Last week, President Obama authorized the elimination of a ban on Cuban access to the international banking system, which in turn would allow a Cuban national to make a living in the United States without requiring that person to emigrate. As a result, the door now is open for Cuban baseball players to legally play for a Major League Baseball (MLB) club while maintaining a permanent residence in Cuba.
Previously, a Cuban national wanting to sign with an MLB franchise as a free agent was required to first take up residence outside of Cuba and then obtain a specific license from the United States Treasury’s Office of Foreign Assets Control (OFAC). Specifically, under the Cuban Assets Control Regulations (the Regulations), Cuban nationals who took up permanent residence outside of Cuba were required to apply to OFAC for a specific license to become an “unblocked national” authorized to do business with companies subject to U.S. jurisdiction, such as an MLB club. Many MLB clubs, however, viewed the requirement as unduly burdensome because it could take up to a year to obtain a specific license, which sometimes resulted in a year of not playing baseball with a MLB franchise.
Of course, there was a way around the time-consuming specific-license requirement: Cuban national could become “unblocked” immediately by immigrating to the United States. But that would subject the player to baseball’s amateur draft, and the player’s rights would be controlled by one major league team. By taking up a residence outside the U.S., Puerto Rico, or Canada, Cuban nations can become free agents and get more lucrative contract offers. Needless to say, OFAC’s specific license—and unblocking process—was a significant obstacle to MLB franchises and Cuban nationals, alike.
In 2015, that process was changed. After President Obama announced changes in U.S. foreign policy towards to Cuba and the Regulations were amended, MLB eliminated the license requirement to make it easier for MLB franchises to sign Cuban nationals. In lieu of obtaining a special license, Cuban national prospects were only required to provide the following sworn statement in order to sign with a MLB franchise:
I have taken up permanent residence outside of Cuba. In addition, I hereby state that I do not intend to, nor would I be welcome to, return to Cuba. Further, I hereby state that I am not a prohibited official of the Government of Cuba … and am not a prohibited member of the Cuban Communist Party.
Now that President Obama has eliminated the ban on Cuban access to the international banking system, Cuban nationals will no longer need to take up residence outside of Cuba to sign with a MLB club. With this recent change (and with President Obama probably making a call for an end to the trade embargo during his visit this week to Cuba), the obstacles to signing Cuban baseball players to play for an MLB club are quickly being dismantled. Without a doubt, the change in U.S. foreign policy will speed up the negotiation process for other Cuban players waiting to play ball in U.S. without the need for defection.
Continue to check back with us for updates on the status of this important foreign policy issue. For more information, please contact Maria del Carmen Ramos at 813.227.2252 or mramos@slk-law.com.