Cuba Pays $60 Million of Indebtedness to Major Creditor Nations     

The week of October 15 Cuba paid $60 million of indebtiness to 14 wealthy creditor nations. Last year Cuba paid $40 million to the same group. The total debt is $2.6 billion after the creditors in 2015 forgave $8.5 billion of $11.1 billion upon which Cuba had defaulted through 1986 plus charges.[1]

These creditor nations known as the Club of Paris are the following: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Italy, Japan, the Netherlands, Spain, Sweden, Switzerland and the United Kingdom.

Under the 2015 agreement, Cuba agreed for the first time to grant the creditors equity in development projects, in areas like manufacturing and agriculture, in exchange for a portion of their debt holdings. Many of these restructuring agreements include the establishment of so-called counter-value funds, under which a percentage of debt is discounted in exchange for the potential profits stemming from participation by a creditor country’s firms in Cuba joint-development projects.

The counter-value funds have an estimated combined value of around $750 million of the $2.6 billion owed. Japan, Spain, France and Italy – Cuba’s largest Paris Club creditors – are furthest along in negotiating swaps.

  • For example, a $46 million French project to develop cattle ranching and dairy products in central Camaguey province is ready to sign, according to France’s ambassador to Cuba, Jean-Marie Bruno.
  • Another example is Spain which has a project ready to manufacture cardboard and another aluminium structures for construction capable of resisting earthquakes and hurricanes, both involving Spanish companies.

This access to Cuban development projects gives the European countries and companies an advantage over U.S. companies who are banned by various U.S. laws from such projects.

This payment happened during dire economic times for Cuba due to the political and economic crisis in its ally Venezuela, declines in Cuban exports and tourism due, in part, to the damages caused by Hurricane Irma.

Cuba’s payment in these circumstances showed the importance Cuba attaches to the 2015 agreement with this group of major creditor nations.

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[1] Reuters, Cash-Strapped Cuba Makes Debt Payment to Major Creditors-Diplomats, N.Y. Times (Oct. 18, 2017); Chow, Cuba Reaches Deal to Pay $2.6 Billion in Arrears to Paris Club, W.S.J. (Dec. 12, 2015); Paris Club, Agreement on the Debt Between Cuba and the Group of Creditors of Cuba (Dec. 12, 2015).

Issues of Cuban Human Rights To Be Discussed by Cuba and United States (Part II)

On March 26 Cuba announced that the U.S. and Cuba will commence their negotiations regarding human rights on March 31 in Washington, D.C.; this was covered in a prior post.

Issues of Cuban human rights that probably will be put on the agenda for further discussions were first examined in a prior post about the recent speech on this subject by Cuban Foreign Minister, Bruno Rodriguez Parrilla.

In Cuba’s March 26th announcement of the upcoming talks, Pedro Luis Pedroso, Cuba’s Deputy Director General of Multilateral Affairs and International Law, referred to “the recognition Cuba received at the last Universal Periodic Review [UPR] by the U.N. Human Rights Council, where the international community praised and commended Cuban achievements in areas such as education, health and access to cultural rights, and the contribution the island has made in those same areas in other countries.”

Therefore, this post will look at that UPR of Cuba while another post will discuss the latest U.S. State Department report on Cuban human rights (the one issued in 2014 for 2013).

The Nature of the UPR Process [1]

In order to assess the recent UPR of Cuba, we first must understand the UPR process, which provides the opportunity for each of the 193 U.N. members, on a periodic basis, to declare what actions it has taken to improve its human rights and to fulfill its human rights obligations.

The UPR process includes a report on all human rights issues from the subject country, compilations of information about the country from various U.N. organizations and from “stakeholders” (non-governmental organizations), a public interactive session of the Human Rights Council about the country, a report by a working group about the proceedings that includes conclusions and recommendations, the subject country’s responses to those conclusions and recommendations and a subsequent evaluation of the UPR by the Council.

It is exceedingly important, however, to know that these conclusions and recommendations are merely a systematic compilation or listing of all those that had been offered by all of the countries participating in the UPR. Hence, there is a lot of duplication and overlapping in this part of the report, which is not similar to an independent judicial body’s reaching certain findings and conclusions based upon an evaluation of often conflicting evidence. Indeed, the Working Group’s report expressly states that the conclusions and recommendations “should not be construed as endorsed by the Working Group as a whole.” In short, there is no overall “grade” of a country’s human rights performance by the Working Group or by the Council as a whole.

Most Recent UPR of Cuba [2]

The most recent UPR of Cuba occurred in 2013.

1. The Report of  the Working Group.

The key document in figuring out what happened in this UPR is the “Report of the Working Group on the Universal Periodic Review—Cuba” that was issued on July 8, 2013. It has the following standard structure, after a brief Introduction:

I. Summary of the proceedings of the review process

A. Presentation by the State under review

B. Interactive dialogue and response by the State under review

II. Conclusions and Recommendations

The “interactive dialogue.” This section of this report states that there was such a dialogue about Cuba involving 132 delegations at the session on May 1, 2013, and sets forth a brief summary of that dialogue in 144 numbered paragraphs. One example is paragraph 31, which states, “ Nicaragua highlighted the commitment of Cuba to human rights despite the blockade, and condemned the [U.S.] convictions against five Cubans.”

The only reference to U.S. comments in this dialogue is in paragraph 77, which states the U.S. “raised concerns for impediments to multiparty elections and freedom of expression and referred to Alan Gross and Oswaldo Paya.” Cuba, according to paragraph 111, responded to this U.S. comment by saying that “freedom of the press was guaranteed in Cuba“ and by “reiterated[ing its] . . . willingness . . . to continue talks with the [U.S.] . . . on the situation of Mr. Gross and of other individuals who were held in detention in Cuba and in the [U.S.].” [3]

Conclusions and Recommendations. This section starts with the following statement: “The recommendations formulated [by all the countries participating] during the interactive dialogue and listed below will be examined by Cuba, which will provide responses in due time, but no later than the twenty-fourth session of the Human Rights Council in September 2013” (para. 170). This section of the Report is concluded by this statement: “All conclusions and/or recommendations contained in the present report reflect the position of the submitting State(s) and/or the State under review. They should not be construed as endorsed by the Working Group as a whole” (para. 171).

The actual conclusions and recommendations are summarized in 292 numbered subparagraphs of the Report. Those offered by the U.S. are for Cuba to “allow for independent investigations into the circumstances surrounding the deaths of Oswaldo Paya and Harold Cepero” (para. 170.138) [4], to “release Alan Gross and imprisoned journalists such as Jose Antonio Torres immediately” (para. 170.187) [5] and to “eliminate or cease enforcing laws impeding freedom of expression” (para. 170.176).

2. Cuba’s Responses to the Recommendations.

In response to the U.S. recommendations and 20 others from other countries, Cuba said they “do not enjoy [its] support . . . on the grounds that they are politically biased and based on false premises; they derive from attempts to discredit Cuba by those who, with their hegemonic ambitions, refuse to accept the Cuban people’s diversity and right to self-determination. These proposals are inconsistent with the spirit of cooperation and respect demanded by the UPR process.” Moreover, said Cuba, they “are incompatible with constitutional principles and national legislation, and whose content is contrary to the spirit of cooperation and respect that should predominate at the UPR.” [6]

The other 20 numbered recommendations that were so summarily rejected by Cuba related to protecting human rights defenders, including journalists, against abusive criminal prosecutions, harassment and intimidation (Czech Republic, Austria, Australia, Germany, Hungary); release of all political prisoners (Czech Republic, Belgium, Slovenia, Poland), end indefinite extensions of preliminary criminal investigations (Belgium); improve freedom of expression (Romania, Estonia, Hungary, Spain, Switzerland, United Kingdom, France, Canada); repeal laws relating to “pre-criminal social dangerousness” (Ireland); end repression, investigate acts of repudiation and protect targets of intimidation and violence (Netherlands); and end Internet censorship (Australia, Germany).

Cuba, however, did accept 230 of the recommendations while noting, “Many of these . . . have already been complied with, or are in the process of implementation , or are included among future national priorities.” Therefore, these items “will be implemented in accordance with our capabilities and in step with the evolution of the circumstances within which Cuba is pursuing its aim of complete social justice.”

The remaining 42 recommendations were “noted” by Cuba as matters to be examined with the understanding that its “process of ratifying an international instrument is very rigorous;” that is stands ready “to continue cooperating with . . . the UN System’s human rights machinery;” that it is “philosophically opposed to the death penalty: and wants to eliminate it when suitable conditions exist;” that it has an “extensive and effective” system for resolving human rights complaints; that its “system of criminal justice . . . ensures fair and impartial hearings and full guarantees to the accused;” Cuba is working at expanding internet access; and “the right to freedom of expression and assembly . . . [is] enshrined in the Constitution and . . . national legislation.”

3. Human Rights Council’s Evaluation of this UPR. As paragraph 170 of the Report of the Working Group provided, the Council was to review the UPR of Cuba at its session in September 2013 after Cuba had submitted its response to the conclusions and recommendations. That Cuban response was just summarized, and the Council on September 20, 2013, reviewed this UPR and approved, without a vote, a resolution “to adopt the outcome of the universal periodic review of Cuba, comprising the report thereon of the Working Group on the Universal Periodic Review . . ., the views of Cuba concerning the recommendations and/or conclusions made, and its voluntary commitments and replies presented before the adoption of the outcome by the plenary to questions or issues not sufficiently addressed during the interactive dialogue held in the Working Group.” [7]

Criticism of the Recent UPR of Cuba

It must also be noted that an observer has alleged that Cuba “corrupted and abused” this UPR process by prompting the submission of many “fraudulent” stakeholder NGOs; there was a total of 454 submissions regarding Cuba compared with the next highest, 48 on Canada. As a result, says this observer (UN Watch), “numerous statements of praise taint the UN’s official summary” of stakeholders’ submissions. UN Watch also alleges that the compilation of information from U.N. agencies was unfairly slanted in favor of Cuba. [8]

Another observer (International Service for Human Rights) reported that during the UPR of Cuba, 132 countries, at 51 seconds each, took the floor to ask questions and make recommendations. As a result, Cuba received 293 recommendations, the highest number that a State under review has ever received at the UPR, but 121 of them started with the verb ‘continue,’ thus requiring minimal action to be taken by Cuba. [9]

Conclusion

I do not know whether any of NGO stakeholders at this UPR were “fraudulent,” as alleged, but it does appear that Cuba “stacked” the process to minimize the time available to authentic critics of its human rights record and to maximize the time available to its supporters. It also appears as if Cuba rejected recommendations for improving many foundational human rights.

In any event, because the UPR process does not involve a truly independent fact-finder to assess the human rights record of Cuba or any other country in such a process, I reject the assertion by Cuba’s Deputy Director General of Multilateral Affairs and International Law, Pedro Luis Pedroso, that Cuba obtained a laudatory evaluation of its human rights record by the U.N. Human Rights Council. In short, I think this UPR is irrelevant to Cuba’s human rights issues.

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[1] Details about the UPR process are provided on the Council’s website. The process involves a “working group,” which is composed of all 47 members of the Council.

[2] All of the documents about the UPR of Cuba are available on the Council’s website, including the Report of the Working Group on the Universal Periodic Review—Cuba, dated July 8, 2013.

[3] As discussed in a prior post, Alan Gross was released from a Cuban prison on December 17, 2014, and returned to the U.S. as part of the U.S.-Cuba agreement to re-establish normal diplomatic relations.

[4] Paya was a Cuban political activist, a leader of the political opposition to the to the Cuban government. He was the founder and organizer of the Varela Project, which collected enough signatures to present to the government a request for changes in legislation. He was awarded the Andrei Sakharov Prize for Human Rights of the European Parliament in 2002. On July 12, 2012, Paya was killed in an automobile crash in Cuba under suspicious circumstances; Harold Cepero, a youth leader, was also killed in the crash. Many people believe they were murdered by government agents.

[5] Torres, a correspondent for the Cuban government newspaper, Granma, wrote an article about alleged mismanagement of a Santiago Cuba aqueduct project and of the installation of the Cuba-Venezuela fibre-optic cable. Afterwards he was charged and convicted of spying and sentenced to 14 years in prison and cancellation of his university degree in journalism.

[6] Report of the Working Group on the Universal Periodic Review—Cuba: Addendum: Views on conclusions and/or recommendation, voluntary commitments and replies presented by the State under review [Cuba] (Sept. 2013).

[7] Report of the Human Rights Council at its 24th session (Para. 24/114) (Jan. 27, 2014).

[8] UNWatch, Massive Fraud: The Corruption of the 2013 UPR of Cuba.

[9] Int’l Service for Human Rights, Unprecedented challeng to the Universal Periodic Review (May 31, 2013)  See also Center for Human Rights & Humanitarian Law, Alleged Fraud During Cuba’s Universal Periodic Review, Human Rights Brief (Oct. 24, 2013).

 

 

 

 

 

 

 

Battling Australian and Wisconsin Courts

In the mid-1980’s Sentry Insurance A Mutual Company (Sentry) of Stevens Point, Wisconsin, and the parent of The Sentry Corporation, sold its Australian operations to an Australian insurance company. Thereafter the Australian buyer alleged that the financial statements for the purchased operations were materially overstated.

Federal Courthouse, Sydney, Australia
Courthouse, Stevens Point, WI

This set the stage for a conflict and battle between the Federal Court of Australia and the state courts of Wisconsin. It is an illustration of the unnecessary disputes that can be generated by litigation over international commercial disputes and that would not exist in an agreed-to international arbitration.[1]

In 1987 the Australian insurance company (the buyer) commenced a lawsuit in the Federal Court of Australia against The Sentry Corporation (the seller) and Peat Marwick Mitchell & Co. (PMM), an Australian accounting firm, for money damages caused by those alleged material financial misstatements. The Sentry Corporation made a cross claim against PMM in that case, and the case was scheduled to commence trial in Australia in October 1990.

In October 1988 Sentry commenced a lawsuit in Wisconsin state court in its home town of Stevens Point against KPMG Peat Marwick, the U.S. affiliate of PMM, relating to these issues.  In January 1990 Sentry amended its complaint to add PMM (the Australian accounting firm) as a defendant, and I was retained as PMM’s attorney.

My first maneuver was a motion to dismiss the Wisconsin complaint for lack of personal jurisdiction over the Australian accounting firm[2] and alternatively to stay or postpone the Wisconsin case until the prior Australian litigation was resolved.

Before the Wisconsin dismissal and stay motion was decided, however, the plaintiff (Sentry) noticed the oral depositions of nine PMM auditors to be taken for the Wisconsin case in Sydney, Australia. While such depositions are common practice in U.S. civil litigation, they are not in Australia and most other countries, and PMM and I believed that such depositions were a tactical move by Sentry to gain an unfair advantage in the Australian litigation. Therefore, we moved the Wisconsin court to prohibit the depositions, but the Wisconsin court denied the motion.[3]

I, therefore, went to Sydney to prepare the Australian auditors for their depositions and to defend those depositions, but after I was there, PMM requested the Australian court to issue an injunction against the depositions taking place on Australian soil. The Australian court granted that injunction. Thus, the depositions did not take place in Sydney.

Later, after my return to the U.S., the Wisconsin court denied PMM’s motion to dismiss for lack of personal jurisdiction and granted Sentry’s motion to strike that defense to the Wisconsin plaintiff’s claims.[4]

PMM then sought and obtained permission to take interlocutory appeals (immediate appeals before final judgment) to the Wisconsin Court of Appeals from the denial of PMM’s motion to bar the depositions and from the denial of its personal jurisdiction motion and defense.

Before the Wisconsin appeals were argued and decided, however, trial of the Australian case commenced. Contrary to Australian and U.S. general practice, the Australian insurance company’s expert witness was called as the first witness (instead of waiting until all the fact witnesses had testified) and was demonstrated not to have expertise on at least some of the subjects of his proposed testimony. As a result, the plaintiff’s barrister had a nervous breakdown. This triggered the collapse of  the Australian plaintiff’s case and a truly global settlement that ended all of the litigation.

I should add that as I did not have much to do in Australia for the Wisconsin case after the Australian court enjoined the depositions. I thus had some time for personal pleasure.

Sydney Opera House

I attended a production of “Aida” at the spectacular Sydney Opera House and saw many interesting sights in that great city.

Heron Island, Great Barrier Reef

 

I also went scuba diving near Heron Island on the Great Barrier Reef. I flew from Brisbane, Australia to Heron Island by helicopter and saw large triangular manta rays in the water from the air. In the hotel on the Island a male nurse from Melbourne, Australia and I formed an unbeatable team in an international game of Trivial Pursuit.

Qantas 747

My return 14-hour flight to Los Angeles on Qantas Airlines was rescheduled, and much to my consternation the only available seat was in the smoking section. I was told not to worry because I probably could be re-seated on the plane itself. That happened. I got a very comfortable and quiet seat in the upper deck of the 747.

My Australian adventure was over. Thereafter I often referred to this Australian jaunt as the best business trip I ever took.


[1] See Post: Resolving Disputes between Manufacturers and Distributors/Dealers (Aug. 9, 2011); Post; International Commercial Dispute Resolution (Aug. 11, 2011).

[2] See Post: The Personal Jurisdiction Requirement in Civil Litigation in U.S. Courts (Aug. 8, 2011).

[3] Order, Sentry Ins. v. KPMG Peat Marwick, No. 88-CV-481 (Wis. Cir. Ct. Portage Cty, May 24, 1990).

[4] Decision and Order, Sentry Ins. v. KPMG Peat Marwick, No. 88-CV-481 (Wis. Cir. Ct. Portage Cty, June 28, 1990).