regular flights from the United States to Cuban cities other than Havana began in late August,

and American Airlines reportedly will be the first to begin direct flights to Havana from Miami in

late November. (See “Restrictions on Travel and Remittances,” below.)

Introduction

Political and economic developments in Cuba and U.S. policy toward the island nation, located

just 90 miles from the United States, have been significant congressional concerns for many

years. Especially since the end of the Cold War, Congress has played an active role in shaping

U.S. policy toward Cuba, first with the enactment of the Cuban Democracy Act (CDA) of 1992

(P.L. 102-484, Title XVII) and then with the Cuban Liberty and Democratic Solidarity

(LIBERTAD) Act of 1996 (P.L. 104-114). Both measures strengthened U.S. economic sanctions

on Cuba that had first been imposed in the early 1960s but also provided roadmaps for a

normalization of relations dependent upon significant political and economic changes in Cuba. A

decade ago, Congress partially modified its sanctions-based policy toward Cuba when it enacted

White House, Office of the Press Secretary, “Presidential Policy Directive—United States-Cuba Normalization,”

October 14, 2016, at https://www.whitehouse.gov/the-press-office/2016/10/14/presidential-policy-directive-unitedstates-cuba-normalization.

For hearing testimony and transcript, see http://agriculture.house.gov/calendar/eventsingle.aspx?EventID=3512.

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the Trade Sanctions Reform and Export Enhancement Act of 2000 or TSRA (P.L. 106-387, Title

IX) allowing for U.S. agricultural exports to Cuba.

Over the past decade, much of the debate in Congress over U.S. policy has focused on U.S.

sanctions, especially over U.S. restrictions on travel to Cuba. In 2009, Congress took legislative

action in an appropriations measure (P.L. 111-8) to ease restrictions on family travel and travel for

the marketing of agricultural exports, marking the first congressional action easing Cuba

sanctions in almost a decade. The Obama Administration took further action in April 2009 by

lifting all restrictions on family travel and on cash remittances by family members to their

relatives in Cuba. In January 2011, the Administration announced the further easing of restrictions

on educational and religious travel to Cuba and on non-family remittances. In December 2014,

just after the adjournment of the 113th Congress, President Obama announced a major shift in

U.S. policy toward Cuba, moving away from a sanctions-based policy aimed at isolating Cuba to

a policy of engagement and a normalization of relations.

This report is divided into three major sections analyzing Cuba’s political and economic

environment, U.S. policy, and selected issues in U.S.-Cuban relations. Legislative initiatives in

the 114th Congress are noted throughout the report, and four appendixes provide a listing of

enacted measures and approved resolutions (Appendix A), bills receiving some action in 2015

and 2016 (Appendix B), and additional bills and resolution introduced in the 114th Congress

(Appendix C). For more on Cuba from CRS, see



CRS In Focus IF10045, Cuba: U.S. Policy Overview, by (name redacted) ;

CRS Insight IN10616, Fidel Castro’s Death: Implications for Cuba and U.S.

Policy, by (name redacted) ;

CRS Insight IN10466, President Obama’s Historic Visit to Cuba, by (name re

dacted) ;

CRS Insight IN10369, Pope Francis in Cuba, by (name redacted) ;

CRS Report R43888, Cuba Sanctions: Legislative Restrictions Limiting the

Normalization of Relations, by (name redacted) and (name redacted)

;

CRS Report RL31139, Cuba: U.S. Restrictions on Travel and Remittances, by

(name redacted) ;

CRS Insight IN10514, Financing U.S. Agricultural Exports to Cuba, by (name re

dacted)

;

CRS Report R44119, U.S. Agricultural Trade with Cuba: Current Limitations

and Future Prospects, by (name redacted)

;

CRS Legal Sidebar WSLG1586, House Approves Measure to Prevent Return of

GTMO to Cuba without Congress’s Say So, by (name redacted) ;

CRS Report R44137, Naval Station Guantanamo Bay: History and Legal Issues

Regarding Its Lease Agreements, by (name redacted) and (name redacted);

CRS Legal Sidebar WSLG1405, Can Creditors Enforce Terrorism Judgments

Against Cuba?, by (name redacted) ; and

CRS Report R44714, U.S. Policy on Cuban Migrants: In Brief, by (name re

dacted).

Congressional Research Service

Figure 1. Provincial Map of Cuba

Source: Congressional Research Service (CRS).

Notes: This map shows 15 provinces and the special municipality of Isla de la Juventud. See a current interactive provincial map of Cuba, showing municipalities and

other information, from Juventud Rebelde (Cuba), available at http://www.juventudrebelde.cu/multimedia/graficos/nueva-division-politico-administrativa/.

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Cuba: Issues and Actions in the 114th Congress

Cuba’s Political and Economic Environment

Brief Historical Background3

Cuba became an independent nation in 1902. From its discovery by Columbus in 1492 until the

Spanish-American War in 1898, Cuba was a Spanish colony. In the 19th century, the country

became a major sugar producer, with slaves

Cuba at a Glance

from Africa arriving in increasing numbers to

Population: 11.4 million (2015, WB)

work the sugar plantations. The drive for

independence from Spain grew stronger in

Area: 109,884 sq. km, slightly smaller than Pennsylvania

the second half of the 19th century, but it only

GDP: $83.51 billion (2015, current U.S. $, EIU)

came about after the United States entered the Real GDP Growth: 4.3% (2015, EIU); 0.5% (2016 est.,

EIU, although the Cuban government reportedly said the

conflict when the USS Maine sank in Havana

economy shrunk 0.9%)

Harbor after an explosion of undetermined

Key Trading Partners: Exports (2014): Venezuela,

origin. In the aftermath of the Spanish42.6%; Canada, 10.8%; the Netherlands, 9.6%; China,

American War, the United States ruled Cuba

6.2%. Imports (2014): Venezuela, 39.8%; China, 10.2%,

for four years until Cuba was granted its

Spain, 7.9%; Brazil, 4.5%; Mexico, 3.4%; Canada, 3.1%

independence in 1902. Nevertheless, the

(ONEI)

United States still retained the right to

Life Expectancy: 79 years (2014, WB)

intervene in Cuba to preserve Cuban

Literacy (adult): 99.8% (2013, UNDP)

independence and maintain stability in

Legislature: National Assembly of Peoples Power, 612

accordance with the Platt Amendment4 that

members

became part of the Cuban Constitution of

Sources: World Bank (WB); National Office of Statistics

1901. The United States subsequently

and Information (ONEI), Republic of Cuba; U.N.

Development Programme; Economist Intelligence Unit

intervened militarily three times between

(EIU).

1906 and 1921 to restore order, but in 1934,

the Platt Amendment was repealed.

Cuba’s political system as an independent nation was often dominated by authoritarian figures.

Gerardo Machado (1925-1933), who served two terms as president, became increasingly

dictatorial until he was ousted by the military. A short-lived reformist government gave way to a

series of governments that were dominated behind the scenes by military leader Fulgencio Batista

until he was elected president in 1940. Batista was voted out of office in 1944 and was followed

by two successive presidents in a democratic era that ultimately became characterized by

corruption and increasing political violence. Batista seized power in a bloodless coup in 1952,

and his rule progressed into a brutal dictatorship. This fueled popular unrest and set the stage for

Fidel Castro’s rise to power.

Castro led an unsuccessful attack on military barracks in Santiago, Cuba, on July 26, 1953. He

was jailed, but subsequently freed and went into exile in Mexico, where he formed the 26th of

July Movement. Castro returned to Cuba in 1956 with the goal of overthrowing the Batista

Portions of this background are drawn from U.S. Department of State, “Background Note: Cuba,” April 28, 2011. For

further background, see Rex A. Hudson, ed., Cuba, A Country Study, Federal Research Division, Library of Congress

(Washington, DC: GPO, 2002); “Country Profile: Cuba,” Federal Research Division, Library of Congress, September

2006, available at http://lcweb2.loc.gov/frd/cs/profiles/Cuba.pdf; Leslie Bethell, ed., Cuba, A Short History

(Cambridge, UK: Cambridge University Press, 1993); and Hugh Thomas, Cuba: The Pursuit of Freedom (New York:

Harper & Row, Publishers, 1971).

U.S. Senator Orville Platt introduced an amendment to an army appropriation bill that was approved by both houses

and enacted into law in 1901.

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dictatorship. His revolutionary movement was based in the Sierra Maestra mountains in eastern

Cuba and joined with other resistance groups seeking Batista’s ouster. Batista ultimately fled the

country on January 1, 1959, leading to 47 years of rule under Fidel Castro until he stepped down

from power provisionally in July 2006 because of poor health.

While Castro had promised a return to democratic constitutional rule when he first took power, he

instead moved to consolidate his rule, repress dissent, and imprison or execute thousands of

opponents. Under the new revolutionary government, Castro’s supporters gradually displaced

members of less radical groups. Castro moved toward close relations with the Soviet Union while

relations with the United States deteriorated rapidly as the Cuban government expropriated U.S.

properties. In April 1961, Castro declared that the Cuban revolution was socialist, and in

December 1961, he proclaimed himself to be a Marxist-Leninist. Over the next 30 years, Cuba

was a close ally of the Soviet Union and depended on it for significant assistance until the

dissolution of the Soviet Union in 1991.

From 1959 until 1976, Castro ruled by decree. In 1976, however, the Cuban government enacted

a new Constitution setting forth the Cuban Communist Party (PCC) as the leading force in state

and society, with power centered in a Political Bureau headed by Fidel Castro. Cuba’s

Constitution also outlined national, provincial, and local governmental structures. Since then,

legislative authority has been vested in a National Assembly of People’s Power that meets twice

annually for brief periods. When the Assembly is not in session, a Council of State, elected by the

Assembly, acts on its behalf. According to Cuba’s Constitution, the president of the Council of

State is the country’s head of state and government. Executive power in Cuba is vested in a

Council of Ministers, also headed by the country’s head of state and government, that is, the

president of the Council of State.

Fidel Castro served as head of state and government through his position as president of the

Council of State from 1976 until February 2008. While he had provisionally stepped down from

power in July 2006 because of poor health, Fidel still officially retained his position as head of

state and government. National Assembly elections were held in January 2008, and Fidel Castro

was once again among the candidates elected to the 614-member legislative body. (As in the past,

voters were offered a single slate of candidates.) On February 24, 2008, the new Assembly was

scheduled to select from among its ranks the members of the Council of State and its president.

Many observers had speculated that because of his poor health, Fidel would choose not to be

reelected as president of the Council of State, which would confirm his official departure from

heading the Cuban government. Statements from Castro himself in December 2007 hinted at his

potential retirement. That proved true on February 19, 2008, when Fidel announced that he would

not accept the position as president of the Council of State, essentially confirming his departure as

titular head of the Cuban government.

Political Conditions

After Fidel stepped down from power, Cuba’s political succession from Fidel to Raúl Castro was

characterized by considerable stability. After two and a half years of provisionally serving as

president, Raúl Castro officially became Cuba’s president in February 2008, when Cuba’s

legislature selected him as president of the 31-member Council of State.5 While Raúl Castro

For more on Cuba’s political succession, see CRS Report RS22742, Cuba’s Political Succession: From Fidel to Raúl

Castro, by (name redacted) . For background discussion of potential Cuban political scenarios envisioned in the

aftermath of Fidel Castro’s stepping down from power in 2006, see CRS Report RL33622, Cuba’s Future Political

Scenarios and U.S. Policy Approaches, by (name redacted) .

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began implementing economic reforms in 2008, there has been no change to his government’s

tight control over the political system, and few observers expect such changes to occur with the

government backed up by a strong security apparatus.

The Cuban Communist Party (PCC) held its sixth congress in April 2011. While the party

concentrated on making changes to Cuba’s economic model, some political changes also

occurred. As expected, Raúl became first secretary of the PCC, officially replacing his brother

Fidel. Most significantly, Raúl proposed two five-year term limits for top positions in the party

and in the government, calling for systematic rejuvenation, a change that was confirmed by a

January 2012 national PCC conference. Also at the 2012 conference, the PCC approved a

resolution by which its Central Committee would be allowed to replace up to 20% of its 115

members within its five-year mandate.6

In February 2013, Cuba held elections for over 600 members of the National Assembly of

People’s Power, the national legislature, as well as over 1,600 provincial government

representatives, both for five-year terms. Under Cuba’s one-party system, the overwhelming

majority of officials elected are PCC members. Critics maintain that elections in Cuba are a sham

and entirely controlled by the PCC. The new National Assembly selected Raúl Castro for a

second five-year term as president of the Council of State (Cuba’s head of government). In

conformity with the new two-term limit for top officials, Castro indicated that this would be his

last term, which means that he would serve until February 2018, when he would be 86 years of

age.

Most significantly, a much younger official, Miguel Díaz-Canel Bermúdez (currently aged 56),

was selected to serve as first vice president of the Council of State, replacing then 82-year-old

José Ramón Machado, part of the older generation of so-called históricos of the 1959 Cuban

revolution. The position of first vice president is significant because, according to the Cuban

Constitution, the person holding the office is the official successor to the president. Prior to his

appointment, Díaz-Canel—an engineer by training—was serving as one of the Council of State’s

six other vice presidents. His appointment as the official constitutional successor to Castro

represents a move toward bringing about generational change in Cuba’s political system. DíazCanel became a member of the Politburo in 2003 and also held top PCC positions in the

provinces of Villa Clara and Holguín. He became education minister in 2009 until he was tapped

to be a vice president of the Council of State. Díaz-Canel has been described in media reports as

an experienced manager with good relations with the military and as someone that worked his

way up through the party.7

Some Cuba watchers maintain that Díaz-Canel is still very much in the shadow of Raúl, and has

not yet taken on a prominent role, and contend that the Cuban military is perhaps the most

important institution to watch as the transition to a post-Castro government unfolds.8 Under Raúl,

who served as defense minister from the beginning of the Cuban revolution until 2008, the Cuban

military has played an increasing role in government, with several military officers and confidants

of Raúl serving as ministers.

Juan O. Tamayo, “Cuban Communists OK Term Limits for Party and Government Officials,” Miami Herald, January

29, 2012, and “Cuba’s Communists Meet to Update Party, Not Much Buzz on Street,” Miami Herald, January 28,

2012; Patricia Grogg, “Cuba: Party Aims for Efficient, Inclusive Socialism,” Inter Press Service, February 1, 2012.

Damien Cave and Victoria Burnett, “As Castro Era Drifts to Close, a New Face Steps in at No. 2,” New York Times,

February 28, 2013; Marc Frank, “Castro Successor Lacks Charisma But Is Experienced Manager,” Reuters, February

26, 2013.

Tracy Wilkinson, “New Face Waits in Cuba,” Los Angeles Times, February 7, 2015.

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Speaking on the 60th anniversary of the start of the Cuban revolution on July 26, 2013, President

Castro asserted that a generational transfer of power had already begun, stating that “there is a

slow and orderly transfer of the leadership of the revolution to the new generations.”9 In October

2015, however, Castro stayed with the historical leadership when, after the resignation of 76year-old Minister of the Interior (MININT) General Abelardo Colomé Ibarra because of health

reasons, he replaced Colomé with 77-year-old MININT First Vice Minister General Carlos

Fernández Gondín. In September 2015, the Council of State had given Fernández the honorific

title of Hero of the Republic because of his role fighting in Angola.

April 2016 Communist Party Congress

The PCC’s seventh party congress was held April 16-19, 2016. Few details were made public

ahead of the congress, prompting criticism over the lack of information and consultation

compared with the 2011 party congress.10 While some observers expected there to be a preview of

forthcoming economic changes, no new reform measures were announced. Raúl Castro noted,

however, that Cuba must reestablish a single currency as soon as possible in order to resolve

wage and other economic distortions. Castro reported that just 21% of the more than 300

economic guidelines adopted at the 2011 party congress had been implemented. He said that for

the 2016-2021 period, 268 guidelines were being proposed for updating the country’s economic

model, including 193 modified since the 2011 party congress, 31 the same, and 44 new

guidelines.11 Castro reasserted that Cuba would move forward updating its economic model

“without haste, but without pause.” The slow pace of Cuba’s economic reform process, however,

demonstrates the government’s extreme cautiousness in taking economic actions could have

negative social or political consequences.

Castro also proposed 60 years of age as the maximum age to join the Central Committee and 70

years of age as the maximum age to assume a leadership position in the party and in state and

government institutions and mass organizations. He noted that these changes would be

implemented through future reforms to the constitution and that there would be a five-year period

of transition for the introduction of these age limits for top positions. In contrast, on the last day

of the congress, Castro (currently 85 years of age) and José Ramón Machado Ventura (currently

86 years of age) were reelected as first and second secretaries of the PCC. Both will continue to

serve on the 17-member Political Bureau (Politburo)—10 other Politburo members will continue

to serve on the ruling body, while 5 new members, including 3 women, were elected, bringing the

total number of women to 4.12 The membership of the Central Committee grew from 116 to 142,

with 55 new members younger than 60 years of age.13 While Castro reiterated his intention to step

down as President in February 2018, at this juncture it appears that he will retain his position as

first secretary of the PCC.

Marc Frank, “Cuba’s Raúl Castro Promises Succession Has Started,” Reuters, July 26, 2013.

“Party Congress Less Than a Month Away,” Granma, March 30, 2016; “Andrea Rodriguez and Michael

Weissenstein, “Unusual Dissent Erupts Inside Cuban Communist Party,” World Politics Review, March 30, 2016; and

“Cuba Politics: Uncertainty Surrounds Upcoming PCC Congress,” EIU ViewsWire, April 8, 2016.

Raúl Castro Ruz, “Full Text of Central Report: The development of the national economy, along with the struggle for

peace, and our ideological resolve, constitute the Party’s principal missions,” Granma, April 18, 2016, available at

http://en.granma.cu/cuba/2016-04-18/the-development-of-the-national-economy-along-with-the-struggle-for-peaceand-our-ideological-resolve-constitute-the-partys-principal-missions.

“Raúl Present New Politburo of the CC of the PCC,” Cubadebate, April 19, 2016.

William M. Leogrande, “Updating the Party: Cuba’s New (and Not So New) Leaders,” Huffington Post, April 23,

2016.

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Death of Fidel Castro

Cuba’s former long-time ruler Fidel Castro died on November 25, 2016, at 90 years of age.

Although Fidel Castro’s historical legacy is significant—regardless of whether one views him

positively or negatively—he has not held formal power since he stepped down in 2006. After

stepping down, Fidel continued to author essays published in Cuban media that cast a shadow on

Raúl’s rule. Many Cubans reportedly believe that Fidel encouraged so-called hardliners in Cuba’s

Communist Party and government bureaucracy to slow the pace of reforms. With Fidel’s passing,

some Cuban entrepreneurs hope that the pace of reforms might accelerate. Fidel’s death points to

the generational change that has already begun in the Cuban government and a passing of the

older generation of the 1959 revolution.

Upon Fidel’s passing, President Obama issued a statement extending condolences to Fidel’s

family and extending “a hand of friendship to the Cuban people.” He said that “history will

record and judge the enormous impact of this singular figure on the people and world around

him.” The President acknowledged that while the United States and Cuba have had profound

political disagreements, his Administration has “worked hard to put the past behind us, pursuing a

future in which the relationship between our two countries is defined not by our differences but

by the many things that we share as neighbors and friends....”14

Human Rights

The Cuban government has a poor record on human rights, with the government sharply

restricting freedoms of expression, association, assembly, movement, and other basic rights since

the early years of the Cuban revolution. The government has continued to harass members of

human rights and other dissident organizations. These include the Ladies in White (Damas de

Blanco), currently led by Berta Soler, formed in 2003 by the female relatives of the so-called

“group of 75” dissidents arrested that year; and the Patriotic Union of Cuba (UNPACU), led by

José Daniel Ferrer García, established in 2011 by several dissident groups with the goal of

fighting peacefully for civil liberties and human rights. Two Cuban political prisoners conducting

hunger strikes have died in recent years, Orlando Zapata Tamayo in February 2010 and Wilman

Villar Mendoza in January 2012. Tamayo died after an 85-day hunger strike that he had initiated

to protest inhumane conditions in Cuba’s prisons. Villar Mendoza died following a 50-day hunger

strike after he was convicted of “contempt” of authority and sentenced to four years in prison.

Other hunger strikers have included Vladimir Morera Bacallao, discussed below, who conducted

a hunger strike for more than 80 days in late 2015, and Guillermo Fariñas, who ended an almost

two-month hunger strike in October 2016.

While the human rights situation in Cuba remains poor, the country has made some advances in

recent years. In 2008, Cuba lifted a ban on Cubans staying in hotels that previously had been

restricted to foreign tourists in a policy that had been pejoratively referred to as “tourist

apartheid.” In recent years, as the government has enacted limited economic reforms, it has been

much more open to debate on economic issues. In January 2013, Cuba took the significant step of

eliminating its long-standing policy of requiring an exit permit and letter of invitation for Cubans

to travel abroad. The change has allowed prominent dissidents and human rights activists to travel

abroad and return to Cuba.

Political Prisoners. The Cuban government has released a number of political prisoners in recent

years. With the intercession of the Cuban Catholic Church, the Cuban government released some

White House, “Statement by the President on the Passing of Fidel Castro,” November 26, 2016.

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125 political prisoners in 2010 and 2011, including the remaining members of the “group of 75”

that were still in prison. In the aftermath of the December 2014 shift in U.S. policy toward Cuba,

the Cuban government released another 53 political prisoners (although as noted below, six were

rearrested in 2015).15

Among the 53 released were five jailed dissidents whom Amnesty International (AI) had named

as prisoners of conscience in 201316 as well as several other dissidents whose cases AI was

following. Two of the five prisoners of conscience, Emilio Planas Robert and Iván Fernández

Depestre, had been imprisoned since September 2012 and July 2013, respectively, and had been

convicted of “dangerousness” (a preemptive measure defined as the special proclivity of a person

to commit crimes). The other three “prisoners of conscience,” brothers Alexeis, Django, and

Vianco Vargas Martín, were members of UNPACU. They were detained in late 2012 and

convicted in June 2014 after a summary trial in which they were charged with “public disorder.”17

Three other dissidents whose cases were followed by AI were released from prison on December

9, 2014—Ladies in White member Sonia Garro Alfonso; her husband, Ramón Alejandro Muñoz

González; and a neighbor, Eugenio Hernández. They had been held since March 2012.18

In 2015, the Cuban government released two additional political prisoners named as prisoners of

conscience by Amnesty International, but one of them was rearrested in late 2016. Ciro Alexis

Casonova Pérez, who had been placed under house arrest in June 2014 after demonstrating in the

streets, was convicted in December 2014 of public disorder and sentenced to one year in prison.

In April 2015, AI declared Casonova Pérez a prisoner of conscience, and he was ultimately

released in June 2015.19

Danilo Maldonado Machado (known as El Sexto), a graffiti artist, was unconditionally released

from prison in October 2015, after almost 10 months in prison. Although he was never formally

charged, Maldonado reportedly was accused of “aggravated contempt” for painting the names

Fidel and Raúl on two pigs that he intended to release in Havana’s Central Park as part of an art

show. Maldonado, who had attended Miami Dade College in 2014 on a scholarship program,

went on a hunger strike before his release. On November 26, 2016, however, Maldonado was

arrested again after he made a video celebrating the death of Fidel Castro, and he was

subsequently again declared a prisoner of conscience by AI, which has called for his immediate

and unconditional release.

As noted above, 6 of the 53 political prisoners released in December 2014 at the time of the

improvement in U.S.-Cuban relations were rearrested in 2015. One of the prisoners, Vladimir

Morera Bacallao, detained in April 2015 for hanging a sign outside his home in protest of

municipal elections, began a hunger strike in early October 2015 that endured more than 80 days.

The list of 53 prisoners reportedly had been drawn up by the Obama Administration and included those jailed for

having peacefully exercised their rights of freedom of expression and assembly. David Adams, Matt Spetalnick, and

Lesley Wroughton, “How Prisoners Names Were Drawn Up in U.S.-Cuba Secret Talks,” Reuters News, January 12,

2015.

AI defines prisoners of conscience as those jailed because of their political, religious, or other conscientiously held

beliefs, ethnic origin, sex, color, language, national or social origin, economic status, birth, sexual orientation, or other

status, provided they have neither used nor advocated violence.

AI, “Prisoners of Conscience Released in Cuba,” January 9, 2015.

AI, “Government Critics Under House Arrest,” December 15, 2014.

AI, “Political Dissident Must Be Released,” April 2, 2015; “El Régimen Excarcela al Opositor Ciro Alexis Casanova

Pérez,” Diario de Cuba, June 11, 2015.

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Going beyond AI’s narrow definition of prisoners of conscience, the Cuban government has held

a larger number of political prisoners, generally defined as a person imprisoned for his or her

political activities. In April 2016, the Havana-based Cuban Commission for Human Rights and

National Reconciliation (CCDHRN) estimated that the Cuban government held 82 people

imprisoned for political motives (up from 60 people in June 2015), with 11 others released from

prison but still on parole—for a total of 93 convicted for political reasons. CCDHRN’s report

includes dozens of opposition activists, a number of whom are members of UNPACU, as well as

those convicted on such charges as hijacking, terrorism, sabotage, other acts of violence, and

espionage.20

The State Department’s human rights report on Cuba covering 2015 stated that it was difficult to

determine an accurate number of political prisoners because of the Cuban government’s lack of

transparency, its systematic violation of due process rights, and its continued denial of access to

Cuban jails to independent monitors. The report noted, however, that two independent

organizations estimated that there were 60 to 70 political prisoners.21

Short-Term Detentions. Short-term detentions for political reasons have increased significantly

over the past several years, a reflection of the government’s change of tactics in repressing dissent

away from long-term imprisonment. The CCDHRN reports that there were at least 2,074 such

detentions in 2010, 4,123 in 2011, 6,602 in 2012, and 6,424 in 2013. For 2014, the group reported

that there were at least 8,899 such detentions, almost 39% higher than the previous year. In 2015,

the CCDHRN reported at least 8,616 short-term detentions, with 1,447 in November alone. In

2016, there were at least 9,940 short-term arbitrary detentions for political reasons, higher than

annual levels over the past several years. In March 2016, for example, there were 1,416

detentions, including almost 500 detentions during President Obama’s visit.22

Bloggers and Civil Society Groups. Over the past several years, numerous independent Cuban

blogs have been established that are often critical of the Cuban government. Cuban blogger Yoani

Sánchez has received considerable international attention since 2007 for her website, Generación

Y, which includes commentary critical of the Cuban government. In May 2014, Sánchez launched

an independent digital newspaper in Cuba, 14 y medio, available on the Internet, distributed

through a variety of methods in Cuba, including CDs, USB flash drives, and DVDs.23

The Catholic Church, which, as noted above, played a prominent role in the release of political

prisoners in 2010 and 2011, has been active in broadening the debate on social and economic

issues through its publications Palabra Nueva (New Word) and Espacio Laical (Space for

Laity).24 The Church has also played an increasing role in providing social services, including

soup kitchens, services for the elderly and other vulnerable groups, after-school programs, job

training, and even college coursework. In 2014, the two former editors of Espacio Laical,

Roberto Veiga and Lenier Gonzalez, launched an online forum known as Cuba Posible.25

Comisión Cubana de Derechos Humanos y Reconciliación Nacional (CCDHRN), “Comunicado,” April 25, 2016,

available at http://www.14ymedio.com/nacional/LISTA-PRESOS-COMUNICADO2_CYMFIL20160425_0001.pdf.

U.S. Department of State, Country Reports on Human Rights Practices for 2015, April 13, 2016.

CCDHRN, “Cuba: Algunos Actos de Represion Politica en el Mes de Diciembre de 2016,” January 5, 2017.

Sánchez’s website, which has links to numerous other independent blogs and websites, is available at

http://generacionyen.wordpress.com/, and her online digital newspaper is available at http://www.14ymedio.com/.

See http://www.palabranueva.net/newPage/index.php and http://www.espaciolaical.org/.

Marc Frank, “Cuba’s Catholic Church May Restrict Rare Forum for Open Debate,” Reuters, June 16, 2014; Daniel

Trotta and Rosa Tania Valdés, “Cuban Editors, Pressured to Leave Magazine, Announce New Venture,” Reuters, July

1, 2014. The Cuba Posible website is available at http://cubaposible.net/.

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Estado de SATS, a forum founded in 2010 by human rights activist Antonio Rodiles, has had the

goal of encouraging open debate on cultural, social, and political issues.26 The group has hosted

numerous events and human rights activities over the years, but has also been the target of

government harassment. In November 2012, Rodiles was arrested and held for 19 days on

charges with “resisting authority,” but he was released after Amnesty International issued an

urgent appeal on his case. In early July 2015, Rodiles was severely beaten for attempting to

participate in the weekly protest march of the Ladies in White.27

Human Rights Reporting on Cuba

Amnesty International (AI), Cuba, https://www.amnesty.org/en/countries/americas/cuba/.

Cuban Commission for Human Rights and National Reconciliation (Comisión Cubana de Derechos

Humanos y Reconciliación Nacional, CCDHRN), the independent Havana-based human rights organization

produces a monthly report on short-term detentions for political reasons.

CCDHRN, “Cuba: Algunos Actos de Represion Politica en el Mes de Diciembre de 2016,” January 5, 2017.

CCDHRN, “Comunicado” April 25, 2016 (list of political prisoners), available at http://www.14ymedio.com/

nacional/LISTA-PRESOS-COMUNICADO2_CYMFIL20160425_0001.pdf.

14ymedio.com, independent digital newspaper, based in Havana available at http://www.14ymedio.com/.

Human Rights Watch (HRW), https://www.hrw.org/americas/cuba.

HRW’s 2017 World Report maintains that “the Cuban government continues to repress dissent and punish

public criticism,” available at https://www.hrw.org/world-report/2017/country-chapters/cuba.

Inter-American Commission on Human Rights, Annual Report 2015, March 17, 2016, Chapter IV has a

section on Cuba, available at http://www.oas.org/en/iachr/docs/annual/2015/doc-en/InformeAnual2015-Cap4-CubaEN.pdf.

U.S. Department of State, Country Report on Human Rights Practices for 2015, April 13, 2016, available at

http://www.state.gov/j/drl/rls/hrrpt/humanrightsreport/index.htm?year=2015&dlid=253005.

Trafficking in Persons. The State Department released its 2016 Trafficking in Persons (TIP)

Report on June 30, 2016, and for the second consecutive year Cuba was placed on the Tier 2

Watchlist (in prior years, Cuba had Tier 3 status).28 Tier 3 status refers to countries whose

governments do not fully comply with the minimum standards for combatting trafficking and are

not making significant efforts to do so. In contrast, Tier 2 Watchlist status refers to countries

whose governments, despite making significant efforts, do not fully comply with the minimum

standards and still have some specific problems (an increasing number of victims or failure to

provide evidence of increasing anti-trafficking efforts) or whose governments have made

commitments to take additional anti-trafficking steps over the next year.

The State Department maintained in its 2015 report that Cuba was upgraded to Tier 2 Watchlist

status because of its progress in addressing and prosecuting sex trafficking, including the

provision of services to sex trafficking victims, and its continued efforts to address sex tourism

and the demand for commercial sex.

In its 2016 report, the State Department maintained that Cuba remained on the Tier 2 Watchlist

for the second consecutive year because the country did not demonstrate overall increasing anti26

See the group’s website at http://www.estadodesats.com/.

Nora Games Torres, “Cuban Dissidents Report Being Attacked by Government Security Forces,” Miami Herald,

July 6, 2015.

U.S. Department of State, Trafficking in Persons Report 2016, pp. 146-147, at http://www.state.gov/documents/

organization/258876.pdf.

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trafficking efforts compared to 2015. Nevertheless, the 2016 report noted that the Cuban

government continued efforts to address sex trafficking, including prosecution and conviction,

and the provision of services to victims. The State Department noted that the Cuban government

released a report on its anti-trafficking efforts in October 2015; that multiple government

ministries were engaged in anti-trafficking efforts; and that the government funded child

protection centers and guidance centers for women and families, which served crime victims,

including trafficking victims. However, the report also noted that the Cuban government did not

prohibit forced labor, report efforts to prevent forced labor, or recognize forced labor as a possible

issue affecting Cubans in medical missions abroad.

Economic Conditions

Cuba’s economy is largely state-controlled, with the government owning most means of

production and employing a majority of the workforce. Key sectors of the economy that generate

foreign exchange include the export of professional services (largely medical personnel to

Venezuela); tourism, which has grown significantly since the mid-1990s, with 3.5 million tourists

visiting Cuba in 2015; nickel mining, with the Canadian mining company Sherritt International

involved in a joint investment project; and a biotechnology and pharmaceutical sector that

supplies the domestic health care system and has fostered a significant export industry.

Remittances from relatives living abroad, especially from the United States, have also become an

important source of hard currency, amounting to some $3 billion in 2015. The once-dominant

sugar industry has declined significantly over the past 20 years; in 1990, Cuba produced 8.4

million tons of sugar, while in 2016 it produced just 1.6 million tons (compared to 1.9 million

tons in 2015).29

Cuba is highly dependent on Venezuela for its oil needs. In 2000, the two countries signed a

preferential oil agreement that until recently provided Cuba with some 90,000 barrels of oil per

day, about two-thirds of its consumption. Cuba’s goal of becoming a net oil exporter with the

development of its offshore deepwater oil reserves was set back significantly in 2012, when the

drilling of three exploratory oil wells was unsuccessful. The setback in Cuba’s offshore oil

development combined with political and economic difficulties in Venezuela have raised concerns

among Cuban officials about the security of the support received from Venezuela. Cuba is

increasingly focusing on the need to diversify its trading partners and to seek alternative energy

suppliers in the case of a cutback or cutoff of Venezuelan oil.30

Over the years, Cuba has expressed pride for the nation’s accomplishments in health and

education. According to the United Nations Development Program’s 2015 Human Development

Report, Cuba is ranked 67 out of 188 countries worldwide and is characterized as having “high

human development,” with life expectancy at 79.4 years and adult literacy estimated at almost

100%.

In terms of economic growth, Cuba experienced severe economic deterioration from 1989 to

1993, with an estimated decline in gross domestic product ranging from 35% to 50% when the

Soviet Union collapsed and Russian financial assistance to Cuba practically ended. Since then,

Information and statistics were drawn from several sources: U.S. Department of State, “U.S. Relations with Cuba,”

September 7, 2016; Oficina Nacional de Estadísticas e Información, “Turismo Internacional Indicadores Seleccionados,

Enero-Diciembre 2015, March 2016; Marc Frank, “Cuba 300,000 Tonnes Short of Raw Sugar Goal as Harvest EndsSources,” Reuters News, June 9, 2016.

For example, see “Cuba, Economy, Seeking New Partners,” Latin American Caribbean & Central America Report,

May 2013.

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however, there has been considerable improvement. From 1994 to 2000, as Cuba moved forward

with some limited market-oriented economic reforms, economic growth averaged 3.7% annually.

Economic growth was especially strong in the 2004-2007 period, registering an impressive 11%

and 12%, respectively, in 2005 and 2006 (see Figure 2). The economy benefitted from the growth

of the tourism, nickel, and oil sectors and support from Venezuela and China in terms of

investment commitments and credit lines. However, the economy was hard hit by several

hurricanes and storms in 2008 and the global financial crisis in 2009, with the government having

to implement austerity measures. As a result, economic growth slowed significantly. Growth

improved modestly from 2010-2014, averaging 2.4% annually during the period, although growth

was just 1% in 2014 because of Cuba’s challenges in shifting from a centrally planned to a more

decentralized economy.

Stronger growth of 4.4% returned in 2015, but the Economist Intelligence Unit (EIU) maintains

that economic growth dropped to an estimated 0.5% economic growth in 2016 because of

austerity measures, lower export earnings, and reduced support from Venezuela. (At the end of

2016, Cuba’s economic minister reportedly said that the economy had shrunk 0.9% during the

year.)31 The economic crisis in Venezuela has affected Venezuela’s oil exports to Cuba. Looking

ahead, the EIU forecasts economic growth of 1% in 2017 and 2.4% in 2018, far less than the 5%

that the government and some economists maintain is needed to develop the economy and create

new jobs.32

Figure 2. Cuba: Real GDP Growth (%) 2005-2016

Source: Economist Intelligence Unit, Country Data Tool, 2017.

The government of Raúl Castro has implemented a number of economic policy changes, but there

has been some disappointment that more far-reaching reforms have not been forthcoming. As

noted above, the government employs a majority of the labor force, almost 80%, but it has been

allowing more private sector activities. In 2010, the government opened up a wide range of

activities for self-employment and small businesses. There are now almost 200 categories of work

Sarah Marsh and Marc Frank, “Cuba Says Economy Shrank This Year in Wake of Venezuela Crisis,” Reuters News,

December 27, 2016.

“Cuba Country Report,” Economist Intelligence Unit (EIU), October 2016.

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allowed, and the number of self-employed has risen from some 156,000 at the end of 2010 to

some 507,000 in 2016.33

Analysts contend, however, that the government needs to do more to support the development of

the private sector, including an expansion of authorized activities to include more white-collar

occupations and state support for credit to support small businesses. A major challenge for the

development of the private sector is the lack of money in circulation. Most Cubans do not make

enough money to support the development of small businesses; those private sector activities

catering to tourists and foreign diplomats have fared better than those serving the Cuban market.

Among Cuba’s significant economic challenges are low wages (whereby workers cannot satisfy

basic human needs) and the related problem of how to unify Cuba’s two official currencies

circulating in the country.34 Most people are paid in Cuban pesos (CUPs), and the minimum

monthly wage in Cuba is 225 pesos (U.S. $9),35 but for increasing amounts of consumer goods,

convertible pesos (CUCs) are used. (For personal transactions, the exchange rate for the two

currencies is CUP24/CUC1.) Cubans with access to foreign remittances or who work in jobs that

give them access to convertible pesos are far better off than those Cubans who do not have such

access.

In October 2013, the Cuban government announced that it would move toward ending its dualcurrency system and move toward monetary unification, but the action has been delayed for

several years. In March 2014, the government had provided insight about how monetary

unification would move forward when it published instructions for when the CUC is removed

from circulation; no date was provided, but it was referred to as “day zero.” Currency reform is

ultimately expected to lead to productivity gains and improve the business climate, but an

adjustment would create winners and losers.36 As noted above, at the PCC’s April 2016 Congress,

Raúl Castro called for moving toward a single currency as soon as possible to resolve economic

distortions.

A significant reform effort under Raúl Castro has focused on the agricultural sector, a vital issue

because Cuba reportedly imports some 70%-80% of its food needs according to the World Food

Programme.37 In an effort to boost food production, the government has turned over idle land to

farmers and given farmers more control over how to use their land and what supplies to buy.

Despite these and other efforts, overall food production has been significantly below targets.

In March 2014, Cuba approved a new foreign investment law with the goal of attracting needed

foreign capital to the country. The law cuts taxes on profits by half, to 15%, and exempts

companies from paying taxes for the first eight years of operation. Employment or labor taxes are

also eliminated, although companies still must hire labor through state-run companies, with

agreed-upon wages. A fast-track procedure for small projects reportedly will streamline the

approval process, and the government has agreed to improve the transparency and time of the

“Background 10 Years, 10 Reforms form Cuba’s Raúl Castro by DPA Correspondents,” Deutsche Press-Agentur,

August 1, 2016.

For more on Cuba’s currency problem, see “Replacing Cuba’s Dual Currency System: What Are the Issues That

Really Matter?” Latin American Economy & Business, July 2013.

U.S. Department of State, “Country Reports on Human Rights Practices for 2015, Cuba,” April 13, 2016.

“Cuba: Exchange Rate Unification Approaching,” Latin America Regional Report: Caribbean & Central America,

March 2014.

“Cuba, Current issues and what the World Food Programme is doing,” World Food Programme, available at

https://www.wfp.org/countries/cuba.

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approval process for larger investments.38 It remains to be seen to what extent the new law will

attract investment. Over the past several years, Cuba has closed a number of joint ventures with

foreign companies and has arrested several executives of foreign companies reportedly for

corrupt practices. According to some observers, investors will want evidence, not just legislation,

that the government is prepared to allow foreign investors to make a profit in Cuba.39

In October 2014, the Cuban government issued a list of some 246 projects in which it was

seeking some $8.7 billion in investment in such sectors as energy, tourism, agriculture, and

industry.40 Cuban Minister of Foreign Trade and Investment Rodrigo Malmierca reportedly

maintained in November 2015 that 40 of these projects were in “advanced negotiations” and that

Cuba has signed 36 foreign investment projects since the 2014 investment law was approved, but

did not indicate the value of these projects. In November 2015, Malmierca announced a list of

326 projects in which it is seeking $8.2 billion in foreign investment, including new opportunities

in health care, tourism, transportation, construction, agriculture, and renewable energy.41

In December 2015, Cuba reached a Paris Club arrangement with a group of 14 creditor countries

to forgive $8.5 billion out of $11.1 billion of debt owed, including late interest. Pursuant to the

agreement, Cuba will pay $2.6 billion over a period of 18 years. The creditor countries include

Australia, Austria, Belgium, Canada, Denmark, Finland, Italy, Japan, the Netherlands, Spain,

Sweden, Switzerland, and the United Kingdom.42 The agreement resolves an outstanding

economic challenge for the Cuban government and could make it easier for Cuba to gain access

to credit and attract investment.43 (In 2014, Russia wrote off 90% of Cuba’s $32 billion Soviet-era

debt. See “Cuba’s Foreign Relations” below.)

As noted above, no new economic measures emanated from the PCC’s seventh party congress

held April 16-19, 2016. After the party congress, press articles reported that one of Cuba’s leading

advocates for economic reforms, Omar Everleny Pérez, was dismissed from his position at the

Center for the Study of the Cuban Economy, spreading concern about the Cuban government’s

retrenchment from its commitment to reform.44

A number of Cuba’s economists are pressing for the government to enact more far-reaching

reforms and embrace competition for key parts of the economy and state-run enterprises. They

criticize the government’s continued reliance on central planning and its monopoly on foreign

trade.45 Cuba’s economic potential, according to one analysis, is held back by several factors,

including the lack of political will; dilapidated infrastructure; a transportation sector in need of

repair and modernization; an inefficient and poorly resourced construction sector; and a

“Cuba Approves New Foreign Investment Law,” Latin American Regional Report: Caribbean & Central America,

April 2014; “What’s Changed in Cuba’s New Foreign Investment Law,” Reuters News, March 29, 2014.

Marc Frank, “Cuba Plans Big Tax Breaks to Lure Foreign Investors,” Reuters News, March 26, 2014; and Daniel

Trotta, “Cuba’s Past Raises Skepticism About New Foreign Investment Law,” Reuters News, March 31, 2014.

“Cuba Seeks $8.7 Bn in Foreign Investment,” EFE News Service, November 4, 2014.

“Cuba Seeks $8.2 Billion in Foreign Investment for 326 Projects,” Reuters News, November 3, 2015.

Paris Club, “The Group of Creditors of Cuba and the Republic of Cuba Agree to Clearance of All Arrears,” press

release, December 12, 2015.

“Cuba Seals ‘Historic’ Debt Pact with Paris Club,” Agence France Press, December 14, 2015.

Andrea Rodriguez, “Renowned Cuban Pro-Reform Economist Fired as Chill Set In,” World Politics Review, April

21, 2016.

Marc Frank, “As Cuban Economy Stagnates, Economists Press for Deeper Reforms,” Reuters News, October 24,

2014.

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government bureaucracy that suffers from morale problems, a weak decisionmaking process, and

a lack of familiarity with international practice.46

For Additional Reading on the Cuban Economy

Association for the Study of the Cuban Economy, annual proceedings, available at http://www.ascecuba.org/

publications/annual-proceedings/.

Brookings Institution

Richard E. Feinberg and Richard S. Newfarmer, Tourism in Cuba, Riding the Wave Toward Sustainable Prosperity,

available at https://www.brookings.edu/research/tourism-in-cuba/.

Richard E. Feinberg, The Cuban Economy Could Sing—with a Stronger Score, October 13, 2016, available at

https://www.brookings.edu/blog/order-from-chaos/2016/10/13/the-cuban-economy-could-sing-with-astronger-score/.

Richard E. Feinberg and Ted Piccone, eds., Cuba’s Economic Change in Comparative Perspective, November 2014,

available at http://www.brookings.edu/research/papers/2014/11/cuba-economic-change-comparativeperspective.

Ted Piccone and Harold Trinkunas, The Cuba-Venezuela Alliance: The Beginning of the End? June 2014, available

at http://www.brookings.edu/research/papers/2014/06/16-cuba-venezuela-alliance-piccone-trinkunas.

The Cuban Economy, La Economia Cubana, website maintained by Arch Ritter, from Carlton University,

Ottawa, Canada, available at http://thecubaneconomy.com/.

Revista Temas (Havana), links to the Cuban journal’s articles on economy and politics, in Spanish available at

http://temas.cult.cu/.

Oficina Nacional de Estadísticas e Información, República de Cuba (Cuba’s National Office of Statistics and

Information), available at http://www.one.cu/.

Cuba’s Foreign Relations

During the Cold War, Cuba had extensive relations with and support from the Soviet Union, with

billions of dollars in annual subsidies to sustain the Cuban economy. This subsidy system helped

fund an activist foreign policy and support for guerrilla movements and revolutionary

governments abroad in Latin America and Africa. With an end to the Cold War, the dissolution of

the Soviet Union, and the loss of Soviet financial support, Cuba was forced to abandon its

revolutionary activities abroad. As its economy reeled from the loss of Soviet support, Cuba was

forced to open up its economy and economic relations with countries worldwide. In 2014, Cuba’s

leading trading partners in terms of Cuban exports were Venezuela (almost 43%), Canada, the

Netherlands, and China, while the leading sources of Cuba’s imports were Venezuela (almost

40%), China, Spain, Brazil, Mexico, Canada, Italy, the United States, Argentina, and Germany.47

Russia. Relations with Russia, which had diminished significantly in the aftermath of the Cold

War, have been strengthened somewhat over the past several years. In 2008, then-Russian

President Dmitry Medvedev visited Havana, while Raúl Castro visited Russia in 2009 and again

in 2012. Current Russian President Vladimir Putin visited Cuba in July 2014 on his way to attend

the BRICS48 summit in Brazil. Just before arriving in Cuba, Putin signed into law an agreement

writing off 90% of Cuba’s $32 billion Soviet-era debt, with some $3.5 billion to be paid back by

Fulton Armstrong, “Cuba’s Limited Absorptive Capacity Will Slow Normalization,” Center for Latin American &

Latino Studies, Cuba Initiative, American University, October 20, 2015.

Statistics drawn from Oficina Nacional de Estadística e Información, República de Cuba, Anuario Estadístico de

Cuba 2014, Capítulo 8: Sector Externo, Edición 2015.

The BRICS is an association of five major emerging economies: Brazil, Russia, India, China, and South Africa.

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Cuba over a 10-year period that would fund Russian investment projects in Cuba.49 In the

aftermath of Putin’s trip, there were press reports alleging that Russia would reopen its signals

intelligence facility at Lourdes, Cuba, which had closed in 2002, but President Putin denied

reports that his government would reopen the facility.50

While trade relations between Russia and Cuba are not significant, two Russian energy

companies have been involved in oil exploration in Cuba, and a third announced its involvement

in 2014. Gazprom had been in a partnership with the Malaysian state oil company, Petronas, that

conducted unsuccessful deepwater oil drilling off Cuba’s western coast in 2012. The Russian oil

company Zarubezhneft began drilling in Cuba’s shallow coastal waters east of Havana in

December 2012, but stopped work in April 2013 because of disappointing results. During

President Putin’s July 2014 visit to Cuba, Russian energy companies Rosneft and Zarubezhneft

signed an agreement with Cuba’s state oil company CubaPetroleo (Cupet) for the development of

an offshore exploration block, and Rosneft agreed to cooperate with Cuba in studying ways to

optimize existing production at mature fields.51 Some energy analysts are skeptical about the

prospects for the offshore project given the unsuccessful attempts by foreign oil companies

drilling wells in Cuba’s deepwaters.

In January 2015, as U.S.-Cuba normalization talks were beginning in Havana, a Russian

intelligence ship docked in Havana. U.S. officials downplayed the arrival of the ship, maintaining

that it was legal and not out of the ordinary.52 Russian officials publicly welcomed the

improvement in U.S.-Cuban relations, although the change in U.S. policy could be viewed as a

potential setback for Russian overtures in the region.

In early October 2016, a Russian military official maintained that Russia was reconsidering

reestablishing a military presence in Cuba (and Vietnam), although there was no indication that

Cuba would be open to the return of the Russian military.53

China. Relations with China have also strengthened in recent years. During the Cold War, the

two countries did not have close relations because of Sino-Soviet tensions, but bilateral relations

have grown close in recent years, with Chinese trade and investment in Cuba increasing. Chinese

President Hu Jintao visited Cuba in 2004 and again in 2008, while Chinese Vice President Xi

Jinping visited Cuba in June 2011 and again in July 2014, this time as China’s president, after

attending the BRICS summit in Brazil. Raúl Castro had also visited China in 2012 on a four-day

visit, in which the two countries reportedly signed cooperation agreements focusing on trade and

investment issues. During Xi Jinping’s 2014 visit, the two countries reportedly signed 29 trade,

debt, credit, and other agreements. While in Cuba, the Chinese president said that “China and

That agreement had been discussed in a 2013 visit by now Prime Minister Medvedev to Cuba, and had been

announced in December 2013. Anna Andrianova and Bill Faries, “Russia Forgives $32B of Debt, Wants to Do

Business in Cuba,” Bloomberg News, July 13, 2014; Marc Frank, “Russia Signs Deal to Forgive $29 Billion of Cuba’s

Soviet-Era Debt–Diplomats,” Reuters, December 9, 2013; “Castro Declares He Had a Good Visit with Russia’s

Medvedev,” Agence France Presse, February 23, 2013.

“Putin Denies Russia to Reopen Soviet-Era Spy Post in Cuba,” Reuters News, July 17, 2014.

“Russia Cements Energy Ties with Latin America,” Oil Daily, July 15, 2014.

“Russian Spy Ship Arrives in Havana Ahead of U.S.-Cuba Talks,” Radio Free Europe Documents and Publications,

January 21, 2015.

Andrew Roth, “Russia Has Its Permanent Air Base in Syria; Now It’s Looking at Cuba and Vietnam,” Washington

Post, October 8, 2016; and Mimi Whitefield, “Russian Media Report: Kremlin Considering Reopening Bases in Cuba,

Vietnam,” Miami Herald, October 7, 2016.

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Cuba being socialist countries, we are closely united by the same missions, ideals, and

struggles.”54

European Union. The European Union (EU) and Cuba held seven rounds of talks—two in 2014,

four in 2015, and one on March 3-4, 2016—on a Political Dialogue and Cooperation Agreement

covering political, trade, and development issues. Ultimately, an agreement was reached after the

last round of talks and initialed by Cuba and the EU in Havana on March 11, 2016.55 In 1996, the

EU adopted a Common Position on Cuba, stating that the objective of EU relations with Cuba

included encouraging “a process of transition to pluralist democracy and respect for human rights

and fundamental freedoms.” The position also stipulated that full EU economic cooperation with

Cuba would depend upon improvements in human rights and political freedom. 56 The new

cooperation agreement, which has to be officially approved by EU governments, would replace

the 1996 Common Position. It includes political dialogue and a framework to deepen relations in

a number of areas, including trade.

Venezuela and Other Latin American Countries. For more than 15 years, Venezuela has been a

significant source of support for Cuba. Dating back to 2000 under populist President Hugo

Chávez, Venezuela began providing subsidized oil (some 100,000 barrels per day) and

investment. For its part, Cuba has sent thousands of medical personnel to Venezuela. In the

aftermath of Chávez’s death in March 2013, Venezuela’s mounting economic challenges since

mid-2014 because of the rapid decline in oil prices, and the defeat of the ruling party in

Venezuela’s December 2015 legislative elections, Cuba has been concerned about the future of

Venezuelan financial support. Cuba’s economic growth has slowed to a projected 0.5% in 2016,

to a large extent due to the decrease in Venezuelan support.57

With El Salvador’s restoration of relations with Cuba in June 2009, all Latin American nations

now have official diplomatic relations with Cuba. Cuba has increasingly become more engaged in

Latin America beyond the already close relations with Venezuela. Cuba is a member of the

Bolivarian Alliance for the Americas (ALBA), a Venezuelan-led integration and cooperation

scheme founded in 2004. In August 2013, Cuba began deploying thousands of doctors to Brazil in

a program aimed at providing doctors to rural areas of Brazil, with Cuba earning some $225

million a year for supplying the medical personnel.58 Brazil also has been a major investor in the

development of the port of Mariel west of Havana. Since 2012, Cuba has hosted peace talks

between the Colombian government and the Revolutionary Armed Forces of Colombia. In early

November 2015, Raúl Castro visited Mexico on a trip designed to warm relations and increase

economic linkages.

Community of Latin American and Caribbean States (CELAC). Cuba became a full member

of the Rio Group of Latin American and Caribbean nations in November 2008, and a member of

the succeeding CELAC that was officially established in December 2011 to boost regional

cooperation, but without the participation of the United States or Canada. In January 2013, Raúl

Castro assumed the presidency of the organization for one year, and Cuba hosted the group’s

Marc Frank, “Chinese President Ends Regional Tour in Cradle of Cuban Revolution,” Reuters News, July 23, 2014.

European Union, External Action, “EU Relations with Cuba,” at http://eeas.europa.eu/cuba/index_en.htm.

European Union, Official Journal of the European Commission, “Common Position of 2 December 1996, Defined by

the Council on the Basis of Article J.2 of the Treaty on European Union, on Cuba,” (96/697/CFSP), December 2, 1996.

“Cuba Country Report,” Economist Intelligence Unit (EIU), October 2016. Also see William M. Leogrande,

“Venezuelan Contagion Hits Cuba’s Economy, Putting Reforms in Jeopardy,” August 1, 2016.

Anthony Boadle, “Cuban Doctors Tend to Brazil’s Poor, Giving Rousseff a Boost,” Reuters News, December 1,

2013.

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second summit in January 2014 in Havana, attended by leaders from across the hemisphere as

well as United Nations Secretary General Ban Ki-moon. The Secretary General reportedly raised

human rights issues with Cuban officials, including the subject of Cuba’s ratification of U.N.

human rights accords and “arbitrary detentions” by the Cuban government.59

Summits of the Americas. Cuba had expressed interest in attending the sixth Summit of the

Americas in April 2012 in Cartagena, Colombia, but ultimately was not invited to attend. The

United States and Canada expressed opposition to Cuba’s participation. Previous summits were

limited to the hemisphere’s 34 democratically elected leaders, and the Organization of American

States (OAS) (in which Cuba does not participate) has played a key role in summit

implementation and follow-up activities. Several Latin American nations vowed not to attend the

seventh Summit of the Americas to be held in Panama on April 10-11, 2015, unless Cuba was

allowed to participate, and as a result, Panama announced in August 2014 that it would invite

Cuba to attend. Cuba’s participation was a looming challenge for the Obama Administration, but

in December 2014, when President Obama announced a new policy approach toward Cuba, he

said that the United States was prepared to have Cuba participate in the summit. Cuba ultimately

participated in the summit in Panama, with a historic sidelines meeting between President Obama

and President Raúl Castro. (For more on the summit, see CRS Report R43952, Seventh Summit of

the Americas: In Brief, by (name redacted)

OAS. Cuba was excluded from participation in the OAS in 1962 because of its identification with

Marxism-Leninism, but in 2009, the OAS overturned the 1962 resolution in a move that could

eventually lead to Cuba’s reentry into the regional organization in accordance with the practices,

purposes, and principles of the OAS. While the Cuban government welcomed the OAS vote to

overturn the 1962 resolution, it asserted that it would not return to the OAS.60

International Organizations. Cuba is an active participant in international forums, including the

United Nations (U.N.) and the controversial United Nations Human Rights Council. Cuba also

has received support over the years from the United Nations Development Programme (UNDP)

and the United Nations Educational, Scientific, and Cultural Organization (UNESCO), both of

which have offices in Havana. The U.N. has played a significant role in providing relief and

recovery from Hurricane Sandy that struck in October 2012.

Since 1991, the U.N. General Assembly has approved a resolution each year criticizing the U.S.

economic embargo and urging the United States to lift it. In 2015, the vote calling for the United

States to lift the embargo occurred on October 27, with 191 votes in favor and 2 votes (Israel and

the United States) against.61 Leading up to the vote, there had been speculation that the United

States would abstain. In 2016, the vote on the U.N. resolution took place on October 26, with 191

votes in favor and—for the first time—the United States (and Israel) abstaining. In remarks at the

U.N. General Assembly session, Ambassador Samantha Power, the U.S. Permanent

Representative to the United Nations, stated that the resolution was “a perfect example of why the

U.S. policy of isolation toward Cuba was not working” and that U.S. policy instead had isolated

the United States, including at the United Nations. She stated, however, that “abstaining on the

resolution does not mean that the United States agrees with all the policies and practices of the

“UN Chief Pushes Cuba on ‘Arbitrary Detentions,’” Agence France Presse, January 28, 2014.

For further background, see section on “Cuba and the OAS” in archivedCRS Report R40193, Cuba: Issues for the

111th Congress, by (name redacted) ; also see CRS Report R42639, Organization of American States: Background and

Issues for Congress, by (name redacted)

U.N. General Assembly, 70 Session, Resolution No. A/RES/70/5, “Necessity of Ending the Economic, Commercial

and Financial Embargo Imposed by the United States of America Against Cuba,” October 27, 2015, available at

http://research.un.org/en/docs/ga/quick/regular/70.

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Cuban government,” adding that the United States was “profoundly concerned by the serious

human rights violations that the Cuban government continues to commit with impunity against its

own people.”62

Among other international organizations, Cuba was a founding member of the World Trade

Organization, but it is not a member of the International Monetary Fund, the World Bank, or the

Inter-American Development Bank. In January 2016, the executive president of the Development

Bank of Latin America (CAF) stated in an interview that the bank was in the process of looking at

a way for Cuba to become a member; the CAF’s current membership includes 17 Latin American

and Caribbean countries as well as Spain and Portugal. In September 2016, Cuba signed a

memorandum of understanding with the CAF with the objective of supporting technical

cooperation programs for Cuba’s social and economic development and laying the foundation for

Cuba’s future memberships in the CAF.63

Compliance with U.N. Sanctions on North Korea. In July 2013, the discovery of a weapons

shipment aboard a North Korean ship that had left Cuba on its way back to North Korea raised

questions about the nature of Cuban-North Korean relations and about Cuba’s compliance with

U.N. sanctions against North Korea. Panama had detained the North Korean ship as it prepared to

enter the Panama Canal due to suspicion that the ship was carrying illicit narcotics; instead, the

ship was found to be carrying military weapons. The U.N. Security Council’s Panel of Experts for

North Korea visited Panama in August 2013 and issued a report on the incident in March 2014.

The Panel of Experts concluded that both the shipment and the transaction between Cuba and

North Korea were violations of U.N. sanctions banning weapons transfers to North Korea.64 In

July 2014, the U.N. Security Council imposed sanctions on the operator of the North Korean ship,

and the company is now subject to an international asset freeze.65 U.S. Ambassador to the United

Nations Samantha Power described the North Korean ship incident as a “cynical, outrageous and

illegal attempt by Cuba and North Korea to circumvent United Nations sanctions.”66

U.S. Department of State, United States Mission to the United Nations, Ambassador Samantha Power, “Remarks at a

UN General Assembly Meeting on the Cuba Embargo,” October 26, 2016.

Marc Jones, “Interview – Latam Development Bank CAF Sees Cuba Joining in Weeks,” Reuters News, January 15,

2016; CAF, Development Bank of Latin America, “CAF and Cuba Sign First Agreement of Understanding To

Establish a Joint Working Agenda,” September 3, 2016.

United Nations Security Council, notes by the President of the Security Council, report of the panel of experts

established pursuant to resolution 1874 (2009), S/1014/147, March 6, 2014, available at http://www.un.org/en/ga/

search/view_doc.asp?symbol=S/2014/147. The panel found that the “hidden cargo ... amounted to six trailers

associated with surface-to-air missile systems and 25 shipping containers loaded with two disassembled MiG-21

aircraft, 15 engines for MiG-21 aircraft, components for surface-to-air missile systems, ammunition and miscellaneous

arms-related material.” According to the report, the “extraordinary and extensive efforts to conceal the cargo of arms

and related material ... and the contingency instructions ... found onboard the vessel for preparing a false declaration for

entering the Panama Canal ... point to a clear and conscious intention to circumvent the resolutions.”

U.N. Security Council, “Security Council Committee Designates Entity Subject to Measures Imposed by Resolution

1718 (2006),” press release, July 28, 2014.

Michelle Nichols, “U.N. Blacklists Operator of North Korean Ship Seized in Panama,” Reuters, July 29, 2014.

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U.S. Policy Toward Cuba

Background on U.S.-Cuban Relations67

In the early 1960s, U.S.-Cuban relations deteriorated sharply when Fidel Castro began to build a

repressive communist dictatorship and moved his country toward close relations with the Soviet

Union. The often tense and hostile nature of the U.S.-Cuban relationship is illustrated by such

events and actions as U.S. covert operations to overthrow the Castro government culminating in

the ill-fated April 1961 Bay of Pigs invasion; the October 1962 missile crisis in which the United

States confronted the Soviet Union over its attempt to place offensive nuclear missiles in Cuba;

Cuban support for guerrilla insurgencies and military support for revolutionary governments in

Africa and the Western Hemisphere; the 1980 exodus of around 125,000 Cubans to the United

States in the so-called Mariel boatlift; the 1994 exodus of more than 30,000 Cubans who were

interdicted and housed at U.S. facilities in Guantánamo and Panama; and the 1996 shootdown by

Cuban fighter jets of two U.S. civilian planes operated by the Cuban-American group Brothers to

the Rescue, which resulted in the deaths of four U.S. crew members.

Beginning in the early 1960s, U.S. policy toward Cuba consisted largely of isolating the island

nation through comprehensive economic sanctions, including an embargo on trade and financial

transactions. President Kennedy proclaimed an embargo on trade between the United States and

Cuba in February 1962,68 citing Section 620(a) of the Foreign Assistance Act of 1961 (FAA),

which authorizes the President “to establish and maintain a total embargo upon all trade between

the United States and Cuba.”69 At the same time, the Department of the Treasury issued the

Cuban Import Regulations to deny the importation into the United States of all goods imported

from or through Cuba.70 The authority for the embargo was later expanded in March 1962 to

include the Trading with the Enemy Act (TWEA).71

In July 1963, the Department of the Treasury revoked the Cuban Import Regulations and replaced

them with the more comprehensive Cuban Assets Control Regulations (CACR)—31 C.F.R. Part

515—under the authority of TWEA and Section 620(a) of the FAA.72 The CACR, which include a

prohibition on most financial transactions with Cuba and a freeze of Cuban government assets in

the United States, remain the main body of Cuba embargo regulations and have been amended

many times over the years to reflect changes in policy. They are administered by the Department

of the Treasury’s Office of Foreign Assets Control (OFAC) and prohibit financial transactions as

well as trade transactions with Cuba. The CACR also require that all exports to Cuba be licensed

by the Department of Commerce, Bureau of Industry and Security, under the provisions of the

For additional background, see archived CRS Report RL30386, Cuba-U.S. Relations: Chronology of Key Events

1959-1999, by (name redacted) .

27 Federal Register 1085, February 7, 1962 (Proclamation 3447, Embargo on All Trade with Cuba, February 3,

1962).

In October 1960 under the Eisenhower Administration, exports to Cuba were strictly controlled under the authority

of the Export Control Act of 1949 in response to the expropriation of U.S. properties. This in effect amounted to an

embargo on exports of all products with the exception of certain foods, medicines, and medical supplies.

27 Federal Register 1116, February 7, 1962.

27 Federal Register 2765-2766, March 24, 1962.

28 Federal Register 6974-6985, July 9, 1963.

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Export Administration Act of 1979, as amended.73 The Export Administration Regulations (EAR)

are found at 15 C.F.R. Sections 730-774.74

Congress subsequently strengthened sanctions on Cuba with enactment of the Cuban Democracy

Act (CDA) of 1992 (P.L. 102-484, Title XVII), the Cuban Liberty and Democratic Solidarity

(LIBERTAD) Act of 1996 (P.L. 104-114), and the Trade Sanctions Reform and Export

Enhancement Act of 2000 or TSRA (P.L. 106-387, Title IX).



Among its provisions, the CDA prohibits U.S. foreign subsidiaries from engaging

in trade with Cuba and prohibits entry into the United States for any seaborne

vessel to load or unload freight if it has been involved in trade with Cuba within

the previous 180 days, except pursuant to a Treasury Department license. (In

October 2016, the Treasury Department issued a general license for vessels

involved in trade with Cuba.)

The LIBERTAD Act (P.L. 104-114), enacted in the aftermath of Cuba’s shooting

down of two U.S. civilian planes in February 1996, combines a variety of

measures to increase pressure on Cuba and provides for a plan to assist Cuba

once it begins the transition to democracy. Most significantly, the law codified

the Cuban embargo, including all restrictions under the CACR. This provision is

noteworthy because of its long-lasting effect on U.S. policy options toward Cuba.

The executive branch is prevented from lifting the economic embargo without

congressional concurrence until certain democratic conditions set forth in the law

are met, although the President retains broad authority to amend the regulations

therein. Another significant sanction in Title III of the law holds any person or

government that traffics in U.S. property confiscated by the Cuban government

liable for monetary damages in U.S. federal court. Acting under provisions of the

law, however, Presidents Clinton, Bush, and Obama have suspended the

implementation of Title III at six-month intervals.

Although TSRA authorizes U.S. commercial agricultural exports to Cuba, it also

includes prohibitions on U.S. assistance and financing and requires “payment of

cash in advance” or third-country financing for the exports. The act also prohibits

tourist travel to Cuba.

In addition to these acts, Congress enacted numerous other provisions of law over the years that

impose sanctions on Cuba, including restrictions on trade, foreign aid, and support from

international financial institutions. The government of Cuba also was designated by the State

Department as a state sponsor of international terrorism in 1982 under Section 6(j) of the Export

Administration Act and other laws because of its alleged ties to international terrorism.75 (For

additional information, see CRS Report R43888, Cuba Sanctions: Legislative Restrictions

Limiting the Normalization of Relations, by (name redacted) and (name redacted)

In addition to sanctions, another component of U.S. policy has consisted of support measures for

the Cuban people. This includes U.S. private humanitarian donations, medical exports to Cuba

31 C.F.R. §515.533.

See especially 15 C.F.R. §746.2 on Cuba, which refers to other parts of the EAR. See http://www.ecfr.gov/cgibin/text-idx?SID=d318b728a0d070fda95fa3bf8232e829&node=pt15.2.746&rgn=div5#se15.2.746_12.

Cuba’s designation on the state sponsor of terrorism list has allowed U.S. nationals injured by an act of international

terrorism to file lawsuits against Cuba in the United States for damages. For more information, see CRS Legal Sidebar

WSLG254, Can Victims of Terrorism in the United States Sue Foreign Governments?, by (name redacted) ; and CRS

Legal Sidebar WSLG1405, Can Creditors Enforce Terrorism Judgments Against Cuba?, by (name redacted) .

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under the terms of the CDA, U.S. government support for democracy-building efforts, and U.S.sponsored radio and television broadcasting to Cuba. The enactment of TSRA by the 106th

Congress also led to the United States becoming one of Cuba’s largest suppliers of agricultural

products. Authorization for purposeful travel to Cuba and cash remittances to Cuba have

constituted important means to support the Cuban people, although there has been significant

congressional debate over these issues for many years.

Despite the poor state of U.S.-Cuban relations, there have been several examples of bilateral

cooperation over the years in areas of shared national interest. Three areas that stand out are alien

migrant interdiction (with migration accords negotiated in 1994 and 1995), counternarcotics

cooperation (with increased cooperation dating back to 1999), and cooperation on oil spill

preparedness and prevention (since 2011).

Obama Administration Policy

During its first six years, the Obama Administration continued the dual-track policy approach

toward Cuba that has been in place for many years. It maintained U.S. economic sanctions and

continued measures to support the Cuban people, such as U.S. government-sponsored radio and

television broadcasting and funding for democracy and human rights projects.

Alan Gross Case

At the same time, however, the Obama

Administration initiated a significant shift in

U.S.-Cuban relations took a turn for the worse in

December 2009 when Alan Gross, an American

policy toward Cuba beginning in 2009. As

subcontractor working on Cuba democracy projects

part of the policy of reaching out to the Cuban

funded by the U.S. Agency for International Development

people, President Obama fulfilled a campaign

(USAID), was arrested in Havana. Gross was providing

pledge by lifting all restrictions on family

Internet communications equipment to Cuba’s Jewish

travel and remittances. At the April 2009

community. He was convicted in March 2011 on charges

of acting “against the independence and territorial

Summit of the Americas, President Obama

integrity of the state,” and sentenced to 15 years in

announced that “the United States seeks a new

prison. U.S. officials and some Members of Congress

beginning with Cuba.” While recognizing that

repeatedly raised the issue with the Cuban government

it would take time to “overcome decades of

and asked for his release. In the aftermath of Gross’s

conviction, the United States and Cuba continued to

mistrust,” the President said “there are critical

cooperate on issues of shared national interest, such as

steps we can take toward a new day.” He

antidrug efforts and migration interdiction, but

stated that he was prepared to have his

improvement of relations in other areas became stymied.

Administration “engage with the Cuban

Securing his release remained a top U.S. priority until he

government on a wide range of issues—from

was ultimately released by the Cuban government on

December 17, 2014.

drugs, migration, and economic issues, to

human rights, free speech, and democratic

reform.”76 In the aftermath of the Summit in 2009, there was some momentum toward improved

relations: in July, the two countries restarted semi-annual migration talks that had been suspended

by the United States five years earlier; in September, the two countries held talks on resuming

direct mail service.

The Obama Administration introduced new measures in 2011 to further reach out to the Cuban

people through increased purposeful travel (including people-to-people educational travel) and an

easing of restrictions on non-family remittances. Beginning in mid-2013, there was also renewed

engagement with Cuba on several fronts, including direct mail service talks, resumed migration

talks (that had not taken place for 18 months), and air and maritime search and rescue.

White House, “Remarks by the President at the Summit of the Americas Opening Ceremony,” April 17, 2009.

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In remarks made in November 2013 on policy toward Cuba, President Obama maintained that

“we have to be creative ... we have to be thoughtful ... and we have to continue to update our

policies.” He contended that “the notion that the same policies that we put in place in 1961 would

somehow still be as effective as they are today in the age of the Internet and Google and world

travel doesn’t make sense.”77

Throughout the Obama Administration’s first six years, human rights violations in Cuba remained

a fundamental concern. President Obama and the State Department continued to issue statements

expressing concern about violations as they occurred, including the death of hunger strikers in

2010 and 2012 and targeted repression against dissidents and human rights activists. As noted

above, securing the release of Alan Gross from prison in Cuba also remained a top U.S. priority.

The State Department maintained that it was using every appropriate channel to press for his

release, including the Vatican.

President Obama Unveils a New Policy Approach Toward Cuba

On December 17, 2014, just after the adjournment of the 113th Congress, President Obama

announced major developments in U.S.-Cuban relations and unveiled a new policy approach

toward Cuba. First, he announced that the Cuban government had released Alan Gross on

humanitarian grounds after five years of imprisonment. The President also announced that, in a

separate action, the Cuban government released “one of the most important intelligence assets

that the United States has ever had in Cuba” in exchange for three Cuban intelligence agents who

had been imprisoned in the United States since 1998. Media reports identified the U.S.

intelligence asset as Rolando Sarraff Trujillo, a cryptographer in Cuba’s Directorate of

Intelligence, who reportedly provided information that helped the FBI dismantle three Cuban spy

networks in the United States.78

Most significantly, in the aftermath of having secured the release of Gross and the U.S.

intelligence asset, President Obama announced a major shift in U.S. policy toward Cuba, moving

away from a sanctions-based policy aimed at isolating Cuba to a policy of engagement. The

President said that his Administration

will end an outdated approach that, for decades, has failed to advance our interests, and

instead we will begin to normalize relations between our two countries. Through these

changes, we intend to create more opportunities for the American and Cuban people, and

begin a new chapter among the nations of the Americas.

The President maintained that the United States would continue to raise concerns about

democracy and human rights in Cuba but stated that “we can do more to support the Cuban

people and promote our values through engagement.” According to the President, “After all, these

50 years have shown that isolation has not worked. It’s time for a new approach.”79

The President outlined three major steps to move toward normalization: (1) the reestablishment of

diplomatic relations with Cuba; (2) a review of Cuba’s designation by the Department of State as

a state sponsor of international terrorism; and (3) an increase in travel, commerce, and the flow of

information to and from Cuba.

White House, Office of the Press Secretary, “Remarks by the President at a DSCC Fundraising Reception,” Miami,

Florida, November 8, 2013, at http://www.whitehouse.gov/the-press-office/2013/11/08/remarks-president-dsccfundraising-reception-0.

Adam Goldman and Missy Ryan, “Spy Helped Unmask 3 Cuban Spy Networks, U.S. Officials Say,” Washington

Post, December 18, 2014.

White House, “Statement by the President on Cuba Policy Changes,” December 17, 2014.

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When President Obama announced his Cuba policy change, he also indicated that his

Administration was prepared to have Cuba participate in the Summit of the Americas to be held

April 10-11, 2015, in Panama. The White House emphasized that human rights and democracy

would be key themes of the summit and asserted that Cuban civil society must be allowed to

participate with civil society from other countries. Cuba’s potential participation in the summit

had been a policy challenge for the Administration since it had opposed Cuba’s participation in

the 2012 Summit of the Americas in Colombia.

Cuba ultimately participated in the summit in Panama, with President Obama and Cuban

President Raúl Castro holding a historic bilateral meeting in Panama on April 11. President

Obama stated that “there are still going to be deep and significant differences between our two

governments,” with the United States continuing to raise concerns around democracy and human

rights and Cuba raising concerns about U.S. policy. He maintained, however, that “what we have

both concluded is that we can disagree with the spirit of respect and civility, and that over time it

is possible for us to turn the page and develop a new relationship in our two countries.” Several

Cuban dissidents attended and participated in the Civil Society and Social Actors Forum,

although there were problems with a reported attack on anti-Castro protestors by Cuban

government supporters just ahead of the summit and efforts by Cuban government supporters to

disrupt an event in which Cuban dissidents were scheduled to speak.80

Reestablishment of Diplomatic Relations

As U.S.-Cuban relations deteriorated in the early 1960s, relations were severed by the

Eisenhower Administration in January 1961 in response to the Cuban government’s demand to

decrease the number of U.S. Embassy staff within 48 hours. In 1977, under the Carter

Administration, both countries established Interests Sections in each other’s capitals.

In 2015, four rounds of talks were held on reestablishing relations, with the U.S. delegation

headed by Assistant Secretary of State for Western Hemisphere Affairs Roberta Jacobson and the

Cuban delegation led by Josefina Vidal, director of the North American division of Cuba’s

Ministry of Foreign Relations. The first round took place on January 22, 2015, in Havana, a day

after previously scheduled semi-annual migration talks, and focused on the required steps for the

reestablishment of relations, the opening of embassies, and expectations on how the U.S.

Embassy in Havana would operate.81 Subsequent rounds took place on February 27 in

Washington, DC; March 16 in Havana; and May 21-22, 2015, in Washington, DC. Issues

discussed included staffing numbers, lifting in-country travel restrictions on diplomats,

unimpeded shipments for the diplomatic post, and access to the post by Cubans.82 In other

developments, a U.S. government delegation visited Havana March 24-26, 2015, focusing on the

development of telecommunications and Internet connections between the United States and

Cuba. On March 31, U.S. and Cuban delegations met in Washington, DC, to discuss how they

would proceed on a future human rights dialogue.

“U.S. Trouble by Reported Attacks on Protesters in Panama,” Reuters News, April 9, 2015; and Nick Miroff and

Karen DeYoung, “In Havana, Old Habits Die Hard,” Washington Post, April 12, 2015.

U.S. Department of State, Roberta Jacobson, Assistant Secretary, Bureau of Western Hemisphere Affairs, “Talks to

Re-Establish Diplomatic Relations,” January 22, 2015.

According to the State Department, the U.S. Interests Section in Havana has a cap of 51 direct U.S. hires, a cap

previously jointly agreed by the United States and Cuba. The U.S. Interests Section in Havana also employs almost 400

foreign nationals. U.S. Department of State and Broadcasting Board of Governors, Office of Inspector General,

Inspection of U.S. Interests Section Havana, Cuba, May 2014; U.S. Department of State, “Press Availability with

Assistant Secretary of State for Western Hemisphere Affairs,” February 27, 2015.

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Ultimately, on July 1, 2015, President Obama announced that the United States and Cuba agreed

to reestablish diplomatic relations, effective July 20, and to reopen embassies in their respective

capitals on the same day. The President maintained that “this is a historic step forward in our

efforts to normalize relations with the Cuban government and people.”83 On the same day,

Secretary of State Kerry notified Congress, pursuant to Section 7015(a) of the Department of

State, Foreign Operations, and Related Programs Appropriations Act, 2015 (Division J, P.L. 113235), of the plan to redesignate the U.S. Interests Section in Havana as an embassy. That

provision of law required congressional notification 15 days in advance before closing or opening

a mission or post. On July 20, the U.S. and Cuban Interests Sections in Washington, DC, and

Havana, respectively, were converted to embassies. Cuba held a flag-raising ceremony on that

day at its embassy attended by Cuban Foreign Minister Bruno Rodriguez. Secretary of State John

Kerry visited Havana on August 14, 2015, for a flag-raising ceremony at the U.S. Embassy. This

marked the first visit of a U.S. Secretary of State to Cuba since 1945.

Rescission of Cuba’s Designation as a State Sponsor of International Terrorism

Cuba had been on the list since 1982 pursuant to Section 6(j) of the Export Administration Act

(EAA) of 1979 (P.L. 96-72; 50 U.S.C. Appendix 2405(j)) and other laws because of its alleged

ties to international terrorism and support for terrorist groups in Latin America. On December 17,

2014, President Obama directed Secretary of State Kerry to review Cuba’s designation “guided

by the facts and the law.” The President stated that “at a time when we are focused on threats

from al Qaeda to ISIL, a nation that meets our conditions and renounces the use of terrorism

should not face this sanction.”

On April 9, 2015, during a trip to Jamaica ahead of the Summit of the Americas in Panama,

President Obama said that the State Department had completed its review and he would soon be

making his decision. That occurred on April 14, when the President transmitted to Congress a

report justifying the rescission of Cuba’s designation as a state sponsor of terrorism. No

resolutions of disapproval were introduced in Congress to block the rescission, which took place

on May 29, 2015, 45 days after the submission of the report to Congress. Subsequently, to reflect

the rescission of Cuba’s designation as a state sponsor of terrorism in U.S. regulations, the

Treasury Department’s Office of Foreign Assets Control (OFAC) amended the Cuban Assets

Control Regulations (CACR) in June 2015 and the Commerce Department’s Bureau of Industry

and Security (BIS) amended the Export Administration Regulations in July 2015.84 (For

additional information, see “State Sponsor of Terrorism Designation,” below.)

Increase in Travel, Commerce, and the Flow of Information

The White House announced a number of policy changes to implement this third step. The

changes build upon previous steps that President Obama took in 2009, when he lifted all

restrictions on family travel and remittances to family members in Cuba, and in 2011, when he

took action to increase purposeful travel to Cuba, such as people-to-people educational trips.

Just as in 2009 and 2011, the President’s new initiative required changes to U.S. embargo

regulations administered by the Treasury Department’s OFAC (CACR; 31 C.F.R. Part 515) and

the Department of Commerce’s BIS (EAR; 15 C.F.R. Parts 730-774). Such changes fall within

White House, “Statement by the President on the Re-Establishment of Diplomatic Relations with Cuba,” July 1,

2015.

80 Federal Register 34053-34054, June 15, 2015; and 80 Federal Register 43314-43320, July 22, 2015.

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the scope of the President’s discretionary licensing authority to make changes to the embargo

regulations.

To implement the policy changes to increase travel and commerce, the two agencies issued five

rounds of amendments to the CACR and the EAR in January 2015, September 2015, January

2016, March 2016, and October 2016; this was in addition to the regulatory changes noted above

related to the rescission of Cuba’s designation as a state sponsor of terrorism.85

The regulations included changes in the following areas:



Travel and Remittances. The amended Treasury regulations authorize a general

license for the existing 12 categories of authorized travel in the CACR, meaning

that travelers who fall under these categories do not have to apply to the

Department of the Treasury for permission. Travel agents and air and vessel

carriers are also able to provide services for travel to Cuba under a general

license. Authorized travelers will also be permitted to use U.S. credit and debit

cards as U.S. financial institutions offer these services. Donative remittances to

Cuban nationals are authorized without limit; initially the cap was increased from

$500 to $2,000 per quarter in January 2015, and then it was removed altogether

in September 2015. The regulations also authorize without limit remittances for

certain activities related to humanitarian projects, the promotion of civil society,

and the development of private businesses. In March 2016, the CACR were

amended to permit individuals to travel to Cuba for individual, people-to-people

education travel (previously, such trips had to take place under the auspices of an

organization). Authorized travelers to Cuba, as well as U.S. travelers to third

countries, can bring back Cuban products to the United States for personal use,

including alcohol and tobacco products. (Also see “Restrictions on Travel and

Remittances,” below.)

Trade and Telecommunications. The Commerce regulations expand

commercial exports to Cuba of certain goods and services to empower Cuba’s

nascent private sector, including authorization for certain building materials for

private residential construction, goods for use by private-sector Cuban

entrepreneurs, and agricultural equipment for small farmers. To implement this

change, Commerce’s Bureau of Industry and Security (BIS) created a license

exception in the Export Administration Regulations (EAR) for “support to the

Cuban people,” authorizing the export without license of such items described

above. This license exception also included the export to Cuba of items for

telecommunications, including access to the Internet, use of Internet services,

infrastructure creation, and upgrades.

80 Federal Register 2286-2302, January 16, 2015; 80 Federal Register 56898-56904 and 56915-56926, September

21, 2015; 81 Federal Register 4580-4586, January 27, 2016; 81 Federal Register 13972-13974 and 13989-13994,

March 16, 2016; and 81 Federal Register 71365-71367 and 71372-71378, October 17, 2016. For background on the

regulatory changes, see U.S. Department of the Treasury, “Cuba Sanctions,” at https://www.treasury.gov/resourcecenter/sanctions/Programs/Pages/cuba.aspx; U.S. Department of the Treasury, “Frequently Asked Questions Related to

Cuba,” at https://www.treasury.gov/resource-center/sanctions/Programs/Documents/cuba_faqs_new.pdf; U.S.

Department of Commerce, Bureau of Industry and Security, “Cuba,” at https://www.bis.doc.gov/index.php/policyguidance/country-guidance/sanctioned-destinations/cuba; and U.S. Department of Commerce, “Cuba, Frequently

Asked Questions,” at https://www.bis.doc.gov/index.php/forms-documents/doc_download/1446-bis-cuba-consolidatedfaqs.

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The Treasury regulations also revise the definition of “payment of cash in

advance” required by TSRA for authorized trade with Cuba to specify that it

means “cash before transfer of title” for payment. Certain goods and services

produced by independent Cuban entrepreneurs (as determined by the State

Department) are eligible to be imported into the United States.86 In October 2016,

OFAC amended the regulations to allow for transactions to obtain U.S. Food and

Drug Administration approval of Cuban-origin pharmaceuticals. OFAC also

authorized transactions for importation into the United States of FDA-approved

Cuban-origin drugs, including marketing, sales, or other distribution.

The Commerce regulations permit the commercial export of certain consumer

communication devices, related software, applications, hardware, and services,

and items for the establishment and update of communications-related systems;

previously such exports were limited to donations. They also permit the export of

items for telecommunications, including access to the Internet, use of Internet

services, infrastructure creation, and upgrades.

An expanded Treasury Department general license authorizes transactions to

provide commercial telecommunications services in Cuba or link third countries

and Cuba. U.S. companies may establish joint ventures with entities in Cuba to

provide telecommunication and Internet-based services and to enter into

licensing agreements related to, and to market, such services. An updated general

license allows for U.S. persons to make payments to a telecommunications

operator located in Cuba for services provided to Cuban individuals.

In January 2015, BIS revised the EAR to state a general policy of approval for

license applications to export items to Cuba necessary for the environmental

protection of U.S. and international air quality, waters, and coastlines, including

items related to renewable energy or energy efficiency.

In January 2016, BIS expanded the categories of exports that fall under a

“general policy of approval” license policy to include certain items for civil

aviation and commercial aircraft safety; telecommunications; U.S. news bureaus;

human rights organizations and nongovernmental organizations; and agricultural

commodities (such as insecticides, pesticides, and herbicides) that fall outside the

scope of those allowed under the existing BIS license exception for agricultural

commodities covered by TSRA.

In January 2016, BIS amended the EAR to include a new category of exports for

which licenses will be considered on a case-by-case basis. The new category

includes items exported to state-owned enterprises, agencies, and other

organizations of the Cuban government that provide goods and services for the

use and benefit of the Cuban people. (For more details, see “U.S. Exports and

Sanctions,” below.)

In October 2016, OFAC added a general license for authorization to enter into

contingent contracts for transactions currently prohibited by the embargo. It also

added a general license waiving the restriction in the Cuban Democracy Act of

1992 prohibiting foreign vessels from entering U.S. ports for purposes of loading

On February 13, 2015, the State Department issued a list of eligible goods and services produced by independent

Cuban entrepreneurs that may be imported. See http://www.state.gov/e/eb/tfs/spi/cuba/515582/237471.htm.

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or unloading freight for 180 days after calling on a Cuban port for trade purposes.

BIS also generally authorized by license exception the export of certain

consumer goods sold directly to eligible individuals in Cuba for their personal

use.



Banking and Financial Services. The Treasury regulations permit U.S. financial

institutions to open correspondent accounts at Cuban financial institutions to

facilitate the processing of authorized transactions, including payment for U.S.

exports and for travel services. In January 2016, U.S. private export financing

was authorized for all authorized nonagricultural export trade to Cuba. In March

2016, Treasury permitted U.S. banking institutions to authorize U-turn payments

through the U.S. financial system for transactions in which Cuba or a Cuban

national has an interest (whereby funds from a bank outside of the United States

may pass through one or more U.S. financial institutions before being transferred

to a bank outside the United States).

Physical Presence. Companies or entities in the following categories are

authorized to have a physical presence in Cuba, such as an office, retail outlet, or

warehouse: news bureaus; exporters of authorized goods to Cuba; entities

providing mail or parcel transmission services; telecommunication or Internetbased service providers; entities organizing or conducting certain educational

activities; religious organizations; and carrier and travel service providers. U.S.

exports to establish, operate, or support such a physical presence are authorized

under a license exception.

Embargo Remains in Place

When the President unveiled his policy changes, he acknowledged that he does not have the

authority to lift the embargo because it was codified into law (Section 102(h) of the LIBERTAD

Act). However, the President maintained that he looks forward to engaging Congress in a debate

about lifting the embargo. As noted above, the LIBERTAD Act ties the lifting of the embargo to

conditions in Cuba (including that a democratically elected government is in place). Lifting the

overall economic embargo at this time would require amending or repealing the LIBERTAD Act

as well as other statutes that have provisions impeding normal economic relations with Cuba,

such as the Foreign Assistance Act of 1961, the Cuban Democracy Act of 1992, and the Trade

Sanctions Reform and Export Enhancement Act of 2000. For example, as noted above, TSRA

denies U.S. exporters access to U.S. government support, prohibits U.S. private commercial

financing or credit for agricultural exports, and prohibits tourist travel to Cuba.

March 2016 Presidential Visit

President Obama traveled to Cuba from March 20 to 22, 2016—the first visit of a U.S. President

since Calvin Coolidge visited in 1928. Before the trip, the White House set forth the goals of the

visit, stating that the President would build on progress toward normalizing relations, including

advancing commercial and people-to-people ties and expressing support for human rights.87

During his visit (which included Secretary of State Kerry, Agriculture Secretary Vilsack, and

Commerce Secretary Pritzker), President Obama announced additional initiatives, including

White House, “Statement by the Press Secretary on the President’s Travel to Cuba and Argentina,” February 18,

2016.

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support for collaboration between the U.S. and Cuban agricultural sectors; Cuban participation in

the Administration’s 100,000 Strong in the Americas Initiative to increase student exchanges; and

new partnerships in health, science, and the environment. The President attended an event with

Cuban entrepreneurs to demonstrate support for the country’s nascent private sector. At the event,

he noted such commercial plans as General Electric selling aviation and energy equipment, the

Alabama-based Cleber company building tractors in Cuba (this project ultimately was rejected by

the Cuban government), Starwood and Marriott planning to operate hotels in joint ventures with

Cuba, and Carnival beginning cruise service in May. The President also attended a baseball game

between the Tampa Bay Rays and the Cuban national team in a significant demonstration of

sports diplomacy.88

As a reflection of the momentous shift in his Administration’s policy toward Cuba, President

Obama said during the trip that he had “come here to bury the last remnant of the Cold War in the

Americas.”89 The policy shift on Cuba, which has been lauded throughout Latin America, has

helped to bolster the image of the United States in the region and solidify the Administration’s

message that it is committed to sustained engagement and partnership in the Americas.

Respect for human rights was a major focus of the visit, and President Obama spoke out strongly

on the issue. Just a day before the President’s arrival, the Cuban government disrupted the weekly

peaceful protest march of the Ladies in White human rights group, again demonstrating the

government’s severe repression of political dissent. In a joint press conference with President

Raúl Castro, President Obama said that the United States would “continue to speak up on behalf

of democracy, including the right of the Cuban people to decide their own future” and to “speak

out on behalf of universal human rights, including freedom of speech, and assembly, and

religion.” In contrast, President Castro became defensive when asked about political prisoners in

Cuba.90

President Obama spoke out most forcefully for advancing human rights during his televised

speech to the Cuban nation. While maintaining that the United States “will not impose our

political or economic system on you,” the President said:

I believe citizens should be free to speak their mind without fear—to organize, and to

criticize their government, and to protest peacefully, and that the rule of law should not

include arbitrary detentions of people who exercise those rights. I believe that every

person should have the freedom to practice their faith peacefully and publicly. And, yes, I

believe voters should be able to choose their governments in free and democratic

elections.

Speaking directly to President Castro, President Obama said:

I am also confident that you need not fear the different voices of the Cuban people—and

their capacity to speak, and assemble, and vote for their leaders. In fact, I’m hopeful for

the future because I trust that the Cuban people will make the right decisions.91

U.S. Department of Agriculture, “Agriculture Secretary Vilsack Announces Historic Agreements for U.S.-Cuba

Agriculture Sectors,” News Release, March 21, 2016; U.S. Department of State, “New Commitments to President

Obama’s 100,000 Strong in the Americas Initiative,” March 22, 2016; White House, “Remarks by President Obama at

an Entrepreneurship and Opportunity Event,” March 21, 2016; and “Rays Beat Cuba Team with Barack Obama, Raúl

Castro in Attendance,” ESPN.com News Services, March 22, 2016.

White House, “Remarks by President Obama to the People of Cuba,” March 22, 2016.

White House, Remarks by President Obama and President Raúl Castro of Cuba in a Joint Press Conference,” March

21, 2016.

White House, “Remarks by President Obama to the People of Cuba,” March 22, 2016.

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President Obama met for almost two hours with 13 prominent human rights and political

activists, including Berta Soler, leader of the Ladies in White; José Daniel Ferrer, leader of the

Patriotic Union of Cuba; Elizardo Sánchez, president of the Cuban Commission for Human

Rights and National Reconciliation (CCDHRN); and Antonio Rodiles, coordinator of Estado de

Sats, a forum to promote cultural, social, and political debate. The meeting itself signaled

recognition of the activists.92 Another participant, human rights activist and independent journalist

Miriam Leiva, commented that no head of state visiting Cuba had met with prominent dissidents,

“not even the popes.”93

Looking ahead, the extent to which President Obama’s trip will spur the pace of the normalization

process will depend on several factors. These include, as the President acknowledged during the

trip, the extent to which the Cuban government makes progress on human rights issues and the

extent to which Cuba takes advantage of the recent regulatory changes to the U.S. embargo.

Moreover, as President Obama noted, even if the United States lifted the embargo tomorrow,

“Cubans would not realize their potential without change in Cuba.” He pointed to such needed

changes as making it easier to open a business, allowing workers to get jobs directly with

companies that invest in Cuba, eliminating the use of two currencies that separate the types of

salaries that Cubans can earn, and expanding Internet access so that Cubans can connect to the

wider world.

Advancing Engagement

U.S. and Cuban officials have held five Bilateral Commission meetings, the most recent in

December 2016, to coordinate efforts to advance the normalization process. These meetings have

included a review of progress on shared priorities, such as regulatory issues, telecommunications,

science and technology, U.S. property claims, environmental protection and cooperation, human

trafficking, human rights, migration, law enforcement, civil aviation, agriculture, culture and

education, nonproliferation, and maritime borders.94 The next Bilateral Commission meeting is

scheduled to take place in Havana in December 2016.

Among the numerous meetings and agreements that have occurred are the following:95



U.S. and Cuban officials have held three regulatory dialogues—in October

2015, February 2016, and July 2016—with the U.S. delegations consisting of

officials from Commerce, Treasury, and State. According to the State

Department, the delegations presented information on the U.S. regulatory

changes and addressed ways the two countries can work together within the

existing framework of U.S. laws and regulations.

With regard to law enforcement cooperation, an inaugural Law Enforcement

Dialogue took place in November 2015 in Washington, DC, focusing on such

Patricia Mazzei and Nora Gamez Torres, “Cuban Dissidents Meet Obama to Air Grievances about Castro – and

About New U.S. Policy,” Miami Herald, March 22, 2016.

Frances Robles, “Cuban Dissident Praise ‘Closeness and Trust’ after Meeting with Obama,” New York Times, March

22, 2016.

U.S. Department of State, media note, “United States and Cuba Hold Inaugural Bilateral Commission in Havana,”

September 11, 2015, “United States and Cuba Hold Second Bilateral Commission Meeting in Washington, D.C.,”

November 10, 2015, “United States and Cuba to Hold Third Bilateral Commission Meeting in Havana, Cuba,” May 12,

2016, “United States and Cuba Hold Forth Bilateral Commission Meeting in Washington, D.C.,” September 30, 2016.

For a State Department listing of events and other aspects of U.S.-Cuban engagement at the one year anniversary of

the reestablishment of diplomatic relations, see http://www.state.gov/r/pa/prs/ps/2016/07/260306.htm.

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

areas of cooperation as counterterrorism, counternarcotics, transnational crime,

cybercrime, secure travel and trade, and fugitives.96 Bilateral technical talks on

cybercrime and online fraud took place in February 2016, in Havana. A second

Law Enforcement Dialogue took place in Havana in May 2016. Also under the

rubric of the Law Enforcement Dialogue, U.S. and Cuban officials held technical

exchanges on human smuggling and fraud prevention in February and September

2016, as well as a technical exchange on legal cooperation in September 2016.

On January 16, 2017, U.S. and Cuban officials signed a memorandum of

understanding to deepen bilateral law enforcement cooperation and information

sharing.

In June 2016, the United States and Cuba held the first counterterrorism

technical exchange in Cuba, which included U.S. officials from several

agencies: the State Department, FBI, and Homeland Security (U.S. Customs and

Border Protection and U.S. Immigration and Customs Enforcement’s Homeland

Security Investigations).

In the environmental arena, the United States and Cuba signed an

environmental memorandum on November 18, 2015, for the protection of fish

and coral resources.97 On November 24, 2015, both countries signed a joint

statement on environmental cooperation designed to facilitate and guide

cooperation on a range of issues, including coastal and marine protection, the

protection of biodiversity, climate change, disaster risk reduction, and marine

pollution. U.S. and Cuban delegations met June 28-July 1, 2016, in Cuba to

advance cooperation on issues affecting the marine environment.

With regard to maritime issues, the United States and Cuba signed a

memorandum of understanding on hydrography and nautical charting in March

2016 to improve maritime navigation safety. In July 2016, U.S., Cuban, and

Mexican delegations met in Mexico to discuss delimiting maritime boundaries of

the continental shelf that are more than 200 nautical miles from each country’s

shore in the eastern Gulf of Mexico, often referred to as the Eastern Gap.98

On counternarcotics issues, U.S. and Cuban officials held a second dialogue in

Washington, DC, in December 2015 (the first occurred in April 2014). At a third

counternarcotics meeting held in Havana in July 2016, Cuba and the United

States singed a Counternarcotics Arrangement to facilitate additional cooperation

and information sharing in efforts against illicit narcotics trafficking. (See

“Antidrug Cooperation,” below.)

U.S. and Cuban officials have held three discussions on claims, in December

2015, July 2016, and most recently on January 12, 2017. Outstanding U.S. claims

include those of U.S. nationals certified by the Foreign Claims Settlement

Commission, claims related to unsatisfied U.S. court judgments against Cuba,

and claims held by the U.S. government. (See “U.S. Property Claims,” below.)

U.S. Department of State, “United States and Cuba Hold Law Enforcement Dialogue in Washington, D.C.,”

November 9, 2015.

“U.S., Cuba Reach Historic Agreement on Sea Life,” Chicago Tribune, November 19, 2015.

U.S. Department of State, “United States, Cuba, and Mexico: Resolving Maritime Boundaries, July 7, 2016.

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

On December 11, 2005, Cuban and U.S. officials announced that they had

finalized plans for direct mail service. The service began on March 16, 2016, for

the first time in more than 50 years.

U.S. and Cuban officials reached a bilateral civil aviation arrangement on

December 16, 2015 (signed in February 2016), which will allow U.S.

commercial airlines to operate regular flights to Cuba. (See “Restrictions on

Travel and Remittances,” below.)

With regard to health cooperation, the U.S. Department of Health and Human

Services and the Cuban government signed a memorandum of understanding on

June 13, 2016, to facilitate cooperation on such diseases as cancer and the Zika

virus.

On human rights, U.S. and Cuban officials traveled to Havana for the first U.S.Cuban human rights dialogue in October 2016.

U.S. and Cuban officials held an inaugural economic dialogue in Washington,

DC, in September 2016, and discussed trade and investment, labor and

employment, renewable energy and energy efficiency, small business, intellectual

property rights, economic policy, regulatory and banking matters, and

telecommunications and Internet access.

U.S. and Cuban officials signed an oil spill preparedness and response

agreement on January 9, 2017, for cooperation and coordination in an effort to

prevent, contain, and clean up marine oil and other hazardous pollution.

President Obama issued a presidential policy directive on the normalization of relations with

Cuba on October 14, 2016.99 The directive set forth the Administration’s vision for normalization

of relations and laid out six medium-term objectives: (1) government-to-government interaction;

(2) engagement and connectivity; (3) expanded commerce; (4) economic reform; (5) respect for

universal human rights, fundamental freedoms, and democratic values; and (6) Cuba’s integration

into international and regional systems. The directive also outlined the roles and responsibilities

for various U.S. departments and agencies to move the normalization process forward. It noted

that the Administration will seek to build support in Congress to lift the embargo and other

statutory provisions constraining efforts to normalize economic relations with Cuba. The directive

can be viewed as an attempt to keep up the momentum toward normalizing relations in the next

Administration and to protect the changes that have been made to date in policy toward Cuba.

Debate on the Direction of U.S. Policy

Over the years, although U.S. policymakers have agreed on the overall objectives of U.S. policy

toward Cuba—to help bring democracy and respect for human rights to the island—there have

been several schools of thought about how to achieve those objectives. Some have advocated a

policy of keeping maximum pressure on the Cuban government until reforms are enacted, while

continuing efforts to support the Cuban people. Others argue for an approach, sometimes referred

to as constructive engagement, that would lift some U.S. sanctions that they believe are hurting

the Cuban people and move toward engaging Cuba in dialogue. Still others call for a swift

White House, “Presidential Policy Directive – United States-Cuba Normalization,” October 14, 2016, at

https://www.whitehouse.gov/the-press-office/2016/10/14/presidential-policy-directive-united-states-cubanormalization.

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normalization of U.S.-Cuban relations by lifting the U.S. embargo. Legislative initiatives

introduced over the past decade have reflected these three policy approaches.

Dating back to 2000, there have been efforts in Congress to ease U.S. sanctions, with one or both

houses at times approving amendments to appropriations measures that would have eased U.S.

sanctions on Cuba. Until 2009, these provisions were stripped out of final enacted measures, in

part because of presidential veto threats. In 2009, Congress took action to ease some restrictions

on travel to Cuba, marking the first time that Congress has eased Cuba sanctions since the

approval of the Trade Sanctions Reform and Export Enhancement Act of 2000. In light of Fidel

Castro’s departure as head of government and the gradual economic changes being made by Raúl

Castro, some observers had called for a reexamination of U.S. policy toward Cuba. In this new

context, two broad policy approaches were advanced to contend with change in Cuba: an

approach that called for maintaining the U.S. dual-track policy of isolating the Cuban government

while providing support to the Cuban people and an approach aimed at influencing the attitudes

of the Cuban government and Cuban society through increased contact and engagement.

The Obama Administration’s December 2014 change of U.S. policy from one of isolation to one

of engagement and moving toward the normalization of relations has highlighted divisions in

Congress over Cuba policy. Some Members of Congress lauded the Administration’s actions as in

the best interests of the United States and a better way to support change in Cuba, while other

Members strongly criticized the President for not obtaining concessions from Cuba to advance

human rights. Some Members vowed to oppose the Administration’s efforts toward

normalization, while others have, as in the past, introduced legislation to normalize relations with

Cuba by lifting the embargo in its entirety or in part easing some aspects of it.

In general, those who advocate easing U.S. sanctions on Cuba make several policy arguments.

They assert that if the United States moderated its policy toward Cuba—through increased travel,

trade, and dialogue—then the seeds of reform would be planted, which would stimulate forces for

peaceful change on the island. They stress the importance to the United States of avoiding violent

change in Cuba, with the prospect of a mass exodus to the United States. They argue that since

the demise of Cuba’s communist government does not appear imminent, even without Fidel

Castro at the helm, the United States should espouse a more pragmatic approach in trying to bring

about change in Cuba. Supporters of changing policy also point to broad international support for

lifting the U.S. embargo, to the missed opportunities for U.S. businesses because of the unilateral

nature of the embargo, and to the increased suffering of the Cuban people because of the

embargo. Proponents of change also argue that the United States should be consistent in its

policies with the world’s few remaining communist governments, including China and Vietnam.

On the other side, opponents of lifting U.S. sanctions maintain that the two-track policy of

isolating Cuba, but reaching out to the Cuban people through measures of support, is the best

means for realizing political change in Cuba. They point out that the Cuban Liberty and

Democratic Solidarity Act of 1996 sets forth the steps that Cuba needs to take in order for the

United States to normalize relations. They argue that softening U.S. policy without concrete

Cuban reforms would boost the Castro government, politically and economically, and facilitate

the survival of the communist regime. Opponents of softening U.S. policy argue that the United

States should stay the course in its commitment to democracy and human rights in Cuba and that

sustained sanctions can work. Opponents of loosening U.S. sanctions further argue that Cuba’s

failed economic policies, not the U.S. embargo, are the causes of Cuba’s difficult living

conditions.

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Public opinion polls show a majority of Americans support normalizing relations with Cuba,

including a majority of the Cuban American community in South Florida.100

Incoming Trump Administration

Statements from President-elect Trump suggest that he might reverse some of the Obama

Administration’s Cuba policy changes. After Fidel Castro’s death in November 2016, the

President-elect issued a statement referring to Castro as a “brutal dictator who oppressed his own

people for nearly six decades.”101 This statement was followed by a longer message maintaining

that “If Cuba is unwilling to make a better deal for the Cuban people, the Cuban/American people

and the U.S. as a whole, I will terminate [the] deal.”102 At this juncture, it remains unclear what

actions might be taken by the incoming Administration. During the electoral campaign, candidate

Trump said he would cancel or reverse President Obama’s policy on Cuba unless Cuba took

action to improve political and religious freedom and free political prisoners.103

Since President Obama’s policy shift on Cuba was done largely by executive action, Presidentelect Trump could reverse many of those policies, including the reestablishment of diplomatic

relations, the rescission of Cuba’s designation as a state sponsor of terrorism, and actions taken to

ease restrictions on travel and commerce. As described above, this third step involved regulatory

changes to the economic embargo taken by the Treasury and Commerce Departments. The

Administration could decide to reverse some or all these changes or to ease or tighten other

aspects of the embargo regulations. The Administration also could make changes to other aspects

of bilateral government-to-government cooperation and dialogues that have occurred under the

Obama Administration. These include a variety of agreements and dialogues on such issues as

telecommunications, science and technology, U.S. property claims, environmental protection,

human rights, migration, law enforcement, civil aviation, and maritime borders.

As noted above, opinion polls have shown that the policy of engagement has largely been

popular, which could make it difficult for the incoming Administration to reverse the U.S. policy

completely. Burgeoning U.S. business linkages also could make it difficult to reverse current

policy. Given that much of the economic embargo on Cuba remains in place (and can be lifted

only by Congress), the incoming Administration could choose to let the changes that have already

been made remain but refrain from approving any additional easing of restrictions pending

economic or political changes in Cuba.

Selected Issues in U.S.-Cuban Relations

For many years, Congress has played an active role in U.S. policy toward Cuba through the

enactment of legislative initiatives and oversight on the numerous issues that comprise policy

toward Cuba. These include U.S. economic sanctions on Cuba, such as restrictions on travel,

100

See, for example, Florida International University, Cuba, 2016 FIU Cuba Poll, How Cuban Americans in Miami

View U.S. Policies Toward Cuba, September 2016, available at https://cri.fiu.edu/events/2016/the-2016-fiu-cuba-poll/

cuba-poll-web.pdf; Atlantic Council, Adrienne Arsht Latin American Center, U.S-Cuba, A New Public Survey Supports

Policy Change, February 11, 2014, available at http://www.atlanticcouncil.org/publications/reports/us-cuba-a-newpublic-survey-supports-policy-change; Pew Research Center, “Growing Public Support for U.S. Ties with Cuba – And

an End to the Trade Embargo,” July 21, 2015.

101

Eugene Scott, “Donald Trump: Fidel Castro Is Dead!” CNN, November 26, 2016.

102

Donald Trump@realDonaldTrump, Twitter, November 28, 2016.

103

Jeremy Diamond, “Trump Shifts on Cuba, Says He Would Reverse Obama’s Deal,” CNN, September 16, 2016.

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remittances, and agricultural and medical exports; terrorism issues, including Cuba’s designation

as a state sponsor of international terrorism; human rights issues, including funding and oversight

of U.S.-government sponsored democracy and human rights projects; funding and oversight for

U.S.-government sponsored broadcasting to Cuba (Radio and TV Martí); migration issues;

bilateral antidrug cooperation; and U.S. claims for property confiscated by the Cuban

government.

Diplomatic and Military Engagement

In reaction to the Administration’s Cuba policy changes, some Members attempted to restrict

operations of the U.S. Embassy in Havana and U.S. military engagement with the Cuban military

through appropriations and defense authorization legislation.

U.S. Embassy Operations. At least two U.S. Senators said they would put a hold on any

nominee for U.S. ambassador to Cuba, effectively blocking the Senate from voting on a nominee.

The absence of a U.S. ambassador at a U.S. Embassy, however, is not an unusual occurrence,

with the senior ranking State Department official assuming the title of chargé d’affaires ad interim

and responsibility for the day-to-day functioning of the diplomatic post. With the reestablishment

of relations, the chief of the U.S. Interests Section in Havana, Jeffrey DeLaurentis, became chargé

d’affaires of the U.S. Embassy in Havana. On September 27, 2016, President Obama officially

nominated DeLaurentis to become U.S. ambassador to Cuba, although the Senate Foreign

Relations Committee did not take up nomination by the end of the 114th Congress.

In its FY2016 budget request, the State Department asked for just over $6 million for the Western

Hemisphere Affairs Bureau (WHA) to support expanded operations in Havana, including

increased engagement with Cuban civil society and new demands on staff likely to result from an

increase in visitors to Cuba. The House Appropriations Committee’s FY2016 State Department

and Foreign Operations appropriations bill, H.R. 2772, had a provision in Section 7045(c)(3) that

would have prohibited funds for the establishment or operation of a U.S. diplomatic presence in

Cuba beyond that which was in existence prior to December 17, 2014, until the President

determined and reported to Congress that the requirements and factors specified in the

LIBERTAD Act (related to democratic conditions in Cuba) had been met. The Senate

Appropriations Committee-approved version of the bill did not include such a provision, and

ultimately the FY2016 omnibus appropriations bill, H.R. 2029, did not include such a provision.

The Administration opposed the provision as interfering with its ability to make the best decisions

consistent with U.S. national security.104

In its FY2017 budget request, the State Department requested $3.8 million for WHA to fill nine

additional positions and update aging infrastructure at the U.S. Embassy in Havana. According to

the request, the positions would include a mix of reporting and support positions to deepen

understanding of Cuba’s political, social, and economic environment; oversee maintenance

upgrades; conduct human rights monitoring and advocacy; and strengthen law enforcement

cooperation. The House Appropriations Committee version of the FY2017 State Department and

Foreign Operations appropriations measure, H.R. 5912 (H.Rept. 114-693) reported on July 15,

2016, had a provision in Section 7045(c)(1) that would have prohibited funding for the

establishment or operation of a U.S. diplomatic presence in Cuba beyond what was in place prior

to December 17, 2014. In contrast, the Senate Appropriations Committee-reported version of the

104

White House, Office of Management and Budget, “Letter to the Chair and Ranking Member of the House

Appropriations Committee with Respect to the FY2016 State, Foreign Operations, and Related Programs

Appropriations Bill,” June 10, 2015.

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measure—S. 3117 (S.Rept. 114-290), reported on June 29, 2016—would, in Section 7045(c)(4),

have funded the operation of and infrastructure and security improvements to U.S. diplomatic

facilities in Cuba. It also would have funded costs associated with additional diplomatic personnel

in Cuba.

For FY2017, the U.S. Department of Agriculture also requested $1.5 million for the Foreign

Agricultural Service to establish an overseas post in Cuba. The report to the Senate version of the

FY2017 agriculture appropriations measure (S.Rept. 114-259 to S. 2956) recommended full

funding for the Administration’s request.

As previously noted, the 114th Congress did not complete action on FY2017 foreign operations

appropriations, but in December 2016 approved a continuing resolution (P.L. 114-254) funding

most programs at the FY2016 level, minus an across-the-board reduction of almost 0.2%, through

April 28, 2017.

Bilateral Military Engagement. Both the House- and Senate-passed versions of the National

Defense Authorization Act (NDAA) for FY2017 had different provisions restricting U.S. military

interaction with the Cuban military, effectively curbing the Administration’s changed policy

toward Cuba. The House bill, H.R. 4909, had a provision in Section 1259B that would have

prohibited funds authorized in the act for FY2017 for any bilateral military-to-military contact or

cooperation pending certification from the Secretaries of State and Defense, in consultation with

the Director of National Intelligence (DNI), that Cuba has fulfilled numerous conditions

regarding democracy and human rights, outstanding claims and judgements of U.S. nationals,

support to the military and security forces of Venezuela, cessation of the demand for the return of

the U.S. Naval Station at Guantanamo Bay, U.S. fugitives, and requirement that Cuban military

officials indicted in the United States for the murder of U.S. citizens killed during the 1996 shoot

down of two U.S. civilian planes be brought to justice.

The Senate version of the NDAA, S. 2943, had a provision in Section 1204 prohibiting the use of

any funds by the Secretary of Defense to invite, assist, or otherwise assure the participation of

Cuba in certain joint or multilateral exercises or related security conferences between the United

States and Cuba until the Secretary of Defense, in coordination with the DNI, submits to

Congress written assurances regarding some of the same conditions cited above in the House bill.

These include the Cuban military and security forces’ involvement in human rights abuses; Cuban

military support to the Venezuelan military and security forces; Cuba’s demand for the United

States to relinquish control of Guantanamo; and that Cuban military officials indicted in the

United States for the 1996 killing of U.S. citizens during the shoot down of two U.S. civilian

planes are brought to justice.

Both the White House’s statement of policy on S. 2943, issued June 7, 2016, and the Secretary of

Defense’s letter to Congress on the NDAA strongly objected to the restrictions on U.S.-Cuban

military-to-military interactions in Section 1204. Both maintained that restrictions “would hamper

pragmatic, expert-level coordination between the United States and Cuba on issues that benefit

the United States.” As noted, this coordination includes counternarcotics exercises and operations,

participation of the Cuban government in security conferences, and monthly talks between the

commanding officer of the U.S. Naval Station at Guantánamo Bay and his Cuban counterpart to

share information about activities on both sides of the fence to reduce the risk of accidental

escalation. According to both documents, “It is in the U.S. national security interest to maintain

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flexibility in U.S. military-to-military engagement with Cuba due to Cuba’s proximity and the

many shared challenges faced by the United States and Cuba.”105

Ultimately, in the final version of the FY2017 NDAA (P.L. 114-328) enacted in December 2016,

Section 1286 prohibits the Secretary of Defense from authorizing FY2017 funds for the

Department of Defense to invite, assist, or otherwise assure the participation of Cuba in certain

joint or multilateral exercises or related security conference between the governments of the

United States and Cuba until the Secretaries of Defense and State, in consultation with the

Director of National Intelligence, submit to Congress written assurances regarding Cuba’s

fulfillment of conditions for Cuba related to human rights, support to the security forces of

Venezuela, cessation of Cuba’s demand that the United States relinquish control of the U.S. Naval

Station at Guantánamo Bay, and requirement that Cuban military officials indicted in the United

States for the murder of U.S. citizens killed during the 1996 shoot down of two U.S. civilian

planes are brought to justice. The provision provides exceptions to the funding prohibition for any

payments related to the lease agreement or other financial transactions for maintenance and

improvements of the military base at Guantanamo Bay, Cuba; any assistance or support of

democracy-building efforts; customary and routine financial transactions necessary for the

maintenance, improvements, or regular duties of the U.S. mission in Havana; or any joint or

multilateral exercise or operation related to humanitarian assistance or disaster response.

The conference report to FY2017 NDAA (H.Rept. 114-840) stated that it is the intent of the

conferees that the exception related to the Guantanamo base includes periodic contact between

appropriate U.S. and Cuban officials concerning the security and management of the naval station

commonly referred to as “fence-line talks.”

Restrictions on Travel and Remittances106

Restrictions on travel to Cuba have been a key and often contentious component of U.S. efforts to

isolate Cuba’s communist government for much of the past 50+ years. Over time there have been

numerous changes to the restrictions and for five years, from 1977 until 1982, there were no

restrictions on travel. Restrictions on travel and remittances to Cuba are part of the Cuban Assets

Control Regulations (CACR), the overall embargo regulations administered by the Department of

the Treasury’s Office of Foreign Assets Control. Under the George W. Bush Administration,

enforcement of U.S. restrictions on Cuba travel increased, and restrictions on travel and on

private remittances to Cuba were tightened.

Under the Obama Administration, Congress took legislative action in March 2009 easing

restrictions on family travel and on travel related to U.S. agricultural and medical sales to Cuba

(P.L. 111-8, Sections 620 and 621 of Division D). In April 2009, the Obama Administration went

further when the President announced that he was lifting all restrictions on family travel as well

as restrictions on cash remittances to family members in Cuba. In January 2011, the Obama

Administration made a series of changes further easing restrictions on travel and remittances to

Cuba. The measures (1) increased purposeful travel to Cuba related to religious, educational, and

journalistic activities, including people-to-people travel exchanges; (2) allowed any U.S. person

to send remittances to non-family members in Cuba (up to $500 per quarter) and made it easier

105

White House, Office of Management and Budget, Statement of Administration Policy, National Defense

Authorization Act for Fiscal Year 2017, June 7, 2016. U.S Department of Defense, Secretary of Defense, Letter to

Senate John McCain, Chairman of the Committee on Armed Services, regarding the NDAA for FY2017, July 13, 2016.

106

For more information, see CRS Report RL31139, Cuba: U.S. Restrictions on Travel and Remittances, by (name re

dacted) .

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for religious institutions to send remittances for religious activities; and (3) allowed U.S.

international airports to become eligible to provide services to licensed charter flights to and from

Cuba. In most respects, these new measures were similar to policies that were undertaken by the

Clinton Administration in 1999 but subsequently curtailed by the Bush Administration in 2003

and 2004.

As noted above, just after the adjournment of the 113th Congress, President Obama announced

major changes in U.S. policy toward Cuba on December 17, 2014. These changes included the

provision for general licenses for the 12 existing categories of travel to Cuba set forth in the

CACR: (1) family visits; (2) official business of the U.S. government, foreign governments, and

certain intergovernmental organizations; (3) journalistic activity; (4) professional research and

professional meetings; (5) educational activities; (6) religious activities; (7) public performances,

clinics, workshops, athletic and other competitions, and exhibitions; (8) support for the Cuban

people; (9) humanitarian projects (now including microfinancing projects); (10) activities of

private foundations or research or educational institutes; (11) exportation, importation, or

transmission of information or information materials; and (12) certain export transactions that

may be considered for authorization under existing regulations and guidelines.

Despite the easing of travel restrictions, travel to Cuba solely for tourist activities remains

prohibited. Section 910(b) of TSRA prohibits travel-related transaction for tourist activities,

which are defined as any activity not expressly authorized in the 12 categories of travel in the

CACR (31 C.F.R. 515.560).

Before the policy change, travelers under several of these categories had to apply for a specific

license from the Department of the Treasury before traveling. Under the new regulations, both

travel agents and airlines are able to provide services for travel to Cuba without the need to obtain

a specific license. U.S. credit and debit cards are permitted for use by authorize

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