Farmers and agribusinesses in the US are finding it increasingly difficult to arrange letters of credit (L/Cs) for sales to Cuba.

The difficulties are a product of the Trump administration's increasingly hard line on Cuba.

L/C arrangements

Since 2001, US agricultural producers have sold nearly US$6 billion of commodities to Cuba under an exemption to the long-running trade embargo on US exports to the Caribbean island.

Until last month, successive US presidents have waived the embargo on agricultural exports to Cuba so that producers contract sales with Alimport, Cuba's state-run food importer, which then issues an L/C from a third-country bank.

When the US supplier receives the L/C proceeds in its bank account it delivers the produce to Alimport.

Permission to sue

But unlike previous presidents, Trump has decided to activate Title III of the 1996 Helms-Burton Act, which allows US entities and citizens, including Cubans who later became US citizens to sue almost any company deemed to be "trafficking" in property confiscated by Cuba's government.

This activation allows lawsuits against foreign entities making use of nationalised property and may generate dozens or even hundreds of lawsuits.

Action on L/Cs

Financial institutions meanwhile have renewed concerns that they may violate these tougher sanctions and are increasingly reluctant to provide L/Cs because of this.

US producers are urging Congress to help exporters obtain L/Cs. "The increasing challenges of obtaining L/Cs to export food to Cuba is a strong indicator that Congress needs to act to protect agriculture trade from Title III," chair of the United States Agriculture Coalition for Cuba, Paul Johnson, told the Reuters news agency.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.