The American Farm Bureau Federation (AFBF) and a number of other agricultural associations recently sent a letter to President Bush urging him to instruct the Treaury Department's Office of Foreign Assets Control (OFAC) to not change the method of payment procedures used in connection with sales of agricultural products to Cuba. OFAC recently changed its interpretation of the term "cash in advance" to specify that shipments to Cuba may not leave the U.S. until payment is received. Until recently, the standard practice was that payment would be made by wire transfer to the U.S. seller's bank once the products arrived in Cuba, but before the goods were unloaded or title was transferred to the Cuban purchaser. The Departments of Treasury and Commerce are in the process of determining whether or not to formalize the change in payment procedures for Cuba agricultural sales.
The AFBF's letter to the President stated that since exports of agricultural products to Cuba were authorized by the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA), payment from Cuba has only been required prior to goods being released to the buyer, not prior to shipment. The letter noted that U.S. agricultural exporters have met both the letter and the spirit of the law by not unloading their cargo in Cuba until payment is received and that requiring payment prior to shipment would be contrary to the standard method of international business.
The letter also indicated that “[w]e urge you not to make unnecessary and harmful changes to the implementation of TSRA. Cuba has become our 22nd largest agricultural market, valued at almost $400 million per year. It is a market we cannot afford to lose. TSRA has been followed flawlessly for the past three years. Any changes made would threaten to shut down an important market for U.S. exporters of agricultural goods.”
