WASHINGTON (12/31/14)--President Barack Obama's Dec. 17 announcement about a change in American policy toward Cuba will effect change in the financial community.
Obama has announced new efforts to re-establish diplomatic relations with Cuba, review the country's designation as a State Sponsor of Terrorism and to take steps to increase travel and commerce to and from Cuba.
According to an announcement from the U.S. Treasury, its Office of Foreign Assets Control will implement Treasury-specific changes via amendments to its Cuban Assets Control Regulations. Those amendments are expected to be issued in the coming weeks, and none of the changes announced by Obama will take effect until the new regulations are issues.
The U.S. Department of Commerce will implement the rest of the changes with amendments to its Export Administration Regulations.
According to an article on CreditCards.com, the changes are likely to mean American travelers to Cuba will be able to use a U.S.-issued credit or debit card. The piece quotes Mark Ranta, a consultant for a large credit card processor, who says that once Congress approves an embargo lift, U.S.-issued cards could be used in Cuba.
"The block on current U.S.-based cards is tied to the embargo, so if a credit card is issued by a U.S. entity, it would not validate upon use by design so the entity can't be held responsible for breaking the embargo," Ranta said.
The article also cites an unnamed senior Obama administration official who says new regulations will be issued allowing U.S. financial institutions to establish correspondent accounts with Cuban financial institutions.
More information on forthcoming regulations will be available on the Treasury's Cuba sanctions website.