Have Cruise Lines Sunk Themselves With Itineraries- Defining "Meaningful" For Trump Administration?

Have Cruise Lines Sunk Themselves?

Changing Cruise Line Itineraries May Influence Decision

What Defines “Meaningful Interaction

Audit Could Require Millions Of Pieces Of Paper

Obama Administration Elasticity

Trump Administration Constraint 

The Obama Administration was not intent upon enforcing who could not travel to the Republic of Cuba because it did not support the statute which prohibited travel for the purpose of tourism.  The Obama Administration permitted an elasticizing of the twelve (12) statutorily-authorized definitions as to who could visit the Republic of Cuba.  

The Trump Administration is nearing the end of an internal analysis: If two 3,000-passenger cruise ships arrive to the Port of Havana, how do 6,000 passengers have, as regulations for the statute require, “meaningful interaction between the traveler and individuals in Cuba” during a several hour visit?  What does a Republic of Cuba national gain from the brief encounter other than money?  Isn’t a cruise ship, by definition, a vehicle to transport and service tourists?  Isn’t a cruise ship passenger, by definition, a tourist- regardless of whether they believe it so?  Can “meaningful interaction” be reasonably defined?  Is the definition a function of the individual rather than the government?   

When Miami, Florida-based Carnival Corporation & plc, commenced cruises on 1 May 2016 to the Republic of Cuba, it used the 704-passenger Adonia and the itineraries were licensed by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury and managed through its Fathom subsidiary which specialized in travel with a social impact.  Importantly, the cruise itinerary only included the Republic of Cuba- it was not a component of a multi-country cruise which are designed for tourism.  Given a lack of marketplace interest, soon the Fathom cruises to the Republic of Cuba ceased and the Republic of Cuba was increasingly included on regularly-scheduled mainline cruise ship itineraries, but with on-shore excursions within the Republic of Cuba that were marketed to be in compliance with OFAC regulations.  

Since that 1 May 2016 inaugural cruise by the Adonia, there are few cruises by any company, including Miami, Florida-based Norwegian Cruise Line and Miami, Florida-based Royal Caribbean International, that only have the Republic of Cuba as the multi-day cruise destination. 

According to the Republic of Cuba, in 2018 the three-largest United States-based cruise lines and smaller cruise lines delivered more than 500,000 passengers to the Republic of Cuba.  The majority of passengers traveled on cruise itineraries that included multiple countries.   

If cruise lines could not be profitable with Republic of Cuba-only cruises, then is the message to the OFAC that the passengers are not focusing upon the Republic of Cuba?  If the Republic of Cuba is one of two or three or four countries on a cruise itinerary, what percentage of passengers would not participate on the cruise if the Republic of Cuba was excluded?  That data will likely be important for the cruise lines to compile.   

The OFAC authorized (specific licenses and general licenses) the cruises under the “educational travel” provision within the Trade Sanctions Reform and Export Enhancement Act (TSREEA) of 2000.  The licensee is the cruise line rather than the passenger; the cruise line has potential liability as the passenger is reasonably relying upon the licensee to operate within the confines of United States laws, regulations and policies.  To mitigate liability, cruise lines have been requiring passengers to self-certify that they adhere to the statutory and regulatory requirements of the TSREEA. 

United States airlines are not considered licensees and passengers traveling from the United States to the Republic of Cuba are self-certifying that they adhere to one of the twelve authorized categories of travel to the Republic of Cuba.  The third-party companies that are processing the self-certifications are also not licensees.  The passenger is wholly-responsible for compliance with the OFAC regulations. 

The OFAC can reach back five years to seek documentary evidence of compliance.  Because the OFAC has not yet sought action against United States-based companies engaged in providing travel-related services does not exempt compliance.  Individuals remain liable for their actions.     

All general and specific licenses issued by the OFAC are subject to change or revocation at any time should the terms of the license no longer be deemed as consistent with United States policy.  

The Trump Administration may require the airlines, cruise lines and tour operators to provide the documentation since 1 May 2016 from each passenger who has traveled to the Republic of Cuba under their license.  That’s potentially millions of pieces of paper subject to audit by the OFAC… and how long would that take to complete?  And, would the cruises be permitted to operate during the audit process? 

12 Categories Of Permitted Travel 

There are twelve (12) categories of travel authorized by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury; the categories were codified into law by the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSREEA).   

The authorized categories are: 1) family visits 2) official business of the U.S. government, foreign governments, and certain intergovernmental organizations 3) journalistic activity 4) professional research and professional meetings 5) educational activities 6) religious activities 7) public performances, clinics, workshops, athletic and other competitions, and exhibitions 8) support for the Cuban people 9) humanitarian projects 10) activities of private foundations or research or educational institutes 11) exportation, importation, or transmission of information or information materials and 12) certain authorized export transactions. 

Travel to the Republic of Cuba for the purpose of tourism by individuals subject to United States law is prohibited by United States law- not by regulation and not by policy. 

The statute within the TSREEA: “(b) Prohibition on travel relating to tourist activities (1) In general Notwithstanding any other provision of law or regulation, the Secretary of the Treasury, or any other Federal official, may not authorize the travel-related transactions listed in subsection (c) of section 515.560 of title 31, Code of Federal Regulations, either by a general license or on a case-by-case basis by a specific license for travel to, from, or within Cuba for tourist activities.  (2) Definition.  In this subsection, the term ‘‘tourist activities’’ means any activity with respect to travel to, from, or within Cuba that is not expressly authorized in subsection (a) of this section, in any of paragraphs (1) through (12) of section 515.560 of title 31, Code of Federal Regulations, or in any section referred to in any of such paragraphs (1) through (12) (as such sections were in effect on June 1, 2000).  (Pub. L. 106–387, § 1(a) [title IX, § 910], Oct. 28, 2000, 114 Stat. 1549, 1549A–71.)” 

From The OFAC: 

“What is individual people-to-people travel, and how does the President’s announcement impact this travel authorization? 

Individual people-to-people travel is educational travel that: (i) does not involve academic study pursuant to a degree program; and (ii) does not take place under the auspices of an organization that is subject to U.S. jurisdiction that sponsors such exchanges to promote people-to-people contact. The President instructed Treasury to issue regulations that will end individual people-to-people travel. The announced changes do not take effect until the new regulations are issued. 

Will group people-to-people travel still be authorized? 

Yes. Group people-to-people travel is educational travel not involving academic study pursuant to a degree program that takes place under the auspices of an organization that is subject to U.S. jurisdiction that sponsors such exchanges to promote people-to-people contact. Travelers utilizing this travel authorization must: (i) maintain a full-time schedule of educational exchange activities that are intended to enhance contact with the Cuban people, support civil society in Cuba, or promote the Cuban people’s independence from Cuban authorities, and that will result in meaningful interaction between the traveler and individuals in Cuba; and (ii) be accompanied by an employee, consultant, or agent of the sponsoring organization, who will ensure that each traveler maintains a full-time schedule of educational exchange activities. In addition, the predominant portion of the activities engaged in by individual travelers must not be with prohibited officials of the Government of Cuba or prohibited members of the Cuban Communist Party (as defined in the regulations). Once OFAC issues the new regulations, new individual people-to-people travel will not be authorized. 

Will organizations subject to U.S. jurisdiction that sponsor exchanges to promote people-to-people contact be required to apply to OFAC for a specific license? 

No. To the extent that proposed travel falls within the scope of an existing general license, including group people-to-people educational travel, persons subject to U.S. jurisdiction may proceed with sponsoring such travel without applying to OFAC for a specific license. It is OFAC’s policy not to grant applications for a specific license authorizing transactions where a general license is applicable.” 

20. 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

LINK To Complete Analysis In PDF Format

Could Trump Administration Change U.S. Travel Rules For Cuba By Accepting Cuba's Visa?

Will Trump Administration Cite Cuba “Tourist Card” As Defense For Travel Changes?
Was Travel Lawful?
What Defines “Meaningful Interaction”
Obama Administration Elasticity
Trump Administration Constraint

Might the Trump Administration accept the “REPUBLIC DE CUBA VISA – TARJETA DEL TURISTA” (Tourist Card) as proof that individuals subject to United States jurisdiction are engaging in unlawful activities when visiting the Republic of Cuba?  Or, is it only a trope? 

If visas issued by the Republic of Cuba indicate individuals subject to United States jurisdiction arriving to the Republic of Cuba by regularly-scheduled airline flights from the United States and other countries and by cruise ships from the United States and other countries are “tourists,” then why should the United States government dispute that definition?   

United States travelers who obtain “tourist” visas are acknowledging their status, so is it logical for the Trump Administration to accept that acknowledgement?  Travelers would counter that regardless of how their travel is characterized by the Republic of Cuba, they would never accept that that constitutes an admission of unlawful activities.   

Since travel to the Republic of Cuba for the purpose of tourism is illegal under provisions of the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSREEA), the Trump Administration may argue it is enforcing the statute- and certain travelers subject to United States jurisdiction seeking and receiving visas from the Republic of Cuba which reflect a tourist status are in violation of United States law. 

There would seem, then, to be a remedy- the Republic of Cuba creates a Visitor Card for use by individuals subject to United States law.  The Visitor Card would include check-off options for one of the twelve (12) authorized categories of travel to the Republic of Cuba.  Unknown whether the cruise lines and the airlines and the tour operators have sought a such a change. 

For the Trump Administration: If an individual subject to United States law seeks a Tourist Card, makes payment for a Tourist Card, receives a Tourist Card, uses a Tourist Card for entry to the Republic of Cuba, is permitted to enter the Republic of Cuba using a Tourist Card, and departs the Republic of Cuba using a Tourist Card, then logic to believe that the individual subject to United States jurisdiction has engaged in unlawful activity.  

A question to be resolved: What matters- how the Republic of Cuba designates a traveler or what the traveler does while in the Republic of Cuba? 

The Trump Administration believes that group activity itineraries created by cruise lines and tour operators are not in compliance with the TSREEA and activity itineraries created by individuals are not in compliance with the TSREEA. 

For the Trump Administration, both the designation by the Republic of Cuba and the activities by travelers while in the Republic of Cuba may be used to further restrict who can travel to the Republic of Cuba.  

The Obama Administration was not intent upon enforcing who could not travel to the Republic of Cuba because it did not support the statute which prohibited travel relating to tourism.  The Obama Administration permitted an elasticizing of the definitions as to who could visit the Republic of Cuba.  The Trump Administration seeks to constrict travel to the Republic of Cuba.  

Important for travelers to note that the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury may reach back five years to seek documentary evidence of compliance. 

12 Categories Of Permitted Travel 

There are twelve (12) categories of travel authorized by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury; the categories were codified into law by the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSREEA).   

The authorized categories are: 1) family visits 2) official business of the U.S. government, foreign governments, and certain intergovernmental organizations 3) journalistic activity 4) professional research and professional meetings 5) educational activities 6) religious activities 7) public performances, clinics, workshops, athletic and other competitions, and exhibitions 8) support for the Cuban people 9) humanitarian projects 10) activities of private foundations or research or educational institutes 11) exportation, importation, or transmission of information or information materials and 12) certain authorized export transactions. 

Travel to the Republic of Cuba for the purpose of tourism by individuals subject to United States law is prohibited by United States law- not by regulation and not by policy. 

The statute within the TSREEA: “(b) Prohibition on travel relating to tourist activities (1) In general Notwithstanding any other provision of law or regulation, the Secretary of the Treasury, or any other Federal official, may not authorize the travel-related transactions listed in subsection (c) of section 515.560 of title 31, Code of Federal Regulations, either by a general license or on a case-by-case basis by a specific license for travel to, from, or within Cuba for tourist activities.  (2) Definition.  In this subsection, the term ‘‘tourist activities’’ means any activity with respect to travel to, from, or within Cuba that is not expressly authorized in subsection (a) of this section, in any of paragraphs (1) through (12) of section 515.560 of title 31, Code of Federal Regulations, or in any section referred to in any of such paragraphs (1) through (12) (as such sections were in effect on June 1, 2000).  (Pub. L. 106–387, § 1(a) [title IX, § 910], Oct. 28, 2000, 114 Stat. 1549, 1549A–71.)” 

From The OFAC (2017): 

“What is individual people-to-people travel, and how does the President’s announcement impact this travel authorization? 

Individual people-to-people travel is educational travel that: (i) does not involve academic study pursuant to a degree program; and (ii) does not take place under the auspices of an organization that is subject to U.S. jurisdiction that sponsors such exchanges to promote people-to-people contact. The President instructed Treasury to issue regulations that will end individual people-to-people travel. The announced changes do not take effect until the new regulations are issued. 

Will group people-to-people travel still be authorized? 

Yes. Group people-to-people travel is educational travel not involving academic study pursuant to a degree program that takes place under the auspices of an organization that is subject to U.S. jurisdiction that sponsors such exchanges to promote people-to-people contact. Travelers utilizing this travel authorization must: (i) maintain a full-time schedule of educational exchange activities that are intended to enhance contact with the Cuban people, support civil society in Cuba, or promote the Cuban people’s independence from Cuban authorities, and that will result in meaningful interaction between the traveler and individuals in Cuba; and (ii) be accompanied by an employee, consultant, or agent of the sponsoring organization, who will ensure that each traveler maintains a full-time schedule of educational exchange activities. In addition, the predominant portion of the activities engaged in by individual travelers must not be with prohibited officials of the Government of Cuba or prohibited members of the Cuban Communist Party (as defined in the regulations). Once OFAC issues the new regulations, new individual people-to-people travel will not be authorized. 

Will organizations subject to U.S. jurisdiction that sponsor exchanges to promote people-to-people contact be required to apply to OFAC for a specific license? 

No. To the extent that proposed travel falls within the scope of an existing general license, including group people-to-people educational travel, persons subject to U.S. jurisdiction may proceed with sponsoring such travel without applying to OFAC for a specific license. It is OFAC’s policy not to grant applications for a specific license authorizing transactions where a general license is applicable.” 

20. 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

LINK To Complete Analysis In PDF Format

U.S. Department Of State Updates Cuba Restricted List

“The Department of State is publishing an update to its List of Restricted Entities and Subentities Associated with Cuba (Cuba Restricted List) with which direct financial transactions are generally prohibited under the Cuban Assets Control Regulations (CACR). This Cuba Restricted List is also considered during review of license applications submitted to the Department of Commerce's Bureau of Industry and Security (BIS) pursuant to the Export Administration Regulations (EAR).“

The United States Department of State has updated the Cuba Restricted List and published the information in the Federal Register.

LINK

Updated CRL In PDF Format

The United States Department of State Internet site:

https://www.state.gov/e/eb/tfs/spi/cuba/

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U.S. Food/Ag Exports To Cuba Increase 3.5% In February; Total Up 13.6% Compared To 2018

ECONOMIC EYE ON CUBA©

April 2019

 

February 2019 Food/Ag Exports To Cuba Increase 3.5%- 1

Food/Ag Exports Up 13.6% Compared To 2018- 1

Cuba Ranked 52nd of 229 U.S. Food/Ag Export Markets- 2

February 2019 Healthcare Product Exports US$6,888.00- 2

February 2019 Humanitarian Donations US$581,585.00- 3

Obama Administration Initiatives Exports Continue To Increase- 3

U.S. Port Export Data- 16

FEBRUARY 2019 FOOD/AG EXPORTS TO CUBA INCREASE 3.5%- Exports of food products and agricultural commodities from the United States to the Republic of Cuba in February 2019 were US$27,048,523.00 compared to US$26,122,933.00 in February 2018 and US$18,145,564.00 in February 2017. 

United States exports from January 2019 through February 2019 were US$50,933,209.00 compared to US$44,803,278.00 from January 2018 through February 2019, representing an increase of 13.6%.

The export of artwork (paintings, drawings, engravings, sculptures, etc.) from the Republic of Cuba to the United States in February 2018 was US$503,387.00.

The report contains information on exports from the United States to the Republic of Cuba- products within the Trade Sanctions Reform and Export Enhancement Act (TSREEA) of 2000, Cuban Democracy Act (CDA) of 1992, and regulations implemented (1992 to present) for other products by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury and Bureau of Industry and Security (BIS) of the United States Department of Commerce.

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.

Complete Report To Be Published Soon

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Karadeniz Of Turkey Delivering Floating Power Plant To Cuba For 51-Month Contract

From The Republic of Cuba: 

Ankara, Apr 10 (Prensa Latina) The agreement between Cuba and the Turkish company Karadeniz Holding put a floating power plant on the way to the port of Mariel, diplomatic sources informed Prensa Latina this Wednesday. 

In the ceremony of departure of the ship, named Karadeniz Baris Bey, were present the technical director of the Electrical Union of Cuba (UNE), Lázaro Guerra; and the ambassador of Cuba in the country, Luis Amorós Núñez; and the president and vice-president of the owner company, Osman and Orhan Karadeniz.

In the ceremony of departure of the ship, named Karadeniz Baris Bey, were present the technical director of the Electrical Union of Cuba (UNE), Lázaro Guerra; and the ambassador of Cuba in the country, Luis Amorós Núñez; and the president and vice-president of the owner company, Osman and Orhan Karadeniz.

In this way, Cuba becomes part of the group of 9 countries that have floating facilities for the production of electricity, built by the Turkish group, and will be the first in Latin America to be able to participate in this innovative experience.

The ship departed from the port of Yalova, in the sea of Marmara, in western Turkey, where it was built in the Karmarine shipyards, and upon its arrival on the island the power plant will be connected to the grid to supply the National Electric System of Cuba for a period of 4 years. 

From The EEOC On 31 March 2019:

The February 2019 issue of The Turkish Perspective, distributed to passengers traveling on Istanbul, Turkey-based Turkish Airlines, included an article on page 20 about Istanbul, Turkey-based Karadeniz Holding and its “Karpowership” project in the Republic of Cuba.  

The title of the article was “The Floating Energy Hub Of The ‘One World’” Karadeniz Holding is taking Turkey’s technology to other countries with it’s global brand Karpowership.  As of 2018, it has become the company with the world’s largest floating power plant fleet with 15 energy ships with an installed capacity of 2,800 MW.”  

“Lastly, in October 2018, Karpowership expanded to South America and signed a contract with Energoimport, part of the Ministry of Energy of Cuba [Republic of Cuba government-operated Union Electrica], to provide electricity of 160 MW for 51-months.  This is a crucial step in the Power of Friendship project, as Karpowership continues to spread ability to access economical electricity around the world.”   

Unknowns: Is Energoimport paying the full cost of the service?  Why is the service contract for 51-months?  Why is the service contract for 160 MW?  Where will the vessel be docked in the Republic of Cuba?  

Response from Karadeniz Holding: “The details of our project are not fixed, still in the works, we will reach back out to you once our full project parameters are finalized.”  Karadeniz Holding had sought an employee to manage its operations in the Republic of Cuba.  

https://www.cubatrade.org/blog/2019/3/31/rbvjp97hn81sa5mgnqmg3m9t8yq75p

Four Years Later, What Did NY Governor Cuomo's 27-Hour Visit To Cuba Accomplish?

Four Years Later…. What Did New York State Companies Get For Governor Cuomo’s Estimated US$150,000.00+ 27-Hour Visit To Cuba?  

Was a US$10,000.000 “Advance” Trip Necessary If A Consultant Was Paid US$25,000.00? 

What’s Happened- Where’s The Yogurt And Milk And Healthcare Products? 

Why No Representatives From PANYNJ, NYSDAM? 

Governor Staff To Company Ratio Was More Than 2:1 

Why Has He Ignored Financial Institutions? 

Four years (1,461 days) ago, The Honorable Andrew Cuomo (D), Governor of the State of New York, embarked on a twenty-seven (27) hour quixotic journey to the Republic of Cuba with a foundation anchored far more upon his focus to be the “first” governor to visit the archipelago since the 17 December 2014 statements by President Barack Obama and President Raul Castro than by his role as the Chief Marketing Officer (CMO) of the State of New York.   

To date, there have been no published reports of exports of products to the Republic of Cuba from the seven (7) companies participating in the 20 April 2015 to 21 April 2015 visit. 

The Governor and his staff have embraced the “planting seeds” analogy… There are few seeds that do not create something within four years. 

The planning process and follow-up to the April 2015 visit was the third-least transparent of the twenty-one (21) governors who visited the Republic of Cuba since 1999.  The visits by West Virginia Governor Earl Ray Tomblin and Mississippi Governor Phil Bryant were the least transparent.

LINK To Complete Analysis

State Department Background Briefing For Foreign Press

Senior State Department Official

U.S. Policy Towards Cuba

Background 

Press Briefing

April 17, 2019

Moderator:  Good morning, and greetings to everyone from the U.S. Department of State Media Hub of the Americas in Miami, Florida.  I am Lydia Barraza, the Director of the Miami Media Hub and the Spanish-language spokesperson.  I would like to welcome all of our callers who have dialed in from the United States, Latin America, and Europe.  

Today we are joined by a Senior State Department Official who is speaking to us from Washington, DC to talk about U.S. policy towards Cuba.  We have received questions in advance from some participants and we’ll be asking those along with the live questions.  This call will be on background.  That means that any statement needs to be attributed to a Senior State Department Official.   

With that, I will turn it over to our speaker. 

Senior State Department Official:  Thanks very much, Lydia, and thanks to everyone for joining us.  I know I’ve had the opportunity to speak with some of you before, and I’m pleased to have the opportunity to do so again. 

As you likely know, Secretary Pompeo just announced his historic decision not to suspend Title III of the LIBERTAD Act.  This decision will become effective on May 2nd.  So first I’ll outline briefly what it means not to suspend Title III and the rationale behind the decision, and then I’m happy to take any questions. 

Some quick background, under Title III, Congress gave U.S. nationals with a claim to confiscated property in Cuba the right to file a lawsuit against the people or companies who were trafficking in that property.  But for more than 22 years, U.S. Presidents or Secretaries of State have suspended American’s rights under Title III which Congress authorized when both necessary to U.S. national interests and necessary to expedite a transition to democracy in Cuba. 

Now our decision on Title III is fundamentally related to the actions of the Cuban regime.  After suspending Title III for more than 22 years in a row we still have not seen Cuba transition to democracy.  In fact the opposite is true.  Cuba shows no sign that it will achieve democracy in the near future as the repressive political situation in Cuba has persisted.  And even under a new leader in Cuba, nothing has fundamentally changed.  The recent illegitimate constitutional referendum on February 24th simply entrenched the one-party rule in Cuba, and of course the human rights situation in Cuba remains abysmal. 

But not only has the situation in Cuba worsened, Cuba also actively undermines democracy in the region as a whole.  We’ve seen it export dictatorship, export torture, export arbitrary detentions, and export the harassment and intimidation of dissidents and opposition factors.  And in all of these actions Cuba continues to prop up the former Maduro regime which denies Venezuelans their right to self-determination. 

So under the Trump administration U.S. policy towards Cuba will reflect reality.  Twenty-two years of suspending Title III has failed to advance the goal set forth by the legislation in the first place.  Secretary Pompeo’s decision today recognizes the truth of that failure and enacts Congress’ common sense policy to starve the Cuban regime of the wealth it needs to hold onto power while simultaneously supporting the people of Cuba. 

So ending the suspension of Title III sends a strong signal against trafficking in these confiscated properties as well as opens a path for U.S. claimants whose property was confiscated by the Cuban regime to seek compensation. 

I’d just close by saying that starting with NSPM5, this administration has made clear its intent on holding the Cuban regime accountable for repression on the island and maligned activity overseas, while at the same time supporting the Cuban people.  And this administration will not allow those trafficking in confiscated property off the hook for their complicity in the regime’s malign behavior. 

With that, I am happy to take any questions that you may have. 

Moderator:  Thank you, Senior State Department Official.  We will now begin the question and answer portion of today’s call. 

The first question will go to the line of Lucia Leal from Efe News.

 Question:  Hi.  Good morning.  Thanks for doing this. 

You said in your earlier press conference that the vast majority of European companies investing in Cuba shouldn’t worry about this, but some experts say that 90 percent of the property that was nationalized in Cuba after the Revolution actually belongs to Cubans who left for the United States.  So if that’s true, this could potentially affect investment in the entire island.  Do you have any reason to believe that’s not true?  And if so, what guarantees do European companies have?  Thank you.

Senior State Department Official:  Thanks very much for the question. 

The purpose of the legislation as it was originally passed was to ensure that there was justice for those who had their property illegally confiscated by the Cuban regime.  So of course any European company, any American company, any company around the world that traffics in property that was confiscated by the regime does have the possibility of being hit by this legislation. 

So I wouldn’t be comfortable giving an assessment on how many companies that applies to, but the LIBERTAD Act also does include certain conditions and requirements to bring an action under Title III.  So in that instance we advise potential plaintiffs to consult with legal counsel. 

Moderator:  The next question was received in advance from Isabel Espronceda from the Office of Cuban Broadcasting in Miami.  The question is: 

Question:  European Union officials have warned Secretary of State Pompeo that they are planning to start a case against the U.S. at the World Trade Organization over this issue.  How is the United States preparing to respond? 

Senior State Department Official:  Thanks for that question as well. 

I would just start by stressing that our relationship with our partners in Europe is very critical to this administration.  We’ve consulted with them numerous times.  We’ve taken into account their considerations and their concerns.  I think its fair to say, and we’ve said this earlier, that we all agree on the broader strategy to promote democracy and human rights in Cuba.  There is some disagreement on the tactics to get there.   

And in terms of the next steps and whether the Europeans would be taking this to the World Trade Organization, I would just defer to them on their response and what their actions will be, and just simply reiterate that we here are implementing the laws passed by Congress. 

Moderator:  The following question comes from the question queue and the line of Andrei Sitov from TASS News Agency. 

Question:  -- you are working for the Cuban crisis, and [inaudible] what is your message to Moscow at this point? 

Senior State Department Official:  Sorry, what is the message to whom? 

Question:  What is the message to Russia, to Moscow?  Because as you know, Moscow has longstanding relationship, partnership with Cuba. 

Senior State Department Official:  Thank you for that question. 

With this legislation, with the implementation of this legislation we are not targeting any specific countries or specific companies.  The Secretary has made very clear that this is a decision not to waive, that has no exceptions.  So there is no direct targeting reflected here. 

And in terms of the broader message that we’re trying to communicate writ large, it is the administration’s continued focus on holding the Cuban regime accountable for human rights abuses, and again, simultaneously supporting the people of Cuba in their fight for democracy. 

Moderator:  The following question was submitted in advance from Norah Gamez from the Miami Herald and [Inaudible] Herald.  The question is: 

Question:  American companies on the island have been operating under a Treasury license.  Is that enough to protect them from lawsuits under Title III? 

Senior State Department Official:  Once again, there are no exceptions to the implementation of Title III.   

Moderator:  The next question comes from the line of Danieo Benites from Channel 41, America TV. 

Question:  Good morning, thanks for the opportunity. 

A few minutes ago the Secretary said Cuba is still [inaudible] .  At this point the administration are considering putting back the [inaudible].  Is the [inaudible] a sponsor of [inaudible]? 

Senior State Department Official:  As was stated in today’s remarks earlier, this administration is very committed and clear-eyed in its focus on bringing human rights to Cuba.  This decision is part of a long trajectory that started with NSPM5 and continues with the Cuba restricted list with this decision.  I think you will continue to see decisions and announcements from this administration up to and until a moment when we have democracy in Cuba. 

Moderator:  The following question was submitted in advance from Mario Vallejo from Univision Miami.  

Question:  What is the position of the government of the United States on the threats that the European Union is going to take action if the Helms-Burton Law is activated?  Similarly, we have another question received from Rocio Martinez Posada from Europa Press.  Are you going to activate the Helms-Burton Act with complete effects?  The European Union is considering legal action with the WTO.  Are you prepared for that?  How would you answer that? So further questions on this issue with the relationship with the EU. 

Senior State Department Official:  Thanks very much for that.  I think we’ve covered most of those questions.  The decision today is with respect to Title III of the Helms-Burton Act.  And in terms of the World Trade Organization, once again, we defer to the Europeans as to what their next steps will be. 

Moderator:  The following question comes from the question queue.  Nicolas Gutierrez, and Nicolas, could you also clarify the name of your outlet when you ask your question. 

Question:  Yes.  Thank you.   

The guidelines require a notice to be formally sent to the trafficker, and if the trafficker does not respond within 30 days then the damages to be sought under the Title III action becomes [inaudible] damages.  I just want to confirm that that is still the structure envisioned with this full implementation of Title III, with no exceptions, which we thank the administration for today. 

Senior State Department Official:  We would defer any specific questions like that to any legal counsel. 

Question:  Thank you. 

Moderator:  The next question comes from the question queue from the line of Anna Vargas from W Radio Colombia. 

Question:  Hi, thank you so much for your time. 

How far is the U.S. willing to go after implementing this Title III, but how far is it willing to go to pressure Cuba into limiting the island support towards the regime in Venezuela? 

Senior State Department Official:  Thank you for that question. 

We have already begun to undertake a number of actions when it comes to Cuba’s role in Venezuela.  As mentioned, this is based off of the Cuban regime’s activities, both inside Cuba as well as its actions inside Venezuela.   

So we have been very clear on our intent to ratchet up that pressure.  We’ve also been clear that we’re monitoring the impact, the recent suspensions had on bringing about meaningful reform in Cuba.  And we have seen none of those things. 

In addition, I would just say that this administration has already come out with a number of sanctions and designations specifically related to Cuba’s, the relationship between Cuba and Venezuela, so that again is an indication that we are willing to ratchet up the pressure with respect to Cuba’s foreign intervention in that country. 

Moderator:  The following question was submitted in advance from [Inaudible].  

Question:  Internationally there is a lot spoken about a hypothetical military intervention in Venezuela, but there is already Russian military personnel, Iranian support, and they say thousands of Cuban agents.  Is the military intervention already done?  How can it be possible to break the Cuban support to the Maduro regime?  Are there any extra steps against Cuba based on their support for the Maduro regime?   

Senior State Department Official:  Thank you for that question.  We would agree, there definitely is military intervention in Venezuela.  It’s not on the part of President Juan Guaido or the United States.  It is uniquely on the part of former regime leader Nicolas Maduro, the Cubans, the Russians, and the Iranians.  It is something that we do not accept.  The Lima Group recently announced that they do not accept this intervention.  It is against all of the principles of non-intervention that are held so dear to the people of the Western Hemisphere.  So we absolutely agree with that assertion. 

With respect to what can be done about it, this is something that the U.S. administration is fully committed to.  We have no tolerance or patience for the recent landing of Russian military personnel inside Venezuela.  We have no tolerance or patience for the way the Cuban regime treats the people of Venezuela, how it props up the Maduro regime, how it provides repression training and tactics to Sabine and others.  So accordingly we are and will continue to take action. 

We know that there are Cuban military and intelligence services present in Venezuela.  It is widely known both inside and outside of Venezuela that these officers are deeply entrenched in the Venezuela state.  They are the ones providing physical protection and other support directly to Maduro and to the inner circle.  And Maduro himself has made no secret of his partnership with the Cuban armed forces. 

In October 2018 Maduro celebrated the deployment of Cuban Special Forces units which were called the Black Wasps, to the Venezuelan-Colombia border for provocative military exercises, and we’ve seen publicly the provocative actions undertaken by the Russians in recent weeks as well. 

In terms of the next steps that we can do, as I’ve alluded to, on April 12th the United States sanctioned four companies for operating in the oil sector of the Venezuelan economy and identified nine vessels as blocked properties pursuant to an Executive Order.  Those actions were themselves a follow-on to previous designations and identifications announced earlier in the month which targeted entities and vessels known to be involved in the transportation of crude oil from Venezuela to Cuba. 

Again, all of these actions are aligned with our broader Venezuela strategy which seeks to hinder the former Maduro regime’s ability to line its pockets with the profits from natural resources that properly belong to the people of Venezuela but that Maduro himself steals.  And it’s also very consistent with our policy approach when it comes to Cuba, which is making sure that we are again holding the regime accountable for its abuses, both inside the country as well as its abuses outside the country. 

Moderator:  The next question comes from the line of Mercedes Gallego from El Correo. 

Question:  Good morning, thank you very much for this call. 

I have a couple of questions.  First, surely the State Department must have an estimate of the number of companies and countries that could be affected by this decision.  If so, I would like to hear it. 

And the second question is regarding the speech that Mr. John Bolton is having today in Miami.  I was wondering if there is any message he is going to convey that hasn’t been treated in this conference call.  

Finally, tomorrow it the anniversary of the protests in Nicaragua.  What is the position of the U.S. regarding Nicaragua since there has been a lot of actions regarding Venezuela and Cuba but not much except speeches regarding Nicaragua.  Is there anything in terms of sanctions or actions that we should expect? 

Thank you very much. 

Senior State Department Official:  Thank you for those questions.  

I’ll start with the first with respect to estimations.  What we do have is that the Foreign Claims Settlement Commission has certified nearly $2 billion worth of claims.  That doesn’t include possible interests.  The United States did an assessment, this was back in 1996, where we saw that there were over 6,000 certified claims.  However, this determination is not specifically focused only on certified claims, so we’ve assessed that there could be as many as 200,000 certified claims, or uncertified claims.  That’s why we can’t give a concrete assessment of exactly how many companies or how much money this would entail.  However it’s possible that it could be in the tens of billions of dollars. 

With respect to your second and third questions about Nicaragua and Ambassador Bolton’s upcoming speech, I can’t preview much that’s going to be coming up in the speech, but what I can say is that you can certainly anticipate additional actions taken against both the regimes in Cuba, Nicaragua and Venezuela. 

Moderator:  The next question comes from the line of Alejandra Molina from Telemundo 51. 

Question:  Good morning. 

My question is in regards to Title IV of the legislation.  Is it still suspended beyond May 2nd? 

Senior State Department Official:  Thank you for that question.

 Title IV was never suspended, and what I can say is that we are going to be ramping up investigations in that space as well. 

Moderator:  The next question comes from Tomas Regalado from Marti. 

Question:  Good morning to Lydia, good morning to the Senior Administration Official, and Alejandra Molina queued it up for me. 

Regarding Title III and its actions since the announcement that was done by the Secretary of State as well as the State Department this morning, and the Title IV part of it would say that whatever company is doing business with confiscated properties on the island would signify that those company heads or people that worked for those companies would not be allowed inside, into the United States and could also serve some penalties.  Is this part of this whole announcement this morning? Or is this something to come in the next coming days, as you just said maybe with the ramp up of Title IV as well? 

Senior State Department Official:  Thanks for that question. 

So I mentioned, we are continuing to make investigations into Title IV.  There is no real change there.  That’s something that’s been consistently true.  Title III is, of course, a historic change as its the first time that we will no longer suspend.

 Moderator:  The following question is from Isabel Espronceda from the Office of Cuban Broadcasting in Miami.  The question is: 

Question:  Absent the crisis in Venezuela, would the administration have implemented completely Title III of the Helms-Burton today? 

Senior State Department Official:  Thanks for that question. 

I would just say that once again this decision was predicated off of the Cuban regime’s actions.  That includes the Cuban regime’s actions in Cuba.  Of course the Cuban regime’s actions in Venezuela are also a part of that.  We can’t speculate as to if the facts on the ground were different what the Secretary’s determination may or may not be.  

Moderator:  The final question comes from Eva Gonzalez from ITS. 

Question:  What would be the impact of these new measures for the first American groups that were registered and included in the negotiations between Cuba and the United States about compensation during the Obama government? 

Senior State Department Official:  This would be open to them because that includes certified claims.  But once again, we are not making any exceptions. 

Moderator:  Okay.  We have completed the question and answer portion of this call.  Thank you very much to our Senior State Department Official. 

Do you have any final remarks for the journalists on the line? 

Senior State Department Official:  I would just reiterate our point that suspending Title III for over 22 years has failed to yield any real results, and so Secretary Pompeo’s decision today recognizes the truth of those failures which to us is a fundamental and historic change. 

Moderator:  Thank you Senior State Department Official.  We thank all of our journalists from across the United States, from Latin America and from Europe for joining this call.  This concludes the call.

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Statement From The White House- Cuba, Nicaragua & Venezuela Decisions

Office of the Press Secretary

FOR IMMEDIATE RELEASE 
April 17, 2019

PRESIDENT DONALD J. TRUMP IS TAKING A STAND FOR DEMOCRACY AND HUMAN RIGHTS IN THE WESTERN HEMISPHERE

“When Venezuela is free, and Cuba is free, and Nicaragua is free, this will become the first free hemisphere in all of human history” – President Donald J. Trump

HOLDING THE CUBAN DICTATORSHIP ACCOUNTABLE: President Donald J. Trump is holding the Cuban regime accountable for its repression of the Cuban people.

President Trump is enabling Americans to file lawsuits against persons and entities that traffic in property confiscated by the Cuban regime.

This marks the first time that these kind of claims have been available for Americans under the Helms-Burton Act.

Pursuant to Helms-Burton, the Administration is ensuring that anyone who has trafficked in property confiscated by Cuba from an American is not issued a visa to the United States. 

The Administration is adding five entities owned by the Cuban military to its restricted list, which now has over 215 entities, prohibiting Americans from transacting with them.

The Administration will be placing a cap on remittances to Cuba, prohibiting dollar transactions through third-party financial institutions, and restricting non-family travel.

President Trump is continuing his efforts to hold the Cuban regime accountable for its abuses and to reverse previous policies that enriched the regime.

The President announced a policy in 2017 aimed at diverting economic activity away from the Cuban military, enhancing travel restrictions, and reaffirming the embargo.

STANDING WITH THE PEOPLE OF VENEZUELA: President Trump is standing with the Venezuelan people and has imposed tough sanctions targeting the corrupt, former regime.

President Trump has issued multiple executive orders imposing sanctions to pressure the illegitimate former dictator Nicolas Maduro to accept a peaceful democratic transition.

These actions have targeted Maduro and his corrupt cronies for undermining Venezuela’s democracy and looting Venezuela’s resources.

The United States has designated over 150 individuals and entities connected to Venezuela for sanctions, cutting off a significant stream of resources to the Maduro regime

Among these entities are the state oil company PdVSA and the Central Bank.

President Trump was the first head of state to officially recognize Juan Guaido as the Interim

President of Venezuela. Leaders from over 50 nations have since joined him.

The United States has provided hundreds of tons of humanitarian aid for the Venezuelan people, who have suffered horribly under Maduro.

PROMOTING DEMOCRACY IN NICARAGUA: President Trump is committed to restoring liberty, democracy, and the rule of law in Nicaragua.

President Trump has targeted the Ortega regime and its supporters in Nicaragua who have engaged in corruption, human rights abuses, and the dismantling of democratic institutions. 

President Trump has sanctioned the Ortega regime’s financial resources, including BANCORP which acts as a slush fund for the Ortega regime. 

The Administration imposed sanctions on Laureano Ortega, the son of President Ortega, who has used the investment promotion agency ProNicaragua to corruptly enrich the regime. 

The President signed the Nicaragua Human Rights and Anticorruption Act in December 2018, targeting Nicaraguan officials associated with human rights violations. 

President Trump has called for early, free and fair elections for the Nicaraguan people.

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OFAC Will Eliminate U-Turn Transactions For Cuba

What Is A U-Turn Transaction?

“31 CFR § 515.584(d), commonly known as the “U-turn” general license, authorizes U.S. banking institutions to process transactions originating and terminating outside the United States provided that neither the originator nor the beneficiary is a person subject to U.S. jurisdiction. This means that transactions related to third-country commerce involving Cuba or Cuban nationals may be processed in U.S. dollars through the U.S. financial system via financial institutions located in the United States that serve as intermediary banks.  

Additional FAQs below clarify that foreign branches or subsidiaries of U.S. banking institutions may act as the originating or beneficiary banks for such transactions.  

The examples below illustrate some of the transactions and parties that may use the U-turn general license:

UPDATED NOVEMBER 8, 2017”

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Briefing With Assistant Secretary for Western Hemisphere Affairs Kimberly Breier

Special Briefing

Office of the Spokesperson

Assistant Secretary for Western Hemisphere Affairs Kimberly Breier

Washington, DC 

April 17, 2019

MS ORTAGUS: Good morning, everybody.

ASSISTANT SECRETARY BREIER: Good morning, everyone.

MS ORTAGUS: Let’s start with Matt.

QUESTION: Thank you. Ms. Secretary, I – even before the announcement just now, the Canadians, the Europeans, and – have come out against this and vowed to protect their companies – European, Canadian companies that could be sued under – with this decision. And I’m just wondering how much of a concern that is for the administration and whether there will be any exemptions at all. As you know, it’s not just Europe and Canada that have companies there. There’s some significant Israeli investment in Cuba. So I’m just wondering how you’re going to respond to their unhappiness, to put it mildly. Thank you.

ASSISTANT SECRETARY BREIER: Thank you. Thanks for the question, and good morning, everybody. I think the first thing to highlight is that obviously we’ve been in very deep and close contact with our allies in Europe and Canada and around the world as we consulted on this decision over the past several months as the Secretary had been shortening the period of suspension with his previous decisions. I think it’s clear if you look in the macro sense we have broad agreement with our allies in Europe and Canada and around the world on the policy objective, which is to promote democracy in Cuba and to free the Cuban people from the tyranny that they live under.

We are in broad agreement on this. Where we sometimes disagree is on the best way to achieve that. And I think at the end of the day, you’ll need to speak to the European Union and to our allies as to what response they will have, but I would like to emphasize that European companies that are operating in Cuba will have nothing to worry about if they are not operating on property that was stolen from Americans post-revolution. So I think the vast number of European companies will not have any concerns operating in Cuba.

MS ORTAGUS: Lesley.

QUESTION: Yep, good morning. How does – so how are you going to deal with the unhappy Europeans? They have now threatened to take you to the WTO. And so how are you going to deal with that? And to what extent do you put – how does this in any way tie to cutting off any funds to Maduro, or how does this enhance the anti-Maduro campaign?

ASSISTANT SECRETARY BREIER: Thanks for the question. First, I would defer you to the Europeans for their response. They certainly – we took a decision today based on our laws and our sovereign concerns for the property of American citizens and Europeans will respond as they see fit, and we will continue to work closely with them on this policy and on the policy in Venezuela.

I think it’s important to note that the decision today is part of the trajectory that started with the Trump Administration’s NSPM-5, which was announced in June of 2017. The objective of that was of course to support the Cuban people and to deny resources to the regime, and in particular to the security services in Cuba. So this is part of a trajectory. We have since published a Cuba restricted list. We have since amended the restricted list several times, and this is part of the trajectory of the administration trying to ensure that we support the people of Cuba and not the regime of Cuba.

And going forward, I would say the decision – the Secretary’s decision was about the actions of the Cuban regime; certainly, the actions of the Cuban regime in Venezuela are part of the context of the moment in which we are living. And we are very clear, and I think our allies – and this is something very important – the Lima Group, which is a group of 12 countries in the Western Hemisphere, for the very first time this week announced its concern over Cuba’s role in Caracas and made public its concern, and called on the Cuban regime to support the transition in Caracas. So I think it’s a very important moment in our relations in the hemisphere as well.

MS ORTAGUS: Rich.

QUESTION: How much – thank you. How much further is the administration considering going on its Cuba policy, whether there’s deliberations about the terrorism list or – I mean, is this a trajectory that you see continuing?

ASSISTANT SECRETARY BREIER: I think that’s – it’s a great question. I do put it in context of we’ve been over the past two years building off of NSPM-5 and looking at the various tools that we have to implement the President’s vision for how we would conduct this policy. I think you’re going to be seeing quite a bit more from us, and that this is the beginning of a new process on this that recognizes the reality on the ground in Cuba, which is in the past 20-plus years the underlying reality in Cuba has not changed for the average Cuban.

MS ORTAGUS: Nick.

QUESTION: Assistant Secretary, can you talk – just to follow up on Matt’s question on the issue of exemptions, are there any exemptions under the decision announced today specifically with any U.S. company that is doing business in Cuba?

ASSISTANT SECRETARY BREIER: There will not be any exemptions.

MS ORTAGUS: Great. Kim, do you have time for one more?

ASSISTANT SECRETARY BREIER: Sure.

MS ORTAGUS: Okay. Go ahead.

QUESTION: How much property are you talking about in terms of value, money and number of properties?

ASSISTANT SECRETARY BREIER: Let me flip to – so this is actually one of these questions where I can tell you what I know, and then what I don’t know is actually a larger – what we understand, the Foreign Claims Settlement Commission has – it’s an independent agency within the Department of Justice – has certified nearly 6,000 claims for property confiscated in Cuba with a total value of approximately 2 billion. With interest, we believe that value is somewhere in the $8 billion range. The most recent estimate we have from 1996, at the time that the law was enacted, that there could be up to 200,000 uncertified claims that were not certified by the Foreign Claims Settlement Commission, and that value could very easily be in the tens of billions of dollars. But it will depend on, of course, whether claimants decide to pursue legal cases or not.

QUESTION: Could I just ask you to clarify what you said? What was the 8 billion from --

ASSISTANT SECRETARY BREIER: The 8 billion is with interest.

QUESTION: With interest.

QUESTION: So 2 billion of the actual property or what it was worth when it was taken.

ASSISTANT SECRETARY BREIER: At the time it was – when it was confiscated, correct.

QUESTION: And then with interest that amounts to 8 billion.

ASSISTANT SECRETARY BREIER: Correct.

QUESTION: So the total then would be 8 billion.

ASSISTANT SECRETARY BREIER: Eight billion of certified claims, yes.

QUESTION: And then on the 200,000 uncertified claims, they haven’t been rejected, right? They

could still be certified?

ASSISTANT SECRETARY BREIER: They could still be if the window were open.

QUESTION: And that would be hundreds of billions.

ASSISTANT SECRETARY BREIER: That could be.

QUESTION: Thank you.

QUESTION: Tens.

QUESTION: Oh, tens.

ASSISTANT SECRETARY BREIER: Tens of billions. Yeah, sorry.

MS ORTAGUS: Thanks, Matt.

QUESTION: Thank you.

ASSISTANT SECRETARY BREIER: Thank you so much. Thanks, everybody.

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Secretary Of State Mike Pompeo Announces Implementation Of Title III Of Libertad Act

Remarks

Michael R. Pompeo 

Secretary of State

Washington, DC

 

April 17, 2019

SECRETARY POMPEO: Good morning, everyone. Welcome. I’m here to announce an important decision regarding the United States policy towards Cuba. 

In 1996, Congress passed the Cuban Liberty and Democratic Solidarity Act, also known as Libertad. Until Title III of that act, United States citizens who had their property confiscated by the Castro regime were given the right to file suit against those who traffic in such properties. 

But those citizens’ opportunities for justice have been put out of reach for more than two decades. For now more than 22 years, every president, every secretary of state has suspended Title III in the hope that doing so would put more pressure on the Cuban regime to transition to democracy. 

But just as we did in regard to moving our embassy to Jerusalem, the true capital of Israel, or designating the Islamic Revolutionary Guard Corps for what it is, a terrorist organization, the Trump administration recognizes reality. We see clearly that the regime’s repression of its own people and its unrepentant exportation of tyranny in the region has only gotten worse because dictators perceive appeasement as weakness, not strength. 

President Obama’s administration’s game of footsy with the Castros’ junta did not deter the regime from continuing to harass and oppress the heroic Ladies in White, a group of women dedicated to peacefully protesting the regime’s human rights abuses. 

More broadly, the regime continues to deprive its own people of the fundamental freedoms of speech, press, assembly, and association. Indeed, according to NGO reports, Cuban thugs made more than 2,800 arbitrary arrests in 2018 alone. In the run-up to the country’s recent sham constitutional referendum, one that enshrined the Communist Party as the only legal political party in Cuba, the regime harassed, beat, and detained leaders and – opposition leaders and activists. Three hundred and ten people were arbitrarily detained according to the Cuban Commission on Human Rights and National Reconciliation. 

Cuba’s behavior in the Western Hemisphere undermines the security and stability of countries throughout the region, which directly threatens United States national security interests. The Cuban regime has for years exported its tactics of intimidation, repression, and violence. They’ve exported this to Venezuela in direct support of the former Maduro regime. Cuban military intelligence and state security services today keep Maduro in power. 

Sadly, Cuba’s most prominent export these days is not cigars or rum; it’s oppression. Detente with the regime has failed. Cozying up to Cuban dictators will always be a black mark on this great nation’s long record of defending human rights. 

For these reasons, I’m announcing that the Trump administration will no longer suspend Title III. Effective May 2nd, the right thing to bring – the right to bring an action under Title III of the Libertad Act will be implemented in full. I have already informed Congress of my decision. 

Implementing Title III in full means a chance at justice for Cuban Americans who have long sought relief for Fidel Castro and his lackeys seizing property without compensation. For the first time, claimants will be able to bring lawsuits against persons trafficking in property that was confiscated by the Cuban regime. Any person or company doing business in Cuba should heed this announcement.

In addition to being newly vulnerable to lawsuits, they could be abetting the Cuban regime’s abuses of its own people. Those doing business in Cuba should fully investigate whether they are connected to property stolen in service of a failed communist experiment. I encourage our friends and allies alike to likewise follow our lead and stand with the Cuban people. 

As I said throughout my trip to South America this last week, the Trump administration is committed to helping grow the wave of democracy, good governments, and openness, which is steadily building throughout the entire Western Hemisphere. On my trip last week, I saw these positive changes firsthand, and told our friends and allies that we’re with them. We’re on the side of what’s right and what is just. 

Today we are holding the Cuban Government accountable for seizing American assets. We are helping those whom the regime has robbed get compensation for their rightful property. And we’re advancing human rights and democracy on behalf of the Cuban people. 

Now I will turn it over to Western Hemisphere Assistant Secretary Kim Breier to take some of your questions this morning. Thank you all.

https://www.state.gov/secretary/remarks/2019/04/291174.htm

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Trump Administration Expected To Permit Third Claims Program- Harmful To Current Certified Claimants

Trump Administration Expected To Permit Third Claims Program 

The Trump Administration is likely to authorize a Third Program by the United States Foreign Claims Settlement Commission (USFCSC) within the United States Department of Justice in an effort to increase the number of certified claims, thus reducing the expectation that the current 5,913 certified claimants will receive any compensation from the Republic of Cuba.  According to the United States Department of State, there may be approximately 200,000 potential plaintiffs whose claims are not certified.  The majority of the potential plaintiffs reside in the state of Florida and state of New Jersey. 

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.  The USFCSC permitted interest to be accrued in the amount of 6% per annum; with the current value of the 5,913 certified claims approximately US$8,521,866,156.95.  

The Republic of Cuba has acknowledged legitimacy of the 5,913 certified claims as they were for assets owned by individuals subject to United States jurisdiction.  Accepted international legal precedence dictate that citizens of a country whose assets were expropriated without compensation need seek restitution directly from their government; that is the avenue for non-certified claimants who were Republic of Cuba nationals at the time of expropriation. 

Adding to the number of certified claims would expectantly render any current or future government of the Republic of Cuba unable to provide the value of court judgements, which would in many instances include treble damages.  

For the 5,913 certified claimants, the currently-implemented strategy by the Trump Administration is not viewed as viable or efficient or serious because there is no focus- no analysis of whether announcements lessen the distance between the issue of the certified claims and a settlement of the certified claimants.  

Why is this a rational view for the certified claimants?  Because neither The White House (including the National Security Council) nor the United States Department of State have held a formal briefing, let alone briefings, for the two largest certified claimants (who represent 24% of the total value of the certified claims) or the thirty (30) largest certified claimants (who represent 56% of the total value of the certified claims).   

If the Trump Administration wants to assist the certified claimants, wouldn’t sound decision-making processes require formal input from the injured parties?  Yes, it would.  Why hasn’t there been a formal outreach to the largest certified claimants?  Because the Trump Administration does not want to resolve the issue of the certified claims; formal briefings would hold them accountable for action or inaction; no formal briefings, no formal accountability for what is done or left dangling for future presidents.    

The Trump Administration has thus far in its first twenty-seven (27) months focused upon commerce- the terms of trade for exports and imports.  Consistent with that theme would be for a singular focus upon negotiating compensation for the 5,913 certified claimants who have been awaiting fifty-eight (58) years for an occupant of the Oval Office to surgically engage in a bilateral negotiation with the Republic of Cuba. 

Foreign Claims Settlement Commission Programs 

“First  Program - Title V of the International Claims Settlement Act of 1949, as amended (the Act) authorized the Commission to consider claims of nationals of the United States against the Government of Cuba, based upon: (1) losses resulting from the nationalization, expropriation, intervention, or other taking of, or special measures directed against, property by that government; and (2) the disability or death of nationals of the United States resulting from actions taken by or under the authority of that government.  The program covered claims for losses which occurred on or after January 1, 1959, when the Castro regime took power. Ordinarily, the Commission would have held that its jurisdiction extended only to claims arising before October 16, 1964, the date the program was authorized.  In this case, however, the Commission reasoned that, because the statute was remedial, and because it had as one of its main purposes the collection, examination and preparation of evidence and information relating to the claims while it was still fresh and available, it would adjudicate any otherwise valid claim even if it arose after the filing deadline of January 1, 1967. 

When the program was authorized, there were no funds available with which to make payment on the claims, and the statute precluded Congress’ appropriation of funds for such payments.  As was the case with the First China Program, the statute provided only for the determination of the validity and amounts of such claims, and for the certification of the Commission’s findings to the Secretary of State for use in the future negotiation of a claims settlement agreement with the Government of Cuba.  The Cuban Claims Program was completed on July 6, 1972.  The Commission adjudicated a total of 8,816 claims in the program, of which it found 5,911 to be compensable.  The adjudicated total principal value of those claims was $1,851,057,358.00. 

Second Program - By letter dated July 15, 2005, Secretary of State Condoleezza Rice requested that the Commission conduct a Second Cuban Claims Program.  As specified in the Secretary’s letter, the purpose of the program was to effect the adjudication and certification by the Commission of claims for uncompensated taking of United States nationals’ property by the Cuban government that arose after May 1, 1967, and were not adjudicated in the Commission’s original Cuban Claims Program, described above.  The Commission published notice of the commencement of the claims program in the Federal Register on August 11, 2005 (70 F.R. 46890), in accordance with its usual procedures, and set a filing period of six months and a program length of twelve months, as specified in the Secretary’s letter.  The notice announced that the filing deadline was February 13, 2006, and that the program would end on August 11, 2006. 

During the six-month filing period, the Commission received a total of five claims, and denied three of them because they failed to meet the criteria set out in the Secretary of State’s referral letter.  The other two claims did meet those criteria, and after careful review the Commission issued Proposed Decisions certifying the two claims as valid in the total principal amounts of $51,128,926.95 and $16,000.00, respectively.  Neither of the claimants objected to these Proposed Decisions, and they were accordingly entered as final.  After the program’s end in August 2006, the Commission certified these two claims to the Secretary of State, for eventual use in negotiation of a lump-sum claims settlement agreement with the Cuban government.”  

https://www.justice.gov/fcsc/claims-against-cuba 

Certified Claims Background 

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 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 Analysis

Text of Letter From European Union To United States In Response To Implementation Of Provisions Of Libertad Act

10 April 2019 text of letter from The Honorable Federica Mogherini, High Representative of the European Union for Foreign Affairs and Security Policy since November 2014, to The Honorable Mike Pompeo, United States Secretary of State, relating to the implementation of provisions of the Cuban Liberty and Solidarity Act of 1996.

LINK 

Thoughts About Where Is The Relationship Between The Trump Administration And Diaz-Canel Administration

Thoughts About Where Is The Relationship Between The Trump Administration And Diaz-Canel Administration                                   

For the 5,913 certified claimants, the currently-implemented strategy by the Trump Administration is not viewed as viable or efficient or serious because there is no focus.  The result thus far suggests not a government strategy, but a child-like exercise- there is no core, no “what do we want and when do we want it and how do we get it” only a what-comes-next impulse; no review of whether announcements lessen the distance between the issue of the certified claims and a settlement for the certified claimants.   

Why is this a rational view of certified claimants?  Because neither The White House (including the National Security Council) nor the United States Department of State have held a formal briefing, let alone briefings, for the two largest certified claimants (who represent 24% of the total value of the certified claims) or the thirty (30) largest certified claimants (who represent 56% of the total value of the certified claims).   

If the Trump Administration wants to assist the certified claimants, wouldn’t sound decision-making processes require formal input from the injured parties?  Yes, it would.  Why hasn’t there been a formal outreach to the largest certified claimants?  Because the Trump Administration does not want to resolve the issue of the certified claims; formal briefings would hold them accountable for action or inaction; no formal briefings, no formal accountability for what is done or left dangling for future presidents.    

The Trump Administration has thus far in its first twenty-seven (27) months focused upon commerce- the terms of trade for exports and imports.  Consistent with that theme would be for a singular focus upon negotiating compensation for the 5,913 certified claimants who have been awaiting fifty-eight (58) years for an occupant of the Oval Office to surgically engage in a bilateral negotiation with the Republic of Cuba.  

With the DNA of the current occupant entwined with more than is normal the number of negotiating strands, why hasn’t he chosen, or been permitted by his staff to resolve a fifty-eight-year-old issue valued at US$1.9 billion?  Who is holding him back?  Why are they holding him back?  Who gains from the certified claims not gaining a resolution?  Some members of the United States Congress and political consultants who pronounce that an ongoing issue is better for use during a campaign than is a message that an issue has been resolved.  It seems that continuing to “fight” to resolve an issue has more value than basking in a glow of success.    

What will be the response from the United States Department of Justice if a claimant, certified or non-certified, sues in a United States District Court a United States company who is deemed to be using an asset in the Republic of Cuba upon which there is a certified or non-certified claim?  What if the plaintiff is located in Spain, France, United Kingdom, Japan or Canada?  Or, from China or Russia?   

The Trump Administration wants the Republic of Cuba to abandon its interests in Venezuela, abandon its interests in Nicaragua, alter its internal commercial, economic and political models, and compensate certified claimants and non-certified claimants.  The first requirement and second requirement are doable; the second requirements are unlikely in tandem; the third requirement is, thus far, neither accepted with seriousness by the certified claimants nor the non-certified claimants or by the Republic of Cuba.  Has the Trump Administration submitted a formal request to the Republic of Cuba for a meeting to establish a framework to negotiate a settlement for the 5.913 certified claims valued at US$1.9 billion?  No, it has not.  

Normally, a customer enters a casino and plays slot machines, craps, poker, or roulette and anticipates winning- they don't know how much they will win, but they expect to win.  For opponents of the Trump Administration's policies towards the Republic of Cuba, the reality is this: the customer enters a casino and hopes for the least unattractive outcome- they know they are going to lose, the only unknowns are how much they're going to lose and how quickly they're going to lose it. 

The distance between what the Obama Administration introduced relating to Republic of Cuba and what the Trump Administration has unleashed relating to the Republic of Cuba is not measured in degrees of change, it's measured by distance between time zones. 

If anyone is "surprised" with the breadth of decisions by the Trump Administration impacting the Republic of Cuba, they are heavily medicated and residing in a pre-November 2016 galaxy far, far away. 

The Trump Administration will not permit the United States Department of Agriculture (USDA) to implement MAP/FMD (Market Access Program/Foreign Market Development) funding for use in the Republic of Cuba that was authorized in the 2018 Farm Bill.  If the Trump Administration is blocking what is statutorily permitted, what was the intent of the United States Congress by an amendment co-authored by The Honorable Marco Rubio (R- Florida), a member of the United States Senate, then what advocate of sound mind would believe that any legislation currently in the United States Congress, particularly relating to providing for a lessening of financial constraints upon the Republic of Cuba, would have a "pathway forward."  

There are aged and not-so-aged officials in the Republic of Cuba who awake each morning to a telephone call; they hope either Leonid Brezhnev or Nikita Khrushchev is on the other end- giving credence that the last thirty years was just an awful nightmare and the U.S.S.R. remains intact and providing support to the Republic of Cuba.  

In the 1980's, a United States diplomat posted to what was then the United States Interests Section in Havana, Republic of Cuba, shared an observation about then leader H.E. Dr. Fidel Castro Ruz: "Mr. Castro says to the United States 'I'm prepared to let my people suffer; are you prepared to let my people suffer?'" 

Cruise lines are the navy, airlines are the air force, visitors are the army; the Obama Administration commenced the assault upon the Republic of Cuba.  The Trump Administration is pulling back upon some of those conventional forces and replacing them with asymmetrical special forces-like applications.   

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Two Professors In Canada Are Not Correct: Obama Administration Did NOT Negotiate Certified Claims

The following statement is not true.  The Obama Administration mentioned the issue of claims, not only certified claims, during bilateral meetings with the Republic of Cuba a published total of three (3) times in eight (8) years.   

The Obama Administration and then-Castro Administration confirmed that none of the three mentions were to be characterized as negotiations. 

The Globe and Mail

Toronto, Canada

15 April 2019 

OPINION

Where is Canada’s backbone in standing up to the U.S. on Cuba?

STEPHEN KIMBER AND JOHN KIRK 

John Kirk is a professor of Latin American studies at Dalhousie University, where he has worked since 1978. He is the author or co-editor of 18 books on Latin America. 

Stephen Kimber is a professor of journalism at the University of King’s College and the author of nine books, including most recently, the award-winning What Lies Across the Water: The Real Story of the Cuban Five. 

“Under Mr. Obama, even the United States, which had previously rejected Cuban compensation offers, began to negotiate certified claims.”

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Trump Administration Expands Efforts To Disrupt Oil Shipments From Venezuela To Cuba

Press Releases: The United States Takes Action To End Cuba's Malign Influence on Venezuela

04/12/2019 04:02 PM EDT  

Media Note

Office of the Spokesperson

Washington, DC

April 12, 2019  

Today, the United States sanctioned four companies for operating in the oil sector of the Venezuelan economy and identified nine vessels as blocked property, pursuant to Executive Order 13850. These actions are a follow-on to the designations announced on April 5, which targeted entities and vessels known to be involved in the transportation of crude oil from Venezuela to Cuba.  

Venezuela’s ongoing democratic transition is being impeded by malign actors that continue to prop up the former Maduro regime. Venezuelans lack access to basic necessities, such as water, electricity and adequate health care, while Maduro and his cronies continue to enrich themselves and strip Venezuela of its natural assets.  

These actions seek to hinder the regime’s further theft and the predatory influence of Cuba, which takes Venezuela’s oil and pays the regime with security and intelligence forces to keep Nicolas Maduro in power. 

The United States will continue to do all we can to stand up against Cuba’s support for the former Maduro regime and its hostility to the Venezuelan people’s aspiration to a peaceful, prosperous, democratic future. Cuba’s intervention only seeks to delay the inevitable—the peaceful transition back to freedom and democracy that is underway in Venezuela, led by the Venezuelan people, Interim President Juan Guaido, and the National Assembly.

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Ambassador John Bolton May Announce New (And Renewed) Measures Impacting Cuba

Ambassador Bolton May Speak On 17 April 2019

What’s Next For Cuba? Five Targets

Return To The Terrorism List

Increase Travel Advisory Level

Use 7031(c) To Designate Cubans In Venezuela

Reinstate Per Diem Limits For Travelers

Adding To SDN List

Require U.S. Companies To Directly Pay Cuban Employees 

The Honorable John R. Bolton, Assistant to the President for National Security Affairs, is rumored to planning to deliver remarks on Wednesday, 17 April 2019, at a yet-to-be-confirmed location, but likely within the state of Florida. 

The remarks would be focused upon the Republic of Cuba and Venezuela; with announcements of commercial, economic and political decisions designed directly and indirectly to influence the Republic of Cuba.   

If the remarks are delivered, ironic that 17 April 2019 is the fifty-eighth (58th) anniversary of the military attack at the Bay of Pigs (Bahia de Cochinos) in the Republic of Cuba.  The symbolism of a speech by Ambassador Bolton on this date will expectantly result in the interpretation- tried and failed once does not mean never try again. 

1 May 2019 is the expiration of the most recent suspension (3 April 2019) of Title III of the Cuban Liberty and Democratic Solidarity Act (Libertad Act) of 1996.  Title III is a provision within the statute authorizing the filing of lawsuits against entities using an asset upon which there is a certified claim for which the claimant has not received compensation.  A notification to the United States Congress is expected by 17 April 2019 as to what the Trump Administration will decide to implement on 1 May 2019.  LINK: https://www.cubatrade.org/blog/2019/4/3/trump-administration-issues-another-extension-two-weeks-could-negotiations-with-eu-and-others-be-underway 

What might the Trump Administration do? 

Return Cuba To Terrorism List 

The Trump Administration continues to consider re-designating the Republic of Cuba using as evidence the presence in Venezuela of representatives of the Revolutionary Armed Forces of the Republic of Cuba (FAR) and Ministry of Interior of the Republic of Cuba (MININT); the continued relationship by the Republic of Cuba with the Revolutionary Armed Forces of Colombia-People’s Army (FARC) and National Liberation Army (ELN) in Colombia; the continued commercial, economic and political relationship with Iran, North Korea and Syria; and support for Nicaragua.  

“Countries determined by the Secretary of State to have repeatedly provided support for acts of international terrorism are designated pursuant to three laws: section 6(j) of the Export Administration Act, section 40 of the Arms Export Control Act, and section 620A of the Foreign Assistance Act. Taken together, the four main categories of sanctions resulting from designation under these authorities include restrictions on U.S. foreign assistance; a ban on defense exports and sales; certain controls over exports of dual use items; and miscellaneous financial and other restrictions.  

Designation under the above-referenced authorities also implicates other sanctions laws that penalize persons and countries engaging in certain trade with state sponsors. Currently there are four countries designated under these authorities: the Democratic People's Republic of Korea (North Korea), Iran, Sudan, and Syria.”  LINK: https://www.state.gov/j/ct/list/c14151.htm 

Re-designating the Republic of Cuba would impact authorized financial transactions as United States-based and non-United States-based financial institutions would avoid transactions involving the Republic of Cuba. 

Increase Travel Advisory Level 

The Trump Administration continues to consider shifting the Travel Advisory Level for the Republic of Cuba from Level 2 (exercise increased caution) to Level Three (reconsider travel), but perhaps Level 4 (do not travel).  Level 1 (exercise normal precautions).  Venezuela is Level 4.   

Shifting to Level 4 could result in United States-based insurance companies who provide coverage for airlines, cruise lines, tour operators and travel agents to constrict or eliminate coverage.  The result would be disruptive for all travelers, including those of Cuban descent residing in the United States (primarily in the state of Florida and state of New Jersey) who visit family and friends on a regular basis.  United States-based insurance companies also provide coverage for non-United States-based airlines, cruise lines, hotels, and travel-related entities; thus, this revenue may be eliminated as impacted entities seek insurance coverage from other sources. 

If the Trump Administration returned the Republic of Cuba to the Terrorism List, the United States Department of State would be expected to shift the Travel Advisory Level for the Republic of Cuba from Level 2 to at least Level Three (reconsider travel), but perhaps Level 4.   

Increasing the Travel Advisory Level for the Republic of Cuba would impact authorized financial transactions as United States-based and non-United States-based financial institutions would avoid transactions involving the Republic of Cuba. 

LINK: https://travel.state.gov/content/travel/en/international-travel/International-Travel-Country-Information-Pages/Cuba.html   

Use 7031(c) To Designate Cubans In Venezuela 

The United States Department of State continues to consider designating Republic of Cuba nationals residing/working/deployed in Venezuela who are deemed significant to the role of the Republic of Cuba in providing support to the Nicolas Maduro Administration in Venezuela under Section 7031(c) of the Department of State, Foreign Operations, and Related Programs Appropriations Act of 2019 (Section 7031(c)).  A focus would be towards members of the Revolutionary Armed Forces of the Republic of Cuba (FAR) and Ministry of Interior of the Republic of Cuba (MININT). 

“Section 7031(c) provides that, in cases where the Secretary of State has credible information that officials of foreign governments have been involved in significant corruption or gross violations of human rights, those individuals and their immediate family members are ineligible for entry into the United States. The law requires the Secretary of State to publicly or privately designate such officials and their immediate family members.” 

Reinstating Per Diem Rates For Travelers To Cuba 

The Trump Administration may return to [George W.] Bush Administration policy of requiring individuals subject to United States jurisdiction visiting the Republic of Cuba to remain within daily expenditure limitations maintained by the Office of Allowances within the Office of Operations of the Bureau of Administration of the Under Secretary of Management of the United States Department of State in Washington, D.C. 

One important question will be whether the Trump Administration requires travelers to use the Per Diem expenditure valuations for direct expenditures and indirect expenditures.  Including indirect expenditures would expectantly result in a spending decrease by travelers subject to United States jurisdiction to entities included in the Cuba Restricted List (CRL) [https://www.cubatrade.org/blog/2019/3/12/us-department-of-state-publishes-new-cuba-restricted-list] maintained by the United States Department of State.  The CRL includes distinctions between direct payments and indirect payments to Republic of Cuba government-operated entities affiliated with the Revolutionary Armed Forces of the Republic of Cuba (FAR). 

Individual and group travelers arriving by aircraft and cruise ship to the Republic of Cuba can easily calculate their Per Diem.  However, for spending limits to be deemed impactful, the Trump Administration will need to create compliance criteria to be implemented by U.S. Immigration and Customs Enforcement (ICE) which reports to the U.S. Department of Homeland Security (DHS).  January 2019 Per Diem Rates LINK: https://aoprals.state.gov/web920/per_diem.asp   

Adding To SDN List 

The Trump Administration continues to consider adding Republic of Cuba government-operated entities and Republic of Cuba nationals to the list of Specially Designated Nationals maintained by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury. 

“As part of its enforcement efforts, OFAC publishes a list of individuals and companies owned or controlled by, or acting for or on behalf of, targeted countries. It also lists individuals, groups, and entities, such as terrorists and narcotics traffickers designated under programs that are not country-specific. Collectively, such individuals and companies are called "Specially Designated Nationals" or "SDNs." Their assets are blocked and U.S. persons are generally prohibited from dealing with them.”  LINK: https://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx

Require U.S. Companies To Make Direct Payments To Cuban Employees

The Trump Administration continues to consider requiring United States companies operating in the Republic of Cuba under a general license or specific license from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury who directly or indirectly employ Republic of Cuba nationals in the Republic of Cuba to make salary payments in convertible currency directly to those individuals rather than through a Republic of Cuba government-operated entity. 

The primary reasoning is if the companies earn convertible currency, their employees should earn convertible currency.  Among United States companies with a presence (some have offices) in the Republic of Cuba who could be impacted:  

ABC Charters (Miami, Florida); American Airlines (Chicago, Illinois); Carnival Cruise Lines (Miami, Florida); Cuba Travel Services (Cypress, California); Delta Air Lines (Atlanta, Georgia); JetBlue Airways (Long Island City, New York); John Deere (Peoria, Illinois); Marriott International (Bethesda, Maryland); Norwegian Cruise Lines (Miami, Florida); RIMCO (San Juan, Puerto Rico; Caterpillar distributor); Royal Caribbean Cruise Lines (Miami, Florida); Southwest Airlines (Dallas, Texas) and United Airlines (Chicago, Illinois). 

The government of the Republic of Cuba has experience with not directly first receiving payments to Republic of Cuba nationals.  Owners of properties in the Republic of Cuba registered with San Francisco, California-based Airbnb receive U.S. Dollars, Euros, CUCs (Convertible Pesos) and other currencies directly, without the government of the Republic of Cuba first receiving the funds and then distributing the funds to the owners of the properties, although the government of the Republic of Cuba has considered implementing a first-capture mechanism.   

There is confidence by advocates for the policy change that they can withstand any pressure from United States companies with a presence in the Republic of Cuba.  According to one advocate, “If we can shift even one company to making payments directly, that could permit other governments to pressure their companies operating in Cuba to do the same; a desired result would be squeezing out the military from what should be a civilian-led economy to empowering Cuban employees to demand salaries in the same currencies earned by the companies.” 

Another advocate added, “American, United, Jet Blue, Delta, Caterpillar, John Deere, Marriott and the cruise lines all receive U.S. Dollars or other convertible currencies as revenue.  Why shouldn’t Cubans working as ticket agents, baggage handlers, salesmen and saleswomen, service technicians, tour guides, tour bus drivers, housekeepers and front desk workers also earn U.S. Dollars or convertible currencies… and be paid directly by those multinational companies?  Isn’t that setting a better example?  Wouldn’t the companies benefit by a better-paid workforce and a happier workforce?”  

United States companies will submit they are abiding by the laws and regulations of the government of the Republic of Cuba, contracting with Republic of Cuba government-operated entities for the employment of Republic of Cuba nationals.  They will submit they make fair-market payments in convertible currency for the monthly salaries of Republic of Cuba nationals they directly and/or indirectly employ.  They will submit they have received licenses from the OFAC and/or the Bureau of Industry and Security (BIS) of the United States Department of Commerce and/or approval from the Office of the Legal Advisor (OLA) at the United States Department of State to engage in their respective operations- and have done so under the Obama Administration and thus far under the Trump Administration. 

NOTE: Licenses from the OFAC and BIS and approval from the OLA may be reviewed and altered at any time if the license is deemed no longer consistent with United States policy.   

Currently, companies with operations in the Republic of Cuba who employ a Republic of Cuba national generally make payment to a Republic of Cuba government-operated entity in convertible currency and the Republic of Cuba national receives a non-convertible Peso. 

An example: a company wants to employ a Republic of Cuba national and the position would pay US$500.00 per month, the company would pay a Republic of Cuba government-operated entity US$500.00 (or 500.00 CUCs- Convertible Pesos with or without a 10% currency exchange fee implemented in 2004) which would then pay the Republic of Cuba national 1,000 Pesos.  One CUC is worth approximately 25 Pesos, so 500 Pesos is worth approximately US$20.00.  The government of the Republic of Cuba retains approximately US$480.00.  Within the Mariel Special Economic Development Zone (ZED Mariel) companies have increased salary flexibility; the US$500.00 per month could equate to 5,000 Pesos to the Republic of Cuba national.  Joint Ventures also have increased salary flexibility. 

Bethesda, Maryland-based Marriott International would be the most impacted company as it has a management contract (since 2016) for the 186-room Four Points By Sheraton Havana.   

The property is owned by Republic of Cuba government-operated Gaviota which is a subsidiary of the Enterprise Administration Group (GAESA) which is controlled by the Revolutionary Armed Forces of the Republic of Cuba (FAR).  GAESA has a substantial role throughout the economy of the Republic of Cuba with a specific focus upon hospitality, transportation and infrastructure. 

Marriott International previously announced that the company would commence in December 2019 (delayed without reason from December 2016) management of the 83-room Hotel Inglaterra, also owned by Gaviota.  LINK: https://www.cubatrade.org/blog/2017/5/10/starwoodmarriott-now-reporting-36-month-delay-to-manage-hotel-inglaterra-no-reasons-provided?rq=Marriott 

The Four Points By Sheraton Havana reportedly has approximately 300 employees who are Republic of Cuba nationals.  The Hotel Inglaterra reportedly has approximately 150 employees who are Republic of Cuba nationals. 

United States airlines would also be substantially impacted as they contract for ticket agents (through Republic of Cuba government-operated Havanatur) at five (5) ticket offices within the city of Havana, Republic of Cuba and gate agents, ground handlers, and aircraft maintenance personnel at airports throughout the Republic of Cuba through Republic of Cuba government-operated Empresa Cubana de Aeropuertos y Servicios Aeronauticos (ECASA). 

United States cruise lines would be impacted as they contract for ground transportation and tour guides with Havanatur and Gaviota for hundreds of thousands of passengers who visit the Republic of Cuba.  

Peoria, Illinois-based Caterpillar Inc., dealer San Juan, Puerto Rico-based RIMCO has a distribution center located in ZED Mariel, so Republic of Cuba nationals employed by the company may have a higher monthly salary than Republic of Cuba nationals employed by companies outside of the ZED Mariel. 

Boston, Massachusetts-based General Electric continues to manage a power generation equipment delivery contract commenced in 2017 under a license from the OFAC.  Thus far, equipment valued in excess of US$21 million has been delivered to the Republic of Cuba.

LINK To Complete 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).

LINK To Blog Post

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Is USDA Defying Congress (And Senator Rubio) By Preventing Farm Bill MAP/FMD Funding? 

Is USDA Defying Congress (And Senator Rubio) By Preventing Farm Bill MAP/FMD Funding? 

Four Months After Farm Bill Signed Into Law, Not One Request To Use US$201 Million In MAP/FMD Funds. 

If MAP/FMD Funding Was So Important, Why Has There Not Been A Request To Use It? 

Advocates Have A Credibility Problem- 109 Days Without A Request; Who Is To Blame? 

Was The “Victory” Unalloyed? 

The Honorable Sonny Perdue, United States Secretary of Agriculture, is prohibiting applicants who successfully submitted applications for United States Department of Agriculture (USDA) Fiscal Year 2019 MAP (Market Access Program) and FMD (Foreign Market Development) funding requests from redirecting funding from other countries to the Republic of Cuba.   

Why?  The USDA confirms that it can permit such requests.  Total MAP/FMD Fiscal Year 2019 funding is US$201,697,191.00 compared to US$200,287,394.00 in Fiscal Year 2018.   

According the USDA no request has been made to use the Republic of Cuba provision in H.R. 2, the five-year Agriculture Improvement Act, known as the “Farm Bill” signed into law on 20 December 2018 by The Honorable Donald J. Trump, President of the United States.   

Not one request in more than 109 days.  Advocates maintained that the Farm Bill provision was critical to “laying the groundwork” for increasing exports of agricultural commodities and food products to the Republic of Cuba.  Statements from members of Congress included: “… an important first step to regaining our presence in Cuba.”  Yet, not one request to the USDA.     

Most observers reasonably concluded that legislative advocates- within the United States Congress and organizations located in Washington DC and located outside of the beltway would have prominently teed-up at least one high-profile applicant to request funding on 21 December 2018- regardless of whether the USDA was expected to approve including the Republic of Cuba in Fiscal Year 2019 allocations.  Unfortunately, for some advocates having the USDA deny the allocation would be of greater value than the USDA approving the allocation- another avenue to seek funding for advocacy.   Why hasn’t anyone said anything?

Not one of the eighty-seven (87) applicants who were approved for Fiscal Year 2019 MAP/FMD funding have sought to use any of the US$200 million in funding in the Republic of Cuba?  Not one. 

The most significant impact of not having any requests to use the Republic of Cuba provision in the Farm Bill is what the lack of interest foretells for legislative efforts currently in the United States Congress to rescind prohibitions upon the provision of payment terms for agricultural commodity and food product exports from the United States to the Republic of Cuba.  To remind, there has yet to be a United States agricultural commodity exporter or United States financial institution who has publicly stated that they would today provide payment terms and/or financing and what those payment terms and financing terms would be for Republic of Cuba government-operated entities.  That absence- which has remained consistent since 2000, is a massive legislative hurdle.  Lacking pressure, why would the Trump Administration do anything that it does not want to do? 

From USDA 

On 3 August 2018, the USDA wrote to the USCTEC: “Per the 2019 MAP NOFA (Federal Register Notices attached), All applications must be received by 5 p.m. Eastern Daylight Time, on Friday, June 8, 2018.  Applications received after this date will not be considered. FAS anticipates that the initial funding selections will be made by the end of October 2018, with the initial award dates estimated to be by the end of December 2018.  Hence, groups are not able to submit additional applications. Groups can request to make changes to their Unified Export Strategy in order to reallocate funding from one approved project to another. These modifications are routine and groups work with their FAS Marketing Specialist to submit changes for approval.” 

On 20 March 2019, the USDA wrote to the USCTEC: “Applications for FY19 MAP/FMD funds were made in 2018 when Cuba was not an eligible country. USDA is not allowing those funds to shift to Cuba.  USDA will consider proposals for FY20 MAP/FMD funds for Cuba projects.” 

On 5 April 2019, the USDA wrote to the USCTEC: “For FY 2019, FMD and MAP are being operated according to the NOFAs [Notice of Funding Availability] published in May 2018, at which time Cuba was ineligible. At this time FAS has no plans, nor has it received any requests, to authorize the redirection of already allocated funds to Cuba this fiscal year. For FY 2020, the NOFAs are currently under development and FAS program managers are working to ensure that the funding solicitations reflect the intent of Congress as expressed in the Farm Bill vis-à-vis Cuba.” 

USDA Background 

In 2018, the Foreign Agricultural Service (FAS) of the USDA reported none of the applications for Fiscal Year 2019 submitted by the 8 June 2018 deadline included funding requests for MAP/FMD to be allocated for use in the Republic of Cuba. 

That none of the applications included the Republic of Cuba was not unexpected as the Republic of Cuba was not eligible for MAP/FMD funding and applicants may not have known on 8 June 2018 that an amendment would be introduced in the United States Senate on 13 June 2018 to authorize MAP/FMD funds to be available for the Republic of Cuba and whether that amendment would become a statute and when it would become a statute: 

https://www.heitkamp.senate.gov/public/index.cfm/2018/6/heitkamp-boozman-introduce-2018-farm-bill-amendment-to-boost-u-s-ag-exports-authorize-trade-promotion-funds-to-be-used-in-cuba 

According to the USDA in 2018, if the Republic of Cuba was included among Fiscal Year 2019 eligible countries for MAP/FMD funding, applications submitted by 8 June 2018 would be authorized by the USDA to be amended.  The FMD Year began in October 2018 and the MAP Year began in January 2019.

According to the USDA in 2018, absent changes to the then-existing USDA application process by Secretary Perdue, applications submitted by 8 June 2018 would have only been permitted to be amended- not to seek additional USDA funding, but reallocate previously-submitted funding requests from one country to another country, in this instance the Republic of Cuba.   

The USDA reported in 2018 that it recognized there were unplanned events that impact an applicant’s ability to use previously-requested or previously-authorized MAP/FMD funds.   

For example, the People’s Republic of China and members of the Brussels, Belgium-based European Union (EU) implemented tariffs on certain food products and agricultural commodities after 8 June 2018, so an applicant might not want or might have been precluded from using requested or allocated funds towards activities in the People’s Republic of China and EU; so, the applicant might have wanted to submit a request to the USDA to reallocate all or a portion of funds towards use within another country.  

According to the USDA in 2018, there may also have been impacting events that remained unknown through 2018 and became known in 2019, after the USDA had allocated all MAP/FMD funds to applicants, so then an entity having received a MAP/FMD funding allocation could request a reallocation from the USDA.   

The USDA does not provide any payments to selected applicants in advance of the applicant making disbursements.  The USDA provides payment upon receipt of an invoice from the applicant.  The invoices are audited by the USDA and a claw back of payments is permitted.  Any Republic of Cuba-related invoice is likely to receive additional scrutiny due to an amendment to the Farm Bill submitted by The Honorable Marco Rubio (R- Florida), a member of the United States Senate.  

What Is FMD & MAP? 

https://www.fas.usda.gov/programs/market-access-program-map/map-funding-allocations-fy-2019 

For Fiscal Year 2019, the USDA allocated US$174,600,000.00 in taxpayer funds to sixty-five (65) participants under the MAP, an average of US$2,686,153.00 per distribution.  For Fiscal Year 2018, the USDA allocated US$173,802,447.00 in taxpayer funds to sixty-six (66) participants under the MAP, an average of US$2,633,370.00 per distribution.   

MAP: “Through the Market Access Program (MAP), FAS partners with U.S. agricultural trade associations, cooperatives, state regional trade groups and small businesses to share the costs of overseas marketing and promotional activities that help build commercial export markets for U.S. agricultural products and commodities. 

MAP reaches virtually every corner of the globe, helping to build markets for a wide variety U.S. farm and food products. FAS provides cost-share assistance to eligible U.S. organizations for activities such as consumer advertising, public relations, point-of-sale demonstrations, participation in trade fairs and exhibits, market research and technical assistance. When MAP funds are used for generic marketing and promotion, participants must contribute a minimum 10-percent match. For promotion of branded products, a dollar-for-dollar match is required. 

Each year, FAS announces the MAP application period and criteria in the Federal Register. Applicants apply for MAP through the Unified Export Strategy (UES) process, which allows eligible organizations to request funding from multiple USDA market development programs through a single, strategically coordinated proposal. FAS reviews the proposals and awards funds to applicants that demonstrate the potential for effective performance based on a clear, long-term strategic plan.” 

https://www.fas.usda.gov/programs/foreign-market-development-program-fmd/fmd-funding-allocations-fy-2019 

For Fiscal Year 2019, the USDA allocated US$27,097,191.00 in taxpayer funds to twenty-two (22) cooperators under FMD, an average of US$1,231,690.00 per distribution.  For Fiscal Year 2018, the USDA allocated US$26,484,947.00 in taxpayer funds to twenty-three (23) cooperators under the FMD, an average of US$1,021,084.00 per distribution.   

FMD: “The Foreign Market Development (FMD) Program, also known as the Cooperator Program, helps create, expand and maintain long-term export markets for U.S. agricultural products. Under the program, FAS partners with U.S. agricultural producers and processors, who are represented by non-profit commodity or trade associations called “cooperators,” to promote U.S. commodities overseas. 

The FMD program focuses on generic promotion of U.S. commodities, rather than consumer-oriented promotion of branded products. Preference is given to organizations that represent an entire industry or are nationwide in membership and scope. 

FMD-funded projects generally address long-term opportunities to reduce foreign import constraints or expand export growth opportunities. For example, this might include efforts to: reduce infrastructural or historical market impediments, improve processing capabilities, modify codes and standards, or identify new markets or new uses for the agricultural commodity or product. 

Each year, FAS announces the FMD application period and criteria in the Federal Register. Organizations apply for the FMD program through the Unified Export Strategy (UES) process, which allows applicants to request funding from multiple USDA market development programs through a single, strategically coordinated proposal. FAS reviews the proposals and awards funds to applicants that demonstrate the potential for effective performance based on a clear, long-term strategic plan.”  

Value Of MAP/FMD 

For the United States business community, the MAP/FMD amendment to the Farm Bill was significant, but more likely to provide greater financial value to the government of the Republic of Cuba than to United States food product and agricultural commodity exporters using provisions of the Trade Sanctions Reform and Export Enhancement Act (TSREEA) of 2000. 

The likelihood of a value to United States taxpayers, as members of the United States Senate have posited, of US$28.00 returned for every US$1.00 in expenditures of MAP/FMD throughout the world, and now including the Republic of Cuba, will be challenging to measure- but it will be important to measure and the USDA should focus upon the cost-benefit analysis. 

Reporting Year

U.S. Dollar Value Of TSREEA-Authorized Exports To Cuba

Export Market Ranking

2019- US$23,884,686.00- 54th (of 229)

2018- US$224,910,413.00- 60th (of 226)

2017- US$268,800,005.00- 52nd (of 229)

2016- US$232,064,645.00- 55th (of 232)

2015- US$170,551,329.00- 60th (of 230)

2014- US$291,258,881.00- 49th (of 223)

2013- US$348,747,293.00- 46th (of 224)

2012- US$457,318,357.00- 43rd (of 229)

2011- US$358,457,389.00- 50th (of 232)

2010- US$366,467,782.00- 45th (of 228)

2009- US$528,482,955.00- 36th (of 232)

2008- US$710,086,323.00- 29th (of 228)

2007- US$437,564,824.00- 37th (of 230)

2006- US$340,433,442.00- 34th (of 227)

2005- US$350,218,040.00- 30th (of 228)

2004- US$391,990,382.00- 25th (of 228)

2003- US$256,901,471.00- 35th (of 219)

2002- US$138,634,784.00- 50th (of 226)

2001- US$4,318,906.00 (December- 1st sales under TSREEA)- 144th (of 226)

Total Sales- US$5,926,232,023.00 

History Of The Legislative Provision 

On 28 June 2018, the United States Senate, by a vote of 86-11, approved the S. 3042, the Agriculture Improvement Act of 2018.  On 21 June 2018, the United States House of Representatives passed H.R. 2, the 748-page Agriculture and Nutrition Act of 2018 by a vote of 213-211.  Then, S. 3042 and H.R. 2 were submitted to a conference committee with final language eventually submitted to The White House for signature.   

On 18 June 2018, the United States Senate Committee on Agriculture, Nutrition, & Forestry reported, on a vote of 20-1, S. 3042, the 1,210-page The Agriculture Improvement Act of 2018 which included an amendment on page 248 authored by The Honorable Heidi Heitkamp (D- North Dakota; defeated for re-election in 2018): “To provide for the use of market access program and foreign market development cooperator program funds in Cuba.”  In Fiscal Year 2018, the total expenditures for these two programs was US$200,287,394.00.     

A representative of a member of the United States Senate Committee on Agriculture, Nutrition, & Forestry shared “[t]here is no set amount of funds that would be made available specifically for Cuba.  The amendment would only allow producers and agricultural trade associations who are already utilizing these programs to also use them to promote their goods in Cuba.  So to that point, yes these funds are only going towards agriculture producers who are represented by trade associations and state regional trade groups.” 

On 27 June 2018, Senator Rubio reported, via Twitter, that “I have decided to block the addition of any new amendments to #FarmBill until they either accept the Cruz amendment striking the use of taxpayer $ for promotions in #Cuba or they accept my amendment that prohibits taxpayer $ being spent at business owned by Cuban military.”   

Then, in remarks on the floor of the United States Senate later in the day, Senator Rubio said: “I’m not going to object to the ability for American farmers to market our products to a market,” he said. “In the end, it’s food. What I do think we should not allow, however, is the ability to spend taxpayer money in properties and in other places on the island that are owned and controlled by the Cuban military.” 

From an interview in Politico: Under current law, U.S. producers are free to travel to Cuba to meet with importers on their own dime, said Olivia Perez-Cubas, a spokeswoman for Rubio. “Taxpayer dollars shouldn’t be used to subsidize private U.S. industries to travel to Cuba, especially when that money goes into the pocket of the Cuban military,” she said. 

Senator Heitkamp responded with a statement: “This amendment passed unanimously with overwhelming bipartisan support during markup of the farm bill in the Senate Agriculture Committee… This amendment would do nothing to lift current restrictions on doing business with the Cuban government, and it would provide a much-needed opportunity for American producers when so many of our important trade relationships are suffering from uncertainty.” 

This is the text of and LINK to the amendment submitted by Senator Rubio which was approved by the United States Senate: https://www.congress.gov/amendment/115th-congress/senate-amendment/3364/actions?q=%7B%22search%22%3A%5B%22S.Amdt.+3364%22%5D%7D 

1. S.Amdt.3364 to S.Amdt.3224   — 115th Congress (2017-2018) Purpose: To prohibit the use of funds to carry out programs in Cuba in contravention of the National Security Presidential Memorandum prohibiting transactions with entities owned, controlled, or operated by or on behalf of military intelligence or security services of Cuba. Amends Bill: H.R.2 Sponsor: Sen. Rubio, Marco [R-FL] (Submitted 06/28/2018) (Proposed 06/28/2018) Latest Action: 06/28/18 Amendment SA 3364 agreed to in Senate by Unanimous Consent. (All Actions)  

S.Amdt.3364 to S.Amdt.3224115th Congress (2017-2018)

Amends Bill:  H.R.2 — Agriculture and Nutrition Act of 2018

Sponsor:          Sen. Rubio, Marco [R-FL] (Submitted 06/28/2018, Proposed 06/28/2018)

Latest Action: 06/28/2018 Amendment SA 3364 agreed to in Senate by Unanimous Consent. 

On 28 June 2018, Senator Rubio issued the following through Twitter: Rubio Keeps Taxpayer Dollars Out of the Cuban Regime's Pocket.  Washington, D.C. – U.S. Senator Marco Rubio (R-FL) today issued the following statement after the Senate adopted his amendment to the Agriculture Improvement Act of 2018, commonly known as the 2018 Farm Bill, to prevent U.S. taxpayer funds for agricultural export promotion from going to the Cuban regime: “American taxpayer dollars should never go into the pocket of the Cuban regime. That is why we worked to ensure that taxpayer funds for agricultural promotion will not be going to the oppressive Cuban military and its subsidiaries.” 

On 28 June 2018, Senator Heitkamp issued the following statement: “Her amendment to boost trade with Cuba. Heitkamp and Boozman successfully included their bipartisan amendment to allow USDA to use its existing export market development programs to create, expand, and maintain a strong Cuban export market for U.S. agricultural producers and processors— at no additional cost to U.S. taxpayers. This change in USDA policy would provide some needed relief from low American commodity prices by fostering a new, reliable trade relationship, boosting agricultural export revenue, and increasing export volume for American farmers and ranchers. This builds on Heitkamp’s efforts to boost trade with Cuba going back to 2015, when she first introduced legislation to lift the ban on private banks and companies offering credit for agricultural exports to Cuba.” 

Senator Heitkamp was inaccurate to submit that her amendment will be “at no additional cost to U.S. taxpayers.”  Accurate that the amendment did not specifically allocate new Republic of Cuba-specific United States taxpayer funds, but it did permit the eighty-nine (89) United States-based entities (and potentially others in Fiscal Year 2019) who obtained US$200,287,394.00 for use in FMD and MAP expenditures in Fiscal Year 2018 to seek authority from the USDA to use United States taxpayer funds for Republic of Cuba-focused activities.  The amendment as passed by the United States Senate does authorize the use of United States taxpayer funds in the Republic of Cuba. 

Senator Rubio was inaccurate to submit that his amendment to Senator Heitkamp’s amendment ensures that “taxpayer funds for agricultural promotion will not be going to the oppressive Cuban military and its subsidiaries.”  United States taxpayer funds may continue to weave their way to companies controlled by the Revolutionary Armed Forces (FAR) of the Republic of Cuba, albeit indirectly.  Here’s why: 

In November 2017 (and again in March 2019), the United States Department of State published a list (https://www.state.gov/e/eb/tfs/spi/cuba/cubarestrictedlist/index.htm) of Republic of Cuba government-operated entities that were to be restricted from engagement by travelers (and United States companies) subject to United States jurisdiction.   

The list identifies entities affiliated with and/or controlled by (Grupo de Adminisracion Empresarial (GAESA) and FAR.  The wording with respect to compliance is “Direct financial transactions with certain entities and subentities under the control of, or acting for or on behalf of, the Cuban military, intelligence, or security services are also generally prohibited.”  Significant the document also contains “*** Entities or subentities owned or controlled by another entity or subentity on this list are not treated as restricted unless also specified by name on the list. ***.”   

Republic of Cuba government-operated Havanatur (reported to be controlled by GAESA and thus FAR) is not on the list.  The majority of travelers subject to United States jurisdiction use the services of Havanatur.  

In March 2018, the Miami, Florida-based publication Cuba Standard reported that a New York, New York-based attorney received verbal confirmation from a representative of the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington DC that at least one Trump Administration travel-related narrative believed true by many is not accurate.   

It is the process of engagement that defines the impact upon travelers.  The meaning of “direct” and “indirect” are relevant.  If a payment to an entity on the list maintained by the United States Department of State (which has not been updated since its initial publication) is made indirectly, that indirectness may satisfy the OFAC requirement.   

From one experienced legislative observer: “The Rubio legislation will require a new rule making by OFAC.  We’ll see if the OFAC takes its traditional position that independent due diligence is required by United States companies to determine whether a Republic of Cuba entity is owned, controlled etc. by a different Republic of Cuba entity - in this case the due diligence must focus on whether the proposed recipient of United States taxpayer money is “operated by or on behalf” of the FAR.  If so, it can’t receive that United States taxpayer money.  Also, we might see a new OFAC rule in the context of a new statute (i.e. Senator Rubio’s amendment) addressing the word “direct” to eliminate the pass-through deals currently permitted with third party intermediaries to get around the State Department’s Prohibited Cuban Entities List.” 

And added, “There could have been some sloppy lobbying work- and a result could be impactful, collaterally, on all visitors to Cuba.” 

Previous Blog Posts

Did USDA MAP/FMD Applicants Predict In June What Is Likely In September?  If Not, Cuba Needs To Help Now 

https://www.cubatrade.org/blog/2018/8/5/zan5yu902gxothclktn4aqt93m0v5u 

Portion of US$200 Million In DMF & MAP Funds Likely To Be Available For Cuba Soon; Know The Application Process 

https://www.cubatrade.org/blog/2018/8/3/2sayhxrojudnr42pra4ffdjdbng8r0

LINK To Complete Analysis In PDF Format

Background Interview With Trump Administration Officials

The following excerpts are from an “on background” interview by the Economic Eye On Cuba© with two senior-level officials in the Trump Administration.     

Question: The [Nicolas] Maduro Administration remains in control of Venezuela; the [Miguel] Diaz-Canel Administration remains in control of [Republic of] Cuba.  Do you believe there has become an optical challenge for the Trump Administration- promising too much too quickly?   

Senior Official One: I wish that everyone would take seriously our statements about Cuba and Venezuela.  I think that there is a belief, or maybe a hope, that President Trump is bluffing and we don’t have a strategy.  We’re not and we do.  There is an overall strategy, but good strategies change with the realities of the landscape; we’d be pretty stupid to maintain a plan when the situation on the ground changes.  President Trump is adapting to the conditions- but, and let me stress, that does not mean he is deviating from the goal- a better Cuba and a better Venezuela.  This is our backyard- we take that seriously. 

Senior Official Two: Some people here in Washington believed that the ‘stars aligned’ during the [George W.] Bush Administration- we had, I mean they had [The Honorable] Otto Reich [recess appointment- Assistant Secretary of State for Western Hemisphere Affairs 2002-2003 and United States Ambassador to Venezuela 1986-1989] among others.  But, what was expected never really materialized.  I remember the nearly 1,000 businessmen attending that food show [U.S. Food & Agribusiness Exhibition in 2002] in Havana.  They never were proactive. 

For President Trump, the stars have aligned, and Venezuela is the tool that we believe can provide change within two countries which have a long and complicated history with the United States.  We have the team in place that every president should want- committed to the goal and capable of implementing a strategy rather than just talking about implementing a strategy.  First, using sanctions to remove an illegitimate leader who has made a mess of his country.  Anyone defending what Maduro has done to his citizens has to have their head examined.  Second, while we do not expect immediate political change in Cuba because of our direct sanctions on Venezuela and direct and indirect sanctions upon Cuba, we believe that at least one result will be changes to the Cuban economy because of what the [Juan] Guaido Administration is doing regarding oil exports to Cuba- and we are helping Interim President Guaido achieve his goal of no longer subsidizing the Cuban regime.  Cuba will have to adjust to losing 30% or more of its heavily-subsidized oil imports, and that means permitting more of a market-based economy.  They won’t like it, but their ability to derail it is pretty fast moving beyond their control. 

Question: The Obama Administration was viewed has having weaponized the OFAC [Office of Foreign Assets Control of the United States Department of the Treasury], has the Trump Administration “nuclearized” the OFAC and what about the impact upon third countries, particularly smaller countries, and how OFAC sanctions impact the ability of the Trump Administration to corral assistance, including from the EU [Brussels, Belgium-based European Union], Canada, Japan, China and Russia? 

Senior Official One: I’m not certain I would agree with the characterization that we have “nuclearized” the OFAC.  The OFAC is a tool in the arsenal of the United States.  Can sanctions be coercive?  Yes, they can be.  The Trump Administration is using the OFAC in several ways, but two are primary.  First, if a country wants to engage with the United States- their companies, their banks, etc., then we expect certain behaviors- such as supporting human rights and democracy and good governance and good behavior.  So, the OFAC plays a huge role in our relationship with Syria, Iran, North Korea, Russia, China, Cuba and Venezuela.  Second, some governments just don’t get it- killing your citizens, permitting your citizens to suffer, raping- stealing from the treasury, remaining in office for decades absent free and fair elections- all of those are wrong.  The United States, and this president, is doing what we believe is right.  

Senior Official Two:  I will echo those statements and add this regarding the impact upon our allies.  We want their help and we need their help.  The United States does not want to be alone- and we aren’t alone in Venezuela or Syria or North Korea or Iran or Russia or China.  Cuba is another matter.  The EU, Canada and Japan can and should be more helpful regarding Cuba- and we believe they will be.  As for smaller countries, we are working with them so they can not only mitigate any impact, but thrive once Mr. Maduro has departed Venezuela.  Secretary [of State Mike] Pompeo has been pretty clear about our support for countries in this hemisphere. 

Question: With respect to the implementation of Title III [authorizing lawsuits] of the [Cuban Liberty and Democratic Solidarity Act (Libertad Act) of 1996] Libertad Act, thus far, at least publicly, members of the EU and other countries have not been supportive of decisions by the Trump Administration taken in 2018 and thus far in 2019.  What makes you believe they will be helpful? 

Senior Official Two: I can’t, won’t get into details as to our private conversations, but countries whose companies are active in Cuba understand they will gain far more from a Cuba that makes political changes and changes to its economy than they do from what Cuba looks like today.  I’m guessing that you are indirectly asking about the claims? 

Question: Yes, specifically the 5,913 certified claimants.  To date, statements by the Trump Administration and briefings focus more about political change to Cuba than about settling the US$1.9 billion [US$1,902,202,284.95] in certified claims against Cuba.  The Libertad Act, specifically Title III and Title IV [visa prohibitions on executives and their families], have a focus upon certified claims, yet the Trump Administration is not focusing upon the certified claimants- no meetings, etc. 

Senior Official One: I want to push back against that characterization.  President Trump has not forgotten about the claimants- and I reference both certified and not certified.  The tools of the Libertad Act are numerous, and the State Department has updated the Cuba Restricted List twice, each time expanding the number of entities that are affiliated with the Cuban military.  Our goal is to discourage transactions with these entities- do any U.S. companies really want to engage with a Cuba dominated by the military rather than civilians?  What would U.S. companies say if [Bethesda, Maryland-based] Marriott [International] and [Fort Worth, Texas-based] American Airlines were owned by the Pentagon and flight attendants wore military uniforms and all revenues went to the Department of Defense and the Joint Chiefs of Staff controlled [Bentonville, Arkansas-based Wal-Mart?  That’s not a good model for us and not for Cuba and not for any country. 

Question: But what about a bilateral negotiation to settle the certified claims?  If the certified claims are settled, then would not be more likely for the United States to have the support of the EU, Canada, Japan, and others for further changes in Cuba? 

Senior Official Two: I disagree with your premise that resolving the certified claims is most important; I would argue that democracy and human rights are more important.  This does not mean that we are not focused on the claims; we are.  The Obama Administration wasn’t.  If the Cubans want to send a certified check for US$1.9 billion, we will deposit it and then distribute it.   

Question: Then why not agree to a negotiation?  The expropriation of the Texaco [White Plains, New York-based Texaco, Inc., now a subsidiary of San Ramon, California-based Chevron Corporation with a certified claim valued at US$56,196,422.73] refinery in 1960 was pretty much the foundation for where the relationship is today.  Why not focus on the foundation?  Why not meet with the largest certified claimants?  Why not permit the certified claimants to have officially-approved negotiations?  The Obama Administration failed to use its time to do so; now the Trump Administration can make a deal; the President is focused upon deals- this would be settling a nearing sixty-year-old problem.  That has to be enticing?   

Senior Official One: We are not there yet.  And, while the seizure of the refinery was wrong, was illegal, the three regimes [General Fidel Castro, General Raul Castro, Mr. Miguel Diaz-Canel] since have done other things that are far worse.  But, I agree that the Obama Administration failed to use its time to extract concessions from Cuba or to condition the presence of U.S. companies upon changes to how Cuba pays workers and what U.S. companies could do in Cuba.  That was a missed opportunity.  As for the idea of certified claimants, as a group, seeking to negotiate a settlement for the monies owed to them- if the Cuban government agreed to it, we would consider it.  If our international partners want to help, terrific.  We are always open to help with solving problems.  The Cubans have an embassy in Washington; we have an embassy in Havana.  Each has plenty of space for negotiations.  They have our telephone number and email. 

Senior Official Two: It’s been suggested- and written that the Trump Administration is not seeking a resolution to the many issues keeping the United States from having a normal relationship with Cuba; that the goal is to perpetuate issues for political purposes.  That’s not accurate.  There are so many more important issues in the world facing the United States- so, the more problems that can be resolved, the better for this country and for the world.  This president likes moving issues from the in-box to the out-box to the resolved-box.   

Question: What is the position of the Trump Administration towards the certified claims settlement proposal [link] created in December of 2018? 

Senior Official One: It was creative, but there are some problems with its approach.  First, the normal process is for the negotiation to be government-to-government.  The proposal adds a private sector dynamic- Mr. [Kenneth] Feinberg, if I remember correctly, as basically a special negotiator.  Second, we’ve thus far seen no evidence that the Cuban government wants to negotiate. 

Question: Has the Trump Administration connected, directly or indirectly, with the Diaz-Canel Administration for the purpose of opening a channel for negotiating a settlement for the certified claims? 

Senior Official One: Neither of us can comment upon any direct or indirect communications relating to the claims.  Good effort though. 

Question: Can you appreciate that from the perspective of the United States business community, it seems that every issue but the certified claims is a priority for the Trump Administration?  Which runs counter to the deal-making image of the President. 

Senior Official Two: I don’t know if we are going to have an answer for you that you seem to want- certainly, prior to the issues now facing the citizens of Venezuela, there may have been a moment for a dialogue, or more accurately, a negotiation process to take root.  And, remember that we have the unresolved issue of the attacks upon our diplomats- and diplomats from other countries.  That is a consequential impediment to any negotiation process. 

Question: But, isn’t there an ability to de-link issues; I think “siloing” is the term, so that everything doesn’t stop? 

Senior Official One: We are prepared to, use your term, “silo.”  The Cubans are not too interested at the moment.  They need to want to resolve issues.  What we mostly hear is how they are victims- they want US$900 billion from the United States.  That’s crazy talk. 

Question: Can you understand if the Cuban government was reticent now to initiate negotiations regarding the certified claims given the vitriol from the Trump Administration?  Could the Trump Administration not seek to engage in a victory-lap until the negotiations were complete and a settlement was announced?  Doesn’t there need to be a bit of political space- a quiet period so that the Cuban government feels that the negotiations are about a settlement rather than a public relations moment for the Trump Administration? 

Senior Official Two: Remember- the United States did not take nearly 6,000 pieces of property and assets from Cuba; companies and individuals in the United States are the victims.  All administrations operate on multiple tracks- some you see, some you don’t.  What they did was wrong; if they want to make it right, we are prepared to listen. 

Question: If the Diaz-Canel Administration back-channeled or front-channeled an openness to have a face-to-face, bilateral negotiation to settle the 5,913 certified claims, and only the 5.913 certified claims, would the Trump Administration be prepared to have senior-level representatives sit across the table and negotiate? 

Senior Official Two: There is quite a bit to that question.  That would be quite a diplomatic bomb throwing.  As we said earlier, I’m not certain we are there yet- meaning, well, that would be a shocker.  Frankly, there might be considerable pressure from our friends in other countries to engage- which we might.  However, there is tremendous distance between an overture and a negotiation.   Having said that, if there was a sincere outreach, we would respond. 

Question: So, a negotiation is not off-the-table?  Is not a non-starter?  The Trump Administration would negotiate agree to a negotiation even if the government of Cuba said that it is limited to the 5,913 certified claimants? 

Senior Official One: I am starting to see that we are moving from an oval to a circle with your questions.  Let’s end here: If there is a succinct outreach from the Cubans, whether directly or indirectly, President Trump will respond.  Again, our goal is to resolve issues, not perpetuate them.    

Question: There is a rumor that the Trump Administration has asked Panama and other countries to de-flag vessels used to transport oil from/to Cuba and Venezuela. 

Senior Official One: No comment. 

Senior Official Two: No comment.

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