Impact Of Hurricane Ian Upon Privately-Owned Tobacco Plantations In Cuba Opportunity For U.S.-Origin OFAC-Authorized Direct Investment And Direct Financing?

Will United States Department Of State “include section IV, chapter 24, heading 2401 (unmanufactured tobacco)” In List Of Goods And Services Eligible For Importation?

Might this be a message to the Ministry of Agriculture, privately-owned co-operatives, and owners of privately-owned plantations located in Cuba?

“The impact of Hurricane Ian upon Pinar del Rio, home to the finest tobacco plantations in Cuba, including those defined as privately-owned, may provide an opportunity for investment and financing to privately-owned tobacco growers. In May 2022, the Biden-Harris Administration authorized direct investment in and direct financing to a privately-owned company located in Cuba owned by a Cuban national. Hopefully soon the government of Cuba will publish investment/financing regulations so that opportunities may be evaluated and, if workable, return quickly investment and financing from the United States to independent tobacco growers in Cuba and eventually a return tobacco from Cuba to the United States marketplace. Crucial for the investment/financing regulations to recognize distinctions between investment in and financing in private sector and investment in and financing to government-controlled entities.”

One potential source for investment and financing? From 1895 to 1962, Tampa, Florida-based J.C. Newman Cigar Company imported tobacco from the Republic of Cuba and retains custody of the last bale of pre-embargo tobacco imported from the Republic of Cuba.

There are tobacco plantations (small, medium, and large) in the Republic of Cuba that were, prior to the 1959 Revolution, and have remained since, owned by families rather than the government of the Republic of Cuba. They sell their crop to the government of the Republic of Cuba.

Cigar Aficionado Magazine: “Estamos vivos”—we are alive—tobacco grower Hirochi Robaina told Cigar Aficionado this morning. He owns Cuba’s best-known tobacco farm, Cuchillas de Barbacoa, which was torn apart by the storm, damage that Robaina called “apocalyptic, a real disaster.” Photos of his farm showed considerable damage to buildings and barns, with tractors flipped over, roofs shorn from buildings, trees stripped of foliage and tobacco tarps shredded by the winds. It was unlikely that Robaina or any of his neighbors had planted tobacco yet—the tobacco season typically begins later in the year, when the threat of storms diminishes. But regardless, the level of damage will be a setback to Cuba’s tobacco harvest. Tobacco cannot be properly harvested without barns.

Reuters: When Hurricane Ian ripped through western Cuba last week, tobacco farmer Victoriano Maqueira lost the two large barns he used for drying his crop, as well as his dogs, chickens, a pig, his television and the roof off his home. The deluge drenched his tobacco seeds, so he will not plant this year. But this was no time to sulk, the wiry 63-year-old told Reuters, as he tilled his fields with oxen to plant beans instead. "I wanted to cry, to scream," he said, recalling the moment he saw the damage to his home and barns. "We're going to lose an entire year. But you need to keep moving forward." Nearly all of its tobacco infrastructure - including drying houses - were flattened by the hurricane just days ahead of the October planting season.

In 2016, the United States Department of State certified certain coffee plantations and charcoal sourcing areas in the Republic of Cuba as meeting the requirements- and those requirements continued to be maintained, without interruption, through the Obama-Biden Administration (2009-2017), Trump-Pence Administration (2017-2021), and thus far through the Biden-Harris Administration (2021- ).

United States Department of State- Bureau of Economic and Business Affairs
Section 515.582 List- Goods and Services Eligible for Importation

“In accordance with the policy changes announced by the President on December 17, 2014, to further engage and empower the Cuban people, Section 515.582 of the Cuban Assets Control Regulations (31 CFR Part 515 – the CACR) authorizes the importation into the United States of certain goods and services produced by independent Cuban entrepreneurs as determined by the State Department as set forth on the Section 515.582. The goods whose import is authorized by Section 515.582 are goods produced by independent Cuban entrepreneurs, as demonstrated by documentary evidence, that are imported into the United States, except for goods specified in the following sections/chapters of the Harmonized Tariff Schedule of the United States (HTS).”

On 2 June 2021, Mr. Newman wrote to the United States Department of State requesting raw tobacco from the Republic of Cuba grown by “independent Cuban entrepreneurs” be eligible for import to the United States and specifically to “include section IV, chapter 24, heading 2401 (unmanufactured tobacco)” in the list of Goods and Services Eligible for Importation. LINK To Letter

On 10 May 2022, the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury issued a license authorizing direct investment in and direct financing to a privately-owned company located in the Republic of Cuba owned by a Republic of Cuba national. Presently, investment funds and dividends, and financing funds and interest/interest/principal payments must currently be transferred through financial institutions located in third countries.

Related Analyses Links

Will Cuba Permit Limited Edition “Cuban-American” Hand-Rolled Cigars To Be Created In The United States From 100 Pounds Of Tobacco From Cuba? U.S. Company May Provide Grower Financing June 07, 2021

J.C. Newman Cigar Co. Wants To Add Tobacco Leaves To Coffee & Charcoal As Authorized Imports From Cuba June 03, 2021

Ag Delegations Traveling To Cuba Must Know What Is Possible, Advocate To Government Of Cuba To Permit All That Is Permissible- Direct Export Of Coffee, Cacao, Honey. Complaining Not Constructive. April 14, 2022

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