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).

 

Cuban Entrepreneurs Issue Policy Recommendations to Trump Administration  

On July 18, a group of eight Cuban entrepreneurs held a press conference in Washington, D.C. to announce that they had written to the U.S. Secretaries of State, Treasury and Commerce saying that they were “encouraged to read in President Trump’s June 16 National Security Memorandum on Strengthening the Policy of the United States Toward Cuba that the President wishes to encourage the growth of the Cuban private sector.” Therefore, these entrepreneurs asked the Trump Administration to consider and adopt recommendations regarding U.S. travel to the island, U.S. remittances to Cubans, U.S. banking services for such Cuban enterprises and continued U.S.-Cuba discussions and negotiations.[1]

U.S. Travel to Cuba

The group first asserted: “U.S. travel to Cuba directly benefits private entrepreneurs. The vast majority of U.S. individual travelers (vs. groups) frequent private restaurants and lodging. Fewer travelers will have a direct negative impact on businesses in the hospitality sector as well an indirect negative impact on both forward and backward linkage enterprises.” Therefore, the group recommended the following:

  • “Restore the ability of individuals to engage in self-directed People-to-People educational travel.”
  • “Issue guidance to clarify that individuals who support the Cuban private sector by using private lodging or restaurants are eligible, by general license, for individual travel under the Support for the Cuban People category by virtue of supporting civil society.”
  • “Clearly define new regulations so as not to deter would-be travelers; produce informational materials for public.”

U.S. Remittances to Cubans

Again the group started with a factual background: “Remittances are essential to Cuba’s private sector, providing the financing to begin, and the working capital to sustain, businesses. Remittances also provide Cuban consumers with the ability to patronize private businesses. A U.S. policy of not restricting remittances is therefore critical to the health of the private sector.” The following were the recommendations:

  • “The Department of Commerce should adopt a favorable disposition to approving those exports to Cuba likely to benefit Cuban private sector individuals and/or companies
  • “Allow maximum remittance flows to increase liquidity for private sector and Cuban families; exempt remittance from the prohibition on payments to ‘prohibited officials’ of the Cuban government.”

Banking

The following was the factual background: “Many Cuban entrepreneurs purchase goods and services in the [U.S.] to help run their businesses. Cubans are legally permitted to open bank accounts in the U.S., but there are restrictions on the allowable transactions, and limited and uncertain account services, impairing businesses in both countries.” Therefore, these were the recommendations:

  • “Expand the allowable transactions for Cubans holding bank accounts in the U.S. to include business-related transactions including the acquisition of goods for business use.”
  • “Do not close, and allow access to, U.S. bank accounts held by Cubans when the Cuban individual is not present in the U.S.”
  • “Make public statements clarifying the intent of the Administration to allow Cubans to open bank accounts in the U.S. (limiting risk for banks).”

Bilateral Dialogue and Cooperation

 “Most Cuban entrepreneurs view improved relations between the U.S. and Cuba as a net positive for their businesses, and many developed their business model on this premise.” Therefore, the following recommendations were made:

  • “Continue bilateral engagement on issues of mutual interest to build respect and confidence.”
  • “Continue outreach to U.S. banks and businesses to clarify regulations so allowable engagement continues and expands.”
  • “Engage directly with the Cuban private sector; [Cuban sector] leaders have written two letters to the Administration (one to the President-elect, another to Ivanka Trump Kushner) with no response.”

Conclusion

This letter and its recommendations are wholeheartedly endorsed by this blogger. Cuba’s private sector is a positive development for the Cubans directly involved in that sector, all other Cubans and the U.S., and President Trump’s June 16 announcement already is having negative effects on that sector and needs to be reversed.[2]

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[1] Letter, Acosta, et al. to Secretaries Tillerson, Ross and Minuchin (July 18, 2017); Policy Recommendations [to Trump Administration]: Support to Cuba’s Private Sector (July 18, 2017).

[2] Here is another report of those negative effects: Zanona, In Cuba, Trump’s policy shift casts dark shadow, The Hill (July 19, 2017).

President Raúl Castro Discusses Cuba-U.S. Relations

On July 14, Raúl Castro Ruz, Army General, First Secretary of the Communist Party of Cuba Central Committee and President of the Councils of State and Ministers, addressed a session of Cuba’s legislature (the National Assembly of People’s Power).[1]

A previous post discussed his remarks about Cuba’s private sector. He also made the following comments about the history of Cuba-U.S. relations.[2]

Present Castro’s Comments

President Trump’s Policies Regarding Cuba

“This past June 16, the President of the [U.S.], Donald Trump, announced his administration’s policy toward Cuba, nothing novel for sure, since he retook a discourse and elements from the confrontational past, which showed their absolute failure for over 55 years.”

“It is evident that the U.S. President has not been well informed on the history of Cuba and its relations with the [U.S.], or on the patriotism and dignity of the Cuban people.”

Cuba-U.S. Relations, 1789-2014

“History cannot be forgotten, as they have at times suggested we do. For more than 200 years, the ties between Cuba and the [U.S.] have been marked, on the one hand, by the pretensions of the northern neighbor to dominate our country, and on the other, by the determination of Cubans to be free, independent, and sovereign.”

“Throughout the entire 19th century, invoking the doctrines and policies of Manifest Destiny, of Monroe, and the ‘ripe fruit,’ different U.S. administrations tried to take possession of Cuba, and despite the heroic struggle of the mambises,[3] they did so in 1898, with a deceitful intervention at the end of the war which for 30 years Cubans had waged for their independence, and which the U.S. troops entered as allies and then became occupiers. Negotiating with Spain behind Cuba’s back, they militarily occupied the country for four years, demobilizing the Liberation Army, dissolving the Revolutionary Cuban Party – organized, founded, and led by Martí – and imposed an appendix to the Constitution of the nascent republic, the Platt Amendment, which gave them the right to intervene in our internal affairs and establish, among others, the naval base in Guantánamo, which still today usurps part of the national territory, the return of which we will continue to demand.”

“Cuba’s neocolonial condition, which allowed the [U.S.] to exercise total control over the economic and political life of the island, frustrated, but did not annihilate, the Cuban people’s longing for freedom and independence. Exactly 60 years later, January 1, 1959, with the triumph of the Revolution led by Comandante en Jefe Fidel Castro, we became definitively free and independent.”

“From that moment on, the strategic goal of U.S. policy toward Cuba has been to overthrow the Revolution. To do so, over more than five decades, they resorted to dissimilar methods: economic war, breaking diplomatic relations, armed invasion, attempts to assassinate our principal leaders, sabotage, a naval blockade, the creation and support of armed bands, state terrorism, internal subversion, the economic, commercial, financial blockade, and international isolation.”

Cuba-U.S. Relations, 2014-2017

“Ten administrations held office until President Barack Obama, in his statement of December 17, 2014, without renouncing the strategic goal, had the good sense to recognize that isolation had not worked, and that it was time for a new focus toward Cuba.”

“No one could deny that the [U.S.], in its attempts to isolate Cuba, in the end found itself profoundly isolated. The policy of hostility and blockade toward our country had become a serious obstacle to relations with Latin America and the Caribbean, and was rejected almost unanimously by the international community. Within U.S. society, growing majority opposition to this policy had developed, including among a good portion of the Cuban émigré community.”

“In the Sixth Summit of the Americas in Cartagena de Indias, Colombia, in 2012, Ecuador refused to participate if Cuba was not permitted to attend, and all Latin American and Caribbean countries expressed their rejection of the blockade and Cuba’s exclusion from these events. Many countries warned that another meeting would not take place without Cuba. As such, we arrived in April 2015 – three years later – to the Seventh Summit in Panama, invited for the very first time.”

“Over the last two years, and working on the basis of respect and equality, diplomatic relations have been reestablished and progress made toward resolving pending bilateral matters, as well as cooperation on issues of mutual interest and benefit; limited modifications were made to the implementation of some aspects of the blockade. The two countries established the bases from which to work toward building a new type of relationship, demonstrating that civil coexistence is possible despite profound differences.”

“At the end of President Obama’s term in office, the blockade, the Naval Base in Guantánamo, and the regime change policy, remained in place.”

Cuba-U.S. Relations, 2017–

“The announcements made by the current U.S. President, last June 16, represent a step back in bilateral relations. This is the opinion of many people and organizations in the [U.S.] and around the world, who have overwhelmingly expressed their outright rejection of the announced changes. This sentiment was also expressed by our youth and student organizations, Cuban women, workers, campesinos, Committees for the Defense of the Revolution, intellectuals, and religious groups, on behalf of the vast majority of the nation’s citizens.”

“The U.S. government has decided to tighten the blockade by imposing new obstacles on its businesspeople to trade and invest in Cuba, and additional restrictions on its citizens to travel to the country – justifying these measures with out-dated rhetoric regarding the Cuban people’s exercise and enjoyment of human rights and democracy.”

“President Trump’s decision disregards the support of broad sectors of U.S. society, including the majority of Cuban émigrés, for lifting of the blockade and normalization of relations, and only satisfies the interests of an increasingly isolated, minority group of Cuban origin in South Florida, who insist on harming Cuba and its people for having chosen to defend, at any cost, their right to be free, independent, and sovereign.”

“Today, we reiterate the Revolutionary Government’s condemnation of measures to tighten the blockade, and reaffirm that any attempt to destroy the Revolution, whether through coercion and pressure, or the use of subtle methods, will fail.”

“We likewise reject manipulation of the issue of human rights against Cuba, which has many reasons to be proud of its achievements, and does not need to receive lessons from the [U.S.] or anyone else.”

“I wish to repeat, as I did so in the CELAC Summit held in the Dominican Republic in January of this year, that Cuba is willing to continue discussing pending bilateral issues with the [U.S.], on the basis of equality and respect for the sovereignty and independence of our country, and to continue respectful dialogue and cooperation in issues of common interest with the U.S. government.”

“Cuba and the [U.S.] can cooperate and coexist, respecting our differences and promoting everything that benefits both countries and peoples, but it should not be expected that, in order to do so, Cuba will make concessions essential to its sovereignty and independence. [N]or will it negotiate its principles or accept conditions of any kind, just as we have never done throughout the history of the Revolution.”

“Despite what the government of the [U.S.] does, or does not decide to do, we will continue advancing along the path sovereignly chosen by our people.”

Conclusion

Castro’s review of the history of these relations was succinct, fact-based, fair and necessary for the two countries’ moving forward in a positive direction.

Moreover, the two countries, as Castro said, should be “willing to continue discussing pending bilateral issues . . . on the basis of equality and respect for the sovereignty and independence of [each] country, and to continue respectful dialogue and cooperation in issues of common interest.” The two countries should be able to “cooperate and coexist, respecting our differences and promoting everything that benefits both countries and peoples.”

These principles should govern U.S. relations with Cuba and every other country in the world.

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[1] Castro Ruz, We will continue to advance along the path freely chosen by our people, Granma (July 17, 2017).

[2] Various aspects of this history have been discussed in the posts identified in List of Posts to dwkcommentaries–Topical: CUBA.

[3]Mambises” refers to the guerrilla Cuban independence soldiers who fought against Spain in the Ten Years’ War (1868–78) and Cuban War of Independence (1895–98).

 

Open Letter to U.S. Congress About U.S. Freedom To Travel to Cuba

To: Senator Flake: As an U.S. and Minnesota citizen, I thank you for sponsoring legislation to grant U.S. citizens freedom to travel to Cuba (S.127 Freedom for Americans to Travel to Cuba Act). I also thank and copy my Minnesota Senators, Amy Klobuchar and Al Franken, for joining 52 other senators in co-sponsoring this bill.

To: Representative Mark Sanford: I thank you for sponsoring a similar bill in the House (H.R.351—Freedom to Travel to Cuba Act of 2017). I also thank and copy the three Minnesota representatives (Tom Emmer, Erik Paulsen and Rick Nolan) who have joined 21 other representatives in cosponsoring the bill. By copies of this open letter, I urge the other Minnesota representatives (Timothy Walz, Jason Lewis, Betty McCollum, Keith Ellison and Collin Peterson) to join the ranks of cosponsors.

Now is the time to push these bills forward for votes in the two chambers before the Trump Administration comes forward with proposed regulations to implement the President’s intention to eliminate individual person-to-person travel to the island. (A copy of this open letter is also being sent to President Trump.)

In addition to the arguments already advanced for supporting these bills, I submit that the new Trump policy is internally inconsistent for the following reasons:

  • The ban on individual person-to-person travel, by all accounts, will reduce the overall amount of U.S. travel to the island and thereby have substantial negative effects on Cuba’s emerging private sector, which has improved the living standards of many Cubans and is a force for change in Cuba and for friendlier relations with the U.S. Remember that President Trump favors measures to improve the lives of ordinary Cubans.
  • Forcing Americans who want to have a person-to-person experience in Cuba to do so only with established tour groups will mean “large tour groups [that] are too big for smaller bed-and-breakfast rentals, and their [Cuban] government-appointed guides tend to ply the well-trodden routes that bypass the new galleries, restaurants and night spots opened by enterprising Cubans and others.” This is a direct negative effect on Cubans’ standard of living, which President Trump does not want.
  • According to Andrea Gallina, an Italian entrepreneur who last year opened a high-end boutique hotel, Paseo 206, with his Cuban spouse, “If independent American travel is cut off, you won’t only hurt the bed-and-breakfasts. It’s also the construction crews, the private tour guides, the taxi drivers, the restaurants and the artists selling handicrafts.” Again, the Cubans now engaged in these private enterprises will be substantially disadvantaged.
  • The larger groups will by necessity have to stay in hotels, most of which are state-owned, rather than individually owned b&bs, and travel in tour buses (again, state-owned), rather than individually owned taxis. The large-group U.S. visitors also probably will be provided with government-provided guides rather than private guides used by people traveling by themselves or in small groups. All of these consequences are contrary to the President’s intent to stop or limit U.S. persons from doing business with enterprises owned or controlled by the Cuban military or security services.
  • The ban on individual person-to-person travel will increase the cost for Americans’ traveling to the island and thereby reduce the amount of such travel. As a result, the U.S. will lose the impact on Cubans of ordinary Americans, who often are the best ambassadors for the U.S., its government, people and values.

====================================================For more details, see This Blogger’s Reactions to Trump Reversal of Some U.S.-Cuba Normalization Policies (June 23, 2017).

Cuban Entrepreneurs Fear Implementation of Trump’s Ban on Individual Person-to-Person Travel to the Island

Meg Whitefield of the Washington Post reports that members of Cuba’s emerging entrepreneurial sector are fearful of the negative impact on their business of the future implementation of President Trump’s announced ban on individual person-to-person travel to the island.[1]

Here are examples:

  • The manager of a Cuban “loose association of vintage car owners who have banded together to offer transportation for visiting dignitaries and other groups” already has received cancellations of reservations and fears for the 20 drivers who depend on these bookings for their livelihood as well as a group of mechanics that refurbish classic cars.
  • The husband and wife owners of a Cuban “bed and breakfast for the past two decades have gradually renovated an old mansion that was in ruins when they began, adding guest rooms and struggling to find parts to get the swimming pool filter running again.” They are fearful of having fewer American visitors. The couple also fears the negative impact on “their 17 employees and the private sub-contractors they use to do everything from carpentry work to washing and pressing clothes for guests.” The couple said, “Cuentapropistas (the self-employed) have created a network. We regularly seek out each other’s services to solve our problems.”

Phil Peters, a consultant and president of the U.S. non-profit Cuba Research Center, said most casa particulares are small and won’t be able to handle group travel. “It’s harder if you have 20 people and need to run a scheduled program. You can’t have a tour bus stop at 10 different locations to pick up group members. It’s a little impractical.”

The exceptions, said Peters, “are tourist towns like Trinidad or Viñales where it seems like almost every other house is a casa particular. The three state-run hotels in Viñales, a small rural town near dramatic rock formations and caves, have a combined total of 193 rooms, while there are 1,107 private bed-and-breakfasts, many that have two or three rooms.”

The adverse effects of the future ban on individual person-to-person travel will also be felt in the U.S., according to Sandra Levinson, executive director of The Center for Cuba Studies, which is based in New York and has sponsored educational travel to Cuba since 1973. She said, “Millions are being spent by Cuban Americans who are helping their families in Cuba start their businesses by providing them with the necessary equipment for their startups — everything from bought-in-the-U.S. blenders, ice cream makers, coffee pots, dinnerware, air conditioners, TV sets, leather upholstery for cars, computers, cell phones, sound systems, bedding, shower curtains and more.”

These are important reminders to those of us in the U.S. who oppose this change in U.S. policy. Write your Senators and Representatives to pass the pending bills granting Americans freedom to travel to Cuba.

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[1] Whitefield, Cuban entrepreneurs brace for President Trump’s new Cuba policy, Miami Herald (July 3, 2017)  This blog previously has commented on the upcoming negative impact of the ban on individual person-to-person travel on Cuba’s private sector: President Trump Announces Reversal of Some U.S.-Cuba Normalization Policies (June 19, 2017); Cuban Reactions to Trump Reversal of Some U.S.-Cuba Normalization Policies (June 22, 2017); This Blogger’s Reactions to Trump Reversal of Some U.S.-Cuba Normalization Policies (June 23, 2017); Reducing Adverse Impact on Cuban Entrepreneurs of Trump’s Partial Ban on U.S. Person-to-Person Travel to Cuba (June 28, 2017).

 

 

 

 

 

 

 

Analysis Shows Cuban Military Controls Only 4% of Cuba’s Gross Domestic Product

William LeoGrande, Professor of Government at Washington, D.C.’s American University and a noted expert on Cuba, has analyzed the repeated assertion by many, including this blogger, that 60% of the Cuban economy is controlled by the Cuban military’s holding company Grupo de Administración Empresarial S.A. (GAESA).[1]

LeoGrande sets forth his analysis and concludes that GAESA’s revenue constitutes 21% of total hard currency income from both state enterprises and the private sector, 8% of total state revenue, and just 4% of GDP (Anuario Estadístico 2015).

This suggests that President Trump’s recent announcement of a future regulation banning U.S. companies from engaging in business with such Cuban entities may not have as a significant adverse effect on the Cuban economy as originally thought.

As always, comments of agreement or disagreement are encouraged.

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[1] LeoGrande, Does the Cuban Military Really Control Sixty Percent of the Economy, HuffPost (June 28, 2017).

Reducing Adverse Impact on Cuban Entrepreneurs of Trump’s Partial Ban on U.S. Person-to-Person Travel to Cuba   

As described in a prior post, on June 16 President Donald Trump announced a ban on U.S. citizens going to Cuba on individual person-to-person travel to be effective upon future adoption of regulations and instead requiring such travel to be only in organized groups. Another post then reviewed the anticipated adverse impact of this change upon Cuba’s emerging private enterprise sector (b&bs, restaurants, taxis, tour guides and others) by forcing visiting Americans to travel in buses and hotels owned by the Cuban government (including its military and security forces), which presumably will be banned by future regulations implementing another Trump policy change.

That is still the assessment of the anticipated impact[1] and, therefore, why this blogger advocates the prompt congressional passage of bills granting Americans the freedom to travel to Cuba as discussed in another post.

Indeed, the Associated Press confirms this view with reports of recent cancellations of reservations at b&bs in Havana and Trinidad, a colonial city on the south coast of the island, and by a prospective American traveler for this very reason. “Tour operators ‘should be opening Champagne’ because of the new policy, said John Caulfield, former chief of mission of the U.S. Interests Section in Havana and co-founder of the nonprofit Innovadores Foundation, which seeds innovation in Cuba.”[2]

The Associated Press, however, reports ways for Cuban entrepreneurs to reduce this adverse impact on their business with American travelers. Some small bed-and-breakfast owners plan to create informal associations of neighboring businesses so they can accommodate larger American groups. And at least some tour operators say they already use privately owned villas, casas and eateries, and engage with local guides, entrepreneurs and artists. And presumably the future U.S. regulations banning U.S. businesses from dealing with Cuban businesses owned or controlled by the Cuban military or security services will prohibit tour operators from having their travelers staying in hotels so owned or controlled and instead booking accommodations at privately owned enterprises.

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[1] Kunović, Five things you need to know about Trump’s Cuba policy—and who it will hurt, Wash. Post (June 22, 2017).

[2] Assoc. Press, New Trump Rules on Cuba Travel Leaves Winners and Losers, N.Y. Times (June 27, 2017).