Havana/Washington, September 18

The White House is drafting sweeping regulations to further weaken the US trade embargo on Cuba that would ease restrictions on US companies and make it safer for Americans to travel there, US government sources said yesterday.

US companies would be allowed to establish offices in Cuba for the first time in more than half a century, according to a draft of the new rules seen by Reuters. The regulations make it easier for airlines and cruise ships to import parts and technology to improve safety in Cuba; loosen restrictions on software exports; and allow authorised companies to establish subsidiaries with Cuba, possibly via joint ventures with Cuban firms such as state telecommunications monopoly Etecsa.

However, they do not authorize private financing of trade nor change current rules on who can travel to Cuba, though it is possible regulations could still be modified by other agencies or updated later in the year, according to people familiar with the White House’s thinking on Cuba policy.

There was no immediate comment from President Barack Obama’s administration. “These are the most comprehensive expansion in US trade and investment regulations with Cuba in decades,” said John Kavulich, head of the US-Cuba Trade and Economic Council, who is familiar with the new rules.

“The result will be an exponential increase in interest towards Cuba by US companies and pressure upon Cuba by those same companies to permit access to the marketplace,” Kavulich said.

The regulations expand on others that Obama announced in January to ease the 53-year-old embargo of the Communist-ruled island.

Those rules were an initial gesture after Obama and Cuban President Raul Castro announced on December 17 they would move towards normal relations between the former Cold War foes for the first time in more than half a century.

Although legislation seeking to promote commercial ties between the two countries has support from Democrats and some Republicans, efforts to pass bills that would ease trade and travel restrictions have been stymied by opposition from Republican congressional leaders.

Given the resistance from Congress, Obama is using executive powers to ease the trade barriers.

The administration was preparing the new regulations as Jose Cabanas, a veteran diplomat, on Thursday became Cuba’s first ambassador to the United States in 54 years.

Washington has yet to name an ambassador to Cuba.