Tuesday, January 24, 2017

Freight Trade Between Cuba and the US in the Balance Despite Recent Softening of Regulations

Much Will Depend on How the New President Sees the Situation
Shipping News Feature
US – CUBA – The inauguration of President Trump leaves many area of US policy in some doubt, none more so than in the area of Foreign Trade, as has been evidenced by the recent scrapping of the Trans Pacific Partnership (TPP) agreement, a move which some of his supporters are mistakenly trumpeting, no pun intended, as a policy aimed at cheap Chinese imports. The President’s unpredictability however also leaves many unanswered questions such as where he stands on the question of relations with Cuba, a country which has gradually had thawing relations with its larger neighbour, particularly as concerns both freight and tourist matters.

The UK headquartered Shipowners’ Club has pointed out that the US Treasury Department Office of Foreign Assets Control (OFAC) this month revised its Frequently Asked Questions (FAQs) adding five new FAQs (numbers 86-90) to provide further clarity on matters concerning the 180 day rule. This rule refers to the fact that no vessel is allowed to call in the US to load or unload cargo for 180 days after calling in Cuba. The new general licence, issued by the OFAC in October 2016, waives the restriction prohibiting foreign (non US) vessels from entering a US port for purposes of loading or unloading freight for 180 days after calling in a Cuban port for trade purposes.

This waiver is subject to the proviso that the items the vessel carried to Cuba would, if subject to the Export Administration Regulations (EAR), be designated as EAR99 (i.e. items that are not controlled for export) or controlled on the Commerce Control List for anti-terrorism reasons only. Incidentally anyone unclear as to exactly what US shipping terms and acronyms refer to, or indeed has any queries regarding exports from the US, the export.gov site is a mine of information written in simple form.

The moves which the Obama administration introduced to regularise relations with Cuba, and which led to us postulating that an increase in trade between the two might be becoming ever closer, may now well come to nought if President Trump decides this is a backward step. Talk of protectionism abounds, which when one considers America’s track record even without Mr Trump, is almost laughable. As with so much of what this new administration represents, the future of US trade, not just with Cuba, but globally, now lies in the lap of the Gods, or at least His representative in Washington, who is now leading the most powerful country in the world on a path which it seems may be long, winding and very unpredictable.