Will Caterpillar And Deere Disclose Use Of Payment Terms And Financing For Exports To Cuba?

Reporting On Activity Is Important For Market Credibility 

As the Biden Administration compares what worked during the Obama Administration (2009-2017) and Trump Administration (2017-2021) with what did not work during the Obama Administration and Trump Administration, important during the review include commercial activities, specifically focusing upon those exports from the United States to the Republic of Cuba for which payment terms and financing are permitted.

Critical for members of the United States Congress to have before them evidence demonstrating that when United States exporters are permitted to provide payment terms and financing, Republic of Cuba-based entities a) make use of the payment terms and financing and b) maintain the terms of all payment terms and financing. Meaning, the United States exporters are being paid on time as expected.

In 2015 and in 2016, the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury and Bureau of Industry and Security (BIS) of the United States Department of Commerce expanded the list of products authorized for export from the United States and from third countries to the Republic of Cuba with a focus upon products (non-durable, durable and consumable) to entities not affiliated with the government of the Republic of Cuba. 

In 2017, Deere & Company (2019 revenues approximately US$39.26 billion) established a distribution center in the Republic of Cuba, joining San Juan, Puerto Rico-based RIMCO, the Republic of Cuba distributor for Peoria, Illinois-based Caterpillar Inc. (2019 revenues approximately US$53.8 billion) established the same year.  At the time, neither Deere & Company nor Caterpillar issued media releases or posted information on their respective Internet sites. 

Since November 2017, Deere & Company delivered more than US$800,000.00 in agricultural equipment to the Republic of Cuba for use at its distribution center. Antioch, Tennessee-based Wirtgen America, Inc., a subsidiary of Windhagen, Germany-based Wirtgen Group (2020 revenues approximately US$3 billion), a construction equipment machinery subsidiary (acquired in 2017) of Deere & Company has also delivered products to the Republic of Cuba.  RIMCO continues to deliver equipment for use at its distribution center in the Republic of Cuba, including excavators, backhoes, graders, scrapers, bulldozers, railway fixtures, and signaling equipment, valued at more than US$4 million since December 2018. 

John Deere Financial Services was to provide payment terms/financing for the exports, primarily Series 5000 (price range US$25,000.00 to US$80,000.00) with a limited quantity of Series 7000 (price range US$219,000.00 to US$280,000.00).  According to the company, several hundred tractors, parts and accessories may be exported from the United States to the Republic of Cuba during the next four years, with the first deliveries (for testing and evaluation) scheduled for mid-November 2017.  The potential value of the several hundred products exported from the United States to the Republic of Cuba that would be financed could range from US$9 million to US$30 million.   

John Deere Financial Services has not commented as to whether the product sales goals have been achieved or if there have been issues relating to the receipt of payments.   

Caterpillar has not disclosed if the company has provided payment terms for its products exported to the Republic of Cuba. 

Without the provision of substantial discounts in conjunction with extended payment terms and low-interest financing, United States companies remain at a competitive disadvantage as Republic of Cuba government-operated companies prefer government-to-government transactions and government-to-government financing agreements. 

For example, the governments of the People's Republic of China, Russian Federation, Japan, Belarus, France and India among others provide substantial long-term financing for durable product exports to the Republic of Cuba; and those financing agreements are almost always extended when repayment is problematic, which is often. 

Due to inaction by the Obama Administration throughout its two terms in office despite repeated requests from representatives of the United States business community, payments from the Republic of Cuba to Deere & Company and Caterpillar, payments for agricultural commodities and food products authorized by the Trade Sanctions Reform and Export Enhancement Act (TSREEA) of 2000, and payments for medical equipment, medical instruments, medical supplies, pharmaceuticals, and healthcare products authorized by the Cuban Democracy Act (CDA) and were routed through financial institutions located in third countries rather than directly through the use of Direct Correspondent Banking (DCB).