United States embargo against Cuba

Fidel Castro at a meeting of the United Nations General Assembly (1960)

The United States imposed an arms embargo on Cuba on March 14, 1958, during the armed conflict of 1953-1958 between rebels led by Fidel Castro and the Fulgencio Batista régime. Arms sales violated U.S. policy which had permitted the sale of weapons to Latin-American countries which had signed the 1947 Inter-American Treaty of Reciprocal Assistance (Rio Treaty) as long as the weapons were not used for hostile purposes.[17] The arms embargo had more of an impact on Batista than on the rebels. After the Castro socialist government came to power on January 1, 1959, Castro made overtures to the United States but was rebuffed by the Dwight D. Eisenhower administration, which by March began making plans to help overthrow him. Congress did not want to lift the embargo.

In May 1960 the Cuban government began regularly and openly purchasing armaments from the Soviet Union, citing the US arms embargo. In July 1960 the United States reduced the import quota of brown sugar from Cuba to 700,000 tons under the Sugar Act of 1948;[18] and the Soviet Union responded by agreeing to purchase the sugar instead.

In October 1960 a key incident occurred: Eisenhower's government refused to export oil to the island, leaving Cuba reliant on Soviet crude oil, which the American companies in Cuba refused to refine. This led the Cuban government to nationalize all three American-owned oil refineries in Cuba in response. The refinery owners were not compensated for the nationalization of their property. The refineries became part of the state-run company, Unión Cuba-Petróleo.[19][20] This prompted the Eisenhower administration to launch the first trade embargo—a prohibition against selling all products to Cuba except food and medicine. The Cuban regime responded with nationalization of all American businesses and most American privately owned properties on the island. No compensation was given for the seizures, and a number of diplomats were expelled from Cuba.

The second wave of nationalizations prompted the Eisenhower administration, in one of its last actions, to sever all diplomatic relations with Cuba in January 1961. The U.S. partial trade embargo with Cuba continued under the Trading with the Enemy Act 1917.

After the Bay of Pigs Invasion in April 1961, which had been largely planned under the Eisenhower administration, but which Kennedy had been informed of and approved during the months preceding his presidency and in his first few months as president, the Cuban government declared that it now considered itself Marxist and socialist, and aligned with the Soviet Union. On September 4, 1961, partly in response, Congress passed the Foreign Assistance Act, a Cold War Act (among many other measures) which prohibited aid to Cuba and authorized the President to impose a complete trade embargo against Cuba.

On January 21, 1962, Cuba was suspended by the Organization of American States (OAS), by a vote of 14 in favor, one (Cuba) against with six abstentions. (See Cuba–OAS relations.) Mexico and Ecuador, two abstaining members, argued that the expulsion was not authorized in the OAS Charter.[21] Multilateral sanctions were imposed by OAS on July 26, 1964, which were later rescinded on July 29, 1975. Cuban relations with OAS have since improved, and suspension of membership was lifted on June 3, 2009.

President John F. Kennedy extended measures by Executive order, first widening the scope of the trade restrictions on February 8, 1962 (announced on February 3 and again on March 23, 1962). These measures expanded the embargo to include all imports of products containing Cuban goods, even if the final products had been made or assembled outside Cuba.

On August 3, 1962, the Foreign Assistance Act was amended to prohibit aid to any country that provides assistance to Cuba.

On September 7, 1962, Kennedy formally expanded the Cuban embargo to include all Cuban trade, except for the non-subsidized sale of food and medicines

Following the Cuban Missile Crisis (October 1962), Kennedy imposed travel restrictions on February 8, 1963, and the Cuban Assets Control Regulations were issued on July 8, 1963, again under the Trading with the Enemy Act in response to Cubans hosting Soviet nuclear weapons. Under these restrictions, Cuban assets in the U.S. were frozen and existing restrictions were consolidated.

The restrictions on U.S. citizens traveling to Cuba lapsed on March 19, 1977;[22] the regulation was renewable every six months, but President Jimmy Carter did not renew it and the regulation on spending U.S. dollars in Cuba was lifted shortly afterwards.[23][24] President Ronald Reagan reinstated the trade embargo on April 19, 1982, though it was now only restricted to business and tourist travel and did not apply to travel by U.S. government officials, employees of news or film making organizations, persons engaging in professional research, or persons visiting their close relatives.[24] This has been modified subsequently with the present regulation, effective June 30, 2004,[25] being the Cuban Assets Control Regulations, 31 C.F.R. part 515.[26]

The current regulation does not prohibit travel by U.S. citizens to Cuba per se, but it makes it illegal for U.S. citizens to have transactions (spend money or receive gifts) in Cuba under most circumstances without a US government Office of Foreign Assets Control issued license.[27] Since even paying unavoidable airfare ticket taxes into a Cuban airport would violate this transaction law, it is effectively impossible for ordinary tourists to visit Cuba without breaking the monetary transaction rule.

The embargo was reinforced in October 1992 by the Cuban Democracy Act (the "Torricelli Law") and in 1996 by the Cuban Liberty and Democracy Solidarity Act (known as the Helms–Burton Act) which penalizes foreign companies that do business in Cuba by preventing them from doing business in the U.S. Justification provided for these restrictions was that these companies were trafficking in stolen U.S. properties, and should, thus, be excluded from the United States. However, President Obama tried to lift the embargo, but congress did not allow it.

The European Union resented the Helms-Burton Act because it felt that the U.S. was dictating how other nations ought to conduct their trade and challenged it on that basis. The EU eventually dropped its challenge in favor of negotiating a solution.[28]

After Cuba shot down two unarmed brothers planes in 1996, killing three Americans and a U.S. resident, a bi-partisan coalition in the United States Congress approved the Helms-Burton Act. The Title III of this law also states that any non-U.S. company that "knowingly trafficks in property in Cuba confiscated without compensation from a U.S. person" can be subjected to litigation and that company's leadership can be barred from entry into the United States. Sanctions may also be applied to non-U.S. companies trading with Cuba. This restriction also applies to maritime shipping, as ships docking at Cuban ports are not allowed to dock at U.S. ports for six months. It's important to note that this title includes waiver authority, so that the President might suspend its application. This waiver must be renewed every six months and traditionally it has been.

In response to pressure from some American farmers and agribusiness, the embargo was relaxed by the Trade Sanctions Reform and Export Enhancement Act, which was passed by the Congress in October 2000 and signed by President Bill Clinton. The relaxation allowed the sale of agricultural goods and medicine to Cuba for humanitarian reasons. Although Cuba initially declined to engage in such trade (having even refused U.S. food aid in the past,[29] seeing it as a half-measure serving U.S. interests), the Cuban government began to allow the purchase of food from the U.S. as a result of Hurricane Michelle in November 2001. These purchases have grown since then, even though all sales are made in cash. In 2007, the U.S. was the largest food supplier of Cuba, which nevertheless is largely self-sufficient,[30] and its fifth largest trading partner.

In some tourist spots across the island, American brands such as Coca-Cola can be purchased. Ford tankers refuel planes in airports and some computers use Microsoft software.[31] The origin of the financing behind such goods is not always clear. The goods often come from third parties based in countries outside the U.S., even if the product being dealt originally has U.S. shareholders or investors.[32] This can be seen, for example, with Nestlé products (which have a 10% US ownership) that can be bought in Cuba with Cuban convertible pesos (CUCs). These CUC pesos are hard currency that are traded in foreign exchange against the US dollar, Euro and other currencies.

Barack Obama and Raul Castro at the Palace of the Revolution in Havana, 2016.

On April 13, 2009, President Barack Obama eased the travel ban, allowing Cuban-Americans to travel freely to Cuba;[33][34] and on January 14, 2011, he further eased the ban, by allowing students and religious missionaries to travel to Cuba if they meet certain restrictions.[35]

On July 16, 2012, the Ana Cecilia became the first officially sanctioned direct ship to sail from Miami to Cuba.[36] It carried food, medicine and personal hygiene goods sent by Cuban-Americans to family members.[37]

In 2014, the Obama administration announced its intention to re-establish relations with Cuba.[38] In January 2015, the Administration lightened restrictions on U.S. citizen travel to Cuba. While restrictions on travel for missionary work and education have been loosened, visits for tourism remain banned. President Obama and President Raúl Castro of Cuba met on April 11, 2015, which was the first meeting between distinct leaders of the two countries in over fifty years.[38] In May 2015, several American companies reported they had been granted licenses to establish ferry travel between Florida and Cuba,[39] with a U.S. Department of Treasury spokeswoman confirming they had begun issuing licenses. So far the general ban on travel to Cuba remains in effect for Americans, so the ferry service will not be accessible to Americans who have not received special approval for travel to Cuba.[40]

On September 21, 2015, the Commerce and Treasury Departments took additional coordinated actions in support of the President's Cuba policy. These actions included a rule published by the Commerce Department's Bureau of Industry and Security (BIS) that amended the terms of existing license exceptions that are available for Cuba, increased the number of license exception provisions that are available for Cuba, created a new Cuba licensing policy to help ensure the safety of civil aviation and the safe operation of commercial passenger aircraft, and made the deemed export and deemed reexport license requirements for Cuba consistent with other sanctioned destinations.[41]

In February 2016, the U.S. Government allowed two American men from Alabama to build a factory that will assemble as many as 1,000 small tractors a year for sale to private farmers in Cuba. The $5 million to $10 million plant would be the first significant U.S. business investment on Cuban soil since 1959. They expect to start making deliveries in 2017.[42][43]

In concert with a prisoner exchange with Cuba, Presidents Barack Obama and Raúl Castro announced moves on December 17, 2014 to reestablish diplomatic relations and to loosen travel and economic policies.[44] Cuba released Alan Gross, an American prisoner, on humanitarian grounds and exchanged an unnamed American spy for the three remaining members of the Cuban Five. Obama also announced a review of Cuba's status as a terrorist state and an intention to ask Congress to remove the embargo entirely.[45] Cuba agreed to release 53 political prisoners and to allow Red Cross and UN human-rights investigators access.[46] On May 29, 2015, according to the U.S. State Department, "Cuba's designation as a state sponsor of terrorism was rescinded".[47]

Under the announced changes by President Obama, there will be an increased ability to transact with Cuban nationals and businesses, including Cuban financial institutions. Additionally, permitted U.S. banks will now be able to open accredited accounts in Cuban banks.[48]

On January 12, 2017, President Barack Obama announced the immediate cessation of the wet feet, dry feet policy, eight days before his term ended.[49] The Cuban government agreed to accept the return of Cuban nationals.[50] Beginning in 2014, anticipation of the end of the policy had led to increased numbers of Cuban immigrants.[51]

On November 8, 2017, it was announced that US President Donald Trump's Administration had enacted new rules which would re-enforce the business and travel restrictions which were loosened by the Obama Administration[52] and would go into effect on November 9.[53]

The U.S. sanctions on Cuba and their economic impacts can be traced back to when they were first implemented in the 1960s.[55]

In 2009, the United States Chamber of Commerce estimated that the embargo was costing the United States economy $1.2 billion per year as a result of the legal structures that prevented American exporters from entering Cuban markets.[56] The Cuba Policy Foundation (CPF) has provided more extreme data; its estimates put the cost of the embargo at $4.84 billion per year while costing Cuba $685 million per year.[3] Cuba is estimated to have lost over $28.6 billion in trade, according to a 1992 study published by the Cuban Central Planning Board's Institute of Economic Research.[57]

Between 1954 and 1959, trade between Cuba and the United States was at a higher level than what it is today, with 65% of Cuba's total exports sent to the United States while American imports totaled 74% percent of Cuba's international purchases. After the formal implementation of the embargo and the passage of Proclamation 3355, there was a 95% decrease in Cuba's sugar quota, which canceled roughly 700,000 tons of the 3,119,655 tons previously allotted to the United States.[58] A year later, Cuba's sugar quota was reduced to zero when President Eisenhower issued Proclamation 3383. This substantially affected Cuba's total exports, as Cuba was one of the world's leading sugar exporters at the time.[58]

In 1989, with the collapse of the Soviet bloc, Cuba witnessed its most devastating economic crises. Cuba's GDP plummeted 34% and trade between the nations apart from the Council of Mutual Economic Assistance (CMEA) declined by 56%.[58] Between 1989 and 1992, the termination of traditional trade partnerships with the Soviet bloc caused the total value of Cuba's exports to fall by 61% and imports to drop by approximately 72%. This period is known as the Special Period.[59] Supporters of the embargo and many international economists believed that the dissolution of the Soviet Union and the resultant economic crisis would lead to the downfall of Fidel Castro's government. However, Cuba's government instituted a campaign of macroeconomic adjustment and liberalization, which helped significant economic recovery.[58]

According to a 2001 U.S. International Trade Commission report in response to a request made by the U.S. House of Representatives, the total value of U.S. exports of selected agricultural products, intermediate goods, and manufactured goods to Cuba in the absence of U.S. sanctions was estimated to be at $146 and $658 million for U.S. imports from Cuba between 1996 and 1998.[60]

Recently, the United States Commerce's Bureau of Industry and Security (BIS) has become more lenient with some of the sanctions imposed upon Cuba by introducing new streamlined procedures to expedite processing of license applications for exporting eligible agricultural commodities to Cuba. As a result, annual U.S. exports to Cuba have risen from $6 million to about $350 million between 2000 and 2006. Over this period, U.S. exports to Cuba have totaled more than $1.5 billion. As of 2006, agricultural products comprised 98% of total U.S. exports to Cuba.[61]

The U.S. Chamber of Commerce estimates that the embargo costs the U.S. economy $1.2 billion per year in lost sales and exports, while the Cuban government estimates that the embargo has cost the island itself $753.69 billion.[62][63] The Cuba Policy Foundation estimates that the embargo costs the U.S. economy $3.6 billion per year in economic output.[64]

The 1998 U.S. State Department report Zenith and Eclipse: A Comparative Look at Socio-Economic Conditions in Pre-Castro and Present Day Cuba[65] attributed Cuba's economic penury not as a result of the embargo, but instead the lack of foreign currency due to the unwillingness of Cuba to liberalize its economy and diversify its export base during the years of abundant Soviet aid. Cuba also amassed substantial debts owed to its Japanese, European, and Latin American trading partners during the years of abundant Soviet aid.

According to critics, one of the major problems with the embargo is that the United States is the only major country that has such an embargo against Cuba in place. Cuba still receives tourists and trade from other countries making the embargo appear both illegitimate and pointless.[66]

Cuba is 90 miles (145 kilometres) south of Florida

Under the Cuban Assets Control Regulations persons subject to U.S. jurisdiction must obtain a licence to engage in any travel-related transactions pursuant to travel to, from, and within Cuba. Transactions related solely to tourist travel are not licensable.

Spurred by a burgeoning interest in the assumed untapped product demand in Cuba, a growing number of free-marketers in Congress, backed by Western and Great Plains lawmakers who represent agribusiness, have tried each year since 2000 to water down or lift regulations preventing Americans from traveling to Cuba. Four times over that time period the United States House of Representatives has adopted language lifting the travel ban, and in 2003 the U.S. Senate followed suit for the first time. Each time President George W. Bush threatened to veto the bill. Faced with a veto threat, each year Congress dropped its attempt to lift the travel ban before sending legislation to the president.

Some United States nationals circumvent the ban by traveling to Cuba from a different country, such as Mexico, The Bahamas, Canada or Costa Rica. Cuban immigration authorities do not routinely stamp passports, instead stamping a Cuban visa page which is provided, and not permanently affixed to the passport. However, the practice still opens U.S. citizens to a risk of prosecution and fines by the U.S. government if discovered. Until July 20, 2015 there was no U.S. Embassy or consulate in Cuba and United States representation was limited to a United States Interests Section.

The United States Treasury Department's Office of Foreign Assets Control (OFAC) considers any visit of more than one day to be prima facie proof of violation. OFAC also holds that U.S. citizens may not receive goods or services for free from any Cuban national, eliminating any attempts to circumvent the regulation based on that premise. On July 25, 2011, OFAC declared that the "people to people" relaxation of restrictions on travel conceded by the Obama administration should not be mistakenly interpreted as promoting tourism.

On October 10, 2006, the United States announced the creation of a task force will pursue more aggressively violations of the U.S. trade embargo against Cuba, with severe penalties.[67] The regulations are still in force and are administered by OFAC. Criminal penalties for violating the embargo range up to ten years in prison, $1 million in corporate fines, and $250,000 in individual fines; civil penalties up to $55,000 per violation.

In September 2016, Newsweek reported that then future President Donald Trump's hotel company violated the embargo, spending a minimum of $68,000 for its 1998 foray into Cuba without U.S. government approval. With Trump's knowledge, executives funneled the cash for the Cuba trip through an American consulting firm called Seven Arrows Investment and Development Corp. Once the business consultants traveled to Cuba and incurred the expenses for the venture, Seven Arrows instructed senior officers with Trump's company—then called Trump Hotels & Casino Resorts—how to make it appear legal by linking it after the fact to a charitable effort.[68][69]

The UN General Assembly has, from 1992, passed a resolution each year criticizing the ongoing impact of the embargo.[70]

The embargo has been criticized for its effects on food, clean water,[72] medicine, and other economic needs of the Cuban population. Criticism has come from both Fidel Castro and Raúl Castro, citizens and groups from within Cuba, and international organizations and leaders. Some academic critics, outside Cuba, have also linked the embargo to shortages of medical supplies and soap which have resulted in a series of medical crises and heightened levels of infectious diseases.[73][74] Academic critics have also been linked to epidemics of specific diseases, including neurological disorders and blindness caused by poor nutrition.[73][75] Travel restrictions embedded in the embargo have also been shown to limit the amount of medical information that flows into Cuba from the United States.[72] An article written in 1997 suggests malnutrition and disease resulting from increased food and medicine prices have affected men and the elderly, in particular, due to Cuba's rationing system which gives preferential treatment to women and children.[74] Cuban Foreign Minister Felipe Pérez Roque called the embargo "an act of genocide", quoting a classified State Department memo dated April 6, 1960 that called on the US to use every tool at its disposal to bring down Fidel Castro through hunger and disease.[76]

On May 1, 2009, Venezuelan President Hugo Chávez, while speaking about his meeting U.S. President Barack Obama at a summit days earlier, stated "if President Obama does not dismantle this savage blockade of the Cuban people, then it is all a lie, it will all be a great farce and the U.S. empire will be alive and well, threatening us."[77] In June 2009, Moisés Naím wrote in Newsweek: "The embargo is the perfect example used by anti-Americans everywhere to expose the hypocrisy of a superpower that punishes a small island while cozying to dictators elsewhere."[78]

The Helms-Burton Act has been the target of criticism from Canadian and European governments in particular, who object to what they say is the extraterritorial pretensions of a piece of legislation aimed at punishing non-U.S. corporations and non-U.S. investors who have economic interests in Cuba. In the House of Commons of Canada, Helms-Burton was mocked by the introduction of the Godfrey-Milliken Bill, which called for the return of property of United Empire Loyalists seized by the American government as a result of the American Revolution (the bill never became law). The European Council has stated that it:[79]

while reaffirming its concern to promote democratic reform in Cuba, recalled the deep concern expressed by the European Council over the extraterritorial effects of the "Cuban Liberty and Democratic Solidarity (Libertad) Act" adopted by the United States and similar pending legislation regarding Iran and Libya. It noted the widespread international objections to this legislation. It called upon President Clinton to waive the provisions of Title III and expressed serious concern at the measures already taken to implement Title IV of the Act. The Council identified a range of measures which could be deployed by the EU in response to the damage to the interests of EU companies resulting from the implementation of the Act. Among these are the following:

1. a move to a WTO dispute settlement panel;
2. 'changes in the procedures governing entry by representatives of US companies to EU Member States;
3. the use/introduction of legislation within the EU to neutralize the extraterritorial effects of the US legislation;
4. the establishment of a watch list of US companies filing Title III actions.

Some critics say that the embargo actually helps the regime more than it hurts it, by providing it with a bogeyman for all of Cuba's misfortunes. Hillary Clinton publicly shared the view that the embargo helps the Castros, noting that "It is my personal belief that the Castros do not want to see an end to the embargo and do no want to see normalization with the United States." Clinton said in the same interview that "we're open to changing with them."

In a 2005 interview, George P. Shultz, who served as Secretary of State under Reagan, called the embargo "insane".[80] Daniel Griswold, director of the Cato Institute's Center for Trade Policy Studies, criticized the embargo in a June 2009 article:[81]

The embargo has been a failure by every measure. It has not changed the course or nature of the Cuban government. It has not liberated a single Cuban citizen. In fact, the embargo has made the Cuban people a bit more impoverished, without making them one bit more free. At the same time, it has deprived Americans of their freedom to travel and has cost US farmers and other producers billions of dollars of potential exports.

Some American business leaders openly call for an end to the embargo. They argue, as long as the embargo continues, non-U.S. foreign businesses in Cuba that violate the embargo, do not have to compete with U.S. businesses, and thus, will have a head start when and if the embargo is lifted.[82]

Some religious leaders oppose the embargo for a variety of reasons, including humanitarian and economic restrictions the embargo imposes on Cubans. Pope John Paul II called for the end to the embargo during his 1979 pastoral visit to Mexico.[83] Patriarch Bartholomew I called the embargo a "historic mistake" while visiting the island on January 25, 2004.[84] Rev. Jesse Jackson, Rev. Al Sharpton, and Minister Louis Farrakhan have also publicly opposed the embargo. On May 15, 2002 former President Jimmy Carter spoke in Havana, calling for an end to the embargo, saying "Our two nations have been trapped in a destructive state of belligerence for 42 years, and it is time for us to change our relationship." The US bishops called for an end to the embargo on Cuba, after Pope Benedict XVI's 2012 visit to the island.[85]

The United Nations General Assembly has condemned the embargo as a violation of international law every year since 1992. Israel is the only country that routinely joins the U.S. in voting against the resolution[86] as has Palau every year from 2004 to 2008. On October 26, 2010, for the 19th time, the General Assembly condemned the embargo, 187 to 2 with 3 abstentions. Israel sided with the U.S., while Marshall Islands, Palau and Micronesia abstained.[87]

Film director Michael Moore challenged the embargo by bringing 9/11 rescue workers in need of health care to Cuba to obtain subsidized health care.[88]

In June 2011, former Democratic presidential candidate George McGovern blamed "embittered Cuban exiles in Miami" for keeping the embargo alive. Before visiting Cuba, he said:[89]

It's a stupid policy. There's no reason why we can't be friends with the Cubans, and vice versa. A lot of them have relatives in the United States, and some Americans have relatives in Cuba, so we should have freedom of travel ... We seem to think it's safe to open the door to a billion communists in China but for some reason, we're scared to death of the Cubans.

Barack Obama discussed easing the embargo during his 2008 campaign for president of the U.S.,[90] though he promised to maintain it.[91] In December 2014, he called the embargo a failure, asking the U.S. Congress to enact legislation to lift it entirely.[92]

Proponents of the embargo argue that the Cubans have done much to antagonize the United States and Cuba deserves to be under an embargo as they have been an especially unfriendly government. The Cubans backed, armed, and fought with militant movements that attempted to overthrow U.S. allies and targeted U.S. interests throughout Latin America and Africa for decades. One example of this was Cuba's assistance to FARC in their operations through several South American countries, especially Colombia. Another example is Cuba's shooting down of unarmed American civilian aircraft whose pilots were known for protesting the Castro regime.

Furthermore, proponents argue that Cuba has little to offer the United States economically. From the United States viewpoint, Cuba's one party semi-dictatorial form of government is especially undesirable due to characteristics such as its crackdowns on religious freedom, repression of the press, and repression of almost all criticism of the government. These policies are allegedly designed to ensure one party, dictatorial rule for as long as possible. Many in the United States profoundly disagree with Cuba's historical policies of severely limiting private property ownership and property rights in order to attain a more communistic society. The danger that Cuba will try to export its form of government, especially into the United States, is a national security threat due to Cuba's close proximity to the United States. This is not an unfounded threat as Cuba has launched several military campaigns, by itself and with other usually hostile nations, designed to export its undesirable form of government in the past.

Cuba does not have an advanced industrial base and manufactures little of value that could be traded with the United States if the embargo was lifted. U.S. demand for products that Cuba does export are generally easily covered by domestic production or trade relations with more economically reliable and friendlier nations. It is true that Cuba's state medical program has indigenously made some advancements in the treatments of some cancer and heavily state subsidized medical industries from Cuba have driven down costs, even to poor foreigners, for those who could not otherwise afford medical treatment. Despite this exception, benefits from lifting the embargo would be very one sided in Cuba's favor. Cuban benefits would include the easing of the frequent shortages of goods the island experiences, additional low cost services not readily available in Cuba, and access to new and better technology for personal consumption and economic development.

For these reasons proponents argue that lifting the embargo is not advantageous to the United States or Cuba's population, until economic or political reforms are enacted by the Cubans.