Will allow direct cash payments between Cuban buyers and U.S. financial institutions
Sep 15 2011
WASHINGTON, D.C. – Today, U.S. Senator Jerry Moran’s (R-Kan.) legislation to remove a trade barrier with Cuba, by allowing direct cash payments from Cuban buyers to U.S. financial institutions during the 2012 fiscal year (FY), was adopted by the U.S. Senate Committee on Appropriations as an amendment to the FY2012 Financial Services and General Government Appropriations Bill. By allowing direct cash payments, Sen. Moran’s amendment will fuel economic growth and enable agricultural producers to compete on a level playing field.
“Current U.S. trade policies hurt American farmers and ranchers by making it more expensive for Cuba to purchase agriculture products from the United States,” Sen. Moran said. “This means Cuba is buying more of its food from countries such as Vietnam and China. The change is an important step to increase American export sales and support thousands of American jobs without increasing the debt.”
In 2000, the passage of the Trade Sanctions Reform and Export Enhancement Act allowed for the cash sale – including sales by direct cash transfer – of U.S. agricultural commodities and medicine to Cuba for the first time in 38 years. In 2005, however, the Treasury Department administratively banned direct cash transfers. This resulted in payments having to be routed through a third party in a foreign country, driving up transaction costs and making American products less competitive.
In addition to Sen. Moran’s amendment, the FY2012 Financial Services and General Government Appropriations Bill includes a provision making cash payments due when a Cuban buyer receives their goods, which is standard trading practice. Without the provision to fix the definition of “payment of cash in advance”, which has been included in appropriations bills for the last three years, payments would be due before ships leave U.S. ports. This bill was voted out of committee today and will now move to the full Senate for a vote.
According to a Texas A&M University report, giving relief from the current regulatory prohibitions on direct cash transfers could increase annual agricultural exports to Cuba by over $270 million and support nearly 4,500 United States jobs per year.
Sen. Moran has long fought for commonsense changes to U.S. trade policy with Cuba – which must import nearly 85 percent of its food – in order to open up more markets for American farmers. In February 2010, then-Congressman Moran introduced – and the House Agriculture Committee passed – H.R. 4645, legislation to expand agricultural trade with Cuba. Nearly 150 U.S. organizations have voiced their strong support for doing so, including the U.S. Chamber of Commerce, the American Farm Bureau Federation, the National Association of Wheat Growers and the National Farmers Union.