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What are the prospects for shipping between the US and Cuba?

What are the prospects for shipping between the US and Cuba?
Washington DC “insider” Matthew Thomas, partner at the law firm Blank Rome, offered an up to date view on recent developments relating to the US easing restrictions on Cuba, with an eye towards what might happen going forward and lunch hosted by The Society of Maritime Arbitrators (SMA).

The Obama administration announced an easing of decades-old embargo limiting travel, and on trade with Cuba, in mid-January. Thomas, whose career has included stints with the Federal Maritime Commission, said that issues of sanctions and the like are increasingly intertwined with commercial matters.

A main message of the talk is that the relaxation of sanctions on ships calling in Cuba, including the “180 day rule” enacted in 1992, along with restrictions on tourist travel, is still a work in progress, with the speaker acknowledging: “it’s been slow going since the president’s announcement.”

He said “a lot of the embargo is written into US law” and would take efforts on the part of Congress, going much further than actions that the Obama administration can take, to unwind, and added that: “we are really at the beginning part of the process.”

Thomas explained that currently, shipping to Cuba from the States requires a license, saying that “If you have a sailing out of the US Gulf with cargo (or a yacht traveling to Cuba out of Florida) you are exporting that.” Since the year 2000, US agricultural exports to Cuba have been allowed, with leading goods being poultry, corn and soybean products; at that time Crowley set up a steady liner service, albeit with small volumes, roughly 8,000- 9,000 teu, to the island, with drybulk operator Dan-Gulf and barge owner Crimson Shipping licensed afterwards for handling US exports to Cuba.

Other topics in the talk included restrictions on financing that have kept volumes low, with requirements for cash payments before a cargo can be loaded, that had made shipping very difficult. These requirements were eased slightly in mid January.

One bright spot is a possible announcement, which could come soon, according to Thomas, of the removal of Cuba from a list maintained by the US Department of State of states that sponsor terrorism, which could make it easier to grapple with issues related to the ISPS code- and could ease “extremely burdensome security requirements” on U.S. port calls on vessels returning from Cuba voyages.

Showing a slide depicting the late comic Rodney Dangerfield, who lamented, “I don’t get no respect”, Thomas said that airlines get more attention, and respect from Washington DC based regulators, than shipping; a general license has been issued that has allowed airlines to begin arranging regularly scheduled service between the US and Cuba. He pointed out that such a license has not been given for travel by ferry.

There was some optimism, with speaker looking “for a boost in containerized cargo going to Cuba” because the mid-January rules did expand categories for permitted exports beyond agricultural, including, for example, building supplies.