As you know, the President made a big announcement back in December, 2014 that the US would take historic steps to chart a new course in our diplomatic relations with Cuba. One specific action item was instructing the Secretary of State to immediately launch a review of Cuba’s designation as a State Sponsor of Terrorism, and provide a report to the President within six months regarding Cuba’s support for international terrorism.
Within four months of the President’s announcement, on April 8, 2015 (2 months early!), the Secretary of State finalized their review and recommended that Cuba no longer be designated as a State Sponsor of Terrorism. Thereafter, on April 14, the President sent Congress the statutorily required report indicating the Administration’s intent to rescind Cuba’s State Sponsor of Terrorism designation, including the certification that “Cuba has not provided any support for international terrorism during the previous six-months; and that Cuba has provided assurances that it will not support acts of international terrorism in the future.” Members of Congress, initially vowing to block the removal of Cuba from the “terrorism list” had no legal outlet to voice their opposition, and as of today, the 45-day Congressional pre-notification period has expired. As a result, the Secretary of State has officially made the final decision to rescind Cuba’s designation as a State Sponsor of Terrorism, effective today, May 29, 2015.
The Department of State issued a Press Statement today advising that:
The rescission of Cuba’s designation as a State Sponsor of Terrorism reflects our assessment that Cuba meets the statutory criteria for rescission. While the United States has significant concerns and disagreements with a wide range of Cuba’s policies and actions, these fall outside the criteria relevant to the rescission of a State Sponsor of Terrorism designation
- Perception. Now that the stigma of being a “terrorist state” has been removed, businesses and investors will no longer see Cuba as an investment risk.
- Credit. Although the US maintains the embargo with Cuba – which can only be removed by an act of Congress – international financial institutions, such as the IMF and World Bank, are now accessible to Cuba and more banking institutions are likely to join Stonegate in providing banking options to Cuba and U.S. travelers (who can now legally use their debit and credit cards while in Cuba (for one of the 12 general license purposes)).
- Diplomacy. One of the largest barriers preventing
diplomacy between the US and
has been dissolved. Current negotiations between both state actors, such as re-opening
embassies in each other’s capitals, are now likely to be finalized (word on the street is new announcements will be made within the month).
- Trade. More international companies are likely to be willing to trade with Cuba as a result and some regulatory and economic hurdles associated
with exporting, reporting, and compliance restrictions (including banking) will become easier.