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The move to normalize relations with Cuba includes a lot of potential business opportunities for U.S. companies. A big one could be banking. If things go smoothly, Americans traveling in Cuba will soon be able to use their credit and ATM cards there. But many U.S. banks see the new rules as something of a legal minefield. As NPR's Jim Zarroli reports, they're eyeing the changes cautiously.
JIM ZARROLI, BYLINE: Even before yesterday's announcement, the trade embargo with Cuba wasn't absolute. The government allowed U.S. citizens to sell certain kinds of agricultural and medical products to Cuba under special license. But a lot of companies have been reluctant to do so. Doing business in the country has been difficult because the U.S. government has long barred its banks from doing business in Cuba. That meant anyone hoping to sell products there had to find an intermediary bank in Cuba to process the trade. It's a complicated process, and Julia Sweig of the Council on Foreign Relations says a lot of banks decided it wasn't worth the trouble.
JULIA SWEIG: Cuba has to tie itself in knots in order to find financial or business institutions that are willing to pay the additional markups to do business with it.
ZARROLI: The rules announced by President Obama will allow U.S. banks to form direct relationships with banks in Cuba. They will also make the process of paying for goods traded with the country a lot easier. Ted Henken of Baruch College is the author of "Entrepreneurial Cuba: The Changing Policy Landscape."
TED HENKEN: So these changes are potentially seismic in that they will make a lot simpler, a lot more direct and a lot cheaper all of these financial transactions.
ZARROLI: And yet, many banks are looking at these changes with caution. The United States has trade embargos against several countries including Iran and North Korea, and in recent years the U.S. government has pursued banks that violate them aggressively. In July, the French bank BNP Paribas agreed to pay a $9 billion fine for processing transactions for clients in several embargoed countries including Cuba. Clif Burns is an attorney at Bryan Cave who specializes in sanctions.
CLIF BURNS: In general, banks have been shaken very deeply by recent enforcement actions and are disinclined to dip their feet in what they see as shark-infested waters.
ZARROLI: Right now many U.S. banks are waiting to see the text of the new regulations, says David Schwartz, President and CEO of the Florida International Bankers Association.
DAVID SCHWARTZ: Banks are going to analyze very closely the regulations that do come out to determine how much leeway that does give them. How does that reduce the risk of doing that business?
ZARROLI: But Schwartz also acknowledges that the relaxation of the Cuban embargo is an opportunity for banks even if they're cautious about taking advantage of it. Jim Zarroli, NPR News, New York.
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