Background Conference Call on Policy Changes in Cuba and the Release of Alan Gross

Via Telephone

10:02 A.M. EST

MS. MEEHAN:  Hi, everybody.  Thanks very much for joining this background call on policy changes to Cuba.  This call will be embargoed until the end of the call.  We will lift the embargo at the end of the call, so you cannot report anything that you hear on this call until the call is concluded.  At that point, you may quote officials on the call as senior administration officials only, not by name.  We will also lift the embargo on the factsheet that the White House released this morning at the end of this call.

So again, at the end of the call you’re welcome to report on background anything you hear on this call as well as quote from the factsheet, but not before this call is over.

We have seven senior administration officials with us today from across the interagency.  And with that, I will turn it over to senior administration official number one.

SENIOR ADMINISTRATION OFFICIAL:  Great.  Thanks, everybody, for joining the call.  I wanted to start by walking you through the overview of what we will be announcing today, and then my colleagues can fill in some of the details. 

First of all, these steps will be the most significant changes to our Cuba policy in more than 50 years.  The President, when he came into office, was committed to changing a policy that we felt had failed to advance our interests for the last several decades by promoting greater openness with Cuba and facilitating greater access for the Cuban people to economic opportunity and to the type of relations with the United States that can ultimately empower the Cuban people.

In that vein, the President, as you know, authorized, for instance, Cuban Americans to be able to travel to the island and to send remittances to their family on the island.  We received very positive feedback from those initial policy changes.  And the President was committed to pursuing additional steps through his time in office.

However, we had a significant impediment to our ability to pursue additional policy changes with the imprisonment -- wrongful imprisonment of Alan Gross, a USAID subcontractor in Cuba, for over five years now.

So, first, let me walk you through Alan’s release and an exchange of intelligence assets that took place today before getting into the policy changes.  Importantly, we did pursue a swap, an exchange of intelligence assets, including the return of the three Cubans who remained jailed in the United States from the so-called Cuban Five Wasp Network.  They were returned to Cuba this morning.  In exchange, the Cubans released a U.S. intelligence asset who has been imprisoned in Cuba for nearly 20 years.  The identity of this asset will remain secret, but we can provide you with some information about his importance to the United States. 

So this individual was responsible for some of the most important intelligence and counterintelligence prosecutions that the United States has been able to pursue in recent decades.  For instance, he provided the information that led to the identification and conviction of Defense Intelligence Agency senior analyst, Ana Belen Montes; former Department of State official, Walter Kendall Myers and his spouse, Gwendolyn Myers; and members of the Wasp Network in Florida, including the so-called Cuban Five.  So again, this intelligence asset, who was a part of this exchange, provided information that led to the prosecution in part of the Cuban Five.  So his return was particularly important to us.

At the same time, Cuba agreed to release Alan Gross on humanitarian grounds.  And Alan was flown back -- is currently flying back to the United States with his wife, Judy.  Again, we believe Alan was wrongfully imprisoned, and we overwhelmed with joy that Alan will be reunited with his family, particularly in this holiday season of Hanukkah. 

So again, the exchange was the three Cubans who have been imprisoned in the United States for the U.S. intelligence asset who’s been imprisoned in Cuba for nearly 20 years.  And then the Cuban government released Alan Gross on humanitarian grounds.

With that issue resolved, the President is now going to be announcing very significant changes to our Cuba policy.  What we are doing is beginning the normalization of relations between the United States and Cuba.  And I’ll just give the overview of these steps, and then my colleagues can fill in some details.

First, we will be immediately initiating discussions with Cuba to reestablish diplomatic relations that have been severed since 1961.  And so we will enter into discussions with Cuba about reestablishing an embassy in Havana, and we will be initiating high-level contacts and visits with Cuba.  We do so in the belief that there are significant issues where we’d benefit from cooperation, like our current efforts to fight Ebola, where Cuba has dispatched hundreds of health care workers to Africa, but also issues like migration, counterterrorism, drug trafficking, disaster response, where practical cooperation can serve the interests of the United States and Cuba.

At the same time, we fully expect that we’ll continue to have strong differences, particularly on issues related to democracy and human rights.  The United States will continue to promote our values.  We will continue to support civil society in Cuba.  We’ll continue our democracy programming. 

So, again, the fact that we are reestablishing diplomatic relations is, frankly, a better way in our view of advancing our interests and our values.  President Obama has long believed that engagement is a better tool than isolation, and nowhere is that clearer than in Cuba where we have seen a policy of isolation fail for the last 50 years in advancing American interests and values on the island.

Second, the President has instructed Secretary Kerry to review Cuba’s designation as a state sponsor of terrorism.  So that process will be initiated and has to go through a formal review so that we are guided by the facts and the law in making that determination.

Third, we are taking a number of steps to significantly increase travel, commerce, and the flow of information to and from Cuba.  And we do this on the premise that it does not make sense to impose restrictions on the American people and on American businesses that disadvantage the freedom of Americans to travel or the ability of U.S. businesses to operate in Cuba.  And so those -- the steps that we are taking will facilitate greater activity for U.S. persons and businesses, but also, importantly, we believe that by further opening up to Cuba, we will be able to promote openness and reform in Cuba. 

There have been some incremental reforms taken in Cuba in recent years, but clearly we believe that more needs to be done.  Again, however, we believe that openness is a better policy than isolation in advancing the things that we care about in Cuba.  So there will be greater people-to-people engagement and travel opportunity.  There will be the ability for the American people to use credit and debit cards when they travel to Cuba.  We’ll be increasing significantly the amount of money that can be sent to Cuba through remittances.  We will, again, be facilitating increased transactions, including U.S. financial institutions being allowed to open accounts in Cuban financial institutions.  And we will be authorizing increased telecommunications connections between the United States and Cuba.  All of these policy changes my colleagues can go through in greater detail.

In addition, the United States will be participating at the Summit of the Americas in Panama next year, and Cuba will be participating as well.  We are not objecting to Cuba’s participation at the summit.  We are making clear that we believe that democracy and human rights have to be on the agenda at the summit; that civil society has to be included at the summit.

But I would note that in all of his engagements with Latin American leaders, the President has consistently heard of the importance of taking the kind of steps that he is taking today, which we believe will be strongly welcomed across the hemisphere.

Let me just go through a couple other points before turning to my colleagues. 

In terms of how we got to where we are today, the President authorized a high-level channel of communication with the Cuban government last spring.  The individuals on the U.S. side who participated in that channel are Ben Rhodes and Ricardo Zuñiga, the Senior Director for Western Hemisphere here at the National Security Council.

There were multiple meetings with Cuban officials that took place in third countries; I’ll just identify the two principal ones.  Canada hosted the majority of these meetings, and I want to thank the Canadian government for providing its good offices and hosting our discussions with the Cuban government.  Canada did not participate in the substance of the discussions, but they were indispensable in providing a venue and support for these efforts.

Second, and very importantly, the Vatican played a role in this as well.  Pope Francis personally issued an appeal through a letter that he sent to President Obama and to President Raul Castro, calling on them to resolve the case of Alan Gross and the cases of the three Cubans who have been imprisoned here in the United States, and also encouraging the United States and Cuba to pursue a closer relationship.  The Vatican then hosted the U.S. and Cuban delegations where we were able to review the commitments that we’re making today in terms of the exchange of assets, in terms of the release of Alan Gross, and also in terms of some of the other changes in our relations that we’re pursuing.

I’d also note that the Cuban government has made some additional decisions.  These are sovereign decisions of the Cuban government that we have welcomed.  Specifically, the Cuban government agreed to release 53 prisoners whose cases we brought to their attention.  These are individuals that we believe are political prisoners, and we welcome very much their release.  A number of those individuals have already been released, and we expect to continue to see those releases going forward. 

The Cuban government also made it known to us that it is going to be taking steps to increase internet connectivity for its citizens.  This would obviously be a welcomed step.  And with the additional authorization for U.S. telecommunications companies to operate in Cuba, combined with Cuba’s willingness to pursue greater internet connectivity, we believe that the Cuban people will be further empowered.

Lastly, the Cubans are increasing their engagement with the United Nations and with the International Committee of the Red Cross to have discussions about certain conditions within Cuba.  This is an issue that we have consistently encouraged the Cubans to take action on, and so there will be additional visits to come for those two institutions.

Finally, I’d note that President Obama spoke yesterday with President Raul Castro of Cuba to review and finalize the steps that were taken today in terms of the release of the three Cubans in exchange for our intelligence asset and for the release of Alan Gross.  And the President also made clear his intent to pursue these policy changes, but also to continue our advocacy for human rights in Cuba.

With that, I’ll turn it over to my State Department colleague to give a little bit more detail on the State pieces of this.

SENIOR ADMINISTRATION OFFICIAL:  Thank you very much.  Let me just go through a couple of things from the State Department’s perspective that are our responsibility, or our emphasis.

On diplomatic relations let me just say a couple of things.  Obviously, diplomatic -- full diplomatic relations are something that get worked out between two governments.  We’ve agreed to move towards full diplomatic relations, reestablishment of them.  They were broken in 1961, as my colleague mentioned.

As you probably all know, we did not have any presence in Cuba from 1961 until 1977, when we established the Interests Section.  We’ve been under the protection of the Swiss the entire time.  But we will end that relationship and move towards having an embassy and the full normal diplomatic relations.  But those things get worked out between the two governments, and they will -- we will proceed to do so in conjunction with the Cubans.  And we don't know exactly what that timeline will be, but we’ll move towards that as quickly as we can.

The other part of this that is within the State Department’s purview is the review that the President has asked for of the listing of Cuba on the state sponsor of terrorism list.  Cuba has been on that list since 1982.  And we will undertake that review quickly.  But there are many steps that are in the law that we must undertake, and so we will do that, including the consultations with the intelligence community and other steps in the law before we undertake the recommendation that will be made at the end of that process.

Let me also emphasize that I think what my colleague said -- let me emphasize, as well, that it’s important to note that this is being done because we believe the policy of the past has not worked and because we believe that the best way to bring democracy and prosperity to Cuba is to do so via a different kind of policy.  But that does not for a moment believe that we're lessening our emphasis on human rights, on democracy, on the importance of civil society.  Quite the contrary.  In fact, our emphasis on human rights will be just as strong and we believe more effective under this policy.  We will engage directly with the Cuban government on human rights. 

And as an example of that, our principal officer in Havana, Jeff DeLaurentis, will be meeting with members of Cuban society and dissidents later today to walk them through the President’s initiatives of today, and to emphasize to them, as well, that their efforts on behalf of democracy and human rights in Cuba not only won’t be forgotten in these initiatives, but will, in fact, take center stage and a new emphasis, and we believe a new -- get new wind, if you will, by this approach.

Let me also say that one of the things you all know is that our policy and the way we’ve gone about it on Cuba has been a severe problem -- or we’ve been severely criticized for it by most countries, if not all, in this hemisphere.  You may remember that in 2012, when the President attended the Summit of the Americas in Cartagena, this was one of the issues that was universally criticized by countries around the hemisphere, our policy on Cuba.

We believe that this policy shift and the way we will engage the Cuban government in support of democracy and prosperity will greatly help our policy initiatives around the hemisphere and our influence throughout the hemisphere on things that are important to us, including democracy and human rights.  And we expect strong support from governments throughout the hemisphere, both for this policy change and for efforts to support and promote civil society and human rights in Cuba.  So we expect those efforts to be more effective under this policy than they’ve been in the past. 

Let me stop with that.  Thank you.

MS. MEEHAN:  Thank you.  And now we’ll turn it over to our colleague at the Department of Treasury.

SENIOR ADMINISTRATION OFFICIAL:  Thank you and good morning, everyone.  As my colleague noted, the changes that the President will be announcing today aimed at advancing the administration’s policy on empowering the Cuban people, promoting political, social and economic reform in Cuba, and will also pave the way for enhanced commerce and trade between the United States and Cuba in certain areas.  There is a slew of changes that the Office of Foreign Access Control, or OFAC, will be implementing through amendments to our Cuban assets control regulations to give effect to these changes, and I expect to see those changes made in the coming weeks. 

To give you a little bit of detail, in 2011 we took steps to ease travel restrictions, in particular with respect to Americans’ ability to visit family in Cuba, generally licensing such travel.  We will be easing travel in the coming weeks across all of the 12 categories for which OFAC has historically issued licenses.  Those categories are family visits; official business of the U.S. government, foreign governments and international organizations; journalistic activity; professional research and professional meetings; educational activities, religious activities, public performances, workshops, and other competitions and expeditions; support for the Cuban people; humanitarian projects; activities of private foundations or research or educational institutes; export-import of the transmission of information or informational materials, as well as certain export transactions that may be considered for authorization under the existing guidelines. 

Under these new forthcoming regulations, travel to Cuba for tourist activities, which Congress has defined as activities outside of these 12 categories, will remain prohibited.  Concerning remittances, we had already eased in 2009 restrictions on non-family remittances to allow individuals in the United States to send up to $500 to any Cuban national, with the exception of Cuba government or communist party officials per quarter.  The President will be announcing that we will be increasing that amount to $2,000 per quarter.  Notably, donated remittances for humanitarian projects, support for the Cuban people, and development of private businesses in Cuba will be generally licensed with no limitation on amount. 

Another very important area in which we will be easing restrictions is increasing communication and access to communication technology for the Cuban people.  Telecom and Internet linkages between the U.S. and Cuba, including infrastructure related to those linkages in Cuba, will be authorized without requiring a specific license from OFAC.  These steps build upon efforts initiated in 2009 to facilitate the increase flow of information to and from the island. 

The regulatory definition of cash in advance, a provision that regulates payment for the export of agricultural and medical goods from the U.S. to Cuba, will be changed to a cash before transfer of title definition.  This will allow U.S. exporters to be more competitive with respect to their exports to Cuba, and will generally permit the export of agricultural products to Cuba so long as payment is received prior to the goods arrival at a Cuban port of entry.

U.S. travelers to Cuba will be permitted to import into the United States merchandise as they bring back with them with a value of up to $400 per person.  Included in this new provision will be an allowance of up to $100 per person of alcohol or tobacco products.  I also want to note that we will be issuing new regulations to allow U.S. banks to establish correspondent accounts with Cuban banks.  U.S. financial institutions will also be authorized to facilitate the use of U.S. credit and debit cards by travelers in Cuba. 

These changes will ease the flow of remittances to, and authorize transactions with, the Cuban people.  This also means that those who do trade with Cuba -- for example, in the areas of agricultural medicine and medical products, telecommunications, et cetera -- will have a much easier time doing so, and the financial easing will facilitate a number of the changes that I outlined above.

As I noted earlier, the regulatory amendments are currently in development and you will see these changes in the coming weeks, along with detailed guidance.  These changes will not take effect, however, until the new regulations have been published, and we will take every measure possible to keep everyone apprised of developments.  Thank you.

SENIOR ADMINISTRATION OFFICIAL:  Great.  We’ll go to Commerce now.

SENIOR ADMINISTRATION OFFICIAL:  Hi, Secretary Pritzker strongly supports the President’s initiative to spur long overdue economic and political reform in Cuba.  She believes that commercial diplomacy initiatives outlined today will strengthen human rights and the rule of law.  She believes that economics and more commercial engagement have the power to change lives for the better, and she looks forward to the opportunity to visit -- to do a commercial diplomacy visit to Cuba as part of the President’s initiative to encourage positive change in Cuba.

Specifically, the Commerce Department will be issuing regulations that will authorize for export certain building materials for private residential construction, goods for use by private sector Cuban entrepreneurs, and agricultural equipment for small farmers.  These changes will make it easier for Cuban citizens to have access to lower-priced goods to improve their living standards, gain greater economic independence from the state, and overall develop the private sector in Cuba.

In addition, regulations also will be issued to facilitate export of telecom devices equipment, including related hardware, software and services in order to enhance communications to and from Cuba and among the Cuban people.

Q    Hi, guys.  Thanks for doing the call.  I wonder if, one, you could talk a little bit more about President Obama’s call with President Castro yesterday, how long it lasted and what else was discussed.  Is there any plan for them to talk again in the future?  And then, secondly, on these talks that have taken place since the spring, mostly in Canada, could you elaborate a little bit more on that, how that took place?  And was there a key moment -- what happened that made today happen?  In other words, was there a meeting last week?  What was the final critical stage that pulled all this together?

SENIOR ADMINISTRATION OFFICIAL:  Thanks, Peter.  On the first question, the call yesterday I think lasted between 45 minutes and an hour, and it was obviously the first engagement at the presidential level with Cuba since the Cuban Revolution.  And President Obama went through the swap and the release of Alan Gross, and then discussed the changes that he would be announcing today.  They discussed the potential for cooperation on issues like Ebola, issues in the hemisphere, issues like counterterrorism and counter-narcotics.  At the same time, the President did underscore that we would continue our support for democracy and human rights in Cuba.

Again, President Castro reviewed the steps that Cuba is taking, and I'll leave it -- I believe President Castro is making a statement later today, so I won't go into too much detail about what he said.  We tend not to do that with calls with foreign counterparts.  But suffice to say, they were summing up the work that's been done through the channel over the course of the last -- over a year now, as well as looking forward to the announcements today, while noting that we understand we're going to continue to have differences.  So this change doesn’t negate the fact that the U.S. and Cuba are going to have strong differences on the Cuban political model and on aspects of foreign policy, both U.S. and Cuban foreign policy.  So they had areas of agreement and areas of difference that they went through on the call.

With respect to the channel, I could give a couple more details.  This was initiated when the President authorized exploratory discussions with Cuban officials in the spring of 2013.  We have multiple ways of communicating with Cuba, through our Interests Section in Havana and those here in Washington, and we interacted -- our missions in New York.  So we have the ability to pass messages, and so we initiated this contact with the Cuban government last spring.

The first face-to-face discussions with the Cubans took place in June of 2013 in Canada.  And again, Canada was the principal venue for a series of discussions that took place between June of 2013 and November of this year. 

In terms of critical meetings or junctures, I'd just note a couple things.  One, it was very important to us that we recover this intelligence asset for a couple of reasons.  Obviously, we’ve wanted Alan Gross to be released for five years now.  We rejected the notion that Alan Gross was an intelligence asset, so we were not going to engage in a swap of intelligence assets that involved Alan Gross directly.

Number two, this intelligence asset did heroic work for the United States at great risk to himself, enabling the prosecution of a number of individuals, including the Cuban Five.  And he’s been in a Cuban prison for nearly 20 years, and so our ability to recover him was an important principle for us in those discussions.  But also, this was an opportunity to review broader aspects of our relationship, areas of agreement and disagreement, to get a sense from Cuba of the steps that they are contemplating taking, and the release of a certain number of prisoners was important to us, but also to explore with them areas of practical cooperation and the types of steps that President Obama is announcing today.

An important meeting, and I guess where you could say this all was finalized, was hosted by the Vatican.  So senior Vatican officials received both the U.S. and Cuban delegations this fall, and essentially the Vatican was a venue for the U.S. and Cuban sides to present their commitments and to finalize the types of steps that are being taken, including obviously the prisoner transfers.  And the support of Pope Francis and the support of the Vatican was important to us, given the esteem with which both the American and Cuban people hold the Catholic Church and, in particular, Pope Francis, who as you know has a substantial history in Latin America -- the first Pope to be chosen from Latin America.  So President Obama has enormous respect for Pope Francis and his personal engagement in this was important to us.

When President Obama met with Pope Francis, for instance, earlier this year, Cuba was a topic of discussion that got as much attention as anything else that the two of them discussed.  So I would say that particularly the exchange and transfer of prisoners was finalized in that meeting at the Vatican, but we also were able to review the steps that we’d each be taking with the Vatican, including the normalization of relations between the countries and the establishment of diplomatic relations.  And the Vatican welcomed that news.

I’d just note that there were no meetings that took place in either Cuba or the United States in this channel, and I’d also just note that we are not going to characterize the Cuban participation just because that’s our principle in terms of these types of negotiations.  That’s what we did with respect, for instance, to the work that Jake Sullivan and Bill Burns did with the Iranian side in the lead-up to the Joint Plan of Action last year.

So with that, we’ll move to the next question.

Q    Can you talk about the timeframe or the opening end of this?  Does this have to follow the sort of the (inaudible) to what happened with Vietnam?  When would you expect to actually have restoration of diplomatic relations?  And will the President be trying to overturn Helms-Burton?

SENIOR ADMINISTRATION OFFICIAL:  Thanks, Andrea.  So the decision has been made to establish diplomatic relations by both President Obama and President Castro.  So we’ve decided to establish an embassy, we’ve decided to restore diplomatic relations.  So it’s, frankly, just a matter of going through the process -- logistical and otherwise -- of formalizing that decision.  So I can’t put an exact timeline on it, but we expect to do it as soon as possible.  But for your purposes, I mean, I think you can characterize this as a decision that has been made that will be taken. 

And now, with the announcement today, what that will do is set in motion discussions that can take place between the Department of State and then reps in Cuba to resolve any specifics related to the establishment of a U.S. embassy in Cuba and a Cuban embassy here in the United States.  That shouldn’t be too difficult, given the fact that we already have a very significant Interests Section in Cuba.  So we have a presence there, but we are now going to transition that into an embassy.  So I can’t put an exact timeline on it because the discussions are just being initiated today, but the discussions are taking place with both Presidents having taken a decision to establish diplomatic relations.

The second question was Helms-Burton.  Look, we start from the premise that -- the President does -- that the collective policy known as the embargo hasn’t worked, so we support efforts to remove those restrictions.  However, we understand that Congress is unlikely to take those steps in the immediate future.  So what we’re doing today is acting within the boundaries of the law to substantially increase travel, investment, commerce with Cuba through what the President can do.  At the same time, we’d encourage members of Congress to look at what they can do to support the direction the President has set today.

And again, our belief is that -- as with the family travel and remittances -- it will become evident that there are benefits in this type of engagement, and that already there is support in Congress on a bipartisan basis for a new approach.  But there’s also strong opposition.  So there will be a debate that takes place.  But we believe that the utility of these policy changes will become evident and will hopefully create greater momentum for legislative action going forward.

I’d also note that attitudes have been changing.  The Cuban American population, particularly younger generations of Cuban Americans have increasingly supported greater openness.  That's something that President Obama personally experienced in his contacts with Cuban Americans and in his travels to places like Florida and New Jersey and in the 2008 and 2012 campaigns.  So there’s been a continued evolution of public opinion, of opinion in the Cuban American community. 

But if you look at the constituency for this type of change, it involves many different elements of American society:  Cuban Americans; the Catholic Church has been very supportive; the U.S. business community has been very supportive of the type of changes that we're announcing today.  So again, we believe that there is a substantial constituency and multiple constituencies for this type of change.  And that too will shape the dynamic in Congress going forward.

Next question.

Q    Hey, guys, thanks for doing the call.  Just wondered if you could follow up on the Congress question.  Do you know if the President has talked to the new Republican leadership about this and asked them for anything in terms of a timeline on moving forward on lifting the embargo?

And then, I’m also curious -- there’s been a lot of reporting from some of my colleagues on some USAID programs that have been pretty controversial in Cuba.  Does that factor into these discussions at all?  And is Raj Shah’s decision to leave the administration part of this negotiation?

SENIOR ADMINISTRATION OFFICIAL:  So on your first question, Julie, the President has had a number of conversations with members of Congress leading up to this decision.  And he and other administration officials have briefed multiple members of Congress, including the leadership and key committee members and key members who focused on Cuban American relations.

Again, we're not focused today on legislative action; we're focused on what the President can do.  So he’s not sought to initiate any process with respect to the lifting of the embargo.  Again, I think he’s signaling with the actions he’s taking today that he does not think that policy has succeeded, and we’d welcome efforts in Congress to end those restrictions.  But we're not focused today on calling on Congress to take a particular action.  We're focused on communicating this new direction for U.S. policy.

I’d also note that in terms of the recovery of Alan Gross, we had Senator Flake, Senator Leahy and Congressman Van Hollen travel on the plane to get Alan.  And that's indicative of bipartisan support in Congress for not just Alan’s recovery, but for the types of changes that we have announced today.  Alan will also be greeted at the airport by a group of members of Congress.

And I’d like to thank really a broad group of members of Congress who have advocated for Alan’s release, but also for these types of changes we're announcing.

With respect to USAID, Raj’s departure had absolutely nothing to do with this.  He had long planned to leave around the end of this year.  We’ve known that for some time now.  So it’s merely a coincidence of timing.  Raj, by the way, has done extraordinary work as USAID Director and we’ll certainly have more time to honor his contributions.

With respect to the democracy programming, it did factor into the discussions.  The Cubans do not like our democracy programming.  They consistently protest those initiatives, not just in our channel, but in other diplomatic engagements with the United States. 

Again, we made clear that we’re going to continue our support for civil society for the advancement of our values in Cuba.  So really, that was an issue of difference that we will continue to have with Cuba, and we fully expect them to raise those issues just as we will raise issues with the Cubans about democracy and human rights.  However, we’re going to do that through a normal relationship.  We’re going to do that through our embassy in Havana.  We’re going to do that through contacts between our various agencies.

This does not need to be a relationship that is frozen in time.  If there is any U.S. foreign policy that has passed its expiration date, it is the U.S.-Cuba policy.  And what we’re focused on today is turning the page to a new chapter where we’ll be more able to raise directly with the Cubans our concerns, and, frankly, they’ll be more able to directly raise with us their concerns.  And frankly, that can avert hopefully the type of scenario we had with Alan Gross.

Q    Thanks.  Just briefly, could you talk about the timing of the Pope’s letter?  And then also, could you give a little bit more color about the upcoming OAS Summit and how much of a -- how awkward the existing U.S. policy would have been, how much pushback there would have been?  Would the President not have even been able to attend that summit, or what would that have been like had you not made this change?

SENIOR ADMINISTRATION OFFICIAL:  Good questions there.  The letter followed the President’s meeting with Pope Francis.  So they discussed these issues.  I think Pope Francis got a sense that President Obama was contemplating these types of changes.  We had already initiated discussions with Cuba, but Pope Francis then decided to make a personal appeal, which is very rare.  We haven’t received communications like this from the Pope that I’m aware of other than this instance.

And so he sent that letter directly to President Obama, and separately he communicated through a letter directly to President Castro early this summer following the meeting.  And that gave I think greater impetus and momentum for us to move forward.  And then of course, the Vatican hosted the two delegations, and they were the only government, I should note, that participated in these discussions.  Canada hosted talks, but when we met at the Vatican with the Cuban side, Vatican officials were in that meeting, and so they were able to participate and express their support for these steps.

With respect to the Summit of the Americas, it is a huge burden, if not an albatross, on our relations in the hemisphere.  The last Summit of the Americas, instead of talking about the things that we were focused on -- exports, counter-narcotics, citizen security -- we spent a lot of time talking about U.S.-Cuba policy.  And frankly, any of you who cover the hemisphere know that a key factor in every bilateral relationship we have -- including with our closest friends in the hemisphere -- is when are you going to change your Cuba policy. 

And so we believe that this substantially opens the door for the United States in the hemisphere.  This could be a transformative event for the United States in Latin America, and I think that will be a very positive aspect of this policy.  And frankly, for us, it’s not just about Cuba, it’s about Latin America broadly.

I would also add that, having taken these steps, we’ll also be saying to our friends in the hemisphere that we all need to be raising human rights with the Cuban government; that, frankly, there will no longer be this focus on American policy.  We’ve changed that.  And now we can focus on discussing issues we care about and that includes human rights.  So we believe that there’s opportunity in that respect, as well.  And the summit in Panama will be an opportunity to advance those discussions. 

But again, we believe that this is going to be a very important issue in terms of increasing our engagement in Latin America, and it positions the United States to advance our interests and our values more effectively without us being the issue, without our Cuba policy consistently being the issue. 

Just one additional in terms of international fora.  There’s the annual vote on whether or not the U.S. embargo should be lifted at the United Nations.  That took place earlier this year.  I believe the vote was something along the lines of 192 to 2.  I think we were joined by Palau in that vote.  The rest of the world has gone from this set of policies, and I think this will be good for the United States and not just the hemisphere, but in the world and in international fora generally. 

Next Question.

Q    Hello, yes, thank you for doing this.  I was wondering if in the past, Congress, and especially led by Cuban American lawmakers, have (inaudible) at this by the Obama administration to ease restrictions on travel and remittances.  I was wondering if you reached out to them and what has been their response in terms of all these new efforts being announced today.  And also, can you confirm that, in fact, there was a swap -- because I’ve seen media reports that Alan Gross’s freedom was not a swap, so can you clarify that please?  And thank you so much for doing this again.

SENIOR ADMINISTRATION OFFICIAL:  Yes, no I'm happy to clarify that.  There was a swap for the three Cubans in exchange for the U.S. intelligence asset who’s been detained in Cuba for nearly 20 years.  That was a swap.  Alan Gross was not a part of that exchange because he’s not an intelligence agent, but the Cuban government took the decision to release Alan Gross on humanitarian grounds.  That’s the basis for their decision to release Alan.  So it's a swap -- three Cubans who were intelligence assets for Cuba and who have been imprisoned here in the United States for over 15 years for the U.S. intelligence asset who’s been imprisoned in Cuba.  And then Alan Gross was released concurrently this morning as a humanitarian step by the Cuban government.

With respect to Cuban American members of Congress, look, we respect the passion of those who have been advocates for change in Cuba.  We recognize that some members of Congress, including some Cuban American members of Congress, will strongly disagree with elements of what the President is announcing today.  But this is going to be a continued dialogue, and our point is going to be that we’re taking these steps because we care about the same things.  We care about the Cuban people.  We care about human rights.  And we believe that the current approach isn’t working and that a policy of engagement is going to be more effective.

However, as we engage Cuba, as we establish an embassy, as we prepare for the Summit of the Americas, we want the Cuban American community broadly to be partners in setting the agenda and communicating to us what we need to be concerned about.  But with respect to the President’s authority, we are acting within the limits that have been set by Congress but we believe and are certain, and we’ve done the appropriate reviews inside the government, that the President has the authority to announce the steps that he did today. 

For instance, diplomatic relations -- that’s an area that falls fully within the purview of the President.  The SSOT list, we’ll make a determination based on the facts.  And then these regulatory changes that will facilitate greater commerce and travel, we are acting within the boundaries that have been set and so we’re confident in our ability to take these steps.

We’ve got time for a couple more questions.

Q    Regarding the trade portion of this plan, how would you characterize how open trade will be with Cuba?  Is there any estimate on the potential market for U.S. exporters?  And then, finally, what about the Cuban side?  Are we going to be able to buy Cuban cigars?

SENIOR ADMINISTRATION OFFICIAL:  I’ll turn this to my Treasury and Commerce colleagues to start.

SENIOR ADMINISTRATION OFFICIAL:  This will open up certain kinds of products that will be mainly used by the private sector within Cuba, which only recently has initiated and is growing.  It will be residential construction, goods used by private sector Cuban entrepreneurs such as restaurants, barber shops, small business operators, and agricultural equipment for small farmers.  So it is designed to strengthen civil society and the private sector.

In addition, there is a focus on telecommunications equipment and facilitating exports of goods and services that will enable the country to improve its telecom and IT infrastructure.

SENIOR ADMINISTRATION OFFICIAL:  To give you some round numbers for dollar values, last year, in 2013, we at Commerce issued licenses for almost $300 million worth of commercial sales for medical products alone and about $3 billion of agricultural exports.  So just in those two areas that have already been authorized, there are some substantial potential.

SENIOR ADMINISTRATION OFFICIAL:  And the regulatory changes being announced today will be implemented through new regulations, but they will facilitate the ability to do exports by making the opportunity to do that more general and have more general authority to do that, rather than having to apply for specific licenses each time.  

SENIOR ADMINISTRATION OFFICIAL:  This is from the Treasury Department.  I would just respond to the final part of the question.  Authorized travelers to Cuba we allow to return with $400 worth of general goods and up to $100 of alcohol or tobacco products.  That can include cigars.  But that authorization is for personal consumption; that is not for resale or commercial purposes. 

SENIOR ADMINISTRATION OFFICIAL:  I would just add one more piece to that, which is that existing authorized trade for food and medicine, but particularly for agricultural goods, is going to be facilitated by a number of the measures that are going to be undertaken by the Department of the Treasury, particularly with respect to the cash and advance rule for agricultural sales.

Q    I’m not quite sure you fully answered Angela’s question about buying Cuban cigars.  Not to take it to that level, but there are some of us who would probably like that answered question -- that question answered.  It sounds like from what you’re saying that the importing of Cuban goods is still going to be restricted by the embargo.  And is the travel ban on American travel to Cuba being lifted here, or is that still being constrained by the embargo?  And I just wanted to know if Fidel Castro was involved.  Was Fidel Castro involved in any of these conversations that led up to today’s announcement?  Thanks very much for doing the call.

SENIOR ADMINISTRATION OFFICIAL:  Jim, I’ll start.  And again, I know you’re a proud Cuban American.  With respect to the travel, we cannot completely lift the travel ban because of the legislation.  However, what we’re doing is we’re authorizing as much travel as we possibly can within the constraints of legislation.  So every kind of travel that can possibly be licensed we are now permitting.  And so that should lead to a significant ability for Americans to travel to Cuba for the broad variety of purposes that were outlined earlier in the call.

So the ban has to be lifted by Congress, but the President is doing everything that he can with his authority to facilitate travel within the limitations of the law.  And we believe that that will lead to a significant increase in travel.  We’ve already seen Americans take advantage of the more limited licensing that has facilitated travel to Cuba.  With these steps, there is a significant broadening to include every kind of travel that is licensable under the law, and that should lead to an increase in Americans traveling.

Fidel Castro was not involved in the discussions.  President Raul Castro obviously was the individual on the Cuban side who was authorizing his team and the person who communicated with President Obama yesterday.  The Cuban side can speak to their decision-making process.  But clearly, Raul Castro is the President of Cuba now and is the decision-maker on these steps.

And then I’ll turn it over to my colleagues on your question.  But again, you are permitted to purchase tobacco products, including cigars up to a certain amount, so that may be the answer you're looking for.  But I’ll turn it over to my colleagues.

SENIOR ADMINISTRATION OFFICIAL:  Yes, so that amount is $100 if you're an authorized traveler.  So if you're going under any of the categories that my colleague and I have outlined, you can purchase up to $100 of tobacco products to bring back to the United States -- but not for resale -- for consumption or for personal use.

With respect to the travel categories, I do want to just correct a misstatement I made at the very outset in my opening remarks.  There have been two prior relaxations by President Obama with respect to travel:  2009 generally focused on family travel, and 2011 focused on a number of other categories, including educational, cultural, religious, and journalistic activity.  And I had put the 2011 date on family travel.  I just wanted to be sure I corrected that.

MS. MEEHAN:  Thank you, everyone.  With that, our call is concluded.  Just to reiterate the ground rules on -- the embargo on this call is now lifted.  The embargo on the White House factsheet is also now lifted.  But you can only quote the officials on this phone call on background and attributed to senior administration officials, rather than by name.

Thank you very much.  Have a great day.

END

11:02 A.M. EST

Via Telephone

10:02 A.M. EST

MS. MEEHAN:  Hi, everybody.  Thanks very much for joining this background call on policy changes to Cuba.  This call will be embargoed until the end of the call.  We will lift the embargo at the end of the call, so you cannot report anything that you hear on this call until the call is concluded.  At that point, you may quote officials on the call as senior administration officials only, not by name.  We will also lift the embargo on the factsheet that the White House released this morning at the end of this call.

So again, at the end of the call you’re welcome to report on background anything you hear on this call as well as quote from the factsheet, but not before this call is over.

We have seven senior administration officials with us today from across the interagency.  And with that, I will turn it over to senior administration official number one.

SENIOR ADMINISTRATION OFFICIAL:  Great.  Thanks, everybody, for joining the call.  I wanted to start by walking you through the overview of what we will be announcing today, and then my colleagues can fill in some of the details. 

First of all, these steps will be the most significant changes to our Cuba policy in more than 50 years.  The President, when he came into office, was committed to changing a policy that we felt had failed to advance our interests for the last several decades by promoting greater openness with Cuba and facilitating greater access for the Cuban people to economic opportunity and to the type of relations with the United States that can ultimately empower the Cuban people.

In that vein, the President, as you know, authorized, for instance, Cuban Americans to be able to travel to the island and to send remittances to their family on the island.  We received very positive feedback from those initial policy changes.  And the President was committed to pursuing additional steps through his time in office.

However, we had a significant impediment to our ability to pursue additional policy changes with the imprisonment -- wrongful imprisonment of Alan Gross, a USAID subcontractor in Cuba, for over five years now.

So, first, let me walk you through Alan’s release and an exchange of intelligence assets that took place today before getting into the policy changes.  Importantly, we did pursue a swap, an exchange of intelligence assets, including the return of the three Cubans who remained jailed in the United States from the so-called Cuban Five Wasp Network.  They were returned to Cuba this morning.  In exchange, the Cubans released a U.S. intelligence asset who has been imprisoned in Cuba for nearly 20 years.  The identity of this asset will remain secret, but we can provide you with some information about his importance to the United States. 

So this individual was responsible for some of the most important intelligence and counterintelligence prosecutions that the United States has been able to pursue in recent decades.  For instance, he provided the information that led to the identification and conviction of Defense Intelligence Agency senior analyst, Ana Belen Montes; former Department of State official, Walter Kendall Myers and his spouse, Gwendolyn Myers; and members of the Wasp Network in Florida, including the so-called Cuban Five.  So again, this intelligence asset, who was a part of this exchange, provided information that led to the prosecution in part of the Cuban Five.  So his return was particularly important to us.

At the same time, Cuba agreed to release Alan Gross on humanitarian grounds.  And Alan was flown back -- is currently flying back to the United States with his wife, Judy.  Again, we believe Alan was wrongfully imprisoned, and we overwhelmed with joy that Alan will be reunited with his family, particularly in this holiday season of Hanukkah. 

So again, the exchange was the three Cubans who have been imprisoned in the United States for the U.S. intelligence asset who’s been imprisoned in Cuba for nearly 20 years.  And then the Cuban government released Alan Gross on humanitarian grounds.

With that issue resolved, the President is now going to be announcing very significant changes to our Cuba policy.  What we are doing is beginning the normalization of relations between the United States and Cuba.  And I’ll just give the overview of these steps, and then my colleagues can fill in some details.

First, we will be immediately initiating discussions with Cuba to reestablish diplomatic relations that have been severed since 1961.  And so we will enter into discussions with Cuba about reestablishing an embassy in Havana, and we will be initiating high-level contacts and visits with Cuba.  We do so in the belief that there are significant issues where we’d benefit from cooperation, like our current efforts to fight Ebola, where Cuba has dispatched hundreds of health care workers to Africa, but also issues like migration, counterterrorism, drug trafficking, disaster response, where practical cooperation can serve the interests of the United States and Cuba.

At the same time, we fully expect that we’ll continue to have strong differences, particularly on issues related to democracy and human rights.  The United States will continue to promote our values.  We will continue to support civil society in Cuba.  We’ll continue our democracy programming. 

So, again, the fact that we are reestablishing diplomatic relations is, frankly, a better way in our view of advancing our interests and our values.  President Obama has long believed that engagement is a better tool than isolation, and nowhere is that clearer than in Cuba where we have seen a policy of isolation fail for the last 50 years in advancing American interests and values on the island.

Second, the President has instructed Secretary Kerry to review Cuba’s designation as a state sponsor of terrorism.  So that process will be initiated and has to go through a formal review so that we are guided by the facts and the law in making that determination.

Third, we are taking a number of steps to significantly increase travel, commerce, and the flow of information to and from Cuba.  And we do this on the premise that it does not make sense to impose restrictions on the American people and on American businesses that disadvantage the freedom of Americans to travel or the ability of U.S. businesses to operate in Cuba.  And so those -- the steps that we are taking will facilitate greater activity for U.S. persons and businesses, but also, importantly, we believe that by further opening up to Cuba, we will be able to promote openness and reform in Cuba. 

There have been some incremental reforms taken in Cuba in recent years, but clearly we believe that more needs to be done.  Again, however, we believe that openness is a better policy than isolation in advancing the things that we care about in Cuba.  So there will be greater people-to-people engagement and travel opportunity.  There will be the ability for the American people to use credit and debit cards when they travel to Cuba.  We’ll be increasing significantly the amount of money that can be sent to Cuba through remittances.  We will, again, be facilitating increased transactions, including U.S. financial institutions being allowed to open accounts in Cuban financial institutions.  And we will be authorizing increased telecommunications connections between the United States and Cuba.  All of these policy changes my colleagues can go through in greater detail.

In addition, the United States will be participating at the Summit of the Americas in Panama next year, and Cuba will be participating as well.  We are not objecting to Cuba’s participation at the summit.  We are making clear that we believe that democracy and human rights have to be on the agenda at the summit; that civil society has to be included at the summit.

But I would note that in all of his engagements with Latin American leaders, the President has consistently heard of the importance of taking the kind of steps that he is taking today, which we believe will be strongly welcomed across the hemisphere.

Let me just go through a couple other points before turning to my colleagues. 

In terms of how we got to where we are today, the President authorized a high-level channel of communication with the Cuban government last spring.  The individuals on the U.S. side who participated in that channel are Ben Rhodes and Ricardo Zuñiga, the Senior Director for Western Hemisphere here at the National Security Council.

There were multiple meetings with Cuban officials that took place in third countries; I’ll just identify the two principal ones.  Canada hosted the majority of these meetings, and I want to thank the Canadian government for providing its good offices and hosting our discussions with the Cuban government.  Canada did not participate in the substance of the discussions, but they were indispensable in providing a venue and support for these efforts.

Second, and very importantly, the Vatican played a role in this as well.  Pope Francis personally issued an appeal through a letter that he sent to President Obama and to President Raul Castro, calling on them to resolve the case of Alan Gross and the cases of the three Cubans who have been imprisoned here in the United States, and also encouraging the United States and Cuba to pursue a closer relationship.  The Vatican then hosted the U.S. and Cuban delegations where we were able to review the commitments that we’re making today in terms of the exchange of assets, in terms of the release of Alan Gross, and also in terms of some of the other changes in our relations that we’re pursuing.

I’d also note that the Cuban government has made some additional decisions.  These are sovereign decisions of the Cuban government that we have welcomed.  Specifically, the Cuban government agreed to release 53 prisoners whose cases we brought to their attention.  These are individuals that we believe are political prisoners, and we welcome very much their release.  A number of those individuals have already been released, and we expect to continue to see those releases going forward. 

The Cuban government also made it known to us that it is going to be taking steps to increase internet connectivity for its citizens.  This would obviously be a welcomed step.  And with the additional authorization for U.S. telecommunications companies to operate in Cuba, combined with Cuba’s willingness to pursue greater internet connectivity, we believe that the Cuban people will be further empowered.

Lastly, the Cubans are increasing their engagement with the United Nations and with the International Committee of the Red Cross to have discussions about certain conditions within Cuba.  This is an issue that we have consistently encouraged the Cubans to take action on, and so there will be additional visits to come for those two institutions.

Finally, I’d note that President Obama spoke yesterday with President Raul Castro of Cuba to review and finalize the steps that were taken today in terms of the release of the three Cubans in exchange for our intelligence asset and for the release of Alan Gross.  And the President also made clear his intent to pursue these policy changes, but also to continue our advocacy for human rights in Cuba.

With that, I’ll turn it over to my State Department colleague to give a little bit more detail on the State pieces of this.

SENIOR ADMINISTRATION OFFICIAL:  Thank you very much.  Let me just go through a couple of things from the State Department’s perspective that are our responsibility, or our emphasis.

On diplomatic relations let me just say a couple of things.  Obviously, diplomatic -- full diplomatic relations are something that get worked out between two governments.  We’ve agreed to move towards full diplomatic relations, reestablishment of them.  They were broken in 1961, as my colleague mentioned.

As you probably all know, we did not have any presence in Cuba from 1961 until 1977, when we established the Interests Section.  We’ve been under the protection of the Swiss the entire time.  But we will end that relationship and move towards having an embassy and the full normal diplomatic relations.  But those things get worked out between the two governments, and they will -- we will proceed to do so in conjunction with the Cubans.  And we don't know exactly what that timeline will be, but we’ll move towards that as quickly as we can.

The other part of this that is within the State Department’s purview is the review that the President has asked for of the listing of Cuba on the state sponsor of terrorism list.  Cuba has been on that list since 1982.  And we will undertake that review quickly.  But there are many steps that are in the law that we must undertake, and so we will do that, including the consultations with the intelligence community and other steps in the law before we undertake the recommendation that will be made at the end of that process.

Let me also emphasize that I think what my colleague said -- let me emphasize, as well, that it’s important to note that this is being done because we believe the policy of the past has not worked and because we believe that the best way to bring democracy and prosperity to Cuba is to do so via a different kind of policy.  But that does not for a moment believe that we're lessening our emphasis on human rights, on democracy, on the importance of civil society.  Quite the contrary.  In fact, our emphasis on human rights will be just as strong and we believe more effective under this policy.  We will engage directly with the Cuban government on human rights. 

And as an example of that, our principal officer in Havana, Jeff DeLaurentis, will be meeting with members of Cuban society and dissidents later today to walk them through the President’s initiatives of today, and to emphasize to them, as well, that their efforts on behalf of democracy and human rights in Cuba not only won’t be forgotten in these initiatives, but will, in fact, take center stage and a new emphasis, and we believe a new -- get new wind, if you will, by this approach.

Let me also say that one of the things you all know is that our policy and the way we’ve gone about it on Cuba has been a severe problem -- or we’ve been severely criticized for it by most countries, if not all, in this hemisphere.  You may remember that in 2012, when the President attended the Summit of the Americas in Cartagena, this was one of the issues that was universally criticized by countries around the hemisphere, our policy on Cuba.

We believe that this policy shift and the way we will engage the Cuban government in support of democracy and prosperity will greatly help our policy initiatives around the hemisphere and our influence throughout the hemisphere on things that are important to us, including democracy and human rights.  And we expect strong support from governments throughout the hemisphere, both for this policy change and for efforts to support and promote civil society and human rights in Cuba.  So we expect those efforts to be more effective under this policy than they’ve been in the past. 

Let me stop with that.  Thank you.

MS. MEEHAN:  Thank you.  And now we’ll turn it over to our colleague at the Department of Treasury.

SENIOR ADMINISTRATION OFFICIAL:  Thank you and good morning, everyone.  As my colleague noted, the changes that the President will be announcing today aimed at advancing the administration’s policy on empowering the Cuban people, promoting political, social and economic reform in Cuba, and will also pave the way for enhanced commerce and trade between the United States and Cuba in certain areas.  There is a slew of changes that the Office of Foreign Access Control, or OFAC, will be implementing through amendments to our Cuban assets control regulations to give effect to these changes, and I expect to see those changes made in the coming weeks. 

To give you a little bit of detail, in 2011 we took steps to ease travel restrictions, in particular with respect to Americans’ ability to visit family in Cuba, generally licensing such travel.  We will be easing travel in the coming weeks across all of the 12 categories for which OFAC has historically issued licenses.  Those categories are family visits; official business of the U.S. government, foreign governments and international organizations; journalistic activity; professional research and professional meetings; educational activities, religious activities, public performances, workshops, and other competitions and expeditions; support for the Cuban people; humanitarian projects; activities of private foundations or research or educational institutes; export-import of the transmission of information or informational materials, as well as certain export transactions that may be considered for authorization under the existing guidelines. 

Under these new forthcoming regulations, travel to Cuba for tourist activities, which Congress has defined as activities outside of these 12 categories, will remain prohibited.  Concerning remittances, we had already eased in 2009 restrictions on non-family remittances to allow individuals in the United States to send up to $500 to any Cuban national, with the exception of Cuba government or communist party officials per quarter.  The President will be announcing that we will be increasing that amount to $2,000 per quarter.  Notably, donated remittances for humanitarian projects, support for the Cuban people, and development of private businesses in Cuba will be generally licensed with no limitation on amount. 

Another very important area in which we will be easing restrictions is increasing communication and access to communication technology for the Cuban people.  Telecom and Internet linkages between the U.S. and Cuba, including infrastructure related to those linkages in Cuba, will be authorized without requiring a specific license from OFAC.  These steps build upon efforts initiated in 2009 to facilitate the increase flow of information to and from the island. 

The regulatory definition of cash in advance, a provision that regulates payment for the export of agricultural and medical goods from the U.S. to Cuba, will be changed to a cash before transfer of title definition.  This will allow U.S. exporters to be more competitive with respect to their exports to Cuba, and will generally permit the export of agricultural products to Cuba so long as payment is received prior to the goods arrival at a Cuban port of entry.

U.S. travelers to Cuba will be permitted to import into the United States merchandise as they bring back with them with a value of up to $400 per person.  Included in this new provision will be an allowance of up to $100 per person of alcohol or tobacco products.  I also want to note that we will be issuing new regulations to allow U.S. banks to establish correspondent accounts with Cuban banks.  U.S. financial institutions will also be authorized to facilitate the use of U.S. credit and debit cards by travelers in Cuba. 

These changes will ease the flow of remittances to, and authorize transactions with, the Cuban people.  This also means that those who do trade with Cuba -- for example, in the areas of agricultural medicine and medical products, telecommunications, et cetera -- will have a much easier time doing so, and the financial easing will facilitate a number of the changes that I outlined above.

As I noted earlier, the regulatory amendments are currently in development and you will see these changes in the coming weeks, along with detailed guidance.  These changes will not take effect, however, until the new regulations have been published, and we will take every measure possible to keep everyone apprised of developments.  Thank you.

SENIOR ADMINISTRATION OFFICIAL:  Great.  We’ll go to Commerce now.

SENIOR ADMINISTRATION OFFICIAL:  Hi, Secretary Pritzker strongly supports the President’s initiative to spur long overdue economic and political reform in Cuba.  She believes that commercial diplomacy initiatives outlined today will strengthen human rights and the rule of law.  She believes that economics and more commercial engagement have the power to change lives for the better, and she looks forward to the opportunity to visit -- to do a commercial diplomacy visit to Cuba as part of the President’s initiative to encourage positive change in Cuba.

Specifically, the Commerce Department will be issuing regulations that will authorize for export certain building materials for private residential construction, goods for use by private sector Cuban entrepreneurs, and agricultural equipment for small farmers.  These changes will make it easier for Cuban citizens to have access to lower-priced goods to improve their living standards, gain greater economic independence from the state, and overall develop the private sector in Cuba.

In addition, regulations also will be issued to facilitate export of telecom devices equipment, including related hardware, software and services in order to enhance communications to and from Cuba and among the Cuban people.

Q    Hi, guys.  Thanks for doing the call.  I wonder if, one, you could talk a little bit more about President Obama’s call with President Castro yesterday, how long it lasted and what else was discussed.  Is there any plan for them to talk again in the future?  And then, secondly, on these talks that have taken place since the spring, mostly in Canada, could you elaborate a little bit more on that, how that took place?  And was there a key moment -- what happened that made today happen?  In other words, was there a meeting last week?  What was the final critical stage that pulled all this together?

SENIOR ADMINISTRATION OFFICIAL:  Thanks, Peter.  On the first question, the call yesterday I think lasted between 45 minutes and an hour, and it was obviously the first engagement at the presidential level with Cuba since the Cuban Revolution.  And President Obama went through the swap and the release of Alan Gross, and then discussed the changes that he would be announcing today.  They discussed the potential for cooperation on issues like Ebola, issues in the hemisphere, issues like counterterrorism and counter-narcotics.  At the same time, the President did underscore that we would continue our support for democracy and human rights in Cuba.

Again, President Castro reviewed the steps that Cuba is taking, and I'll leave it -- I believe President Castro is making a statement later today, so I won't go into too much detail about what he said.  We tend not to do that with calls with foreign counterparts.  But suffice to say, they were summing up the work that's been done through the channel over the course of the last -- over a year now, as well as looking forward to the announcements today, while noting that we understand we're going to continue to have differences.  So this change doesn’t negate the fact that the U.S. and Cuba are going to have strong differences on the Cuban political model and on aspects of foreign policy, both U.S. and Cuban foreign policy.  So they had areas of agreement and areas of difference that they went through on the call.

With respect to the channel, I could give a couple more details.  This was initiated when the President authorized exploratory discussions with Cuban officials in the spring of 2013.  We have multiple ways of communicating with Cuba, through our Interests Section in Havana and those here in Washington, and we interacted -- our missions in New York.  So we have the ability to pass messages, and so we initiated this contact with the Cuban government last spring.

The first face-to-face discussions with the Cubans took place in June of 2013 in Canada.  And again, Canada was the principal venue for a series of discussions that took place between June of 2013 and November of this year. 

In terms of critical meetings or junctures, I'd just note a couple things.  One, it was very important to us that we recover this intelligence asset for a couple of reasons.  Obviously, we’ve wanted Alan Gross to be released for five years now.  We rejected the notion that Alan Gross was an intelligence asset, so we were not going to engage in a swap of intelligence assets that involved Alan Gross directly.

Number two, this intelligence asset did heroic work for the United States at great risk to himself, enabling the prosecution of a number of individuals, including the Cuban Five.  And he’s been in a Cuban prison for nearly 20 years, and so our ability to recover him was an important principle for us in those discussions.  But also, this was an opportunity to review broader aspects of our relationship, areas of agreement and disagreement, to get a sense from Cuba of the steps that they are contemplating taking, and the release of a certain number of prisoners was important to us, but also to explore with them areas of practical cooperation and the types of steps that President Obama is announcing today.

An important meeting, and I guess where you could say this all was finalized, was hosted by the Vatican.  So senior Vatican officials received both the U.S. and Cuban delegations this fall, and essentially the Vatican was a venue for the U.S. and Cuban sides to present their commitments and to finalize the types of steps that are being taken, including obviously the prisoner transfers.  And the support of Pope Francis and the support of the Vatican was important to us, given the esteem with which both the American and Cuban people hold the Catholic Church and, in particular, Pope Francis, who as you know has a substantial history in Latin America -- the first Pope to be chosen from Latin America.  So President Obama has enormous respect for Pope Francis and his personal engagement in this was important to us.

When President Obama met with Pope Francis, for instance, earlier this year, Cuba was a topic of discussion that got as much attention as anything else that the two of them discussed.  So I would say that particularly the exchange and transfer of prisoners was finalized in that meeting at the Vatican, but we also were able to review the steps that we’d each be taking with the Vatican, including the normalization of relations between the countries and the establishment of diplomatic relations.  And the Vatican welcomed that news.

I’d just note that there were no meetings that took place in either Cuba or the United States in this channel, and I’d also just note that we are not going to characterize the Cuban participation just because that’s our principle in terms of these types of negotiations.  That’s what we did with respect, for instance, to the work that Jake Sullivan and Bill Burns did with the Iranian side in the lead-up to the Joint Plan of Action last year.

So with that, we’ll move to the next question.

Q    Can you talk about the timeframe or the opening end of this?  Does this have to follow the sort of the (inaudible) to what happened with Vietnam?  When would you expect to actually have restoration of diplomatic relations?  And will the President be trying to overturn Helms-Burton?

SENIOR ADMINISTRATION OFFICIAL:  Thanks, Andrea.  So the decision has been made to establish diplomatic relations by both President Obama and President Castro.  So we’ve decided to establish an embassy, we’ve decided to restore diplomatic relations.  So it’s, frankly, just a matter of going through the process -- logistical and otherwise -- of formalizing that decision.  So I can’t put an exact timeline on it, but we expect to do it as soon as possible.  But for your purposes, I mean, I think you can characterize this as a decision that has been made that will be taken. 

And now, with the announcement today, what that will do is set in motion discussions that can take place between the Department of State and then reps in Cuba to resolve any specifics related to the establishment of a U.S. embassy in Cuba and a Cuban embassy here in the United States.  That shouldn’t be too difficult, given the fact that we already have a very significant Interests Section in Cuba.  So we have a presence there, but we are now going to transition that into an embassy.  So I can’t put an exact timeline on it because the discussions are just being initiated today, but the discussions are taking place with both Presidents having taken a decision to establish diplomatic relations.

The second question was Helms-Burton.  Look, we start from the premise that -- the President does -- that the collective policy known as the embargo hasn’t worked, so we support efforts to remove those restrictions.  However, we understand that Congress is unlikely to take those steps in the immediate future.  So what we’re doing today is acting within the boundaries of the law to substantially increase travel, investment, commerce with Cuba through what the President can do.  At the same time, we’d encourage members of Congress to look at what they can do to support the direction the President has set today.

And again, our belief is that -- as with the family travel and remittances -- it will become evident that there are benefits in this type of engagement, and that already there is support in Congress on a bipartisan basis for a new approach.  But there’s also strong opposition.  So there will be a debate that takes place.  But we believe that the utility of these policy changes will become evident and will hopefully create greater momentum for legislative action going forward.

I’d also note that attitudes have been changing.  The Cuban American population, particularly younger generations of Cuban Americans have increasingly supported greater openness.  That's something that President Obama personally experienced in his contacts with Cuban Americans and in his travels to places like Florida and New Jersey and in the 2008 and 2012 campaigns.  So there’s been a continued evolution of public opinion, of opinion in the Cuban American community. 

But if you look at the constituency for this type of change, it involves many different elements of American society:  Cuban Americans; the Catholic Church has been very supportive; the U.S. business community has been very supportive of the type of changes that we're announcing today.  So again, we believe that there is a substantial constituency and multiple constituencies for this type of change.  And that too will shape the dynamic in Congress going forward.

Next question.

Q    Hey, guys, thanks for doing the call.  Just wondered if you could follow up on the Congress question.  Do you know if the President has talked to the new Republican leadership about this and asked them for anything in terms of a timeline on moving forward on lifting the embargo?

And then, I’m also curious -- there’s been a lot of reporting from some of my colleagues on some USAID programs that have been pretty controversial in Cuba.  Does that factor into these discussions at all?  And is Raj Shah’s decision to leave the administration part of this negotiation?

SENIOR ADMINISTRATION OFFICIAL:  So on your first question, Julie, the President has had a number of conversations with members of Congress leading up to this decision.  And he and other administration officials have briefed multiple members of Congress, including the leadership and key committee members and key members who focused on Cuban American relations.

Again, we're not focused today on legislative action; we're focused on what the President can do.  So he’s not sought to initiate any process with respect to the lifting of the embargo.  Again, I think he’s signaling with the actions he’s taking today that he does not think that policy has succeeded, and we’d welcome efforts in Congress to end those restrictions.  But we're not focused today on calling on Congress to take a particular action.  We're focused on communicating this new direction for U.S. policy.

I’d also note that in terms of the recovery of Alan Gross, we had Senator Flake, Senator Leahy and Congressman Van Hollen travel on the plane to get Alan.  And that's indicative of bipartisan support in Congress for not just Alan’s recovery, but for the types of changes that we have announced today.  Alan will also be greeted at the airport by a group of members of Congress.

And I’d like to thank really a broad group of members of Congress who have advocated for Alan’s release, but also for these types of changes we're announcing.

With respect to USAID, Raj’s departure had absolutely nothing to do with this.  He had long planned to leave around the end of this year.  We’ve known that for some time now.  So it’s merely a coincidence of timing.  Raj, by the way, has done extraordinary work as USAID Director and we’ll certainly have more time to honor his contributions.

With respect to the democracy programming, it did factor into the discussions.  The Cubans do not like our democracy programming.  They consistently protest those initiatives, not just in our channel, but in other diplomatic engagements with the United States. 

Again, we made clear that we’re going to continue our support for civil society for the advancement of our values in Cuba.  So really, that was an issue of difference that we will continue to have with Cuba, and we fully expect them to raise those issues just as we will raise issues with the Cubans about democracy and human rights.  However, we’re going to do that through a normal relationship.  We’re going to do that through our embassy in Havana.  We’re going to do that through contacts between our various agencies.

This does not need to be a relationship that is frozen in time.  If there is any U.S. foreign policy that has passed its expiration date, it is the U.S.-Cuba policy.  And what we’re focused on today is turning the page to a new chapter where we’ll be more able to raise directly with the Cubans our concerns, and, frankly, they’ll be more able to directly raise with us their concerns.  And frankly, that can avert hopefully the type of scenario we had with Alan Gross.

Q    Thanks.  Just briefly, could you talk about the timing of the Pope’s letter?  And then also, could you give a little bit more color about the upcoming OAS Summit and how much of a -- how awkward the existing U.S. policy would have been, how much pushback there would have been?  Would the President not have even been able to attend that summit, or what would that have been like had you not made this change?

SENIOR ADMINISTRATION OFFICIAL:  Good questions there.  The letter followed the President’s meeting with Pope Francis.  So they discussed these issues.  I think Pope Francis got a sense that President Obama was contemplating these types of changes.  We had already initiated discussions with Cuba, but Pope Francis then decided to make a personal appeal, which is very rare.  We haven’t received communications like this from the Pope that I’m aware of other than this instance.

And so he sent that letter directly to President Obama, and separately he communicated through a letter directly to President Castro early this summer following the meeting.  And that gave I think greater impetus and momentum for us to move forward.  And then of course, the Vatican hosted the two delegations, and they were the only government, I should note, that participated in these discussions.  Canada hosted talks, but when we met at the Vatican with the Cuban side, Vatican officials were in that meeting, and so they were able to participate and express their support for these steps.

With respect to the Summit of the Americas, it is a huge burden, if not an albatross, on our relations in the hemisphere.  The last Summit of the Americas, instead of talking about the things that we were focused on -- exports, counter-narcotics, citizen security -- we spent a lot of time talking about U.S.-Cuba policy.  And frankly, any of you who cover the hemisphere know that a key factor in every bilateral relationship we have -- including with our closest friends in the hemisphere -- is when are you going to change your Cuba policy. 

And so we believe that this substantially opens the door for the United States in the hemisphere.  This could be a transformative event for the United States in Latin America, and I think that will be a very positive aspect of this policy.  And frankly, for us, it’s not just about Cuba, it’s about Latin America broadly.

I would also add that, having taken these steps, we’ll also be saying to our friends in the hemisphere that we all need to be raising human rights with the Cuban government; that, frankly, there will no longer be this focus on American policy.  We’ve changed that.  And now we can focus on discussing issues we care about and that includes human rights.  So we believe that there’s opportunity in that respect, as well.  And the summit in Panama will be an opportunity to advance those discussions. 

But again, we believe that this is going to be a very important issue in terms of increasing our engagement in Latin America, and it positions the United States to advance our interests and our values more effectively without us being the issue, without our Cuba policy consistently being the issue. 

Just one additional in terms of international fora.  There’s the annual vote on whether or not the U.S. embargo should be lifted at the United Nations.  That took place earlier this year.  I believe the vote was something along the lines of 192 to 2.  I think we were joined by Palau in that vote.  The rest of the world has gone from this set of policies, and I think this will be good for the United States and not just the hemisphere, but in the world and in international fora generally. 

Next Question.

Q    Hello, yes, thank you for doing this.  I was wondering if in the past, Congress, and especially led by Cuban American lawmakers, have (inaudible) at this by the Obama administration to ease restrictions on travel and remittances.  I was wondering if you reached out to them and what has been their response in terms of all these new efforts being announced today.  And also, can you confirm that, in fact, there was a swap -- because I’ve seen media reports that Alan Gross’s freedom was not a swap, so can you clarify that please?  And thank you so much for doing this again.

SENIOR ADMINISTRATION OFFICIAL:  Yes, no I'm happy to clarify that.  There was a swap for the three Cubans in exchange for the U.S. intelligence asset who’s been detained in Cuba for nearly 20 years.  That was a swap.  Alan Gross was not a part of that exchange because he’s not an intelligence agent, but the Cuban government took the decision to release Alan Gross on humanitarian grounds.  That’s the basis for their decision to release Alan.  So it's a swap -- three Cubans who were intelligence assets for Cuba and who have been imprisoned here in the United States for over 15 years for the U.S. intelligence asset who’s been imprisoned in Cuba.  And then Alan Gross was released concurrently this morning as a humanitarian step by the Cuban government.

With respect to Cuban American members of Congress, look, we respect the passion of those who have been advocates for change in Cuba.  We recognize that some members of Congress, including some Cuban American members of Congress, will strongly disagree with elements of what the President is announcing today.  But this is going to be a continued dialogue, and our point is going to be that we’re taking these steps because we care about the same things.  We care about the Cuban people.  We care about human rights.  And we believe that the current approach isn’t working and that a policy of engagement is going to be more effective.

However, as we engage Cuba, as we establish an embassy, as we prepare for the Summit of the Americas, we want the Cuban American community broadly to be partners in setting the agenda and communicating to us what we need to be concerned about.  But with respect to the President’s authority, we are acting within the limits that have been set by Congress but we believe and are certain, and we’ve done the appropriate reviews inside the government, that the President has the authority to announce the steps that he did today. 

For instance, diplomatic relations -- that’s an area that falls fully within the purview of the President.  The SSOT list, we’ll make a determination based on the facts.  And then these regulatory changes that will facilitate greater commerce and travel, we are acting within the boundaries that have been set and so we’re confident in our ability to take these steps.

We’ve got time for a couple more questions.

Q    Regarding the trade portion of this plan, how would you characterize how open trade will be with Cuba?  Is there any estimate on the potential market for U.S. exporters?  And then, finally, what about the Cuban side?  Are we going to be able to buy Cuban cigars?

SENIOR ADMINISTRATION OFFICIAL:  I’ll turn this to my Treasury and Commerce colleagues to start.

SENIOR ADMINISTRATION OFFICIAL:  This will open up certain kinds of products that will be mainly used by the private sector within Cuba, which only recently has initiated and is growing.  It will be residential construction, goods used by private sector Cuban entrepreneurs such as restaurants, barber shops, small business operators, and agricultural equipment for small farmers.  So it is designed to strengthen civil society and the private sector.

In addition, there is a focus on telecommunications equipment and facilitating exports of goods and services that will enable the country to improve its telecom and IT infrastructure.

SENIOR ADMINISTRATION OFFICIAL:  To give you some round numbers for dollar values, last year, in 2013, we at Commerce issued licenses for almost $300 million worth of commercial sales for medical products alone and about $3 billion of agricultural exports.  So just in those two areas that have already been authorized, there are some substantial potential.

SENIOR ADMINISTRATION OFFICIAL:  And the regulatory changes being announced today will be implemented through new regulations, but they will facilitate the ability to do exports by making the opportunity to do that more general and have more general authority to do that, rather than having to apply for specific licenses each time.  

SENIOR ADMINISTRATION OFFICIAL:  This is from the Treasury Department.  I would just respond to the final part of the question.  Authorized travelers to Cuba we allow to return with $400 worth of general goods and up to $100 of alcohol or tobacco products.  That can include cigars.  But that authorization is for personal consumption; that is not for resale or commercial purposes. 

SENIOR ADMINISTRATION OFFICIAL:  I would just add one more piece to that, which is that existing authorized trade for food and medicine, but particularly for agricultural goods, is going to be facilitated by a number of the measures that are going to be undertaken by the Department of the Treasury, particularly with respect to the cash and advance rule for agricultural sales.

Q    I’m not quite sure you fully answered Angela’s question about buying Cuban cigars.  Not to take it to that level, but there are some of us who would probably like that answered question -- that question answered.  It sounds like from what you’re saying that the importing of Cuban goods is still going to be restricted by the embargo.  And is the travel ban on American travel to Cuba being lifted here, or is that still being constrained by the embargo?  And I just wanted to know if Fidel Castro was involved.  Was Fidel Castro involved in any of these conversations that led up to today’s announcement?  Thanks very much for doing the call.

SENIOR ADMINISTRATION OFFICIAL:  Jim, I’ll start.  And again, I know you’re a proud Cuban American.  With respect to the travel, we cannot completely lift the travel ban because of the legislation.  However, what we’re doing is we’re authorizing as much travel as we possibly can within the constraints of legislation.  So every kind of travel that can possibly be licensed we are now permitting.  And so that should lead to a significant ability for Americans to travel to Cuba for the broad variety of purposes that were outlined earlier in the call.

So the ban has to be lifted by Congress, but the President is doing everything that he can with his authority to facilitate travel within the limitations of the law.  And we believe that that will lead to a significant increase in travel.  We’ve already seen Americans take advantage of the more limited licensing that has facilitated travel to Cuba.  With these steps, there is a significant broadening to include every kind of travel that is licensable under the law, and that should lead to an increase in Americans traveling.

Fidel Castro was not involved in the discussions.  President Raul Castro obviously was the individual on the Cuban side who was authorizing his team and the person who communicated with President Obama yesterday.  The Cuban side can speak to their decision-making process.  But clearly, Raul Castro is the President of Cuba now and is the decision-maker on these steps.

And then I’ll turn it over to my colleagues on your question.  But again, you are permitted to purchase tobacco products, including cigars up to a certain amount, so that may be the answer you're looking for.  But I’ll turn it over to my colleagues.

SENIOR ADMINISTRATION OFFICIAL:  Yes, so that amount is $100 if you're an authorized traveler.  So if you're going under any of the categories that my colleague and I have outlined, you can purchase up to $100 of tobacco products to bring back to the United States -- but not for resale -- for consumption or for personal use.

With respect to the travel categories, I do want to just correct a misstatement I made at the very outset in my opening remarks.  There have been two prior relaxations by President Obama with respect to travel:  2009 generally focused on family travel, and 2011 focused on a number of other categories, including educational, cultural, religious, and journalistic activity.  And I had put the 2011 date on family travel.  I just wanted to be sure I corrected that.

MS. MEEHAN:  Thank you, everyone.  With that, our call is concluded.  Just to reiterate the ground rules on -- the embargo on this call is now lifted.  The embargo on the White House factsheet is also now lifted.  But you can only quote the officials on this phone call on background and attributed to senior administration officials, rather than by name.

Thank you very much.  Have a great day.

END
11:02 A.M. EST