Change To OFAC Banking Regulation Long Overdue; No Rationale For Delay

The Obama Administration appears to finally be making a far-too-unnecessarily-long-awaited change to financial regulations relating to the moving of funds from the United States to the Republic of Cuba and from the Republic of Cuba to the United States.  

This specific change was discussed in 2015 and earlier in 2016; there is no rationale provided for the delays.

The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury is expected to authorize by general license Republic of Cuba government-operated financial institutions to have correspondent accounts with financial institutions located in the United States.

Currently, the OFAC does not authorize Republic of Cuba-based financial institutions to have accounts at United States-based financial institutions.

A Republic of Cuba government-operated financial institution would need to apply for a specific license from the OFAC; they likely won't, however, due to the perceptual issue of the OFAC authorizing United States-based financial institutions to have accounts in the Republic of Cuba, but no authorization for Republic of Cuba-based financial institutions to have accounts in the United States.

The purpose of the regulatory change by the OFAC is to further the efficiency of the commercial payment process for exports to the Republic of Cuba and imports from the the Republic of Cuba; and for the transfer of funds related to travel by companies and individuals subject to United States jurisdiction- credit/debit card issuers, air carriers, travel agents, tour operators, hotel management companies, cruise ship operators, and air cargo services among others.

There remains concern that funds contained in an account established in the United States by a Republic of Cuba government-operated financial institution (or other entity) could be subject to civil action by an individual or company with a claim against the government of the Republic of Cuba.  An OFAC policy of commercial prior restraint, dispensed as a proactive mechanism to prevent risk should be alien to the capitalist marketplace.   Evaluating any legal potentiality is best determined by the parties involved rather than by the United States government. 

United States-based companies have advocated to the OFAC that they, the companies, should be the determinant of any Republic of Cuba-related risk, rather than the United States government.  

Removing the regulatory impediment to Republic of Cuba government-operated financial institutions having correspondent accounts with United States-based financial institutions will remove an item from the list of issues maintained by the government of the Republic of Cuba as reasons for not seeking to fully-engage United States-based companies.  The impediment is by choice, not by statute. 

Removing the regulation does not solve the problem, but removing the regulation makes the problem less relevant and assists the Republic of Cuba with re-establishing and establishing financial relationships with other countries, which assists United States-based entities.

In 2015, Pompano Beach, Florida-based Stonegate Bank (2015 assets exceeded US$2.3 billion) signed a Direct Correspondent Banking Agreement (DCBA) with Republic of Cuba government-operated Banco Internacional de Comercio SA (BICSA), a member of Republic of Cuba government-operated Grupo Nuevo Banca SA, created by Corporate Charter No. 49 on 29 October 1993 and commenced operation on 3 January 1994.

Stonegate Bank also provides commercial operating accounts for the Embassy of the Republic of Cuba in Washington, DC.

However, even though Stonegate Bank has a DCBA with BICSA, regulations issued by the OFAC continue to require financial institution transactions relating to the Republic of Cuba to be subject to an inefficient triangular payment process using Panama, Panama-based Multibank, which has extensive dealings (and an office in Havana) with Republic of Cuba-based entities.

For example, a Republic of Cuba-based entity places an order with a United States-based company.  The Republic of Cuba-based entity then either transfers funds from the Republic of Cuba to a third country financial institution or uses existing funds in a third country financial institution.  The third country financial institution transfers the funds to a financial institution (either within the United States or another country) selected by the United States-based company.  This process can take up to five days (if a weekend, for example) and there are higher-then-normal transfer costs to the Republic of Cuba-based entity and United States-based company.

With a fully-implemented DCBA, Stonegate Bank and BICSA would transfer funds (using SWIFT codes) from their respective accounts.   

After the arrival of funds from the Republic of Cuba, there would be a transfer from Stonegate to the financial institution selected by the United States-based company.  The process generally can be confirmed during a business day; and the transfer costs are lower for both seller and buyer.

Currently, Stonegate Bank uses a Multibank to route payments to and from BICSA.  The average transaction time is one to two days.  The current retail cost to transfer US$100,000.00 is approximately US$250.00 (.3%), which would decrease if the process was two-way instead of three-way.

There are two prohibitions in the Cuba Assets Control Regulations (CACR) that prevent the establishment of correspondent accounts at United States financial institutions for Republic of Cuba government-operated financial institutions unless specifically licensed by the OFAC: 31 C.F.R. §515.201(a)(1) and §515.201(b)(1).

Title 31 → Subtitle B → Chapter V → Part 515 → Subpart B
Title 31: Money and Finance: Treasury
PART 515—CUBAN ASSETS CONTROL REGULATIONS
Subpart B—Prohibitions

§515.201   Transactions involving designated foreign countries or their nationals; effective date.

(a) All of the following transactions are prohibited, except as specifically authorized by the Secretary of the Treasury (or any person, agency, or instrumentality designated by him) by means of regulations, rulings, instructions, licenses, or otherwise, if either such transactions are by, or on behalf of, or pursuant to the direction of a foreign country designated under this part, or any national thereof, or such transactions involve property in which a foreign country designated under this part, or any national thereof, has at any time on or since the effective date of this section had any interest of any nature whatsoever, direct or indirect:

(1) All transfers of credit and all payments between, by, through, or to any banking institution or banking institutions wheresoever located, with respect to any property subject to the jurisdiction of the United States or by any person (including a banking institution) subject to the jurisdiction of the United States;

(2) All transactions in foreign exchange by any person within the United States; and

(3) The exportation or withdrawal from the United States of gold or silver coin or bullion, currency or securities, or the earmarking of any such property, by any person within the United States.

(b) All of the following transactions are prohibited, except as specifically authorized by the Secretary of the Treasury (or any person, agency, or instrumentality designated by him) by means of regulations, rulings, instructions, licenses, or otherwise, if such transactions involve property in which any foreign country designated under this part, or any national thereof, has at any time on or since the effective date of this section had any interest of any nature whatsoever, direct or indirect:

(1) All dealings in, including, without limitation, transfers, withdrawals, or exportations of, any property or evidences of indebtedness or evidences of ownership of property by any person subject to the jurisdiction of the United States; and

(2) All transfers outside the United States with regard to any property or property interest subject to the jurisdiction of the United States.

[28 FR 6974, July 9, 1963, as amended at 62 FR 45106, Aug. 25, 1997]

Which Companies Are The First To Open Offices In Cuba?

Fort Worth, Texas-based American Airlines will be the first United States company since 1961 to have an office in the Republic of Cuba; and will be followed by New York-based JetBlue Airways. 

The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury has authorized United States-based companies to have representative offices in the Republic of Cuba.

Both companies will have ticket offices in the city of Havana's Miramar District. They will be staffed by Republic of Cuba nationals and a Resident Country Manager.

The United States Department of Transportation (USDOT) has authorized the re-establishment of regularly-scheduled commercial services from the United States to the Republic of Cuba; there will be up to 110 daily flights.

LINK TO DOT ROUTES FOR US/HAV

LINK TO DOT ROUTES FOR US/NON-HAV

What President Castro Thinks About What President Obama Has Done... And Still Needs To Do

Excerpts Of Remarks by H.E. Raul Castro Ruz, President of the Republic of Cuba, during the 17th Summit of the Non-Aligned Movement, held on Margarita Island, in Venezuela

September 17, 2016

Esteemed compañero Nicolás Maduro Moros, President of the Bolivarian Republic of Venezuela; Heads of state and government; Esteemed ministers, delegates, and guests; Ladies and gentlemen:

Esteemed President Maduro,

Twenty-one months have passed since our simultaneous announcement with President Barack Obama of the decision to reestablish diplomatic relations between Cuba and the United States.

There has been some progress, mostly in the diplomatic area and cooperation on issues of mutual interest, but the same cannot be said of the economic or commercial spheres due to the limited, albeit positive, scope of the measures so far adopted by the U.S. government.

Cuba will persevere with its demand to have the economic, commercial and financial blockade lifted, a blockade that brings so much damage and hardship to our people, and which also has a negative impact on many other countries due to its extraterritorial implementation. By the same token, Cuba will continue urging the return to our sovereignty of territory illegally occupied by the United States Naval Base in Guantanamo.

There will not be normal relations before this issue is resolved, and other policies harmful to Cuba’s sovereignty still in force are terminated, such as interventionist and subversive programs.

We reaffirm our disposition to engage the United States government in a civilized relationship, but Cuba will neither renounce any of its principles nor compromise on its sovereignty and independence. Cuba will not cease defending its revolutionary and anti-imperialist ideals, or supporting the self-determination of all peoples.

Compañero Maduro,

We wish our sister Republic of Venezuela full success in the leadership of non-aligned nations. At the same time, we congratulate the Islamic Republic of Iran on its good work during this past term at the head of the Movement.

Our only alternative given the enormous dangers and challenges we face is unity and solidarity, in defense of our common objectives and interests.

Thank you, very much.

(Cubaminrex)

Secretary of State John Kerry to Travel to Colombia; Likely Meeting With Cuba Official(s)

Press Statement

John Kirby
Assistant Secretary and Department Spokesperson, Bureau of Public Affairs
Washington, DC

September 19, 2016

"U.S. Secretary of State John Kerry will travel to Cartagena, ‎Colombia, on September 26. He will lead the United States delegation at the signing of the peace accord between the Government of Colombia and the Revolutionary Armed Forces of Colombia (FARC) to end over 50 years of conflict. He will also participate in bilateral meetings with regional counterparts. The Secretary's presence follows years of U.S. engagement to facilitate the negotiations."

Secretary Kerry is expected to meet with whomever is the representative(s) from the government of the Republic of Cuba in what could be the final high-ranking meeting during the final days (123 and counting down) of the Obama Administration between an official of the government of the United States and official of the government of the Republic of Cuba.

Video- Senator Marco Rubio (R- FL) mentioning U.S-Cuba Trade and Economic Council in his speech on Senate floor

14 September 2016

"Back in May, the Assistant Secretary for Policy, at the Department of Homeland Security told the House Homeland Security Committee that new scheduled air service from the United States to Cuba and vice versa was not going to start until air marshals were allowed to be on board those flights. In August, the TSA provided the U.S.-Cuba Trade and Economic Council as well as reporters a statement, and they said that the United States and Cuba had entered into an aviation security agreement that sets forth the legal framework for the deployment of air marshals on board certain flights to and from Cuba.

Well, today at a hearing in the house, a top TSA official divulged for the first time that Cuba has yet to agree to allow air marshals aboard scheduled airline flights between the two countries, meaning there have been no air marshals on board thus far despite the fact that the administration said there would be.

So basically what we have here is an outright lie.

Last month, to great fanfare the administration announced that the agreement had been reached that there was going to be air marshals on the flights to and from Cuba, on the commercial flights. And today, they confirmed that they weren't telling the truth. There was no agreement finalized. On most if not all of these flights there are no air marshals, and this is endangering U.S. passengers. 

This is a startling admission from the administration; it's a startling admission by the TSA, and to the American people that they lied. They told us these flights would not begin until they had reached an agreement with the Cuban government to have air marshals and other security measures in place. And today only because they were asked -- only because they were asked -- did they admit that this is not happening.

It’s incumbent upon the TSA to lock down a federal air marshal agreement before these flights started taking off to begin with. That’s what they told us they were going to do. That’s what they said or implied was happening. And unless that question had been specifically asked today at that hearing, we would not have known about this.

And my friends, this is the latest example of an administration that is so intent on burnishing its legacy, on getting credit for this opening that they're willing to throw everything else out the window. They already are ignoring the human rights violations. We had one of the leading dissidents in Cuba on the verge of death because of a hunger strike and this administration hasn’t said a word about it. They don’t do anything about it. They don’t highlight that case.

Instead they're celebrating and popping corks of champagne on these new flights that they told us we’re going to be safe because they were going to have air marshals and today because they were specifically asked we find out it's not true. This is outrageous.

The TSA, under the Obama administration, has lied to us about the status of the security.

Last week I filed a bill that would stop all flights to Cuba, commercial flights, until this agreement was in place, until adequate security is in place. And now we know for a fact that adequate security is not in place. These flights should be suspended until such time as this agreement is signed. And I want you to think about what this means if it doesn’t happen. What it means is that these are now flights that are vulnerable. There’s a reason why we have air marshals on flights, because of the experience of 9/11 that we just commemorated the anniversary of on Sunday.

And you now have flights 90 miles from our shores that could theoretically be commandeered and you could have a repeat of that, particularly South Florida which is just minutes away from the airport in Havana. This is just unacceptable.

Forget how you feel about Cuba policy for a moment. They have lied to the American people and congress and they were only caught today because they were specifically asked about the status of this. This puts us in incredible danger. And by the way it is important for everyone to remember years ago there were no metal detectors even at airports. You know why they started putting metal detectors at airports 35, 30 years ago? Because of hijackings to Cuba. There's a reason.

And so now here you have this situation where theoretically some terrorist can travel from any country in the world into Cuba and then try to come into the United States, commandeer an aircraft and I don't need to tell you what can happen next. This is an incredibly dangerous situation.

I think we need to unite across the aisle and basically say no matter how you feel about Cuba policy, we all agree that travel to Cuba should be safe, no less safe than travel to the Bahamas, no less safe than travel to the Dominican Republic, no less safe than travel to Mexico. Why does the Cuban government and why are we allowing them to conduct flights without the same conditions that we have on allies of the United States? Cuba is not an ally of the United States. The Cuban government hosts intelligence facilities for both the Chinese and Russians. The Cuban government harbors fugitives of the American justice. The Cuban government helped North Korea evade U.N. sanctions on missile technology and weapons. And yet we have allies in this hemisphere who have to comply with all of this, but not Cuba? This is absurd.

The TSA has lied. It leaves this nation vulnerable and those commercial flights need to be immediately suspended until such time as these security measures are put in place. And I hope that – this is something that just broke hours ago – and I hope that we can come together here and actually deal with it irrespective of how you may feel about the issue of Cuba."

From Inside US Trade: Lawmaker Pledges To Push Ahead On Cuba Trade Bill After House Hearing

Inside US Trade
Arlington, VA
14 September 2016

Lawmaker Pledges To Push Ahead On Cuba Trade Bill After House Hearing

A Republican lawmaker from Arkansas will continue to push forward on his bill allowing private companies to extend credit to Cuba to purchase U.S. agricultural products following a Sept. 14 House Agriculture Committee hearing on trade with that country.

Rep. Rick Crawford indicated during the hearing on trade with Cuba that he is willing to meet with opponents to discuss changes to a bill allowing the issuing of private credit to Cuba to purchase agricultural products from the United States. A staffer in Crawford's office said he's hopeful there's enough support to move the bill during a potential lame-duck session later this year, but added the congressman will offer the bill again next year if it fails to get a vote this year.

The hearing comes after Crawford was promised a path forward for his bill in exchange for not proposing it as an amendment to a House financial services appropriations bill in July. That promise included a committee markup for the stand-alone bill.

Members raised several issues with Crawford's bill, H.R. 3687, including that private money from the U.S. will go to the Castro brothers or the Cuban military; that U.S. agricultural products will be traded through ports and property seized from American companies by the Cuban government; and that the U.S. will not see enough economic concessions in return for easing the embargo.

Agriculture Committee Chairman Michael Conaway (R-TX) and ranking member Collin Peterson (D-MN) both said they support the legislation. A handful of other members, both Republicans and Democrats, either specifically said they back Crawford's bill, or want their states' agricultural industries to have improved access to Cuba.

Rep. Steve King (R-IA) was one of the most vocal opponents to the legislation on the committee, saying the bill does not create new demand for U.S. products, and instead the U.S. would supplant imports from another market. Critics also said the bill only shifts existing U.S. exports from one market to another.

Crawford indicated he is willing to work with opponents of his bill to try strike a compromise on the language.

During an exchange with witness Mauricio Claver-Carone, executive director of Cuba Democracy Advocates, Crawford asked if the anti-Castro activist was willing to continue discussing the legislation outside the hearing. Claver-Carone said he would be open to such discussions and reiterated that he believes the bill needs stronger language ensuring private credit does not end up in the hands of the Castro government, and is instead issued to private citizens and business.

Such a policy would force Cuba to make significant economic changes, especially since all imports currently go through Alimport, a government-owned entity, and not through private companies.

“With all the sincerity, would you be willing to continue the dialogue to bring this to the satisfaction to the folks in south Florida? If we can do that, we can move forward to reaching an agreement,” Crawford said.

Claver-Carone cautioned the committee against voting for the bill in response to a drastic decrease in U.S. agricultural exports to Cuba since 2009. While several nations including China, Korea and Brazil allow the extension of credit that is backed by their respective governments, which gives their agricultural industries an advantage over the U.S., he added Cuba has a history of trying to influence foreign lawmakers through spending and changing its import practices to target specific congressional districts or industries. He added Cuba also has a history of failing to pay its bills on time.

If the U.S. does scale back elements of its existing trade embargo, Claver-Carone said, it needs to see concrete changes in Cuban policies, such as lifting a current prohibition on U.S. companies working directly with privately owned businesses.

“The Castro regime does not allow that currently,” Claver-Carone said. “We want to encourage that -- private ownership. If Congress sent that message to the regime, 'please allow your people to be independent entrepreneurs, have property rights and to trade freely with the United States'… if were going to export our principles, we should do it under the conditions and terms that are consistent with those principles.”

A key question that was not answered during the hearing is whether private export companies or banks are willing to extend credit to Cuba.

Witness Karen Lowe, senior vice president and agriculture export finance division head at CoBank ACB, a company that provides agriculture credit, said anyone issuing credit will want to know whether they are working with Alimport or another entity. U.S. companies will also want more access to financial and credit information, especially because any credit issued will not be backed by the U.S. government.

That is a key difference between the U.S. and other governments, Lowe pointed out. Other governments have backed the credit their private industries extended to Cuba.

“In the very short-term, the impact this bill has will be somewhat limited, but it does create a level playing field,” Lowe said. “More things need to happen -- particularly with the credit worthiness of the importing agency in Cuba.”

John Kavulich, president of the U.S.-Cuba Trade and Economic Council, a group that analyzes U.S.-Cuban policies, said nothing new came out of the hearing regarding U.S.-Cuban relations. Kavulich maintained his position that lawmakers are wasting their time focusing on Crawford's bill, especially since no legislation on Cuba has passed in nearly 16 years. House Speaker Paul Ryan (R-WI) and key members of the Senate have also opposed easing the embargo.

Instead, Kavulich said more pressure should be directed at the Obama administration to issue changes to the embargo as President Obama prepares to leave office in January, especially since Cuba will be a low priority under a new administration.

It will also be easier for lawmakers to wait until 2018, when Raul Castro is expected to step down from power, in order to build support for any Cuba-centric legislation. Current law limits what can be done under the embargo as long as the Castros remain in power.

“For many members of Congress, there are only two people that live on that 800-mile-long archipelago, and they're both named Castro,” Kavulich said, referring to brothers Raul and Fidel Castro, who have run the one-party communist state for decades. “That makes it easier for some members of Congress who are just vehemently opposed to what the Castros stand for, to help 11.3 million people whose names are not Castro.” -- Nate Robson

US & Cuba Hold Discussions On Intellectual Property

From The United States Department of State
15 September 2016

The initial meeting between the U.S. Intellectual Property Enforcement Coordinator and Cuban officials on Intellectual Property Rights was held on September 8 and 9. The process of normalization relations has allowed the U.S. and Cuba to discuss a broad range of issues. Our engagement approach is working, and the United States and Cuba have made significant progress on issues like the environment, transportation, agriculture, health, law enforcement, and educational and cultural exchange.

From the Ministry of Foreign Affairs of the Republic of Cuba
12 September 2016

La Habana, 12 de septiembre de 2016. Los días 8 y 9 de septiembre, visitó Cuba una delegación de los Estados Unidos, presidida por Daniel Marti, coordinador de la Oficina Ejecutiva del Presidente de ese país para los temas de la Propiedad Intelectual, y que estuvo integrada por funcionarios del Departamento de Estado, de la Oficina de Derecho de Autor y de la Oficina de Patentes y Marcas de Estados Unidos.

Los visitantes fueron recibidos por representantes de la Oficina Cubana de la Propiedad Industrial, el Centro Nacional de Derecho de Autor, la Facultad de Derecho de la Universidad de La Habana, el Ministerio de Relaciones Exteriores, el Ministerio de Comercio Exterior y la Inversión Extranjera y los bufetes internacionales CLAIM S.A. y LEX S.A.

En este primer encuentro oficial entre Cuba y los Estados Unidos en materia de Propiedad Intelectual, ambas partes intercambiaron opiniones sobre las regulaciones vigentes en los respectivos países en esta área y el marco jurídico de los dos Estados para la protección de marcas, patentes y el derecho de autor.

Los funcionarios cubanos, tras explicar las garantías existentes en nuestro país para la protección de la Propiedad Industrial, que se expresa en el registro de más de seis mil marcas estadounidenses, reiteraron la profunda preocupación del Gobierno de Cuba por la vigencia en los Estados Unidos de leyes, como las del bloqueo y la conocida como Sección 211, que afectan el reconocimiento de los derechos marcarios de empresas y entidades cubanas, incluyendo sobre marcas notorias como Havana Club y Cohiba.

Enfatizaron, además, que la protección recíproca de marcas y patentes será un aspecto esencial para el mejoramiento de las relaciones bilaterales, en particular, en la esfera económico-comercial, y expresaron su disposición a continuar los intercambios en esta materia. (Cubaminrex)

From Google Translate:

Havana, September 12, 2016. On 8 and 9 September, a delegation visited Cuba from the United States, chaired by Daniel Marti, coordinator of the Executive Office of the President of that country for Intellectual Property issues, and which included officials from the State Department, Office of Copyright and the United States Patent and Trademark Office.

The visitors were welcomed by representatives of the Cuban Office of Industrial Property, the National Center of Copyright, the Faculty of Law of the University of Havana, the Ministry of Foreign Affairs, the Ministry of Foreign Trade and Foreign Investment and international law CLAIM SA and LEX S.A.

In this first official meeting between Cuba and the United States on intellectual property, both sides exchanged views on the current regulations in the respective countries in this area and the legal framework of the two States for the protection of trademarks, patents and law copyright.

Cuban officials, after explaining the guarantees in our country for the Protection of Industrial Property, which is expressed in the registration of more than six thousand American brands, reiterated the deep concern of the Government of Cuba by force in the United States laws, such as the blockade and known as Section 211, which affect the recognition of trademark rights of companies and Cuban entities, including on well-known marks as Havana Club and Cohiba.

They further emphasized that the reciprocal protection of trademarks and patents will be essential for the improvement of bilateral relations, particularly in trade and economic sphere aspect, and expressed willingness to continue exchanges in this field. (Cubaminrex)

U.S.-Cuba Legal Cooperation Working Group To Meet In Havana

From The United States Department Of State

U.S.-Cuba Legal Cooperation Working Group to Meet in Havana, Cuba

Media Note
Office of the Spokesperson
Washington, DC
September 14, 2016

The United States and Cuba will hold the first Legal Cooperation Technical Exchange in Havana, Cuba, on September 15. The U.S. delegation will include working-level representatives from the Department of Justice, the Department of State, the Federal Bureau of Investigation, and the Department of Homeland Security.

Improving legal cooperation between our two countries has been one of several important topics discussed as part of the Law Enforcement Dialogue between the United States and Cuba. We welcome the opportunity to bring together technical experts to discuss this topic of common interest.

From The Government Of The Republic Of Cuba

CUBA.- On September 15, 2016 was held in the Cuban capital the first meeting on cooperation in criminal matters between the authorities of Cuba and the United States, with the aim of exploring mechanisms that contribute to effective action against the perpetrators of crimes and the timely exchange of investigative procedures.

The meeting took place in a climate of respect and professionalism.

Both delegations agreed on the usefulness of the meeting and agreed to hold talks in the future. (Cubaminrex)

US & Cuba Hold Inaugural Economic Dialogue... Different Perspectives

From The United States:

United States and Cuba Hold Inaugural Economic Dialogue in Washington, D.C.

Media Note
Office of the Spokesperson
Washington, DC
September 12, 2016

The United States and Cuba held the inaugural Economic Dialogue in Washington, D.C., today. Assistant Secretary for Economic and Business Affairs Charles Rivkin led the opening of the dialogue. U.S. Department of State Deputy Assistant Secretary for Western Hemisphere Affairs John Creamer, Special Representative for Commercial and Business Affairs Ziad Haider, and U.S. Department of Commerce Deputy Assistant Secretary for the Bureau of Industry and Security Matthew Borman co-chaired the U.S. delegation. Ministry of Foreign Trade and Foreign Investment Vice Minister of Commercial Policy Ileana Nunez Mordoche led the Cuban delegation.

The Economic Dialogue’s goal is to discuss long-term bilateral engagement on a wide range of topics as part of the ongoing normalization process between our two countries. The delegations discussed trade and investment, labor and employment, renewable energy and energy efficiency, small business, intellectual property rights, economic policy, regulatory and banking matters, and telecommunications and internet access.

Both parties agreed to continue the dialogue and, under its auspices, convene working groups to continue technical discussions in the coming months.

From The Republic Of Cuba:

Cuba and the United States hold the first economic bilateral dialogue

HAVANA, September 12, 2016. Representatives from Cuba and the United States held on September 12, in Washington, the first meeting of the Bilateral Economic Dialogue, a mechanism established under the Cuba-US Bilateral Commission to address economic, commercial and financial issues of mutual interest, including those issues that may emerge in a post-blockade scenario.

The Cuban delegation was led by Deputy Minister for Foreign Trade and Investment, Ileana Núñez Mordoche, and the US delegation was presided over by Deputy Assistant Secretary of State for Western Hemisphere Affairs, John Creamer. The Cuban delegation included high-ranking officials of the Ministry for Foreign Trade and Foreign Investment, the Cuban Central Bank and the Ministry of Foreign Affairs. From the US side attended the meeting representatives of the Department of Commerce, the Treasury Department, the State Department, the Departments of Agriculture, Transportation and Energy, among others, and the Office of the United States Trade Representative.

As a result of this first meeting and to follow up on specific issues of mutual interest, different working groups were established. Said groups will meet periodically in alternate venues.

The Cuban delegation reaffirmed that lifting the blockade is essential in order to make progress in economic, commercial and financial relations and toward the normalization of bilateral ties, as it affects the development of our economy and causes damages and privations to the Cuban people. (Cubaminrex)

Why won't Obama Administration seek dismissal of civil judgements against Cuba… to help certified claimants?

Members of Congress & advocates should focus upon the NSC… Mr. Ben Rhodes

129 days to act on behalf of certified claimants

On 20 July 2016, a senior official of the United States Department of State provided a briefing about the process of negotiating a settlement of the certified claims against the Republic of Cuba, claims by the United States government against the Republic of Cuba, and individual United States court judgements against the government of the Republic of Cuba.

At the same time, representatives of the government of the Republic of Cuba reinforced that its courts have issued judgements (damages and reparations) against the United States with values ranging from US$121 billion to US$180 million to US$900 billion…. And, the government of the Republic of Cuba reported that there had been no negotiations with the government of the United States.

First, why isn’t the United States Department of State robustly focused upon negotiating a settlement of the certified claims?  A resolution would have the most impact upon the bilateral relationship with the Republic of Cuba.  

Second, why hasn’t the United States Department of State declared the United States national interest in a cessation of civil judgments against the Republic of Cuba by courts located in the State of Florida- which now are valued at more than US$4 billion… and with interest (upwards of 11% annually) continuing to increase in value?  

United States-based companies- with and without certified claims against the Republic of Cuba, need the United States Department of State to 1) seek the dismissal of actions pending against the Republic of Cuba and 2) move to vacate judgments entered against the Republic of Cuba.

Iran Example

The United States government successfully intervened in a case against the Islamic Republic of Iran brought by United States diplomats and United States Marines held in the United States Embassy in Tehran.

The United States government requested that the court dismiss a case against the Islamic Republic of Iran due to defects under the Foreign Sovereign Immunities Act (FSIA).  The court allowed the intervention and dismissed the suit.  

The same infirmity applies to judgements against the Republic of Cuba.  Yet, surprisingly, when courts have asked the United States government for its position on plaintiffs seizing frozen United States bank accounts of the Republic of Cuba, the response has been to recommend the courts do what the courts want to do.  So much for principled advocacy on behalf of legitimate claimants.

The results of the position of the United States government has been to deplete bank accounts of the Republic of Cuba that had been frozen since the early 1960s- which were always considered to be for the benefit of the 5,913 claims valued at US$1,902,202,284.95 that were certified by the Foreign Claims Settlement Commission (FCSC) within the United States Department of Justice.   

Long Term Impact

Today, the issue is no longer about preserving funds for use in the settlement of the certified claims because those funds have pretty much vanished.  Instead, Florida-based civil judgments for individuals are obstructing normalization of relations between the United States and Republic of Cuba.   

These judgements are seemingly intended to punish the brothers Castro, but in reality they are punishing the 11.3 million citizens of the Republic of Cuba, as well as, punishing companies and individuals who have legitimate, and certified, claims.  These judgements are also obstructing normalized relations between the United States and the Republic of Cuba.

The Republic of Cuba could attempt to halt default judgments by claiming sovereign immunity in lieu of filing a response.  However, there is resistance in Havana to recognizing the jurisdiction of United States courts, even if only to assert sovereign immunity.  As officials of the government of the Republic of Cuba appreciate, nothing in United States courts (especially in the State of Florida) is simple when it comes to the Republic of Cuba.  They fear lengthy and expensive litigation would follow any assertion of sovereign immunity and they would probably end up being victimized by home-court (pun intended) advantage.

“Vulcan Justice”

For Mr. Ben Rhodes, the thirty-nine (39) year old Assistant to the President and Deputy National Security Advisor for Strategic Communications for the National Security Council (NSC) at The White House, who was a primary participant in the secret negotiations with the government of the Republic of Cuba that resulted in in the 17 December 2014 announcement by President Barack Obama, and who was quoted by The New York Times sharing “I don’t know anymore where I begin and Obama ends,” … it’s time for another Vulcan “mind meld.”

LINK TO PDF DOCUMENT IN PDF FORMAT

LINK TO ANALYSIS BY ANDREW LYUBARSKY

July Food/Ag Exports To Cuba Increased 705%; Down 2% Overall For Year

ECONOMIC EYE ON CUBA©
September 2016


July Food/Ag Exports Increased 705%- 1
Decreased 2% For First Seven Months Of 2016- 5
Healthcare Product Exports- 2
Humanitarian Donations- 2
U.S. Port Export Data- 13
Updated Speaking Schedule- 15

JULY FOOD/AG EXPORTS INCREASED 705%- Exports of food products & agricultural commodities from the United States to the Republic of Cuba in July 2016 were US$20,227,854.00 compared to US$3,342,526.00 in July 2015 and US$17,242,746.00 in July 2014.

An outbreak of Avian Flu had restricted United States poultry exports to the Republic of Cuba in 2015.  In June 2015, July 2015, and September 2015, Republic of Cuba government-operated Empresa Cubana Importadora Alimentos (Alimport), under the auspice of the Ministry of Foreign Trade of Cuba (MINCEX), used a credit facility to purchase frozen poultry from Brazil.  Poultry prices were high in 2014, low in 2015 and are expected to remain low in 2016.  Alimport is expected to purchase between 8,400 metric tons and 12,000 metric tons of frozen poultry per month from United States-based companies in 2016.

Products included: Chicken Leg Quarters, Soybean Oil, Chicken Meat, Chicken Legs, Cookies, Chocolate (retail), Chocolate (bulk), and Beer.

July 2016 exporters included: Atlanta, Georgia-based Globex International (poultry); New York, New York-based Intervision Foods (poultry); Atlanta, Georgia-based AJC International (poultry); Chattanooga, Tennessee-based Koch Foods (poultry and not reported products); Bedford, Massachusetts-based Sellari Enterprises (poultry); Wellesley, Massachusetts-based Grove Services (poultry); Little Rock, Arkansas-based Mountaire Farms (poultry); Park Ridge, Illinois-based Koch Foods (not reported).

Complete Report In PDF Format

Memorandum To The National Security Council- Hurry Up.

In advance of or in conjunction with the meeting of President Barack Obama and President Raul Castro at the United Nations in New York City in September 2016…

Regulations Need Be Issued; Here They Are.

All parties need time to adjust, adapt, accept and implement.

7 September 2016: The United States business community has increasing concerns that the Obama Administration does not appreciate the enormity of the impact of the dwindling days until Inauguration Day upon Republic of Cuba-focused initiatives.

There will be no changes to United States statutes relating to the Republic of Cuba during the remaining days of the Obama Administration; there were never going to be any changes to the Cuban Democracy Act (1992), Libertad Act (1996) or Trade Sanctions Reform and Export Enhancement Act (2000) given the political dynamic existing during the final two-years of this two-term president.  There were unavailed opportunities when the President’s party controlled the United States Congress from 2009 to 2011.

Prudent to remember that the last change in United States law relating to the Republic of Cuba will be sixteen years next month.  

Legislative history has shown the Republic of Cuba to be a low-value commodity; to be traded away in most instances because it lacks importance.  The legislative calendar is littered with Members of Congress pronouncing they would not permit legislation unrelated to the Republic of Cuba to proceed unless issues relating to the Republic of Cuba were resolved.  In the end, no Member of Congress was going to seek to hold appropriation or other legislation of national importance because of the Republic of Cuba.

In the fifteen years (December 2001) since the resumption of direct exports of food products and agricultural commodities from the United States to the Republic of Cuba, United States companies have received approximately US$5.2 billion from the Republic of Cuba.  Since the inauguration of President Obama, exports of food products and agricultural commodities have decreased from US$528.4 million in 2009 to US$170.5 million in 2015; thus far in 2016, at US$120.0 million, they have decreased 2% for the first seven months of the year.  

Healthcare product (medical instruments, medical equipment, medical supplies, pharmaceuticals) exports from the United States to the Republic of Cuba in 2009 were US$85,408.00; and in 2015 were US$4,896,966.00.  Thus far in 2016, exports were US$617,315.00.  

Since 17 December 2014, the Republic of Cuba has received (from United States visitors) and has saved (cost of business operations due to changes in United States regulations) in excess of US$1 billion.  

One Republic of Cuba government-operated company has contracted with a United States-based company for one (1) piece of agricultural equipment.  There have been no other durable-defined product exports from the United States to the Republic of Cuba since 17 December 2014.  

Useful to remember that while the Trade Sanctions Reform and Export Enhancement Act (TSREEA) included, with the support of the United States business community, a re-authorization of exports (on a cash basis, which was also supported by the United States business community but opposed by agricultural organizations and by the government of the Republic of Cuba) for food products and agricultural commodities, the legislative balance insisted upon by opponents was a codification of authorized travel categories (which excluded tourism); they were successful.

Legislation currently considered by the United States Congress may well result in a “path forward” balance in order to obtain support from opponents- and that equilibrium could include unintended, but predictable consequences- a limitation upon United States companies as to which entities within the Republic of Cuba are authorized for commercial engagement (i.e., military-affiliated).

Opponents to further changes in United States law have twenty-four years of precedent (1992, 1996, 2000); and they have prevented statutory changes in the last 631 days (since 17 December 2014) during which the President of the United States has sought to make the Republic of Cuba a significant component of his two-term (eight-year) legacy.

For the Obama Administration, there may be non-Republic of Cuba considerations that will stifle additional regulatory changes- the importance of hearings for a nominee to the United States Supreme Court and approval of the Trans-Pacific Partnership (TPP).

For the Obama Administration, the use of regulatory authority was always the only efficient pathway for creating changes to the commercial, economic and political bilateral landscape with the Republic of Cuba.

The Obama Administration focus must be upon departing at 12:00 pm on 20 January 2017 with only statutory impediments remaining throughout this bilateral landscape.  In this way, all that can be done will have been done.

As a result, the government of the Republic of Cuba will need to reconcile with the reality of opportunities available for engagement or continued posturing about what statutes remain in place as reason(s) for awaiting any further deepening of commercial relationships.

The Obama Administration (at the direction of the National Security Council at The White House) does plan to issue changes to existing regulations and issue new regulations before 20 January 2016.  That’s the good news.

There is peril in a “Regulation Dump” immediately before Inauguration Day, rather than doing so as soon as possible…. Doing all of it.

All parties need time to adjust, adapt, accept and implement.

The Obama Administration does not seem to appreciate the importance for United States companies and the government of the Republic of Cuba to have sufficient time for regulations to be vetted by legal counsel, dissected to determine if they are viable, and then if possible implemented.

There needs to be time for subsequent regulatory revisions so there are not what will be significant delays during the settling-in of the next Administration.  

Regulators at departments and agencies throughout the United States government are generally paralyzed during the first months (or year or more) of any new Administration as they await placement of political appointees for policy guidance.

This freezing of decision-making would be heightened due to the political sensitivities of anything relating to the Republic of Cuba in 2017 as the anticipation focuses upon 24 February 2018, the retirement of President Castro- and how to entice changes by him during his final months in office or await and provide incentives to his successor, First Vice President of the Council of State of the Republic of Cuba, Miguel Diaz-Canel (DOB 20 April 1960).  That is what the United States Congress will be analyzing.

The Obama Administration needs to make the changes to existing regulations and issue new regulations as soon as possible.  

There are desires among some in The White House to synchronize announcements with the final meeting of President Obama and President Castro; that means during the week that includes 20 September 2016.  

Earlier would be preferred so that the two heads of state would be able to discuss how the regulatory announcements were received by the United States business community and in Havana.

Go all in; the government of the Republic of Cuba has not fully reciprocated, is not fully reciprocating and is unlikely to fully reciprocate to a depth which would balance the Obama Administration initiatives with the Castro Administration responses.  So, the choice is awaiting what will not arrive or finishing the task as forcefully as possible.  

The successor to President Obama will unlikely be focused upon regulatory changes certainly at the beginning, and likely through the beginning of their term in office.  And, with President Castro retiring on 24 February 2018, there may well be an incentive to withhold regulatory changes until a successor is in place and governing.  So, President Obama should go “all in” and leave only for his successor the shepherding of a legislative agenda.

What Would Be Helpful

  • Authorize all commercial activity under a general license from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury and Bureau of Industry and Security (BIS) of the United States Department of Commerce, including Direct Foreign Investment (DFI)
  • Issue a general license from the OFAC for all vessels pursuant to the 180-day provision of the Cuban Democracy Act (CDA) of 1992
  • Authorize all transactions with Republic of Cuba government-operated companies
  • Authorize all imports under general license
  • Authorize all exports under general license
  • Authorize Republic of Cuba government-operated financial institutions to have accounts with
  • United States-based financial institutions for the purpose of correspondent activities
  • File motions to dismiss unwarranted civil judgements against the Republic of Cuba
  • Announce specific progress for the settlement of the 5,913 claims certified with the Foreign Claims Settlement Commission (FCSC) within the United States Department of Justice

The mathematics are simple, the fewer days remaining in the Obama Administration, the fewer days for United States companies to make the greatest advantage of the initiatives implemented since 17 December 2014.  

It’s time to be practical rather than political.

COMPLETE TEXT IN PDF FORMAT

United States and Cuba To Hold Human Smuggling and Migratory Fraud Prevention Technical Exchange in Havana, Cuba

United States and Cuba To Hold Human Smuggling and Migratory Fraud Prevention Technical Exchange in Havana, Cuba

Media Note
Office of the Spokesperson
Washington, DC
September 6, 2016

The United States and Cuba will hold the second Human Smuggling and Migratory Fraud Prevention Technical Exchange in Havana, Cuba, on September 7. The U.S. delegation will include working-level representatives from U.S. Immigration and Customs Enforcement, U.S. Customs and Border Protection, the U.S. Coast Guard, U.S. Citizenship and Immigration Services, and the Department of State.

Coordination and cooperation on human smuggling and migratory fraud has been one of several important topics discussed as part of the Law Enforcement Dialogue between the United States and Cuba. We welcome the opportunity to bring together technical experts to discuss this topic of common interest.

WLRN (NPR-MIAMI)- U.S. Airlines Fly High In Cuba, But The Island's Economy Is Badly Grounded

WLRN
Miami, Florida
5 September 2016

U.S. Airlines Fly High In Cuba, But The Island's Economy Is Badly Grounded

By Tim Padgett  

Listen To The Complete Segment (4:43 minutes)

Excerpts….

There was a lot of celebration – and not a little hype – last week when JetBlue took the first U.S. commercial flight into Cuba in more than 50 years.

It was another big step in the normalization of U.S.-Cuba relations. But beneath all the airborne cheering is the grim reality that Cuba’s economic wings have been all but clipped.

Thanks largely to the collapse of its oil-rich ally Venezuela, Cuba’s economy is in big trouble – forecast to grow just 1 percent this year if at all.

And if you think Cuba’s distress means it will open up to more free-market reforms, think again. It could mean instead that its socialist leadership will dig in its heels.

Few know that better than John Kavulich, president of the U.S.-Cuba Trade and Economic Council in New York. Kavulich has been watching Cuba for more than a quarter century, and he sat down with WLRN to discuss Cuba’s crisis – and how it’s affecting the new U.S.-Cuba relationship.

The Cuban government has had to cut the island’s fuel consumption by a third. You’ve been to Cuba this year; you’re going back this month – how badly is the economy getting hit?

Not to the extent of the so-called “special period” of the 1990s, when Cuba lost all its aid from the former Soviet Union. But the issues with Venezuela are irreversible. Venezuela’s economy has imploded; providing discounted oil to Cuba is simply no longer sustainable for the Venezuelan government. And further, export markets for Cuban services of people – doctors and others – now they’re having issues.
So a billion-plus dollars of revenue the Cuba government depended on from the export of services is now in jeopardy. For the Cuban citizenry, workdays are getting shorter; ground transportation less frequent; initiatives the government said they were going to push through that help individuals wanting businesses – that is impacted too. Maybe most important: Cuba publicly has said they are having trouble paying their bills.

Why is that so important?

For the Cuban government there's a worse dynamic now, because the U.S. is no longer a bystanding actor. It is an active actor. We are invading Cuba again, with dollars this time instead of bullets.

Generally, they’re not transparent about that. So we have a sort of truth serum, which is I think good for the Cubans.

Would things be even worse if President Raúl Castro hadn’t introduced at least limited free-enterprise reforms so that half a million Cubans could now run their own businesses?

Yes, it would certainly have been harder now if he hadn’t.

So Cuba’s leaders ought to reason that the best way out of their troubles now is more free enterprise, right?

Yeah. But that’s not how the Cuban government operates. When they feel threatened, they’re generally going to retrench even more. And for them there’s a worse dynamic now, because the United States is no longer a bystanding actor. It is now an active actor. We are doing everything possible to resurrect a middle class in Cuba that the Cuban Revolution sought to extinguish.

President Obama’s initiatives for the last 600-plus days – the five rounds of regulatory changes – put into Cuba more than a billion dollars. And remittances have gone up as well, from people of Cuban descent in South Florida and northern New Jersey. So the Cuban government’s situation has been made less worse because of what President Obama has done – but at the same time, they know what President Obama is trying to do.

Which is: Use visitors as an army; commercial airplanes as an air force; cruise ship lines as they navy, and businesses as the marines. We are invading Cuba again. But this time, instead of using bullets we’re using dollars.

ASPIRATION VS. REALITY

Is this soft invasion perhaps more alarming to the Cuban leadership than a hard invasion like the Bay of Pigs?

Oh, absolutely. Because the more money that’s in the system that they didn’t create, the more it shows that their system doesn’t work.

But didn’t Raúl Castro and the Cuban leadership know this would be the case?

Yes, but they also thought they could control it. So, because of President Obama’s initiatives, U.S. companies can now export almost anything to an independently operated Cuban business. But instead of opening things up, the Cuban government has said no to that. You’ve had a thousand U.S. business people going down there in the last 600 days – and they’ve come back with nothing. And we continue this year to have a 27 percent decline in food and agricultural exports from the U.S. to Cuba.

So why do U.S. companies keep wanting in to Cuba?

There’s a lot of aspiration chasing very little reality. It’s like trying to get into a club. They don’t necessarily know what’s in the club, but they don’t want to be on the other side of that rope. What they see is what they want to see – not necessarily what’s there.

The JetBlue flight from Fort Lauderdale gets a water-cannon salute as it arrives in Santa Clara, Cuba, last week. Carl Juste / Miami Herald  

The JetBlue flight from Fort Lauderdale gets a water-cannon salute as it arrives in Santa
Clara, Cuba, last week. Carl Juste / Miami Herald

 

Journal of Commerce: Mariel port head outlines Cuba’s long-term shipping prospects

Journal of Commerce
Newark, New Jersey
5 September 2016

Mariel port head outlines Cuba’s long-term shipping prospects

Greg Miller, Special Correspondent

Charles Baker, general director of the PSA International terminal in Cuba. Credit: Greg Miller.

Within maritime circles, there is tremendous interest in the promise of Cuban trade and how shipping can navigate the political minefield of the US embargo and the 180-day rule, which bars a vessel that calls in Cuba from visiting the United States for six months.

To obtain an insider’s perspective on current conditions and future prospects, special correspondent Greg Miller interviewed Charles Baker, the general director of the PSA International-operated container terminal in Mariel, Cuba, on August 30.

Greg Miller: Let’s start with how the port is performing now and then move on to your big plans for the future. You did around 160,000 twenty-foot-equivalent units in fiscal year 2014, the first year of operations for Mariel, then 330,000 TEUs in 2015, which equated to an increase of 35 percent to 40 percent when you subtract out the volumes that were simply shifted over from Havana. Back in May, you were predicting that your throughput for this year would rise to around 360,000–370,000 TEUs. Is that still your forecast today?

Charles Baker: “Unfortunately, no. After a very, very good start, the situation that the country faces economically has become much more challenging. What we saw in the second quarter was a slowing down of traffic. What we’re now predicting is that our figures for this year will be close to last year’s. It’s not the end of the world, but it’s not as exciting as it looked at the beginning of this year.”

You’re now in your third year of port operations in Cuba, so you must have a strong view on the quality of Cuban labor. I’ve heard the theory that because Cuban workers were brought up in a Communist society, they won’t be productive workers, so terminal operations in Cuba would be at a disadvantage. How would you describe your workforce?

“What I would say is that if you could bottle the spirit of our workforce and sell it, you’d have the next Red Bull on your hands. Now that the terminal is doing good business and making a profit, we’ve increased salaries significantly, but back before the terminal opened, the salaries we were offering were in line with the country’s general averages, which are probably around $25–30 per month. Even so, we would be working on some aspect of the development and would ask, ‘Is anyone willing to come in on Saturday and Sunday?’ And people were always willing to come in on Saturday and Sunday, for no additional money.

“Also remember, a lot of our workers live in Havana and it’s a pretty arduous journey to Mariel, about an hour and a half there and an hour and a half back at the end of the shift. So we take our hats off to these workers and sometimes we look on in awe of their tenacity. They’ve also got a very, very good handle on the technology. The average crane rates are around 27 moves per hour, so we’re very happy with their performance.”

One of the issues you’ve faced is long dwell times for containers on your property, driven by factors outside the port. How are you dealing with this?

“There have been a number of elements involved. One of them was that last year, there was a lack of truck availability on the island and this has been addressed by the arrival of approximately 200 new trucks, with the last batch just coming onto the roads recently. There have also been new warehouses opening up in the Mariel area, so containers don’t need to be trucked all the way to Havana.

“I’d also say that some aspects of Cuban logistics are pretty antiquated. Warehouses are not open even 16 hours, let alone 24 hours a day. They also do a lot of cargo inspections — there are probably not enough inspectors and too many inspections. There is also the fact that we are obliged to offer 15 days of free storage, and in my experience, anywhere in the world, if you offer it, people will take it. There is a program to reduce the amount of free time over the course of the next two years and bring it down to seven days.

“All of these things are going to take time to get sorted out. We’re talking about a wide modernization process for the whole logistics and supply chain system in the country.”

What about your rail connection? How is that affecting port operations?

“We’ve got two new rail-mounted gantry cranes arriving at the beginning of September from Shanghai and that will give us more than enough rail capacity for the foreseeable future. We’re handling an average of one train a day and there is more demand for rail. This is a very long, thin island, so it lends itself to rail transport. The challenges involve the efficiency of the country’s rail network: how quickly those trains can be discharged and reloaded and how quickly the trains can get back here. There is also a need for more investments in wagons and locomotives. That is under way, so there should be additional wagons and locomotives arriving in 2017.”

Who are the main shipping lines serving the port besides Melfi (the Cuban government-owned carrier)?

“Melfi is the main customer. It has about 30 percent of the business. Then following them, roughly in order, would be Maersk Line, Mediterranean Shipping Co., CMA CGM, Hamburg Sud, Cosco Container Lines – and now China Shipping after the merger – and then Hapag-Lloyd, Zim Integrated Shipping Services, Evergreen Line, Nirint and Crowley.

How much of this is coming to Mariel through mainline services and how much through feeders?

“Melfi has mainline services. Maersk has a mainline service coming from North Europe that started in May. Hapag-Lloyd runs services from Mexico. The rest are bringing in cargo by feeders, from Panama and Kingston and the Bahamas and a little from Caucedo, much of it through Isla Bonita Shipping.” (Editor’s note: Panamanian corporate records indicate that the directors of Island Bonita Shipping are executives of X-Press Feeders)

Mariel currently has a capacity of 800,000 TEUs per year, with four cranes and 700 meters (2,296 feet) of quay. You’ve previously indicated that the next phase will be the development of an additional 300 meters of quay. What’s the timetable for that?

“We are in the process of talking about that right now with the Cuban authorities and the partners we’re working with. That means it wouldn’t be (coming online) until sometime in 2019. The ‘crystal ball gazing’ element we’ve got to consider is how quickly and far-reaching any changes to US legislation vis-à-vis the embargo and the 180-day rule will be. If those rules disappear, then we’re in the game and very well positioned geographically, so we may want more than another 300 meters.”

You also have an additional 1,400 meters that’s possible to develop, bringing the total potential quay length to 2.4 kilometers (1.5 miles) and the total future capacity potential to 3 million TEUs per year. I’m assuming that this additional 1,400-meter stretch is earmarked for the post-embargo era?

“Yeah, that’s a long-term project.”

It has only been a few months since the expanded Panama Canal has come online and we’re already seeing 10,000 TEUs neo-Panamaxes in the Caribbean. Where are you now with dredging and what’s the schedule for further deepening?

“At the moment, we have a Panamax access channel. The maritime authority has literally just published new navigational regulations for Mariel that represent the culmination of the investments in dredging that have taken place through today. These regulations allow for vessels of up to 295 meters length overall, 32.3 meter beam, and up to 12.1 meter draft. There’s probably about 15 meters of actual water depth in the channel and the channel itself is somewhat wider than it would need to be under international guidelines for a Panamax vessel, so they’re also now reviewing whether or not that (vessel allowance) can be increased. Dredging is ongoing with a view to completing a neo-Panamax-dimension channel sometime in 2017.”

The big potential for the future of Mariel is transshipment. Even with the embargo and the 180-day rule, couldn’t you start up an international transshipment business serving mainliners on, for example, a Europe-South America route, and transshipping to the Caribbean but not touching the US?

“There is a possibility, but it’s very challenging for a number of reasons. First, all of the different shipping lines in these alliances need to agree that they will include Mariel in their route and some of them have a greater degree of difficulty in making that decision. Earlier, I gave you the list of our customers and you might ask, ‘Where are NYK Line, “K” Line, MOL, and the Koreans?’ The answer is that some shipping lines have purposefully decided not to do business with Cuba so they don’t jeopardize their interests in the United States.

“Another aspect is that you have to consider who owns the ships. If half of the ships are chartered, then who are they chartered from? If it’s from a company listed on the US stock exchange, that ship cannot participate. Another question is: who insures the vessel? If an owner is using an American-based insurance plan, there’s another difficulty.

“And finally, if you have ships in a service that comes to Mariel and for whatever reason you need to change the configuration of your service, those ships cannot be deployed into a service that touches the US for 180 days. You have black-listed your ships from US service for six months after your call in Cuba.”

From what you’re saying, it sounds like the challenge to your transshipment potential is not just the 180-day rule, it’s also the embargo, even in cases where the transshipment doesn’t touch the US.

“Yes, it’s a mixture of the two.”

I know you’ve been to Washington and lobbied for repealing the 180-day rule prior to the end of the embargo. I’m trying to understand why Congress would be interested in doing that. I can see how it would benefit European and Asian carriers, a Singaporean terminal operator and the Cuban economy, but wouldn’t it create direct competition for US-based carriers operating out of US ports and carrying US exports to Caribbean buyers? What’s in it for US voters, which is what Congress cares about?

“We believe that as far as international transhipment, the US is not in that business. We’re talking about doing transhipment in Mariel as opposed to a place like Kingston, Jamaica. We also believe that if we can provide a more efficient system (than other hubs), US-based importers and exporters could reduce their transportation costs — and that is favourable to US companies and therefore US voters.

“Another aspect we think is very interesting is that if you allow transshipment to take place from Mariel to US ports, you could open up service to Tampa, which is the closest port to Orlando, which is of course a huge area for distribution centers serving the state of Florida. Supply chain costs would be reduced and you’d also get the cargo closer to the distribution centers, so you could reduce emissions from trucks that would otherwise have to run the cargo up from Miami or Ft. Lauderdale.

“The final consideration is that you’ve got a lot of federal and state budgets under discussion for dredging projects to increase the vessel-size capabilities of ports along the US Gulf and Eastern Seaboard. If you create a transshipment hub in Mariel, where we’re already putting the capital expenditures into the ground and into the channel to receive the bigger vessels, US ports could receive goods in a timely and efficient fashion without having to spend hundreds of millions of dollars on their channels. We would argue that you could actually save capital investment dollars in US ports by handling transshipment in Mariel.”

I thought the potential for Mariel was transshipping to non-US ports if the 180-day rule was lifted prior to the end of the embargo, but I’m hearing you talk a lot about the potential for transshipment involving US ports. Wouldn’t a box from Asia that was transhipped from Mariel to Florida be considered a Cuban export and therefore illegal under the embargo?

“No, it would be transit cargo and not covered under the embargo. Our interpretation is that if you remove the 180-day rule and the Torricelli Act (the Cuban Democracy Act of 1992] that goes with it, you could perform international transhipment in Mariel for US import and export cargoes. You still couldn’t trade freely between Cuba and the US, so you wouldn’t be exporting US goods to Cuba or Cuban goods to the US, but you could create a transshipment network for international transshipment cargo.

“On whether or not this is feasible, I’d point out that there’s a lot going on politically and I think we can read between the lines of some of the recent developments outside the shipping industry. The first development is the advent of cruises by Carnival from Miami to Havana and then to Cienfuegos and Santiago de Cuba. These cruises are taking place even while the 180-day rule is in place and US tourists are not permitted to visit the island. The second development is that starting tomorrow, we have the first scheduled airline flights from the US into Cuba in 55 years and within the next three months there will over 25 such flights per day, even though we are still in the same situation where US citizens are not free to travel to Cuba as tourists. So why are the airlines putting so many flights into the island?

“If exceptions are being made for those types of industries, is it really so unrealistic to think that if we lobby in the right corners, we might be able to find a similar solution for the 180-day rule and container ships? I don’t know the answer, but we’re certainly going to keep trying.”

OK, final question: what is your thinking on the timing of the lifting of the trade embargo? What I’ve been told is that even with a new US president coming in and a new Congress convening in January 2017, any action will effectively have to wait until February 2018, when Cuban president Raul Castro retires. So we should really be looking not to next year but to the year after. Does that make sense?

“It does. And if you look at the Helms-Burton Act (the Cuban Liberty and Democratic Solidarity Act of 1996), it actually names Fidel and Raul Castro and specifically states that the US will not do business with a government that involves these individuals. So if Raul retires in early 2018 as he says he will, it will be easier for Congress to get rid of the embargo.

“I am not a betting man, so I would not bet on it, but if I was a betting man, I would bet on 2018.”

Cuba Journal Publishes List Of Wi-Fi Locations In Cuba

From Cuba Journal (www.cubajournal.com)
3 September 2016

At the moment, there are 189 public WIFI locations in Cuba.  The official rate is US$2.00 per hour for access at a public WIFI location.  Hotels often sell Internet access cards at a premium, usually US$5.00 per hour for access within their facility.

Network congestion and slow speeds characterize Internet use in Cuba. Generally, you can accomplish basic tasks using Cuba’s Internet, but you can forget about downloading the entire HD version of Dr. Zhivago.  ETESCA is the Cuban state ISP for the entire country.

Temporary access to Cuba’s public Internet is offered through prepaid cards that are not rechargeable.  The cards have an active period of 30 calendar days from the first connection. Prepaid cards are in demand by tourists and are marketed in ETESCA’s retail locations and in hotels, airports and tourist locations.

It is common to find large numbers of Cubans crowding around the public WIFI locations at night when it is cooler outside.  Several luxury and business hotels offer access in rooms.  The Hotel Saratoga has the best Internet access we have encountered in Cuba.  Here are all the current public WIFI access points in Cuba (excluding private locations like hotels):

LINK TO LIST

DOT Releases US-HAV Final Route Schedules; Retains Tentative Ruling

2016 U.S.-CUBA FREQUENCY ALLOCATION PROCEEDING

DOCKET DOT-OST-2016-0021

By this order the Department makes final its tentative decision to allocate 20 daily frequencies to U.S. air carriers for scheduled passenger services between the United States and Havana, Cuba.

LINK TO FINAL RULE

LINK TO ANALYSIS

What Today's Flight By JetBlue Airways To Cuba Means

Today Is About “Re-“ As In “Re-Establishing”
Flight Is Not “The” Moment; It’s “A” Moment
A Transformative Moment
What’s To Come?

JetBlue flight 387 from Fort Lauderdale, Florida, to Santa Clara, Republic of Cuba, should not be viewed as the end of “the embargo.”  It’s a moment in a series of moments that is the bilateral relationship between the United States and the Republic of Cuba.   

Important to remember the numbers:

Fifteen years since the last United States law was enacted that focused upon the Republic of Cuba; ironically, signed by then-President William Clinton- a result was re-authorizing agricultural commodity and food product exports, but creating (codifying) twelve categories of travel- which excluded tourism.  

President Barack Obama has 142 days remaining in his term.  

Today is the 625th day since 17 December 2014, the joint announcements by President Obama and Raul Castro…. And during that time, no legislation has become law despite substantial expenditures of resources by individuals, organizations, and companies.  What changes have been implemented are a result of altering and creating regulations; that’s where the focus is and should remain.  

This is a transformative moment.  Yesterday, a passenger had to endure a journey to the Republic of Cuba on a charter flight- perhaps a JetBlue aircraft paid for by a third party who then sold tickets in order to repay JetBlue; the aircraft would have a JetBlue crew, but that is where the comfort ended.

Sometimes, tickets would be need to be paid for in cash; they often would not be refundable or changeable (because one charter operation would not necessarily honor travelers from another charter operation), the schedules would be inconvenient, the airfares would be high, the customer service would be terrible, and the benefits non-existent.

Today, a traveler may use frequent flyer miles for a ticket, may earn miles for the flight, may upgrade to first class, select seats in advance, will have access to airport lounges, will be able to use credit cards, make changes to reservations, obtain refunds, make a complaint and obtain a resolution, find lower ticket prices, and, most importantly, do it all using the Internet.  Earning something from traveling to somewhere is an important component of today’s traveler profile.

Where charter flights reinforced an aura of restriction, illegitimacy, forbidding, stress; the re-establishment of regularly-scheduled commercial airline service welcomes consistency, comfort, normalcy and accountability.

Accountability to the passenger in the form of improved passenger service at Republic of Cuba's immigration, customs and airport facilities.  United States airlines will be changing the Republic of Cuba; the Republic of Cuba will not be changing United States airlines.  

Important to note that the United States Department of Transportation (USDOT) has authorized approximately 1.2 million passenger seats for the US-Cuba routes; less than the 3.4 million requested by airlines.  

There have been and will continue to be enormous infrastructure challenges within the Republic of Cuba that will severely impact the country’s ability to absorb the new arrivals; changing this reality will take years, not months.  

The Republic of Cuba has become increasingly expensive- hotels that should be charging US$99.00 per night are charging US$350.00 per night; that’s unsustainable and dangerous from a marketing perspective.  Most visitors from the United States need to visit or want to visit Havana; neither the number of hotel rooms or the quality of hotel rooms exists today to accommodate the demand.

The United States business community expects that authorization by the government of the Republic of Cuba for American Airlines to operate a ticket office in Havana will lead to the authorization of offices for other, non-hospitality-related United States-based companies. 

The re-establishment of regularly-scheduled commercial airline services between the two countries is a transformative moment in the bilateral relationship; one of many during the last fifty-six years… and continues the re-normalization process. 

The airlines appreciate that they have 142 days remaining in the Obama Administration, so every effort is being made to have as established an operation as possible so that the time may be used to seek further regulatory and policy expansions in the United States and in the Republic of Cuba.  And, having service to the Republic of Cuba will provide marketing value for an airline's entire route system.

Don’t be surprised if the USDOT awards a Washington Dulles to Havana route; There is much symbolism linking capital-to-capital.

What United States Companies Continue To Seek From The Obama Administration:

  • Authorize all commercial activity under a general license from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury and Bureau of Industry and Security (BIS) of the
  • United States Department of Commerce, including Direct Foreign Investment (DFI)
  • Issue a general license from the OFAC for all vessels pursuant to the 180-day provision of the Cuban Democracy Act (CDA) of 1992
  • Authorize all transactions with Republic of Cuba government-operated companies
  • Authorize all imports under general license
  • Authorize all exports under general license
  • Authorize Republic of Cuba government-operated financial institutions to have accounts with United States-based financial institutions for the purpose of correspondent activities
  • File motions to dismiss unwarranted civil judgements against the Republic of Cuba
  • Announce specific progress for the settlement of the 5,913 claims certified with the Foreign Claims Settlement Commission (FCSC) within the United States Department of Justice

What Have The Governments Of The US & Cuba Done During The Last 622 Days?

What has the government of Cuba agreed to or done since 17 December 2014:

  • Re-establish diplomatic relations
  • Re-open its embassy in Washington, DC
  • Authorize the re-opening of the United States Embassy in Havana
  • Hosted an official (state) visit by President Barack Obama
  • Hosted visits by four (4) members of the Obama Administration Cabinet: The Honorable John Kerry, United States Secretary of State; The Honorable Penny Pritzker, United States Secretary of Commerce; The Honorable Thomas Vilsack, United States Secretary of Agriculture; The Honorable Anthony Foxx, United States Department of Transportation
  • Hosted a visit by The Honorable R. Gil Kerlikowske, Commissioner, U.S. Customs and Border Protection
  • Hosted a visit by The Honorable Thomas Wheeler, Chairman of the Federal Communications Commission
  • More than eighty (80) representatives of the government of Cuba have visited the United States
  • More than one hundred and sixty (160) representatives of the United States government have visited Cuba
  • Hosted for formal meeting more than one hundred fifty (150) senior-level representatives of United States companies (more than 500 have visited and held individual meetings and non-official meetings)
  • Continue to decrease food product/agricultural commodity purchases authorized by the Trade Sanctions Reform and Export Enhancement Act (TSREEA) of 2000; down 24% thus far in 2015 compared to 2014
  • Increase healthcare product purchases authorized by the Cuban Democracy Act (CDA) of 1992.  Healthcare product exports (cash-only with verification requirements) permitted by the CDA increased 457% in 2015 compared with 2014
  • Authorize a direct correspondent banking agreement by Banco Internacional de Comercio S.A. (BICSA) with Florida-based Stonegate Bank
  • Authorize Stonegate Bank to issue a MasterCard-branded credit card and debit card for use in Cuba (10,800 current locations); with expansion in 2016 for use at ATM locations in Cuba
  • Announced (but not implemented) a removal of the 10% surcharge for converting United States currency to CUC
  • Authorize hospitality companies to contract with assets owned by the Revolutionary Armed Forces of the Republic of Cuba
  • Authorize Starwood Hotels & Resorts Worldwide (being acquired by Marriott International) to manage three properties in Cuba (Gran Caribe-owned Hotel Inglaterra; Habaguanex-owned Hotel Santa Isabel; Gaviota-owned Hotel Quinta Avenida- rebranded as Four Points By Sheraton Havana in June 2016)
  • Authorize Marriott International to manage properties in Cuba
  • Authorize California-based Google to install and operate a no-cost high-speed Internet-based product display and interactive location(s)
  • Authorize booking.com (owned by New York-based The Priceline Group) to provide hotel reservations services for United States authorized travelers
  • Authorize California-based Air bnb, Inc. to offer reservations throughout the world
  • Authorize Cisco Systems to establish a no-cost Networking Academy in Havana
  • Authorize Cuba government-operated Banco Popular de Ahorro to establish lines of credit up to US$400.00 for licensed independent businesses; but continue to prohibit the entities to import products directly, requiring purchases through government-operated companies
  • Creating a uniform commercial code and mortgage regulations
  • Authorize roaming agreements between Cuba government-operated ETECSA and New York-based Verizon Wireless, Kansas-based Sprint, Texas-based AT&T, Washington-based T-Mobile
  • Increase Wi-Fi areas (parks and urban) for wireless Internet access
  • Negotiate with Alabama-based Cleber LLC tractor warehouse/assembly facility in Mariel Special Development Zone.  OFAC has authorized.  1st year investment US$1.8 million (which has been obtained according to the company); total investment US$5 million
  • Purchased through Republic of Cuba government-operated Tecnotex (affiliated with the Revolutionary Armed Forces of the Republic of Cuba) advanced planting and harvesting equipment valued at US$108,184,00 from Foley, Alabama-based GulfWise LLC, affiliated with Foley, Alabama-based The Woerner Companies (2015 revenues exceeded US$40 million) for use by Republic of Cuba government-operated Indio Hatuey Research Station, a Matanzas, Republic of Cuba-based agricultural research institution
  • Resumption of direct long-distance telephone service through an agreement between ETECSA and New Jersey-based IDT Corporation
  • Negotiate the re-establishment of regularly-scheduled commercial airline service (Civil Aviation Agreement- CAA); Arrangement (US) & Memorandum of Understanding (Cuba) signed in December 2015; Arrangement signed February 2016
  • Agree to a (limited) resumption of United States Postal Service operations
  • Permit a substantial increase in visitors from United States visitors (charter flights, pleasure craft, general aviation aircraft, cruise lines, and third-country transit) and revenues from those visitors.  United States visitors to Cuba (authorized, unauthorized, non-family), who have the highest net profit margin per person of any visitor to the country, increased 76.6% from approximately 92,000 in 2014 to 161,233 in 2015; and increased 84% during the first six months of 2016 compared to 2015
  • Continue to increase hotel room rates in the city of Havana; Paris, France-based AccorHotels has increased per night rates (with breakfast) at the Hotel Mercure Sevilla Habane from US$120.00 in November 2015 to US$180.00 in March 2016 and US$280.00 in November 2016
  • Authorize Miami, Florida-based Carnival Cruise Line to operate itineraries
  • The Ministry of Science, Technology, and Environment (CITMA) of the Republic of Cuba signed a Memorandum of Understanding (MOU) with the National Oceanic and Atmospheric Administration (NOAA) and the National Park Service (NPS).  “The MOU aims to facilitate joint efforts concerning science, stewardship, and management related to Marine Protected Areas (MPAs). The MOU also includes a sister MPA program to foster conservation and understanding of natural marine resources in both countries, sharing technical and scientific data, and promoting education and outreach initiatives.”
  • Signed a joint statement with the United States Department of State on environmental cooperation including coastal and marine protection, the protection of biodiversity including endangered and threatened species, climate change, disaster risk reduction, and marine pollution
  • National Office of Hydrography and Geodesy (ONHG) signed a MOU with NOAA to improve maritime navigation safety and related areas of mutual interest to protect lives and property at sea
  • Changed policy to permit individuals of Cuban descent to travel to the Republic of Cuba by authorized cruise ship
  • The Ministry of Public Health of the Republic of Cuba signed a MOU with the United States Department of Health and Human Services
  • Signed Counternarcotics Arrangement with U.S. Drug Enforcement Agency (DEA), US Coast Guard (USCG) and Customs Enforcement-Homeland Security Investigations (ICE/HIS)
  • Agreed to discussions about the 5,913 claims certified with the Foreign Claims Settlement Commission (FCSC) within the United States Department of Justice

What has the government of Cuba not (yet) agreed to or done since 17 December 2014:

  • Authorize ferry services
  • Authorize more than one passenger cruise line from the United States to have regularly-scheduled services
  • Authorize United States companies to export products directly to the 200+ categories of licensed independent businesses
  • Authorize any United States non-hospitality-related company to have an operational presence (including hiring Cuban nationals, obtaining office space, establish bank accounts)
  • Authorize Florida-based Florida Produce of Hillsborough County to establish in Havana a distribution center for food products and agricultural commodities
  • Authorize the Alabama-based Cleber LLC tractor warehouse/assembly facility in Mariel Special Development Zone.  OFAC has authorized.  1st year investment US$1.8 million (which has been obtained according to the company); total investment US$5 million
  • Authorize United States companies to engage in loan/lease programs to licensed independent businesses
  • Purchase communications/telecommunications equipment, although there are security, pricing and sourcing reasons not to purchase the equipment or permit the provision of such services
  • Increase overall purchases of agricultural commodities and food products
  • Respond in a timely manner to inquiries from United States companies
  • Negotiate settlement of the 5,913 claims certified with the FCSC

What has the government of the United States agreed to or done since 17 December 2014:

  • Re-establish diplomatic relations
  • Re-open its embassy in Havana
  • Authorize the re-opening of the Cuban Embassy in Washington
  • Removed Cuba from the List of State Sponsors of Terrorism (“Sanctions List”)
  • Visit to Cuba by President Barack Obama
  • Dispatched four (4) members of the Cabinet to Cuba: The Honorable John Kerry, United States Secretary of State; The Honorable Penny Pritzker, United States Secretary of Commerce; The Honorable Thomas Vilsack, United States Secretary of Agriculture; The Honorable Anthony Foxx, United States Department of Transportation
  • Dispatched The Honorable R. Gil Kerlikowske, Commissioner, U.S. Customs and Border Protection to Cuba
  • Dispatched The Honorable Thomas Wheeler, Chairman of the Federal Communications Commission to Cuba
  • Dispatched Maria Contreras-Sweet, Administrator of the Small Business Administration, in the Official Delegation visiting Cuba with President Obama and for second visit
  • Permitted more than one hundred sixty (160) representatives of the United States government to visit Cuba
  • Permitted more than eighty (80) representatives of the government of Cuba to visit the United States
  • Remove or lessen most licensing requirements for authorized travel to Cuba
  • Negotiate a Civil Aviation Agreement (CAA)-equivalent (“Arrangement”) and remove most impediments relating to commercial flight operations
  • Agree to a (limited) resumption of United States Postal Service operations
  • Remove some restrictions upon U.S. financial institutions
  • Re-authorize direct correspondent banking agreements
  • Re-authorize credit card and debit card usage.  There remain compliance issues for United States financial institutions; New York-based MasterCard has removed its “block” on credit cards issued by United States financial institutions using its brand).  There are approximately 10,800 points of sale in Cuba
  • Authorize hospitality companies to manage properties in Cuba
  • Authorize hospitality companies to contract with assets owned by the Revolutionary Armed Forces of the Republic of Cuba
  • Authorized Republic of Cuba government-operated Tecnotex (affiliated with the Revolutionary Armed Forces of the Republic of Cuba) to purchase advanced planting and harvesting equipment valued at approximately US$125,000.00 from Alabama-based Woerner Companies for use by Republic of Cuba government-operated Indio Hatuey, a Matanzas-based agricultural research institution
  • Authorize Starwood Hotels & Resorts Worldwide (being acquired by Marriott International) to manage three properties (rebranding one to a Four Points by Sheraton) in Cuba (Gran Caribe-owned Hotel Inglaterra; Habaguanex-owned Hotel Santa Isabel; Gaviota-owned Hotel Quinta Avenida)
  • Authorized Internet and telecommunications companies to install equipment in Cuba
  • Authorize Marriott International to manage properties in Cuba
  • Authorized booking.com (owned by New York-based The Priceline Group) to provide hotel reservations services for United States authorized travelers
  • Authorize California-based Air bnb, Inc. to offer reservations throughout the world
  • Authorize California-based Google to install and operate a no-cost high-speed Internet-based product display and interactive location(s)
  • Authorize Cisco Systems to establish a no-cost Networking Academy in Havana
  • Expanded the list of products that may be exported to Cuba and authorize payment terms for product exports to Cuba not subject to prohibitions by the CDA or TSREEA
  • Removed limits on remittances to Cuba
  • Authorized individuals and businesses to have bank accounts in Cuba
  • Authorized the export to Cuba of 100% U.S.-origin products from third countries
  • Authorized companies to establish offices in Cuba
  • Authorize payments to Republic of Cuba nationals who work in the United States
  • Changed the definition of the “cash in advance” provision of TSREEA from “cash before shipment” to cash before transfer of title and control”
  • Authorize micro-financing projects
  • Authorized financing (bank and third-party) and payment terms for selected authorized exports
  • Expand the list of eligible products authorized for importation to the United States to include textiles and coffee
  • Issued a license to Switzerland-based Nestle Nespresso (United States subsidiary) to import coffee sourced from Cuba to the United States through Europe (where the beans will be roasted)
  • Removed Cuba from the Exclusion List maintained by the International Bureau of the Federal Communications Commission
  • Discuss settlement of the 5,913 claims certified with the FCSC
  • Removed restrictions upon Cuba for the use of United States Dollars for international transactions
  • US Coast Guard removed conditions of entry on vessels arriving from Cuba
  • In selected instances, use an expansive, rather than constrictive interpretation of the TSREEA, title IX, Public Law 106-387 [22 U.S.C. 7207(a)(1)] (TSRA)

What has the government of the United States not (yet) agreed to or done since 17 December 2014:

  • Authorize, under a general license from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury, Republic of Cuba government-operated financial institutions to have correspondent bank accounts at United States-based financial institutions
  • In all instances, use an expansive, rather than constrictive interpretation of the TSREEA, title IX, Public Law 106-387 [22 U.S.C. 7207(a)(1)] (TSRA)
  • Authorize all commercial activity under a general license from the OFAC and Bureau of Industry and Security (BIS) of the United States Department of Commerce, including Direct Foreign Investment (DFI)
  • Issue a general license from the OFAC for all vessels pursuant to the 180-day provision of the CDA
  • Authorize all transactions with Republic of Cuba government-operated companies
  • Authorize all imports under general license
  • Authorize all exports under general license
  • File motions to dismiss civil judgements against the Republic of Cuba
  • Specific progress for the settlement of the certified claims

LINK TO PDF

Banco Popular de Puerto Rico and Popular Community Bank Customers Can Now Use Their MasterCard® Credit Cards In Cuba

Tuesday, August 23

SAN JUAN, Puerto Rico

NASDAQ: BPOP

"Popular is excited about this development. The ability to use these credit cards in Cuba will facilitate travel and promote the interaction between our clients in P.R. and the U.S. with the citizens of Cuba."

SAN JUAN, Puerto Rico--(BUSINESS WIRE)--Popular, Inc. (NASDAQ: BPOP) announced that it is the second financial institution in the United States (U.S.) and the first in Puerto Rico (P.R.) to enable their credit cards for use in Cuba. The MasterCard® credit cards of its two banking subsidiaries, Banco Popular de Puerto Rico (BPPR) and Popular Community Bank (PCB), can now be used at any of Cuba’s more than 11,000 authorized merchant terminals and ATMs throughout the Island.

Ignacio Alvarez, President and Chief Operating Officer of Popular stated that, “Popular is excited about this development. The ability to use these credit cards in Cuba will facilitate travel and promote the interaction between our clients in P.R. and the U.S. with the citizens of Cuba.”
Before visiting Cuba, BPPR and PCB MasterCard® cardholders will need to ensure that they have an active credit card and that they are traveling under one of the 12 categories authorized by U.S. regulations, including religious and professional purposes. Customers will also be required to complete a document acknowledging that the card may only be used in connection with one of the 12 categories authorized by U.S. regulations.

For further information on obtaining or activating a credit card, BPPR customers should visit http://www.popular.com/en/mastercard-in-cuba and PCB customers should visit www.popularcommunitybank.com/mastercard-in-cuba.

NOTE: In June 2016, Pompano Beach, Florida-based Stonegate Bank became the first United States-based financial institution to issue a MasterCard (credit and debit) valid for use within the Republic of Cuba.

LINK TO STONEGATE BANK MEDIA RELEASE