Challenges in Implementing a

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1 Cuba and the U.S.; Progress and Challenges in Implementing a Changing Policy Towards Cuba April 7, 2016 Pedro A. Freyre

2 La Isla Mas Bella La Isla Mas Bella

3 Prospects: Economic Overview Akerman 3

4 Prospects: Economic Overview Akerman 4

5 Prospects: Economic Overview Akerman 5

6 Cuban Armed Forces in Washington D.C.

7 The Cuba Opportunity Closed to U.S. interest for almost 60 years In great need of infrastructure repair Tightly controlled, centrally planned economy. Low GDP Low per capita income Subject to U.S. economic sanctions. YOU HAVE TO BE CRAZY TO GO THERE.. Largest island in the Caribbean 90 miles away the forbidden fruit for almost 60 years. 11.7MM people with a 99% literacy rate. YUGE uptick potential. YOU HAVE TO BE CRAZY NOT TO GO THERE.

8 Recent Changes in U.S.-Cuba Policy On December 17, 2014, President Obama announced a historic shift in U.S. policy towards Cuba Diplomatic Initiatives: The U.S. reestablished diplomatic ties with Cuba and reopened its Embassy in Havana on August 14. Bilateral talks on claims, immigration, air service and anti drug activities are ongoing. Presidents Obama and Castro met in Panama. Secretary of State Kerry reviewed Cuba s status as a State Sponsor of Terrorism and Cuba was removed from the list President Obama visited Havana March 20 to the 22 nd. Akerman 8

9 The U.S. Marines, and American Heavy Metal, in Havana

10 Recent Changes in U.S.-Cuba Policy U.S. Policy Objectives Chart a new course for relations with Cuba. Engage with the Cuban people. Facilitate Travel. Improve Telecom Access and Services. Facilitate Financial Interactions. Stimulate Small Business Growth. Improve Communications. Re set relations with a close neighbor. Akerman 10

11 One Year Out

12 Recent Changes in U.S.-Cuba Regulations Regulatory Changes (cont.): General Licenses under 31 C.F.R et seq. will be issued for 12 travel categories i.e; 1) family visits; 2) official business of the US government; 3) journalistic activity; 4) professional research and professional meetings; 5) educational activities; 6) religious activities; 7) public performances, clinics, workshops, athletic and other competitions, and exhibitions; 8) support for the Cuban people; 9) humanitarian projects; 10) activities of private foundations for research or educational institutes; 11) exportation and provision for transmission of information or information materials; and 12) certain export transactions that may be considered for authorization under existing regulations and guidelines Akerman 12

13 Recent Changes in U.S.-Cuba Regulations Other Key Regulatory Changes: Licensed U.S. Companies may now have administrative, rental and warehousing presence in Cuba. Cruise lines are authorized to transport licensed U.S. Travelers. Telecoms may hire Cuban Programmers. Airlines may preposition spare parts in Cuba and crew can sojourn. Limits on remittances are lifted. U.S. Credit Cards may be used in Cuba. The sale of certain U.S. products may be financed Infrastructure projects may be authorized. Akerman 13

14 Recent Changes in U.S.-Cuba Regulations Effect of Key Regulatory Changes on the Ground: Service providers for remittances and travel services received general licenses. Arbnb launched its services in Cuba, Carnival Cruises and Pearl Seas have announced plans to conduct cruises to Cuba Starwood announced a Hotel management deal. Building materials for private residential construction, goods for the private sector, and agricultural equipment were authorized for export. Several U.S. entities are engaged in conversations with Cuba on this opportunity. Telecommunications providers will be able to establish the necessary mechanisms, including infrastructure in Cuba, to provide commercial telecommunications and Internet services. Verizon and Sprint have entered into roaming agreements with ETECSA U.S. banks are able to open correspondent accounts at Cuban financial institutions. Stonegate Bank has announced its establishing a relationship. Akerman 14

15 Recent Changes in U.S.-Cuba Relations Other Impact on the Ground Significant increase in U.S. business interest Increase in official contacts ( i.e. Congressional Delegations, Governors, etc.). 40% increase in U.S. travel to Cuba. Uptick in Cuban economy. Shift in Cuban American attitudes. Increased private sector activity. Akerman 15

16 Recent Changes in U.S.-Cuba Regulations Cuban Policy Objectives Lift the U.S. Embargo Facilitate U.S. Tourism Boost Foreign Investment and Collaboration in Key Sectors principally through JV s with State Entities. Clean Energy Bio-Tech Tourism Agriculture Mining Light Manufacturing Akerman 16

17 Recent Changes in U.S.-Cuba Regulations Cuban Economic Model and Regulations Centrally Planned Economy. Dominant Role for the State Sector. Limited Private Sector Activity. Preference for Cuban control in JV s. Dual currency. Akerman 17

18 FLORIDA MULTIFAMILY FOCUS

19 The Cuban Political Sandwich Issues Travel Trade Telecoms Pharma Finance Immigration Claims Human rights Fugitives Akerman 19

20 Handicapping the U.S.Election

21 RISKS AND TIME HORIZON U.S. Elections and Congress U.S. Claims. Cuban Political and Economic Evolution Lifting the Embargo

22 Recent Changes in U.S.-Cuba Regulations Conclusions; moving forward Transparency Communications Build on Success Sense of Urgency Continue to Remove Bottlenecks Work on a common set of objectives and above all..build Trust Akerman 22

23 Conclusion You campaign in poetry, you govern in prose Mario Cuomo Re establishing diplomatic relations was done in poetry, implenting the policy changes, on both sides, must be done in prose and prose is really hard

THE WHITE HOUSE Office of the Press Secretary

THE WHITE HOUSE Office of the Press Secretary Fact Sheet: Charting a New Course on Cuba Today, the United States is taking historic steps to chart a new course in our relations with Cuba and to further