Monday, January 26, 2015

Internet Prospects

Tech eyes Cuban payday

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Tech companies see a potential windfall in the Obama administration’s decision to ease trade restrictions with Cuba — and they’re racing to cash in.

The historic announcement late last year is leading to a rush of business interest to plug the island nation in to the rest of the world.

While the landmark change in policy is still in its infancy and companies have a long way to go before they feel comfortable spending millions on new projects, officials are eagerly working the phones to iron out how they might bring the Communist nation into the 21st Century. 

“You’ve got a greenfield,” said Scott Belcher, the head of the Telecommunications Industry Association.

“You can leap over the last five generations of telecommuncations technology and build out a pretty robust system,” he added. “In that sense it’s a wonderful opportunity. It’s the least developed telecommuncations system in the Americas.”

Communications technology was one of the few industry sectors that Obama singled out last month for expansion into Cuba, along with a concerted diplomatic push to establish an embassy and roll back legal restrictions between the U.S. and its island neighbor just 90 miles off the coast of Florida.

Currently, Cubans’ ability to access the Internet is abysmal.

In 2013, just 26 percent of the country used the Internet, according to the International Telecommunications Union, an agency of the United Nations — but most of them could merely access a walled-off network of largely Cuban websites and services. The portion of Cubans who have actual unfettered access to the true, global Internet is estimated to be closer to 5 percent.

“Cuba remains one of the most heavily restricted environments for Internet use in the world, and it has been that way for quite some time,” said Laura Reed, a research analyst at Freedom House, a pro-democracy organization.

Poor infrastructure keeps the speed for most people’s Internet near dial-up levels, leaving even those with access to the Web unable to take full advantage of it.

Access is also prohibitively expensive for many on the poor island nation. A one-hour trip at an Internet cafĂ©, for instance, can cost an average worker’s salary for the week.

It’s worth remembering that Alan Gross — the contractor whose release from Cuban custody in December allowed the two governments to reach a rapprochement — was arrested in Cuba for smuggling in electronics equipment, including equipment to create Wi-Fi hotspots.

The Obama administration is trying to change that situation.

“I believe in the free flow of information,” Obama said last month, in announcing his new policy. “I’ve authorized increased telecommunications connections between the United States and Cuba. Businesses will be able to sell goods that enable Cubans to communicate with the United States and other countries.”

Following up on that announcement, the Treasury Department this month updated regulations to authorize exports of some communications devices into Cuba without a license, including computers, cellphones and digital cameras. It also authorized telecom companies to build infrastructure and run Internet connections between Cuba and the U.S. or another country, as well as allowed Web companies such as social networking sites to operate in the country.

But not everyone is entirely clear just exactly what those rules mean.

For instance, phones and laptops clearly count as communications devices, but what about a speaker, which might complement those other devices? Would those qualify under the administration’s new licensing rules?

“It’s going to take a while to test those waters,” said Sage Chandler, the vice president of international trade at the Consumer Electronics Association. “We have to first make sure we understand the rules of the game.”

Those regulatory ambiguities have kept many lawyers tied up in phone calls and meetings in recent days.

“The phones are ringing off the hook with people that want to talk about the issue and understand the situation,” said Jack Nadler, a partner at Squire Patton Boggs who has worked on opening up telecommunications markets from Hungary to Myanmar.

The new rules are also just the first step in a much longer legal process that is rife with potential obstacles.

For one, many companies would like to see the Obama administration take Cuba off the list of state sponsors of terror, a distinction it shares with Iran, Sudan and Syria. Countries on the list are subject to special sanctions and exports are put under extra scrutiny.

To roll back the full embargo would take an act of Congress. So would authorizing the Export-Import Bank — an institution many Republicans have long been leery of — to facilitate American companies’ dealings with Cuba.

Key Republican lawmakers have already objected to the Obama administration’s move, which could result in a protracted battle in months to come. That’s not likely to inspire much confidence in company boardrooms.

“Imagine you’re AT&T and Verizon, and you’re sitting there saying: ‘Huh, do I want to lay cable in Cuba?’” said Belcher, the telecom industry group head. “I could start, then the House could pass legislation ... to prevent us from normalizing relations, and then I’ve just made a pretty big investment that I’m not going to get the benefit from.”

Havana needs to show that it can play ball, too.

If the Cuban government maintains too much control over the market, that could discourage companies from jumping in. Or if it clamps down on people’s access to the Web once firms do get involved, that could discourage the Obama administration and private companies from pushing the issue.

Multiple industry sources expected business groups to plan exploratory trips to Cuba in the next few months, to start to taking leaders’ temperature about their intentions.

As it stands, Cuba’s 11 million people largely without access to the Web are too attractive an opportunity for companies not to be eyeing seriously.

“Anybody that thinks they’re going to jump into Cuba, it’s going to be easy and they’re going to make a lot of money quickly, they’re going to be sorely disappointed,” said Nadler. “But I think companies that recognize this as a high-risk but potential high-long-term-reward situation ... will have some good opportunities in an exciting but very challenging market."

“For the last 50 years, Cuba has been forbidden fruit,” he added. “Everyone wants to taste forbidden fruit.”

“At the same time, forbidden fruit is sometimes very bitter.”

Friday, January 23, 2015

Cuba Cruise People to People Parameters

P2P Cuba Cruise
Havana – Maria la Gorda - Cienfuegos – Santiago de Cuba -Montego Bay 

Celestyal's Cuba Cruise is without equal for a reasonable cost low stress educational and cultural introduction to all four compass points of the Caribbean's globally significant and largest country.   Since December 2014, there has been steady progress toward a more normal relationship between too long divided neighbors.  Traveling with Cuba Cruise is an enjoyable way to contribute to a historic process of fostering mutual understanding.  (See below for unique aspects of Cuba Cruise.)

Two Easy Steps to Come Aboard

!) Book your cabin and program with a travel agent or on-line here

2)  Register within one week here with the Fund for Reconciliation and Development, a US not-for-profit educational exchange organization, for inclusion in a legally licensed group.  
FFRD registration and an affiliation contribution of $95 must be received  within one week of booking a cabin unless a specific exception is made. 

You will receive a receipt and a letter certifying your participation in a general licensed FFRD people to people group on Cuba Cruise almost immediately after completing the registration and contribution form.  (If you don't, be sure to look in your spam or junk box.)  The letter may be useful when you return from Havana or Montego Bay through US immigration and customs but is no longer required and does not need to be kept for five years to document travel.  

New regulations were announced on March 16. 2016:

"In the case of an individual traveling under the auspices of an organization that is a person subject to U.S. jurisdiction and that sponsors such exchanges to promote people-to-people contact, the individual may rely on the entity sponsoring the travel to satisfy his or her record keeping requirements ... "*

A general license is not a document.  It is a concept, in effect an entitlement because of who one is or what one is doing.  FFRD is the qualifying organization to sponsor people to people programs in Cuba in partnership with Cuba Cruise. The letter we issue is a courtesy to confirm affiliated participation in the group trip authorized under our general license but the essential requirement is that each passenger is entered in our data base.

An agent of FFRD will be on board to assist you with our program, as required by OFAC.

For your legal protection and ours, we are very serious about making your trip with Cuba Cruise appropriately people to people and thus legitimate under our general license. Participants in Cuba Cruise just like travelers on more conventional (and more expensive) ground tours are purchasing a "full-time schedule of educational exchange activities".  (OFAC's current interpretation of legal requirements is here )

On board, please introduce yourself to some of the eighty Cuban staff.  Most speak English and welcome a chance to exchange experiences and personal stories.  They will be part of your life for a very pleasant and meaningful week.  Plan on attending daily talks about Cuban history and culture.

Regulations do not allow us to structure independent excursions into the cruise schedule except on Monday evening in Havana but free time is provided in every port:

"An organization that sponsors and organizes trips to Cuba in which travelers engage in individually selected and/or self-directed activities would not qualify for the general license."*

If you receive a customs form to complete or are asked by US immigration or customs officials what countries you have visited, do not hesitate to say Cuba.  This is a completely legal trip.

Specialized Excursions with Cuba Cruise and FFRD

With at least six weeks notice, encounters can be arranged for special interest groups large enough for a designated bus, e.g. teachers, medical practitioners, lawyers, students, artists, social workers,  dancers, musicians; African Americans, Irish Americans, Chinese Americans, Hispanic Americans; Jewish, Protestant and Catholic faith communities, etc. Supplemental charges will apply.

On request with at least one month notice FFRD will try to arrange an opportunity for you to invite a Cuban professional counterpart to a private lunch in Havana, Santiago or Cienfuegos.

Combine the Cruise with self-directed travel

Americans are welcome to embark in Montego Bay, Jamaica, or in Havana.   New commercial flights offer convenient access to the cruise through international airports in Havana, Santa Clara and Varadero/Matanzas.  This creates an opportunity to organize your own people to people program under an individual general license before or after the cruise.  According to the regulations:

"(1) Travel-related transactions pursuant to this authorization must be for the purpose of engaging, while in Cuba, in a full-time schedule of activities intended to enhance contact with the Cuban people, support civil society in Cuba, or promote the Cuban people's independence from Cuban authorities;
(2) Each traveler has a full-time schedule of educational exchange activities that will result in meaningful interaction between the traveler and individuals in Cuba;
(5) persons relying on the authorization in paragraph (b) of this section must retain records sufficient to demonstrate that each individual traveler has engaged in a full-time schedule of activities that satisfy the requirements of paragraphs (b)(1) through (3) of this section. "*

 For guidelines on use of the individual general license, click here


Under regulations announced in January 2015 it became possible for US companies to sell travel insurance for Americans going to Cuba.  Your provider may ask you to complete a Cuba Travel Compliance Certification form which can be sent to you on line or by mail.

No documentation is required from FfRD or Cuba Cruise.  The form doesn't even ask how and when you are going to Cuba.  The completed form is sent to the insurance agent, not to FFRD.

Their coverage for Cuba is by reimbursement which means Cuba will still require you to have local insurance from Asistur.   You can obtain it through Cuba Cruise.

John McAuliff
Executive Director
Fund for Reconciliation and Development
Cuba/US People to People Partnership

Riverhead, NY


We encourage travelers to urge their Senators and Representative to support legislation to end all travel restrictions so the above becomes unnecessary.  For list of House members who support and oppose the President's opening of travel, go here


OFAC Language to Stop Bank and Paypal Account Freezes

There have been numerous instances of Paypal and bank transfers, checks etc. frozen because "Cuba" was mentioned in a memo line.  The following language should end that problem but it is safer to avoid all Cuba references.


52. Is a financial institution required to independently verify that an individual’s travel is authorized when processing Cuba travel-related transactions? No.  A financial institution may rely on U.S. travelers to provide their certifications of authorized travel directly to the person providing travel or carrier services when processing Cuba travelrelated transactions, unless the financial institution knows or has reason to know that the travel is not authorized by a general or specific license.

The CACR requires persons subject to U.S. jurisdiction providing travel or carrier services to retain for at least five years from the date of the transaction a certification from each customer indicating the section of the CACR that authorizes the person to travel to Cuba.  See § 515.572(b).  U.S. travelers utilizing a general or specific license are also required to retain for five years records associated with their travel to Cuba.

53. May a person subject to U.S. jurisdiction utilize online payment platforms to facilitate or process authorized transactions involving Cuba or a Cuban entity?  Yes.  Subject to certain exceptions, transactions that are ordinarily incident to an authorized transaction are authorized.  Such transactions may include use of online payment platforms to facilitate authorized transactions.  Please see the interpretive guidance in 31 CFR § 515.421.

Distinguishing characteristics of Celestyal's Cuba Cruise 

1) Three years of experience; hosted 6,000 very diverse Americans in 2015-2016 season
2) One more port, Maria la Gorda
3) Longer time on the ground in Cuba (5 vs. 3 1/2 days)
4) Interact for full week with eighty Cuban staff and crew including lectures by two University of Havana professor, animators, musicians, singers, dancers, chefs, waiters and cabom stewards. Most speak English.
5) High level Cuban guest experts speak about current issues
6) Opportunity to fly on scheduled commercial flights to Havana, Varadero/Matanzas or Santa Clara on Friday or Saturday; self-directed casa particular weekend under individual general license or group program through tour operator or travel agent under FFRD general license; then join full cruise program on Monday
7) Opportunity to disembark in Santiago, enjoy its night life and fly home on Sunday on a commercial flight
8) Extensive live Cuban entertainment on board, including professionally produced nightly shows, classical and Cuban music, and a performance of Afro Cuban religious music and dance by N'Sila che che.
9) Opportunity to choose for Havana night-life a reasonably priced performance by Opera de la Calle ("Music of the Street"), the first large scale private cultural production
10) Significantly lower all inclusive cost (with all but top shelf drinks provided)
11) Montego Bay, Jamaica, interlude; excursion or beach time for passengers boarding in Havana