Most Secretive Visit By A Governor? West Virginia; No Mention On State's Web Site Until Two Days After Return

The Honorable Earl Ray Tomblin (D), Governor of West Virginia, visited the Republic of Cuba for two days (17 November 2016 to 19 November 2016) with representatives of West Virginia-based public sector and private sector entities; no information was provided about the visit at www.wv.gov or www.governor.wv.gov

This was the most secretive visit to the Republic of Cuba by any United States governor.

"Governor Tomblin Joins Department of Commerce for Trade Mission to Cuba

11/21/2016
West Virginia businesses highlighted for new export opportunities

CHARLESTON, W.Va. (November 21, 2016) – Gov. Earl Ray Tomblin returned Saturday from a two-day trade mission to Cuba, where he accompanied officials from the West Virginia Department of Commerce to pursue new trade opportunities between the state and country. The delegation was joined by officials from Pilgrim’s Pride, Multicoat and Industrial Bolting Technologies, who were all looking to grow their export potential.  

“Our goal was to highlight West Virginia’s outstanding exporters and pursue opportunities for trade between our state and Cuba, and I believe we did so with great success,” Gov. Tomblin said. “Like other governors across the country, I believed it was extremely important to take advantage of the new opportunity before us to visit with Cuban officials as the U.S. and Cuba have recently started to normalize trade relations. In today’s economy, exporting is vital for business success – and this is another opening for us to take the Mountain State to the world market.”

“We went into this trade mission without any expectations, and I can tell you it exceeded any hopes we could have had. Last week, we learned that Cuba has a strong economic market for many products, including our own. We believe this will be a game changer for our product,” said Multicoat Vice President John Dill, who was a member of the delegation. “I normally spend the Monday before Thanksgiving in a tree stand, but I’m so excited about these new opportunities that I’m already in the office following up on leads we established. We appreciate Governor Tomblin leading this mission and for the state giving us the opportunity to be a part of the state’s sales team.”

“During my time as governor, I have had the privilege of representing the people of West Virginia by traveling across the country and around the world and sharing what makes our state a great place to live, work and do business,” Gov. Tomblin said. “I was pleased to share with Cuban officials not only more information about the goods and services West Virginia offers, but also our state’s dependable workers who have allowed so many of our businesses to grow local operations to a global scale.”

This visit marked Gov. Tomblin’s sixth and final international mission, and the first focused primarily on developing new trade and export opportunities for West Virginia businesses. In 2015, West Virginia businesses exported goods and services to more than 141 countries totaling $5.8 billion."

2,400 Trucks From KAMAZ (Russian Federation) Sold To Cuba

Naberezhnye Chelny, Tatarstan, Russian Federation-based KAMAZ (2015 revenues approximately US$3 billion), the largest manufacturer of trucks in the Russian Federation, reported that the company would export 2,400 units, spare parts, and after-sales service equipment to the Republic of Cuba. 

The first deliveries, which have long-term financing, will arrive in November 2016.

From KAMAZ:

CUBAN DELEGATION ON A VISIT TO KAMAZ
1 February 2016

Today, on February 1-st, KAMAZ (a portfolio company of Rostech State Corporation) received a visit by a delegation headed by Emilio Lozada Garcia, Ambassador of the Republic of Cuba to the Russian Federation.

The Cuban Ambassador, within the framework of the visit to Tatarstan, visited KAMAZ, accompanied by the military attache of the Republic of Cuba in the Russian FederationYuri Israel Curbello Prado and Major General, President of Civil Aviation Corporation OJSC Ramón Martinéz Echevarri. The members of the delegation took part in discussions with Sergey Kogogin, General Director of KAMAZ PTC as well as met up with the management of KAMAZ International Trade Company.

During their visit to the Truck Assembly Plant, the guests were shown around the final assembly line and the cab assembly line. After that, they were given the opportunity of viewing a display of fire fighting vehicles based on KAMAZ chassis.

Please be reminded that last spring representatives of Cuba had visited KAMAZ already. The purpose of the visit then was discussions with the Company’s top management during which the possibility of organizing an assembly plant of KAMAZ trucks in Cuba was discussed.

Wells Fargo Is Circumspect Regarding Cuba Transactions; Joining Citibank & ABA

San Francisco, California-based Wells Fargo & Company provided the following answer to a question relating to transactions with the Republic of Cuba:

[The U.S.-Cuba Trade and Economic Council] would appreciate learning the policy for Republic of Cuba-related transactions and the reason(s) for the policy(s).

“Wells Fargo considers processing a payment which is authorized under U.S. sanctions regulations on a case by case basis.”

"Wells Fargo & Company (NYSE: WFC) is a diversified, community-based financial services company with $1.9 trillion in assets. Founded in 1852 and headquartered in San Francisco, Wells Fargo provides banking, insurance, investments, mortgage, and consumer and commercial finance through more than 8,600 locations, 13,000 ATMs, the internet (wellsfargo.com) and mobile banking, and has offices in 42 countries and territories to support customers who conduct business in the global economy. With approximately 269,000 team members, Wells Fargo serves one in three households in the United States. Wells Fargo & Company was ranked No. 27 on Fortune’s 2016 rankings of America’s largest corporations. Wells Fargo’s vision is to satisfy our customers’ financial needs and help them succeed financially. In 2015, Wells Fargo donated $281.3 million to 16,300 nonprofits, ranking No. 3 on the Chronicle of Philanthropy’s rankings of the top corporate cash philanthropists. Wells Fargo team members volunteered 1.86 million hours in 2015, serving more than 40,000 nonprofits. Wells Fargo’s corporate social responsibility efforts are focused on three priorities: economic empowerment in underserved communities, environmental sustainability, and advancing diversity and social inclusion."

Citibank Declines To Comment On Processing Cuba Transactions
November 08, 2016

New York, New York-based Citibank (a subsidiary of New York, New York-based Citigroup) declined to comment when asked the following questions relating to transactions with the Republic of Cuba:

Does Citibank process Republic of Cuba-related transactions where a specific license is not required from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury?

Does Citibank only process transactions where a license is required and provided to Citibank?

ABA Has No "Formal Position" About Cuban Banks Having Accounts With US Banks
November 08, 2016

Today, the Washington, DC-based American Bankers Association (ABA), stated that the organization does not have a formal position relating to the authorization of Republic of Cuba government-operated financial institutions to have accounts with United States-based financial institutions for correspondent activities.  The ABA did not provide a reason(s).

"The American Bankers Association is the united voice of America’s hometown bankers- small, regional and large banks that together employ more than 2 million people, hold more than $16 trillion in assets, safeguard $12 trillion in deposits and extend more than $8 trillion in loans.

ABA believes that government policies should recognize the industry’s diversity. Laws and regulations should be tailored to correspond to a bank’s charter, business model, hometown markets and risk profile. This policymaking approach avoids the negative economic consequences of burdensome, unsuitable and inefficient bank regulation.

Through a broad array of information, training, staff expertise and other resources, ABA supports America’s hometown bankers as they perform their critical role as drivers of America’s economic growth and job creation."

For reference:

http://www.cubatrade.org/blog/2016/10/16/has-the-obama-administration-called-it-quits-leaving-united-states-companies-with-more-than-was-expected-but-far-less-than-was-needed?rq=Direct%20Correspondent%20Banking

Who Will Provide Cargo Services For Roswell Park? UAL, DEL, AA, FDX Or JBU

Will United States air carriers assist with transporting a vaccine from the Republic of Cuba to the United States with a series of commercial (paid) deliveries from the Jose Marti International Airport (HAV) in Havana, Republic of Cuba, to Buffalo Niagara International Airport (BUF) in Cheektowaga, New York? 

In April 2015 Buffalo, New York-based Roswell Park Cancer Institute (RPCI) signed an agreement with the Republic of Cuba government-operated Center for Molecular Immunology (CIM) to develop a lung cancer vaccine with a clinical trial in the United States.

In August 2016, RPCI received authorization from the United States Food and Drug Administration (FDA) to commence (this year) a Phase One Clinical Trial of the lung cancer treatment vaccine CIMAvax-EGF® to a limited number of patients.

In October 2016, RPCI received authorization from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury to establish a commercial joint venture with the CIM, to established in the Mariel Special Development Zone (ZEDM) and which will be the first commercial joint venture with a United States-based entity in the Republic of Cuba licensed to research, develop, manufacture and market biotech products in the Republic of Cuba.

In October, as a test, the CIM sent to RPCI four (4) cartons (approximately 30 pounds each) of vials containing saline from the Republic of Cuba to the United States. 

The cartons were sent on an Dorval, Canada-based Air Canada flight from HAV to Toronto Pearson International Airport (YYZ) in Toronto, Canada, and then transported by truck to a border crossing near Buffalo, New York, before being delivered to RPCI. 

This first trial effort took almost one week, end-to-end, primarily due to U.S. Customs and Border Protection (CBP) not having processing documentation uploaded to the automated cargo processing applications.  RPCI and the FDA are working on eliminating issues with the importation process.

Given the vaccine must be maintained at a constant temperature, critical to develop an efficient and consistent supply chain- one that crosses from one country to the other rather than a triangular model.  The goal is to have the product delivered the same day.

RPCI intends to commence the Phase One Clinical Trial in 2016, which will coincide with the implementation of regularly scheduled commercial airline schedules from HAV to Newark Liberty International Airport (EWR) in Newark, New Jersey (United Airlines); from HAV to John F. Kennedy International Airport (JFK) in Queens, New York (Delta Air Lines & JetBlue Airways); and from HAV to Charlotte Douglas International Airport (CLT) in Charlotte, North Carolina (American Airlines).   These four (4) commercial airlines have continuing services from EWR to BUF, from JFK to BUF, and from CLT to BUF.  Memphis, Tennessee-based FedEx (FDX) is also operating regularly-schedule cargo service.

There will be six (6) shipments of the vaccine during the next twelve (12) months; not necessarily on a regular schedule.  Approximately five hundred (500) vials per shipment contained in four (4) cartons of approximately thirty (30) pounds per carton.  The shipment temperature needs to remain from 4 to 8 degrees C; there will be internal temperature monitoring equipment in each carton.

When An Advocacy Group Makes A Mistake... It Should Correct It, Not Ignore It

On 4 November 2016, a Washington, DC-based Republic of Cuba-focused advocacy group used the image below to represent a port in the Republic of Cuba. 

The image is from a port at Dubai which can handle 10 million containers; the port at Mariel in the Republic of Cuba can handle approximately 800,000 containers.  The image of the port at Dubai shows more than twenty yellow cranes; the port at Mariel has four green cranes. 

The advocacy group was notified that the image was incorrect, yet continues to use the image (through the morning of 14 November 2016, when it was replaced).  The decision not to change the image demonstrates a focus more upon messaging than credibility and providing factual information to United States-based companies.  All organizations are harmed.

Washington, DC-based Engage Cuba uses this image to represent the Port of Mariel near the city of Havana, Republic of Cuba

"Jebel Ali (also sometime written "Mina Jabal Ali") is a deep port located in Jebel Ali, Dubai, United Arab Emirates. Jebel Ali is the world's largest man-made harbour and the biggest and by far the busiest port in the Middle East.[1] Port Jebel Ali was constructed in the late 1970s to supplement the facilities at Port Rashid."  The facility is managed by Dubai-based DP World.

The Port at Mariel, Republic of Cuba, managed by Singapore-based PS International.

FAA Caribbean Initiative Requesting Air Traffic Flow Management position in Havana Center

Fact Sheet – FAA Caribbean Initiative
For Immediate Release

November 10, 2016
 

Aviation is a global enterprise that brings the world together. U.S. civil aviation has a $2.4 trillion dollar impact on the global economy, and accounts for more than 58 million jobs.

Growth in travel, new routes, increasing trade and investment, and new technological endeavors underscore the importance of international cooperation. The Federal Aviation Administration (FAA) prioritizes and targets resources to engage with the international aviation community to improve safety, efficiency, and environmental sustainability through regulatory harmonization and partnerships such as the Caribbean Initiative.

Overview

The FAA is working with our Caribbean partners to enhance the safety and efficiency of aviation in an important region next to the United States. Through the Caribbean Initiative, the FAA’s technical experts work with our Caribbean partners to improve air traffic flow management through collaborative decision-making, and increasing airport safety and certification in the region. It also supports the region’s implementation of International Civil Aviation Organization (ICAO) standards.

The Caribbean is a critical nexus for the U.S. airspace system:

More than 7 million passengers fly from the United States to the Caribbean each year, accounting for nearly 17 percent of all U.S. outbound passengers.

Millions of Americans travel to the Caribbean each year and air traffic in the Caribbean region is expected to grow rapidly by five to six percent over the next two decades, second only to the Middle East.

Air traffic management is complex and requires extensive coordination among air navigation partners. The region includes 10 air traffic service providers managed by separate sovereign nations.  Half a million aircraft cross one of the six flight regions adjacent to the U.S.

Varying tropical weather patterns and the complexity of a multitude of airports contribute to air traffic schedule uncertainty and delays within the region.

U.S. carriers have begun to operate scheduled passenger service Cuba.

Given the significant U.S. passenger and air carrier traffic to and through the Caribbean, the FAA dedicates time and resources by working with our civil aviation partners in the region, ICAO, and industry to maximize all of our efforts to improve the safe and efficient management of this important airspace. The agency shares best practices through airport workshops, offers technical assistance and training, promotes efficiency by working with countries that manage flight information regions that are adjacent to ours to enhance air traffic flow management and collaborative decision making tools and procedures, and promotes greater implementation of System Wide Information Management (SWIM).

Actions

The Caribbean Initiative frames regional cooperation between the FAA, ICAO, Civil Air Navigation Services Organization (CANSO), American and Caribbean Air Transport Association (ALTA), Airports Council International (ACI) Latin American-Caribbean, American Association of Airport Executives (AAAE), International Air Transport Association (IATA), and our Caribbean partners. Activities include:

Air Traffic Flow Management and Collaborative Decision-Making

The FAA is working with its Caribbean partners to share best practices for air traffic flow management and collaborative decision making. These efforts should improve air traffic performance and efficiency in the region.  For example, the FAA is:

Working with Caribbean airport authorities and airport operators to enhance airport certification and overall safety in the region’s airports.

Partnering with Cuba, the Dominican Republic, and Trinidad and Tobago in bilateral exchanges of traffic flow data. Air service providers in the region now speak weekly to share real-time air traffic flow, demand, weather and other data. By increasing communication, they can anticipate and be proactive together to handle capacity issues. Sharing critical data and collaborative decision-making tools will increase the safety and efficiency of the Caribbean region.

Providing technical support for an Air Traffic Flow Management Data Exchange Network for the Americas. The CANSO-led effort, called CADENA, will enable other countries to leverage the collaborative decision making experience of their neighboring air traffic providers and the FAA.

Encouraging Cuba to establish the first Air Traffic Flow Management position in Havana Center to accommodate growing traffic as U.S. carriers begin scheduled passenger service to Havana. The FAA continues to collaborate within the U.S. Government and with the Cuban aviation authorities to improve access in the busy Giron corridor between Miami and Havana. The U.S. warning areas in U.S. airspace were moved in September to help alleviate growing traffic congestion issues. This will improve the safety and efficiency of air traffic through that area by allowing for dedicated north and southbound routes at all times, even when U.S. military warning areas are activated.  

Airspace Improvements

The FAA is implementing recommendations from a U.S. government-industry panel which reviewed issues affecting FAA-managed airspace in the South Florida/Caribbean region. The panel’s recommendations focused on improving infrastructure, airspace capacity, and harmonization.  The agency is currently conducting a Caribbean airspace study and reviewing the Area Navigation (RNAV) routes in the Giron corridor near the Miami and Havana airspace boundary.     

System Wide Information Management Services (SWIM)

In addition to the activities listed above, the Caribbean Initiative also aims to implement a NextGen technology called SWIM as the vehicle for sharing situational data across the region. SWIM will provide the region with greater access to real-time information on flight data, weather, airport operations and special use airspace status. This will allow users to more effectively address airport capacity and traffic flow management constraints. By providing real time weather data and pilot observations, SWIM also offers enhanced safety and capacity building opportunities. This technology will help ensure that the entire region has a common traffic picture that enables safety and air traffic control efficiencies.

An interoperable network approach for theCaribbean region would lead to system-widebalancing of demand and capacity, enhanced safety and optimized efficiency. This optimization will be a key feature to ensure safety and efficiency as air traffic continues to grow in the region. Airline operators will also benefit from increased situational awareness, improved air traffic control system predictability, increased on-time performance and improved use of aircraft, crew, and maintenance resources.

Airport Safety Activities

The Caribbean Initiative has a strong safety component which impacts the large number of U.S. citizens that travel to the region, by enhancing airport safety and supporting ICAO standards and recommended practices for aerodromes and ground aids.

The FAA is working with Caribbean airport authorities and airport operators to enhance airport certification and overall safety in the region’s airports.  Activities include:

• Developing English and Spanish-Language Airport Safety Seminars.
• Providing a Spanish-language Airport Safety Seminar in the Dominican Republic
• Providing English-language Airport Safety Seminars in Jamaica and Trinidad and Tobago.
• Offering a General Aviation Seminar in Cuba for the Cuban Institute of Civil Aeronautics.
• Offering opportunities for civil aviation or airport authority personnel to job shadow Airport Certification Safety Inspectors in the U.S
• Foster a working-level exchange of best practices pertaining to airport certification.
• Supporting ICAO airport safety workshops/assistance missions in the Caribbean.

US Food/Ag Exports Increase 47% For Month; Up 17% For Year- 1st Year-To-Year Increase Since 2011/2012

ECONOMIC EYE ON CUBA©
November 2016

American Airlines Continues To Import Equipment- 1
September Food/Ag Exports Increased 47%- 1
16% Increase For First Nine Months Of 2016- 2
First Yearly Increase Expected Since 2011/2012- 2
Healthcare Product Exports- 2
Humanitarian Donations- 2
Obama Administration Initiatives Product Exports- 3
U.S. Port Export Data- 13

SEPTEMBER FOOD/AG EXPORTS INCREASED 47%- Exports of food products & agricultural commodities from the United States to the Republic of Cuba in September 2016 were US$32,349,488.00 compared to US$22,020,796.00 in September 2015 and US$15,469,734.00 in September 2014.  

Total exports under provisions of the Trade Sanctions Reform and Export Enhancement Act (TSREEA) in 2016: US$169,482,206.00 and in 2015: US$170,551,329.00

NOTE: An outbreak of Avian Flu had restricted United States poultry exports to the Republic of Cuba in 2015.  In June 2015, July 2015, and September 2015, Republic of Cuba government-operated Empresa Cubana Importadora Alimentos (Alimport), under the auspice of the Ministry of Foreign Trade of Cuba (MINCEX), used a credit facility to purchase frozen poultry from Brazil.  Poultry prices were high in 2014, low in 2015 and are expected to remain low throughout 2016.  Alimport is expected to purchase between 8,400 metric tons and 12,000 metric tons of frozen poultry per month from United States-based companies in 2016.

COMPLETE REPORT IN PDF FORMAT

Cuba: Legislative Pathway Deceased At 3:00 AM; Now All About 2/24/18; Conditionality Will Increase; Advocacy Groups To Struggle

9 November 2016 (11/10/16 & 11/14/16)

Legislative Pathway For Cuba Was Deceased At 3:00 AM
It’s Now All About 2/24/18
Advocacy Groups Will Become Tour Guides To Remain Solvent
Does The Government Of Cuba Bear Responsibility?
OFAC & BIS Licenses Will Take Longer; Be More Focused

Takeaway….

The Trump Administration will increase conditionality upon the United States-Republic of Cuba relationship, specifically relating to commercial engagement; its focus will be upon 2/24/18 when President Raul Castro retires and “Post-Castro Cuba” begins.  

Unlikely will Obama Administration regulations be reversed.  Advocacy groups will struggle for relevance.  Legislative initiatives are dead.

Reaction by the government of the Republic of Cuba: Do not expect an express-lane-like opening to United States-based companies during the next seventy-two (72) days; reasonable to believe that the government of the Republic of Cuba will be defiant in expectation of increased conditionality by a Trump Administration.

The government of the Republic of Cuba is hostage to the Obama Administration initiatives.... The issue for the Republic of Cuba will be, for the next months, uncertainty caused by not knowing precisely what the Trump Administration will do... or could do... or may consider doing or may threaten to do... It all can create an atmosphere where companies in other countries may become cautious....

The government of the Republic of Cuba embraced the narrative that permitting a few high-profile United States company “demonstratibles” would serve as a catalyst to obtain legislative and comprehensive regulatory changes; that was a mistaken strategy… Few does not necessarily bring many, but many generally brings more.  Announcing more now may be futile.

Energies relating to changing legislation were misplaced.  The focus should have always been on changing regulations.  

For the Obama Administration- decision is to make additional regulatory changes now or depart on 20 January 2017 lamenting about what could have been accomplished was left for consideration by the Trump Administration.  But, changes made during the next months could increase focus upon the Republic of Cuba- which may be onerous for United States companies.

Before 17 December 2014, Members of the United States Congress and their supportive United States-based advocacy organizations who had (have) the support of the government of the Republic of Cuba focused upon legislation as a strategy to change the commercial, economic and political relationship of the United States toward the Republic of Cuba.

During the period 17 December 2014 through 8 November 2016, the same strategy by the same actors was followed.

From 9 November 2016 through 12:00 pm on 20 January 2017, seventy-two days from now, the sole focus by members of the United States Congress, their supportive United States-based advocacy organizations, and the government of the Republic of Cuba should be upon seeking changes to regulations.  Period.

The legislative pathway is deceased; it passed at 3:00 am this morning.

Due, in part, to the agendas of advocacy organizations, the Obama Administration focused less upon regulatory changes and more on legislative changes and, as a result, today's landscape exists.  The advocacy organizations now must shift from an agenda of gaining more to not getting less... and are in need of protecting the existence of their organizations rather than fulfilling their mission.  To ensure a revenue stream, some advocacy organizations are altering their mandate from seeking funding to focus on legislative changes to seeking funding, and creating additional entities, to serve as travel agents.

And, given the results of the election, any further regulatory changes by the Obama Administration during the period until inauguration day will receive heightened scrutiny and, as a result, perhaps be targeted for reversal or alteration.

Since the 1990’s, President-Elect Donald J. Trump has altered his positions relating to the Republic of Cuba; from constrictive to expansive, and returning to constrictive and then expansive before becoming agnostic and then constrictive again.  His most recent statements indicate that he may not immediately reverse commercial, economic and political engagement, but may increase conditionality as a cost of expansion.

For United States-based companies, directing resources towards supporting Republic of Cuba-focused legislative agendas has ceased to be a constructive use of time and money.  They have seventy-two (72) days to directly engage with the Obama Administration to seek as many regulatory changes and as many individual licenses as possible.

The Speaker of the House of Representatives, The Honorable Paul Ryan (R- Wisconsin), wrote earlier this year that he would seek to prevent United States-based companies from engaging with companies in the Republic of Cuba controlled by the Revolutionary Armed Forces of the Republic of Cuba (FARC)… that would impact Gaviota, which owns the Four Points Sheraton Havana.  This property commenced operations in June 2016.  The Sheraton brand is owned by Stamford, Connecticut-based Starwood Hotels & Resorts Worldwide, a subsidiary of Bethesda, Maryland-based Marriott International.  Then-Representative Ryan was the vice-presidential running mate of Mitt Romney in 2012.  Governor Romney is on the Board of Directors of Marriott International.  William and Richard Marriott are two of the Republican Party’s major financial supporters.  Marriott International confirms its discussions with Cuba government-operated companies to identify property-management opportunities within Cuba.  This is one reason for the importance of the remaining seventy-two (72) days until the inauguration.  

The 114th United States Congress is likely to use omnibus legislation to enact the remaining budget appropriations during the "lame duck" session of the United States Senate and United States House of Representatives.  There is Republic of Cuba-related legislation that could be included in omnibus legislation.

For those members who are retiring, moving to another office, or have lost, their next career path may include consultancy, lobbying, advocacy organizations, law, advisory, financial, speaking engagements, and non-governmental organizations; each expect to earn more than their current US$174,000.00 to US$193,400.00.  If they are not already supportive of changes to Republic of Cuba-related statutes, then the potential of enhancing their earnings by supporting statutory changes on their way out the door may be appealing.  There are entities that might show their appreciation after a transition from the public sector to the private sector.  If already supportive of changes to Republic of Cuba-related statutes, then those departing become potential fundraisers for those colleagues who remain in office.... so perhaps making easier to have a greater focus on the statutes.  But, this path is likely futile.

Since 2014, there have been legislative initiatives to disrupt the engagement begun by President Barack Obama.  Since 2014, there have been legislative initiatives to expand the engagement begun by President Obama.  What do these legislative initiatives have in common? … failure.  Sixteen years has passed since the last Republic of Cuba-focused law was enacted.

There will likely be no changes to United States statutes relating to Cuba during the remaining days of the Obama Administration; there were never going to be any changes to the Cuban Democracy Act (1992), Libertad Act (1996) or Trade Sanctions Reform and Export Enhancement Act (2000) given the political dynamic existing during the final two-years of this two-term president.  There were unavailed opportunities when the President’s party controlled the United States Congress from 2009 to 2011.

Opponents to further changes in United States law have twenty-four years of precedent (1992, 1996, 2000); and they have prevented statutory changes in the last 693 days (since 17 December 2014) during which the President of the United States has sought to make the Republic of Cuba a significant component of his two-term (eight-year) legacy.

Legislative history has shown the Republic of Cuba to be a low-value commodity; to be traded away in most instances because it lacks importance.  The legislative calendar is littered with Members of Congress pronouncing they would not permit legislation unrelated to Cuba to proceed unless issues relating to the Republic of Cuba were resolved.  In the end, no Member of Congress was going to seek to hold appropriation or other legislation of national importance because of the Republic of Cuba.

Members of the United States Congress will now focus upon 24 February 2018, the retirement of President Raul Castro, as a legislative target date- they will debate whether changes to law will incentivize him during his final thirteen (13) months in office or await and provide incentives to his successor, First Vice President of the Council of State of Cuba, Miguel Diaz-Canel, who was born in 1960.  That is what the United States Congress will be analyzing.  There will remain a question as to whether President Castro remains First Secretary of the Communist Party of the Republic of Cuba, which, if it happens, may complicate some efforts to change United States laws.  

If the government of Cuba were to host (again) a naval presence by the Russian Federation… we all know the likely response by the next occupant of The White House and Members of the United States Congress.

President Obama should go all in with regulatory changes during his remaining days in office; the government of the Republic of Cuba has not fully reciprocated, is not fully reciprocating and is unlikely to fully reciprocate to a depth which would balance the Obama Administration initiatives with the Castro Administration responses.  The choice is awaiting what will not arrive or finishing the task as forcefully as possible.  

Regulations in place before 20 January 2017 are likely to resist change as opposed to the challenges for creating regulations after 20 January 2017 where none existed.  The Obama Administration needs to issue as many licenses as possible; licenses will likely not be rescinded… if they are issued and then implemented by 20 January 2017.

So, and this has been in the echo-chamber before, President Barack Obama should have left only for his successor the shepherding of a legislative agenda.

What Would Be Helpful?

• Authorize all commercial activity under a general license from 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, including Direct Foreign Investment (DFI)
• Authorize all transactions with Cuba government-operated companies
• Authorize all imports under general license
• Authorize all exports under general license
• Authorize Cuba government-operated financial institutions to have accounts with United States-based financial institutions for correspondent activities
• File motions to dismiss unwarranted civil judgments against Cuba
• Announce specific progress for the settlement of the 5,913 claims certified with the Foreign Claims Settlement Commission (FCSC) within the United States Department of Justice

COMPLETE TEXT IN PDF FORMAT

ABA Has No "Formal Position" About Cuban Banks Having Accounts With US Banks

Today, the Washington, DC-based American Bankers Association (ABA), stated that the organization does not have a formal position relating to the authorization of Republic of Cuba government-operated financial institutions to have accounts with United States-based financial institutions for correspondent activities.

The ABA did not provide a reason(s).

"The American Bankers Association is the united voice of America’s hometown bankers- small, regional and large banks that together employ more than 2 million people, hold more than $16 trillion in assets, safeguard $12 trillion in deposits and extend more than $8 trillion in loans.
 
ABA believes that government policies should recognize the industry’s diversity. Laws and regulations should be tailored to correspond to a bank’s charter, business model, hometown markets and risk profile. This policymaking approach avoids the negative economic consequences of burdensome, unsuitable and inefficient bank regulation.
 
Through a broad array of information, training, staff expertise and other resources, ABA supports America’s hometown bankers as they perform their critical role as drivers of America’s economic growth and job creation."

For reference:

http://www.cubatrade.org/blog/2016/10/16/has-the-obama-administration-called-it-quits-leaving-united-states-companies-with-more-than-was-expected-but-far-less-than-was-needed?rq=Direct%20Correspondent%20Banking

Citibank Declines To Comment On Processing Cuba Transactions

New York, New York-based Citibank (a subsidiary of New York, New York-based Citigroup) declined to comment when asked the following questions relating to transactions with the Republic of Cuba:

• Does Citibank process Republic of Cuba-related transactions where a specific license is not required from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury?
• Does Citibank only process transactions where a license is required and provided to Citibank?

Cuba.com Sale Report Receives Response From Cuba Government Publication

The domain www.cuba.com is for sale, asking US$4.5 million:

http://www.cubatrade.org/blog/2016/10/21/wwwcubacom-is-for-sale-us45-million

On 2 November 2016, Cubadebate, an official publication of the government of the Republic of Cuba, commented (English language translation follows) upon the legitimacy of the sale:

http://www.cubadebate.cu/noticias/2016/11/02/a-la-venta-dominio-cuba-com-en-estados-unidos-por-45-millones-de-dolares-es-legal/

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A la venta dominio Cuba.com en Estados Unidos por 4,5 millones de dólares: ¿Es legal?

Por: Rosa Miriam Elizalde
2 noviembre 2016

El dominio Cuba.com fue creado el 20 de febrero de 1995, está registrada en EEUU y actualmente promociona viajes a Cuba.

El dominio Cuba.com está a la venta y su precio en efectivo es de 4,5 millones de dólares, de acuerdo con el sitio VIP Brokerage que funge como intermediaria de la operación.

El propósito principal de los nombres de dominio en Internet y del sistema de nombres de dominio (DNS), es traducir las direcciones numéricas en la red a términos memorizables y fáciles de encontrar. O dicho de una manera más simplificada, el dominio sería el nombre único y exclusivo que se le asigna a una página web en Internet.

VIP Brokerage, que no reveló quien es el dueño de ese dominio, anunció originalmente que el precio de venta del dominio Cuba.com es de 4,5 millones en efectivo, aunque se podía financiar la compra por cinco años con un pago inicial de 2 millones de dólares.

VIP Brokerage solo admite ofertas a partir de un millón de dólares, según se aprecia en la propia página web. “Este activo digital especial tiene un enorme potencial de crecimiento e ingresos en materia de viajes, turismo, hoteles, entretenimiento, recreación, etc”, dijo Mark Thomas, director ejecutivo de la firma especializada en la compraventa de nombre de dominios de internet, en una cita publicada en el diario The Miami Herald.

VIP Brokerage indicó que el dominio ha pertenecido al mismo propietario por más de 15 años y, según el Herald, varios reportes nombran a Skip Hoagland, fundador de Domain New Media LLC, como el dueño.

El “pequeño problema” es que este tipo de “activo digital especial” vinculado a Cuba y alojado en Estados Unidos, está penalizado por la Ley de la Democracia Cubana (Ley Torricelli) de 1992, que impuso límites y sanciones para las personas naturales o jurídicas de la nación estadounidense que favorecieran el comercio electrónico, el turismo o cualquier otra área que generara beneficios económicos para la Isla. Hasta el día de hoy, Estados Unidos no ha levantado esa restricción.

De hecho, existen antecedentes de intervenciones del gobierno de Estados Unidos, que ha borrado con un clic decenas de sitios en Internet bajo sospecha de violar esta ley. En octubre de 2008 retiró los derechos del uso de 80 dominios en los que se mencionaban genéricos cubanos a un británico con residencia en España. Más de 3 719 dominios .com aparecían en la lista negra del gobierno de los Estados Unidos, cuyo uso estaba prohibido en virtud de esa ley.

Susan Crawford, profesora de la Universidad Yale y una de las voces más autorizadas en leyes sobre la Internet, aseguró entonces a The New York Times que el hecho de que muchos de los principales registros de dominios están en los EEUU le da a la OFAC (Oficina de Control de Bienes Extranjeros), control “sobre una gran cantidad de voces – muchas de las cuales puede que ni siquiera estén en los EEUU, ni se refieran a los EEUU o entren en conflicto con las leyes de los EEUU.”

Debido a la amenaza de las sanciones, muchas páginas y servicios en Internet están bloqueados desde EEUU para las usuarios cubanos, entre ellos algunos productos estrellas de Google, como Code y Adwords.

Sin embargo, después del anuncio del restablecimiento de las relaciones con Cuba el 17 de diciembre del 2014, se disparó el número de dominios con la palabra “Cuba” comprados en Estados Unidos. Ese mismo día se registraron unos 1 500 dominios que contenían “Cuba”, según la herramienta DomainView. También se registraron el 17 de diciembre de 2014 unos 300 dominios que contenían “Havana”, protegida, al igual que el nombre del país, por la Oficina Cubana de la Propiedad Industrial.

Por qué a unos sí y a otros no, una buena pregunta para la OFAC.

dercreto ley

Las Indicaciones Geográficas en Cuba se regulan por el Decreto-Ley 228 de 20 de febrero de 2002 y comprenden a las Denominaciones de Origen y las Indicaciones de Procedencia.

Por otro lado, para la mayoría de las legislaciones, incluyendo la estadounidense, el registro en Internet de una marca o denominación ajena equivale a una infracción penalizada, conocida como “ciberocupación”.

La “ciberocupación” generalmente tiene el propósito de exigir dinero al titular legítimo del nombre o de inducir a engaño o confundir a los consumidores, advierte la Organización Mundial de la Propiedad Intelectual (OMPI), que aconseja evitar los nombres de dominio geográficos, nombres de personas famosas, nombres genéricos de sustancias farmacéuticas, nombres de organizaciones internacionales, y nombres comerciales (por ejemplo, el nombre de la empresa de otra persona). Todos ellos pueden interferir con los derechos de terceras personas o sistemas internacionales de protección.

En Cuba, las llamadas “Indicaciones Geográficas” -expresión o nombre geográfico en una marca- pertenecen al patrimonio nacional y respecto a ellas sólo se conceden derechos de uso, previo pago de un tarifa establecida.  Los derechos de uso que se confieren no son trasmisibles por formas contractuales. La Isla cuenta actualmente con veinticinco denominaciones de origen protegidas internacionalmente, entre las que se encuentran Cuba y Habana, de acuerdo con la Oficina Cubana de la Propiedad Intelectual. Están reconocidas ante la OMPI, que ha creado un portal de bases de datos sobre marcas (en http://ecommerce.wipo.int/) para ayudar a las personas y empresas a identificar cuándo una marca está protegida y no puede ser “ciberocupada”.

Pero las selectivas agencias registradoras de dominios en EEUU, obviamente no tienen en cuenta este hecho cuando sancionan a algunos individuos que compran dominios en los que incluyen la palabra “Cuba” ni cuando se lo perdonan a otros.

¿Será la superventa de Cuba.com un arriesgado negocio para el comprador? ¿Por qué se han hecho de la vista gorda en este caso los chicos de la OFAC? Próximamente, Cubadebate volverá sobre este asunto.

English Translation

Home »News, Science and Technology»

For sale domain Cuba.com in the United States for $ 4.5 million: Is it legal?

By: Pink Miriam Elizalde

2 November 2016

The domain Cuba.com was created on February 20, 1995, is registered in the US and currently promotes trips to Cuba.

The domain Cuba.com is for sale and its cash price is 4.5 million dollars, according to the VIP Brokerage site that serves as an intermediary of the operation.

The main purpose of Internet domain names and DNS is to translate the numerical addresses into the network into terms that are memorable and easy to find. Or put it more simply, the domain would be the unique and exclusive name assigned to a web page on the Internet.

VIP Brokerage, who did not reveal who owns the domain, originally announced that the sale price of the domain Cuba.com is 4.5 million in cash, although it could finance the purchase for five years with an initial payment of 2 millions of dollars.

VIP Brokerage only supports offers from one million dollars, as seen on the website itself. "This special digital asset has enormous potential for growth and revenue in travel, tourism, hotels, entertainment, recreation, etc.," said Mark Thomas, chief executive officer of VIP Brokerage in a quote published in The Miami Herald.

VIP Brokerage said the domain has been owned by the same owner for more than 15 years and, according to the Herald, several reports name Skip Hoagland, founder of Domain New Media LLC, as the owner.

The "small problem" is that this type of "special digital asset" tied to Cuba and housed in the United States is penalized by the Cuban Law of Democracy (Torricelli Act) of 1992, which imposed limits and sanctions for natural persons or Legal systems of the US nation that favored electronic commerce, tourism or any other area that would generate economic benefits for the island. To date, the United States has not lifted that restriction.

In fact, there are records of interventions by the US government, which has clicked off dozens of Internet sites on suspicion of violating this law. In October 2008 it withdrew rights to the use of 80 domains in which Cuban generics were mentioned to a British resident in Spain. More than 3,719 .com domains were blacklisted by the United States government, whose use was prohibited under that law.

Susan Crawford, a professor at Yale University and one of the most authoritative voices in Internet law, then told The New York Times that the fact that many of the major domain registrations are in the US gives OFAC (Office of Foreign Assets Control), control "over a large number of voices - many of which may not even be in the US, nor refer to the US or conflict with US law."

Due to the threat of sanctions, many pages and Internet services are blocked from the US for Cuban users, including some Google star products such as Code and Adwords.

However, after the announcement of the re-establishment of relations with Cuba on December 17, 2014, the number of domains with the word "Cuba" bought in the United States shot up. That same day registered about 1,500 domains that contained "Cuba", according to the tool DomainView. Also registered on December 17, 2014 were some 300 domains containing "Havana", protected, as well as the name of the country, by the Cuban Office of Industrial Property.

Why not yes and no, a good question for OFAC.

Derrida law

The Geographical Indications in Cuba are regulated by Decree-Law 228 of February 20, 2002 and include Denominations of Origin and Indications of Origin.

On the other hand, for most laws, including the US, the online registration of a trademark or other name is equivalent to a criminal offense, known as cybersquatting.

"Cybersquatting" is generally intended to demand money from the legitimate owner of the name or to mislead or confuse consumers, warns the World Intellectual Property Organization (WIPO), which advises avoiding geographic domain names, Famous names, generic names of pharmaceutical substances, names of international organizations, and trade names (for example, the name of another person's business). All of them may interfere with the rights of third parties or international protection systems.

In Cuba, the so-called "Geographical Indications" -expression or geographical name in a brand- belong to the national patrimony and with respect to them only rights of use are granted, upon payment of a set fee. The rights of use that are conferred are not transferable by contractual forms. The island currently has twenty-five internationally protected designations of origin, including Cuba and Havana, according to the Cuban Intellectual Property Office. They are recognized by WIPO, which has created a brand database portal (http://ecommerce.wipo.int/) to help individuals and businesses identify when a trademark is protected and can not be "cyber-populated" ".

But selective US domain registrars obviously do not take this into account when they sanction some individuals who buy domains that include the word "Cuba" or when they forgive others.

Will the supermarket of Cuba.com be a risky business for the buyer? Why have the boys of the OFAC been turned a blind eye in this case? Soon, Cubadebate will return on this issue.

From The Atlantic: How FedEx (Might Have) Helped Commence A Cancer Vaccine Clinical Trial

The Atlantic
7 November 2016
Washington, DC

Cuba's Innovative Cancer Vaccine Is Finally Coming to America

The country has a whole arsenal of unique drugs locked behind the U.S. embargo.

By Sarah Zhang

Last week, in a historic first, a box of water made it from Havana to Buffalo, New York. It was roundabout journey, since you can’t just FedEx a box from Cuba to the U.S. (The embargo, no commercial cargo flights, etc.) The box flew first to Toronto. Customs brokers then escorted it across the U.S.-Canada border to its final destination at Roswell Park Cancer Institute.

Why such a production for a box of water? It was the test run for a promising lung-cancer vaccine called CIMAvax, which was developed in Cuba and soon will begin clinical trials in the U.S. But no one in America has ever run a clinical trial with Cuban drugs, and no one was even sure, logistically, how to ship fragile cargo between the two countries. (Again, the embargo, no commercial cargo flights.) So the researchers devised a roundabout route and tested it with this box of water. “We actually wanted them to ship a box of beer,” joked Kelvin Lee, an immunologist at Roswell who helped forge the Cuban collaboration, “but it turned out to be too complicated.”*

This shipment came, of course, at a time of thawing relations between U.S. and Cuba. The embargo is still in place—only Congress can vote to lift it—but the Obama administration has been issuing executive actions easing restrictions on trade and travel to the country. Last month, the administration made it easier to carry out joint U.S.-Cuban medical research, and the Food and Drug Administration promptly followed by approving clinical trials for the Cuban lung-cancer vaccine at Roswell.

CIMAvax is so interesting, scientifically speaking, because it belongs to a new class of cancer treatments called immunotherapy. Rather than using a scalpel, radiation, or chemicals to take cancerous cells out directly, immunotherapy stimulates the patient’s own immune system to fight cancer. A few immunotherapies are already on the market, and pharmaceutical companies are racing to develop the next. For the past two decades, Cuba, a country with a tiny biomedical research budget, has been quietly sitting on CIMAvax. And this vaccine could be just the first of several Cuban drugs, currently locked behind the embargo, to make to the U.S.

The collaboration between Roswell and Cuba’s Center for Molecular Immunology, which developed the vaccine, actually began in 2011, years before the Obama administration started easing restrictions on Cuba. Gisela Gonzalez, one of the Cuban researchers working on CIMAvax, was visiting family in Pittsburgh when she cold-called one of Lee's colleagues at Roswell.** She wanted to give a talk about the research they were doing in Cuba.

“We were not thinking about Cuba at all,” says Lee. “Our image of Cuba was from back in the I Love Lucy days. We didn’t consider they had really advanced cancer treatments.” But Cuba manages to punch far above its weight in medicine. Although the country lacks access to advanced medical equipment due to the embargo, life expectancy in Cuba is even a bit higher than in the U.S. Its strength is a robust primary-care system that focuses on disease prevention.

That’s how CIMAvax came along, too. In the 1980s, Cuba developed a vaccine to prevent meningitis, a bacterial infection of the membranes around the brain. The vaccine uses pieces of protein from meningitis bacteria, which signal “hey, I’m foreign” and switch the immune system into attack mode. One particular protein, they found, was especially good at activating the immune response.

So when researchers at the Center for Molecular Immunology turned their attention to lung cancer—then the number-two killer in Cuba—they didn’t start from scratch. They took that unusually powerful meningitis protein and fused it to part of another protein called epidermal growth factor, or EGF. EGF is important for controlling cancer because, as its name implies, EGF makes cells grow, and cancer is essentially cells growing out of control. When injected, this fused hybrid protein kicks a patient’s immune system into high gear (thanks to the meningitis) and targets cancer cells (thanks to the EGF). That’s how CIMAvax is supposed to work. It’s called a vaccine because like other vaccines, it stimulates the immune system, but it is actually used to treat rather than prevent lung cancer.

Lee recalls learning all this for the first time at Gonzalez’s talk. “I’m just sitting in the audience and going, ‘That’s really amazing,’” he says. CIMAvax had been approved in a handful of Latin American countries by then, and a handful of desperate American patients have since traveled abroad to get CIMAvax. The vaccine doesn’t necessarily kill cancer cells, but it slows their growth enough to prolong patients’ lives by several months in trials. And its side effects are mild, especially compared to how chemotherapy can ravage the body.

So the Roswell and Center for Molecular Immunology started working together. It wasn’t your typical collaboration though. Calling Cuba is expensive (something like a dollar a minute), and the country only has slow dial-up internet. And then there was all the complications from the embargo, which made moving materials or money between the countries pretty much impossible.  “This has been a very challenging atmosphere for them to collaborate in,” says Gail Reed, the founder of MEDICC, a nonprofit that promotes U.S.-Cuban partnerships in medicine. “It’s really to their credit that they have been pursuing it.”

As the Obama administration looked into restoring relations with Cuba, politicians, law firms, and nonprofits interested in Cuba started paying attention to CIMAvax. MEDICC was one of those nonprofits, and it wrote a white paper detailing policy changes that would make collaborations like the one over CIMAvax less challenging. The executive actions on medical research last month largely reflect those recommendations. And Lee himself has since made about a dozen trips to Havana.

Roswell is now recruiting patients to its clinical trial for CIMAvax in New York. This trial will be a rigorous test for how well the vaccine works. “There have been trials done outside of U.S., and when we test in U.S., they sometimes don’t give us the same results, because the way we conduct clinical trials is very strict,” says Erminia Massarelli, an oncologist specializing in lung, head and, throat cancer at City of Hope cancer treatment center. “We will have to see if this vaccine is truly successful. We hope so because we’re hoping for better treatment.”

Regardless of how well CIMAvax itself works, it will blaze a path for medical collaborations with Cuba. Behind CIMAvax, Roswell has prepared paperwork for clinical trials on a second cancer immunotherapy candidate from Cuba, and it’s interested in several more. Cuba also has developed other cost-effective treatments that are currently unavailable in the U.S., such as injections for diabetes-related foot ulcers and the meningitis vaccine that predated CIMAvax. “This first trial really is the stone that we’re throwing in the pond to see what happens,” says Lee.

The collaboration has brought about all sorts of changes already, from explicitly allowing the FDA’s policy to approve Cuban pharmaceuticals, to changes as mundane as getting Cuba’s regulatory agency to follow the same drug application formats as the U.S. and other countries. Altogether, they could signal Cuba’s slow reentry in the global community. And FedEx has announced plans for commercial cargo service between the U.S. and Cuba next year. Eventually, shipping a box of medicine from Havana to Buffalo may be no harder than shipping a box anywhere else in the world.

Which Companies Are First To Open Offices In Cuba?

On 7 November 2016, Atlanta, Georgia-based Delta Air Lines became the first United States-based company to establish an office since 1961 in the Republic of Cuba.

Fort Worth, Texas-based American Airlines had been expected to be the first company to have an office; the company does have an operations office for its resident country manager and expects to have a ticket office soon.

Long Island City, New York-based JetBlue Airways expects to open an office soon. 

The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury has authorized United States-based companies to have representative offices in the Republic of Cuba.

The ticket offices will be staffed by Republic of Cuba nationals.

The United States Department of Transportation (USDOT) has authorized the re-establishment of regularly-scheduled commercial services from the United States to the Republic of Cuba; there will be up to 110 daily flights.

LINK TO DOT ROUTES FOR US/HAV

LINK TO DOT ROUTES FOR US/NON-HAV

Why Is US$1.5 Million For Cuba A USDA Secret? Hubris? Four Departments Can't Seem To Agree

Why Is USDA’s US$1.5 Million For Cuba A Secret? Hubris?
FOIA Request Or Inspector General?
Part Of A Larger Conflict Between Agriculture, Commerce, State and Transportation

The United States business community has been supportive of efforts by the United States Department of Agriculture (USDA) to increase its focus upon the Republic of Cuba.  This support does not, however, exclude the responsibility of the USDA to be transparent, timely, and informative with respect to that focus.

In June 2016, the U.S.-Cuba Trade and Economic Council (USCTEC) asked questions of the USDA relating to a requested budget appropriation.  Despite monthly (and sometimes weekly) follow-up, the USDA refused to provide the totality of the information- information which is not, by any measure, considered confidential.  The USDA has no statutory basis for withholding the information.

The USDA rejects disclosing budget information that would assist the United States business community with developing a greater appreciation of what the USDA seeks to implement and how that implementation may be of value to the United States business community.  

For the United States business community, understanding the statutory and regulatory and policy rationale used by legal counsel within the USDA (and other United States government departments and agencies) is imperative to analyzing and then creating strategies for use with respect to the Republic of Cuba.  

Lack of transparency by the USDA (and other United States government departments and agencies) only serves to delay opportunities for United States-based companies.

There continues to be a lack of continuity relating to how The White House (National Security Council), United States Department of Agriculture, United States Department of Commerce, United States Department of State and United States Department of Transportation interpret United States statutes, regulations and policies.

June-November 2016
USCTEC Request To USDA

The USDA 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 approved on 19 May 2016 by the United States Senate Committee on Appropriations; the request requires approval by the United States Senate and United States House of Representatives before becoming law.

USDA Budget Justification for FY2017 (http://www.obpa.usda.gov/33fas2017notes.pdf): d) An increase of $1,500,000 and 5 staff years to open an overseas post in Cuba. In 2014, the President announced a set of diplomatic and economic changes to chart a new course in U.S. relations with Cuba and to further engage and empower the Cuban people. FAS continues its efforts to remove technical barriers between U.S. and Cuban companies and to create more efficient, less burdensome opportunities for Cuba to buy U.S. agricultural products. U.S. agricultural exports to Cuba have grown significantly since trade was authorized in 2000. FAS is currently working on collaborative activities that would eventually allow U.S. representation in Cuba to move beyond the limited technical activities and into trade promotion within any applicable legal limits. For example, redefining the statutory term “cash-in-advance” and allowing U.S. banks to establish corresponding accounts at Cuban banks will improve the speed, efficiency, and oversight of authorized payment between the United States and Cuba. This will expand choices for Cuban shoppers at the grocery stores and help build the customer base for America’s farmers and ranchers. The increase in funds will cover the start-up costs for the first year of operations of the new Cuba post.

1) The USDA plans to place employees in the Republic of Cuba in 2016/2017, if the budget is approved by the United States Congress.  What is the statutory language authorizing the USDA to include this budget proposal?

2) The CFR [Code of Federal Regulations], CACR (Cuban Assets Control Regulations], CDA [1992 Cuban Democracy Act], Libertad [1996 Libertad Act], and TSREEA [2000 Trade Sanctions Reform and Export Enhancement Act] apply to the United States Government.  What is(are) the provision(s) of law(s) that authorizes the USDA to use budgetary authority/resources to pay for staff, rent, office (if required), expenses, etc., for USDA employees to be stationed in the Republic of Cuba?

3) On 15 July 2016, Secretary Vilsack, during remarks at the National Governors Association (NGA) meeting in Des Moines, Iowa, said that the USDA would have one individual stationed at the United States Embassy in Havana, Republic of Cuba.  There is no media release relating to this specific statement.  Please provide as soon as possible the details for this announcement including, but not limited to:

• What is the budgetary authority that has been approved for this expenditure?
• How many individuals?
• What is the salary(s) of the individual(s)?
• What is the total expenditure for this effort?  Line-item breakdown.
• What will be the title(s) of the individual(s)?
• When will the posting commence?
• The OPM [Office of Personal Management]/OMB [office of Management & Budget] job description(s) for the individual(s).

Note: The USCTEC asked the United States Department of Commerce (DOC) if it would seek a 2016/2017 appropriation to provide payments for U.S. Commercial Service staffing within the Embassy of the United States in Havana, Republic of Cuba.  From the DOC Internet site: “The U.S. Commercial Service is the trade promotion arm of the U.S. Department of Commerce’s International Trade Administration [ITA]. U.S. Commercial Service [CS] trade professionals in over 100 U.S. cities and in more than 75 countries help U.S. companies get started in exporting or increase sales to new global markets.” Response from the DOC: “Export promotion is not permitted under the sanctions, which is what ITA/CS does. Many agricultural products are not impacted by the sanctions.”

DOC & USDA Point To § 7207 As Preventing Assistance
State & Transportation See No Issue

The USDA (November 2015) and the DOC reported that their Republic of Cuba-related activities (and by extension the United States Government) were restricted and/or prohibited not be choice (policy), but law (statute), by the Trade Sanctions Reform and Export Enhancement Act (TSREEA) of 2000, title IX, Public Law 106-387 [22 U.S.C. 7207(a)(1)] (TSRA).   

§ 7207. Prohibition on United States assistance and financing
(a) Prohibition on United States assistance
(1) In general Notwithstanding any other provision of law, no United States Government assistance, including United States foreign assistance, United States export assistance, and any United States credit or guarantees shall be available for exports to Cuba or for commercial exports to Iran, Libya, North Korea, or Sudan.
(2) Rule of construction
Nothing in paragraph (1) shall be construed to alter, modify, or otherwise affect the provisions of section 6039 of this title or any other provision of law relating to Cuba in effect on the day before October 28, 2000.
(3) Waiver
The President may waive the application of paragraph (1) with respect to Iran, Libya, North Korea, and Sudan to the degree the President determines that it is in the national security interest of the United States to do so, or for humanitarian reasons.

From The FY 2017 Agriculture Appropriations Bill S. 2956
May 2016

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 attaché 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.

October 2016
From USDA To USCTEC

Regarding the news release of Sec. Vilsack’s announcement at the National Governors Association meeting that USDA would have a presence at U.S. Embassy Havana; a radio announcement from USDA’s Office of Communication from Monday, July 18, 2016: https://audioarchives.oc.usda.gov/node/2003

USDA needs permanent in-country presence 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 the meantime, USDA is working with U.S. Department of State to carry out a series of short-term USDA duty assignments in Cuba.  These assignments, while insufficient for meeting all needs associated with the quickly evolving U.S. – Cuba agricultural relationship, will help develop necessary contacts, gain firsthand knowledge of the country’s agricultural challenges and opportunities, and, of critical importance, protect U.S. agriculture from the introduction of new pests and diseases.

Note: In November 2016, staff within a United States Senate office confirmed to the USCTEC that the USDA budget request is for “the equivalent of five (5) staff members for the fiscal year.”  That’s US$300,000.00 per staff member….

USDA Media Notification
May 2016

“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.”

USDA Media Notification
March 2016

HAVANA, March 21, 2016 - As part of President Obama's historic trip to Cuba to further normalization of relations, advance commercial and people-to-people ties, and express our support for human rights for all Cubans, Agriculture Secretary Tom Vilsack today announced several measures that will foster further collaboration between the U.S. and Cuban agriculture sectors. The two neighboring countries share common climate and agriculture related concerns, and the measures announced today in Havana will mutually benefit the Cuban people and U.S. farmers and ranchers.

While in Cuba, Secretary Vilsack announced that USDA will allow the 22 industry-funded Research and Promotion Programs and 18 Marketing Order organizations to conduct authorized research and information exchange activities with Cuba. These groups, which are responsible for creating bonds with consumers and businesses around the world in support of U.S. agriculture, will be able to engage in cooperative research and information exchanges with Cuba about agricultural productivity, food security and sustainable natural resource management. Secretary Vilsack called the announcement "a significant step forward in strengthening our bond and broadening agricultural trade between the United States and Cuba."

During their bilateral meeting today, Secretary Vilsack and Cuban Minster of Agriculture Gustavo Rodriguez Rollero will sign a Memorandum of Understanding that establishes a framework for sharing ideas and research between the two countries. Secretary Vilsack also has invited Minister Rodriguez to join on a visit to one of USDA's Climate Sub Hubs in Puerto Rico in late May, where USDA researchers are studying the effects of climate change in the subtropical region and strategies for mitigating these effects.

"Recognizing the importance of agriculture in the United States and Cuba, USDA is advancing a new partnership for the 21st century between our two countries," said Vilsack. "U.S. producers are eager to help meet Cuba's need for healthy, safe, nutritious food. Research and Promotion and Marketing Order Programs have a long history of conducting important research that supports producers by providing information about a commodity's nutritional benefits and identifying new uses for various commodities. The agreements we reached with our Cuban counterparts on this historic trip, and the ability for our agriculture sector leaders to communicate with Cuban businesses, will help U.S. agricultural interests better understand the Cuban market, while also providing the Cuban people with science-based information as they grow their own agriculture sector."

USDA will review all proposed Research and Promotion Board and Marketing Order activities related to Cuba to ensure that they are consistent with existing laws. Examples of activities that may take place include the following:

Provide nutritional research and guidance, as well as participate with the Cuban government and industry officials, at meetings regarding nutrition and related Cuban rules and regulations.

Conduct plate waste study research in schools to determine what kids eat and what they discard, leading to improved nutritional information that helps develop the guidance for school meal requirements, ensuring kids are getting adequate nutrition to be successful in school.

Provide U.S. based market, consumer, nutrition and environmental research findings to Cuban government and industry officials.

Research commodities' role in a nutritious diet that improves health or lowers the risk of chronic diseases.

Study the efficacy of water disinfectants to eliminate/inactivate bacteria on commodities.

Test recipes and specific products amongst Cuban consumers of all ages, with the goal of increasing product development and acceptance.

Conduct consumer tracking studies to measure attitudes when it comes to a specific commodity and consumption and to identify consumer groups based on their behavior, attitudes, and purchasing habits for a commodity.

The visit to the Puerto Rico Sub Hub would allow USDA and Cuba's Ministry of Agriculture to exchange information on climate change as it relates to tropical forestry and agriculture, and explore opportunities for collaboration. The two officials would be able to explore tools and strategies to cope with challenges associated with climate change, such as drought, heat stress, excessive moisture, longer growing seasons, and changes in pest pressure.

The Puerto Rico hub is part of the USDA Regional Climate Hub network that supports applied research and provides information to farmers, ranchers, advisors, and managers to inform climate-related decision making. The hubs are an invaluable resource for those seeking to understand the specific risks of climate change, as well as region-specific adaptation strategies.

The agriculture and forestry sectors in the Caribbean are especially vulnerable to the effects of climate change. Not only is the region particularly exposed to extreme weather events, but much of its population and prime agricultural lands are located on the coast. The Puerto Rico Sub Hub is specifically focused on addressing these unique challenges and supporting the people and institutions involved in tropical forestry and agriculture.

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.

This historic visit to Cuba is the first by a sitting U.S. President in nearly 90 years. It is Secretary Vilsack's second visit and is another demonstration of the President's commitment to chart a new course for U.S.-Cuban relations and connect U.S. and Cuban citizens through expanded travel, commerce, and access to information.

USDA Media Notification
November 2015

Last week, I [The Honorable Thomas Vilsack, United States Secretary of Agriculture] was part of the first USDA team to visit Cuba since U.S. Government offices were closed there in 1961, and I was the third U.S. Cabinet official to visit the island since President Obama announced his intent to resume relations with Cuba late last year. Food and agricultural goods are the dominant U.S. exports to Cuba, and it is my firm belief—and one that appears to be shared by the Cuban people and government officials—that agriculture can serve as a bridge to foster cooperation, understanding and the exchange of ideas.

Several members of Congress from states with strong agriculture economies also made the trip, including Senator Jeff Merkley of Oregon, and U.S. Representatives Terri Sewell of Alabama, Suzan Del Bene of Washington and Kurt Schrader of Oregon. We were able to meet with counterparts in the Cuban government, as well as farmers, farmers market operators, and both urban and rural citizens, just as the USDA team and I do on a regular basis in the United States. We learned from Cuban farmers that they are fighting many of the same pests and diseases that American farmers face, such as citrus greening, and saw that cooperation could lead to faster eradication.

USDA has made a collection of photos from the visit, like the one above, available on Flickr.com/USDAgov. I encourage those interested in Cuba’s food, agriculture, and community to take a glance at all that we saw and accomplished last week.

Expanding markets for American agriculture has been a priority for this Administration, and relationships like the one we are building with Cuba are crucial to continuing the momentum we have seen over the past six years. USDA will continue to work with commodity groups and U.S. businesses interested in exporting to Cuba, building on the common ground that we share in agricultural interests with this neighboring country.

From USCTEC To USDA/DOC & USDA/DOC To USCTEC
December 2015

The USDA refused for more than one (1) month to provide the names and titles of the USDA employees who accompanied Secretary Vilsack on the November 2015 visit to the Republic of Cuba.  The request was adjudicated by the FOIA office at the USDA.  The USDA has never responded to the following question:

What was the statutory and/or policy reason(s) that the Secretary was not accompanied by representatives of United States-based companies?

In October 2015, the United States Department of Commerce (DOC) responded to the same question.  The Honorable Penny Pritzker, United States Secretary of Commerce, was prohibited from being accompanied by representatives of United States companies during her October 2015 visit to the Republic of Cuba due to provisions of the TSREEA.  The DOC also refused for months to provide the names and titles of the DOT employees who accompanies Secretary Pritzker to the Republic of Cuba.

In January 2016, The Honorable Thomas Wheeler, Chairman of the Federal Communications Commission (FCC) visited the Republic of Cuba and members of the official delegation included representatives of United States-based companies and one United States-based subsidiary of a Europe-based company.  By its action, the United States Department of State (which led the delegation) rendered the positions of the USDA and the DOC as baseless.  However, from the perspective of the USDA and DOC, the United States Department of State was violating United States law.

Chairman Wheeler’s Statement
January 2016

Last week, I had the privilege of participating in bilateral talks with the Cuban government focused on how we can work with Cuba to increase connectivity between our two countries, as well as within Cuba.  We discussed ideas for opening more direct communications links with Cuba, and we got a better sense of Cuba’s Internet and communications connectivity needs. We also met with representatives of the small but growing entrepreneurial community that is hungry for network connectivity.

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.

The Cubans we met were proud people who recognize the benefits new telecommunications networks can bring to education, health care and economic growth. Our message was simple: we want to help (already, for instance, two companies have roaming agreements with the state-owned telecom provider). We spoke about a new undersea cable connecting our countries, commercial relations for equipment and service providers, as well as an ongoing regulatory dialog.

We at the FCC have contributed to efforts to improve connectivity between the United States and Cuba, and within Cuba, by removing Cuba from the Commission’s Exclusion List for International Section 214 Authorizations.  By removing Cuba from this list, the Commission opened the door for U.S. telecom carriers to provide facilities-based voice and data service to Cuba without separate approval from the Commission.  This should lead to increased competition on the U.S.-Cuba route.   We are also working on removing certain non-discrimination requirements on the U.S.-Cuba route, which would give U.S. carriers more flexibility to negotiate rates with the state-owned telecommunications operator and to respond to market forces.

Cuba remains one of the least digitally connected countries in our hemisphere. They talk about upgrading to DSL and 3G wireless. We urged them to leapfrog such linear transitions and expand to state-of-the-art services. We pledged our support and the support of U.S. companies to achieve this. It is unclear, however, just how anxious the Cuban government is to open up expanded network capabilities.  

I enjoyed my visit to Cuba and came away from it with a newfound understanding of both the opportunities and challenges facing Cuba in terms of communications technology and access.  I am grateful to Ambassador Sepulveda for his unstinting leadership, to our Cuban hosts for their warm hospitality, and to our agency and private sector partners for helping to make the trip a success.

August 2016
United States Department of Transportation (DOT)

In August 2016, The Honorable Anthony Foxx, United States Secretary of Transportation, traveled aboard a [Long Island City, New York-based] JetBlue Airways aircraft on an inaugural flight from Fort Lauderdale, Florida, to Santa Clara, Republic of Cuba.  The United States Department of Transportation (DOT) believed that no statutory prohibition existed relating to promoting commercial activities of a United States-based company.  Secretary Foxx returned to the United States aboard an aircraft owned by the United States government.  The approximate cost to United States taxpayers?  Approximately US$70,000.00.  Thus, the DOT believed that no statutes prohibited the DOT from using taxpayer funds to promote the activities of United States companies, including the highly visible role of landing in the Republic of Cuba aboard an aircraft owned by a United States-based company.  The DOC and USDA would suggest that this activity was unlawful.

“U.S. Transportation Secretary Foxx Arrives in Cuba on First Scheduled Flight in Over 50 Years: DOT Announces Final Selection of U.S. Airlines and Cities for New Service to Havana

HAVANA – As part of the Obama Administration’s historic effort to normalize relations with Cuba, U.S. Transportation Secretary Anthony Foxx today arrived in Cuba on the first scheduled flight to the island in over 50 years, a JetBlue Airways flight from Fort Lauderdale to Santa Clara.  In addition, the U.S. Department of Transportation (DOT) today finalized its selection of eight U.S. airlines to begin scheduled flights to Havana as early as this fall.”

ECONOMIC EYE ON CUBA©
February 2016
Special Report
Secretaries Pritzker, Vilsack & Lobbying Group… State Department Violates US Law

Based Upon 2016 Actions by State Department, Representatives of U.S. Companies Could Have Participated in 2015 Visits by Secretaries Pritzker & Vilsack and Benefited from Them

Evolution of Legal Thinking or Political Calculation?

Complete Analysis In PDF Format

Is Visiting Cuba Becoming A Costume Party For Some U.S. Executives?

Representatives of United States companies- along with their consultants and representatives of commerce-focused organizations, those who are of Cuban-descent and those who are not of Cuban-descent, are increasingly creating a Republic of Cuba-inspired wardrobe for use when visiting the country.

There are arguments for wearing a guayabera and against wearing a guayabera:

For- demonstrates respect for the culture of the Republic of Cuba; “Relax, I’m with you, I understand you, I am your friend… let’s do business.” 

Against- Disrespectful by trivializing, costuming, the apparel worn by those with whom one is negotiating and socializing; believing that by dressing alike, differences will be easier to overcome...  Visitors should not pretend they are citizens... "We're are one of you..." is not demonstrated by apparel.

Seeing United States business representatives, including former United States officials, wearing what may be interpreted as a costume, complete with cigars in the upper pockets, has been questioned from some officials of the government of the Republic of Cuba.

At the hotel preparing to depart for Jose Marti International Airport (HAV), the guayabera is packed neatly in a suitcase, the dress shirt or t-shirt or pullover is worn for the journey home... not forgetting eight bottles of rum and boxes of cigars.

From Wikipedia:

The guayabera (/ɡwaɪ.əˈbɛrə/) is a men's shirt typically distinguished by two vertical rows of closely sewn pleats that run the length of the front and back of the shirt. The shirt is typically worn untucked. Guayaberas are popular in the Caribbean region of Colombia, Mexico, Ecuador, Venezuela, Central America, the Caribbean, Southeast Asia, and throughout Africa. It is also known as a "Wedding Shirt".

The origin of the garment is something of a mystery, thought to be the result of a mixture of Native American and Spanish styles, developed in the late 18th or early 19th centuries. Various claims for the distinctive style have been made, from Mexico to other Latin American countries to the Philippines.

A version of the shirt's origins claims that Mexicans originated it in either the state of Veracruz or the Yucatán Peninsula. One theory holds that it was during the era of trade routes through the Caribbean that the Mexican shirts got to Cuba and were taken to the Philippines by the Spaniards, where the evolution of the intricate embroidery started. Alternatively, others speculate that the shirt, which has documented origins in the Philippines prior to the arrival of the Spanish, made its way to Cuba through Mexico via the Manila-Acapulco galleon trade. The origin of the Guayabera shirt remains a mystery, and a similar prototypical shirt has existed since the 18th century, probably imported from Spain.

Guayabera may come from a Cuban legend that tells of a poor countryside seamstress sewing large patch-pockets onto her husband's shirts for carrying guava (guayaberas) from the field.  Guayabera may also have originated from the word yayabero, the singular nickname for those who lived near the Yayabo River in Cuba.

Others claim the origin to be from Baní, Dominican Republic, also for the harvesting of guayaba fruit in the region. This theory explains the movement to Cuba, through Máximo Gómez, which used this type of shirt.

Delayed From 2017 To 2018, Unilever Begins Construction Of US$35 Million Facility In ZEDM

Although production will be delayed by one year, from 2017 to 2018, Unilever's US$35 million majority-owned joint venture has commenced construction within the Mariel Special Development Zone (ZEDM) near the city of Havana, Republic of Cuba.  See 5 November 2016 article and 22 January 2016 media release:

ThomsonReuters
Havana, Republic of Cuba
5 November 2016

By Sarah Marsh | HAVANA

Communist-ruled Cuba and global consumer products company Unilever Plc (ULVR.L) on Friday started work on their new $35 million soap and toothpaste factory, a joint venture in the Mariel special development zone west of Havana.

The factory, due to begin production in 2018, reflects a surge of investor interest in Cuba since President Raul Castro took over from his brother Fidel in 2008 and started on a path of structural reform to update the centrally-planned economy.

Among the reforms were a new foreign investment law and creation of the Mariel zone, which offers companies significant tax and customs breaks and is centered around a giant container terminal.

"Our (planned) new and sustainable installations demonstrate our commitment to invest in the long-term growth of the Cuban economy," Unilever Chief Executive Officer Paul Polman said at a ceremony in Mariel, where he and Cuban Industry Minister Salvador Pardo laid the first slab for the factory's foundation.

Unilever (UNc.AS) (ULVR.L) had announced its joint venture with Cuban state company Intersuchel S.A, which will be called Unilever-Suchel SA, last January.

The factory, which will make products such as Sedal shampoo, Rexona deodorant, Omo detergent, Lux soap and Close-Up toothpaste, marks a symbolic return of the Dutch-British company to the island.

Unilever was one of the first companies to establish a venture in Cuba once it allowed some Western investment in the 1990s after the fall of former benefactor the Soviet Union.

It left in 2012 over a dispute over who would have the controlling interest in a joint venture. Now it will have a 60 percent stake, with Intersuchel SA holding 40 percent.

At the time of the dispute, Cuba had preferred that the state hold a majority stake in joint ventures with foreign companies, but Cuba has since become more flexible and investor-friendly.

"We are witnesses to the start of a new phase," Polman said.

Unilever is the best known company to have so far received approval to operate at Mariel. Cuba has given the green light to 19 business proposals in total, some joint ventures, other Cuban or 100 percent foreign-owned.

Many are still in the early stages of planning or construction and the zone, which covers the 180 square miles (466 square km), looked deserted on Friday, a largely empty, wind-swept, sandy area by Mariel Bay.

Unilever plc
London, United Kingdom
22 January 2016

Unilever and Intersuchel agree $35 million Cuban joint venture

Unilever is to invest in Mariel, Cuba’s Special Development Zone. Partnering with state-owned company Intersuchel, we will build a $35 million homecare factory to open in 2017.

Cuba has a new overseas investor in its Mariel Special Development Zone and a new joint venture to celebrate.

Unilever and state-owned firm Intersuchel have signed a deal which will see the formation of a new company, Unilever-Suchel S.A. and a $35 million investment (equivalent to €32.3 million) in a personal and homecare factory which is set to open in 2017.

The factory will manufacture some of our top-selling personal and homecare international brands, including Sedal shampoo, Rexona deodorant, Omo detergent, Lux soap and Close-Up toothpaste. Unilever will take a 60% stake in the venture, and Intersuchel will hold 40%. The factory is expected to generate 300 direct jobs.

Unilever will invest in Mariel’s Special Development Zone, which allows foreign and domestic companies to trade and invest with fewer regulations and is designed to encourage overseas investment.

The signing ceremony for the joint venture was attended by Dutch Foreign Trade Minister Lilianne Ploumen, Ana Teresa Igarza, General Director of the Mariel Special Development Zone, Fabio Prado, President of Unilever Mexico & Greater Caribbean and Pedro Fraga, President of Intersuchel S.A.

Since 2011 Cuba has been gradually opening up its economy to outside investment to attract foreign capital and generate new jobs. Ploumen told reporters attending the event that she hoped Unilever would be the first of many Dutch companies to come and invest in Cuba.

Unilever’s Fabio Prado added: “We’re very enthusiastic about this approval, which will allow us to strengthen our leadership position in strategic regions, in order to develop home and personal care products that are always aligned with Unilever's Sustainable Living Plan."

Updated: After One-Year, Cuba Rejects Alabama-Based Cleber LLC Tractor Assembly Proposal

Updated From 1 November 2016.....

As of 8 November 2016, neither The White House, United States Department of Commerce, United States Department of State, United States Department of the Treasury or United States Department of Agriculture have, despite requests, issued a statement relating to the rejection of Cleber LLC.

The first proposal from a United States-based company to assemble tractors at a leased warehouse located in the Mariel Special Development Zone (ZEDM) using parts manufactured in the United States and then exported from the United States to the Republic of Cuba has been rejected (28 October 2016) after one year of discussion and negotiation, including the use of the full 180-days of formal evaluation as mandated by ZEDM proposal regulations.  

Cleber LLC has been advised to seek commercial export opportunities- delivering assembled tractors (US$8,000.00 to US$12,000.00) from the United States to the Republic of Cuba.

Reportedly, the government of the Republic of Cuba shared that it preferred technologically-advanced products to be assembled/manufactured in the ZEDM.  However, the government of the Republic of Cuba knew the technological limitations of the Cleber LLC-designed tractor more than one year ago; those technological limitations did not change during that time.

Projects thus far approved for the ZEDM include photovoltaic solar farms, radial tires, aluminum cans, air conditioning equipment, light automobiles, valves for pressure bodies, glass bottles for beverages, glassware items, medical items (expendable), engineering and technological projects company, soy processing, instant dry yeast, monoclonal antibodies, biodrugs to treat cancer and other chronic diseases, oral biodrugs, blood-based products plant, enteral medications (tablets, caplets and capsules), injectible cephalosporins and carbapenemas, and oral penicillin-based antibiotics, auxiliary services, and biomaterial plant joint venture.

Also possible that larger, United States-based and non-United States-based equipment manufacturers advocated against the proposal by Cleber LLC for competitive reasons.
 
Paint Rock, Alabama-based Cleber LLC (www.cleberllc.com) had authorization from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury and the Bureau of Industry and Security (BIS) of the United States Department of Commerce to create a tractor warehouse/assembly facility in the ZEDM located near the city of Havana, Republic of Cuba.  

The first year investment US$1.8 million (which had been obtained according to the company); with total investment valued at US$5 million.

Cleber LLC was one of only two United States-based companies that had been public with efforts to establish a physical presence in the Republic of Cuba where the focus was not related to hospitality: 1) an assembly facility (Cleber LLC) and 2) distribution facility (Florida Produce of Hillsborough County) in the Republic of Cuba.  The proposal for the distribution facility was not approved; and in July 2016 Republic of Cuba government-operated Cimex established a warehouse-style operation, but without wholesale prices:

http://www.cubatrade.org/blog/2016/7/16/cuba-opens-zona-store-a-sort-of-wholesale-version-of-costco-sams-club-florida-company-proposal-seems-finished?rq=Florida%20Produce%20of%20Hillsborough%20County

Reasons for the rejection may also include:

1) The government of the Republic of Cuba believes confident that with grants, loans, restructuring of existing obligations, energy-focused project announcements, revenues from visitors- United States and other countries, the government will have the ability to maintain its resistance to meaningful commercial and economic engagement with United States-based companies.

2) Cleber LLC required that the government of the Republic of Cuba take too many ideological steps and commercial risks.  Steps-  Cleber LLC would be perceived that the Republic of Cuba is accepting of current United States statutes, regulations and policies; that they have surrendered; highly-visible individual of Cuban descent, Saul Berenthal, may have been too combustible an optic.... Risks- Cuba is importing agricultural equipment from India, Japan, China, Belarus, France, etc., where the governments of those countries are providing financing and/or financing guarantees, so the Cleber LLC product would have likely faced substantial and potentially crippling competitive issues.

3) The interest by, and media focus upon Cleber LLC served a purpose for the government of the Republic of Cuba to entice (through a year-plus narrative) United States-based companies and non-United States-based companies to focus upon commercial potentialities in the Republic of Cuba.  Cleber LLC was perceived as a lure.

China Companies Expanding Trade With Cuba- Long Term Financing Is The Reason

HAVANA, Nov. 3 (Xinhua) -- More than 60 Chinese companies are present this week at the 34th Havana International Trade Fair to boost trade with Cuba.

The Chinese pavilion at ExpoCuba, a site on the outskirts of Havana, has attracted the attention of thousands of companies and entrepreneurs from all over the world.

Hosted by the China Council for the Promotion of International Trade, Beijing's pavilion is a sign of the diverse economic relations with Cuba and it will provide advanced technology, first-class equipment and infrastructure to the island.

One of those companies is Midea, one of China's leading home appliance manufacturers, which has been in Cuba for 7 years.

"We have just started selling fans in the Cuban market. In 2013, we introduced other products like air conditioning, refrigerators and rice cookers, which have made a positive impact on the Cuban market," Gu Junqiu, Midea's manager in Cuba, told Xinhua.

Gu said that the Chinese firm and Cuba's CIMEX, the island's largest commercial corporation, recently opened a joint store to sell Midea's products. So far,their sales performance has been very good.

"We will continue cooperating with Cuban companies to introduce other products in this changing market and build a post-sales system for providing spare parts and quality service," he said.

Another popular Chinese company in Cuba is Geely Automotive, which has sold over 15,000 cars on the island since 2008, mainly for the tourism industry. Several models of the Chinese-made vehicles, which can be seen at car rental spots, are also popular among locals.

"Since the first year we entered the Cuban market, we have been successful. We will continue to provide our buyers in this country with high-quality cars which are already very well known here," Du Shaokui, one of Geely's representatives in Cuba, told Xinhua.

One of the latest technological products entering the Cuban market is the high-definition (HD) TV decoder, which is sold by the Chinese company Soyea.

Over 500,000 decoders have been sold by Soyea in Cuba in the last two years along with over 20,000 TVs, making it one of the most widespread brands on the island.

"We are about to introduce new products in the Cuban market such as Ultra HD TVs and new decoders. We are also in discussions with Cuban authorities to set up a factory on the island," said Zhao Jianhua, Soyea's general manager.

Zhao also said the Cuban market is new for Soyea but it shows great potential for development. "Cuba's geographical position is also very strategic to introduce our products in nearby markets, particularly Caribbean nations," he said.

China is Cuba's second-largest trading partner behind Venezuela.Numerous Chinese companies are involved in multiple areas of this nation's economy and development, particularly in technology, transportation, biotechnology, agricultural machinery, household appliances and textiles.

For that reason, the Cuban government has named China as a great partner in the process of updating the country's economic and social model.

Cuba Receives 10-Year Financing For US$35 Million Port Dredger From Royal IHC Of The Netherlands

News [edited] first published by Royal IHC on 05 June 2016

Kinderdijk, The Netherlands-based Royal IHC (IHC) (2015 revenues exceeded US$1.277 billion) has recently implemented a contract first signed in June 2015 for an Easydredge® 3,700- the largest of its range of trailing suction hopper dredger (TSHD) valued at approximately US$35 million for Tecnoimport and Empresa Constructora de Obras Marítimas in Havana, Cuba.

Financing for the vessel is from a government agency based in The Netherlands; payment terms of ten (10) years with twenty percent (20%) down payment and first payment due within six (6) months of signing of the contract.  Unknown is where the vessel will be built.

The contract was signed in the presence of Mr Mark Rutte, Prime Minister of The Netherlands and Mr Ricardo Cabrisas Ruiz, Vice President of the Council of Ministers and Executive Committee of Cuba.

The 3,700m3 vessel is the largest in the series of standardized Easydredge® twin-screw TSHDs, designed and built by IHC. In addition to the standard features the vessel will be upgraded with options such as: larger crew accommodation and increased autonomy; a booster pump, which enhances shore-pumping capacities to more than 4km; and a dynamic positioning system that will help to navigate through narrow passages to protect the coral reefs around the Cuban coast.

Physical properties

Length (OA): 92.95 m
Length (BP): 91 m
Width: 16.5 m
Depth: 6.7 m
Draft (loaded): 6.2 m
speed: 12 knts
Hopper volume: 3700 m³
Dredging depth: 50 m
Suction pipe diameter: 0.6 m

An extensive training programme will also enable the customer to open up the full potential of the vessel. It will amongst others be deployed for maintenance works and beach nourishment projects, which are fundamental for stimulating further investment in the Cuban tourism industry.

“The confirmation of this order once again shows that our focus on building standardized TSHDs with proven technology appeals to the market, and by ensuring a short delivery time, we met our customer’s requirements,” said Mr Bram Roelse, CEO IHC. “IHC is proud and honoured to contribute to the further growth of the Cuban economy.”

Due for delivery in late 2017 or early 2018, the new vessel will work alongside the 1981 IHC-built split hopper vessel QUALITY STAR, which was originally named GAMMA BAY.

It has yet to be decided whether the training crew will sail the vessel to Cuba.

The Easydredge® is a product line of standardized TSHDs with a hopper capacity of 1,600, 2,700 or 3,700m3, and can be upgraded via options. This allows the vessel to grow with the business and ensures it remains the right tool for the right job. For more information see www.easydredge.com.

5 June 2016 Media Release Text In PDF Format

Artist Rendering