A classic American car flying a Cuban flag drives past the US embassy during a rally calling for the end of the US blockade against Cuba. Photo: AP/Ramon Espinosa.
By Nino Pagliccia – Jun 21, 2024
On May 28 the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced measures according to which Cuban entrepreneurs can open a bank account in the United States and access it from Cuba. The Treasury Department stated that this intends “to promote internet freedom in Cuba, support independent Cuban entrepreneurs in the private sector, and expand access to certain financial services for the Cuban population.”
Far from being a sign of the US government softening its economic and financial siege on Cuba and contributing to help Cuba’s private sector, this new policy attempts to destroy the core of the ideological makeup of Cuban socialism.
The announcement by the Treasury Department is titled, “Treasury Amends Regulations to Increase Support for the Cuban People and Independent Private Sector Entrepreneurs.” This misleading since there is no indication that there is any “support for the Cuban people” but only for some individuals in a US-selected Cuban private sector.
As reported by the Center for Democracy in the Americas (CEDA), the Washington-based group that sponsored a Cuban entrepreneur delegation to Washington, DC in July 2023, the new regulations cover four main areas:
- Updated authorizations for internet-based services, such as social media, collaboration platforms, video conferencing, and cloud-based services.
- Expanded definitions for “self-employed individuals,” replacing the term with “independent private sector entrepreneurs,” to include small private businesses and cooperatives with up to 100 employees.
- Cuban nationals who are independent, private-sector entrepreneurs are now authorized to open and use US bank accounts for transactions.
- Reinstatement of “U-turn” transactions to facilitate remittances and payments. U-turn transactions are dollar-denominated transfers that start and end outside the US but are processed through a US banking institution. This will permit individuals and businesses not subject to US jurisdiction to transfer funds to and from Cuba through US banks. In 2019, the Trump-Pence Administration halted these transactions as part of a series of policy changes aimed at strengthening the embargo on the island, which severely limited Cuba’s international trade and financial activities.
What is not evident in the four points above is that the regulation will only apply to businesses that Washington deems not to be linked to the Cuban State.
The notion of Trabajadores por Cuenta Propia (TCP) or Cuentapropistas (self-employed proprietorships) in Cuba was developed, with wide consultation of the population, in the process of advancing the Cuban socio-economic model in an attempt to soften the hardship created by the US blockade. The TCP have been legal for several years. By 2019 Cuba had close to 620,000 registered Cuentapropistas. Later in 2021, following a contraction of the tourist sector as a result of the Covid-19 pandemic that negatively impacted the Cuban economy, Cuba expanded the establishment of small and medium-sized operators in various economic sectors. The number has grown but that might not fully qualify to constitute what in the capitalist-run US is termed “private sector.”
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In the meantime, the timing of Washington’s announcement is quite peculiar since the Biden administration is preparing for a presidential election in November and it must have made a political calculation that the voters in the crucial State of Florida might favour the new regulations. The report Florida Democrats lie low on Biden plan to lift some Cuba sanctions makes weak statements of support for “legitimate private enterprises and small businesses” while “maintaining strong sanctions against the human rights abusing regime and their allies.” Obviously, maybe on purpose, it misses the point that the “strong sanctions” make it so much harder for the “legitimate private enterprises” to operate at the optimum economic level.
On the other hand, Republicans in Florida have been very critical of the regulations. US Rep. Mario DĂaz-Balart, for instance, has stated on the platform X that “the regime’s licenses have created an incestuous network of Communist party members which, shamefully, the Biden Administration has decided to help with sanctions relief.”
Never mind the fact that there is no such “sanctions relief, what DĂaz-Balart calls in hateful and insulting tone “incestuous network of Communist party members”, in reality Cubans see it as a strong cohesive and inclusive “network” of people where even those who dissent still share what the State is able to offer. Of course, what the State can offer is limited by the US unilateral coercive measures euphemistically called sanctions.
DĂaz-Balart’s work in a capitalist-run political environment makes him blind to the sense of unity that is the foundation of Cuban socialist society where all parts of the system from every individual, to their endeavors as citizens, to their communities as social actors, are not left alone.
The new US regulations attempt precisely to break up the cohesiveness of Cuban society by favouring a group of Cubans against other Cubans and their State. Washington tries to impose on Cuba a mirror image of its own society where division has a higher value than unity. Reuter’s highlighting that Cuba’s economic reforms allow small entrepreneurs to dream big misinterprets the fact that Cuba’s actions do not intend to curtail the dreams of the rest of Cubans.
In fact, Havana’s response to Washington through the Minister of Foreign Affairs (MINREX) is appropriately titled, “There is only one Cuba,” and that the US is using “this [private] sector for political purposes against the Revolution, in the interest of its change of regime policy.” Regardless of these new regulations, “The coercive measures that are part of the economic blockade will remain in force, with their cruel impact on the entire Cuban population.”
Other quotes from the MINREX declaration are quite relevant in the context of “only one Cuba”:
These measures are limited in scope and do not target the essence of the blockade against Cuba nor the additional sanctions that make up the maximum pressure policy. Once again, this US government decision relies on its own distorted view of the Cuban reality, for it intends to artificially separate the private sector from the public sector, when they are both part of Cuba’s entrepreneurial system and the Cuban society as a whole.
The point of unity is again made: “If these measures are implemented, the United States would seek to give advantage to the Cuban private sector, which was lawfully established and has been able to develop thanks to the measures taken, as a sovereign act, by the Cuban government in consultation with the Cuban people.”
We are also reminded that the “private sector” is not separate from the “state sector”: “Obviously, the United States is ratifying its willingness to punish Cuba’s state sector, knowing that this is the one that offers essential services such as education, health, culture, sports and others to all Cubans, including the private sector; and that it is the guarantee of social justice and equity among all citizens.”
Ultimately, the Cuban government has a long experience in multiplying any resources that enters the country for the benefit of all. So MINREX concludes its response by saying that as long as the new regulations “do not infringe upon our national legislation, and they are in fact an openness that would benefit the Cuban people, even if only one sector, it will not impede its implementation.”
Nino Pagliccia
Nino Pagliccia is a Venezuelan-Canadian statistician who writes about international relations with a focus on the Americas. Nino Pagliccia has managed collaborative projects with Cuban partners in the University of British Columbia’s Global Health Research Program. He is the editor of "Cuba Solidarity in Canada—Five Decades of People-to-People Foreign Relations" (2014). He has been the vice-president of the Canadian-Cuban Friendship Association in Vancouver and founding co-chair of the Canadian Network on Cuba. He has led groups doing volunteer work in Cuba for over 12 years.
