President Trump Mentions Cuba When Signing Farm Bill.... And It Wasn't Positive

The Agriculture Improvement Act of 2018 (H.R. 2) is valued at US$867 billion, to be expended during a five-year period; the document is more than 600 pages.

Yet The White House, when issuing a two-paragraph statement by the President of the United States, determined important to mention a provision within H.R. 2 which relates to the Republic of Cuba.

The background to the insertion of mention of the Republic of Cuba is relevant for those who believe there is a “pathway forward” and momentum for the 116th Congress in 2019 to pass legislation that will further expand the commercial relationship between the United States and the Republic of Cuba; specifically, authorizing the provision of payment terms and financing for agricultural and food product exports from the United States to the Republic of Cuba.

For the statement about the Republic of Cuba to be inserted into a public document relating to a bill signing, it would likely have been specifically requested by the National Security Council (NSC) and Office of Legislative Affairs; and perhaps at the request of a Member of the United States Congress.

So, advocates need be sober and appreciate the peril arising from believing that after A will automatically come B. The last B took eighteen years to follow A.

Office of the Press Secretary

FOR IMMEDIATE RELEASE
December 20, 2018

STATEMENT BY THE PRESIDENT

Today, I have signed into law H.R. 2, the "Agriculture Improvement Act of 2018" (the "Act").  Section 12303 of the Act requires the Secretary of Agriculture (Secretary) to establish a Tribal Advisory Committee (Committee), predominantly composed of individuals appointed by Members of Congress, to advise the Secretary on matters relating to tribal and Indian affairs.  My Administration supports the policy aims of this Committee.  Because it includes legislative branch appointees, however, the Committee cannot be located in the executive branch, consistent with the separation of powers.  I will therefore instruct the Secretary not to establish this Committee.  I will, however, instruct the Secretary to work with the Congress to revise section 12303 to permit a properly constituted committee to be established within the Department of Agriculture to perform similar functions.  My Administration will also take additional steps to further develop and advance its important relationships with tribal leaders.
 
In addition, section 3201 permits the Department of Agriculture to use funds to carry out certain programs in Cuba.  The Act prohibits such funds from being used in contravention of the policy outlined in National Security Presidential Memorandum 5 of June 16, 2017, (Strengthening the Policy of the United States Toward Cuba).  I appreciate the recognition of the Congress that these funds must not be used to undermine the foreign policy of the United States with respect to Cuba.  As such, my Administration will not use any taxpayer funds from these Department of Agriculture programs to benefit the Cuban regime.
 
DONALD J. TRUMP

Another Obama (Ben Rhodes) Administration Legacy Decision Harms Major League Baseball

Ben Rhodes Again Takes Credit; Leaves Orphaned Failure About Payments 

MLB Challenge: Prove No Funds Benefiting Cuba’s Military 

Trump Administration Challenge: Ending Third-Country Benefit For MLB Transactions 

Once again, Mr. Ben Rhodes, Assistant to the President and Deputy National Security Advisor for Communications at the National Security Council (NSC) during the Obama Administration has offered his perspective on a commercial transaction involving the United States and the Republic of Cuba.  And, as expected, leaves unspoken his role in a third-country receiving financial benefits when there is no reason for doing so. 

From Mr. Rhodes: “Huge deal. We spent the end of the Obama Administration trying to set the conditions to make this possible, including Obama and Raul attending an MLB game in Havana. At a time of political division baseball is something that can bring Americans and Cubans together.” 

New York, New York-based Major League Baseball (MLB) has announced an agreement with Republic of Cuba-based Federacion Cubana de Beisbol (FCB) a component of which will require potentially tens of millions of dollars payments by electronic transfer from MLB to FCB. LINK To English Text & LINK to Spanish Text.

The current process: MLB will transfer funds from a United States-based financial institution to a financial institution located in a third-country and then that third-country financial institution will transfer the funds to a Republic of Cuba government-operated financial institution in the Republic of Cuba.  Third-country financial institutions will receive commissions for every transaction from MLB to FCB. 

The Trump Administration and Members of the United States Congress have expressed qualifications about the MLB/FCB agreement.  They want to know how MLB will ensure no funds delivered to FCB are directed to entities controlled by or affiliated with the Revolutionary Armed Forces of the Republic of Cuba (FAR).  The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury may require MLB and FCB to certify, in writing, that no funds delivered from MLB to FCB will be subject to the influence of FAR.  For the government of the Republic of Cuba to put that type of clause into a document may be problematic.  And, the Trump Administration may require FCB to certify, subject to audit, that no payments from MLB will be used by the government of the Republic of Cuba to make payments on non-athletic-related debt or be used for Venezuela-related and Nicaragua-related transactions.  

MLB will look to the Trump Administration, and specifically to the NSC and then to the OFAC to solve the electronic payment process issue.  The solution is a simple one.  No regulation needs to be changed.  OFAC just issues the 50% of a license that it previously issued 2015 to a financial institution located in Florida and which is now owned by a financial institution in Arkansas.  

Had Mr. Rhodes (and the Obama Administration) thought more about, or more accurately, listened to what others were urging from 20 January 2009 through 20 January 2017, what was required to re-establish a United States-Republic of Cuba bilateral commercial infrastructure, the Obama Administration would have fully-implemented Direct Correspondent Banking (DCB) for authorized transactions.   

The Trump Administration appreciates that DCB benefits United States entities: It’s faster, It’s less expensive and it requires increased transparency on the part of the Republic of Cuba government-operated financial institutions.  DCB means less time for United States entities to be paid and less cost to receive those payments; and less cost, less time and more transparency for those United States entities which send payments to the Republic of Cuba.  It also means that financial institutions in Canada, Europe and in The Americas will not be receiving commissions on every transaction. 

DCB Background 

For the last seventeen years, financial institutions in Canada, Europe and in The Americas have received a commission on every authorized United States export to the Republic of Cuba; that’s a percentage on more than US$5.8 billion since December 2001.  It’s the equivalent of winning a bank lottery. 

This triangular payment process has remained in force because the Obama Administration (channeling Mr. Rhodes) instructed the OFAC to only issue 50% of a license to Pompano Beach, Florida-based Stonegate Bank. 

The Obama Administration provided a license to a U.S. bank to have an account at a bank in Cuba but did not provide a license for the bank in Cuba to have an account at the U.S. bank.  Thus, no DCB.   

In September 2017, Conway, Arkansas-based Home BancShares (2018 assets approximately US$14 billion) through its Centennial Bank subsidiary purchased Stonegate Bank.  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), a member of Republic of Cuba government-operated Grupo Nuevo Banca SA, created by Corporate Charter No. 49 on 29 October 1993 and commenced operation on 3 January 1994.  Stonegate Bank also provides commercial operating accounts for the Embassy of the Republic of Cuba in Washington, DC. 

Trade Sanctions Reform and Export Enhancement Act of 2000 (TSREEA) exports (agricultural commodities and food products) since first use by the Republic of Cuba in December 2001 are US$5,849,925,838.00 through October 2018: Clinton Administration: US$0.00. Bush Administration: US$2,697,501,426.00. Obama Administration: US$2,700,145,225.00. Trump Administration: US$452,279,187.00 (through October 2018).  TSREEA requires that payments be made on a cash-in-advance basis; no other payment terms are permitted. 

With DCB, the Republic of Cuba-based entity would transfer funds (using SWIFT codes) from its account at BICSA directly to Stonegate or would use existing funds at the BICSA account at Stonegate.  The funds would then be transferred from Stonegate to the financial institution selected by the United States-based company.  The process generally can be confirmed in hours; and the transfer costs are substantially less. 

Why did the Obama Administration refuse to issue the 50% of the license that would be required to implement DCB?  Because the Obama Administration did not comprehend what companies require to engage globally.  They were so excited about doing something, that there was little focus upon the consequences of what they did. 

After the OFAC issued the 50% of the license to Stonegate Bank, representatives of the United States business community pleaded with the Obama Administration to issue the complete license.  Their response was “we have done as much as we can do.”   

The Trump Administration can eliminate a three-way payment process and create a two-way payment process resulting in more efficiency and less cost to United States entities; and, important to the Trump Administration, removing an unnecessary seventeen-year (17) multi-million-dollar revenue stream for third-country financial institutions that the Obama Administration unwisely permitted to remain in place. 

An unnecessary and painful and egregious irony that the Obama Administration’s lack of follow-through negatively impacts “America’s Greatest Pastime.”  Another mind-meld gone awry.    

Congress Should Encourage U.S. Companies To Import Products From Cuba

Instead of focusing upon legislation, Members of Congress should encourage United States companies in their states and districts to import authorized products from Cuba; and Cuba should do more to present those opportunities. 

The Obama Administration authorized specifically-sourced agricultural commodities, food products and non-food products to be exported from the Republic of Cuba directly to the United States.   

From the United States Department of State: To be eligible for import into the United States, a listed 515.582 product must be produced by independent Cuban entrepreneurs, as demonstrated by documentary evidence.  Persons subject to US jurisdiction engaging in import transactions involving goods produced by an independent Cuban entrepreneur pursuant to 515.582 must obtain documentary evidence that demonstrates the entrepreneur's independent status, such as a copy of a license to be self-employed issued by the Cuban government, or in the case of an entity, evidence that demonstrates that the entity is a private entity that is not owned or controlled by the Cuban government. 

Although the Trump Administration has not instituted changes to Obama Administration eligibility requirements, not unreasonable to expect importers to certify that the Republic of Cuba-based exporter is not be controlled by or affiliated with the Revolutionary Armed Forces of the Republic of Cuba (FAR). 

Thus far, charcoal and coffee have been sourced in the Republic of Cuba and then exported (or re-exported) from the Republic of Cuba to the United States. 

Links To Previous Posts: 

https://www.cubatrade.org/blog/2016/6/20/nespresso-to-indirectly-import-coffee-from-cuba-to-usa?rq=nespresso 

https://www.cubatrade.org/blog/2016/7/14/update-hecho-en-cuba-begins-to-mean-something-obama-administration-will-help-accept-certification-from-cuba?rq=nespresso 

https://www.cubatrade.org/blog/2016/6/26/nestle-sa-positioning-to-be-an-importer-of-consumables-from-cuba-with-obama-administration-assistance?rq=nespresso 

https://www.cubatrade.org/blog/2017/1/5/charcoal-joins-coal-to-become-second-commodity-exported-from-cuba-to-the-united-states?rq=Fogo 

https://www.cubatrade.org/blog/2018/10/23/fogo-in-florida-reports-2nd-charcoal-purchase-from-cuba-two-20ft-containers?rq=Fogo 

HAVANA, July 7 (Xinhua) – [EXCERPTS]: Cuba seeks to increase exports of non-conventional agricultural products like honey, charcoal, coffee and pine resin to various markets around the world and contribute to the government's strategy of diversification of foreign markets. 

According to top officials at the island's Agroforestry Group (GAF), part of the Ministry of Agriculture, the group plans to generate 34 million U.S. dollars through the export of its leading products.  "Our plan this year is to exceed the 30 million dollars the group exported in 2017 and continue helping the Cuban economy reduce imports by manufacturing goods here with our own resources," said Arturo Forteza, GAF's first vice president, at a recent press conference. 

Forteza explained that beekeeping and the products derived from it, like honey, wax and royal jelly, generate the most income to the group, with an average of 28 million dollars in exports each year. 

These sound returns are the reason that investments are heavily concentrated on the industry, specifically in the installation of honey processing plants and smaller product packaging. 

"We seek to create added value for our beekeeping industry that goes beyond the production of honey. We want to develop our own marketing and production structures," Forteza said. 

Mercedes de la Cruz, acting director of marketing at GAF, said that the main market for Cuban honey is Europe, with Germany in the highest demand.  The group is also exploring markets in other countries, such as Canada, Costa Rica, Colombia and China. 

"The goal is to increase the added value of our products by producing smaller and more varied formats that sell for a higher price. In the case of honey, the price is above 4,000 dollars per ton," De la Cruz said.  Cuba currently exports its honey in large formats to various markets in Europe. 

Lazaro Garcia, director of honey producer Apicuba, explained that each year Cuba produces about 8,000 tons of honey, of which around 95 percent is destined for exports. 

The producer's intention, according to Garcia, is to have a total of 220,000 hives, increasing production in the near future to 15,000 tons of honey annually. If current prices are maintained, the honey production could generate 61 million dollars. 

Another promising product of the group is charcoal, with exports of more than 28,000 tons, mostly sent to Europe, particularly Turkey, Greece, Spain and Italy.  De la Cruz said that currently seven state companies are producing charcoal, which is expected to reach 130,000 tons for export this year. 

These favorable results came from the diversification of charcoal production from highly valued hardwoods and African marabou which is abundant in Cuba. 

Increasing coffee production on the island is another objective of the agricultural group, which is expected to grow substantially.  According to Forteza, the group is collaborating with Vietnam to develop high-quality coffee after last year's all-time low production rate because of storms. 

"We want to develop our own high-quality Arabica coffee in Vietnam and their robust coffee here in Cuba. This project is focused on the eastern provinces of Granma and Santiago in Cuba and we plan to extend it to other areas," he said. 

Despite the industry's setbacks, significant steps have been taken, such as the introduction of ecological coffee bean pulpers.  "We also improved the technology in the two plants we have in Guantanamo and Santiago in Cuba, which has raised the quality of our strongest product," Forteza said.  Currently Japan is the main market for Cuban Arabica coffee, purchasing the product for around 10,000 dollars per ton. 

Cuba is also engaged in diversifying and expanding production of other items like pine resin, cocoa, coconut and henequen plant fibers to bring in foreign currency and replace imports.

LINK To Complete Document In PDF Format

President Trump To Sign Farm Bill; It Will Include Cuba Provision. Is It Significant?

The Honorable Donald J. Trump, President of the United States, will sign into law legislation known as the “Farm Bill” passed by the United States Congress. 

For the first time since 28 October 2000- more than eighteen (18) years (6,622 days) ago, legislation which includes the Republic of Cuba will become law.  

The Republic of Cuba-related provision within the Farm Bill will become law, somewhat ironically, because of one (1) United States Senator representing the State of Florida- who initially opposed the provision, but supported the provision when language was added which prohibited the use of United States taxpayer funds with entities in the Republic of Cuba controlled by the military.  The United States business community did not oppose that prohibition. 

The Farm Bill includes a provision authorizing the use in the Republic of Cuba of funding from the United States Department of Agriculture (USDA) for Market Access Program (MAP) and Foreign Market Development (FMD).  

The provision in the “Farm Bill” was co-authored by two members of the United States Senate: The Honorable Heidi Heitkamp (D- ND) and The Honorable Marco Rubio (R- FL).  

Senator Heitkamp agreed to include language submitted by Senator Rubio that would prohibit MAP and FMD funding to be used with Republic of Cuba entities that are controlled by the Revolutionary Armed Forces of the Republic of Cuba (FAR), consistent with policies of the Trump Administration.   

The specific language: “(d)  Cuba .— Notwithstanding section 908 of the Trade Sanctions Reform and Export Enhancement Act of 2000 ( 22 U.S.C. 7207 ) or any other provision of law, funds made available under this section may be used to carry out the programs authorized under sections 222 and 223 in Cuba. Funds may not be used as described in the previous sentence in contravention with directives set forth under the National Security Presidential Memorandum entitled ‘Strengthening the Policy of the United States Toward Cuba’ issued by the President on June 16, 2017, during the period in which that memorandum is in effect. 

Is provision optically significant?  Yes, it is.  How United States organizations seek to use the funds and how the government of the Republic of Cuba permits the funds to be used will be the baseline for determining effectiveness.  If the funds are disproportionally purposed to make payments for travel to the Republic of Cuba and for larger booths at trade shows in the city of Havana, likely will be scrutiny by members of the United States Congress.  If the Republic of Cuba permits funds to be used for what would not be expected to be authorized- permitting activities perceived in the United States as bold, members of the United States Congress and those within the Trump Administration would take positive note.      

Will the provision result in an increase in agricultural commodity and food product exports from the United States to the Republic of Cuba?  There is no straight-line calculation which justifies that belief.  United States agricultural commodity and food product exports to the Republic of Cuba continue to decline; 16.1% thus far in 2018 compared to the same period in 2017- and have done so when commodity inventories have been high, commodity prices have been low and there would have been political value in purchases during a time of pain for United States farmers.  Healthcare product exports have also declined; 44.1% thus far in 2018 compared to the same period in 2017. 

Is there value in spending United States taxpayer funds to promote corn, dairy, poultry, rice, soy and wheat in the Republic of Cuba?  Arguable given there is one contracting entity in the Republic of Cuba, cash-in-advance payment terms remain unchanged and the Republic of Cuba seeks payment term of up to two years due to its chronic shortage of foreign exchange.  Unlikely a significant number of the United States organizations (approximately eighty-one in fiscal year 2018) applying for USDA reimbursement will shift previously-allocated country-targeted funds to the Republic of Cuba for fiscal year 2019.   

Does the inclusion of the provision suggest a “pathway forward” and “momentum” for additional Republic of Cuba-related legislation to become law, specifically relating to authorizing private-sector payment terms and private-sector financing for agricultural commodity and food product exports to the Republic of Cuba?  Uncertain, as there is an eighteen-year-old legislative graveyard filled with headstones of initiatives that were “on the cusp” of success.   

Legislative initiatives suffer from 1) lack of public support from specific exporting companies stating on-the-record (at hearings, in media releases, etc.) that they would today provide payment terms- and what those payment terms would be, to Republic of Cuba government-operated entities and 2) lack of public support from financial institutions including Greenwich Village, Colorado-based CoBank stating on-the-record (at hearings, in media releases, etc.) that they would today provide loans to Republic of Cuba government-operated entities based upon the credit profiles of those entities.  In addition, Conway, Arkansas-based Home BancShares, which has an authorized account with a Republic of Cuba government-operated financial institution, has refused to comment as to why it has not sought authorization from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury for the Republic of Cuba government-operated financial institution to have an account with Home BancShares.  If each financial institution had an account with the other, the implementation of Direct Correspondent Banking (DCB) services would be operable- meaning that third-country financial institutions would no longer receive a commission for each United States-Republic of Cuba transaction.  DCB saves money, saves time, is more transparent, and more safe.  Ironically, the four (4) members of the House of Representatives and two (2) members of the United States Senate from Arkansas (exporter of poultry, rice, etc.) have not demonstrated an interest in public engagement with Home BancShares to implement DCB.         

Trade Sanctions Reform and Export Enhancement Act of 2000 (TSREEA) exports (agricultural commodities and food products) since first use by the Republic of Cuba in December 2001 are US$5,849,925,838.00 through October 2018: Clinton Administration: US$0.00. Bush Administration: US$2,697,501,426.00. Obama Administration: US$2,700,145,225.00. Trump Administration: US$452,279,187.00.  TSREEA requires that payments be made on a cash-in-advance basis; no other payment terms are permitted.

LINK To PDF Format

Failure Of Agreement Between FedEx & Cuba Is A Problematic And Oft-Repeated Symbol

That Memphis, Tennessee-based FedEx Corporation (2017 revenues exceeded US$60 billion) and the government of the Republic of Cuba have not been successful during more than two years of discussions/negotiations to create a viable delivery infrastructure is a highly visible and thus impactful symbol that dissuades United States-based companies from seeking commercial engagement with the Republic of Cuba.

Memphis Business Journal

Memphis, Tennessee

14 December 2018 

It’s a no-go for FedEx’s scheduled service to Cuba.  

The Memphis-based logistics and delivery giant received approval from the Department of Transportation (DOT) in July 2016 to be the first all-cargo airline to start service to Cuba. That approval was followed by multiple launch date extensions filed by FedEx Corp. — with the latest set for Saturday, Dec. 15.  

With that date approaching, the Memphis Business Journal asked FedEx if service would, in fact, begin this weekend.  FedEx provided the following statement Dec. 14, in response:  

“FedEx will not be filing for an extension of the start-up date for U.S. – Cuba cargo air service between Miami and Varadero (VRA.) We are evaluating alternative all-cargo service options to Cuba.” 

The original plan was for FedEx to run flights, Monday through Friday, from Miami to Matanzas/Varadero starting in April 2017. The extension pushed that to Oct.15, 2017, then to June 15, 2018, and then finally to the Dec. 15.  

Posts About FedEx And The Republic Of Cuba: 

https://www.cubatrade.org/blog/2018/6/16/fedex-seeks-another-delay-from-usdot-to-initiate-services-to-cuba?rq=FedEx 

https://www.cubatrade.org/blog/2016/7/19/dot-approves-fedex-for-first-scheduled-all-cargo-service-to-cuba?rq=FedEx

Troika To Negotiate Settlement Of Certified Claims Against Cuba? Kushner, Greenblatt & Feinberg

Troika To Negotiate Settlement Of Certified Claims Against Cuba?

Kushner, Greenblatt & Feinberg

The Process: Briefings, Lunch, Travel

It’s Primarily About Real Estate; So Why Not Use Real Estate Executives?

Two Largest Claims Account For 24%; Thirty Account For 56% Of Total

President Trump Can Negotiate A Deal That Eluded Eleven Of His Predecessors  

Settlement Is Possible Without Cuba Putting Up Cash

Every Country Cuba Owes Will Benefit From A Settlement

EU Should Be Advocating For A Swift Agreement 

The Trump Administration has created the political moment for tag-team negotiators Mr. Jason Greenblatt (DOB 1967; Assistant to the President and Special Representative for International Negotiations) and Mr. Jared Kushner (DOB 1981; Senior Advisor to the President & Director- Office of American Innovation) to expand their bilateral portfolios to include the Republic of Cuba.   

Why Mr. Kushner? 

Irrespective of one’s thoughts as to the appropriateness of a role at The White House for the son-in-law of the president of the United States, what matters is the level of confidence by the President of the United States in his son-in-law.  Nearing two years into a four-year term, Mr. Kushner retains a prominent presence in Trump Administration.   

On 30 November 2018, while at the signing ceremony for the U.S.-Mexico-Canada Agreement (USMCA) in Buenos Aires, Argentina, The Honorable Donald Trump, President of the United States, began his remarks with thanking six (6) people by name; the first was the United States Trade Representative and the second was Mr. Kushner- before the United States Secretary of State, the United States Secretary of the Treasury, Director of the National Trade Council and Director of the National Economic Council.    

Prior to the signing ceremony for the USMCA, Mr. Kushner received the highest civilian award, Order of the Aztec Eagle, from the government of Mexico for his work relating to the USMCA.  During the presentation, Mr. Kushner shared that his experience working for the USMCA was the equivalent of earning a “PhD in Trade.”  President Trump attended the presentation- but the event was not on his public schedule.  

At the first meeting of the leaders of the G20 in Buenos Aires, President Trump was accompanied by two individuals: The United States Secretary of the Treasury and Mrs. Ivanka (Trump) Kushner. Not the United States Secretary of State, United States Trade Representative, Director of the National Trade Council or Director of the National Economic Council.   

At an evening dinner for leaders of the G20, President and Mrs. Trump were accompanied by Mr. and Mrs. Kushner; and included the couple in official photograph opportunities with H.E. Mauricio Macri, President of Argentina and Mrs. Macri. 

On 1 December 2018, Mr. Kushner was a member of the official delegation at the working dinner with President Trump and H.E. Xi Jinping, President of the People’s Republic of China.

On 1 December 2018, Mrs. Kushner was a member of the official United States delegation, accompanying The Honorable Mike Pence, Vice President of the United States, attending the inauguration of the president of Mexico. 

On 27 November 2018, H.E. Eduardo Bolsonaro (34 years of age), a two-term member of the National Congress of Brazil and son of the president-elect of Brazil, H.E. Jair Bolsonaro, met with Mr. Kushner at The White House; and departed with a baseball cap with “Trump 2020” printed on the front.  According to media reports, the two discussed a plan to relocate the Brazil Embassy in Israel and undisclosed subjects.   

The Trump Administration has identified Mr. Kushner as having a significant role in portfolios that include the Middle East, relocating the United States Embassy in Israel, China, Mexico, trade and prison reform among others.    

Issue Importance 

Senior-level officials within the Trump Administration confirm that resolution of the certified claims, and only the certified claims, is a focus and the United States Department of State, United States Department of the Treasury, United States Department of Commerce, and National Security Council (NSC) at The White House are committed to dedicating necessary resources.   

The United States government retains broad discretion to negotiate a settlement on behalf of the claims certified by the United States Foreign Claims Settlement Commission (USFCSC).  There exists a highly-motivated pre-positioned constituency among the certified claimants in support of a prompt resolution. 

However, identification of the causes for health-related issues impacting United States government personnel located in the city of Havana, Republic of Cuba, remains the primary focus of the Trump Administration and lack of resolution, until which the United States Embassy in Havana will operate at a less than optimal level of personnel, will continue to contaminate all aspects of the bilateral relationship.  Within the Trump Administration there exists a confidence that negotiations to resolve the certified claims can develop independent of a resolution to other bilateral issues. 

There is bipartisan political party support and bipartisan ideological support within the United States Congress for a robust and sustained effort to obtain a resolution to the certified claims, particularly from those who represent exporters whose expansion of commercial engagement with the Republic of Cuba remains infringed: agricultural commodities, food products and healthcare products and providers of travel-related services.  

The Obama Administration deemed resolution of the certified claims was a “top priority,” but had only three (3) discussions (not bilaterally confirmed negotiations) with representatives of the government of the Republic of Cuba in 2,923 days (766 days if calculated from 17 December 2014- the date upon which the United States and the Republic of Cuba announced an intention to re-establish diplomatic relations).  During a 20 July 2016 background briefing by a senior official of the United States Department of State:  

REPORTER QUESTION (Miami Herald):  My question has to do with the property rights issue. I wonder if you could give us any details there.  And two, whether Cuba still has outstanding property rights issues with any other countries, and is there a target number we’re looking for, like settling on 20 cents on the dollar, 10 cents on the dollar, whatever?   

SENIOR STATE DEPARTMENT OFFICIAL:  As I mentioned, property claims is one of our top priorities.  We had an initial – or first-round meeting with the Cubans on this issue last December in Havana.  We will have a second round of talks here in Washington at the end of this month.  We certainly have not laid out any kind of – the details which you’ve described.  That will emerge from the negotiations, but we’re committed to pursuing all of the registered claims, as well as other claims that U.S. citizens have against Cuba.  So it’s a process.  We had a good round last December.  We hope to make further progress this month in moving forward on the issue. 

The Certified Claims 

There are 8,821 claims of which 5,913 awards were certified by the United States Foreign Claims Settlement Commission (USFCSC- https://www.justice.gov/fcsc) at the United States Department of Justice which are valued at US$1,902,202,284.95.  

The largest certified claim (Cuban Electric Company) valued at US$267,568,413.62 is controlled by Boca Raton, Florida-based Office Depot, Inc.  The second-largest certified claim (International Telephone and Telegraph Co, ITT as Trustee, Starwood Hotels & Resorts Worldwide, Inc.) valued at US$181,808,794.14 is controlled by Bethesda, Maryland-based Marriott International.  The smallest certified claim is by Sara W. Fishman in the amount of US$1.00 with reference to the Cuban-Venezuelan Oil Voting Trust. 

The two (2) largest certified claims total US$449,377,207.76, representing 24% of the total value of the certified claims.  Thirty (30) certified claimants hold 56% of the total value of the certified claims.  This concentration of value creates an efficient pathway towards a settlement. 

The USFCSC permitted interest to be accrued in the amount of 6% per annum; with the current value of the 5,913 certified claims approximately US$8,521,866,156.95.

“The Foreign Claims Settlement Commission of the United States (FCSC) is a quasi-judicial, independent agency within the Department of Justice which adjudicates claims of U.S. nationals against foreign governments, under specific jurisdiction conferred by Congress, pursuant to international claims settlement agreements, or at the request of the Secretary of State. Funds for payment of the Commission's awards are derived from congressional appropriations, international claims settlements, or liquidation of foreign assets in the United States by the Departments of Justice and the Treasury.” 

Certified claimants with current or recent activity within the Republic of Cuba include: New York, New York-based Colgate-Palmolive, Moline, Illinois-based Deere & Company, Atlanta, Georgia-based Delta Air Lines, Boston, Massachusetts-based General Electric, Bethesda, Maryland-based Marriott International, Chicago, Illinois-based University of Chicago, Denver, Colorado-based Western Union and New Haven, Connecticut-based Yale University among others. 

Real Estate Experience Helps 

The 5,913 certified claims consist primarily of real estate- so who better equipped to negotiate essentially a multi-party real estate deal than two real estate executives?  One individual from a multi-generational real estate family.  The other a former senior-level executive of a real estate company.  Each a hardened negotiator.  Each having the confidence of the president of the United States.  Each appreciating the focus by the President upon tackling (and resolving) problems left unresolved by predecessors.  A fifty-eight (58) year-old unresolved bilateral issue self-defines as a lip-smacking, saliva-creating opportunity for the Trump Administration.  

The Trump Administration has less than 800 days during which to identify, commence and complete initiatives that by 12:00 pm on Wednesday on 20 January 2021 will be defined as legacy achievements.  The Trump Administration would complete what eleven (11) presidential administrations could not achieve. 

The Day-To-Day Guy 

The Kushner/Greenblatt tag-team would become a troika with the addition of Mr. Kenneth Feinberg (DOB 1945), the Washington DC-based attorney (www.feinberglawoffices.com) specializing in mediation and alternative dispute resolution, who served as Special Master for the September 11th Victim Compensation Fund and TARP Executive Compensation; Administrator of the BP Deepwater Horizon Disaster Victim Compensation Fund; retained to assist in the General Motors recall response and compensation for Volkswagen owners.  Mr. Feinberg, who could be appointed a Special Envoy, appreciates the singular importance of deadlines.  He is positioned to coordinate the day-to-day discussions and negotiations with the government of the Republic of Cuba. Mr. Feinberg has confirmed his interest in assisting with the settlement negotiations.

The troika would be the Trump Administration’s effort to conclude what the Obama Administration failed to do- and what previous occupants of The White House have failed to do on behalf of those 5,913 individuals and companies whose assets were expropriated without compensation by the government of the Republic of Cuba, beginning with an oil refinery owned by White Plains, New York-based Texaco, Inc., now a subsidiary of San Ramon, California-based Chevron Corporation (USFCSC: CU-1331/CU-1332/CU-1333 valued at US$56,196,422.73). 

How to begin? A Lunch   

The task for Messrs. Kushner, Greenblatt and Feinberg is to directly engage in negotiations with representatives of the government of the Republic of Cuba with the singular goal of obtaining a settlement of the 5,913 individual and company claims against the government of the Republic of Cuba certified by the USFCSC- and only those claims. 

First, the troika would convene a series of intimate briefings with representatives of the United States business community, specifically those with certified claims along with their respective legal counsels.  As two (2) certified claimants represent 24% of the total value of the certified claims and thirty (30) certified claimants represent 56% of the total value of the certified claims, briefings with each of the primary stakeholders would not be an unreasonable effort to undertake within a thirty (30) day period.   

Second, would be an invitation to lunch at The White House extended from the troika to H.E. Jose Ramon Cabanas Rodriguez, Ambassador of the Republic of Cuba to the United States or his successor.  The purpose of the lunch would be to establish a personal rapport and create a reasonable and measurable timeline towards resolving the issue of the certified claims; thirty (30) days to create a timeline should be adequate.   

Third, would be a visit to the Republic of Cuba by the troika within thirty (30) days of completion of the timeline.   

The troika would complete an effort of engagement with the Republic of Cuba awkwardly commenced by Mr. Ben Rhodes, Assistant to the President and Deputy National Security Advisor for Communications at the National Security Council (NSC) during the Obama Administration. 

The youthful Mr. Kushner, of reserved demeanor; reared in the oft-described bitter chill of New York City real estate politics, appreciating the role of financial institutions, contracts, loan values, payback periods, incentives, and, most significantly, the development of creative financing packages, would bring a skill set to a bilateral dialogue which has been lacking in successive presidential administrations.  Mr. Greenblatt is his perfect partner.  Mr. Feinberg brings along the practical experience. 

Important that the negotiations have a timeline- a beginning and an end.  Six (6) months is more than adequate. 

Imperative there be no intermediaries between the governments; no third-parties arranging meetings or serving as couriers for messages.  Not a triangle.  A straight line of communication.  No meetings in third countries. 

Structure Of A Resolution 

A certified claims settlement should be based upon the payment of 100% of the value of each certified claim.  Even with a full settlement based upon principal and interest, the annual rate of inflation has substantially diminished the value of each certified claim.   

Opportunities for settlement include, but are not limited to, 100% compensation, debt-for-equity swaps and substitution investments (one structure for another; one piece of land for another, etc.).  

Portions of monies owed could be transformed into tradable equity positions which a certified claimant could use or could redirect or could market to a third-party. 

In combination with or separately from compensation formats, the government of the Republic of Cuba could provide transferable values to the certified claimants including: 

·       Income tax holidays

·       Import duty exemptions

·       Reduced energy rates

·       Property tax credits

·       Earned income tax credits

·       Issuance of commercial paper 

Resolution is the means to the goal in whatever form such resolutions may take for the largest United States corporate claimants (e.g. debt-for-equity swaps for new direct foreign investment opportunities, or property restitution combined with re-investment in once-owned properties, or the sale of development rights to third parties, United States-based or non-United States-based).  The goal is closure. 

Importance For Diaz-Canel Administration 

If the Trump Administration unleashed this troika, H.E. Miguel Diaz-Canel, President of the Republic of Cuba, would understandably be required to seriously consider the effort and promptly dedicate members of his team to the negotiations- rather than reply upon holdovers from previous administrations. 

Resolving the issue of the certified claims would cement the Trump Administration and the Diaz-Canel Administration firmly into legacy-claiming territory. 

Resolving the issue of the certified claims is the foundation for six decades of United States laws, regulations and policies. 

A re-normalized bilateral commercial, economic and political relationship would benefit the 11.3 million citizens of the 800-mile archipelago and the approximately two million individuals of Cuban descent residing in the United States, primarily in the State of Florida and State of New Jersey.  

For the Diaz-Canel Administration, resolving the issue of the certified claims would materially benefit the governments and the private sectors within those countries who have supported the Republic of Cuba- and in far too many instances, found their loans, rescheduling of loans, commercial credits, government-to-government assistance, and private sector investments habitually subject to multi-year and sometimes multi-decade disappointment.  Success in the Republic of Cuba has always strained to obtain enough oxygen to provide for consistent and positive performance. 

Not institutionally sustainable, nor fair, for the Republic of Cuba to not seek to resolve the one issue with the United States that most negatively impacts those to whom it owes much: European Union (EU)-member countries, Brazil, China, Mexico, Russia, Venezuela and Vietnam among others. 

Without the issue of the certified claims, the United States would be expected to remove much of the onerous, and for the commercial partners of the Republic of Cuba, extraterritorial financial sanctions infrastructure managed by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury, Bureau of Industry and Security (BIS) of the United States Department of Commerce, and Office of Legal Advisor (OLA) of the United States Department of State.    

The OFAC, BIS, and OLA-administered sanctions against the Republic of Cuba inflict collateral damage to countries who directly engage with the Republic of Cuba and to countries which may tangentially engage with the Republic of Cuba.  All parties would be jubilant if the Diaz-Canel Administration would negotiate a settlement which resulted in an elimination of the sanctions. 

No government should build a long-term strategy of victimization when there exists means to remove a problem.  Both the United States and the Republic of Cuba have been guilty of such strategies with respect to their bilateral relationship.  The history may not be fair; the process for resolution may feel unjust.  Governments need weigh the cost of maintaining political pride against the impact upon their citizens (their shareholders) of not resolving an action taken by the government. 

The Republic of Cuba should not need to continue to define success by how much others will provide to it for the maintenance of commercial, economic and political systems which are neither self-sufficient nor sustainable.  The Republic of Cuba must not be perceived as an exhibit in a museum; and as a symbol of what only functions if others continue to fund it and fuel it. 

Resolution of the certified claims will not, on their own, transform the commercial, economic and political infrastructure of the Republic of Cuba.  However, it will remove a highly-visible pillar of resistance used to forestall provision of choice, of opportunities to its citizenry. 

The government of the Republic of Cuba would wisely accept the advances of the troika for Mr. Kushner, not dissimilar from Mr. Rhodes during the Obama Administration, maintains an intimate working relationship with the President of the United States where the distance between is often immeasurable; and Mr. Kushner has the additional bona fides of proximity due to marriage- which should not be undervalued. 

There is in the United States and within other countries an increasing lack of empathy for the Republic of Cuba.   

There is a shift of accountability from all that is unsound in the Republic of Cuba is the fault of the United States to its primarily the fault of the Republic of Cuba.  A shift from the United States should repair it to the Republic of Cuba should repair it.  This dynamic may not be fair, but it is a reality.  And successful negotiations are about reality rather than wishful thinking. 

For the bilateral relationship with the Republic of Cuba to re-normalize, there must be a resolution of the certified claims; there are no reasons the Trump Administration and Diaz-Canel Administration can’t make it happen during the next 700-plus days.

It’s important to exceed expectations… 

LINK TO ANALYSIS IN PDF FORMAT

LINK TO CERTIFIED CLAIMS LIST 

Posts About Certified Claims & Trump Administration:

31 August 2018

https://www.cubatrade.org/blog/2018/8/29/ouktsdg4gyrblq7zudchikvdd6abdo?rq=certified%20claims 

14 June 2018

https://www.cubatrade.org/blog/2018/6/14/trump-administration-may-be-focusing-upon-certified-claims-unlike-obama-administration?rq=certified%20claims 

17 July 2017

https://www.cubatrade.org/blog/2017/7/11/memo-from-nsc-to-potus-this-week-for-title-iii-suspension-capitulate-incapacitate-or-negotiate?rq=certified%20claims 

29 May 2017

https://www.cubatrade.org/blog/2017/5/29/0t6ts1bv3by20ot3mi9bydvdqv3e86?rq=certified%20claims 

1 January 2017

https://www.cubatrade.org/blog/2017/1/12/h2uudthnn6be8hfgxifqsrdo4aqpb0?rq=certified%20claims 

1 December 2016

https://www.cubatrade.org/blog/2016/12/1/zigs56x0gme3a9rqg7aecx9vf2gqgk?rq=certified%20claims 

13 September 2016

https://www.cubatrade.org/blog/2016/8/6/obama-administration-wont-seek-dismissal-of-civil-judgements-against-cuba-to-help-certified-claimants?rq=certified%20claims

U.S. Food/Ag Exports To Cuba Decrease 54.7% In October; Decrease 16.1% Thus Far For Year

October 2018 Food/Ag Exports To Cuba Decrease 54.7%- 1

16.1% Decrease Year-To-Year-5

Cuba Ranks 55th Of 224 U.S. Food/Ag Export Markets- 2

October 2018 Healthcare Product Exports US$156,321.00- 2

October 2018 Humanitarian Donations US$829,293.00- 3

Obama Administration Initiatives Exports Continue To Increase- 3

U.S. Port Export Data- 15

OCTOBER 2018 FOOD/AG EXPORTS TO CUBA DECREASE 54.7%- Exports of food products and agricultural commodities from the United States to the Republic of Cuba in October 2018 were US$9,698,149.00 compared to US$21,436,667.00 in October 2017 and US$21,994,945.00 in October 2016.

For the period January 2018 through October 2018, exports were US$197,629,030.00 compared to US$235,558,893.00 for the same period in 2017.

TSREEA exports since first use by the Republic of Cuba in December 2001 are US$5,849,925,838.00 through October 2018.

Clinton Administration: US$0.00. Bush Administration: US$2,697,501,426.00. Obama Administration: US$2,700,145,225.00. Trump Administration: US$452,279,187.00.

LINK To Complete Report

3G Internet Access Expanding In Cuba

From ETECSA: 

Internet service is extended in Cuba with access through the mobile network (3G) December 4, 2018  

The Telecommunications Company of Cuba SA (ETECSA) informs that as of December 6 of this year, the commercialization of the Internet access service will begin through the third generation (3G) mobile network for prepaid customers.

At the time of launching the service, it will be available to users with terminal equipment that supports 3G technology in the 900MHz frequency, duly configured with the Nauta Access Point Name (APN) and whose line has been identified as having used Data , on some previous occasion, about this Network.

Subscribers already recognized by the network with these characteristics will be able to acquire the package of their preference without having to go to a commercial office, dialing * 133 # from their own telephone and following the menu options, with discount of the main account of the mobile service.

From December 6, users will progressively receive a notification according to the numbering when their service is ready to proceed to acquire the package:  

December 6th day: 52xxxxxx and 53xxxxxx

December 7th day: 54xxxxxx and 55xxxxxx

December 8th day: 56xxxxxx and 58xxxxxx  

After these days, you can do any numbering with the conditions mentioned above, that is, those lines that use a terminal with access to 3G technology in 900MHz frequency and that have accessed Data in said technology.  

For users who use a cell phone with those characteristics and who have not made a connection so far, if they are interested in accessing the service; they must configure the Nauta APN, activate the data from a 3G coverage and make a first connection. It is suggested, taking into account that they are free ETECSA portals, access http://www.etecsa.cu, https://portal.nauta.cu or http://mi.cubacel.net.  From that moment on, it will be validated; after which a notification message will be sent in the next 48 hours, announcing that the desired offer can already be purchased.

In the first days of operation of this service, incidents could be experienced in certain areas or areas. In this sense, ETECSA is grateful to the clients that if there is any inconvenience with their service, they inform the company through the institutional channels.  

With this opening, the Company continues to expand the possibilities of access to the Internet as part of the process of computerization of Cuban society.  

The details of the offer, prices and other information can be obtained by the 118, 5264-2266, accessing the portals www.etecsa.cu or http://mi.cubacel.net.

Jared Kushner's Importance Reinforced By How President Trump (And Others) Recognize Him

Mr. Jared Kushner (DOB 1981) is Senior Advisor to the President & Director- Office of American Innovation.   

Irrespective of one’s thoughts as to the appropriateness of a role in the United States government for the son-in-law of the president of the United States, what matters is the level of confidence the president of the United States has in his son-in-law. 

Nearing two years into a four-year term, Mr. Kushner retains a prominent presence in Trump Administration.   

On 30 November 2018, while at the signing ceremony for the U.S.-Mexico-Canada Agreement (USMCA) in Buenos Aires, Argentina, The Honorable Donald Trump, President of the United States, began his remarks with thanking six (6) people by name; the first was the United States Trade Representative and the second was Mr. Kushner- before the United States Secretary of State and the United States Secretary of the Treasury and Director of the National Trade Council and Director of the National Economic Council.   

Prior to the signing ceremony for the USMCA, Mr. Kushner received the highest civilian award, Order of the Aztec Eagle, from the government of Mexico for his work relating to the USMCA.  During the presentation, Mr. Kushner shared that his experience working for the USMCA was the equivalent of earning a “PhD in Trade.”  President Trump attended the presentation- but the event was not on his public schedule. 

At the first meeting of the leaders of the G20 in Buenos Aires, President Trump was accompanied by two individuals: the United States Secretary of the Treasury and Mrs. Ivanka (Trump) Kushner. Not the United States Secretary of State, United States Trade Representative, Director of the National Trade Council or Director of the National Economic Council.  

At an evening dinner for leaders of the G20, President and Mrs. Trump were accompanied by Mr. and Mrs. Kushner; and included the couple in official photograph opportunities with President and Mrs. Macri of Argentina.

On 1 December 2018, Mr. Kushner will be a member of the official delegation at the working dinner with President Trump and H.E. XI Jinping, President of the People’s Republic of China.

On 1 December 2018, Mrs. Kushner will be a member of the official United States delegation, accompanying The Honorable Mike Pence, Vice President of the United States, attending the inauguration of the president of Mexico.

The Trump Administration has also identified Mr. Kushner as having a significant role in portfolios that include the Middle East, relocating the United States Embassy in Israel, China, Mexico, trade and prison reform.   

On 27 November 2018, H.E. Eduardo Bolsonaro (34 years of age), a two-term member of the National Congress of Brazil and son of the president-elect of Brazil, H.E. Jair Bolsonaro, met with Mr. Kushner at The White House; and departed with a baseball cap with “Trump 2020” printed on the front.  According to media reports, the two discussed a plan to relocate the Brazil Embassy in Israel and undisclosed subjects.     

The "2024 Process" For Venezuela And Cuba

The 2024 Process
(first published 2018; revised)

“2024” May Unlock A Solution For Venezuela
Need For Multilateral Quid Pro Quo
For Cuba- 25/25/25/25
Many Companies Have An Interest In Venezuela
Maduro Isn’t Likely Going Unless Assassinated Or Four Governments Agree
Guaido Fatally Contaminated By Connectivity With Trump Administration
What Is The Realistic “Mission Set”
Adhering To Aspirational & Desired Instead Of Doable
The Process Will Not Be A Moment, It Will Be A Series Of Moments

The year 2018 may be the key to creating a pathway for the succession/transition in Venezuela sought by the Trump Administration with support by the other stakeholders.

LINK TO ANALYSIS IN PDF FORMAT

Should EU Promote For Cuba An SPV Designed To Protect Iran From OFAC?

Will EU’s Effort To Create SPV For Cuba Help Or Harm?

Rather Than EU Creating A Work-Around, It Should Encourage Cuba To Settle U.S. Issues

EU Can Shepard Cuba Towards Negotiations With The U.S. Rather Than Creating Further Distance?

EU Has Much To Gain From Resolution Of U.S.-Cuba Issues

Does Cuba Benefit Financially Or Politically From Using An Instrument Created For Iran?

SPV Will Create Unnecessary Elasticity In U.S.-Cuba Relationship

The Republic of Cuba’s problem is not that it lacks a mechanism to make payments to vendors.  The problem is a chronic inability to consistently make payments to vendors when due which is substantially a result of inefficiencies within its commercial, economic and political infrastructure and the laws, regulations and policies which impact the ability to pay what is owned when due.

The Republic of Cuba may view a Special Purpose Vehicle (SPV) as an additional opportunity to create a financing mechanism rather than a means of consummating transactions and obligations.  It can be used as an instrument for delay rather than a tool used to create prosperity.

What is a SPV?  According to Ms. Federica Mogherini, High Representative for Foreign Affairs and Security Policy of the EU: “…EU member states will set up a legal entity to facilitate legitimate financial transactions with Iran and this will allow European companies to continue to trade with Iran in accordance with European Union law and could be open to other partners in the world.”

How might an SPV work:  Edited excerpts from one published analysis: “It could involve a barter system that would allow firms to bypass the SWIFT international bank transfer system.  Credits for oil or goods imported from Iran by one EU company could be used to pay an EU exporter for its goods or services to Iran, without any funds being sent to Iran.  The SPV would operate in euros rather than U.S. dollars and the OFAC won't be able to scrutinize transactions, unlike the SWIFT system, which is fully transparent.  The system would be similar to one used by the then-U.S.S.R. to trade with Iran without money changing hands.”

The goal of implementing an SPV for Iran (and potentially for the Republic of Cuba) is to attempt to insulate transactions from sanctions imposed by the Trump Administration through the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury, Bureau of Industry and Security (BIS) of the United States Department of Commerce, and United States Department of State.  A mechanism for the OFAC is to disrupt transactions routed through La Hulpe, Belgium-based Society for Worldwide Interbank Financial Telecommunication (SWIFT) “a global member-owned cooperative and the world’s leading provider of secure financial messaging services.”

A SPV could be functional and the Republic of Cuba could use it, but does use of an SPV assist the Republic of Cuba with making changes it does not want to make, but needs to make?  Does it permit the Republic of Cuba to further delay what it must do to be a productive, responsible, reliable and profitable importer, exporter and provider of services?  A marketplace today where the first consideration by a company is how it will be paid, when it will be paid, and if it will be paid; and then seek a government guarantee.  This is not the type of transactional marketplace the Republic of Cuba endeavors to be- one where hesitation, rather than excitement, is the first emotion for importers, exporters, and service providers.

During the last twenty-five years, the Republic of Cuba has repeatedly required, requested and received, write-downs and write-offs of government-to-government debt and debt incurred by Republic of Cuba government-operated entities.

For some in the Republic of Cuba there exists a belief that the global community owes it for what harm the United States has brought to bear against it.  That the Republic of Cuba is the mascot of the global community against the hegemony of the United States.  So, the global community needs to pay its dues so that the Republic of Cuba may continue to be an example.  

A strategy by the Republic of Cuba of expecting taxpayers in other countries to become shareholders in debt incurred by the Republic of Cuba- when the Republic of Cuba refuses to make changes which would alleviate that recurring theme, is not responsible; is not fair.

The use of a SPV by the Republic of Cuba will result in additional efforts by the Trump Administration to interrupt the use of a SPV by the Republic of Cuba.

The UE and other governments may support the creation and implementation of an SPV, but companies within those countries with global operations, particularly those with a presence in the United States and those with financial transactions requiring engagement with the United States Dollar, may be hesitant.

From one Europe-based senior-level financial executive: “It’s a great idea, but still only an idea.  Even the Iranian SPV is proving difficult and that’s urgent!  So, I don’t see anything imminent.  It all depends upon the degree to which EU is prepared to cooperate with Russia and China in setting up a U.S.-excluded-para-SWIFT system.” 

The Republic of Cuba would be better served by focusing less upon ways around United States laws, regulations and policies and focusing more towards actions designed to weaken them.  That means negotiations.  That means settling the certified claims.  Both the EU and the Republic of Cuba will benefit.

Absent the issue of the certified claims, the Republic of Cuba could then play-off on a level playing field the interests of EU-based companies and United States-based companies.  United States-based companies would no longer be solely proffered as bait to obtain the interest by EU-based companies; they would now be fish of equal or near-equal weight. 

The Republic of Cuba should desire to be that type of marketplace- it’s the type of competition that would benefit the 11.3 million citizens of the 800-mile archipelago which lies ninety-three miles south of Key West, Florida.  

LINK To complete text in PDF Format

All That Separates Executive Order For Nicaragua With One For Cuba Is Microsoft Word

The White House today issued an Executive Order relating to Nicaragua and added names to the Specially Designed Nationals (SDN) List maintained by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury:

https://www.whitehouse.gov/briefings-statements/president-donald-j-trump-pressuring-nicaraguan-regime-restore-democracy-rule-law/

https://www.whitehouse.gov/briefings-statements/presidential-message-congress-blocking-property-certain-persons-contributing-situation-nicaragua/

https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20181127.aspx

https://www.state.gov/r/pa/prs/ps/2018/11/287604.htm

A mistake not to expect the Trump Administration to consider an Executive Order to focus upon the Republic of Cuba- specifically targeting the assets of individuals affiliated with the Revolutionary Armed Forces of the Republic of Cuba (FAR) and its subsidiaries, including Enterprise Administration Group (GAESA) which has a substantial impact upon the economic and commercial infrastructure of the Republic of Cuba.   

Replace the word “Nicaragua” with “Cuba” and below is the text of an Executive Order that could easily be created using cut-and-paste features of Microsoft Word:   

Office of the Press Secretary

FOR IMMEDIATE RELEASE

Month/Day/Year 

PRESIDENT DONALD J. TRUMP IS PRESSURING THE CUBAN REGIME TO RESTORE DEMOCRACY AND THE RULE OF LAW 

“All people deserve a government that cares for their safety, their interests, and their wellbeing, including their prosperity.” – President Donald J. Trump 

COMMITTED TO LIBERTY, DEMOCRACY, AND THE RULE OF LAW: President Donald J. Trump is taking a strong stand against the corrupt Cuban regime. 

Today, President Donald J. Trump issued an Executive Order “Blocking Property of Certain Persons Contributing to the Situation in Cuba.” 

This Order demonstrates the President’s strong leadership in the Western Hemisphere, defense of democratic principles, and protection of human rights.  The President’s Order permits: 

Sanctions against individuals, entities, and their associates engaged in corruption, human rights abuses, and undermining democracy in Cuba.  The targeting of individuals and entities that threaten peace, security, and stability in Cuba. 

President Trump is committed to pressuring the regime of Cuban President Miguel Diaz-Canel to restore democracy and rule of law in the country.   

President Trump is calling for free, fair, and early elections in Cuba to give the Cuban people a true voice and vote in their future. 

IMPOSING SANCTIONS: The Trump Administration is imposing targeted sanctions against high-level officials from the Cuban regime and their supporters. 

The Department of the Treasury is imposing sanctions on high-level officials from the Cuban regime. Individuals sanctioned include: General Raul Castro Ruz who leads the Revolutionary Armed Forces of the Republic of Cuba (FAR) and its subsidiaries, including Enterprise Administration Group (GAESA) which has a substantial impact upon the economic and commercial infrastructure of the Republic of Cuba.  Gen. Luis Alberto Rodriguez Lopez Calleja who has been affiliated with GAESA.  These individuals are involved in human rights abuse or acts of corruption in Cuba. 

The Trump Administration will continue to add pressure on the Diaz-Canel regime and its supporters, using all the economic and diplomatic tools at our disposal. 

STANDING UP TO AUTOCRATIC REGIMES: President Trump is confronting regimes in the region that disregard democracy and degrade security and stability in the hemisphere. 

President Trump’s actions demonstrate his continued commitment to standing up to autocratic regimes in the Western Hemisphere.  Since taking office, President Trump has worked to counteract the corrupt and destabilizing regimes in Cuba, Nicaragua and Venezuela. 

President Trump stands with the Cuban, Nicaraguan and Venezuelan people and supports their calls for freedom.  The Trump Administration will continue to publicly denounce Cuba under the Diaz-Canel regime as one of three undemocratic outliers in the region.

Marriott Will Have An Influential Friend In Senator Mitt Romney (R- Utah)

Given the decades-long relationship between The Honorable Mitt Romney, United States Senator-elect (R- Utah), who will be assume office on 1 January 2019 and be sworn-in on 3 January 2019, and Bethesda, Maryland-based Marriott International (2017 revenues exceeded US$23 billion), likely that Senator Romney will maintain an interest in the activities of the company; and the company may seek his assistance.  

Specifically, Senator Romney and his staff would reasonably be expected to assist (guide) Marriott International if there are issues in maintaining existing operations and/or preventing disruption to future operations in the Republic of Cuba.   

According to media reporting, Senator-elect Romney has an interest in serving as a member of the United States Senate Committee on Commerce, Science, and Transportation; United States Senate Committee on Finance, and United States Senate Committee Foreign Relations.  Each committee would have direct or tangential jurisdiction of Republic of Cuba-related matters.  

Issues that may impact Marriott International would be within the purview of the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury, Bureau of Industry and Security (BIS) of the United States Department of Commerce, and Office of the Legal Adviser (OLA) at the United States Department of State as the Trump Administration continues to seek means to disrupt activities by United States companies and entities affiliated with the Revolutionary Armed Forces of the Republic of Cuba (FAR). 

Top Hotel News (Rotenburg, Germany) 21 November 2018: Mitt Romney Leaves Marriott Board After Being Elected to U.S. Senate 

“Last week, Mitt Romney was elected to represent the state of Utah in the United States Senate; now, the Marriott International Inc. board member is resigned from his role with the hotel company, citing an inability to “commit sufficient time and attention to Marriott and its shareholders.  

In the wake of Romney’s departure, the company has decided to reduce the size of its board from 14 members down to 13. Romney, who is a former presidential nominee for the Republican party and also a former governor of the commonwealth of Massachusetts, has been balancing his commitments in the political arena with his work with Marriott for many years.  

In fact, his history with Marriott goes back some time. Romney first served as Marriott’s director from 1993 to 2002. This is also not the first time he has left his role with Marriott for public service, doing so back in 2002 after Massachusetts elected him as its governor. He returned to Marriott from 2009 to 2011, before leaving to run for president, and subsequently rejoining the hotel company’s board back in 2012.  

Romney’s history with the hospitality company, however, goes back much much further. In fact, his given name is Willard, which is in honor of J. Willard Marriott, who was a friend of Romney’s father as well as the founder of what has become the single largest hotel company in the world.” 

Note: Unknown if Senator-elect Romney and/or his immediate family has retained or divested any shareholding in Marriott International.

From Mitt Romney For Senate Internet Site: 

“Mitt Romney is running to represent the people of Utah in the U.S. Senate.  He was the 2012 Republican nominee for President of the United States. He was also a candidate for the 2008 Republican presidential nomination and served as the Governor of the Commonwealth of Massachusetts from 2003 through 2007. 

Prior to his time as Governor, he led the 2002 Salt Lake Organizing Committee for the Winter Olympics and, with a team of volunteers and managers, helped turn the struggling Games into a Utah success story. 

Romney was the co-founder of Bain Capital, a leading investment company, and the turnaround CEO of Bain & Company, an international management consulting firm. Romney currently serves in both corporate and charitable organizations including Marriott International, Solamere Capital, CharityVision of Salt Lake City and the Ann Romney Center for Neurologic Research. 

Romney earned his bachelor’s degree from Brigham Young University and his JD and MBA from Harvard University. He is the proud husband to Ann Romney, father to five sons, and grandfather to twenty-four grandchildren. He and Ann reside in Holladay, Utah and celebrate their 49th wedding anniversary this year.”  

Marriott International Presence In Cuba: 

Since 2016, Marriott International (initially through Stamford, Connecticut-based Starwood Hotels and Resorts Worldwide LLC which was acquired by Marriott International in 2016) has managed the 186-room Four Points By Sheraton Havana in the Republic of Cuba.   

The property is owned by Republic of Cuba government-operated Gaviota which is a subsidiary of the Enterprise Administration Group (GAESA) which is controlled by the FAR.  GAESA has a substantial role throughout the economy of the Republic of Cuba with a specific focus upon hospitality, transportation and infrastructure.  

In March 2016, Marriott International reported that the company would manage the 83-room Hotel Inglaterra, also owned by Gaviota.  Subsequently, the company reported that the property would be under management in December 2017 and then in December 2019.  No reason(s) have been provided for the thirty-six (36) month delay.  The Hotel Inglaterra will be amongst the company's 122-property The Luxury Collection. 

On 16 March 2016, the company reported signing a Letter of Intent to manage a third property, the 27-room Hotel Santa Isabel, also owned by Gaviota.  There has been no mention of the property by the company since the 16 March 2016 announcement.  

Due to the acquisition of Starwood Hotels and Resorts Worldwide, Marriott International gained control of certified claims in the Republic of Cuba.

Related Blog Posts: 

U.S. Clears Marriott to Engage in Business Development in Cuba (20 March 2016)

https://www.cubatrade.org/blog/2016/3/20/g4yf5lm0xme98ynt7hacjjhfhe03us?rq=Marriott%20International

Speaker Of The House Paul Ryan Wants To Rescind Starwood Hotel Management Agreement (11 June 2016)

https://www.cubatrade.org/blog/2016/6/11/speaker-of-the-house-paul-ryan-wants-to-rescind-starwood-hotel-management-agreement?rq=mitt%20romney

LINK To Analysis In PDF Format

Ten Garbage Trucks Manufactured By MAN Of Germany Donated To Cuba

Munich, Germany-based MAN Truck & Bus AG (2017 revenues approximately US$11 billion) manufactured the vehicles, but reported that a customer of company, not the company, was involved in the donation of the vehicles to the Republic of Cuba:

“Vienna, Nov 15 (Prensa Latina) Cuba expressed satisfaction with and gratitude for the donation by the Vienna authorities of 10 waste collecting trucks for Havana, as a concrete contribution to the capital''s 500th anniversary.

Cuban Ambassador to Austria Juan Antonio Fernández Palacios welcomed representatives of the 48th Department of the Mayor's Office of the initiative, in a meeting in his residence with top executives from the company Transimport, which is in charge of the technical and logistical coordination for the donation.

Fernandez thanked the proposal for cooperation between Havana and Vienna, and specifically for the express will to send these 10 vehicles to Cuba, with which they reissue 'a similar and invaluable experience between both cities in the years 2000 and 2001'.

He recognized that the collection of solid waste in Havana is one of the most complex issues in the Cuban capital, as nearly half of the trucks required are paralyzed, which makes it difficult to collect the more than 23,000 cubic meters of garbage in the Cuban capital.

The donation of garbage collecting vehicles will be an important contribution to the enormous efforts and actions under way to guarantee that vital sanitation work of the city.

He introduced Juan Carlos Feé, Director of Imports, and Jorge Luis Fontova, Technical Assistance Technician of Transimport, the Cuban central supply and sales entity for heavy equipment and its spare parts.

He stated that due to their experience in importing heavy equipment, the Government of Havana has asked them to assume the necessary tasks to transport the donation.”

14% Of US$13.575 Billion U.S. Government Foreign Bank Fines Could Have Settled Certified Claims Against Cuba

If the United States government directed 14% of US$13.575 billion in fines received from foreign banks during the last 14 years, the certified claims against the Republic of Cuba would have been resolved. 

There is an ethical quandary for certified claimants and their respective legal counsel: Is it just for a third-party to be the source from which to reimburse certified claimants for actions by the government of the Republic of Cuba?  Shouldn’t the government of the Republic of Cuba have “skin in the game?”    

After fifty-eight (58) years, the issue for some (perhaps most) certified claimants is resolving the issue so that they, along with other United States-based companies, may determine if they want to re-enter or enter the Republic of Cuba marketplace absent the impediment inflicted by United States laws, regulations and policies.  They don’t necessarily care from where the funds originate to provide for compensation. 

With a certified claims settlement, United States laws, regulations and policies will have natural trajectory towards change and demise.  

Two (2) France-based financial institutions now have the distinction of incurring the largest penalties by the United States government for unauthorized transactions primarily relating to the Republic of Cuba: 

Paris, France-based Société Générale S.A. paid US$1.4 billion in 2018; Paris, France-based BNP Paribas paid US$9 billion in 2015; London, United Kingdom-based HSBC Holdings PLC paid US$1.92 billion in 2012; Amsterdam, Netherlands-based The ING Group paid US$619 million in 2012; Zurich, Switzerland-based Credit Suisse AG paid US$536 million in 2009; Basel, Switzerland-based UBS Group AG paid US$100 million in 2004.

During the last fourteen (14) years, US$13.575 billion has been obtained by the government of the United States for financial infractions primarily relating to the Republic of Cuba.  NOTE: 14% of the funds would fund 100% of the value of the certified claims.  

There are 8,821 claims of which 5,913 awards have been certified by the United States Foreign Claims Settlement Commission (USFCSC- https://www.justice.gov/fcsc) at the United States Department of Justice which are valued at US$1,902,202,284.95.  

Of these claims, thirty (30) United States-based companies hold 56.85% of the total value.  The USFCSC permitted interest to be accrued in the amount of 6% per annum; with the current value approximately US$9 billion. 

The largest certified claim is by the Cuban Electric Company in the amount of US$267,568,413.62 and the smallest certified claim is by Sara W. Fishman in the amount of US$1.00 with reference to the Cuban-Venezuelan Oil Voting Trust. 

The first asset to be expropriated by the government of the Republic of Cuba was an oil refinery owned by White Plains, New York-based Texaco, Inc., now a subsidiary of San Ramon, California-based Chevron Corporation (USFCSC: CU-1331/CU-1332/CU-1333 valued at US$56,196,422.73). 

Certified claimants with current or recent activity within the Republic of Cuba include: New York, New York-based Colgate-Palmolive, Moline, Illinois-based Deere & Company, Atlanta, Georgia-based Delta Air Lines, Boston, Massachusetts-based General Electric, Bethesda, Maryland-based Marriott International, Chicago, Illinois-based University of Chicago, Denver, Colorado-based Western Union and New Haven, Connecticut-based Yale University among others. 

“The Foreign Claims Settlement Commission of the United States (FCSC) is a quasi-judicial, independent agency within the Department of Justice which adjudicates claims of U.S. nationals against foreign governments, under specific jurisdiction conferred by Congress, pursuant to international claims settlement agreements, or at the request of the Secretary of State. Funds for payment of the Commission's awards are derived from congressional appropriations, international claims settlements, or liquidation of foreign assets in the United States by the Departments of Justice and the Treasury.”

LINK To Complete Analysis

Cuba & EU Meet On Same Day As Societe Generale Fined By U.S. For Cuba Sanctions Violations

Coincidence…..?

On the same day the United States Department of the Treasury in Washington DC announces settlement with Paris, France-based Societe Generale and the United States Attorney for the Southern District of New York announces criminal charges against Societe Generale, representatives of the European Union (EU) and representatives of the government of the Republic of Cuba were meeting in Brussels, Belgium, to discuss sanctions: 

Havana, Nov 18 (Prensa Latina) Cuba and the European Union (EU) will hold on Monday in Brussels, Belgium, the first Dialogue on Unilateral Coercive Measures, according to a statement from the Cuban Ministry of Foreign Affairs.  

The main issues to be addressed will be the legal and practical aspects of existing EU legislation to counteract the extraterritorial application of third country legislation and the use of unilateral coercive measures with extraterritorial effect as a political and economic means of exerting pressure against states.

The Cuban delegation will discuss, among the agenda matters, the effects of the economic, commercial and financial blockade imposed by the United States on the Caribbean nation for almost 60 years. 

This is the most prolonged unilateral coercive economic measures in history and implies a massive, flagrant and systematic violation of the human rights of the Cuban people, as denounced by the authorities of the island.

This Monday's meeting will be held in virtue of Article 10 of the Political Dialogue and Cooperation Agreement concluded between Cuba and the EU in 2016, provisionally put into effect in 2017.

Manhattan U.S. Attorney Charges Société Générale With Violations Of TWEA: US$1.3 Billion In Penalties

Manhattan U.S. Attorney Announces Criminal Charges Against Société Générale S.A. For Violations Of The Trading With The Enemy Act

Bank to Pay Total Penalties of more than $1.3 Billion as part of Resolution with Federal and State Prosecutors and Regulators

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, James D. Robnett, the Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), and Mark Bialek, Inspector General, Board of Governors of the Federal Reserve System and the Consumer Financial Protection Bureau (“IG-FRB/CFPB”), announced criminal charges against Société Générale S.A. (“SG” or the “Bank”) consisting of a one-count felony information charging SG with conspiring to violate the Trading with the Enemy Act (“TWEA”) and the Cuban Asset Control Regulations promulgated thereunder (the “Cuban Regulations”) for SG’s role in processing billions of dollars of U.S. dollar transactions using the U.S. financial system, in connection with credit facilities involving Cuba (the “Cuban Credit Facilities”).  The case is assigned to United States District Judge P. Kevin Castel. 

Mr. Berman also announced an agreement (the “Agreement”) under which SG agreed to accept responsibility for its conduct by stipulating to the accuracy of an extensive Statement of Facts, pay penalties totaling $1,340,165,000 to federal and state prosecutors and regulators, refrain from all future criminal conduct, and implement remedial measures as required by its regulators.  Assuming SG’s continued compliance with the Agreement, the Government has agreed to defer prosecution for a period of three years, after which time the Government will seek to dismiss the charges.  The $1.34 billion in penalties represents the second largest penalty ever imposed on a financial institution for violations of U.S. economic sanctions.

The penalty shall be collected, in part, through SG’s forfeiture to the United States of $717,200,000 in a civil forfeiture action also filed today.  Of that amount, one-half shall be transferred to the United States Victims of State Sponsored Terrorism Fund, pursuant to the Justice for United States Victims of State Sponsored Terrorism Act.  In addition, SG has reached separate agreements with the  New York County District Attorney’s Office (“DANY”), United States Department of the Treasury, Office of Foreign Assets Control (“OFAC”), the Federal Reserve Board of Governors and the Federal Reserve Bank of New York (collectively the “Federal Reserve”), and the New York State Department of Financial Services (“DFS”), under which it shall pay additional penalties of $622,965,000 as follows: $162,800,000 to DANY; $53,900,000 to OFAC; $81,265,000 to the Federal Reserve; and $325,000,000 to DFS. 

The Government entered into this resolution due, in part, to SG’s acceptance and acknowledgement of responsibility under the laws of the United States for its conduct, as exhibited by its undertaking of a thorough internal investigation, collecting and producing voluminous evidence located in other countries to the full extent permitted under applicable laws and regulations, and its enhancement of its compliance program and sanctions-related internal controls both before and after it became the subject of a U.S. law enforcement investigation.  These factors and SG’s willingness to enter into the commitments set forth in the  Agreement, along with all other relevant factors and considerations, collectively weighed in favor of deferral of prosecution, and outweighed in this particular case SG’s failure to self-report all of its violations of United States sanctions laws in a timely manner, as described below.

U.S. Attorney Geoffrey S. Berman said:  “Today, Société Générale has admitted its willful violations of U.S. sanctions laws – and longtime concealment of those violations – which resulted in billions of dollars of illicit funds flowing through the U.S. financial system.  With today’s resolution, the Bank has accepted responsibility for its criminal conduct and demonstrated its commitment to remedying these failures and enhancing its compliance programs and internal controls.  Other banks should take heed:  Enforcement of U.S. sanctions laws is, and will continue to be, a top priority of this Office and our partner agencies.”

IRS-CI Special Agent in Charge James D. Robnett said:  “Today, Société Générale is being held accountable for illegal transactions made through the U.S. financial system on behalf of entities subject to U.S. economic sanctions.  Sanctions enforcement is of vital importance to our national security and the integrity of our financial system.  IRS-CI will continue to work closely with partner law enforcement agencies, federal regulators and prosecutors to ensure compliance with federal banking laws to promote integrity across financial institutions worldwide.”

FRB/CFPB Inspector General Mark Bialek said:  “As today’s agreement makes clear, Société Générale’s knowing and willful violation of U.S. economic sanctions through structuring and concealment has resulted in an agreement to pay over $1.3 billion in monetary penalties.  I commend our agents in New York and their law enforcement partners for their hard work, along with the coordination of the Federal Reserve Bank of New York and the Federal Reserve Board, which resulted in this outcome.”

According to the documents filed today in Manhattan federal court:

SG’s Operation of U.S. Dollar Credit Facilities to Finance Cuban Business

From approximately 2004 through 2010, SG, in contravention of U.S. sanctions laws, operated 21 credit facilities that provided significant money flow to Cuban banks, entities controlled by Cuba, and Cuban and foreign corporations for business conducted in Cuba; those facilities (the “Cuban Credit Facilities”) involved substantial U.S.-cleared payments through U.S. financial institutions, in violation of TWEA and the Cuban Regulations.  In total, during this time period, SG engaged in more than 2,500 sanctions-violating transactions through U.S. financial institutions, causing those U.S. financial institutions to process close to $13 billion in transactions that otherwise should have been rejected, blocked, or stopped for investigation pursuant to regulations promulgated by OFAC.  The majority of these transactions and most of the total value involved a U.S. dollar credit facility designed to finance oil transactions between a Dutch commodities trading firm and a Cuban corporation with a state monopoly on the production and refining of crude oil in Cuba.

SG avoided detection, in part, by making inaccurate or incomplete notations on payment messages that accompanied these sanctions-violating transactions.  Indeed, the SG department that managed many of the Cuban Credit Facilities engaged in a deliberate practice of concealing the Cuban nexus of U.S. dollar payments that were made in connection with those facilities.  For example, SG routed approximately 500 U.S. dollar-denominated payments through a particular Spanish bank in order to disguise the fact that the transactions violated U.S. sanctions, and employees were instructed to omit any references to Cuba or Cuban entities from the messages that accompanied the fund transfers. 

In late 2004, SG began to reconsider its Cuba business in light of U.S. enforcement actions, and began to shift away from U.S. dollar transactions involving Cuba to avoid U.S. scrutiny and possible penalties.  In a December 1, 2004, email, a senior leader of SG’s global Group Compliance Department expressed concern to a top executive in the SG group responsible for liaising with SG’s regulators that (1) “any discovery of breach” regarding Cuba “attracts the most stringent punishment,” and (2) U.S. authorities, including “criminal authorities,” were focusing on U.S. dollar payments that had been sent through U.S. banks.  Several days later, the same senior leader of Group Compliance, after being alerted to a U.S. dollar transaction between SG Canada and an exporter of goods to Cuba in connection with which “[n]o reference to Cuba is made to [the Canadian bank],” emailed several members of SG’s senior management, noting that “we have lived with the OFAC list for some time and have developed various methods of avoiding it,” and asked whether “given the new regulatory scrutiny in the US on USD payments do we remain satisfied with those methods?”  

In mid- to late-December 2004, as a result of these concerns, SG’s top management determined that U.S. dollar transactions in connection with the Cuban Credit Facilities should be eliminated as quickly as possible, but still permitted continued U.S. dollar transactions in the interim.  Despite the decision in 2004 to wind down U.S. dollar transactions for the Cuban Credit Facilities, as well as the Bank’s overall Cuban exposure, SG continued to engage in such transactions for almost six more years, until October 2010.  The conduct continued despite the ongoing awareness of SG’s Group Compliance, and despite awareness by the participants of ongoing U.S. sanctions enforcement actions.  In October 2010, as the last of the Cuban Credit Facilities was being replaced with a non-U.S. dollar facility at the insistence of a senior leader of SG’s Group Sanctions Compliance function, SG sent payment instructions directing that the final $600,000 arrangement fee be paid in U.S. dollars, but “not to mention any reference to [Cuban Corporation] within the references of this settlement.”  From 2005 to 2010, SG conducted a total of 1,921 U.S. dollar transactions that violated TWEA and the Cuban Regulations, with a total value of approximately $10.3 billion.

SG’s Failure to Disclose Its Wrongdoing in a Timely Manner

Despite the awareness of both SG’s senior management and Group Compliance that SG had engaged in this unlawful conduct, SG did not disclose its conduct to OFAC or any other U.S. regulator or law enforcement agency until well after the commencement of the Government’s investigation. 

This investigation was triggered by the blocking by other U.S. financial institutions, in March 2012, of two transactions that SG processed on behalf of a Sudanese sanctioned entity, and a subsequent February 2013 voluntary disclosure by SG regarding $22.8 million in transactions with the Sudanese entity and a small number of transactions with other sanctioned entities that violated U.S. sanctions.  The Bank did not, however, disclose the existence of the Cuban Credit Facilities at that time, but rather did so only in October 2014, after SG performed a detailed forensic analysis based on the scope of investigation required by the Government and the other investigating agencies. 

Société Générale S.A. To Pay US$53 Million To OFAC For Cuba/Other Violations

Settlement Agreement between the U.S. Department of the Treasury's Office of Foreign Assets Control and Société Générale S.A.  

11/19/2018​

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) today announced a $53,966,916.05 settlement with Société Générale S.A. to settle potential civil liability for apparent violations of U.S. sanctions.  The settlement resolves OFAC’s investigation into Société Générale S.A.’s processing of transactions to or through the United States or U.S. financial institutions in a manner that removed, omitted, obscured, or otherwise failed to include references to OFAC-sanctioned parties in the information sent to U.S. financial institutions that were involved in the transactions.  Société Générale S.A. processed 1,077 transactions totaling $5,560,452,994.36 in apparent violation of the Cuban Assets Control Regulations, 31 C.F.R. part 515; the Iranian Transactions and Sanctions Regulations, 31 C.F.R. part 560; and the Sudanese Sanctions Regulations, 31 C.F.R. part 538.  This settlement with OFAC is part of a global settlement among Société Générale S.A., OFAC, the Board of Governors of the Federal Reserve System, the U.S. Department of Justice, the New York County District Attorney’s Office, the U.S. Attorney for the Southern District of New York, and the New York State Department of Financial Services.

LINK To Settlement Document

Nespresso Of Switzerland Announces Another Release Of Coffee From Cuba

LINK To Announcement: https://www.nespresso.com/us/en/order/capsules/vertuo/cafe-de-cuba?utm_id=54c8275f-5c33-4610-978c-dd43d1fc7b04&j=11093594&sfmc_sub=1043771238&l=95943_HTML&u=253929697&mid=1065837&jb=157&dclid=CMPrnvOd3t4CFVgNNwod1ooNOw

On 17 August 2017, the first Nespresso product with coffee beans sourced from the Republic of Cuba entered the marketplace: https://www.cubatrade.org/blog/2016/8/18/its-here-nespressos-cafecito-de-cuba-capsules-us125-each?rq=nespresso 

LINK To Blog Posts Relating To Nespresso: https://www.cubatrade.org/search?q=nespresso