Tag: U.S. Department of the Treasury

U.S. Reactions to New U.S. Anti-Cuba Policies 

U.S. objections to the new U.S. policies regarding Cuba (and Venezuela and Nicaragua) have been registered by a Bloomberg News editorial; by the U.S. Chamber of Commerce; by Representative Eliot Engel, the Chair of the House Committee on Foreign Affairs and other representatives and by groups and individuals outside the government. They will be discussed first.[1]

Then we will look at support for the policies from three Cuban-American legislators (Sen. Marco Rubio (Rep., FL), Sen. Robert Menendez (Dem., NJ) and Rep.Mario Diaz-Balart (Rep., FL); from Sen. Rick Scott (Rep., FL); and from Walter Russell Mead of the Wall Street Journal.

Given the legitimate current U.S.  preoccupation with the Mueller Report and its implications, there have been no editorials (to date) on these Cuba policy changes in other leading newspapers (New York Times, Washington Post and Wall Street Journal) or by the sponsors of the pending Senate bill to end the U.S. embargo of Cuba (Senators Amy Klobuchar (Dem., MN), Patrick Leahy (Dem., VT) and Mike Enzi (Rep., WY)) or by the Chair of the House ‘s Cuba Working Group Steering Committee (Tom Emmer (Rep., MN).

Critics of the New Policies[2]

  1. The Bloomberg Editorial.

Although it was worthy for the U.S. to seek to persuade Cuba to stop helping Venezuela’s Maduro, Bloomberg says the new policies are “the wrong way to get results.”

In fact, says Bloomberg, the new U.S. policies and actions will “inflict real damage on Cuba,” and  “that’s unlikely to make the country’s rulers budge. Instead, opening the [U.S.] floodgates for litigation against Canadian and European companies doing business in Cuba will fracture the international front against Maduro — not to mention swamping U.S. courts with troublesome lawsuits.” In fact, such litigation is “more an attack on America’s friends than on Cuba or Venezuela.”

Moreover, according to Bloomberg, “Aside from dividing what could have been a U.S.-led coalition [against Venezuela’s Maduro], the new escalation will play into the hands of aging hardliners, encouraging Cuba to seek help from Russia and China, and weaken potent internal forces for change.”

  1. Engage Cuba

Engage Cuba, the leading bipartisan coalition of businesses and others who support U.S.-Cuba normalization, issued the following critical comments:

(Statement by James Williams, President of Engage Cuba)

  • “President Trump is doing this for one reason, and one reason only: to appease fringe hardliners in South Florida ahead of the 2020 election. The only way to get property claimants what they deserve is through diplomatic negotiations, which President Trump just threw off the table. . . This lets the Cuban government off the hook and shifts the burden to American, European and Canadian companies. American companies and our closest allies will now be paying instead of the Cuban government.”
  • “The hypocrisy of the Trump administration cozying up to the most brutal dictatorships in the world in Saudi Arabia, Russia and North Korea, but claiming to care about democracy and human rights in Cuba, is like living in a parallel universe. President Trump himself tried for years to open up a Trump Hotel and golf resort in Cuba.”
  • “U.S. travel and remittances are the lifeblood of the private sector entrepreneurs in Cuba. These restrictions are a cruel betrayal and a knife in the back of Cuban civil society and the prospects for a growing independent private sector in Cuba. The Cuban people are already struggling under tremendous difficulties, and these actions only make it worse. We need a policy that focuses on empowering the Cuban people and advancing American interests, not continuing a 60-year failed policy that only serves fringe domestic politics in South Florida.”

(Property Claim Lawsuits)

  • “The Trump administration has chosen to break precedent with every administration since President Clinton by failing to waive Titles III and IV of the the LIBERTAD Act, commonly referred to as the Helms-Burton Act after its sponsors. When Title III takes effect on May 2, American companies and foreign firms will be subject to lawsuits in U.S. courts over the use of properties that were nationalized by the Cuban government following the 1959 revolution. Title IV will also take effect, requiring the denial of U.S. visas for anyone “trafficking” in confiscated Cuban properties, as well as their relatives.”
  • “In opposition to international law, Title III affords claimant rights to Cuban Americans who were Cuban citizens at the time their property was confiscated. Currently, there are 5,913 certified claims of seized American property in Cuba, but the State Department has estimated there could be a flood of up to 200,000 claims with the full activation of Title III.”
  • “Due to Title III’s potential to jeopardize U.S. trade interests, every U.S. administration since the law’s enactment in 1996 has suspended its implementation, typically for a period of six months. Today’s announcement marks the first time Title III has been fully activated and U.S. firms will be subject to lawsuits.”
  • “Companies from the biggest U.S. trade partners, including the European Union, Canada, and Mexico, will also be subject to property claim lawsuits under Title III, though most countries will protect their companies from having to pay damages to U.S. property claimants. The EU and Canada have threatened retaliation in the World Trade Organization.”
  • “Meanwhile, U.S. adversaries like Russia and China are unlikely to comply with Title III lawsuits and will instead align themselves with Cuba against this extraterritorial U.S. policy. By maintaining a trade embargo, the U.S. has already left a vacuum in Cuba for adversarial influence. As Cuba continues to be isolated by the Trump administration, it will increasingly turn to Russia and China, who offer them favorable credit terms and invest in high-profile projects.”

(New Restrictions on Remittances,Travel, and Financial Transactions)

  • “Bolton also announced there will be new limits on non-family travel to Cuba and U.S. remittances to the island, a heavy blow to Cuba’s nascent private sector (roughly one-third of the workforce) which greatly depends on remittances and U.S. travelers to keep their small businesses alive. Remittances will now be capped at $1,000 per quarter, a dramatic departure from the $4 billion that flowed to the Cuban people after the Obama administration lifted all limits on remittances in 2015.”
  • “Five Cuban government-run businesses will be added to the list of entities with which direct financial transactions are barred. New Department of Treasury regulations will prohibit U.S. banks from processing “U-Turn transactions,” Cuba-related funds transfers from a bank outside the U.S. that pass through U.S. financial institutions before being transferred to banks abroad where neither the originator nor the beneficiary is a U.S. national.”
  1. U.S. Chamber of Commerce

“Six decades of trying to isolate Cuba has failed to bring change to the island, and today’s move only doubles down on this strategy. The U.S. Chamber’s support for a new approach to Cuba is founded in our profound conviction that more engagement with the Cuban people — on the basis of free enterprise and free markets — is essential to democratic change and improvements in the Cuban people’s lives.”

“We strongly support U.S. government efforts to protect the property rights of U.S. citizens abroad, but full implementation of Title III is unlikely to achieve those aims and is instead more likely to result in a protracted legal and diplomatic morass that ensnares U.S. courts, companies and partners. . . . Furthermore, it is difficult to see how this action squares with the administration’s earlier commitment to hold harmless U.S. companies legally authorized and previously encouraged to do business in Cuba.”

“Many American companies will now be subjected to countersuits in Europe, Canada, Latin America, and elsewhere. Today’s announcement threatens to disrupt our trade ties to these countries, which are among our closest allies and best customers. Instead, we should be working with them to make the case for democratic change in Cuba.”

  1. Center for Democracy in the Americas

Another U.S. group that supports U.S.-Cuba normalization, the Center for Democracy in the Americas, said through its executive director (and former Obama National Security Advisor) Emily Mendrala, “Capping remittances is mean-spirited, and can only be understood as the U.S. government’s attempt to create economic hardship among the Cuban people. Ambassador Bolton’s speech conflated Cuba with Venezuela, and he announced a policy approach that does the same. The two countries are different, living through very different moments, and to exploit events in Venezuela to settle Cold War scores with Cuba is a distraction from real needs in Venezuela.”

  1. Cuba Educational Travel

Collin Laverty, president of Cuba Educational Travel, added other critical comments. First, “the measures on remittances and travel threaten the economic survival of Cuban families and the viability of thousands of independent small businesses allowed to operate since 2010 under reforms implemented by former President Raúl Castro.” Second, “The only winners here are a handful of members of Congress and those stuck in the past that support them. The losers are millions of Cubans on and off the island and the overwhelming majority of Americans that support engagement with Cuba.”

  1. Current and Former Federal Government Officials

Representative Eliot Engel (Dem., NY), the Chair of the House Committee on Foreign Affairs, stated, ““President Trump’s rejection of over two decades of bipartisan consensus on a key piece of U.S. policy toward Cuba will further isolate the United States from our Latin American and European allies and diminish our ability to promote democracy in Cuba and Venezuela. Sadly, this decision will do nothing to resolve U.S. property claims in Cuba—an important goal toward which we must continue to strive.”

Similar statements were issued by Representatives Kathy Castor (Dem., FL), James McGovern (Dem., MA), Barbara Lee (Dem., CA) and Donna Shalala (Dem., FL).

Benjamin Rhodes, a former Obama adviser who helped negotiate the December 2014 U.S.-Cuba normalization agreement, said, “Restricting remittances that can be sent to Cubans will directly hurt the Cuban people. This is a shameful and mean-spirited policy.”

Mark Feierstein, a former National Security Council’s Director for the Western Hemisphere, tweeted: “As Bolton delivers speech in Miami today on Cuba, it’s useful to keep in mind that according to public opinion polls, most Cuban-Americans approve the measures taken by the Obama Administration to support the Cuban people. The [National Security Council]. . . is out of step with majority opinion in Miami.” In another tweet  he stated, “What we’re leading the Cuban people toward is a darker day, where there will be less economic opportunity.”

  1. Other Americans

Tim Fernholz, who covers space, the economy and geopolitics for Quartz, has addressed the new policies’ adverse effects on the emrging Cuban private sector. He says, “The Trump administration is setting out to crush free markets in Cuba.” These policies “will damage Cuba’s nascent private sector far more than a ruling regime that has out-lasted six decades of US embargo. Trump is pulling the rug out from Cuba’s cuentrapropistas—literally, self-employed—eliminating their sources of capital and revenue and reducing their influence during the all-important transition to a post-Castro Cuban government. . . . US policy toward Cuba, meanwhile, is defined by a near-theological belief that isolating the Cuban people will lead them to abandon national self-determination.”

Supporters of the New Policies[3]

The two Cuban-American Senators and one of the Cuban-American U.S. Representatives, as expected, endorsed at least some of the new U.S. policies. So did Senator Rick Scott. So did Walter Russell Mead, who is the James Clarke Chace Professor of Foreign Affairs and the Humanities at Bard College, a Distinguished Fellow in American Strategy and Statesmanship at the Hudson Institute, and The Wall Street Journal’s Global View columnist.

Senator Marco Rubio (Rep., FL) said, “”By no longer suspending Title III of the Freedom Act, the Trump administration is the sixth of impunity by the Castro regime. The United States is opening the door to justice and enabling victims of the Cuban dictatorship to rightfully sue their perpetrators. Today, as we commemorate the value of the fallen heroes in the Bay of Pigs invasion, history is once again being written. ”

Senator Robert Menendez (Dem., NJ) offered a similar statement: “By fully implementing Title III of the LIBERTAD Act, the United States is rightly providing U.S. citizens with the means to hold the Cuban regime accountable through the U.S. justice system.”

Representative Mario Diaz-Balart (Rep., FL) issued a lengthier statement, which is extracted below:

  • “At long last, victims of confiscated properties will finally have the chance to pursue claims to recoup losses suffered at the hands of the Castro regime.”
  • “President Trump and his administration have demonstrated remarkable solidarity with the Cuban people and the regime’s other victims in tightening sanctions by prohibiting financial transactions with the Cuban military.
  • “Cutting off resources and investment to the regime in Cuba will benefit both U.S. national security interests and regional security interests for neighbors in our hemisphere.”

Senator Scott stated, “Americans can finally sue for property stolen by the Cuban regime. We must continue to do everything we can to cut off the money supply to the Castro Regime, which continues to prop up dangerous dictators like Nicolas Maduro in Venezuela and Daniel Ortega in Nicaragua.”

Walter Russell Mead. He starts with the proposition that Venezuela presents the key challenge of Latin America. “Left to accelerate, the breakdown of governance and civilized life in Venezuela can only create more refugees, enrich arms smugglers and drug cartels, allow forces like Hezbollah to insinuate themselves more deeply in the region. On the other hand, a return to some kind of stability under a pro-business government would initiate an economic recovery that would help the people of Venezuela and their neighbors alike, and deprive the terror cartels of much of their arms and funding. Crucially, if Venezuelan oil production recovers, it would help stabilize world energy markets and significantly increase American leverage with both Russia and Iran.”

“The continued collapse of Venezuela’s economy means the Cuban regime is also facing disaster. From the Trump administration’s point of view, this is a historic opportunity. If Cuba . . . abandons socialism on Mr. Trump’s watch, the president’s prestige at home and abroad would soar.”

Therefore, says Mead, the Trump Administration hopes for “historic victories in Cuba and Venezuela.” That plus  “the fear of a costly defeat have combined to persuade the Trump administration to adopt some of the most far-reaching economic sanctions ever imposed.” In short, no previous U.S. president “has been willing to impose sanctions that alienate powerful allies to this degree over Caribbean policy. That Washington is pressing ahead suggests how high a priority Venezuela has become for the administration.”

Conclusion

There are so many reasons to oppose the new U.S. policies towards Cuba, as this blogger does. Just refer to the above section regarding such opposition and to the similar discussion in the previous posts cited in footnote 1.

As always, this blog invites reasoned comments, pro or con, or corrections from all readers of this post.

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[1] Prior posts have discussed (a) the April 17 announcement of the U.S. allowance of litigation over alleged trafficking in American-owned Cuba property that was expropriated by the Cuban government, circa 1959-60; (b) National Security Advisor John Bolton’s April 17 announcement of additional Cuba sanctions; (c) Cuban reactions to these changes; and (d) European and other countries’ reactions to these changes. These changes take effect in the midst of Cuba’s current dire economic situation, which was the subject of another post.

[2] Editorial, Cuba Is a Problem That Trump Is Making Worse, Bloomberg (April 22, 2019); Press Release, Engage Cuba Statement on New Cuba Sanctions (April 17, 2019); Engage Cuba, Memorandum: New Sanctions on Cuba Announced April 17, 2019 (April 2019); U.S. Chamber of Commerce, Statement on Cuba and Title III of the LIBERTAD Act (April 17, 2019); Center for Democracy in the Americas, CDA STATEMENT:Cuba Sanctions announcement (April 17, 2019); Cuba Educational Travel, CET Statement on President Trump’s Cuba Policy Changes (April 17, 2019); Engel on Implementation of Article III of the Helms-Burton Act (April  17, 2019); U.S. Rep. Castor: The Trump Administration’s Announcement of New, Hardline Restrictions on Cuba Brings Pain to Families, Hurts Growing Cuban Private Sector (April 17, 2019); McGovern Statement on Trump Administration;’s Reckless Policy Change Toward Cuba (April 17, 2019); Congresswoman Barbara Lee Slams President Trump’s Backwards Policy Towards Cuba (April 17, 2019); Caputo, Trump crackdown on “3 stooges of socialism’ has 2020 thrust, Politico (April 17, 2019) (Rep. Shalala quotation); Reuters, Trump’s Cuba Hawks Try to Squeeze Havana Over Venezuela Role, N.Y Times  (April 18, 2019) (Rhodes quotation); Feierstein Twitter Account; Fernholz, Cuba’s entrepreneurs are under attack by Donald Trump, Quartz  (April 22, 2019).

[3] Press Release, Rubio Commends Trump Administration’s Move to Hold Cuba Accountable (April 17, 2019); Press Release, Rubio Highlights Importance of Trump Administration’s Commitment to Democracy in Latin America (April 17, 2019); Press Release, Menendez Statement on Announcement to Let Cuban Americans File Suit over Property Confiscated by Cuban Regime (April 17, 2019); Diaz-Balart: Trump Administration’s Full Implementation of Title III Is a Monumental Decision   (April 17, 2019); Press Release, Sen. Rick Scott Applauds President Trump For Fully Implementing Title III of the Libertad Act (April 17, 2019); Mead, Trump Takes Aim at Caracas and Havana, W.S.J. (April 22, 2019).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

National Security Advisor Bolton Discusses New U.S. Sanctions Against Cuba

On April 17, as discussed in a prior post, the U.S. State Department announced new sanctions against Cuba. The major change was eliminating the waiver of Title III of the Helms-Burton (LIBERTAD) Act allowing U.S. litigation by U.S. owners of Cuban property that was expropriated by the Cuban government in the early years of the Cuban Revolution. This Act also allows the U.S. to deny or revoke U.S. visas to any person or corporate officer “involved in the confiscation of property or trafficking in confiscated property,” as well as their family members.

Later that same day in a Miami speech National Security Advisor John Bolton  proudly announced that “President Trump decided to END the Helms-Burton Title III Waivers, once and for all and that under Title IV of Helms-Burton no U.S. visas would be issued to “anyone who traffics in property stolen from Americans.” In addition, Bolton announced additional anti-Cuba measures.[1] As noted in a prior post, Bolton’s hostility towards Cuba is not new.

The Additional New Sanctions

The additional new sanctions announced by Bolton are the following:

  • Remittances from Cubans in the U.S. to family members on the island will be reduced by the U.S. Treasury Department to $1,000 per person [payor or payee?] per quarter. According to Bolton, the unlimited remittances permitted by the Obama Administration had allowed the Cuban government to evade U.S. sanctions and obtain access to hard currencies.
  • “Non-family travel” or “veiled tourism” to Cuba will be subject to new (and unspecified) restrictions in order to “steer American dollars away from the Cuban regime, or its military and security services, who control the tourism industry in Cuba.” (However, there still are 12 categories of permissible U.S. nationals travel to Cuba under Treasury Department regulations.)
  • The State Department will add five companies to its Cuba Restricted List, including Aerogaviota, an airline controlled by Gaviota, a group of tourism-relative companies controlled by the Cuban Armed Forces.[2]
  • The U.S. Treasury Department will adopt new regulations to “end the use of “U-turn transactions,” which allow the regime to circumvent sanctions and obtain access to hard currency and the U.S. banking system.”

Bolton’s Remarks

Bolton, once again, referred to Cuba, Venezuela and Nicaragua as the “troika of tyranny” and their leaders as “the three stooges of socialism.” They all now are “beginning to crumble” and the U.S. “looks forward to watching each corner of this sordid triangle of terror fail.”

While accusing Cuba of propping up Venezuela’s Maduro with thousands of security force members in the country, Bolton also warned “all external actors, including Russia, against deploying military assets to Venezuela to prop up the Maduro regime.”. The United States will consider “such provocative actions a threat to international peace and security in the region.” Bolton noted  that Moscow recently sent in military flights carrying 35 tons of cargo and a hundred personnel.

In short, from Bolton’s perspective, “the destinies of our nations will not be dictated by foreign powers; they will be shaped by the people who call this Hemisphere hme. Today, we proudly proclaim for all to hear: the Monroe Doctrine is alive and well.” (Emphasis added.)

In addition, Bolton had harsh words for President Obama’s efforts to normalize relations with Cuba. The National Security Advisor said, “Tragically, the Obama administration’s misguided Cuba policy provided the Cuban regime with the necessary political cover to expand its malign influence and ideological imperialism across the region.” He added, “In no uncertain terms, the Obama administration’s policies toward Cuba have enabled the Cuban colonization of Venezuela today.” The Trump Administration’s changes were designed to reverse “the disastrous Obama-era policies, and finally end the glamorization of socialism and communism.”

“To justify its policy of normalizing relations with Cuba, President Obama said Cuba (quote) ‘poses no genuine threat.’ Tell that to the American diplomats who were attacked in Havana. Tell that to the terrorized people of Venezuela. The reality is that the Obama government sought to normalize relations with a tyrannical dictatorship.”  In contrast, Bolton reminded his audience that Trump met with Cuban opposition activists like the Ladies in White and called the late Fidel Castro “a brutal dictator.”

Bolton also implicitly criticized Obama by saying “Naïve beliefs have now given way to clear-eyed common sense. We are no longer surrendering American liberty in the name of global governance. We are no longer selling out our friends to appease our adversaries. [We] are no longer sacrificing the interests of the American people to pursue idealistic fantasies—in Havana, Tehran, or anywhere else.”

After reciting the U.S. and allies’ efforts regarding Venezuela, Bolton said when Maduro falls, “we know that Cuba will be next.”

“Let me be clear: The Trump administration will NEVER, EVER abandon you,” Bolton said. “We will need your help in the days ahead. We must all reject the forces of communism and socialism in this hemisphere — and in this country.”

The Ignominious Timing and Location of the Announcement

Bolton intentionally and ignominiously chose the date and location for this announcement. Last week Bolton tweeted, “[I am] Pleased to announce that I will be joining the Bay of Pigs Veterans Association on April 17 in Miami to deliver remarks on the important steps being taken by the Administration to confront security threats related to Cuba, Venezuela, and the democratic crisis in Nicaragua.”

The date, April 17, was the 58th anniversary of the U.S. disastrous invasion of Cuba’s Bay of Pigs (Playa Girón). Recall that this failed military invasion of Cuba was undertaken by the Central Intelligence Agency (CIA)-sponsored paramilitary group Brigade 2506.  The U.S. gravely underestimated the force-power in Cuba and consequently led their troops to their own destruction. The U.S.-sponsored combatants were members of a counter-revolutionary military group (made up of mostly Cuban exiles who had traveled to the U.S. after Castro’s takeover plus some U.S. military personnel).This invading force was defeated within three days by the Cuba Revolutionary Armed Forces under the direct command of Fidel Castro.[3]

The location of Bolton’s remarks was  the Miami gathering of the Bay of Pigs Veterans Association. In his remarks Bolton paid them homage. He compared the aging Cuban Americans to “the brave men of Bunker Hill, Belleau Wood and Normandy,” and said the new measures were being undertaken to “honor your courage . . . by boldly confronting the evils of socialism and communism in the hemisphere.”

In his remarks, Bolton said, “This is just the beginning. As long as the people of Cuba, Venezuela and Nicaragua stand for freedom, the United States will stand with them. The remarkable story of Brigade 2506 helped inspire President Trump’s hard-hitting Cuba policy. During the 2016 campaign, he visited you here in Miami, he heard your heroic accounts, he saw your stirring pictures and today he is proud to stand by your side.”

“Together, we can finish what began on those beaches, on those famous days in April, 58 years ago today,” Bolton said to rousing applause from the aging brigade members who backed Trump in 2016 when he narrowly won the state.

Conclusion

Bolton’s vigorous embrace of the Monroe Doctrine is outrageous. That Doctrine is a self-proclaimed right to intervene militarily and otherwise in any other country in the Western Hemisphere when a U.S. president deems it appropriate.  From a Latin America perspective it was often seen as a U.S. license to intervene at will in other countries’ internal affairs and is contrary to international law. It, therefore, was entirely appropriate for then Secretary of State John Kerry in 2013 to state that “ the Monroe Doctrine is dead once and for all.”[4]

Also inappropriate was Bolton’s criticism of President Obama’s adoption of policies to normalize U.S.-Cuba relations. I thought and still think that was one of his administration’s greatest accomplishments.[5]

Another objection needs to be registered to Bolton’s comments about the Bay of Pigs. The U.S. financed, organized and ineptly assisted the Bay of Pigs invasion, I always have regarded it as horrible stain on U.S. relations with Cuba that repeatedly needs to be denounced.

Future posts will look at reactions to these U.S. policies from Cuba, the U.S. and other countries.

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[1] This post was updated after discovering on April 20 the text of Bolton’s speech on the website of the U.S. Embassy in Cuba.  See U.S. Embassy in Cuba, Ambassador Bolton Bay of Pigs Veterans Asociation-Brigade 2506 (April 17, 2019); Gámez Torres, Bolton coming to Miami to discuss U.S. action on Miami to discuss action on Cuba, Venezuela and Nicaragua, Miami Herald (April 12, 2019); Solomon, Reichmann & Lee (AP), Trump Cracks Down on Cuba, Nicaragua and Venezuela, Wash. Post (April 17, 2019); DeYoung, Trump administration announces new measures against Cuba, Wash. Post (April 17, 2019); Bolton announces new sanctions against Cuba, Venezuela and Nicaragua, Wash. Post  (Jan. 17. 2019 (partial video of Bolton’s remarks); Gámez Torres, U.S. restricts travel, remittances to Cuba as part of a new policy under Trump, Miami Herald (April 17, 2019).

[2] These five entities were added to the Cuba Restricted List on April 24, 2019: State Dep’t, Department of State Updates the Cuba Restricted List (April 24, 2019); State Dep’t, List of Restricted Entities and Subentities Associated with Cuba as of April 24, 2019 (April 24, 2019). See also these posts to dwkcommentarie.com: New Restrictions on U.S. Travel to Cuba and Transactions with Certain Cuban Entities (Nov. 8, 2017); More Cuban Businesses Forbidden to U.S. Visitors (Nov. 16, 2018); U.S. Authorizes U.S. Litigation Against Entities on Cuba Restricted List (Mar. 5, 2019); Cuba Modifies Its Cuba Restricted List (Mar. 13, 2019).

[3] Bay of Pigs Invasion, Wikipedia; Brigade 2506: Official Site of the Bay of Pigs Veterans Association.

[4] Johnson, Kerry Makes It Official: ‘Era of Monroe Doctrine Is Over,’ W.S.J. (Nov. 18, 2013).

[5] See posts listed in the “U.S. (Obama) & Cuba (Normalization), 2014,” “U.S. (Obama) & Cuba (Normalization), 2015,” “U.S. (Obama) & Cuba (Normalization), 2016,” and “U.S. (Obama) & Cuba (Normalization), 2017” sections of List of Posts to dwkcommentaries—Topical: Cuba.

 

New U.S. Sanctions on Cuba and Venezuela

On April 5, the U.S. Treasury Department announced new sanctions on Venezuela and Cuba. The sanctions are on 34 vessels owned or operated by Venezuelan state-run oil company Petróleos de Venezuela, S.A, or PDVSA , and also on two companies and a vessel that delivered oil to Cuba in February and March. The announcement stated, “The United States continues to take strong action against the illegitimate regime of former President Nicolas Maduro, not only to isolate corrupt Venezuelan enterprises, but also to target Maduro’s supporters in Havana who continue to enable the oppression of the people of Venezuela.” [1]

The announcement further said, “The relationship between Cuba and Venezuela hinges on a two-decade long political, security, and economic alliance, particularly given Cuba’s reliance on a barter system for Venezuelan oil imports.  Cuba is a major importer of crude oil from Venezuela, and in return, sends assistance to Venezuela in the form of political advisors, intelligence and military officials, and medical professionals, all of whom are used to ensure Maduro’s hold on power and complete social control over the people of Venezuela.  Cuba’s influence has contributed to Venezuela’s failure.  Maduro continues to send aid to Cuba as Venezuelans suffer from a deepening humanitarian crisis while denying entry to food, medicine, and other supplies provided by the United States and our allies and partners.”

“As a result of today’s action, all property and interests in property of these entities, and of any entities that are owned, directly or indirectly, 50 percent or more by the designated entities, that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC [Treasury’s Office of Foreign Assets Control]. OFAC’s regulations generally prohibit all dealings by U.S. persons or within (or transiting) the United States that involve any property or interests in property of blocked or designated persons.”

The Treasury Secretary, Steve Mnuchin, said, “Treasury is taking action against vessels and entities transporting oil, providing a lifeline to keep the illegitimate Maduro regime afloat. Cuba continues to profit from, and prop up, the illegitimate Maduro regime through oil-for-repression schemes as they attempt to keep Maduro in power. The United States remains committed to a transition to democracy in Venezuela and to holding the Cuban regime accountable for its direct involvement in Venezuela’s demise.”

Vice President Mike Pence also voiced support for these new measures on April 5, actually just before their official announcement.. He said, “The United States will continue to exert all diplomatic and economic pressure to bring about a peaceful transition to democracy, calling oil shipments “the lifeblood of that corrupt regime” with its oil shipments being “the lifeblood of that corrupt regime.”Pence also called Cuba’s “leaders as the “real imperialists” in the Western Hemisphere, adding: “The time has come to liberate Venezuela from Cuba.”[2]

Cuban President Díaz-Canel immediately responded to these new sanctions. He tweeted, The U.S. “sanctioned Friday vessels and companies involved in the transportation of fuel between [Cuba and Venezuela], a legal activity and covered by trade agreements. These measures are an act of extraterritoriality, interference and imperial arrogance.”[3]

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[1] Treasury Dept, Press Release: Treasury Sanctions Companies Operating in the Oil Sector of the Venezuelan Economy and Transporting Oil to Cuba (April 5, 2019); Reuters, U.S. Targets Cuba’s Oil Supply From Venezuela in New Sanctions, N.Y. Times (April 5, 2019).

[2] Reuters, U.S. ratchets Up Pressure on Venezuela, Cuban Backers, N.Y. Times (April 6, 2019).

[3] Diaz-Canel qualified as an act of extraterritoriality, interference and imperial arrogance, the recent sanctions against Venezuela and Cuba, Granma (April 6, 2019).

 

 

Good News: Increasing U.S. Travel to Cuba

A website for travel professionals reports that recently U.S. travel to Cuba is increasing. It cites Tom Popper,  the president of InsightCuba, which specializes in travel to the island, who says it has seen an increase of 30% for such travel in May, June and July 2018 over the prior year.[1]

One of the problems many U.S. nationals encounter in planning a trip to Cuba is not finding flights to Cuba on Expedia, TripAdvisor or Orbitz. This is due to such businesses wanting to avoid hassling with the airlines that fly to the island having an obligation to the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) for confirming that U.S. nationals on such flights are going there for a legal reason under the OFAC regulations.

The airlines, however, have no such difficulty because when you buy a ticket to fly to Cuba, you merely have to hit “accept” on the affidavit pop-up that you are traveling under one of 12 general licenses for U.S. legal travel to Cuba, which are described on OFAC’s website. The traveler, therefore, before buying a ticket must carefully review that website and determine which of the following 12 general licenses fits the planned trip:

  1. family visits;
  2. official business of the U.S. government, foreign governments, and certain intergovernmental organizations;
  3. journalistic activity;
  4. professional research and professional meetings;
  5. educational activities;
  6. religious activities;
  7. public performances, clinics, workshops, athletic and other competitions, and exhibitions;
  8. support for the Cuban people;
  9. humanitarian projects;
  10. activities of private foundations or research or educational institutes;
  11. exportation, importation, or transmission of information or information materials; and
  12. certain authorized export transactions.

U.S. travelers to Cuba also need to review this OFAC statement (para. 32) about spending in Cuba by “persons subject to U.S. jurisdiction:”

  • “There is no specific dollar limit on authorized expenses; however, in accordance with the NSPM [National Security Presidential Memorandum], OFAC is amending the CACR [Cuban Assets Control Regulations] to restrict persons subject to U.S. jurisdiction from engaging in direct financial transactions with entities and subentities identified on the State Department’s Cuba Restricted List, with certain exceptions. See 31 CFR § 515.209 and § 515.421. Consistent with these authorizations and restrictions, authorized travelers may engage in transactions ordinarily incident to travel within Cuba, including payment of living expenses and the acquisition in Cuba of goods for personal consumption there. In addition, travelers are authorized to acquire in Cuba and import as accompanied baggage into the United States merchandise for personal use only. Value imports remain subject to the normal limits on duty and tax exemptions for merchandise imported as accompanied baggage and for personal use.” (Emphasis added.)

As this OFAC statement indicates, the U.S. State Department has published its “List of Restricted Entities and Subentities Associated with Cuba as of November 9, 2017.” Direct transactions with these entities and subentities by “persons subject to U.S. jurisdiction” are prohibited. The State Department also has published “Frequently Asked Questions on the Cuba Restricted List (Nov. 8, 2017).”

Finally Americans thinking about going to Cuba should know that the two major carriers to the island—Delta and American—have taken over many routes abandoned by other airlines and with the experience of the last several years have figured out the best size of aircrafts and frequency of flights to Cuba from the gateways of New York City, Houston, Atlanta and Miami. The result? Round-trip tickets to Cuba from these gateways are inexpensive, such as $300 from JFK in New York.

The traveler will be aided in all of this by working with a company, like InsightCuba, that specializes in travel to the island.

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[1] Cogswell, Under the Radar, Cuba Market Comes Back, travelmarket report (Aug. 1, 2018).

Discussion About Cuba at the Washington Conference on the Americas

On May 8 the U.S. Department of State hosted the Americas Society’s Council of the Americas’ 48th Annual Washington Conference on the Americas with U.S. administration senior officials and distinguished leaders from across the Americas to focus on the major policy issues affecting the hemisphere..[1]

The speakers at this event were Acting Secretary of State John J. Sullivan; U.S. Ambassador to the U.N., Nikki Haley; U.S. Senators Marco Rubio (Rep., FL) and Benjamin Sasse (Rep., NE); other U.S. State Government officials (U.S. Treasury Undersecretary for International Affairs, David Malpass; U.S. Agriculture Undersecretary of Trade and Foreign Agricultural Affairs, Ted McKinney; U.S. Acting Assistant Secretary of State for Western Hemisphere Affairs, Francisco Palmieri) plus Brazilian Ministry of Finance Secretary for International Affairs Marcello Estevão; and International Finance Corporation Chief Executive Officer Philippe Le Houérou.

The bulk of the comments were directed at combatting corruption and at criticizing Venezuela and then at Nicaragua with only a few barbs at Cuba, as discussed below.

Acting Secretary Sullivan’s Remarks[2]

Acting Secretary Sullivan said, “Our engagement in the Americas, of course, is not a recent phenomenon. Since the birth of our republic, the United States has had strong relationships in the Western Hemisphere, bonds built on geography, shared values, and robust economic ties. We strive to coexist peacefully and to do so in a mutually beneficial way.”

The U.S. “Caribbean 2020 strategy is increasing private sector investment in the Caribbean, promoting Caribbean energy security, and building resilience to natural disasters. The Caribbean Basin Security Initiative seeks to enhance maritime interdictions, build institutions, counter corruption, and foster cooperation to protect our shared borders from the impact of transnational crime.”

“Threats to the hemisphere occur on a number of other complex fronts, requiring coordinated and sophisticated responses. Whether building capacity to counter cyber threats, supporting de-mining in Colombia, or combating trafficking in persons, the United States is committed to being the security partner of choice for the Americas in the years ahead.”

“The United States is the top trading partner for over half of the 34 countries in the Western Hemisphere. Annually, we trade $1.8 trillion in goods and services with the hemisphere, supporting millions of jobs and leading to an $8 billion surplus in goods and services in 2017.”

“Underpinning our economic engagement is respect for the rule of law and shared values. Corruption both undermines and corrodes the confidence our citizens have in democratic institutions.”

“Finally, we must keep working together to ensure that the people in this hemisphere can live according to democratic values. . . . While most of the region enjoys democratic rule, a few outliers – Cuba, Nicaragua, and Venezuela – continue to undermine the region’s shared vision for effective democratic governance as enshrined in the Inter-American Democratic Charter.” (Emphasis added.)

The United States remains committed to championing freedom and to standing with the people of Venezuela and Cuba in their struggle to achieve the liberty they deserve. . . . We look to our partners – including governments and civil society organizations – to join us in speaking up whenever and wherever the hemisphere’s shared democratic principles come under attack.” (Emphasis added.)

U.S. Ambassador Haley’s Remarks[3]

“I am here today because the Trump Administration places a high priority on the Western Hemisphere, its security, its prosperity, and its freedom. And we recognize that the United States must reassert our leadership in the hemisphere.”

“I have seen time and time again at the United Nations that when the United States fails to lead, we suffer, and the world suffers. This is even more true in our relationships with other nations. There is no substitute for strong U.S. leadership, based on our values of political and economic freedom and respect for human rights.”

“The prosperity of the United States is critically tied to the prosperity of the hemisphere. Our future is bound up with our neighbors.”

“Among other things, we are each other’s largest and best trading partners. The United States sells more goods and services to our neighbors in the Western Hemisphere than we do to China, Japan, and India combined. While a lot of attention is placed on issues of trade with China, we should keep in mind that we trade nearly three times as much with the Western Hemisphere as we do with China.”

“We are also dependent on each other for our security.”

“And the principle that ties it all together is something else the United States has in common with most of our neighbors in the hemisphere – a commitment to freedom. . . . The western hemisphere is increasingly dominated by countries that share our political and economic principles.”

“The great human rights activist Natan Sharansky had a test for evaluating the freedom of societies that he called the “Town Square Test.” According to Sharansky, if someone can walk into a town square and express his or her views without being arrested, thrown in prison, or beaten, then they lived in a free society. If not, they lived in what he called a ‘fear society.’”

“As we look across the Americas, it’s pretty easy to tell the free societies from the fear societies. It’s a testament to the people of Latin America – and the love of freedom and dignity that exists in the human heart – that most of the hemisphere is free.”

“Across Latin America, the good news is that these challenges are increasingly dealt with through a commitment to the rule of law and democratic institutions. The region is far from perfection, but the progress is unmistakable.”

The democratic process  “has exposed the rot at the core of the Nicaraguan government. Like his patron in Caracas and his mentors in Havana, the Ortega government has stayed in power by rigging elections, intimidating critics, and censoring the media.” (Emphasis added.)

“The Cuban-Venezuelan-Nicaraguan model of socialism, dictatorship, corruption, and gross human rights violations has proved to be a complete and total failure. It has caused the suffering of millions of people. (Emphasis added.)

“We cannot allow the last, few surviving authoritarians to drag down the hemisphere. As neighbors, the United States and all the nations of Latin America are bound together on this journey.”

Senator Rubio’s Remarks[4]

Senator Rubio’s hostile opinions regarding the Cuban government are well known and appear to be a major factor behind the Trump Administration’s policies on Cuba. At this conference, Rubio was brief. He said, “What I care about in Cuba is political freedoms. The ability to have independent political parties, and a free press and to speak your mind, that’s what I support in Cuba.” (Emphasis added.)

About a week later, a Rubio complaint led the State Department to cancel a seminar, titled “Cuba under [Miguel] Díaz-Canel,” because it only was going to feature speakers who support normalization with Cuba. The scheduled speakers were Carlos Saladrigas, president of the Cuba Study Group; Marguerite Jimenez of the Washington Office on Latin America; American University professor William LeoGrande; and Philip Peters of the Cuba Research Center. LeoGrande and Peters also are advisers to Engage Cuba, a bipaartisan coalition which favors lifting the U.S. embargo.

Americas Society Background[5]

The Americas Society “Is the premier forum dedicated to education, debate, and dialogue in the Americas. Its mission is to foster an understanding of the contemporary political, social, and economic issues confronting Latin America, the Caribbean, and Canada, and to increase public awareness and appreciation of the diverse cultural heritage of the Americas and the importance of the inter-American relationship.”

Its Council of the Americas is “the premier international business organization whose members share a common commitment to economic and social development, open markets, the rule of law, and democracy throughout the Western Hemisphere. The Council’s membership consists of leading international companies representing a broad spectrum of sectors, including banking and finance, consulting services, consumer products, energy and mining, manufacturing, media, technology, and transportation.”

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[1] State Dep’t, Deputy Secretary Sullivan To Deliver Opening Keynote Remarks at the 48th Annual Washington Conference on the Americas (May 7, 2018); Council of the Americas, Washington Conference on the Americas.

[2] U.S. Embassy in Havana, Remarks at 48th Annual Washington Conference on the Americas (May 8, 2018).

[3] Americas Society. Remarks: U.S. Ambassador Nikki Haley to the 48th Annual Washington Conference (May 8, 2018).

[4]  Press Release, VIDEO: Rubio Delivers Remarks at Annual Washington Conference on the Americas (May 8, 2018); Torres, State Department postpones event on Cuba after Sen. Rubio protests, Miami Herald (May 17, 2018).

[5] Americas Society, About AS/COS .

 

Senator Rubio Takes Credit for More Hostile U.S. Policies Regarding Cuba 

On December 22, Senator Marco Rubio (Rep., FL) released a “summary of his 2017 accomplishments.”[1]

Second on this list was “Shaping U.S. Policy Toward Cuba.” It stated, “Rubio worked closely with President Trump and his Administration to develop a new U.S. policy toward Cuba that rolls back the Obama Administration’s one-sided concessions to the Castro regime, and instead works to economically and politically empower private Cuban citizens and entrepreneurs.”

The hyperlinked article for Rubio’s working closely with President Trump was written in Politico by Marc Caputo, formerly of the Miami Herald.[2] It asserts that on May 5 Rubio along with his fellow Miami Republican and Cuban-American, Representative Mario Diaz-Balart, met at the White House with President Trump, Secretary of State Rex Tillerson, National Security Adviser H.R. McMaster, then White House Chief of Staff Reince Priebus and Advisor Jared Kushner. Rubio and Diaz-Balart warned the President not to rely upon career service people in the State and Treasury Departments because they did not favor abandoning President Obama’s policy of normalization with the island. Instead, it was suggested, the President himself and his close advisors should develop the new policy themselves.

Trump immediately accepted the suggestion and McMaster volunteered to implement the decision to change U.S. policy towards Cuba, which was announced in the President’s speech in Miami on June 16  and formalized in the National Security Presidential Memorandum on Strengthening the Policy of the United States Toward Cuba, which he signed immediately after the speech.[3]

This blogger already has expressed his opposition to this reversal of U.S. policy and rhetoric regarding Cuba and suggested instead on overturning the new ban on individual person-to-person travel and emphasizing the ban’s adverse impact on Cuba’s emerging entrepreneurs while continuing to advocate for implementation of other normalization measures.[4]

Although Rubio is a Cuban-American, he has never lived there or even visited the island. Thus, he is subject to legitimate criticism for having a distorted view of what U.S. policy should be. Addressing this glaring gap in his knowledge, a group of Cuban businesswomen have invited him to visit Cuba to learn about Cuba, the island’s emerging private sector and the adverse impact on those new businesses from the U.S. policies advocated by the Senator and President Trump. The Senator, however, has not accepted the invitation or even acknowledged this graceful gesture by the women.[5]

The Senator also could learn from Living Waters for the World, a project of the Synod of Living Waters of the Presbyterian Church (U.S.A.) that has installed nearly 900 clean water systems in 25 countries, including nearly 50 in Cuba. A recent U.S. volunteer group visited 10 such clean water sites in Cuba and said there was a sense of God whispering, “Pay attention, I have something important to show you—our inherent connectedness. Clearly, God does extraordinary things when we reach beyond our boundaries to know, be with, and pay attention to our brothers and sisters in Christ.”[6]

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[1] Press Release: Rubio Highlights 2017 Accomplishments (Dec. 22, 2017).

[2] Caputo, Inside Marco Rubio’s campaign to shape Trump’s Cuba crackdown, Politico (June 15, 2017).

[3] See these posts to dwkcommentaries.com: President Trump Announces Reversal of Some Cuba Normalization Policies (June 19, 2017); U.S. Reactions to Trump Reversal of Some U.S.-Cuba Normalization Policies (June 21, 2017); Cuban Reactions to Trump Reversal of Some U.S.-Cuba Normalization Policies (June 22, 2107).

[4] This Blogger’s Reactions to Trump Reversal of Some U.S.-Cuba Normalization Policies, dwkcommentaries.com (June 23, 2017).

[5]  Reuters, Cuban businesswomen seek Rubio meeting as U.S. policy bites (Nov. 17, 2017).

[6] Zehnder, Changing Subjectivity, Waters of Life (Nov.-Dec. 2017).

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).

Additional Reactions to New U.S. Regulations Regarding  Cuba         

As noted in a prior post, on November 8, new U.S. regulations on travel to Cuba and business with Cubans were issued while another post discussed initial reactions thereto.  Already additional reactions have surfaced: impact on what Americans drink in Cuba and the adverse impact on U.S. interests.

Americans Drinks in Cuba[1]

The new Cuba Restricted List bans U.S. businesses and individuals from doing business with the Cuba companies that produce two rum brands—Ron Varadero and Ron Caney—and three soft drinks—Tropicola Cachito, Jupiña and Nahita. That has raised concern that Americans in Cuba would have to be careful about what they drink.

Two days after the issuance of the new regulations, the U.S. Treasury issued a clarification. The List only bans direct financial transactions with the entities on the List. Therefore, says the Treasury, “Americans may still consume those soft drinks and rums” — as long as they don’t buy them directly from the companies on the List. They can buy a Tropicola from a street vendor, for example, and they won’t have to tell a bartender: ‘No Varadero or Caney rum, please.’”

But the Americans may not buy “a rum and coke at . . . one of the 83 hotels that are run by Gaviota or Habaguanex, two tourism brands controlled by the military [and, therefore, on the List]. It’s off limits for not only drinks but also lodging.”

Adverse Impact on U.S. Interests[2]

A Miami Herald journalist, Fabiola Santiago, has identified at least five ways the new regulations harm U.S. interests.

“First, by doing away with the independent people-to-people travel by Americans, . . . [the regulations] are actually helping the Cuban government control what travelers do, whom they meet, and how their perceptions of the country are shaped, thus becoming enablers of the dictatorship. Yet, tours are the mode of travel endorsed by Trump’s policy — and propagandistic historical tours are one of the activities that prove to the Treasury Department that your travel to Cuba is ‘educational.’”

Second, the new regulations put “the trips back in the hands of babysitters . . . [i.e.,] loyal government employees who shuttle around visitors. . . . Trump just expanded their ranks. Jobs!”

Third, the new regulations thereby harm “Cuba’s fledgling entrepreneurial class,” who will lose customers to the state-owned businesses.

Fourth, the new regulations do not adversely affect U.S. cruise ship operators even though their “passengers are a captive audience of government stores filled with Che Guevara paraphernalia and peddlers who offer government services to people disembarking.”

Fifth, the regulations and the Trumpian rhetoric about Cuba are helping the Russians enhance their relationship with Cuba, which includes “aggressively pursuing establishing a military base in Cuba, 90 miles from the USA.”

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[1] Whitefield, Do new rules on Cuba travel mean no rum in cocktails for American travelers? Miami Herald (Nov. 10, 2017). (I was unable to find the Treasury Department clarification on its website.)

[2] Santiago, It’s your Cuba policy, Miami republicans. You can’t blame Obama now, Miami Herald (Nov. 10, 2017)

New Restrictions on U.S. Travel to Cuba and Transactions with Certain Cuban Entities                                     

On November 8, the U.S. Treasury, Commerce and State departments released regulations imposing new restrictions on U.S. citizens travel to Cuba. Taking effect on November 9, they “are aimed at preventing U.S. trade and travelers from benefiting its military, intelligences and security arms of the Communist-ruled country.” In addition, they require U.S. travelers on “person-to-person” trips “to use a U.S.-based organization and be accompanied by a U.S. representative of the group.”[1]

This blog post will first provide a list of the Treasury Department’s 12 categories of general licenses for approved travel to Cuba, only two of which are directly affected by the new regulations. These two categories will be discussed followed by the new regulations ban on transactions with certain Cuban entities that affects all 12 categories.

Categories of Approved Travel[2]

“Travel-related transactions are permitted by [OFAC’s] general license for certain travel related to the following activities, subject to the criteria and conditions in each general license: (1) family visits; (2) official business of the U.S. government, foreign governments, and certain intergovernmental organizations; (3) journalistic activity; (4) professional research and professional meetings; (5) educational activities; (6) religious activities; (7) public performances, clinics, workshops, athletic and other competitions, and exhibitions; (8) support for the Cuban people; (9) humanitarian projects; (10) activities of private foundations or research or educational institutes; (11) exportation, importation, or transmission of information or information materials; and (12) certain authorized export transactions.”

Only the two categories in bold are affected by the new regulations—travel for “educational” reasons (organized and people-to-people) and “support for the Cuban people.”

Formal Educational Travel[3]

OFAC states, “Among other things, this general license authorizes, subject to conditions, faculty, staff, and students at U.S. academic institutions . . . to engage in certain educational activities, including study abroad programs, in Cuba, Cuban scholars to engage in certain educational activities in the United States, and certain activities to facilitate licensed educational programs. U.S. and Cuban universities may engage in academic exchanges and joint non- commercial academic research under the general license. This provision also authorizes persons subject to U.S. jurisdiction to provide standardized testing services and certain internet-based courses to Cuban nationals.

In addition, “educational exchanges, including study abroad programs, sponsored by Cuban or U.S. secondary schools involving secondary school students’ participation in a formal course of study or in a structured educational program offered by a secondary school or other academic institution, and led by a teacher or other secondary school official are authorized. Such exchanges must take place under the auspices of an organization that is a person subject to U.S. jurisdiction, and a person subject to U.S. jurisdiction who is an employee, paid consultant, agent, or other representative of the sponsoring organization (including the leading teacher or secondary school official) must accompany each group traveling to Cuba. For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.565(a)(2)(vi). This authorization allows for participation of a reasonable number of adult chaperones to accompany the secondary school students to Cuba.”

“People-to-People” Educational Travel[4]

“OFAC is amending the general license for people-to-people educational activities in Cuba to remove the authorization for individual people-to-people educational travel. This general license now authorizes, subject to conditions, persons subject to U.S. jurisdiction to engage in certain educational exchanges in Cuba under the auspices of an organization that is a person subject to U.S. jurisdiction and sponsors such exchanges to promote people-to-people contact. Travelers utilizing this general license must ensure they maintain a full-time schedule of educational exchange activities intended to enhance contact with the Cuban people, support civil society in Cuba, or promote the Cuban people’s independence from Cuban authorities, and that will result in meaningful interaction between the traveler and individuals in Cuba.”

“The predominant portion of the activities must not be with a prohibited official of the Government of Cuba, as defined in 31 CFR § 515.337, or a prohibited member of the Cuban Communist Party, as defined in 31 CFR § 515.338.”

“A person subject to U.S. jurisdiction who is an employee, paid consultant, agent, or other representative of the sponsoring organization must accompany each people-to-people educational group traveling to Cuba to ensure that each traveler has a full-time schedule of educational exchange activities. Individuals traveling under the auspices of an organization that is a person subject to U.S. jurisdiction and that sponsors such exchanges to promote people-to-people contact may rely on the entity sponsoring the travel to satisfy his or her recordkeeping obligations with respect to the requirements described above. OFAC is amending this general license to exclude from the authorization direct financial transactions with entities and subentities identified on the State Department’s Cuba Restricted List.”

“Support for the Cuban People” Travel[5]

“This general license authorizes, subject to conditions, travel-related transactions and other transactions that are intended to provide support for the Cuban people, which include activities of recognized human rights organizations; independent organizations designed to promote a rapid, peaceful transition to democracy; and individuals and non-governmental organizations that promote independent activity intended to strengthen civil society in Cuba. OFAC is amending this general license to require that each traveler utilizing this authorization engage in a full-time schedule of activities that enhance contact with the Cuban people, support civil society in Cuba, or promote the Cuban people’s independence from Cuban authorities and that result in meaningful interactions with individuals in Cuba. OFAC is also amending this general license to exclude from the authorization certain direct financial transactions with entities and subentities identified on the State Department’s Cuba Restricted List. The traveler’s schedule of activities must not include free time or recreation in excess of that consistent with a full-time schedule in Cuba. For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.574.”

“ Renting a room in a private Cuban residence (casa particular), eating at privately owned Cuban restaurants (paladares), and shopping at privately owned stores run by self-employed Cubans (cuentapropistas) are examples of authorized activities; however, in order to meet the requirement of a full-time schedule, a traveler must engage in additional authorized Support for the Cuban People activities.”

Ban on Transactions with Certain Cuban Entities[6]

The new regulations also ban U.S. travelers and businesses from transactions with “the large military-run corporations that dominate the Cuban economy. These include GAESA and CIMEX, the holding companies that control most retail business on the island; Gaviota, the largest tourism company; and Habaguanex, the firm that runs Old Havana.” The regulations include a list of forbidden hotels, including Havana’s “Manzana Kempinski, which opened with great fanfare this year as Cuba’s first hotel to meet the international five-star standard.”

This “Cuba Restricted List,” which will be maintained and updated by the State Department, has the following categories of organizations (and the number of entities in each category): Cuban Ministries (2) ; Cuban Holding Companies (including CIMEX,GAESA, Gavotte and Companies Touristic Habituate S.A.) (5) ; Hotels in Havana and Old Havana (27); Hotels in Santiago de Cuba (1); Hotels in Varadero (13); Hotels in Pinar del Rio (2); Hotels in Baracoa (7); Hotels in Cayos de Villa Clara (15); Hotels in Holguín (11); Hotels in Jardine’s del Rey (5); Hotels in Topes de Collates (3); Tourist Agencies (2); Marinas (5); Stores in Old Havana (10);  Entities Directly Serving the Defense and Security Sectors (38); Additional Subentries of CIMEX (16); Additional Subentities of GAESA (13); Additional Subentries of GAVIOTA (4); and Additional Subentries of HABAGUANEX (1).

Conclusion

All of these new regulations are meant to implement President Trump’s National Security Presidential Memorandum on Strengthening the Policy of the United States Toward Cuba, which he signed on June 16, 2017, at an event in Miami Florida.[7]

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[1] U.S. Treasury Dep’t, Treasury, Commerce, and State Implement Changes to the Cuba Sanctions Rules (Nov. 8, 2017); U.S. Treasury Dep’t (Office of Foreign Assets Control), Frequently Asked Questions Related to Cuba (updated Nov. 8, 2017); Reuters, Trump Administration Tightens Sanctions Against Cuba, N.Y. Times (Nov. 8, 2018); Assoc. Press, US Takes Steps to Make It Harder for Americans to Visit Cuba, N.Y. times (Nov. 8, 2017); DeYoung, White House implements new Cuba policy restricting travel and trade, Wash. Post (Nov. 8, 2017).

[2] U.S. Treasury Dep’t (Office of Foreign Assets Control), Frequently Asked Questions Related to Cuba (updated Nov. 8, 2017).

[3] Id.

[4] Id.

[5] Id.

[6] U.S. State Dep’t, List of Restricted Entities and Subentities Associated With Cuba as of November 9, 2017 (Nov. 8, 2017); U.S. State Dep’t, Frequently Asked Questions on the Cuba Restricted List (Nov. 8, 2017).

[7]  White House, Trump’s National Security Presidential Memorandum on Strengthening the Policy of the United States Toward Cuba (June 16, 2017). This Memorandum and the Miami event were discussed in a prior post.

 

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).