Additional State Department Briefing on Helms-Burton Changes

A prior post discussed the changes in U.S. implementation of Title III of the Helms-Burton Act that were announced on April 17 by Secretary of State Mike Pompeo and discussed by an Assistant Secretary of State. That same day an unidentified senior official of the Department held a briefing for journalists, apparently at the U.S. Embassy in Havana. Here are highlights of that briefing.[1]

General Comments on Helms-Burton Act

“[U]nder 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.”

“[S]tarting with NSPM5 [National Security Presidential Memorandum], 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.”

“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.”

Impact of U.S. Changes on Europe

“{O]ou 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. . . . 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.”

“[W]hether 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.”

“With this . . . 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. [No response to question about impact on Russia.]

“[T[his 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.” [No response to question about possible re-designation of Cuba as a State Sponsor of Terrorism.]

Cuba and Venezuela

“We have already begun to undertake a number of actions when it comes to Cuba’s role in Venezuela.  As mentioned, this is based [on] . . . 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”

“{T]his is 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.”{

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.”

“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 Sebin 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, . . . 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.”

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.”

Potential Claims for Expropriated Cuban Property

The U.S. “ Foreign Claims Settlement Commission has certified nearly $2 billion worth of claims.  That doesn’t include possible interest.  The United States did an assessment, . . .in 1996, where we saw that there were over 6,000 certified claims.  However,  . . . [today’s] determination is not specifically focused only on certified claims . . . [and] there could be as many as 200,000 certified claims [and] 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.”

“Title IV  [of the Helms-Burton Act] was never suspended, and what I can say is that we are going to be ramping up investigations in that space as well.”

Conclusion

Exceedingly important facts are ignored by the U.S. cancelling further waiver of Title III of the Helms-Burton Act, by the U.S. current discussion of the claims by U.S. nationals for Cuba’s expropriation of their property on the island, by the above comments by a State Department official as well as Secretary Pompeo’s April 17 announcement of the changes regarding the Act and by the subsequent briefing by Assistant Secretary Breier, as set forth in a prior post.

First, Cuba has consistently recognized that it has an obligation under international law to pay fair compensation for all property that was expropriated in the early years of the Cuba Revolutionary Government. [2]

Second, Cuba has negotiated and paid such expropriation claims by claimants from other countries. [2]

Third, during  the Obama Administration in 2015-2016 held bilateral meetings with Cuba in Washington, D.C. and Havana on many issues that had accumulated during the 50-plus years of U.S.-Cuba estrangement. One such subject was compensation for U.S. claimants for expropriated property. However, there was no resulting agreement on this and many other subjects. I suspect this was due to the complexity of these many issues, potential U.S. political difficulties in approving any such settlement and Cuba’s lack of money to pay such U.S. claims. [2]

Fourth, as a result, this blog has proposed, in an earlier post, that the U.S. and Cuba should agree to an international arbitration over this and other U.S. and Cuba damage claims. (Remember every Fall at the U.N. General Assembly Cuba alleges large amounts of damages from the U.S. embargo when the Assembly overwhelmingly approves Cuba’s resolution condemning that U.S. embargo and this Cuba claim would also be part of the arbitration.) This is a peaceful, responsible way to settle these claims, and frequently in U.S. litigation over large, competing claims, settlements frequently occur after the parties become further educated about the merits and risks of such claims.

The current U.S. bluster over the Helms-Burton Act totally fails to recognize this solution to the issue of compensation of U.S. nationals for expropriation of their property in Cuba.

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[1] U.S. Embassy in Cuba, Telephonic Press Briefing with Senior State Department Official  on the U.S. Policy Towards Cuba (April 17, 2019).

[2] See posts listed in the “U.S. (Obama) & Cuba (Normalization), 2015” and “U.S. (Obama) & Cuba (Normalization), 2016” sections of List of Posts to dwkcommentaries–Topical: CUBA.

 

Proposed Resolution of U.S.-Cuba Issues

The 60 years of U.S. hostility towards Cuba (with the two-year respite (2014-2016) under President Obama) have left many important unresolved issues.[1] Here is at least a partial list of those issues:

  1. U.S. ending embargo (blockade) of Cuba?
  2. U.S. response to Cuba’s claims for alleged damages from embargo & other acts?
  3. U.S. closing its detention facility at Guantanamo Bay?
  4. U.S. paying Cuba for use of Guantanamo Bay, 1960— ?
  5. U.S. returning Guantanamo Bay to Cuba or entering into new lease of territory?
  6. Cuba paying U.S. persons for expropriated property, 1959-60?
  7. U.S. ending unilateral “democracy promotion” activities in Cuba?
  8. Mutual extradition of the other’s criminal suspects & convicts?
  9. Cuba improving human rights?
  10. U.S. & Cuba resolving responsibility for medical problems of U.S. diplomats in Cuba, 2016-??
  11. U.S. ending or modifying U.S. ban on transactions with certain Cuban entities on the State Department’s “Cuba Restricted List”?
  12. U.S. possible restoration of parole for Cuban medical professionals?
  13. U.S. possible allowance of lawsuits for expropriated Cuban property?
  14. U.S. possible re-designation of Cuba as a “state sponsor of terrorism” due to Cuban military aid to Venezuela?
  15. U.S. possible adoption of other U.S. hostile acts against Cuba proposed by President Trump, National Security Advisor Bolton, Secretary of State Pompeo, Senator Rubio, et al.?

Many of these issues were discussed in the meetings of the two countries in 2015-17 although the substance of the discussions have not been publicly disclosed.

If I were President with a supportive Congress,  I would work for the following comprehensive bilateral resolution:of these issues:

  • U.S. ends embargo (blockade) of Cuba;
  • U.S. ends unilateral “democracy promotion” efforts in Cuba;
  • U.S. closes detention facility at Guantanamo Bay;
  • U.S. pays Cuba for its use of Guantanamo Bay, 1960 to date;
  • U.S. and Cuba enter into new lease of Guantanamo Bay at fair market value rental;
  • U.S. pays Cuba for alleged damages caused by U.S. embargo (blockade);
  • Cuba agrees to pay fair market value, with interest, to U.S. owners of expropriated property (potentially with funds provided by U.S. paying Cuba for past use of Guantanamo Bay; for future use of Guantanamo Bay under new lease; and for alleged damages caused by U.S. embargo (blockade));
  • U.S. abolishes Title III of Helms-Burton Act allowing U.S. owners of expropriated property to sue persons trafficking in property owned by U.S. persons that were expropriated by Cuba (1959-60);
  • U.S. agrees not to reintroduce parole for Cuban professional medical personnel;
  • U.S. agrees not to re-designate Cuba as “state sponsor of terrorism;”
  • U.S. and Cuba enter into new agreement on mutual extraditions;
  • U.S. and Cuba agree on bilateral ways to improve Cuban human rights and Internet access; and
  • U.S. and Cuba resolve issues regarding medical problems of US diplomats in Cuba (2016-??).

The proposal to have the U.S. use some or all of its payments to Cuba for Guantanamo usage and alleged Cuban damages from the embargo for the U.S. to pay for the U.S. claims for Cuba’s expropriations  is based on the painful realization that Cuba does not have the resources to pay for any significant portion of these U.S. claims.

Cuba repeatedly has asserted that the U.S. use of Guantanamo Bay is an illegal occupation and the property should be returned to Cuba. Because of the  U.S. argument to legally have occupied the territory under the 1903 lease and because of U.S. current national security concerns, however, the U.S. would not and should not agree to this Cuban proposal, especially since Cuba is developing closer relationships with Russia and China, which potentially could occupy Guantanamo to enhance their threats to the U.S.

Failure to reach agreement on any of these issues may well result in narrowing the issues, and any unresolved issues should be submitted to a binding international arbitration at the Permanent Court of Arbitration at the Hague in the Netherlands. Based on this blogger’s experience as a corporate litigator in U.S. courts, I note that many cases like the one proposed for arbitration of the Cuban and U.S. claims frequently are settled before they go to trial.

One example of narrowing the issues is Cuba’s recognition with other countries that it has an international legal obligation to pay for expropriated property, which is the major premise of the U.S. claims for expropriated property. That would leave important, subsidiary issues: are the claimants valid owners of the Cuban properties; what were the fair market values of the properties at the time of expropriation; and what is a fair rate of interest on the claims?

I invite anyone with other ideas for a comprehensive bilateral resolution of outstanding issues or objections to my proposed resolution to share them in reasoned comments to this post.

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[1] These issues are discussed in many posts listed in List of Posts to dwkcommentaries—Topical: CUBA.

Recent U.S.-Cuba Developments 

Here are updates on several U.S.-Cuba issues.

U.S.-Cuba Bilateral Commission Meeting[1]

On June 14 in Washington, D.C., the U.S. and Cuba held their seventh meeting of the  Bilateral Commission that was started by the Obama Administration and Cuba.

Afterwards the State Department said the two parties “reviewed . . . areas for engagement that advance the interests of the [U.S.] and the Cuban people including combatting trafficking in persons; facilitating safe civil aviation; law enforcement cooperation; agricultural cooperation; maritime safety and search and rescue cooperation; resolution of certified claims;[2] advancing understanding of environmental challenges; and protecting the national security and public health and safety of the [U.S.]”

The State Department also said, “The [U.S.] reiterated the urgent need to identify the source of the attacks on U.S. diplomats and to ensure they cease. We also reiterated that until it is sufficiently safe to fully staff our Embassy, we will not be able to provide regular visa services in Havana. We expressed our continued concerns about the arbitrary detention of independent journalists and human rights defenders. The [U.S.] acknowledged progress in repatriating Cubans with final orders of removal from the [U.S.], but emphasized Cuba needs to accept greater numbers of returnees.” The U.S. also voiced concern about the “arbitrary detention of independent journalists and human rights defenders” in Cuba.

“Carlos Fernandez de Cossio, the top Cuban official at [this meeting], told The Associated Press that his delegation had “challenged the U.S. on the use of the word ‘attack.’ “There is no evidence of a weapon, there is no evidence of a source, nobody can point to motivation and yet they continue to use the word ‘attack.’ We see it as politically motivated.’” He also noted that neither American nor Cuban experts had been able to determine what caused the symptoms. He renewed concerns that the Trump administration is using the incidents as an excuse to roll back U.S.-Cuba rapprochement started under the Obama administration.

This objection to the U.S. verbiage for this problem was reiterated in a statement by the Cuba Foreign Ministry. “The Cuban delegation urged the government of the [U.S.] to desist from the continued political manipulation of the alleged health cases, which became the pretext to adopt new unilateral measures that affect the performance of the respective embassies, in particular, the rendering of consular services depended upon by hundreds of thousands of persons.” Cuba also raised its objection to the U.S. “travel warning” for Cuba, saying it “hinders the scientific, academic, cultural, religious and entrepreneurial exchanges, as well as the visits by Americans to a country that is internationally recognized as safe and healthy.”

The Cuba Foreign Ministry statement added, “The Cuban delegation rebuffed the regress in the bilateral relationship imposed by the government of the [U.S.] and called attention on the negative consequences thereof for both peoples, the Cuban emigration and the international and regional environment. The Cuban delegation reiterated that the economic, commercial and financial blockade continues to be the main obstacle to any perspective of improvement in the bilateral relationship and denounced its intensification with the adoption, in particular, of additional financial measures of aggressive extraterritorial nature.” Another Cuban objection was registered to what it said were U.S. actions, which were “intended interference in the internal affairs of Cuba, with the open manipulation of the human rights issue, which is flagrantly, massively and systematically violated with the implementation of the blockade.”

The Cuban Foreign Ministry, on the other hand, acknowledged “that it has been demonstrated that it is possible to cooperate and live in a civilized manner, by respecting differences and promoting that which benefits both countries and peoples. It expressed Cuba’s willingness to continue the bilateral dialogue and to work on issues of common interest through the active implementation, based on concrete proposals, of the bilateral agreements subscribed as those on environmental protection, law enforcement, health, agriculture, hydrography and geodesy, among others.”

Finally the State Department announced that the parties had “agreed to hold the next rounds of the biannual Migration Talks and the Law Enforcement Dialogue this summer.”

Another source mentioned that since Trump took office, the two countries have met around two dozen times on topics such as migration, public health, combating illicit drugs, environmental protection, law enforcement, agriculture, people smuggling and migration fraud, fugitives from justice, cyber-security, anti-money laundering, human trafficking, maritime safety, civil aviation and human rights.

Overall Evaluation of U.S.-Cuba Relations Under Trump[3]

Mimi Whitefield, who closely follows Cuban developments for the Miami Herald, notes that U.S.-Cuba relations appear to be stalled since President Trump gave his speech in Miami announcing retreats on U.S. engagement with Cuba.

However, she points out, the Havana-based “Cuban Commission for Human Rights and National Reconciliation documented 5,155 such cases last year, compared to 8,616 and 9,940 during the last two years of the Obama administration.” And in May 2018 they fell to 128, the lowest monthly total in three years, which may have been affected by “factors that affected Cubans’ activism: Poor weather conditions kept many people indoors, Cubans were preoccupied and took more time trying to find food and other staples, transportation was difficult, and the deaths of 112 people in a May 18 airline crash left the nation shell-shocked.”

Whitefield also states that the U.S. List of Restricted Entities and Subentities Associated With Cuba as of November 9, 2017, with which U.S. persons are not to have any dealings, has not been updated and does not even include all the hotels run by Cuba’s military conglomerate, and Americans still have the option of staying at hotel chains operated by the Cuban Ministry of Tourism.

U.S. visitors to the island declined 56.6% in the first quarter of 2018 versus the prior year, with enormous adverse impact on Cuba’s emerging private sector. “Cuban entrepreneurs complain that the confusing U.S. travel policy has hurt them disproportionally because individual travelers tend to stay with them rather than at state-owned hotels. Business, some say, is down 30 to 40 percent because U.S. travel in general is down.”

On the other hand, says John McAuliffe, executive director of the Fund for Reconciliation and Development, which promotes engagement between Cuba and the U.S., “there is one form of travel to Cuba that is booming and that is cruises, and most of the revenue from the cruise industry goes to the state. With cruise terminal fees, buses, tours, and cruise passengers eating at mostly state restaurants, it’s channeling more money to official circles.”

Expansion of Bipartisan State Councils Supporting  Engagement with Cuba[4]

 On June 12, Engage Cuba, a bipartisan coalition promoting U.S. engagement with Cuba, announced that there are now 18 states with bipartisan state councils supporting these efforts. The latest is Pennsylvania, which like the others will seek to build statewide support for pro-engagement policies and ending U.S. trade and travel restrictions on Cuba.

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[1] U.S. State Dep’t, United States and Cuba Hold Seventh Bilateral Commission Meeting (June 14, 2018); Cuba Foreign Ministry, Seventh Meeting of the Cuba-United States Bilateral Commission held in Washington, D.C, (June 14, 2018); Assoc. Press, US Renews Call for Cuba to Probe Cause of Health ‘Attack,’ N.Y.Times (June 14, 2018); The US urges the Government of Cuba to identify the origin of attacks on diplomats, Diario de Cuba (June 14, 2018).

[2] The “certified claims” probably refers to claims against Cuba by U.S. nationals for their claims for compensation for Cuba’s expropriation of their property on the island in 1959-1960 that were certified by the U.S. Department of Justice. See these posts to dwkcommentaries.com: Resolution of U.S. and Cuba’s Damage Claims (April 6, 2015); Resolving U.S. and Cuba Damage Claims (Dec. 13, 2015).

[3]  Whitefield, Has President Trump’s year-old Cuba policy helped the Cuban people? Miami Herald (June 14, 2018).

[4]   Engage Cuba, Pennsylvania Leaders Launch Engage Cuba State Council (June 12, 2018).

 

U.S. Reactions to the New President of Cuba

A prior post reported the April 19 election of Miguel Díaz-Canel as the new President of Cuba. U.S. reactions to that election  have been unanimous: at least initially there probably will be no major changes in Cuba’s international and domestic policies, and many also say there was not a democratic transition of power. Here is a sampling of these U.S. reactions.

U.S. Reactions

Soon after Raúl Castro in his April 19 speech referred to U.S. Vice President Mike Pence’s leaving the Summit of the Americas, Pence tweeted the U.S. will not rest until Cuba “has free & fair elections, political prisoners are released & the people of Cuba are finally free! #CubaLibre.”[1]

On April 18 a spokesperson for the White House National Security Council told an independent Cuban news outlet, “The United States has no expectation that the Cuban people will see greater liberties under Castro’s hand-picked successor. We will continue to show solidarity with the Cuban people in their petition for freedom and prosperity, so we are not expected to change our policy of directing funds to the Cuban people and away from Cuba’s military, security and intelligence services.”[2]

The previous day the spokeswoman for the U.S. State Department, Heather Nauert, said, “As we watch what’s taken place at the Cuba national assembly, we certainly see that that’s not a democratic transition. So when we see that something is not a democratic transition, that’s of great concern to us. We would like citizens to be able to have a say in their political outcomes, and this certainly does not seem like regular folks will have a say. . . . They basically don’t have a real or meaningful choice because it’s not a democratic process. We hope that Cuba’s new president will listen to the Cuban people. We’re not sure that that’s going to happen. We would like a more free and democratic Cuba. We will be watching but aren’t overly optimistic, because this isn’t a democratic process.”[3]

A New York Times editorial stated, “Rául Castro, who handpicked this loyal apparatchik as his successor, remains at the helm of the Communist Party and the armed forces; his son runs the intelligence services; his ex-son-in-law runs the military’s vast business interests. In his first speech, Mr. Díaz-Canel vowed there would be no “capitalist restoration” and concluded with a slogan that has not roused the masses for some time now: “Socialism or death! We will triumph!”[4]

The Times’ editorial also stated, “President “Trump should join with Cuba’s other neighbors to encourage the new Cuban leader to expand the private economy, release political prisoners, increase access to the internet, decentralize power and in other critically needed ways finally break his country out of the Castro cocoon.”

After noting his concurrence in not expecting major changes in Cuba, Christopher Sabatini, a lecturer at Columbia University’s School of International and Public Affairs and executive director of Global Americans, urges changes in U.S. policies regarding the island. He says, “While it is not in America’s interest to promote investment to prop up an anachronistic, repressive regime, it is also not in its interest to stand by while a neighbor’s fragile economy crumbles under the weight of its failed policies. In the worst of cases, an economic implosion would produce social unrest and waves of migrants to American shores.” To that end, he suggests, “Multilateral banks like the International Monetary Fund and the World Bank, at Washington’s urging, could be given special allowances to offer economic assistance to the next Cuban government while providing international cover for American-led efforts. Any aid should come with a strong message from Washington and the banks that the Cuban government must refrain from repression in response to protests.” Sabatini also recommends that the U.S. restore the full staffing of the U.S. Embassy in Havana.[5]

Engage Cuba, a U.S. coalition of businesses and others that supports U.S.-Cuba normalization, issued two statements about this change.[6]

The first one said this “is a historic and potentially transformative change. The new Cuban president will face an internal political struggle between continuity and reform. I hope that they choose reform and openness, including greater support for the private sector and access to the internet.” It added, “The [U.S.] must also seize this historic moment. After 60 years of a failed embargo, it is time to recognize that with this Cuban transition comes opportunity. We must show leadership and constructively engage. If President Trump is willing to meet with the hostile leader of North Korea, surely we can talk with Cuba. If the U.S. abandons Cuba and fails to lead, we can be sure our adversaries in China and Russia will fill the void, and the losers will be the Cuban people.”

The second press release from Engage Cuba stated the following:

  • “U.S. policy . . . [should] encourage the change we’d like to see. For almost 60 years we have pursued an embargo policy that has failed. With new generational leadership in Cuba, we now have an opportunity to reimagine our policy for the 21st century. We know that continuing the embargo will not work, so let us not double down on 60 years of failure. President Trump and Congress should seize this moment, support the Cuban private sector, let American businesses compete, and look to the future with a modern policy of constructive engagement. After all, the American and Cuban people overwhelmingly support engagement and improved relations. Washington politicians should listen to them for a change.”
  • “Diaz-Canel inherits the challenges of Castro’s Cuba, particularly on the economic front. In the interest of institutional continuity, reforms under Diaz-Canel are expected to be gradual. But market distortions caused by the country’s multiple exchange rates, slow GDP growth, and declining exports will test the new president’s ability to balance badly needed reform with preserving Cuba’s brand of socialism.”
  • “The transition comes at a time of historically low diplomatic engagement between the U.S. and Cuba. The health incidents affecting U.S. diplomats remain an unsolved mystery,which the State Department has used as a rationale for slashing U.S. embassy staff in Havana. Diplomatic personnel have been reduced to 40 percent capacity (12 officers), with no consular services for Cubans seeking U.S. travel or immigrant visas.”
  • “In this transitional period, the fragile U.S.-Cuba relationship poses national security risks for the U.S. Both Russia and China have ramped up exports and investment in Cuba and expressed interest in increasing military and intelligence presence in the region. Further U.S. withdrawal from Cuba could jeopardize the dozens of agreements and joint security initiatives between the two nations.”

The leading long-time U.S. opponent of normalization of U.S.-Cuba relations, Senator Marco Rubio (Rep., FL), stated, “The sham ‘elections’ in Cuba were nothing more than a predetermined charade by the Castro regime. With Raul Castro stepping down today, and his appointed crony Miguel Diaz-Canel taking his place, Cuba will continue to be imprisoned under the rule of an oppressive single-party political system. The Cuban dictatorship portrays this election as a step towards change, yet we know that Diaz-Canel and the regime will remain an enemy of democracy, human rights and the impartial rule of law. If Castro really wanted democratic change for Cuba, he would allow the Cuban people to determine their fate through free, fair, and multi-party elections. “[7]

Cuban Reactions Through U.S. Eyes

 According to a U.S. journalist in Havana, no Cubans seemed to have been watching and listening to the televised April 19 speeches by Díaz-Canel and Raúl Castro. “Instead, a collective sense of apathy seemed to permeate Havana, a feeling that appeared to have been fostered, at least to some degree, by the government itself.” This was coupled with “a sense of hopelessness.”[8]

Conclusion

As apparent from many previous posts, this blog consistently has called for U.S.-Cuba normalization, rescinding the U.S. embargo (blockade) of Cuba, restoring the full staffing of our Havana Embassy and of Cuba’s embassy in Washington, D.C., rescinding the recent U.S. warning about U.S. citizens traveling to the island, ceasing U.S. efforts that seek to change Cuba’s regime, continuing the bilateral meetings that address issues of common concern and engaging in efforts to resolve other long-pending issues (U.S. claims for Cuban compensation for expropriation of property owned by American interests, Cuban claims for damages from the embargo and other actions and disputes about Cuba’s lease of Guantanamo Bay to the U.S.).

Such changes in U.S. policies would do a lot to encourage changes in Cuba’s policies and improve the lot of the Cuban people.

It must also be said that U.S. does not have standing to criticize  Cuba’s not having a national popular election to choose its president. How can anyone forget that the U.S. still uses an antiquated indirect way (the Electoral College) to choose its president and vice president while some state voting laws have been designed to discourage voting by African-Americans.

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[1] Assoc. Press, The Latest: Pence tweets response to Cuba’s Raul Castro, Wash. Post (April 19, 2018).

[2] The White House rules out changes in its policy towards Cuba, Diario de Cuba (April 19, 2018).

[3] U.S. State Dep’t, Department Press Briefing-April 17, 2018.

[4] Editorial, A New Cuba After the Castros? Not Quite, N.Y. Times (April 20, 2018).

[5] Sabatini, We Shouldn’t Ignore Cuba, N.Y. Times (April 17, 2018). 

[6] Press Release, Engage Cuba Statement on Selection of New Cuban President (April 19, 2018); Press Release, Engage Cuba Statement on Cuba’s Presidential Transition (April 19, 2018).

[7] Press Release, Rubio Statement on Sham Cuban “Elections,” (April 18, 2018).

[8] Ahmed, Cubans Doubt a Change at the Top Will Bring Change at the Bottom, N.Y. Times (April 21, 2018).

U.S. Continues To Suspend Part of Its Embargo of Cuba 

On July 14 U.S. Under Secretary of State for Political Affairs Thomas Shannon notified appropriate Congressional committees that the Trump Administration would suspend Title III of the Helms-Burton Act (a/k/a the Cuban Liberty and Democratic Solidarity (LIBERTAD) Act) for a six-month period beyond August 1. The law requires Congressional notification at least 15 days before a suspension is to begin.[1]

Title III allows former owners of commercial property expropriated by Cuba to sue foreign companies and the Cuban government for using or “trafficking” in those confiscated holdings.

But ever since the enactment of the Helms-Burton Act, every president has routinely suspended Title III at six-month intervals. Such suspensions have been prompted by U.S. fear of alienating important U.S. trading partners such as Canada, Mexico, and EU countries from the filing of a potential tidal wave of lawsuits in U.S. federal courts brought by persons whose Cuban properties had been expropriated against companies from those U.S. trading partners that use Cuban tourism properties, mining operations, or seaports.[2]

This suspension by the Trump Administration is the first action on Cuba since President Trump announced his new direction on U.S.-Cuba relations during a June 16 speech in Miami. It is the latest sign that President Trump is not fully reversing President Barack Obama’s opening of relations with Cuba.[3]

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[1] U.S. State Dep’t, U.S. Determination of Six-Month Suspension Under Title III of LIBERTAD (July 14, 2017); Whitefield, Trump to suspend lawsuit provision of Helms-Burton in August, Miami Herald (July 17, 2017); Assoc. Press, Trump Administration Again Suspends a Part of Cuba Embargo, N.Y. Times (July 14, 2017).

[2] After the December 17, 2014, announcement by President Obama and Castro that the two countries were embarking on a path of normalization, they have engaged in discussions or negotiations about obtaining Cuban payment of U.S. persons’ claims for expropriation, now believed, with interest, to total at least $ 8 billion. Although Cuba has recognized that it has an international legal obligation to pay such claims and has paid expropriation claims from other countries and although Cuba has an economic and political interest in paying these U.S. claims, Cuba does not have the cash to do so and instead has asserted claims against the U.S. for alleged damage from the U.S. embargo and other acts. See these posts to this blog: Resolution of U.S. and Cuba’s Damage Claims (April 4, 2015); Resolving U.S. and Cuba’s Damage Claims (Dec. 13, 2015); U.S. and Cuba Discuss Their Claims Against Each Other (July 30, 2016).

 

[3] President Trump Announces Reversal of Some U.S.-Cuba Normalization Policies, dwkcommentaries.com (June 19, 2017).

 

U.S. Senators Urge Prioritization of Obtaining Compensation for Cuba’s Expropriation of Property Owned by U.S. Nationals

On June 1 U.S. Senators Marco Rubio (Rep., FL) and Bill Nelson (Dem., FL) urged Secretary of State Rex Tillerson and Secretary of the Treasury Steven Mnuchin to prioritize seeking compensation for Americans whose property was expropriated by the Cuban government at the start of the Cuban Revolution in 1959.[1]

The Senators correctly point out that the “U.S. Foreign Claims Settlement Commission (FCSC) has certified more than 5,900 claims against the Cuban Government for stolen [expropriated] property. These claims—now valued at approximately $8 billion—remain unresolved.”[2]

Therefore, the Senators requested the two Secretaries to “work with Congress to develop a plan and timeline for resolution of these claims, as well as consider instructing the FCSC to conduct a third Cuban Claims Program to allow for potential new claimants.”

On an unrelated matter, the Senators expressed “concern with a January 2016 decision to allow Cubaexport—a company owned by the Cuban Government—to renew its illegitimate claim on the trademark for Havana Club rum. Cubaexport registered the trademark for Havana Club in the United States only after the Cuban Government stole the trademark from the original owners. The decision was a troubling development, given longstanding U.S. policy and support for the rightful owners of stolen property, and we urge you to reconsider.”

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[1] Press Release: Rubio, Nelson Urge Administration to Seek Compensation for American Property Stolen by Cuban Government (June 5, 2017).

[2] This blog’s posts about these expropriation and other damage claims are listed in the “U.S. and Cuba Damage Claims” section of List of Posts to dwkcommentaries—Topical: CUBA.

Conference on “Prospects for United States Cuba Normalization, Commerce and Investment”

On February 18, 2016, the Cuba Consortium hosted its first annual Washington Conference: “Prospects for United-States Cuba Normalization, Commerce and Investment.” [1]

The speakers at the Conference included Penny Pritzker, U.S. Secretary of Commerce; Rodrigo Malmierca, Cuban Minister of Foreign Trade and Investment; Tom Vilsack, U.S. Secretary of Agriculture; Benjamin Rhodes, Assistant to the President and Deputy National Security Advisor for Strategic Communications and Speechwriting; and Andrea Gacki, Assistant Director, Compliance and Enforcement, Office of Foreign Asset Control, U.S. Department of Treasury. Here is a summary of their remarks.

Secretary Pritzker

Secretary Pritzker
Secretary Pritzker

In her speech, Pritzker said that she and the U.S. delegation on their visit to Cuba last October learned more about how the Cuban economy works, including the rules and regulations that govern the import, export, and distribution of goods across the island. This information helped to guide the most recent (January 2016) U.S. regulatory changes regarding Cuba.

Those new U.S. regulations created a general policy of approval of exports for purposes such as: disaster preparedness and relief, education, agricultural production, artistic endeavors, food processing, public transportation, Cuban civil society, enhanced communications on the island, and civil aviation safety.

Those new regulations also provided that the Commerce Department’s Bureau of Industry and Security will now review on a case-by-case basis proposed exports from U.S. companies to Cuban state-owned enterprises and government entities to determine if the export will meet the needs of the Cuban people. We had learned in our visit that in Cuba – as in many of our other trading partners around the world – it is necessary to work with state-owned enterprises in order to support the local private sector.

The corresponding new regulations from the U.S. Department of the Treasury permit financing for most authorized exports and travel authorizations.

In sum, whether environmental goods, telecommunications equipment, or products that private sector entrepreneurs need, the U.S. government’s regulatory changes permit a wide variety of trade and commercial activities.

However, if the U.S. is to truly maximize the benefits of our regulatory changes for the Cuban people, the Cuban government needs to make it easier for Cuban citizens to start their own businesses, purchase goods through wholesale markets, engage in external trade, secure credit, and access information online. These steps include making Cuban economic and business regulations publicly available; providing clear public guidance on the relevant government units and officials that are empowered to make decisions on potential transactions; and authorizing Cuban imports of U.S. products that are now allowed by U.S. regulations.

The bilateral civil aviation agreement signed on February 16 is an example of what we have accomplished together.

“The U.S. embargo continues to be a roadblock to increasing engagement between our countries. As President Obama reaffirmed during his State of the Union address, our Administration strongly supports lifting the embargo, and we will continue to call on Congress to repeal it immediately.”

Minister Malmierca

Minister Malmierca
Minister Malmierca

Malmierca asserted that President Obama has the legal authority to adopt additional regulations that would permit Cuba to use the U.S. Dollar in international financial transactions, authorize Cuban exports to the U.S. and allow U.S. companies to invest in other Cuban sectors besides telecommunications.

The U.S. regulatory changes to date are positive, but they are not enough. For example, he said, since the December 2014 joint U.S.-Cuba announcement of normalization, six financial institutions have been fined nearly two billion dollars for trading with Cuba. These fines and the ban on the use of the U.S. Dollar have had serious negative effects on Cuba.

The previous day (February 17), Malmierca led a Cuban delegation at a meeting with Secretary Pritzker and other officials of the U.S. Department of Commerce. [2] On that occasion he made many of the same points just mentioned. He also pointed out that Cuba does not apply any coercive measures against U.S. companies or businesspeople and, in fact, welcomes them to do business on the island.

At that prior meeting in response to a question by Secretary Pritzker, Malmierca said that the next meeting of the Congress of the Communist Party of Cuba will seek to define the priority economic sectors for long-term development. “The most complex issue is that Cuba wants all these changes to be implemented without affecting the population; we do not want to apply shock measures or measures that may have a negative effect.”

This upcoming Congress will address the role of the market in the Cuban economy and the role of foreign investment in its economic development. This will seek to further consolidate changes adopted by Cuba before December 17, 2014, which are irreversible. “All the measures we are adopting, and which were sovereignly chosen long before December 17, 2014, . . . will also contribute to making the decisions we are making together more feasible,” he concluded.

Secretary Vilsack

Secretary Vilsack
Secretary Vilsack

Secretary Vilsack also criticized the U.S. embargo (blockade), noting that it restricts opportunities for trade between Cuba and the U.S. One area of such negative impact was the U.S. helping Cuba’s organic and urban farming practices.

The U.S. Agriculture Department is looking to identify business opportunities through a fund to which several U.S. agricultural companies voluntarily contribute. This fund, however, cannot use federal resources to explore business opportunities with the island, as is common practice, thus obstructing U.S. companies’ access to the Cuban market.

Although a U.S. law in 2000 authorized sales of agricultural products to Cuba, it required Cuba to pay in cash in advance, which has had a severe negative impact on such U.S. exports.

Associate Director Gacki

Associate Director Gacki
Associate Director Gacki

Gacki was unable to identify the specific law which prohibits Cuba’s use of the U.S. Dollar in international transactions, but said the Treasury Department currently was investigating whether there were other executive measures President Obama could adopt to reduce the adverse impacts on Cuba of restrictions on its use of the U.S. Dollar.

Assistant to the President Rhodes

Assistant to President Rhodes
Assistant to President Rhodes

Rhodes confirmed that Obama still has broad executive powers to make further and more substantial modifications to the U.S. embargo (blockade) policy.

Rhodes said that while the embargo policy may have had relevance in the past, the island is changing as are opinions of some Cuban-Americans. In addition, the increased numbers of Americans visiting Cuba are seeing why the embargo should be ended.

The Obama Administration, he added, is reviewing other potential regulatory changes that could be made within the existing legal framework.Thus, he believed it is possible to do more before the end of this administration to generate the necessary momentum to definitively end the embargo.

Conference Background

The Cuba Consortium is an assembly of companies, non-profit organizations, investors, academics, and entrepreneurs organized to track and examine the normalization process in both countries and to inform and prepare its members for opportunities to engage Cuba. They are complemented by foreign policy, political, economic, international development, legal, and cultural experts who have specialized knowledge of the diplomacy, politics, and economics of the normalization process.

The Consortium’s Advisory Board is co-chaired by Senators Nancy Kassebaum Baker and Tom Daschle and includes Dr. Michael Adams, Lon Augustenborg, Richard Blum, Sheila Burke, Tomas Diaz de la Rubia, Senator Byron Dorgan, Rodney Ferguson, Senator Bill Frist, Dr. Helene Gayle, Maurice Greenberg, Senator Bob Kerrey, Linda Klein, Fred Malek, Janet Napolitano, Thomas Ross, Senator Olympia Snowe, The Honorable Ellen Tauscher, Bill Weldon, and Rob Wilder.

The Consortium was organized by the Howard Baker Forum, which was founded by former Senator Howard Baker to provide a platform for examining specific, immediate, critical issues affecting the nation’s progress at home and its relations abroad under a philosophy of reasoned consensus, founded upon an agreed set of facts.

Conclusion

The Consortium and its conference join the U.S. Agricultural Coalition for Cuba and Engage Cuba as important bipartisan U.S. efforts to promote U.S.-Cuba reconciliation. I applaud all of their efforts.

On the same day of this conference, the White House announced that President Obama and Michelle Obama will be visiting Cuba on March 21 and 22. The White House Press Secretary said, “In Cuba, the President will work to build on the progress we have made toward normalization of relations with Cuba – advancing commercial and people-to-people ties that can improve the well-being of the Cuban people, and expressing our support for human rights. In addition to holding a bilateral meeting with Cuban President Raul Castro, President Obama will engage with members of civil society, entrepreneurs and Cubans from different walks of life.”

The previously mentioned Benjamin Rhodes also issued a similar statement that also reviewed the various steps towards normalization since December 17, 2014.

Before President Obama’s trip, I anticipate and hope that the U.S. will announce additional steps in the process of normalization, including:

  • issue new regulations allowing or expanding Cuba’s ability to use the U.S. Dollar in international transactions, authorize Cuban exports to the U.S. and allow U.S. companies to invest in other Cuban sectors besides telecommunications;
  • announce the ending of special U.S. immigration benefits for Cubans, including the policy of allowing entry without visas into the U.S. of Cubans arriving by land (the dry feet policy); and
  • announce further steps in the process of resolving U.S. claims against Cuba for expropriation of property owned by U.S. persons without compensation.

In addition, it is hoped that before President Obama’s trip Cuba will make Cuban economic and business regulations publicly available; provide clear public guidance on the relevant government units and officials that are empowered to make decisions on potential transactions; and authorize Cuban imports of U.S. products that are now allowed by U.S. regulations. In addition, some improvement in Cuban human rights would be helpful, an objective apparently to be pursued in Havana next week by Secretary of State John Kerry. ==========================================

[1] Gomez, Rapprochement moving forward, Granma (Feb. 22, 2016). Amazingly a 2/23/16 Google search of “Cuba Consortium” did not reveal any U.S. media coverage of this Conference. Secretary Pritzker’s speech was on the website of the U.S. Treasury Department.

[2] Gomez, Malmierca: Obama has support to continue dismantling the blockade, Granma (Feb. 18, 2016).