International Trade > AG Trade Law > Cuba on Trend: Chanel Hosts Fashion Show in Havana as Diplomatic and Cultural Relations Continue to Open with Cuba
06 May '16

On May 3, French fashion house Chanel hosted the first international fashion show in Cuba since the 1959 communist revolution. The Resort 2017 show was held open-air in Paseo del Prado, one of the city’s central streets. It was preceded by a tour of Havana, transportation for guests in a fleet of 170 1950s American convertibles and international celebrities Instagramming to #ChanelCruiseCuba.

As Vogue named the “Viva Coco Libre!” t-shirt “next season’s must-own tee” and many reports focused on the novelty and cultural richness of the event, some reporters highlighted the disparity between the show and the Cuban lifestyle. Local Cuban laws have historically limited the sale of fashion goods as well as imported fashions. The Guardian quoted local designer Idania del Rio, saying “I think that the catwalk is going to be more for Chanel than for Cuba. I don’t know whether the people here in Cuba are ready for this type of product.…  I want to see what $40,000 clothing looks like.”  The BBC pointed out that “Chanel goods would cost well beyond the average Cuban wage of $25 (£17) a month.”

While France does not have sanctions in place against Cuba, the event follows a stream of high-profile diplomatic and cultural events in Havana related to changes in U.S. sanctions, including President Obama’s historic visit in March. In particular, the January 27, 2016, changes expanded authorizations for travel and related services (e.g., organizing professional meetings, public performances, competitions and exhibitions pursuant to 31 CFR Sec. 515.560 and 567), eased U.S. restrictions on non-agricultural export trade financing and created a general policy of approval for certain export and reexport license applications and case-by-case review for others (e.g., artistic endeavors and retail distribution). More recently, March 16, 2016, changes announced in conjunction with President Obama’s visit to the island eased U.S. restrictions on banking and financial services, and shipping, and also made additional allowances for U.S. travel to Cuba.

The still-evolving landscape of U.S. laws and regulations, as well as ongoing changes in Cuban law and policy regarding foreign investment and trade, and cultural norms and practices that are unique to Cuba, present significant challenges to companies considering business opportunities in the country. At the same time, as its government is opening up the country’s markets in unprecedented ways for the first time in over half a century, Cuba presents attractive opportunities to U.S. companies and the international community in a wide range of sectors that promise particular rewards to first-mover entrants that approach their Cuban counterparts with mutual respect and commercial savvy. U.S. companies and individuals now have more opportunities and flexibility to travel to Cuba, to engage with Cuban counterparts and participate in cultural, scientific and educational exchanges, to engage in trade and to pursue potential investments and business partnerships in Cuba in ways that were unthinkable only a year and a half ago.

The emerging market environment and opportunities that Cuba presents at this time also frames a unique landscape that is ready-made to capture the imagination of international audiences in the fashion industry. It presents a unique setting with ready branding value to leverage the image of fashion labels and high-end consumer goods in ways that project globally—far beyond Cuba. One important caveat, however, is that companies that wish to pursue the opportunity should take care to be mindful and well informed of the need to ensure careful compliance with the potential challenges of U.S. trade restrictions, as well as Cuban and other international trade regulations, to ensure that they can remain focused on their commercial objectives and not be distracted by inadvertent regulatory pitfalls along the way. See, e.g., the Office of Inspector General’s investigation of the legality of Beyoncé and Jay-Z’s 2013 trip to Cuba.