For many U.S. entrepreneurs, forbidden fruit lies just within
reach, 90 miles south of Florida. In recent years, the Republic of
Cuba has attracted interest from myriad businesses
worldwide--perhaps because of its highly qualified work force,
near-perfect literacy rate, improving economy and strong desire for
foreign products and services.
But for all intents and purposes, this island country is
off-limits to businesses in the United States. Today, nearly 40
years after the United States ended diplomatic relations with
Castro-controlled Cuba, the country is saturated with foreign
investments and involved in commercial dealings with more than 100
countries. And although the United States is conspicuously absent,
the U.S. Department of the Treasury's Office of Foreign Assets
Control is standing its ground. "The basic goal of the
sanctions is to isolate Cuba economically and deprive it of U.S.
dollars," declares an official statement released by the
department.
Despite stringent laws and numerous restrictions, however, some
business opportunities with Cuba are authorized for U.S.
individuals. American businesses can invest in foreign companies
that conduct business in Cuba as long as they don't earn the
majority of their revenue there and provided the U.S. investor only
holds a minority stake. While permitted, exporting and importing
informational materials such as publications, films, artwork and
music is arduous. Lincoln Cushing and partner Dan Walsh learned
that lesson the hard way: Their business, Berkeley,
California-based Cuba Poster Project, which imports Cuban cultural
and revolutionary images to create notecards, T-shirts and other
items, encountered its share of obstacles when it started in
1986.
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"[Although] it was considered legal to import these
materials as far as the United States was concerned, it wasn't
legal to travel there to make the arrangements," says Cushing,
who was born in Cuba. So the partners sued the Treasury Department,
citing unfair restriction of trade--and won. Today, they're two
in a limited pool of U.S. residents who can legally enter Cuba. Not
everyone goes to such great lengths: Of the 75,000 U.S. citizens
who traveled to Cuba in 1996, 15,000 did so sans authorization.
"[Entrepreneurs] make up the vast majority of the
unauthorized travelers to Cuba," says John Kavulich, president
of the U.S.-Cuba Trade and Economic Council Inc., a nonprofit,
nonpartisian business organization based in New York City.
"Historically, entrepreneurs are always the first troops to go
into any new market before the big companies go in."
Socialist Cuba, for its part, is undergoing a dynamic economic
transformation, one that for two years has fostered the development
of Cuban entrepreneurship. According to a recent study by Philip
Peters of the Alexis de Tocqueville Institution, a public policy
research organization in Arlington, Virginia, as of last December,
Cuba's legally self-employed population totaled
180,000--compared to only 10,000 in 1993. Peters also estimates,
however, that just as many entrepreneurs operate in the
shadows.
Americans eyeing Cuba must tread carefully, especially since the
United States has tightened the embargo in recent years. The
Libertad Act, commonly known as Helms-Burton, was signed in March
1996 after Cuba illegally shot down two unarmed American civilian
aircraft. The act, among other things, entitles U.S. nationals to
sue foreign businesses that conduct business with Cuba on property
seized from U.S. citizens. But the promise of Cuba's untapped
market still tempts American entrepreneurs, whose mother country
once claimed 85 percent of Cuba's pre-Revolution visitors as
her own.
Contact Sources
Alexis de Tocqueville Institution, (703) 527-7235,
peters@dgs.dgsys.com
Cuba Poster Project, (510) 845-7111, http://www.zpub.com/cpp
Office of Foreign Assets Control, U.S. Department of the
Treasury, 1500 Pennsylvania Ave. N.W., Washington, DC 20220
U.S.-Cuba Trade and Economic Council Inc., http://www.cubatrade.org