Major League Baseball can help Cuban players without helping Cuba

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The new agreement between Major League Baseball and the Cuban Baseball Federation (FCB) purports to end the trafficking of Cuban baseball players. Under the agreement, MLB clubs could negotiate with a player in Cuba, pay a release fee to FCB and sign the player to a major or minor league contract.

Unfortunately, the agreement may well violate the embargo. But MLB has a simple option that would help Cuban players without putting money into the hands of the Cuban government: Apply its own rules to allow Cuban players to sign as international free agents from within the United States.

The new agreement is premised on a Treasury Department ruling from the Obama administration that FCB is not part of the Cuban government. This conclusion is startling. Compare a regulation announced last year: The Trump administration prohibited trade with much of the tourism industry in Cuba on the grounds that Cuban military and intelligence interests owned substantial hidden shares of those businesses. But if a hotel with an international brand is part of the Cuban government for purposes of the embargo, it is hard to see how the FCB — which is led by the son of Fidel Castro — is not. Treasury relied on the fact that the Olympic Committee treats FCB as a nongovernmental organization. But the relevant question is whether the FCB is part of the Cuban government as defined in the embargo statutes and regulations, not under Olympic Committee policies.

Absent a reasoned explanation from Treasury, a court could set aside the ruling as arbitrary and capricious. And the Supreme Court recently agreed to hear a case that could limit court deference to agency interpretations of their regulations. Although the impact of increased judicial review is difficult to predict, it seems likely that the Treasury ruling would undergo scrutiny in the courts.

Perhaps aware of the contradiction with its previous policy, the Trump administration promptly backed away from the deal. The administration would also have to demonstrate reasons for the reversal to survive court review, but the slim support provided for the earlier ruling probably leaves room to do so.

If the transfer agreement runs aground, MLB may throw up its hands and blame politics and the lawyers. This is a cop-out. The reason Cuban players have been trafficked through third countries is because the collective-bargaining agreement between MLB and the MLB Players Association encourages it. Under that agreement, a player who is a resident of the United States or Canada must go through the draft, while a player from any other country may sign as an international free agent for much more money. A network of agents and handlers expecting a cut will ensure that the player is trafficked to third countries.

MLB can fix this today. The collective-bargaining agreement already gives the MLB commissioner discretion to determine the residency of a player for purposes of international free agency eligibility. The commissioner could use that discretion to say that a Cuban player who comes directly to the United States will not be treated as a resident of the United States for a limited period, perhaps one year. MLBPA has no reason to object.

This solution would not entirely end trafficking, and Cuban ballplayers would still have to defect to play in MLB. But allowing players to come directly to the United States and sign as free agents would give federal and local law enforcement much more power to investigate and prosecute crimes of extortion, confinement and violence against players.

MLB club owners might have to negotiate harder and pay a bit more for players in such a free market. But the next generation of Cuban players would be protected from the worst abuses of trafficking without supporting the Cuban government. Best of all, this option is available to MLB now, under its own rules, and would not be subject to legal restriction or political whim.

Alison Peck is a law professor at West Virginia University College and blogs about international trade.