The Future of Business Relations in Cuba – Commentary from a Seasoned Customs Attorney

Since the December 2014 reopening of diplomatic relations, access to Cuba has been greatly widened, with new changes to regulations taking place as recently as late January.  These developments signal opportunities for legal service providers to assist clients who are seeking advice on business development opportunities in Cuba. However, effective advising requires a thorough understanding of the history of the U.S. embargo on Cuba and the changes in the laws themselves.

Peter Quinter, Chair of the Customs and International Trade Law Group at GrayRobinson P.A., offers a unique perspective regarding U.S. and Cuban relations as a former attorney in the Office of Chief Counsel for U.S. Customs in Miami. As a South Florida resident surrounded by the stories about the 1959 Cuban Revolution and Fidel Castro, Peter was fascinated with the unique relationship between the two countries. As an attorney with U.S. Customs, he was also responsible for enforcing the U.S. embargo of Cuba. I recently had the opportunity to discuss his perspective on the progress of reopening relations with Cuba following his participation in a panel discussion at the recent Marketing Partner Forum.¹

Since the imposition of the U.S. embargo on Cuba 55 years ago, Cuba’s economy has remained relatively stagnant in growth. I was initially focused on the idea that only the U.S. refused to trade with Cuba, and that despite access to everywhere else in the world, their economy did not grow. Mr. Quinter corrected my assumption, stating “[t]here were multiple embargoes, but they disappeared long ago. Only the U.S. retains the embargo, and it was U.S. policy to punish any country doing business with Cuba.”  In fact, the UN General Assembly has nearly unanimously voted to condemn the embargo every year since 1992. The U.S. only garnered support from one other nation –Israel– in the most recent vote on the embargo in October 2015.

Despite the standing embargo, the U.S. is now poised to begin contributing to the significant growth of the Cuban economy. Although most U.S. companies are still prohibited from doing business in Cuba, the relaxed rules and opening of embassies in D.C. and Havana have allowed a few major companies to start doing business in Cuba including Verizon, Netflix, and AirBNB. Mr. Quinter believes many industries have the opportunity to rapidly develop in Cuba due to the expansion of diplomatic relations: “Logistics, warehousing, hospitality, aviation, travel agents, sports, education..to name a few.” These developments signal new opportunities for U.S. law firms to advise companies in their up-and-coming dealings in Cuba.

Like business dealings in any country, it is imperative to understand and work within the laws of Cuba’s socialist government. Mr. Quinter’s extensive experience in advising clients on OFAC regulations and policies (Office of Foreign Assets Control) for 26 years makes him uniquely positioned to comment on the current state of U.S. law firm involvement in this rapidly evolving area. During the presentation, he stated that few firms are approaching this opportunity in the appropriate manner. In our follow up discussion, he called attention to this error: “Suddenly, numerous law firms are ‘experts’ in this, and are attempting to be business brokers, instead of legal advisors.”

As a legal advisor, Mr. Quinter elaborated that law firms’ focus should remain on advising U.S. persons and companies about the relevant legal requirements that allow these entities to travel to, trade with, or invest in Cuba. A major part of this practice is determining whether a license is required to do any of these things, and if so, obtaining the license from the U.S. Treasury for the client. Once the appropriate license is obtained, then the firm will need to assist the client in working with the Cuban government.

Law firms can add value to their practice by beginning to form new partnerships now so they can be better equipped to help their clients establish businesses down the line. Mr. Quinter advises that traveling to Cuba, experiencing the culture, and introducing themselves to the community is an excellent way for law firms to equip themselves to guide clients who are looking to do business in Cuba. In May 2015, Mr. Quinter, as Chair of the Florida Bar’s International Law Section, led the largest lawyer delegation ever to visit Cuba. While the group was in Cuba, they met with lawyers, journalists, and dissidents to get a better lay of the land and to help move toward opening up business relationships. Mr. Quinter has since returned to Cuba in October 2015 on behalf of a client meeting with government officials.

The upcoming 2016 presidential elections could greatly impact the progress being made in Cuba. Several presidential hopefuls have made their sentiments toward the embargo known: Republican candidate Marco Rubio staunchly for the embargo, and Democratic candidate Hillary Clinton ardently against it. However, Mr. Quinter posited, “What has happened to date is legally reversible, but realistically not.” He believes the embargo will eventually meet its end: “As more investment in and trade with and authorized travel by Americans occur to Cuba, even the few people who support the U.S. embargo (Cubans call it a ‘blockade’) will realize the embargo is counterproductive, and a leftover from the Cold War of the 1950’s and 1960’s.”

At the moment, Mr. Quinter acknowledges that in the short term, OFAC regulations continue to make it difficult to do business in Cuba. However, he is hopeful for the future: “In 10 years, we will look back and wonder why the U.S. did not terminate the U.S. embargo of Cuba decades ago, and we will recognize the leadership of President Obama in having the courage and vision to starting the process.” In fact, President Obama has recently announced that he will be the first sitting U.S. president to visit Cuba in over the 85 years. This is a signal of the U.S.’s overall sentiment toward Cuba, but only time will tell how U.S.-Cuban relations are progressing.

Article By Nicole Cudiamat Minnis of The National Law Review / The National Law Forum LLC