The US has formally removed Cuba from its list of state sponsors of terrorism, marking a continuation of improved relations between the two countries.

But other legislation prohibiting exports and foreign aid means removal from the list has no direct impact on sanctions that restrict trade and banking relations between Cuba and the US.

Restoring relations
The removal of Cuba from the US list of state sponsors of terrorism builds on the December 2014 announcement by US President Barack Obama and Cuban President Raul Castro that they would endeavour to restore diplomatic relations.

The removal from the list appears to end bans on US economic aid arms exports as well as controls on dual-use items with military and civilian applications.

It also seems to remove the obligation for the US to oppose loans to Cuba by international financial institutions such as the World Bank and International Monetary Fund.

Limited impact
But those measures are also substantially contained in the US embargo on exports and foreign aid imposed on Cuba in 1962. It remains in place, at least for the time being.

The Republican-controlled Congress has so far resisted calls requests by Obama, a Democrat, to lift the embargo.

Obstacles to trade
The embargo would need to be lifted to restore normal trade and banking relations while the other major obstacle obstructing normalised ties is the US naval base at Cuba’s Guantanamo Bay.

The US has leased this 45 square mile area since 1903, but Cuba wants it returned and restored as its full sovereign territory.