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A recent federal rule change regarding purchases of U.S. farm products by Cuba jeopardizes current and future shipments and sales to that growing market for American agricultural goods, and, according to American Farm Bureau Federation, the flawed rule must be changed.
Testifying before the House Agriculture Committee, Missouri corn and soybean farmer Charlie Kruse said recent actions taken by the Treasury Department's Office of Foreign Assets Control to restrict the financing of sales of U.S. agricultural products to Cuba jeopardize a market that has become the 25th largest purchaser of U.S. farm products.
Kruse, president of the Missouri Farm Bureau and a member of the AFBF Board of Directors, told committee members that until passage of trade reform legislation in 2000, the Cuban market had been closed to U.S. agricultural exports since sanctions were imposed in 1963. But since 2000, the market has blossomed.
Last month, however, OFAC announced that it was redefining payment rules for Cuba. Under the new definition of "payment of cash in advance," payments from Cuba for U.S. agricultural sales would have to be received by U.S. banks before the product could be shipped from U.S. ports.
Under its original interpretation, Kruse said that U.S. agricultural products could first be shipped to Cuba, with all certificates, title and ownership of the goods transferred after payment was received from Cuba.
"This new definition is significant in that `payment of cash in advance' is the most commonly used means for receiving payment from Cuba," Kruse said. "The new definition reverses the original interpretation and established method for sales to Cuba. OFAC's new regulation ignores the original intent of Congress. This could result in the loss of sales currently under contract in addition to all future sales to the country, and disregards contract sanctity, putting U.S. agriculture in the position of being viewed as an unreliable supplier."
