Cuba-U.S. Embassies Opening has Trade Potential

Aaccording to the Journal of Commerce,  on July 20th Cuba and America reopened their embassies and ended a 54-year diplomatic stalemate.

For cargo shipping and port operators, the burgeoning détente between the United States and Cuba has major implications. Indeed, there has already been a flurry of activity among maritime interests despite the U.S. trade embargo remaining firmly in place.

Although most forms of U.S. trade are still banned under the 54-year-old embargo, a limited but growing number of American firms, such as food exporters and technology companies, are eligible to do business there.

For cargo shipping, the Cuban port focus is squarely on Container Terminal SA Mariel (TC Mariel) operated by Singapore’s PSA. According to Drewry, “Cuba does have the potential to act as a transhipment hub for U.S. cargo, in a similar way to how Freeport, Bahamas, does now,”.

But  U.S. restrictions on vessel calls remain in place, with the exception of vessels granted special licences. The U.S. rule barring vessels that visit Cuba from calling at a U.S. port for 180 days, is still in effect.

Nevertheless, there have been positive regulatory developments. In January, the U.S. Office of Foreign Assets Control broadened allowances in place for U.S. vessels carrying certain agricultural or otherwise approved cargoes, extending them to non-U.S. vessels.

In June, OFAC removed a number of formerly Cuban-controlled commercial vessels from the sanctions list.  However,  the Helms-Burton barrier is still in place.

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