USDA Updates Reporting On Usage In Cuba Of MAP/FMD Funding Authorized By 2018 Farm Bill

In 2018, legislative advocates maintained that inserting a Market Access Program (MAP) and Foreign Market Development (FMD) provision in the Farm Bill 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 application to the United States Department of Agriculture (USDA) in 2018 or 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 publicize in advance they would use the provision if it became law or at least one high-profile applicant to immediately and publicly request funding when the Farm Bill became law on 21 December 2018.  

The most significant impact of a shockingly low number of MAP/FMD requests in 2018, 2019, 2020, and 2021 is what the lack of interest portends 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.  

Use to date of USDA MAP/FMD Republic of Cuba-focused funding provisions in the 2018 Farm Bill has been anemic.  Since 2018, One entity has used MAP funding in the Republic of Cuba.  No entity has used FMD funding in the Republic of Cuba.  The USDA reported no applications were rejected. 

Since 2019, a total of eight applications were received by the USDA to use MAP and/or FMD.  According to the USDA, “Although the table indicated nine expressions of interest over two years, these represent fewer than nine organizations as some of the organizations applied in multiple years.  The earlier table only included those entities that expressed interest in Cuba directly, not anyone that sought to add Cuba to a regional program.”   

According to the USDA, at least one participant in 2021 and 2020 sought to add the Republic of Cuba to a regional program for MAP, but none for FMD.  No entity pursued or was rejected for activities in the Republic of Cuba through a regional program.  In some respects, that some entities applied more than once, but did not ultimately use MAP and/or FMD in the Republic of Cuba is more consequential because it begs the question- why did the entities apply, but not choose to use MAP and/or FMD in the Republic of Cuba? 

One entity received MAP funding (US$60,000.00) in the Republic of Cuba- Denver, Colorado-based Potatoes USA which in November 2020 delivered to the Republic of Cuba 33,118 pounds of potato seeds valued at US$44,760.00.  Sample costs are ineligible for MAP or FMD funding. 

In 2020, one (1) entity applied to use, but did not use FMD funding and four (4) entities applied to use MAP funding while one (1) entity (Potatoes USA) used MAP funding.  From the USDA, “… any unspent funds would normally remain in participants’ agreements, available for the agency to approve for plans a participant submits in a future year.”    

In 2021, no entity applied to use FMD funding and three entities applied to use MAP funding, but no entity has yet used MAP funding.  From the USDA, “Most MAP programs operate on a January to December year, however, some run on a July to June year.  The regulations allow groups to continue already approved activities up to thirty days after the end of the program year.  Thus, the latest a participant could continue an activity funded by MAP 21 would be July 30, 2022, if their MAP 21 program began June 1, 2021.  A participant would have until the end of January 2022, if their MAP program began January 1, 2021.  The MAP regulations allow a participant to file claims up to six months after the end of the program year.”  In 2021, sixty-seven (67) entities received funding for MAP and twenty-one (21) entities received funding for FMD.

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.”

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.”

“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.”

“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 COMPLETE ANALYSIS IN PDF FORMAT

U.S. Secretary Of State Questions Legitimacy Of Returning Cuba To List Of State Sponsors Of Terrorism

United States Department of State
Washington DC
1 February 2021

Secretary Antony J. Blinken With Andrea Mitchell of MSNBC Andrea Mitchell Reports

QUESTION: Will you revoke the terror designation on Cuba?

SECRETARY BLINKEN: So there were a series of actions that the outgoing administration took, including that one, that were – that it took it in the very last days of the administration, steps it could have taken presumably over four years that it took in the last basically four weeks. We’re looking at all of them.

291 Days Since Spain-Based Iberostar Hotels & Resorts Requested Guidance From EC For Libertad Act Lawsuit In United States

MARIA DOLORES CANTO MARTI, AS PERSONAL REPRESENTATIVE OF THE ESTATES OF DOLORES MARTI MERCADE AND FERNANDO CANTO BORY V. IBEROSTAR HOTELES Y APARTAMENTOS SL [1:20-cv-20078; Southern Florida District]

Zumpano Patricios P.A. (plaintiff)
Bird & Bird (defendant)
Holland & Knight (defendant)

19 January 2021: “DEFENDANT’S STATUS REPORT Defendant IBEROSTAR HOTELES Y APARTAMENTOS, S.L.U. (“Iberostar”) submits1this status report pursuant to this Court’s Order Granting Defendant’s Motion to Stay Proceedings dated April 24, 2020 (D.E. 17), directing Defendant to submit status reports every 30 days on its request for authorization to the European Union Commission. Defendant states as follows:

Since the last update filed on December 21, 2020, Iberostar continues to await a decision on its application for authorization to the European Commission to respond to the Complaint in this action which was filed with the European Commission on April 15, 2020 (the “Application”). Defendant’s Motion to Stay, ¶ 2. (D.E. 16).

Iberostar reserves all its rights and will move to dismiss based on its Rule 12 defenses when it receives authorization to do so from the European Commission.

The European Commission acknowledged receipt of Defendant’s Application on May 19, 2020.

On June 15, 2020, Iberostar requested the European Commission to provide an update on the status of the Application.

On June 22, 2020, the European Commission confirmed that it is “currently assessing [Defendant’s] application,” and that the Commission does “[its] utmost to ensure that a decision is taken in due course.”

On August 10, 2020, the European Commission informed Iberostar regarding the procedures involved in the consideration of the pending Application. They explained that it requires “extensive consultation of both the Commission’s services and Member States’ authorities.”

On September 23, 2020, the Commission replied that its “services are actively assessing [Iberostar’s] application.” The Commission highlighted that the “complexity of [Iberostar’s] request requires careful consideration, including extensive consultation of both the Commission services and Member States’ authorities.” Finally, the Commission confirmed that, “[d]espite the challenges presented by the current health situation, [they] do [their] utmost to ensure that a decision is taken in due course.”

On November 19, 2020, the European Commission informed Iberostar regarding the status of its pending Application. They explained that “challenges presented by the current health situation [have] lengthened the process.” Further, it confirmed they “are doing [their]utmost to ensure a timely response.”

On December 20, 2020, the European Commission sent a new communication to Iberostar in which they confirmed the Commission has “been actively liaising to complete the required consultations of both the Commission Services and Member States’ authorities, as required.” The Commission “trust[s] any such assessments and investigations will shortly be completed and the authorisation process will pursue its course.”

There have been no further developments since December 20, 2020. Defendant will keep this Court duly apprised of any further developments regarding the request for authorization from the European Commission. Filed this 19th day of January, 2021.”

LINK To Court Filing In PDF Format

President Biden: A Special Presidential Representative For Cuba Negotiations- With Or Without An Ambassador

Appointing Special Presidential Representative For Cuba Negotiations
Feinberg As Department Of State Special Representative For Cuba Negotiations
Biden Administration Should Negotiate Deal That Eluded Twelve Predecessors
Aren’t Two Centuries, Seven Decades And Twelve Presidencies Enough To Wait?
Two Largest Claims Account For 24%; Thirty Account For 56% Of Total
Replacing Title III Lawsuits With Government-To-Government Negotiation
Settlement Possible Without Cuba Putting Up Cash
Every Country Cuba Owes Will Benefit From A Settlement
EU Should Be Supportive As Their Companies Benefit

To create a sphere of optimism and remove a multi-decade specter of recirculating omnipresence, the Biden Administration needs to install a negotiating team who reflect gravitas as viewed by the Republic of Cuba.  That means no careerist diplomats.  It means politicians or business executives who the Republic of Cuba has confidence can speak directly with the President of the United States.

Senior-level officials within and surrounding the Biden Administration confirm that resolution of the 5,913 certified claims, and only the certified claims, will be a focus for 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.   

Unfortunately, the same statements were provided by the Trump Administration (2017-2021), which did not engage with the Republic of Cuba and the Obama Administration (2009-2017) which did not effectively use the engagement it created.   

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) within the United States Department of Justice.  There exists a pre-positioned constituency among the certified claimants in support of a prompt resolution. 

Unknown is whether within the Biden Administration exists a confidence that direct negotiations to resolve the certified claims can develop independent of a resolution for other bilateral issues with the Republic of Cuba. 

The issue of the certified claims has survived one century to the next century, seven decades, and twelve (12) presidencies: Eisenhower Administration, Kennedy Administration, Johnson Administration, Nixon Administration, Ford Administration, Carter Administration, Reagan Administration, G.H.W. Bush Administration, Clinton Administration, G.W. Bush Administration, Obama Administration, and Trump Administration.  Thirteen is considered by some an unlucky number. 

The Honorable Joseph Biden, President of the United States, has a varied reservoir of contacts from his service in the United States Senate (1973-2009) and Vice President of the United States (2009-2017).  Suggestions for Special Presidential Representative for Cuba Negotiations reporting to the President rather to the National Security Council or United States Department of State, in alphabetical order: 

Mr. G. Allen Andreas (Florida)
Chairman and Chief Executive Officer- ADM (1997-2006)

Mr. Micky Arison (Florida)
Chairman- Carnival Corporation & plc (2013-Present)

The Honorable Max Baucus (D- Montana)
United States Ambassador to China (2014-2017)
United States Senate (1978-2014)
United States House of Representatives (1975-1978)

Mr. Lloyd Blankfein (New York)
Senior Chairman- Goldman Sachs (2019-Present)
Chairman and Chief Executive Officer- Goldman Sachs (2006-2018)

The Honorable Bob Corker (R- Tennessee)
United States Senate (2007-2019)

The Honorable Christopher Christie (R- New Jersey)
Governor of New Jersey (2010-2018)

The Honorable Christopher Dodd (D- Connecticut)
Motion Picture Association of America (2011-2017)
United States Senate (1981-2011)
United States House of Representatives (1975-1981)

The Honorable Ted Kaufman (D- Delaware)
Head- Biden Transition (2020)
United States Senator (2009-2010)
Office of Senator Biden (1976-1995)

Mr. Oscar Munoz (Illinois)
Chairman and Chief Executive Officer- United Airlines (2015-2020)

Mr. Richard Parsons (New York)
President- Time Warner (1995-2002)
Chairman and Chief Executive Officer- AOL Time Warner (2002-2008)
Chairman- Citigroup (2009-2012)
Interim Chairman- Los Angeles Clippers (2014)
Interim Chairman- CBS (2018)

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 commercial engagement with the Republic of Cuba remains infringed: agricultural commodities, food products, medical equipment, medical instruments, medical supplies, pharmaceuticals, healthcare products, artwork, and providers of travel-related services.  

The Obama Administration deemed resolution of the certified claims was a “top priority,” yet had only reported three (3) discussions (not bilaterally confirmed negotiations) with representatives 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 the following exchange:  

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 [2015] 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 Trump Administration did not disclose any direct dialogue with the Republic of Cuba relating to negotiating a settlement for the certified claims.  The Trump Administration on 2 May 2019 made operational Title III of the Cuban Liberty and Democratic Solidarity Act of 1996 (known as “Libertad Act”).  Title III authorizes lawsuits in United States District Courts 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. 

To date, thirty-two Title III lawsuits (certified claimants and non-certified claimants) have been filed in United States District Courts.  Some remain before the original judge, some have been dismissed, some have been restructured, and others are at Courts of Appeals.  Plaintiffs include 2nd, 9th, 31st, 38th, 73rd, 88th, 182nd, 183rd, 188th, and 3,954th largest certified claimants and other non-certified claimants. LINK To Lawsuit Filing Statistics  

The Day-To-Day Guy 

Mr. Kenneth Feinberg is a 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, as United States Department Of State Special Representative (with rank of Ambassador) For Cuba Negotiations, would bring his known appreciation for deadlines to his tenure.  He would coordinate the day-to-day discussions and negotiations with the Republic of Cuba.  Since 2018, Mr. Feinberg has confirmed his interest in assisting with settlement negotiations. 

His goal would be to  conclude during the Biden Administration what the Trump Administration and Obama Administration failed to do- and what previous occupants of The White House failed to deliver on behalf of those 5,913 individuals and companies whose assets were expropriated without compensation by 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   

Mr. Feinberg’s importantly narrow mandate is to directly engage with representatives of the Republic of Cuba with the singular goal of obtaining a settlement of the 5,913 individual and company claims against the Republic of Cuba certified by the USFCSC- and only those claims. 

First, the Special Presidential Representative For Cuba Negotiations and Mr. Feinberg would convene a series of intimate briefings with representatives of the thirty-largest certified claimants and 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 a lunch invitation from the Special Presidential Representative For Cuba Negotiations and Mr. Feinberg to the Ambassador of the Republic of Cuba to the United States.  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 by the Special Presidential Representative For Cuba Negotiations and Mr. Feinberg to the Republic of Cuba within thirty (30) days of completion of the timeline.   

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 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 

H.E. Miguel Diaz-Canel, President of the Republic of Cuba, would need seriously consider the Biden Administration certified claims negotiating effort and should promptly dedicate members of his team to the negotiations. 

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

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

A re-normalized United States-Republic of Cuba 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 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, Iran, Japan, Mexico, Russia, Turkey, Venezuela, and Vietnam, among others. 

Absent the issue of the certified claims, the United States could remove 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 exist 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. 

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 Biden Administration and Diaz-Canel Administration cannot make it happen.  It is important for each government to exceed expectations. 

The Certified Claims 

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 (some assets were officially confiscated in the 1960’s, some in the 1970’s and some in the 1990’s).  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$8.8 billion.  

The first asset (along with 382 enterprises the same day) to be expropriated by the Republic of Cuba was an oil refinery on 6 August 1960 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).  

From the certified claim filed by Texaco: “The Cuban corporation was intervened on June 29, 1960, pursuant to Resolution 188 of June 28, 1960, under Law 635 of 1959.  Resolution 188 was promulgated by the Government of Cuba when the Cuban corporation assertedly refused to refine certain crude oil as assertedly provided under a 1938 law pertaining to combustible materials.  Subsequently, this Cuban firm was listed as nationalized in Resolution 19 of August 6, 1960, pursuant to Cuban Law 851.  The Commission finds, however, that the Cuban corporation was effectively intervened within the meaning of Title V of the Act by the Government of Cuba on June 29, 1960.” 

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 third-largest certified claim valued at US$97,373,414.72 is controlled by New York, New York-based North American Sugar Industries, Inc.  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.   

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 ITT Corporation Agreement 

In July 1997, then-New York City, New York-based ITT Corporation and then-Amsterdam, the Netherlands-based STET International Netherlands N.V. signed an agreement whereby STET International Netherlands N.V. would pay approximately US$25 million to ITT Corporation for a ten-year right (after which the agreement could be renewed and was renewed) to use assets (telephone facilities and telephone equipment) within the Republic of Cuba upon which ITT Corporation has a certified claim valued at approximately US$130.8 million.  ETECSA, which is now wholly-owned by the Republic of Cuba, was a joint venture controlled by the Ministry of Information and Communications of the Republic of Cuba within which Amsterdam, the Netherlands-based Telecom Italia International N.V. (formerly Stet International Netherlands N.V.), a subsidiary of Rome, Italy-based Telecom Italia S.p.A. was a shareholder.  Telecom Italia S.p.A., was at one time a subsidiary of Ivrea, Italy-based Olivetti S.p.A.  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 Trump Administration on 2 May 2019 made operational Title III of the Cuban Liberty and Democratic Solidarity Act of 1996 (known as “Libertad Act”).  

Title III authorizes lawsuits in United States District Courts 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.  Title III lawsuit statistics:   

32 Lawsuits Filed (11 Certified Claimants & 21 Non-Certified Claimants)
4 Of The Dismissed Lawsuits At Court Of Appeals
US$191,493.00+ Court Filing Fees (not including attorney court appearance fees)
72+ Law Firms
206+ Attorneys
10,600+ Filed Court Documents
US$5+ Million Law Firm Billable Hours (estimated 85% by defendants)
14 Countries Impacted
115 Plaintiffs (some in multiple cases)
4 Class Action Requests
60 Defendants (including corporate parent, subsidiaries; some sued in multiple lawsuits)
24 United States Defendants (not including subsidiaries)
6 Republic of Cuba Initial Defendants (three remaining)
27 Non-United States Defendants
8 European Union-Based Defendants
5 Companies Notified As Potential Defendants

Posts About Certified Claims & Trump Administration & Obama 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

LINK TO COMPLETE ANALYSIS IN PDF FORMAT

"Spain Wants Biden To Suspend Helms-Burton Act And Customs Duties On Its Products"

Letter from Minister for Industry to Vice-President of European Commission

Reyes Maroto urges European Commission to call for Joe Biden to suspend Helms-Burton Act and customs duties on Spanish products

Thursday 28 January 2021
Madrid, Spain

“The Minister for Industry, Trade and Tourism, Reyes Maroto, sent a letter to the Vice-President of the European Commission, Valdis Dombrovskis, urging him to start talks with the new United States (US) Administration to call to suspend the Helms-Burton Act and the customs duties on Spanish products being applied by the US.

The minister urged the Vice-President of the European Commission to start talks with the new US Administration, since the Helms-Burton Act prejudices Spanish trade and investment in Cuba, particularly the tourism sector, and also to call for the suspension of customs duties on Spanish products being applied by the US, which prejudice the export of olive oil, wine and table olives, among others.

"The restoration of mutual trust is clearly one of the key goals of our future trade policy. We need to identify the main areas of immediate action and base ourselves on mutual needs and common goals that we share in our respective foreign economic and trade policies. The resolution of our disputes would send out a message of confidence to the private sector, which is calling for a negotiated solution between the two parties", stated the minister in her letter.

Reyes Maroto focused on four priorities in new trade relations between the EU and the US: the resolution of trade disputes; improved cooperation in areas of mutual interest for the future, fostering the highly necessary reform of the multilateral trade system and, finally, coordinating responses to avoid trade distortions while laying the foundations for resilient, fair and open international trade in the future.

Specifically, the minister referred in her letter to stepping up contacts for a negotiated, balanced and mutually beneficial solution to the civil aviation dispute (Airbus-Boeing), the customs duties on Spanish table olives, the tax on certain digital services and safeguard measures on steel and aluminium.

"Working on the suspension of the Helms-Burton Act is one of Spain's main priorities, to which
end we call to step up diplomatic contacts underway between the European Commission and the United States to suspend this Act, which is seriously affecting our trade and investment in Cuba, particularly regarding tourism, in which Spanish companies are market leaders", concluded the minister. Non official translation”

LINK To Media Release From Ministry

Eurasia Review
Albany, Oregon
29 January 2021

Spain Wants Biden To Suspend Helms-Burton Act And Customs Duties On Its Products

Spain’s Minister for Industry, Trade and Tourism, Reyes Maroto, sent a letter to the Vice-President of the European Commission, Valdis Dombrovskis, urging him to start talks with the new United States (US) Administration to call to suspend the Helms-Burton Act and the customs duties on Spanish products being applied by the US.

The Spanish minister urged the Vice-President of the European Commission to start talks with the new US Administration, since the Helms-Burton Act prejudices Spanish trade and investment in Cuba, particularly the tourism sector, and also to call for the suspension of customs duties on Spanish products being applied by the US, which prejudice the export of olive oil, wine and table olives, among others.

“The restoration of mutual trust is clearly one of the key goals of our future trade policy. We need to identify the main areas of immediate action and base ourselves on mutual needs and common goals that we share in our respective foreign economic and trade policies. The resolution of our disputes would send out a message of confidence to the private sector, which is calling for a negotiated solution between the two parties”, stated the minister in her letter.

Reyes Maroto focused on four priorities in new trade relations between the EU and the US: the resolution of trade disputes; improved cooperation in areas of mutual interest for the future, fostering the highly necessary reform of the multilateral trade system and, finally, coordinating responses to avoid trade distortions while laying the foundations for resilient, fair and open international trade in the future.

Specifically, the minister referred in her letter to stepping up contacts for a negotiated, balanced and mutually beneficial solution to the civil aviation dispute (Airbus-Boeing), the customs duties on Spanish table olives, the tax on certain digital services and safeguard measures on steel and aluminium.

“Working on the suspension of the Helms-Burton Act is one of Spain’s main priorities, to which end we call to step up diplomatic contacts underway between the European Commission and the United States to suspend this Act, which is seriously affecting our trade and investment in Cuba, particularly regarding tourism, in which Spanish companies are market leaders”, concluded the minister.

Will Caterpillar And Deere Disclose Use Of Payment Terms And Financing For Exports To Cuba?

Reporting On Activity Is Important For Market Credibility 

As the Biden Administration compares what worked during the Obama Administration (2009-2017) and Trump Administration (2017-2021) with what did not work during the Obama Administration and Trump Administration, important during the review include commercial activities, specifically focusing upon those exports from the United States to the Republic of Cuba for which payment terms and financing are permitted.

Critical for members of the United States Congress to have before them evidence demonstrating that when United States exporters are permitted to provide payment terms and financing, Republic of Cuba-based entities a) make use of the payment terms and financing and b) maintain the terms of all payment terms and financing. Meaning, the United States exporters are being paid on time as expected.

In 2015 and in 2016, 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 expanded the list of products authorized for export from the United States and from third countries to the Republic of Cuba with a focus upon products (non-durable, durable and consumable) to entities not affiliated with the government of the Republic of Cuba. 

In 2017, Deere & Company (2019 revenues approximately US$39.26 billion) established a distribution center in the Republic of Cuba, joining San Juan, Puerto Rico-based RIMCO, the Republic of Cuba distributor for Peoria, Illinois-based Caterpillar Inc. (2019 revenues approximately US$53.8 billion) established the same year.  At the time, neither Deere & Company nor Caterpillar issued media releases or posted information on their respective Internet sites. 

Since November 2017, Deere & Company delivered more than US$800,000.00 in agricultural equipment to the Republic of Cuba for use at its distribution center. Antioch, Tennessee-based Wirtgen America, Inc., a subsidiary of Windhagen, Germany-based Wirtgen Group (2020 revenues approximately US$3 billion), a construction equipment machinery subsidiary (acquired in 2017) of Deere & Company has also delivered products to the Republic of Cuba.  RIMCO continues to deliver equipment for use at its distribution center in the Republic of Cuba, including excavators, backhoes, graders, scrapers, bulldozers, railway fixtures, and signaling equipment, valued at more than US$4 million since December 2018. 

John Deere Financial Services was to provide payment terms/financing for the exports, primarily Series 5000 (price range US$25,000.00 to US$80,000.00) with a limited quantity of Series 7000 (price range US$219,000.00 to US$280,000.00).  According to the company, several hundred tractors, parts and accessories may be exported from the United States to the Republic of Cuba during the next four years, with the first deliveries (for testing and evaluation) scheduled for mid-November 2017.  The potential value of the several hundred products exported from the United States to the Republic of Cuba that would be financed could range from US$9 million to US$30 million.   

John Deere Financial Services has not commented as to whether the product sales goals have been achieved or if there have been issues relating to the receipt of payments.   

Caterpillar has not disclosed if the company has provided payment terms for its products exported to the Republic of Cuba. 

Without the provision of substantial discounts in conjunction with extended payment terms and low-interest financing, United States companies remain at a competitive disadvantage as Republic of Cuba government-operated companies prefer government-to-government transactions and government-to-government financing agreements. 

For example, the governments of the People's Republic of China, Russian Federation, Japan, Belarus, France and India among others provide substantial long-term financing for durable product exports to the Republic of Cuba; and those financing agreements are almost always extended when repayment is problematic, which is often. 

Due to inaction by the Obama Administration throughout its two terms in office despite repeated requests from representatives of the United States business community, payments from the Republic of Cuba to Deere & Company and Caterpillar, payments for agricultural commodities and food products authorized by the Trade Sanctions Reform and Export Enhancement Act (TSREEA) of 2000, and payments for medical equipment, medical instruments, medical supplies, pharmaceuticals, and healthcare products authorized by the Cuban Democracy Act (CDA) and were routed through financial institutions located in third countries rather than directly through the use of Direct Correspondent Banking (DCB).

"Biden administration to review Trump policy on Cuba: White House"

The White House
Washington DC
28 January 2021

Press Briefing by Press Secretary Jen Psaki
James S. Brady Press Briefing Room

”Q And if I may ask one more on Cuba: Do you guys plan on starting -- walking back all of those restrictions that were put into place under the Trump administration after the Obama administration had opened things up with Cuba?”

”MS. PSAKI: Well, our Cuba policy is governed by two principles. First, support for democracy and human rights. That will be at the core of our efforts. Second is Americans, especially Cuban Americans, are the best ambassadors for freedom in Cuba. So we'll review the Trump administration policies, as we are in a number of other areas of national security, with an eye to assure -- ensuring that our approach is aligned with that. But, you know, we will take our own path. I don't I don't have anything to predict for you at this point in time.”

Thomson Reuters
London, United Kingdom
28 January 2021

Biden administration to review Trump policy on Cuba: White House

WASHINGTON (Reuters) - The Biden administration will review U.S. policy on Cuba, the White House said on Thursday, after former President Donald Trump tightened the U.S. trade embargo on the Communist-run island and returned Cuba to the U.S. list of state sponsors of terrorism.

“Our Cuba policy is governed by two principles. First, support for democracy and human rights - that will be at the core of our efforts. Second is Americans, especially Cuban Americans, are the best ambassadors for freedom in Cuba. so we’ll review the Trump administration policies,” White House press secretary Jen Psaki said at a news briefing.

One Week For Biden Administration And No Read-Out Of Calls By President, National Security Advisor Or Secretary Of State Mention Cuba Or Venezuela

Today marks the first week of the Biden Administration. 

During the last seven days, The White House and United States Department of State have published “read-outs” of individual telephone conversations between heads of state, heads of government, and foreign government leadership with The Honorable Joseph Biden, President of the United States, The Honorable Jake Sullivan, Assistant to the President for National Security Affairs, The Honorable Antony Blinken, United States Secretary of State. 

While unwise to extract too much fortune telling from the absence of Republic of Cuba and/or Venezuela from the official distribution about the telephone calls, insightful nonetheless. 

Was the Republic of Cuba and/or Venezuela referenced by the United States in any of the telephone calls, but the Biden Administration believed not of enough consequence to be mentioned in the read-outs?  And, the other party agreed?   

Was the Republic of Cuba and/or Venezuela mentioned by a head of state, head of government, and foreign government leadership, but the Biden Administration believed not of enough consequence to be mentioned in the read-outs?  And, the other party agreed?   

One thought… Neither the Republic of Cuba nor Venezuela are now amongst the most pressing issues for the Biden Administration. 

Is it deliberate?

UPDATE: On 29 January 2021, the United States Department of State reported Venezuela discussed during a telephone call by Secretary of State Blinken and the Minister of Foreign Affairs of Colombia.

UPDATE: On 1 February 2021, The White House reported Vice President Kamala Harris spoke with Justin Trudeau, Prime Minister of Canada. Neither the Republic of Cuba nor Venezuela was reported as discussed.

UPDATE: On 16 February 2021, the United States Department of State reported Venezuela discussed during a telephone call by Secretary of State Blinken and the Minister of Foreign Affairs of Spain.

Baseball Diplomacy? An Opportunity For Re-Engagement With Cuba, Biden Administration May Be Open To Revised MLB Agreement

1 April 2021 is “Opening Day” for Major League Baseball (MLB).  With a new starting pitcher on The White House political mound, might there be an opportunity for the Biden Administration to revisit a 2018 proposal from New York, New York-based Major League Baseball (2019 revenues US$10.7 billion) which was publicly denounced and disapproved by the Trump Administration? 

The Honorable Joseph R. Biden Jr., President of the United States, has been invited to throw the ceremonial first pitch on 1 April 2021 at the home opener of the Washington Nationals (NL East) versus New York Mets (NL East).  He will likely accept that invitation. President Biden is a known fan of the Philadelphia Phillies (NL East).

Then Joe Biden attended Archmere Academy in Claymont, Delaware, where he was an outfielder (reportedly batting in the latter half of the lineup) on the high school baseball team. 

On 19 December 2018, MLB reported an agreement with Republic of Cuba-based Federacion Cubana de Beisbol (FCB).  Terms of the agreement include payments to FCB.  LINK To Document    

Members of the United States Congress, the most notable being The Honorable Marco Rubio (R- Florida), a member of the United States Senate, and officials of the Trump Administration expressed displeasure with the agreement.  

The Trump Administration denied authorization for the agreement because of payments to the FCB which the Trump Administration believed would ultimately benefit the government of the Republic of Cuba. LINK OFAC Letter To MLB. There were then and remain now options to revise the agreement and resubmit as a license application to the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington DC. 

MLB should not as it did in 2018 retain a consultant, outside counsel or lobbyist to engage with the Biden Administration.  Doing so would be counterproductive as MLB can make its case in a license application to the OFAC.  Why create a triangle when a straight line is more efficient.  The direct approach is preferred.  The application will certainly be subject to an inter-agency review process including departments and agencies to determine if issuance of an OFAC license is “consistent with United States policy” so the decision will not be immediate. 

Options Include: 

First.  MLB believed the agreement was permitted under OFAC general license provisions implemented during the Obama Administration.  Those who opposed the agreement believed the agreement was not permissible within the OFAC general license guidelines; and, even if it was permitted during the Obama Administration, such an agreement should not be permitted during the Trump Administration as the agreement was “not consistent with United States policy.”  MLB should reformat the agreement and seek a two-year (which is normal) license from the OFAC.   

Second.  The MLB agreement was for two years (ending on 31 October 2021).  The annual release fee payments to FCB have been speculated to be from US$2 million to US$25 million to US$50 million to US$100 million.  The lower value estimates seem reasonable.  Instead of MLB making payment to FCB in currency, FCB would provide MLB with a shopping list of equipment equal to the value of the payments due.  This may satisfy those who opposed the agreement- because the government of the Republic of Cuba would not have access to currency.  By using the purchasing power of MLB, the FCB would be receiving the lowest pricing for equipment- thus maximizing the value of every payment.  Members of the United States Congress and Biden Administration could be supportive of an agreement that provides benefits to United States sporting “Made in the USA” equipment-focused companies.  

From The original MLB agreement: “The Release Fee owed to the FCB by the MLB Club that signs an FCB Player is calculated using the same formula embodied in MLB's agreements with the NPB, KBO, and CPBL (i.e., between 15% and 20% of the total guaranteed value for Major League contracts, and 25% of the signing bonus for Minor League contracts). In addition, Supplemental Release Fees may be owed if a contract with an FCB Player contains bonuses, escalators, or options that are later triggered. The Release Fee (and any Supplemental Release Fee) paid by the MLB Club is in addition to the compensation agreed to by the MLB Club to the FCB Player in the player's contract, which will be paid by the MLB Club directly to the FCB Player.”  

One important benefit of using product as payment rather than currency as payment is avoiding the use of a third-country financial institution for MLB to send payments to FCB; currently there are not operational direct correspondent banking agreements which would permit direct electronic transfers from the United States to the Republic of Cuba or from the Republic of Cuba to the United States.  Thus, third-country financial institutions receive fees for every transaction.  Members of the United States Congress and Biden Administration should oppose third-countries unnecessarily benefiting from bilateral commercial transactions involving the United States.   

Third.  MLB would agree to publish real-time data as to when a payment is made to FCB, the value of payment, and what products have been purchased with the payments.   

LINKS To Previous Posts: 

Cuba Lobbyist Works? President Trump To Participate In Oval Office Meeting With MLB To Discuss "Human Trafficking" 

OFAC Responds To Major League Baseball Proposal For Players From Cuba 

New OFAC Regulation Benefits MLB Players; Performers & Teachers Too 

MLB Commissioner Plays Golf With President Trump; Renewed Life For Cuba Agreement? Second-Base For Lobbyist? 

MLB Might Consider Three Options To Obtain Support For Agreement With Cuba 

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

Some Parallels Between President Obama's Baseball and President Nixon's Ping Pong

Norwegian Cruise Line To Court: "any defendant sued under any statute with an element of scienter would lose its right to assert privilege by merely denying liability.”

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)

LINK: Norwegian Cruise Line Holdings Ltd.’S Response In Opposition To Havana Docks Corporation’s Motion To Compel Evidence Withheld Under The Attorney-Client Privilege And Work-Product Doctrines (22 January 2021)

Excerpt (BOLD not added):

“In breathtakingly sweeping fashion, via the Motion Plaintiff seeks to do away with nearly all aspects of the attorney-client privilege and work-product protections in this case by arguing that although Plaintiff is the one who brought a claim under the Helms Burton Act, Norwegian has purportedly injected Norwegian’s corporate “state of mind” into the case by denying that it violated the Act. But Norwegian has not asserted a single position or defense that relies on Norwegian’s subjective understanding or interpretation of the law. It simply has denied, in a variety of ways, that it objectively violated the law. If, on this basis, the Court were to find that Norwegian impliedly waived privilege, the result would be catastrophic: any defendant sued under any statute with an element of scienter would lose its right to assert privilege by merely denying liability.”

LINK: Havana Docks’ Opposition To Norwegian Cruise Line Holdings Ltd.’S Motion To Compel (D.E. 127) The Production Of Documents Withheld On The Basis Of The Work-Product Doctrine That Pre-Date January 16, 2019 (22 January 2021)

LINK: Declaration Of Jerry Johnson (22 January 2021)

LINK: Document (22 January 2021)

LINK: Norwegian’s Second Amended Responses And Objections To Havana Docks Corporation’s First Set Of Interrogatories (22 January 2021)

Cuba Has 1.42% Shareholding In Hungary-Based International Investment Bank

International Investment Bank (IIB)
Republic of Cuba Governor Of IIB
Mrs. Marta Sabina Wilson Gonzalez
Minister-President
Central Bank of Cuba
Havana, Republic of Cuba

As of 1 August 2020, the Republic of Cuba had a 1.42% share (5.361 million Euros) of Budapest, Hungary-based International Investment Bank (IIB), “a multilateral development institution” crafted by Russian Federation-based interests, compared with 1.6% as of 31 December 2018, 1.7% as of 31 December 2017, 1.713% (5.4 million Euros) as of 31 December 2016, and 1.769% as of 31 December 2015.  The total paid-in capital of IIB was 313.1 million Euros as of 31 December 2016 compared with 748.7 million Euros as of 1 August 2020.  As of 1 August 2020, the Republic of Cuba represented 4% of the IIB net loan portfolio. 

LINKS
2020 Investor Presentation
2019 Annual Report (not available)
2018 Annual Report
2017 Annual Report
2016 Annual Report

From 2018 Annual Report 

Technical Assistance Fund (ongoing projects): The main purpose of the Technical Assistance Fund (TAF) is to finance the provision of advisory services and technical assistance on the projects financed, or to be financed by IIB within its mandate. The target countries include Mongolia, Vietnam and Cuba. 

Client: Proxenta Cuban Investments, a.s. Country: Cuba Project description: the goal of the project is to provide technical expertise including: (1) verifying the assumptions of the project preparation and implementation; (2) obtaining knowledge about the market conditions, legal environment, risks, and regulation in Cuba; and (3) developing relevant project documentation. The project started in October 2018 and is expected to be completed in February 2019.  Consultant: Ernst & Young, s.r.o. Budget: EUR 91,745.00 

As of 31 December 2018, the Republic of Cuba (Proxenta Cuban Investments, a.s.) owed the IIB approximately 49.4 million Euros, representing approximately 7% of IBB loans then outstanding. 

From 2016 Annual Report 

We expect a substantial impact from developing direct cooperation with Cuba.  In the past year, the IIB approved the first Cuban project- a loan to Banco International de Comercio SA (BICSA). The funds are to be used for financing imports to Cuba from IIB member states and joint ventures between the Republic and companies from IIB member states. 

At the business forum Supporting Economic Growth in Hungary and the CEE Region, held during the 105th Meeting of the IIB Council in Budapest, the IIB and the Central Bank of Cuba signed the Agreement on Cooperation in the Arrangement of Financing providing for guarantees to be issued by the Central Bank of Cuba for IIB’s projects and programs in Cuba. In this context, the IIB ap­proved its first Cuban project, as part of a two-tier financing structure. The bor­rower, Banco International de Comercio SA (BICSA), will receive EUR 30 million for the purpose of financing imports to Cuba from IIB member states and support to joint ventures between Cuba and IIB member states.  

The deal with Sberbank CZ, A.S. (funding Czech exports to Cuba) became the pilot project within the country limit for Cuba as established by the Bank: IIB took over the risks from Cuba’s BICSA, by whose instruction an irrevocable reimbursement undertaking. 

As of 31 December 2016, IIB has Term deposits (amounts due to IIB) with the National Bank of the Republic of Cuba without credit rating of 34,967 Euros less an allowance for impairment of 34,967 Euros. 

Who Is The IIB 

What is IIB? International Investment Bank (IIB) is a multilateral development institution with headquarters in Budapest, Hungary.  It was established in 1970 and operates as an international organisation based on the intergovernmental Agreement Establishing the International Investment Bank dated 10 June 1970, registered with the United Nations Secretariat on 1 December 1971 under number 11417, as amended and restated from time to time.  The IIB’s mission is to facilitate connectivity and integration between the economies of the Bank’s member states in order to ensure sustainable and inclusive growth and the competitiveness of national economies, backed by the existing historical ties.  IIB specialises in medium- and long-term financing of projects aimed at supporting the economies of its members that would have a significant positive social, economic and environmental impact.  The Bank offers direct financing and provides loans in partnership with other financial institutions as well as through partner banks. 

Who are members of IIB?  The following countries are the Bank’s members: the Republic of Bulgaria, the Republic of Cuba, the Czech Republic, Hungary, Mongolia, Romania, the Russian Federation, the Slovak Republic and the Socialist Republic of Vietnam. 

In which countries does IIB operate?  IIB operates in its member states and can also finance projects in other countries, if the implementation of such projects would have a significant positive impact on the Bank’s members. 

How does IIB differ from a commercial bank?  IIB is an international financial organisation. Its goal is to promote the economic development of the member states, develop export and import operations, and stimulate trade and economic ties between them. Unlike commercial banks, making profit is not the Bank’s main priority.  As an international organisation, the Bank is not subject to national banking and other regulations; it enjoys immunities and privileges and inter alia is exempt from paying taxes on the territories of its member states. The IIB’s activities are regulated by the Bank’s statutory documents, namely, the Agreement Establishing the International Investment Bank dated 10 June 1970, registered with the United Nations Secretariat on 1 December 1971 under number 11417, as amended and restated from time to time, together with the Bank’s Charter, which is an integral part of the Agreement, that constitutes an international treaty, bilateral agreements between the Bank and the member states, applicable international law, as well as other regulatory documents of the Bank. 

Where is IIB located?  The IIB’s headquarters is located in Budapest, Hungary. IIB has a branch in the Russian Federation, in Moscow. 

Who is the head of IIB?  The Chairperson of the Management Board, Mr Nikolay Kosov, has managed IIB since 2012. 

Who can become a member of IIB?  A distinguishing characteristic of IIB as an international organisation is its supranational status. The Bank has members from Asia, Europe and Latin America. International financial institutions from other countries that share the IIB’s aims and operating principles and assume the obligations arising out of the Agreement Establishing the IIB may be accepted as members of the Bank.  New members of the Bank shall be accepted upon a resolution of the Board of Governors. 

Are there other forms of participation in the activities of IIB?  States, international financial institutions, banking, economic and financial organisations and funds that share the IIB’s mission, aims, values and objectives may participate in the IIB’s activities as an associate member, associate partner or observer. 

Management structure of IIB  The Board of Governors is the Bank’s supreme collective governing body, consisting of representatives from the IIB’s member states. The Board of Directors is responsible for the general management of the Bank. The Bank’s executive body is the Management Board, whose members are appointed by the Board of Governors. The Bank’s activities are controlled by the Audit Committee, which is made up of representatives from the IIB’s member states appointed by the Board of Governors. The Bank’s financial statements are confirmed by a half-year compliance audit review and an annual audit conducted by international auditors EY. 

What are the advantages of working with IIB?  The Bank’s intergovernmental status and solid support from the public authorities of the member states; Wide geographical presence: IIB operates in EU countries and the Asian market; A tailor-made approach to deals and projects, considering regional specifics as well as integration projects between the member states; Flexibility in terms of financing terms and conditions; Priority participation in implementation of the Bank’s projects. 

How to apply for IIB financing?  Customer Relations Department; Tel.: + 36 1 727 89 11, +7 495 604 7416, e-mail: credit@iibbank.com 

Who can become a client of IIB?  Corporate clients and financial organisations that share the IIB’s principles and priorities and that meet the IIB’s general requirements and financial criteria, including: corporate clients, whose activities provide added value and ensure sustainable development of the member states, and who are implementing investment projects on the territories of the member states; international financial institutions; national development banks; banks with state ownership and /or ownership by national and international development banks; commercial banks focused on financing key areas of the economy in the member states and which are leading players in regional markets; leasing companies that lease products to key sectors of the economy in the member states; funds whose activities comply with the IIB’s principles and priorities. 

Which projects does IIB not finance?  Projects that do not promote the sustainable development of the IIB’s member states; Projects that do not comply with the Bank’s strategy, mission and priorities or that involve illegal practices. 

What is the IIB’s policy regarding corporate social responsibility?  IIB is guided by the principles of corporate social responsibility (CSR), which enable the Bank to effectively respond to the challenges of an international development institution. By giving priority to the financing of socially oriented, energy- and resource-efficient projects, IIB is pursuing the goals of sustainable development. This serves the national interests of the member states and promotes a high quality of life for their citizens. The Bank’s activities are aimed at helping to improve the environment and mitigate the impact of climate change.  The Bank’s aims, objectives and priority areas are determined by the Corporate Social Responsibility Policy, approved by the IIB Management Board. 

How to report corruption, fraud or other offenses?  The Bank operates in accordance with the international compliance standards (FATF, Basel Committee on Banking Supervision, OECD).  According to the Procedure for Receiving and Handling Complaints in IIB, any person can contact IIB to report suspected or actual offenses associated with the activities of IIB. Such reports may concern corruption, fraud and money laundering by IIB or by its employees and counterparties.  Complaints can be sent to IIB through the following channels: By post to IIB marked “for the attention of the Compliance Department”; By email to compliance@iibbank.com; Using the online form Report abuse. 

Who regulates the Bank’s activities and which standards does it observe?  The Bank’s operations shall be governed by the Agreement Establishing the IIB, bilateral agreements between the Bank and the member states, as well as applicable international law. In accordance with Article 12 of the Agreement Establishing the International Investment Bank dated 10 July 1970, registered with the United Nations Secretariat on 1 December 1971 under number 11417, as amended and restated from time to time, the Bank’s activities are regulated by the above Agreement and the Bank’s Charter, which is an integral part of the Agreement, as well as other regulatory documents of the Bank. Based on the supranational nature of its legal personality, the Bank adheres to universally accepted principles and standards of international law. 

IIB top management held a working meeting with representatives of the international audit and consulting company EY (22 May 2019)  

On May 21, 2019, IIB top management held a working meeting with representatives of the international audit and consulting company EY, which was appointed as the Bank's auditor as a result of an international tender procedure. The company presented managers of EY Hungary, who will carry out ongoing cooperation with IIB after the relocation of the Bank’s headquarters from Moscow to Budapest. 

The IIB Chairperson of the Management Board Nikolay Kosov addressed the audience with a welcoming speech. He briefly described the progress of the implementation of the IIB “Growth Strategy” for 2018-2022, stressing that the Bank shows impressive performance in all key areas of activity and is developing ahead of plans agreed by the member states. Deputy Chairpersons of the Management Board also made brief presentations on the areas of their responsibility, presenting heads of key departments.  EY auditors gave a high assessment to the reform and current performance of International Investment Bank, emphasizing the long-term positive effect of the decision of the member states to relocate IIB headquarters to Europe. The parties noted with satisfaction the high level and effectiveness of joint work and expressed confidence in further fruitful cooperation between IIB and EY. 

High-level dialogue with Cuba (6 November 2018)  

As part of the official visit to the Russian Federation the Chairman of the State Council and the Council of Ministers of the Republic of Cuba, Miguel Mario Díaz-Canel-Bermudes and key members of the Council of Ministers held a business meeting with leaders of major companies and financial institutions that implement strategic projects in Cuba. International Investment Bank (IIB) was represented by the Acting Chairman of the Management Board Georgy Potapov. 

Addressing the audience, Mr. Mikel Mario Díaz-Canel-Bermudez noted the great importance the country gives to attracting investment to local economy, stressed the fundamental role of foreign, in particular, Russian business participation in the context of a modernization program of the country's economic system aimed at further increase of its industrial and financial potential. 

Mr. Potapov in his speech expressed appreciation for the support provided to IIB, both in the search for new and in the implementation of projects already funded by the Bank in Cuba.  “IIB remains the only multilateral development bank with Cuba as a shareholder, which currently supports the country's economy through providing funds to Cuban financial institutions,” Georgy Potapov said, “the trade finance portfolio aimed at assistance of Cuban exports already exceeds 21 million euros, and is constantly growing. At present, IIB is considering its participation in several significant initiatives in the country, including major infrastructure projects.” 

IIB Acting Chairman of the Management Board also noted that in December this year, Cuba would host the inaugural meeting of the IIB Board of Governors, the first one since ratification of the new version of the Bank’s statutory documents, where strategically important decisions for IIB’s further development will be made.  In the framework of the dialogue, the participants of the meeting discussed a wide range of issues related to further expansion of economic interaction of Cuban enterprises with the leaders of Russian and international business, outlined specific steps for their practical implementation. 

Cuban direction: IIB charts route on location (3 November 2017)  

The implementation of projects involving Cuban companies and building of a potential for investment activity of the International Investment Bank (IIB) in Cuba was the main topic during the IIB’s working visit to Havana that took place on October 30 – November 2, 2017.  

The Bank’s delegation held a series of meetings and negotiations with high-ranking representatives of the Cuban government, and also with the CEOs of major Cuban banks, financial institutions, and investors from the IIB member states.  

The IIB granted credit facilities to leading Cuban banks this year, including the Banco Exterior de Cuba (BEC) and Banco Internacional de Comercio S.A. (BICSA), worth EUR 20 million and 30 million, respectively.During the visit, the BICSA President Mr. José Lázaro Alari Martínez and chief investment officer of BEC, Mrs. Elvia Graveran Pacheco, welcomed the IIB delegation and discussed ways how to promote cooperation. The parties discussed the implementation of previous deals with a view of expanding portfolio of export-import transactions between the IIB member states and Cuba, as well as setting up and funding joint ventures. During the negotiations, a number of technical issues were also examined, including those relevant to current and future lending cooperation.  

The meeting between the head of the IIB delegation, Deputy Chairman of the Board Denis Ivanov and Vice President of the Council of Ministers of Cuba, Mr. Ricardo Cabrisas Ruiz, was used to explore the possibility of investment support for the construction, energy and processing sectors of the national economy. The meeting touched upon the implementation of large-scale infrastructure projects on the island, and further steps in lending to the banking sector.Mr Ruíz stressed that Cuba is interested in more active use of the IIB resources, including the funding of strategic and priority projects as part of the Programme of Socio-Economic Development of Cuba until 2030. He noted the importance of increased funding for foreign trade operations and development projects involving Cuban companies.  The Bank’s representatives also held negotiations with the Vice-President of the Central Bank of Cuba and head of the Cuban delegation to the IIB Council, Mr. Arnaldo Alayón Bazo.Business issues under current agreements were also discussed, as well as the outlook for future development of the entire range of mutually beneficial cooperation.  

As follow up of the visit additional information was requested for the investment support of a number of projects submitted to the IIB by the Embassy of the Republic of Cuba to the Russian Federation. The Bank expressed its interest in the construction project looking forward to expand the Havana Airport. The conditions were clarified for the formation of a joint venture by the Slovak company Proxenta with the Cuban government on producing confectionery products. Under this venture, the Slovak party would be keen to receive the IIB funding.   As part of the visit, the IIB also participated in events related to the 35th Havana International Fair (FIHAV 2017), which was attended by the investors from the IIB member states and which turned out to be a great success. 

Government delegation of the Republic of Cuba visited headquarters of the IIB (13 July 2017)  

On July 12, 2017, the delegation of the Republic of Cuba, led by the Minister of Construction, Mr. René Mesa Villafaña, payed a working visit to the headquarters of the International Investment Bank (IIB). During the meeting, the members of the IIB Board discussed with the Cuban partners a wide range of issues concerning the investment cooperation and the comprehensive expansion of the Cuban direction of the Bank’s activities. 

The delegation also included the Ambassador Extraordinary and Plenipotentiary of the Republic of Cuba to the Russian Federation, Mr. Emilio Lozada Garcia, the Head of the Secretariat of the Minister, Mr. Ariel Pérez Ruiz, and other Cuban officials.  The parties discussed both the existing opportunities for the IIB to promote the sustainable development of the Cuban economy and economic cooperation of the member states, and the specific options to support the institution’s activities by its shareholders in the context of the Bank's Development Strategy for the period 2018-2022. 

The Deputy Chairman of the IIB Board, Jozef Kollár, presented an overview of the Bank's existing projects, related to Cuba, including under the Trade Finance Support Programme, and highlighted the activities of the Fund for Technical Support, managed by the IIB. He noted the importance to finance the programmes and to support the export-import operations that promote economic cooperation between the Republic of Cuba and other member states of the Bank. 

Whereas, Mr. René Mesa Villafaña, stressed Cuba's interest to attract foreign capital and marked a number of development projects for investments at the territory of the island. The Minister expressed hope for their implementation with the active use of resources provided by the IIB. 

During the past several years, the Cuban direction of the Bank’s activities has seen substantial positive developments. The Bank is the only multilateral development institution with Cuba as a member and effectively carries the status of a special creditor for the Republic. In 2016, the IIB signing of Memoranda on Cooperation with leading Cuban banks – Banco Exterior de Cuba (BEC) and Banco Internacional de Comercio S.A. (BICSA) and the Agreement on Cooperation the IIB and the Chamber of Commerce of the Republic of Cuba; and the pipeline includes a number of future deals.   

EUR 50 million in credit lines anticipated after signing of documents at IIB Day in Cuba (7 November 2016)  

On November 3, 2016, at the so-called IIB Day during the Havana International Fair, Deputy Chairman of the IIB Board, Vladimir Liventsev, gave a detailed presentation of the financial instruments of the Bank for supporting sustainable development projects in the country, emphasizing export/import and financing of SPVs set up jointly with companies from other IIB member states. In contrast with the past four years, when the renewed Bank supported the Cuban economy only indirectly, by financing its trade partners in the total amount of around EUR 50 million, today the IIB is ready to work directly on the Caribbean’s largest island. 

As a testimony, the event included the signing of Memoranda on Cooperation with leading Cuban banks – Banco Exterior de Cuba (BEC) and Banco Internacional de Comercio S.A. (BICSA), represented by their presidents, Manuel A. Vale Marrero and José Lázaro Alari Martínez. The subject of these documents is the support for, on one hand, Cuba’s trade with other member countries of the Bank and, on the other hand, development of joint ventures with foreign investors. Even more importantly, these memoranda shall bring a practical result already in the near future in the form of the anticipated signing of agreements, under which the IIB will provide BEC (EUR 20m) and BICSA (EUR 30m) with credit lines for a total of EUR 50 million. 

In addition, institutionalising relations between the IIB and the Chamber of Commerce of the Republic of Cuba, which provided significant support to the Bank in organising the IIB Day, on November 4 the parties concluded an Agreement on Cooperation to further develop their partnership and exchange of information between them with the aim of expanding collaboration in the area of trade and investments. 

Thus, the Cuban direction of the Bank’s activities has seen substantial positive developments during the past several years, on the background of geopolitical shifts around the island country. Today, the IIB as the only multilateral development institution with Cuba as a member effectively carries the status of a special creditor for the Republic, as confirmed by the Agreement on Cooperation in Organising Financing, signed between the IIB and the Central Bank of Cuba in June this year and guaranteeing the Bank’s activities on the island. 

IIB signs cooperation agreement with Central Bank of Cuba, confirming its status as a global development institution (24 June 2016)  

The International Investment Bank (IIB) and the Central Bank of Cuba (CBC) today signed the Agreement on Cooperation in Organising Financing. The document confirms a special status of the IIB as a global development finance institution represented on three continents and the only multilateral development bank with Cuba as a full member. The signing ceremony took place during the Business Forum “Supporting Economic Growth in Hungary and the CEE Region”, associated with the 105th IIB Council Meeting in Budapest. 

Under the terms of the Agreement, parties aim to support and contribute to economic and social development, as well as to improve the efficiency and the level of participation in projects and sectors that are of interest for the Republic of Cuba. The CBC guarantees the due and timely payment of financing, which is organised and implemented by the IIB in relation to projects and programmes in the country, in accordance with the Agreement Establishing the IIB and its Charter and their amended versions.  The parties agree to hold consultations and to exchange information in order to meet the Agreement’s aims. In addition, the CBC will assist the IIB in setting up bank accounts in authorised currencies within the Republic’s national banking system. 

The Agreement was concluded for a period of 5 years with the possibility of automatic renewal for a further five-year period. It is also important that, in respect of projects, implementation of which starts before the termination of this Agreement, its terms will remain in force until their completion.  “Given that the Agreement in fact confirms IIB’s status as a special lender for Cuba, as well as more than significant economic potential of the country with regard to foreign investments, the IIB may soon become an important investment channel to the Republic for its member countries, and, potentially, for non-member countries and other development institutions," – commented Chairman of the IIB Board, Nikolay Kosov, on the signing of the Agreement. He added that additional opportunities for potential investors and historical partners of Cuba stem from the ongoing legislative changes in the country in relation to foreign capital under the Conceptualisation of Cuba’s socio-economic model and the National development plan until 2030, as well as from the implementation of Act 118 of 2014 on foreign investments. 

The Agreement further confirms the intensification of the Cuban direction in IIB’s activities, which was relaunched in 2013 after the restructuring of Cuba's debt towards the Bank and the decision by the Cuban Government to remain among shareholders of the institution. In May 2014, the Cuban capital, Havana, hosted the 101st Meeting of the IIB Council, which was the first meeting of the Bank's highest governing body in its modern history on the American continent. At the Havana meeting, a crucial decision was adopted to make fundamental amendments to the statutory documents of the Bank for the first time since the foundation of the institution in 1970.

Twelve Days Later, The Designation Of Cuba As A State Sponsor Of Terrorism Is Published In The Federal Register

Federal Register
Washington DC
22 January 2020
4:24 am (EST)

DEPARTMENT OF STATE [Public Notice: 11332] Republic of Cuba Designation as a State Sponsor of Terrorism (SST) In accordance with section 6(j)(1) of the Export Administration Act of 1979 (50 U.S.C. App. 2405(j)), and as continued in effect by Executive Order 13222 of August 17,2001, section 620A(a) of the Foreign Assistance Act of 1961, Public Law 87–195, as amended (22 U.S.C. 2371(c)), and section 40(f) of the Arms Export Control Act, Public Law 90–629, as amended (22U.S.C. 2780(f), I hereby determine that the Republic of Cuba has repeatedly provided support for acts of international terrorism. This notice shall be published in the Federal Register. Dated: January 12, 2021. Michael R. Pompeo, Secretary of State. [FR Doc. 2021–01416 Filed 1–21–21; 8:45 am] BILLING CODE 4710–AD–P

LINK To Federal Register Notification

On 11 January 2021, the United States Department of State returned the Republic of Cuba to the List of State Sponsors of Terrorism.

Such designation would suggest an issue of significance and be important for the United States Department of State to publish changes, publish filings, and most critically make certain information is timely and accurate…

On 15 January 2021, the United States Department of State revised on its Internet site the List of State Sponsors of Terrorism to include the Republic of Cuba. LINK

As of 16 January 2021, the United States Federal Register did not show a new filing relating to including the Republic of Cuba on the List of State Sponsors of Terrorism.

NOTE: On 14 January 2021, an on-the-record statement was requested from the United States Department of State. The question was what, if any notification was made by the United States Department of State to the United States Congress prior to designating the Republic of Cuba on the List of State Sponsors of Terrorism. Despite repeated multi-day attempts, the United States Department of State would only provide off-the-record statements.

From The United States Department Of State

“Countries determined by the Secretary of State to have repeatedly provided support for acts of international terrorism are designated pursuant to three laws: section 6(j) of the Export Administration Act, section 40 of the Arms Export Control Act, and section 620A of the Foreign Assistance Act. Taken together, the four main categories of sanctions resulting from designation under these authorities include restrictions on U.S. foreign assistance; a ban on defense exports and sales; certain controls over exports of dual use items; and miscellaneous financial and other restrictions. 

Designation under the above-referenced authorities also implicates other sanctions laws that penalize persons and countries engaging in certain trade with state sponsors. Currently there are three countries designated under these authorities:  Democratic People’s Republic of Korea (North Korea) on 20 November 2017; Islamic Republic of Iran on 19 January 1984; Syrian Arab Republic on 29 December 1979.”

U.S. Announces Designation of Cuba as a State Sponsor of Terrorism
Press Statement
Michael R. Pompeo, Secretary of State
January 11, 2021

The State Department has designated Cuba as a State Sponsor of Terrorism for repeatedly providing support for acts of international terrorism in granting safe harbor to terrorists.

The Trump Administration has been focused from the start on denying the Castro regime the resources it uses to oppress its people at home, and countering its malign interference in Venezuela and the rest of the Western Hemisphere.

With this action, we will once again hold Cuba’s government accountable and send a clear message: the Castro regime must end its support for international terrorism and subversion of U.S. justice.

For decades, the Cuban government has fed, housed, and provided medical care for murderers, bombmakers, and hijackers, while many Cubans go hungry, homeless, and without basic medicine.  Members of the National Liberation Army (ELN), a U.S.-designated Foreign Terrorist Organization, traveled to Havana to conduct peace talks with the Colombian government in 2017.  Citing peace negotiation protocols, Cuba has refused Colombia’s requests 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 87 others.

Cuba also harbors several U.S. fugitives from justice wanted on or convicted of charges of political violence, many of whom have resided in Cuba for decades.  For example, the Cuban regime has refused to return Joanne Chesimard, on the FBI’s Most Wanted Terrorists List for executing New Jersey State Trooper Werner Foerster in 1973; Ishmael LaBeet, convicted of killing eight people in the U.S. Virgin Islands in 1972; Charles Lee Hill, charged with killing New Mexico state policeman Robert Rosenbloom in 1971; and others.

Cuba returns to the SST list following its broken commitment to stop supporting terrorism as a condition of its removal by the previous administration in 2015.  On May 13, 2020, the State Department notified Congress that it had certified Cuba under Section 40A(a) of the Arms Export Control Act as “not cooperating fully” with U.S. counterterrorism efforts in 2019.

In addition to the support for international terrorism that is the basis for today’s action, the Cuban regime engages in a range of malign behavior across the region.  The Cuban intelligence and security apparatus has infiltrated Venezuela’s security and military forces, assisting Nicholas Maduro to maintain his stranglehold over his people while allowing terrorist organizations to operate.  The Cuban government’s support for FARC dissidents and the ELN continues beyond Cuba’s borders as well, and the regime’s support of Maduro has created a permissive environment for international terrorists to live and thrive within Venezuela.

Today’s designation subjects Cuba to sanctions that penalize persons and countries engaging in certain trade with Cuba, restricts U.S. foreign assistance, bans defense exports and sales, and imposes certain controls on exports of dual use items.

The United States will continue to support the Cuban people in their desire for a democratic government and respect for human rights, including freedom of religion, expression, and association.  Until these rights and freedoms are respected, we will continue to hold the regime accountable.

On Background From Biden Administration: What To Expect For Cuba & Message To U.S. Companies

On Background comments about the Republic of Cuba from two senior-level officials of the Biden Administration foreign policy and national security offices:

“Venezuela is a priority and there will be a connection between what Cuba does to assist regional interests with a just resolution for the Venezuelan people and how we [Biden Administration] can engage with Cuba.” 

“Our approach to Venezuela and Cuba will seek to be based upon communication rather than isolation.” 

“Removal of Cuba from the Terrorism List [List of State Sponsors of Terrorism] will be reviewed in consultation with [the United States] Congress.” 

“The Biden Administration will not be rescuing Cuba from problems of its own making.  Then Vice President Biden’s beliefs while serving in the Obama Administration and later as a candidate, president-elect and now as president is about creating democracy where it may not exist and supporting democracy where it may be fragile and basing engagement upon a government respecting the human rights of its citizens.”   

“We don’t anticipate decisions to enhance the role of the Cuban government in supporting their tourism sector.  We are focused upon helping the Cuban people.” 

“The President will have announcements to make, but I remind there is a commitment and necessity to work closely with both sides of the aisles of [the United States] Congress.” 

“The role of the military in Cuba’s economy will remain a challenge for us as it did for the Trump Administration.  We do not discount the negative impact upon the Cuban people.  We appreciate the realities- the goal will be to promote change.” 

“There have been no decisions regarding Helms-Burton.  The EU [European Union] has for many years opposed the law.  We also recognize the importance of resolving the claims [corrected to reference certified claims].  Hopefully, we can work with the EU and other countries to find a solution that protects the rights of those who had properties expropriated by Cuba.” 

Background: The Trump Administration on 2 May 2019 made operational Title III of the Cuban Liberty and Democratic Solidarity Act of 1996 (known as “Libertad Act” and “Helms-Burton”).  Title III authorizes lawsuits in United States District Courts 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.    

“Yes, negotiating a resolution of the [certified] claims are a priority.”  

“And, yes, we are cognizant of what the Obama Administration did and did not do relating to [certified] claims.”  

“Given the sensitivity with members of [the United States] Congress about issues that include Cuba, unhelpful for U.S. companies to publicly now discuss changes to Trump [Administration] policies or returning to Obama [Administration] policies.”

Thomson Reuters
London, United Kingdom
19 January 2021

Mr. Rajesh K. Agrawal
Executive Vice President and Chief Financial Officer
Western Union Company (2019 revenues US$5.3 billion)
Denver, Colorado

“We’re hopeful that, putting aside any concerns that there may be from the administration standpoint, that they allow us to move the money for people who want to move money to their loved ones.”

Carnival Corporation & plc
Q4 Earnings Call
11 January 2021

James Hardiman
Managing Director- Leisure and Travel Analyst
Wedbush Securities
Beachwood, Ohio

“… And obviously, what was a nice benefit for you guys during the Obama administration was the availability of Cuba. Have you had any conversations on that front? It seems like it could be maybe an opportunity going forward.”

Mr. Arnold W. Arnold
President and Chief Executive Officer
Carnival Corporation & plc (2019 revenues US$20.83 billion)
Miami, Florida

”… With regard to other matters, obviously, Cuba was a focal point for the Obama administration, opening up Cuba, etc. We'll see what happens with the incoming administration. We obviously will be well prepared. We were very actively with the first ones to sail to Cuba. And we'll be well prepared to be able to operate in whatever -- the guidelines and rules and regulations are. But we'll be prepared to again help people really want to go to Cuba see as the best way we feel, which is arriving via cruise and then experiencing what Cuba has to offer when it opens.”

The Miami Herald
Miami, Florida
23 November 2020

Excerpts:

Rubio’s office wouldn’t answer questions Monday about the senator’s position on Blinken’s nomination. But Rubio, who is Cuban American, was plenty critical of Blinken’s answers in 2014 when Rubio pressed him during a confirmation hearing on whether Obama would “unilaterally” move to lift sanctions on Cuba.

“Anything that might be done in Cuba would have to be consistent with the law,” Blinken, at the time Obama’s deputy national security adviser, said while appearing before the Senate Foreign Relations Committee. “And second, anything that in the future that might be done in Cuba would be done in real consultation” with the committee.

A few weeks later, Blinken was confirmed by the Senate as deputy secretary of state. And the very next day, Obama announced that he’d ordered the State Department to establish an embassy in Havana for the first time in more than a half-century. He also moved to ease restrictions on travel, remittances and commerce on the island. When Blinken appeared before the foreign relations committee again in 2015, Rubio reminded him of his commitment, reading aloud Blinken’s previous statement on Cuba.

“I did not live up to the standard I set during that hearing and in the remarks that you just quoted. I think that I could have done a better job in engaging with you and consulting with you in advance,” Blinken told Rubio. “And I regret that.”

What Did U.S. Secretary Of State-Designate Antony Blinken Say About Cuba During His Confirmation Hearing? "Objectives... Makes Very Good Sense To Me"

Committee on Foreign Relations
United States Senate
Washington DC
19 January 2021

The Honorable Marco Rubio (R- Florida)
Ranking Member
Subcommittee on Western Hemisphere, Transnational Crime, Civilian Security, Democracy, Human Rights, and Global Women's Issues of the Committee on Foreign Relations

As you are well aware in Cuba there is a very small, but not real large or substantial, small private businesses. The bulk of the economic activity in that country is controlled by a holding company named GAESA [Grupo de Administración Empresarial S.A.] which controls basically anything that makes money.

And they actually, anytime they figure out something that might make money they pull it in. GAESA is controlled by the Cuban military and military officials. And the current administration, the Trump Administration, put in place a policy that prohibits financial transactions with any of those companies that are controlled by that holding company owned by the Cuban military.

So, theoretically if the Cuban Government would allow it you could, an independent Cuban could open a restaurant, a hotel, a business and do interact and have transactions, but not a company controlled by the Cuban military as identified through that holding company. Is that a policy you would recommend to the Biden Administration that we keep or not?

The Honorable Antony Blinken (D- New York)
Nominee
United States Secretary of State

Senator, I would propose to review that very very quickly. In terms of the objectives that you cite, that makes very good sense to me.

I think the question is and I don’t know enough to form a full judgement is to whether it is in fact achieving those objectives and are there any other costs or consequences we might want to look at. But, the, certainly, the objectives strike me as exactly the right one.

I would welcome an opportunity if confirmed to talk to you about that and by the way about our approach to Cuba more broadly.

Senator Rubio

On the issue of as a matter of theory, because obviously the Cuban Government can control, we can open-up whatever we want to them, but the Cuban Government controls what they allow and what they don’t allow.

So, as an example, if an individual Cuban decided to borrow money from a relative in the United States and open-up a business, they could do so under existing [United States] law potentially depending on how the transaction was structured, but the Cuban Government wouldn’t allow it, in fact they’ve cracked-down on that.

So, I think we could agree, could we not, that to the extent that it involves economic independence for Cubans, individuals or companies that they’re allowed to start, that’s one thing, but when it comes to these entities that are not state-controlled entities, there’re oligarchs that control it basically one individual largely because they want to be not just politically a totalitarian state but an economic totalitarian state that it would further the national interest of the United States to encourage more economic independence for the individual and less dependence on the state that gives them all this leverage over them?

So, I do sincerely hope that just because these were Trump [Administration] policies and I’m not claiming that’s what you’re saying, that we just don’t throw the whole thing out and say let’s go back to the Obama [Administration] policy that even some of the architects of it have since conceded could have been structured a little differently because they were unilateral and didn’t lead to some of results we thought.

I do think as you carefully review many of the steps that have been taken there is a logic and rationale behind each of them that I hope will be taken into account. I think it serves our national interest to do so.

The Miami Herald
Miami, Florida
23 November 2020

Excerpts:

Rubio’s office wouldn’t answer questions Monday about the senator’s position on Blinken’s nomination. But Rubio, who is Cuban American, was plenty critical of Blinken’s answers in 2014 when Rubio pressed him during a confirmation hearing on whether Obama would “unilaterally” move to lift sanctions on Cuba.

“Anything that might be done in Cuba would have to be consistent with the law,” Blinken, at the time Obama’s deputy national security adviser, said while appearing before the Senate Foreign Relations Committee. “And second, anything that in the future that might be done in Cuba would be done in real consultation” with the committee.

A few weeks later, Blinken was confirmed by the Senate as deputy secretary of state. And the very next day, Obama announced that he’d ordered the State Department to establish an embassy in Havana for the first time in more than a half-century. He also moved to ease restrictions on travel, remittances and commerce on the island. When Blinken appeared before the foreign relations committee again in 2015, Rubio reminded him of his commitment, reading aloud Blinken’s previous statement on Cuba.

“I did not live up to the standard I set during that hearing and in the remarks that you just quoted. I think that I could have done a better job in engaging with you and consulting with you in advance,” Blinken told Rubio. “And I regret that.”

Background

The Trump Administration issued a 9 November 2017 deadline for United States companies to execute agreements with Revolutionary Armed Forces (FAR) of the Republic of Cuba-controlled Grupo de Administración Empresarial S.A. (GAESA), which has interests in the tourism, financial investment, import/export, and remittance sectors.  Agreements executed by 9 November 2017 would be permitted to remain in force.  

GAESA is on the State Department’s List of Restricted Entities and Subentities Associated with Cuba (“Cuba Restricted List” or “CRL”).  The CRL is a list of entities and subentities “under the control of, or acting for or on behalf of, the Cuban military, intelligence, or security services or personnel with which direct financial transactions would disproportionately benefit such services or personnel at the expense of the Cuban people or private enterprise in Cuba.” 

GAESA is on the List of Specially Designated Nationals and Blocked Persons by the OFAC pursuant to the Cuban Assets Control Regulations (CACR), 31 C.F.R. part 515. 

Norwegian Cruise Line Uses "Attorney-Client Privilege" As Defense Against Providing Documents In Libertad Act Title III Lawsuit

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)

Havana Docks’ Motion For Leave To File Exhibits To Motion To Compel (D.E. 128) Under Seal (18 January 2021)

Norwegian Cruise Line Holdings Ltd.’s Motion To Compel The Production Of Documents Withheld On The Basis Of The Work-Product Doctrine That Pre-Date January 16, 2019 (15 January 2021)

What Is The Process For Removing Cuba From The List Of State Sponsors Of Terrorism?

In 1987, the Export Administration Act (EAA) included the requirement for an annual list of state sponsors of terrorism by the United States Department of State (U.S. Code, Title 22, Sec. 2656f). 

From Congressional Research Service (CRS): “In December 2014, the President announced he would proceed over the coming months to reestablish diplomatic relations with Cuba and ease those diplomatic and economic restrictions he could, while anticipating Congress could engage in a review of sanctions codified in permanent law. At the same time, the President announced that the State Department had begun a review of Cuba’s designation on the state sponsors of terrorism list.  On April 14, 2015, the President sent a message to Congress to certify that “the Government of Cuba has not provided any support for international terrorism during the preceding 6-month period; and ... has provided assurances that it will not support acts of international terrorism in the future.” This met the requirements of the statutes that form the terrorist lists; Cuba’s designation was removed on the 45th calendar day following the announcement (May 29, 2015), as the laws provide.” 

“Removal from the Lists: Statutory Requirements.  Each of the three statutes has some unique aspects to its construction, but all three have in common two possible paths for removing a foreign government from designation. The first possible option is that the President certifies and reports to Congress that(i) there has been a fundamental change in the leadership and policies of the government of the country concerned;(ii) that government is not supporting acts of international terrorism; and iii) that government has provided assurances that it will not support acts of international terrorism in the future.  In the case of the ECA, the President notifies the Speaker of the House, Chairpersons of the House Committees on Foreign Affairs, and on Banking, Housing, and Urban Affairs, and Chairpersons of the Senate Committees on Banking, Housing, and Urban Affairs, and on Foreign Relations that such changes have occurred.  The FAA’61 and AECA require the President to notify only the Speaker and the Foreign Relations Committee Chairperson. The second possible option the statutes offer is that the President, 45 days before a rescission takes effect, certifies to congressional leadership (as identified in the first option) that(i) the government concerned has not provided any support for acts of international terrorism during the preceding 6-month period; and(ii) the government concerned has provided assurances that it will not support acts of international terrorism in the future.  There is no reporting requirement to notify Congress that the clock has started ticking on the six-month period of changed behavior of the designated government. In past instances of delisting a foreign government, the Secretary of State has published a notice that the designation is under review, but the law does not require this advance notice beyond the 45-day requirement prior to issuing a rescission.”

Congressional Research Service (CRS) 

State Sponsors of Acts of International Terrorism- Legislative Parameters: In Brief (30 November 2018) 

State Sponsors of Acts of International Terrorism- Legislative Parameters: In Brief (19 November 2015) 

Can Creditors Enforce Terrorism Judgements Against Cuba"? (29 September 2015)

Suits Against Terrorist States by Victims of Terrorism (8 August 2008) 

Cuba and the State Sponsors of Terrorism List (22 August 2006) 

Baker & McKenzie
Chicago, Illinois
12 January 2020

“On January 11, 2021, the US State Department published a press release announcing Cuba’s designation as a State Sponsor of Terrorism (“SST”) for allegedly providing support for acts of international terrorism in granting safe harbor to terrorists. Cuba was originally designated as an SST in 1982 but was delisted in 2015 by President Barack Obama. 

Legal Implications of the SST Designation  

Cuba’s SST designation triggers the following sanctions and restrictions: 

A licensing requirement for exports or reexports of goods or technology that could significantly enhance Cuba’s military capability or ability to support terrorism; 

A prohibition on exports and reexports to Cuba of defense articles and defense services and related technology under the International Traffic in Arms Regulations; 

A requirement for the United States to oppose loans to Cuba by the World Bank and other international financial institutions; 

A prohibition on any assistance to Cuba under the Food for Peace, Peace Corps, and Export-Import Bank programs; 

A prohibition on US Persons (i.e., entities organized under US laws and their non-US branches; individuals and entities physically located in the United States; and US citizens and permanent resident aliens, wherever located or employed) from engaging in financial transactions with the Cuban government without a license from the Treasury Department’s Office of Foreign Assets Control, under the Terrorism List Governments Sanctions Regulations; and 

An exception to sovereign immunity that would allow individual US Persons to bring claims against the Cuban government in US courts for personal injury and death resulting from terrorism or material support for terrorism. 

The legal implications of Cuba’s SST designation are likely to be limited. Many of the above activities have remained prohibited by US sanctions or export controls even after Cuba was delisted as an SST in 2015. For example, an SST designation normally triggers a change under the Export Administration Regulations to claim US jurisdiction over non-US items that incorporate more than 10% controlled US content rather than the 25% de minimis threshold used for most other countries. However, the Trump Administration imposed the 10% de minimis threshold on Cuba in October 2019 (see here) even though Cuba was not then an SST.

Cuba’s SST designation may lead to increased scrutiny for US-listed companies if they engage in dealings with Cuba. Specifically, the Office of Global Security Risk (“OGSR”) within the US Securities and Exchange Commission may periodically request information from US-listed companies regarding material dealings with SST countries if such dealings have not been previously disclosed in a company’s regular annual and quarterly filings. Accordingly, US-listed companies that receive OGSR inquiries can now expect them to ask about Cuba transactions.” 

50 U.S.C.
United States Code, 2009 Edition
Title 50 - WAR AND NATIONAL DEFENSE
TITLE 50 - APPENDIX-WAR AND NATIONAL DEFENSE
EXPORT REGULATION
Sec. 2405 - Foreign policy controls From the U.S. Government Publishing Office

§2405. Foreign policy controls (a) Authority

(1) In order to carry out the policy set forth in paragraph (2)(B), (7), (8), or (13) of section 3 of this Act [section 2402(2)(B), (7), (8), or (13) of this Appendix], the President may prohibit or curtail the exportation of any goods, technology, or other information subject to the jurisdiction of the United States or exported by any person subject to the jurisdiction of the United States, to the extent necessary to further significantly the foreign policy of the United States or to fulfill its declared international obligations. The authority granted by this subsection shall be exercised by the Secretary, in consultation with the Secretary of State, the Secretary of Defense, the Secretary of Agriculture, the Secretary of the Treasury, the United States Trade Representative, and such other departments and agencies as the Secretary considers appropriate, and shall be implemented by means of export licenses issued by the Secretary.

(2) Any export control imposed under this section shall apply to any transaction or activity undertaken with the intent to evade that export control, even if that export control would not otherwise apply to that transaction or activity.

(3) Export controls maintained for foreign policy purposes shall expire on December 31, 1979, or one year after imposition, whichever is later, unless extended by the President in accordance with subsections (b) and (f). Any such extension and any subsequent extension shall not be for a period of more than one year.

(4) Whenever the Secretary denies any export license under this subsection, the Secretary shall specify in the notice to the applicant of the denial of such license that the license was denied under the authority contained in this subsection, and the reasons for such denial, with reference to the criteria set forth in subsection (b) of this section. The Secretary shall also include in such notice what, if any, modifications in or restrictions on the goods or technology for which the license was sought would allow such export to be compatible with controls implemented under this section, or the Secretary shall indicate in such notice which officers and employees of the Department of Commerce who are familiar with the application will be made reasonably available to the applicant for consultation with regard to such modifications or restrictions, if appropriate.

(5) In accordance with the provisions of section 10 of this Act [section 2409 of this Appendix], the Secretary of State shall have the right to review any export license application under this section which the Secretary of State requests to review.

(6) Before imposing, expanding, or extending export controls under this section on exports to a country which can use goods, technology, or information available from foreign sources and so incur little or no economic costs as a result of the controls, the President should, through diplomatic means, employ alternatives to export controls which offer opportunities of distinguishing the United States from, and expressing the displeasure of the United States with, the specific actions of that country in response to which the controls are proposed. Such alternatives include private discussions with foreign leaders, public statements in situations where private diplomacy is unavailable or not effective, withdrawal of ambassadors, and reduction of the size of the diplomatic staff that the country involved is permitted to have in the United States.

Court In Spain Requires Government Of Cuba And Gaviota Tourism Company Be Included In "Unjust Enrichment" Lawsuit Against Melia Hotels International

On 29 May 2019, descendants of Mr. Rafael Lucas Sanchez Hill, acting as Central Santa Lucia L.C., filed a lawsuit in Spain seeking US$10 million from Palma de Mallorca, Spain-based Melia Hotels International S.A. (2019 revenues approximately US$2 billion) seeking damages for the use of land upon which a hotel is located in the Republic of Cuba. The lawsuit is not using provisions of Title III of the Cuban Liberty and Democratic Solidarity Act of 1996 (known as “Libertad Act”). 

On 24 November 2020, a judge in Palma de Mallorca, Spain, held a hearing to narrow the issues between the parties prior to the trial and determine how to proceed.

On 11 January 2021, the judge issued a ruling. Melia Hotels International requested the inclusion of the government of the Republic of Cuba, and Revolutionary Armed Forces (FAR) of the Republic of Cuba-controlled Gaviota S.A., and Panama City, Panama-based Gesmesol S.A. which is referenced as controlled by Melia Hotels International S.A. 

Gaviota S.A. is a subsidiary of Grupo de Administración Empresarial S.A. (GAESA) which is controlled by the FAR.  GAESA has with interests in the tourism, financial investment, import/export, and remittance sectors and includes businesses incorporated in Panama. 

NOTE: GAESA is on the State Department’s List of Restricted Entities and Subentities Associated with Cuba (“Cuba Restricted List” or “CRL”).  The CRL is a list of entities and subentities “under the control of, or acting for or on behalf of, the Cuban military, intelligence, or security services or personnel with which direct financial transactions would disproportionately benefit such services or personnel at the expense of the Cuban people or private enterprise in Cuba.”  GAESA is on the List of Specially Designated Nationals and Blocked Persons by the OFAC pursuant to the Cuban Assets Control Regulations (CACR), 31 C.F.R. part 515.  

On 11 January 2021, the judge ordered the inclusion of the government of the Republic of Cuba and Gaviota S.A., but not Gesmesol S.A.  Plaintiff attorneys objected as the complaint alleges “unjust enrichment” only against Melia Hotels International S.A.  Plaintiff attorneys did not appeal the order to avoid the risk of a dismissal.  Plaintiff attorneys are serving the government of the Republic of Cuba and Gaviota S.A. through the required diplomatic channels.  The government of the Republic of Cuba may claim sovereign immunity, but Gaviota S.A. is subject to the jurisdiction of the court.  The government of the Republic of Cuba and Gaviota S.A. are not subject to plaintiff claim of “unjust enrichment,” but are deemed necessary parties by the judge since they are responsible for the initial expropriation and current operation of property of plaintiff. 

LINK To Providencia
LINK To Decreto

Mr. José Luis Iriarte, Of Counsel [to Madrid, Spain-based Lupicinio law firm] in an interview on Radio Marti: "The most likely thing, I would dare to say for sure, although in law to be sure is too bold, is that the Ministry of Foreign Affairs will say that no action can be taken against the Cuban State".

Lawsuit Background 

On 12 March 2002, Melia Hotels International reportedly offered US$5 million to the descendants of Mr. Rafael Lucas Sanchez Hill as payment to prevent the United States Department of State from using Title IV relating to the Sol Rio de Oro Hotel in response to enactment in 1996 of the Cuban Liberty and Democratic Solidarity Act of 1996 (known as "Libertad Act").  

Title IV of the Libertad Act restricts entry into the United States by individuals who have connectivity to unresolved certified claims or non-certified claims.  Employees of one Canada-based company is currently known to be subject to this provision based upon a certified claim.   

On 26 March 2002, Sol Melia International, reportedly believing the [George W. Bush Administration; 20 January 2001 to 20 January 2009] United States Department of State would neither implement Title III nor Title IV of the Libertad Act, Melia Hotels International withdrew the offer of US$5 million and proposed US$3,197.75 representing a value (.06%) based upon the twenty-nine (29) acres of land occupied by the Sol Rio de Oro Hotel of the approximately 120,000 acres of land claimed by the descendants of the owners of the property. The US$3,197.75 was determined by Melia Hotels International as the corresponding percentage of the US$5 million tax loss carry-forward amount with the Internal Revenue Service (IRS) in the 1960's.     

On 29 May 2019, descendants of Mr. Rafael Lucas Sanchez Hill, acting as Central Santa Lucia L.C., filed a lawsuit in Spain seeking US$10 million from Meliá Hotels International seeking damages for the use of land upon which a hotel is located in the Republic of Cuba. The lawsuit is not using provisions of Title III of the Libertad Act.   

Title III of the Libertad Act authorizes lawsuits in United States District Courts 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. 

LINK To Previous Posts About Lawsuit

Four Days Later, U.S. Department Of State Corrects Internet Site To Reflect Inclusion Of Cuba On List Of State Sponsors Of Terrorism; No Filing Yet In Federal Register

On 11 January 2021, the United States Department of State returned the Republic of Cuba to the List of State Sponsors of Terrorism.

Such designation would suggest an issue of significance and be important for the United States Department of State to publish changes, publish filings, and most critically make certain information is timely and accurate…

On 15 January 2021, the United States Department of State revised on its Internet site the List of State Sponsors of Terrorism to include the Republic of Cuba. LINK

UPDATE: As of 16 January 2021, the United States Federal Register does not show a new filing relating to including the Republic of Cuba on the List of State Sponsors of Terrorism.

NOTE: On 14 January 2021, an on-the-record statement was requested from the United States Department of State. The question was what, if any notification was made by the United States Department of State to the United States Congress prior to designating the Republic of Cuba on the List of State Sponsors of Terrorism. Despite repeated multi-day attempts, the United States Department of State would only provide off-the-record statements.

A question for individuals, companies, financial institutions, organizations, and governments:  When does the designation become effective?

From The United States Department Of State

“Countries determined by the Secretary of State to have repeatedly provided support for acts of international terrorism are designated pursuant to three laws: section 6(j) of the Export Administration Act, section 40 of the Arms Export Control Act, and section 620A of the Foreign Assistance Act. Taken together, the four main categories of sanctions resulting from designation under these authorities include restrictions on U.S. foreign assistance; a ban on defense exports and sales; certain controls over exports of dual use items; and miscellaneous financial and other restrictions. 

Designation under the above-referenced authorities also implicates other sanctions laws that penalize persons and countries engaging in certain trade with state sponsors. Currently there are three countries designated under these authorities:  Democratic People’s Republic of Korea (North Korea) on 20 November 2017; Islamic Republic of Iran on 19 January 1984; Syrian Arab Republic on 29 December 1979.”

U.S. Department Of Commerce Adds Cuba To Military Control Regulations

UPDATE: LINK To Interim Final Rule Published On 9 April 2021

Commerce Tightens Controls to Prevent Support of Foreign Military-Intelligence and WMD Activities

FOR IMMEDIATE RELEASE

Thursday, January 14, 2021
Office of Public Affairs
(202) 482-4883
publicaffairs@doc.gov

Today, the Bureau of Industry and Security (BIS) in the Department of Commerce (Commerce) imposed new controls on any U.S. technologies and specific activities of U.S. persons who may be supporting foreign military-intelligence end uses and end users in China, Cuba, Russia, and Venezuela, as well as in terrorist-supporting countries. BIS is also enhancing controls to prevent U.S. persons from supporting unauthorized weapons of mass destruction (WMD) programs, including weapons delivery systems and production facilities.

“We cannot allow the foreign military-intelligence organizations of our adversaries in China, Cuba, Russia, Venezuela, Iran, and other terrorist-supporting nations to benefit from U.S. technology or U.S. services to support their destabilizing activities,” said Secretary of Commerce Wilbur Ross. “We must ensure our controls prevent U.S. persons, wherever located, from supporting unauthorized WMD activities around the globe. Today’s important updates to the U.S. export control system achieve these two goals and enhance our national security.”

The new controls prevent U.S. persons from supporting certain foreign military-intelligence services, such as through brokering the sale of foreign-origin items or providing maintenance, repair, or overhaul services. BIS is also expanding the license requirement for exports, reexports, and transfers (in-country) to military-intelligence end uses and end users in China, Russia, and Venezuela beyond enumerated items subject to existing military end-use and end-user (MEU) controls to apply to all items subject to the Export Administration Regulations. These controls will also apply to terrorist-supporting and embargoed countries.

“These new strict controls will inhibit China’s Intelligence Bureau and Russia’s GRU from leveraging U.S. technology and services to support espionage, intelligence collection and operations, and other activities contrary to U.S. national security interests,” added Ross.

Similarly, BIS is revising end-use controls related to chemical and biological weapons, rocket systems, and unmanned aerial vehicles (UAVs) to ensure that any U.S. activity related to the operation, installation, maintenance, overhaul, repair, or refurbishing of such weapons, rocket systems, or UAVs triggers a catch-all license requirement, as outlined in the EAR. BIS also is establishing a framework for informing exporters, re-exporters, and transferors of items subject to the EAR that a license is required for specific transactions intended to circumvent Entity List-based license requirements, or for specific foreign parties assisting listed entities in circumventing such license requirements.

Both of these actions, which go into effect March 16, 2021, are directed by the Export Control Reform Act of 2018. The foreign military-intelligence organizations impacted by today’s action are:

Cuba’s Directorate of Military Intelligence (DIM) and Directorate of Military Counterintelligence (CIM)
China’s Intelligence Bureau of the Joint Staff Department
Iran’s Islamic Revolutionary Guard Corps Intelligence Organization (IRGC-IO) and Artesh Directorate for Intelligence (J2)
North Korea’s Reconnaissance General Bureau (RGB)
Russia’s Main Intelligence Directorate (GRU)
Syria’s Military Intelligence Service
Venezuela’s General Directorate of Military Counterintelligence (DGCIM).

15 January 2021

AGENCY: Bureau of Industry and Security, Commerce.

ACTION: Interim final rule:

SUMMARY: The Bureau of Industry and Security (BIS), Department of Commerce, is issuing this interim final rule to implement the provisions of the Export Control Reform Act of 2018 by: imposing additional license requirements under the Export Administration Regulations (EAR) for exports, reexports, and transfers (in-country), as well as specific activities of U.S. persons, in connection with certain military-intelligence end uses and end users; clarifying that license requirements under the EAR for specific activities of U.S. persons apply even when the items at issue are not subject to the EAR; establishing restrictions on transactions intended to circumvent license requirements for listed entities; and expanding the scope of activities subject to chemical and biological weapons and rocket systems and unmanned aerial vehicles end-use controls.

DATES: Effective date: This rule is effective March 16, 2021. Comment date: Comments must be received by BIS no later than March 1, 2021.

“The mission of the Bureau of Industry and Security (BIS) is to advance U.S. national security, foreign policy, and economic objectives by ensuring an effective export control and treaty compliance system and promoting continued U.S. strategic technology leadership. BIS activities include regulating the export of sensitive goods and technologies in an effective and efficient manner; enforcing export control, antiboycott, and public safety laws; cooperating with and assisting other countries on export control and strategic trade issues; assisting U.S. industry to comply with international arms control agreements; and monitoring the viability of the U.S. defense industrial base and seeking to ensure that it is capable of satisfying U.S. national and homeland security needs.”

Agency URL: https://www.bis.doc.gov/
Parent Agency Commerce Department

LINK To Federal Register Document