08/04/05 Change in Treasury`s rule on Cuba

Farm and Ranch August 4, 2005 The U.S. Treasury Department has made a clarification on its rule regarding trade with Cuba that the American Farm Bureau Federation says has the potential to provide relief to U.S. agriculture in making food sales to the island nation. Since Treasury's original rule in February, Cuba has turned to U.S. competitors to avoid letters of credit forced by the rule barring shipment before payment. Farm Bureau trade specialist Chris Garza, says this new interpretation by Treasury is a bit more flexible. Garza: "The issue that stands with the current rule is that, if the Cubans pay for the product and it goes into the sellers bank and at that point becomes Cuban property, which means we would have Cuban assets in the U.S. that could face possible seizure. What this rule allows is basically for them to still use cash, but the cash to be held by a middleman so the boat can go ahead and leave without that being Cuban goods." And while that avoids possible confiscation of Cuban-owned goods in unrelated claims, Garza says the U.S. could still be at a competitive disadvantage. Garza: "Well again, we are using sellers agent so there are obviously going to be some fees associated with this new option for payment with cash. We are just hoping that those fees are less than the letter of credit." The American Farm Bureau says it will continue to work with Congress to legislatively overturn the Treasury rule. I'm Bob Hoff and that's the Northwest Farm and Ranch Report on the Northwest Ag Information Network.