Russia & China Providing Substantial (And Long-Term) Financing For Vehicle Purchases

HAVANA, January 20. /TASS/. Russian carmaker Avtovaz delivered 344 Lada cars to Cuba, completing the first shipment of Russian cars to the island nation in more than a decade.

A cargo vessel, carrying 320 Lada Vesta and 24 Lada Largus Cross cars, docked at the port of Havana on Friday. All cars will be handed over to the state-run taxi company Taxis Cuba and are painted in bright orange.

"We have carried out an eight-month test run of several Lada cars. They made a good impression, so we were looking forward to this delivery," Taxis Cuba director general Gorge Luis Dias Hernandez has told TASS.

Avtovaz President Nicolas Maure said earlier that the automaker would train Cuban specialists to provide after-sale services. Cuba is a priority market for car exports, Maure said, and Avtovaz hopes to export Ladas in the coming years "with an increase in amounts."

According to the company, the delivery of cars to Cuba is carried out with the assistance of Vnesheconombank, which provided financing, as well as the Russian Export Center.  The previous batch of Avtovaz cars arrived in Cuba 12 years ago.

China, key partner in Cuba's tourism development
2018-01-20
Xinhua

As Cuba's leading trade partner, China has become a key driver of tourism development in the Caribbean island nation.

With investments exceeding 700 million U.S. dollars and an increasing presence of Chinese goods and know-how, China is helping Cuba promote its tourism industry.

"Every day we want to use more Chinese products and technologies in the tourism sector," Jose Daniel Alonso, director of development and investment at Cuba's tourism ministry, told Xinhua in a recent interview.

The tourism sector's potential for growth and capability to generate much-needed foreign revenue makes it a development priority. Local authorities are seeking reliable investors to enhance resorts' infrastructure as well as expand hotel capacity and recreational options.

At local car rental agencies catering to foreign visitors, Chinese car brands of GAC Motor, Geely, BYD, BAIC and Maxus represent 65 percent of the fleet.

Almost the entire fleet of buses of all dimensions are supplied by Chinese companies, mainly Yutong and King Long.

"In addition to the buses and rental vehicles, we have bought air conditioners for rooms in many hotels. We are also assessing other goods for the Cuban hotel industry," Alonso said.

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Russia Receives Level 3 ("Reconsider Travel"); Same As Cuba

16 January 2018

The Department of State has launched new Travel Advisories and Alerts to make it easier for U.S. citizens to access clear, timely, and reliable safety and security information about every country in the world. For more details and FAQs about our Travel Advisories and Alerts, please see travel.state.gov/travelsafely. You are receiving this because you are enrolled in our Smart Traveler Enrollment Program (STEP). You do not need to take further action to continue receiving these updates. Before any travel abroad, we encourage you to check our safety and security information for your destination at travel.state.gov/destination.

Russia, Level 3: Reconsider travel

Reconsider travel to Russia due to terrorism and harassment. Some areas have increased risk. Read the entire Travel Advisory

Do not travel to:

The north Caucasus, including Chechnya and Mount Elbrus, due to civil unrest and terrorism.
Crimea due to foreign occupation and abuses by occupying authorities.

Terrorist groups continue plotting possible attacks in Russia. Terrorists may attack with little or no warning, targeting tourist locations, transportation hubs, markets/shopping malls, and local government facilities. Bomb threats against public venues are common.

U.S. citizens are often victims of harassment, mistreatment, and extortion by law-enforcement and other officials. U.S. consular assistance to detained individuals is often unreasonably delayed by Russian officials. Russia also enforces special restrictions on dual U.S.-Russian nationals. Due to the Russian government-imposed reduction on U.S. diplomatic personnel in Russia, the U.S. government has reduced ability to provide services to U.S. citizens.

Read the Safety and Security section on the country information page.

If you decide to travel to Russia:

Avoid demonstrations.
Monitor local media for breaking events and adjust your plans based on news information.
Stay alert in locations frequented by Westerners.
Have travel documents up to date and easily accessible.
Visit our website for Travel to High-Risk Areas.
Enroll in the Smart Traveler Enrollment Program (STEP) to receive Alerts and make it easier to locate you in an emergency.
Follow the Department of State on Facebook and Twitter.
Review the Crime and Safety Reports for Russia.
U.S. citizens who travel abroad should always have a contingency plan for emergency situations. Review the Traveler's Checklist.

North Caucasus (including Chechnya and Mount Elbrus)

Civil unrest and terrorist attacks continue throughout the North Caucasus region including in Chechnya, North Ossetia, Ingushetia, Dagestan, Stavropol, Karachayevo-Cherkessiya, and Kabardino-Balkariya. Local gangs have kidnapped U.S. citizens and other foreigners for ransom. There have been credible reports of arrest, torture, and extrajudicial killing of gay men in Chechnya allegedly conducted by Chechen regional authorities.

Do not attempt to climb Mount Elbrus, as travelers must pass close to volatile and insecure areas of the North Caucasus region.

The U.S. government is unable to provide emergency services to U.S. citizens traveling in the North Caucasus region, including Mount Elbrus, as U.S. government employees are prohibited from traveling to the region.

Crimea

There is extensive Russian Federation military presence in Crimea. The Russian Federation is likely to take further military actions in Crimea as part of its occupation of this part of Ukraine. The international community, including the United States and Ukraine, does not recognize Russia's purported annexation of Crimea. There are continuing abuses against foreigners and the local population by theoccupation authorities in Crimea, particularly against those who are seen as challenging their authority on the peninsula.

The U.S. government is unable to provide emergency services to U.S. citizens traveling in Crimea as U.S. government employees are prohibited from traveling to Crimea.

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US Exports To Cuba Increase 101%; More Than US$700,000.00 In Agricultural Equipment

ECONOMIC EYE ON CUBA©
January 2018

November 2017 Food/Ag Exports To Cuba Increased 101%- 1
2017 Exports Will Exceed 2016 Exports- 2
Healthcare Product Exports US$246,735.00- 2
Humanitarian Donations US$883,776.00- 2
Obama Administration Initiatives Exports Substantially Increase- 3
John Deere Exports 86 Metric Tons Of Equipment Valued At US$755,823.00- 3
U.S. Port Export Data- 14
Speaking Schedule- 16

OBAMA ADMINISTRATION INITIATIVES EXPORTS SUBSTANTIALLY INCREASE- In 2015 and in 2016, the OFAC and BIS expanded the list of products authorized for export from the United States and from third countries of the Republic of Cuba with a focus upon products (non-durable, durable and consumable) to entities not affiliated with the government of the Republic of Cuba; the government of the Republic of Cuba has generally prohibited these exports.  The one United States company with two hotel management contracts, the five United States airlines servicing United States-Republic of Cuba routes, and the two United States companies with agricultural equipment distribution centers have (are) also imported equipment.

In November 2017, US$921,996.00 in products for use at the hotels, for the airlines and at the agricultural product distribution centers (US$755,823.00 of the total) were exported to the Republic of Cuba.    

January 2017 through November 2017 exports were US$248,703,676.00.  Exports for 2016 were US$232,064,645.00.

LINK TO COMPLETE REPORT

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U.S. & Cuba Hold Technical Meeting About Cyber Security/Cyber Crimes

UNITED STATES, January 12, 2018.- Cuban and US authorities held a technical meeting in Washington D.C. on cooperation in cybersecurity and the combat against cybercrimes. This meeting falls within the context of the law enforcement dialogue, which was established by both parties in November 2015.

The meeting was held in an ambiance of respect and professionalism. The Cuban delegation was composed of representatives of the ministries of the Interior, Communications and Foreign Affairs while the US delegation was composed of officials of the departments of Homeland Security, Justice and State.

The delegations of both countries shared the view on the importance to advance cooperation in this area and agreed to continue holding these technical meetings in the future. (Cubaminrex)

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Cuba Receives Level 3 ("Reconsider Travel) Advisory; Not Level 4 ("Do Not Travel")

LINK TO Level 3 Travel Advisory

LINK TO Description Of Travel Advisories

Special Briefing

Michelle Bernier-Toth, Bureau of Consular Affairs Acting Deputy Assistant Secretary For Overseas Citizens Services

Via Teleconference (10 January 2018)

MR GREENAN: Thank you. Good morning, everyone, and thank you all for joining us this morning for an on-the-record with Bureau of Consular Affairs Acting Deputy Assistant Secretary for Overseas Citizen Services Michelle Bernier-Toth. She’s going to talk to us this morning about the launch of the department’s new Travel Advisories. So I’ll turn it over now to Michelle.

MS BERNIER-TOTH: Thank you, Robert. Good morning, everybody, and thank you for joining us. This is, in our world, a very exciting day. As Robert said, we are launching our new travel advisory program. This is a revamping of our Consular Information Program – which, as you all know, because you follow these things, is the cornerstone of our efforts to keep U.S. citizens safe while they travel or live abroad. The purpose of the Consular Information Program does not change. It’s again, to provide information to people to make timely decisions about their travel plans and their activities while they’re overseas.

But over the years, we’ve come to recognize that sometimes our various documents were not readily understood. And frankly, I personally was tired of explaining the difference between a Travel Warning and a Travel Alert even to some of my colleagues. So about a year ago we began a very intensive analysis of our Consular Information Program and all the Travel Warnings, the Travel Alerts, how we conveyed information to the public, and we realized we needed to do a couple of things.

First, we needed to make it more accessible to people. And that’s why in November we went to a mobile-friendly design for our website. We also needed to make sure that the information was more easily understood, putting it into plain language, making it clearer why we were ranking countries, why we were citing them as a threat or a risk, and making that very obvious to people. And finally, making the information more actionable. We often got questions from people saying, “Well, I’ve read your Travel Warning, but what does it mean? What am I supposed to do?”

So in the new Travel Advisories, we’ve done away with Travel Warnings and Travel Alerts. We’ve done away with emergency and security messages – because, again, that was something that people didn’t always understand the difference – and we have gone to a Travel Advisory for every country, including Antarctica. And within that Travel Advisory, we have gone to a four-level ranking system, starting with a Level 1, which is “Exercise normal precautions.” Level 2 is “Exercise increased caution,” Level 3 is “Reconsider travel,” and level four is “Do not travel.”

And for each country that has a Level 2 or above, we will specify what we think those risks or threats are, why is it that we’re telling people to consider – reconsider travel or to exercise caution or not to travel at all. And those risks and conditions and circumstances are going to be very clearly spelled out with icons – C for crime, T for terrorism, U for civil unrest, H for health issues, N for natural disasters, E for time-limited events such as elections or major sporting events, and O for other, which is our catch-all for the things that don’t fit into those other categories. So it’s going to be very obvious.

We have interactive maps that you can look at and sort of see where things are. The new Travel Advisories will continue to provide what we used to call the country-specific information about things like entry requirements, special circumstances, health issues perhaps, road safety issues and things like that. That’s still all there, but again, it’s laid out in a format that is much more readily accessible, much more easily understandable, and I think far more actionable than our old Travel Warnings, Travel Alerts, and other documents.

So with that, I will stop and take questions.

MR GREENAN: Thank you very much. We’ll now go to our first question.

OPERATOR: And ladies and gentlemen, just a quick reminder, if you do have a question, please press *1 at any time. And we’ll go to Arshad Mohammed with Reuters. Please, go ahead.

QUESTION: Good morning. Thank you very much for doing this and for doing it on the record. I have looked quickly at the excellent and interesting interactive map on your website. Two questions, or three questions. One, do you have anywhere on the website a list that segregates countries that are given a ranking of four – “do not travel” – ranked three, two and one, so that we can see all of those as a group? If you don’t have that, I, just quickly looking at it, have counted about 10 countries that I see that are “do not travel”: Afghanistan, Central African Republic, Iraq, Iran, Libya, Mali, North Korea, Somalia, South Sudan, Syria, and Yemen. Have I gotten all the countries that you advised U.S. citizens not to travel with – not to travel to, or have I missed any?

And then finally, can you explain to us whether – it’s my memory that the U.S. Government does not have the ability to bar U.S. citizens from traveling to countries, but can you please explain to me whether that is correct or not, whether you can, for example, say that a U.S. passport is not valid for travel to country X or Y or Z? Although I suppose the – an individual could use another passport or try to travel to that country without a passport.

MS BERNIER-TOTH: Those are excellent questions. No, we don’t have a space – a place where we separate countries by their – order of their ranking. That’s something that’s of interest, I think. I didn’t catch all the countries that you listed as a Level 4, “Do not travel.” It sounds pretty good. Basically, these are the countries where, under the previous Travel Warnings, we already recommended people not to go to them, places like Somalia, places like Afghanistan, Syria, Iraq. So I’d have to go back and check that list.

But essentially how we assess the threat level in a country hasn’t changed. There’s still a collaborative process that involves our security experts, the intel community, host governments, our embassies and consulates, the information that we – they feed into us that we then assess and determine how we are going to rank a country. That really hasn’t changed. It’s how we describe those conditions and set those levels that has changed.

And you’re absolutely right, we cannot prevent people from traveling to a country. The “do not travel” is our recommendation. But if you read through sort of what the language says behind that, you recognize that, yes, we can’t prevent you from traveling. The exception, though, as I’m sure many of you have – all of you know is that we do have a general travel restriction on the use of a U.S. passport for North Korea. That means that if you – American citizens who wish to travel to North Korea must apply for a one-time waiver and provide justification as to why they need to go, and there’s certain criteria that would allow us then to grant those waivers. That is the only country where we specifically say you cannot use your U.S. passport to travel to, North Korea. And as you say, people could use other documents. That would be their choice. But we want to warn them that there are risks involved in traveling to North Korea, and we have made that clear through the GTR.

MR GREENAN: Okay, thank you. Next question, please.

OPERATOR: And we’ll go to Nora Gamez with The Miami Herald. Please, go ahead.

QUESTION: Hi. Good morning, and thank you for doing this. I just checked the Cuba Travel Warning. The previous warning was “do not travel,” and now Cuba is a Level 3. So have the circumstances in Cuba changed? Why the change in classification?

MS BERNIER-TOTH: Yeah. Again, as we were putting all this together, we did a very careful assessment. We talked to all of our experts, and this is where we came out on Cuba. Whenever we – as you all know, we have significantly reduced our staffing at our embassy in Havana. Whenever we do that, traditionally we have always issued a Travel Warning, and that has not changed. This is reflected now in the Level 3 ranking that we’ve given to Cuba.

MR GREENAN: All right, thank you. Next question, please.

OPERATOR: And we’ll go to Laura Koran with CNN. Please, go ahead.

QUESTION: Hi, thanks so much for doing the call and again for making it on the record. Can you tell me what sort of communications the department has had with foreign governments in advance of this release to advise them on their tier ranking, particularly at those upper levels, tiers three and four? And even though you and your colleagues have said that these rankings are based on security conditions, are you concerned about any pushback or retaliation from countries that don’t agree with their rankings?

MS BERNIER-TOTH: An excellent question. Yes. Where we have given our – we gave our embassies authority to provide their host governments with an advance copy of the final Travel Advisory for their country if they thought that that was important to the host government. By and large, I think there have been no surprises. Again, a country that was previously a “do not travel” sort of ranking is not going to be surprised that we’ve put them at a Level 4. But again, it’s – we did brief various host governments in advance. They – we do not give host foreign governments the ability to change the language. These are not political documents; these are simply based on our assessment of the security situation and what we need to tell U.S. citizens who might be traveling or living in that country.

MR GREENAN: Thank you. Next question, please.

OPERATOR: And we’ll go to Josh Lederman with the Associated Press. Please, go ahead.

QUESTION: Hey, thanks for doing this, and like Arshad said, thanks for doing it on the record. I wasn’t sure I understood the answer to the earlier question on the – on the – Cuba. Regardless of sort of how one previous system transits to the next, I mean, the content of it – like, before you were telling Americans don’t go to Cuba; now you’re putting them at a level where you’re saying something short of that. So can you just be real specific: Have you changed your assessment since the most recent Travel Warning about Cuba about the safety of traveling there? Is this less of a threat level than it was in the previous iteration? Thanks.

MS BERNIER-TOTH: So this was – again, we routinely review our previous Travel Warnings. We will continue to review our Travel Advisories on a regular basis, either because – the Levels 1 and 2 will be reviewed every year, if not more frequently, depending on circumstances. Levels 3 and 4 we review every six months just as we did Travel Warnings. In the process of that review, we will look very carefully and we wanted to make sure that we were being consistent across the globe as to how we were assessing and ranking countries, and I think that’s where we had that change in Cuba. It was looking at it very closely to say what is the situation on the ground right now and how are we going to describe that.

The fact of the matter, though, too, is that we have a very small footprint in our embassy in Havana. We have very, very limited consular resources and our ability to help people in an emergency is extremely limited. So that’s another factor that plays into it.

MR GREENAN: Thank you. Next question, please.

OPERATOR: And we’ll go to Dave Clark with AFP. Please, go ahead.

QUESTION: Hi. A practical question for the journalists on the call. In the future, if following a review or following an incident you change a country’s ranking up or down, will you issue a statement to that effect to us or will we just have to check this website every day?

MS BERNIER-TOTH: Certain aspects of our information program don’t change. When we – when we change – and I should note first, I mentioned earlier the security and emergency messages. We’re doing away with those as well. Instead, we will be issuing alerts. They might be a demonstration alert, a hurricane alert, a terrorist incident alert, but they will be alerts. Those will continue to go out through our Smart Traveler Enrollment Program as well as be posted to the website. So if you’re enrolled in our Smart Traveler Enrollment Program, you are going to get those messages, as well as updates and changes to the Travel Advisories.

MR GREENAN: Thank you, and we’ll go to the next question, please.

OPERATOR: That will be Mark Laiosa with WBAI FM. Please, go ahead.

QUESTION: Good morning. Thank you for taking this on the record. Will the real-time updates for critical areas be posted simultaneously, mobile and online? And also – follow-up – how often will you assess the countries’ statuses?

MS BERNIER-TOTH: Okay. Thank you for that. Yes. I mean, the – when we update to the website, it’s updated – we push out over the STEP program as well. That sort of happens at the same time. And again, as I mentioned earlier, Level 1 and 2 countries, we review those every year, at least on an annual basis, unless something happens that prompts us to review it more frequently. There might be a change in circumstances, there might be a new threat, something like that that would cause us to re-evaluate and reassess more frequently. Levels 3 and 4, we continue to review those on schedule every six months, again, unless something happens that prompts us to do it more frequently.

MR GREENAN: Okay. Take the next question, please.

OPERATOR: That will be Dan Peltier with Skift. Please, go ahead.

QUESTION: Hi, thanks. So I know you’ve laid out your case a few minutes ago about why you’re changing the system and doing away with warnings, but just from my point of view and a lot of people I know, I mean, when a warning was issued in the past, that was very explicit that it’s probably not safe to travel somewhere, whereas an advisory might not be safe to travel to some parts of the country but other parts are perfectly safe. So I’m just wondering if you’re kind of – some people it might be more complicated, and I know you’re trying to make it more simple, but seems like you’re stirring the pot a little bit more, I don’t know, in terms of throwing out the word “warning.” If there was any – if there’s any concern about that still that’s lingering, that people might have a hard time grasping this at first.

MS BERNIER-TOTH: I think there might be a bit of a learning curve, but I think if you look at the actual advisories – and those countries we’ll say “do not travel,” it’s in red. It’s Level 4. It’s pretty obvious that these are countries that have a high threat level that we want people to be aware of. And this – actually, we’ve looked at other – how other countries handle their travel information as well, and this tracks to a degree with them, although in ours I think we have a little bit more detail in terms of what those risk or threat conditions are that are very clearly indicated. So I think people will find it easier to understand than our old Travel Warnings, and again, people often did not understand the difference between a Travel Alert and a Travel Warning, and we shouldn’t need to spend more time explaining the difference between those two documents than we do explaining what the threat actually is.

MR GREENAN: Thank you. We’ll take the next question, please.

OPERATOR: We’ll go to Nick Wadhams with Bloomberg. Please, go ahead.

QUESTION: Hi, thanks very much. Just two questions. One, can you explain why China I guess is the only country on the map so far with the – its advisory status being pending?

And then also, is there any correlation between the advisories you issue here and the change in status for countries and the precautions that will be taken by embassy and consular staff, or do those staff sort of judge security risks or are they advised about security risks based on a different system or protocol?

MS BERNIER-TOTH: Great questions. China is not up simply because of technical issues. It should be up shortly. It’s going to be a Level 2, I can tell you that.

And as far as what advice is given to embassy staff, our entire Consular Information Program is predicated on what we call the “no double standard” policy, and that’s if we have threat information that is – it’s credible, it’s specific, and there’s something we can’t mitigate against, and we provide that information and recommendations on actions to our embassy personnel, we must provide that to the American community. And so that – when you see something that goes up on a Travel Advisory, it’s because we have told our own people very much the same. And as you read through some of the advisories, you’ll see that very clearly spelled out. For example, Mexico – I’m thinking of a couple of them where it’s very specific as to what the restrictions are on U.S. embassy personnel in that country. Again, we can’t tell private Americans what they can – should or should not – what they – we can’t prevent them from doing things, but we want them to know what restrictions we’ve imposed upon ourselves so that if they choose to, they can follow the same guidance.

MR GREENAN: Okay, thank you very much. We’ll take the next question, please.

OPERATOR: And we’ll go to Tomas Regalado with Radio TV Marti. Please, go ahead.

QUESTION: Good morning and thank you very much for taking this call. I have a quick question regarding the Cuba change. My questions are the following: There – I see that there is here on the change it says, obviously, review the crime and safety and also avoid Nacional Hotel – Nacional and Hotel Capri.

My questions are the following: When you go to the travel – the new Travel Advisories, you have C for crime, T for terrorism, CU for civil unrest. The Secretary of State has just asked for a whole new investigation as well as what occurred yesterday with the Senate Foreign Relations. Wouldn’t this be considered, what happened to the diplomats, as a terrorist attack as well? And why wouldn’t T be on there? As well as why the change if diplomats were hurt in this – in these attacks, in these sonic attacks?

MS BERNIER-TOTH: Yeah. I should be clear: There is no change in our assessment of what is going on in Cuba, and I think – to your point, I think there is an – looking at what – there’s an investigation into what happened. We don’t know what happened, so we’re not going to speculate before we have final answers.

MR GREENAN: Okay. Thank you. We’ll take the next question, please.

OPERATOR: We’ll go to Bart Jansen with USA Today. Please, go ahead.

QUESTION: Hello, thanks for holding the call. I wondered when might have been the last of this kind of a major overhaul for this online service.

MS BERNIER-TOTH: This is the first major overhaul in a very long time. I don’t even know when the last one was. We did do some tinkering about 10 years ago with a terminology that we used. As some of you might remember, we used to issue Public Announcements. We did away with those in favor of Travel Alerts. We changed some of our security messaging criteria. But this is the – really the biggest overhaul that we’ve done in a very, very long time.

MR GREENAN: Okay. Thank you. We’ll take the next question, please.

OPERATOR: And we’ll go to Arshad Mohammed with Reuters. Please, go ahead.

QUESTION: Three quick things: Am I correct in understanding that you will continue to issue publicly new Travel Alerts when you make a new decision for authorized or ordered departure at a U.S. embassy?

Second, I still don’t understand – and perhaps it’s that I’m obtuse – the answer on Cuba. I think on October the 3rd, you said do not travel to Cuba, and therefore I don’t understand why you are now saying – why you – why they’re not now in Category 4, particularly since you said that, if I understood you correctly, there had been no changes, that those countries where you had said do not travel previously are now – are now Category 4.

MS BERNIER-TOTH: Thank you for that. So on the authorized and ordered departure, again, our policy does not change there. When an embassy goes to authorized or ordered departure, that automatically puts it into either the Level 3 or Level 4 rankings, which would be the equivalent of an old Travel Warning if it’s not already there. And we will make that information public through the Consular Information Program, through an update to the Travel Advisory and then again – and then through putting out an alert through the STEP program.

On Cuba, I would note if you read further into what the different definitions or explanations of the different levels are, Level 3 is reconsidered travel, but the message behind that is avoid travel due to serious risks. So I think that does not change from where we were on Cuba previously.

QUESTION: Thank you.

MR GREENAN: We have time for one last question.

OPERATOR: And that’ll be Jose Diaz with Reforma. Please, go ahead.

QUESTION: Hello?

OPERATOR: Please, go ahead with your question.

QUESTION: Perfect. Yes, my question is regarding Mexico. I see very detailed information on several regions in Mexico. It goes state by state and then very detailed information. Is Mexico a different case than other countries? I see different levels of warning for each of the different states of Mexico.

MS BERNIER-TOTH: That’s an excellent question. Thank you. This gets back to a point I made earlier about the no double standards. The differentiation between states that you see from Mexico relates to the restrictions that our mission in Mexico imposes upon U.S. Government personnel in the country: where they can go, where they’re not allowed to go, where they can go with very specific security precautions.

We wanted to make sure that the U.S. traveling public was aware of all those restrictions and rules that we impose upon ourself in Mexico. And the Mexico Travel Warning, the previous Travel Warning, had that information. I think it’s much more clearly spelled out here in the new Travel Advisory.

MR GREENAN: Thank you very much. Thank you to everyone for joining us this morning. And a special thanks to Acting Deputy Assistant Secretary for Overseas Citizens Services Michelle Bernier-Toth. This (inaudible) call was on-the-record, so we – hopefully we’ll see some reporting. And we look forward to another call with you in the future.

Thanks so much.

MS BERNIER-TOTH: Thank you.

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U.S. Department Of State Discusses Health Issues Relating To Diplomats In Cuba

Special Briefing

I. Steven (Steve) Goldstein
Under Secretary for Public Diplomacy and Public Affairs

Washington, DC
January 9, 2018

QUESTION: Has the Secretary communicated his decision on whether or not to create a review board to look into Cuba – the Cuban sonic attacks? And with the FBI seemingly not able to confirm what exactly is causing these, has the State Department considered increasing again its diplomatic presence in Havana, as I believe Senator Flake and others may have suggested?

UNDER SECRETARY GOLDSTEIN: We are going to create, as we’ve said previously, an accountability review board, and I would expect that we would have the announcements of the chair and the members of the board available for release within the next week. And the – we still do not have definitive answers on the source or cause of the attacks. The investigation is ongoing. The most recent medically confirmed attack occurred August 21st, 2017. We believe that the Cuban Government has the answer to this and they should be doing more to assist us in bringing this to resolution.

Paco – Francisco Palmieri, who goes in the department as – the assistant secretary[2], he goes by Paco – testified this morning on the Hill, as did our medical doctor and I believe someone from Diplomatic Security, to this matter at 10:00, and we have – we have his testimony if you have not seen it. But we are not much further ahead than we were in finding out why this occurred, and we need to find that out, and we would expect the Cuban Government to help us in that process.

QUESTION: Is there anything specifically you want the Cubans to do that you can say that they’re not doing currently?

UNDER SECRETARY GOLDSTEIN: We believe that the Cuban Government knows what occurred, and so what we’d like them to do is to tell us what occurred so we can ensure this doesn’t happen again. And you asked me a last question about whether people could go back.

QUESTION: Whether the U.S. was considering restoring staff that had been withdrawn.

UNDER SECRETARY GOLDSTEIN: No, we’re not considering restoring staff.

QUESTION: And are you considering pulling out given that the Secretary’s comments quoted about his concerns about the safety of people? If he can’t ensure that people who’d be sent back would be safe, why are you continuing to staff the embassy? Why are you certain --

UNDER SECRETARY GOLDSTEIN: We’re providing extensive medical care to people that need it, and we have also made it clear that if people do not want to serve in that particular embassy, they do not have to.

Abbie.

QUESTION: The chairman of that committee, Marco Rubio, had some harsh words for the State Department regarding how long it took to put the accountability review board in place. Do you have any response to some of his statements that it’s against the law that it took, rather than 60 or 120 days, almost a year to stand that up?

UNDER SECRETARY GOLDSTEIN: Right. Well, I – we have great respect for the senator, and he shares our concern about trying to reach resolution on this matter. It took time to set up the accountability review board because we were hopeful that we would be able to know what occurred. We were – the investigation has taken longer than we anticipated, and – but it is now time to go forward. And again, we would expect the – I would expect the names to be announced over the next several days. I do have the names, I just can’t – I’m not – I want to make sure that the people have been notified.

QUESTION: Just a follow-up on --

UNDER SECRETARY GOLDSTEIN: Yes, sir.

QUESTION: -- Abbie’s question. The senator basically claimed that the State Department had violated the law --

UNDER SECRETARY GOLDSTEIN: Yes.

QUESTION: -- by failing to announce or create this review board back in July, that the – that you had confirmed that people were seriously wounded by March or May, that the law requires if you know that a State Department personnel is seriously wounded, that you create a review board within 60 days or tell Congress why you’re not doing so. That is the clear letter of the law. You did not follow it. That’s what he claims. What is your response to that?

UNDER SECRETARY GOLDSTEIN: Right. We don’t agree with that. The assistant secretary today made clear, and we have said too, that it took us time to get the investigation in place. The investigation is continuing, and we believe that we have the – had the authority to determine when the accountability review board should be set in place. I think let’s not lose focus here. There’s 24 people that had injuries, and those people are receiving treatment, and we’ve had over 20 conversations with the people of Cuba. We’ve – the government investigators have been down four times; they’re going down again within the next few weeks. And so our primary goal at the present time is to find out why this occurred, to prevent it from happening again in Cuba and the embassy of Cuba or in any other place where American citizens are located.

Tell me your name. I’m sorry.

QUESTION: My name is Cristina Artia with the Spanish news wire EFE.

UNDER SECRETARY GOLDSTEIN: Yes.

QUESTION: My question is also on Cuba. I was at the hearing at – Assistant Director for Diplomatic Security Todd Brown said that the State Department is not sure that the attacks suffer – that the attacks are sonic. Do you have any update on this? Because until now, you have been repeating that the attacks was like sonic attacks.

UNDER SECRETARY GOLDSTEIN: No, I don’t believe we used the word – I’d have to check on that. But no, we’re not sure why – what occurred and why it occurred. But we do know it did occur, and there’s no question about that.

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US Visitor Arrivals To Cuba In 2017 Increase

The Ministry of Tourism of the Republic of Cuba reported that 1,173,428 individuals subject to United States jurisdiction visited the Republic of Cuba in 2017.

453,905 individuals of Cuban descent visited in 2017, representing an increase of 137.8% compared to 2016.

619,523 individuals not of Cuban descent visited in 2017, an increase of 217.4% compared to 2016.

Important to acknowledge that some individuals subject to United States jurisdiction visited the Republic of Cuba on more than one occasion, which is especially true for those of Cuban descent who have family and friends in the Republic of Cuba.  

The increase in visitors was also meaningfully impacted by the increased frequency and decreased prices of regularly-scheduled commercial airline services which commenced in the fourth quarter of 2016 and increase in cruise ship frequencies.

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Collapsing PDVSA Amplifies Obama Administration's Failures In Cuba; Another Dose Of Pepto-Bismol

Collapsing PDVSA Amplifies Obama Administration's Failures In Cuba; Another Dose Of Pepto-Bismol

While the Obama Administration is not culpable in totality for the government of the Republic of Cuba redirecting, again and again, towards the Russian Federation and People's Republic of China for its energy and financial and commercial requirements, had the Obama Administration engaged commercial and economic changes sought by the United States business community, there would have existed, albeit perhaps marginally, opportunities for United States taxpayers and shareholders of United States companies. 

The Republic of Cuba seeking assistance from Venezuela, Russian Federation and People's Republic of China was not, and is not with a purpose of transforming the Republic of Cuba from its existing commercial, economic and political infrastructure- the goal was and remains to seek reinforcement, preservation and barriers to change.

From The New York Times (28 December 2017):

https://www.nytimes.com/2017/12/27/world/americas/venezuela-oil-pdvsa.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region&region=top-news&WT.nav=top-news

https://www.nytimes.com/2017/12/27/world/americas/venezuela-maduro-brazil-canada.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region&region=top-news&WT.nav=top-news

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Cuba Constricting Success Of Self-Employed; Not Fault Of Trump Administration

Cuba tightens regulations on nascent private sector

Reuters
21 December 2017

HAVANA (Reuters) - A government official announced tighter regulations for Cuba’s private sector on Thursday as part of a review of market reforms stemming from complaints about excess accumulation of wealth, tax evasion and other practices.

The number of self-employed Cubans has more than tripled to around 580,000, about 12 percent of the total workforce, since President Raul Castro in 2010 launched his plan to expand private enterprise.

In August, however, Cuba suspended issuing new licenses for cooperatives and certain private-sector activities from bed-and-breakfasts to restaurants until it had implemented new measures to curb wrongdoing such as tax dodging.

Private cooperatives will now be limited to the province where they were located and levels of income capped for their leaders at no more than three times the average wage of members, state-run media quoted Marino Murillo, head of the Cuban Communist Party’s reform commission, as saying on Thursday.

Business licenses will be limited to a single activity per entrepreneur, he said. Currently some restaurant owners also run bed-and-breakfasts or cafeterias and cooperatives often operate in more than one province. This would no longer be possible.

In Cuba, only certain types of small businesses and private activities are allowed.

Murillo, speaking to a closed-door session of the National Assembly, was quoted as stating those activities would be reduced and in some cases consolidated, for example manicurist would now fall under a general expanded beauty salon license.

Small business tax policy was also under review, he said.

The measures come even as Cubans say their businesses are already suffering from travel restrictions and warnings issued by the Trump administration.

The government earlier had also definitively stopped issuing licenses for wholesale and retail sellers of agricultural goods, vendors of CDs or DVDs, and operators of recreation equipment.

The backtracking on the private sector hints at unease among some in the ruling Cuban Communist Party that free market reforms may have gone too far, amid a broader debate about rising inequality on the island.

The average state monthly wage is $30, the same sum a B&B owner can charge visitors for a night’s stay.

Castro, speaking to the National Assembly in July, said the government had detected wrongdoings in the sector, from tax evasion to the use of goods of illicit provenance, that it needed to curb.

“We are not renouncing the development of the self-employed sector,” said Castro. “However, it is necessary to ... resolutely confront the illegalities and other deviations from the established policy.”

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National Security Strategy Includes Cuba (Page 52)

National Security Strategy of the United States of America
Washington DC
December 2017

Page 52:

In Venezuela and Cuba, governments cling to anachronistic leftist authoritarian models that continue to fail their people. Competitors have found operating space in the hemisphere.

We look forward to the day when the people of Cuba and Venezuela can enjoy freedom and the benefits of shared prosperity, and we encourage other free states in the hemisphere to support this shared endeavor.

Complete Document In PDF Format

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President Trump Comments Upon 3rd Anniversary Of Obama Administration Re-Engagement With Cuba

17 December 2017

POTUS: “Hopefully everything will normalize with Cuba, but right now, they are not doing the right thing. And when they don’t do the right thing, we’re not going to do the right thing. That’s all there is to it. We have to be strong with Cuba. The Cuban people are incredible people. They support me very strongly. But we’ll get Cuba straightened out.”

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President Trump Deserves Opportunity To Right An Obama Administration Wrong: SFTCP & DCB

President Trump Deserves Opportunity To Right An Obama Administration Wrong

Support SFTCP With DCB

A Syringe That Six Members Of Congress Should Prefer

OFAC And Banks Would Benefit 

With the publication of regulations on 8 November 2017, the Trump Administration removed, revised, reversed and left undisturbed Republic of Cuba-related initiatives.

For United States companies, and for individuals subject to United States jurisdiction seeking commercial connectivity with entities (government and non-government) in the Republic of Cuba, the Trump Administration has expanded one crucial, but often neglected and underappreciated component of engagement established during the Clinton Administration and continued through the Bush Administration and Obama Administration…. Support for the Cuban People (SFTCP).

The government of the Republic of Cuba detests this component as its primary objective, cloaked in a non-too-obvious manner by the government of the United States, is disruption, dismantling and destruction of existing commercial, economic and political (infra)structure of the Republic of Cuba.

However, the government of the Republic of Cuba, when discerning opportunity and leverage, accepts SFTCP when perceiving that SFTCP serves value; this does not indicate that the government of the Republic of Cuba is correct in their assumption, it’s their perception…. and that matters.  

For example, introducing private ownership of paladars (restaurants), self-employed categories (extremely limited to date), roles for shareholder-owned cooperatives, services provided using platforms created by San Francisco, California-based Airbnb, expanding availability of wireless technologies (and access to social media platforms) each has connectivity to elements of goals for SFTCP.  Note: Last week, Republic of Cuba government-operated ETECSA announced that international texting has become operational at US$.60 per message.  

No rational individual should be offering a high-five to the government of the Republic of Cuba for these decisions, but there need be an acknowledgement of their significance and usefulness- although there will be debate as to the reasons for the actions.   

For the six (6) Members of the United States Congress who are of Cuban descent, three in the United States Senate and three in the United States House of Representatives, SFTCP, while not ideal in terms of desired goals achieving desired objectives in a timely manner, is the most visible and probative syringe by which to penetrate the Republic of Cuba.  

SFTCP doesn’t work singularly; it’s designed to impact the governmental immune system over time- puncture by puncture.

Which brings about the necessity for a change in regulation (actually adding the 50% that the Obama Administration failed to include) relating to sending/receiving funds which will positively impact SFTCP and, with added benefit to the Trump Administration, is a regulation the Obama Administration failed to grasp and then change (factually, they permitted 50%, but without the other 50% their action amounted to 100% of nothing)- to the determent of providing opportunities for the 11.3 million residents (or hostages as some Members of Congress would define them) of the Republic of Cuba. 

The government of the Republic of Cuba permits, on a selective basis (meaning there is opportunity for expansion), individuals and entities to have accounts at Republic of Cuba government-operated financial institutions.  

Through these accounts, individuals and entities can be permitted to send and receive funds relating to their operations.  

The owner of a paladar (restaurant), owner of an Airbnb property, an artist/musician, a cooperative (coffee/charcoal, etc.), should have the means to send funds securely, efficiently and transparently directly from Havana to the United States for purchases of items necessary for their businesses; and the importation of agricultural commodities, food products and healthcare products from the United States would also be advantaged.       

One slight imperfection to this calculus: The Obama Administration, without explanation, did permit United States-based financial institutions to have accounts at Republic of Cuba government-operated financial institutions.  

However, the Obama Administration did not permit Republic of Cuba government-operated financial institutions to have accounts with United States-based financial institutions.  Thus, no applicable direct correspondent banking (DCB).

Without an addition to this regulation, the payment process for funds from the United States to the Republic of Cuba and from the Republic of Cuba to the United States remains triangular rather than a straight line- which would be more efficient, more timely (same day versus two or more days), and less costly.  

In 2015, the Obama Administration authorized Pompano Beach, Florida-based Stonegate Bank (2017 assets approximately US$2.5 billion) to have an account with Republic of Cuba government-operated Banco Internacional de Comercio SA (BICSA).  There is also Republic of Cuba government-operated Banco Financiero Internacional SA (BFI) which handles international payments.  Unfortunately, because BICSA (and BFI) are not permitted to have an account with Stonegate Bank, funds have been sent and received through Panama City, Panama-based Multibank, which has extensive dealings with the Republic of Cuba.  

Since December 2001, the Republic of Cuba has transferred US$5.4 billion to United States-based companies for the purchase of agricultural commodities, food products and healthcare products; approximately US$180 million went to third-country financial institutions (primarily on the European Continent) to process those payments.

Additional effort.  Additional time.  Additional expense.  And, additional reasons for the government of the Republic of Cuba to avoid United States-based companies.

What the Obama Administration asked: Applaud us for authorizing funds to be sent to the Republic of Cuba… never mind that we won’t authorize those funds to arrive to the Republic of Cuba.  But, please remember to applaud us for our legacy-building efforts.  That was commercial malpractice

Officials of the Obama Administration often spoke of “planting seeds” which is political code for absolving them of accountability within their term in office.

By permitting direct correspondent banking and thus completing the commercially critical pathway that the Obama Administration was incapable of comprehending, the Trump Administration would be creating additional pressures upon the government of the Republic of Cuba by encouraging the transformation of the self-employed from optically beneficial to materially impactful, and thus furthering the disruption of the status quo in the Republic of Cuba.  Another puncture, but perhaps larger in diameter.

Direct correspondent banking is not a provision of credit, of payment terms.  Rather, it reduces the time between when the sender sends and the receiver receives.

Not permitting direct correspondent banking was just one of too many areas of neglect (certified claimants, only coffee (Nespresso) and charcoal (Fogo), continued restrictions upon international financial transactions, etc.) by the Obama Administration relating to the implementation of rules, regulations and policies that would have provided additional means for United States companies engage with the Republic of Cuba and to specifically use SFTCP as a means for that engagement.  

Direct correspondent banking will also permit authorized purchasers in the Republic of Cuba to transmit payments directly to United States companies for the products (including high-priced durable equipment) and services they provide by statute and by executive branch decision.  A piece of farm equipment awaiting export has languished in Alabama since 2016.  

That means more revenues for individuals and companies in the United States- and hopefully additional employment opportunities throughout the United States for those exporters.  Thus, the cost to import and the cost to export will be reduced; and this will benefit importer and exporter.  The Trump Administration appreciates the necessary arithmetic.

The government of the Republic of Cuba may not happily digest the merits of direct correspondent banking and its relativeness to SFTCP; that doesn’t matter.  If accepted terrific.  If not, one less impediment to the bilateral relationship will be functional for future use.

For Members of Congress seeking more, they need be practical rather than aspirational, or delusional; there will be no expansionary legislation becoming law without substantive commercial, economic and political changes to the Republic of Cuba.  The focus should be upon making existing regulations workable.

Direct correspondent banking strengthens SFTCP opportunities by ensuring accountability, transparency, flexibility, and recourse that third-party, often cash transactions, lack.  

These benefits are what financial institution executives seek as do attorneys and policy makers at the United States Department of the Treasury, United States Department of Commerce, United States Department of State, United States Department of Defense, Federal Reserve and Securities and Exchange Commission (SEC).

Complete Analysis In PDF Format

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Delta Air Lines Terminating Six Flights Per Week From JFK To Havana; Retains One Flight; Seeks One MIA-HAV Flight

8 December 2017

Mr. Brian Hedberg
Director, Office of International Aviation Department of Transportation
1200 New Jersey Avenue SE Washington, D.C. 20590

Re: 2016 U.S.-Cuba Frequency Allocation Proceeding (Docket DOT-OST-2016-0021)

Dear Mr. Hedberg:

In the Department’s 2016 Allocation Proceeding, Delta Air Lines, Inc. (“Delta”) was awarded frequencies to operate daily service from New York to Havana (JFK-HAV), along with service to Havana from Miami (MIA) and Atlanta (ATL). (DOT Order 2016-8-38). Delta has invested significant resources to establish and support its new service to Havana and appreciates the time and effort the Department put into this proceeding. However, recent regulatory changes have resulted in lower demand for travel to Cuba from areas outside of South Florida. In particular, traffic on Delta’s service to Havana from JFK has diminished substantially.

Effective February 1, 2018, Delta will terminate service on Sunday to Friday and return those frequencies to the Department. Delta will continue to maintain and operate once-weekly, Saturday round-trip service between JFK-HAV.

In light of the Department’s ongoing 2017 Allocation Proceeding, Delta wished to notify the Department and other interested parties of its plans. For the sake of administrative efficiency and to maximize the utilization of these assets for the traveling public, Delta would have no objection if the Department reallocates the six once-a-day frequencies being returned as part of its current Proceeding. If awarded, Delta also remains excited about starting a second daily flight from Miami to bring additional service to this important gateway.

Respectfully submitted,


Alexander Krulic
Associate General Counsel Regulatory & International Affairs
DELTA AIR LINES, INC.

Complete Text In PDF Format

Supplemental  Filing Seeking One MIA-HAV Route

 

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United States and Cuba Hold Biannual Migration Talks in Washington, DC

Media Note
Office of the Spokesperson
Washington, DC
December 11, 2017

The United States and Cuba held the 31st biannual Migration Talks in Washington, DC on Monday, December 11. Deputy Assistant Secretary of State for Western Hemisphere Affairs John Creamer and Deputy Assistant Secretary of State for Consular Affairs Ed Ramotowski led the U.S. delegation. The Cuban delegation was led by Josefina Vidal, the Foreign Ministry’s Director General for U.S. Affairs.

The delegations discussed the significant reduction in irregular migration from Cuba to the United States since the implementation of the January 2017 Joint Statement. Apprehensions of Cuban migrants at U.S. ports of entry decreased by 64 percent from fiscal year 2016 to 2017, and maritime interdictions of Cuban migrants decreased by 71 percent. The United States confirmed it met its annual commitment in fiscal year 2017 to facilitate legal migration by issuing a minimum of 20,000 documents under the Migration Accords to Cubans to immigrate to the United States. The U.S. delegation also raised the need for increased Cuban cooperation in the return of Cubans with final orders of removal from the United States.

A strong migration policy is vital to the United States’ national security. The Migration Talks, which began in 1995, provide a forum for the United States and Cuba to review and coordinate efforts to ensure safe, legal, and orderly migration between Cuba and the United States. The talks were last held in April 2017.


From The Ministry of Foreign Affairs of the Republic of Cuba

Washington, December 11, 2017.- A new round of migration talks was held between Cuban and US delegations, presided over respectively by Josefina Vidal Ferreiro, Director-General of the US Division at the Ministry of Foreign Affairs; and John Creamer, Deputy Assistant Secretary of State for Western Hemisphere Affairs.

The Cuban delegation expressed deep concern over the negative impact that the unilateral, unfounded and politically motivated decisions adopted by the US Government in September and October of 2017 have on migration relations between both countries.

The Cuban delegation once again warned about the negative effect resulting from the suspension of the granting of visas by the US Consulate in Havana.  The decision to discontinue the processing of visas applied for by Cubans willing to visit or migrate to that country is seriously hampering family relations and all kinds of exchanges between both peoples.

Likewise, the Cuban delegation reiterated its rejection of the arbitrary expulsion of a considerable group of officials from the Cuban embassy in Washington, which has seriously affected the functioning of the diplomatic mission, particularly the Consulate and the services it offers to Cubans residing in the United States, as well as US citizens who continue to be interested in traveling to our country.

It also noted the counterproductive effect that the decision to cancel the visits of official delegations from the United States to Cuba is having on cooperation in the field of migration, which has led to the postponement of several mutually beneficial exchanges that had been previously scheduled. Should the current situation persist, exchanges in this and other areas will be even more affected.

Regarding the implementation of the migration accords in force, the Cuban representatives urged the US Government to comply with its obligation to grant no less than 20 000 travel documents every year for Cuban citizens willing to migrate to that country. Likewise, the Cuban delegation once again expressed its concern over the enforcement of the Cuban Adjustment Act, which continues to encourage irregular migration and whose abrogation will be crucial to the establishment of normal migration relations between the two countries.

Both delegations agreed to recognize the positive impact that the Joint Statement signed on January 12, 2017 has had, particularly the elimination of the “wet foot/dry foot” policy and the “Cuban Medical Professional Parole Program”, in reducing irregular migration from Cuba to the United States. Likewise, both delegations agreed on the usefulness of the exchange between the Cuban Border Guard and the U.S. Coast Guard Service held in July and the technical meeting on trafficking in persons and migration fraud held in September, which will be followed up on December 12, 2017.

The Cuban delegation reiterated its willingness to continue holding new rounds of migration talks. (Cubaminrex)

US Food/Ag Exports To Cuba Decrease 3%

ECONOMIC EYE ON CUBA©
December 2017

October 2017 Food/Ag Exports To Cuba Decreased 3%- 1
Healthcare Product Exports US$319,637.00- 2
Humanitarian Donations US$639,222.00- 2
Obama Administration Initiatives Exports Continue To Increase For Airlines/Hotel- 3
U.S. Port Export Data- 14

OCTOBER 2017 FOOD/AG EXPORTS TO CUBA DECREASED 3%- Exports of food products & agricultural commodities from the United States to the Republic of Cuba in October 2017 were US$21,436,667.00 compared to US$21,994,945.00 in October 2016 and US$13,407,640.00 in October 2015.  

Complete Report In PDF Format

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Moody's changes Cuba's outlook to stable from positive; Caa2 rating affirmed

https://www.moodys.com/research/Moodys-changes-Cubas-outlook-to-stable-from-positive-Caa2-rating--PR_373378

Rating Action: Moody's changes Cuba's outlook to stable from positive; Caa2 rating affirmed
Global Credit Research - 08 Nov 2017

New York, November 08, 2017 -- Moody's Investors Service has today affirmed Government of Cuba's Caa2 foreign currency issuer rating, assigned a Caa2 local currency issuer rating, and changed the rating outlook to stable from positive.

The key drivers of the change of outlook are:

1) The rapprochement process with the United States has stalled resulting in a reversal of measures to ease the economic embargo, and in recent months US-Cuba relations have deteriorated

2) Moody's expectations of continued reform momentum and favorable macroeconomic performance have not materialized due to a series of climate shocks, strained relations with the US and the upcoming domestic political transition

Cuba's Caa2 sovereign rating reflects credit weaknesses that include limited access to external financing, structural inefficiencies, political transition risk, and importantly, limited data transparency. The rating also incorporates the economic impact of the growing tourism sector, nickel-related mining activities, and the potential for future economic diversification.

Cuba's long-term local-currency country risk ceilings and the foreign currency bond ceiling remain unchanged at Caa2. The foreign-currency bank deposit ceilings is also unchanged at Caa3. The short-term foreign currency bond and deposit ceilings remain at NP (Not Prime).

RATINGS RATIONALE

RATIONALE FOR THE OUTLOOK CHANGE TO STABLE

The positive outlook on Cuba's Caa2 rating was based on increased prospects for rapprochment with the US as well as for domestic economic reforms. The principal drivers of Moody's decision to change the outlook to stable from positive are the stalled process of rapprochement with the US, and the dimmer prospects for further economic reform on the island.

Restrictions on travel to Cuba, which the previous US administration had loosened, have been tightened. Regulations effective 9 November rescind the travel authorization for individual "people-to-people" exchanges, a broad category increasingly used by Americans under the previous administration to conduct legally authorized travel to the island without the need to participate in organized group exchanges. The tightened controls also include a provision applicable to persons that are otherwise authorized to engage in Cuban travel or other Cuba-related activity, prohibiting them from engaging in most direct financial transactions with 180 entities linked to the Cuban military, which controls a broad swath of the tourist economy.

While the tightened travel authorizations only reinforce the longstanding statutory tourism ban on Cuba, these changes and new sanctions targeting the Cuban military highlight a reversal of the previous rapprochement efforts undertaken by Cuba and the previous US administration. Although a number of relevant measures taken by the previous US administration remain in place, Moody's believes that the changes to be adopted on 9 November will curtail the flow of American visitors to Cuba and diminish impetus for investment into the country, primarily into tourism projects, but also into other sectors that were expecting a further opening up of the Cuban economy.

More recently, diplomatic relations between the US and Cuba have become strained by alleged sonic attacks on US embassy and government personnel in Havana, resulting in the US recalling the majority of the staff from its embassy in Cuba and expelling Cuban diplomats from Washington. These developments will likely constrain further economic or diplomatic openness between the two nations.

Despite recent growth in the tourism sector, Cuba's economic outlook remains challenging following climate and commodity price shocks, and negative spillovers from the economic crisis in Venezuela. The country has been hit by two major hurricanes since late-2016. This caused widespread destruction and affected economic activity. Agriculture, food production, construction and healthcare likely posted a significant contraction owing to the various shocks faced by the economy. Key export prices for nickel have recovered but remain short of the highs achieved in 2008 and 2011, and sugar prices remain near 2015 lows.

Moody's estimates that the Cuban economy contracted 0.9% in 2016 despite a 13.3% increase in visitor arrivals. Moody's forecasts that the economy will contract once again in 2017 by 0.5% before returning to moderate growth of 1.1% in 2018. Nevertheless, prospects for recovery remain fragile and the upcoming political transition will limit the pace of reforms that could support economic recovery.

President Raul Castro will step down at the end of his second five year term in February 2018. This will be the first time since 1959 that a member of the Castro family will not rule Cuba, potentially posing risks to political stability and increasing uncertainty over economic policy and prospects. Moody's believes that risks to economic liberalization are substantial given the state's wavering commitment to private enterprise and Cuba's lack of experience with implementation of market policies.

WHAT COULD MOVE THE RATING UP/DOWN

There could be upward pressure on Cuba's rating if there is a further easing of US economic sanctions or domestic reforms that have a material impact on Cuba's economic prospects. More clarity over the political transition at the end of President Raul Castro's current term would ease concerns over political and social instability. Enhanced data timeliness and transparency would also be credit positive.

Conversely, evidence of increased stress on Cuba's external finances along with deteriorating economic prospects due to external shocks or reform reversal would result in downward pressure on Cuba's rating.

GDP per capita (PPP basis, US$): $7,700 (2016 Actual) (also known as Per Capita Income)

Real GDP growth (% change): -0.9% (2016 Actual) (also known as GDP Growth)

Inflation Rate (CPI, % change Dec/Dec): 3.1% (2016 Actual)

Gen. Gov. Financial Balance/GDP: -6.8% (2016 Actual) (also known as Fiscal Balance)

Current Account Balance/GDP: 0.7% (2016 Actual) (also known as External Balance)

External debt/GDP: 23.4% (2016 Actual)

Level of economic development: Low level of economic resilience

Default history: No default events (on bonds or loans) have been recorded since 1983.

Note: Numbers have been updated to 2016 (from 2014), which is what was used for committee purposes.

On 06 November 2017, a rating committee was called to discuss the rating of the Cuba, Government of. The main points raised during the discussion were: The issuer's economic fundamentals, including its economic strength, have materially decreased. The issuer's institutional strength/ framework, have not materially changed. The issuer's governance and/or management, have not materially changed.

The principal methodology used in these ratings was Sovereign Bond Ratings published in December 2016. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

The weighting of all rating factors is described in the methodology used in this credit rating action, if applicable.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Jaime Reusche
VP - Senior Credit Officer
Sovereign Risk Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

Atsi Sheth
MD - Sovereign Risk
Sovereign Risk Group
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

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Cuba Becoming A Billion Dollar Travel Marketplace For The United States

Cuba Becoming A Billion Dollar Travel Marketplace For The U.S.
U.S. Cruise Lines Add Capacity, Revenue From Cuba, Revenue To Cuba
U.S. Airlines Gain From Cruise Passengers

As of 4 December 2017, with an additional 115,474 potential passengers (43,384 from changes to vessels and 72,090 from forty-five (45) new itineraries that include the Republic of Cuba) by Miami, Florida-based Royal Caribbean Cruises Ltd, cruise lines operating from the United States could for the cumulative period 2017/2018/2019:

Deliver 570,000+ Passengers To Cuba
335+ Sailings To Cuba
US$761+ Million In Gross Revenues To The Companies
US$80+ Million Spent In Cuba By Passengers
US$21+ Million In Port Fees To Cuba

US$228+ Million To U.S. Airlines
US$105+ Million Hotels/Restaurants/Ground Transportation In Florida

Transporting, housing, and feeding these 570,000+ travelers could result in an additional US$228+ Million to United States airlines transporting passengers to South Florida port gateways and US$105+ million to hotels, restaurants and ground transportation services located in South Florida.  

The three (3) largest cruise lines (through their multiple brands Oceana Cruises, Azamara Club Cruises, Regent Seven Seas Cruises, and Holland America Line among others) and smaller cruise lines (through their multiple brands) have approximately 335 itineraries which include the Republic of Cuba for the cumulative 2017, 2018 and 2019 sailing seasons.  Additional itineraries are expected.  The largest three:  

Miami, Florida-based Norwegian Cruise Line Holdings Ltd
Miami, Florida-based Carnival Corporation & plc
Miami, Florida-based Royal Caribbean Cruises Ltd

NOTE: In 2016, the three-largest cruise lines combined operated a fleet of approximately 144 vessels, managed approximately 14 brands, earned approximately US$28.8 billion in gross revenues, and employed approximately 218,000 men and women.

If each vessel sails at capacity, more than 570,000 passengers would visit the Republic of Cuba from 2017 through 2019.

The gross revenues to the cruise lines from the approximately 335 sailings that include the Republic of Cuba could cumulatively exceed US$761 million for the period 2017 through 2019.

The 570,000 passengers would be projected to spend approximately US$80+ million while in the Republic of Cuba [averaging approximately US$140.00 per person in expenditures and organized/non-organized excursions including cost(s) for tour(s), meals (government-operated and privately-operated), ground transportation (privately-operated classic car tours), sundries and souvenirs (including spirits, coffee, tobacco, artwork and crafts)].  Some passengers could spend considerably more (alcohol, cigars and coffee for example) given the United States duty-free personal exemption of US$800 per person.  

Vessel port charges in the Republic of Cuba may exceed US$21 million, ranging up to approximately US$79,000.00 for the largest vessels (684-passenger to 2,744-passenger).

Analysis In PDF Format

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OFAC 2016 Terrorist Assets Report Shows No Cuba Blocked Assets

TERRORIST ASSETS REPORT
Calendar Year 2016
Twenty-Fifth Annual Report to the Congress on Assets in the United States Relating to Terrorist Countries and International Terrorism Program Designees

The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, DC, continues to hold US$243.5 million blocked assets relating to the Republic of Cuba.

See Complete 2016 Report

Reports From 2006 To 2016

Reports From 1994 To 2005

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Ten Companies, The Moral Compass, FAR, Alignment Of Stars...

Ten companies have established the moral compass and operational platform for United States commercial (re)engagement with the Republic of Cuba.

American Airlines, Carnival Corporation, Caterpillar, Delta Air Lines, Jet Blue Airways, Norwegian Cruise Line, Marriott International, Royal Caribbean Cruise Lines, Southwest Airlines and United Airlines have established and maintained operations, as specifically authorized by the Obama Administration and Trump Administration, with entities controlled by the Revolutionary Armed Forces (FAR) of the Republic of Cuba.

While the companies have not issued statements in support of connectivity with FAR-controlled entities, the companies are, by their presence, acknowledging and, thus far, accepting the role of the military in the economy of the Republic of Cuba.

The Obama Administration and Trump Administration acknowledged and acknowledges, respectively, this same reality.

There are issues of complicity: Does cooperation equate to enabling; to sustaining the status quo?  Are the companies serving as tools of change or as dams preventing alteration of the commercial, economic and political landscape throughout the Republic of Cuba?

With one exception, the ten companies are engaged in transporting and housing individuals who lawfully visit the Republic of Cuba.  The primary beneficiaries of the services provided by five of the nine companies are individuals of Cuban descent who visit their families and friends who reside in the Republic of Cuba. 

No executive of a company wants to laud the role of the FAR in the economy of the Republic of Cuba.  All the companies prefer civilian control, non-state actors, private enterprise as their contracting partners.  

For the companies, the choice is providing a product and/or service that is permitted under law, by regulation, by policy or awaiting an environment within which all commercial, economic and political stars align... as they have since 1959. 

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