Trump’s New Regulations Adversely Affect Cuban Entrepreneurs

The new travel regulations and anti-Cuba rhetoric of President Trump already are hurting ordinary Cubans, especially those who have become entrepreneurs and who employ 600,000 of the island’s 11 million people.  The “self-employed” sector, a euphemism used by the Cuban government to avoid the words “private” or “entrepreneur,” already is encumbered by Cuban regulations that leave little room for development.[1]

Now an “association of Cuban businesswomen has asked to meet with Senator Marco Rubio (Rep., FL), a Cuban-American who has never been to the island and who is believed to be a major influencer on the Trump Administration’s Cuba policies. These women want to explain ” the impact on the country’s nascent private sector of rolling back a detente in U.S. relations.” They say, “The current situation has us very worried and we would like to share our personal histories and perspective from Cuba.”

One of these women, Niuris Higueras, the owner of the Atelier restaurant in Havana, said her  “business is down 60 percent from a year ago.” Another woman, Julia de la Rosa, who runs a 10-room bed and breakfast, said rentals were down 20 percent in October and she expected a further decline as new U.S. regulations on individual travel kick in this month.

The Trump Administration’s evident hostility toward Cuba also has caused U.S. businesses to reduce their interest in trying to create and build business in Cuba. At this year’s Cuba trade fair only 13 U.S. companies had booths compared with 33 last year. Another cause of this reduction is growing awareness of the difficulty of doing business in Cuba.[2]

Former U.S. Secretary of Commerce Carlos Gutierrez, the Cuban-born head of the U.S.-Cuba Business Council, said, “This is a huge step backwards. We had made so much progress.”

U.S. airlines with licenses for flights to Cuba also are seeing the reduction in U.S. demand for visiting Cuba. As a result, five airlines have cancelled all flights to the island while others have reduced the number of their flights.[3]

A caveat to this negative reaction is the opinion of some that the new regulations on business dealings “produce brighter lines that may make it easier for companies to identify who exactly they can do business with when trying to operate on the island.”

One who expressed this view is Peter Harrell, an adjunct senior fellow at the Center for a New American Security who previously served as a deputy assistant secretary for counter-threat finance and sanctions in the U.S. State Department, said that the new regulations “made trade easier with the country’s private sector.” A significant point in this regard was the State Department’s FAQ document stating that “entities not on its restricted list, even if they’re subsidiaries of those on the list, are [not] restricted until they themselves appear on the blacklist.”[4]

Another caveat is “the new regulations limiting “disruption to pre-existing commercial activities, ensuring that U.S. companies can continue to do business with Cuba’s nascent private sector.” Examples of such preexisting deals are Deere & Co. and Caterpillar Inc.’s arrangements for distribution of their products on the island.[5]

Myron Brilliant, the head of international affairs at the U.S. chamber of Commerce, urged the administration “to continue to keep business in mind and avoid further steps to restrict the economic relationship between the U.S. and Cuba.”

Nevertheless, the U.S. regime of Cuba sanctions presents risks to U.S. companies. The latest example is the November 17 announcement by the U.S. Treasury of an OFAC settlement with American Express Co. for $204,000 for its 50%-owned Belgian credit-card issuer’s corporate customers’ 1,818 transactions in Cuba between 2009 and 2014.[6]

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[1] Reuters, Cuban Businesswomen Seek Rubio Meeting as U.S. Policies Bite, N.Y. Times (Nov. 17, 2017). The above topics and others are the subjects of earlier posts listed in the “Cuban Economy” section of List of Posts to dwkcommentaries—Topical: CUBA.

[2] Reuters, Blooming U.S. Business Interest in Cuba Wilts Under Trump, N.Y. Times (Nov. 10, 2017).

[3] Reuters, Alaska Airline Discontinues Los Angeles-Havana Daily Flight, N.Y. Times (Nov. 14, 2017); Assoc. Press, Alaska Airlines to Halt Flights to Cuba, N.Y. Times (Nov. 14, 2017).

[4] Rubenfeld, New U.S. Cuba Regulations May Make Compliance There Easier, W.S.J. (Nov. 9, 2017).

[5] Schwartz & Radnofsky, New Trump Rules Pare Back Obama’s Opening to Cuba, W.S.J. (Nov. 8, 2017).

[6] Rubenfeld, American Express Unit Fined Over Cuba Sanctions Violations, W.S>J. (Nov. 17, 2017).

Subdued Commemoration of Second Anniversary of U.S.-Cuba Rapprochement    

December 17, 2016 was the second anniversary of Presidents Obama and Castro’s joint announcement that their two countries had embarked on the path of normalization and reconciliation. The U.S. commemoration of this date was subdued. The White House held a small gathering that was not widely publicized .The Cuban government, on the other hand, apparently did not hold any such event. But two Cuban publications published sketchy comments on the anniversary.

White House Commemoration[1]

On December 15, the Obama Administration hosted a private gathering across the street from the White House at the Eisenhower Executive Office Building. President Obama did not attend, but did send a letter to the 20 or so attendees encouraging them “to carry forward the work of strengthening our partnership in the years ahead.”

The gathering was addressed by Benjamin Rhodes, Deputy National Security Advisor; Jeffrey DeLaurentis, the acting U.S. ambassador in Havana; and three high-level officials from the U.S. Commerce, State and Treasury departments. Another speaker was

José Ramón Cabañas, the Cuban Ambassador in Washington. Also in attendance were U.S. Senator Patrick Leahy of Vermont and U.S. Representative Kathy Castor of Tampa, Florida, both Democrats.

Rhodes and DeLaurentis touted the administration’s accomplishments and, at different times, got emotional — Rhodes remembering support from Cuban-American friends in the wake of stinging criticism over his work, and DeLaurentis describing his work in Cuba, where he began and might end his diplomatic career, as the most rewarding of his life.

The attendees were Cuban Americans, Cuban government officials and business partners in Washington, including Miami entrepreneur Hugo Cancio, who publishes an arts magazine in Cuba; Felice Gorordo, founder of the Roots of Hope nonprofit; former U.S. Commerce Secretary Carlos Gutierrez; John McIntire, head of the Cuba Emprende Foundation; Miami attorney Ralph Patino; Giancarlo Sopo, founder of the CubaOne foundation, and Miami Foundation president and chief executive Javier Alberto Soto.

Another attendee, Ted Henken, a Baruch College sociology professor and Cuba expert, observed, “It was partly a celebration of what has been achieved, and a mourning” for the intense political fight that awaits.”

As Ric Herrero, former head of the pro-engagement Cuba Now group and the current president of Manos Americas, a social entrepreneurship nonprofit, put it, the gathering was “bittersweet. There was just a lot of gratitude toward the administration for their commitment to this cause and to everything they’ve done.” But they all were left with the questions: “What next? Where do we go from here? Because there is no certainty.”

Indeed, a chief concern among attendees was that Trump’s “volatile” personality could ignite a war of words with the Cubans, who have so far kept silent about the president-elect’s Cuba statements. On the other hand, attendees noted, Trump doesn’t have a clear political ideology, and could be more interested in showing up Obama on Cuba by negotiating more concessions.  However, Rhodes said, “We would like nothing more than the new administration to succeed beyond what we did.”

Obama supporters at the meeting thought that Trump had a willingness to keep negotiating with Raúl Castro’s government and that U.S. regulatory changes, following a top-to-bottom policy review, could take time–so long, perhaps, that by then Castro might near his own retirement, scheduled for February 2018.

“We’re living through a lot of uncertainty, but there’s a pretty strong consensus that Trump is going to realize that turning back the clock is going to be very difficult,” said Carlos Saladrigas, president of the Cuba Study Group. “Returning to a failed policy doesn’t make any sense.”

However, at a December 16 “thank You” rally in Ordlando, Flordia, Trump told the crowd, “America will also stand with the Cuban people in their long struggle for freedom. Their support has been unbelievable. The Cuban people. We know what we have to do, and we’ll do it. Don’t worry about it.”[2]

Cuban Observance

No Cuban commemoration event was found in searching Cuban public sources, Instead, two articles on the subject were found.[3]

The CubaDebate article reviewed some of the key things that had happened since December 17, 2014, while reiterating Cuba’s fervent desire for the U.S. to end its embargo (blockade) and to return Guantanamo Bay to the island. It also alleged that President Obama had done “much less than he could, given the broad executive powers that he [allegedly]possesses and that [allegedly] would have allowed him to reduce the blockade to its minimum expression.”

Nevertheless, the article stated, on December 7, 2016, Josefina Vidal of the Cuban government reaffirmed Cuba’s willingness to continue this process and expressed its hope that President-elect Donald Trump will take into account, when he takes office on January 20, what has been achieved” over the last two years.

These same points were essentially repeated in the article in Granma, the official newspaper of the Communist Party of Cuba. It also added the following points:

  • Obama had acknowledged for the first time that the U.S. policy of “aggression” [“hostility” would be more diplomatic] against Havana was a failure and had ended up isolating the U.S. itself. It also alleged that the U.S. methods were changing, but not its objective – regime change in Cuba.
  • The U.S. still has a ban on US investment in Cuba, except in the area of telecommunications.
  • The Cuban state sector, where more than 75% of the labor force is employed, remains deprived of selling its products to the U.S. with the sole exception of pharmaceuticals and biotechnology.Also, Cuban imports of goods produced in the U.S. that the state-owned enterprise can make are very restricted.
  • Although several months ago the US approved the use of the U.S. Dollar by Cuba in its international transactions, it has not yet been possible to make deposits in cash or payments to third parties in that currency, due to international banks’ fears of fines by the U.S.
  • The U.S. has not yet ended Radio and TV Marti programs aimed at Cuba.

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[1] Mazzei & Torres, Muted White House celebration marks Obama Cuba anniversary, Miami Herald (Dec. 17, 2016).

[2] Lemmongello, Trump thanks Florida at Orlando rally, Orlando Sentinel (Dec. 116, 2016).

[3] Cuba-US: After two years, much remains to be done, CubaDebate (Dec. 17, 2016); Gomez, The keys of December 17, Granma (Dec. 16, 2016).

 

U.S. Announces Agreement To Restore Diplomatic Relations with Cuba

On July 1, 2015, the U.S. and Cuba announced an agreement to restore diplomatic relations. This post will discuss the U.S. announcement and reactions.[1] A subsequent post will do the same for the Cuban announcement and reactions.

U.S. Announcement

President Obama & Vice President Biden
President Obama & Vice President Biden

In the White House’s Rose Garden, President Obama announced the plans to reopen the embassies. Here is what he said:

  • “More than 54 years ago, at the height of the Cold War, the United States closed its embassy in Havana.  Today, I can announce that the United States has agreed to formally re-establish diplomatic relations with the Republic of Cuba, and re-open embassies in our respective countries.  This is a historic step forward in our efforts to normalize relations with the Cuban government and people, and begin a new chapter with our neighbors in the Americas.”
  • “When the United States shuttered our embassy in 1961, I don’t think anyone expected that it would be more than half a century before it re-opened.  After all, our nations are separated by only 90 miles, and there are deep bonds of family and friendship between our people.  But there have been very real, profound differences between our governments, and sometimes we allow ourselves to be trapped by a certain way of doing things.”
  • “For the United States, that meant clinging to a policy that was not working.  Instead of supporting democracy and opportunity for the Cuban people, our efforts to isolate Cuba despite good intentions increasingly had the opposite effect -– cementing the status quo and isolating the United States from our neighbors in this hemisphere.  The progress that we mark today is yet another demonstration that we don’t have to be imprisoned by the past. When something isn’t working, we can -– and will –- change.”
  • “Last December, I announced that the United States and Cuba had decided to take steps to normalize our relationship.  As part of that effort, President Raul Castro and I directed our teams to negotiate the re-establishment of embassies.  Since then, our State Department has worked hard with their Cuban counterparts to achieve that goal.  And later this summer, Secretary Kerry will travel to Havana formally to proudly raise the American flag over our embassy once more.”
  • “This is not merely symbolic.  With this change, we will be able to substantially increase our contacts with the Cuban people.  We’ll have more personnel at our embassy.  And our diplomats will have the ability to engage more broadly across the island.  That will include the Cuban government, civil society, and ordinary Cubans who are reaching for a better life.”
  • “On issues of common interest –- like counterterrorism, disaster response, and development -– we will find new ways to cooperate with Cuba.  And I’ve been clear that we will also continue to have some very serious differences.  That will include America’s enduring support for universal values, like freedom of speech and assembly, and the ability to access information.  And we will not hesitate to speak out when we see actions that contradict those values.”
  • “However, I strongly believe that the best way for America to support our values is through engagement.  That’s why we’ve already taken steps to allow for greater travel, people-to-people and commercial ties between the United States and Cuba.  And we will continue to do so going forward.”
  • “Since December, we’ve already seen enormous enthusiasm for this new approach. Leaders across the Americas have expressed support for our change in policy; you heard that expressed by President Dilma Rousseff of Brazil yesterday.  Public opinion surveys in both our countries show broad support for this engagement. . . .
  • “Here in the United States, we’ve seen that same enthusiasm.  There are Americans who want to travel to Cuba and American businesses [that] want to invest in Cuba.  American colleges and universities . . . want to partner with Cuba.  Above all, Americans who want to get to know their neighbors to the south. And through that engagement, we can also help the Cuban people improve their own lives.”
  • “Americans and Cubans alike are ready to move forward.  I believe it’s time for Congress to do the same.  I’ve called on Congress to take steps to lift the embargo that prevents Americans from travelling or doing business in Cuba.  We’ve already seen members from both parties begin that work.  After all, why should Washington stand in the way of our own people?”
  • “Yes, there are those who want to turn back the clock and double down on a policy of isolation.  But it’s long past time for us to realize that this approach doesn’t work.  It hasn’t worked for 50 years.  It shuts America out of Cuba’s future, and it only makes life worse for the Cuban people.”
  • So I’d ask Congress to listen to the Cuban people.  Listen to the American people.  Listen to the words of a proud Cuban-American, Carlos Gutierrez, who recently came out against the policy of the past, saying, ‘I wonder if the Cubans who have to stand in line for the most basic necessities for hours in the hot Havana sun feel that this approach is helpful to them.’”
  • “Of course, nobody expects Cuba to be transformed overnight. But I believe that American engagement — through our embassy, our businesses, and most of all, through our people — is the best way to advance our interests and support for democracy and human rights.  Time and again, America has demonstrated that part of our leadership in the world is our capacity to change.  It’s what inspires the world to reach for something better.”
  • “A year ago, it might have seemed impossible that the United States would once again be raising our flag, the stars and stripes, over an embassy in Havana.  This is what change looks like.”
  • “In January of 1961, the year I was born, when President Eisenhower announced the termination of our relations with Cuba, he said:  It is my hope and my conviction that it is ‘in the not-too-distant future it will be possible for the historic friendship between us once again to find its reflection in normal relations of every sort.’  Well, it took a while, but I believe that time has come.  And a better future lies ahead.”
Secretary John Kerry
Secretary John Kerry

The same day Secretary of State John Kerry from Vienna, Austria also discussed the plans, including his intent to travel to Havana for the opening of the embassy later this month. His statement included the following:

  • “Later this summer, as the President announced, I will travel to Cuba to personally take part in the formal reopening of our United States Embassy in Havana. This will mark the resumption of embassy operations after a period of 54 years. It will also be the first visit by a Secretary of State to Cuba since 1945. The reopening of our embassy . . . is an important step on the road to restoring fully normal relations between the United States and Cuba. Coming a quarter of a century after the end of the Cold War, it recognizes the reality of the changed circumstances, and it will serve to meet a number of practical needs.”
  • “The United States and Cuba continue to have sharp differences over democracy, human rights, and related issues, but we also have identified areas for cooperation that include law enforcement, safe transportation, emergency response, environmental protection, telecommunications, and migration. The resumption of full embassy activities will help us engage the Cuban Government more often and at a higher level, and it will also allow our diplomats to interact more frequently, and frankly more broadly and effectively, with the Cuban people. In addition, we will better be able to assist Americans who travel to the island nation in order to visit family members or for other purposes.”

In addition, the State Department conducted a special briefing by a senior official on this historic development. This individual said, “We’re confident that our embassy in Havana will be able to operate similar to other embassies operating in restrictive environments. We will be able to meet and exchange opinions with a variety of voices and views both within the government and outside. We’ll be able to engage a broad range of Cuban civil society and citizens.” The conditions for “access to diplomatic facilities, travel of diplomats, and the level of staffing . . . are acceptable for carrying out the core diplomatic functions necessary for implementing the President’s new policy direction on Cuba.” There were not any agreed “constrains or restrictions” on the exact types of programs or facilities that each of our embassies conducts.

According to the State Department spokesperson, there will be future discussions or negotiations with Cuba over human rights, telecommunications, health issues, fugitives, law enforcement, U.S. claims for property expropriation, Cuban claims for damages under the embargo and U.S. broadcasts to the island. Until there is a nomination and confirmation of an ambassador, Jeffrey DeLaurentis will be the charge d’affaires and will lead the embassy.

Jeffrey DeLaurentis & Marcelinio Medina
Jeffrey DeLaurentis & Marcelinio Medina

Also earlier the same day Cuba’s Foreign Ministry confirmed that the head of the US Interests Section in Cuba, Jeffrey DeLaurentis, had delivered to the Acting Foreign Minister, Marcelino Medina, a letter from President Obama to Army General Raul Castro confirming “the restoration of diplomatic relations and the opening of embassies in the respective countries” on or after July 20. Here is the text of that letter:

  • “I am pleased to confirm, after high-level talks between our two governments, and in accordance with international law and practice, that the United States of America and the Republic of Cuba decided to restore diplomatic relations and permanent diplomatic missions in our respective countries 20 July 2015. This is an important step forward in the normalization process, which started last December, with regard to relations between our two countries and peoples.”
  • “In making this decision, the United States are encouraged by the mutual intention to enter into friendly and cooperative relations between our two peoples and governments, consistent with the purposes and principles enshrined in the Charter of the United Nations, in particular those relating to equality sovereign states, the settlement of international disputes by peaceful means, respect for the territorial integrity and political independence of States, respect for the equal rights and self-determination of peoples, non-interference in internal affairs States as well as promoting and encouraging respect for human rights and fundamental freedoms for all.”
  • “The United States and Cuba are parties to the Vienna Convention on Diplomatic Relations, signed in Vienna on April 18, 1961, and the Vienna Convention on Consular Relations, signed in Vienna on April 24, 1963. I am pleased to confirm the understanding the United States that the above conventions apply to diplomatic and consular relations between our two countries.”

Although the U.S. can easily change the plaque on its building in Havana to one proclaiming that it is the Embassy of the United States of America, the State Department has said it needs $6.6 million to retrofit the building to make it suitable as an embassy. This may require a supplemental appropriation by Congress.

The U.S. will need an Ambassador to Cuba, and such an appointment needs to be confirmed by the U.S. Senate. In the meantime, as just noted, the U.S. has a capable career diplomat running the interests section, Jeffrey DeLaurentis, who will be in charge.

Reactions to the Announcement

The announcement of re-establishment of diplomatic relations drew widespread praise. Senator Jeff Flake (Rep., AZ) stated, “It’s long past time for U.S. policy toward Cuba to be associated with something other than five decades of failure. It is difficult to overstate the importance of resuming diplomatic relations ‎with Cuba, in furthering our own national interests, benefiting our relations in the region, and encouraging a positive future for the Cuban people. I am confident that this move will lead to increased travel and contact between U.S. citizens and everyday Cubans, to the benefit of both.” Senator Amy Klobuchar (Dem., MN), a co-sponsor of a bill to expand U.S. travel to Cuba and the author of a bill to lift the trade embargo, said, “This is the first step that must happen in order to lift the embargo.” Democratic Senators Patrick Leahy (VT) and Benjamin Cardin (MD) issued similar positive statements.

Engage Cuba, a bipartisan public policy organization dedicated to coalescing and mobilizing American businesses, non-profit groups and concerned citizens for the purpose of supporting the ongoing U.S.‐Cuba normalization process and enacting legislation to reform U.S. travel and trade restrictions with Cuba, issued a statement of support. It said, “We applaud this important step in bringing the U.S. and Cuba closer together, and urge Congress to hasten the day when American travelers and companies have the freedom to engage with one of our nearest neighbors. Opening embassies in Washington and Havana is an important step toward the day when Americans can make their own decisions on where they travel, and our businesses can compete with the rest of the world. We are making history by making it clear that America’s engagement isn’t a concession, it is a show of strength and the best way to promote our values and create opportunities for both Americans and the Cuban people.”

Moreover, said Engage Cuba, “A vast majority of the American people – and 97% of the Cuban people – support re-establishing diplomatic relations. Today is a great day for the American and Cuban people who seek a brighter future for their two countries. After 54 years of a failed Cold war policy, better days finally lie ahead.”

A similar supportive statement came from the Center for Democracy in the Americas (CDA), which is “devoted to changing U.S. policy toward the countries of the Americas by basing our relations on mutual respect, fostering dialogue with those governments and movements with which U.S. policy is at odds, and recognizing positive trends in democracy and governance” and which is a member of Engage Cuba. CDA stated, “”This is a moment we have been working toward for many years. The restoration of diplomatic relations between our countries is a major achievement that will help to heal decades of mistrust and will open opportunities for the U.S. and Cuba to collaborate on issues of mutual interest like immigration, environmental conservation, and regional trade. We applaud the tireless work of Cuban and U.S. diplomats, policymakers, academics, and activists who have helped make this possible. We are ready to work with all our allies to defend these positive steps initiated by President Obama and to move forward with removing the embargo once and for all.”

The day before this announcement, President Obama held a joint press conference at the White House with the visiting President of Brazil, Dilma Rousseff.[2] In his opening remarks, Obama said, “As President, I’ve pursued a new era of engagement with Latin America where our countries work together as equal partners, based on mutual interest and mutual respect.  As we saw at the recent Summit of the Americas, the United States is more deeply engaged in the region than we’ve been in decades, and I believe the relationship between the United States and Latin America is as good as it’s ever been.  We’re focused on the future — what we can accomplish together.”

After he had reviewed the many ways that Brazil and the U.S. cooperate, Obama commented, “And finally, we’re working together to uphold democracy and human rights across Latin America.  I very much appreciate President Rousseff and Brazil’s strong support for our new opening toward Cuba.  I updated Dilma on our progress, including our work to open embassies in Havana and Washington.  And I believe that Brazil’s leadership in the region, as well as its own journey to democracy and a market economy can make it an important partner as we work to create more opportunities and prosperity for the Cuban people.”

In her response President Rousseff remarked about “the importance for Latin America of the recent decision made by President Obama and by President Raul Castro, even with the partnership with Pope Francis to the effect of opening up relations with — or resuming relations with Cuba, a very decisive milestone and point in time in U.S. relations with Latin America.  It is really about putting an end to the lingering vestiges of the Cold War.  And it ultimately elevates the level of the relations between the U.S. and the entire region. May I acknowledge the importance of that gesture to all of Latin America and also to world peace at large.  It is an important example of relations to be followed.”

These thoughts were echoed in the subsequent Joint Communique by the two presidents: “President Rousseff praised President Obama’s policy changes towards Cuba, and the Leaders agreed that the latest Summit of the Americas (held in Panama, on April 10 and 11, 2015) demonstrated the region’s capacity to overcome the differences of the past through dialogue, thereby paving the way for the region as a whole to find solutions to the common challenges facing the countries of the Americas.”

As anticipated, however, Senator Marco Rubio (Rep., FL), a Cuban-American, immediately issued a press release condemning the agreement.[3] It said:

  • “Throughout this entire negotiation, as the Castro regime has stepped up its repression of the Cuban people, the Obama Administration has continued to look the other way and offer concession after concession. The administration’s reported plan to restore diplomatic relations is one such prized concession to the Castro regime. It remains unclear what, if anything, has been achieved since the President’s December 17th announcement in terms of securing the return of U.S. fugitives being harbored in Cuba, settling outstanding legal claims to U.S. citizens for properties confiscated by the regime, and in obtaining the unequivocal right of our diplomats to travel freely throughout Cuba and meet with any dissidents, and most importantly, securing greater political freedoms for the Cuban people. I intend to oppose the confirmation of an Ambassador to Cuba until these issues are addressed. It is time for our unilateral concessions to this odious regime to end.”

Conclusion

I am glad that my recent concern about the delay in announcing resumption of diplomatic relations has been alleviated. This is an important development in the            reconciliation of our country with Cuba. Now all advocates for reconciliation need to notify their senators and representatives to oppose any of the measures put forward by Senator Rubio and others to try to block this important move.

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[1] This portion of the post is based upon the following: White House, Statement by the President on the Re-Establishment of Diplomatic Relations with Cuba (July 1, 2015); Letter from Barack Obama [to] Raúl Castro, Granma (July 1, 2015); Letters between Obama and Castro to restore diplomatic relations, el Pais (July 1, 2015); Kerry, Statement on Cuba (July 1, 2015); State Dep’t, Special Briefing on Re-Establishment of Diplomatic Relations with Cuba (July 1, 2015); Baker & Davis, U.S. and Cuba Reach an Agreement to Reopen Embassies, Officials Say, N.Y. Times (June 30, 2015); Schwartz, Córdoba & Lee, U.S., Cuba Reach Agreement to Establish Full Diplomatic Relations, W.S.J. (June 30, 2015); Center for Democracy in Americas, Press Release: CDA Applauds Announcement That U.S. And Cuba Will Reopen Embassies (June 30, 2015); Minister for Foreign Affairs will receive †he Head of †he Section of Interests of the United States, Granma (July 1, 2015); Ayuso, Cuba and the United States announced the reopening of embassies on Wednesday, El Pais (July 1, 2015); Flake, Re-Establishment of Diplomatic Relations with Cuba (June 30, 2015); Engage Cuba, Press Release: Statement from Engage Cuba on Announcement that U.S., and Cuban Embassies Will Re-open (July 1, 2015); Rubio, Rubio Comments On Obama Re-Establishing Diplomatic Relations With Cuba (July 1, 2015)

[2] This portion of the post is based upon the following: White House, Remarks by President Obama and President Rousseff of Brazil in Joint Press Conference (June 30, 2015); White House, Joint Communique by President Barack Obama and President Dilma Rousseff (June 30, 2015); Harris, Leader of Brazil Visits Amid Home Turbulence, N.Y. Times (June 30, 2015).

[3] Senator Rubio in a letter to Secretary Kerry in June “vowed to oppose the confirmation of any ambassador until issues like human rights, fugitive terrorists and billions of dollars of outstanding claims were resolved.” The Senator said it is “important that pro-democracy activities not be sacrificed in the name of ‘diplomacy’ just so that we can change the name of a building from ‘Interest Section’ to ‘Embassy,’ ” Similar negative press releases came from other Cuban-Americas in the Congress: Senator Robert Menendez (Dem., NJ) and Republican Representatives from Florida, Ileana Ros-Lehtinen and Mario Diaz-Balart.

 

 

 

 

 

Update on Congressional Actions Regarding Cuba 

A June 12th post reviewed the status of appropriations bills relating to Cuba in the U.S. House of Representatives. Now we look at what happened last week in Congress on these and other measures.

National Defense Authorization Act FY 2016[1]

On June 18, the Senate passed its version of the spending authorization for the Department of Defense for Fiscal Year 2016.

The White House threatened to veto the bill. The main bone of contention is the bill’s continuation of sequestration of funds and use of so-called budget gimmicks. The White House opposes also opposes the bill because it contains language that it claims would make it hard to shutter the U.S. prison facility in Guantánamo Bay, Cuba. It calls the process for winning congressional approval of closing Guantánamo “unnecessary and overly restrictive.”

The same day, however, Senator John McCain (Rep., AZ) said that Defense Secretary Aston Carter had pledged to come forward to Congress with a plan to close the Guantanamo prison facility. Even if the administration hands over a plan to close the facility, however, it’s unclear if it could get passed through Congress. McCain’s proposal divided Republicans on the Senate Armed Services Committee and he faces opposition from House lawmakers.

Now the Senate and House have to confer and negotiate a bill that can pass both chambers. One of the major challenges are the different provisions regarding the Guantanamo detention facility and detainees:

  • The Senate’s version of the bill provides the President with a path to close the prison in Guantanamo if Congress signs off on the plan.
  • The House version does not include an option for closing the prison, but instead would maintain restrictions on transferring prisoners. The House bill also adds additional certification requirements, bans detainees from being transferred to “combat zones” and blocks any transfers of prisoners to the United States including for medical purposes.

Intelligence Authorization Act, FY 2016 (H.R.2596)[2]

On June 16 the House passed, 247-178, the Intelligence Authorization Act FY 2016 (H.R.2596). It outlines policy for 16 federal intelligence agencies, including the CIA and .the National Reconnaissance Agency. After the vote, John Boehner (Rep., OH), the Speaker of the House, said, “This bill sustains and strengthens our capabilities to combat terrorism, cyberattacks, and the proliferation of weapons of mass destruction, while making every taxpayer dollar count.”

The bill’s sections 321 would ban the transfer of certain Guantanamo detainees to the U.S.; section 322 would ban the construction or modification of U.S. facilities to house certain Guantanamo detainees; and section 323 would ban transfer of Guantanamo detainees to combat zones. Sections 331 and 333 would require certain reports to Congress regarding such detainees.

Rep. Adam Schiff (Dem., CA), the top Democrat on the Intelligence Committee, criticized the bill’s banning the government from transferring such detainees to the U.S. or a recognized “combat zone.” Schiff said, “We are not safer because of Guantanamo’s existence. In fact, it makes us more vulnerable by drawing more recruits to the jihad.” Moreover, the definition of “combat zone,” Schiff added, is “so broad as to include allies and partners such as Jordan.” An amendment from Schiff to eliminate the new restrictions failed 176-246.

Before the vote, the White House said, “While there are areas of agreement with the committee, the administration strongly objects to several provisions of the bill,” and “If this bill were presented to the president, the President’s senior advisors would recommend to the president that he veto it.”

Financial Services and General Government Appropriations Act FY 2016[3]

On June 17 the House Appropriations Committee approved the Financial Services and General Government Appropriations Act FY 2016 on a straight party-line vote, 30 to 20.The Committee’s press release states the bill provides $20.2 billion in funding for “critical national programs to enforce U.S. laws , maintain a fair and efficient judicial system, and help small businesses grow” while reducing or eliminating lower-priority programs and cutting “poor-performing agencies—including an $838 million reduction to the Internal Revenue Service.”

One of the most controversial provisions of the bill was the temporary blocking of the newly implemented net neutrality rules, which was criticized by the White House without a threat of a veto.

As noted in a prior post, according to the Committee’s press release, the bill contains prohibitions on (a) “travel to Cuba for educational exchanges not involving academic study pursuant to a degree program;” (b) “importation of property confiscated by the Cuban Government;” and (c) “financial transactions with the Cuban military or intelligence service.” I, however, am still unable to find these provisions in the bill. I solicit comments identifying these provisions.

In the Committee Rep. Nita Lowey (Dem., NY), the top Democrat of the full committee, offered an amendment that would have removed what she called “20 veto-bait riders” or policy provisions, including these Cuba-related measures. The proposal was blocked on a party-line vote.

Freedom to Travel to Cuba Act of 2015 (S.299)[4]

A prior post discussed the Freedom to Travel to Cuba Act of 2015 that was introduced by Senator Jeff Flake (Rep., AZ). In addition, it now has 44 cosponsors: 36 Democrats, 6 Republicans and 2 Independents.

A recent New York Times editorial endorsed the lifting the ban on travel to Cuba. It said, “The ban — the only travel prohibition American citizens are currently subjected to — never made sense, and it’s particularly misguided in an era of broadening engagement between the United States and Cuba.” Now, “the trajectory is unmistakable. Public opinion polls show that a majority of Cubans on the island and Americans favor engagement. Congress should wait no longer to do its part.”

Cuban Military Transparency Act (S.1489)[5]

On June 3 Senator Marco Rubio (Rep., FL) introduced the Cuban Military Transparency Act (S.1489) with seven cosponsors (Robert Menendez (Dem., NJ), Orrin Hatch (Rep., UT), Tom Cotton (Rep., AR), Ted Cruz (Rep., TX), Cory Gardner (Rep., CO), David Vitter (Rep., LA), Mark Kirk (Rep., IL). It was referred to the Committee on Foreign Relations.

The bill would prohibit a U.S. person from engaging in any financial transaction with or transfer of funds to: the Ministry of the Revolutionary Armed Forces of Cuba or the Ministry of the Interior of Cuba (or any of their subdivisions); a senior member of such Ministries; any agency, instrumentality, or other entity that is more than 25% owned, or that is operated or controlled by, such a Ministry; or any individual or entity for the purpose of avoiding a prohibited financial transaction or transfer of funds that is for the benefit of that individual or entity. Excluded from these bans are the sale to Cuba of agricultural commodities, medicines, and medical devices; remittances to an immediate family member; or assistance in furtherance of democracy-building efforts for Cuba.

The bill would also require (a) the U.S. Attorney General to coordinate with the International Criminal Police Organization (INTERPOL) in order to pursue the location and arrest of U.S. fugitives in Cuba, including current and former members of the Cuban military and (b) the U.S. President to provide reports on the role of the Ministry of the Revolutionary Armed Forces and the Ministry of the Interior in Cuba and the return of property that has been confiscated by the Government of Cuba.

In his press release about the bill, Senator Rubio said, ““It is not in the interest of the United States or the people of Cuba for the U.S. to become a financier of the Castro regime’s brutality. The Cuban Military Transparency Act would prevent U.S. dollars from getting into the hands of the Cuban military and would demand accountability from the Obama Administration regarding fugitives of American justice in Cuba, the return of stolen and uncompensated property and the role of the Ministry of the Revolutionary Armed Forces and the Ministry of the Interior in Cuba.”

The Center for Democracy in the Americas opposes this bill. It admits “that in Cuba, a socialist state with a largely state-owned economy, the military is invested in state-owned businesses, and several of those . . . are dominant players in Cuba’s tourist industry. Given the military’s broad role in Cuba’s economy, any expenditure by U.S. travelers and businesses – including the cost of hotel rooms, telephone calls, airport taxes, the hotel occupancy tax, sales taxes on tourist purchases, resort fees – could be prohibited presumptively unless the traveler or company could persuade [the U.S. Treasury agency] they spent their money in Cuba some other way.” But “how could they prove the negative? Who in Cuba will hand out the forms that say “that hotel room” or “that painting” or “that serving of ropa vieja” didn’t come from an enterprise owned or controlled by Cuba’s military?”

Therefore, according to the Center for Democracy in the Americas, the true purpose of this bill is “to shame, harass, and try to stop every American from visiting Cuba or seeking to do business in Cuba, and to return U.S. policy to its pre-December 17, 2014 goal of starving the Cuban economy and the Cuban people along with it.”

Conclusion

These latest congressional developments reinforce the need for continued vigilance by supporters of U.S.-Cuba reconciliation to pay attention to what is happening in Congress and to continue to express their opinions on these issues to their representatives in that body and to the larger community.

I take pride in the strong support for such reconciliation in the State of Minnesota, so far away from Cuba. A recent article in MINNPOST explored this apparently strange phenomenon. Eric Schwartz, Dean of the Humphrey School of Public Affairs at the University of Minnesota and a non-native Minnesotan, believes there are three main reasons for this fact. First, two of Minnesota’s biggest industries — agriculture and medical devices — have massive potential exports to Cuba. Second, Minnesota’s lack of a large Cuban-American community and its distance from the island mean our lawmakers are not subject to the same pressures as representatives from states like Florida and New Jersey. Third, many of Minnesota’s federal legislators are reasonable people.

I concur in that opinion, but believe Schwartz has missed the fundamental reason for strong Minnesota support for this reconciliation. Many people in this State are interested in what goes on in the world and are actively engaged with the rest of the world through their churches like Minneapolis’ Westminster Presbyterian Church, the Center for Victims of Torture, Advocates for Human Rights, the Minnesota Cuba Committee and various programs at the University of Minnesota and through Minnesotans’ welcoming immigrants and refugees from around the world, especially from Somalia, Viet Nam and Laos, and through major multinational corporations headquartered here like Cargill, which is leading the U.S. Agricultural Coalition for Cuba,3M, Medtronic and General Mills.

I was pleased to read about the change of heart of a prominent Cuban-American Republican who was U.S. Secretary of Commerce in the George W. Bush Administration, Carlos Gutierrez. In an op-ed essay in the New York Times, he said,” it is now time for Republicans and the wider American business community to stop fixating on the past and embrace a new approach to Cuba.” He added, “Some of my fellow Cuban-Americans insist that continuing to squeeze Cuba economically will help the Cuban people because it will lead to democracy. I wonder if the Cubans who have to stand in line for the most basic necessities for hours in the hot Havana sun feel that this approach is helpful to them.”

Gutierrez concluded, “America must look to the future instead — and pursue this opportunity to assist Cubans in building a new economy. There is a lot of work to do, and progress will be slow. However, the business community and my fellow Cuban-Americans and Republicans should not ignore the possibilities ahead. The Cuban people need and deserve our help.”

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[1] Matishak, White House threatens to veto Senate’s defense spending bill, The Hill (June 18, 2015); Carney, McCain expects Pentagon plan on closing Guantanamo, The Hill (June 18, 2015);Carney, Five challenges for the defense bill (June 21, 2015).

[2] This section of the post is based upon Hattem, House passes intel bill over White House objections, The Hill (June 16, 2015).

[3] This section of the post is based upon the following: House Appropriations Comm., Press Release: Appropriations Committee Approves Fiscal Year 2016 Financial Services Bill (Jun 17, 2015); House Appropriations Comm., Financial Services Appropriations Act FY 2016 (June 9?, 2015); House Appropriations Comm., Report: Financial Services and General Government Appropriations Bill, 2016, No. 114- —( 2015);Trujillo, House panel advances rider to block Internet rules, The Hill (June 7, 2015); Trujillo, Obama administration knocks net neutrality riders in funding bill, The Hill (June 17, 2015)  Shabad, Bill with $838M IRS cut advances in House, The Hill (June 17, 2015).

[4] Library of Congress THOMAS, S.299 Freedom to Travel to Cuba Act of 2015 (Cosponsors)

[5] This portion of the post is based upon the following: Library of Congress THOMAS, Cuban Military Transparency Act; Rubio, Press Release: Senators Introduce Bill To Deny Resources To Castro’s Military and Security Services (June 3, 2015); Center for Democracy in Americas, The Cuban Military Not So Transparent Act (June 19, 2015).