Obama has power to further weaken Cuba sanctions

Obama has power to further weaken Cuba sanctions
Cars drive past the US Interests Section, in Havana December 17, 2014.

President Barack Obama has the power to further weaken US sanctions against the Communist-run island beyond the normalization of relations with Havana that he announced on Wednesday, sanctions experts said.

While the restoration of diplomatic ties to Havana after decades of animosity was a big breakthrough, the real obstacle to normal ties between the two countries is the decades-old embargo.

With Republicans due to take control of both the US House of Representatives and the Senate in Jan, the chance of lawmakers scrapping all sanctions on Cuba soon is almost zero.

But Obama has wide executive powers to further open up to Cuba, after his announcement that he will ease some restrictions on commerce, transportation and banking.

While the sanctions are enshrined in law, most notably the Helms-Burton Act of 1996, a US president has leeway to chip away at the embargo even if Congress objects, the experts said.

"There is a lot of breadth to authorise things more broadly than they've been authorised, provided that the broad (legislative) contours are adhered to," said Peter Kucik, a former Treasury Department official who worked on Cuban sanctions.

The sanctions on Cuba are tighter than those against other US adversaries such as Iran and Russia although America sends food and medicine to Cuba.

A president can loosen trade bans with Cuba as long as at least one restriction remains on the books to justify an embargo, said Clif Burns, a sanctions lawyer at Bryan Cave LLP in Washington.

"He can do anything other than end the economic embargo. So, say, the way it's written, we can have an economic embargo. But the only thing that can't be shipped to Cuba are jigsaw puzzles," Cave said.

Undermining the sanctions might enflame Congress but if he wanted to, Obama could instruct the Treasury Department's sanctions bureau, known as OFAC, to soften its rules on Cuba.

OFAC could issue "general licenses" to allow the export of US goods such as cars or glassware to Cuba, or permit the import of sugar.

There are some grey areas.

"The president has some flexibility to loosen restrictions on exports to Cuba but it's not clear how far he can go in light of the Helms-Burton Act," said John Bellinger, the State Department's top legal adviser under former President George W. Bush.

There are half a dozen provisions in sanctions law that specifically limit what Obama can do, for example in telecoms investments or trade with specific ports.

The Obama administration is unlikely to weaken sanctions to allow dealings with the Cuba's leadership any time soon, said former Treasury official Kucik.

"The government is going to be off limits, dealings with the Communist Party are not suddenly going to be authorised," said Kucik, now at Inle Advisory Group.

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