U.S. banks are no longer barred from providing financing when American companies export certain products to Cuba, according to revised regulations from the Obama administration.
The looser financial rules are part of a larger package of changes announced Tuesday, which will also make it easier for Americans to travel to the Communist island nation.
Under the old rules, authorized U.S. exports to Cuba either had to be financed through a third country, or payment for the purchase had to be made in cash. As a result, U.S. exporters have been operating at a disadvantage to foreign competitors.
During a conference call with reporters Tuesday, a senior administration official said that when a Cuban buyer has the choice between U.S.-made machinery and equipment manufactured in Brazil, the buyer is likely to choose the Brazilian option because the purchase can be financed.
"Certainly that's something very concrete that we've heard about repeatedly from the Cuban side," the official said.
The new financial rules, which take effect Wednesday, are expected to boost U.S. exporters that make products, such as telecommunications equipment, that can legally be sold in Cuba. By extension, the changes could also help U.S. banks that choose to provide financing for those transactions.
But U.S. exports to Cuba still must be authorized by the Commerce Department, and many categories of American-made products remain subject to restrictions. In addition, the looser financial rules will not apply to authorized exports of agricultural items and commodities as a result of requirements imposed by Congress.
Over the last 13 months, the Obama administration has been gradually easing restrictions on economic ties between the U.S. and Cuba.
Many of the changes impact the U.S. banking sector. For example, banks can now process credit and debit card transactions in Cuba, and they can also establish correspondent banking relationships on the island.
A U.S. embargo of Cuba, which has been in effect since the early 1960s, limits the scope of action that the Obama administration can take. Administration officials on Tuesday again called on Congress to end the embargo.