Trump Administration Expected To Use Section 7031(c) To Add More Cuba Officials To Visa Denial List

The Trump Administration is expected to continue to use Section 7031(c) as a means to influence the behavior of the Republic of Cuba. Thus far, however, those individuals sanctioned are unlikely to feel impeded by a lack of visa to visit the United States. A question is why the Trump Administration has only chosen to identify three individuals within the Republic of Cuba who meet the criteria for Section 7031(c)? Could there be only three within a population of 11 million?

Thus far subject to Section 7031(c):

Former President Raul Castro & Family
Minister of Defense & Family
Minister of Interior & Family

From United States Department Of State: “This designation is made under Section 7031(c) of the Department of State, Foreign Operations, and Related Programs Appropriations Act, 2020 (Div. G, P.L. 116-94). Under Section 7031(c), once the Secretary of State designates officials of foreign governments for their involvement, directly or indirectly, in significant corruption, those individuals and their immediate family members are ineligible for entry into the United States. The law also requires the Secretary of State to either publicly or privately designate or identify such officials and their immediate family members.”

Sec. 7031. (c) Anti-Kleptocracy and human rights. (1) INELIGIBILITY.

(A) Officials of foreign governments and their immediate family members about whom the Secretary of State has credible information have been involved in significant corruption, including corruption related to the extraction of natural resources, or a gross violation of human rights shall be ineligible for entry into the United States.

(B) The Secretary shall also publicly or privately designate or identify officials of foreign governments and their immediate family members about whom the Secretary has such credible information without regard to whether the individual has applied for a visa.

(2) EXCEPTION.—Individuals shall not be ineligible if entry into the United States would further important United States law enforcement objectives or is necessary to permit the United States to fulfill its obligations under the United Nations Headquarters Agreement: Provided, That nothing in paragraph (1) shall be construed to derogate from United States Government obligations under applicable international agreements.

(3) WAIVER.—The Secretary may waive the application of paragraph (1) if the Secretary determines that the waiver would serve a compelling national interest or that the circumstances which caused the individual to be ineligible have changed sufficiently.

LINK To Previous Posts:

U.S. Designates Cuba's Minister Of Interior And His Children Under Section 7031(c); Raul Castro & Family Designated In September; More Designations Expected
16 November 2019

https://www.cubatrade.org/blog/2019/11/16/us-designates-cubas-minister-of-interior-and-his-children-under-section-7031c-more-designations-expected?rq=7031

U.S. Department Of State Designates General Raul Castro, Former President Of Cuba
26 September 2019

https://www.cubatrade.org/blog/2019/9/26/us-department-of-state-designates-general-raul-castro-former-president-of-cuba?rq=7031

United States Department Of State Designates Minister Of Defense Of Cuba For Violations Of Human Rights
2 January 2020

https://www.cubatrade.org/blog/2020/1/2/united-states-department-of-state-designates-minister-of-defense-of-cuba-for-violations-of-human-rights?rq=7031

Vessel Flags Of Convenience Targeted By Trump Administration To Pressure Cuba And Venezuela: Panama Focus

The Trump Administration continues to focus upon countries that register merchant vessels where those vessels transport products to/from the Republic of Cuba and Venezuela. The governments of Panama, which has the largest (17%) registration of vessels (approximately 8,000 representing approximately 217 million gross tons) , and Liberia, with the second-largest registration of vessels, have been particular targets. Reportedly, the tenor of some of the conversations initiated by officials of the Trump Administration have been less then courteous.

From Wikipedia: Flag of convenience (FOC) “is a business practice whereby a ship's owners register a merchant ship in a ship register of a country other than that of the ship's owners, and the ship flies the civil ensign of that country, called the flag state.  The term is often used pejoratively, and the practice is regarded as contentious.  Each merchant ship is required by international law to be registered in a registry created by a country, and a ship is subject to the laws of that country, which are used also if the ship is involved in a case under admiralty law.  A ship's owners may elect to register a ship in a foreign country which enables it to avoid the regulations of the owners’ country which may, for example, have stricter safety standards.  They may also select a jurisdiction to reduce operating costs, bypassing laws that protect the wages and working conditions of mariners.  The term "flag of convenience" has been used since the 1950s. A registry which does not have a nationality or residency requirement for ship registration is often described as an open registry.  Panama, for example, offers the advantages of easier registration (often online) and the ability to employ cheaper foreign labour. Furthermore, the foreign owners pay no income taxes.”

BBC
London, United Kingdom

Excerpts For Background: “Most merchant ships flying Panama's flag belong to foreign owners wishing to avoid the stricter marine regulations imposed by their own countries.  Panama operates what is known as an open registry.  Its flag offers the advantages of easier registration (often online) and the ability to employ cheaper foreign labour.  Furthermore the foreign owners pay no income taxes.  Under international law, every merchant ship must be registered with a country, known as its flag state.  That country has jurisdiction over the vessel and is responsible for inspecting that it is safe to sail and to check on the crew's working conditions.  Open registries, sometimes referred to pejoratively as flags of convenience, have been contentious from the start.  Panama now has the largest registry in the world.  The registry is lucrative for Panama, bringing in [more than] half a billion dollars for the economy in fees, services and taxes.  However, critics of the system point to the ease of hiding the true identity of shipowners and the lax enforcement of rules and regulations.”

The Hague, The Netherlands-based Secretariat Paris Memorandum of Understanding On Port State Control: “The organization consists of 27 participating maritime Administrations and covers the waters of the European coastal States and the North Atlantic basin from North America to Europe.  The current member States of the Paris MoU are: Belgium, Bulgaria, Canada, Croatia, Cyprus, Denmark, Estonia, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Latvia, Lithuania, Malta, the Netherlands, Norway, Poland, Portugal, Romania, the Russian Federation, Slovenia, Spain, Sweden and the United Kingdom.  Mission is to eliminate the operation of sub-standard ships through a harmonized system of port State control.  Annually more than 17.000 inspections take place on board foreign ships in the Paris MoU ports, ensuring that these ships meet international safety, security and environmental standards, and that crew members have adequate living and working conditions.  Basic principle is that the prime responsibility for compliance with the requirements laid down in the international maritime conventions lies with the shipowner/operator. Responsibility for ensuring such compliance remains with the flag State.”

Flag Of Convenience (FOC) Countries

“The International Transport Workers’ Federation (ITF) is a democratic, affiliate-led federation recognised as the world’s leading transport authority. We fight passionately to improve working lives, connecting trade unions from 150 countries that may otherwise be isolated and helping their members to secure rights, equality and justice. We are the voice for nearly 20 million working men and women across the world.  Our headquarters is located in London with offices in Amman, Brussels, Nairobi, New Delhi, Ouagadougou, Rio de Janeiro, Singapore, Sydney and Tokyo.”

“The following countries have been declared FOCs by the ITF’s fair practices committee (a joint committee of ITF seafarers' and dockers' unions), which runs the ITF campaign against FOCs: Antigua and Barbuda, Bahamas, Barbados, Belize, Bermuda (UK), Bolivia, Cambodia, Cayman Islands, Comoros, Cyprus, Equatorial Guinea, Faroe Islands (FAS), French International Ship Register (FIS), German International Ship Register (GIS), Georgia, Gibraltar (UK), Honduras, Jamaica, Lebanon, Liberia, Malta, Madeira, Marshall Islands (USA), Mauritius, Moldova, Mongolia, Myanmar, Netherlands Antilles, North Korea, Panama, Sao Tome and Príncipe, St Vincent, Sri Lanka, Tonga, Vanuatu.”

“The below table shows the Flags of Convenience as declared by ITF along with the recent information (Source: Central Intelligence Agency, as of January 2017) in regards to their profile (i.e. the total number of vessels and foreign vessels) under each registry: Table 1: Flags of Convenience:”

U.S. Department Of Transportation Limits Cuba Charter Flights To 3,600 Annually

U.S. Department of Transportation Issues Order Finalizing Procedures to Distribute Public Charter Flights Between the United States and Havana, Cuba

Thursday, May 28, 2020 

The U.S. Department of Transportation (DOT) today issued an Order finalizing procedures to distribute public charter flights between the United States and Havana, Cuba.  The Order also grants an initial allocation of charters to the carriers Swift Air and World Atlantic Airlines for U.S.-Havana public charter flights between June 1, 2020, and May 31, 2021.  The remaining charters will be maintained in a charter pool for distribution on a first-come, first-served basis to interested carriers.  Carriers receiving flights work with tour operators that arrange the charter programs.  Earlier this year, DOT announced that it would implement a cap on Havana public charter flights in response to a request from the U.S. Department of State.  Then, in a show-cause order, DOT proposed tentative procedures to implement the cap and invited comments from interested parties.  Today’s Order finalizes the tentative procedures with certain modifications made in response to the comments filed on the record of the proceeding.   

The final Order can be found at www.regulations.gov, by searching “Docket DOT-OST-2020-0011.”   

LINK To Decision

Cuba Advocates Shouldn't Be So Confident About President Biden

Cuba Advocates Shouldn’t Be So Confident About President Biden

Might & Might Not Do
Might Require President Diaz-Canel To Do
United States Companies Are Deliberately MIA
Cuba Resolving Venezuela Issues Would Change Dynamic

28 April 2020 from The Hill: “In large part, I would go back,” Biden said in an interview with a CBS affiliate in Miami. “I’d still insist they keep the commitments they said they would make when we, in fact, set the policy in place.” 

Therefore, the most important questions for a Biden Administration: Has the Republic of Cuba kept its commitments to the [Barack] Obama Administration?  Is legitimate for the Republic of Cuba to blame the Trump Administration for the Republic of Cuba not keeping commitments to the Obama Administration?

One perception among some in the United States Congress is the Obama Administration required little of the Republic of Cuba and the [Raul] Castro Administration squandered its commercial, economic and political moments which could have cemented the bilateral relationship rather than having nothing which was neither alterable nor reversible.

Another perception is a lack of empathy towards the Republic of Cuba as to the impact of Trump Administration decisions upon revenues from visitors.  Among even advocates, there is shared agreement that the Republic of Cuba viewed the Obama Administration decisions to permit and to encourage individuals subject to United States jurisdiction to visit the Republic of Cuba became for the Castro Administration similar to the role of the U.S.S.R., China and Venezuela- a new benefactor whose financial support would permit the Republic of Cuba to forestall foundational commercial, economic and political changes- why change when others would pay for it not to change.

The Republic of Cuba must avoid connecting Trump Administration policies with [Miguel] Diaz-Canel Administration policies.  Blaming Washington for Havana’s decisions will not have many sympathetic partners (particularly those with influence) on Capitol Hill.  Seeking a quid-pro-quo will not find support.

If on 3 November 2020 The Honorable Joseph Robinette Biden, Jr. defeats The Honorable Donald John Trump, then advocates in the United States and the Republic of Cuba should not expect the Biden Administration to immediately nor in the medium-term reverse many or all of President Trump’s decisions relating to the Republic of Cuba.

If the [Nicolas] Maduro Administration remains in control of Venezuela through the transfer of power in Washington DC on Inauguration Day at 12:00 pm on 20 January 2021, and the Diaz-Canel Administration continues to provide support to Venezuela and Venezuela continues to provide subsidized oil products to the Republic of Cuba, then President Biden will have an even narrower range of options.

If, however, the Diaz-Canel Administration delivers an early resolution to issues relating to Venezuela- providing a safe-haven for members of the Maduro Administration, the Biden Administration would likely reward the Republic of Cuba- including support for a transparent four-year wind-down of subsidized oil deliveries from Venezuela and an agreement not to seek extradition of members of the Maduro Administration indicted by the United States Department of Justice.

The connectivity between the Republic of Cuba and Venezuela, while the Diaz-Canel Administration disputes the depth of that connectivity, does exist and has metastasized to impactfully define how the United States public sectors and private sectors view the bilateral relationship between the United States and the Republic of Cuba.

United States company c-suite executives don’t have an answer for and don’t want to answer: “Cuba supports Maduro; why would you want to do business with them?”  Facts-on-the-ground don’t matter as much as public perception.  Instructive to note that the most recent visit to the Republic of Cuba by a United States governor was 2017.

While President Biden will endeavor to differentiate his “strength” from the definition embraced by his predecessor, the newly-installed head of state will not want to appear weak- and there are members of the Democratic Party who believe (or need to believe to ensure their re-election) that President Trump, while often inarticulate and offensive with his use of words, has achieved beneficial, if in some instances not fully-achieved results with “fairness issues,” particularly with efforts including the United States-Mexico-Canada Agreement, Universal Postal Union rates, World Trade Organization rules, NATO member payments, Russia sanctions, and trade agreements (China, Japan, South Korea among others).  President Biden may embrace much of the Trump Administration outside-our-borders policies, but doing so less in public than in private.

If on 20 January 2021 the United States Senate remains in control of the Republican Party, then President Biden will tread carefully with respect to the Republic of Cuba and Venezuela because he will need approval of his spending requests, confirmation of his administration nominees and judicial nominees, and support for treaties, bilateral agreements and multi-lateral agreements.

If the United States Senate is in control of the Democratic Party and the United States House of Representatives remains in control of the Democratic Party, then President Biden might find legislative initiatives relating to the Republic of Cuba and Venezuela heading to the Resolute desk for his signature.  However, the Republican Party members in the United States Senate would retain substantial legislative authority to impact legislation relating to the Republic of Cuba.

With perhaps two Associate Justices of the United States Supreme Court likely to retire during the first year of President Biden’s term, he will be loath to do anything to jeopardize his nominees.

Issues relating to the Republic of Cuba will, as they often are, be commoditized, thus tradeable for more important objectives.  The Republic of Cuba needs to make itself relevant rather await the United States to make it relevant. 

Instructive to note from 20 January 2009 through 20 January 2017, and in particular from 17 December 2014 through 20 January 2017- the “period of re-engagement” when embassies were re-opened, the Obama Administration (led by some on the National Security Council staff) did not permit direct correspondent banking- perhaps the most basic foundation for bilateral commerce: the ability of a purchaser to directly electronically transfer funds to a seller within minutes to hours rather than days required for a purchaser using a financial institution (which receives a fee) located in a third country to transfer funds. 

During the Obama Administration more than US$3 billion was transferred from the Republic of Cuba through third country financial institutions to United States companies for payments relating to agricultural commodities, food products, and healthcare products; and billions of dollars (including remittances, aircraft landing fees, dock fees, telecommunications fees, etc.) were transferred from United States companies through financial institutions in third countries, particularly Panama, to the Republic of Cuba. 

Enabling direct correspondent banking would be one immensely significant decision by the Biden Administration as it would benefit authorized commercial transactions and compel Republic of Cuba government-operated financial institutions to be transparent and comply with United States regulations, resulting in greater confidence towards the Republic of Cuba and increased accountability by the Republic of Cuba.

President Biden will be a one-term president, and likely will confirm as much prior to the election in November 2020.  Most first-term presidents avoid issues relating to the Republic of Cuba until well into their second term.  He may not, however, feel encumbered from initiating dynamic or controversial decisions as would a newly-inaugurated president preparing immediately for a second term.  His Madam Vice President may have differing views in preparing to be the presidential nominee of the Democratic Party in 2024.

The Biden Administration will have the benefit of reviewing the past as a guide for the future.  What the Trump Administration did, what the Obama Administration did, what the Castro Administration did, and what the Diaz-Canel Administration is doing to determine what worked and what failed- and the reasons for each.

President Biden Might Seek From The Republic Of Cuba

· Cease support for Maduro Administration
· Permit United States companies to establish offices
· Permit direct payment to employees who are Republic of Cuba nationals
· Remove restrictions upon the self-employed
· Provide definitive explanation for injuries suffered by United States diplomats
· Negotiate settlement for the 5,913 certified claims
· Seek return of fugitives for crimes committed in New Jersey

President Biden Might Do (But Unlikely Rush To Do)

· Reinstate regularized government-to-government dialogue for departments and agencies
· Re-authorize commercial airline flights to all Republic of Cuba cities
· Use recess appointment to install United States ambassador
· Meet with President Diaz-Canel during the United Nations General Assembly
· Re-authorize unlimited remittances
· Debate re-authorizing People-To-People travel category
· Not soon re-authorize cruise ships
· Re-authorize U-turn financial transactions
· Authorize direct correspondent banking
· Remove travel restrictions upon diplomats from the Republic of Cuba
· Retain Libertad Act Title III lawsuits
· Permit students unimpeded travel to the Republic of Cuba
· Lessen use of Libertad Act Title IV letters
· Remove (if Trump Administration adds) from list of countries supporting terrorism
· Retain on list of countries not cooperating with United States counterterrorism efforts
· Reduce United States content rules for export controls
· Permit Republic of Cuba to replace its ambassador in Washington

What Might Happen Within The First Three Months

· Reinstate regularized government-to-government dialogue for departments and agencies
· Re-authorize commercial airline flights to all Republic of Cuba cities
· Retain Libertad Act Title III lawsuits

What Might Happen Within The First Six Months

· Re-authorize unlimited remittances
· Remove travel restrictions upon diplomats from the Republic of Cuba
· Discuss re-authorization of highly restrictive People-To-People travel category

What Might Happen Within The First Year

· Reduce United States content rules for export controls
· Permit students unimpeded travel to the Republic of Cuba
· Authorize direct correspondent banking

The Republic of Cuba is wishing-upon-a-star for President Trump to be defeated.  However, unlike the catastrophic strategy implemented in 2015/2016 by the Republic of Cuba and Obama Administration when they convinced themselves The Honorable Hillary Clinton would not be defeated, the Republic of Cuba has modeled for President Trump’s second term and President Biden’s first term.  Regardless of who wins, the Republic of Cuba should not be rejoicing.

Neither President Trump in his second term nor President Biden in his first term will be soon arriving to Jose Marti International Airport in Havana.

In September 2020, when the United Nations General Assembly meets in New York City, President Diaz-Canel should attend and request meetings with President Trump and with former Vice President Biden.  That is what many other heads of state and heads of government who are thinking strategically will be doing.

LINK To Analysis In PDF Format

One Libertad Act Lawsuit Dismissed Against Trivago, Expedia, Orbitz, Hotels, Booking

MARIO DEL VALLE, ENRIQUE FALLA, MARIO ECHEVARRIA V. EXPEDIA, INC., HOTELS.COM L.P., HOTELS.COM GP, ORBITZ, LLC, BOOKING.COM B.V., BOOKING HOLDINGS INC. Initial defendants were: TRIVAGO GMBH, BOOKING.COM B.V., GRUPO HOTELERO GRAN CARIBE, CORPORACION DE COMERCIO Y TURISMO INTERNACIONAL CUBANACAN S.A., GRUPO DE TURISMO GAVIOTA S.A., RAUL DOE I-5, AND MARIELA ROE 1-5, [1:19-cv-22619; Southern Florida District]

Rivero Mestre LLP (plaintiff)
Manuel Vazquez, P.A. (plaintiff)
Scott Douglass & McConnico (defendant)
Akerman (defendant)

Excerpts:

“Now before the Court are the Defendants’ motions to dismiss. The Defendants Booking.com BV and Booking Holdings Inc. (the “Booking Defendants”) filed a motion to dismiss (ECF No. 52), and the Defendants Expedia Group, Inc., Hotels.com L.P., Hotels.com GP, and Orbitz, LLC (the “Expedia Defendants”) filed a separate motion to dismiss (ECF No. 53). For the reasons set forth below, the Defendants’ motions are granted.”

“In sum, the Court grants the Defendants’ motions to dismiss (ECF Nos. 52, 53) without leave to amend.2 The Plaintiffs have had multiple opportunities to plead jurisdiction and have failed to do so. Further, the Plaintiffs have not requested leave to amend; nor have they indicated in their response to the Defendants’ motion any inclination whatsoever to do so. Wagner v. Daewoo Heavy Industries Am. Corp., 314 F.3d 541, 542 (11th Cir. 2002) (“A district court is not required to grant a plaintiff leave to amend his complaint sua sponte when the plaintiff, who is represented by counsel, never filed a motion to amend nor requested leave to amend before the district court.”); Avena v. Imperial Salon & Spa, Inc., 17-14179, 2018 WL 3239707, at *3 (11th Cir. July 3, 2018) (“[W]e’ve rejected the idea that a party can await a ruling on a motion to dismiss before filing a motion for leave to amend.”). The Court directs the Clerk to close this case. Any pending motions are denied as moot.”

LINK To Order on the Motion to Dismiss (5/26/20)

Cuba Defaulting On Paris Club Agreements, Seeking Again More Time; Trump Administration Message To Members: "Negotiate Like Donald Trump, Not Like EU"

The Paris, France-based Paris Club of Creditor Nations (Paris Club) members: Australia, Austria, Belgium, Brazil, Canada, Denmark, Finland, France, Germany, Ireland, Israel, Italy, Japan, the Netherlands, Norway, the Russian Federation, South Korea, Spain, Sweden, Switzerland, the United Kingdom and the United States.

The fourteen members of the Paris Club members who are parties to a 2015 agreement with the Republic of Cuba: Austria, Australia, Belgium, Canada, Denmark, Finland, France, Italy, Japan, Spain, Sweden, Switzerland, the Netherlands, and United Kingdom.

The countries owed by the Republic of Cuba have few palatable choices: 1) accept the offer by the Republic of Cuba 2) present a counteroffer seeking more than the offer by the Republic of Cuba or 3) Permit another default by the Republic of Cuba.

Regardless, governments and companies will never receive what they were initially owed by the Republic of Cuba- and with each delay, they receive less.

The Trump Administration, while unable to block revision of debt agreements by some Paris Club members, will advocate that members require the Republic of Cuba to maintain obligations or at minimum implement commercial, economic and political changes that further enhance the opportunity to earn foreign exchange.

The Trump Administration position to those countries owned money- Don’t permit the Republic of Cuba to continue to function as it does solely because governments continually subsidize every financial transaction with the country.  The Republic of Cuba should not be “permitted to continue to operate as it does simply to make an ideological point; the country must support itself.”  

The Trump Administration mantra to participating Paris Club members will be: Provide first a good deal for member governments and their respective taxpayers rather than a good deal for the Republic of Cuba and second “don’t negotiate like the European Union, negotiate like Donald Trump.”

To make sovereign debt and commercial debt payments, the Republic of Cuba depends upon 1) stable commodity prices for exports 2) stable commodity prices for imports (most importantly, agricultural commodities and oil) 3) increasing Direct Foreign Investment (DFI) 4) increasing tourism net profits 5) continuing short-term, medium-term and long-term government-to-government loans and grants and 6) continuing medium-term to long-term commercial financing for imports. 

Without changes to the commercial, economic and political structures within the Republic of Cuba, there is little elasticity between fulfilling obligations and default on obligations.

Cuba seeks delay in debt repayment to 2022: diplomats
by Katell ABIVEN
Agence-France Presse
20 May 2020

Cuba has asked the Paris Club of major creditors for a delay in repaying its debt until 2022, citing the impact of the coronavirus pandemic on its economy, diplomatic sources told AFP on Wednesday.

In a letter sent to 14 Paris Club countries to whom Cuba owes money including Britain, Canada, France and Japan, Deputy Prime Minister Ricardo Cabrisas proposed "a moratorium for 2019, 2020 and 2021 and a return to paying in 2022," a diplomatic source revealed. Two other diplomats subsequently confirmed the information. All sources spoke to AFP on condition of anonymity due to the sensitive nature of the matter.

Havana missed more than $30 million in reimbursements in 2019. In February, it committed to settling that debt by May, but the virus crisis has now put paid to those plans. According to one source, the letter stipulates that Cuba would reassess its economic situation in 2021 to see if it could resume repayments.

The agreement with the Paris Club is crucial for Cuba, which has been subjected to punishing US sanctions since 1962. After an easing of tensions under Barack Obama, sanctions have been ramped up under the administration of US President Donald Trump.

In 2015, Havana renegotiated its debt with 14 Paris Club countries, wiping out $8.5 billion from an $11 billion debt, with the repayments restructured gradually until 2033. Cuba, which has suffered from food and fuel shortages, also benefited from several other creditors writing off debt: $6 billion by China in 2011, $500 million by Mexico in 2013 and $35 billion by Russia in 2014.

Havana is increasingly reliant on the European Union, which has become its main investor with almost $3.5 billion in trade in 2018. However, lockdown measures enforced to combat the pandemic have badly affected Cuba's main sources of income, such as tourism and remittances sent from Cubans abroad.

Tourism brought in $3.3 billion in 2018 but there has not been a single new visitor since March 24, putting a third of privately run businesses, and the 200,000 people they employ, at risk. Tourist numbers had already dropped by 9.3 percent in 2019 due to new restrictions on American visitors. The year-on year fall reached 16.5 percent in January and February -- and that was before Cuba closed its borders.

- 'Humanitarian crisis' -

Remittances accounted for $3.5 billion in 2017, according to an estimate by economist Carlos Mesa-Lago. "If the economic damage in Florida (where many Cuban immigrants live) is significant, then (remittances) will fall and that will impact people's lives," said the Inter-American Dialogue think tank, warning of "a humanitarian crisis."

Another major source of income that has been hit is Cuba's export of health care workers, which brought in $6.3 billion in 2018. That has been cut by the return of 9,000 workers from countries with whom Cuba has strained diplomatic relations. "It's time to work on our reserves," said Economy Minister Alejandro Gil, because "we must save everything we can." The island nation, which imports 80 percent of goods, "reduced by 75 percent its first quarter imports" because of a lack of cash flow, said economist Omar Everleny Perez.

Cuba is desperate to avoid a default, like it suffered in 1986. It is hoping for clemency, given that the Group of 20 largest economies put in place a one-year freeze on debt repayments for the world's poorest countries, including 40 in Africa. The World Bank and International Monetary Fund have vowed to help vulnerable countries, but Cuba is a member of neither organization. The UN Economic Commission for Latin America and the Caribbean has said it expects Cuba's GDP to fall by 3.7 percent in 2020, but many experts predict a greater contraction.

USDA Received Zero MAP/FMD Program Applications For Cuba in 2019 Or 2020; Will Any Group Request For FY2021?

USDA Accepting Applications for FY 2021 Export Programs

“The U.S. Department of Agriculture’s Foreign Agricultural Service is accepting applications from eligible organizations for fiscal year 2021 funding for five export market development programs. FAS recently published the FY 2021 Notices of Funding Opportunity for the Market Access Program, Foreign Market Development Program, Technical Assistance for Specialty Crops Program, Quality Samples Program and Emerging Markets Program. The application deadline for the five programs is June 26, 2020.

Under the Market Access Program, USDA provides competitive, cost-share assistance to U.S. exporters and agricultural, fish, and forest product trade organizations for international marketing and promotion of U.S. commodities and products. More information about the program and the FY 2021 funding opportunity is available at: https://www.fas.usda.gov/programs/market-access-program-map.

Under the Foreign Market Development Program, USDA partners with nonprofit agricultural and forest product trade associations to build longer-term international demand for U.S. commodities. More information about the program and the FY 2021 funding opportunity is available at: https://www.fas.usda.gov/programs/foreign-market-development-program-fmd.”

Analysis From USCTEC

According the USDA, no request was made in Fiscal Years 2019 or 2020 to use the Republic of Cuba provision in H.R. 2, the five-year Agriculture Improvement Act, known as the “Farm Bill” signed into law on 20 December 2018 by The Honorable Donald J. Trump, President of the United States. No requests in the more than 517 days since the Republic of Cuba became eligible for funding.

In 2018, advocates maintained that the Farm Bill provision was critical to “laying the groundwork” for increasing exports of agricultural commodities and food products to the Republic of Cuba. Statements from members of Congress included: “… an important first step to regaining our presence in Cuba.” Yet, there was not one request to the USDA for Fiscal Year 2019.

Most observers reasonably concluded that legislative advocates- within the United States Congress and organizations located in Washington DC and located outside of the beltway would have prominently teed-up at least one high-profile applicant to request funding on 21 December 2018- regardless of whether the USDA was expected to approve including the Republic of Cuba in Fiscal Year 2019 allocations.

The most significant impact of not having any MAP/FMD requests for Fiscal Years 2019 and 2020 to use the Republic of Cuba provision in the Farm Bill is what the lack of interest portended for other legislative efforts in the United States Congress to rescind prohibitions upon the provision of payment terms for agricultural commodity and food product exports from the United States to the Republic of Cuba.

There has yet to be a United States agricultural commodity exporter or United States financial institution who has publicly stated that they would today provide payment terms and/or financing and what those payment terms and financing terms would be for Republic of Cuba government-operated entities. That absence- which has remained consistent since 2000, is a massive legislative hurdle. Lacking pressure, why would the Trump Administration do anything that it does not want to do?

What Is FMD & MAP?

The USDA does not provide any payments to selected applicants in advance of the applicant making disbursements. The USDA provides payment upon receipt of an invoice from the applicant. The invoices are audited by the USDA and a claw back of payments is permitted. Any Republic of Cuba-related invoice is likely to receive additional scrutiny due to an amendment to the Farm Bill submitted by The Honorable Marco Rubio (R- Florida), a member of the United States Senate.

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

For Fiscal Year 2020, the USDA allocated US$176,849,915.00 in taxpayer funds to 65 participants under the MAP compared to US$174,600,000.00 to 65 participants in Fiscal Year 2019 and US$173,802,447.00 to 66 participants in Fiscal Year 2018.

“MAP reaches virtually every corner of the globe, helping to build markets for a wide variety U.S. farm and food products. FAS provides cost-share assistance to eligible U.S. organizations for activities such as consumer advertising, public relations, point-of-sale demonstrations, participation in trade fairs and exhibits, market research and technical assistance. When MAP funds are used for generic marketing and promotion, participants must contribute a minimum 10-percent match. For promotion of branded products, a dollar-for-dollar match is required. Each year, FAS announces the MAP application period and criteria in the Federal Register. Applicants apply for MAP through the Unified Export Strategy (UES) process, which allows eligible organizations to request funding from multiple USDA market development programs through a single, strategically coordinated proposal. FAS reviews the proposals and awards funds to applicants that demonstrate the potential for effective performance based on a clear, long-term strategic plan.”

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

For Fiscal Year 2020, the USDA allocated US$26,961,898.00 to 22 participants under the FMD compared to US$27,097,191.00 in taxpayer funds to 22 participants in Fiscal Year 2019 and US$26,484,947.00 to 23 participants in Fiscal Year 2018.

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

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

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

Value Of MAP/FMD  

For the United States business community, the MAP/FMD amendment to the Farm Bill was significant, but more likely to provide greater financial value to the government of the Republic of Cuba than to United States food product and agricultural commodity exporters using provisions of the Trade Sanctions Reform and Export Enhancement Act (TSREEA) of 2000.  

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

LINK To Analyses:

After Resisting For More Than One Year, USDA Confirms No Requests From US Groups For MAP Or FMD For Use In Cuba
https://www.cubatrade.org/blog/2020/2/26/after-resisting-for-more-than-one-year-usda-confirms-no-requests-from-us-groups-for-map-or-fmd-for-use-in-cuba?rq=FMD

USDA Requested To Publish Organizations/Funding Amounts Approved For FY2020 FMD/MAP Funds In Cuba
https://www.cubatrade.org/blog/2019/12/13/6jb1gv4vgdyxybaom3w2nf0f2jxzlq?rq=MAP

Why Is USDA Stonewalling Response To Follow-Up About FMD/MAP Funding For Which It Previously Provided Answers?
https://www.cubatrade.org/blog/2019/10/9/why-is-usda-stonewalling-response-to-follow-up-about-fmdmap-funding-for-which-it-previously-provided-answers?rq=MAP

USDA Has Up To US$201 Million Available For Cuba- Why Doesn't Any Organization Want To Use It?
https://www.cubatrade.org/blog/2019/5/12/2abai1pugt44khnn3wps4pt0f0wvcl?rq=MAP

Farm Bill: No Fiscal Year 2019 MAP/FMD Applications Submitted To USDA Included Cuba
https://www.cubatrade.org/blog/2018/8/12/h68z2i1k5qc3eizw28z10rg3hfthv2?rq=MAP

Secretary Of State Pompeo Issues Statement On Cuban Independence Day

United States Department of State
Washington DC

20 May 2020

Cuban Independence Day
Michael R. Pompeo, Secretary of State

On Cuban Independence Day, I extend my warm regards and best wishes to the people of Cuba. The United States joins you in celebrating the anniversary of Cuba’s independence, 118 years ago today. The struggle of the Cuban people continues. Your democratic system was overthrown by a military dictator at the middle of the last century. But the revolution your forefathers fought for your rights, freedoms, and prosperity was hijacked by a communist dictatorship that has inflicted the worst forms of abuse on the Cuban people for 61 years.

Both Americans and Cubans alike value our independence and we seek to provide a better, more prosperous future for families, in realization of our God-given rights and dignity as individuals. We salute the brave Cubans who carry on this struggle despite the threats and abuses of the Castro regime: human rights defenders like José Daniel Ferrer and the Ladies in White; and journalists and truth-tellers like Roberto Quiñones, who by shining light on conditions in Cuba prevent the regime from hiding the truth. We salute those demanding the right to exercise their faith in peace, like Pastors Ayda Expósito Leyva and Ramón Rigal, who chose to provide their children with a faith-based home-school education but were imprisoned for doing so. These brave individuals, and many more who are unjustly imprisoned for their beliefs, or who daily face threats and abuse for standing up for what is right, are the true heirs to José Martí.

The United States stands with the Cuban people as you struggle to achieve your vision of a Cuba that is free and more just. The day when your dream of freedom becomes reality is decades overdue, but that day will come.

President Trump Issues Statement On Cuban Independence Day

The White House
Washington DC
Office of the Press Secretary

FOR IMMEDIATE RELEASE

May 20, 2020

Presidential Message on Cuban Independence Day, 2020

On Cuban Independence Day, we recognize the patriots who fought to liberate Cuba from its colonial oppression and build a society founded on freedom. We continue to stand with the Cuban people as they seek those fundamental rights, and we express our commitment to supporting them as they continue to fight for freedom and democracy.

The United States has historic ties to the Cuban people and remains in solidarity with the millions who have fled the oppression of Cuba’s tyrannical regime in search of a new life. Cuba’s people deserve a government that promotes individual liberties, basic human rights, and opportunities to prosper. The Cuban model represents failed socialism, and we will continue to ensure that Cuba does not export its repression anywhere else in the Western Hemisphere. That is why I took action early in my Administration to implement a strong policy toward Cuba that promotes respect for human rights, free markets, and a transition to democracy in Cuba. America will keep working with our allies and partners in the Western Hemisphere to bring stability, religious liberty, cooperation, and a freer future to the great people of Cuba.

Today, we celebrate the many contributions of Cuban Americans to our American story, and we pledge to continue working with them to secure a better tomorrow for Cuba.

Trump Administration Inching Nearer To Returning Cuba To Terrorism List; Adding Venezuela

United States Department of State
Washington DC
13 May 2020

Countries Certified as Not Cooperating Fully with U.S. Counterterrorism Efforts
Office of the Spokesperson

Yesterday, the Department of State notified Congress that Iran, North Korea, Syria, Venezuela, and Cuba were certified under Section 40A(a) of the Arms Export Control Act as “not cooperating fully” with U.S. counterterrorism efforts in 2019. This is the first year that Cuba has been certified as not fully cooperating since 2015. This certification prohibits the sale or license for export of defense articles and services and notifies the U.S. public and international community that these countries are not fully cooperating with U.S. counterterrorism efforts.

Iran: In 2019, Iran continued to be the world’s largest state sponsor of terrorism, supporting Hizballah, Palestinian terrorist groups, and other terrorist groups operating throughout the Middle East. In 2019, Iran maintained its support for various Iraqi Shia terrorist groups, including Kata’ib Hizballah (KH), Harakat al-Nujaba (HAN), and Asa’ib Ahl al-Haq (AAH). Iran’s Islamic Revolutionary Guard Corps (IRGC), a designated Foreign Terrorist Organization, has been directly involved in terrorist plotting and has killed U.S. citizens. The IRGC – most prominently through its Qods Force – has the greatest role among Iranian regime actors in directing and carrying out a global terrorist campaign.

North Korea: In 2019, four Japanese individuals who participated in the 1970 hijacking of a Japan Airline flight continued to live in the DPRK. The Japanese government also continued to seek a full account of the fate of 12 Japanese nationals believed to have been abducted by DPRK state entities in the 1970s and 1980s.

Syria: Syria has continued its political and military support for terrorist groups, including the provision of weapons and political support to Hizballah. The Assad regime’s relationship with Hizballah and Iran grew stronger in 2019 as the regime became more reliant on external actors to fight opponents and secure areas. The IRGC and IRGC-backed militias remain present and active in the country with the permission of President Bashar al-Assad.

Venezuela: In 2019, Maduro and members of his former regime in Venezuela continued to provide permissive environments for terrorists in the region to maintain a presence. While Maduro was not the recognized President of Venezuela during this period, his control within Venezuela effectively precluded cooperation with the United States on counterterrorism efforts. Individuals linked to Revolutionary Armed Forces of Colombia (FARC) dissidents (who remain committed to terrorism notwithstanding the peace accord) and the National Liberation Army (ELN) were present in the country. The U.S. Department of Justice has criminally charged Maduro and certain other former regime members with running a narco-terrorism partnership with the FARC for the past 20 years.

Cuba: Members of the ELN, who travelled to Havana to conduct peace talks with the Colombian government in 2017, remained in Cuba in 2019. Citing peace negotiation protocols, Cuba refused Colombia’s request to extradite ten ELN leaders living in Havana after the group claimed responsibility for the January 2019 bombing of a Bogota police academy that killed 22 people and injured more than 60 others. As the United States maintains an enduring security partnership with Colombia and shares with Colombia the important counterterrorism objective of combating organizations like the ELN, Cuba’s refusal to productively engage with the Colombian government demonstrates that it is not cooperating with U.S. work to support Colombia’s efforts to secure a just and lasting peace, security, and opportunity for its people.

Cuba harbors several U.S. fugitives from justice wanted on charges of political violence, many of whom have resided in Cuba for decades. For example, the Cuban regime has refused to return Joanne Chesimard, who was convicted of executing New Jersey State Trooper Werner Foerster in 1973. The Cuban Government provides housing, food ration books, and medical care for these individuals.

Analysis:

There are individuals within the Trump Administration who want passionately to restore the Republic of Cuba to the State Department list of state sponsors of terrorism. The individuals, within the National Security Council at The White House and at the United States Department of State, and with support from some members of the United States Congress (House of Representatives and Senate), believe that restoration, along with including Venezuela, will assist with finalizing (before the 3 November 2020 elections in the United States) the demise of President Nicolas Maduro in Caracas and pain to President Diaz-Canel in Havana.

Restoring the Republic of Cuba to the list may also impact what remains of the United States-Republic of Cuba commercial, economic and political relationship and likely impact United States commercial relationships with third countries.

If the Republic of Cuba is returned to the List of State Sponsors of Terrorism there are practical, demonstrative impacts:

First, financial institutions would have another reason to avoid transactions with the Republic of Cuba.

Second, insurance companies could either suspend coverage of transactions and operations (vessels, ships, aircraft, etc.) and if continuing, increase the cost for coverage.

Third, transactions with the Republic of Cuba would have an increase in scrutiny, resulting in fewer governments and companies wanting to engage with it.

Will returning Cuba to the list of state sponsors of terrorism and adding Venezuela to the list of state sponsors of terrorism result in the exit of President Maduro and a lessening of support for President Maduro by President Diaz-Canel? No.

LINK To Federal Register Document

LINK:
Trump Administration Creating Foundational Narrative To Re-Designate Cuba As “State Sponsor Of Terrorism”
https://www.cubatrade.org/blog/2019/2/2/gh5oted5x2mhbtqqzejhxv1e74vkv5?rq=terrorism

Amazon & Susshi Win Dismissal (With Prejudice) Of Libertad Act Lawsuit For Selling Charcoal From Cuba; Will Plaintiff Appeal?

DANIEL A. GONZALEZ VS. AMAZON.COM, INC., AND SUSSHI INTERNATIONAL, INC., D/B/A/ FOGO CHARCOAL [1:19-cv-23988; Southern Florida District]

Cueto Law Group, P.L. (plaintiff)
Wicker Smith O’Hara McCoy & Ford (defendant- Susshi International)
Morgan, Lewis & Bockius (defendant- Amazon)

Excerpts:

Gonzalez has still failed to sufficiently allege in his Amended Complaint that he has an actionable ownership interest in the property.1 Gonzalez does not allege that he inherited the property before 1996 (and instead alleges that he inherited it sometime after November 2016), and therefore he fails to state a claim. [1 Gonzalez’s failure to sufficiently allege that he has an actionable ownership interest is dispositive, and therefore, the Court need not address whether Gonzalez has sufficiently alleged that the Defendants knowingly and intentionally trafficked in the property.]

“In the case of property confiscated before March 12, 1996, a United States national may not bring an action under [the Act] . . . unless such national acquires ownership of the claim before March 12, 1996.” 22 U.S.C. § 6082(a)(4)(B). In other words, the United States citizen filing suit must already own the interest in the confiscated property on March 12, 1996 when the Act was passed. Congress intended that this requirement prevent foreigners from “relocate[ing] to the United States for the purpose of using this remedy” and that it “eliminate any incentive that might otherwise exist to transfer claims to confiscated property to U.S. nationals in order to take advantage of the remedy created by [the Act].” Conference Report at H1660, 1996 WL 90487. Therefore, the Helms-Burton Act only applies to claim owners who are already United States citizens at the time the Act was passed on March 12, 1996. Id.

Here, the Plaintiff’s father allegedly inherited the property from the Plaintiff’s grandfather in 1988, and then Plaintiff’s mother inherited the property from his father in November 2016. (ECF No. 29 at ¶ 16.) Sometime after the Plaintiff’s mother inherited the land in November 2016, she “chose to pass her ownership claim” to the Plaintiff. (Id.) The plain language of the statute indicates that these allegations are insufficient. The statute states that a United States national may not bring an action “unless such national” acquires an interest to the property before 1996. 22 U.S.C. § 6082(a)(4)(B) (emphasis added). “[S]uch national” plainly refers to the “United States national” who may or may not bring an action under the Helms-Burton Act. See Havana Docks Corporation v. MSC Cruises SA Co., -- F. Supp. 3d --, 2020 WL 59637, at *3 (S.D. Fla. Jan. 6, 2020) (Bloom, J.) (reasoning that ignoring the qualifying word “such” in interpreting a separate provision of the Act “would run afoul basic canons of statutory interpretation.”). Moreover, this interpretation of the subsection is consistent with its intent, which is to prevent individuals from transferring their ownership interest in confiscated property to a United States citizen after the Act’s enactment in 1996. Conference Report at H1660, 1996 WL 90487. Congress did not intend for those who acquired an interest in confiscated property after 1996 to bring Helms-Burton Act claims if their property was confiscated before March 12, 1996. Therefore, Gonzalez has failed to state a claim upon which relief may be granted.

In sum, the Court grants the Defendants’ motions to dismiss (ECF Nos. 35, 36) with prejudice. Gonzalez has had two opportunities to state a claim and has failed to do so, and it appears any further amendment would be futile. Further, Gonzalez has not requested leave to amend; nor has he indicated in his response to the Defendants’ motions any inclination whatsoever to do so. Wagner v. Daewoo Heavy Industries Am. Corp., 314 F.3d 541, 542 (11th Cir. 2002) (“A district court is not required to grant a plaintiff leave to amend his complaint sua sponte when the plaintiff, who is represented by counsel, never filed a motion to amend nor requested leave to amend before the district court.”); Avena v. Imperial Salon & Spa, Inc., 17-14179, 2018 WL 3239707, at *3 (11th Cir. July 3, 2018) (“[W]e’ve rejected the idea that a party can await a ruling on a motion to dismiss before filing a motion for leave to amend.”) The Court directs the Clerk to close this case. Any pending motions are denied as moot.

Done and ordered, in Chambers, in Miami, Florida on May 11, 2020.

LINK To Judge’s Order on Motions to Dismiss

Will Plaintiff Appeal?

The plaintiff may seek to appeal the dismissal to the United States Court of Appeals for the Eleventh District whose headquarters is located in Atlanta, Georgia.  

According to practitioners, Courts of Appeals generally prefer a holistic approach, disliking piecemeal legal filings and will await final dispensation of a case prior to moving up within the legal process.

From The Court: “Established by Congress in 1981, the United States Court of Appeals for the Eleventh Judicial Circuit has jurisdiction over federal cases originating in the states of Alabama, Florida and Georgia. The circuit includes nine district courts with each state divided into Northern, Middle and Southern Districts.” 

From The Court: “Although some cases are decided based on written briefs alone, many cases are selected for an "oral argument" before the court. Oral argument in the court of appeals is a structured discussion between the appellate lawyers and the panel of judges focusing on the legal principles in dispute. Each side is given a short time — usually about 15 minutes — to present arguments to the court. 

Most appeals are final. The court of appeals decision usually will be the final word in the case, unless it sends the case back to the trial court for additional proceedings, or the parties ask the U.S. Supreme Court to review the case. In some cases the decision may be reviewed en banc, that is, by a larger group of judges (usually all) of the court of appeals for the circuit. 

A litigant who loses in a federal court of appeals, or in the highest court of a state, may file a petition for a "writ of certiorari," which is a document asking the Supreme Court to review the case. The Supreme Court, however, does not have to grant review. The Court typically will agree to hear a case only when it involves an unusually important legal principle, or when two or more federal appellate courts have interpreted a law differently. There are also a small number of special circumstances in which the Supreme Court is required by law to hear an appeal.  Different types of cases are handled differently during an appeal.  Civil Case: Either side may appeal the verdict.” 

LINK To United States Court Of Appeals For The Eleventh Circuit
http://www.ca11.uscourts.gov/

Havana Docks Corporation And Four Cruise Lines Argue About Appeals And COVID-19 Delays

HAVANA DOCKS CORPORATION V. MSC CRUISES SA CO, AND MSC CRUISES (USA) INC. [1:19-cv-23588; Southern Florida District]

Colson Hicks Eidson, P.A. (plaintiff)
Margol & Margol, P.A. (plaintiff)
Venable (defendant)

MSC Cruises’ Motion For Limited Stay (5/4/20)
Plaintiff’s Opposition To Defendants’ Motion For Certification For Interlocutory Appeal (5/7/20)

HAVANA DOCKS CORPORATION VS. ROYAL CARIBBEAN CRUISES, LTD. [1:19-cv-23590; Southern Florida District]

Colson Hicks Eidson, P.A. (plaintiff)
Margol & Margol, P.A. (plaintiff)
Holland & Knight (defendant)

Defendant’s Motion To Stay Discovery For Ninety Days (5/4/20)
Plaintiff's Opposition To Defendant's Motion For Certification For Interlocutory Appeal (5/11/20)

HAVANA DOCKS CORPORATION VS. CARNIVAL CORPORATION D/B/A/ CARNIVAL CRUISE LINES [1:19-cv-21724; Southern Florida District]

Colson Hicks Eidson, P.A. (plaintiff)
Margol & Margol, P.A. (plaintiff)
Jones Walker (defendant)
Boies Schiller Flexner LLP (defendant)
Akerman (defendant)

Defendant Carnival Corporation’s Motion To Stay Discovery For 90 Days (5/4/20)
Plaintiff's Opposition To Defendants' Motion For Certification For Interlocutory Appeal (5/11/20)

HAVANA DOCKS CORPORATION V. NORWEGIAN CRUISE LINE HOLDINGS, LTD. [1:19-cv-23591; Southern Florida District]

Colson Hicks Eidson, P.A. (plaintiff)
Margol & Margol, P.A. (plaintiff)
Hogan Lovells US LLP (defendant)

Norwegian’s Motion For Stay Of Action Pending Resolution Of The Interlocutory Appeal Process Or- In The Alternative- For Limited Stay Due To COVID-19 Related Hardships (5/4/20)
Plaintiff’s Opposition To Defendant’s Motion For Certification For Interlocutory Appeal (5/6/20)

Melia Hotels International Of Spain, Largest Foreign Hotel Operator In Cuba, Reports "Drastic Drop In Business"

GABRIEL ESCARRER, Vice Chairman and CEO of Meliá:

“Dear stakeholders, As you all know, the effect of the COVID 19 pandemic on the travel industry has been especially devastating, direct and intense, causing what some international observers have begun to call “the great travel crisis” For Meliá, the crisis has caused a progressive and drastic drop in business, culminating in the closure of practically all of our hotels except for a few hotels in Asia Pacific in countries that have not been hit so hard, and the almost 15 hotels that remain open after being converted into hospitals or residences for emergency service workers.” The company manages thirty-five (35) properties in the Republic of Cuba.

2020 First Quarter Report

CEIBA Investments In Cuba Impacted by COVID-19 Pandemic And By Trump Administration Decisions

CEIBA Investments Limited is a Guernsey-incorporated, closed-ended investment company located at Dorey Court, Admiral Park, St. Peter Port, Guernsey, GY1 2HT Channel Islands.

“On the investment front, this crisis will affect corporate revenues and investment valuations in a myriad of ways, and I do not expect the full implications of the present disruption to become apparent for some time.”

“The Company's total equity has grown from approximately US$19 million in 2001 to US$256 million as at 31 December 2019.  During the 2019 accounting period the Company paid approximately US$8.6 million in cash dividends.” 

“As a direct result of the measures announced by the Cuban government on 20 March 2020, Miramar, the Cuban joint venture company in which CEIBA has a 32.5% interest, which owns and operates one hotel in Havana and three hotels in Varadero, is temporarily closing its hotels and substantially decreasing its workforce. Miramar has no debt financing and a healthy cash balance which allows Miramar to operate without income for an extended period of time. The operations of Monte Barreto, the owner and operator of the Miramar Trade Centre office complex in which the Company has a 49% interest, do not appear to be materially impacted.. Monte Barreto has no debt financing and a cash balance which would allow it to operate without income for an extended period of time if it were to become necessary.“

“The balance sheet of the Company itself is strong and remains debt free and the operational Cuban joint venture companies in which it holds interests are well positioned to navigate the COVID-19 pandemic, however to support our joint ventures through this pandemic, the board has taken the decision to change the Company's dividend policy and not to declare a year-end dividend in respect of the 2019 financial year. The Company expects to issue its results for the year ended 31 December 2019 towards the end of April 2020 and not to seek temporary relief as offered by the Financial Conduct Authority.”

29 April 2019 Update From CEIBA Investments

2019 CEIBA Investments Annual Report

2018 CEIBA Investments Annual Report

Aberdeen Standard Investments Key Information Document

U.S. Ag/Food Exports To Cuba Decreased 60.4% In March 2020; Down 51.6% Year-To-Year

ECONOMIC EYE ON CUBA©
May 2020

March 2020 Food/Ag Exports To Cuba Decrease 60.4%- 1
59th In March 2020 Of 217 U.S. Food/Ag Export Markets- 2
Cuba Ranks 60th Of 217 Ag/Food Export Markets- 2
March 2020 Healthcare Product Exports US$11,940.00- 2
March 2020 Humanitarian Donations US$406,391.00- 3
Obama Administration Initiatives Exports Continue To Increase- 3
U.S. Port Export Data- 16

MARCH 2020 FOOD/AG EXPORTS TO CUBA DECREASE 60.4%- Exports of food products and agricultural commodities from the United States to the Republic of Cuba in March 2020 were US$16,278,071.00 compared to US$41,165,385.00 in March 2019 and US$24,454,451.00 in March 2018.

Exports in March 2020 include chicken legs, chicken leg quarters, chicken meat, calcium phosphate, woodpulp, kraftliner, and birch wood.

Total 2020 exports to the Republic of Cuba are US$44,508,892.00 compared to same period in 2019 total exports of US$92,098,594.00 representing a decrease of 51.6%.

Thus far for 2020, the Republic of Cuba ranks 59th of 217 agricultural commodity and food product export markets for the United States.

Total reported agricultural commodity and food product exports from the United States to the Republic of Cuba since December 2001 is US$6,177,381,588.00.

The information on exports from the United States to the Republic of Cuba- products within the Trade Sanctions Reform and Export Enhancement Act (TSREEA) of 2000, Cuban Democracy Act (CDA) of 1992, and regulations implemented (1992 to present) for other products by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury and Bureau of Industry and Security (BIS) of the United States Department of Commerce.

The TSREEA re-authorized the direct commercial (on a cash basis) export of food products (including branded food products) and agricultural commodities from the United States to the Republic of Cuba, irrespective of purpose. The TSREEA does not include healthcare products, which remain authorized and regulated by the CDA.

LINK To Report

BIOMIN America Settles Cuba Export Violation For US$257,862.00; Company Did Not Seek Guidance Beforehand

Release of OFAC Civil Penalties and Enforcement Information​​

“The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) today announced that BIOMIN America, Inc. ("BIOMIN America"), an animal nutrition company based in Overland Park, Kansas, has paid $257,862 to settle its potential civil liability for apparent violations of the Cuban Assets Control Regulations, 31 C.F.R. part 515 (CACR).

Specifically, between the approximate dates of July 2012 and September 2017, BIOMIN America and its owned or controlled foreign entities engaged in a total of 30 sales of agricultural commodities produced outside the United States to Alfarma S.A. in Cuba without authorization from OFAC, which resulted in 44 apparent violations of § 515.201 of the CACR.

BIOMIN America could potentially have availed itself of such authorization but failed to take the steps necessary to do so. Instead, BIOMIN America developed a transaction structure that it incorrectly determined would be consistent with U.S. sanctions requirements. OFAC determined that BIOMIN

America voluntarily disclosed the Apparent Violations, and that the Apparent Violations constitute a non-egregious case.”

LINK To Enforcement Agreement

From Biomin: “BIOMIN is a part of ERBER Group, a leading group of companies in the field of food and feed safety headquartered in Getzersdorf, Lower Austria. ERBER Group consists of BIOMIN, ROMER LABS, SANPHAR and EFB.”

Plaintiffs In Libertad Act Lawsuit Against Booking.Com & Expedia- Check Article III Of The U.S. Constitution

MARIO DEL VALLE, ENRIQUE FALLA, MARIO ECHEVARRIA V. EXPEDIA, INC., HOTELS.COM L.P., HOTELS.COM GP, ORBITZ, LLC, BOOKING.COM B.V., BOOKING HOLDINGS INC. Initial defendants were: TRIVAGO GMBH, BOOKING.COM B.V., GRUPO HOTELERO GRAN CARIBE, CORPORACION DE COMERCIO Y TURISMO INTERNACIONAL CUBANACAN S.A., GRUPO DE TURISMO GAVIOTA S.A., RAUL DOE I-5, AND MARIELA ROE 1-5, [1:19-cv-22619; Southern Florida District]

Rivero Mestre LLP (plaintiff)
Manuel Vazquez, P.A. (plaintiff)
Scott Douglass & McConnico (defendant)
Akerman (defendant)

LINK To Plaintiff’s Omnibus Opposition To Defendants’ Motion To Dismiss (5/1/20)

Excerpt:

“In separate Motions to Dismiss, defendants Booking Holdings Inc. and Booking.com B.V. (the “Booking Entities”2), and Expedia Group, Inc., Hotels.com L.P., Hotels.com GP, LLC, and Orbitz, LLC (the “Expedia Entities”3), make two critical admissions. First, they admit that plaintiffs’ homes on Varadero Beach and Arroyo Bermejo Beach, Cuba (the “Properties”) were confiscated by the Cuban government, and they were aware of this fact while they trafficked, and benefitted from others’ trafficking, in the Properties. See Expedia MTD at 11 (The Cuban government’s “confiscation may constitute a concrete and particularized injury to individuals from whom the property was taken.”); Booking MTD at 13 (The Cuban government’s “confiscation might constitute concrete and particularized injury to the owners of the property at the time it was confiscated.”).4 Second, defendants admit that they trafficked in the Starfish Cuatro Palmas and Memories Jibacoa (the “Resorts”), which were built on the sites of the Properties.5 Expedia MTD at 1 (“Decades after the Cuban government allegedly confiscated the Properties, certain subsidiaries of Defendant Expedia Group, Inc. . . . began to offer travelers the ability to secure reservations at the Resorts through web-based systems . . . .”); Booking MTD at 1 (“Decades after the Cuban government allegedly confiscated the property at issue, defendant Booking.com B.V. . . . began to offer travelers the ability to secure reservations at hotels anywhere in the world—including at the Subject Hotels—through its web-based system.”). Nonetheless, defendants argue that plaintiffs lack “constitutional standing” to bring their claims because there is no causal connection between plaintiffs’ injuries and defendants’ trafficking. See Expedia MTD at 11-12; Booking MTD at 13-14. This is a rank mischaracterization of Title III of the Helms-Burton Act, 22 U.S.C. § 6021, et. seq. (“Title III” of “the Act”), not to mention Article III of the U.S. Constitution. The express language of Title III and the operative complaint make clear that plaintiffs’ injury in this case is not the Cuban government’s theft of their Properties. Plaintiffs’ injury—indeed the sole focus of Title III and this case—is defendants’ trafficking, and benefitting from others’ trafficking, in the Properties, which these defendants have admitted.”

Plaintiffs In Libertad Act Lawsuit To Defendant Amazon- Recognize Inheritance & Congressional Intent

DANIEL A. GONZALEZ VS. AMAZON.COM, INC., AND SUSSHI INTERNATIONAL, INC., D/B/A/ FOGO CHARCOAL [1:19-cv-23988; Southern Florida District]

Cueto Law Group, P.L. (plaintiff)
Wicker Smith O’Hara McCoy & Ford (defendant- Susshi International)
Morgan, Lewis & Bockius (defendant- Amazon)

LINK To Plaintiff’s Response In Opposition To Defendant Amazon’s Motion To Dismiss The Amended Complaint (5/1/20)

Excerpt From Text:

A. Section 6082(a)(4)(B) Does Not Bar Plaintiff’s Inheritance of a Title III Claim After March 12, 1996.

"For its argument, Amazon asserts that, pursuant to 6082(a)(4)(B), Plaintiff must have acquired his claim prior to March 12, 1996. This issue, however, is not as simple as Amazon suggests. Amazon’s interpretation requires the Court to review selected words in Title III in a vacuum, without consideration of the Act as a whole and the context and purpose of the law. Indeed, as used in section 6082(a)(4)(B), the term “acquires” is ambiguous with respect to its application to transfers of claims by operation of law, e.g. inherited claims. And the context of Title III confirms that section 6082(a)(4)(B) was not intended to bar recovery on inherited claims. In contrast, the statutory interpretation advanced by Amazon is incompatible with the text and purpose of the Act, as well as its congressional intent. Under Amazon’s theory, individual claimants—the overwhelming majority of claim owners—will be barred from recovering under the Act. Tethering the enforceability of Title III to the death of original claim holders, as Amazon urges this Court to do, would render the cause of action a nullity—a result strongly disfavored under Eleventh Circuit and Supreme Court precedent. See United States v. Atl. Research Corp., 551 U.S. 128, 137 (2007); Medberry v. Crosby, 351 F.3d 1049, 1061 (11th Cir. 2003).”

One Year Later: Trump Administration Wanted Deathstar From Libertad Act Lawsuits, But May Have Gotten Lodestar; Is .15% A Legal Or Political Success?

.15% Of 5,913 Certified Claimants Have Sued
To Punish Cuba, U.S. Companies Have Been Sued
45.4% Of Defendants Are U.S. Companies
Five Cuba Companies Were Defendants In Initial Lawsuits; Two Remain
Law Firms Are Big Winners
Why Did Trump Administration Avoid Negotiating A Certified Claims Settlement?
Cuba Has Been Impacted
Comments From U.S./EU/Cuba Officials

To share that some officials within the Trump Administration are heartbroken due to lack of robust use of Title III of the Cuban Liberty and Democratic Solidarity Act of 1996 (known as “Libertad Act”) is an incalculable understatement. 

The company owning the first asset expropriated by the government of the Republic of Cuba has not sued.  The largest and second-largest certified claimants have not sued.  The eighth-largest certified claimant (Exxon Mobil Corporation) has sued two Republic of Cuba government-operated companies.  The smallest certified claimant has not sued.  Approximately .15% of certified claimants, to whom the Libertad Act was marketed as benefiting, have filed a lawsuit. Yes, point-one-five-percent.

However, among the United States-based companies sued: Amazon, American Airlines, Carnival Corporation, Expedia, Mastercard, Norwegian Cruise Lines, Orbitz, Royal Caribbean Cruises, Tripadvisor, and Visa. 

The Libertad Act was introduced in the United States House of Representatives on 14 February 1995, enacted into law by President William J. Clinton on 12 March 1996 and then Title III of the law was suspended by the Clinton Administration, [George W.] Bush Administration, [Barack H.] Obama Administration, and until 2 May 2019 by the [Donald J.] Trump Administration when lawsuits could then be filed in any of the ninety-four United States District Courts.   

Title III authorizes lawsuits against companies and individuals who are using a certified claim or non-certified claim where the owner of the certified claim or non-certified claim has not received compensation from the Republic of Cuba or from a third-party who is using (“trafficking”) the asset.   

On 4 March 2019, an official of the United States Department of State reported the “1996 assessment by the United States Department of State on many certified and uncertified claims were out there, and so that had estimated approximately 75,000 to 200,000 potential claims that could be at play here.  Of course, because we have restricted this exclusively to the Cuban entities and sub-entities on the Cuba Restricted List, that affects the final determination of how many claims are out there.  Again, on the question of joint ventures, you can – the shortest way of putting it is that you can sue the Cuban entity or the Cuban sub-entity.  This action does not authorize the suit of a European, a Japanese, any other company from other countries.  It’s only action brought against a Cuban entity or the Cuban sub-entity on a property on the Cuba Restricted List.”  What has happened:   

25 Lawsuits Filed (9 Certified Claimants & 16 Non-Certified Claimants)
US$163,700.00 Court Filing Fees
51 Law Firms
146+ Attorneys
5,900+ Filed Court Documents
US$4+ Million Law Firm Billable Hours (estimated 85% by defendants)
11 Countries Impacted
79 Plaintiffs
4 Class Action Requests
44 Defendants (including corporate parent, subsidiaries; some sued in multiple lawsuits)
20 United States Defendants (not including subsidiaries)
5 Republic of Cuba Initial Defendants (two remaining)
14 Non-United States Defendants
5 European Union-Based Defendants
5 Companies Notified As Potential Defendants

Libertad Act Lawsuit Filing Statistics: https://static1.squarespace.com/static/563a4585e4b00d0211e8dd7e/t/5ea9b8923361221b3862ef91/1588181139307/Libertad+Act+Filing+Statistics.pdf

There are 8,821 claims of which 5,913 awards valued at US$1,902,202,284.95 were certified by the United States Foreign Claims Settlement Commission (USFCSC) and have not been resolved for nearing sixty years.  The USFCSC permitted simple interest (not compound interest) of 6% per annum (approximately US$114,132,137.10); with the approximate current value of the 5,913 certified claims US$8,750,130,510.95.  

The first asset to be expropriated by the Republic of Cuba was an oil refinery in 1960 owned by White Plains, New York-based Texaco, Inc., now a subsidiary of San Ramon, California-based Chevron Corporation (valued at US$56,196,422.73).  

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 certified claim also includes land adjacent to the Jose Marti International Airport in Havana, Republic of Cuba.  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. 

Ten countries have been impacted: Canada, Chile, France, Germany, Netherlands, Republic of Cuba, Spain, Switzerland, Thailand, United Kingdom, United States. 

Most disappointing for the Trump Administration is only five Republic of Cuba government-operated companies were listed as defendants in the initial filings; two remain.  That’s 11.3% initially and currently 4.5%. 

Who are the other defendants? United States-based companies represent 45.4%.  Of all defendants, 11.3% are located within the twenty-seven member countries of the Brussels, Belgium-based European Union (EU) with Spain having the most defendants.  The EU has been asked by one defendant to weigh-in on its case. 

Thus far, attorneys for plaintiffs and defendants have combined US$4+ million in billable hours- with the overwhelming majority for United States companies who are defendants in lawsuits. 

The Libertad Act was presented as the “Death Star,” the “Empire’s ultimate weapon,” that would, with finality, result in the abrupt last chapter of the Republic of Cuba as it exists- commercially, economically and politically. 

Has the Libertad Act been in fact a Lodestar?  Defined by Merriam-Webster as “as star that leads or guides” and “one that serves as an inspiration, model or guide.” With one-year of Libertad Act lawsuits accounted for, the question for the Lodestar:  What is the destination and when is arrival to the destination? 

There was an opportunity to use negotiation, but thus far interest by the Trump Administration has been restrained, despite its appreciation for the negotiation process.  On 18 December 2018, a proposal outlined a process for the Trump Administration to commence negotiations to resolve the issue of the 5,913 certified claims.  LINK 

Impact Upon Cuba 

Libertad Act lawsuits have been corrosive for the Republic of Cuba.  There are companies who have chosen to freeze or abandon their interests in the Republic of Cuba.  Law firms are recommending to their clients that any focus upon the Republic of Cuba await resolution of some or all the current twenty-five lawsuits.  Financial institutions have extinguished or lessened their exposure to the Republic of Cuba. 

Accompanying the impact of the Libertad Act lawsuits have been Trump Administration initiatives- regulation changes to travel, remittances, financial transactions, and exports along with the unanticipated (but welcomed) consequences by COVID-19 upon the economy (tourism) of the Republic of Cuba, expansive sanctions by the United States upon Venezuela which impact financially the Republic of Cuba, and successful efforts by the United States to reduce the number of countries making payments to the Republic of Cuba for the employment of healthcare professionals. 

And, with six months until the 3 November 2020 presidential elections in the United States, there are expectantly more punitive measures awaiting the Republic of Cuba, particularly if the [Nicolas] Maduro Administration remains in control of Venezuela. Annus Horribilis for the Republic of Cuba. 

Comments: 

Senior-level official at The White House: “Maduro remains.  Diaz-Canel remains.  We expected ‘shock-and-awe,” but what we got is frustration- lawsuits against so many American companies was not what we anticipated.  It’s embarrassing.” 

Senior-level official at the United States Department of State: “Disappointing is the word I would use to describe the trajectory of the lawsuits.”  

Senior-level official at the United States Department of Justice: “We are pretty shocked that there have been so few filings.” 

Senior-level official of the government of the Republic of Cuba: “We’re wounded, but not dead yet.  We expected much more. United States efforts to oust President Maduro have been far more challenging for us than the lawsuits.” 

Senior-level official of the EU: “These lawsuits are a headache, but we are used to headaches.  How we respond to the Iberostar request will be determinative.” LINK

Senior-level executive of the United States-based defendant: “We thought Helms-Burton was about suing companies in Cuba.  Who would have thought among the first defendants would be American companies?  Is this what President Trump wanted to achieve?” 

Libertad Act Lawsuit Filing Statistics: https://static1.squarespace.com/static/563a4585e4b00d0211e8dd7e/t/5ea9b8923361221b3862ef91/1588181139307/Libertad+Act+Filing+Statistics.pdf

Previous Posts

Troika To Negotiate Settlement Of Claims Against Cuba? Kushner, Greenblatt & Feinberg
11 December 2018
https://www.cubatrade.org/blog/2018/11/18/lojx6s6oe5epgonh6mub855d5ak143?rq=Kushner

Is It Time For President Trump To Appoint A Special Representative For Cuba?
12 February 2020
https://www.cubatrade.org/blog/2020/2/9/xsvmmu0wyej8ov3swputirlayab5g1?rq=Kushner

President Diaz-Canel Meeting With Thirty-Largest Certified Claimants In NYC In September? He Should.
8 September 2019
https://www.cubatrade.org/blog/2019/9/8/wxavytwo3pqtbnnl3pse8rvcp5b1k1?rq=Kushner

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