New U.S. Sanctions Against Cuba

The U.S. recently has announced additional sanctions against Cuba. Here is a summary of those measures.

 U.S.Sanctions Against Certain Cuban Hotels, Cigars and Alcohol[1]

On September 23 President Trump announced that the “Treasury Department will prohibit U.S. travelers from staying at properties owned by the Cuban government. We’re also further restricting the importation of Cuban alcohol and Cuban tobacco. These actions will ensure that U.S. dollars do not fund the Cuban regime and go directly to the Cuban people.”

Treasury Secretary Mnuchin said, “The Cuban regime has been redirecting revenue from authorized U.S. travel for its own benefit, often at the expense of the Cuban people. This Administration is committed to denying Cuba’s oppressive regime access to revenues used to fund their malign activities, both at home and abroad.”

A negative assessment of this move was made by Lawrence Ward, a partner in the international law firm Dorsey & Whitney, who said Trump’s action will make it nearly impossible for Americans to visit Cuba since the government owns or controls nearly all hotels. “Certainly, these new sanctions will have some minor impact on the Cuban government and Cuba’s economy but there’s a fair argument that the actions are more symbolic and political given that the United States stands nearly alone in its sanctions as to Cuba.”

Enrique Gutierrez, a spokesman for the Democratic Party said in an email, “This is a desperate and hypocritical attempt by Trump to pander to Cuban-American voters in Florida. American citizens are already banned from traveling to Cuba because of the coronavirus.” Mr. Trump was “using our foreign policy for his own political gain.”

U.S. Sanctions Against Cuban Debit Cards[2]

On September 28, the State Department added American International Services (AIS), a financial institution, to the Cuba Restricted List. According to Secretary of State Michael Pompeo, the stated reason for this action was AIS’ allegedly being “controlled by the Cuban military that processes remittances sent to the Cuban people” and its charging “fees and manipulat[ing] the remittance and foreign currency market as part of the regime’s schemes to make money and support its repressive apparatus. The profits earned from these operations disproportionately benefit the Cuban military, furthering repression of the Cuban people and funding Cuba’s meddling in Venezuela.”

The Secretary added, “Adding AIS to the Cuba Restricted List furthers the Administration’s goal of preventing the Cuban military from controlling and benefiting from the flow of remittances that should instead benefit the Cuban people.  The people should be able to receive funds from their family abroad without having to line the pockets of their oppressors.” Therefore, the Secretary urged “anyone who sends remittances to family in Cuba to use means other than Cuban government-controlled remittance entities.”

This move against AIS hurts ordinary Cubans who receive remittances in hard currencies from families in the U.S. and elsewhere through AIS that are used to buy food in government-owned retail grocery stores. Bruno Rodriguez, Cuba’s foreign minister, said in a tweet, “it is a maneuver aimed at damaging the Cuban people and the family ties between both nations.”

List of Cuba Prohibited Accommodations and Entities [3]

In addition, on September 28, the Department published its initial list of Cuba Prohibited Accommodations. This is a “list of properties in Cuba owned or controlled by the Cuban government, a prohibited official of the Government of Cuba, as defined in 31 CFR § 515.337, a prohibited member of the Cuban Communist Party, as defined in 31 CFR § 515.338, a close relative, as defined in 31 CFR § 515.339, of a prohibited official of the Government of Cuba, or a close relative of a prohibited member of the Cuban Communist Party.” The list is by cities and towns that not in alphabetical order so it should be carefully examined by any U.S. citizen traveling to Cuba.

On September 29, the Department published the List of Restricted Entities and Subentities Associated with Cuba. This is a “list of entities and subentities under the control of, or acting for or on behalf of, the Cuban military, intelligence, or security services or personnel with which direct financial transactions would disproportionately benefit such services or personnel at the expense of the Cuban people or private enterprise in Cuba.” U.S. nationals are prohibited from having “direct financial transactions with these entities.”

Another Cuban “Blocked Person”[4]

On September 30 the Department added Luis Alberto Rodriguez Lopez-Calleja to the U.S. list of Specially Designated Nationals and Blocked Persons, which will block all transactions with “all assets, property and interests of property of Mr. Lopez-Calleja that are subject to U.S. jurisdiction, including within the possession or control of U.S. persons.”   The stated reason for this action was his being the head of the Cuban military-owned conglomerate Grupo de Administración Empresarial S.A. (GAESA), which allegedly uses its revenue “to oppress the Cuban people and to fund Cuba’s parasitic, colonial domination of Venezuela.  He also is the son-in-law of Raul Castro.

Other Reactions [5]

 These new sanctions might seem inconsequential to someone in the U.S. But they are especially mean-spirited when directed at the much smaller and weaker island whose economy is suffering from the total collapse of foreign tourism and mismanagement and whose food is sold at high prices in government-operated stores only for U.S. Dollars as a way for the government to obtain Dollars it needs for other purposes.

Elijah Love, a commentator in the private Diario de Cuba and generally supportive of U.S. restrictions on Cuba, says, “Unfortunately, private entrepreneurs have been especially harmed, and although the US government wants the sanctions applied to military companies and State Security to leave room for private entrepreneurs to occupy the place they deserve, it does not seem that this be the case.”

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[1] White House, Remarks by President Trump Honoring Bay of Pigs Veterans (Sept. 23, 2020); Treasury Dep’t, Office of Foreign Asset Control, Cuban Assets Control Regulations, 85 Fed. Reg. 60068-72 (Sept. 24, 3030)(new prohibition on lodging and related transactions at certain Cuban properties; restrictions on U.S. imports of Cuban alcohol and tobacco products; ends authorization of attendance or organization of professional meetings in Cuba and participation or organization of certain public performances , clinics , workshops in Cuba); Yeginsu, Trump Administration Adds to US Travel Restrictions in Cuba, N.Y. Times (Sept. 24, 2020); Superville, Trump tightens Cuba sanctions as he woos Cuban-American vote, Wash. Post (Sept. 23, 2020).

[2] State Dep’t, Addition to the Cuba Restricted List (Sept. 28. 2020); Rodriguez, U.S. adds popular Cuban debit card to restricted list, Wash. Post (Sept. 28, 2020).

[3]  State Dep’t, Cuba Prohibited Accommodations List Initial Publication (Sept. 28, 2020);  State Dep’t, List of Restricted Entities and Subentities Associated with Cuba Effective September 29, 2020 (Sept. 29, 2020)

[4] State Dep’t, Press Statement (Secretary Michael Pompeo): Addition to the Specially Designated Nationals and Blocked Persons List (Sept. 30, 2020);Lee, US imposes sanctions on Cuba’s Raul Castro’s son-in-law, Wash. Post (Sept. 30, 2020)

[5]  Augustin & Robles, Cuba’s Economy Was Hurting. The Pandemic Brought a Food Crisis, N.Y. Times (Sept. 20, 2020); Love, US sanctions on the Cuban economy create opportunities, but also risks, Diario de Cuba (Sept.  29, 2020).

 

Employer’s Lawsuits Against Former Employees

Employers frequently get involved in lawsuits with former employees. That was not the primary focus of my legal practice, but I did represent former employees in two interesting cases. One was brought by  Green Tree Acceptance, Inc. of St. Paul, Minnesota. The other, by Surgidev Corporation of Goleta, California, already has been discussed.[1]

John Wheeler was an employee of Green Tree from 1977 through October of 1984. At the time, Green Tree was the largest U.S. company in the business of mobile home financing. Wheeler towards the end of his career with the company was its executive vice president and a member of its board of directors. In 1983 he entered into a written employment agreement and noncompetition agreement with the company, but in October 1984 he and the company agreed to a termination of his employment and, he testified, a release from the noncompetition agreement. In May 1986 Wheeler became the president and CEO of another company based in San Diego, California that was involved in financing mobile homes.[2]

In September 1986 Green Tree sued Wheeler for breach of the noncompetition agreement in Minnesota’s federal court.[3] In October 1986 the court denied the plaintiff’s motion for a preliminary injunction barring Wheeler from working for his new employer. The next month (November 1986) the case went to trial before Judge James Rosenbaum and a jury. The jury’s special verdict found that the noncompetition agreement had terminated before Wheeler went to work for his new employer. Accordingly the district court denied Green Tree’s motion for a new trial or judgment notwithstanding the verdict and entered judgment in favor of Wheeler.[4]

Green Tree then appealed, and in October 1987 the appellate court reversed the judgment because of its conclusion that the district court erroneously had submitted to the jury the issue of whether the noncompetition agreement was still in effect. Accordingly the appellate court remanded the case to the district court for a new trial.[5] Soon thereafter the case settled.

This was one of those unfortunately rare cases in which the opposing lawyers were professionally civil with each other while simultaneously vigorously contested the case. I, therefore, commend Green Tree’s lawyers, Peter Hendrixson and David Lauth of the Dorsey & Whitney law firm and Rick Evans, Green Tree’s General Counsel.


[1] See Post: Intraocular Lenses Litigation (Aug. 18, 2011).

[2] Green Tree Acceptance, Inc. v. Wheeler, 832 F.2d 116 (8th Cir. 1987).

[3]  See Post: Minnesota’s Federal Court (June 28, 2011).

[4]  832 F.2d 116.

[5]  Id.