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111th Congress                                                  S. Prt.
 1st Session                COMMITTEE PRINT                       111-5
_______________________________________________________________________

 
      CHANGING CUBA POLICY--IN THE UNITED STATES NATIONAL INTEREST

                               __________

                           STAFF TRIP REPORT

                                 TO THE

                     COMMITTEE ON FOREIGN RELATIONS

                          UNITED STATES SENATE

                     One Hundred Eleventh Congress
                             First Session

                           February 23, 2009

[GRAPHIC] [TIFF OMITTED] TONGRESS.#13


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                     COMMITTEE ON FOREIGN RELATIONS

                 JOHN F. KERRY, Massachusetts, Chairman
CHRISTOPHER J. DODD, Connecticut     RICHARD G. LUGAR, Indiana
RUSSELL D. FEINGOLD, Wisconsin         Republican Leader designee
BARBARA BOXER, California            BOB CORKER, Tennessee
ROBERT MENENDEZ, New Jersey          JOHNNY ISAKSON, Georgia
BENJAMIN L. CARDIN, Maryland         JAMES E. RISCH, Idaho
ROBERT P. CASEY, Jr., Pennsylvania   JIM DeMINT, South Carolina
JIM WEBB, Virginia                   JOHN BARRASSO, Wyoming
JEANNE SHAHEEN, New Hampshire        ROGER F. WICKER, Mississippi
EDWARD E. KAUFMAN, Delaware
KIRSTEN E. GILLIBRAND, New York
                      David McKean, Staff Director
            Kenneth A. Myers, Jr., Republican Staff Director





                            C O N T E N T S

                              ----------                              
                                                                   Page
Letter of Transmittal............................................     V
Introduction.....................................................     1
Findings.........................................................     2
     The Cuban Regime Is Institutionalized.......................     2
     Positive Developments Are Occurring in Cuba But They Should 
      Not Be Mistaken for Structural Reform......................     3
     Popular Dissatisfaction With Cuba's Economic Situation Is 
      the Regime's Vulnerability.................................     4
     The Regime Appears To Be Open to Some Bilateral Dialogue and 
      Cooperation................................................     5
Recommendations..................................................     6
     The Resumption of Bilateral Talks on Drug Interdiction and 
      Migration..................................................     7
     Investments in Alternative Energy...........................     8
     Agricultural Trade..........................................     8
     Medical Trade...............................................     9
     Bipartisan Commission and a Multilateral Framework..........    10
Conclusion.......................................................    11

                               Appendixes

Appendix I.......................................................    13
Appendix II......................................................    15
                         LETTER OF TRANSMITTAL

                              ----------                              

                                                 February 23, 2009.

    Dear Colleagues: From January 11-14, 2009, I directed my 
senior Senate Foreign Relations Committee (SFRC) staff member 
for Latin America, Carl Meacham, to evaluate U.S. policy 
towards Cuba. Mr. Meacham traveled to Cuba at the invitation of 
the Lexington Institute on official U.S. Government business 
under a general license for travel, as provided by the Cuban 
Assets Control Regulations (31 C.F.R. Part 515 Section 101 et 
seq.). Peter Quilter, Senior Staff on the House International 
Relations Committee, was also on the delegation.
    During this trip, staff met with government officials, 
foreign diplomats, members of the clergy, international media 
representatives, Cuban entrepreneurs, and other Cuban citizens 
in a variety of informal settings outside the apparent presence 
of Cuban Government officials (Appendix 1).
    The proclamation by Cuba's National Assembly making Raul 
Castro President of Cuba on February 24, 2008, the election of 
Barack Obama as President of the United States, on November 4, 
2008, and the fiftieth anniversary of the Cuban Revolution on 
January 1, 2009, have generated much discussion about U.S. 
policy towards the island. This debate is important because it 
has implications for security interests in the Straits of 
Florida, broader U.S.-Latin American relations, and global 
perceptions of U.S. foreign policy. Despite uncertainty about 
Cuba's mid-term political future, it is clear that the recent 
leadership changes have created an opportunity for the United 
States to reevaluate a complex relationship marked by 
misunderstanding, suspicion, and open hostility.
    Economic sanctions are a legitimate tool of U.S. foreign 
policy, and they have sometimes achieved their aims, as in the 
case of apartheid South Africa. After 47 years, however, the 
unilateral embargo on Cuba has failed to achieve its stated 
purpose of ``bringing democracy to the Cuban people,'' while it 
may have been used as a foil by the regime to demand further 
sacrifices from Cuba's impoverished population. The current 
U.S. policy has many passionate defenders, and their criticism 
of the Castro regime is justified. Nevertheless, we must 
recognize the ineffectiveness of our current policy and deal 
with the Cuban regime in a way that enhances U.S. interests.
    Mr. Meacham's report provides significant insight and a 
number of important recommendations to advance U.S. interests 
with Cuba. I hope you find the report helpful. We look forward 
to working with you on these issues and welcome any comments 
you may have on this report.
            Sincerely,
                                          Richard G. Lugar,
                                                    Ranking Member.
      CHANGING CUBA POLICY--IN THE UNITED STATES NATIONAL INTEREST

                              ----------                              


                              Introduction

         We anticipate a review of U.S. policy regarding Cuba 
        and look forward to working with members of the 
        Committee and other members of Congress as we move 
        forward to the consideration of appropriate steps to 
        take to help advance U.S. interests and values in the 
        context of relations with Cuba.--Hillary Clinton \1\
---------------------------------------------------------------------------
    \1\ This statement was provided on January 12, 2009, as the 
response to the following two questions: (1) Cuba has been on the State 
Department's State Sponsors of Terrorism list since 1982. Please 
provide your views regarding why Cuba should or should not remain on 
the State Department's State Sponsors of Terrorism list; (2) Please 
provide your views on U.S.-Cuban cooperation on energy security and 
environmentally sustainable resource management, especially as Cuba 
begins deep-water exploration for potentially significant oil reserves.

    Secretary of State Clinton responded to Senator Lugar's 
questions for the record with this pledge to conduct a review 
of U.S. policy towards Cuba. Echoing President Obama's campaign 
position, she also wrote that the Administration intends to 
lift restrictions on Cuban-American travel and remittances to 
Cuba while maintaining the U.S. trade and investment embargo. 
She left the door open for bolder policy changes, however, by 
expressing support for U.S.-Cuban cooperation in drug 
interdiction and suggesting a willingness to engage with Cuba 
on issues of mutual concern.
    Staff believes that the promised review of Cuba policy will 
reveal at least four weaknesses in current policy. First, 
because of Cuba's symbolic importance to Latin America, U.S. 
policy towards the island nation remains a contentious subject 
with many countries in the region. Chilean President Michelle 
Bachelet's February 2009 visit to Havana,\2\ and Cuba's 
admission in December 2008 to the Rio Group of more than 20 
Latin American and Caribbean countries demonstrate the region's 
convergence around a policy of engagement with Cuba, in sharp 
contrast to the U.S. policy of isolation. U.S. policy is also a 
source of controversy between the U.S. and the European Union, 
as reflected in the perennial transatlantic debate over 
sanctions versus engagement, as well as in the United Nations, 
which has passed a widely supported resolution condemning the 
embargo for the past 17 years.
---------------------------------------------------------------------------
    \2\ This is the first visit by a Chilean leader to Cuba since 
President Salvador Allende visited in 1972.
---------------------------------------------------------------------------
    Second, the United States Government (USG) hurts broader 
national security interests by impeding cooperation with Cuba 
on matters of shared concern, such as migration and 
counternarcotics, among others. There is a precedent for such 
bilateral cooperation, yet the broad outcome of the last eight 
years was a near-total breakdown in official interaction 
between the two governments; coordination of drug interdiction, 
for example, is where most official interaction occurs with 
Cuba, and only on a limited, case-by-case basis, while semi-
annual U.S.-Cuba migration talks were suspended in 2004.
    Third, despite the ostensible goal of promoting a peaceful 
transition to democracy in Cuba, U.S. policy has instead 
provided the Government of Cuba (GOC) with both a convenient, 
though overblown, scapegoat for its economic difficulties and 
an external threat with which to justify its authoritarianism.
    Finally, current U.S. policy ignores recent developments 
that have the potential to redefine relations with Cuba. The 
sanctions-based policy has significantly impeded the United 
States' ability to influence the direction of policy in Cuba or 
gain a broader understanding of events taking place on the 
island. By directing policy towards an unlikely scenario of a 
short-term democratic transition on the island and rejecting 
most tools of diplomatic engagement, the U.S. is left as a 
powerless bystander, watching events unfold at a distance.

                                Findings

    The Obama Administration's review of policy towards Cuba 
will occur during a complex period on the island and in the 
United States, while the onslaught of a global recession 
provides an unpredictable environment for foreign relations. 
The following sections provide background and staff's principal 
observations from travel to Cuba.
The Cuban regime is institutionalized
    The Cuban government remains riddled with deep problems 
including resource constraints, inefficiency, and corruption, 
but it continues to function nonetheless. It exercises control 
over its territory, manages government functions such as 
taxation, policing, and delivery of social services, and 
engages in effective international diplomacy.
    Though the Cuban Revolution first emerged as a popular 
movement, the process of institutionalization that began in the 
1970s has strengthened and formalized the political structure 
to the extent that the island's institutions occupy an 
important role in the governance of Cuba. This process has been 
accelerated by Fidel Castro's retirement in 2008 and the 
accompanying departure from his charismatic but erratic 
leadership style. Under Raul Castro, decision-making relies on 
more regularized and predictable channels such as the Cuban 
Communist Party, the National Assembly, and government 
ministries.
    While a popular uprising against the government cannot be 
completely ruled out, staff concluded that a sudden collapse of 
the GOC is unlikely given the institutionalized nature of the 
regime and the absence of an external war or other catalyst. 
Moreover, the internal opposition does not appear sufficiently 
well developed to precipitate a negotiated transition, while 
external opposition efforts have been proven peripheral.\3\ It 
is thus more likely that the post-Castro era will be led by 
factions of the current regime.\4\
---------------------------------------------------------------------------
    \3\ According to a report released by Freedom House in September 
2008, the general Cuban public lacks familiarity and interest in 
dissident organizations. Staff suspects that this disinterest stems 
from several factors, namely the prioritization of economic concerns, 
political apathy, the opposition's lack of access to the mass media, 
and fear of the state's repressive apparatus.
    \4\ Cuba most closely parallels pre-1989 Bulgaria with its thin 
opposition movement. Unlike in Hungary or Czechoslovakia, the Bulgarian 
regime initiated and controlled the transition. Factionalization within 
the communist party led to a series of liberalizing steps and round-
table talks coordinated and chaired by one of the party leaders of the 
internal coup. In Hungary, in contrast, the well-organized opposition 
set out firm principles of negotiation even before it agreed to enter 
talks, while in Czechoslovakia the established opposition groups headed 
a provisional government following regime collapse.
---------------------------------------------------------------------------
    Consequently, the basic premise of U.S. policy--that a 
liberal democracy will arise in the post-Castro era without 
political continuity from the current system--is unlikely. This 
is not to say that a democratic transition is either impossible 
or inevitable, but rather that Cuba's future leadership will 
not be a tabula rasa. By limiting engagement with Cuba's 
second-tier leaders, the USG forgoes the opportunity of 
establishing ties that might positively influence the 
advancement of U.S. interests in the near future.

Positive developments are occurring in Cuba but they should not be 
        mistaken for structural reform

    Change in Cuba cannot be assessed against a yardstick of 
full multi-party democracy, free-market capitalism, and civil 
rights. Nevertheless, since officially assuming the presidency 
in early 2008, Raul Castro has introduced a series of modest 
reforms that are regarded on the island as a departure from the 
orthodox policies of his long-ruling brother, Fidel Castro. For 
example, Cubans may now purchase cell phones and computers and 
stay at hotels previously reserved for foreigners, though the 
vast majority of the population cannot afford to take advantage 
of these reforms. The GOC is granting new licenses to private 
taxi drivers, who set their own prices, for the first time in a 
decade. Most significantly, private farmers are now permitted 
to purchase their own equipment, and the government is 
proceeding with a plan to hand over unused state lands to 
private farmers and cooperatives under long-term leases, 
including more than 45,500 land grants approved in February 
2009.
    Raul Castro has repeatedly acknowledged the need to 
increase efficiency and production, particularly in the 
agricultural sector, and his decisions have demonstrated a 
willingness to implement some reforms at a gradual pace, though 
it is not clear whether they will lead to structural change. He 
has also encouraged a series of town-hall meetings to publicly 
debate government programs, but he made it clear that decisions 
about changes would rest with the GOC, and many citizens feared 
retribution for expressing their real opinions.\5\
---------------------------------------------------------------------------
    \5\ Freedom House Special Report. (15 Sept. 2008). Change in Cuba: 
How Citizens View Their Country's Future.
---------------------------------------------------------------------------
    While limited economic opening is taking place, the 
government continues to ban most political activity that occurs 
outside the confines of the Cuban Communist Party. Opposition 
parties are illegal, virtually all media remain state 
controlled, and Cuba has the highest number of political 
prisoners of any country in the Americas. Cuba regularly ranks 
at the bottom of most internationally recognized rankings on 
political and economic liberty, and the state controls most 
means of production.
    Still, recent developments in Cuba may indicate that the 
government while able and willing to exercise its machinery of 
repression, is showing some small signs of political 
moderation. According to the non-governmental Cuban Commission 
of Human Rights and National Reconciliation (CCDHRN), a 
respected domestic human rights group, Cuba had 316 political 
prisoners when Raul Castro first took power on a provisional 
basis in July 2006, following the serious health setback 
suffered by his brother Fidel. By early 2008, when Raul Castro 
formally assumed the presidency, that number had declined to 
234. In February 2009, the CCDHRN reported that the number of 
documented political prisoners had dropped still further to 
205.\6\ Raul Castro has commuted most death sentences on the 
island, and the GOC signed two United Nations human rights 
treaties in February 2007.\7\ As a result, Cuba is about to 
undergo its first Universal Periodic Review in the United 
Nations Human Rights Council.
---------------------------------------------------------------------------
    \6\ Comision Cubana de Derechos Humanos y Reconciliacion Nacional. 
(2 Feb. 2009). ``Cuba en el ano 2009: La situacion de derechos civiles 
politicos y economicos.''
    \7\ BBC News. (29 April 2008). ``Cuba to commute death sentences.''
---------------------------------------------------------------------------
    Due in part to these modest shifts, Cuba's ranking for 
civil liberties improved in 2008 from 7 to 6 (on a scale of 1 
to 7, with 7 being the least free) on Freedom House's annual 
survey, Freedom in the World--still a very low ranking of ``not 
free'' but the first change since 1989. The GOC, however, has 
increasingly used the practice of arbitrary short-term 
detentions to intimidate and repress human rights and democracy 
activists. According to the CCDHRN, there were more than 1,500 
such detentions in 2008. The government also employs 
surveillance and travel restrictions against political 
dissidents, and ordinary Cubans still do not have the right to 
travel abroad and return to Cuba.
    While some positive developments have occurred, they do not 
appear to represent a long-term reform program, at least at 
this time. These changes are welcomed, but no one should be 
under the illusion that there might not be setbacks.

Popular dissatisfaction with Cuba's economic situation is the regime's 
        vulnerability

    Recent developments in Cuba respond to both urgent economic 
challenges and raised public expectations for economic change. 
Cuba has become increasingly reliant on food imports to feed 
its people, and most food crops show declining trends. Since 
mid-2008, the Cuban economy has suffered not only the impact of 
Hurricanes Gustav and Ike, which caused large crop losses and 
food shortages, but also the global financial crisis, with a 
resulting decline in credit, tourism revenues, remittance 
flows, and demands for nickel, the island's chief export. An 
additional vulnerability lies in the island's dependence on 
subsidized oil from Venezuela.
    Among ordinary Cubans, moreover, staff found that the 
harshest complaints are directed at the stark disparity between 
incomes and prices. The average monthly wage of a Cuban worker 
is US$17, but many goods are sold at prices equivalent to what 
they would cost in the United States. This disparity is 
sustained through a dual currency system: local salaries are 
paid in pesos valued at about 25 to the dollar, and many food 
products and consumer goods are sold in prices marked in 
convertible pesos (CUC) valued at parity with the dollar. Staff 
visited CUC stores that sold items such as Nike, Adidas, and 
Reebok apparel, and they were full of Cubans purchasing goods 
at U.S. market prices, while the peso stores that staff visited 
showed a meager selection of low quality goods. Those who 
benefit from remittances or work in the tourism industry are 
able to purchase goods at CUC stores. This is in sharp contrast 
to the majority of Cubans who, because monthly wages are 
insufficient to purchase even basic foodstuffs, engage in 
illegal economic activities reflected in popular Cuban jargon 
like ``resolver'' (to make do), ``inventar'' (to invent), and 
``hacer las cosas por la izquierda'' (to do things ``on the 
left,'' i.e. transactions in the underground economy).
    Staff believes that popular dissatisfaction with the 
economic situation among Cuba's youth is especially problematic 
for Raul Castro. During an evening visit to the intersection of 
23rd Street and ``Calle G'' (G Street, a popular gathering 
place for college students in Havana) staff observed young 
adults dressed in fashions similar to average American youth. 
The contemporary music that staff could hear played was 
Reggaeton, a form of Latin urban music that became popular with 
Latin American youth in the early 1990s. Yet even relatively 
successful young people expressed frustration with the limits 
placed by the state on their prospects for upward mobility. 
Staff concluded that this generation, which came of age after 
the collapse of the Soviet Union plunged Cuba into profound 
economic crisis in the 1990s, has high expectations when it 
comes to the economy but has only the most tenuous link with 
the Cuban Revolution in political terms.
    Cuba's economic challenges and vulnerabilities have 
important implications for U.S. interests, for they provide an 
incentive for the GOC to advance economic reforms that could 
provide commercial opportunities and markets for the United 
States.

The regime appears to be open to some bilateral dialogue and 
        cooperation

    Staff's meetings with GOC officials revealed stark 
differences between Cuban and U.S. priorities in bilateral 
relations. Most of the U.S. policy reforms that are proposed in 
Washington center on liberalizing travel to the island, yet the 
GOC considers travel to be a domestic issue for the United 
States and therefore of less relevance to bilateral 
discussions. Most importantly, the GOC views the USG's emphasis 
on conditionality (i.e., lifting U.S. economic sanctions in 
return for concrete movement toward democracy) as an unlikely 
starting point for future negotiations. When staff asked GOC 
officials about the human rights situation and the plight of 
Cuban dissidents, GOC officials countered with Guantanamo,\8\ 
Abu Ghraib, and the case of the ``Cuban Five.'' \9\
---------------------------------------------------------------------------
    \8\ Following staff's trip, President Obama signed an executive 
order to close the Guantanamo detention camp. Fidel Castro has demanded 
a return of the base to the GOC.
    \9\ The Cuban Five are five Cuban unregistered intelligence agents 
who infiltrated South Florida exile groups in the 1990s and have been 
imprisoned in the United States since 2001.
---------------------------------------------------------------------------
    When staff asked about what gestures the Cuban government 
would find positive, officials expressed concerns with programs 
by USAID intended to facilitate a transition to democracy in 
Cuba as well as Radio and TV Marti broadcasts from Miami, which 
are intended to provide an alternative source of information 
for the Cuban people. They view these programs as 
interventionist tools of the United States intended to bring 
about regime change.
    On issues of national security and commerce, however, the 
GOC indicated a willingness to cooperate with the United States 
where mutual interests exist, echoing previous statements by 
Raul Castro on his desire for dialogue with the USG. Since 
assuming power in 2006, he has made several overtures to engage 
in dialogue with the United States with the condition that the 
dialogue is based on the principles of equality, reciprocity, 
non-interference, and mutual respect.\10\ According to State 
Department sources, the USG has also made overtures over the 
last 18 months to discuss narco-trafficking and current 
restrictions on travel for diplomats in Havana and Washington, 
but these efforts have proven unsuccessful thus far.
---------------------------------------------------------------------------
    \10\ Sullivan, Mark P. (3 Feb. 2009). ``Cuba: Issues for the 111th 
Congress.'' Congressional Research Service.
---------------------------------------------------------------------------

                             Recommendatons

    According to a recently published book on U.S. policy 
towards Cuba, only three avenues of regular official 
communication exist with the GOC: monthly meetings between U.S. 
and Cuban military officers at the Guantanamo Bay Naval Base, 
occasional cooperation between the U.S. and Cuban coast guards 
on drug enforcement and migration matters (through a U.S. Coast 
Guard attache at the U.S. Interests Section in Havana), and 
frequent contact between U.S. and Cuban meteorologists who 
track hurricanes in the Caribbean.\11\
---------------------------------------------------------------------------
    \11\ Erikson, Daniel P. (2008). The Cuba Wars: Fidel Castro, the 
United States, and the Next Revolution. New York: Bloomsbury Press.
---------------------------------------------------------------------------
    Given these precedents and the current state of U.S.-Cuban 
relations, staff concluded that progress could be attained by 
replacing conditionality with sequenced engagement, beginning 
with narrow areas of consensus that develop trust. A steady 
series of gradual measures has significant confidence-building 
potential and could ultimately create the conditions for 
effective dialogue over more contentious issues. By sequencing 
this process of engagement with Cuba, the USG would have the 
opportunity to continually reassess progress towards the 
advancement of national interests. In other words, a pragmatic, 
phased approach would allow the USG to halt the engagement 
process at any point if U.S. interests were no longer being 
served.
    Staff recommends assessing the viability of reinstating 
discussions on drug interdiction and migration, and incremental 
steps in other areas, in order to address issues of concern for 
both countries. These measures should build upon each other to 
establish new foundations for dialogue. Initially, increased 
communication and cooperation between the GOC and USG can take 
place within the framework of the existing embargo, though 
staff suggests consideration of several exceptions to U.S. 
sanctions as talks progress, as detailed below.
    As an initial unilateral step, staff recommends fulfilling 
President Obama's campaign promise to repeal all restrictions 
on Cuban-American family travel and remittances before the 
Fifth Summit of the Americas in Trinidad and Tobago on April 
17-19, 2009. The timing of this gesture would signal an 
important change and would improve goodwill towards the United 
States from Latin American countries, as the USG seeks regional 
cooperation on a wide range of issues. Congressional action to 
lift all current U.S. travel restrictions should be considered 
as an effort along these lines, as well.
    Staff suggests that efforts to lift current travel 
restrictions on the Cuban Interests Section personnel in 
Washington, whose diplomats may not venture beyond the Beltway 
without explicit permission from the USG, be supported. Such a 
move would encourage a reciprocal lifting of GOC restrictions 
on the ability of U.S. diplomats to travel outside of Havana, 
improving the USG's ability to understand conditions on the 
entire island.
    In addition, staff recommends a review of the effectiveness 
of several components of U.S. policy in both the legislative 
and executive branches: first, the Cuban Democracy Act of 1992 
and the Cuban Liberty and Democratic Solidarity Act of 1996; 
and, the policy recommendations of the 2004 and 2006 reports of 
the Commission for Assistance to a Free Cuba, an inter-agency 
commission established in 2003 that was tasked with developing 
recommendations to ``hasten'' a transition to democracy in 
Cuba.\12\
---------------------------------------------------------------------------
    \12\ Commission for Assistance to a Free Cuba. Retrieved from 
http://www.cafc.gov.
---------------------------------------------------------------------------
    Beyond these immediate unilateral measures, the timing of 
policy reforms and elimination of embargo restrictions would 
depend on the evolution of negotiations, which should be 
spearheaded by the U.S. Assistant Secretary of State for 
Western Hemisphere Affairs. The following are additional areas 
of reform for consideration in the short and mid-term:

The resumption of bilateral talks on drug interdiction and migration

    Cuba's geographic position makes it key to halting the 
rapid increase in drugs flowing through Caribbean routes to the 
United States. Yet anti-narcotics cooperation between the USG 
and GOC presently occurs on only a limited, case-by-case basis, 
despite the GOC's expressed interest in signing a formal 
agreement with the USG.
    Staff encourages the USG to undertake comprehensive 
counternarcotics cooperation with Cuba, including the provision 
of needed equipment and technical assistance. Working more 
closely with Cuba to combat the growth of drug trafficking 
would protect vital U.S. security interests in the region and 
would put the United States in a better position to help thwart 
any future strategies by international drug traffickers to use 
Cuba as a transit point for drug shipments to the United 
States.
    Regarding migration, staff recommends the revival of U.S.-
Cuban biannual migrations talks, which have been suspended 
since 2004. These talks provide an important venue for 
discussing the shared problem of illegal migration. The USG 
should remain committed to fully implementing its agreements 
under the 1994 Joint Communique and the 1995 Joint Statement 
(collectively known as the U.S.-Cuba Migration Accords) as 
effective tools for promoting safe, legal, and orderly 
migration.
    In addition, staff suggests an executive branch review of 
the ``wet-foot, dry-foot policy.'' Under this policy, Cubans 
who are intercepted at sea are sent back to Cuba or to a third 
country while those who make it to U.S. soil are allowed to 
remain in the United States. The review should assess whether 
this policy has led to the inefficient use of U.S. Coast Guard 
resources and assets as well as the potential to redirect these 
resources to drug interdiction efforts.

Investments in alternative energy

    Energy security has vaulted to the top of both the U.S. and 
Cuban political agendas amid concerns about supply 
interruptions and rising prices, sparking a renewed search for 
viable alternative fuels. For the USG, an important element of 
an effective energy strategy from both cost and environmental 
perspectives lies in forging technological and open trading 
relationships in the Western Hemisphere.
    For the GOC, upgrading the island's decaying energy 
infrastructure and promoting alternative energy sources are 
national security priorities referred to as the ``energy 
revolution.'' GOC officials indicated to staff that they are 
particularly interested in wind power, while other renewable 
energy projects are receiving support from the United Nations 
Development Program, which maintains an office in Havana and 
finances, among other projects, household solar photovoltaics 
and hydro power for use in rural areas. In addition, the GOC is 
encouraging foreign investment to develop its oil fields, with 
probable hydrocarbon reserves of five billion barrels, 
according to estimates by the United States Geological Survey--
significant for Cuban energy consumption and comparable to the 
oil reserves of Ecuador.
    In staff's meetings, GOC officials particularly welcomed 
U.S. participation in renewable energy development. If 
restrictions were lifted, U.S. technology could help ensure 
environmentally-sustainable development of Cuba's energy 
sector. Most importantly, cooperation in this area would be 
consistent with long-term U.S. interests in energy security and 
efficiency in the region.

Agricultural trade

    Since the Trade Sanctions Reform and Export Enhancement Act 
(TSRA) of 2000 lifted sanctions on sales of agricultural 
commodities, the U.S. has become Cuba's most important food 
provider and its fifth largest overall trading partner. Yet 
many restrictions and licensing requirements remain in place, 
making it difficult for agricultural exporters to take full 
advantage of trade opportunities in Cuba. The TSRA denied 
exporters access to U.S. private commercial financing or 
credit, and a 2005 regulation by the Treasury's Office of 
Foreign Assets Control (OFAC) redefined the sales terms set 
forth in TSRA, stipulating that cash payment must be received 
by the seller prior to the shipment of goods, rather than prior 
to transfer of title and control of the goods, as had been the 
practice until 2005.\13\ According to a 2007 Government 
Accountability Office report, smaller U.S. exporters have found 
OFAC's licensing process to be cumbersome, nontransparent, and 
time consuming, while other exporters have complained that 
Cuban purchasing officials are routinely denied visas to travel 
to the United States for inspections of U.S. processing and 
facilities.\14\
---------------------------------------------------------------------------
    \13\ U.S. International Trade Commission. (July 2007). U.S. 
Agricultural Sales to Cuba: Certain Economic Effects of U.S. 
Restrictions. Retrieved from http://www.usitc.gov/publications/
pub3932.pdf.
    \14\ U.S. Government Accountability Office. (Nov. 2007). Economic 
Sanctions: Agencies Face Competing Priorities in Enforcing the U.S. 
Embargo on Cuba.
---------------------------------------------------------------------------
    Easing these restrictions would benefit U.S. economic 
interests and expand an important source of dialogue and 
engagement between the two countries. According to staff's 
sources, the GOC welcomes this nascent trading relationship, 
due to the quality and proximity of U.S. goods, and the 
professionalism of U.S. exporters. This is especially true 
following Hurricanes Gustav and Ike, which badly depleted Cuban 
food stores, creating food shortages. Specifically, staff 
recommends assessing the viability of a combination of 
potential executive and legislative actions to: (1) review the 
``cash in advance'' requirement; (2) authorize private 
financing for agricultural sales; (3) expand the types of 
products that may be sold to include agricultural machinery and 
supplies, which are especially needed for rebuilding in the 
wake of the recent hurricanes; (4) authorize general licenses 
for travel to Cuba for the marketing, negotiation, and delivery 
of agricultural goods; (5) facilitate the issuance of U.S. 
visas for Cuban officials to conduct activities, including 
sanitary inspections, related to such sales.

Medical trade

    Because the Trade Sanctions Reform and Export Enhancement 
Act did not clearly repeal or supersede the relevant Cuban 
Democracy Act (CDA) provisions on medical items, the latter's 
requirements still apply. The CDA required the issuance of a 
specific license from the Department of Commerce as well as 
``proper end-use monitoring'' to ensure that medical items 
would be used for their intended purpose.\15\ In contrast to 
U.S. agricultural exports, U.S. exports of medical products 
have not increased substantially since 2001 and remain a minor 
part of U.S. exports to the island.
---------------------------------------------------------------------------
    \15\ U.S. Department of State. Fact Sheet: Medical Sales to Cuba. 
Retrieved from http://www.state.gov/p/wha/rls/fs/2001/fsjulydec/
2612.htm.
---------------------------------------------------------------------------
    Staff recommends reviewing the viability of authorizing 
private financing for medical sales as well as general licenses 
for travel to Cuba for the marketing and sale of these goods. 
Appropriate legislative action could also include a review of 
the current end-use monitoring requirement, which is why some 
U.S. companies do not export medical products to Cuba.
    In addition, staff suggests reviewing the potential for 
legislative action to permit pharmaceutical imports from Cuba's 
rapidly developing biotech industry. Cuba has made important 
strides in biotechnology, including the production of 
meningitis and hepatitis B vaccines, and U.S. scientists have 
called for enhanced research cooperation with their Cuban 
counterparts.\16\ In 2004, the Treasury Department allowed 
California's CancerVax Corporation to conduct clinical trials 
of three cancer vaccines in conjunction with Cuba's Center for 
Molecular Immunology, yet the embargo prohibits importation of 
medical products, and there is no permanent program of 
cooperation between Cuban and U.S. research institutions.
---------------------------------------------------------------------------
    \16\ U.S.-Cuban Scientific Relations. (17 Oct. 2008). Science. Vol. 
322.
---------------------------------------------------------------------------

Bipartisan commission and a multilateral framework

    In sum, increased dialogue through appropriate channels, 
coupled with looser trade terms, would lay the groundwork for 
more substantial discussions between the USG and GOC. Staff 
believes that the USG should begin treating Cuba as it does 
other nations with whom it has fundamental disagreements but 
where engagement advances broader interests.
    In the short-term, staff recommends the targeted sequencing 
of U.S. unilateral options in addition to the pursuit of a 
multilateral approach to Cuba. No U.S. strategy to reform its 
relationship with Cuba will be fully successful if it is 
pursued unilaterally. With this goal, the Administration should 
consider establishing a bipartisan commission to forge a new, 
multilateral strategy with Latin American and European Union 
partners. Just as the bipartisan Iraq Study Group proposed 
important recommendations based on a comprehensive policy 
review, a Cuba Study Group could complement the State 
Department's ongoing policy review with a road map for future 
policy direction.
    A multilateral component of this road map could include 
reengagement with Cuba in international institutions. In the 
medium-term, the USG could review dropping opposition to Cuban 
participation in the International Monetary Fund, the World 
Bank, and the Inter-American Development Bank. Cuban membership 
of these financial institutions would increase the GOC's 
accountability to the international community and encourage 
free-market reforms consistent with U.S. commercial interests.
    In addition, a member country of the Organization of 
American States (OAS) could call for the reincorporation of 
Cuba as a member of the OAS. This would require a resolution by 
the OAS General Assembly to revoke the 1962 decision that 
suspended the GOC's membership privileges because it was 
concluded that Cuba was a Marxist-Leninist country, whose 
government was incompatible with the inter-American system. In 
the event of such a development, the GOC would be required to 
sign the Inter-American Democratic Charter in order to be 
considered a full member.
    On the diplomatic front, staff recommends the consideration 
of a mechanism for regular information-sharing and coordinated 
action between the USG and other countries that have a 
bilateral human rights dialogue with the GOC, including members 
of the European Union, Japan, Brazil, Mexico, Chile, and 
Canada. An appropriate model is provided by the Berne Process 
in Beijing, which has afforded a framework for dialogue among 
diplomats in China, including from the USG, to enhance 
cooperation with other diplomatic missions interested in 
engaging the Government of China on sensitive human rights 
issues. A similar process should be considered as a framework 
for our diplomats in Havana.

                               Conclusion

    Cuba is important for the United States because of 
proximity, intertwined history, and culture. Cuba is important 
in Latin America because it is a romanticized symbol of a small 
country that stood up to the most powerful country in the 
world. The Cuban Revolution legitimizes some of the passions 
that fuel the outrage that many Latin Americans feel regarding 
the inequality of their own societies, and for 50 years, 
rightly or wrongly, Cuba has ably portrayed itself as having 
fought this fight for them, as well as for the downtrodden 
around the world.
    During the visit, a Cuban official stated to staff that 
``U.S. foreign policy towards Latin America goes through 
Cuba.'' With the end of the Cold War, however, the GOC does not 
represent the security threat to the U.S. that it once did. The 
USG still has significant grievances with the GOC--mostly, its 
human rights practices and the stifling of political pluralism 
and property rights as well as the lack of adequate 
compensation for expropriated assets of U.S. firms and 
individuals. The remaining security issues, on the other hand, 
are limited to the potential for a migration crisis provoked by 
political or economic instability on the island. While Cuba's 
alliance with Venezuela has intentions of influencing regional 
affairs, the GOC has not been positioned to ably export its 
Revolution since the collapse of the Soviet Union forced an end 
to Cuba's financial support for Latin American guerrilla 
movements. The GOC's program of medical diplomacy, which 
exports doctors to developing countries, bolsters the island's 
soft power, but does not represent a significant threat to U.S. 
national security. Given current economic challenges, any 
revenue gained from economic engagement with the United States 
would likely be used for internal economic priorities, not 
international activism.
    For these reasons, the United States' relationships with 
Brazil, Mexico, Colombia, and Chile, have taken priority in 
Latin America. Cuba, too, has demonstrated that relations with 
the United States, though advantageous, are not necessary to 
its survival, having forged closer relationships around the 
globe. Venezuela, China, and Canada are Cuba's top three 
trading partners, and recent economic agreements with Brazil 
and Russia are examples of Cuba's resourcefulness in this 
regard. As one GOC official told staff, ``We've endured much 
harsher conditions during the Special Period. We can survive 
with or without the United States.'' \17\
---------------------------------------------------------------------------
    \17\ The Special Period refers to the economic crisis caused by the 
1991 collapse of the Soviet Union and the resulting loss of economic 
subsidies.
---------------------------------------------------------------------------
    In hindsight, the U.S. embargo has not served a national 
security agenda since Cuba ceased to be an effective threat to 
the security of the United States. In the immediate post-Cold 
War era, the cost of maintaining this policy was negligible in 
comparison to the domestic political benefit derived from 
satisfying Cuban-American groups in the United States. The USG 
justified the embargo policy as an incentive or inducement for 
negotiations with the Cuban government, the rationale being 
that the U.S. would lift the embargo, or parts of it, in 
response to reform on human rights and democracy. This narrow 
approach, however, has not furthered progress in human rights 
or democracy in Cuba and has come at the expense of other 
direct and regional strategic U.S. interests.
    Today it is clear that a reform of our policy would serve 
U.S. security and economic interests in managing migration 
effectively and combating the illegal drug trade, among other 
interests. By seizing the initiative at the beginning of a new 
U.S. Administration and at an important moment in Cuban 
history, the USG would relinquish a conditional posture that 
has made any policy changes contingent on Havana, not 
Washington.
    Reform of U.S.-Cuban relations would also benefit our 
regional relations. Certain Latin American leaders, whose 
political appeal depends on the propagation of an array of 
anti-Washington grievances, would lose momentum as a 
centerpiece of these grievances is removed. More significantly, 
Latin Americans would view U.S. engagement with Cuba as a 
demonstration that the United States understands their 
perspectives on the history of U.S. policy in the region and no 
longer insists that all of Latin America must share U.S. 
hostility to a 50-year-old regime. The resulting improvement to 
the United States' image in the region would facilitate the 
advancement of U.S. interests.
    If reform in U.S.-Cuba policy were to occur in the 
direction of sequenced engagement, the impact on the region 
would be swift and to the benefit of the security and 
prosperity of the United States. In due order, we must correct 
the failures of our current policy in a way that enhances U.S. 
interests.
                               APPENDIX I

                              ----------                              

Contributor
Kezia McKeague, Legislative Assistant, Committee on Foreign 
        Relations, United States Senate

                   MEETINGS WITH INDIVIDUALS IN CUBA

U.S. diplomats
Jonathan Farrar, Principal Officer, U.S. Interests Section, and 
        country team members
Cuban government officials
Vice Minister for Economy and Planning, Alfonso Casanova
Vice Minister for Foreign Relations, Dagoberto Rodriguez
Advisor to the President of the Cuban National Assembly, Miguel 
        Alvarez
Advisor to the President of the Cuban National Assembly, Ana 
        Mayra Alvarez
Alimport representatives
Center for Molecular Immunology representatives
Ministry of Basic Industries representatives
Cupet (Cuban oil company) representatives
Foreign diplomats
Manuel Cacho Quesada, Spanish Ambassador to Cuba
Susan McDade, United Nations Resident Coordinator for Cuba
Bernardo Pericas, Brazilian Ambassador to Cuba
Catholic Church
Orlando Marquez, advisor to Cardinal Jaime Ortega and editor of 
        archdiocesan monthly Palabra Nueva
Foreign correspondents
Gerardo Arreola, La Jornada
Maurico Vicent, El Pais
Other individuals
Omar Everleny Perez, Cuban economist
Cuban farmers in private cooperative in Managua, Cuba
Cuban citizens in Santa Maria del Rosario
                              APPENDIX II

                              ----------                              

    Staff's recommendations rely on actions by both the 
executive and legislative branches of the USG. For this reason, 
staff requested the following information from the 
Congressional Research Service (CRS). It summarizes the 
potential actions the executive branch could take on its own to 
move towards normalization of U.S.-Cuban relations versus 
actions that would require congressional action.

                     Potential Presidential Actions

Travel restrictions
    The President has the authority to ease U.S. restrictions 
on travel to Cuba that are in place today. Restrictions on 
travel are set forth in the Cuban Assets Control Regulations 
(CACR) (31 CFR, Part 515), the main body of Cuba embargo 
regulations administered by the Department of Treasury that set 
forth 12 categories of permissible travel. The embargo 
regulations do not ban travel itself, but place restrictions on 
any financial transactions related to travel to Cuba, which 
effectively result in a travel ban. Under the CACR, certain 
categories of travelers (such as journalists and full-time 
professional researchers) may travel to Cuba under a general 
license, which means that there is no need to obtain special 
permission from the Treasury Department's Office of Foreign 
Assets Control (OFAC), which implements the Cuba embargo. In 
addition, a wide variety of travelers engaging in family 
visits, and educational, religious, humanitarian, and other 
activities may be eligible for specific licenses. Applications 
for specific licenses are reviewed and granted by OFAC on a 
case-by-case basis.
    There have been various changes to the travel restrictions 
over time. For example, the Clinton Administration tightened 
family travel restrictions in 1994 by requiring a specific as 
opposed to a general license, and subsequently reversed this 
action in 1995. In 1999, the Clinton Administration announced a 
number of changes to the travel regulations that allowed 
people-to-people exchanges in a variety of areas. In contrast, 
the Bush Administration tightened travel restrictions in 2003 
by prohibiting people-to-people exchanges unrelated to academic 
coursework, and in 2004 restricted family travel in various 
ways. This included requiring a specific license, limiting such 
travel to once every three years with no exceptions, allowing 
visits only to immediate family (grandparents, grandchildren, 
parents, siblings, spouses, and children) for a period not to 
exceed 14 days, and reducing the amount that can be spent while 
in Cuba to $50 daily (from the State Department per diem rate 
of $179).
    Just as President Bush tightened travel restrictions, 
President Obama could ease the restrictions by amending the 
CACR travel regulations. As a presidential candidate, Obama 
vowed to change U.S. policy toward Cuba by allowing unlimited 
family travel, which would require changes to the licensing 
procedures in the CACR. The 12 categories of permissible travel 
are defined in law, but within those categories the 
Administration has the authority to make changes to licensing 
procedures. For example, the President could choose to change 
the CACR travel regulations back to as they were during the 
first two years of the Bush Administration. This would include 
easing restrictions on travel for family visits, people-to-
people educational activities, academic educational activities 
(including for secondary schools), and participation in amateur 
or semi-professional sports competitions.
Remittances
    The President has the authority to ease restrictions on 
remittances to Cuba. These restrictions are also set forth in 
the CACR and have changed over time. In June 2004, the Bush 
Administration tightened restrictions so that remittances may 
only be sent to nationals of Cuba who are members of the 
remitter's immediate family (spouse, child, grandchild, parent, 
grandparent, or sibling). Up to $300 in remittances may be 
carried by an authorized traveler to Cuba. Prior to those 
changes, remittances were not restricted to members of the 
remitter's immediate family, but could be sent to any household 
in Cuba, provided the household did not include a senior-level 
Cuban government official or senior-level Communist Party 
official. Authorized travelers also could carry up to $3,000 in 
cash remittances compared to $300 now. Both before and after 
the June 2004 tightening, however, the level of remittances 
that can be provided per quarter remained the same, $300 per 
household.
Gift parcels
    Consistent with the U.S. embargo of Cuba, the Export 
Administration Regulations (EAR), implemented by the Department 
of Commerce, Bureau of Industry and Security, require a license 
for exports of all items subject to the EAR to Cuba, with only 
a limited number of license exceptions. The President has the 
authority to make changes to the EAR. For example, in June 
2004, the Bush Administration tightened restrictions on items 
that may be included in humanitarian gift parcels sent to Cuba. 
The new regulations prohibited gift parcels from including 
seeds, clothing, personal hygiene items, veterinary medicines 
and supplies, fishing equipment and supplies, and soap-making 
equipment (15 CFR 740.12). The President could ease these 
restrictions on gift parcels. In June 2008, the Bush 
Administration added mobile phones and related accessories to 
the eligible list of gift parcel items, and increased the value 
of the gift parcel from $200 to $400 (which does not apply to 
the value of food sent in the parcel).
U.S. agricultural exports
    The President has the authority to reverse the Treasury 
Department's February 2005 amendment to the CACR that provides 
a definition of the term ``payment of cash in advance'' for 
exporting U.S. agricultural goods to Cuba. The Trade Sanctions 
Reform and Export Enhancement Act of 2000 (TSRA, P.L. 106-387, 
Title IX) allows for U.S. commercial agricultural exports to 
Cuba, but with numerous conditions and licensing requirements. 
TSRA requires that all transactions must be conducted by 
payment of cash in advance or financing by third country 
financial institutions. In February 2005, the Treasury 
Department amended the CACR to define the term ``payment of 
cash in advance'' to mean ``that payment is received by the 
seller or the seller's agent prior to the shipment of the goods 
from the port at which they are loaded.'' This was in contrast 
to past practice whereby the seller would receive payment while 
the goods were in transit or before they arrived at a Cuban 
port. U.S. exporters and some Members of Congress objected to 
the amendment as a new sanction that violated the intent of 
TSRA. There have been various legislative initiatives over the 
past several years to ease sanctions on U.S. agricultural 
exports to Cuba by preventing the Treasury Department from 
implementing the February 2005 amendment defining payment of 
cash in advance.
Bilateral talks and agreements
    The Executive Branch could choose to engage Cuba in 
bilateral talks in a range of areas or negotiate new bilateral 
agreements with Cuba. In 2002, Cuba proposed the negotiation of 
bilateral agreements on drug interdiction, terrorism, and 
migration issues. In the context of Fidel Castro's departure 
from political power in 2006, some observers called for a 
policy of engagement with Cuba in these areas as well as on 
efforts to combat human trafficking and environmental 
cooperation.\18\
---------------------------------------------------------------------------
    \18\ For a discussion of this approach, see CRS Report RL33622, 
Cuba's Future Political Scenarios and U.S. Policy Approaches, September 
3, 2006.
---------------------------------------------------------------------------
    For example, the President could choose to restart the 
semi-annual U.S.-Cuban talks on the implementation of the 1994 
and 1995 bilateral migration accords. The Bush Administration 
cancelled those talks in January 2004 before the 20th round, 
and no talks have been held since. The State Department 
maintained that they cancelled the talks because Cuba refused 
to discuss five issues: (1) the issuance of exit permits for 
all qualified migrants; (2) cooperation in holding a new 
registration for an immigrant lottery; (3) the need for a 
deeper Cuban port used by the U.S. Coast Guard for the 
repatriation of Cubans interdicted at sea; (4) the issue of 
Cuba's responsibility to permit U.S. diplomats to travel to 
monitor returned migrants; and (5) Cuba's acceptance of the 
return of Cuban nationals determined to be inadmissible to the 
United States.\19\ In response to the cancellation of the 
talks, Cuban officials maintained that the U.S. decision was 
irresponsible and that Cuba was prepared to discuss all of the 
issues raised by the United States.\20\
---------------------------------------------------------------------------
    \19\ U.S. Department of State. State Department Regular Briefing, 
Richard Boucher, January 7, 2004.
    \20\ ``Migration Talks Cancelled,'' Miami Herald, January 8, 2004.
---------------------------------------------------------------------------
    Another example could be closer cooperation on anti-drug 
efforts or the negotiation of an anti-drug agreement with Cuba. 
Bilateral cooperation on anti-drug efforts has increased since 
1999 when U.S. and Cuban officials met in Havana to discuss 
ways to improve anti-drug cooperation, and Cuba accepted the 
stationing of a U.S. Coast Guard Drug Interdiction Specialist 
(DIS) at the U.S. Interests Section in Havana. In 2002, Cuba 
called for a bilateral anti-drug agreement with the United 
States, but the Bush Administration indicated at the time that 
cooperation would continue on a case-by-case basis, not through 
a bilateral agreement. More recently, Assistant Secretary of 
State for Western Hemisphere Affairs Tom Shannon maintained in 
an interview with Spain's El Pais newspaper in early January 
2009 that a drug trafficking accord with Cuba would be logical, 
although he could not anticipate what the next Administration 
would do.\21\
---------------------------------------------------------------------------
    \21\ Jose Manuel Calvo, ``Thomas Shannon Secretario de Estado 
adjunto para Latinoamerica: Seria un acuerdo contra el narcotrafico 
entre Cuba y EE UU,'' El Pais, January 11, 2009.
---------------------------------------------------------------------------
Foreign assistance
    Numerous provisions of law prohibit U.S. assistance to 
Cuba, some without waiver authority. For instance, Section 
620(a)(1) of the Foreign Assistance Act of 1961 generally 
prohibits assistance to the present government of Cuba and does 
not authorize the President to waive its application. 
Nevertheless, the President does retain authority to provide 
certain types of assistance to Cuba. Pursuant to Section 491 of 
the Foreign Assistance Act of 1961, for example, the President 
is authorized to provide assistance to any foreign country, 
``on such terms and conditions as he may determine, for 
international disaster relief and rehabilitation, including 
assistance relating to disaster preparedness, and to the 
prediction of, and contingency planning for, natural disasters 
abroad.'' Another example is Section 104(c)(4) of the Act, 
which allows for health-related assistance notwithstanding any 
other provision of law. Section 109 of the Cuban Liberty and 
Democratic Solidarity (Libertad) Act of 1996 (P.L. 104-114) 
authorizes the President to provide support to individuals and 
independent nongovernmental organizations working to support 
democracy-building efforts for Cuba. In addition, annual 
foreign operations appropriations measures have had a provision 
(for FY2008, see Section 634(b) of P.L. 110-161, Division J) 
allowing for assistance to support tropical forestry and 
biodiversity conservation and energy programs aimed at reducing 
greenhouse gas emissions. This provision, however, has been 
subject to Section 620A of the Foreign Assistance Act of 1961 
that prohibits assistance to governments supporting 
international terrorism unless the President determines that 
national security interests or humanitarian reasons justify a 
waiver. Such a waiver would be required for Cuba since it is on 
the State Department's list of countries supporting 
international terrorism.
    Section 307 of the Foreign Assistance Act withholds the 
U.S. proportionate share from international organizations 
conducting programs in specific countries, including Cuba, with 
the exception of programs of the United Nations Children's Fund 
(UNICEF) and certain programs of the International Atomic 
Energy Agency (IAEA). This provision is largely symbolic, 
however, and does not prevent international organizations from 
conducting programs in Cuba. For example, the United Nations 
Development Program has an active program in Cuba.
    The President also has special authority under Section 614 
of the Foreign Assistance Act of 1961 to authorize a limited 
amount of assistance each fiscal year ``when the President 
determines and so notifies in writing to the Speaker of the 
House and the chairman of the Committee on Foreign Relations of 
the Senate, that to do so is important to the security 
interests of the United States.'' Before exercising this 
authority, the President needs to consult with and provide a 
written policy justification to the appropriations and foreign 
relations committees in both houses.
Diplomatic relations
    While the President has the power to restore full 
diplomatic relations with Cuba, such an action would usually 
occur as part of a broader effort toward normalizing relations. 
For example, the normalization of U.S. relations with Vietnam 
proceeded incrementally for a number of years, with Congress 
playing a significant role in the normalization process. A 
detailed roadmap for the normalization of relations with 
Vietnam was issued in 1991, although an Ambassador was not 
appointed until 1997, after President Clinton issued a 
determination that certain conditions had been met regarding 
Vietnamese cooperation on POW/MIA issues. The President has the 
power to appoint Ambassadors with the advice and consent of the 
Senate.
Terrorism lists
    The President has authority to remove Cuba from various 
terrorist lists in U.S. law. Under Section 40A of the Arms 
Export Control Act (P.L. 90-629; 22 U.S.C. 2781), the Secretary 
of State makes an annual determination listing those countries 
that are not cooperating fully with U.S. antiterrorism efforts. 
Being on the list prohibits the export of defense articles and 
defense services, but the President may waive the sanction if 
he determines that the transaction is important to the national 
interests of the United States. Cuba was added to the State 
Department's list of states sponsoring international terrorism 
in 1982 pursuant to Section 6(j) of the Export Administration 
Act (P.L. 96-72). Exports of dual-use good and services require 
a license to any country identified as a state supporter of 
terrorism. Being listed under Section 6(j) also triggers other 
laws that limit economic transactions. Pursuant to provisions 
in the Act, the President may remove a country from the list in 
two ways. The first option is to submit a report to Congress 
certifying, before the removal would take effect, that: (1) 
there has been a fundamental change in the leadership and 
policies of the government; (2) the government is not 
supporting acts of international terrorism; and (3) the 
government has provided assurances that it will not support 
acts of international terrorism in the future. The second 
option is to submit a report at least 45 days before the 
removal of the country from the list certifying that: (1) the 
government has not provided any support for international 
terrorism during the preceding six-month period, and (2) that 
the government has provided assurances that it will not support 
acts of international terrorism in the future.

                  Actions Requiring Legislative Action

Embargo
    Lifting or substantially easing the U.S. economic embargo 
on Cuba today as set forth in the CACR would require 
legislative action to amend or repeal certain provisions in the 
Libertad Act (P.L. 104-114) and other Acts. Section 102(h) of 
that law codified the economic embargo, including the CACR 
restrictions. While the CACR itself includes licensing 
authority that provides administrative flexibility, totally 
lifting or substantially easing the embargo regulations would 
appear to violate the intention of Congress. Additional 
provisions of the Libertad Act, Sections 204-206, require that 
certain conditions be met before the President may suspend or 
ultimately terminate the economic embargo. For the suspension 
of the embargo, these conditions require that a transition 
government: does not include Fidel or Raul Castro; has 
legalized all political activity; has released all political 
prisoners; has dissolved several coercive elements of state 
security; has made commitments to free and fair elections for a 
new government in 18 months; has ceased interference with Radio 
and TV Marti broadcasts; is making demonstrable progress in 
establishing an independent judiciary, respecting international 
recognized human rights and basic freedoms, and allowing the 
establishment of independent trade unions and social, economic, 
and political associations; and has given assurances that it 
will allow the speedy and efficient distribution of assistance 
to the Cuban people. The actual termination of the embargo 
would require additional conditions, including most 
significantly, that an elected civilian government is in power.
Travel
    Lifting travel restrictions altogether would require 
legislative action. This is because of the codification of the 
embargo in Section 102(h) of the Libertad Act discussed above, 
although, as noted above, the Administration retains 
flexibility through licensing authority to ease travel 
restrictions. In addition, a provision in the TSRA (Section 
910(b) of P.L. 106-387, Title IX) prevents the Administration 
from licensing travel for tourist activities, and defines such 
activities as any activity not expressly authorized in the 12 
categories of travel set forth in the CACR regulations. This 
legislative provision essentially circumscribes the authority 
of the Executive Branch to issue travel licenses for activities 
beyond those already allowed, and would have to be amended or 
repealed in order to expand categories of travel to Cuba or 
lift travel restrictions altogether.
Agricultural and medical exports
    Further lifting restrictions on the sale of agricultural 
and medical exports to Cuba would require legislative action. 
TSRA allows for the granting of one-year export licenses for 
shipping food and medicine to Cuba. However, no U.S. government 
assistance (including foreign assistance, export assistance, 
credits, or credit guarantees) can be made available to finance 
such exports. The law also denies exporters access to U.S. 
private commercial financing or credit, and, as noted above, 
all transactions must be conducted with payment of cash in 
advance, or with financing from third countries. The Cuban 
Democracy Act of 1992 (P.L. 102-484, Section 1705) allows 
commercial medical exports to Cuba under certain conditions. 
The law requires specific licenses for such transactions, and 
requires onsite verification to determine that the exported 
item is to be used for the purposes for which it was intended 
and only for the use and benefit of the Cuban people.
U.S. foreign subsidiary trade with Cuba
    Allowing U.S. foreign subsidiaries to trade with Cuba would 
require legislative action. A provision in the Cuban Democracy 
Act of 1992 (P.L. 102-484, Section 1706) prohibits U.S. foreign 
subsidiary trade with Cuba. When this provision went into 
effect, U.S. foreign subsidiary exports to Cuba amounted to 
over $400 million.\22\ This provision would have to be repealed 
for such trade to be allowed.
---------------------------------------------------------------------------
    \22\ Donna Rich Kaplowitz, Anatomy of a Failed Embargo, U.S. 
Sanctions Against Cuba (Lynne Rienner Publishers, 1998), p. 152.
---------------------------------------------------------------------------