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The joint announcement by Presidents Barack Obama and Raul Castro on December 17, 2014 to normalize relations between the U.S. and Cuba, and the most recent policy changes adopted by the U.S. administration have created a new scenario for the bilateral relations between the two countries. On January 15, 2015, the Department of the Treasury's Office of Foreign Assets Control (“OFAC”) amended the Cuban Assets Control Regulations to facilitate authorized travel to the island by U.S. persons, certain authorized commerce, and the flow of information to, from and within Cuba.
During the last years, the Cuban government has adopted several steps to improve the operation of state-owned enterprises and benefit the incipient private sector which starts to transform the face of Cuba’s centralized economy. Another measure to update the model of the island is the adoption in the near future of a single currency unifying the two currencies which have circulated in Cuba for many years. While they may face some inflation in the short term, the Cuban government expects such measures to benefit the economy in the near future.
Curiously, while negotiations to normalize relations with the U.S. were taking place, Cuba was studying the adoption of a new Foreign Investment Act which entered into force during the summer of 2014. The main purpose of the act is to attract foreign capital, technology, and markets where mutual interests are identified. The law sets forth guarantees for investors and tax cuts and provisions to fight corruption. The benefits of the new legal framework in this sector are coupled with the establishment of the Special Development Zone of Mariel (ZEDM in Spanish) which would accelerate the modernization of the Cuban industry.
Analyzing and monitoring those developments in the U.S. and Cuba has become a priority for the Brown Rudnick’s Latin America Practice Group. The team has been involved with Cuba for many years providing advice on applicable U.S. laws and regulations administered by the OFAC and maintaining relations and contacts, as permitted by U.S. law, with U.S. and non-U.S. companies and non-U.S. law firms and others doing business in Cuba. Although the Cuba embargo remains in place, commercial relations with Cuba have been expanded and will continue to expand during the course of the following months.
Brown Rudnick is well positioned to help clients exploring the possibility of doing business in Cuba as this new chapter in U.S.-Cuban relations unfolds. We have extensive experience in Latin America and a team of fully bilingual lawyers, educated and trained in both common and civil law jurisdictions, and licensed to practice law in some Latin American countries, including Cuba. The team also includes a partner who has represented for over ten years a U.S. based client doing business in Cuba pursuant to a transaction covered by a license and all appropriate U.S. approvals issued by OFAC.