Obama admin loosens rules on Cuba travel

Havana: The Obama administration on Tuesday loosened rules on travel to Cuba and the Cuban government's use of the dollar, removing obstacles to closer ties between the two countries five days before President Barack Obama makes a historic trip to Havana.

The administration announced Tuesday that Americans can now take "people-to-people" trips to Cuba on their own instead of on expensive group tours. That means any American can legally go to Cuba as long as they fill out a form asserting that their trip was for educational purposes instead of tourism. The measure is expected to help fill demand for commercial flights that US airlines hope to launch in coming months.

The new measures also allow US banks to process Cuban government transactions that pass even momentarily through the US banking system. A ban on those transactions crippled Cuba's ability to buy and sell goods internationally and become one of Cuba's biggest complaints about the US trade embargo on the island.

Tuesday's action is the fifth round of measures aimed at punching holes in the embargo on Cuba through executive action while Congress leaves the embargo itself in place. More than a year after Obama and President Raul Castro announced the reestablishment of diplomatic relations, US companies can now manufacture goods in Cuba, export to the Cuban government and fly regularly scheduled flights to Cuba. The Starwood hotel chain says it soon expects to get US approval to manage hotels in Cuba.

"Today's steps build on the actions of the last 15 months as we continue to break down economic barriers, empower the Cuban people and advance their financial freedoms, and chart a new course in US-Cuba relations," Treasury Secretary Jacob J. Lew said.

Rather than swiftly responding to Obama administration measures with matching openings in Cuba's state-controlled economy, the Castro government has moved slowly enough to raise questions about whether there will be significant trade between the two countries before Obama leaves office.

Although the Obama administration has legalized exports of badly needed goods ranging from constructions materials to tractor parts, no such trade has begun. And while European cruise ships now make regular appearances in Havana harbor, US lines have yet to receive Cuban approval months after getting the OK from the Treasury Department.

While Cuba's lack of cash reserve and labyrinthine bureaucracy are obstacles to any new business here, many experts believe that the Communist government is delaying trade with the US in order to build pressure on Congress to do away with the embargo entirely.