International Trade Law News

Published by Jacobson Burton Kelley PLLC

A coalition of nearly 30 companies and organizations have called on the U.S. Congress to enact legislation repealing the Office of Foreign Assets Control's (OFAC) new regulation modifying the definition of "payment of cash in advance" for purposes of sales of humanitarian products to Cuba.

In a press release, Bill Reinsch, co-chairman of USA*Engage said "OFAC's February 2005 ruling not only ignores the congressional intent of the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA), it discounts the fact that export markets are important to the future of U.S. agriculture." He added that "it is critical to U.S. agricultural trade that this issue be resolved expeditiously in a manner that does not jeopardize current or future exports to Cuba." Referring to the Agricultural Export Facilitation Act of 2005 that was recently introduced in both houses of Congress, Bob Stallman, president of the American Farm Bureau Federation stated "we applaud members of both the House and Senate who understand the great importance of this issue to the agriculture community and have introduced legislation to rectify the situation. We will continue to work closely with Congress to resolve this issue."

Since the new regulation was issued, Alimport, the Cuban government agency responsible for purchasing food and medical products is requiring all U.S. sellers to use the following payment terms for all sales: "Irrevocable, payable at sight and Non-confirmed Letter of Credit to be issued by a Non Cuban-Non U.S Bank"

The groups calling on Congress for relief from the OFAC ruling include Ag BioTech, Inc., AlaCaribe Initiative Inc., Alamar Associates, American Farm Bureau Federation, Crowley Liner Services, Cuba Trade Coalition, FC Stone, Kaehler Homedale Farm Enterprise, Louis Dreyfus Corporation, Maybank Shipping Company, Inc., Miller Farm Exports/Miller Medical Exports, Molimar Export Consultants, National Association of Wheat Growers, National Chicken Council, National Grain and Feed Association, National Milk Producers Federation, National Turkey Federation, North American Export Grain Association, Sunlight Foods, Inc., USA*Engage, USA Rice Federation, U.S. Dairy Export Council, US Rice Producers Association, US Wheat Associates, Vista Trade Group, Wheat Export Trade Education Committee, Wide West Exports.

Separately, during a recent trip to Havana, Representative Jeff Flake (R-AZ) said he will make his fourth attempt to get Congress to approve an amendment to the Treasury Department's appropriations bill that would eliminate funding for enforcement of the U.S. travel ban against Cuba and thus allow Americans to travel to the Cuba. Flake said he didn't sponsor the spending bill amendment in 2004 because it was a presidential election year, but did back a similar one in the three previous years. All three times the amendment was eliminated from final spending bill in the conference committee.