Obama’s Commerce Secretary’s Family Could Have Largest U.S. Footprint In Cuba

Obama’s Commerce Secretary’s Family Could Have Largest U.S. Footprint In Cuba
Hotels & Cruises
Acquisition Of Hotel Company In Spain
U.S. Department Of State Reports One Hotel Is A Site Of Health Issues
One Hotel Has Chicago Mafia & Hollywood Roots
Will OFAC Approve?
Irony: Secretary Pritzker’s Self-Imposed Selective Restraint To Help U.S. Companies
Illinois 1st Among States With Companies Having A Physical Presence In Cuba

The Honorable Penny Pritzker (net worth approximately US$2.8 billion according to Forbes Magazine) served as United States Secretary of Commerce from 2013 to 2017 during the Obama Administration. 

Her brother, Mr. J.B. Pritzker, is the 2018 nominee for governor of the Democrat Party; and was national co-chairman of the 2008 Hillary Clinton presidential campaign. 

Her cousin, Mr. Thomas J. Pritzker, is the Executive Chairman of Chicago, Illinois-based Hyatt Hotels Corporation (2017 revenues approximately US$4.6 billion) which is controlled by the Chicago, Illinois-based Pritzker Family (net worth approximately US$29 billion according to Forbes Magazine).  Mr. Pritzker is on the board of directors and has a substantial shareholding in Miami, Florida-based Royal Caribbean Cruises Ltd. (RCCL; 2017 revenues approximately US$6.3 billion).  

RCCL has continued to expand sailings to the Republic of Cuba: https://www.royalcaribbeanpresscenter.com/press-release/1341/royal-caribbean-expands-sailings-to-cuba-in-2018/.  The company has not had a consistent message about its focus upon the Republic of Cuba: https://www.cubatrade.org/blog/2017/2/3/royal-caribbean-cruises-increases-2017-cuba-projections-175-for-passengers-150-for-revenues?rq=Penny%20Pritzker

While in office, then-United States Secretary of Commerce Penny Pritzker inexplicably created a non-sensical self-restrained interpretation of United States statues and United States regulations so that the interests of United States companies were unnecessarily curtailed during a pivotal series of moments from 2015 to 2017; including her 2015 visit to the Republic of Cuba where representatives of United States companies were prohibited from participating.  https://static1.squarespace.com/static/563a4585e4b00d0211e8dd7e/t/581f8240e3df287bcc8a0e5f/1478459972414/EconomicEyeOnCubaSpecialReportFebruary2016.pdf

Hyatt Hotels Corporation, with approximately 700 properties located in fifty countries made an offer, since amended, to acquire Madrid, Spain-based NH Hotel Group (2017 revenues approximately US$1.3 billion) with approximately 382 properties located in thirty countries.  https://newsroom.hyatt.com/nhhotelsstatement

Hyatt Hotels Corporation has previously sought hotel management opportunities within the Republic of Cuba: https://www.cubatrade.org/blog/2017/2/11/hyatt-hotels?rq=Hyatt

NH Hotel Group manages two properties in the Republic of Cuba each of which is owned by Republic of Cuba government-operated Gran Caribe: 31-room NH Collection Victoria La Habana (a favorite for business representatives and journalists for twenty-five years: https://www.nh-collection.com/hotel/nh-collection-victoria-la-habana and the 220-room NH Capri La Habana: https://www.nh-hotels.com/corporate/press-room/news/nh-hotel-group-brings-back-emblematic-hotel-capri-collaboration-gran-caribe-hotel.  Reservations for NH Capri La Habana may be obtained through www.booking.com.  Gran Caribe is not listed by the United States Department of State as a prohibited entity from engagement with United States companies.

The NH Capri La Habana was identified by the United States Department of State as one of two hotels within which employees of the United States Government reported experiencing issues that impacted their health.  The Hotel Nacional de Cuba, also owned by Gran Caribe, is the other hotel.

https://www.cubatrade.org/blog/2017/10/1/travelers-need-to-know-when-us-department-of-state-will-publish-addresses-of-implicated-locations-in-cuba?rq=Hotel%20Capri

If Hyatt Hotels Corporation acquires NH Hotel Group, likely will be required a license from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington DC., as the ownership would not be in compliance with at least one opinion by the OFAC: A U.S. company or individual may make a secondary market investment in a third-country business which has commercial dealings within the Republic of Cuba provided that the investment does not result in control-in-fact of the third-country business by the U.S. investor and the third-country company does not derive a majority of its revenues from business activity within the Republic of Cuba.  Secondary market investment that falls short of a controlling interest in such a business is not prohibited. 

Would Obama Administration authorization for United States companies to obtain management contracts for properties in the Republic of Cuba be applicable to a wholly-owned foreign subsidiary of the United States-based company?  What will be the response by the government of the Republic of Cuba, specifically if Hyatt Hotels Corporation decided to terminate the management contracts?  What would the message be to United States companies given Secretary Pritzker’s role during the Obama Administration?

If Hyatt Hotels Corporation acquires NH Hotel Group, and continues to manage both properties located in the Republic of Cuba, Ms. Pritzker would become the highest-ranking former United States Government official to have a commercial engagement with the government of the Republic of Cuba.

One other United States-based hotel management company operates in the Republic of Cuba: In 2016, Stamford, Connecticut-based Starwood Hotels & Resorts Worldwide (a subsidiary of Bethesda, Maryland-based Marriott International) announced the company would manage three properties in the Republic of Cuba.  One property is operational; a second property has been delayed from December 2016 to December 2019; and a third property is no longer mentioned by the company.  https://www.cubatrade.org/blog/2017/5/10/starwoodmarriott-now-reporting-36-month-delay-to-manage-hotel-inglaterra-no-reasons-provided?rq=inglaterra

The State of Illinois has the largest number of companies with a physical presence in the Republic of Cuba: Distribution Centers: Moline, Illinois-based John Deere (2017 revenues approximately US$27 billion) and Peoria, Illinois-based Caterpillar Inc. (2017 revenues approximately US$38 billion).  Travel Services (including ticket office): Chicago, Illinois-based United Airlines, Inc. (2017 revenues approximately US$37 billion).  https://static1.squarespace.com/static/563a4585e4b00d0211e8dd7e/t/5aeb122a1ae6cf4e52a6831c/1525355050930/USCompaniesAndCuba.pdf

Complete Analysis In PDF Format (including reference articles)

Three Articles For Reference:

July 30, 2018

Hyatt backs off Spain's NH Hotels bid in face of Minor stake

By Sonya Dowsett

MADRID (Reuters) - Hyatt Hotels (H.N) has backed away from launching a takeover of NH Hotels (NHH.MC), days after a rival bidder Minor (MINT.BK) revealed it controlled 44 percent of the Spanish group.

In a letter from Hyatt released to the Spanish stock exchange by NH, the U.S. hospitality company, which on Friday said it may launch a cash bid for 100 percent of NH, said it saw pursuing an offer as extremely challenging.

“Based on the information we now have, we believe that the path to a successful tender offer by Hyatt under the terms expressed in our letter has narrowed to a point of being impractical,” Hyatt’s President and Chief Executive Officer Mark Hoplamazian said in the letter released on Monday.

Thailand-based Minor International made an offer in June which valued NH at up to 2.5 billion euros ($2.9 billion).

Minor already owns 29.8 percent with agreements in place to buy Chinese conglomerate HNA’s 8.4 percent holding and Oceanwood Capital Management’s 5.7 percent stakes. It said late on Friday it had control over 44 percent of NH’s share capital.

Shares in NH dropped 6.4 percent on Monday to 6.3 euros per share, slightly below Minor’s offer price.

NH, with over 370 hotels in 30 countries, in January turned down a takeover offer from Spanish peer Barcelo which valued the company at 2.48 billion euros.

Minor had agreed to pay HNA 622 million euros for a 26.5 percent stake in the hotel group, taking its stake to around 38 percent after the conversion of some bonds to shares. It would then offer 6.4 euros for each remaining share, it said.

Hotels Magazine

Chicago, Illinois

Hyatt makes move for NH Hotels; Minor adds shares

NH Collection Gran Hotel Calderón in Barcelona

By Jeff Weinstein on 7/27/2018

Hyatt Hotels Corp. has sent a non-binding letter to NH Hotel Group stating its interest in acquiring the Madrid-based hotel operator and challenging the June tender from Thailand’s Minor International, who later on Friday announced an additional investment, cumulatively totaling up to a 44% share in NH.

Minor’s June offer for NH, valued at €1.64 billion, is conditional on a scheduled August 9 approval from shareholders. On Friday, it announced a deal with Oceanwood Capital Management to purchase 22,496,064 shares in NH, representing a 5.7% shareholding, again subject to the approval at the August 9 meeting. It also has a pending deal to acquire from Tangla Spain SLU 32,937,996 NH shares representing an 8.4% share. It is already NH’s biggest shareholder with a 35.55% stake after acquiring HNA Group Co.’s stake in June.

Hyatt President and CEO Mark Hoplamazian said in a statement, “Hyatt has a demonstrated track record of making strategic investments to extend the reach of our brands and create value for our stakeholders. In keeping with our growth strategy, we submitted a letter expressing our interest in pursuing a potential acquisition of NH Hotel Group.

“We believe that marrying NH Hotel Group’s strong footprint in Europe and select other markets with Hyatt’s global presence would yield a powerful portfolio of brands and network of hotels delivering compelling benefits for guests, owners and shareholders of both companies.

“Consistent with our strategy of pivoting to an asset-lighter business model, we see significant value creation for shareholders through a separation of NH Hotel Group’s real-estate assets from its hotel management platform. As a next step, we are seeking to conduct additional due diligence to further inform valuation and determine the optimal approach to a potential offer.”

HOTELS asked Minor International to comment and only said, “this is a non-binding letter and Minor Hotels has no comment about it.”

Hotels Magazine

Chicago, Illinois

With new $724M stake, Minor to launch NH takeover bid

By Barbara Bohn on 6/6/2018

Minor International has set the stage to acquire Spain’s NH Hotel Group after reaching an agreement with HNA Group to increase its equity stake in the company by 25.2% on a fully diluted basis.

The new stake, which knocks Spain’s Grupo Barcelo out of the running for NH, is valued at €619 million (US$724.0 million). That brings Minor’s total proposed stake to 38%, which triggers Spanish regulations to launch a full takeover bid.

“Today we are embarking on a new era, driving investment strategy to further cement our footprint in the European hospitality industry,” said Dillip Rajakarier, CEO of Minor Hotels, according to a statement. “We will be able to create a network of over 540 hotels with a reach across Asia, Oceania, the Middle East, Africa and Europe, all of which are important hospitality regions around the world. The business network will allow the two companies to capitalize on our leadership positions in key growth areas, highly complementary asset and brand portfolio, technology platform and talented employees.”

Minor’s bid values the Spanish hotel group at up to €2.50 billion (US$2.90 billion); it said in a filing with the Spanish market regulator that it will offer €6.40 (US$7.49) for each remaining share in the company.

HNA’s sale, prompted by a restructuring to sell assets to raise cash, will take place in two stages: a 17.6% stake is expected to close on June 15, and when that is completed, it would sell a further 8.8%.

The deal is expected to close in September and would close a bumpy chapter for the Chinese company, which came under scrutiny by its government and has been, along with other Chinese hotel investors, squeezed to sell off its holdings in foreign companies. And NH knocked HNA’s representatives off its board after asserting that HNA’s 2016 purchase of Carlson Rezidor Hotel Group was a conflict of interest.

Minor said it intends to keep NH Hotel Group, which has 382 hotels in 30 markets in Europe, the Americas and Africa, as a publicly listed company on the Madrid Stock Exchange.

Will Alimport Take Advantage Of Low U.S. Commodity Prices? They’ve Done It Before And Earned Gratitude For Doing It

Will Alimport Take Advantage Of Low U.S. Commodity Prices?  They’ve Done It Before And Earned Gratitude For Doing It

With the implementation of tariffs by the United States and on the United States impacting the export of corn, poultry and soybeans, watch for Alimport in the Republic of Cuba take advantage of lower prices to purchase commodities and gain the favor of farmers, exporters, organizations and politicians. 

During the last seventeen years, when United States agricultural commodity exporters and food product exporters have been challenged by political, regulatory and sanitary issues with exports (famously poultry) to China, European Union, and Russia, Alimport has gone shopping for commodities…. and earned high marks for doing so. 

The Republic of Cuba has purchased more than US$5.6 billion in agricultural commodities and food products on a cash-in-advance basis since 2001.  The Republic of Cuba currently ranks as the 51st of 229 export market countries for agricultural commodities and food products; and ahead of 19 of the 28 members of the European Union.  Agricultural commodity and food product exports from the United States to the Republic of Cuba thus far in 2018 have increased 15% compared to 2017. 

https://www.cubatrade.org/blog/2018/7/6/us-foodag-exports-to-cuba-decrease-in-may-2018-remains-15-above-2017

Direct Correspondent Banking has been permitted for 3 years; why hasn’t Home BancShares of Arkansas (Stonegate Bank) obtained the 50% of the OFAC license it needs to help U.S. food/ag exporters increase sales to Alimport Cuba?  Straight line payments could increase sales by +3%.

https://www.cubatrade.org/blog/2018/7/12/foodag-export-to-china-down-11-cuba-up-15-one-arkansas-bank-can-help

GAO Has Recommendations For U.S. Airlines & Cuba

From The GAO:

"Did the Transportation Security Administration (TSA) follow its procedures to ensure the security of U.S.-bound aircraft from Cuba?

TSA generally followed its security procedures for airport assessments and air carrier inspections in Cuba in fiscal years 2012 through 2017. However, TSA did not inspect all the required aircraft from Cuba in the established time frames, in part because TSA was not able to identify or reliably track U.S.-bound public charter flights from Cuba.

We recommended that TSA develop a tool to reliably track air carriers' public charter operations between the U.S. and Cuba.

Transportation Security Administration inspectors prepare to inspect an aircraft at Frank Pais Airport in Holguin, Cuba"

Complete Report In PDF Format

Food/Ag Exports To China Down 11%; Cuba Up 15%- One Arkansas Bank Can Help

July Update…. Revised U.S. Export Data

President Trump’s Problem: Food/Ag Tariffs By Canada, China, EU & Mexico

For 2018:
U.S. Food/Ag Exports To China Decreased 11.5%
U.S. Food/Ag Exports To Mexico Increased 1.3%
U.S. Food/Ag Exports To Canada Increased 1.3%
U.S. Food/Ag Exports To The EU Increased 14.4%

U.S. Food/Ag Exports To Cuba Increased 15.4%
Cuba Imported More Food/Ag Products From U.S. Than 19 Of 28 EU Members
Cuba Ranks 51st Of 229 Countries For U.S. Food/Ag Exports

A Viable Option
No Change To Law
One OFAC License Could Increase Exports
Home BancShares In Arkansas
Removing Foreign Banks From Transactions Can Increase U.S. Exports
Direct Banking Can Save Exporters 2%+ From Each Payment  
Where’s Arkansas’s Republican Governor & All-Republican Congressional Delegation?

Link To Complete Analysis In PDF Format

U.S. & Cuba Hold 4th Law Enforcement Dialogue In Washington DC

United States and Cuba Hold Fourth Law Enforcement Dialogue in Washington, DC

Media Note
Office of the Spokesperson
Washington, DC
July 10, 2018

The United States and Cuba held the fourth Law Enforcement Dialogue in Washington, DC on Tuesday, July 10. During the dialogue, the United States and Cuba addressed topics of bilateral interest on national security matters, including fugitives and the return of Cuban nationals with final orders of removal. The delegations also discussed the health attacks against diplomatic personnel at the U.S. Embassy in Havana, including two recent cases. The U.S. delegation reminded the Cubans of their responsibility to protect U.S. diplomats from harm.

During the Dialogue, the delegations reviewed recent progress in the law enforcement relationship, such as new bilateral cooperation that resulted in the conviction of a Cuban national who murdered an American citizen and who had fled persecution in the United States, as well as areas where there is more work to be done, such as trafficking in persons.

Deputy Assistant Secretary for Western Hemisphere Affairs John Creamer, Department of Justice Deputy Assistant Attorney General Bruce Swartz, and Department of Homeland Security Assistant Secretary for Threat Prevention and Security Policy Elizabeth Neumann led the U.S. delegation. The Ministry of Foreign Affairs Director of Bilateral Affairs for the United States, Yuri A. Gala Lopez, and Ministry of Interior Colonel Nestor Borrero Calvo led the Cuban delegation.

Could (Directly Or Indirectly) Cuba Be On Putin/Trump Summit Agenda In Helsinki?

On 16 July 2018, The Honorable Donald Trump, President of the United States of America, and H.E. Vladimir Putin, President of the Russian Federation, are scheduled to meet in Helsinki, Finland.  
 
The official schedule includes a one-on-one meeting, an expanded meeting with staff, and a luncheon.
 
What might be on the agendas?  Acceptance of territorial integrity.  Acceptance of territorial realities.  Exchange of interests.   Acceptance of political realities.  Acceptance of ideologies.  Retaining balance.  Acceptance of muscularity.  Strength by conflict.
 
Notable that neither head of state believes the meeting requires a moment, an announcement, an agreement, and accomplishment other than the optic of the meeting.  
 
For each president, a (or perhaps the) primary goal is to establish the mechanism for a visit to Washington DC by President Putin and to Moscow by President Trump.
 
The Countries (in alphabetical order):
 
Baltics (Estonia, Latvia and Lithuania)
China
Cuba
Georgia
Iran
Israel
North Korea
Russia (Crimea)
Syria
Turkey
Ukraine
Venezuela
 
Subjects (in alphabetical order):
 
Arms Control
Elections
Natural Gas
Oil
Re-Opening Consulates
Sanctions
Trade

Putin visit to Washington DC (September 2018)
Trump visit to Moscow (November 2018)

If the Republic of Cuba is discussed, the topics may include the activities in the country by: China (infrastructure, telecommunications, durables, consumables, consumer products, military cooperation); Russia (infrastructure, power generation, railroads, military cooperation); Turkey (civil aviation, ports); and Venezuela (energy, financial services).  The Trump Administration would seek assistance from the Putin Administration towards fostering commercial, economic and political changes in the Republic of Cuba.  There would likely none to minimum assistance.

US Food/Ag Exports To Cuba Decrease In May; 2018 Remains 15% Above 2017

May 2018 Food/Ag Exports To Cuba Decrease 8%- 1
15.4% Increase Year-To-Year-5
Cuba Ranks 51st Of 229 U.S. Food/Ag Export Markets- 2
May 2018 Healthcare Product Exports US$327,947.00- 2
May 2018 Humanitarian Donations US$497,061.00- 3
Obama Administration Initiatives Exports Continue To Increase- 3
U.S. Port Export Data- 15

MAY 2018 FOOD/AG EXPORTS TO CUBA DECREASE 8%- Exports of food products & agricultural commodities from the United States to the Republic of Cuba in May 2018 were US$29,169,203.00 compared to US$31,720,403.00 in May 2017 and US$19,384,881.00 in May 2016.  

Total purchases under provisions of the Trade Sanctions Reform and Export Enhancement Act (TSREEA) of 2000 are US$5,681,677,204.00.  

Complete Report In PDF Format

President Diaz-Canel Likely To Attend UN General Assembly In September In New York City

H.E. Miguel Diaz-Canel, President of the Republic of Cuba, is likely to attend the 73rd United Nations General Assembly in New York which begins 18 September 2018 and concludes 5 October 2018. 

This would be his first visit to the United States as Head of State of the Republic of Cuba. 

President Diaz-Canel would expect to have a robust schedule of bilateral meetings with heads of state and heads of government as the country must focus upon the maintenance, establishment and re-establishment of commercial, economic and political relationships with countries which present opportunities to provide to the Republic of Cuba direct financial assistance, indirect financial assistance, extension of repayment for previously-delivered funding, and Direct Foreign Investment (DFI). 

Expectations are for President Diaz-Canel to also host leaders (including ministers of foreign affairs) in the city of Havana, Republic of Cuba, prior to and subsequent to the 73rd United Nations General Assembly in New York.

Not unreasonable to expect H.E. Vladimir Putin, President of the Russian Federation (who could visit Washington DC as well), H.E. Hassan Rouhani, President of the Islamic Republic of Iran, H.E. Bashar al-Assad, President of Syria, and perhaps H.E. Kim Jong-un, the leader of the Democratic People’s Republic of Korea (who could visit Washington DC as well) to attend the 73rd United Nations General Assembly in New York.

Cuba Provision In Farm Bill A Confliction Of Accuracy By Senators Heitkamp & Rubio; OFAC Rule Making Could Be Problematic

Senator Heitkamp Is Misleading

Senator Rubio Is Misleading

U.S. Taxpayer Funding Is To Be Directed In Cuba; That’s OK For U.S. Exporters

New OFAC Regulation(s) May Negatively Impact All Travelers To Cuba

Reminder Of TSREEA In 2000 Which Codified No Travel For Tourism

Might The Conference Committee Remove Amendment- And Protect Travel?

There is, which is not inconsistent with the political process, creatively-written statements by Members of the United States Senate with respect to the meaning of S.Amdt 3364 (The Honorable Marco Rubio R- Florida) and S. 3042 (“Farm Bill”) which included a provision by The Honorable Heidi Heitkamp (D- North Dakota) relating to the Republic of Cuba.  

Neither Senator is being as accurate as they need to be…

For the United States business community, the change to S. 3042 is significant; and it’s far more likely to be of immediate financial value to the government of the Republic of Cuba than to United States food product and agricultural commodity exporters.

The likelihood of a return in value to United States taxpayers, as Members of the United States Senate have posited, of US$28.00 returned for every US$1.00 in expenditures of FMD and MAP throughout the world, and now to include the Republic of Cuba, will be challenging to measure- but it will be important to measure and the United States Department of Agriculture (USDA) should focus upon the cost-benefit analysis.

On 28 June 2018, the United States Senate, by a vote of 86-11, approved the Agriculture Improvement Act of 2018.  Now S. 3042 and H.R. 2 will be subjected to a conference committee with final language submitted to The White House for signature.  

On 21 June 2018, the United States House of Representatives passed H.R. 2, the 748-page Agriculture and Nutrition Act of 2018 by a vote of 213-211.   

Now S. 3042 and H.R. 2 will be subjected to a conference committee with final language submitted to The White House for signature.  

On 18 June 2018, the United States Senate Committee on Agriculture, Nutrition, & Forestry reported, on a vote of 20-1, S. 3042, the 1,210-page The Agriculture Improvement Act of 2018 which included an amendment on page 248 [Link To Text] authored by Senator Heitkamp: “To provide for the use of market access program and foreign market development cooperator program funds in Cuba.”  In Fiscal Year 2018, the total expenditures for these two programs was US$200,287,394.00.    

A representative of a member of the United States Senate Committee on Agriculture, Nutrition, & Forestry shared “[t]here is no set amount of funds that would be made available specifically for Cuba.  The amendment would only allow producers and agricultural trade associations who are already utilizing these programs to also use them to promote their goods in Cuba.  So to that point, yes these funds are only going towards agriculture producers who are represented by trade associations and state regional trade groups.”

On 27 June 2018, Senator Rubio reported, via Twitter, that “I have decided to block the addition of any new amendments to #FarmBill until they either accept the Cruz amendment striking the use of taxpayer $ for promotions in #Cuba or they accept my amendment that prohibits taxpayer $ being spent at business owned by Cuban military.”  

Then, in remarks on the floor of the United States Senate later in the day, Senator Rubio said: “I’m not going to object to the ability for American farmers to market our products to a market,” he said. “In the end, it’s food. What I do think we should not allow, however, is the ability to spend taxpayer money in properties and in other places on the island that are owned and controlled by the Cuban military.”

From an interview in Politico: Under current law, U.S. producers are free to travel to Cuba to meet with importers on their own dime, said Olivia Perez-Cubas, a spokeswoman for Rubio. “Taxpayer dollars shouldn’t be used to subsidize private U.S. industries to travel to Cuba, especially when that money goes into the pocket of the Cuban military,” she said.

Senator Heitkamp responded with a statement: “This amendment passed unanimously with overwhelming bipartisan support during markup of the farm bill in the Senate Agriculture Committee… This amendment would do nothing to lift current restrictions on doing business with the Cuban government, and it would provide a much-needed opportunity for American producers when so many of our important trade relationships are suffering from uncertainty.”

This is the text of and LINK (with handwritten notes) to the amendment submitted by Senator Rubio which was approved by the United States Senate:

https://www.congress.gov/amendment/115th-congress/senate-amendment/3364/actions?q=%7B%22search%22%3A%5B%22S.Amdt.+3364%22%5D%7D

1. S.Amdt.3364 to S.Amdt.3224   — 115th Congress (2017-2018) Purpose: To prohibit the use of funds to carry out programs in Cuba in contravention of the National Security Presidential Memorandum prohibiting transactions with entities owned, controlled, or operated by or on behalf of military intelligence or security services of Cuba. Amends Bill: H.R.2 Sponsor: Sen. Rubio, Marco [R-FL] (Submitted 06/28/2018) (Proposed 06/28/2018) Latest Action: 06/28/18 Amendment SA 3364 agreed to in Senate by Unanimous Consent. (All Actions) 

S.Amdt.3364 to S.Amdt.3224115th Congress (2017-2018)

Amends Bill:  H.R.2 — Agriculture and Nutrition Act of 2018

Sponsor:          Sen. Rubio, Marco [R-FL] (Submitted 06/28/2018, Proposed 06/28/2018)

Latest Action: 06/28/2018 Amendment SA 3364 agreed to in Senate by Unanimous Consent.

On 28 June 2018, Senator Rubio issued the following through Twitter: Rubio Keeps Taxpayer Dollars Out of the Cuban Regime's Pocket.  Washington, D.C. – U.S. Senator Marco Rubio (R-FL) today issued the following statement after the Senate adopted his amendment to the Agriculture Improvement Act of 2018, commonly known as the 2018 Farm Bill, to prevent U.S. taxpayer funds for agricultural export promotion from going to the Cuban regime: “American taxpayer dollars should never go into the pocket of the Cuban regime. That is why we worked to ensure that taxpayer funds for agricultural promotion will not be going to the oppressive Cuban military and its subsidiaries.”

On 28 June 2018, Senator Heitkamp issued two statements: 1) LINK and 2) “Her amendment to boost trade with Cuba. Heitkamp and Boozman successfully included their bipartisan amendment to allow USDA to use its existing export market development programs to create, expand, and maintain a strong Cuban export market for U.S. agricultural producers and processors— at no additional cost to U.S. taxpayers. This change in USDA policy would provide some needed relief from low American commodity prices by fostering a new, reliable trade relationship, boosting agricultural export revenue, and increasing export volume for American farmers and ranchers. This builds on Heitkamp’s efforts to boost trade with Cuba going back to 2015, when she first introduced legislation to lift the ban on private banks and companies offering credit for agricultural exports to Cuba.”

Senator Heitkamp is inaccurate to submit that her amendment will be “at no additional cost to U.S. taxpayers.”  Accurate that the amendment does not specifically allocate new Republic of Cuba-specific United States taxpayer funds, but it does permit the eighty-nine (89) United States-based entities (and potentially others in Fiscal Year 2019) who obtained US$200,287,394.00 for use in FMD and MAP expenditures in Fiscal Year 2018 to seek authority from the USDA to use United States taxpayer funds for Republic of Cuba-focused activities.  The amendment as passed by the United States Senate does authorize the use of United States taxpayer funds in the Republic of Cuba.

Senator Rubio is inaccurate to submit that his amendment to Senator Heitkamp’s amendment ensures that “taxpayer funds for agricultural promotion will not be going to the oppressive Cuban military and its subsidiaries.”  United States taxpayer funds may continue to weave their way to companies controlled by the Revolutionary Armed Forces (FAR) of the Republic of Cuba, albeit indirectly.  Here’s why:

In November 2017, the United States Department of State in Washington DC published a list (https://www.state.gov/e/eb/tfs/spi/cuba/cubarestrictedlist/275331.htm) of Republic of Cuba government-operated entities that were to be restricted from engagement by travelers (and United States companies) subject to United States jurisdiction.  

The list identifies entities affiliated with and/or controlled by (Grupo de Adminisracion Empresarial (GAESA) and FAR.  The wording with respect to compliance is “Direct financial transactions with certain entities and subentities under the control of, or acting for or on behalf of, the Cuban military, intelligence, or security services are also generally prohibited.”  Significant the document also contains “*** Entities or subentities owned or controlled by another entity or subentity on this list are not treated as restricted unless also specified by name on the list. ***.”  

Republic of Cuba government-operated Havanatur (reported to be controlled by GAESA and thus FAR) is not on the list.  The majority of travelers subject to United States jurisdiction use the services of Havanatur.  

In March 2018, the Miami, Florida-based publication Cuba Standard reported that a New York, New York-based attorney received verbal confirmation from a representative of the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington DC that at least one Trump Administration travel-related narrative believed true by many is not accurate.  

It is the process of engagement that defines the impact upon travelers.  The meaning of “direct” and “indirect” are relevant.  If a payment to an entity on the list maintained by the United States Department of State (which has not been updated since its initial publication) is made indirectly, that indirectness may satisfy the OFAC requirement.

From one experienced legislative observer: “The Rubio legislation will require a new rule making by OFAC.  We’ll see if the OFAC takes its traditional position that independent due diligence is required by United States companies to determine whether a Republic of Cuba entity is owned, controlled etc. by a different Republic of Cuba entity - in this case the due diligence must focus on whether the proposed recipient of United States taxpayer money is “operated by or on behalf” of the FAR.  If so, it can’t receive that United States taxpayer money.  Also, we might see a new OFAC rule in the context of a new statute (i.e. Senator Rubio’s amendment) addressing the word “direct” to eliminate the pass-through deals currently permitted with third party intermediaries to get around the State Department’s Prohibited Cuban Entities List.” 

And added, "There could have been some sloppy lobbying work- and a result could be impactful, collaterally, on all visitors to Cuba."

Link To Analysis:

https://www.cubatrade.org/blog/2018/3/10/2b05qodxrf4d2m8qego70oflydtezl?rq=kempinski

What Is FMD & MAP?

For Fiscal Year 2018, the USDA allocated US$173,802,447.00 in taxpayer funds to sixty-six (66) participants [see list at end of analysis or use link] under the Market Access Program (MAP), an average of US$2,633,370.00 per distribution.  

https://www.fas.usda.gov/programs/market-access-program-map/map-funding-allocations-fy-2018

MAP: “Through the Market Access Program (MAP), FAS partners with U.S. agricultural trade associations, cooperatives, state regional trade groups and small businesses to share the costs of overseas marketing and promotional activities that help build commercial export markets for U.S. agricultural products and commodities.

MAP reaches virtually every corner of the globe, helping to build markets for a wide variety U.S. farm and food products. FAS provides cost-share assistance to eligible U.S. organizations for activities such as consumer advertising, public relations, point-of-sale demonstrations, participation in trade fairs and exhibits, market research and technical assistance. When MAP funds are used for generic marketing and promotion, participants must contribute a minimum 10-percent match. For promotion of branded products, a dollar-for-dollar match is required.

Each year, FAS announces the MAP application period and criteria in the Federal Register. Applicants apply for MAP through the Unified Export Strategy (UES) process, which allows eligible organizations to request funding from multiple USDA market development programs through a single, strategically coordinated proposal. FAS reviews the proposals and awards funds to applicants that demonstrate the potential for effective performance based on a clear, long-term strategic plan.”

For Fiscal Year 2018, the United States Department of Agriculture (USDA) allocated US$26,484,947.00 in taxpayer funds to twenty-three (23) cooperators [see list at end of analysis or use link] under the Foreign Market Development Program (FMD), an average of US$1,021,084.00 per distribution.  

https://www.fas.usda.gov/programs/foreign-market-development-program-fmd/fmd-funding-allocations-fy-2018

FMD: “The Foreign Market Development (FMD) Program, also known as the Cooperator Program, helps create, expand and maintain long-term export markets for U.S. agricultural products. Under the program, FAS partners with U.S. agricultural producers and processors, who are represented by non-profit commodity or trade associations called “cooperators,” to promote U.S. commodities overseas.

The FMD program focuses on generic promotion of U.S. commodities, rather than consumer-oriented promotion of branded products. Preference is given to organizations that represent an entire industry or are nationwide in membership and scope.

FMD-funded projects generally address long-term opportunities to reduce foreign import constraints or expand export growth opportunities. For example, this might include efforts to: reduce infrastructural or historical market impediments, improve processing capabilities, modify codes and standards, or identify new markets or new uses for the agricultural commodity or product.

Each year, FAS announces the FMD application period and criteria in the Federal Register. Organizations apply for the FMD program through the Unified Export Strategy (UES) process, which allows applicants to request funding from multiple USDA market development programs through a single, strategically coordinated proposal. FAS reviews the proposals and awards funds to applicants that demonstrate the potential for effective performance based on a clear, long-term strategic plan.” 

Original Heitkamp Amendment

Revised Heitkamp Amendment

Senator Heitkamp Twitter Message

Complete Analysis In PDF Format

Senator Heitkamp's Cuba Amendment Survives, With Conditions. Now To Conference Committee

From Twitter:

Rubio Keeps Taxpayer Dollars Out of the Cuban Regime's Pocket
Jun 28 2018

Washington, D.C. – U.S. Senator Marco Rubio (R-FL) today issued the following statement after the Senate adopted his amendment to the Agriculture Improvement Act of 2018, commonly known as the 2018 Farm Bill, to prevent U.S. taxpayer funds for agricultural export promotion from going to the Cuban regime:
 
“American taxpayer dollars should never go into the pocket of the Cuban regime. That is why we worked to ensure that taxpayer funds for agricultural promotion will not be going to the oppressive Cuban military and its subsidiaries.”

Trump Administration Again Suspends Title III Of Libertad Act

Secretary's Determination of Six Months' Suspension Under Title III of LIBERTAD Act

Media Note
Office of the Spokesperson
Washington, DC
June 28, 2018

The Secretary of State reported on June 28, 2018 to the appropriate Congressional committees that, consistent with section 306(c)(2) of the Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of 1996 (22 U.S.C. 6021 - 6091) and the authority delegated to the Secretary by the President on January 31, 2013, the Secretary had made the statutorily required determination in order to suspend for six months beyond August 1, 2018, the right to bring an action under Title III of the Act.

Text Of Libertad Act

Negotiations On Cuba Provision In Farm Bill Have Begun

https://www.politico.com/story/2018/06/27/marco-rubio-cuba-senate-farm-bill-657545

Senate farm bill stalled by Rubio's Cuba crusade

The Florida Republican is blocking further amendments over a provision that would promote agricultural trade with Cuba.

By LIZ CRAMPTON and CATHERINE BOUDREAU

Updated 06/27/2018 09:27 PM EDT

Senate leadership's goal of holding a floor vote on the farm bill this week is now in doubt, as key farm-state lawmakers work to resolve a new demand from Sen. Marco Rubio over a provision that would promote agricultural trade with Cuba.

The Florida Republican on Wednesday declared on Twitter that he’d block any new amendments to the farm bill unless the Senate votes to strike a provision that would allow USDA funding for foreign market development programs to be spent in Cuba — or until senators adopt his proposal to ban U.S. taxpayer dollars from being spent on businesses owned by the Cuban military.

After a full day of debate on Wednesday, the Senate had only cleared a manager’s package by unanimous consent that contains 18 mostly uncontroversial amendments, including new protections for pollinators and provisions that would increase funding for the milk donation program and raise the catastrophic coverage level under an insurance program for milk producers.

Sen. Chuck Grassley (R-Iowa) scored a win for some taxpayer watchdog and sustainable agriculture groups by securing a provision that would allow only one manager per farm to qualify for commodity subsidies under eligibility criteria set by USDA that require a person to be “actively engaged” in a farm's operation.

But no votes on standalone amendments are expected to be held until Senate Agriculture Chairman Pat Roberts (R-Kan.) and ranking member Debbie Stabenow (D-Mich.) can reach an agreement with Rubio, as well as fellow Cuba hard-liners Sens. Bob Menendez (D-N.J.) and Ted Cruz (R-Texas). Sens. Jeff Flake (R-Ariz.) and Heidi Heitkamp (D-N.D.), both of whom support efforts to change U.S. economic policy in relation to Cuba, are also involved in talks to break the impasse.

Stabenow said during a floor speech on Wednesday that she and Roberts have been working with Rubio to resolve the Cuba dispute for the last few days. After leaving the Senate floor, Stabenow told reporters that they will work through the evening in an effort to reach an agreement, which may mean modifying language pertaining to Cuba, so that it is more narrow, or adding other restrictions on Cuba.

“Hopefully we can do that, because there are a lot of folks really counting on us to be able to come together and get this done,” Stabenow said, adding that the Senate still intends to hold a final vote on the farm bill this week.

Early Wednesday evening, Senate Majority Leader Mitch McConnell filed cloture on the bill. In effect, that means that the earliest a final vote could be held would likely be Friday, unless senators agree to shorten debate.

Roberts, echoing Stabenow's point on the importance of the legislation, said the U.S. agriculture community “is in dire need of this farm bill” because producers have endured slumping commodity prices that have led to a steep decline in farm income in recent years. Further, new woes are cropping up in the form of retaliatory tariffs as trading partners respond to President Donald Trump’s aggressive trade actions.

Lawmakers have cited those conditions as justification for passing a farm bill quickly to provide producers with a greater degree of economic certainty. The current farm bill expires at the end of September.

Roberts, referring indirectly to Rubio, said that passing a farm bill “is paramount over any other issue,” despite some lawmakers wanting to use the farm bill as a vehicle to make a reform “that they believe is very salutary.”

Rubio’s opposition stems from an amendment that Heitkamp secured during the Senate Agriculture Committee's markup of the farm bill earlier this month. It would apply to USDA initiatives like the Market Access Program and Foreign Market Development program, which match taxpayer dollars to private investments by the agribusiness sector to fund projects overseas that build demand for U.S. farm goods.

Many parts of the agriculture industry are interested in opening Cuba to more U.S. farm goods, seeing the island nation as a convenient and largely untapped market. Cuba imported about $260 million in U.S. farm goods last year, according to the U.S.-Cuba Trade and Economic Council.

Cruz has offered an amendment that would block taxpayer funds from being used to support trade promotion programs in Cuba. Rubio’s amendment, meanwhile, would codify an executive order that prohibits taxpayer dollars from being used on programs that benefit businesses owned by the Cuban military.

Following his tweet, Rubio took to the Senate floor on Wednesday afternoon to formally announce his objection.

“I’m not going to object to the ability for American farmers to market our products to a market,” he said. “In the end, it’s food. What I do think we should not allow, however, is the ability to spend taxpayer money in properties and in other places on the island that are owned and controlled by the Cuban military.”

Heitkamp, in a statement, noted that her amendment had broad support when it cleared committee.

“This amendment passed unanimously with overwhelming bipartisan support during markup of the farm bill in the Senate Agriculture Committee," she said, adding: "This amendment would do nothing to lift current restrictions on doing business with the Cuban government, and it would provide a much-needed opportunity for American producers when so many of our important trade relationships are suffering from uncertainty."

Under current law, U.S. producers are free to travel to Cuba to meet with importers on their own dime, said Olivia Perez-Cubas, a spokeswoman for Rubio. “Taxpayer dollars shouldn’t be used to subsidize private U.S. industries to travel to Cuba, especially when that money goes into the pocket of the Cuban military,” she said.

Another round of fireworks on the Senate floor came earlier in the day when Sen. Bob Corker (R-Tenn.) and Sen. Pat Toomey (R-Pa.) tried to introduce an amendment that would curb Trump’s authority to impose tariffs using national security justifications. The senators aimed to get the amendment tacked onto the farm bill after failing to include it as part of a defense bill earlier this month, but they were rebuffed this time when Sen. Sherrod Brown (D-Ohio) blocked a vote.

Some Republicans had speculated privately earlier in the week that Corker's measure could at least get a procedural vote, as POLITICO reported previously, but any one senator can block a vote under the chamber's rules.

“I don’t even know what this body has become that we can’t vote on an issue that is damaging farmers more than what 20 farm bills can make up for,” Corker said, arguing that the amendment should be considered because existing and forthcoming retaliatory tariffs from China and imminent retaliation by Canada and other U.S. allies will cut into the bottom lines of many farmers and ranchers.

Brown, in response, argued that the controversial amendment would have jeopardized the farm bill and also could have forced lawmakers to choose between supporting either the agriculture industry or the steel industry.

“We should not pit farmers against steelworkers,” he said.

Senators Rubio & Cruz Will Attempt To Block Cuba Provision In Farm Bill

By Liz Crampton
Politico Pro
06/27/2018 01:39 PM EDT

Sen. Marco Rubio (R-Fla.) said today he will block new amendments to the farm bill unless the Senate adopts provisions to prohibit taxpayer money from being used for trade promotion efforts in Cuba or from going to businesses owned by the Cuban military.

In a tweet, Rubio said: "I have decided to block the addition of any new amendments to #FarmBill until they either accept the Cruz amendment striking the use of taxpayer $ for promotions in #Cuba or they accept my amendment that prohibits taxpayer $ being spent at business owned by Cuban military."

Rubio's demand is a direct rebuttal of an amendment from Sen. Heidi Heitkamp (D-N.D.) that would authorize U.S. trade promotion funds to be used to increase market access in Cuba for U.S. agricultural products. The amendment, approved at the Senate Agriculture Committee's markup earlier this month, would authorize funding through the USDA Market Access Program and the USDA Foreign Market Development Program, which fund overseas projects that build demand for U.S. farm goods.

The Senate began debating amendments this morning, and eighteen proposals were added to the latest iteration of the farm bill, S. 3042 (115). It was not clear when the bill would be brought up for a final vote.

Senate Farm Bill Has Valuable Cuba Provision; House Version Doesn't; A US$200 Million Question

Some Of US$200 Million In Senate Farm Bill Funding Could Be Used In Cuba
Provision Not In House Version
Senate/House Conference Committee Will Likely Determine Fate
Will Cuba Provision Be In Farm Bill President Trump Signs Into Law?

Supporters Need Help From 89+ Who May Benefit (Profit)
Eight Arguments Opponents May Use

Cuba’s Purchased US$5.6 Billion Since 2001
Are FMD & MAP The Best Incentives To Get More?

Individuals who have invested at least twenty-six (26) years in following the relationship between the United States and the Republic of Cuba have viewed a legislative process that, in an abbreviated manner, is now revisited by the United States Congress.  Could, however, this time have a different outcome? 

Senate Sub-Committee passes.  Senate Committee passes.  Senate passes.  House Sub-Committee passes.  House Committee passes.  House passes.  Conference Committee considers.  Member of Congress issues media release or makes statement proclaiming intent to block legislation unless provision becomes law.  Provision stricken from final legislative language passed by Senate and House.  Legislation without provision signed by President and becomes law.

During the last twenty-six (26) years, there have been three (3) Republic of Cuba-focused legislative initiatives that have become law: 1992 Cuban Democracy Act (CDA), 1996 Libertad Act (“Helms-Burton”), and the 2000 Trade Sanctions Reform and Export Enhancement Act (TSREEA).  For perspective, it’s been eighteen (18) years or 6,451 days since the last Republic of Cuba-focused legislative initiative became law.  Could this time be different?

The Republic of Cuba-related legislative language in what is known as the once-every-five-year “Farm Bill” expected to be approved by the United States Senate (S. 3042) this week is not in the legislative language passed by the United States House of Representatives (H.R. 2). 

If the United States Senate retains the Republic of Cuba-related legislative language, a bicameral conference committee will determine the fate of the Republic of Cuba-related legislative language.

On 18 June 2018, the United States Senate Committee on Agriculture, Nutrition, & Forestry reported, on a vote of 20-1, S. 3042 [Link To Text], the 1,210-page The Agriculture Improvement Act of 2018 which included an amendment on page 248 [Link To Text] authored by The Honorable Heidi Heitkamp (D- North Dakota): “To provide for the use of market access program and foreign market development cooperator program funds in Cuba.”  In Fiscal Year 2018, the total expenditures for these two programs was US$200,287,394.00.    

A representative of a member of the United States Senate Committee on Agriculture, Nutrition, & Forestry shared “[t]here is no set amount of funds that would be made available specifically for Cuba.  The amendment would only allow producers and agricultural trade associations who are already utilizing these programs to also use them to promote their goods in Cuba.  So to that point, yes these funds are only going towards agriculture producers who are represented by trade associations and state regional trade groups.”

On 21 June 2018, the United States House of Representatives passed H.R. 2 [Link To Text], the 748-page Agriculture and Nutrition Act of 2018 by a vote of 213-211.  

What Has Cuba Purchased & Why It Limits Those Purchases

Since 2000, when the TSREEA re-authorized the direct export of food product and agricultural commodities from the United States to the Republic of Cuba, more than US$5.6 billion in food products and agricultural commodities have been delivered to the Republic of Cuba on a “cash in advance” basis as required by the TSREEA.  Thus far in 2018, TSREEA-authorized exports to the Republic of Cuba have increased 25% compared to the same period in 2017. 

The government of the Republic of Cuba requires United States-based food product and agricultural commodity companies to contract with a single entity, Republic of Cuba government-operated Alimport.  The primary purchases from the United States are poultry, corn, soybeans, soybean oil, soybean oil cake, bulk chocolate, soups, calcium phosphates, beer and cookies.

The government of the Republic of Cuba maintains that statutory prohibition on payment terms and financing are the primary impediments to increasing purchases; and banking regulations currently require third-party payment processing and impede currency use in transactions.

For Supporters Of The Provision

Proponents have focused the provision narrowly rather than expansively with respect to seeking a change to a United States statute.  This focus creates a greater likelihood, but not guarantee, of success.  The provision does, however, include the use of United States taxpayer funds which in previous legislative initiatives has deliberately been absent due to opposition.

Supporters of the provision authored by Senator Heitkamp need to have an answer to: The government of the Republic of Cuba has but one designated purchaser for food products and agricultural commodities from the United States - Alimport, whose purchasing decisions are primarily based upon which country source provides payment terms with the longest duration.  Exporters from other countries of durables, consumables and consumer products to the Republic of Cuba prepare for terms of up to 720 days.  Does Alimport, after purchasing food products and agricultural commodities since 2001 from the United States require further convincing about the value of those purchases to the 11.3 million citizens of the 800-mile archipelago?  Isn’t the primary question payment terms?  How do FMD and MAP address those issues?

Those who support the changes to the FMD and MAP should ask those entities who would likely have access to the new United States taxpayer funding source to state publicly how much funding they would probably request and what they would do with those new resources.

Supporters need to articulate the benefits to be obtained and the process for measuring results for the expenditures of United States taxpayer funds for activities within the Republic of Cuba. 

They need to confirm that these efforts are not about spending United States taxpayer funds on billboards in the Republic of Cuba with messages “Eat More Corn” or “Soy Is Good For You” or “Chicken Is Healthy.”

If the government of the Republic of Cuba were to demonstrate that it would approve of FMD and MAP expenditures, and specifically approve of the goals and objectives of FMD and MAP, that confirmation could benefit those who want to assist the Republic of Cuba.

Entities within the Republic of Cuba should offer what they, as receivers of the outreach, would want to see done with the FMD and MAP funds.  What do they need and why do they need it now. 

Those who would be the beneficiaries of Republic of Cuba-focused legislation fail, on a consistent basis, to articulate the specific immediate value in changing a statute: 

1) When legislation is introduced to remove the “cash in advance” payment requirements of the TSREEA, are there United States-based financial institutions whose executives publicly present themselves at hearings to confirm that they will provide financing and specify the type of financing they will provide for the export of food products and agricultural commodities from the United States to the Republic of Cuba?  No, there are not.

2) When legislation is introduced to remove the “cash in advance” payment requirements of the TSREEA, are there United States-based food product and agricultural commodity producers and exporters whose executives publicly present themselves at hearings to confirm that they will provide payment terms (and perhaps financing) and specify the type of payment terms (and perhaps financing) they will provide for the export of food products and agricultural commodities from the United States to the Republic of Cuba?  No, there are not.

The government of the Republic of Cuba’s absence from articulating what it would do if changes were made to specific statutes remains unhelpful. 

If the government of the Republic of Cuba were to say “if this happens, we are prepared immediately to do…” there would be a benefit to supporters of legislation (and to changes in policy and regulations).

The list of reasons for the failure of legislative initiatives which have been introduced often on an annual basis by Members of Congress who serve in the United States Senate and United States House of Representatives is lengthy and bewildering because of a marketing ineptitude of sponsors, co-sponsors and private sector advocates. 

Much more could have been accomplished and can be accomplished through changes to policy and regulations, but those failures-of-action remain self-evident and often removed from consideration due to a lack of strategic vision. 

Focusing upon changes to policy and regulations are said to not be “convenient” or are “confusing” or a “distraction” to [thus far failed] legislative efforts.  Republic of Cuba-focused advocacy groups prefer the likely revenue stream opportunities from promoting legislation rather than changes to policy and regulations. 

For Opponents Of The Provision

Opponents of the language within S. 3042 will focus upon the use of United States taxpayer funds to provide financial gain to the newly-installed Diaz-Canel Administration in the Republic of Cuba while providing little, if any value to United States exporters. 

By funding visits to and activities within the Republic of Cuba, individuals subject to United States jurisdiction will be bringing revenue into Republic of Cuba government-operated companies, including hotels, restaurants, event venues, and internet/wireless communication systems.

With substantial support in the United States Senate for the language in S. 3042, opponents will be arguing against incrementalism; seeking to demonstrate that such small movements become the foundation for ever-larger changes to United States statutes without commensurate benefits.

Opponents may attempt to insert language during the conference committee deliberations that would: 1) require FMD and MAP United States taxpayer funds be restricted to Airbnb-registered properties and privately-operated paladares (restaurants), 2) restrict marketing expenditures to media (newspapers, magazines, television, and radio) which is not owned by the government of the Republic of Cuba, 3) restrict focus to independent agricultural cooperatives, 4) require expenditures be subject to per visit audits by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury, 5) restrict the total value of FMD and MAP taxpayer funds that the USDA may allocate to cooperators and participants, 6) link expenditures with the conclusion of the investigation by the United States Department of State into the matter of injuries sustained by United States Embassy personnel in Havana, Republic of Cuba, and the return of a full complement of diplomats to the Republic of Cuba, 7) require the United States Secretary of Agriculture to report to the United States Congress prior to any distribution of Republic of Cuba-related funds for FMD and MAP, and 8) prohibit funds to any United States political advocacy organization. 

Opponents will also ask if the Republic of Cuba is of such value, why don’t the twenty-three (23) cooperators in the FMD and the sixty-six (66) participants in the MAP continue to use their member-dues resources?  

Opponents will argue that the government of the Republic of Cuba, knowing a portion of approximately US$200 million in United States taxpayer funds are available, will pressure cooperators and participants to use funds in the Republic of Cuba as a means of demonstrating political support for the government of the Republic of Cuba and a not-too-subtle message: if an organization wants its members to receive orders for food products and agricultural commodities, let’s see just how important a market is the Republic of Cuba for organization members and United States taxpayers whose monies will be used to support those efforts.

Something For Both

Opponents could determine that an effort to strip the Republic of Cuba-focused provision from the Farm Bill would not be necessary because permitting the provision may then be used to focus additional attention on the inadequacies of the Republic of Cuba marketplace.  That’s one challenge that proponents would accept.

What Is FMD & MAP?

For Fiscal Year 2018, the United States Department of Agriculture (USDA) allocated US$26,484,947.00 in taxpayer funds to twenty-three (23) cooperators [see list at end of analysis or use link] under the Foreign Market Development Program (FMD), an average of US$1,021,084.00 per distribution.  

https://www.fas.usda.gov/programs/foreign-market-development-program-fmd/fmd-funding-allocations-fy-2018

FMD: “The Foreign Market Development (FMD) Program, also known as the Cooperator Program, helps create, expand and maintain long-term export markets for U.S. agricultural products. Under the program, FAS partners with U.S. agricultural producers and processors, who are represented by non-profit commodity or trade associations called “cooperators,” to promote U.S. commodities overseas.

The FMD program focuses on generic promotion of U.S. commodities, rather than consumer-oriented promotion of branded products. Preference is given to organizations that represent an entire industry or are nationwide in membership and scope.

FMD-funded projects generally address long-term opportunities to reduce foreign import constraints or expand export growth opportunities. For example, this might include efforts to: reduce infrastructural or historical market impediments, improve processing capabilities, modify codes and standards, or identify new markets or new uses for the agricultural commodity or product.

Each year, FAS announces the FMD application period and criteria in the Federal Register. Organizations apply for the FMD program through the United Export Strategy (UES) process, which allows applicants to request funding from multiple USDA market development programs through a single, strategically coordinated proposal. FAS reviews the proposals and awards funds to applicants that demonstrate the potential for effective performance based on a clear, long-term strategic plan.” 

For Fiscal Year 2018, the USDA allocated US$173,802,447.00 in taxpayer funds to sixty-six (66) participants [see list at end of analysis or use link] under the Market Access Program (MAP), an average of US$2,633,370.00 per distribution. 

https://www.fas.usda.gov/programs/market-access-program-map/map-funding-allocations-fy-2018

MAP: “Through the Market Access Program (MAP), FAS partners with U.S. agricultural trade associations, cooperatives, state regional trade groups and small businesses to share the costs of overseas marketing and promotional activities that help build commercial export markets for U.S. agricultural products and commodities.

MAP reaches virtually every corner of the globe, helping to build markets for a wide variety U.S. farm and food products. FAS provides cost-share assistance to eligible U.S. organizations for activities such as consumer advertising, public relations, point-of-sale demonstrations, participation in trade fairs and exhibits, market research and technical assistance. When MAP funds are used for generic marketing and promotion, participants must contribute a minimum 10-percent match. For promotion of branded products, a dollar-for-dollar match is required.

Each year, FAS announces the MAP application period and criteria in the Federal Register. Applicants apply for MAP through the United Export Strategy (UES) process, which allows eligible organizations to request funding from multiple USDA market development programs through a single, strategically coordinated proposal. FAS reviews the proposals and awards funds to applicants that demonstrate the potential for effective performance based on a clear, long-term strategic plan.”

Complete Analysis In PDF Format

Will Farm Bill Retain Provisions Giving Cuba Access To MAP & FMD?

What is known as the “Farm Bill” is revisited by the United States Congress every five (5) years.

During the last twenty-six (26) years, there have been three (3) Republic of Cuba-focused legislative initiatives that have become law: 1992 Cuban Democracy Act (CDA), 1996 Libertad Act (“Helms-Burton”) and 2000 Trade Sanctions Reform and Export Enhancement Act (TSREEA).  For perspective, it’s been eighteen (18) years or 6,400+ days since the last Republic of Cuba-focused legislative initiative became law.

On 18 June 2018, the United States Senate Committee on Agriculture, Nutrition, & Forestry reported, on a vote of 20-1, S. 3042, the 1,210-page The Agriculture Improvement Act of 2018 which included an amendment [Link To Text] authored by The Honorable Heidi Heitkamp (D- North Dakota): “To provide for the use of market access program and foreign market development cooperator program funds in Cuba.”  The United States Senate has scheduled a vote on 3042 for 26 June 2018.  

A representative of a member of the United States Senate Committee on Agriculture, Nutrition, & Forestry shared “[t]here is no set amount of funds that would be made available specifically for Cuba.  The amendment would only allow producers and agricultural trade associations who are already utilizing these programs to also use them to promote their goods in Cuba.  So to that point, yes these funds are only going towards agriculture producers who are represented by trade associations and state regional trade groups.”  

On 21 June 2018, the United States House of Representatives passed H.R. 2, the 748-page Agriculture and Nutrition Act of 2018 by a vote of 213-211.  H.R. 2 has no provision similar to the amendment in S. 3042. 

For Fiscal Year 2018, the United States Department of Agriculture (USDA) allocated US$26,484,947.00 in taxpayer funds to twenty-three (23) cooperators under the Foreign Market Development Program (FMD), an average of US$1,021,084.00 per distribution.

https://www.fas.usda.gov/programs/foreign-market-development-program-fmd/fmd-funding-allocations-fy-2018

For Fiscal Year 2018, the USDA allocated US$173,802,447.00 in taxpayer funds to sixty-six (66) participants under the Market Access Program (MAP), an average of US$2,633,370.00 per distribution.

https://www.fas.usda.gov/programs/market-access-program-map/map-funding-allocations-fy-2018

NOTE: Since 2000, when the TSREEA re-authorized the direct export of food product and agricultural commodities from the United States to the Republic of Cuba, more than US$5.6 billion in food products and agricultural commodities have been delivered to the Republic of Cuba on a “cash in advance” basis as required by the TSREEA.  Thus far in 2018, TSREEA-authorized exports have increased 25% compared to the same period in 2017.  The government of the Republic of Cuba maintains that prohibition on payment terms and financing are the primary impediments to increasing purchases.

Text Of S. 3042 In PDF Format

Text Of H.R. 2 In PDF Format

Confiserie Sprungli AG & Dieter Meier Of Switzerland Use Cocoa Beans From Cuba

Confiserie Sprungli AG & Dieter Meier Of Switzerland Use Cocoa Beans From Cuba  

http://www.spruengli.ch

https://www.spruengli.ch/en/shop/chocolates-truffes/cuba-autentica-coleccion-de-trufas-gran-cru-gr-1-en.html

https://www.spruengli.ch/en/search?q=cuba

https://www.spruengli.ch/en/cuba-chocolate-negro-en.html

From The Company:

“Since we are a traditional Zurich-based company we sell our products exclusively through our own Spruengli stores (Switzerland, Dubai and Abu Dhabi) and via our E-Shop.

We regret to inform you that it is not our business policy to export our products through a franchising system nor do we sell any licenses.  Furthermore, we also do not have any expansion plans for the United States.

For our Cuba auténtica collección products we only use cocoa beans from Baracoa, Cuba. 

The beans are obtained by another company, Max Felchlin AG located in Schwyz, Switzerland. Link: https://www.felchlin.com/en/company/company-portrait

They import the cocoa beans and process them to couverture chocolate which we then use for our well-known products.”

Zurich, Switzerland-based Dieter Meier is also creating chocolate products using cocoa beans from the Republic of Cuba.

https://www.chocolatdietermeier.com/

Editor’s Note: The products from Confiserie Sprungli and Dieter Meier taste very good.    

And, chocolate goes well with a cup of Nespresso Café de Cuba Vertuo… 

https://www.nespresso.com/us/en/order/capsules/original/cafecito-de-cuba-limited-edition-coffee

Secretary Of State Pompeo Speaks At Detroit Economic Club; He Answers 6 Questions- One Is About Cuba

Remarks
Mike Pompeo
Secretary of State
Detroit Economic Club
Detroit, Michigan
June 18, 2018

excerpts......

MR ANDERSON: Well, maybe we will wrap up with one international question that’s a little closer to home, and that’s a question about Cuba. So Cuba now has the first non-Castro president in many decades. Do you continue to think we’ll grow closer with Cuba? How do you see that relationship evolve?

SECRETARY POMPEO: It’s true his last name’s not Castro. (Laughter.) But you wouldn’t know it from looking at his policies and plans. So I don’t see significant changes in the Cuban Government. Having said that, I do see significant opportunity. I think over time that its proximity to the United States, the nature of the human beings there, I think we – I think ultimately we end up in a much better place in Cuba. The question has always been speed, how quickly can you get there, and what are the right toolsets to reinforce that and make that more likely to happen. President Trump’s made clear he wants us to do that, he wants us to be engaged in ways that increase the capacity for ordinary Cubans to have the opportunities that we all have in America, both economic freedoms and political freedoms. And today we still have a lot of work to do.

President Trump Has A Problem: Tariffs By Canada, China, EU & Mexico

Updated…. New Export Data

President Trump Has A Problem: Tariffs By Canada, China, EU & Mexico
Here’s One Solution
He’d Support It If He Knew About It
A Good, Strong Simple Quick Decision
Where Are Secretaries Mnuchin, Perdue & Ross?

Thus Far In 2018:
U.S. Food/Ag Exports To China Decreased 12.2%
U.S. Food/Ag Exports To Mexico Increased .2%
U.S. Food/Ag Exports To Canada Increased 1.1%
U.S. Food/Ag Exports To The EU Increased 13.4%

U.S. Food/Ag Exports To Cuba Increased 25.3%
Cuba Imported More Food/Ag Products From U.S. Than 19 Of 28 EU Members
Cuba Ranks 52nd Of 229 Countries For U.S. Food/Ag Exports

No Change To Law
One OFAC License Could Increase Exports
Home BancShares In Arkansas
Removing Foreign Banks From Transactions Can Increase U.S. Exports
Direct Banking Can Save Exporters 2%+ From Each Payment  
Where’s Arkansas’s Republican Governor & All-Republican Congressional Delegation?

To some, The Honorable Donald J. Trump, President of United States, views trade as binary, having two parts- a winner and a loser.  Perhaps, it’s more ternary, having three parts- a winner, a loser and a component that equates to fairness.

He believes in overtly rewarding good behavior and overtly punishing bad behavior.  He believes in good (strong) deals and not bad (poor) deals.  He believes in high risk, high reward strategies.  All binary.  He espouses and did so during the decades prior to his presidency that trade should be “fair” and the United States should be “treated fairly” and not “treated badly” or “treated poorly.”

President Trump can appreciate the absurdity where a bank located in Canada, Mexico, Panama or the EU receives a fee from a transaction between a farmer, cooperative or company in the United States and the Republic of Cuba. 

Thus far in 2018, according to the United States Department of Commerce (USDOC), the Republic of Cuba has purchased, in U.S. Dollar value, more agricultural commodities and food products from the United States, on a cash-in-advance basis as required by U.S. law, than have nineteen (19), or 68% of the twenty-eight (28) members of the European Union (EU). 

The Republic of Cuba’s 25.3% increase in agricultural commodity and food product purchases from the United States thus far in 2018 is also a higher percentage increase than nineteen (19) of the twenty-eight (28) members of the EU.

President Trump does not consider the government of the Republic of Cuba to be good, a friend.  To him, the government of the Republic of Cuba is a bad actor, a disruptor, deserving to be punished until it changes its behavior voluntarily or through coercion.  He has stated he is a friend (“loves”) to the 11.3 million citizens of the 800-mile long archipelago, whose closest point is approximately one hundred (100) miles from the United States; he separates those who lead from those who are led, as have his predecessors. 

How does the President maintain punishment, remain tough, strong, be a winner, show love, embrace a good deal, accept high risk… and balance (or re-balance) the interests of politically and economically significant constituencies in those among the fifty states where agricultural exports and food product exports are first without equal?

The President’s position is tariffs are necessary to correct macro-imbalances in bilateral and multilateral trade agreements; and that short-term to medium-term micro-impact upon certain constituencies in certain states may be required to create a far better long-term. 

He’s asking those who support him to trust him by accepting pain from his decisions; to those who oppose him, they will come around once he has secured victory.  “Make America Great Again” is not without pain- perceived or real.  There is a means to mitigate that pain.

For the Republic of Cuba to have a role in providing that victory, that “againness,” President Trump needs to permit one United States bank in Arkansas to obtain a portion of a license it does not have from the United States Department of the Treasury. 

One signature from The Honorable Steven Mnuchin, United States Secretary of the Treasury or Ms. Andrea Gacki, Acting Director of the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury makes it happen.

That license would immediately benefit United States agricultural commodity and food product exporters from the first transaction- United States exporters will get paid safer, faster and with less cost for each payment they receive from the Republic of Cuba.  And, ports in Alabama, Florida, Georgia, Louisiana, Mississippi, Texas and Virginia would benefit.

President Trump appreciates that straight line transactions are generally good; triangular transactions are generally bad.  He appreciates spending less and receiving more. 

That’s a view also appreciated by The Honorable Lawrence Kudlow, Director of the National Economic Council at The White House and his colleague The Honorable Peter Navarro, Director of the National Trade Council at The White House.  For both gentlemen, exports matter.

Since December 2001, when the first deliveries from the United States to the Republic of Cuba commenced under provisions of the Trade Sanctions Reform and Export Enhancement Act (TSREEA) of 2000, the Republic of Cuba has purchased, on a cash-in-advance basis, more than US$5.652 billion in agricultural commodities and food products from United States companies. 

In 2017, the Republic of Cuba ranked 53rd amongst 229 agricultural commodity and food export markets for United States companies according to the United States Department of Commerce; ahead of Poland, Jordan, Argentina, Russia, Qatar and Greece and ahead of twenty (20) of the twenty-eight (28) members of the EU among others. 

During the last seventeen (17) years, the Republic of Cuba has purchased approximately US$1.4 billion in soybean products: more than US$623 million in soybeans, more than US$531 million in soybean oil cake, and more than US$251 million in soybean oil.

Thus far in 2018, the Republic of Cuba has purchased approximately US$15 million in soybeans and soybean oil, compared with US$8,493,537.00 (soybeans; no soybean oil) during the same period in 2017.  That is a 76.6% increase.

Soybean products represent approximately 25% of all agricultural commodities and food products exported from the United States to the Republic of Cuba since December 2001.

During the last seventeen (17) years, the Republic of Cuba has purchased approximately US$1.15 billion in corn.

Thus far in 2018, the Republic of Cuba has purchased approximately US$9.4 million in corn, compared with US$14,462,001.00 during the same period in 2017.  That is a 53.8% decrease.              

Corn represents approximately 20% of all agricultural commodities and food products exported from the United States to the Republic of Cuba since December 2001.

On 15 June 2018, President Trump said that the United States “The United States will pursue additional tariffs if China engages in retaliatory measures, such as imposing new tariffs on United States goods, services, or agricultural products; raising non-tariff barriers; or taking punitive actions against American exporters or American companies operating in China.”

On 31 May 2018, President Trump announced that the United States was “taking action to protect America’s national security from the effects of global oversupply of steel and aluminum. Following extensive discussions and a months-long process, the President will implement tariffs on steel and aluminum imports from Canada, Mexico, and the European Union.”

Following the announcement, the governments of Canada, Mexico and twenty-eight members of the EU reported that tariffs on products, including agricultural commodities and food products, from the United States would be implemented.

On 4 May 2018, President Trump was quoted as saying: “My people are coming back right now from China, and we will be doing something, one way or the other, with respect to what's happening in China.  And let me say this:  I have great respect for President Xi.  That's why we're being so nice.  And we have a great relationship.  But we must bring fairness into trade between the U.S. and China.  And we'll do it.”

On 5 May 2018, The Wall Street Journal reported that exports of soybeans and corn from the United States to the People’s Republic of China had substantially decreased.  According to The Honorable Charles Grassley (R- Iowa), a member of the United States Senate, “If [the Chinese] market closes, it could be devastating for local communities across the Midwest.” 

Increasing the export of soybeans and corn, and other agricultural commodities and food products from the United States to the Republic of Cuba would not be a panacea, but could materially offset without risk to United States taxpayers because United States law requires payment of cash-in-advance for deliveries of agricultural commodities and food products from the United States to the Republic of Cuba.  The law does not need to be altered for exports to increase.

President Trump could take immense satisfaction from using rational commercial logic to correct simple commercial arithmetic that escaped comprehension of the Obama Administration: When export opportunities exist, assist and do no harm.  And, if there are two parts to create success, don’t authorize one part and then self-congratulate for not authorizing the other part.  President Trump would concur that’s terrible.

To assist towards increasing agricultural commodity and food product exports, along with other authorized exports (agricultural machinery, farm implements, and medical equipment, for example), Conway, Arkansas-based Home BancShares (2018 assets approximately US$14 billion), who through its Centennial Bank subsidiary purchased Pompano Beach, Florida-based Stonegate Bank in September 2017, must augment its existing license from the OFAC.  Home BancShares has experience with agriculturally-focused transactions on behalf of its customers in Arkansas, Alabama, Florida and New York.

Mr. C. Randall Sims, President and Chief Executive Officer of Home BancShares, along with Mr. John W. Allison, Chairman of Home BancShares, should seek assistance from their Governor (who visited the Republic of Cuba in 2015) and their Members of Congress:

The Honorable Asa Hutchinson (R), Governor of the State of Arkansas; United States Senators: The Honorable John Boozman (R) and The Honorable Tom Cotton (R); and the four members of the United States House of Representatives: The Honorable Eric “Rick” Crawford (R) who has visited the Republic of Cuba, The Honorable French Hill (R), The Honorable Steve Womack (R), and The Honorable Bruce Westerman (R).

In 2015, the OFAC authorized Stonegate Bank (2017 assets approximately US$2.9 billion) to have an account with Republic of Cuba government-operated Banco Internacional de Comercia SA (BICSA). 

However, the Obama Administration would not authorize BICSA under a general OFAC license or in the OFAC license issued to Stonegate Bank, so United States export-related payments have been sent and received through Panama City, Panama-based Multibank, which has dealings with the Republic of Cuba. 

Without bilateral direct correspondent banking accounts, 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 secure, more transparent, more timely (same day versus two or more days), and less costly. 

The augmentation of the OFAC license would be consistent with the export-focused mandates of the United States Department of Agriculture (USDA) and United States Department of Commerce (USDOC) by the Trump Administration.

Previously, officials within the OFAC and United States Department of State shared that if a license application were submitted, the license application would likely be approved.

OFAC Regulations:

55.  Are financial institutions other than banks permitted to open correspondent accounts in Cuba?  Depository institutions, as defined in 31 CFR §515.333, which include certain financial institutions other than banks, are permitted to open correspondent accounts at banks in Cuba. See 31 CFR §515.584(a).

(f) Any banking institution, as defined in §515.314, that is a person subject to U.S. jurisdiction is authorized to provide financing for exports or reexports of items, other than agricultural commodities, authorized pursuant to §515.533, including issuing, advising, negotiating, paying, or confirming letters of credit (including letters of credit issued by a financial institution that is a national of Cuba), accepting collateral for issuing or confirming letters of credit, and processing documentary collections. With the exception of transactions related to exports or reexports of medicines or medical supplies, items associated with the provision of telecommunications and internet services for the Cuban people, or items associated with air and sea operations that support permissible travel, cargo, or trade, nothing in this paragraph authorizes a direct financial transaction prohibited by §515.209.

56.  Are Cuban banks permitted to open correspondent accounts at U.S. banks? No. U.S. depository institutions are permitted to open correspondent accounts at Cuban banks located in Cuba and in third countries, and at foreign banks located in Cuba, but Cuban banks are not generally licensed to open such accounts at U.S. banks. See note to 31 CFR §515.584(a).

What To Do?

Home BancShares should seek the 50% of its correspondent banking license from the OFAC that it does not possess to then transparently, securely, and efficiently receive funds from the Republic of Cuba and transfer funds to the Republic of Cuba.

A fully-implemented direct correspondent banking agreement will lessen transaction costs by up to 2% or more; and that 2% could result in additional soybean products and corn and other agricultural commodities and food products exported from the United States to the Republic of Cuba.  

Since December 2001, the Republic of Cuba has transferred more than US$5.6 billion to United States-based companies for the purchase of agricultural commodities, food products and healthcare products (medical instruments, medical equipment, medical supplies and pharmaceuticals); approximately US$150 million went to third-country financial institutions 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.

The government of the Republic of Cuba may believe, and not without some reasonableness, that if the OFAC does not want United States companies to save on transaction fees and gain from the potential savings in terms of increased product exports, then so be it.  And, providing additional revenues to banks located in Canada, Mexico and the EU creates goodwill for the Republic of Cuba.

The government of the Republic of Cuba has a responsibility to gain as much as possible from each bilateral commercial relationship; and United States companies can provide high quality product, with competitive pricing, on a consistent basis, through efficient ground and rail and port transportation networks.  That’s a benefit to the 11.3 million citizens of the 800-mile long archipelago.  

United States companies (large, medium and small; and individual farmers) who engage in authorized transactions with any country should not be financially penalized by the United States government.

There exists an available OFAC licensing pathway to solve a payment problem.  Home BancShares and BICSA should make use of it.  The USDA, USDOC and OFAC should support it.  

It’s the type of good deal for the United States that President Trump looks to support… he just needs to know about it.

Complete Text In PDF Format

Link To Previous Blog Post:

https://www.cubatrade.org/blog/2017/12/12/president-trump-deserves-opportunity-to-right-an-obama-administration-wrong-sftcp-dcb?rq=Stonegate%20Bank

FedEx Seeks Another Delay From USDOT To Initiate Services To Cuba

MOTION OF FEDERAL EXPRESS CORPORATION FOR ADDITIONAL EXTENSION OF START-UP DATE

14 June 2018

Federal Express Corporation ("FedEx") hereby respectfully moves the Department of Transportation ("DOT") for a six-month extension of time (i.e., through December 15, 2018) to inaugurate U.S.-Cuba scheduled, all-cargo air services. In its July 15, 2016 Notice of Action Taken, the DOT granted FedEx an allocation of five weekly frequencies to provide business daily (i.e., Monday-Friday) all-cargo air services between Miami, Florida (MIA) and Matanzas/Varadero, Cuba (VRA). Under the Notice's standard ninety (90) day start-up requirement, FedEx was required to inaugurate its U.S.-Cuba air services by April 15, 2017. However, the DOT granted FedEx two extensions of this start-up deadline, the latest giving FedEx until June 15, 2018, to inaugurate its U.S.-Cuba all-cargo services. FedEx needs this new extension to provide it with additional time to work through the continuing doing-business challenges and operational constraints that persist in the Cuba market, especially given its emergent nature and the Cuban and U.S. legal, regulatory and policy complexities overlaying such matters.

In additional support of this Motion, FedEx respectfully submits the following:

As the only all-cargo participant in the Department's 2016 U.S.-Cuba Frequency Allocation Proceeding, FedEx is pleased to have received authority from the Department to operate five weekly all-cargo flights between MIA and VRA. Since FedEx is the only U.S. all-cargo carrier seeking to provide U.S.-Cuba scheduled air services, DOT's granting this request for an additional extension will not adversely affect any other U.S. carriers nor the U.S. shipping public.

As previously indicated in this docket, FedEx began the rigorous preparatory and planning work for its Cuba services some time ago. However, FedEx requires another six-month extension of time because of several continuing inextricable dynamics, such as securing and establishing business relationships with Cuban service providers in relation to air operations support services, customs clearance, and ground/ delivery operations. The company must ensure these service providers would appropriately complement the express delivery services for which FedEx is world­ renowned while simultaneously remaining within the limits of the existing, relevant

U.S. and Cuban laws, regulations and policies.

The Department's grant of FedEx's extension request would be consistent with the public interest and Department precedent. FedEx remains committed to using its Cuba authority to provide the highest quality of reliable and efficient U.S.-Cuba air express and general cargo services, which would maximize the public benefit of the U.S.-Cuba Memorandum of Understanding for U.S. shippers and commerce alike. The six-month extension requested herein would not impact such longer-term benefits.

Moreover, all other U.S. carriers who received U.S.-Cuba authority from the Department have requested, and ultimately received, start-up extensions relating to certain U.S.-Cuba flights, including flights serving markets which are in much higher demand than VRA.

WHEREFORE, FedEx respectfully requests that the Department grant this motion for a six-month extension of time, to December 15, 2018, for the start-up of FedEx’s scheduled all-cargo air services between Miami, Florida, and Matanzas/Varadero, Cuba.

Complete Filing In PDF Format