The United States has lifted some financial restrictions against Cuba in a move aimed at supporting private businesses on the island. The new measures will enable independent entrepreneurs to open and access U.S. bank accounts online to bolster their businesses. Additionally, steps have been taken to expand internet-based services and enhance private companies' ability to engage in certain financial transactions.
The Treasury Department stated that these regulatory amendments are intended to promote internet freedom in Cuba, support independent Cuban private sector entrepreneurs, and increase access to specific financial services for the Cuban people.
One significant change allows Cuban private business owners to open U.S. bank accounts and access them online from Cuba, a capability they previously did not have. The U.S. is also reinstating U-turn transactions, facilitating the transfer of money between countries through the United States.
The updated guidance from the Treasury Department clarifies that Cuban officials or prohibited Cuban Communist Party members are not beneficiaries of these changes, which are focused on supporting Cuba's emerging private sector.
There are approximately 11,000 private businesses in Cuba, responsible for about one-third of the island's employment. These changes come at a time when Cuba is grappling with severe economic and energy crises, leading to blackouts, food shortages, and inflation. Many Cuban citizens have migrated, with a significant number heading to the United States.
Relations between the U.S. and Cuba have been strained since the 1959 revolution that brought Fidel Castro to power and established a Communist government. The U.S. imposed a full-scale economic embargo on Cuba in 1962 under President John F. Kennedy.
Efforts to improve relations began under former President Barack Obama, with some restrictions lifted in 2017. However, President Donald Trump reversed many of these policies. In the final days of his administration, Trump labeled Cuba a “state sponsor of terrorism” and imposed new sanctions.
Cuba has gradually opened up its economy to more privately owned enterprises, with reforms initiated by President Raúl Castro in 2010 and the recent authorization for the establishment of small- and medium-sized companies in 2021.
