Societe Generale Of France Is Target Of 9th Lawsuit Using Libertad Act

1:19-cv-22842-DPG Sucesores de Don Carlos Nunez y Dona Pura Galvez, Inc. v. Societe Generale, S.A.
Darrin P. Gayles, presiding

Date filed: 07/10/2019 

LINK To Filing 

Societe Generale sued for $792 million by heirs of Cuban bank seized by Castro 

Reuters

By Jonathan Stempel

10 July 2019 

(Reuters) - The family of the former owners of a Cuban bank seized by Fidel Castro’s government nearly six decades ago sued Societe Generale (SOGN.PA) for approximately $792 million, saying the French bank owes damages for circumventing U.S. sanctions against Cuba. 

In a complaint filed on Wednesday with the U.S. District Court in Miami, 14 grandchildren of Carlos and Pura Nuñez, who once owned Banco Nuñez, want to hold Societe Generale liable under U.S. law for doing business with Cuba’s central bank, which nationalized Banco Nuñez and other lenders in 1960. 

A lawyer for the plaintiffs said he believed the case was the first against a bank that allegedly “trafficked” in property expropriated by the Castro regime, since the Trump administration said in April it would begin letting U.S. nationals sue companies for such conduct. 

“Victims of the Cuban regime who had their property confiscated now have a vehicle to get justice,” Javier Lopez, the lawyer, said in an interview. “We have multiple financial institutions that we’re looking to target.”  Societe Generale did not immediately respond to requests for comment after market hours. 

The lawsuit was filed eight months after Societe Generale agreed to pay $1.34 billion and enter a deferred prosecution agreement to settle U.S. and New York regulatory charges that it handled billions of dollars of transactions related to Cuba and other countries under U.S. sanctions. 

According to the plaintiffs, Societe Generale generated hundreds of millions of dollars of fees by lending money to and processing transactions for Banco Nacional de Cuba from 2000 to 2010. 

The plaintiffs said they own a claim to 10.5% of the equity in Banco Nacional de Cuba, roughly the percentage that Banco Nuñez represented when it was seized.  Lawyers for the plaintiffs at Kozyak Tropin & Throckmorton based the $792 million damages estimate on Banco Nuñez’s $7.8 million worth at the time, plus 6% annual interest and triple damages under the Helms-Burton Act, a 1996 federal law. 

The right to sue under that law had been suspended for 23 years because of opposition from the international community and concern that U.S. courts could be overrun by lawsuits. 

Secretary of State Mike Pompeo announced the lifting of that suspension in April, to boost pressure on Havana to end Cuban support for Venezuela’s socialist president, Nicolas Maduro. 

The case is Sucesors de Don Carlos Nuñez y Doña Pura Galvez Inc v Societe Generale SA, U.S. District Court, Southern District of Florida, No. 19-22842.

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President Trump To Visit Turkey: (Bonus) A Trump Tower In Istanbul & (Challenge) A Well-Known Company May Be Sued

The Honorable Donald J. Trump, President of the United States, continues to plan for a visit to the Republic of Turkey.  Will he visit Trump Towers in Istanbul?  Cuba will be a topic.   

A goal for a two-night visit to Turkey remains for July 2019 or August 2019 (prior or subsequent to the 45th G7 Summit in Biarritz, Nouvelle-Aquitaine, France) or September 2019 prior to the United Nations General Assembly in New York City. 

During the United Nations General Assembly, President Trump anticipates high-profile bilateral meetings (formal and sideline) with leadership of Cuba, Iran, North Korea, Syria, and Venezuela (unified or bifurcated) among others. 

H.E. Recep Tayyip Erdogan, President of the Republic of Turkey since 2014, was Prime Minister from 2003 to 2014, and Mayor of Istanbul from 1994 to 1998.  President Erdogan leads the Justice and Development Party (AKP).  Primary opposition party is Republican People’s Party (CHP). 

Despite current commercial, economic and political challenges for President Erdogan, he and the 82.9 million population of Turkey remain indispensable to the multilateral interests of the United States.  

The Trump Administration remains concerned by a re-alignment of Turkey with China, Russia, India, Iran, Iraq and Syria (where Ankara will have a substantive role in the management and rebuilding of the country).   

The delay by the Brussels, Belgium-based European Union (EU) in its efforts to include Turkey as its 29th member is no longer considered by Turkey to be of immediate importance; membership has ceased to be an enticement to influence behavior.   

Turkey withdrawing from the 29-member Brussels, Belgium-based North Atlantic Treaty Organization (NATO) should not be discounted as a genuine option; Turkey could affiliate with the 125-member and 25 observer countries of the New York, New York-based Non-Aligned Movement (NAM)- Turkey would immediately have a leadership role and revitalize its global influence.    

A goal of the visit to Turkey is to project President Trump as not anti-Muslim in a country where an existing narrative is that he is anti-Muslim; with a perception by some that he separates Muslims into two groups- those who are “civilized” defined as wealthy, purchase products (particularly defense-related) from the United States, and support United States policies and those who are “uncivilized” defined as poor, do not purchase products (particularly defense-related) from the United States, and do not support United States policies. 

Venues in Turkey of interest to staff at The White House- National Security Council (NSC) and Office of Scheduling and Advance, United States Department of State, and United States Secret Service (USSS) include the capital Ankara (population approximately 5 million), the largest city Istanbul (population approximately 15 million), and Izmir (population approximately 4 million), located on the Aegean Sea coast and location of substantive photogenic archaeological sites. 

In Istanbul, the preferred primary location, President and Mrs. Trump with President and Mrs. Erdogan would visit the Blue Mosque, Hagia Sophia Museum and Basilica Cistern.  President Trump and President Erdogan might visit the Suleymaniye Hamam.  Mrs. Trump and Mrs. Erdogan may visit Topkapi Palace Museum, Suleymaniye Mosque and Grand Bazaar.  There may also be a cruise on the Bosphorus and photo opportunity at the Maiden’s Tower; and potentially a visit to one of the Prince’s Islands located in the Sea of Marmara to the southeast of Istanbul.  

The government of Turkey advocates for Air Force One to arrive at US$8 billion Istanbul Airport (IST) which commenced full operation in 2019 and is located approximately expressway 22 miles from Istanbul.  Once completed, expected to be one of the largest airports in the world with eight runways and annual capacity approaching 200 million travelers.  Turkish Airlines is reported as the largest airline in the world by number of destinations, currently 304.  Turkish Airlines is an “Airborne Embassy” and Turkish Cargo is an “Airborne Chamber of Commerce.”   

If bilateral and multilateral defense-related issues are resolved or near resolution, President Trump would have an interest in visiting a military base to reinforce the relationship of Turkey with the United States and NATO (F-35 aircraft manufactured by Fort Worth, Texas-based Lockheed Martin with components manufactured in Turkey).  If there are Patriot surface-to-air (SAM) systems manufactured by Waltham, Massachusetts-based Raytheon Company available for viewing, they would be included in any tour. 

If Turkey accepts delivery of the S-400 SAM from Moscow, Russia-based VKO Almaz-Antey, a visit by President Trump to an installation site should not be discounted as it would provide an opportunity for the President to present reasons the Patriot is superior to the S-400.   

Venue concerns are primarily focused upon (though unlikely) demonstrations- in support of the AKP and against the AKP and in support of the CHP and against the CHP.  The recently-elected mayors of Ankara (the capital) and Istanbul (the largest city in the country) are members of the CHP and each will welcome President Trump when he arrives to their respective cities.  Expect Turkey to consider temporarily closing its overland borders with Syria, Iraq, Iran, Armenia and Georgia as security precautions.  President Erdogan will desire to be perceived as a muscular democrat- tolerant to opposition yet unquestioned as to his leadership of the country.    

A most significant optical challenge for the Trump Administration is how to manage the desire of President Trump to visit the two-building Trump Towers located in the Sisli District of Istanbul.  

According to the required 2018 filing to the U.S. Office of Government Ethics, President Trump certified: “TRUMP MARKS ISTANBUL II LLC NIA 342.  Value: None (or less than $1,001).  Income Type: royalties.  Income Amount: $100,001-$1,000,000.  Value reported reflects bank account holding only.  Additional Underlying Asset: license deal with ORTADOGU OTOMOTIV TICARET AS - value not readily ascertainable. License holder, New York, NY.  Trump Marks Istanbul II LLC shareholders: 1% Trump Marks Istanbul II Corp (role- managing shareholder) and 99%- DTTM Operations LLC (role- member).”   

The property is near previously-outlined secure motorcade routes from Ataturk International Airport to the listed hotels (United States government preferred brands include Hilton, Hyatt, Marriott).  The Trump Towers are viewable from most rooms in the United States-branded properties in Istanbul.  

President Trump has been criticized for visiting properties in the United States and other countries owned/managed/licensed by The Trump Organization as the visits are perceived as a United States-taxpayer funded opportunity to provide marketing value for the personal interests of the President and his family.  Thus far, the President has not indicated that he considers such criticism to be justified; and has continued to visit properties even when there is substantial cost to United States taxpayers- golf course in Scotland, for example and no identifiable official purpose.   

Opened in 2010, Trump Towers Istanbul (http://www.trumpistanbul.com.tr/en/default.aspx) was reported as the first to be constructed on the European Continent. 

Trump Towers (Wikipedia): 

“Trump Towers, Istanbul, Sisli is a landmark in the historic city of Istanbul.  With two towers rising in Mecidiyekoy, one of the city's most vibrant areas, the property captures the utmost in luxury.  The residential tower, just under 40 stories, consists of over 200 residences, and will feature the expansive layouts, meticulous eye for design and lavish finishes synonymous with the Trump name.  Forest, city and Bosporus views will be extraordinary through the vista of floor-to-ceiling windows.   

In addition, residents will enjoy a full-service spa and fitness center, an indoor pool, a 24-hour doorman, a business center, and a vast range of additional amenities. The office tower, also 40 stories, will offer commercial luxury at its finest, with a private entrance, a beauty center, fitness area and pool for those working in the building. A luxury retail component of over 400,000-square-feet rests at the base of both towers, offering residents and visitors the best in retail and dining with personalized service incomparable to anything in Istanbul. 

A prominent tenant in the building has been: Reza Zarrab (Persian: رضا ضراب‎, Turkish: Rıza Sarraf; born 12 September 1983 in Tabriz, Iran) is a Turkey-based businessman. He has quadruple Iranian, Azerbaijani, Turkish and Macedonian citizenship.  

On 19 March 2016 he was arrested in the United States, and is accused of being a member of international criminal organization. He was charged with evading the US economic sanctions on Iran and money laundering in an alleged racket scheme to help Iran bypass the sanctions, involving ministers of the Turkish government of then prime minister and now president of Turkey, Recep Tayyip Erdoğan.   

His father, Hossein Zarrab, had a close relationship with Mahmoud Ahmadinejad, who served as the President of Iran between 2005 and 2013. The U.S. Department of Treasury accused Hossein Zarrab of violating U.S. sanctions on Iran and slapped a $9.1 million fine against him. His fine reduced to $2.3 million following his collaboration with the U.S. officials. 

Zarrab was arrested by the FBI in Miami in the US on March 19, 2016 and was accused of bank fraud, money laundering and helping the Iranian government in evading the US economic sanctions on Iran to hinder its nuclear-weapons program. His charges; conspiracy to defraud, violating the International Emergency Economic Powers Act, money laundering, and bank fraud; could bring up to 70 years in prison if found guilty in the U.S. Federal Court.” 

Issues for discussion by President Trump and President Erdogan include:  

Accepting from Iraq the children of Turkish-nationals

Accepting from Syria the children of Turkish-nationals

China (commercial relationship, Uighurs)

Continuing NATO membership

Cuba (potential lawsuit against company using Libertad Act; relationship with Venezuela)

EU Membership

F-35 Aircraft

Fethullah Gulen

Iran

Iraq

Israel

Libya

NATO membership

Natural Gas Purchases

North Korea

Oil Purchases

Prisoner Exchanges

Production Cooperation Agreement for S-500 defense system with Russia

Purchase of S-400 defense system from Russia

Removal of Turkey as a Beneficiary Developing Country (BDC) for GSP

Removed higher level United States tariffs on steel exports to the United States

Russia

Syria

Venezuela

Complete Analysis In PDF Format

OFAC Sanctions Another Company Owned By Government Of Cuba That Engages With Venezuela

United States Department of State

Washington DC

3 July 2019

The United States Curtails Cuban Support for Illegitimate Former Maduro Regime

Today, the United States removed sanctions on oil shipping company PB Tankers in response to actions it has taken to ensure that its vessels no longer were complicit in supporting the former Maduro regime. Additionally, the United States designated Cubametales, the Cuban state-run company and primary facilitator of oil imports from Venezuela, for circumventing U.S. sanctions.

The services and goods Cuba provides Venezuela continue to fuel the corruption of Maduro and his cronies and help maintain their influence over the Venezuelan people. These actions serve to squeeze the lifeline provided by Cuba that preserves Nicolas Maduro’s influence. Every drop of Venezuelan oil shipped to Cuba is traded for additional security and intelligence officers and other personnel, which further robs and impoverishes a once rich nation, denies Venezuelan sovereignty, and prolongs the suffering of the Venezuelan people.

We commend PB Tankers, which was sanctioned on April 12, 2019, for taking actions since then to ensure that its vessels are not used to prop up Maduro and his Cuban sponsors. This is a reminder that those who take concrete and meaningful actions to restore democracy in Venezuela can expect the removal of sanctions.

At the same time, the United States will continue to take action against those that seek to thwart Venezuela’s peaceful transition back to freedom and prosperity.

We call on the international community to step up pressure on Nicolas Maduro and his criminal associates. We must stand together in support of the Venezuelan people’s struggle for democracy and desire to live in dignity.

United States Department of the Treasury

Washington DC

3 July 2019 

Treasury further removes sanctions on company that has ended its involvement in Venezuelan oil shipments to Cuba 

Washington (3 July 2019) – Today, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Cubametales, the Cuban state-run oil import and export company, for its continued importation of oil from Venezuela.  Cuba, in exchange for this oil, continues to provide support, including defense, intelligence, and security assistance, to the illegitimate regime of former President Nicolas Maduro.  Today’s action, taken pursuant to Executive Order (E.O.) 13850, as amended, targets the company for operating in the oil sector of the Venezuelan economy.   

“Maduro is clinging to Cuba to stay in power, buying military and intelligence operatives in exchange for oil.  Treasury’s sanctions on Cubametales will disrupt Maduro’s attempts to use Venezuela’s oil as a bargaining tool to help his supporters purchase protection from Cuba and other malign foreign actors,” said Treasury Secretary Steven T. Mnuchin.  “Treasury’s decision to remove restrictions on PB Tankers and unblock previously sanctioned vessels is a reminder that positive changes in behavior can result in the lifting of sanctions.” 

On October 31, 2000, the Government of Cuba solidified its investment in the oil sector of Venezuela through the Cuba-Venezuela Integral Cooperation Agreement (CIC).  Through this agreement, Venezuela exports oil to Cuba, and in return, Cuba provides assistance to several sectors of the Venezuelan economy, to include the provision of medical services, technology, and military assistance.  The goods and services Cuba provides Venezuela continue to fuel the corruption of Maduro and his associates and help maintain their control over the increasingly impoverished Venezuelan people whose oil has been shipped to Cuba in support of dictatorship.   

Since the January 28, 2019 designation of Petroleos de Venezuela, S.A. (PDVSA), the Venezuelan state-owned oil company, Cubametales and other Cuba-based entities have continued to support Maduro through oil shipments from Venezuela.   

Cubametales is based in Havana, Cuba and is responsible for guaranteeing 100 percent of imports and exports of fuels and imports of additives and basic oils for lubricants to and from Cuba.  Additionally, Cubametales has been the recipient, and charterer, of shipments of oil from Venezuela to Cuba and has expanded its operations to include non-traditionally traded oil products such as sulfur fuel and diluted crude oil.  As a part of the original CIC agreement, the agreement states that Cubametales (and its administrative manager) and PDVSA are responsible for setting the terms and conditions for PDVSA oil exports up to 53,000 barrels per day on a quarterly basis.   

As a result of today’s action, all property and interests in property of this entity, and of any entities that are owned, directly or indirectly, 50 percent or more by the designated entity, that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC.  OFAC’s regulations generally prohibit all dealings by U.S. persons or within (or transiting) the United States that involve any property or interests in property of blocked or designated persons.

Delisting of PB Tanker S.p.A 

In addition to today’s designation of Cubametales, OFAC is delisting PB Tankers S.p.A. (PB Tankers).  OFAC designated PB Tankers on April 12, 2019, for operating in the oil sector of the Venezuelan economy.  As a part of this designation, six vessels were identified as blocked property in the interest of PB Tankers; one vessel, named the Silver Point, was used to deliver oil products from Venezuela to Cuba.  Following the company’s designation, PB Tankers terminated its charter agreement with Cubametales, which had chartered the Silver Point to transport oil between Venezuela and Cuba.  Likewise, PB Tankers took additional steps to increase scrutiny of its business operations to prevent future sanctionable activity.   

Treasury recognizes the actions that PB Tankers has taken to ensure that its vessels are not complicit in propping up the illegitimate former Maduro regime in Venezuela.  As a result of today’s action, all property and interests in property, which had been blocked as a result of PB Tankers’ designation, are unblocked, and all otherwise lawful transactions involving U.S. persons and PB Tankers are no longer prohibited. 

Delistings Promote Positive Changes in Behavior 

U.S. sanctions need not be permanent; sanctions are intended to bring about a positive change of behavior.  The United States has made clear that the removal of sanctions is available for persons designated under E.O. 13692 or E.O. 13850, both as amended, who take concrete and meaningful actions to restore the democratic order, including through refusing to operate in Venezuela’s oil sector, which continues to provide a lifeline to the illegitimate regime of former President Nicolas Maduro.  

Additional Resources 

For information about the methods that Venezuelan senior political figures, their associates, and front persons use to move and hide corrupt proceeds, including how they try to exploit the U.S. financial system and real estate market, please refer to Treasury’s Financial Crimes Enforcement Network (FinCEN) advisories FIN-2019-A002, “Updated Advisory on Widespread Public Corruption in Venezuela,” FIN-2017-A006, “Advisory to Financial Institutions and Real Estate Firms and Professionals” and FIN-2018-A003, “Advisory on Human Rights Abuses Enabled by Corrupt Senior Foreign Political Figures and their Financial Facilitators.”

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Four New Lawsuits Using Libertad Act Filed In Florida Against Trivago

On 24 June 2019, Coral Gables, Florida-based Rivero Mestre LLP filed additional documents in the United States District Court, Southern District of Florida (Miami) against Dusseldorf, Germany-based Trivago GMbH (2018 revenues approximately US$1.2 billion), a subsidiary of  Bellevue, Washington-based Expedia Group (2018 revenues approximately US$11.2 billion). Expedia is expected to be sued soon.  

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On 18 June 2019, Rivero Mestre LLP filed a class-action lawsuit in the United States District Court, Southern District of Florida (Miami) against Trivago GmbH.   

LINK: https://www.cubatrade.org/blog/2019/6/19/trivago-subsidiary-of-expedia-becomes-fifth-title-iii-libertad-act-lawsuit 

Libertad Act 

The Trump Administration has made operational Title III and further implemented Title IV of the Cuban Liberty and Democratic Solidarity Act of 1996 (known as “Libertad Act”).   

Title III authorizes lawsuits in United States District Courts against companies and individuals who are using a certified claim or non-certified claim where the owner of the certified claim or non-certified claim has not received compensation from the Republic of Cuba or from a third-party who is using (“trafficking”) the asset.   

Title IV restricts entry into the United States by individuals who have connectivity to unresolved certified claims or non-certified claims.  One Canada-based company is currently subject to this provision based upon a certified claim. 

Certified Claims Background 

There are 8,821 claims of which 5,913 awards valued at US$1,902,202,284.95 were certified by the USFCSC and have not been resolved for nearing sixty years (some assets were officially confiscated in the 1960’s, some in the 1970’s and some in the 1990’s.  The USFCSC permitted simple interest (not compound interest) of 6% per annum (approximately US$114,132,137.10); with the approximate current value of the 5,913 certified claims US$8,521,866,236.75.  

The first asset to be expropriated by the Republic of Cuba was an oil refinery in 1960 owned by White Plains, New York-based Texaco, Inc., now a subsidiary of San Ramon, California-based Chevron Corporation (USFCSC: CU-1331/CU-1332/CU-1333 valued at US$56,196,422.73).  

The largest certified claim (Cuban Electric Company) valued at US$267,568,413.62 is controlled by Boca Raton, Florida-based Office Depot, Inc.  The second-largest certified claim (International Telephone and Telegraph Co, ITT as Trustee, Starwood Hotels & Resorts Worldwide, Inc.) valued at US$181,808,794.14 is controlled by Bethesda, Maryland-based Marriott International; the certified claim also includes land adjacent to the Jose Marti International Airport in Havana, Republic of Cuba.  The smallest certified claim is by Sara W. Fishman in the amount of US$1.00 with reference to the Cuban-Venezuelan Oil Voting Trust. 

The two (2) largest certified claims total US$449,377,207.76, representing 24% of the total value of the certified claims.  Thirty (30) certified claimants hold 56% of the total value of the certified claims.  This concentration of value creates an efficient pathway towards a settlement.   

Title III of the Cuban Liberty and Democratic Solidarity (Libertad) Act of 1996 requires that an asset had a value of US$50,000.00 when expropriated by the Republic of Cuba without compensation to the original owner.  Of the 5,913 certified claims, 913, or 15%, are valued at US$50,000.00 or more.  Adjusted for inflation, US$50,000.00 (3.70% per annum) in 1960 has a 2019 value of approximately US$427,267.01.  The USFCSC authorized 6% per annum, meaning the 2019 value of US$50,000.00 is approximately US$1,649,384.54.  

The ITT Corporation Agreement 

In July 1997, then-New York City, New York-based ITT Corporation and then-Amsterdam, the Netherlands-based STET International Netherlands N.V. signed an agreement whereby STET International Netherlands N.V. would pay approximately US$25 million to ITT Corporation for a ten-year right (after which the agreement could be renewed and was renewed) to use assets (telephone facilities and telephone equipment) within the Republic of Cuba upon which ITT Corporation has a certified claim valued at approximately US$130.8 million.  ETECSA, which is now wholly-owned by the government of the Republic of Cuba, was a joint venture controlled by the Ministry of Information and Communications of the Republic of Cuba within which Amsterdam, the Netherlands-based Telecom Italia International N.V. (formerly Stet International Netherlands N.V.), a subsidiary of Rome, Italy-based Telecom Italia S.p.A. was a shareholder.  Telecom Italia S.p.A., was at one time a subsidiary of Ivrea, Italy-based Olivetti S.p.A.  The second-largest certified claim (International Telephone and Telegraph Co, ITT as Trustee, Starwood Hotels & Resorts Worldwide, Inc.) valued at US$181,808,794.14 is controlled by Bethesda, Maryland-based Marriott International.  

TITLE III--SEC. 302. LIABILITY FOR TRAFFICKING IN CONFISCATED PROPERTY CLAIMED BY UNITED STATES NATIONALS. 

(a) Civil Remedy.-- (1) Liability for trafficking.--(A) Except as otherwise provided in this section, any person that, after the end of the 3-month period beginning on the effective date of this title, traffics in property which was confiscated by the Cuban Government on or after January 1, 1959, shall be liable to any United States national who owns the claim to such property for money damages in an amount equal to the sum of-- (i) the amount which is the greater of-- (I) the amount, if any, certified to the claimant by the Foreign Claims Settlement Commission under the International Claims Settlement Act of 1949, plus interest; (II) the amount determined under section 303(a)(2), plus interest; or (III) the fair market value of that property, calculated as being either the current value of the property, or the value of the property when confiscated plus interest, whichever is greater; and (ii) court costs and reasonable attorneys' fees.  (B) Interest under subparagraph (A)(i) shall be at the rate set forth in section 1961 of title 28, United States Code, computed by the court from the date of confiscation of the property involved to the date on which the action is brought under this subsection.   

(2) Presumption in favor of the certified claims.--There shall be a presumption that the amount for which a person is liable under clause (i) of paragraph (1)(A) is the amount that is certified as described in subclause (I) of that clause. The presumption shall be rebuttable by clear and convincing evidence that the amount described in subclause (II) or (III) of that clause is the appropriate amount of liability under that clause. 

(3) Increased liability.-- (A) Any person that traffics in confiscated property for which liability is incurred under paragraph (1) shall, if a United States national owns a claim with respect to that property which was certified by the Foreign Claims Settlement Commission under title V of the International Claims Settlement Act of 1949, be liable for damages computed in accordance with subparagraph (C).   

(B) If the claimant in an action under this subsection (other than a United States national to whom subparagraph (A) applies) provides, after the end of the 3-month period described in paragraph (1) notice to-- (i) a person against whom the action is to be initiated, or (ii) a person who is to be joined as a defendant in the action, at least 30 days before initiating the action or joining such person as a defendant, as the case may be, and that person, after the end of the 30- day period beginning on the date the notice is provided, traffics in the confiscated property that is the subject of the action, then that person shall be liable to that claimant for damages computed in accordance with subparagraph (C).   

(C) Damages for which a person is liable under subparagraph (A) or subparagraph (B) are money damages in an amount equal to the sum of-- (i) the amount determined under paragraph (1)(A)(ii), and (ii) 3 times the amount determined applicable under paragraph (1)(A)(i).  (D) Notice to a person under subparagraph (B)-- (i) shall be in writing; (ii) shall be posted by certified mail or personally delivered to the person; and (iii) shall contain-- (I) a statement of intention to commence the action under this section or to join the person as a defendant (as the case may be), together with the reasons therefor; (II) a demand that the unlawful trafficking in the claimant's property cease immediately; and (III) a copy of the summary statement published under paragraph (8).  (4) Applicability.--(A) Except as otherwise provided in this paragraph, actions may be brought under paragraph (1) with respect to property confiscated before, on, or after the date of the enactment of this Act. 

(B) In the case of property confiscated before the date of the enactment of this Act, a United States national may not bring an action under this section on a claim to the confiscated property unless such national acquires ownership of the claim before such date of enactment.  (C) In the case of property confiscated on or after the date of the enactment of this Act, a United States national who, after the property is confiscated, acquires ownership of a claim to the property by assignment for value, may not bring an action on the claim under this section.   

(5) Treatment of certain actions.--(A) In the case of a United States national who was eligible to file a claim with the Foreign Claims Settlement Commission under title V of the International Claims Settlement Act of 1949 but did not so file the claim, that United States national may not bring an action on that claim under this section.  (B) In the case of any action brought under this section by a United States national whose underlying claim in the action was timely filed with the Foreign Claims Settlement Commission under title V of the International Claims Settlement Act of 1949 but was denied by the Commission, the court shall accept the findings of the Commission on the claim as conclusive in the action under this section. 

(C) A United States national, other than a United States national bringing an action under this section on a claim certified under title V of the International Claims Settlement Act of 1949, may not bring an action on a claim under this section before the end of the 2-year period beginning on the date of the enactment of this Act. 

(D) An interest in property for which a United States national has a claim certified under title V of the International Claims Settlement Act of 1949 may not be the subject of a claim in an action under this section by any other person. Any person bringing an action under this section whose claim has not been so certified shall have the burden of establishing for the court that the interest in property that is the subject of the claim is not the subject of a claim so certified.  (6) Inapplicability of act of state doctrine.--No court of the United States shall decline, based upon the act of state doctrine, to make a determination on the merits in an action brought under paragraph (1). 

(7) Licenses not required.--(A) Notwithstanding any other provision of law, an action under this section may be brought and may be settled, and a judgment rendered in such action may be enforced, without obtaining any license or other permission from any agency of the United States, except that this paragraph shall not apply to the execution of a judgment against, or the settlement of actions involving, property blocked under the authorities of section 5(b) of the Trading with the Enemy Act that were being exercised on July 1, 1977, as a result of a national emergency declared by the President before such date, and are being exercised on the date of the enactment of this Act.

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FBI Commends Cuba For Seizing Assets Of Convicted Individual

No Safe Haven

Cuba is an Unreliable Shelter for Illicit Funds 

“Individuals who believe Cuba offers a safe haven for ill-gotten financial gains should understand the nation’s current government offers no such guarantee,” said acting FBI Legal Attaché to Cuba Christopher Starrett. 

Cuba’s recent seizure of assets housed there by Orelvis Olivera is an example of what can happen to property and bank accounts that criminals attempt to illegally shelter on the island. 

Olivera, who came to the United States from Cuba in 2005, was convicted in federal court in 2014 of defrauding Medicare of nearly $8 million. On paper, Olivera’s Acclaim Home Health Inc. provided home health care and physical therapy services to Medicare beneficiaries. In actuality, according to court documents and the FBI, the firm paid bribes to patient recruiters who referred Medicare beneficiaries to the company, allowing Acclaim to bill Medicare for unnecessary services. 

“They were providing limited services,” said Special Agent Noel Gil, who worked the case with the FBI Miami Field Office, “but most of their business was fraudulent. They were also enabling more fraud by accepting kickbacks for referring Medicare recipients to other medical agencies.” 

Olivera’s sentence of six years in prison included an order to pay more than $5.7 million in restitution to the U.S. government. Much of Olivera’s illegally acquired money, however, had been invested in properties and deposited in bank accounts in Cuba before he faced criminal charges. 

Media reports noted that Olivera was able to move the money during frequent trips to Cuba and frequent visits from family members to the United States. 

Gil said it is unlikely that Olivera started to hide his money in Cuba because of any loyalty to the country; rather, he likely viewed it as a safeguard against U.S. authorities. “He was hiding his money in Cuba because he believed he could go back to his businesses and his riches,” Gil said. 

In April 2019, however, the Cuban government convicted Olivera in absentia and sentenced him to 10 years in prison for money laundering, tax evasion, forgery of public documents, and illicit enrichment, among other crimes, based on his conviction in the United States and his investments in Cuba. They also punished several individuals who supported Olivera’s businesses or enterprises with fines or prison sentences. 

Most notably, Cuban authorities seized four properties, a vehicle, and two bank accounts that Olivera had put in the names of relatives and associates in Cuba. The United States will pursue recovering assets held in Cuba as part of the ordered restitution payments. 

The FBI believes Olivera is not the only individual who has had assets seized after a conviction in the United States. “The primary takeaway,” said Starrett, “is that the Cuban government may seize assets linked to crimes and no criminal should count on reclaiming them once they are seized.” 

https://www.fbi.gov/news/stories/cuba-is-an-unreliable-shelter-for-illicit-funds-062419

 

18 New Libertad Lawsuits Expected; 6 Filed In U.S.; 1 Related Lawsuit Filed In Spain

6 Lawsuits Filed; 18 Expected Within 60 Days 

Provided by legal counsels: Previous court filings and expected court filings in United States District Courts within the next thirty (30) and sixty (60) days using Title III of The Cuban Liberty and Democratic Solidarity Act of 1996 (Libertad Act). 

Libertad Act 

Title III of the Libertad Act authorizes lawsuits in United States District Courts against companies and individuals who are using a claim where the owner of the claim has not received compensation from the Republic of Cuba or from a third-party who is using the asset.   

Title IV of the Libertad Act authorizes the United States Department of State to restrict entry into the United States by individuals who have connectivity to unresolved claims.  One company, Toronto, Canada-based Sherritt International (2018 revenue approximately US$500 million), is currently known to be subject to this provision; other companies have been impacted, but current status remains undetermined.  Since 1996, the United States Department of State has declined to provide the names of companies or individuals who have been subject to Title IV and information relating to behavioral change by companies or individuals due to pressure, but not implementation, of the use of Title IV. 

Title III Lawsuits Filed In United States  

(2 May 2019) Miami, Florida-based Carnival; Plaintiff- Havana Docks Corporation

(2 May 2019) Miami, Florida-based Carnival; Plaintiff- Javier Garcia-Bengochea

(2 May 2019) Havana, Cuba-based Corporacion Cimex; Plaintiff- Exxon Mobil Corporation

(2 May 2019) Havana, Cuba-based Union Cuba-Petroleo; Plaintiff- Exxon Mobil Corporation

(20 May 2019) Havana, Cuba-based Grupo Hotelero Gran Caribe, Corporacion de Comercio Y Turismo Internacional, Cubanacan S.A., Grupo De Turismo Gaviota S.A., Corporacion Cimex S.A., Raul Doe 1-5, and Mariela Doe 1-5; Plaintiff: Mata and Hernandez families

(18 June 2019) Dusseldorf, Germany-based Trivago GMbH (subsidiary of Bellevue, Washington-based Expedia); Plaintiff- Hernandez family 

Non-Title III Lawsuit (unjust enrichment statue) Filed In Spain

(29 May 2019) Palma de Mallorca, Spain-based Melia Hotels International; Plaintiff- Sanchez Hill family; filed in Superior Court of Palma de Mallorca, Spain  

Expected Libertad Act Filings In United States

Canada

Blue Diamond Resorts (Subsidiary of Toronto, Canada-based Sunwing Travel Group) 

France

Paris, France-based Group ADP (formerly Aeroports de Paris); Plaintiff: Lopez Regueiro family

Paris, France-based Societe Generale; Plaintiff: Nunez family  

México

Mexico City, Mexico-based Grupo Posadas 

Portugal

Lisbon, Portugal-based Pestana Management 

Spain

Tenerife, Spain-based Be Live Hotels

Palma de Mallorca, Spain-based Blau Hotels

Palma de Mallorca, Spain-based El Salado Resorts

Madrid, Spain-based Iberia Airlines

Palma, Majorca, Spain-based Iberostar Group

Palma de Mallorca, Spain-based Melia Hotels International (for properties in Holguín, Havana, Varadero, Cienfuegos and Cayo Coco among others) 

Turkey

Istanbul, Turkey-based Global Ports Holding 

United States

Fort Worth, Texas-based American Airlines

Norwalk, Connecticut-based Booking Holdings (booking.com); filing likely 18 July 2019

Atlanta, Georgia-based Delta Air Lines

Bellevue, Washington-based Expedia (hotels.com, orbitz.com, travelocity.com); filing likely 18 July 2019

Long Island City, New York-based Jet Blue Airways

Dallas, Texas-based Southwest Airlines

Chicago, Illinois-based United Airlines 

LINK: 

Libertad Act Lawsuit Filings- Part 1

Libertad Act Lawsuit Filings- Part 2 

Complete Analysis In PDF Format

Title III Lawsuits Could Impact 20 Countries 

https://www.cubatrade.org/blog/2019/2/18/title-iii-lawuits-for-cuba-expropriations-could-impact-20-countries-and-6-us-states?rq=Global%20Ports%20Holding

4464597-SYMRGNWZ-6.jpg

Trivago (Subsidiary of Expedia) Becomes Fifth Title III Libertad Act Lawsuit

On 18 June 2019, Coral Gables, Florida-based Rivero Mestre LLP filed a class-action lawsuit in the United States District Court, Southern District of Florida (Miami) against Dusseldorf, Germany-based Trivago GMbH (2018 revenues approximately US$1.2 billion), a subsidiary of  Bellevue, Washington-based Expedia Group (2018 revenues approximately US$11.2 billion). Expedia is expected to be sued soon.

The lawsuit (1:19-cv-2259-FAM) is using Title III of The Cuban Liberty and Democratic Solidarity Act of 1996 (Libertad Act) and was referred to The Honorable Federico A. Moreno:

https://www.fjc.gov/history/judges/moreno-federico 

https://www.flsd.uscourts.gov/content/judge-federico-Moreno 

https://en.wikipedia.org/wiki/Federico_A._Moreno  

Libertad Act 

Title III of the Libertad Act authorizes lawsuits in United States District Courts against companies and individuals who are using a certified claim where the owner of the certified claim has not received compensation from the Republic of Cuba or from a third-party who is using the asset.   

Title IV of the Libertad Act authorizes the United States Department of State to restrict entry into the United States by individuals who have connectivity to unresolved certified claims.  One company is currently subject to this provision. 

Media Release: Rivero Mestre Files Helms-Burton Class Action Against Trivago 

Yesterday, Rivero Mestre LLP filed a class-action lawsuit under the Helms-Burton Act against Trivago GmbH—a subsidiary of Expedia, Inc.--for its part in the trafficking in property owned by Cuban-Americans that were wrongfully confiscated by the Castro dictatorship in Cuba in the 1960s. Concurrently with the complaint, Rivero Mestre provided notice of its intention to add U.S.-based Expedia Inc., Booking Holdings, Inc., and their respective subsidiaries and affiliates in the event those companies fail to cease their improper trafficking and compensate plaintiffs within thirty days of that notice. 

The Helms-Burton Act provides Cuban-Americans whose properties in Cuba was illegally confiscated by the 60-year Castro dictatorship a right to sue any individual or entity that wrongfully trafficked in their properties. The Act also provides for treble damages against a trafficker who has 30-days’ prior notice of the lawsuit against him. 

Andrés Rivero, Jorge A. Mestre, Carlos Rodriguez, and Ana Malave of Rivero Mestre along with their co-counsel, Manuel Vazquez P.A., seek relief for a class of U.S. nationals whose hotel properties in Cuba were wrongfully taken from them by the Castro dictatorship and subsequently exploited by various foreign hotel booking services providers—like Trivago--that actively promote and advertise bookings as wrongfully trafficked hotel properties on their websites for a profit. 

About Rivero Mestre LLP 

Rivero Mestre, with offices in Miami and New York, represents clients from investigation to verdict and appeal in complex business disputes in U.S. federal courts, state courts, and domestic and international arbitration proceedings. The firm’s practice focuses primarily on representing corporate and institutional clients in a broad range of complex commercial disputes including financial institution matters, intellectual property disputes, and litigation and arbitration relating to Latin American trade and investment.

3nd Import From Cuba Goes Mainstream- True Value Hardware, Amazon, Independent Retailers

Alabama Company Is 3rd To Import Commodity From Cuba

Available At True Value, Amazon, Independent Retailers

Obtains UPC-GTIN

Competition: US$49.95 (Alabama) & US$45.99 (Florida)

Payment Through Third Country

Does Two In Three Years Make A Trend?

In Three Years, Why Only Two Commodities- Coffee and Charcoal; Honey Next?

Failure By Obama Administration

Alabama Company Continues To Await US$100,000.00 Agricultural Machinery Export

Why Aren’t Members Of Congress Encouraging Companies To Import? 

Foley, Alabama-based GulfWise Commerce LLC (www.gulfwisecommerce.com), affiliated with Foley, Alabama-based Woerner Companies (2018 revenues exceeded US$40 million; www.woerner.com) reported the delivery in May 2019 to Port Everglades, Florida, of two (2) forty-foot containers (forty (40) metric tons; 88,185 pounds) valued at approximately US$14,000.00 of Marabú charcoal from the Republic of Cuba.  Family-owned Woerner Companies was established in 1885.   

Marabú charcoal is made from the invasive woody plant Marabú (sicklebush).  Marabú charcoal is reported as clean-burning; often used in pizza ovens and bread ovens. 

In 2018, charcoal sales in the United States were approximately US$1 billion.  The state of Missouri is the largest source of charcoal in the United States.  Approximately 98% of charcoal is produced in the eastern United States. 

Woerner Companies has obtained a Universal Product Code (UPC) and Global Trade Item Number (GTIN) which is required for national distribution channels using electronic processing. 

GulfWise Commerce LLC reported that the Marabú charcoal will be available at all five (5) Woerner stores in Alabama, Florida and Mississippi.  There are plans for Marabú charcoal to be available at most Woerner Companies’ farm operations with retail stores in Alabama, Colorado, Florida and Hawaii.  

Atlanta, Georgia-based United Parcel Service (UPS) will be the primary shipper for the Marabú charcoal sold by GulfWise Commerce LLC.  UPS would receive approximately US$$32,064.00 if all 2,672 bags were shipped using its services. 

The Woerner Companies LLC is distributing Marabú charcoal through Chicago, Illinois-based True Value Company (2018 revenues approximately US$1.5 billion) which operates more than 4,500 retail stores in sixty countries.  True Value retail stores order through True Value Corporate vendor number 9336. 

A fifteen (15) kilogram bag, equal to approximately thirty-three (33) pounds, of Marabú charcoal is US$49.95 with free shipping is available at http://woerner.com/charcoal/cuban-charcoal/details/ and at Bellevue, Washington-based Amazon: https://www.amazon.com/Carbon-Vegetal-Cuba-Marabu-Charcoal/dp/B07SNTH38C/ref=sr_1_1?keywords=cuba+charcoal&qid=1559651782&s=gateway&sr=8-1.  The father of Mr. Jeffrey P. Bezos, Founder and Chief Executive Officer of Amazon.com, Inc., is of Cuban descent.  

Loxley, Alabama-based Aloha Hospitality International [https://baumhowers.com/about-bob-baumhower/] which develops and manages Baumhower’s Victory Grille (with ten locations in Alabama) and Dauphin’s Restaurant in Mobile, Alabama, is experimenting with the Marabú charcoal.   

Washington DC-based attorney, Mr. Robert L. Muse (www.robertmuse.com), who represented GulfWise Commerce LLC in this transaction and in a previous Republic of Cuba-related transaction for the company (see page 4) remarked: “transactions, there is a perception among U.S. third-party service providers (freight handlers, etc.) that no import business with Cuba is permitted.  Their first instinct therefore is to decline to participate from concerns about violating the embargo.  The attorney’s role becomes one of assuaging their fears of getting on the wrong side of the Trading With the Enemy Act.  Tact is required because the value of these transactions is small, though they are very important precedents for future bilateral trade.  Overcoming negative risk/reward calculations on the part of US service providers is, for now at least, a key component of legal counsel’s role – and it requires confident explanations of the governing regulations.”   

Mobile, Alabama-based Page & Jones coordinated with Jacksonville, Florida-based Crowley Maritime Corporation (2018 revenues exceeded US$2 billion) to transport the Marabú charcoal from the Republic of Cuba to the United States.  The two containers were delivered to Port Everglades, Florida, and then transported by truck the 689-miles to Foley, Alabama, by Jacksonville, Florida-based Customized Trucking which is owned by Crowley Maritime Corporation.  

GulfWise Commerce LLC plans a second delivery of Marabú charcoal to be directly (623 miles) from the Port of Mariel in the Republic of Cuba to the Port of Mobile, Alabama.  The Port of Mariel is 270-miles from Port Everglades.  Such a shipment would be the first delivery of a product directly from the Republic of Cuba to the Port of Mobile in decades.     

The payment to the Republic of Cuba from GulfWise Commerce LLC for the Marabú charcoal was facilitated by the Foley, Alabama, branch of Centennial Bank, a subsidiary of Conway, Arkansas-based Home BancShares (2018 assets approximately US$14 billion).  The funds were transferred through Panama City, Panama-based Multibank, which has dealings with the Republic of Cuba due the absence of fully-operational direct correspondent banking accounts among financial institutions in the United States and the Republic of Cuba. 

Centennial Bank charges commercial customers approximately 1% of the total transaction as the fee to transfer funds from the United States to the Republic of Cuba.  Denver, Colorado-based Western Union Company charges consumers approximately US$45.00 to transfer US$14,000.00 from the United States to the Republic of Cuba; each transfer is limited to US$5,000.00 and as the transfer is from United States Dollars to CUC (Republic of Cuba Convertible Currency), there is an exchange penalty where US$1.00 equals US$.9709 CUC so total fees are approximately US$435.00.     

From Mr. Muse: “Commerce with Cuba is difficult because, in the absence of reciprocal bilateral trade agreements, every transaction is a handmade arrangement. U.S. agricultural sales are different because established regulations govern those transactions.  When it comes to facilitating Cuban-origin product imports, reciprocal treatment of agricultural products is overdue and it’s a worthwhile project for the U.S. farm lobby.  Better certainly than persisting in one-way legislative activity (e.g, credit sales of U.S. goods) that only serves to preserve a grossly distorted trade pattern that excludes from the U.S. virtually everything Cuba’s rural economy produces.” 

United States Requirements 

Products of privately-operated or cooperative farms in the Republic of Cuba are authorized by the United States for export to the United States. 

From the United States Department of State:To be eligible for import into the United States, a listed 515.582 product must be produced by independent Cuban entrepreneurs, as demonstrated by documentary evidence.  Persons subject to US jurisdiction engaging in import transactions involving goods produced by an independent Cuban entrepreneur pursuant to 515.582 must obtain documentary evidence that demonstrates the entrepreneur's independent status, such as a copy of a license to be self-employed issued by the Cuban government, or in the case of an entity, evidence that demonstrates that the entity is a private entity that is not owned or controlled by the Cuban government.”  

The transaction does not require a specific license (the transaction is authorized by general license) from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury and/or Bureau of Industry and Security (BIS) of the United States Department of Commerce or authorization from the Office of Legal Adviser (OLA) at the United States Department of State.  The importer must provide documentary evidence upon entry to U.S. Customs and Border Protection (CBP) that the product was produced by "independent Cuban entrepreneurs."    LINK: https://static1.squarespace.com/static/563a4585e4b00d0211e8dd7e/t/571a837ef85082f2b527976a/1461355390324/WhatMayBeImportedFromCubaEntrepreneurs.pdf 

Obama Administration 

With the indirect importation of coffee from the Republic of Cuba in 2016, there have been only two agricultural commodities (coffee and charcoal) imported from the Republic of Cuba to the United States.  In 2016, coffee was the first agricultural commodity authorized by the United States government for importation from the Republic of Cuba: http://www.cubatrade.org/blog/2016/6/20/nespresso-to-indirectly-import-coffee-from-cuba-to-usa?rq=nespresso 

The Obama Administration could have authorized additional food products and agricultural commodities, including honey, but chose not to do so.   

The Republic of Cuba has not authorized the direct or indirect export to the United States of agricultural commodities other than coffee and charcoal, despite repeated entreaties from United States-based companies. 

Alabama Cuba Statistics 

Alabama-based companies have been exporters of food products and agricultural commodities (poultry) from the United States to the Republic of Cuba under provisions of the Trade Sanctions Reform and Export Enhancement Act (TSREEA) of 2000. 

For the cumulative period 2010 through 2019, the Port of Mobile, Alabama, ranks 7th of thirty-seven (37) United States ports that have processed exports from the United States to the Republic of Cuba. 

In 2017, the Mobile, Alabama-based Alabama State Port Authority signed a five-year memorandum of understanding (MOU) with the National Port Administration of the Republic of Cuba. 

Members of the United States Congress representing Woerner Companies: The Honorable Richard Shelby (R- Alabama) and The Honorable Doug Jones (D- Alabama) in the United States Senate and The Honorable Bradley Byrne (R- 1st District, Alabama) in the United States House of Representatives. 

Florida Company Was First To Import Marabú Charcoal 

The first import of Marabú charcoal was in January 2016 when Hialeah, Florida-based Fogo Premium Lump Charcoal purchased two (2) twenty-foot (20ft) containers.  In July 2018, the company purchased an additional two (2) containers of Marabú charcoal.     

Through the initial transaction process, Fogo Premium Lump Charcoal reported no issues with OFAC or BIS or OLA. 

40 metric tons (88,185 pounds) of Marabú charcoal, at US$420.00 per ton, for a total value of US$16,800.00 was exported from the Republic of Cuba and delivered to Port Everglades on 18 January 2017 by Crowley Liner Services.  The wholesale price for the Marabú charcoal was approximately US$360.00 per ton. 

The initial 2,672 bags of Marabú charcoal were marketed to restaurants and sold online to consumers for US$49.95 (free shipping) per fifteen (15) kilogram/33-pound bag (US$.72 per pound) under the brand name "Fogo."  The gross revenues from initial the sales were approximately US$122,778.40.  Currently, one bag of Marabú charcoal is priced by Fogo Premium Lump Charcoal at US$45.99, but listed as “Sold Out.” 

Memphis, Tennessee-based FedEx (2018 revenues approximately US$65 billion), could have earned gross revenues of approximately US$32,064.00 if all 2,672 bags were shipped using its services.  Fogo Premium Hardwood Lump Charcoal uses FedEx. 

Charcoal sales are exempt from sales tax in the State of Florida, so neither the state nor Miami-Dade County will receive any revenue.

Marabú Charcoal Background 

Marabú charcoal is produced by worker-owned cooperatives throughout the Republic of Cuba and has been reportedly exported to six countries; opportunities are being sought in Germany and in the United Kingdom.  Approximately 40,000 metric tons to 80,000 metric tons, valued at US$14,400,00.00 to US$28,800,00.00, of Marabú charcoal are exported from the Republic of Cuba on an annual basis. 

Madrid, Spain-based Ibecosol S.L. (Ibérica de Combustibles Sólidos) has provided production and export assistance to the Republic of Cuba since 2007 at facilities located in the provinces of Ciego de Avila and Jobabo.  The company exports more than 10,000 metric tons of Marabú charcoal annually, less than optimal 25,000 metric tons annually. 

Marabú charcoal is sold by cooperatives to a local packager, which sells it on to Republic of Cuba government-operated CubaExport (http://www.gecomex.cu/index.php/en/site/verEntidad.html?sigla=+CUBAEXPORT).  The local packager and CubaExport each take a 1% to 2% commission, according to Ms. Isabell O'Reilly, General Director of CubaExport.  The export contract with Fogo Premium Hardwood Lump Charcoal was signed by Ms. Aurelio Mollineda, Director of Republic of Cuba government-operated Gecomex, a subsidiary of CubaExport.  CubaExport reports that it hopes to add honey to authorized exports to the United States. 

Other Republic of Cuba government-operated companies engaged in the production of Marabú charcoal include Empresa de Flora y Fauna, Corporacion Cimex, Citricos Caribes, and Alcona. 

GulfWise Continues To Await US$100,000.00 Agricultural Machinery Sale 

On 31 March 2016, GulfWise Commerce LLC received a license from the BIS to export to the Republic of Cuba advanced planting and harvesting equipment valued at US$108,184.00.  The BIS application was submitted at the end of January 2016.  LINK: https://www.cubatrade.org/blog/2016/4/4/the-woerner-companies-of-alabama-becomes-first-us-company-to-export-agricultural-equipment-to-cuba?rq=Gulfwise 

In 2014, GulfWise Commerce LLC initiated a dialogue with researchers at the University of Matanzas regarding multiple agriculture production issues in the Republic of Cuba.  That dialogue led to an assessment of specialized equipment needed and to subsequent negotiations for a possible sale, which led to an application to the BIS.   

Representatives of GulfWise LLC and The Woerner Companies made five (5) visits to the Republic of Cuba; the first in 2012.  Two representatives of the Indio Hatuey Research Station visited Alabama in 2015.  The purchase agreement was negotiated in late 2015 and agreement-in-principle was concluded in January 2016. 

The purchaser of the equipment was Republic of Cuba government-operated Tecnotex SA for use by the Republic of Cuba government-operated Indio Hatuey Research Station, a Matanzas, Republic of Cuba-based agricultural research institution.  Tecnotex SA (affiliated with the Revolutionary Armed Forces of the Republic of Cuba (FAR)) imports equipment, technology, and construction materials.   

There are two principal pieces of equipment: (a) Rear load Sprig Harvester, 42 in. with hook chain with box carrier attachment valued at US$49,962.00 and (b) Sprigmaster Broadcast with 12 sides, spring loaders and swivel coulters valued at US$51,944.00.  Supporting parts and equipment include: (a) Gear boxes and Ogura clutch (for the Sprigger); (b) Multiple power belts; (c) Hydraulic motors; (d) Multiple Harvester teeth; and (e) Assorted miscellaneous parts are valued at US$6,278.00.  The estimated weight of the shipment will be approximately 18,000 pounds. 

The equipment, manufactured in Alabama and expected to be delivered in 2016 through the Port of Mobile, Alabama, was to assist in establishing grass-covered areas for purposes ranging from erosion control to the creation of pasturage and the establishment or improvement of parks and recreational areas, such as playgrounds and sport facilities. 

Significant about the transaction is the decision by the government of the Republic of Cuba to not focus upon a United States-based multinational (for example, Illinois-based Caterpillar or Illinois-based John Deere), but rather have the first export to the Republic of Cuba of durable (non-healthcare-related) commercial equipment be from a private company. 

Mr. Robert L. Muse, the Washington, DC-based attorney who represented GulfWise Commerce LLC in the BIS licensing process, said the significance of the transaction is “… the government of Cuba clearly rewarded the patient efforts of a privately-owned company willing to invest the time to identify and fill the needs of Cuba’s rapidly changing rural economic landscape.” 

NOTE: Tecnotex SA is now on the Cuba Restricted List (CRL) published by the United States Department of State.  Entities on the CRL are deemed to be affiliated with the Revolutionary Armed Forces of the Republic of Cuba (FAR).  Individuals subject to United States jurisdiction are restricted/prohibited from transactions with entities on the CLR list.  The inclusion of Tecnotex SA in the CRL complicates efforts to export agricultural equipment from the United States to the Republic of Cuba.   

Charcoal Import From Cuba Will Impact Florida & FedEx 

https://www.cubatrade.org/blog/2017/1/5/charcoal-joins-coal-to-become-second-commodity-exported-from-cuba-to-the-united-states?rq=charcoal 

Fogo In Florida Confirms 2nd Charcoal Purchase From Cuba; Two 20ft Containers 

https://www.cubatrade.org/blog/2018/10/23/fogo-in-florida-reports-2nd-charcoal-purchase-from-cuba-two-20ft-containers?rq=charcoal

LINK To Complete Analysis In PDF Format

UK Embassy In Havana To Award US$12,583.85 To Organizer Of One-Day Business Seminar

https://www.gov.uk/government/news/call-for-bids-seminar-on-challenges-and-opportunities-of-doing-business-with-cuba 

Call for bids: seminar on challenges and opportunities of doing business with Cuba  

British Embassy Havana announces the call for bids for the ‘seminar on challenges and opportunities of doing business with Cuba’ for the financial year 2019-20.  

Overview 

The British Embassy in Havana has been allocated £10,000 of project funds for the UK financial year 2019-20 (April 2019 to March 2020) by the Foreign and Commonwealth Office (FCO) in London, to develop a roundtable between representatives of British business and the Cuban government where the risks and challenges of the Cuban market could be discussed. 

The event would identify potential policy changes that might minimise the risks and maximise the opportunities of doing business in the island. The Cuban government representatives would outline the changes in the newly approved Constitution which are relevant to business, and areas where new legislation and directives might make trade and investment in Cuba easier. 

The event would be a one-day forum, officially hosted by a Cuban minister in a plenary session that would also include further discussions of the challenges and opportunities in specific target sectors, to be agreed. The ideal date for the forum to take place within the w/c 9 December. 

Bidding process 

The British Embassy is running this competitive bidding process and its Cuba Programme Board will select the proposal that is of high quality and ensures better delivering of value for money. The project idea should have concrete actions, objectives and measurable policy outcomes. 

All bidders will be advised if their proposal has been accepted or not for implementation. When approved, the British Embassy in Havana will ask the successful bidder for further due diligence information, and to sign a contract or grant agreement. 

The successful bidder would also work with the British Embassy in Havana to ensure the participation of a Cuban Government Minister. 

Who may bid? 

Eligibility criteria 

In order to be eligible, your organization or agency must be a legal entity, not-for-profit or commercial company, a registered non-governmental (NGO) or governmental organization, an academic or research institution, and must demonstrate that it has: previous experience in delivering and managing projects, preferably previous experience working with international agencies/organizations, proof of legal registration, sufficient technical, financial, human and logistical capacity to deliver the project being proposed, the capacity to deliver at least 85% of the proposed project activity by mid-December 2019 

How to bid? 

Your proposal should include the followings forms: Project Proposal Form for projects under £10,000; A fully developed Activity-Based Budget (financial breakdown) 

Please send all project documents to Ileana Carreño, Projects and Prosperity Officer at the British Embassy in Havana: ileana.carreno@fco.gov.uk, 72142225 / 52115374 

In the subject line of the email please indicate “Business Environment Seminar proposal” and please include in the body of the message a brief reference to your organization and the capacity of delivery.

The deadline for submission of project proposals is close of business Monday 29 July, 2019. But we will appreciate if you could send your proposal earlier.

EU pledges economic cooperation with Cuba amid stiffer US sanctions

Source: Xinhua Published: 2019/6/22  

The European Union (EU) on Friday pledged to continue expanding economic cooperation with Cuba amid stepped-up US trade sanctions against the island.

The EU will "continue to support Cuba's commitment to having a favorable investment environment for European businesses and to explore joint initiatives in high-profile sectors for the country's economy," Neven Mimica, European Commissioner for International Cooperation and Development, told reporters in Havana.

Mimica, senior Cuban officials and more than 100 business owners participated Friday in the first Cuba Business Forum, an initiative that seeks to bring greater foreign capital to the Caribbean nation and to offer certainty to current and future investors.  The high-ranking EU official was here on a three-day official visit to review how bilateral cooperation supported Cuba's sustainable development and particularly its economic modernization.

Mimica announced an additional 4 million euros to establish a Unique Foreign Investment Window to facilitate new ventures and commerce in Cuba.  "Our cooperation with Cuba has surpassed 100 million euros this year and we have engaged in bilateral talks in different sectors such as agriculture, renewable energy, economic modernization and climate change," the envoy said.

Mimica reiterated the EU's condemnation of the half-century US trade embargo against Cuba as well as recent trade and travel restrictions imposed by the US administration.  The bloc strongly condemned the unilateral extraterritorial measures imposed by Washington in violation of international law, and is concerned about the negative impact that recent restrictions might have on the Cuban economy, said Mimica.

In May the US State Department enacted Title III of the Helms-Burton Act against Cuba, allowing US citizens to sue Cuba on nationalized or expropriated properties after 1959. The move put companies operating on properties confiscated by the Cuban government at risk of lawsuits.  The EU's position is "firm" in rejecting the move. Its 28 member states have "antidote laws" in case a US court imposes fines, said the official.

Trade between the bloc and Havana reached 2.6 billion US dollars last year. The EU is also Cuba's leading foreign investor, with projects in such key sectors as infrastructure, renewable energy, transport, food and agriculture.  Over 35 percent of the island's trade is with EU nations, mainly Spain, France and Italy, according to Cuba's official figures.

UKEmbassyHavana.jpg

Melia Hotels International Sued In Spain By United States Descendants Of Property Owner

Descendants of Mr. Rafael Lucas Sanchez Hill have filed a lawsuit in Spain seeking US$10 million from Palma de Mallorca, Spain-based Melia Hotels International SA.  The lawsuit is not using provisions of Title III of the Cuban Liberty and Democratic Solidarity Act of 1996 (known as “Libertad Act”).  The descendants reside in the United States.

Mr. Nicholas J. Guttierez, of Coral Gables, Florida-based Nicolas Gutierrez Enterprises, LLC, serves as a consultant to the Sanchez Hill plaintiffs and to approximately six (6) other parties expected to soon file lawsuits in the state of Florida using Title III of the Libertad Act against hotel management companies operating in the Republic of Cuba.

LINK To Court Filing In Spain

LINK To Melia Hotels International Press Dossier  

LINKS To Articles 

https://www.elconfidencial.com/empresas/2019-06-10/sanchez-hill-demanda-melia-hoteles-helms-burton_2061326/ 

https://www.miamiherald.com/news/nation-world/world/americas/cuba/article231563403.html 

https://www.cubanet.org/noticias/familia-sanchez-hill-demanda-melia-10-millones-euros/ 

https://www.radiotelevisionmarti.com/a/los-s%C3%A1nchez-hill-una-familia-cubana-demanda-a-gigantes-hoteleras-meli%C3%A1-y-blau/238037.html 

http://www.diariodecuba.com/cuba/1556439658_46025.html 

https://babalublog.com/2019/05/02/may-2-cuban-property-lawsuits-unleashed/ 

https://havana-live.com/the-descendants-of-a-cuban-family-asks-melia-for-compensation-of-at-least-10-million-euros/ 

https://elcierredigital.com/turismo-y-viajes/718586180/melia-Cuba-demanda-Castrismo-embargo.html 

Libertad Act 

The Trump Administration has made operational Title III and further implemented Title IV of the Cuban Liberty and Democratic Solidarity Act of 1996 (known as “Libertad Act”).   

Title III authorizes lawsuits in United States District Courts against companies and individuals who are using a certified claim or non-certified claim where the owner of the certified claim or non-certified claim has not received compensation from the Republic of Cuba or from a third-party who is using (“trafficking”) the asset.   

Title IV restricts entry into the United States by individuals who have connectivity to unresolved certified claims or non-certified claims.  One Canada-based company is currently subject to this provision based upon a certified claim. 

Certified Claims Background 

There are 8,821 claims of which 5,913 awards valued at US$1,902,202,284.95 were certified by the USFCSC and have not been resolved for nearing sixty years (some assets were officially confiscated in the 1960’s, some in the 1970’s and some in the 1990’s.  The USFCSC permitted simple interest (not compound interest) of 6% per annum (approximately US$114,132,137.10); with the approximate current value of the 5,913 certified claims US$8,521,866,236.75.  

The first asset to be expropriated by the Republic of Cuba was an oil refinery in 1960 owned by White Plains, New York-based Texaco, Inc., now a subsidiary of San Ramon, California-based Chevron Corporation (USFCSC: CU-1331/CU-1332/CU-1333 valued at US$56,196,422.73).  

The largest certified claim (Cuban Electric Company) valued at US$267,568,413.62 is controlled by Boca Raton, Florida-based Office Depot, Inc.  The second-largest certified claim (International Telephone and Telegraph Co, ITT as Trustee, Starwood Hotels & Resorts Worldwide, Inc.) valued at US$181,808,794.14 is controlled by Bethesda, Maryland-based Marriott International; the certified claim also includes land adjacent to the Jose Marti International Airport in Havana, Republic of Cuba.  The smallest certified claim is by Sara W. Fishman in the amount of US$1.00 with reference to the Cuban-Venezuelan Oil Voting Trust. 

The two (2) largest certified claims total US$449,377,207.76, representing 24% of the total value of the certified claims.  Thirty (30) certified claimants hold 56% of the total value of the certified claims.  This concentration of value creates an efficient pathway towards a settlement.   

Title III of the Cuban Liberty and Democratic Solidarity (Libertad) Act of 1996 requires that an asset had a value of US$50,000.00 when expropriated by the Republic of Cuba without compensation to the original owner.  Of the 5,913 certified claims, 913, or 15%, are valued at US$50,000.00 or more.  Adjusted for inflation, US$50,000.00 (3.70% per annum) in 1960 has a 2019 value of approximately US$427,267.01.  The USFCSC authorized 6% per annum, meaning the 2019 value of US$50,000.00 is approximately US$1,649,384.54.  

The ITT Corporation Agreement 

In July 1997, then-New York City, New York-based ITT Corporation and then-Amsterdam, the Netherlands-based STET International Netherlands N.V. signed an agreement whereby STET International Netherlands N.V. would pay approximately US$25 million to ITT Corporation for a ten-year right (after which the agreement could be renewed and was renewed) to use assets (telephone facilities and telephone equipment) within the Republic of Cuba upon which ITT Corporation has a certified claim valued at approximately US$130.8 million.  ETECSA, which is now wholly-owned by the government of the Republic of Cuba, was a joint venture controlled by the Ministry of Information and Communications of the Republic of Cuba within which Amsterdam, the Netherlands-based Telecom Italia International N.V. (formerly Stet International Netherlands N.V.), a subsidiary of Rome, Italy-based Telecom Italia S.p.A. was a shareholder.  Telecom Italia S.p.A., was at one time a subsidiary of Ivrea, Italy-based Olivetti S.p.A.  The second-largest certified claim (International Telephone and Telegraph Co, ITT as Trustee, Starwood Hotels & Resorts Worldwide, Inc.) valued at US$181,808,794.14 is controlled by Bethesda, Maryland-based Marriott International.  

TITLE III--SEC. 302. LIABILITY FOR TRAFFICKING IN CONFISCATED PROPERTY CLAIMED BY UNITED STATES NATIONALS. 

(a) Civil Remedy.-- (1) Liability for trafficking.--(A) Except as otherwise provided in this section, any person that, after the end of the 3-month period beginning on the effective date of this title, traffics in property which was confiscated by the Cuban Government on or after January 1, 1959, shall be liable to any United States national who owns the claim to such property for money damages in an amount equal to the sum of-- (i) the amount which is the greater of-- (I) the amount, if any, certified to the claimant by the Foreign Claims Settlement Commission under the International Claims Settlement Act of 1949, plus interest; (II) the amount determined under section 303(a)(2), plus interest; or (III) the fair market value of that property, calculated as being either the current value of the property, or the value of the property when confiscated plus interest, whichever is greater; and (ii) court costs and reasonable attorneys' fees.  (B) Interest under subparagraph (A)(i) shall be at the rate set forth in section 1961 of title 28, United States Code, computed by the court from the date of confiscation of the property involved to the date on which the action is brought under this subsection.   

(2) Presumption in favor of the certified claims.--There shall be a presumption that the amount for which a person is liable under clause (i) of paragraph (1)(A) is the amount that is certified as described in subclause (I) of that clause. The presumption shall be rebuttable by clear and convincing evidence that the amount described in subclause (II) or (III) of that clause is the appropriate amount of liability under that clause. 

(3) Increased liability.-- (A) Any person that traffics in confiscated property for which liability is incurred under paragraph (1) shall, if a United States national owns a claim with respect to that property which was certified by the Foreign Claims Settlement Commission under title V of the International Claims Settlement Act of 1949, be liable for damages computed in accordance with subparagraph (C).   

(B) If the claimant in an action under this subsection (other than a United States national to whom subparagraph (A) applies) provides, after the end of the 3-month period described in paragraph (1) notice to-- (i) a person against whom the action is to be initiated, or (ii) a person who is to be joined as a defendant in the action, at least 30 days before initiating the action or joining such person as a defendant, as the case may be, and that person, after the end of the 30- day period beginning on the date the notice is provided, traffics in the confiscated property that is the subject of the action, then that person shall be liable to that claimant for damages computed in accordance with subparagraph (C).   

(C) Damages for which a person is liable under subparagraph (A) or subparagraph (B) are money damages in an amount equal to the sum of-- (i) the amount determined under paragraph (1)(A)(ii), and (ii) 3 times the amount determined applicable under paragraph (1)(A)(i).  (D) Notice to a person under subparagraph (B)-- (i) shall be in writing; (ii) shall be posted by certified mail or personally delivered to the person; and (iii) shall contain-- (I) a statement of intention to commence the action under this section or to join the person as a defendant (as the case may be), together with the reasons therefor; (II) a demand that the unlawful trafficking in the claimant's property cease immediately; and (III) a copy of the summary statement published under paragraph (8).  (4) Applicability.--(A) Except as otherwise provided in this paragraph, actions may be brought under paragraph (1) with respect to property confiscated before, on, or after the date of the enactment of this Act. 

(B) In the case of property confiscated before the date of the enactment of this Act, a United States national may not bring an action under this section on a claim to the confiscated property unless such national acquires ownership of the claim before such date of enactment.  (C) In the case of property confiscated on or after the date of the enactment of this Act, a United States national who, after the property is confiscated, acquires ownership of a claim to the property by assignment for value, may not bring an action on the claim under this section.   

(5) Treatment of certain actions.--(A) In the case of a United States national who was eligible to file a claim with the Foreign Claims Settlement Commission under title V of the International Claims Settlement Act of 1949 but did not so file the claim, that United States national may not bring an action on that claim under this section.  (B) In the case of any action brought under this section by a United States national whose underlying claim in the action was timely filed with the Foreign Claims Settlement Commission under title V of the International Claims Settlement Act of 1949 but was denied by the Commission, the court shall accept the findings of the Commission on the claim as conclusive in the action under this section. 

(C) A United States national, other than a United States national bringing an action under this section on a claim certified under title V of the International Claims Settlement Act of 1949, may not bring an action on a claim under this section before the end of the 2-year period beginning on the date of the enactment of this Act. 

(D) An interest in property for which a United States national has a claim certified under title V of the International Claims Settlement Act of 1949 may not be the subject of a claim in an action under this section by any other person. Any person bringing an action under this section whose claim has not been so certified shall have the burden of establishing for the court that the interest in property that is the subject of the claim is not the subject of a claim so certified.  (6) Inapplicability of act of state doctrine.--No court of the United States shall decline, based upon the act of state doctrine, to make a determination on the merits in an action brought under paragraph (1). 

(7) Licenses not required.--(A) Notwithstanding any other provision of law, an action under this section may be brought and may be settled, and a judgment rendered in such action may be enforced, without obtaining any license or other permission from any agency of the United States, except that this paragraph shall not apply to the execution of a judgment against, or the settlement of actions involving, property blocked under the authorities of section 5(b) of the Trading with the Enemy Act that were being exercised on July 1, 1977, as a result of a national emergency declared by the President before such date, and are being exercised on the date of the enactment of this Act.

LINK To Complete Report

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Private Jets To Cuba? Not So Easy Anymore; But, Possible.

Private Jet Travel To Cuba Was Plunging Before The New Restrictions 

Doug Gollan

Contributor

Forbes Magazine

June 2019 

Boats & Planes I write about private aviation and the business of luxury travel  

It doesn’t look like new travel restrictions to Cuba will have much impact on private jet travel, mainly because the market seems to have been in a free fall that started shortly after the initial hype that surrounded the easing of access to the island. 

Data from Wing-X, an aviation research firm shows that after a 26% drop in flights from 2017 to 2018, so far this year flights by private aircraft registered in the U.S. had fallen another 18% in the first four months. This past April there were just 20 flights to Cuba with U.S. registered private jets. 

In January 2017 there were 50 flights, and during the first four months, 187 movements compared to 115 so far in 2019, a drop off of nearly 40% during the past two years. 

It’s a big turnaround for several years ago when like cruise lines and commercial airlines, the private aviation sector was expecting a surge in demand. In fact, an archives search of Aviation International News shows a more than a half dozen stories about private aviation providers gearing up for demand, including big players such as Wheels Up, JetSuite, Priester Aviation, PlaneSense and Jet Aviation. 

A change in 2015 enabled Part 91 private aircraft (used exclusively for the owner’s needs and without the ability to charge passengers) to remain in Cuba for up to seven days. A similar provision for Part 135 charter aircraft in 2016 along with the people-to-people exception for travel spurred the interest. Previously crews and aircraft could only stay one night meaning for longer stays you would have to pay ferry fees to fly the empty aircraft out after dropping you off and then fly empty back to pick you up. 

At the time, AIN reported the new rule “removes certain financing restrictions for many authorized exports, eases limits on certain authorized transactions and further relaxes restrictions on exports and reexports of items necessary for safety of civil aviation, among other changes.” 

The largest operators of flights to Cuba so far this year were Aero Jet Aviation with 16 flights, NetJets with 10, Skyservice Business Aviation, a Canadian operator, with eight flights, and Flexjet with just seven flights. In fact, Medway Air Ambulance, with just six flights, ranked sixth in movements. 

Whether any of the travel that was taking place on U.S. registered private jets shifts to aircraft registered in other countries remains to be seen, however, year-to-date, Wing-X data shows American aircraft represented 56% of flights to the island. 

Canada was a distant second with just 14 flights by its private jets visiting Cuba this year, Spain was third with two flights and no other country had more than a single flight by private aircraft on their registry, although there were 69 flights from countries that were not disclosed. 

A spokesperson for the National Business Aviation Association said the trade group had yet to issue an advisory to its members, and for the most part, private aviation providers were hesitant to discuss the new rules. 

“It’s not the type of story we really want to be quoted in,” one executive of a major operator told me. He said that after an initial burst of interest, there had been a steep decline, and he said he wasn’t sure the last time his company had operated a flight to Cuba. 

Another charter operator said, “We are still working through the Cuba details internally and we have not made any final decisions or public announcements.”   

Who can still fly to Cuba by private jet? 

There are exceptions, so private travel by U.S. registered private aircraft isn't completely shut down. For example, there is an exemption if travel arrangements and funds had been transferred prior to the June 4th announcement. That could mean that a private aviation customer who had already made and paid for ground arrangements prior to the ban could possibly get an exemption. Also, for customers of jet cards who prepay for their travel, would that count as an exemption? It's hard to tell. 

Universal Weather and Aviation on its website reports, passengers on Part 135 operated aircraft must comply with OFAC’s travel restrictions and must fall into a dozen categories, including family visits, official government business, journalistic activities, professional research and professional meetings, educational activities, religious activities, public performances, such as athletic competitions, support of the Cuban people, humanitarian projects, and activities of research or educational institutes. 

A Department of Commerce spokesperson would only say, “Although subject to a general policy of denial, (The department’s Bureau of Industry and Security) will carefully review any applications received involving use of an aircraft or vessel in support of humanitarian or faith-based activities.” 

That said, it seems like interest to travel to Cuba by private jet had been dwindling since shortly after what was an initial surge. 

Doug Gollan is Editor-in-Chief of DG Amazing Experiences, a weekly e-newsletter for private jet owners and Private Jet Card Comparisons, a buyer's guide comparing over 250 jet card programs.

Cuba Lobbyist Works? President Trump To Participate In Oval Office Meeting With MLB To Discuss "Human Trafficking"

Today at 3:00 pm in the Oval Office, The Honorable Donald J. Trump, President of the United States, “participates in a meeting on Major League Baseball’s efforts to combat human trafficking.” 

One confirmed participant was Mr. Rob Manfred, Commissioner of New York, New York-based Major League Baseball (MLB).

UPDATE: As of 15 June 2019, neither The White House nor MLB have released the names of participants scheduled to attend the meeting in the Oval Office. MLB has not issued a statement relating to the meeting with the President.

UPDATE: Late in the evening of 11 June 2019, The White House issued the following statement: “Major League Baseball Commissioner Manfred met with President Trump to discuss the Administration’s policy on Cuba and MLB’s recent efforts to curtail human trafficking in Cuba. The United States supports efforts to end the scourge of human trafficking, including from Cuba.  The Administration will continue to hold the  Cuban regime accountable for its direct role in the trafficking of its citizens from the island. The Administration looks forward to finding productive ways to work with MLB to help the people of Venezuela, a country that has a rich history with MLB but has been destabilized by Cuba’s interference.”

UPDATE: On 19 June 2019, The Washington Post reported that the meeting was for “more than two hours”. However, The White House reported that the President was to participate in a 3:00 pm event with the winner of the 103rd Indianapolis 500 automobile race; his remarks commenced at 4:19 pm according to a transcript of the event.

The meeting is likely a result of a decision by MLB to retain Washington DC-based Ballard Partners to lobby [LINK To Filing] on “issues related to combating human trafficking.”  A Lobbying Disclosure Act of 1995 filing with the United States Congress on 8 May 2019 listed Mr. Brian Ballard and Mr. Sylvester Lukis as lobbyists.  The filing did not disclose payments to Ballard Partners.  

LINKS To Previous Analysis:

OFAC Responds To Major League Baseball Proposal For Players From Cuba 

7 April 2019 Tweet from The Honorable John R. Bolton, Assistant to the President for National Security Affairs: “Cuba wants to use baseball players as economic pawns—selling their rights to Major League Baseball.  America’s national pastime should not enable the Cuban regime‘s support for Maduro in Venezuela.”  

5 April 2019 letter [LINK] from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury to New York, New York-based Major League Baseball (MLB).  

https://www.cubatrade.org/blog/2019/4/9/ofac-responds-to-major-league-baseball-proposal-for-players-from-cuba?rq=MLB 

MLB Might Consider Three Options To Obtain Support For Agreement With Cuba 

https://www.cubatrade.org/blog/2019/1/11/mlb-might-consider-three-options-to-obtain-support-for-agreement-with-cuba?rq=MLB 

Another Obama (Ben Rhodes) Administration Legacy Decision Harms Major League Baseball 

https://www.cubatrade.org/blog/2018/12/20/uppblm8km7qmk28ly7ilzjz7xgty54?rq=MLB

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OFAC Clarifies: "Support For The Cuban People" Travel Category Visitors May Use Hotels

The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington DC has confirmed that individuals subject to United States jurisdiction may use a non-restricted hotel and/or a private residence when visiting the Republic of Cuba using the “Support for the Cuban People” authorized travel category. 

There had been questions from United States-based travel agents and tour operators as the “Frequently Asked Questions Related To Cuba” and information contained in the regulations (CFR 515.574) published by the OFAC on 4 June 2019 in providing examples of itineraries that would be in compliance with traveling to the Republic of Cuba using the “Support for the Cuban People” authorized travel category did not specifically reference the use of a hotel.   

The lack of specificity suggested that travelers using the “Support for the Cuban People” authorized travel category would be required to use only a private residence (casa particular) rather than have a choice among casa particulars and hotels not included on the Cuba Restricted List (CRL) published by the United States Department of State. 

A prohibition upon the use of a hotel would result in a mismatch of supply and demand; as there would be far too many individuals and groups seeking accommodations at private residences than would be the number of available private residences.  Prices at private residences would increase.  There would be, however, reticence by private residence owners (and their financial providers) to invest further in the development of properties due to uncertainty as to changes to United States policies and regulations and statutes. 

San Francisco, California-based Airbnb, Inc., reportedly represents more than 22,000 properties in the Republic of Cuba; and the properties reportedly generated combined gross revenues of approximately US$47 million annually from 2015 thus far through 2019. LINK To Airbnb: https://www.airbnb.com/s/Cuba/all?refinement_paths%5B%5D=%2Ffor_you&query=Cuba&adults=0&children=0&infants=0&guests=0&place_id=ChIJtUx6DwdJzYgRGqQQkVL3jHk&search_type=UNKNOWN

Bellevue, Washington-based Expedia Group previously reported approximately 50% of reservations to the Republic of Cuba made using www.expedia.com originated from the United States. 

In 2017, 2018 and in 2019 there were recommendations from members of the United States Congress to the Trump Administration for further expansion of requirements for travelers using the “Support for the Cuban People” category to include that a hotel in the Republic of Cuba may only be used where Republic of Cuba national employees of the hotel are paid directly and in convertible currency by management (whether Republic of Cuba government-managed or non-Republic of Cuba government-managed). 

To The OFAC (7 June 2019) Good morning: A question about "support for the Cuban people" general license travel category: While the CFR does not indicate that a traveler must stay at a private residence, there is no language indicating that a traveler may stay in a hotel (not on the Cuba Restricted List). May a traveler stay at a hotel?

From The OFAC (7 June 2019): “Good evening. Thank you for your patience. Assuming that the person traveling to Cuba is doing so in accordance with all of the various requirements of the general license found in section 515.574 (Support for the Cuban People) of the CACR, the terms of this general license do not prohibit travelers from staying in hotels, so long as the traveler’s stay in a hotel does not involve any transactions prohibited by 515.209 of the CACR. Have a nice weekend.”  

Sincerely, Sanctions Compliance & Evaluation

Office of Foreign Assets Control (OFAC)

U.S. Department of the Treasury

1500 Pennsylvania Ave. NW

Washington, DC 20220

Toll Free: 1-800-540-6322

Local: 1-202-622-2490

Email: OFAC_Feedback@treasury.gov

Website: www.treasury.gov/ofac 

Link To CRL:  

https://www.state.gov/cuba-sanctions/cuba-restricted-list/list-of-restricted-entities-and-subentities-associated-with-cuba-as-of-march-12-2019/ 

From The OFAC: 

What constitutes “support for the Cuban people” for generally authorized travel and other transactions?  

This general license authorizes, subject to conditions, travel-related transactions and other transactions that are intended to provide support for the Cuban people, which include activities of recognized human rights organizations; independent organizations designed to promote a rapid, peaceful transition to democracy; and individuals and non-governmental organizations that promote independent activity intended to strengthen civil society in Cuba. In accordance with the NSPM, OFAC is amending this general license to require that each traveler utilizing this authorization engage in a full-time schedule of activities that enhance contact with the Cuban people, support civil society in Cuba, or promote the Cuban people’s independence from Cuban authorities and that result in meaningful interactions with individuals in Cuba. OFAC is also amending this general license to exclude from the authorization certain direct financial transactions with entities and subentities identified on the State Department’s Cuba Restricted List. The traveler’s schedule of activities must not include free time or recreation in excess of that consistent with a full-time schedule in Cuba. For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.574. [11-08-2017] UPDATED June 4, 2019.  

§515.574   Support for the Cuban People.

(a) General license. The travel-related transactions set forth in §515.560(c) and other transactions that are intended to provide support for the Cuban people are authorized, provided that:

(1) The activities are of:

(i) Recognized human rights organizations;

(ii) Independent organizations designed to promote a rapid, peaceful transition to democracy; or

(iii) Individuals and non-governmental organizations that promote independent activity intended to strengthen civil society in Cuba; and

(2) Each traveler engages in a full-time schedule of activities that:

(i) Enhance contact with the Cuban people, support civil society in Cuba, or promote the Cuban people's independence from Cuban authorities; and

(ii) Result in meaningful interaction with individuals in Cuba.

(3) The traveler's schedule of activities does not include free time or recreation in excess of that consistent with a full-time schedule.

Note 1 to paragraph (a): Each person relying on the general authorization in this paragraph must retain specific records related to the authorized travel transactions. See §§501.601 and 501.602 of this chapter for applicable recordkeeping and reporting requirements.

Note 2 to paragraph (a): Staying in a room at a rented accommodation in a private Cuban residence (casa particular), eating at privately-owned Cuban restaurants (paladares), and shopping at privately-owned stores run by self-employed Cubans (cuentapropista) are examples of activities that qualify for this general license. However, in order to meet the requirement for a full-time schedule, a traveler must engage in additional authorized Support for the Cuban People activities.

(b) An entire group does not qualify for the general license in paragraph (a) of this section merely because some members of the group qualify individually.

(c) Certain direct financial transactions restricted. Nothing in paragraph (a)(1)(iii) of this section authorizes a direct financial transaction prohibited by §515.209, with the exception of transactions on behalf of a non-governmental organization.

(d) Specific licenses. Specific licenses may be issued on a case-by-case basis authorizing the travel-related transactions set forth in §515.560(c) and such other transactions as are related to support for the Cuban people that do not qualify for the general license under paragraph (a) of this section. 

Example 1 to §515.574: An individual plans to travel to Cuba, stay in a room at a rented accommodation in a private Cuban residence (casa particular), eat at privately-owned Cuban restaurants (paladares), and shop at privately-owned stores run by self-employed Cubans (cuentapropista) during his or her four-day trip. While at the casa particular, the individual will have breakfast each morning with the Cuban host and engage with the Cuban host to learn about Cuban culture. In addition, the traveler will complete his or her full-time schedule by supporting Cuban entrepreneurs launching their privately-owned businesses. The traveler's activities promote independent activity intended to strengthen civil society in Cuba. Because the individual's qualifying activities are not limited to staying in a room at a rented accommodation in a private Cuban residence (casa particular), eating at privately-owned Cuban restaurants (paladares), and shopping at privately owned stores run by self-employed Cubans (cuentapropista) and the traveler maintains a full-time schedule that enhances contact with the Cuban people, supports civil society in Cuba, and promotes the Cuban people's independence from Cuban authorities, and that results in meaningful interaction between the traveler and Cuban individuals, the individual's travel qualifies for the general license. 

Example 2 to §515.574: A group of friends plans to travel and maintain a full-time schedule throughout their trip by volunteering with a recognized non-governmental organization to build a school for underserved Cuban children with the local community. In their free time, the travelers plan to rent bicycles to explore the streets of Havana and visit an art museum. The travelers' trip would qualify for the general license because the volunteer activities promote independent activity intended to strengthen civil society in Cuba and constitute a full-time schedule that enhances contact with the Cuban people and supports civil society in Cuba, and results in meaningful interaction between the travelers and individuals in Cuba. 

Example 3 to §515.574: An individual plans to travel to Cuba, rent a bicycle to explore the neighborhoods and beaches, and engage in brief exchanges with local beach vendors. The individual intends to stay at a hotel that does not appear on the Cuba Restricted List (see §515.209). The traveler's trip does not qualify for this general license because none of these activities promote independent activity intended to strengthen civil society in Cuba.  [80 FR 2299, Jan. 16, 2015, as amended at 82 FR 52003, Nov. 9, 2017] 

LINK: https://www.ecfr.gov/cgi-bin/text-idx?SID=1f8572cb449cf3e757eebd7f3b568bf3&mc=true&node=se31.3.515_1574&rgn=div8

LINK To Complete Analysis

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U.S. Ag/Food Exports To Cuba Decrease 34.9% In April; Still Up 12.7% For Year

ECONOMIC EYE ON CUBA©

June 2019 

April 2019 Food/Ag Exports To Cuba Decrease 34.9%- 1

Cuba Ranked of 49th of 229 U.S. Food/Ag Export Markets- 2

April 2019 Healthcare Product Exports US$359.391.00- 2

April 2019 Humanitarian Donations US$542,213.00- 3

Obama Administration Initiatives Exports Continue To Increase- 3

U.S. Port Export Data- 16 

APRIL 2019 FOOD/AG EXPORTS TO CUBA DECREASED 34.9%- Exports of food products and agricultural commodities from the United States to the Republic of Cuba in April 2019 were US$16,366,542.00 compared to US$25,159,062.00 in April 2018 and US$17,988,565.00 in April 2017.   

United States exports from January 2019 through April 2019 were US$106,465,136.00 compared to US$94,416,791.00 from January 2018 through April 2018, representing an increase of 12.7%.   

Total exports of agricultural commodities and food products from the United States to the Republic of Cuba since December 2001 is US$5,983,672,357.00 through April 2019 under provisions of the Trade Sanctions Reform and Export Enhancement Act (TSREEA) of 2000.

The TSREEA re-authorized the direct commercial (on a cash basis) export of food products (including branded food products) and agricultural commodities from the United States to the Republic of Cuba, irrespective of purpose. The TSREEA does not include healthcare products, which remain authorized and regulated by the CDA.

LINK To Complete Report In PDF Format

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Global Ports Holding From Turkey Could Be Next To Be Sued Using Title III; President Erdogan Will React Harshly

Will Turkish Company Be Next To Be Sued?

How Will President Erdogan Respond?

Suing A Cruise Line(s) And Then The Port Manager

Like The Cruise Line(s), Turkish Company Has Assets In Many Countries

Like The Cruise Line(s), Turkish Company Is Publicly-Held; Listed In London 

Istanbul, Turkey-based Global Ports Holding (2018 revenues exceeded US$124 million), which also has a registered office in London, United Kingdom, and is listed on the London Stock Exchange (LSE) may be a defendant in a lawsuit relating to Title III of the Libertad Act of 1996. 

Global Ports Holding has “a management agreement in Cuba to advise and consult on cruise port management best practice. The cruise terminal is in the Sierra Maestra complex, in San Francisco pier, with a current capacity for two ships.” 

Absent, as of 5 June 2019 resulting from a decision by the Trump Administration to suspend passenger cruise ship activity from the United States to the Republic of Cuba, the substantial port fees paid by cruise lines operating from the United States since 2016, questionable whether the Republic of Cuba will have the revenue stream required to make payments for and obtain financing for upgrades and expansion at the Port of Havana and other passenger port facilities in the Republic of Cuba. 

Two lawsuits were filed on 2 May 2019 in United States District Court (Southern District of Florida- Miami Division) against Miami, Florida-based Carnival Corporation & plc (2018 revenues approximately US$18.9 billion) by individuals who have certified claims against the Republic of Cuba.   

The lawsuits claim that Carnival Corporation & plc is using (“trafficking”) assets upon which there is a certified claim (the passenger port located in the city of Havana and the passenger port located in the city of Santiago de Cuba) and the certified claimant has not received compensation from the Republic of Cuba.   

The two plaintiffs are expected to also file lawsuits against Miami, Florida-based Royal Caribbean Cruise Lines (2018 revenues approximately US$9.5 billion) and Miami, Florida-based Norwegian Cruise Line (2018 revenues approximately US$5.4 billion). 

On 4 June 2019, the Trump Administration announced that from 5 June 2019, passenger cruise ships would no longer be permitted to transport individuals subject to United States jurisdiction from the United States to the Republic of Cuba. 

Travel Data 

The Ministry of Tourism of the Republic of Cuba (MINTUR) reported total international visitor arrivals of 4.75 million [also reported as 4,732,280] in 2018 compared to 4.5 million in 2017.   

For the period January 2019 through April 2019, MINTUR reported approximately 257,500 visitors (not including individuals of Cuban descent) from the United States representing an increase of approximately 93% compared to the same period in 2018.  MINTUR reported 638,365 visitors in 2018 from the United States who were not of Cuban-descent, representing an increase of approximately 3% compared to 2017.  

MINTUR reported 142,721 of the 257,500, approximately 55%, arrived by cruise ship during the period January 2019 through April 2019.  The 142,721 represented an increase of approximately 300% compared to the same period in 2018. 

Prior to the 4 June 2019 announcement by the Trump Administration, MINTUR expected visitor arrivals in 2019 to increase by approximately 7% to 5.1 million compared to 2018.  MINTUR reported that gross tourism-related revenues were approximately US$2.5 billion in 2018 and were expected to be approximately US$3.1 billion in 2019, representing an increase of approximately 17% compared to 2018. 

MINTUR reported that in 2018 seventeen (17) cruise lines delivered approximately 800,000 [also reported as 851,810] passengers to the Republic of Cuba compared to 619,000 in 2017 and 541,000 in 2016.  Media reporting has 6,770 passengers in 2012, 37,513(9) passengers in 2015, 397,520 passengers in 2017 and 500,000 passengers in 2018.  MINTUR reported that the seventeen cruise lines operate twenty-five (25) cruise ships that visit the Republic of Cuba.   

The Washington, DC-based Cruise Line Industry Association reported that approximately 200,000 passengers visited the Republic of Cuba from January 2019 through May 2019. 

For the period 2017 through 2020, the United States-based cruise lines expected to deliver more than 800,000 passengers (progressively increasing annually) on more than 620 sailings.    

A cruise line will pay US$69,131.00 (US$32.91 per person) for docking a 2,100-passenger, 70,000 gross ton, 260-meter vessel: Dockage (US$6.00 per meter), Passenger Fee (US$20.00 per person), Port Assistance (US$25,571.00- mandatory tug boats, pilots). 

The gross revenues to the Republic of Cuba in 2018 from 500,000 cruise ship passengers would have been approximately US$63 million and the gross revenues to the Republic of Cuba from 851,810 cruise ship passengers would have been approximately US$107 million.   

The gross revenues to the Republic of Cuba from port charges in 2018 were approximately US$20 million.   

The gross revenues to the cruise ship companies in 2018 were approximately US$400 million (500,000 passengers) to US$700 million (851,810 passengers).

Sailings to the Republic of Cuba represented approximately 1% of global sailings for Carnival Corporation & plc; approximately 3% of global sailings for Royal Caribbean Cruise Lines; and approximately 4% of global sailings for Norwegian Cruise Line.  Carnival Corporation & plc had a market share of approximately 15% of sailings to the Republic of Cuba amongst competitors.    

MINTUR reported 585,600 individuals of Cuban descent visited in 2018, with most arriving from the United States.  The majority of these visitors reside with relatives rather than occupying hotels.

The first regularly-scheduled commercial flight occurred on 31 August 2016.  Since that flight, more than 2,203,490 passengers have traveled to the Republic of Cuba aboard more than 13,479 flights. 

2016: 2,036 flights carrying 177,365 passengers.

2017: 1,422 flights carrying 989,280 passengers.

2018: 8,505 flights carrying 893,011 passengers.

2019: (January and February) 1,516 flights carrying 143,834 passengers.  

United States airlines currently operating regularly-scheduled services are: Atlanta, Georgia-based Delta Air Lines (2018 revenues approximately US$41 billion); Fort Worth, Texas-based American Airlines (2018 revenues approximately US$42 billion); Chicago, Illinois-based United Airlines (2018 revenues approximately US$38 billion); Long Island City, New York-based JetBlue Airways (2018 revenues approximately US$7 billion) and Dallas, Texas-based Southwest Airlines (2018 revenues approximately US$22 billion).  United States airlines with ticket offices in the city of Havana, Republic of Cuba: Delta Air Lines, American Airlines, United Airlines and JetBlue Airways. 

Erdogan Vs. Trump: The Politics 

If a lawsuit is filed against Global Ports Holding, expect a robust response towards the United States by the government of Turkey.   

The Honorable Donald J. Trump, President of the United States, and H.E. Recep Tayyip Erdogan, President of the Republic of Turkey, are scheduled to meet at the G20 gathering in Osaka, Japan on 27/28 June 2019 and again in Turkey in July 2019. 

The expectation is for a lawsuit to be filed against Global Ports Holding by Lexington, Kentucky-based Havana Docks Corporation, one of the plaintiffs who is suing Carnival Corporation & plc for use of “certain commercial waterfront real property in the Port of Havana, Cuba identified specifically by the Republic of Cuba (“Cuba”) as the Havana Cruise Port Terminal (the Subject Property”).   

According to Global Ports Holding: “In May 2018 Global Ports Holding signed a management agreement in Cuba to advise and consult on cruise port management best practice. The cruise terminal is in the Sierra Maestra complex, in San Francisco pier, with a current capacity for two ships. The building itself is a designed architectural landmark of the city. Located at the historic heart of the city, in the waterfront promenade, in front of San Francisco square and near to other important attractions such as the “Plaza Vieja”, the “Plaza de las Armas” and the Cathedral, it enjoys the unique atmosphere of both the Havana Bay and the old town.” 

“Cuba is located in the main cruise destination, the Caribbean, and its capital Havana very near to the Floridian ports. Thanks to its strategic location in the region, Havana can be included in all kind of itineraries: the longest ones deployed in the West and East Caribbean but also the 3- 4 days itineraries sailing out from Florida. Besides, the cultural richness of the island and its capital is unparalleled anywhere in the Caribbean.”  Link: http://www.globalportsholding.com/ports/17/la-habana-cruise-port 

“Global Ports Holding Plc (GPH) is the world's largest [independent] cruise port operator with an established presence in the Caribbean, Mediterranean, Asia-Pacific regions, including extensive commercial port operations in Turkey and Montenegro.” 

The company, founded by Mr. Gregory Michael Kiez, born in Canada before residing in Turkey, was “established in 2004 as an international port operator with a diversified portfolio of cruise and commercial ports. As an independent cruise port operator, the group holds a unique position in the cruise port landscape, positioning itself as the world’s leading cruise port brand, with an integrated platform of cruise ports serving cruise liners, ferries, yachts and mega-yachts. GPH operates 17 ports in 9 countries and continues to grow steadily. GPH provides services for 8,5 million passengers reaching a market share of 24% in the Mediterranean annually. The group also offers commercial port operations which specialize in container, bulk and general cargo handling.

A portfolio of award-winning ports and terminals allows GPH to transfer best practices to its subsidiaries. With a strong focus on operational excellence, enhanced security practices and customer-oriented services, GPH aims to contribute to the development of the cruise industry.

Global Ports Holding Plc is 59.30% owned by Global Ports Holding B.V., which is a wholly owned subsidiary of Global Investment Holdings (GIH) - listed on Borsa Istanbul (BIST) under the ticker "GLYHO". The remaining 40.70% of the total issued share capital represents free float on the London Stock Exchange (LSE).” 

According to the company, the “duration of the management contract is thirty-three (33) years with “no future Capex Obligation” and “Tariff Discretion.”  The company reported that the management contract was not a result of a “Competitive Process” and the Process Description was defined as an “Uncompetitive tender” with comments “GPH submitted and unsolicited tender.” 

However, the 2018 Annual Report for the company references that the management contract is for fifteen (15) years: 

“Our new port investment strategy has been selective, choosing ports in marquee destinations (such as Barcelona, Havana, Venice, Lisbon, Kuşadası, and Valletta) which we believe are less susceptible to being replaced by others.” 

Page 32: At GPH we continue to target ports where we can add value, by adding them to our global portfolio.  During the year we were therefore delighted to announce we had signed a 15-year management agreement for the operation of the cruise port in Havana, Cuba. The move also aligned with our stated intention to extend our interests into the Americas.  GPH will bring its global expertise to manage all aspects of the cruise port operations over the life of the agreement. We will be paid a management fee that is based on a number of factors including passenger numbers, with growth-based incentives.  In addition, we will continue to work with our Cuban partners on the design and technical specification of the cruise port investment programme, including proposed new terminals. Once these have been completed, GPH will take responsibility for their marketing and commercialisation.  The agreement is part of a significant investment by Cuba into the port area and tourism infrastructure in Havana.  We enter the port’s story at an exciting time: its two berths welcomed around 328,000 cruise passengers in 2017, some 156% higher than in 2016. 

Our role is to ensure this growth path continues, and with the facility expanding to six berths by 2024, the Havana port, and the allure of Cuba as a destination, offers exceptional potential.  The port itself is situated in the heart of Havana and only a 30-minute drive from Jose Marti International Airport, making it an ideal homeporting destination.  Indeed, in 2018 cruising contributed to Cuba’s best-ever year for tourism.  This represents our first agreement in the Caribbean and an important step in the history of Global Ports Holding.  The GPH team looks forward to working with our local partners and staff to drive continued growth, delivering both a world class cruise port and a great experience for passengers.  As for the wider network, we hope to add three new ports during 2019. 

Developments in 2018: GPH took over the operation of the cruise port in Havana in June 2018, and the remainder of the year was spent appraising the potential of the terminal and implementing our financial reporting procedures. Our new General Manager is in post, together with the support team.  

Plans for 2019: We will work with our Cuban partners throughout the year on the design and technical specification of the cruise port investment programme, including proposed new terminals.  In the meantime we will roll out our global best in class operating procedures and processes. 

Libertad Act 

The Trump Administration has made operational Title III and further implemented Title IV of the Cuban Liberty and Democratic Solidarity Act of 1996 (known as “Libertad Act”).   

Title III authorizes lawsuits in United States District Courts against companies and individuals who are using a certified claim or non-certified claim where the owner of the certified claim or non-certified claim has not received compensation from the Republic of Cuba or from a third-party who is using (“trafficking”) the asset.   

Title IV restricts entry into the United States by individuals who have connectivity to unresolved certified claims or non-certified claims.  One Canada-based company is currently subject to this provision based upon a certified claim. 

Certified Claims Background 

There are 8,821 claims of which 5,913 awards valued at US$1,902,202,284.95 were certified by the USFCSC and have not been resolved for nearing sixty years (some assets were officially confiscated in the 1960’s, some in the 1970’s and some in the 1990’s.  The USFCSC permitted simple interest (not compound interest) of 6% per annum (approximately US$114,132,137.10); with the approximate current value of the 5,913 certified claims US$8,521,866,236.75.  

The first asset to be expropriated by the Republic of Cuba was an oil refinery in 1960 owned by White Plains, New York-based Texaco, Inc., now a subsidiary of San Ramon, California-based Chevron Corporation (USFCSC: CU-1331/CU-1332/CU-1333 valued at US$56,196,422.73).  

The largest certified claim (Cuban Electric Company) valued at US$267,568,413.62 is controlled by Boca Raton, Florida-based Office Depot, Inc.  The second-largest certified claim (International Telephone and Telegraph Co, ITT as Trustee, Starwood Hotels & Resorts Worldwide, Inc.) valued at US$181,808,794.14 is controlled by Bethesda, Maryland-based Marriott International; the certified claim also includes land adjacent to the Jose Marti International Airport in Havana, Republic of Cuba.  The smallest certified claim is by Sara W. Fishman in the amount of US$1.00 with reference to the Cuban-Venezuelan Oil Voting Trust. 

The two (2) largest certified claims total US$449,377,207.76, representing 24% of the total value of the certified claims.  Thirty (30) certified claimants hold 56% of the total value of the certified claims.  This concentration of value creates an efficient pathway towards a settlement.   

Title III of the Cuban Liberty and Democratic Solidarity (Libertad) Act of 1996 requires that an asset had a value of US$50,000.00 when expropriated by the Republic of Cuba without compensation to the original owner.  Of the 5,913 certified claims, 913, or 15%, are valued at US$50,000.00 or more.  Adjusted for inflation, US$50,000.00 (3.70% per annum) in 1960 has a 2019 value of approximately US$427,267.01.  The USFCSC authorized 6% per annum, meaning the 2019 value of US$50,000.00 is approximately US$1,649,384.54.  

The ITT Corporation Agreement 

In July 1997, then-New York City, New York-based ITT Corporation and then-Amsterdam, the Netherlands-based STET International Netherlands N.V. signed an agreement whereby STET International Netherlands N.V. would pay approximately US$25 million to ITT Corporation for a ten-year right (after which the agreement could be renewed and was renewed) to use assets (telephone facilities and telephone equipment) within the Republic of Cuba upon which ITT Corporation has a certified claim valued at approximately US$130.8 million.  ETECSA, which is now wholly-owned by the government of the Republic of Cuba, was a joint venture controlled by the Ministry of Information and Communications of the Republic of Cuba within which Amsterdam, the Netherlands-based Telecom Italia International N.V. (formerly Stet International Netherlands N.V.), a subsidiary of Rome, Italy-based Telecom Italia S.p.A. was a shareholder.  Telecom Italia S.p.A., was at one time a subsidiary of Ivrea, Italy-based Olivetti S.p.A.  The second-largest certified claim (International Telephone and Telegraph Co, ITT as Trustee, Starwood Hotels & Resorts Worldwide, Inc.) valued at US$181,808,794.14 is controlled by Bethesda, Maryland-based Marriott International.  

TITLE III--SEC. 302. LIABILITY FOR TRAFFICKING IN CONFISCATED PROPERTY CLAIMED BY UNITED STATES NATIONALS. 

(a) Civil Remedy.-- (1) Liability for trafficking.--(A) Except as otherwise provided in this section, any person that, after the end of the 3-month period beginning on the effective date of this title, traffics in property which was confiscated by the Cuban Government on or after January 1, 1959, shall be liable to any United States national who owns the claim to such property for money damages in an amount equal to the sum of-- (i) the amount which is the greater of-- (I) the amount, if any, certified to the claimant by the Foreign Claims Settlement Commission under the International Claims Settlement Act of 1949, plus interest; (II) the amount determined under section 303(a)(2), plus interest; or (III) the fair market value of that property, calculated as being either the current value of the property, or the value of the property when confiscated plus interest, whichever is greater; and (ii) court costs and reasonable attorneys' fees.  (B) Interest under subparagraph (A)(i) shall be at the rate set forth in section 1961 of title 28, United States Code, computed by the court from the date of confiscation of the property involved to the date on which the action is brought under this subsection.   

(2) Presumption in favor of the certified claims.--There shall be a presumption that the amount for which a person is liable under clause (i) of paragraph (1)(A) is the amount that is certified as described in subclause (I) of that clause. The presumption shall be rebuttable by clear and convincing evidence that the amount described in subclause (II) or (III) of that clause is the appropriate amount of liability under that clause. 

(3) Increased liability.--(A) Any person that traffics in confiscated property for which liability is incurred under paragraph (1) shall, if a United States national owns a claim with respect to that property which was certified by the Foreign Claims Settlement Commission under title V of the International Claims Settlement Act of 1949, be liable for damages computed in accordance with subparagraph (C).   

(B) If the claimant in an action under this subsection (other than a United States national to whom subparagraph (A) applies) provides, after the end of the 3-month period described in paragraph (1) notice to-- (i) a person against whom the action is to be initiated, or (ii) a person who is to be joined as a defendant in the action, at least 30 days before initiating the action or joining such person as a defendant, as the case may be, and that person, after the end of the 30- day period beginning on the date the notice is provided, traffics in the confiscated property that is the subject of the action, then that person shall be liable to that claimant for damages computed in accordance with subparagraph (C).   

(C) Damages for which a person is liable under subparagraph (A) or subparagraph (B) are money damages in an amount equal to the sum of-- (i) the amount determined under paragraph (1)(A)(ii), and (ii) 3 times the amount determined applicable under paragraph (1)(A)(i).  (D) Notice to a person under subparagraph (B)-- (i) shall be in writing; (ii) shall be posted by certified mail or personally delivered to the person; and (iii) shall contain-- (I) a statement of intention to commence the action under this section or to join the person as a defendant (as the case may be), together with the reasons therefor; (II) a demand that the unlawful trafficking in the claimant's property cease immediately; and (III) a copy of the summary statement published under paragraph (8).  (4) Applicability.--(A) Except as otherwise provided in this paragraph, actions may be brought under paragraph (1) with respect to property confiscated before, on, or after the date of the enactment of this Act. 

(B) In the case of property confiscated before the date of the enactment of this Act, a United States national may not bring an action under this section on a claim to the confiscated property unless such national acquires ownership of the claim before such date of enactment.  (C) In the case of property confiscated on or after the date of the enactment of this Act, a United States national who, after the property is confiscated, acquires ownership of a claim to the property by assignment for value, may not bring an action on the claim under this section.   

(5) Treatment of certain actions.--(A) In the case of a United States national who was eligible to file a claim with the Foreign Claims Settlement Commission under title V of the International Claims Settlement Act of 1949 but did not so file the claim, that United States national may not bring an action on that claim under this section.  (B) In the case of any action brought under this section by a United States national whose underlying claim in the action was timely filed with the Foreign Claims Settlement Commission under title V of the International Claims Settlement Act of 1949 but was denied by the Commission, the court shall accept the findings of the Commission on the claim as conclusive in the action under this section. 

(C) A United States national, other than a United States national bringing an action under this section on a claim certified under title V of the International Claims Settlement Act of 1949, may not bring an action on a claim under this section before the end of the 2-year period beginning on the date of the enactment of this Act. 

(D) An interest in property for which a United States national has a claim certified under title V of the International Claims Settlement Act of 1949 may not be the subject of a claim in an action under this section by any other person. Any person bringing an action under this section whose claim has not been so certified shall have the burden of establishing for the court that the interest in property that is the subject of the claim is not the subject of a claim so certified.  (6) Inapplicability of act of state doctrine.--No court of the United States shall decline, based upon the act of state doctrine, to make a determination on the merits in an action brought under paragraph (1). 

(7) Licenses not required.--(A) Notwithstanding any other provision of law, an action under this section may be brought and may be settled, and a judgment rendered in such action may be enforced, without obtaining any license or other permission from any agency of the United States, except that this paragraph shall not apply to the execution of a judgment against, or the settlement of actions involving, property blocked under the authorities of section 5(b) of the Trading with the Enemy Act that were being exercised on July 1, 1977, as a result of a national emergency declared by the President before such date, and are being exercised on the date of the enactment of this Act. 

LINK To Complete Analysis In PDF Format 

LINK: 2018 Global Ports Holding Annual Report

LINK To 15 April 2017: Daring Or Enticing The Trump Administration About Cuba

Related Libertad Act Analyses:

https://www.cubatrade.org/blog/2019/5/2/libertad-title-iii-united-states-district-court-lawsuit-filing-texts-against-carnival-corporation

https://www.cubatrade.org/blog/2019/5/6/the-three-federal-court-judges-assigned-to-title-iii-cases-have-previously-ruled-in-cases-involving-cuba

https://www.cubatrade.org/blog/2019/5/1/title-iii-operational-at-1201-am-on-2-may-2019-first-lawsuit-expected-thursday

OFAC & BIS Publish New Cuba Travel Regulations- Cruise Sailings End; Educational Travel Impacted

The OFAC has published new regulations for travel and transactions with the Republic of Cuba:

LINK To OFAC Press Release

LINK To OFAC Frequently Asked Questions

LINK To OFAC Federal Register Filing

LINK To Final CFR

The BIS has published new regulations for travel and transactions with the Republic of Cuba:

LINK To Press Release

LINK To BIS Regulations

LINK To Final CFR

The United States Department of State

LINK To Statement

ofac-treasury.jpg

Delta Air Lines & Western Union Plus US$1.15 Million Could Be Keys To Resolving Certified Claims

Two Certified Claims Where Cuba Earns Far Exceeds What Cuba Owes

2.5% of What Delta Air Lines Has Paid To Cuba Settles Claim

Western Union Has Paid Far More To Cuba Than Its Claim Of US$939,367.20

US$1.15-5.23 Million Could Resolve Both Certified Claims

Settling Western Union And Delta Air Lines Claims Could Gain Cuba Needed Goodwill

Certified Claimants With A Presence In Cuba Represent 10.9% Of Total Claims Value

Cuba Needs To Demonstrate It’s Capable Of Negotiating A Settlement

Endure Trump Administration Gloating; Focus Upon The Solution

Settlements May Create Fissures Within Trump Administration & U.S. Congress

Wouldn’t Certified Claimants Prefer A Direct Negotiation To Cost Of Court?

Will President Trump Object To Solving The Problem?

Will President Trump Agree To Direct Settlement Negotiations With Cuba? 

From what should be the perspective of the Republic of Cuba, there are two (2) certified claims with a combined value of US$1,151,763.28 (or US$5,229,005.28 with interest) that are incomplex to quickly settle due to the extremely low value of each certified claim as a percentage of the revenues received by the Republic of Cuba from the services provided by each certified claimant.   

As one senior-member (Republican Party) of the United States Congress shared, “A resolution would tremendously assist with repairing the bilateral relationship.  Right now, there is nothing to reference in the positive column.” 

The Two Claims 

Atlanta-Georgia-based Delta Air Lines (2018 revenues approximately US$44 billion) has since December 2016 operated regularly-scheduled flights from Atlanta, Georgia, and Miami, Florida, to Havana, Republic of Cuba. 

To date, Delta Air Lines has operated approximately 3,152 flights from the United States to the Republic of Cuba, delivering approximately 331,944 passengers. 

Would anyone believe the Republic of Cuba has not earned during the last twenty-nine (29) months a net profit from the landing fees for Delta Air Lines flights of at least US$212,396.08 (or US$964,278.20 with interest) the value of the certified claim?  Provide Delta Air Lines with a discount on landing fees and the certified claim evaporates. 

Using as an example a 160-passenger Boeing 737-800 aircraft landing at Jose Mart International Airport (HAV) in Havana, Republic of Cuba, and departing within three (3) hours so not to incur parking fees.  Aircraft weight with 160-passengers is approximately 164,000 pounds (79,015 KG; 79.015 MT).  The flight example would be MIA/HAV/MIA.  1CUC=US$1.00.  Landing Fee: 4.89 CUC X 79.015 equals US$386.38. 

Passengers Departure Rate: 25.00 CUC X 160 equals US$4,000.00.  Customs: 96.00 CUC.  Airport Medical Services: 80.00 CUC.  Total Fees to land and then depart HAV: CUC 4,562.38.   

Approximate number of Delta Air Lines flights from 1 December 2016 through 30 November 2018: 1,855.  Approximate Landing Fees paid by Delta Air Lines to HAV from 2016: US$8,463,214.90The value of the certified claim represents approximately 2.5% of the fees paid by Delta Air Lines to the Republic of Cuba. LINK To Delta Air Lines certified claim.

Denver, Colorado-based Western Union Company (2018 revenues approximately US$6 billion) has electronically delivered annually transfers of reportedly valued in the hundreds of millions of dollars from the United States to the Republic of Cuba.  The Republic of Cuba has earned in fees at least US$939,367.20 (or US$4,264,727.08 with interest), the value of the certified claim.  Eliminate or reduce the fee paid by Western Union Company to Republic of Cuba government-operated Fincimex and the certified claim evaporates.  Western Union Company does not report data as to the value of transfers from the United States to the Republic of Cuba; consistent media reporting estimates that remittances from the United States to the Republic of Cuba are annually approximately US$1.5 billion to US$3 billion, with the majority of the funds delivered as currency by individuals traveling to the Republic of Cuba.  On 14 March 2018, Havana Times, an online publication edited in Nicaragua, reported without verification that Western Union Company delivered “more than 3 billion US dollars annually” to the Republic of Cuba, but did not mention as to the origin(s) of the funds- whether from the United States and/or other countries.     

To send US$100.00 from the United States to the Republic of Cuba where the recipient will receive the funds in currency, using www.westernunion.com, the fees range from 9% to 14.99% to 19.49% depending upon delivery time and method of payment used for the transaction.  The Republic of Cuba reportedly receives approximately 20% of the fee paid by customers to Western Union. LINK To Western Union Company certified claim.   

Settlements Could Begin A Trend 

A settlement with two high-profile service-focused companies who operate within the Republic of Cuba and provide value to the 11.4 million citizens of the Republic of Cuba becomes workable as the cost of a lawsuit far exceeds the cost of bilateral negotiations- and the resolution is far more certain to be of present value rather than a judgement from a court that may require years (or decades) to enforce. 

Upon settlement, the defendant companies and defendant individuals may no longer be subject to impediments to their operations relating to the Republic of Cuba and other countries which are within reach of the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury, the Office of Legal Adviser (OLA) of the United States Department of State and the United States Department of Justice (DOJ). 

Settlements would result in an increase to the operational value of an asset located in the Republic of Cuba- the value of the asset increases as governments, financial institutions, investors, partners, and suppliers have increased confidence in long-term market-based viability. 

With respect to structuring a settlement, there could be commercial, economic and political value to those who were subject to certified claims from having an ongoing presence by companies and individuals subject to United States jurisdiction as a shareholder, partner or leaseholder- meaning that if a defendant settles with the owner of an asset, and the owner is of Cuban descent residing in the United States or an individual not of Cuban descent, or company located in the United States, there may be an optical and practical benefit- lessening stigma, lessening risk, increasing opportunity and increasing value of the asset.    

Most publicly-held companies with certified claims need to pursue resolution- whether through the courts or within a bilateral government-to-government settlement agreement, because the companies could be subject to shareholder(s) lawsuits for not using all means available to retrieve assets of the corporation- which are owned by shareholders.

A settlement may require a change in posture by the Trump Administration and create an opportunity for direct negotiations with the Republic of Cuba. 

Yes, the Trump Administration and some members of the United States Congress and some political pundits would proclaim victory- that the policies of the Trump Administration “brought to its knees” the Republic of Cuba.  Who should care? 

The goal is to solve an issue that negatively impacts- and will continue to negatively impact the population of the Republic of Cuba and the workers in other countries who export to, import from and provide services within the Republic of Cuba.  The better off is the Republic of Cuba, the more revenues to those exporters, importers and service providers. 

The implementation by the Trump Administration of Title III of the Cuban Liberty and Democratic Solidarity Act of 1996 (known as “Libertad Act”) is not an issue of national significance in the United States.   

Nor has the creation of the Cuba Restricted List by the United States Department of State ignited demonstrations in opposition.  Previous and expected changes to travel regulations have not resulted in national debate.  Expected changes to remittance regulations primarily impact unique constituencies in located in specific locations within two states; so exempted from the national dialogue.  Increasing sanctions against Venezuela which impact the Republic of Cuba do not matter to most citizens of the fifty states.  Provisions of legislation that are law remain unused.  Advocacy groups opposing decisions by the Trump Administration or seeking to shape legislation in the United States Congress have become marginalized and, in many instances, impotent- both within the Washington Beltway and in Havana.  

Meaning, what the Trump Administration is doing relating to- directly and indirectly, the Republic of Cuba is not throughout the United States of political significance or economic significance or commercial significance in comparison to other issues.  It is of importance primarily in one state with twenty-nine (29) votes in the Electoral College, which determines who becomes president of the United States. 

As a result, the Republic of Cuba has few opportunities to retain relevance.  The most important and simplest is settling the certified claims because their absence unleashes the commercial, economic and political potentiality of the nation.  The certified claims are an albatross; and the Republic of Cuba continues to lose support from its traditional commercial partners as they become impatient with the choices made by the Diaz-Canel Administration.   

When the Republic of Cuba is deemed to be bullied by the United States without recourse, there lies empathy.  When the Republic of Cuba is deemed to be resisting changes that would enable it to better repay what it owes and be a more vibrant atmosphere for expanded relationships, those countries who would have shown empathy are instead lessening resistance to hostility; patience is fleeting. 

The Trump Administration is gambling the Brussels, Belgium-based European Union (EU) and Geneva, Switzerland-based World Trade Organization (WTO) will not engage in in a sustained rhetorical, commercial, economic and political conflict with the United States because of the Republic of Cuba and at the potential determent to cooperation on other issues.  And, if the gamble is inartful, if wrong, then so be it. 

Certified Claimants Operating In Cuba  

Certified claimants with current or recent activity within the Republic of Cuba include New York, New York-based Colgate-Palmolive, Moline, Illinois-based Deere & Company, Atlanta, Georgia-based Delta Air Lines, Boston, Massachusetts-based General Electric, Bethesda, Maryland-based Marriott International, Chicago, Illinois-based University of Chicago, Denver, Colorado-based Western Union and New Haven, Connecticut-based Yale University.   

The combined value of the certified claims by these entities is US$206,707,396.21 (US$938,451,578.64 with interest) representing 10.9% of the value of 5,913 certified claims. 

Colgate-Palmolive (US$14,507,935.04) 

From New York, New York-based Colgate-Palmolive Company (2018 revenues approximately US$15 billion) on 5 April 2016: “Colgate Palmolive’s Bright Smiles, Bright Futures program provides oral health education and screening to millions of children in more than 80 countries as part of an effort to reduce and prevent cavities among children. The global program, celebrating its 25th anniversary, has reached more than 850 million children around the world with its education curriculum. This award-winning curriculum is translated into 30 languages. Colgate’s well-established partnerships with governments, schools and communities -- combined with a committed network of volunteer dentists and educators -- make the program work.    

With government approval, we brought a humanitarian program modeled on Bright Smiles, Bright Futures to Cuba in 2014. In our first year, we ran the program in one municipality of Havana and reached approximately 10,000 children. Additionally, we presented our plan to dentists and representatives from the Ministry of Health at the Cuban Dental Congress in November 2015.  

Today, we’re extending our reach in Havana as well as expanding the program to the provinces of Cienfuegos and Pinar del Río in partnership with the Ministry of Health. With this expansion, we expect to reach more than 170,000 children by the end of 2016.”  

Deere & Company (US$267,171.50) 

In November 2017, and continuing through 2018, Moline, Illinois-based Deere & Company (2018 revenues approximately US$27 billion) delivered more than $800,000.00 in agricultural equipment to the Republic of Cuba for use at its distribution center affiliated with Republic of Cuba government-operated Maquimport, a subsidiary of Republic of Cuba government-operated Gecomex.  Antioch, Tennessee-based Wirtgen America, Inc., a subsidiary of Windhagen, Germany-based Wirtgen Group (2018 revenues approximately US$3 billion), a construction equipment machinery subsidiary (acquired in 2017) of Deere & Company has also delivered products to the Republic of Cuba. John Deere reported that the company would provide financing for equipment purchases by authorized Republic of Cuba entities. 

Delta Air Lines (US$212,396.08) 

Atlanta, Georgia-based Delta Air Lines (2018 revenues approximately US$44 billion) has regularly-scheduled flights between the United States the Republic of Cuba and have a ticket office in the city of Havana, Republic of Cuba, managed by Republic of Cuba government-operated Havanatur, a subsidiary of Republic of Cuba government-operated Corporacion Cimex SA which is controlled by Enterprise Administration Group (GAESA) which is controlled by the Revolutionary Armed Forces of the Republic of Cuba (FAR).  

General Electric (US$5,870,436.86) 

Since December 2017, Boston, Massachusetts-based General Electric (GE; 2018 revenues exceeded US$122 billion) delivered from the United States to the Republic of Cuba “parts for steam turbines” valued at more than US$21 million. Some of the parts traveled from Atlanta, Georgia, to Port Everglades, Florida, then to Port Mariel in the Republic of Cuba. GE is the largest (by revenue) United States-based company to have engaged with the Republic of Cuba. Although GE has not issued a media release relating to the project in the Republic of Cuba, in 2017 the government of the Republic of Cuba confirmed in a PowerPoint presentation used by the Embassy of the Republic of Cuba in Washington DC that the company was providing parts and equipment for a power plant. The total value of the project has not been reported. The Obama Administration first authorized the transactions by GE as primarily advancing benefit to the citizens of the Republic of Cuba rather than to the government of the Republic of Cuba. This type of transaction was and remains licensable (general or specific) through the OFAC and BIS. In November 2015, GE purchased for approximately US$10.6 billion the power and grid division of Paris, France-based Alstom (2018 revenues approximately US$8 billion). In 2016, GE commenced a power generation project in the Republic of Cuba resulting, in part, from a relationship between Alstom and the Republic of Cuba prior to the 2015 acquisition by GE of the power and grid division of Alstom, which had exported products to the Republic of Cuba. On 31 March 1971, GE certified a claim against the Republic of Cuba in the amount of US$5,870,436.86 through the United States Foreign Claims Settlement Commission (USFCSC) within the United States Department of Justice.  Interest accrued at 6% per annum from the respective date(s) of loss to the date of settlement. 

Marriott International (US$181,808,794.14) 

A subsidiary of Bethesda, Maryland-based Marriott International, Inc. (2018 revenues approximately US$20 billion), Stamford, Connecticut-based Starwood Hotels and Resorts Worldwide LLC, has a series of two-year licenses from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington DC to manage two (2) properties located in the Republic of Cuba. 

Both properties managed by Marriott International (through Starwood Hotels and Resorts Worldwide LLC) are in the city of Havana, Four Points by Sheraton Havana and Hotel Inglaterra (delayed opening without explanation from December 2016 to December 2019) and owned by entities controlled by the Revolutionary Armed Forces of the Republic of Cuba (FAR). 

The OFAC licenses were first issued during the Obama Administration and were renewed during the Trump Administration, although there has been a reported delay by the OFAC in transferring the licenses from Starwood Hotels and Resorts Worldwide LLC to Marriott International. 

The certified claim also includes land adjacent to the Jose Marti International Airport (HAV) in Havana, formerly known as Rancho-Boyeros Airport, located in the town of Boyeros, approximately 9 miles from Havana.  HAV handles approximately 25 international airlines and serves approximately 60 destinations in approximately 30 countries. 

University of Chicago (US$2,500,000.00) 

The Center for Latin American Studies at the Chicago, Illinois-based University of Chicago has offered academic programs in the Republic of Cuba and Alumni Association of the University of Chicago has marketed educational visits to the Republic of Cuba.  

Western Union (US$939,367.20) 

Denver, Colorado-based Western Union Company (2018 revenues approximately US$6 billion) provides online and app-based money transfer services in the Republic of Cuba through 420 Agent locations in all sixteen provinces and 168 municipalities.  Western Union Company has an agreement with Republic of Cuba government-operated Fincimex S.A., a subsidiary of Republic of Cuba government-operated Corporacion Cimex SA which is controlled by Enterprise Administration Group (GAESA) which is controlled by the Revolutionary Armed Forces of the Republic of Cuba (FAR). 

Yale University (US$601,295.39) 

The Yale MacMillan Center: Council on Latin American & Iberian Studies at New Haven, Connecticut-based Yale University has offered academic programs in the Republic of Cuba 

LINK To List Of United States Companies With A Presence In The Republic Of Cuba. 

Libertad Act

The Trump Administration has made operational Title III and further implemented Title IV of the Cuban Liberty and Democratic Solidarity Act of 1996 (known as “Libertad Act”).   

Title III authorizes lawsuits in United States District Courts against companies and individuals who are using a certified claim or non-certified claim where the owner of the certified claim or non-certified claim has not received compensation from the Republic of Cuba or from a third-party who is using (“trafficking”) the asset.   

Title IV restricts entry into the United States by individuals who have connectivity to unresolved certified claims or non-certified claims.  One Canada-based company is currently subject to this provision based upon a certified claim. 

Certified Claims Background 

There are 8,821 claims of which 5,913 awards valued at US$1,902,202,284.95 were certified by the USFCSC and have not been resolved for nearing sixty years (some assets were officially confiscated in the 1960’s, some in the 1970’s and some in the 1990’s.  The USFCSC permitted simple interest (not compound interest) of 6% per annum (approximately US$114,132,137.10); with the approximate current value of the 5,913 certified claims US$8,521,866,236.75.  

The first asset to be expropriated by the Republic of Cuba was an oil refinery in 1960 owned by White Plains, New York-based Texaco, Inc., now a subsidiary of San Ramon, California-based Chevron Corporation (USFCSC: CU-1331/CU-1332/CU-1333 valued at US$56,196,422.73).  

The largest certified claim (Cuban Electric Company) valued at US$267,568,413.62 is controlled by Boca Raton, Florida-based Office Depot, Inc.  The second-largest certified claim (International Telephone and Telegraph Co, ITT as Trustee, Starwood Hotels & Resorts Worldwide, Inc.) valued at US$181,808,794.14 is controlled by Bethesda, Maryland-based Marriott International; the certified claim also includes land adjacent to the Jose Marti International Airport in Havana, Republic of Cuba.  The smallest certified claim is by Sara W. Fishman in the amount of US$1.00 with reference to the Cuban-Venezuelan Oil Voting Trust. 

The two (2) largest certified claims total US$449,377,207.76, representing 24% of the total value of the certified claims.  Thirty (30) certified claimants hold 56% of the total value of the certified claims.  This concentration of value creates an efficient pathway towards a settlement.   

Title III of the Cuban Liberty and Democratic Solidarity (Libertad) Act of 1996 requires that an asset had a value of US$50,000.00 when expropriated by the Republic of Cuba without compensation to the original owner.  Of the 5,913 certified claims, 913, or 15%, are valued at US$50,000.00 or more.  Adjusted for inflation, US$50,000.00 (3.70% per annum) in 1960 has a 2019 value of approximately US$427,267.01.  The USFCSC authorized 6% per annum, meaning the 2019 value of US$50,000.00 is approximately US$1,649,384.54.  

The ITT Corporation Agreement 

In July 1997, then-New York City, New York-based ITT Corporation and then-Amsterdam, the Netherlands-based STET International Netherlands N.V. signed an agreement whereby STET International Netherlands N.V. would pay approximately US$25 million to ITT Corporation for a ten-year right (after which the agreement could be renewed and was renewed) to use assets (telephone facilities and telephone equipment) within the Republic of Cuba upon which ITT Corporation has a certified claim valued at approximately US$130.8 million.  ETECSA, which is now wholly-owned by the government of the Republic of Cuba, was a joint venture controlled by the Ministry of Information and Communications of the Republic of Cuba within which Amsterdam, the Netherlands-based Telecom Italia International N.V. (formerly Stet International Netherlands N.V.), a subsidiary of Rome, Italy-based Telecom Italia S.p.A. was a shareholder.  Telecom Italia S.p.A., was at one time a subsidiary of Ivrea, Italy-based Olivetti S.p.A.  The second-largest certified claim (International Telephone and Telegraph Co, ITT as Trustee, Starwood Hotels & Resorts Worldwide, Inc.) valued at US$181,808,794.14 is controlled by Bethesda, Maryland-based Marriott International.  

TITLE III--SEC. 302. LIABILITY FOR TRAFFICKING IN CONFISCATED PROPERTY CLAIMED BY UNITED STATES NATIONALS. 

(a) Civil Remedy.-- (1) Liability for trafficking.--(A) Except as otherwise provided in this section, any person that, after the end of the 3-month period beginning on the effective date of this title, traffics in property which was confiscated by the Cuban Government on or after January 1, 1959, shall be liable to any United States national who owns the claim to such property for money damages in an amount equal to the sum of-- (i) the amount which is the greater of-- (I) the amount, if any, certified to the claimant by the Foreign Claims Settlement Commission under the International Claims Settlement Act of 1949, plus interest; (II) the amount determined under section 303(a)(2), plus interest; or (III) the fair market value of that property, calculated as being either the current value of the property, or the value of the property when confiscated plus interest, whichever is greater; and (ii) court costs and reasonable attorneys' fees.  (B) Interest under subparagraph (A)(i) shall be at the rate set forth in section 1961 of title 28, United States Code, computed by the court from the date of confiscation of the property involved to the date on which the action is brought under this subsection.   

(2) Presumption in favor of the certified claims.--There shall be a presumption that the amount for which a person is liable under clause (i) of paragraph (1)(A) is the amount that is certified as described in subclause (I) of that clause. The presumption shall be rebuttable by clear and convincing evidence that the amount described in subclause (II) or (III) of that clause is the appropriate amount of liability under that clause. 

(3) Increased liability.--(A) Any person that traffics in confiscated property for which liability is incurred under paragraph (1) shall, if a United States national owns a claim with respect to that property which was certified by the Foreign Claims Settlement Commission under title V of the International Claims Settlement Act of 1949, be liable for damages computed in accordance with subparagraph (C).   

(B) If the claimant in an action under this subsection (other than a United States national to whom subparagraph (A) applies) provides, after the end of the 3-month period described in paragraph (1) notice to-- (i) a person against whom the action is to be initiated, or (ii) a person who is to be joined as a defendant in the action, at least 30 days before initiating the action or joining such person as a defendant, as the case may be, and that person, after the end of the 30- day period beginning on the date the notice is provided, traffics in the confiscated property that is the subject of the action, then that person shall be liable to that claimant for damages computed in accordance with subparagraph (C).   

(C) Damages for which a person is liable under subparagraph (A) or subparagraph (B) are money damages in an amount equal to the sum of-- (i) the amount determined under paragraph (1)(A)(ii), and (ii) 3 times the amount determined applicable under paragraph (1)(A)(i).  (D) Notice to a person under subparagraph (B)-- (i) shall be in writing; (ii) shall be posted by certified mail or personally delivered to the person; and (iii) shall contain-- (I) a statement of intention to commence the action under this section or to join the person as a defendant (as the case may be), together with the reasons therefor; (II) a demand that the unlawful trafficking in the claimant's property cease immediately; and (III) a copy of the summary statement published under paragraph (8).  (4) Applicability.--(A) Except as otherwise provided in this paragraph, actions may be brought under paragraph (1) with respect to property confiscated before, on, or after the date of the enactment of this Act. 

(B) In the case of property confiscated before the date of the enactment of this Act, a United States national may not bring an action under this section on a claim to the confiscated property unless such national acquires ownership of the claim before such date of enactment.  (C) In the case of property confiscated on or after the date of the enactment of this Act, a United States national who, after the property is confiscated, acquires ownership of a claim to the property by assignment for value, may not bring an action on the claim under this section.   

(5) Treatment of certain actions.--(A) In the case of a United States national who was eligible to file a claim with the Foreign Claims Settlement Commission under title V of the International Claims Settlement Act of 1949 but did not so file the claim, that United States national may not bring an action on that claim under this section.  (B) In the case of any action brought under this section by a United States national whose underlying claim in the action was timely filed with the Foreign Claims Settlement Commission under title V of the International Claims Settlement Act of 1949 but was denied by the Commission, the court shall accept the findings of the Commission on the claim as conclusive in the action under this section. 

(C) A United States national, other than a United States national bringing an action under this section on a claim certified under title V of the International Claims Settlement Act of 1949, may not bring an action on a claim under this section before the end of the 2-year period beginning on the date of the enactment of this Act. 

(D) An interest in property for which a United States national has a claim certified under title V of the International Claims Settlement Act of 1949 may not be the subject of a claim in an action under this section by any other person. Any person bringing an action under this section whose claim has not been so certified shall have the burden of establishing for the court that the interest in property that is the subject of the claim is not the subject of a claim so certified.  (6) Inapplicability of act of state doctrine.--No court of the United States shall decline, based upon the act of state doctrine, to make a determination on the merits in an action brought under paragraph (1). 

(7) Licenses not required.--(A) Notwithstanding any other provision of law, an action under this section may be brought and may be settled, and a judgment rendered in such action may be enforced, without obtaining any license or other permission from any agency of the United States, except that this paragraph shall not apply to the execution of a judgment against, or the settlement of actions involving, property blocked under the authorities of section 5(b) of the Trading with the Enemy Act that were being exercised on July 1, 1977, as a result of a national emergency declared by the President before such date, and are being exercised on the date of the enactment of this Act.

LINK To Complete Analysis In PDF Format

Former Rep. Dan Burton, Co-Author Of "Helms-Burton" & "Libertad Act" May Again Take The Stage

The Return Of Dan “Helms-Burton” & “Libertad Act” Burton

What He Thought In 1995/1996 Might Be Relevant To A Judge Today 

The judges presiding in United States District Courts will decide who can sue, who can’t sue, who can be sued and who can’t be sued.  The intent of the United States Congress will be an important component as to how rulings are constructed. 

The Cuban Liberty and Democratic Solidarity Act of 1996 (Libertad Act) is known widely as “Helms-Burton” for its authors: The Honorable Jesse Helms (R- North Carolina) of the United States Senate and The Honorable Dan Burton (R- Indiana) of the United States House of Representatives.  Senator Helms retired in 2003 and died in 2008 and Representative Burton retired in 2013. 

The now 81-year-old Mr. Burton may be shuttling between courts in Florida, New Jersey, New York and Washington DC serving as an expert witness to describe the intention of the framers of the Libertad Act; and intent can be a critical component in how lawsuits are resolved.   

He would be expected to confirm that the Libertad Act, and specifically Title III and Title IV, were designed to be expansive, rather than constrictive in impact upon the Republic of Cuba.   

Libertad Act 

Title III of the Libertad Act authorizes lawsuits in United States District Courts against companies and individuals who are using a certified claim where the owner of the certified claim has not received compensation from the Republic of Cuba or from a third-party who is using the asset.   

Title IV of the Libertad Act authorizes the United States Department of State to restrict entry into the United States by individuals who have connectivity to unresolved certified claims.  One company is currently subject to this provision. 

The Obama Travel Decisions 

Judges will determine whether the Obama Administration when expanding who within the twelve (12) authorized categories of travel to the Republic of Cuba permitted by the Trade Sanctions Reform and Export Enhancement Act (TSREEA) of 2000 did, unlawfully, allow travel for the purpose of tourism, which is specifically prohibited by the TSREEA. 

If judges determine that the Obama Administration violated the TSREEA, then there will the question of whether the activities of United States companies (and non-United States companies) engaging in the provision of travel-related services (airlines, cruise lines, hotel management companies) incident to what would then be deemed as unlawful (based upon language in the Libertad Act- which a judge may ask Mr. Burton to interpret) have not been engaging in lawful activities despite licenses (general and specific) issued by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury. 

Then, if the travel-related services companies are found to not be operating lawfully, they could be deemed to be subject to a determination of whether they are “trafficking” using the definition of the term in Title III: 

From the Libertad Act: (13) Traffics.--(A) As used in title III, and except as provided in subparagraph (B), a person "traffics" in confiscated property if that person knowingly and intentionally-- (i) sells, transfers, distributes, dispenses, brokers, manages, or otherwise disposes of confiscated property, or purchases, leases, receives, possesses, obtains control of, manages, uses, or otherwise acquires or holds an interest in confiscated property, (ii) engages in a commercial activity using or otherwise benefiting from confiscated property, or (iii) causes, directs, participates in, or profits from, trafficking (as described in clause (i) or (ii)) by another person, or otherwise engages in trafficking (as described in clause (i) or (ii)) through another person, without the authorization of any United States national who holds a claim to the property. (B) The term "traffics" does not include-- (iii) transactions and uses of property incident to lawful travel to Cuba, to the extent that such transactions and uses of property are necessary to the conduct of such travel; or (iv) transactions and uses of property by a person who is both a citizen of Cuba and a resident of Cuba, and who is not an official of the Cuban Government or the ruling political party in Cuba. 

From the Libertad Act: (3) Commercial activity.-- The term "commercial activity" has the meaning given that term in section 1603(d) of title 28, United States Code.  [Definition: (d) A “commercial activity” means either a regular course of commercial conduct or a particular commercial transaction or act. The commercial character of an activity shall be determined by reference to the nature of the course of conduct or particular transaction or act, rather than by reference to its purpose]. 

If a judge rules that United States companies are subject to provisions of Title III, then the companies could be potential defendants.  

Twenty-three years later, the voice of Mr. Burton could one again be heard… The question will be for a judge to determine if what Mr. Burton thought then is applicable now.

LINK To Complete Analysis

220px-Dan_Burton,_Official_Portrait,_108th_Congress.jpg

EU Could Be Primary Beneficiary Of Title III And Title IV- If Cuba Listens To Them

EU Could Be Primary Beneficiary Of Title III And Title IV- If Cuba Listens To Them

Not Exactly What The Trump Administration Has In Mind 

Might the implementation of Title III and enhanced enforcement of Title IV of the Cuban Liberty and Democratic Solidarity Act of 1996 (Libertad Act) by the Trump Administration result in the Republic of Cuba permitting commercial, economic and political changes that it loathes- but which result in re-magnetizing the 800-mile archipelago? 

That’s what the EU wants. 

Might, however, those changes which the Trump Administration would seem to want to embrace from a macro perspective and micro perspective result in a further fortification of the 11.4 million residents of the Republic of Cuba from the interests of the United States business community? 

The EU wouldn’t mind that either. 

If the Republic of Cuba meaningfully restructures (which is unachievable absent of significant hardship; requiring robust leadership by the Diaz-Canel Administration), resolves issues with at least some of the United States-based certified claimants and only the certified claimants, then those non-United States-based (primarily EU-domiciled) companies which export to, import from, and provide services for the Republic of Cuba will have relationships worth far more than they are today.    

Ambassador Alberto Navarro, Head of Delegation of the twenty-eight (28) member Brussels, Belgium-based European Union (EU) to the Republic of Cuba, at a forum sponsored by the Ministry of Foreign Affairs (MINREX) of the Republic of Cuba, was quoted in media reporting: 

“Beyond looking at the past and criticizing the Helms-Burton law, there is also an opportunity here to improve the security of investments, to facilitate trade and investment and there the European Union will be with you,”  

“[I]n these difficult times, seek the opportunity to improve the investment climate and to facilitate trade and investment,”  

“[T]here are sufficient arguments for Cuba to understand that the countries with the greatest trade opening are the most prosperous in the world.” 

“I have not seen any country emerge from underdevelopment through development aid and international solidarity (...) The countries that prosper are thanks to trade liberalization and foreign investment (...). unique, an opportunity,” 

“What this legislation wants, and I think we all agree, is to create confusion and discourage investment,”    

“There are businesspeople who've been here 20, 30 years, who've made bets on investing their financial resources in Cuba to stimulate commerce, tourism, international exchange, and many of them tell me that they haven't lived through a similar situation,”  

From Thomson Reuters: “He encouraged Cuban reforms to make the island more attractive to foreign investors and offset disincentives created by the Trump administration policy.” 

From the EU [https://eeas.europa.eu/delegations/cuba/area/contacts_cs]: “The EU remains Cuba's main export and second trade partner; the EU is also the biggest foreign investor in Cuba (mainly in the sectors of tourism, construction, light and agro-industries) and accounts for a third of the arriving tourists.  In 2016, exports in goods to Cuba were worth €2.04 billion, and imports amounting to €0.41 billion. Cuba's main export goods are agricultural products, beverages and tobacco and mineral fuels for which there is no preferential trade regime.  The aim of the PDCA [Political Dialogue and Cooperation Agreement] is to create a more predictable and transparent atmosphere for economic operators and increase their economic capacity to produce, trade and create jobs, but it does not establish a free trade area between the parties or cover investment protection.  The EU advocates diversification of exports from Cuba beyond the traditional products, and cooperates to disseminate the necessary knowledge among Cuban exporters to improve the access of goods onto the EU market."

From Ambassador Navarro: Republic of Cuba bilateral trade with EU-member countries in 2018 exceeded US$2.6 billion of which approximately US$400 million was exports from the Republic of Cuba.  In 2018, the EU represented approximately 35% of total trade for the Republic of Cuba. 

Libertad Act 

Title III of the Libertad Act authorizes lawsuits in United States District Courts against companies and individuals who are using a certified claim where the owner of the certified claim has not received compensation from the Republic of Cuba or from a third-party who is using the asset.   

Title IV of the Libertad Act authorizes the United States Department of State to restrict entry into the United States by individuals who have connectivity to unresolved certified claims.  One company is currently subject to this provision.

LINK To Complete Analysis In PDF Format