Trading With the Enemy: Ending Prejudice, Bigotry, and Narrow-Mindedness

“Certainly, travel is more than the seeing of sights; it is a change that goes on, deep and permanent, in the ideas of living.”
– Miriam Beard

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Many believe that U.S. citizens are not permitted to travel to Cuba from the United States. This belief is based on two common misconceptions: (1) that the Cuban government prohibits such tourism; and/or (2) it is the act of travel from the U.S. to Cuba that is prohibited by the law. As a result, U.S. travelers often go with some fear of the Cuban government simply because they will be in that country, while other U.S. travelers often believe that they might permissibly travel to Cuba from Canada, Mexico, or some other non-U.S. launching point. These beliefs are incorrect because the prohibition stems neither from the act of travel nor from a Cuban law but from U.S. sanctions against Cuba that prohibit U.S. citizens, residents, and companies from engaging in financial transactions with designated enemy countries, including Cuba.

Technically, all financial transactions with Cuba or Cubans are prohibited.[1] These legal prohibitions are based in the Trading With The Enemy Act (TWEA), the Trade Sanctions Reform & Export Enhancement Act of 2000, and the Cuban Assets Control Regulations.
(22 USC 7201-7209; 31 C.F.R. 515 et seq.) These Acts and Regulations govern the sanctions imposed against trade with Cuba and regulate transactions and licensing that are exceptions to the prohibitions.

Notably, transactions incidental to travel to Cuba have been afforded an exception to this prohibition in specified circumstances through the mechanisms of general and specific licenses granted by the U.S. Department of Treasury Office of Foreign Assets Control. (31 CFR 515.201.) Travelers from the U.S. who go to Cuba, regardless of the point of departure, without a license face civil penalties of up to $65,000 and criminal penalties that range up to 10 years in prison, $1,000,000 in corporate fines, and $250,000 in individual fines. (31 CFR 501.701(a)(3); 50 USC App. 16(b).)

Travel is an exception to the sanctions because current U.S. policy recognizes, at least modestly, that meetings and exchanges between non-governmental people, i.e. between a U.S. traveler and a Cuban engaged in their daily life, have the potential to encourage humanitarian and democratizing acts. The U.S. State Department states that “U.S. policy toward Cuba is focused on encouraging democratic and economic reforms, supporting the development of civil society in Cuba, promoting respect for human rights, and supporting the Cuban people.” (http://www.state.gov/p/wha/ci/cu/index.htm)

Licenses Permitting Travel to Cuba
U.S. regulations permit for the application and discretionary granting of “General Licenses” and “Specific Licenses,” which permit financial transactions for closely defined types of travel. There are eight types of “General Licenses” and  these licenses “constitute blanket authorization for [the] transactions” associated with the approved type of travel. (See OFAC Comprehensive Guidelines for License Applications to Engage in Travel-Related Transaction Involving Cuba (hereinafter “OFAC Comprehensive Guidelines”); link available below.) Specific Licenses are granted “on a case-by-case basis to permit travel-related transactions where the proposed activity is not covered by a general license but is” otherwise permitted by regulation or policy.[2] (OFAC Comprehensive Guidelines.)

The license of interest to most tour operators is the Specific License referred to as the “person to person” license. 31 C.F.R. § 515.565(b)(2). This license permits travel by and with “an organization that sponsors and organizes programs to promote people-to-people contact authorizing the organization and individuals traveling under its auspices to engage in educational exchanges not involving academic study pursuant to a degree program.” As part of the license application, the operator must certify that “each traveler will have a full-time schedule of educational exchange activities that will result in meaningful interaction between the travelers and individuals in Cuba,” and include a detailed example itinerary demonstrating the schedule is focused on and advances “purposeful travel by enhancing contact with the Cuban people and/or supporting civil society in Cuba, and/or the exchanges must promote independence from Cuban authorities. OFAC does not authorize transactions related to activities that are primarily tourist-oriented.” As a result, time spent at the beaches of Cuba is usually closely scrutinized by OFAC and often eliminated from itineraries.

The Rewards & Challenges of People-to-People Licensed Travel
People-to-people licensed travel can result in the true cultural exchange envisioned by U.S. policy. During well-operated tours, U.S. travelers can meet and work with Cubans while exchanging information about their respective daily lives – the natural occurrence of any meaningful travel. Alice Kupcik, owner of Salsa Retreat which offers art-filled trips to Cuba and Mexico, found this to be the case when her clients went on planned excursions exploring the music and dancing of Cuban nightlife at the end of days filled with drumming workshops and salsa dancing lessons. The U.S. dance students discovered that their Cuban instructors lived in poverty relative to their own lives. The anticipated glamour of dancing in Havana’s nightlife was shadowed by the learned reality that the dance instructors could not afford to pay cover and drink charges for the dance bars without the travelers and tour operator incurring these costs. Similarly, by relying on home stays, the dance students and their hosts engage in more and more meaningful conversations as the trip progresses.

Unfortunately, the licensing process can be burdensome for tour operators. People-to-people licenses are often one-year licenses and the year begins to run even before the licensee receives notice that the license has been granted. Most U.S. operators have to work with “Travel Service Providers” who hold near monopolies on access to Cuban transportation and lodging. Finding insurance for travel to Cuba is challenging, and so on.

Ms. Kupcik, who met with Congressmen and staff in Washington D.C. in June as part of the Cuban Americans For Engagement effort, offers a solution: Instead of specific licenses that are evaluated on a case-by-case basis and involve remittance of detailed record-keeping, OFAC should clearly define meaningful and purposeful travel to Cuba and then grant a General License to operators with demonstrable purposeful travel. This solution supports small U.S. businesses by ending the year-to-year business risk associated with obtaining annual licenses from bureaucrats armed with the authority of absolute discretion and avoids the analysis of small details that results in inconsistent licensing among operators.

As Mark Twain wrote in The Innocents Abroad, “Travel is fatal to prejudice, bigotry, and narrow-mindedness, and many of our people need it sorely on these accounts. Broad, wholesome, charitable views of men and things cannot be acquired by vegetating in one little corner of the earth all one’s lifetime.”

[1] Unless otherwise noted, references to restrictions on actions in this article relate to U.S. laws applicable to any person or entity subject to U.S. law and jurisdiction. As the OFAC Comprehensive Guidelines for License Applications to Engage in Travel-Related Transaction Involving Cuba state, the laws “prohibit persons subject to the jurisdiction of the United States from engaging in transactions in which Cuba or a Cuban national has any interest whatsoever, direct or indirect, including transactions related to travel.” (http://www.treasury.gov/resource-center/sanctions/Programs/Documents/cuba_tr_app.pdf)
[2] General Licenses are available to people visiting close relatives, government officials traveling on government business, journalists, professionals conducting research or attending conferences, educational activities at the university level, those performing work for religious organizations, and a few other defined types. Many of the Specific License types track the General Licenses and are for those who do not meet the detailed definitions for General Licenses but can meet the requirements for a Specific License.

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