In June, the Trump administration announced its new Cuba policy, which was presented as a cancellation of the Obama administration's agreement to normalize U.S. relations with “the island.” This new policy tightens restrictions on U.S. persons who wish to travel to Cuba and limits the ability of U.S. businesses to engage in commerce with GAESA (Grupo de Administración Empresarial S.A.), the Cuban military's business and commerce division.

One specific consequence of Trump's new policy will be the prohibition of U.S. companies to establish new relationships with certain tourism-related enterprises, including hotels, many of which are run by GAESA's subsidiary, Gaviota. It will also limit foreign investment in Cuba's Special Economic Development Zone of Mariel (Zona de Desarrollo Integral de Mariel), since it is controlled by another GAESA subsidiary. Notwithstanding the new policy, which becomes effective following the adoption of regulations by the Treasury Department, Cuba remains open for business. Specifically, U.S. businesses can pursue ventures in industries that are not controlled by the Cuban military and intelligence services, including telecommunications, airports, cruise ports and agriculture.

However, U.S. companies interested in pursuing any such business must still be prepared to extend their compliance programs with U.S. regulations when dealing with Cuba. Implementing an effective compliance program, including training and due diligence, presents various unique challenges because the Cuban government controls and operates virtually every business on the island through its various government-owned business enterprises and ventures, not just those affiliated with GAESA. Consequently, the government directly or indirectly employs essentially all Cuban persons facilitating business with U.S. companies through such entities, which are deemed “government officials” for purposes of the Foreign Corrupt Practices Act (FCPA), and presents considerable risks for U.S. companies to comply with such anti-corruption laws and regulations,