POMPANO BEACH, FLA. (June 14, 2016) – Stonegate Bank (SGBK) announced today the issuance of MasterCard credit cards for use in Cuba. Stonegate is the first bank in the United States to take this important step.
The Obama Administration’s Air Assault On Cuba…. 1.9+ Million Paratroopers… With Cameras, Cell phones, Laptops & Social Media Apps; Almost 61% Of Cuba’s 2015 Visitor Arrivals
Non-Havana
From the United States Department of Transportation: “On June 10, 2016, DOT issued an order authorizing six U.S. airlines to provide scheduled passenger flights between various U.S. cities and cities in Cuba other than Havana. DOT’s order grants the applications of American, Frontier, JetBlue, Silver Airways, Southwest, and Sun Country. These carriers are now authorized to provide various services to Cuban cities other than Havana, from Miami, Chicago, Ft. Lauderdale, Philadelphia, and Minneapolis.”
The routings approved thus far for each airline has a total scheduled daily flights accommodating up to 2,743 passengers from the United States to the Republic of Cuba. This total does not include the limited frequency flight schedules where some airlines have services from one day to five days per week.
The total capacity (including limited frequency flight schedules) of all of the airlines will accommodate up to 19,543 passengers weekly; 1,016,236 on an annual basis. The initial non-Havana airport opportunities were under-subscribed by the airlines.
The Obama Administration will likely use the flights to secondary cities by individuals subject to United States law and individuals subject to United States jurisdiction authorized to visit the Republic of Cuba within the twelve (12) categories of travelers (CACR 515.560) as a means to further expand the operational reach for United States-based companies in the travel & leisure industry. The government of the Republic of Cuba will neither have the infrastructure nor resources in these secondary cities to efficiently provide the standards necessary to maximize the value for visitors from the United States, so additional activity by United States-based companies is imperative.
Havana
From the United States Department of Transportation: “U.S. carriers have collectively applied for nearly 60 flights per day to Havana, exceeding the 20 daily flights made available by the U.S.-Cuba arrangement. DOT is reviewing and analyzing the competing applications and will need to select from among them. We expect to reach a final decision sometime this summer on which carriers, and the markets they propose to serve, will be awarded the authority to conduct scheduled air service to Havana.”
The airlines have thus far included aircraft (Boeing, Airbus, Saab) with capacities of 186, 180, 162, 160, 144, 143, 126, and 34 passengers. Averaging the seat capacities, which is skewed lower by the 34-passenger aircraft, the average aircraft capacity is 122 passengers. Removing the 34-passenger aircraft, the average aircraft capacity increases to 157.
Using 122 passengers per aircraft for twenty (20) daily flights from the United States to Havana, there would be 2,440 minimum seats per day; 17,080 per week; and 888,160 on an annual basis- increasing to 1,142,960 using 157-seat aircraft average.
For the first 52-week period, the total number of available airline seats for the initially-requested routes is 1,904,396- or 2,159,196 using 157-seat aircraft average for Havana.
The first-year total passenger capacity from the United States to the Republic of Cuba represents 54% (to 61%) of the Republic of Cuba’s 3,524,779 tourist arrivals in 2015.
Obama Administration Strategy
The initiatives proposed and implemented by President Obama (some of which were unsuccessfully attempted by predecessors) are designed to tear at the social fabric of the Republic of Cuba; with a goal of recreating a middle class and a professional class abridged by the 1959 Revolution… a challenging landscape today defined by those who have (through earnings or remittances) and those who have not.
The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury has licensed Stamford, Connecticut-based Starwood Hotels & Resorts Worldwide (2015 revenues exceeded US$5.7 billion) to manage three (3) properties in the Republic of Cuba (Gran Caribe-owned Hotel Inglaterra; Habaguanex-owned Hotel Santa Isabel and Gaviota-owned Hotel Quinta Avenida, which will be re-branded as a Four Points by Sheraton). Gaviota is controlled by the Revolutionary Armed Forces of the Republic of Cuba. Bethesda, Maryland-based Marriott International (2015 revenues exceeded US$14 billion), which is acquiring Starwood Hotels & Resorts Worldwide, is in discussions with Republic of Cuba government-operated companies to identify properties to manage within the Republic of Cuba.
The Obama Administration is likely to use the combination of [created demand for] regularly-scheduled commercial airline service, the two million available passenger seats, and lack of visitor infrastructure within the Republic of Cuba to further expand management and operational opportunities for United States-based companies in the travel & leisure industry. These opportunities may include additional hotel management contracts, food service operations, vehicle rental (and export), and potentially related authorized Direct Foreign Investment (DFI).
Today, U.S. Department of Health and Human Services Secretary Sylvia M. Burwell signed a Memorandum of Understanding (MOU) with Cuba’s Ministry of Public Health, an important milestone between the two countries since the re-establishment of diplomatic relations in 2015.
The MOU establishes coordination across a broad spectrum of public health issues, including global health security, communicable and non-communicable diseases, research and development, and information technology. The signing also kicks off a two-day visit to HHS from Cuba’s Minister of Health, Dr. Roberto Tomás Morales Ojeda.
“Cuba has made significant contributions to health and science, as evidenced by their contribution to the Ebola response in West Africa and becoming the first country to eliminate mother-to-child HIV transmission. This new collaboration is a historic opportunity for two nations to build on each other’s knowledge and experience, and benefit biomedical research and public health at large,” Secretary Sylvia M. Burwell said.
The U.S. and Cuba share an interest in detecting and responding to emerging infectious diseases such as dengue and chikungunya, serious mosquito-borne viral diseases. Both countries also have an aging population, necessitating an increased focus on responding to the increasing burden of neurodegenerative and non-communicable diseases, including cancer, which is the leading cause of death in Cuba and second in the U.S.
Several U.S. delegations have already traveled to Cuba, and Cuba’s vice minister for Public Health spent a week at HHS in April.
The Obama Administration may reverse-engineer the Trade Sanctions Reform and Export Enhancement Act (TSREEA) of 2000 which re-authorized the direct export of agricultural commodities and food products from the United States to the Republic of Cuba on a payment-of-cash-in-advance-only basis.
Since December 2001, the first exports from the United States to the Republic of Cuba under provisions of the TSREEA, the government of the Republic of Cuba has purchased US$5,151,432,158.00 (as of April 2016) in agricultural commodities and food products.
In April 2016, the Obama Administration authorized the importation to the United States, for commercial purposes, of coffee from the Republic of Cuba, with restrictions as to sourcing and production.
There are no statutory impediments to the Obama Administration adding products to the list of eligible products to include sugar, alcohol (rum), tobacco (cigars), tropical fruits, seafood, honey, charcoal and other products (including non-agricultural).
The Obama Administration would need to determine value in maintaining import restrictions based upon the sourcing of the products ("The goods whose import is authorized by Section 515.582 are goods produced by independent Cuban entrepreneurs, as demonstrated by documentary evidence,...") versus accepting that the government of the Republic of Cuba has a dominate role in all export product production, but that, ultimately, there is a benefit to the 11.3 million citizens of the country.
If the Obama Administration wants to further "normalize" the commercial bilateral relationship before 20 January 2017 so as to solidify a post-Obama Administration landscape of activity which may sustain, withstand and potentially expand the 2014-2016 legacy-building efforts, then it will need to move towards the reality of commercial, economic and political structures that currently exist within the Republic of Cuba.
The government of the Republic of Cuba does not have an internationally-recognized organic product certification process or a Fair Trade certification process; and will require both for meaningful export opportunities to the United States:
https://www.ams.usda.gov/services/organic-certification
http://www.fairtrade.net/
If the government of the Republic of Cuba creates a certified organic export marketplace, there would be niche regional and national distribution channels within the United States available for food service and for retail.
However, there will be issues with states that currently produce the same or similar products including, but not limited to, honey (North Dakota/South Dakota/Montana/Florida/California); Charcoal (Missouri); Sugar (Florida/Louisiana/Michigan/Texas/Hawaii); Alcohol (Puerto Rico/Texas/Massachusetts/Colorado/Florida); Tobacco (Connecticut); Seafood (Maine, Massachusetts, Louisiana, Virginia, Washington, Alaska, etc.) and Tropical Fruits (California/Florida).
Members of Congress who are supportive of changing the United States-Republic of Cuba commercial, economic and political landscape may find those efforts strained when confronted by potential import competition for their state-based and district-based companies.
An additional challenge for Members of Congress from states that export agricultural equipment and products is recognizing that the goal of the government of the Republic of Cuba is to develop and sustain an import substitution program so as to grow and process and assemble and manufacture as much food and other related and non-related products as possible.
Thus, a result may be opportunities to export agricultural equipment and products to the Republic of Cuba which will be used to lessen the importation of agricultural commodities and food products from the United States and other countries.
The aspirational view from the United States business community is with increasing visitors to the Republic of Cuba from throughout the world, there will be increase in demand to provide for those visitors. And, the increase in revenues to the Republic of Cuba will result in an increase in the desired and required standard of living for citizens of the Republic of Cuba, which will result in additional imports, even as domestic production of products increase.
The Honorable Alejandro Garcia Padilla (D), Governor of the Commonwealth of Puerto Rico (population 3.5 million), visited the Republic of Cuba to participate (as an observer) in the 4 June 2016 Summit of the Association of Caribbean States (ACS). Governor Garcia Padilla is the first serving governor of Puerto Rico to visit the Republic of Cuba.
During his visit, the Governor reported that the Commonwealth of Puerto Rico was seeking to establish a representative office in the city of Havana, Republic of Cuba, for the purpose of promoting "trade and cultural exchanges."
The Commonwealth of Puerto Rico exported agricultural commodities, food products and healthcare products to the Republic of Cuba valued at US$1,082,168.00 during the period 2003 through 2014 of which US$1,037,563.00 consisted of healthcare products. There were no commercial exports in 2015 or thus far in 2016. During the period 2000 through 2014, product donations from Puerto Rico to the Republic of Cuba were valued at US$1,008,863.00.
The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury "authorizes persons subject to U.S. jurisdiction to may establish and maintain a physical presence in Cuba, such as an office, warehouse, or retail outlet, in Cuba to engage in transactions authorized by or exempt from the CACR in the following categories: entities engaging in non-commercial activities authorized by section 515.574 (Support for the Cuban People); entities engaging in humanitarian projects set forth in section 515.575(b) (Humanitarian projects); private foundations or research or educational institutes engaging in transactions authorized by section 515.576; news bureaus; exporters of certain goods authorized for export or reexport pursuant to 31 CFR §§ 515.533 and 515.559; entities providing mail or parcel transmission services; providers of telecommunications or internet-based services; entities organizing or conducting certain educational activities; religious organizations; and providers of carrier and certain travel services. These persons may employ Cuban nationals in Cuba as well as persons subject to U.S. jurisdiction in Cuba (and such persons may maintain a domicile in Cuba). These persons may open and maintain bank accounts to facilitate authorized transactions. For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.573. Persons subject to U.S. jurisdiction that do not meet the terms of the general license may apply to OFAC for a specific license. Such applications will be reviewed on a case- by-case basis. Additional authorizations from the Cuban government may also be required."
To establish an office in the Republic of Cuba, the Commonwealth of Puerto Rico, which is severely restrained by financial issues (US$70 billion debt; US$2 billion due 1 July 2016; seeking assistance from the United States Congress) could:
1) Rent office space (US$3,000.00 per month), purchase/import a vehicle (US$30,000.00), have a citizen of Puerto Rico reside in Havana (US$60,000.00), lease an apartment (US$2,000.00 per month) hire a Republic of Cuba national as an assistant (US$10,000.00). The first year cost would be approximately US$160,000.00.
2) Retain (US$3,000.00+ per month) a consultancy/law firm that has a presence within the Republic of Cuba and then have representatives of the Commonwealth of Puerto Rico visit as required (US$10,000.00). The first year cost would be approximately US$46,000.00.
3) Create a reciprocal agreement with the Chamber of Commerce of the Republic of Cuba whereby it would represent the interests of the Commonwealth of Puerto Rico in the Republic of Cuba and the Commonwealth of Puerto Rico would represent the interests of the Chamber of Commerce in Puerto Rico. Each party would contribute its staff and invoice the other party for out-of-pocket expenses. This type of relationship might require a license from the OFAC.
The Honorable Paul Ryan (R- WI)
Speaker of the United States House of Representatives
ACHIEVING U.S. SECURITY THROUGH LEADERSHIP & LIBERTY
9 June 2016
Excerpts….
“The Obama administration took office with the misguided goal of conducting closer engagement with America’s adversaries. They extended an open hand to governments in Cuba, Iran, North Korea, Russia, Syria, and Venezuela, and made damaging concessions often from a position of weakness. In the process, they have emboldened those regimes, alienated our allies, and left America in a more vulnerable strategic position. Now we must take immediate action to repair alliances and partnerships around the globe and to be clear about how the United States treats friends and foes.”
“Finally, in our own backyard we will continue to work with our friends and stem the influence of foes. Our relations with Canada and Mexico are crucial, especially in managing trans-border trade and countering trans-border threats. But we cannot blindly follow the administration’s normalization plan with communist Cuba, a regime that is fundamentally opposed to U.S. policy and that represses an entire population only 90 miles from our coastline. Instead, we will work to restore U.S. leverage, hold the Castro regime accountable, and make sure any further accommodations are met first with real concessions from the Cuban government. A first step should be to ban financial transactions with the Cuban military.”
“Our leverage to promote democracy and human rights should never be squandered. The Obama administration sought to normalize relations with the Castro regime in exchange for the promise of democratic and human rights progress in Cuba. One year into the agreement, which included reopening the American embassy in Havana, the Castro regime is as repressive as ever. In the first two months of 2016 alone, the Cuban Commission for Human Rights registered 2,588 political arrests. Nevertheless, President Obama reneged on his vow to refuse to travel to Cuba until human rights had improved.”
Stamford, Connecticut-based Starwood Hotels & Resorts Worldwide (2015 revenues exceeded US$5.7 billion) will be managing three properties in the Republic of Cuba (Gran Caribe-owned Hotel Inglaterra; Habaguanex-owned Hotel Santa Isabel and Gaviota-owned Hotel Quinta Avenida, which will be re-branded as a Four Points by Sheraton). Gaviota is controlled by the Revolutionary Armed Forces of the Republic of Cuba.
Bethesda, Maryland-based Marriott International (2015 revenues exceeded US$14 billion), which is acquiring Starwood Hotels & Resorts Worldwide, is also in discussions with Republic of Cuba government-operated companies to identify properties to manage within the Republic of Cuba.
Members of the Board of Directors of Marriott International include:
J.W. Marriott, Jr., Executive Chairman and Chairman of the Board.
From National Public Radio (NPR), 5 April 2012: “Mitt Romney has been far and away the best-funded of the Republicans running for president. In addition to his own campaign chest, he has the wealthiest superPAC backing him, Restore Our Future. Among the donors to Restore Our Future, are hotel tycoons J.W. and Richard Marriott. Each gave $750,000 so far this campaign cycle.”
The Honorable W. Mitt Romney, Former Republican Nominee for President of the United States [Note: Representative Ryan was the Republican Nominee for Vice President of the United States with Governor Romney in 2012], Former Governor of the Commonwealth of Massachusetts
Arne Sorenson, President and Chief Executive Officer; Vice Chairman of the President’s Export Council
United States Department of Commerce
International Trade Administration
Budget Estimates, Fiscal Year 2017
Congressional Submission
Expansion of International Field
The International Field program expansion ($8.2 million of total export expansion) includes 12 Foreign Service Officers (FSOs) and 32 Locally Engaged Staff (LES) located in international markets of U.S. commercial significance to advance U.S. commercial interests, identify opportunities for U.S. exports, clarify local regulations and standards, resolve disputes with foreign local government officials, and counsel companies on the best strategies to succeed in overseas markets.
This initiative will ensure growing support to U.S. companies in core markets. Additionally, it will support the goals of continued increased exports and foreign direct investment attraction; advancement of key regional trade priorities to expand market clusters tied to the Asia Rebalance, such as India and China; Doing Business in Africa, such as South Africa; and opening a presence in Cuba (pending legislative changes that would allow trade promotion engagement). Final staffing allocations will be based on internal analysis and a planning tool developed in partnership with an external consultant.
Additional resources will also help U.S. firms to take more advantage of trade agreements, reductions in barriers to trade, and the growth of the global middle class-creating stability and ongoing market opportunities for U.S. firms. In addition, this will have immediate impacts on the future development of the highly successful U.S.-China Joint Commission on Commerce and Trade (JCCT), the more recently launched U.S.-India Strategic & Commercial Dialogue (S&CD), and the President’s Advisory Council on Doing Business in Africa (PAC-DBIA). These programs are part of GM’s [Global Markets] commercial diplomacy efforts and present medium to long-term market openings. For example, a third party contractor estimated that the maximum possible economic impact of just seven commercial diplomacy Successes in FY 2015 equaled $444 million in increased U.S. exports with an impact on total U.S. economic output of $940 million, which is sufficient to sustain or create 3,539 jobs.
Global Markets will use the additional funding to assist more clients, and serve those clients better through greater industry expertise; more in-depth assistance; and quicker response times. Global Markets succeeds when U.S. companies can compete and win in foreign markets. In FY 2014, 83% of GM clients surveyed reported that they were highly likely to recommend the agency’s services; and 73% reported that the organization’s services and assistance met their objectives.
The United States Department of Agriculture (USDA) has requested an appropriation of US$1.5 million to provide payments for USDA Foreign Agricultural Service (FAS) staffing within the Embassy of the United States in Havana, Republic of Cuba. The request was unanimously approved on 19 May 2016 by the United States Senate Committee on Appropriations; the request requires approval Committee on Appropriations in the United States House of Representatives and then approval by the United States Senate and United States House of Representatives.
From The USDA:
“With the normalization of relations between the United States and Cuba, USDA requires permanent in-country presence there to effectively carry out the USDA mission and advance U.S. agricultural and national security interests. On May 19, the Senate Appropriations Committee unanimously approved a fiscal 2017 appropriations bill that includes $1.5 million to support President Obama’s budget request for USDA staffing in Cuba.”
“In 2017, FAS will conduct its activities and programs through offices in Washington, D.C. and at 94 overseas locations, including Cuba. The overseas offices represent and advocate for U.S. agricultural interests; provide reporting on agricultural policies, production, and trade for more than170 countries; assist U.S. exporters, trade groups, and State export marketing officials in their trade promotion efforts; and help to implement technical assistance and trade capacity building programs that contribute to increased food security. The Budget provides an appropriated funding level of $197 million for FAS activities in 2017, including increased funding for International Cooperative Administrative Support Services, opening an overseas post in Cuba, and pay costs, including for locally employed staff. Agriculture will play an important role as the U.S. and Cuba expand relations, acting as a bridge that can foster cooperation, understanding, and the exchange of ideas. USDA needs an in-country presence in Cuba to cultivate key relationships, gain firsthand knowledge of the country’s agricultural challenges and opportunities, and develop programs of mutual benefit to both countries.”
The USDA has not indicated how the US$1.5 million would be distributed- salaries, housing, transportation, programs, etc.
From The FY 2017 Agriculture Appropriations Bill S. 2956
The Foreign Agricultural Service [FAS] was established March 10, 1953, by Secretary's Memorandum No. 1320, supplement 1. Public Law 83-690, approved August 28, 1954, transferred the agricultural attaches from the Department of State to the Foreign Agricultural Service.
The mission of FAS overseas is to represent U.S. agricultural interests, to promote export of domestic farm products, improve world trade conditions, and report on agricultural production and trade in foreign countries. FAS staff are stationed at 98 offices around the world where they provide expertise in agricultural economics and marketing, as well as provide attache services.
FAS carries out several export assistance programs to counter the adverse effects of unfair trade practices by competitors on U.S. agricultural trade. The Market Access Program [MAP] conducts both generic and brand-identified promotional programs in conjunction with nonprofit agricultural associations and private firms financed through reimbursable CCC payments.
The General Sales Manager was established pursuant to section 5(f) of the charter of the Commodity Credit Corporation and 15 U.S.C. 714-714p. The funds allocated to the General Sales Manager are used for conducting the following programs: (1) CCC Export Credit Guarantee Program (GSM-102), including facilities financing guarantees; (2) Food for Peace; (3) section 416b Overseas Donations Program; (4) Market Access Program; and (5) programs authorized by the Commodity Credit Corporation Charter Act including barter, export sales of most CCC-owned commodities, export payments, and other programs as assigned to encourage and enhance the export of U.S. agricultural commodities.
COMMITTEE RECOMMENDATIONS
The Committee recommends $202,645,000 for the Foreign Agricultural Service, including a direct appropriation of $196,571,000. The Committee recommendation includes $1,500,000, as requested in the budget, to establish an overseas post in Cuba.
U.S. Transportation Secretary Foxx Approves U.S. Airlines To Begin Scheduled Service to Cuba
WASHINGTON – As part of the Obama Administration’s efforts to normalize relations with Cuba, the U.S. Department of Transportation (DOT) has approved six domestic airlines to begin scheduled flights between Miami, Fort Lauderdale, Chicago, Philadelphia, and Minneapolis/St. Paul and Cuba as early as this fall.
“Last year, President Obama announced that it was time to ‘begin a new journey’ with the Cuban people,” said U.S. Transportation Secretary Anthony Foxx. “Today, we are delivering on his promise by re-launching scheduled air service to Cuba after more than half a century.”
On February 16, 2016, Secretary Foxx and Department of State Assistant Secretary for Economic and Business Affairs Charles Rivkin signed a non-legally-binding arrangement to re-establish scheduled air service between the two countries. At the time of the signing, the administration announced that scheduled service would begin later in 2016.
The carriers receiving the awards are American Airlines, Frontier Airlines, JetBlue Airways, Silver Airways, Southwest Airlines, and Sun Country Airlines.
The five U.S. cities that will receive new scheduled service to Cuba are Miami, Fort Lauderdale, Chicago, Minneapolis/St. Paul, and Philadelphia. The nine Cuban cities are Camagüey, Cayo Coco, Cayo Largo, Cienfuegos, Holguín, Manzanillo, Matanzas, Santa Clara, and Santiago de Cuba.
Under the new arrangement, each country has the opportunity to operate up to 10 daily roundtrip flights between the U.S. and each of Cuba’s nine international airports, other than Havana, for a total of 90 daily roundtrips. Longer term, the arrangement also provides for up to 20 daily roundtrip flights between the U.S. and Havana.
Collectively, U.S. carriers have requested nearly 60 flights per day to Havana, thus requiring DOT to select from among the proposals. A decision on the Havana routes will be announced later this summer.
Interested parties may view the DOT’s decision, track the progress of the case, and view the publicly available documents online at regulations.gov, Docket DOT-OST-2016-0021.
Tuesday, June 7, 2016 08:30 AM
Mobile app and online offerings solidify Western Union’s more than 15 years of serving Cuba
ENGLEWOOD, Colo. & HAVANA--(BUSINESS WIRE)-- The Western Union Company (NYSE: WU), a leader in global payments, today pioneered mobile and online money transfers to Cuba via the Western Union app and wu.com in the U.S., paving the way for a new generation of tech-savvy customers to move money into Cuba in minutes.*
The move solidifies Western Union’s more than 15 years of serving Cuba and reflects its commitment to bring access to its global omni-channel strategy to the Cuban diaspora in the United States.
Consumers using wu.com or the mobile app in the U.S. can select the new “Send to Cuba” option to send and track their money transfers, until they are paid out in minutes in local currency (Cuban convertible pesos) at Western Union’s extensive network of 420 Agent locations in Cuba. Western Union is represented across every one of Cuba’s 16 provinces and 168 municipalities through its principal Agent, Fincimex.
“Western Union has been helping Cubans in the U.S. to send money to their loved ones back home for more than 15 years,” said Odilon Almeida, Western Union president of the Americas and European Union. “Pioneering a new way for our U.S. customers to send money into Cuba via wu.com and our mobile application is yet another milestone in servicing this historic island nation.”
“We expedited activation of our digital money transfer convenience for senders in the Cuban diaspora as we know first-hand the value of remittances to the economic security of families and funding of small businesses. Expanding accessibility and moving money in minutes is what underpins our entire omni-channel strategy.”
Western Union’s four-star rated1 mobile app for iOS and Android is fast and free to download. The app’s streamlined design makes transfers easy to make and track to nearly 500,000 agent locations worldwide, including 420 in Cuba. For convenience, contact information can be saved on the app for quick repeat sending.2
Western Union has now enabled consumers in 29 countries to send money transfers to Cuba.
“Digital money transfer is an area of focus across the world for Western Union led strongly by the United States. More than 55 percent of our total wu.com outbound money transfer services now originate via mobile,” Almeida explains.
Speeding up the pace of digital money transfer into Cuba is good news for both senders and receivers. Hispanics are more likely to use their mobile phones more often than non-Hispanics to transfer money to someone else.3 Remittances to Cuba from all countries were estimated at $1.2 billion in 2013 and 2014, according to a February 2015 report by the Inter-American Dialogue. The majority of money transfers to Cuba are from the U.S., where preferences for mobile and online money transfer services are increasing, especially by younger consumers (under 35 years old).4
According to the Economic Commission for Latin America and the Caribbean (ECLAC), remittances currently reach 62 percent of Cuban households, sustain about 90 percent of the retail market and provide thousands of jobs.5 “Remittances [to Cuba] are the major source of capitalization for small businesses catering to the growing visitor demand,” notesGuillermo J. Grenier, Ph.D. Professor of Sociology, Florida International University and principal investigator of the FIU Cuba Poll, which has been measuring the relationships between the Cuban diaspora in Miami and US/Cuba policy since 1991.
Consumers are looking for different options to send money, and Western Union offers fast and easy to use digital platforms to meet their needs. Western Union has been investing in a technology backbone to improve the customer experience and has optimized money transfer systems to link cash and digital to enhance speed, reliability and convenience, so customers can have choices for sending money to Cuba and the rest of the world.
* Date available will be displayed on receipt. Service and funds availability depends on certain factors including the Service selected, the select ion of delayed delivery options, special terms applicable to each Service, amount sent, destination country, currency availability, regulatory issues, consumer protection issues, identification requirements, delivery restrictions, agent location hours, and differences in time zones (collectively, “Restrictions”).
About Western Union
The Western Union Company (NYSE: WU) is a leader in global payment services. Together with its Vigo, Orlandi Valuta, Pago Facil and Western Union Business Solutions branded payment services, Western Union provides consumers and businesses with fast, reliable and convenient ways to send and receive money around the world, to send payments and to purchase money orders. As of December 31, 2015, the Western Union, Vigo and Orlandi Valuta branded services were offered through a combined network of over 500,000 agent locations in 200 countries and territories and over 100,000 ATMs and kiosks, and included the capability to send money to over one billion accounts. In 2015, The Western Union Company completed 262 million consumer-to-consumer transactions worldwide, moving $82 billion of principal between consumers, and 508 million business payments. For more information, visit www.westernunion.com.
H.E. Gustavo Rodriguez Rollero, Minister of Agriculture of the Republic of Cuba, visited the United States from 1 June 2016 to 3 June 2016. He traveled to Washington, DC, and to Iowa, where he accompanied The Honorable Thomas Vilsack, United States Secretary of Agriculture.
Agriculture Secretary Tom Vilsack to Host Cuban Agriculture Minister, Delegation in Iowa
Des Moines, June 3, 2016 – FRIDAY, Agriculture Secretary Tom Vilsack will host Cuban Minister of Agriculture Gustavo Rodriguez Rollero and a delegation of Cuban officials in Iowa. Since President Obama announced that the United States would resume diplomatic ties with Cuba, Secretary Vilsack has traveled twice to the island and will now welcome the Cuban minister to the U.S. for a tour of Iowa’s diverse farms, agribusinesses, and research facilities. Vilsack will hold a press availability at Aaron Heley Lehman’s Family Farm in Polk City, Iowa on Friday morning.
Both President Obama and Secretary Vilsack have recognized that food and agriculture can serve as a bridge to foster collaboration between the two countries, and both Cuban and American farmers and ranchers have expressed interest in expanding commercial opportunities. To strengthen this bridge, on his second trip to Cuba in March, Vilsack signed a Memorandum of Understanding with Minister Rodriguez that establishes a framework for sharing ideas and research between the two countries. In addition, Vilsack announced that USDA will allow the 22 industry-funded Research and Promotion Programs and 18 Marketing Order organizations to engage in cooperative research and information exchanges with Cuba about agricultural productivity, food security and sustainable natural resource management.
While most U.S. commercial activities are prohibited, the Trade Sanctions Reform Act (TSRA) of 2000 permits the export of U.S. agricultural commodities, though U.S. agricultural exports to Cuba are limited by U.S. restrictions on government export assistance, cash payments, and extending credit. U.S. agricultural exports have grown significantly since trade was authorized in 2000. In 2014, Cuba imported over $2 billion in agricultural products including $300 million from the United States. However, from 2014 to 2015, U.S. agricultural exports to Cuba fell 48 percent to $148.9 million, the lowest since 2002, giving the United States just a 10 percent market share as Cuba's fourth largest agricultural supplier, behind the EU, Brazil, and Argentina.
In May 2016, Bernie, Missouri-based Martin Rice Company donated 20 metric tons (one container with a value of approximately US$18.000.00) of long grain enriched rice sourced from the State of Missouri to Republic of Cuba government-operated Empresa Cubana Importadora Alimentos (Alimport), under the auspice of the Ministry of Foreign Trade of Cuba (MINCEX), for distribution to charities within the Republic of Cuba.
The Trade Sanctions Reform and Export Enhancement Act (TSREEA) of 2000 re-authorized the direct commercial (on a cash basis) export of food products (including branded food products) and agricultural products (commodities) from the United States to the Republic of Cuba, irrespective of purpose.
Since the first exports under TSREEA in December 2001, the government of the Republic of Cuba has purchased more than US$5.2 billion in agricultural commodities and food products from United States-based companies.
Government of Vietnam-operated Vinafood 1 and Vinafood 2 have provided payment terms to Alimport of up to two years to pay for rice (25% to 30% broken).
United States producers can provide rice (25% to 30% broken); payment terms, however, without the use of United States government export programs, would remain cash-on-delivery to 30 days; and for credit-worthy customers, generally not exceed sixty days to ninety days.
Media Release:
Jefferson City, MO
Gov. Jay Nixon will lead a delegation of Missourians representing agriculture, business, education and government on a trade mission to Cuba from May 29 to June 1. With the recent progress toward normalization of relations between the United States and Cuba, the trade mission will focus on growing Missouri exports to the island nation of 11 million, especially agricultural products.
The delegation will include First Lady Georganne Nixon, Missouri Department of Agriculture Director Richard Fordyce and Missouri Department of Economic Development Director Mike Downing. Other members of the trade delegation include Dr. Carlos Vargas, President of Southeast Missouri State University; Gary Wheeler, of the Missouri Soybean Association; Silvia Hollis, of Mid-Continent Aircraft, Hayti; Thorstein Holt, of Holtec Gas Systems, Chesterfield; Brady Moses, of SatCommX, Lampe; Jeffrey Fort, of MOM Brands Sales, St. Louis; and several representatives of Martin Rice, of Bernie.
“The growth of Missouri exports has gone hand in hand with our revitalized economy,” Gov. Nixon said. “Cuba represents a market of 11 million consumers that has been largely untouched by U.S. exports for more than 55 years. Missouri is moving forward to take advantage of this opportunity, particularly when it comes to rice, one of the staples of the Cuban diet.”
Cuba formerly was a significant export destination for Missouri-grown rice. Missouri produces a high-quality, long-grain rice that has proven to be a high-value crop for farmers in the southeast part of the state, the Governor said, and increasing rice exports would be another boost for the regional and state economies.
As part of the focus on Missouri exports, Gov. Nixon will visit the new deep-water port at Mariel, Cuba, which has expanded capacity to receive large cargo ships. Missouri products, particularly grain, often are transported down the Mississippi River by barge to the Gulf of Mexico and then to overseas markets by sea-going cargo ships. As part of his trade mission to the Republic of Panama in March, the Governor went to the newly expanded Panama Canal, a major transportation route for U.S. grain exports.
In addition to meeting with Cuban government officials in Havana, Gov. Nixon will be briefed by Deputy Chief of Mission Scott Hamilton and other high-ranking officials at the U.S. Embassy on progress toward facilitating and increasing trade between the U.S. and Cuba. He is also scheduled to address an entrepreneurial forum coordinated by the Cuban Chamber of Commerce and the Ministry of Trade and Investment, which will include Cuban companies and members of the Missouri delegation.
Travel costs for the Governor and First Lady will be covered by the Hawthorn Foundation, a nonprofit organization dedicated to promoting economic growth in Missouri; state taxpayer funds will not be used.
Gov. Nixon has made creating opportunities for Missouri businesses to sell their products around the globe and promoting Missouri as an ideal location for investment by foreign companies a top economic development priority for his administration. The Governor has led successful trade missions to China (October 2011); Brazil (April 2012); the Republic of China (Taiwan) and the Republic of Korea (March 2013); Western Europe (June 2013, March 2015 and June 2015); Canada (March 2014 and August 2015); Columbia and Peru (February 2016); Panama (March 2016); and Israel (March 2016).
In March 2015, Mrs. Nixon represented the State of Missouri in leading a trade mission to Cuba with members of the U.S. Agriculture Coalition for Cuba (USACC), including 95 current and former government officials, industry representatives, and agriculture leaders including two former U.S. Secretaries of Agriculture. It was the first official trade mission from the United States after President Obama announced the decision to normalize diplomatic relations with Cuba in December 2014. The Governor was unable to travel on that trade mission because of the funeral of State Auditor Thomas Schweich.
California-based technology companies are finding a back-door into the Republic of Cuba marketplace.
San Francisco, California-based Revel Systems (2015 estimated revenues US$75 million; 400 employees; approximately US$1 billion market capitalization) has agreements to sell its cash management application to twelve privately-owned restaurants (paladares) in the Republic of Cuba.
The application will be used with independently-acquired iPad tablets (US$269.00 to US$1,229.00) manufactured by Cupertino, California-based Apple, Inc. (2015 revenue US$234 billion).
The names of the restaurants have not yet been disclosed. Needham, Massachusetts-based TripAdvisor LLC (www.tripadvisor.com) lists 650 restaurants (government-operated and non-government-operated) in the city of Havana. The Ministry of Tourism of the Republic of Cuba reports approximately 1,800 paladares operating in the Republic of Cuba.
Revel Systems (www.revelsystems.com), which has its applications installed in more than 20,000 transacting terminals, markets software that enables tablet computers to function as cash registers- “a point of sale solution for single and multi-location businesses.”
Each application is delivered via the Internet and installed on an iPad. The restaurants pay a minimum of US$119.00 per month (US$1,428.00 annually) for the application (which may be customized at a higher pricing); payment by bank wire transfer or Palo Alto, California-based PayPal Holdings, Inc. (2015 revenues approximately US$9 billion) Internet portal (www.paypal.com), meaning that the payment(s) can be made by a third party residing in the United States on behalf of the restaurant located in the Republic of Cuba.
From Revel Systems, “Our monthly fee is all inclusive of our license, software, support, add-on modules and cloud hosting. And as we make additions to the software (every 3 months) all of that is all-inclusive in this price. So this is an ongoing fee for an ever-expanding software set that will allow their business to focus on doing what they love while we focus on enabling them to grow their business and make it more profitable. Customers do not need to sign on for a year, unless it is part of a promotion, standard contracts are month to month.”
http://revelsystems.com/pos-systems/type/restaurant/
About Revel Systems
Revel Systems software offers a POS solution for restaurant, retail and enterprises with integrated payroll, inventory tracking, customer relationship management and more. With the introduction of the Revel Marketplace, Revel iPad POS System users can now integrate directly into third-party enhancements, including mobile payments, online ordering, gift or reward cards and advanced financial software suites.
Point of Sale, POS, POS for Retail, POS for Restaurants, POS for Quick Service, POS for Grocery, Omni-Channel, Store solutions, Enterprise Management System, Enterprise Reporting, Inventory Management, Customer Relationship Management (CRM), Mobile, eCommerce, Integration to External Systems, POS Hardware, Configuration Management, End to End Implementation Services, SaaS, Cloud Based, Payment Processing, Taxation, Shipment Processing, Device Based, Menu Board, Mobile Device Management, Label Printing, Loyalty Programs, Gift Card, Digital Signage
U.S. Technology Companies’ Backdoor To Cuba
The government of the Republic of Cuba remains unlikely to directly purchase technology hardware and software from United States-based companies.
A challenge for United States-based communications/telecommunications companies and the United States government remains today as has since the implementation of the Cuban Democracy Act (CDA) in 1992 (telecommunications services and facilities) and successive regulatory changes during the Bush, Clinton, Bush, and Obama Administrations, particularly since 17 December 2014- how to answer the following question from the Ministry of Communications of the Republic of Cuba:
“If we purchase your equipment, how do we know the equipment will not be compromised before it arrives or have an ability to be compromised from abroad after its installation? Will you augment the specifications of equipment so we may monitor all voice, text, data and email traffic flowing through the equipment?”
In January 2016, Daniel Sepulveda, Deputy Assistant Secretary of State and U.S. Coordinator for International Communications and Information Policy led an official fourteen-member delegation to the Republic of Cuba which included Thomas Wheeler, Chairman of the Federal Communications Commission and representatives of Information Technology Industry Council, California-based Cisco Systems, Pennsylvania-based Comcast, and the North American headquarters of Ericsson.
From FCC Chairman Wheeler: “Ambassador Daniel Sepulveda from the State Department led our delegation which also included representatives from the Department of the Treasury as well as representatives of the technology community. The inclusion of the private sector in the talks advanced the dialog with real life examples of what was possible.”
Soon after completion of the visit, Republic of Cuba government-operated ETECSA reported that it would install broadband services within the area of Old Havana using equipment sourced from China-based Huawei Technologies Co Ltd. In November of 2015, the same company had reported an agreement to market mobile devices, parts, accessories and to train repair personnel. The government of China has extended substantial financial credits to the government of Cuba; and there is bilateral military and intelligence cooperation.
But, there’s a backdoor not necessarily subject to an intense review by the government of the Republic of Cuba.
United States-based air carriers, United States-based hospitality companies, and the 201 categories of authorized self-employed that are and will operate within the Republic of Cuba (Casas Particulares- Bed & Breakfasts; Paladares; Services; there are an estimated 500,000/600,000 licensed/unlicensed full-time/part-time self-employed) have and will continue to directly and indirectly import technology for their use.
And an increasing number of the Republic of Cuba's 11.3 million citizens are using wireless devices equipped with Mountain View, California-based Alphabet Inc.'s (2015 revenues US$75 billion) Android operating system and Apple Inc.'s iOS.
Update……
After two days of requests, The White House Press Office and the National Security Council Press Office continue to refuse to provide information relating to a third-party privately-organized invitation-only gathering scheduled for 25 May 2016 in the Old Executive Office Building (OEOB) within The White House complex which will focus upon commerce with the Republic of Cuba.
The meeting will be hosted by the Obama Administration, managed by The National Security Council, and scheduled to include senior-level representatives of Departments and Agencies of the United States Government (including the Acting Director of the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury). No participant has been disclosed.
The guest list includes representatives of United States companies, consultancies, lobbyists, and organizations. No participant has been disclosed.
An individual representing a Washington, DC-based Republic of Cuba-focused advocacy group, which was reported to have retained a Washington, DC-based lobbying entity for Republic of Cuba-focused activities, was reported by an invitee as the only non-United States government representative addressing the gathering.
On 20 May 2016, Washington, DC-based Business Forward, which has extensive relationships throughout the Obama Administration, was identified as the undisclosed third-party organizer of the invitation-only gathering. Business Forward did not make the disclosure publicly and it has not been reported publicly.
The gathering is not disclosed in any of the event platforms used by Business Forward; the gathering is consistent with the organization’s “Fly-in Events: Attend a half-day briefing in Washington, D.C. with the President’s top advisors and members of Congress.”
http://www.politico.com/story/2012/04/courting-the-wh-dont-call-it-lobbying-075168
From an executive of a United States-based company that has engaged in commerce with the Republic of Cuba, and was neither informed of the gathering nor invited to the gathering: “If accurate, there are fundamental questions of transparency and openness (Sunshine Acts). Not a good narrative.”
The Obama Administration should not be “renting” meeting space in The White House complex, creating parallels to how guests were selected to overnight in the Lincoln Bedroom during the Clinton Administration.
When United States government officials participate in privately-organized events at public venues, the private sector participants may be paying a fee to the organizer. For example, if a for-profit or not-for-profit entity organizes an event at a hotel or conference center, anyone who makes payment may attend. And, United States government representatives may deliver remarks- keynote, speaker, on a panel, etc. In these instances, the identities of the organizer(s), the speaker(s) and often the participants, are publicly available- and are so long before the event. There is transparency.
When the Obama Administration deliberately maintains secrecy- even after inquiries, about an event being organized at The White House by an outside entity, and permits the outside entity to determine who is invited and who will deliver remarks… on issues of importance to many individuals, consultancies, companies and organizations, a conclusion is The Obama Administration wants to determine who is considered of value by selectively enhancing reputations.
For most individuals and entities in Washington, DC, the sentences “I just spoke to an invitation-only gathering at The White House” and “I just came from a private briefing at The White House” have political, reputational, and financial value. And will be used in marketing materials and in interviews for a long time.
The Obama Administration should make attending this gathering available to everyone- and not selectively permit any one organization to benefit by having a role specifically designed to bring it value… at the expense of all those who have a professional interest in issues relating to the Republic of Cuba.
The White House Press Office and the National Security Council Press Office have refused to provide information relating to a gathering scheduled for next week in the Old Executive Office Building (OEOB) which will focus upon commerce with the Republic of Cuba.
The meeting, which has been “organized” by an unidentified entity, will be hosted by the Obama Administration, passively or actively managed by The National Security Council, and including senior-level representatives of Departments and Agencies of the United States Government, representatives of United States companies, consultants, lobbyists, and representatives of United States organizations. No participant has been disclosed.
From an executive of a United States-based company that has engaged in commerce with the Republic of Cuba, and was neither informed of the gathering nor invited to the gathering: “If accurate, there are fundamental questions of transparency and openness (Sunshine Acts). Not a good narrative.”
The government of the Republic of Cuba, primarily through the Embassy of the Republic of Cuba located in Washington, DC, the Ministry of Foreign Trade (MINCEX) of the Republic of Cuba, and the Chamber of Commerce of the Republic of Cuba has reportedly received inquiries from more than two hundred (200) United States-based companies seeking to establish an office in the Republic of Cuba, primarily within the city of Havana.
The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury "authorizes persons subject to U.S. jurisdiction to may establish and maintain a physical presence in Cuba, such as an office, warehouse, or retail outlet, in Cuba to engage in transactions authorized by or exempt from the CACR in the following categories: entities engaging in non-commercial activities authorized by section 515.574 (Support for the Cuban People); entities engaging in humanitarian projects set forth in section 515.575(b) (Humanitarian projects); private foundations or research or educational institutes engaging in transactions authorized by section 515.576; news bureaus; exporters of certain goods authorized for export or reexport pursuant to 31 CFR §§ 515.533 and 515.559; entities providing mail or parcel transmission services; providers of telecommunications or internet-based services; entities organizing or conducting certain educational activities; religious organizations; and providers of carrier and certain travel services. These persons may employ Cuban nationals in Cuba as well as persons subject to U.S. jurisdiction in Cuba (and such persons may maintain a domicile in Cuba). These persons may open and maintain bank accounts to facilitate authorized transactions. For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.573. Persons subject to U.S. jurisdiction that do not meet the terms of the general license may apply to OFAC for a specific license. Such applications will be reviewed on a case- by-case basis. Additional authorizations from the Cuban government may also be required."
The government of the Republic of Cuba has an application process with meaningful requirements that generally must be fulfilled in advance of establishing a presence; there are always exceptions based upon the perceived importance of the company and/or the mission of the company.
Representatives of the government of the Republic of Cuba have reported that the process may take up to two years.
There are companies (and individuals- consultants, travel providers, etc.), including from the United States, and other countries who are are marketing that they have a "presence" while in reality may be operating within the offices of another authorized entity (which may or may not be permitted), or operating out of a hotel room or a private residence. These unauthorized activities should be avoided.
EY Caribbean Professional Services Ltd has provided five (5) pages of a November 2015 report, "Doing Business With Cuba: A Regulatory Overview By EY" which details the process for any company seeking to establish an office in the Republic of Cuba.
ECONOMIC EYE ON CUBA©
May 2016
Coffee Added To Authorized Import List- 1
March Food/Ag Exports Decreased 69%; 1st Quarter Decreased By 29%- 2
Healthcare Product Exports- 4
Humanitarian Donations- 5
Artist Products Exports Valued At US$23,101.00- 5
Credit Card Processing Terminals Exported Valued At US$3,906.00- 5
U.S. Port Export Data- 16
Updated Speaking Schedule- 17
Blog Post List- 18
NOTE: This issue was delayed due to some data questions relating to port exports.
What to expect from the Obama Administration during its remaining days?
A focus upon expanding regulations, persuading the government of the Republic of Cuba to authorize more initiatives, and negotiating a settlement of the certified claims.
Some advocates in Washington, DC, may argue that if President Obama agrees to a claims settlement the momentum for further legislative and regulatory changes will be weakened- the process will continue to be one of incrementality rather than "the big bang theory" where the United States Congress votes to repeal all relevant statutes... that's a foolish argument.
The bilateral relationship has never been about a moment; it's always been about a series of moments… with each building upon the predecessor moment.
The Obama Administration may seek to use a portion of the funds obtained during the last eight years from global financial institution settlements to offset some or all of the principal amount of approximately US$1.9 billion for the 5,913 certified claimants. The value is approximately US$8 billion with interest.
If the Obama Administration makes a payment to the certified claimants essentially on behalf of the government of the Republic of Cuba, might those who have civil judgements in the United States against the government of the Republic of Cuba seek to seize the funds? Someone may try.
The challenge will be for the government of the Republic of Cuba to recognize there will be no monetary reparations to offset for their potentially US$121 billion to US$800 billion in claims against the United States.
President Obama may have a time window upon the expiration of the Defense Authorization Act this fall; there is a provision in the 2015/2016 law that precludes President Obama from changing the lease for Guantanamo Bay. This could be a component of non-monetary reparation.
There is no more important issue for the Obama Administration to resolve by 20 January 2017 than settling the certified claims; and that process has been made easier due to the decision by Connecticut-based Starwood Hotels and Resorts Worldwide (being acquired by Maryland-based Marriott International), which controls a certified claim valued at US$51 million, to engage with the government of the Republic of Cuba.
Without a settlement of the certified claims, every Obama Administration initiative becomes less secure and more tenuous in terms of post-Obama Administration survival. A settlement of the certified claims would create momentum in the United States Congress that could not be derailed… and that may cause concern for some in the government of the Republic of Cuba, where a slight derailment of energy might be welcomed to slow the process of re-engagement.
Established in 1994, the U.S.-Cuba Trade and Economic Council provides an efficient and sustainable educational structure in which the United States business community may access accurate, consistent, and timely information and analysis on matters and issues of interest regarding United States-Republic of Cuba commercial, economic, and political relations.
Economic Eye On Cuba (EEOC)- posts are corrected and revised as new information becomes available
