2/24/17 For Cuba Policy/Regulatory Announcements? 7 Sectors Receiving Focus

It could.  Might not.  That’s the point…. Create uncertainty.
24 February 2017-24 February 2018
Who Prevails? The Agnostics, The Pragmatics or Passionate Ideologues  
Air Carriers, Cruise Lines, Travel Agents/Tour Operators, OFAC, CBP, Title III, Military
Illogical to plan for nothing.  Irrational to plan for everything.  Informed to plan for something.

There are individuals within the Trump Administration who advocate for an announcement on 24 February 2017 relating to United States-Republic of Cuba policy and regulations.

This date would be one year before a new president is inaugurated in the Republic of Cuba- the first in fifty-nine (59) years not to have the “Castro” family name:  H.E. Miguel Diaz-Canel Bermudez (DOB 20 April 1960), the current First Vice President of the Council of State of the Republic of Cuba.

The Trump Administration may position changes in policy and regulations as fluid rather than momentary- an initial announcement and then, perhaps others.  Personnel issues, not having in place individuals who focus upon enforcement at departments and agencies have disrupted the timing of the initial announcement.

A point of contention is whether to make changes to policy and regulations retroactive or hence-forward.  There are potential legal challenges to removing what has already been relied upon by United States companies and citizens.  The decision is not about can or can’t, it’s about should or shouldn’t.

In 2016, the export of products and provision of services to Republic of Cuba meant approximately US$1.2 billion million in gross revenues to United States companies; and in 2017 is projected to mean US$1.4 billion in gross revenues to United States companies.  Export is defined as food products/agricultural commodities, healthcare products, air carriers, cruise lines, travel agent/tour operator revenues/fees/commissions, financial transaction fees, shipping fees, and private exports of products for use by independent businesses.  A substantial portion of travel agent/tour operator revenues (payments for hotels, ground transportation, tours, etc.) are transferred to the Republic of Cuba.

In 2016, Republic of Cuba government-operated entities earned gross revenues of approximately US$1.0 billion from visitors subject to United States jurisdiction (those with and without passports issued by the government of the Republic of Cuba), in addition to approximately US$2 billion in remittances (a meaningful amount of which was delivered in the form of products purchased in the United States and provided to family and friends; and to customers of independent businesses).

In 2017, the value of visitors subject to United States jurisdiction to Republic of Cuba government-operated companies is projected to exceed US$1.5 billion and remittances are expected to remain similar to 2016.  These projections are based upon no changes to United States policies or regulations by the Trump Administration.

The Trump Administration review process has three (3) groups: The Agnostics, The Pragmatics and the Passionate Ideologues

The first group doesn’t care; the Republic of Cuba is of such insignificance they will neither advocate more nor advocate less; they will adjust to the outcome while appreciating what is enacted today will be sustained or massaged by events as-yet-unknown.

The second group receives input from varied sources (inside government and outside government) and tends to support the status quo unless the status quo is doing harm- to the United States.  They are averse to disruption for it can create uncertainty, which is generally to be avoided as it may negatively impact commerce.  They are influenced by media.

The third group has historically been victorious in legislative, policy and regulatory arenas of combat.  They (specifically Members of the United States Congress) are generally not influenced by whether their respective political party is in the majority or minority.  Their focus has been two-fold: First, “Castro-centric” meaning that until both are gone, commercial engagement perpetuates a multi-decade plague upon the 11.3 citizens of the Republic of Cuba.  Second, the communist/socialist platform embraced by the government of the Republic of Cuba must end.  Their victories are often a result of perpetual assault on legislative, policy and regulatory processes- and their personal stories, and stories of those they share, have often resulted in colleagues not wanting to challenge them.  With the November 2016 death of H.E. Dr. Fidel Castro, former president of the Republic of Cuba, and the year-off retirement of H.E. General Raul Castro, President of the Republic of Cuba, this group may now have a confluence of moments to argue for, at minimum, a dynamic narrative to be presented to the next president of the country. 

They have positioned some Obama Administration initiatives as violations of statute, particularly relating to how visitors travel to the Republic of Cuba; their view is adjustments need to be made to maintain the viability of United States law.  Their self-described principled argument is- the Obama Administration gave away everything and received nothing- voluntarily (nothing was proactive; it was all reactive) which conveys the truth.  The citizens of the Republic of Cuba only benefit when their government is forced to offer them a means to a better life; so, let’s lessen this government’s lifeline and ask of it to do what is in the interests of its citizenry.  When it does so because it believes that it should- not because it will receive a reward, only then should the United States fully engage with it.  

They want the Republic of Cuba to deconstruct the socialism that has only survived because others have provided funding for it and reconstitute it as a self-financing program; meaning providing less and requiring more of the citizenry.  A result being less control over that citizenry.

So, upon which group to wager?  The second combined with the third.  The second group will position the status quo as useful because there are more important items on the Trump Administration agenda; but, they will accept some changes.  The third group will position change in terms of headlines- the Trump Administration will once again reverse misguided Obama Administration initiatives, observe the rule of law, be perceived as rugged.  And they will remind President Trump that he will be the first occupant of the Oval Office to preside as the Republic of Cuba receives a head of state/head of government whose family name is not “Castro.”  That may be an intoxicating political cocktail too tempting to refuse.

On 16 February 2017, Mr. Arne Sorenson, Chief Executive Officer of Bethesda, Maryland-based Marriott Corporation, shared on CNBC that he believed there would be no changes in United States policy or regulations towards the Republic of Cuba: “I don’t actively worry about this Administration turning back the progress on Cuba.  You don’t hear them saying much about Cuba.  You don’t hear a lot of debate in the political environment about Cuba.”

Members of the United States Senate Ted Cruz (R- Texas), Robert Menendez (D- New Jersey), Marco Rubio (R- Florida) and Mitch McConnell (R- Kentucky) and Members of the United States House of Representatives Carlos Curbelo (R- Florida), Mario Diaz-Balart (R- Florida), Ileana Roz-Lehtinen (R- Florida) and Paul Ryan (R- Wisconsin) would disagree.  But, do they have the collective political capital to influence the Trump Administration?  Do they have the collective political capital to prevent rank-and-file members, ranking members, sub-committee chairs and committee chairs from voting to authorize tourist travel to the Republic of Cuba and to authorize payment terms for food products and agricultural commodities, which is prohibited by statute?  They (and predecessors and colleagues) have for nearly 6,000 days- including the last eight (8) years when a president of the United States advocated for change; and two years when a president’s political party controlled the United States Congress.

On 18 February 2017, The New York Times reported that Mr. Jorge M. Perez, Chairman and Chief Executive Officer of Miami, Florida-based Related Group of Florida, recounted a conversation with President Trump: “We used to talk about Cuba as a place to do business — a Trump hotel, a Trump golf course.”  So during that last phone call, he asked Mr. Trump point-blank, did he intend to tighten the trade embargo against Cuba? “He gave me no real answer — not yes, not no. Just ‘We’re going to see what happens, I haven’t decided on that yet.’”

President Trump has shared that he would have made a “better deal” than the Obama Administration which announced its initiatives on 17 December 2014.  He has shared an interest in identifying commercial opportunities in the Republic of Cuba for The Trump Organization.  He has shared that changes should be made to the policies and regulations implemented from 2009 through 2017.

There is logic to conclude, or at minimum be comfortable with based upon the varietal statements from President Trump, President-Elect Trump, nominee of the Republican Party for President of the United States, candidate for the nomination of the Republican Party for President of the United States, and business executive that distance may exist between his words and his actions relating to the Republic of Cuba.

Individuals with his 2015-2016 campaign, those placed on the Transition Team, within the Landing Teams, on staff at The White House, within the Cabinet, and amongst departments and agencies have opinions ranging from supporting a reversal of all policy and regulatory decisions taken by the Obama Administration to reversing some to modifying some to leaving what exists and do nothing further until Saturday, 24 February 2018.    

United States companies do not want constrictive modifications to the Obama Administration initiatives.  What they needed in 2015 and in 2016 and did not receive was a government of the Republic of Cuba accepting far more of those initiatives and the Obama Administration making far more meaningful changes to policy and regulations.  A reason that the Obama Administration initiatives are in peril is directly conditioned upon the lack of presence by United States companies in the Republic of Cuba- that’s the fault of both governments, collectively and individually.  There was and remains no lack of trying by United States companies.  In this regard, United States companies are in concurrence with President Trump- the government of the Republic of Cuba could have, can and should do more. 

Any Republic of Cuba-focused legislation introduced during the 115th United States Congress has an immensely problematic pathway to becoming law.  The President of the United States, the Speaker of the United States House of Representatives, and the Majority Leader of the United States Senate oppose any legislation which would expand the commercial, economic and political relationship with the Republic of Cuba absent manifest and irreversible changes within the Republic of Cuba. 

Supporters in the United States Congress know what they need; they haven’t got it… yet: one necessity being United States companies and financial institutions in public and at congressional hearings stating what payment terms they would provide, today, to the government of the Republic of Cuba.  And, a member of the United States Senate refusing to release a hold on must-pass legislation or nomination unless a Republic of Cuba-focused provision is included; no one can remember when that last happened.

There could be an opening, for example, on 24 February 2018, when President Castro will retire as head of state and be succeeded by First Vice President of the Council of State of the Republic of Cuba, Miguel Diaz-Canel Bermudez. 

The date 24 February has significance to the Republic of Cuba and for the United States:  

·        24 February 2013, H.E. General Raul Castro is elected to a 2nd term as President of the Republic of Cuba. 

·        24 February 2008, H.E. Dr. Fidel Castro Ruz retires as President of the Republic of Cuba. 

·        24 February 1996 was the date when two United States civilian aircraft were shot down by aircraft operated by the Revolutionary Armed Forces of the Republic of Cuba (FAR); four individuals die. 

·        24 February 1976 was the date the Republic of Cuba adopted its constitution. 

·        24 February 1895 was the beginning of Cuba’s War of Independence.

Section 202 of the Libertad Act of 1996 authorizes the United States to aid the Republic of Cuba provided the government does not, among other conditions, “include Fidel or Raul Castro.”  However, while President Castro will retire as head of state, he is likely to retain his position as First Secretary of the Communist Party of the Republic of Cuba, which could be argued is liken to head of government.  If that happens, an opportunity might be unavailable.  That, however, would be a determination for President Trump.

What’s on the list that the Trump Administration is considering?  The recommendations of Members of Congress, White House staff, Cabinet officers, Department and Agency officials range from nothing to everything.  The United States business community wants nothing to change.

Air Carriers

Helping to potentially mitigate policy and regulatory changes are the recently announced reductions in regularly-scheduled commercial flights and reductions in the size of the aircraft used for those flights as they lessen revenue to the Republic of Cuba. 

The reductions are, however, less about fewer individuals seeking to visit the Republic of Cuba than a consequence of aggressive market positioning by air carriers that was not commensurate with reality.  In their 2016 pleadings with the United States Department of Transportation (USDOT) air carriers requested approximately 2 million more seats than the authorized 1.2 million seats under the USDOT arrangement with the government of the Republic of Cuba. 

There is truth in interest to visit the Republic of Cuba has been negatively impacted since 2015 by dramatic increases (100% to 200% or more) in hotel room rates, prices at restaurants, and fares for transportation with no comparative increase in quality of experience; and in too many instances, a continued decrease in quality of experience relative to pricing structures.  For 2017, however, the number of individuals subject to Untied States jurisdiction visiting the Republic of Cuba is expected to increase 20% to 30%.

Potential changes could include requiring airlines to engage in a greater level of passenger certification/verification and require increased record-keeping, thus impacting the efficiency of the services.

Cruise Lines

Not helping to potentially mitigate policy and regulatory changes are the recent announcements from the three-largest United States cruise lines that they are adding capacity for sailings that include the Republic of Cuba; and will, if operating at capacity, which is likely, bring a combined 110,000 individuals subject to United States jurisdiction to the Republic of Cuba in 2017/2018.

Multiple-destination sailings that include the Republic of Cuba are being actively considered for prohibition.  These itineraries are perceived by some in the Trump Administration as tourism and, as such, is prohibited by United States statute.  These itineraries bring revenues (berthing fees, etc.) to the government of the Republic of Cuba, specifically to FAR through affiliated companies, regardless of whether an individual subject to United States jurisdiction disembarks the vessel at the Port of Havana or another location and pays for a guided tour or self-guided tour. 

The sailings that commenced in May 2016 by Miami, Florida-based Carnival Corporation & plc’s Fathom subsidiary which required all passengers to engage in defined people-to-people activities authorized by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury are generally more palpable as there is a direct connection between what a passenger does and the impact upon the Republic of Cuba.

Travel Agents/Tour Operators

The OFAC would increase scrutiny of marketing materials by those companies offering visits to the Republic of Cuba, perhaps requiring pre-approval and, thus, lengthen the distance between presentation and implementation.  The marketing materials of some companies have, in the opinion of some in the Trump Administration, crossed a statutory line.  There may be restrictions and/or prohibitions on self-defined and self-organized visits.

Tour operators and travel agents and charter boat operators marketing their services with statements such as “After breakfast on day five, the group will depart to Varadero, which is often described as the best beach in the world...” will be in peril. 

Where during the Obama Administration the OFAC permitted what were generally defined by the public as tourism-related promotional efforts, when tourism was and remains prohibited by United States law, the Trump Administration may be less supportive. 

Wealthy people cruising around the Republic of Cuba, coming ashore to smoke cigars and drink rum is not appealing to some in the Trump Administration.  The same feeling is directed towards those arriving by general aviation aircraft and departing with little more than selfies posted on Facebook and Instagram.

OFAC

There is support for the re-establishment of aggressive oversight of the Republic of Cuba by the OFAC.  During the Obama Administration, there were meaningful changes, which the United States business community advocated for and made use of primarily relating to the shift from requiring specific licenses to authorizing activities under general licenses.

There was also immense frustration by the United States business community with the OFAC, and by extension the Obama Administration, specifically the National Security Council (NSC), that adhered to imaginary statutory limitations on executive branch authority despite repeated evidence to the contrary.  Two examples: 1) Not permitting under a general license Republic of Cuba government-operated financial institutions to establish accounts with United States financial institutions; the result would have lessened the cost and the time for authorized transactions, for example those under provisions of the Cuban Democracy Act (CDA) of 1992 and Trade Sanctions Reform and Export Enhancement Act (TSREEA) of 2000, healthcare products and food products/agricultural commodities, respectively.  And 2) only permitting coffee and charcoal to be imported from the Republic of Cuba to the United States for commercial purposes.  There is no statutory limitation upon the number of products.

CBP

U.S. Customs and Border Protection (CBP) within the United States Department of Homeland Security (DHS) may be directed to increase inspection of travelers returning to the United States from the Republic of Cuba.

The changes could be subjecting all passengers to secondary inspection- additional questions, requesting to view materials that would verify the authorization of a traveler to have visited the Republic of Cuba; and subjecting luggage to additional screening.  The goal would be to increase the inefficiency of travelers, perhaps missing a connecting flight resulting in additional payments to an air carrier, to a hotel, for ground transportation or for a meal.  While the traveler may be inconvenienced, a result could be a revenue transfer from the traveler to a business- located within or near airports, for example, located in Florida, New Jersey, New York, Texas, and California.

Title III

Title III of the Libertad Act of 1996 may be weaponized to encourage the government of the Republic of Cuba to enter formal negotiations to compensate certified claimants.

There were 8,821 claims of which 5,913 awards have been certified by the United States Foreign Claims Settlement Commission (USFCSC- https://www.justice.gov/fcsc) at the United States Department of Justice which are valued at US$1,902,202,284.95.  Of these claims, thirty (30) United States-based companies hold 56.85% of the total value.  The USFCSC permitted interest to be accrued in the amount of 6% per annum; with the current value ranging from US$6 billion to US$9 billion.

During the next six months, or sooner, the Trump Administration will decide whether to implement this provision which enables individuals with assets expropriated by the government of the Republic of Cuba to bring lawsuits in United States Federal Courts. 

The Libertad Act requires the president to enable or suspend the provision every six months; and Presidents Clinton, Bush and Obama did so.  If not, lawsuits relating to expropriated property in the Republic of Cuba may commence.  The president may rescind the suspension at any time.

The Trump Administration may view creating uncertainty about Title III as an effective means of destabilizing the interests of companies in the United States and other countries toward the Republic of Cuba; and it would be successful.

For example, there are individuals who maintain they have Title III-actionable claims relating to Jose Marti International Airport (HAV) and port at Santiago de Cuba.  In the case of HAV, United States-based air carriers and those from other countries could find their assets attached if they do not avoid the Republic of Cuba.  In the case of the port at Santiago de Cuba, passenger cruise ships and cargo ships might avoid docking and unloading for fear of expensive and enduring legal proceedings.

The United States Department of State reported that the Obama Administration issued a suspension on 5 January 2017; this was not publicized.  The next six-month interval will be July/August 2017.

Military (Airports, Hotels & Ports)

The following are excerpts from the 9 June 2016 statement by The Honorable Paul Ryan (R- WI) Speaker of the United States House of Representatives:  

“The Obama administration took office with the misguided goal of conducting closer engagement with America’s adversaries.  They extended an open hand to governments in Cuba, Iran, North Korea, Russia, Syria, and Venezuela, and made damaging concessions often from a position of weakness. In the process, they have emboldened those regimes, alienated our allies, and left America in a more vulnerable strategic position. Now we must take immediate action to repair alliances and partnerships around the globe and to be clear about how the United States treats friends and foes.” 

“Finally, in our own backyard we will continue to work with our friends and stem the influence of foes. Our relations with Canada and Mexico are crucial, especially in managing trans-border trade and countering trans-border threats. But we cannot blindly follow the administration’s normalization plan with communist Cuba, a regime that is fundamentally opposed to U.S. policy and that represses an entire population only 90 miles from our coastline. Instead, we will work to restore U.S. leverage, hold the Castro regime accountable, and make sure any further accommodations are met first with real concessions from the Cuban government. A first step should be to ban financial transactions with the Cuban military.” 

“Our leverage to promote democracy and human rights should never be squandered. The Obama administration sought to normalize relations with the Castro regime in exchange for the promise of democratic and human rights progress in Cuba.  One year into the agreement, which included reopening the American embassy in Havana, the Castro regime is as repressive as ever. In the first two months of 2016 alone, the Cuban Commission for Human Rights registered 2,588 political arrests.  Nevertheless, President Obama reneged on his vow to refuse to travel to Cuba until human rights had improved.”

On 16 March 2016, Stamford, Connecticut-based Starwood Hotels & Resorts Worldwide (a subsidiary of Marriott International) reported the company had received a license from the OFAC to manage properties in the Republic of Cuba: The Hotel Quinta Avenida (re-branded as Four Points Sheraton Havana on 27 June 2016) and Hotel Inglaterra (delayed from 2016 until 1 December 2017); and a Letter of Intent to manage a third property, Hotel Santa Isabel (no further information provided since 2016).

Two of the properties are owned by Republic of Cuba government-operated Gaviota SA. and one of the properties is owned by Republic of Cuba government-operated Habaguanex; all are controlled by Republic of Cuba government-operated Grupo de Administracion Empresarial S.A. (Enterprise Management Group), or GAESA, which is, in turn, controlled by the Revolutionary Armed Forces of the Republic of Cuba (FAR).

That Starwood Hotels & Resorts Worldwide has only one property in operation may make easier for restrictions/prohibitions to be implemented.  A more dramatic footprint would have created less opportunity for disruption.

Airports and ports in the Republic of Cuba operate under the auspice of the entities affiliated with GAESA and the FAR.

COMPLETE TEXT IN PDF FORMAT

Ports In Mississippi Sign MOU's With Cuba Ports Authority

Mr. Manuel Pérez Guerra, General Director of the Cuban Ports Authority and Messrs. Mark McAndrews and Jonathan Daniels, representing the Port of Pascagoula, Mississippi, and Port of Gulfport signed Memorandums of Understanding.  The Honorable William Thad Cochran (R-Miss), a Member of the United States Senate, attended the signing.

Norwegian’s Oceania Brand Adds Sailings To Cuba; 3 Largest U.S. Cruise Lines Could Now Bring More Than 110,000 Visitors To Cuba In 2017/2018; US$150 Million To Companies; US$11+ Million To Cuba

Norwegian’s Oceania Brand Adds Sailings To Cuba; 3 Largest U.S. Cruise Lines Could Now Bring More Than 110,000 Visitors To Cuba In 2017/2018; US$150 Million To Companies; US$11+ Million To Cuba

Miami, Florida-based Oceania Cruises, a subsidiary of Bermuda-based (Miami, Florida, headquarters) Norwegian Cruise Line Holdings Ltd. (2016 revenues exceeded US$4.3 billion), announced that the company would have two vessels make a combined nine (9) sailings in 2017 that would include the Republic of Cuba.

If the vessel operates at capacity, the 684-passenger 593ft Insignia (with six sailings) would bring 4,104 visitors to the Republic of Cuba with gross revenues to Oceania Cruises of approximately US$12.5 million and have a direct economic impact upon the Republic of Cuba which could exceed US$800,000.00.

If the vessel operates at capacity, the 1,250-passenger 784ft Marina (three sailings) would bring 3,750 visitors to the Republic of Cuba with gross revenues to Oceania Cruises of approximately US$10.5 million and have a direct economic impact upon the Republic of Cuba which could exceed US$600,000.00.

On 7 February 2017, Norwegian Cruise Line Holdings Ltd. announced an additional twenty-five (25) sailings from Miami, Florida, to Havana, Republic of Cuba, for the period June 2017 through December 2017.  Previously, the company announced five (5) sailings for May 2016.  NCL is using the 2,004-passenger, 848ft Norwegian Sky.  If operating at capacity, NCL will deliver 60,120 passengers to the Republic of Cuba, resulting in a potential direct economic impact to the Republic of Cuba of more than US$7 million.   Gross revenues to NCL if the vessel operates at capacity for all sailings could be US$81.4 million. 

On 2 February 2017, Royal Caribbean Cruises, Ltd. (2016 revenues exceeded US$8.5 billion) increased the number of sailings in 2017 that include the Republic of Cuba from four (4) to eleven (11); changing the number of passengers from a potential 6,408 to 17,622 and gross revenues from a potential US$8.3 million to US$22.9 million.  For the Republic of Cuba sailings, the company is using its 1,602-passenger 692ft Empress of the Seas.  For 2017, Royal Caribbean Cruises will have eleven (11) sailings that will include the Republic of Cuba: ten (10) from Tampa, Florida, and one (1) sailing from Miami, Florida.  The sailings, which range from four (4) nights to seven (7) nights, commence in April 2017 and continue through November 2017.  If the Empress of the Seas sails at capacity, the total number of passengers that would visit the Republic of Cuba in 2017 will be 17,622 with gross revenues of approximately US$22.9 million.  The direct economic impact to the Republic of Cuba could exceed US$2.6 million.

Carnival Adds 24,624 Potential Passengers To Cuba Sailings; 3 Largest U.S. Cruise Lines Potential 102,366 Passengers To Cuba; US$121+ Million To Companies; US$13+ Million To Cuba
February 14, 2017

On 14 February 2017, Miami, Florida-based Carnival Corporation & plc (2016 revenues US$16 billion), reported that the company would launch twelve (12) sailings to the Republic of Cuba during the period June 2017 through May 2018 using the 2,052-passenger 855ft Carnival Paradise.

If the vessel operates at capacity, the company would place 24,624 passengers in the Republic of Cuba in 2017/2018, resulting in gross revenues to Carnival Corporation & plc of more than US$21.3 million and a direct economic impact upon the Republic of Cuba of more than US$3.2 million.

On 1 May 2016, Carnival Corporation & plc, through its Fathom subsidiary, commenced seven-day itineraries with the 700-passenger 594ft MV Adonia directly from/to the United States (Port of Miami, Florida) for individuals subject to United States law who are authorized to visit the Republic of Cuba under regulations (twelve categories; tourism is prohibited by United States law) issued by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, DC.  

Wyndham Worldwide's Super 8 Replaces Accor To Manage Cuba Property

Parsippany-Troy Hills, New Jersey-based Super 8 Worldwide, a subsidiary of Parsippany, New Jersey-based Wyndham Worldwide has replaced Ile-de-France, France-based AccorHotels as the management contract holder for the Playa de Oro Hotel in Varadero, Republic of Cuba, owned by Republic of Cuba government-operated Grupo Hotelero Gran Caribe.  Super 8 Worldwide is expected to commence operations in April 2017.

The management contract is reportedly through a Quebec, Canada-based consortium within which one of the members has a partnership with Wyndham Worldwide brands operating in Canada.

If authorization (license) was required, Wyndham Worldwide would be the second United States-based hospitality company to implement an authorization (license) from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury to manage a property in the Republic of Cuba.

Given the location of the property, the OFAC, when issuing a license (or other form of approval) would have known that the revenues of the property would be, at least in the short-term to medium-term, primarily derived from visitors to the Republic of Cuba who are not traveling within the twelve (12) authorized categories of travel- tourism not being one of them.  The majority of visitors subject to United States jurisdiction who visit the Republic of Cuba do not include Varadero in their itinerary as it is primarily a tourist, rather than a cultural or an educational destination. 

The twelve (12) authorized categories are included in the Trade Sanctions Reform and Export Enhancement Act (TSREEA) of 2000.

From the company: "Super 8 ® Worldwide is the world's largest economy lodging chain with over 2,200 properties in the U.S., Canada and China.  Super 8 has recently launched a brand refresh with a new logo and a fresh, new interior and exterior design program.  Guests can depend on every Super 8 to deliver a complimentary SuperStart breakfast, free high-speed Internet access, upgraded bath amenities, free in-room coffee and free premium cable or Satellite TV.  Kids under 17 stay free at Super 8."

In September 2016, Geoff Ballotti, President and Chief Executive Officer of Wyndham Worldwide:

We are working on opportunities there,” Loewen said. “Our teams have been there. We have partners that we’re talking to. We’re looking to bring some more brands there. We’ve talked both to people who want the upscale side and some who really see the need for good solid economy hotels.” The biggest challenge, of course, is utilities and other infrastructure. “The government’s got a lot of work to do down there, I think. But it will be a great location.” 

Mr. Robert Loewen, Executive Vice President And Chief Operating Officer of Wyndham Worldwide:

"We always look at every opportunity, and we think Cuba and the Caribbean in general are going to be big opportunities. I’m excited from a personal standpoint because 25 years ago I worked in the Caribbean doing yacht charters. And every year, it was a story of, 'Cuba’s going to open up, and we can finally take sailboats to Cuba.' It looks like it’s finally broken down and is opening up, and the infrastructure is not there."

LINK TO POST: http://www.cubatrade.org/blog/2016/10/20/wyndham-worldwide-actively-seeking-management-opportunities-in-cuba?rq=wyndham

In May 2016, Hollywood, Florida-based RCI (a subsidiary of Wyndham Worldwide), reported that it would offer travel options to the Republic of Cuba for its timeshare owners.

"RCI is the worldwide leader in vacation exchange with approximately 4,300 affiliated resorts in more than 100 countries. RCI pioneered the concept of vacation exchange in 1974, offering members increased flexibility and versatility with their vacation ownership experience. Today, through the RCI Weeks® program, the week-for-week exchange system, and the RCI Points® program, the industry’s first global points-based exchange system, RCI provides flexible vacation options to its 3.8 million RCI subscribing members each year. RCI’s luxury exchange program, The Registry Collection® program, is the world’s largest program of its kind with approximately 200 affiliated properties either accessible for exchange or under development on six continents. RCI is part of Wyndham Destination Network and the Wyndham Worldwide family of brands (NYSE: WYN)."

On 16 March 2016, Stamford, Connecticut-based Starwood Hotels & Resorts Worldwide (a subsidiary of Bethesda, Maryland-based Marriott International) reported the company had received a license from the OFAC to manage properties in the Republic of Cuba: The Hotel Quinta Avenida (re-branded as Four Points Sheraton Havana on 27 June 2016) and Hotel Inglaterra (delayed until 1 December 2017); and a Letter of Intent to manage a third property, Hotel Santa Isabel (no further information provided since 2016).

"HAVANA--(BUSINESS WIRE)-- Starwood Hotels & Resorts Worldwide, Inc. (“Starwood”) (NYSE:HOT) today signed three new hotel deals in Cuba, marking the first U.S. based hospitality company to enter the market in nearly 60 years. This announcement follows receipt of authorization from the U.S. Treasury Department for Starwood to operate hotels in Cuba. Long-time Havana icon, Hotel Inglaterra, will join The Luxury Collection and Hotel Quinta Avenida will become a Four Points by Sheraton. Both hotels will undergo renovations before raising their new brand flags later in 2016. The Company also announced that it has signed a Letter of Intent to convert the famed Hotel Santa Isabel into a member of The Luxury Collection."

The three properties referenced by Starwood Hotels & Resorts Worldwide are owned by Republic of Cuba government-operated Gaviota SA., controlled by Republic of Cuba government-operated Grupo de Administracion Empresarial S.A. (Enterprise Management Group), or GAESA, which is, in turn, controlled by the Revolutionary Armed Forces of the Republic of Cuba (FAR).

Marriott International, before acquiring Starwood Hotels & Resorts Worldwide, reported in 2016 that it was exploring property management opportunities in the Republic of Cuba.

LINK TO LIST OF UNITED STATES COMPANIES WITH A PRESENCE IN CUBA

Playa de Oro Hotel in Varadero, Republic of Cuba

Playa de Oro Hotel in Varadero, Republic of Cuba

Carnival Adds 24,624 Potential Passengers To Cuba Sailings; 3 Largest U.S. Cruise Lines Potential 102,366 Passengers To Cuba; US$121+ Million To Companies; US$13+ Million To Cuba

On 14 February 2017, Miami, Florida-based Carnival Corporation & plc (2016 revenues US$16 billion), reported that the company would launch twelve (12) sailings to the Republic of Cuba during the period June 2017 through May 2018 using the 2,052-passenger 855ft Carnival Paradise.

If the vessel operates at capacity, the company would place 24,624 passengers in the Republic of Cuba in 2017/2018, resulting in gross revenues to Carnival Corporation & plc of more than US$21.3 million and a direct economic impact upon the Republic of Cuba of more than US$2.5 million.

On 1 May 2016, Carnival Corporation & plc, through its Fathom subsidiary, commenced seven-day itineraries with the 700-passenger 594ft MV Adonia directly from/to the United States (Port of Miami, Florida) for individuals subject to United States law who are authorized to visit the Republic of Cuba under regulations (twelve categories; tourism is prohibited by United States law) issued by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, DC.  

On 7 February 2017, Bermuda-based (Miami, Florida, headquarters) Norwegian Cruise Line Holdings Ltd. (2016 revenues exceeded US$4.3 billion) (NCL), announced an additional twenty-five (25) sailings from Miami, Florida, to Havana, Republic of Cuba, for the period June 2017 through December 2017.  Previously, the company announced five (5) sailings for May 2016.  NCL is using the 2,004-passenger, 848ft Norwegian Sky.  If operating at capacity, NCL will deliver 60,120 passengers to the Republic of Cuba, resulting in a potential direct economic impact to the Republic of Cuba of more than US$7 million.   Gross revenues to NCL if the vessel operates at capacity for all sailings could be US$81.4 million.

On 2 February 2017, Royal Caribbean Cruises, Ltd. (2016 revenues exceeded US$8.5 billion) increased the number of sailings in 2017 that include the Republic of Cuba from four (4) to eleven (11); changing the number of passengers from a potential 6,408 to 17,622 and gross revenues from a potential US$8.3 million to US$22.9 million.  For the Republic of Cuba sailings, the company is using its 1,602-passenger 692ft Empress of the Seas.  For 2017, Royal Caribbean Cruises will have eleven (11) sailings that will include the Republic of Cuba: ten (10) from Tampa, Florida, and one (1) sailing from Miami, Florida.  The sailings, which range from four (4) nights to seven (7) nights, commence in April 2017 and continue through November 2017.  If the Empress of the Seas sails at capacity, the total number of passengers that would visit the Republic of Cuba in 2017 will be 17,622 with gross revenues of approximately US$22.9 million.  The direct economic impact to the Republic of Cuba could exceed US$1.8 million. 

Carnival Corporation
Media Release
14 February 2017

Following the history-making launch of cruises from the U.S. to Cuba on Carnival Corporation’s Fathom brand last year, the company’s namesake and largest cruise brand — Carnival Cruise Line — has now received approval to sail to Cuba.  The Cuban capital of Havana will be added to select Carnival Paradise voyages from Tampa beginning in June 2017.

The overnight visits to Havana will be featured on 12 four- and five-day cruises aboard Carnival Paradise departing from the Port of Tampa starting June 29, 2017, providing vacationers with a rare and exciting opportunity to explore this fascinating and previously off-limits destination.

Four-day cruises will depart June 29, July 13, August 24, September 7 and 21, and October 5 and 19, 2017 as well as May 3, 2018 and include a daytime and overnight visit to Havana. Five-day voyages will depart August 14 and 28, September 25 and October 9, 2017, and include a daytime and overnight visit to Havana as well as a stop in either Cozumel or Key West.

Carnival Paradise guests will be able to choose from a range of exciting shore excursion experiences that showcase Cuba’s vibrant culture and majestic beauty, along with the island’s warm and friendly people and centuries-old architectural landmarks.

“Cuba is an island jewel unique from anywhere else in the Caribbean and we are thrilled to have this rare opportunity to take our guests to this fascinating destination,” said Christine Duffy, president of Carnival Cruise Line.  “The opportunity to visit Havana, combined with the fun, relaxed ambiance and wide variety of amenities and features offered on Carnival Paradise, will make for a truly one-of-a-kind vacation experience,” she added.

Aboard Carnival Paradise, guests can enjoy an array of amenities and a full schedule of daytime activities and nighttime entertainment. A variety of dining options include two full-service main dining rooms and expansive poolside choices. The ship also features a 12,000-square-foot Spa Carnival health and wellness facility and an exclusive Serenity adults-only retreat. Popular family-friendly programming includes Seuss at Sea in partnership with Dr. Seuss Enterprises and featuring the Green Eggs and Ham Breakfast with The Cat in the Hat and Friends and fun, supervised activities for kids in three age groups.  Four swimming pools and a 115-foot-long water slide are additional features.

The visits to Havana comply with regulations of the U.S. Department of Treasury that permit travel operators to transport approved travelers to Cuba to engage in activities as defined by the U.S. Department of Commerce, Office of Foreign Assets Control.

The new voyages can currently be booked via travel agents or by calling 1-800-CARNIVAL.  Later today, the cruises will also be available on carnival.com. Please note that a passport is required for cruises that call in Cuba. Additional information on all special requirements for these voyages can be found on carnival.com.

Hyatt Hotels Does Not (Yet) Find A Property In Cuba

Chicago, Illinois-based Hyatt Hotels Corporation (2016 revenues exceeded US$4 billion), has not identified a property management opportunity in the Republic of Cuba, despite efforts to do so.

The government of the Republic of Cuba is seeking to have companies with management contracts also become sources of financing for the managed property, a change in status that global hotel management companies are resisting.  In most management contracts outside of the Republic of Cuba, the hotel management company receives the daily revenues of the property and directly makes payment for expenses (employees, food, utilities, etc., and, importantly, retains funds for maintenance).  In the Republic of Cuba, the Republic of Cuba government-owner of the property directly collects all revenues and then determines what is necessary for the property manager.  Thus, maintenance is often neglected and the property owner may use Republic of Cuba-sourced products (construction materials, furniture, linens, sundries, amenities, and consumables) even if inferior to imported products; and thus place the global reputation of the property manager at risk and provide the guest with an inconsistent experience.

There is frustration by global hotel management companies with the increasing distance between what the property is charging for a room, especially in the city of Havana, and what the Republic of Cuba nationals who work at the property are receiving as wages.  This distance is negatively impacting the guest experience.

Members of the Chicago, Illinois-based Pritzker family have substantive shareholdings in Hyatt Hotels Corporation.

Members of the Pritzker family also have substantive shareholdings in Royal Caribbean Cruises, Ltd.; at one reporting they were the third-largest shareholder in the company, which operates sailings to the Republic of Cuba.  LINK TO POST: http://www.cubatrade.org/blog/2017/1/26/cuba-is-trivial-part-of-business-says-royal-caribbean-cruises-chairman-ceo-not-quite-accurate?rq=pritzker

The Honorable Penny Pritzker (net worth reported as US$2.4 billion) served as United States Secretary of Commerce during the Obama Administration from 26 June 2013 to 20 January 2017 and visited the Republic of Cuba twice during her tenure.

Economic Eye On Cuba: 2016 Exports Increase 36%; 2016 Healthcare Exports Increase 22%

ECONOMIC EYE ON CUBA©
February 2017

December Food/Ag Exports Increase 597%- 1
2016 Food/Ag Exports Increased 36%- 1
Cuba Was 55th Largest Food/Ag Export Market Of 232 Countries In 2016- 2
2015/2016 Was 1st Year-To-Year Increase Since 2011/2012- 2
2016 Healthcare Product Exports Increased 22%- 2
2016 Humanitarian Donations Increased 3%- 3
Obama Administration Initiatives Product Exports- 3
U.S. Port Export Data: 79% Increase From 242,259 MT to 432,654 MT - 14
2017 Speaking Schedule- 15

 
LINK TO COMPLETE REPORT

Honeywell Fire Notifier Products Throughout New 246-Room Kempinski Hotel In Havana

The Notifiers (priced at approximately US$45.00) manufactured in Northford, Connecticut by Morris Plains, New Jersey-based Honeywell International, Inc. (2016 revenues exceeded US$38 billion).

The 246-room Gran Hotel Kempinski Manzana La Habana will soon accept reservations for its first guests.  The Gran Hotel Kempinski Manzana La Habana may be the first property in the Republic of Cuba to earn a four or five rating from AAA and/or Forbes Travel Guide.

http://www.cubatrade.org/blog/2017/1/29/cubas-1st-us-standard-based-five-star-hotel-is-about-to-open

In 2016, a representative of Honeywell reported that the company had no knowledge of the product being exported to the Republic of Cuba; and that likely a third-party sold the Notifier(s) to the Republic of Cuba for use at the France-based AccorHotels-managed Hotel Mercure Sevilla in the city of Havana.  Honeywell International "trusts commercial barriers will soon be lifted so that we can actively pursue the Cuban market."

Honeywell Fire Notifier Protecting Guests At Hotel Mercure Sevilla In Havana
October 11, 2016

http://www.cubatrade.org/blog/2016/10/3/honeywell-fire-notifier-protecting-guests-at-hotel-mercure-sevilla-in-havana?rq=honeywell

We Got It Wrong... Governor Of Mississippi Will Not Visit Cuba

The Honorable Drew Phillip “Phil” Bryant (R), Governor of the State of Mississippi, will not visit the Republic of Cuba from 20 February 2017 to 24 February 2017.  We got it wrong.  We apologize.

A delegation from the State of Mississippi will visit the Republic of Cuba in February, but will not be led by the Governor.  The delegation will be led by Ms. Rosario "Rose" Boxx, International Trade Director for the Mississippi Development Authority.

For the period 2010 through 2016, the Port at Pascagoula, Mississippi, ranked 9th of 35 United States ports that have exported food products, agricultural commodities, healthcare products and other authorized products from the United States to the Republic of Cuba.  The Port at Pascagoula reported 160,579 metric tons of product for the period 2010 through 2016; no product was reported for 2015 and 2016.

The State of Mississippi is a source of frozen poultry products exported to the Republic of Cuba.

LINK TO: What Governors Should Consider For A Visit To The Republic Of Cuba

The Honorable William Thad Cochran (R), United States Senator from the State of Mississippi, will visit the Republic of Cuba from 19 February 2017 to 22 February 2017 with a group of four (4) members of the United States Senate and one member of the United States House of Representatives.  LINK TO POST: http://www.cubatrade.org/blog/2017/2/10/congressional-delegation-to-visit-cuba-4-senators-1-representative

George Ryan (R- Illinois)-  1999/2002
Jesse Ventura (I- Minnesota)- 2002
John Hoeven (R- Nebraska)- 2002
David Heineman (R- Nebraska)- 2005/2006/2007
Kathleen Blanco (D- Louisiana)- 2005
John Balducci (D- Maine)- 2005
Butch Otter (R- Idaho)- 2007
Mike Beebe (D- Arkansas)- 2009
Bill Richardson (D- New Mexico)- 2009/2010
Sonny Perdue (R- Georgia)- 2010
Jay Nixon (D- Missouri) replaced by wife, Georganne Nixon- 2015
Andrew Cuomo (D- New York)- 2015
Asa Hutchinson (R- Arkansas)- 2015
Greg Abbott (R- Texas)- 2015
Terry McAuliffe (D- Virginia)- 2016
Jay Nixon (D- Missouri)- 2016
Lt. Governor Brad Owen (D-Washington)- 2016
John Bel Edwards (D- Louisiana)- 2016
Earl Ray Tomblin (D- West Virginia)- 2016
John Hickenlooper (D- Colorado)- 2017

 

Senator Cochran

Senator Cochran

Cafe O'Reilly For Freshly-Roasted, Freshly Ground Coffee From Cuba

On 10 February 2017, Cafe O'Reilly had approximately fifty (50) sacks of Arabia Beans from Santa Clara Province, harvested in January 2017.  The same beans are used for the Serrano brand.

Residents of the city of Havana visit here because they know that the beans are from the Republic of Cuba (the country imports green beans from other countries for domestic, including for hotels, restaurants and for retail), are roasted on premises (in sight) and the pricing is reasonable.

Cafe O'Reilly
O’Reilly 304, Habana Vieja
Havana, Cuba
Telephone: 011 53 7 863 0206
Mobile: 011 53 5 264 4725

Congressional Delegation To Visit Cuba- 4 Senators & 1 Representative

From 19 February 2017 to 22 February 2017, five (5) members of the United States Congress will visit the Republic of Cuba.  From the United States Senate: The Honorable Patrick Leahy (D- Vermont), The Honorable Thad Cochran (R- Mississippi), The Honorable Michael Bennet (D- Colorado), and The Honorable Tom Udall ( D- New Mexico).  From the United States House of Representatives: The Honorable Jim McGovern (D- Massachusetts).

LINK TO: List Of U.S. Government, Governors & Members Of Congress Who Have Visited The Republic Of Cuba

LINK TO: Want To Have A Legislative Victory? Then Be Specific... Define Payment Terms & Who Will Offer What

United Airlines Crew Stranded In Havana- Airport, Government, Hotel, and Personnel Provided Everything

On 8 February 2017, United Flight 1502, a Boeing 737-800, was scheduled to depart Jose Marti International Airport (HAV) to Newark International Airport (EWR) at 2:53 pm.  It did not.

A snowstorm was scheduled to impact the New York City Metropolitan Area during the morning and mid-afternoon of 9 February 2017, so United Airlines and other carriers cancelled in advance approximately 1,800 flights, including Flight 1502.

While passengers confirmed on Flight 1502 were re-booked for 10 February 2017, there was the issue of how to accommodate the ten-person crew (two pilots, four flight attendants, one mechanic, and five security personnel) who had travelled on 8 February 2017 from EWR to HAV on United Flight 1501 expecting to return the same day on Flight 1502.

Since the resumption of regularly-scheduled airline flights between the United States and the Republic of Cuba commenced in 2016, there have been no reported instances of crews being stranded in the Republic of Cuba; and the Civil Aviation Arrangement signed by the governments in 2016 does completely anticipate for crews to be accommodated.  Thus, the crew of Flight 1502 on 8 February 2017 became the first to encounter an issue. 

The Ministry of Foreign Affairs of the Republic of Cuba (MINREX) granted emergency visas to the crew and the they were transported to the Four Points Sheraton Havana, managed by Stamford, Connecticut-based Starwood Hotels and Resorts Worldwide (a subsidiary of Bethesda, Maryland-based Marriott International) since 16 June 2016.

The crew of United Airlines flight 1502 were not prepared for an overnight- only one had an overnight bag with clothing or toiletries.  Amongst the ten crew, they had approximately US$200.00 in United States currency.

The management of the Four Points Sheraton Havana placed some of the crew in newly-renovated rooms, others in rooms that have yet to be renovated, provided them with two-plus hours of internet access per day, provided meals, arranged tours of the city of Havana and, most importantly, arranged for the crew to access the Lost & Found for articles of clothing (including bathing suits), which had been washed, so that the crew could have their uniforms cleaned.  Unknown if United Airlines will be receiving an invoice for the services provided to the crew.

At HAV, the United Airlines aircraft had been sealed on 8 February 2017.  Unfortunately, the catering which had been loaded at EWR on the morning of 8 February 2017 was left on the aircraft until the late morning of 10 February 2017 because air carriers do not permit non-company personnel to enter an aircraft without being accompanied by company personnel.  Unknown is the reason(s) for not removing the catering from the aircraft on 8 February 2017.  All the prepared meals had spoiled, permeated the aircraft, and had to be discarded.  On 10 February 2017, catering personnel at HAV removed all the spoiled food and cleaned the galleys.

The catering personnel at HAV offered to fully-provision the flight, but United Airlines would only authorize bottled water reportedly for sanitary reasons and lack of a catering contract.

Unknown as to the reason(s) that United Airlines did not secure the aircraft on 8 February 2017 and send the crew to Houston on another United Airlines flight and/or send the aircraft to a location in the United States.

NCL Could Bring 60,120 Passengers To Cuba In 2017; US$7 Million Economic Impact

Bermuda-based (Miami, Florida, headquarters) Norwegian Cruise Line Holdings Ltd. (2016 revenues exceeded US$4.3 billion) (NCL), has announced an additional twenty-five (25) sailings from Miami, Florida, to Havana, Republic of Cuba, for the period June 2017 through December 2017.  Previously, the company announced five (5) sailings for May 2016.

NCL also reported receiving authorization from the government of the Republic of Cuba for its subsidiaries, Oceania Cruises and Regent Seven Seas Cruises, to operate in the country.  According to the company, "With a combined fleet of 24 ships with approximately 46,500 berths, these brands offer itineraries to more than 510 destinations worldwide."  NCL carried approximately 2.3 million passengers in 2016.

NCL is using the 2,004-passenger, 848ft Norwegian Sky, built in 1999 (refurbished in 2013).  If operating at capacity, NCL will deliver 60,120 passengers to the Republic of Cuba, resulting in a direct economic impact of which could exceed US$7 million.   Gross revenues to NCL if the vessel operates at capacity for all sailings could be US$81.4 million, representing 2% of gross revenues and approximately 3% of total passengers.

Earlier in February 2017, Royal Caribbean Cruises, Ltd. (2016 revenues exceeded US$8.5 billion) increased the number of sailings in 2017 that include the Republic of Cuba from four (4) to eleven (11); changing the number of passengers from a potential 6,408 to 17,622 and gross revenues from a potential US$8.3 million to US$22.9 million.

For the Republic of Cuba sailings, the company is using its 1,602-passenger Empress of the Seas (692ft), which was placed in service on 25 June 1990.  

On 26 January 2017, with four (4) announced itineraries (one departing from Miami, Florida and three from Tampa, Florida), if the Empress of the Seas was fully-occupied for each sailing, the total number of passengers would be 6,408 with gross revenues of approximately US$8.3 million.  In 2016, Royal Caribbean Cruises, Ltd. vessels carried approximately six million passengers.  The four Republic of Cuba sailings would represent .11% of the total passengers carried by the company and .10% of gross revenues to the company.

On 3 February 2017, the company announced additional itineraries.  Thus, for 2017, Royal Caribbean Cruises will have eleven (11) sailings that will include the Republic of Cuba: ten (10) from Tampa, Florida, and one (1) sailing from Miami, Florida.  The sailings, which range from four (4) nights to seven (7) nights, commence in April 2017 and continue through November 2017.  If the Empress of the Seas sails at capacity, the total number of passengers that would visit the Republic of Cuba in 2017 will be 17,622 with gross revenues of approximately US$22.9 million.  The eleven sailings would represent .28% of the total passengers carried by the company in 2016 and represent .29% of gross revenues to the company in 2016.

Cuba's 1st US Standard-Based 4-5 Star/4-5 Diamond Rated Hotel May Arrive In June

The 246-room Gran Hotel Kempinski Manzana La Habana will soon accept reservations for its first guests... who are expected to check-in during the first weeks of June 2017. 

Gran Hotel Kempinski Manzana La Habana
Calle San Rafael (entre Monserrate y Zulueta)
La Habana Vieja , 10100, Havana Cuba

Reservations.lahabana@kempinski.com

Since 2014, there have been reports by media outside the Republic of Cuba and media inside the Republic of Cuba that Geneva, Switzerland-based Kempinski Hotels SA had signed a management contract with Republic of Cuba government-operated Gaviota SA., controlled by Republic of Cuba government-operated Grupo de Administracion Empresarial S.A. (Enterprise Management Group), or GAESA, which is, in turn, controlled by the Revolutionary Armed Forces of the Republic of Cuba (FAR).  Now, there is an agreement.

Kempinski Hotels SA operates seventy-five (75) five-star properties in thirty (30) countries.  The Bangkok, Thailand-based Thailand Crown Property Bureau has a majority shareholding in Kempinski AG, which owns Kempinski Hotels SA.

From the Kempinski Hotels Internet site (https://www.kempinski.com/en/havana/gran-hotel-kempinski-la-habana/): "Originally built between 1894 and 1917 as the first European style shopping arcade in Cuba, Gran Hotel Kempinski Manzana La Habana is situated in the heart of the old Havana with a direct view of the Capitol and the Great Theatre of Havana and amidst UNESCO World Heritage sites. The famous Castillo del Morro is accessible within a 10 minute drive. Experience the first true luxury hotel in Cuba and indulge yourself while staying in one of our 246 large rooms or suites with extra high ceilings and French windows opening out to the old city. Experience a variety of restaurants and bars, which also includes a one of a kind cigar lounge and a roof top Panoramic Restaurant and Bar with spectacular views over the old city. Relax in our spa, fitness center and rooftop pool."

While no data has been provided, the value of the renovation project has been estimated to be US$30 million to US$50 million.

Properties rated five-stars in the Republic of Cuba generally equate with one-star to three-star properties in the United States.

There are no properties in the Republic of Cuba that currently achieve a AAA Four Diamond Award or AAA Five Diamond Award from the Heathrow, Florida-based AAA (formerly American Automobile Association) or a Four-Star Rating or Five-Star Rating from the Atlanta, Georgia-based Forbes Travel Guide.   Neither AAA nor Forbes Travel Guide have rated any properties in the Republic of Cuba.  

From AAA: "AAA’s Diamond Rating System does not cover Cuba at this time."

From Forbes Travel Guide: "At this time we do not have any star rated hotels in Cuba though we continue to watch the destination with interest and look forward to launching the country as a new market in the not too distant future. We are really waiting for the hotel infrastructure to generate levels of service that would qualify them to be considered for an evaluation and potential Star Award.  We have not sent any inspectors into Cuba at this time for this reason though have already made high level visits by members of our Executive office."  The Chief Executive Officer of Forbes Travel Guide, Gerald J. Inzerillo, visited the Republic of Cuba in 2016.

The Gran Hotel Kempinski Manzana La Habana may be the first property in the Republic of Cuba to earn a four or five rating from AAA and/or Forbes Travel Guide.

There are three (3) properties in the Republic of Cuba with ratings by Boulogne Billancourt, France-based Michelin Travel Partner (a subsidiary of Clermont-Ferrand, France-based Michelin): Hotel El Bosque (3 stars), Hotel Kohly (3 stars) and NH Capri La Habana (4 stars).  However, these ratings are deemed too robust by United States-based travel industry executives.

A challenge for the Gran Hotel Kempinski Manzana La Habana will be to control the impact upon guests by the consistently problematic city of Havana electrical grid, water quality and pressure, waste disposal, and internet communications infrastructure. 

Another challenge for the Gran Hotel Kempinski La Habana will be to incentivize employees who are Republic of Cuba nationals as they are not unaware of the convertible currency differences between what guests pay and the spending value of what they earn.  An environment based upon a passive or active requirement for gratuities to obtain basic guest services is unsustainable. 

Food quality, value and pricing have been consistent issues for hotels throughout the Republic of Cuba with an increasing number of guests, especially those staying in hotels located in cities, choosing to pay for meals (lunch and dinner) at paladares (privately-owned restaurants), even when lunch or dinner may be included in their accommodation package.

Related Blog Post: http://www.cubatrade.org/blog/2016/12/28/seeking-better-roi-cuba-hospitality-companies-to-become-landlords-rather-than-managers?rq=Forbes

Stamford, Connecticut-based Starwood Hotels & Resorts Worldwide (a subsidiary of Bethesda, Maryland-based Marriott International), is scheduled to open the Hotel Inglaterra on 1 December 2017 in the city of Havana, Republic of Cuba.  On 16 March 2016, Starwood Hotels & Resorts Worldwide reported that the company would in 2016 manage two (2) properties in the Republic of Cuba- the Hotel Quinta Avenida (rebranded as Four Points Sheraton Havana on 27 June 2016) and Hotel Inglaterra; and had signed a Letter of Intent to manage a third property, the Hotel Santa Isabel.  No reason(s) has been provided for the delay in implementing the management contract or the Letter of Intent.  The Hotel Inglaterra will be amongst the company's 122-property The Luxury Collection; the Hotel Santa Isabel is expected to be included in The Luxury Collection.

Ile-de-France, France-based AccorHotels will be managing the Gaviota SA-owned US$60 million Sofitel So La Habana under construction at the corner of Prado and Malecón and scheduled for completion in the second quarter of 2019.  The company also plans to convert the Accor-managed 178-room Mercure Sevilla Havane into a 112-room MGallery property in Havana; the estimated cost is US$20 million.

Like The Gran Hotel Kempinski Manzana, The Hotel Inglaterra, Hotel Santa Isabel, Sofitel So La Habana, and Hotel Saratoga (owned by Republic of Cuba government-operated Habaguanex SA under the auspice of GAESA and managed under contract with a non-Republic of Cuba-based entity) will likely seek to earn AAA Four Diamond Award or AAA Five Diamond Award and/or Four-Star Rating or Five-Star Rating from Forbes Travel Guide. 

Condition of the building prior to revovation

Condition of the building prior to revovation

Starwood Delays One Hotel And Has Not Commented Upon Another

Stamford, Connecticut-based Starwood Hotels & Resorts Worldwide (a subsidiary of Bethesda, Maryland-based Marriott International), is scheduled to open the Hotel Inglaterra on 1 December 2017 in the city of Havana, Republic of Cuba.  The Hotel Inglaterra will be amongst the company's 122-property The Luxury Collection.

On 16 March 2016, Starwood Hotels & Resorts Worldwide reported that the company would in 2016 manage two (2) properties in the Republic of Cuba- the Hotel Quinta Avenida (rebranded as Four Points Sheraton Havana on 27 June 2016) and Hotel Inglaterra; and had signed a Letter of Intent to manage a third property, Hotel Santa Isabel

No reason(s) has been provided for the twenty-one month delay in implementing the management contract for the Hotel Inglaterra or the signing of a management contract for the Hotel Santa Isabel.

"HAVANA--(BUSINESS WIRE)-- Starwood Hotels & Resorts Worldwide, Inc. (“Starwood”) (NYSE:HOT) today signed three new hotel deals in Cuba, marking the first U.S. based hospitality company to enter the market in nearly 60 years. This announcement follows receipt of authorization from the U.S. Treasury Department for Starwood to operate hotels in Cuba. Long-time Havana icon, Hotel Inglaterra, will join The Luxury Collection and Hotel Quinta Avenida will become a Four Points by Sheraton. Both hotels will undergo renovations before raising their new brand flags later in 2016. The Company also announced that it has signed a Letter of Intent to convert the famed Hotel Santa Isabel into a member of The Luxury Collection."

The three properties to be managed by Starwood Hotels & Resorts Worldwide are owned by Republic of Cuba government-operated Gaviota SA., controlled by Republic of Cuba government-operated Grupo de Administracion Empresarial S.A. (Enterprise Management Group), or GAESA, which is, in turn, controlled by the Revolutionary Armed Forces of the Republic of Cuba (FAR).

Marriott International, before acquiring Starwood Hotels & Resorts Worldwide, reported in 2016 that it was exploring property management opportunities in the Republic of Cuba.

Hotel Inglaterra

Hotel Inglaterra

Hotel Santa Isabel

Hotel Santa Isabel

Four Points Sheraton Havana

Four Points Sheraton Havana

Update On Title Three Suspension Of Libertad Act (Helms-Burton)

During the next six months, or sooner, the Trump Administration will decide whether to implement Title III of the Libertad Act of 1996.  This provision enables individuals with assets expropriated by the government of the Republic of Cuba to bring lawsuits in United States Federal Courts. 

The Libertad Act requires the president to enable or suspend the provision every six months; and Presidents Clinton, Bush and Obama did so.  If not, lawsuits relating to expropriated property in the Republic of Cuba may commence.  The president may rescind the suspension at any time.

"(2) Additional suspensions.--The President may suspend the effective date under subsection (a) for additional periods of not more than 6 months each, each of which shall begin on the day after the last day of the period during which a suspension is in effect under this subsection, if the President determines and reports in writing to the appropriate congressional committees at least 15 days before the date on which the additional suspension is to begin that the suspension is necessary to the national interests of the United States and will expedite a transition to democracy in Cuba."

The Trump Administration may view creating uncertainty about Title III as an effective means of destabilizing the interests of companies in the United States and other countries toward the Republic of Cuba; and it would be successful.

For example, there are individuals who maintain they have Title III-actionable claims relating to Jose Marti International Airport (HAV) and port at Santiago de Cuba.  In the case of HAV, United States-based air carriers and those from other countries could find their assets attached if they do not avoid the Republic of Cuba.  In the case of the port at Santiago de Cuba, passenger cruise ships and cargo ships might avoid docking and unloading for fear of expensive and enduring legal proceedings.

The United States Department of State reported that the Obama Administration issued a suspension on 5 January 2017; this was not publicized.  The next six-month interval will be July/August 2017.

Bureau of Western Hemisphere Affairs
Washington, DC
January 5, 2017

The Secretary of State reported on January 4, 2017 to the appropriate congressional committees that, consistent with Section 306(c)(2) of the Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of 1996 (Public Law 104-114; 22 U.S.C. 6021-6091) and the authority delegated to the Secretary by the President on January 31, 2013, the Secretary had made the statutorily required determination in order to suspend for six months beyond February 1, 2017 the right to bring an action under Title III of the Act.

Secretary's Determination under Title III of Libertad
Bureau of Western Hemisphere Affairs
Washington, DC
July 15, 2016

The Secretary of State reported on July 11, 2016 to the appropriate congressional committees that, consistent with Section 306(c)(2) of the Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of 1996 (Public Law 104-114; 22 U.S.C. 6021-6091) and the authority delegated to the Secretary by the President on January 31, 2013, the Secretary had made the statutorily-required determination in order to suspend for six months beyond August 1, 2016 the right to bring an action under Title III of the Act.

Secretary's Determination of Six Months' Suspension under Title III of Libertad
Bureau of Western Hemisphere Affairs
Washington, DC
January 21, 2016

The Secretary of State reported on January 14, 2016 to the appropriate congressional committees that, consistent with Section 306(c)(2) of the Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of 1996 (Public Law 104-114; 22 U.S.C. 6021-6091) and the authority delegated to the Secretary by the President on January 31, 2013, the Secretary had made the statutorily required determination in order to suspend for six months beyond February 1, 2016, the right to bring an action under Title III of the Act.

Statement on Signing the Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of 1996
March 12, 1996

Today I have signed into law H.R. 927, the "Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of 1996." This Act is a justified response to the Cuban government's unjustified, unlawful attack on two unarmed U.S. civilian aircraft that left three U.S. citizens and one U.S. resident dead. The Act imposes additional sanctions on the Cuban regime, mandates the preparation of a plan for U.S. assistance to transitional and democratically elected Cuban governments, creates a cause of action enabling U.S. nationals to sue those who expropriate or "traffic" in expropriated properties in Cuba, and denies such traffickers entry into the United States. It is a clear statement of our determination to respond to attacks on U.S. nationals and of our continued commitment to stand by the Cuban people in their peaceful struggle for freedom.

Immediately after Cuba's brutal act, I urged that differences on the bill be set aside so that the United States could speak in a single, strong voice. By acting swiftly—just 17 days after the attack—we are sending a powerful message to the Cuban regime that we do not and will not tolerate such conduct.

The Act also reaffirms our common goal of promoting a peaceful transition to democracy in Cuba by tightening the existing embargo while reaching out to the Cuban people. Our current efforts are beginning to yield results: they are depriving the Cuban regime of the hard currency it needs to maintain its grip on power; more importantly, they are empowering the agents of peaceful change on the island. This Act provides further support for the Administration's efforts to strengthen independent organizations in Cuba intent on building democracy and respect for human rights. And I welcome its call for a plan to provide assistance to Cuba under transitional and democratically elected governments.

Consistent with the Constitution, I interpret the Act as not derogating from the President's authority to conduct foreign policy. A number of provisions—sections 104(a), 109(b), 113, 201, 202(e), and 202(f)—could be read to state the foreign policy of the United States, or would direct that particular diplomatic initiatives or other courses of action be taken with respect to foreign countries or governments. While I support the underlying intent of these sections, the President's constitutional authority over foreign policy necessarily entails discretion over these matters. Accordingly, I will construe these provisions to be precatory.

The President must also be able to respond effectively to rapid changes in Cuba. This capability is necessary to ensure that we can advance our national interests in a manner that is conducive to a democratic transition in Cuba. Section 102(h), concerning the codification of the economic embargo, and the requirements for determining that a transitional or democratically elected government is in power, could be read to impose overly rigid constraints on the implementation of our foreign policy. I will continue to work with the Congress to obtain the flexibility needed if the United States is to be in a position to advance our shared interest in a rapid and peaceful transition to democracy in Cuba.

Finally, Title IV of the Act provides for the Secretary of State to deny visas to, and the Attorney General to exclude from the United States, certain persons who confiscate or traffic in expropriated property after the date of enactment of the Act. I understand that the provision was not intended to reach those coming to the United States or United Nations as diplomats. A categorical prohibition on the entry of all those who fall within the scope of section 401 could constrain the exercise of my exclusive authority under Article II of the Constitution to receive ambassadors and to conduct diplomacy. I am, therefore, directing the Secretary of State and the Attorney General to ensure that this provision is implemented in a way that does not interfere with my constitutional prerogatives and responsibilities.

The Cuban regime's lawless downing of two unarmed planes served as a harsh reminder of why a democratic Cuba is vitally important both to the Cuban and to the American people. The LIBERTAD Act, which I have signed into law in memory of the four victims of this cruel attack, reasserts our resolve to help carry the tide of democracy to the shores of Cuba.

WILLIAM J. CLINTON
The White House, March 12, 1996.

White House Makes Second Comments About Cuba Policy

The White House
Office of the Press Secretary
February 03, 2017

Press Briefing
12:37 P.M. EST

Mr. Spicer:  With that, I’m going to go my first Skype question seat.   Jackie Nespral from NBC 6 in South Florida.  Jackie.

Question:  Good afternoon.  On behalf of the viewers of South Florida, thanks so much for this opportunity.  You know, a lot of focus on foreign affairs this week, a new sanctions announced today against Iran, and of course Miami, as you know, is home to the largest Cuban-American community in the country.  And during the campaign, President Trump talked about his discontent with the warming of U.S.-Cuba relations implemented by President Obama.  And in the last days of his administration, he ended the "wet foot, dry foot" policy, leaving thousands of Cubans in limbo.

So my question is twofold.  A, has there been any contact between your administration and the Cuban government?  And B, are there any plans to change the current policy right now?

Mr. Spicer:  Thanks, Jackie.  We are in the midst of a full review of all U.S. policies towards Cuba.  The President is committed to an agenda of ensuring human rights for all citizens throughout the world.  And as we review those policies in Cuba, that will be forefront in their policy discussions, but there is nothing that we have on that front at this point.

The White House
Office of the Press Secretary
Washington, DC
24 January 2017

Press Briefing
36:18 of 45:26

Question:  Does the President have any plans to change US policy towards Cuba there are a lot of changes that took place during the last Administration and the Executive Orders as it relates to US-Cuba relations?

Mr. Spicer:  I have to follow-up with you we've got nothing that we're ready to announce at this point.

http://www.cubatrade.org/blog/2017/1/25/first-comments-from-the-white-house-about-cuba-policy

Correction: Royal Caribbean Cruises Increases 2017 Cuba Projections: 175% For Passengers & 186% For Revenues

NOTE (2:22 pm): Incorrect data was obtained from RCC relating to the passenger count for the Empress of the Seas vessel.  We have corrected the errors throughout the following text.  We apologize.

Royal Caribbean Cruises, Ltd. (2016 revenues exceeded US$8 billion) has increased the number of sailings in 2017 that include the Republic of Cuba from four (4) to eleven (11); changing the number of passengers from a potential 6,408 to 17,622 and gross revenues from a potential US$8.3 million to US$22.9 million.

For the Republic of Cuba sailings, the company is using its 1,602-passenger Empress of the Seas (692ft), which was placed in service on 25 June 1990.  

On 26 January 2017, with four (4) announced itineraries (one departing from Miami, Florida and three from Tampa, Florida), if the Empress of the Seas was fully-occupied for each sailing, the total number of passengers would be 6,408 with gross revenues of approximately US$8.3 million.  In 2016, Royal Caribbean Cruises, Ltd. vessels carried six million passengers.  The four Republic of Cuba sailings would represent .11% of the total passengers carried by the company and .10% of gross revenues to the company.

On 3 February 2017, the company announced additional itineraries.  Thus, for 2017, Royal Caribbean Cruises will have eleven (11) sailings that will include the Republic of Cuba: ten (10) from Tampa, Florida, and one (1) sailing from Miami, Florida.  The sailings, which range from four (4) nights to seven (7) nights, commence in April 2017 and continue through November 2017.  If the Empress of the Seas sails at capacity, the total number of passengers that would visit the Republic of Cuba in 2017 will be 17,622 with gross revenues of approximately US$22.9 million.  The eleven sailings would represent .28% of the total passengers carried by the company in 2016 and represent .29% of gross revenues to the company in 2016.

The economic impact on the Republic of Cuba by the eleven (11) sailings may be approximately US$2.2 million if the vessels operate at capacity.

During an appearance on CNBC's "Power Lunch" on 26 January 2017, Mr. Richard D. Fain, Chairman and Chief Executive Officer of Royal Caribbean Cruises, Ltd., referred to the company's planned April 2017 to May 2017 sailings to the Republic of Cuba as a "trivial part of our business."

Mr. Fain was correct about the economic impact of the Republic of Cuba to the company based upon announced activity for 2017.  He was not accurately reflecting the commensurate effort by the company to obtain authorization from the government of the Republic of Cuba.

Reportedly, members of the Chicago, Illinois-based Pritzker family have substantive shareholdings in Royal Caribbean Cruises, Ltd.; at one reporting they were the third-largest shareholder in the company.  The Honorable Penny Pritzker (net worth reported as US$2.4 billion) served as United States Secretary of Commerce during the Obama Administration from 26 June 2013 to 20 January 2017 and visited the Republic of Cuba twice during her tenure.

The "Godmother" of the Empress of the Seas is the Republic of Cuba-born, Florida-based singer Ms. Gloria Estefan.

ROYAL CARIBBEAN INTERNATIONAL OPENS NEW SAILINGS TO CUBA
Adventure Seekers Can Now Stay in Havana Overnight on Empress of the Seas

MIAMI, Feb. 3, 2017 – Guests looking to dive deeper into the culture and nightlife of Cuba will now have the opportunity to experience the island at night on Empress of the Seas’ new sailings to Havana. Royal Caribbean International has expanded its Caribbean itineraries sailing from Tampa, to include new 4- and 5-night cruises with day and overnight visits to Havana, along with stops in Key West, FL. and Cozumel, Mexico. The new sailings are available through Nov. 4, 2017, and all sailings are now open for sale.

Visiting Cuba with Royal Caribbean means guests can enjoy authentic people-to-people experiences curated to immerse them in the natural beauty and rich culture of the island. Adventures include taking a trip back to the 1950s in a classic American car to tour Havana, with stops at the historic and luxurious Hotel Nacional de Cuba and the Plaza de Revolución, as well as a scenic drive along the island’s famous Malecón waterfront. For guests who want to immerse themselves even more during their time in Cuba, a walking tour offers a close-up experience of the city’s most famous locales, including the old quarter and the Havana Club Museum, a renowned rum producer housed in an 18th-century colonial mansion. For those intrigued by literary greats, a unique excursion will take them to novelist Ernest Hemingway’s favorite haunts, including where he lived, fished, dined and sipped his favorite cocktails.  

In the evenings, travelers can experience another side of Cuba – its diverse nightlife. From visiting the famous Tropicana Club to enjoying a performance by the Buena Vista Social Club or witnessing the family friendly ceremonial cannon firing at El Cañonazo, guests can enjoy the sights and sounds of Cuba after dark.

The vibrant Cuban culture extends beyond land to the experience onboard Empress of the Seas. From cortaditos and café con leche in Café Royal to salsa music and dancing in the Boleros Latin lounge, guests will have a range of onboard activities developed to bring the spirit of the island to life throughout the entire journey.

Royal Caribbean International is an award-winning global cruise brand with a 48-year legacy of innovation and introducing industry “firsts” never before seen at sea. The cruise line features an expansive and unmatched array of features and amenities only found on Royal Caribbean including, jaw-dropping, Broadway-style entertainment and industry-acclaimed programming that appeals to families and adventurous vacationers alike. Onboard, guests are catered to with the cruise line’s world-renowned friendly and engaging Gold Anchor Service by every staff and crew member. Royal Caribbean has been voted “Best Cruise Line Overall” for 14 consecutive years in the Travel Weekly Readers Choice Awards.

The cruise line sails 25 of the world’s most innovative cruise ships to the most popular destinations in Bermuda and the Caribbean, Europe, Canada and New England, Alaska, South America, Asia, and Australia and New Zealand. Media can stay up-to-date by following @RoyalCaribPR on Twitter, and visiting RoyalCaribbeanPressCenter.com. For additional information or to make reservations, vacationers should call their travel agent; visit RoyalCaribbean.com; or call (800) ROYAL-CARIBBEAN.

http://www.cubatrade.org/blog/2017/1/26/cuba-is-trivial-part-of-business-says-royal-caribbean-cruises-chairman-ceo-not-quite-accurate

American Airlines Opens Ticket Office In Havana; Delta Air Lines Was First; Can't Accept Credit Cards & Can't Check-In For Flights

On 1 February 2017, Fort Worth, Texas-based American Airlines opened a ticket office in the city of Havana, Republic of Cuba.  The company has an operations office for its resident country manager.

American Airlines operates thirteen daily flights from Miami, Florida, and from Charlotte, North Carolina, to Havana and the cities of Camaguey, Cienfuegos, Holguin, Santa Clara and Varadero.

From American Airlines on 6 February 2017:

We have three employees at the Ticket Service Center. They are not American Airlines employees, they contract employees.

We sell tickets and provide information. All transactions are cash only, only currency accepted is CUC’s (Cuban Convertible Pesos). Unlike in the U.S. or other TSC’s in Latin America and the Caribbean, customers can’t check-in or receive a boarding pass and the self-service machine is not operational at this time. Also, our frequent flyer program reservations and inquiries are limited.

The office is located at Calle 76 entre 5ta y 3ra Avenida, Centro de Negocios de Miramar, Barcelona Building. Office is open to the public Monday through Friday de 9 a.m.-5 p.m. and Saturdays 9 a.m.-1 p.m.

Additionally we have a training room to bring in our airport contract employees in Cuba for training. Our country manager’s office is also located in this office complex (Edificio Beijing).

On 7 November 2016, Atlanta, Georgia-based Delta Air Lines became the first United States-based company to establish an office since 1961 in the Republic of Cuba.

Long Island City, New York-based JetBlue Airways expects to open an office soon.

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.

The ticket offices are staffed by Republic of Cuba nationals.

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.

http://www.cubatrade.org/blog/2016/9/23/which-companies-are-the-first-to-open-offices-in-cuba?rq=american%20airlines

Florida Budget Proposal Would Impact Florida Ports With Cuba Services

The Honorable Richard Lynn “Rick” Scott, Governor (R) of the State of Florida, has included language on page 221 of his 363-page 2017/2018 budget that would, if approved by the Florida Legislature, impact the ports located in the state which are the location of exports to the Republic of Cuba and/or imports from the Republic of Cuba.  

Governor Scott was inaugurated on 4 January 2011 and is term-limited; his final term ends on 5 January 2019.

The impacted ports may include: Port Everglades, Jaxport (Jacksonville), Port Manatee, Port Miami, Port of Palm Beach, Port of Pensacola and Port Tampa Bay.

Florida Department of Transportation

1873   FIXED CAPITAL OUTLAY
       SEAPORT - ECONOMIC DEVELOPMENT
        FROM STATE TRANSPORTATION
         (PRIMARY) TRUST FUND. . . . . . .                        15,000,000

1874   FIXED CAPITAL OUTLAY
       SEAPORTS ACCESS PROGRAM
        FROM STATE TRANSPORTATION
         (PRIMARY) TRUST FUND. . . . . . .                        10,000,000

1875   FIXED CAPITAL OUTLAY
       SEAPORT GRANTS
        FROM STATE TRANSPORTATION
         (PRIMARY) TRUST FUND. . . . . . .                       140,097,833

1876   FIXED CAPITAL OUTLAY
       SEAPORT INVESTMENT PROGRAM
        FROM STATE TRANSPORTATION
         (PRIMARY) TRUST FUND. . . . . . .                        11,448,082

"No funds in Specific Appropriations 1873 through 1876 may be allocated to infrastructure projects that result in the expansion of trade with the Cuban dictatorship because of their continued human rights abuses."

How the words "result in" and "expansion" could be interpreted has created challenges for officials representing ports located in the State of Florida.  In January/February 2017, three (3) ports declined to execute Memorandums of Understanding (MOU) with the Port Authority of the Republic of Cuba.  

The wording of the budget proposal could be interpreted expansively- that if a port uses state funds to add a crane or expand a container facility and months later Crowley Liner Services increases on one vessel the number of containers transported from Port Everglades to the Port of Mariel, the increase could be interpreted as having been a result of changes to port infrastructure.

The vagueness of the wording was precisely what Governor Scott and his staff sought- to create uncertainty and, as a result, negatively impact the desire of exporters in the United States to engage commerce with Cuba.

In July 2016, the Florida Department of Transportation issued its 2015 Florida Seaport System Plan within which was the following passage:

3.8.3 EXPANSION OF TRADE WITH CUBA
Reaching back as far as the first Seaport Mission Plan, published in1990, the topic of resuming normal trade with Cuba has been listed as a significant issue for Florida’s seaports. Due to the proximity of the state to Cuba and the cultural ties, expanded trade opportunities could be dramatic. Many U.S. companies, educational institutions, humanitarian consortiums, and public officials seek to better understand future opportunities.

Meeting Minutes from the Tampa Bay Ports Regional on 13 August 2014 included the passage:

Primary Meeting Action Items:
Shared Strengths: Research, Manufacturing, Land capacity, Shared channel, Roads and Rail, Proximity to the Panama Canal, Cuba, Central and South America, Shared consumer markets along I4 corridor.