How Arizona companies can jump on the Cuban trade opportunity
Jul 25, 2015, 11:03am MST
INDUSTRIES & TAGS Human Resources, International Business
Barriers to trade with Cuba are coming down, and the island nation's
shopping list includes opportunity for Arizona businesses.
Michael Patterson and Melissa Proctor, shareholders and Latin American
international trade specialists with Phoenix law firm Polsinelli, say
that there is opportunity if businesses plan ahead.
"Although some restrictions are being lifted by executive order, most
trade restrictions will require an act of Congress," said Patterson.
"However, there are exceptions on some products."
Proctor, who authored a white paper on Cuban trade for the Retail Value
Chain Federation, said that many trade items require licenses from the
U.S. State Department, which are invariably declined.
"There is a list of products under the Support for the Cuban People that
are exempt from licensing," she said.
Telecommunications products and services, vehicle parts and agriculture
products are on the SCP list. These are among Arizona's top exported
products. The three categories and others mean there is great
opportunity for Cuban trade, according to Patterson.
It's not all cigars and sandwiches, however. Readying to export to Cuba
is going to take time and effort.
"No business should get into this without a plan," said Patterson.
"Companies need to connect with a trade specialist who understands Cuba."
There are resources available for Arizona businesses. In addition to
legal counsel, the U.S. Commercial Service is directly connected to the
opportunities through the Department of Commerce and State Department,
U.S. Commercial Service and Small Business Administration.
One area where companies need to investigate if trade with Cuba is on
the horizon is banking relationships.
While the Wall Street Journal reports one Miami bank has established
correspondent relations with Havana's Cuban Central Bank, no Arizona
banks contacted by the Phoenix Business Journal are jumping on the
"This is something that is customer-drive," said Mark Roberts, vice
president of special projects for Alliance Bank of Arizona. "It's one of
the reasons (Alliance) acquired Bridge Bank. Silicon Valley will
probably be one of the first markets to trade with Cuba. We'll be ready
when our customers are."
A spokesman for U.S. Bank said it is monitoring the situation to assess
customer interest. Similar responses came from Canadian-owned BMO
Harris. The bank's holding company, Bank of Montreal, has banking
relationships in Cuba, because Canada has never embargoed banking. BBVA
Compass said it has international capability, but would add Cuba if
there were customer demand.
Banking is just one consideration, warns Patterson.
"A company doing business in Cuba has to be able to handle the cash flow
and payment guarantees," he said. "This is more complex without the
Export-Import Bank being funded."
Proctor said that a company needs to ensure that trade counsel has
experience with Cuba.
"There are a lot of trade specialists with Latin American countries,"
she said. "A general specialist should have specific Cuban trade
experience to provide the best guidance."
Getting into exporting is a sure-fire way for companies to increase
revenue and profit.
"A company must maintain good business sense and be accountable for its
own diligence," said Proctor. "It's an opportunity that can be very
profitable for both a company and an industry. A business must keep eyes
open and understand all the issues."
Source: How Arizona companies can jump on the Cuban trade opportunity -
Phoenix Business Journal -