This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. For an explanation of our Advertising Policy, visit this page.

 

Update June 16, 2017: As expected, the President made his announcement Friday confirming the details outlined below. Additionally, there will be no new restrictions on what Americans can bring back from Cuba into the US, including rum and cigars.


Tomorrow, President Trump will announce his administration’s plan to restrict travel and business interactions with Cuba. Relations with the island nation had been gradually opened to American travelers and businesses under the Obama administration starting in 2014.

According to a draft of the presidential policy directive obtained by Politico, new rules will make it much harder for Americans to travel to the country and for American businesses to interact with any companies that are controlled by the Communist government’s military regime. Many of Cuba’s hotels and tour agencies are controlled by the business wing of the Cuban military, called the Grupo de Administración Empresarial S.A. or GAESA, and the new policy states that American travelers and businesses will be unable to spend money in any state-run hotels and restaurants connected to the military. Up to 80% of Cuba’s tourism sector is controlled by the Cuban military, according to John S. Kavulich, president of the US–Cuba Trade and Economic Council.

The Obama administration’s easing of rules surrounding travel to Cuba didn’t abolish an existing ban on tourism to the nation, though many Americans visited under one of the 12 official categories of approved travel. Exact reasons for travel were rarely vetted thoroughly.

The new policy, however, will require travelers to keep detailed records of all financial transactions made in Cuba for five years as well as supply a full-time schedule of activities that, according to the draft Politico obtained, “enhance contact with the Cuban people, support civil society in Cuba, or promote the Cuban people’s independence from Cuban authorities, and that the travel must result in a meaningful interaction between the traveler.”

The directive further explains that the Treasury Department must conduct audits of travel to Cuba to make sure Americans are not spending money at any institution tied to GAESA.

Not all hope is lost for US travelers — the new directive doesn’t ban transactions with private vendors like those who rent out Casa ParticularesAirbnbs and private restaurants. As reported by Politico, fines can be issued to visitors who don’t maintain meticulous notes of their transactions. This could also mean trouble for US-based companies like Marriott, which was in the process of buying and renovating three Cuban hotels and turning them into new branded properties.

The new restrictions could lead to even more capacity reductions in commercial airline service to the island — many US Airlines had cut service to Cuba after realizing the demand for flights wasn’t as strong as originally forecasted. It’ll be interesting to see how the cruise industry, which has been booming in Cuba lately, will be affected by these changes.

The directive also requires that new rules must be issued by the Secretary of the Treasury 90 days after it is issued tomorrow (June 16).

Featured image courtesy of Joe Raedle via Getty Images.

H/T: Politico

Know before you go.

News and deals straight to your inbox every day.

2018 TPG Award Winner: Mid-Tier Card of the Year
Chase Sapphire Preferred® Card

NEW INCREASED OFFER: 60,000 Points

TPG'S BONUS VALUATION*: $1,200

CARD HIGHLIGHTS: 2X points on all travel and dining, points transferrable to over a dozen travel partners

*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.

Apply Now
More Things to Know
  • Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 toward travel when you redeem through Chase Ultimate Rewards®
  • 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
  • Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 60,000 points are worth $750 toward travel
Intro APR on Purchases
N/A
Regular APR
18.24% - 25.24% Variable
Annual Fee
$95
Balance Transfer Fee
Either $5 or 5% of the amount of each transfer, whichever is greater.
Recommended Credit
Excellent/Good

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.