By Timothy Ashby
With Republicans set to take control of both houses of Congress in the new year, it seems unlikely that any initiative to end the Cuban trade embargo will come from Capitol Hill. While only Congress can repeal the snarl of legislation that created the embargo, President Barack Obama has the executive authority to liberalize trade and travel to the island.
If the president is serious about helping Cuba’s private sector — which even hardline congressional critics claim to support — he could start by using his power to allow certain Cuban exports to the USA. Ironically, the United States is a major exporter of agricultural products to Cuba, yet — with a few exceptions — Cuban imports are banned, even though Cuban farmers produce many agricultural products, including tobacco.
Although the Cuban Asset Control Regulations (CACR) and the Helms-Burton legislation generally prohibit the import of Cuban origin goods into the United States, exceptions can be “specifically authorized by the Secretary of the Treasury by means of regulations, rulings, instructions, licenses or otherwise.”
Actually, Helms-Burton may be Obama’s “secret weapon” to eliminate large sections of the trade embargo because it codified the President’s licensing power.
In 1999, Ambassador James Dobbins, National Security Council (NSC) Senior Director for Interamerican Affairs in the Clinton administration, said that in the NSC’s interpretation Helms-Burton merely delineated where a president could alter embargo-related licensing as required. Richard Nuccio, a senior Cuban policy advisor in the Clinton Administration stated:
“When President Clinton signed the Helms-Burton law, his administration issued a statement saying that it does not restrict the right of the executive branch to make foreign policy. In its own view, the administration has the legal authority to make any changes in the embargo that involve regulatory powers, and that is just about everything.”
Obama could exercise executive authority via a “Presidential Determination” to allow certain types of Cuban-origin goods into the United States under general or specific licenses, particularly when such authorizations could be justified as providing support for the Cuban people or democratic change in Cuba.
A Presidential Determination is a document issued by the White House resulting in an official policy of the executive branch. Presidential determinations may involve any number of actions, including setting or changing foreign policy.
The U.S. General Accounting Office (GAO) conducted detailed reviews of the frameworks for seven key statutes that govern Cuban sanctions. The resulting reports concluded that (i) the president still maintains “broad discretion” to make additional modifications to Cuban sanctions; and (ii) prior measures, implemented by the executive branch have had the effect of easing specific restrictions of the Cuba sanctions and have been consistent with statutory mandates as well as within the discretionary authority of the president.
The president maintains broad authority and discretion to significantly ease specific provisions of the Cuba sanctions regime in support of particular U.S. foreign policy objectives recognized by Congress. Presidents Clinton and Obama exercised that authority to ease certain provisions of the regulations implementing the Cuba sanctions program, and a wide range of specific actions are legally available that the president could take to further ease specific provisions of the Cuba sanctions.
Following Clinton administration changes to the CACR in 1998, the House Committee on Government Reform and Oversight requested that the GAO examine the changes to determine whether they were consistent with U.S. statutes regarding the Cuba sanctions. In a December 1998 report to the House Committee, the GAO determined that the changes were consistent with U.S. law. Citing Section 5(b) of the Trading With the Enemy Act (TWEA), the GAO concluded that the president has “a great deal of discretion in making changes to embargo restrictions.”
The 1998 GAO report also cites an Office of Foreign Assets Control (OFAC) letter, co-signed by the State Department’s Office of Cuban Affairs, stating that “OFAC interprets Section 102(h) of [Helms-Burton] to permit the continued exercise of reasonable licensing authority in OFAC’s implementation of the prohibitions contained in the CACR as of March 1, 1996, and in … [Helms-Burton].” After acknowledging the language quoted above with respect to Congress’ intent in codifying the CACR, the OFAC letter further states that Helms-Burton does not “rule out reasonable adjustments to the licensing regime consistent with the limitations on suspension or termination as described above.”
In its conclusions, the GAO agreed with OFAC’s position and found that OFAC has the authority to make changes to specific provisions of the CACR, including changes that effectively loosen sanctions for humanitarian purposes, under its general licensing authority. Both the Treasury Department (which OFAC is part of) and the State Department are executive-branch departments under White House jurisdiction.
President Obama has the authority to alter trade rules via the licensing authority contained in the CACR, which states that the President may authorize transactions with Cuba “by means of regulations, rulings, instructions, licenses, or otherwise.” Liberalizing trade and related transactions – such as allowing imports of Cuban agricultural goods — would therefore not require an act of Congress.
Timothy Ashby, PhD, JD, MBA, is a former Director of the Office of Mexico and the Caribbean, International Trade Administration, U.S. Commerce Department, and acting Deputy Assistant Secretary of Commerce. A member of the Florida and Washington DC bars, his legal practice focuses on commercial relations with Cuba