Congress: Give the President Discretion to Remove the Cuba Embargo

With talk of regime change in the background, the Trump administration has turned up pressure on Cuba in recent weeks. This follows recent developments in Venezuela, where the United States captured Nicolás Maduro in January and has since engaged with Delcy Rodríguez by exerting pressure while also relieving certain sanctions. Without congressional action, however, the president is much more constrained in the ability to change sanctions on Cuba than Venezuela. In contrast to Venezuela, where sanctions are a matter of executive discretion based on a national emergency that President Obama originally declared under the International Emergency Economic Powers Act (IEEPA), the legal basis for the Cuba embargo is more complicated. The statutory codification of the Cuba embargo limits U.S. options to change sanctions, even if such changes are aimed at promoting stability and nudging Cuba toward a more democratic future—the goal of the embargo in the first place. Congress should amend these outdated laws that hinder the president’s ability to act quickly in a crisis by increasing the president’s ability to provide sanctions relief when warranted.

Cuba Embargo Overview

The United States applies a broad embargo on Cuba, including comprehensive sanctions and export controls. Multiple statutes underpin the Cuba embargo, which originated from a December 1950 national emergency to address communist imperialism declared under the Trading with the Enemy Act (TWEA), as well as Presidential Proclamation 3447 from 1962, which embargoed all trade with Cuba under the Foreign Assistance Act of 1961 and continued preexisting prohibitions on exports under the Export Control Act of 1949, as amended. Regulations implemented by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) at 31 CFR Part 515 (the Cuban Assets Control Regulations), the State Department, and the Commerce Department’s Bureau of Industry and Security reflect the current contours of the embargo.

Since its 1960s executive branch origins, the U.S. embargo on Cuba has evolved via executive action and calcified under the weight of multiple statutes, which have layered additional elements onto the embargo and constrained the president’s ability to change it. These statutory restraints contrast with most other modern U.S. sanctions programs, which stem from executive orders declared under TWEA’s successor, IEEPA. In IEEPA-based sanctions programs, the president has complete ability to amend or revoke relevant sanctions. It is rare for a sanctions program to be limited so heavily by statute, especially statutes that omit an authority for the president to waive sanctions for reasons of national interest or national security.

Congress passed the Cuban Democracy Act of 1992 (CDA) after the end of the Cold War, with a goal of promoting a peaceful transition to democracy in Cuba by sanctioning the Castro government and supporting the Cuban people. The CDA prohibited the issuance of licenses to allow foreign subsidiaries of U.S. companies to trade with Cuba, restricted vessels that had traveled to Cuba from subsequently traveling to the United States, and required limits on remittances from the United States to Cuba. The president may waive these requirements only upon a determination and report to Congress that the government of Cuba:

1. has held free and fair elections conducted under internationally recognized observers;
2. has permitted opposition parties ample time to organize and campaign for such elections, and has permitted full access to the media to all candidates in the elections;
3. is showing respect for the basic civil liberties and human rights of the citizens of Cuba;
4. is moving toward establishing a free market economic system; and
5. has committed itself to constitutional change that would ensure regular free and fair elections[.]

The Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of 1996 was enacted after Cuba shot down the aircraft of a U.S. nongovernmental organization on a humanitarian rescue mission. It continued Congress’s drumbeat of using sanctions against Cuba to promote a transition government leading to a democratically elected government in Cuba. Among other sanctions and restrictions, the LIBERTAD Act codified the Cuba embargo, “as in effect on March 1, 1996, including all restrictions under [31 CFR Part 515].” In practice, this means that unless the president determines that a set of nearly impossible conditions are met, the president may not suspend or lift the Cuba embargo. President Clinton took issue with these limitations in his statement on signing the LIBERTAD Act, noting:

The President must also be able to respond effectively to rapid changes in Cuba. This capability is necessary to ensure that we can advance our national interests in a manner that is conducive to a democratic transition in Cuba. Section 102(h), concerning the codification of the economic embargo, and the requirements for determining that a transitional or democratically elected government is in power, could be read to impose overly rigid constraints on the implementation of our foreign policy. I will continue to work with the Congress to obtain the flexibility needed if the United States is to be in a position to advance our shared interest in a rapid and peaceful transition to democracy in Cuba.

Congress could act now to provide for this discretion so that the president is equipped to act quickly and flexibly in the event of a government transition in Cuba.

As things currently stand, to suspend enforcement of key pieces of the embargo, including the Cuba sanctions regime, the LIBERTAD Act requires the president to determine and report to Congress that a “transition government” is in power in Cuba. To make this determination, the president must find that a transition government that “does not include Fidel Castro or Raul Castro” is taking significant actions to democratize and respect human rights in Cuba. These actions include legalizing all political activity; releasing all political prisoners; committing to organizing free and fair elections within 18 months; working to establish an independent judiciary, respect for human rights, and independent trade unions; and providing assurances regarding the speedy and efficient distribution of assistance to the Cuban people. The president must also consider other factors such as the new Cuban government’s support for freedom of speech, private property rights, resolution of property expropriation claims, and the extradition of wanted fugitives.

An additional element of the Cuba embargo comes via the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA), which imposes conditions on agricultural sales and prohibits U.S. export assistance and financing. Most critically for this article, however, is that it also serves to codify the ban on tourist travel to Cuba, defined as “any activity with respect to travel to, from, or within Cuba that is not expressly authorized” in paragraphs (1) through (12) of 31 CFR 515.560, or in any section referred therein, as such sections were in effect on June 1, 2000. There is no presidential waiver authority associated with these prohibitions. This significant travel restriction is particularly noteworthy in contrast to the other, IEEPA-based U.S. sanctions programs, as IEEPA expressly exempts from the scope of its prohibitions “any transactions ordinarily incident to travel to or from any country[.]”

Cuba Sanctions Policy

Since the original issuance of the Cuban Assets Control Regulations on July 9, 1963, the Cuba embargo has evolved through regulatory amendments at the margins. Most presidential administrations have made a mark, usually by increasing or decreasing the nature of authorized travel-related transactions and changing the types and amounts of authorized remittances. Since the LIBERTAD Act’s 1996 codification of the embargo, however, the presidential prerogative to materially change the embargo, through significant licensing actions or regulatory changes, or by repealing key elements, has been limited.

The most significant modern changes to the embargo occurred after President Obama reestablished diplomatic relations with Cuba. These changes occurred via a series of amendments to the Cuban Assets Control Regulations between 2015 and 2016. Among other changes, they authorized “U-turn” payment transactions, allowing funds from third countries to Cuba to transit the U.S. financial system, expanded authorized remittances, and allowed for certain U.S. investment in Cuba’s private sector. They also authorized increased transportation between the United States and Cuba and expanded various travel-related authorizations. For example, individual travelers were allowed to travel to Cuba without a specific license, as long as “the traveler engages in a full-time schedule of educational exchange activities intended to enhance contact with the Cuban people, support civil society in Cuba, or promote the Cuban people’s independence from Cuban authorities and that will result in a meaningful interaction between the traveler and individuals in Cuba.”

Even these changes, however, sought to stay within the main contours of the 1996 Cuban Assets Control Regulations, given the LIBERTAD Act’s codification of the embargo. The people-to-people travel authorization provides an example of these limits. TSRA and the LIBERTAD Act’s prohibitions will not allow any president to expand authorized travel beyond the 12 categories of authorized travel-related transactions allowed under the 1996 version of the embargo. As a result, people-to-people travel is allowed only if it is tied to educational exchange activities, since educational activities are one of the authorized travel categories. Ultimately, as highlighted in President Obama’s Oct. 14, 2016 Presidential Policy Directive, United States-Cuba Normalization, the statutory underpinnings of the embargo served as one of the greatest limiting factors on his administration’s efforts to normalize relations with Cuba.

Promoting Presidential Prerogatives

As we have seen in recent years with the removal of the Sudan and Syria sanctions programs, the ability to remove, revise, and refine sanctions can be a critical lever of foreign policy and national security, especially during times of government transition. Similarly, licensing certain activities and delisting certain companies and industries, as was done recently in the Venezuela and Belarus sanctions programs, can serve as compelling incentives for changes in behavior such as the recent releases of political prisoners in both Venezuela and Belarus. Likewise in Cuba, if we reach a regime tipping point, the loosening of sanctions may motivate changes in behavior that can promote democratic transition better than immovable, decades-old sanctions that have not yet managed to lead to democracy.

In contrast to the above examples, the LIBERTAD Act’s complete lack of a mechanism for the president to change the embargo and its stringent “transition government” requirements for embargo suspension would blunt the legal tools at the president’s disposal to provide stabilizing assistance and relief, and to allow for much-needed economic engagement at a critical moment of transition in the country. Such constraints could be the factor that prevents an effective transition process or tips the scales toward chaos or bad actors rather than an ordered, prosperous democratic transition.

Various failed legislative proposals over the years would have fully removed the embargo, its statutory underpinnings, or aspects of it. While repealing the underlying statutes is one mechanism for increasing presidential discretion in this space, there are other options, as well, that might be more likely to succeed in Congress in the near term. The aim of such congressional action would be to remove the “overly rigid constraints on the implementation of our foreign policy” that Clinton highlighted in his LIBERTAD Act signing statement.

To enable more effective and nimble policy options, Congress could amend LIBERTAD and TSRA to grant the president discretion to adjust or suspend key pieces of the embargo if the situation warrants, even in the absence of a “transition government.” For example, a limited waiver authority might authorize the president to waive the application of Section 102(h) of the LIBERTAD Act (which codifies the embargo) or Section 7209 of TSRA (codifying the ban on tourism) if the president determines and reports to Congress that such waiver is in the national security interest of the United States. A broader waiver authority, which would provide the president greater flexibility to quickly pivot Cuba policy as necessary, would allow the president to waive any section of the CDA, the LIBERTAD Act, TSRA, or the Foreign Assistance Act of 1961 as they relate to Cuba upon a determination and report to Congress that such a waiver is in the national security interest of the United States

Given how quickly the situation can change during a time of government transition, it is important that any waiver authority not overly prescribe or limit presidential discretion, as such limitations may hinder the president’s ability to act at a critical moment. It would be tragic if the statutory constraints of the Cuba legal regime, which Congress originally crafted to assist the Cuban people in regaining their freedom and prosperity, instead hinders U.S. efforts to promote these goals at a time of critical transition for one of our closest neighbors—whether now or in the future.