Washington is tightening financial rules on US exports to Cuba to put pressure on Havana to introduce democratic reforms.

Letters of credit (L/Cs) will be allowed for the next month, after which Cuban importers must pay cash up front for US goods.

Suppliers angered

The announcement by the US Treasury that Cuba must pay in advance for imports from the US of food and medicines has angered suppliers.

"The rule change will make existing transactions more difficult [but] will not make [for] impossible transactions," according to director of the New York-based US-Cuba Trade and Economic Council, John Kavulich.

Advanced payment

According to a statement by the US Treasury's Office of Foreign Asset Control (OFAC), the new rule balances its responsibility "to administer effective sanctions against Cuba while ensuring the island can continue to receive food shipments, medicine and medical supplies from US exporters."

The US had imposed a rule requiring Cuban importers to pay for all US goods within 72 hours of shipment but now US suppliers will have to have received payment for goods before they are shipped.

Window for L/Cs

For 30 days from 22 February 2005 traders will however be allowed a brief window during which they will be allowed to deal on an L./C basis.

For 40 years the US imposed trade embargoes on Cuba but an exemption was granted in 2001 on food and medicines.

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