One of the newest business opportunities on the horizon for U.S. companies is in Cuba. With the ongoing political rapprochement—demonstrated by President Obama’s recent visit—more and greater business opportunities will arise. Of course, there must be a political resolution of the two biggest impasses: the U.S. embargo and Cuban compensation for confiscation of properties over the past 50 years. The sense of momentum for both countries establishing fresh business relations suggests that a solution acceptable to both sides will undoubtedly present itself.
Cuba will present any U.S. company with many challenges going forward and multiple specific challenges under the FCPA.
Foremost will be that every person one deals with in Cuba will be a government official; therefore, every interaction will implicate the FCPA, believe it or not. There are few countries left which are still socialist to the extent of Cuba—only Vietnam and North Korea are comparable. In Cuba, everyone has a job from the state. From the butcher to the baker to the candlestick maker all the way down; are all employees of the state and therefore government officials under the FCPA.
This not only requires a robust compliance program in place and functioning before you begin to explore business opportunities in Cuba but also mandates full documentation of all monies spent and vigorous internal controls. I often say the three most important things in any best practices FCPA compliance program are document, document. and then document. This is only more so in Cuba.
Yet as the political winds continue to blow for the opening of Cuba to trade from the Unites States, and given Cuba’s desperate need for hard currency, foreign capital, and infrastructure spending, U.S. companies will be lining up to do business in this island nation. As a CCO or compliance practitioner, you need to be at the table when your company begins its internal discussions about doing business in Cuba.