By NAN Business Writer
News Americas, NEW YORK, NY, Fri. Jan. 13, 2017: While the interest in investing in Cuba is growing, a top US attorney says “it is (now) important to understand the applicable regulatory rules, and the potential direction of President-elect Trump’s policy on Cuba”
Carl Valenstein, a partner with the law firm Morgan Lewis, recently said in an article on the company’s website, that the US sanctions on Cuba are a regulatory minefield right now.
“While certain sanctions were liberalized by executive action of President Barack Obama, many remain codified in statute and are unlikely to be modified without concessions by the Cuban government, and it is possible that President-Elect Trump may roll back some of the liberalization,” stated Valenstein, who advises clients on international risk management and other global corporate matters and has worked in a broad array of industries in Latin America, the Caribbean, Europe, Africa, Asia, and the Middle East.
He said while Trump has been lobbied heavily by many companies benefitting from the change in US policy toward Cuba to maintain the relaxation of the US embargo, it is also possible that he will strike a compromise in not rolling back the liberalization but rather condition any future liberalization or repeal on concessions by the Cuban government with respect to compensation for US claims for nationalized property and/or the protection of human rights.
Cuba has currently amended its foreign investment law but it is still restrictive, Valenstein said, and there remain many Cuban government controls and restrictions.
For example, employees cannot be contracted for directly. In certain sectors, such as telecom, the Cuban government has squeezed out foreign investment and the military is a major owner/investor in telecom and other sectors.
Still Valenstein said the sectors of travel, hotel, and telecom markets present the greatest opportunities right now for US companies.
Cuban President Raul Castro does not formally relinquish power until 2018, and it remains to be seen whether following the death of Fidel Castro, he or the next generation Cuban government will maintain its current hard line stance on these issues.
Morgan Lewis’s Latin America team has advised clients on Cuba-related business issues for decades in the travel, telecom, and life sciences sectors. Foreign lawyers are not allowed to practice in Cuba, and all Cuban lawyers work in state-owned firms.
But Morgan Lewis has contacts with local lawyers and accounting firms, and is capable of assisting clients considering investments in Cuba in those industries in which the embargo was relaxed to allow US investment.