President Donald Trump will reverse parts of his predecessor’s detente with Cuba in an effort to keep money from flowing to Cuba’s sprawling military-controlled conglomerate, one of the primary beneficiaries of increased tourism in Cuba.
“The policy intent is to steer money away from the Cuban military and toward the Cuban people,” said a senior White House official on background.
The change comes as the Castro family consolidates its direct control over huge swaths of the economy, the kind of state-sponsored oligarchy seen in Russia, Vietnam, and China as they moved toward state-capitalism.
Trump’s revised policy will tighten rules on travel and investment in Cuba but leave much of former President Barack Obama’s policy unchanged. The changes fulfill, in part,campaign promises Trump made to Cubans in Florida who were essential to his win there.
Senior White House officials said the new policy, to be announced by the president in Miami later today, will empower Cuban people and target Cuba’s repressive military, intelligence, and security services establishment.
The change takes aim at loopholes left in the Obama administration’s policies.
“Many of the transactions were benefiting the Cuban military, which continues to repress the people. So the directive that this will enforce will allow business-to-business engagement but will make sure that those profits and flow of money are not going to benefit the Cuban military,” said a senior White House official.
Cuban President Raúl Castro spent five decades as Cuba’s defense minister, and made moves early in his rule to consolidate economic and commercial activity under the state.
Gen. Luis Alberto Rodríguez, Fidel Castro’s son-in-law runs the the military-run Administrative Group of Businesses (GAESA), a sprawling holding company that comprises at least 57 companies owned by the Revolutionary Armed Forces, including foreign exchange businesses, the country’s largest tourism corporation and real estate firm, hundreds of retail outlets, and much much more.
Bloomberg reports that half of Cuba business activity runs through Rodríguez. The GAE.SA’s grip on the economy only increased after Obama’s Cuba detente.
Given that the GAE SA controls airports and cruise ship terminals, most of the foreign-run hotels, all store chains and so on, not having any dealings with the firm is all but impossible.
The new policy directs the Treasury and Commerce departments to develop policy which could affect cruise ships that pay docking fees to military-related entities.
“One of the pieces of the policy is the State Department would create a list of entities owned by the Cuban military, intelligence, security services so individuals can adjust their plans accordingly,” said and official.
White House officials say the restrictions will be lifted once Cuba holds open elections, releases political prisoners, and ends restrictions on religious and political freedoms.
The detailed regulations of the new policy still need to be worked out, and the Treasury, State, Commerce, Homeland Security, and Transportation departments have all weighed in on the new policy.
Officials said there will be no change to Obama’s revision of the wet foot dry foot policy.
The change eliminates person-to-person travel to Cuba but leaves 12 categories of travel permitted. Those wishing to visit Cuba can do so in groups that have scheduled activities or under existing permits.