Might Caterpillar/RIMCO Be Next Defendant In Title III Lawsuit?
Cuba Distributor Located In Same Area As Defendants Crowley And Seaboard
Is what Crowley, Seaboard and Caterpillar doing “lawful” as defined by Libertad Act?

On 1 November 2017, during the 35th Havana International Fair (FIHAV), Peoria, Illinois-based Caterpillar Inc. (2019 revenues approximately US$53.8 billion) through privately-held San Juan, Puerto Rico-based RIMCO, its distributor for Caribbean Sea-area countries, announced a distribution center would be located within the Special Development Zone of Mariel (ZEDM). The Republic of Cuba is not referenced in the 2016, 2017, 2018, 2019 annual reports or 2020 Form 10-K filed by Caterpillar.

RIMCO reported the company did not require a license from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury, but did obtain a license from the Bureau of Industry and Security (BIS) of the United States Department of Commerce and authorization from the United States Department of State. According to the ZEDM Internet site, RIMCO provides sales, service and rental of brands including Caterpillar and Duluth, Georgia-based AGCO Corporation (2019 revenues approximately US$9.3 billion).

Since December 2018, RIMCO has delivered, not necessarily sold, to the Republic of Cuba more than US$4 million in excavators, backhoes, graders, scrapers, bulldozers, railway fixtures, and signaling equipment. There are no United States government prohibitions upon Caterpillar or RIMCO from providing, directly or indirectly, payment terms and/or financing for equipment exports from the United States to the Republic of Cuba.

On 2 November 2017, Moline, Illinois-based John Deere (2019 revenues approximately US$39.2 billion) reported the company would establish a distribution center in the Republic of Cuba, but not located in the ZEDM. The Republic of Cuba is not referenced in the 2016, 2017, 2018 or 2019 annual reports filed by John Deere. In November 2017, and continuing through 2019, John Deere delivered, not necessarily sold, more than $800,000.00 in agricultural equipment to the Republic of Cuba. Antioch, Tennessee-based Wirtgen America, Inc., a subsidiary of Windhagen, Germany-based Wirtgen Group (2019 revenues approximately US$3 billion), a construction equipment machinery subsidiary (acquired in 2017) of Deere & Company has also delivered products to the Republic of Cuba. John Deere reported that the company would provide financing for equipment purchases by authorized Republic of Cuba entities.

The Trump Administration issued a 9 November 2017 deadline for United States companies to execute agreements with Revolutionary Armed Forces (FAR) of the Republic of Cuba-controlled Grupo de Administración Empresarial S.A. (GAESA), which has interests in the tourism, financial investment, import/export, and remittance sectors. ZEDM is managed by Republic of Cuba government-operated Almacenes Universales S.A., a subsidiary of GAESA. Almacenes Universales S.A. focuses upon “professional, technical and skilled workers linked to logistics activities, warehousing, transportation and port activities.” Agreements executed by 9 November 2017 would be permitted to remain in force.

GAESA is on the State Department’s List of Restricted Entities and Subentities Associated with Cuba (“Cuba Restricted List” or “CRL”). The CRL is a list of entities and subentities “under the control of, or acting for or on behalf of, the Cuban military, intelligence, or security services or personnel with which direct financial transactions would disproportionately benefit such services or personnel at the expense of the Cuban people or private enterprise in Cuba.”

GAESA is on the List of Specially Designated Nationals and Blocked Persons by the OFAC pursuant to the Cuban Assets Control Regulations (CACR), 31 C.F.R. part 515.

Since 2013, vessels from the United States and other countries have been calling at the port of Mariel, located approximately forty (road) miles from Havana. The port of Mariel is managed by Singapore-based PSA International. The container terminal at the port of Mariel sits within the 180-square-mile ZEDM. The facility has 2,300 feet of jetty and four quay cranes which can accommodate 13,000 TEU Neo-Panamax vessels.

Salvador, Brazil-based Odebrecht (2016 revenues approximately US$30 billion) was the primary contractor for the port of Mariel and ZEDM. Approximately US$683 million in primary financing was provided by the National Bank of Economic and Social Development (BNDES) of Brazil. Institutions in China and Venezuela also provided financing.

Title III Lawsuits Against Crowley Maritime And Seaboard Marine

On 2 May 2019, the Trump Administration made operational Title III of the Cuban Liberty and Democratic Solidarity Act of 1996 (known as “Libertad Act”). Title III authorizes lawsuits in United States District Courts against companies and individuals who are using a certified claim or non-certified claim where the owner of the certified claim or non-certified claim has not received compensation from the Republic of Cuba or from a third-party who is using (“trafficking”) the asset. Thus far, thirty-two Title III lawsuits have been filed in jurisdictions throughout the United States.

Libertad Act Title III exceptions to the definition of “trafficking” include “transactions and uses of property incident to lawful travel to Cuba, to the extent that such transactions and uses of property are necessary to the conduct of such travel; or transactions and uses of property by a person who is both a citizen of Cuba and a resident of Cuba, and who is not an official of the Cuban Government or the ruling political party in Cuba.” There is no visible exception for non-travel-related activity.

The Trade Sanctions Reform and Export Enhancement Act (TSREEA) of 2000 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 Cuban Democracy Act (CDA) of 1992. For the period December 2001, the first exports using the TSREEA, through October 2020 (latest data), total exports using the TSREEA exceed US$6,270,742,423.00. In twelve of nineteen years, poultry (transported in containers) was the largest U.S. Dollar value export.

Currently, United States TSREEA exporters receive control of payment from the Republic of Cuba prior to product departing United States ports. Previously, United States exporters received control of payment when the vessel arrived to the Republic of Cuba, but had not yet been unloaded.

From the two recent (31st and 32nd) lawsuit filings: “The fact of the confiscation of the Blanco Rosell Siblings’ property in Cuba was so well known that, on April 18, 2019, the day after the Trump Administration announced that it would allow Helms-Burton Act lawsuits under Title III to go forward, stories published on both Radio Marti and TV Marti identified Plaintiff’s claims to the Mariel Special Development Zone as one of the top 10 potential Helms-Burton Claims: The Mariel Special Development Zone, the star Cuban project to attract investment, was built on nationalized land where the Carranza-Bernal, Carbonell-González and Blanco-Rosell families owned sugar and hemp processing plants.”

For plaintiffs, there are three focuses: Do they have standing to file a lawsuit. Does the court have jurisdiction over the lawsuit. Does the defendant have assets accessible using a court judgement.

ODETTE BLANCO DE FERNANDEZ née BLANCO ROSELL, Plaintiff, v. CROWLEY MARITIME CORPORATION, Defendant. [3:20-cv-01426]; Middle District Florida

Murphy & Anderson, P.A. (plaintiff)
Berliner Corcoran & Rowe LLP (plaintiff)
Fields PLLC (plaintiff)
Law Offices of John S. Gaebe P.A. (plaintiff)

LINK To Complaint (12/20/20)
LINK To Libertad Act Lawsuit Filing Statistics
LINK To Mariel Special Economic Zone

Jacksonville, Florida-based Crowley Maritime Corporation (2019 revenues approximately US$2.5 billion). “Crowley, founded in 1892, is a privately-held, U.S.-owned and operated logistics, government, marine and energy solutions company headquartered in Jacksonville, Florida. Services are provided worldwide by four primary business units – Crowley Logistics, Crowley (Government) Solutions, Crowley Shipping and Crowley Fuels.”

ODETTE BLANCO DE FERNANDEZ née BLANCO ROSELL, Plaintiff, v. SEABOARD MARINE, LTD., Defendant. [1:20-cv-25176; Southern Florida District]

Horr, Novak & Skipp, P.A. (plaintiff)
Law Offices of John S. Gaebe (plaintiff)
Berliner Corcoran & Rowe (plaintiff)
Fields (plaintiff)

LINK To Complaint (12/20/20)
LINK To Libertad Act Lawsuit Filing Statistics
LINK To Mariel Special Economic Zone

Miami, Florida-based Seaboard Marine is a wholly-owned subsidiary of Merriam, Kansas-based Seaboard Corporation (2019 revenues of US$6.8 billion). Butterball Turkey is a subsidiary of Seaboard Corporation. Seaboard Corporation 2019 Annual Report: "At Seaboard Marine, our container line operating throughout the Americas surpassed $1 billion in revenues despite fierce competition for market share by both regional and global carriers. We run multiple routes from six U.S. ports to 26 countries in the Caribbean, Central and South America."

Background

FOR IMMEDIATE RELEASE
February 10, 2016
Caterpillar Names Rimco Official Dealer for Cuba

PEORIA, Ill. – Caterpillar Inc. (NYSE: CAT) today announced that it has selected Rimco, a privately owned Puerto Rico-based company, to be the Cat dealer for Cuba. Currently, Rimco serves as the Cat dealer for Puerto Rico and the Eastern Caribbean. Upon easing of trade restrictions, customers in Cuba will be able to purchase Cat products through Rimco in accordance with U.S. and Cuba regulations.

“We’re pleased to take this important step with our longtime partner, Rimco,” said Philip Kelliher, vice president with responsibility for the Americas & Europe Distribution Services Division. “Cuba needs access to the types of products that Caterpillar makes and, upon easing of trade restrictions, we look forward to providing the equipment needed to contribute to the building of Cuba’s infrastructure. This momentous announcement is part of our preparations in anticipation of the United States lifting its 55-year-old trade embargo on Cuba.”

Caterpillar, an advocate for change in policy toward Cuba for nearly two decades, will continue its work with the Administration and Congress to end the embargo. “We’re exceptionally proud of our 34-year relationship with Caterpillar,” said Richard F. McConnie, President of Rimco. “There is great affinity between Cuba and Puerto Rico as a result of our shared language, culture and traditions. Rimco will be honored to serve the Cuba market once the United States and Cuba re-establish commercial relations.” On December 17, 2014, President Obama announced that the United States would move to normalize relations with Cuba. Since that historic day, embassies have opened in each nation and there have been gradual steps to open diplomatic and economic ties between the two countries. While steps remain until relations are fully normalized, including lifting the embargo, Rimco and Caterpillar will continue preparations to best serve the Cuban marketplace with construction and mining equipment, power systems, marine and industrial engines.

About Caterpillar

For 90 years, Caterpillar Inc. has been making sustainable progress possible and driving positive change on every continent. Customers turn to Caterpillar to help them develop infrastructure, energy and natural resource assets. With 2015 sales and revenues of $47.011 billion, Caterpillar is the world’s leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. The company principally operates through its three product segments - Construction Industries, Resource Industries and Energy & Transportation - and also provides financing and related services through its Financial Products segment. For more information, visit caterpillar.com. To connect with us on social media, visit caterpillar.com/social-media.

About Rimco

Rimco is the Caterpillar dealer for Puerto Rico, the U.S. Virgin Islands, the British Virgin Islands, Barbados and the Eastern Caribbean Islands. It is a privately-held Puerto Rico company founded by the McConnie family in 1981. The company has built a strong reputation in the industry with its superior sales, rental and product support capabilities. Rimco sells construction equipment, power systems and engines to its customers in the construction, quarry & aggregates, waste, industrial, commercial and marine segments. Rimco also has a complete fleet of equipment and power systems available for rental through its 5 Cat Rental Stores located in Puerto Rico and Barbados. Additional information about the Rimco organization, its products and services can be found at www.rimcocat.com.

Thomson Reuters
London, United Kingdom
1 November 2017

Caterpillar dealer to open shop in Cuba special development zone

“HAVANA (Reuters) - Rimco, Caterpillar Inc’s dealer for Cuba, said on Wednesday it would open a distribution center for the U.S. heavy equipment maker at Havana’s Mariel special development zone, making it the first U.S. company to open up shop there.

The deal, signed this week, came as worsening U.S.-Cuban political relations are curbing U.S. business interest in the Communist-run island of 11 million inhabitants in the wake of the historic 2014 detente. The United States has said it would vote against a U.N. General Assembly resolution on Wednesday calling for the lifting of the decades-old U.S. economic embargo against Cuba, reversing an abstention by Washington last year.

“We are going to set up a warehouse and distribution center at Mariel and we will be distributing Caterpillar equipment,” Rimco Vice President Caroline McConnie said in a news conference at Cuba’s annual trade fair. “We have a license from the commerce department and other agencies.”

A license from the Treasury Department’s Office of Foreign Assets Control (OFAC), which handles economic and trade sanctions, was not necessary, she said.

Mariel Director Ana Teresa Igarza said at the news conference that Rimco hoped to open shop in 2018, and the deal was one of 30 projects, including 11 Mariel had signed off on this year. Cuba created the zone three years ago to attract foreign capital with tax and customs breaks to boost its anemic economy. It is controlled by Almacenes Universales, a company belonging to the Armed Forces Business Enterprises Group (GAESA), which could prove problematic for U.S. companies. U.S. President Donald Trump in June ordered a ban on business dealings with the military as part of a tightening of trade and travel restrictions. The new regulations, including that ban, have yet to be unveiled. The Trump administration has said that any deals signed before then would be grandfathered in.”

COMPLETE ANALYSIS IN PDF FORMAT