In October 2000, the U.S. Congress passed legislation, later signed by the President into law, which changed the U.S.-Cuba trade relationship by enacting certain exceptions from U.S. sanctions legislation for agricultural and medical exports. This reform was not comprehensive and some prohibitions remain.

As a result of the Trade Sanctions Reform and Export Enhancement Act of 2000, certain U.S. economic sanctions against Cuba were relaxed, allowing U.S. food and agricultural sales to Cuba. However, the legislation includes licensing and financial provisions that exporters must follow. The following frequently asked questions on Cuba are designed to be informative on the status of our trade in agricultural commodities with Cuba following sanctions reform. Federal agencies will have to write or rewrite regulations that will implement requirements of the new legislation to facilitate this trade opportunity for U.S. exporters.

Can I export to Cuba?

The legislation liberalizes U.S. sanctions on exports to Cuba of agricultural commodities. However, strict laws remain in place on using U.S. dollars in Cuba, financing transactions, traveling to Cuba, and limiting U.S. Government assistance. Some Federal regulations and instructions will need to be developed regarding these issues. The principal agencies involved and where to turn for more information about regulations are USDA, U.S. Department of State, U.S. Department of the Treasury’s Office of Foreign Assets Control, and the U.S. Department of Commerce’s Bureau of Export Administration.

Representatives of U.S. industry associations, state governments, and private companies may travel to Cuba provided they apply for and receive a specific license from the Treasury Departments Office of Foreign Assets Control. Under current regulations, travel transactions related to marketing, sales negotiation, and accompanied delivery of agricultural products are possible. Exporters are required to apply to the Treasury Department’s Office of Foreign Assets Control for a license to engage in such transactions and to spend funds in Cuba. For information you may visit OFAC’s website www.treas.gov/ofac or call (202)622-2520. Exporters should also check with the State Department for the most recent regulations for travel of U.S. citizens. Monitor the Federal Register to see proposed regulations on Cuba as they emerge and offer comments on how those regulations should be structured.

U.S. exporters must vie for Cuba’s trade with other, more established competitors such as Canada, France, and Mexico that already export agricultural commodities to Cuba. U.S. proximity to Cuba, the high quality of U.S. agricultural products, and the marketing expertise of the U.S. industry will slowly grow the Cuban marketplace for U.S. products, but only after considerable energy and effort has been made. For general information on Cuba, the U.S. Government operates a U.S. Interests Section in Havana located at Calzada between L & M Streets, Vedado, Havana, tel: (53-7) 33-3551 thru 3559, fax: (53-7) 33-3700. Also, the U.S. Department of Agriculture has a trade office in Miami , tel: (305) 536-5300 or fax: (305) 536-7577 that can help U.S. exporters search for markets throughout the Caribbean Basin, including Cuba. To do business in Cuba and find importers, an exporter should do in-depth market research and develop payment strategies that will conform to U.S. law.

Yes, but they must obtain a license and follow Federal law and regulations. The use of Federal funds to support export promotions is specifically prohibited by Congress. Private companies, cooperatives, trade associations, or state governments may use their own funds for market development purposes, but the use of funds in Cuba is tightly controlled. U.S. agricultural industry trade associations, such as FAS Foreign Market Development Cooperators or Market Access Program participants, are allowed to undertake market development activities in Cuba provided they obtain a license, but not with Federal funds. U.S. industry can use its own resources to explore the Cuban market, but prior to using any funds in Cuba, U.S. industry and associations must apply to the Office of Foreign Assets Control for a license.

The new law prohibits any U.S. person or company from providing payment or financing credit terms to anyone in Cuba. The law specifically rules out open account transactions, requiring cash in advance arrangements. Foreign banks may, however, finance transactions and U.S. banks may confirm or advise such foreign bank letters of credit or similar arrangements. Exporters should be alert to these provisions in law and how payment strategies will be affected by U.S. regulations. The U.S. Treasury Department’s Office of Foreign Assets Control is the regulatory authority on currencies and payments with sanctioned countries and consulted regarding payment issues. For information you may visit OFAC’s website www.treas.gov/ofac or call (202)622-2520.

What is the current level of Cuba’s agricultural trade? What products?

In 2006 Cuba was the 33rd largest market for U.S. agricultural exports, ranking ahead of countries like Morocco, Brazil, Sweden and Denmark.

U.S. agricultural exports to Cuba have grown significantly since trade was authorized in 2000. The United States now is Cuba’s largest supplier of agricultural products, supplying approximately 96 percent of Cuba’s rice imports and 70 percent of their poultry meat imports. U.S. agricultural exports to Cuba peaked at $384 million in 2004 and dropped to $328 million by 2006. The European Union (EU) is the second largest supplier of agricultural products to Cuba, followed by Brazil, Argentina, and Canada. Cuba imports about $1 billion in agricultural products overall.

Basic food products and commodities such as rice, wheat, poultry, corn, soybeans, and soybean products have dominated U.S. sales to Cuba. Although minimal seafood is exported to Cuba, U.S. wood product exports to Cuba now exceed $7 million.

U.S. dairy exports in 2006 were $13 million, down more than 50 percent from 2005. U.S. poultry exports dropped from $58 million in 2005 to $45 million in 2006.

U.S. processed food product exports for Cuba’s growing tourism industry lags far behind exports of these products from competing countries. Major competitors include Argentina, Brazil, the EU, New Zealand, Canada and China.

Top U.S. Agricultural Exports to Cuba
$ million

Product	2001	2002	2003	2004	2005	2006
Total Agricultural	4	140	248	384	346	328
Coarse grains	2	23	36	57	55	43
Poultry Meat	2	23	36	61	58	45
Rice	0	6	11	64	39	40
Wheat	0	23	37	58	51	47
Soybean Meal	0	19	25	33	19	34
Soybeans	0	21	34	28	33	32
Soybean Oil	0	21	51	23	26	21
Pulses	0	.6	1	8	7	19
Red meats	0	.2	0	2	7	14
Dairy products	.3	.3	.3	28	30	13
Source: FAS BICO database, U.S. Bureau of the Census

 

Last modified: Tuesday, June 05, 2007