The move has caused quite a stir: For the first time since the revolution in the 1950s, Cuban entrepreneurs can open a US bank account and access it from the island. On Tuesday, the US government announced regulatory changes “to promote internet freedom in Cuba, support independent Cuban private sector entrepreneurs, and expand access to certain financial services for the Cuban people,” according to a press release from the US Treasury Department.

Cuba’s private sector has grown strongly since the government in Havana created a legal form for small and medium-sized enterprises (SMEs) for the first time in 2021. More than 11,000 private companies have been founded since then – from corner shops to transport and construction companies. And it is above all these newly created SMEs that have recently noticeably improved the range of goods on the island with their imports.

The measures announced on Tuesday will not only allow Cuban entrepreneurs to open bank accounts in the US, but also to use US-based social media platforms, online payment sites, video conferencing and cloud-based services. This will allow them to, for example, conduct financial transactions via online payment platforms, removing a significant hurdle. The new regulations will also allow Cuban software developers to offer their apps for download in the Apple or Google app stores. This was also not possible until now due to the US blockade regulations.

The US Treasury Department is also reversing a Trump-era measure that prohibits US banks from conducting transactions between Cuba and banks in third countries. In the banking industry, these are known as “U-turn transactions”. This allows money transfers for Cuban nationals as long as the sender and recipient are not subject to US law. At the same time, however, this means that financing, investments and payments must continue to be processed via third countries: direct banking transactions with the USA remain prohibited.

“Supporting the Cuban private sector will help curb irregular migration from the island by creating more economic opportunities,” the US daily Miami Herald quoted a US government official as saying. In drawing up the measures, an attempt was made to find a balance between the goal of supporting the Cuban private sector and the desire to avoid benefits for the Cuban authorities, other high-ranking US officials told the press. Business between US companies and entities of the Cuban government or the Cuban military will continue to be restricted. Cuban companies whose owners have ties to the Cuban government will also not be able to benefit from the new rules.

According to US media reports, the package of measures now announced by the US Treasury Department was already ready in September, but met with resistance in Congress. Republican MPs expressed concerns that there was no free enterprise on the island because the private sector was under state control. Congresswoman Maria Elvira Salazar, who is of Cuban descent, immediately criticized the announced measures. “The Biden administration is now giving the ‘Cuban private sector’ access to the US financial system,” she wrote on X. “This would be a mockery of American law, considering that no progress has been made towards freedom on the island and that repression has increased.” Former Congressman Joe García, who advocates for greater support for the Cuban private sector, praised the Joseph Biden administration.

Cuba’s Foreign Minister Bruno Rodríguez, in turn, criticized the new regulations as “limited.” “They do not change the cruel effects and economic suffocation imposed on Cuban families by the application of the blockade and the inclusion in the list of state sponsors of terrorism,” he wrote on Platform X. “These measures aim to divide Cuban society.” The Cuban Foreign Ministry expressed a similar view in an official statement. “Once again, the US government’s decision is based on its own distorted view of Cuban reality, artificially separating the private sector from the public sector, even though both are part of the Cuban economic system and society as a whole,” it said.

Cuban economist Ricardo Torres from the American University in Washington DC told DW that these are “positive measures” because they are adapted to “the changed reality in Cuba.” Some sectors, such as software developers, will certainly benefit from them, said Torres. The facilitation of financial transactions is also positive. “But one thing is the intention, the other is the practice,” he points out.

He points to the fact that a wide range of restrictions still exist. Banks and companies from the USA will want to protect themselves against possible future legal claims, as there is no certainty that the next US government will maintain the measures. Implementation in practice will therefore perhaps be very limited, believes Torres.

A young entrepreneur from Havana, who does not want to be named, is also somewhat skeptical, despite her joy at the announcements. “It would be a big step,” she says, referring to the possibility of opening bank accounts in the USA and using online payment services. “But we will see how it works in practice. Let’s wait and see how it develops.”

Author: Andreas Knobloch

*The article “USA approaches Cuba – a small step” is published by Deutsche Welle. Contact the person responsible here.