How will financial ties with Cuba change now that it’s off the terrorism list?

The State Department on Friday officially lifted its designation of Cuba as a state sponsor of terrorism, in one of the many recent steps by the Obama administration to reestablish diplomatic ties between Cuba and the U.S. Carla Robbins of the Council on Foreign Relations joins Hari Sreenivasan to discuss the implications.

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    Yesterday, the State Department officially lifted its designation of Cuba as a state sponsor of terrorism.

    It's one of the many recent steps by the Obama administration to re-establish diplomatic ties between the island nation and the United States.

    Here to talk about the implications of that move is Carla Robbins, an adjunct senior fellow at the Council on Foreign Relations.

    So, first of all, this was on the list since the early 80s. What put them on this list of state-sponsored terror in the first place?


    Exporting revolution, cozy relations with the FARC in Colombia, cozy relations with the Basque terrorists ETA and we didn't like them.


    Right. And then, now, if they're off this list, what does it mean?


    It means more than anything else, that U.S. banks can have relations with Cuban banks, which will make it much easier to follow through on the easing of financial relations that Obama is promoting, and the Cubans said it was the biggest precondition for reestablishing direct diplomatic relations and opening the embassies.


    In a practical matter, this means that if a tourist is visiting Cuba, their ATM cards or credit cards will work.


    That's the idea. Right now, MasterCard is there. I believe I think American Express is there. But you can't — there's no American bank that can do it because of fear that the Treasury Department will punish you.

    You know, these terrorism lists, particularly since 9/11 — I mean, U.S. banks have been paying very, very high penalties for it. So, now, you'll be able to do that.

    More than anything else, while the embargo is still in place and will remain in place for a very long time, I suspect, you can do business with private businesses in Cuba, a variety of other trade. We can sell medicines.

    We can sell agriculture. We have been able to do that for quite a while.

    But the Cubans had to pay before. They had to send the money here. They couldn't do it through an American bank. It was a very complicated process.

    Now, they're going to be able to clear checks in Cuba and that's a big deal, not an enormous boon. There's not going to be a huge, you know, gold rush here, but it's going to make it easier to do financial transactions.


    So, you pointed out that distinction that this still does not mean that the embargo is lifted. That is a much bigger scenario and that takes congressional approval.


    The embargo was an executive order since Kennedy, all the way through to Clinton. It was written into law during the Clinton administration.

    Not at the behest of the White House, the Republicans pushed it. And so, now, Congress has to agree to do it.

    And what's really interesting — you know, I was up on the Hill and I was surprised to see nobody on the Hill was going to make a big fight about this lifting of the terrorism list. They're not going to fight Obama on all these other things.

    On the other hand, nobody is going to push very hard to lift the embargo. This is a very long process.


    Right. And there are still significant disagreements that the two countries have. I mean, the secretary of state said that yesterday. There are also members of Congress that said that.


    Having diplomatic relations doesn't mean that we love them. And, ultimately, the U.S. and Cuba have very different goals for this rapprochement.

    Obama has been clear — his goal here, have closer contact, is to promote democratic change in Cuba. The Cubans' goal for this is to get enough, you know, economic bailout so that they can maintain their repressive society for a little big longer.

    I think, ultimately — you know, the Castro brothers are very old — ultimately, Cuba is going to move toward some sort of reforms and I think as — also as President Obama said, 50 years of this policy and it didn't work.


    So, when these two countries start to establish embassies officially in each other's countries, what are the kinds of steps that we will see towards this diplomatic normalization?


    Right. I think the biggest issue right now — and we don't know how soon the opening could come, the official opening — I find it to be probably sooner rather than later — the biggest question I think is what they've been going back and forth is the Cubans keep saying, we don't want you to be using the embassy to continue to do what you've been doing — which is giving — training journalists and meeting with dissidents.

    And the Americans keep saying, "What are you talking about? We want to do this."

    I hope the Obama administration doesn't give up too much on that.

    Although they have been signaling that in other authoritarian societies, there are restrictions and they will place restrictions on the Cubans themselves. This not going to be a warm and cuddly relationship for a very long time, I suspect.


    All right. Carla Robbins, thanks so much.


    Thanks so much.

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