Another Unpublicized U.S. Senator Visit To Cuba. Rather Than Focus On What Cuba Private Sector Needs From Cuba Government, He Focuses Upon What Cuba Private Sector Needs From U.S. Government.
/Another U.S. Senator Makes A Unpublicized (Basically Secret) Visit To Cuba.
Welcome’s New Year In Havana.
Rather Than Focus On What Cuba Private Sector Needs From Cuba Government, He Focuses Upon What Cuba Private Sector Needs From United States Government.
The Honorable Ronald Wyden (D- Oregon), Chairman of the United States Senate Committee on Finance, embarked on an unpublicized visit to the Republic of Cuba from 29 December 2022 (no date provided by Senator Wyden’s office) to 1 January 2023. He last reported visit to the Republic of Cuba was February 2018.
The visit went unreported by his office until his office issued a media release- three days after he returned from the Republic of Cuba to the United States. The precise dates of the visit were neither reported in advance by Senator Wyden nor reported immediately after the conclusion of the visit. When he arrived to the Republic of Cuba has yet to be reported. The source of funding for the visit to the Republic of Cuba has not been disclosed. These are rookie errors- unexpected by the chairman of a committee of the United States Senate, particularly one where details and transparency are important.
Granma, the official newspaper of the Communist Party of the Republic of Cuba, published two articles (one with one image and one with two images) about the visit by Senator Wyden on 29 December 2022 and 30 December 2022. Senator Wyden was comfortable with Granma reporting on the visit- in real time, but uncomfortable reporting in advance about the visit himself. Why?
No advance media release, no advance post to Twitter or Facebook, no advance media interview(s) and, most egregiously, no outreach seeking briefings with individuals and organizations who focus upon micro, small, and medium-size enterprises (MSMEs) in the Republic of Cuba and have licenses issued by 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 for engagement with MSMEs in the Republic of Cuba.
Reasonable to believe Senator Wyden would have found value in learning what the holders of those licenses continue to await- for nearing two years from the Diaz-Canel-Valdes Mesa Administration (2019- ).
On 10 May 2022, the OFAC issued the first 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.
The government of the Republic of Cuba has yet to publish regulations with a delay of nearing two years as to the process for MSMEs in the Republic of Cuba to receive direct investment and direct financing.
Does this lack of transparency, lack of ownership, lack of preparation matter? Yes, it does. For a member of the United States Congress (United States Senate and United States House of Representatives) to travel to the Republic of Cuba and not publicize the agenda in advance and then not or wait to publicize the agenda subsequent to the completion of the visit only serves one purpose- to maintain the stigma, the lack of legitimacy, the lack of importance, for the visit to the Republic of Cuba.
In the media release published on 4 January 2023, Senator Wyden shared a statement about his interactions in the Republic of Cuba with representatives of MSMEs in which he provided a list of what the representatives of the MSMEs shared they are seeking from the Biden-Harris Administration (2021- ).
“During my visit to Cuba I was told by entrepreneurs that the vibrant Cuban private sector would benefit from narrow changes to U.S. licensing and other rules,” Wyden said. “Specifically, the entrepreneurs told me that general licenses, allowing them to operate in spite of the sanctions, would bring legitimacy and credibility to them and their businesses. They told me they expected these changes to lead to the creation of thousands of new businesses. In addition, they said bank accounts would make it easier to attract investment capital, and knowing that I authored the U.S. e-commerce law, they requested that I assist with their e-commerce initiatives.”
Significantly, Senator Wyden reported receiving input about banking- and its importance to MSMEs.
One meaningful focus for Senator Wyden in 2023 during his discussions with officials of the Biden-Harris Administration at The White House (National Security Council), United States Department of State, United States Department of the Treasury, and United States Department of Commerce would be to gain authorization for direct correspondent banking.
Currently, payments for electric vehicles; remittance transfers; payments to United States exporters of agricultural commodities, food products, and healthcare products; payments for authorized travel and required visas; payments for airline landing fees; and payments for telecommunications must be transferred through financial institutions located in third countries because the OFAC authorizes United States-based financial institutions to have correspondent accounts at Republic of Cuba government-operated financial institutions, but does not authorize Republic of Cuba government-operated financial institutions to have correspondent accounts with United States-based financial institutions.
In 2022, the Biden-Harris Administration approved the first license authorizing direct investment and direct financing to a privately-owned company owned by a Republic of Cuba national and located in the Republic of Cuba and approved the first license to export electric vehicles to MSMEs. Each of these licenses are negatively impacted by the lack of direct correspondent banking.
When the Diaz-Canel-Valdes Mesa Administration publishes the regulations for the delivering of direct investment funds and dividends and financing funds and interest/interest/principal payments to MSMEs, then critical for direct correspondent banking infrastructure to be in place and to be operational.
If Senator Wyden wants to deliver a significant contribution to the re-engagement by United States-based individuals and companies with MSMEs in the Republic of Cuba, then focus upon two items:
Direct correspondent banking
Publication of regulations by the Diaz-Canel-Valdes Mesa Administration for the delivery of direct investment and direct financing to MSMEs.
Recent Analysis
Why The Delay? Nearing Nineteen Months And Cuba Has Yet To Issue Investment And Financing Regulations, Procedures For MSMEs. Biden Administration Authorized Investment And Financing In May 2022. There Are Nearing 6,000 MSMEs That Could Receive Support From U.S. Investors And U.S. Financiers.
Delays Are An Incentive For The Republic Of Cuba’s “Best And Brightest” Who Will Create And Manage And Grow MSME’s To Leave The Country And Pursue Opportunities Elsewhere- Particularly In The United States. That’s Not Good For The Republic Of Cuba.
Nearing eight months after the Biden-Harris Administration (2021- ) approved on 10 May 2022 the first license authorizing direct investment and direct financing to a privately-owned company owned by a Republic of Cuba national and located in the Republic of Cuba, the Diaz-Canel-Valdes Mesa Administration (2019- ) has yet to publish regulations as to the process for delivering the direct investment and direct financing.
With each day in delay, the government of the Republic of Cuba increases the level of suspicion by individuals and corporate entities that the self-stated commitment to the re-emerging private sector in the Republic of Cuba is sustainable.
Direct investment to and direct financing for MSMEs should not be equated to direct investment to and direct financing to a Republic of Cuba government-operated company or to a joint venture, economic cooperation agreement, or other form of engagement with a Republic of Cuba government-operated entity.
The process for MSMEs to receive direct investment and direct financing should be simple, should be easy, and should not require a committee to approve. Provided the MSMEs self-certify that they are in compliance with regulations issued by the government of the Republic of Cuba, MSMEs must be deemed to be compliant absent evidence of non-compliance.
According to the most recent data published by the government of the Republic of Cuba, there are 5,643 private MSMEs in the Republic of Cuba which includes sixty-eight (68) Republic of Cuba government-operated entities and fifty-nine non-agricultural cooperatives. Fifty-two percent (52%) of the entities are conversions of pre-existing enterprises and forty-eight percent (48%) are new enterprises.
Carlos Fernández de Cossío, Deputy Minister of Foreign Relations of the Republic of Cuba (MINREX), shared this week the following statements which were then and remain now contrary to previous statements from officials of the government of the Republic of Cuba relating to authorizing micro, small, and medium-sized enterprises (MSMEs) to receive direct foreign investment and direct foreign financing from United States-based sources which the Biden-Harris Administration (2021) first authorized on 10 May 2022.
If the government of the Republic of Cuba is supportive, then why nearing an eight-month delay for the issuance of regulations so that unilateral decisions by the Biden-Harris Administration may begin to deliver value to MSMEs?
“If this [unilateral decisions by the Biden-Harris Administration] allows greater prosperity of any sector of the economy, we will not put up obstacles. If they manage to devise exceptions that benefit some and continue to punish others, we will not try to prevent it either.”
On Biden-Harris Administration decisions since 20 January 2022: “it has not had perceptible changes” to the overall United States-Republic of Cuba bilateral relationship.
About Biden-Harris Administration decisions reported “with much fanfare” he saw none.
“There is still no regular flow of remittances... and if it happens in the near future, it is due to steps that Cuba has taken and not to decisions taken by the United States.”
For the last statement, Mr. de Cossío is partially correct noting the Biden-Harris Administration has yet to authorize direct correspondent banking. To be factual, the Obama-Biden Administration (2009-2017) authorized in 2015 United States-based financial institutions to have correspondent accounts with Republic of Cuba government-operated financial institutions. However, without explanation- and there continues to be no rationale provided by the Biden-Harris Administration, the 2015 decision by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury did not authorize Republic of Cuba government-operated financial institutions to have correspondent accounts with United States-based financial institutions. The lack of direct correspondent banking means that funds (particularly commercially-related: those supporting MSMEs, and United States agricultural commodity and food product exports) from the United States to the Republic of Cuba and funds from the Republic of Cuba to the United States must navigate through financial institutions located in third countries- thus a triangle rather than a straight line. Result is more time, more cost, and less transparency.
Where Mr. de Cossío is not accurate- the government of the Republic of Cuba could have provided alternative Republic of Cuba government-operated financial institutions when the Trump-Pence Administration (2017-2021) in October 2020 included one in the Cuba Restricted List (CRL) maintained by the United States Department of State. Remittance forwarders, financial institutions, and companies in the United States asked repeatedly the government of the Republic of Cuba to permit other Republic of Cuba government-operated financial institutions to receive and send remittances. Those requests were denied by the government of the Republic of Cuba. Only in February 2022 did the government of the Republic of Cuba authorize another Republic of Cuba government-operated financial institution to process remittances. The delay was self-inflicted.
LINKS TO RELATED ANALYSES
Biden-Harris Administration Approves First Equity Investment Since 1960 In A Private Cuban Company May 10, 2022
With U.S. Government Authorization For First Direct Equity Investment Into A Private Company In Cuba, Here Is Important Context And Details. About The Parties; About The Message. May 16, 2022
Biden Administration Will Use Cuba's Authorization Of SMSE's As Means To Expand Support For Cuba Private Sector- U.S. Investments And Loans May Be Next June 02, 2021
Remittances: Will Biden-Harris Administration Repeat Mistakes Of Obama-Biden Administration And Learn From Mistakes Of Trump-Pence Administration? No Triangles. Yes Loans. Yes Investments. May 18, 2021
Might Cubaexport In 2020 Permit “Independent Entrepreneurs” To Export Coffee Beans, Cocoa and Honey To The United States? January 14, 2020
January 04, 2023- Wyden: Cuban Private Sector Small Businesses Should Get Strong U.S. Support. Following Fact-Finding Trip to Cuba, Wyden Renews Call to Normalize Trade Relations; Wyden Raised Need to Improve Human Rights In Meeting with Cuban President
Washington, D.C. – U.S. Sen. Ron Wyden, D-Ore., is calling on the Biden Administration to strengthen support for Cuba’s small and medium-sized private enterprises by creating more general licenses, as well as giving the private sector access to international banking, following his fact-finding trip to Cuba. Wyden, who chairs the Senate Finance Committee and was the first Senator to visit Cuba in four years, intends to discuss his ideas with Senate colleagues over the weeks ahead. “During my visit to Cuba I was told by entrepreneurs that the vibrant Cuban private sector would benefit from narrow changes to U.S. licensing and other rules,” Wyden said. “Specifically, the entrepreneurs told me that general licenses, allowing them to operate in spite of the sanctions, would bring legitimacy and credibility to them and their businesses. They told me they expected these changes to lead to the creation of thousands of new businesses. In addition, they said bank accounts would make it easier to attract investment capital, and knowing that I authored the U.S. e-commerce law, they requested that I assist with their e-commerce initiatives.”
Wyden believes the U.S. rule changes would benefit private sector Cuban companies, and developing Cuban economic opportunities would help reduce Cuban migration to the United States. He believes a growing middle class of entrepreneurs and family businesses will lay the foundations for fundamental political and economic reforms in one of our closest neighbors. The senator also saw growing involvement by China in the Cuban economy, which can present national security as well as economic security concerns for Americans.
In addition to Wyden’s work on these new small business proposals, the senator continued his ongoing efforts to build support for three of his long-standing priorities – ending the economic embargo, normalizing U.S.-Cuban trade relations and removing Cuba’s designation as a state sponsor of terrorism – while emphasizing the need to improve human and worker rights in the country. In a meeting on December 28, 2022, Senator Wyden urged Cuban President Miguel Díaz-Canel to offer clemency for the July 2021 Cuban protestors. On his last day in Cuba, January 1, 2023, the senator visited with Miguel Calderon Gomez, the famous former coach of the Cuban national basketball team, to discuss how basketball and sports can contribute to better relations between nations. Calderon Gomez also reminisced with Wyden about how the United States “Dream Team” beat the Cuban squad he coached 30 years ago in Portland, Oregon, before the Barcelona Olympics. Wyden is the sponsor of legislation to end the trade embargo of Cuba, and last year urged the Biden-Harris administration to reverse Donald Trump’s failed Cuba policies. He last visited Cuba in 2018, as part of a Senate delegation.
https://www.granma.cu/cuba/2022-12-29/recibio-presidente-cubano-a-senador-de-estados-unidos
https://www.plenglish.com/news/2023/01/05/democratic-senator-insists-on-lifting-us-blockade-on-cuba/
