Obama Says “Open Cuba” — US Export Controls Challenge Cuba’s Future

International Traffic in Arms Regulations (ITAR) and Export Administration Regulations (EAR) present surprising infrastructure challenges to US companies entering the Cuban market. Debated before the United States International Trade Commission, testimony by Government Relations, LLC.

Washington, DC – June 16, 2015 – A non-obvious but very serious obstacle to opening the Cuban market to trade and travel with the US are the International Traffic in Arms Regulations (ITAR) and Export Administration Regulations (EAR) which restrict the export of encryption technology and other controlled items. Systems that rely on encryption technology are integrated into practically everything the average American uses in the digital age… from software, to cellphones, to banking, to wireless routers. In spite of the 2010 relaxation of encryption rules (75 FR (Federal Register) 36481), enforcement of these regulations would still be onerous to Cuba. Why? Whereas China had the internal capability and financial resource to develop encryption protocols that protect its growing industries from cyber threats, Cuba is both underfunded and behind the technology curve. Unfortunately, Cuba is unlikely to develop sufficient encryption protocols necessary to protect the influx of US information, money, and resources – without US assistance. The net effect of “protecting” American encryption technology from being exported to Cuba, would be the reverse – to expose US money, information, and digital services to easy attack from anywhere in the world. As an example, a US military contractor vacationing in Havana, who – without a second thought checks his work email from his hotel room – could be wide open to hackers quickly downloading military secrets from the unsecure network.

For historic reasons, nuclear and missile technology are likely to be controlled in Cuba. However, again the devil is in the details. Cuba’s medical system would benefit from the latest advances in radiotherapy and more sophisticated imaging systems that rely on radiation. Admittedly, the radiotherapy in Cuba is good enough for former Venezuelan President Hugo Chavez, and the US already has an existing exemption for a number of medical devices. However, this is not likely to be sufficient to accommodate Cuba’s aging population and the expected increase in tourism. Allowing medical specialists and patients access to a much broader range of treatments is going to be a balancing act between security, cost, and humanitarian efforts.

Encryption and radiation-based medical devices are just two of the many examples of the export controls that would have significant and far-reaching effects on Cuba. The US is buzzing with talk about tourism and agriculture in Cuba, but it is crucial that the Commission take the time to examine the underlying systems that support a modern economy. These underlying systems entail both digital security and medical technologies – most of which are controlled by some form of an export license. Making appropriate decisions now could vastly improve the protection of US commercial and/or military items necessary to function in a modern economy, such as using the GPS on a rental car to making cellphone calls back home, to sending emails, to buying that Cuban cigar with a credit card… or even god forbid… receiving appropriate emergency medical care should a US family suffer an accident on the roads in Cuba.

Donald E. Ellison (“Don”), President of Government Relations, LLC, an expert on international trade and corporate governance, was invited by the United States International Trade Commission (ITC) to discuss the effects of International Traffic in Arms Regulations (ITAR) and Export Administration Regulations (EAR) on the reopening of Cuban markets, just days after Secretary of State Kerry removed Cuba from the State Sponsors of Terror List. Don Ellison responded on a number of issues, but principally cited the effects that encryption and nuclear materials restrictions would have on the protection of data security, financial systems, and medical treatment. Afterwards, Don Ellison answered a battery of questions and lead a round of applause for the ITC’s efforts on behalf of the US and Cuban citizens.

Company Information:

Government Relations, LLC, is an international trade consulting firm “helping businesses compete globally”, specializing in assisting companies comply with the International Traffic in Arms Regulations (ITAR) and the Export Administration Regulations (EAR). Established in 1984 in the Washington DC Area, Government Relations, LLC, protects US warfighters at home and abroad by creating customized Export Management Systems for entrepreneurs, companies, and educational institutions.

For complete information, please visit: https://gov-relations.com

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