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U.S. Building Trade Opens with Cuba

Tuesday, January 27, 2015

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U.S. building materials manufacturers, including coatings companies, are now allowed to ship goods to Cuba to renovate private buildings, under new regulations developed by the U.S. Treasury and Commerce Departments.

The new rules follow the momentous December decision by President Obama and Cuban leader Raul Castro to seek normal ties. The countries' relationship has been frozen since 1961, when the United States enacted an embargo on all trade and commercial transactions with Cuba.

The American Coatings Association, which represents coating and related manufacturers, details the new rules, which also allow limited business travel, in a recent announcement to its members.

wooden building
© iStock.com / Jules Kitano

New regulations allow U.S. companies to ship building materials and equipment to private Cuban companies to renovate private buildings.

While most imports and exports between the two countries remain prohibited, new rules and exceptions made final Jan. 16 are intended to improve the living conditions for Cuba’s 11 million people and to support independent economic activity in the country.

Building Materials for Private Use

Under the Commerce Department’s new “Support for the Cuban People” exception to Export Administration Regulations, items intended to “empower the Cuban private sector by supporting private economic activity” are authorized to be exported.

These items include “building materials for use by the private sector to construct or renovate privately owned buildings, including privately owned residences, businesses, places of worship and buildings for private-sector social or recreational use,” according to the rule.

Tools and equipment for private-sector agricultural activity, as well as goods for use by private-sector Cuban entrepreneurs, are also included in the expansion.

The rule intends to facilitate Cuban citizens’ lower-priced access to certain goods to improve their living standards and gain greater economic independence from the state.

Business Travel, Banking

Manufacturers seeking to conduct business in Cuba must also be aware of regulatory obstacles with respect to travel and financial services and others, according to the ACA announcement about the new regulations.

The U.S. Treasury Department’s Office of Foreign Assets Control is providing a “general license” for travel-related transactions incident to the sales of certain items, ACA reports.

passport
© iStock.com / RandyHarris

Businesses welcome new rules regarding travel and trade with Cuba.

Travel-related transactions “directly incident to the conduct of market research, commercial marketing, sales negotiation, accompanied delivery, or servicing in Cuba of items consistent with the export or reexport licensing policy of the Department of Commerce are authorized, provided that the traveler’s schedule of activities does not include free time or recreation in excess of that consistent with a full-time schedule,” according to the rule.

The rule also requires that persons who use this general authorization retain specific records related to the authorized travel transactions, the ACA added.

The Office of Foreign Assets Control is also amending its regulations to allow for expanded financing options for authorized exports to Cuba.

The Commerce Department has issued a fact sheet and a Frequently Asked Questions document on the new regulations. The ACA's explanation of the rules is available here.

Contact ACA's Allen Irish for more information.

 

   

Tagged categories: American Coatings Association (ACA); Building materials; Business matters; Coatings manufacturers; Good Technical Practice; Government; Latin America; Market; New business; North America; Regulations

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