Trump tightens rules on travel to Cuba, doing business with military-linked businesses

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In a Miami speech blasting Cuba for its human rights violations, President Donald Trump signed a policy directive to tighten restrictions on traveling to the island and doing business with Cuban entities tied to the military.

“Effectively immediately, I am canceling the last administration’s completely one-sided deal with Cuba,” Trump said after introductions from Florida Republican lawmakers Gov. Rick Scott, Sen. Marco Rubio and Rep. Díaz-Balart.

The restrictions are not a complete reversal of the Obama administration’s Cuba opening, but they target parts of the Cuban economy that Trump says enrich the government and military.

“The previous administration’s easing of restrictions on travel and trade does not help the Cuban people. They only enrich the Cuban regime,” Trump said.

The policy directive includes a ban on U.S. business transactions with Cuban companies tied to the military. The move targets the Revolutionary Armed Forces’ GAESA conglomerate, whose holdings include hotels, retail chains, banks and remittance services, gas stations, construction companies, golf courses, tourist bus fleets, importing and exporting companies, and marinas. Experts estimate GAESA to control up to 60 percent of the economy, including the powerful Gaviota tourism group. It is near impossible for any foreign company or visitor to Cuba to completely avoid interactions with the conglomerate’s entities.

Airlines and cruises will still be allowed to serve Cuba, because Trump’s directive includes exemptions for landing and docking fees to military-run airports and seaports. Cuban-Americans are also still allowed to send money to family and friends because of an exemption on military-owned remittance services, according the Miami Herald. The remittance exception makes it possible for Airbnb to pay its 22,000 hosts through the Miami-based remittance VaCuba, which it uses to get around the ban on most banking transactions.

It’s not clear what impact Trump’s announcement will have on U.S. businesses already engaged in deals with GAESA entities. Starwood, a Marriott subsidiary, has managed the Gaviota-owned Four Points by Sheraton since summer 2016. It has two other hotels in the pipeline, but work on those properties has been delayed. White House officials said the Treasury and Commerce departments will create regulations to determine Starwood’s future, but the intent “is not to disrupt existing transactions that have occurred.”

“It would be exceedingly disappointing to see the progress that has been made in the last two years halted and reversed by the Administration,” Marriott CEO Arne Sorenson wrote in an emailed statement.

The president also reiterated that tourism to Cuba is illegal, and the administration will narrow the types of trips available to visitors.

“We will enforce the ban on tourism, we will enforce the embargo,” Trump said.

The Treasury Department’s Office of Foreign Assets Control (OFAC) wrote Friday that new regulations will end individual people-to-people trips, which gave visitors freedom to arrange their own itineraries. In a move to keep visitors away from tourist traps and all-inclusive resorts, the administration will only allow group “people-to-people” trips, which typically include scheduled activities and company guides.

While the increased enforcement measures do not directly impact U.S. commercial airlines and cruises, it may discourage U.S. travelers. That’s bad news for Cuba, which saw record 4 million tourists in 2016, and is counting on increased U.S. travelers to energize its struggling economy.

Even though Trump, Scott, Rubio and Díaz-Balart all criticized the Obama administration’s “one-sided” Cuba policy during Friday’s announcement, the directive keeps most of his policies intact. Embassies in Havana and Washington will remain open. Trump did not reinstate the “wet foot, dry foot” policy that gave Cubans who arrived on U.S. soil a pathway to permanent residency. There are also no changes to rules allowing travelers to bring back Cuban products such as rum and cigars.

Friday’s announcement partially fulfills a campaign promise Trump made to anti-Castro Cuban-Americans. Even though the president said he was “fine” with the Obama administration’s Cuba opening early in his campaign, in September 2016 he told a Miami crowd he would get “a better deal.” A day after Fidel Castro died, Trump tweeted a threat to “terminate” the U.S.-Cuba deal.

It also has the stamp of approval of Rubio and Díaz-Balart, who helped craft the policy and are arguably the most prominent opponents of the Obama administration’s Cuba opening.

“You kept your promise,” Díaz-Balart said.

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