Cuba Creates New Peso Exchange Rate: Increase From 24 To 120. Helpful To MSMEs. However, 24 Remains In Use.

Cuba more than quadruples dollar/peso exchange rate 

By Marc Frank 

HAVANA, Aug 3 (Reuters) - Cuba announced it will begin purchasing on Thursday dollars and other convertible currencies at nearly five times the current rate in an effort to undercut the informal money market and capture the funds. 

Central Bank President Marta Wilson Gonzalez, appearing on state-run television on Wednesday evening, said the state-run banking system had set a new rate of 120 pesos to the dollar, compared to the official fixed rate of 24 pesos, and 115 pesos on the informal market, according to independent online news outlet El Toque tracker, the most watched in the communist-run country. 

Gonzalez said the new rate would float and did not apply to most activities of the state-dominated economy which would still operate at the fixed rate in effect for more than 18 months. 

Cuba stopped accepting dollars in 2020 citing U.S. sanctions and stopped selling convertible currency for pesos to the public soon after, stating it simply did not have the cash. 

Economy Minister Alejandro Gil, appearing with the central bank president on Wednesday, said in the near future he hoped to resume currency exchanges, but the first step would be capturing the informal market. “Today there is a high level of foreign currency that is entering the country that is not being captured by the national financial system,” he said. 

Hit by harsh new U.S. sanctions, the pandemic and current high international prices for goods and shipping, the near-bankrupt, import-dependent economy grew 1.3% last year after declining 10.9% in 2020. Gil said a gradual if slow recovery continued without giving figures. Shortages of food, medicine, fuel and now electricity have led to scattered protests in recent months. 

Pavel Vidal, a former Cuban central bank economist who teaches at Colombia’s Pontificia Universidad Javeriana Cali, said the measure addressed a major complaint of tourists who exchanged money at the fixed government rate in hotels and then discovered outside on the street everything is pegged at the informal rate. Vidal said it would also benefit "the private sector which often receives foreign currency from tourists and that the banks will once more accept and exchange physical dollars at 120 which unlocks one of the major impediments that remittances had as they were fetching 24 pesos."

Now The Hard Part For Cuba: Implementing Quickly Transparent, Equal-For-All, MSME Investment & Financing Regulations. No Limitations. No Selectivity. No Orwellian Process.

Now The Hard Part For Cuba. Implementing Quickly Transparent, Workable Regulations For Investments In And Financing To Private Companies.

Regulations Must Be The Same For All Countries.
Not Orwellian: All MSMES Are Equal. Some Are Not More Equal Than Others.

The Government Of Cuba Must Refrain To Its Inherent Desire To Determine Winners And Losers; To Determine “Societal Value”

Only Citizens Of Cuba, Voting With Their Spending, Must Determine Success Or Failure Of An MSME.

The Government Of Cuba Sets Rules And Then Must Get Out Of The Way Of Prosperity.

Direct Correspondent Banking Is Essential To Support MSMEs. If Funds Cannot Move Efficiently In Both Directions, No Incentive For Investors And Providers Of Loans.

In May 2022, the Biden-Harris Administration (2021- ) authorized the first direct equity investment in and the first direct financing to a privately-owned company located in the Republic of Cuba.  Subsequently, the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury added opportunities and amended existing regulations to provide mechanisms for further engagement with privately-owned companies located in the Republic of Cuba. 

In July 2022, the government of the Republic of Cuba confirmed direct equity investment and direct financing are authorized for micro, small, and medium-size enterprises (MSMEs).    

The government of the Republic of Cuba will publish, and hopefully do so promptly, transparent, and workable regulations for the delivery of direct equity investment in and direct financing to MSMEs.    

• There must be one process for all privately-owned companies.  Visualize simplicity.  Embrace clarity.  Write concisely.  Avoid ambiguity.     

• If the government of the Republic of Cuba is uncommitted to permit the global marketplace to determine if an MSME is attractive for direct equity investment and direct financing, and in its place establishes a decision-making infrastructure to “evaluate” and “approve” which MSME may receive funds from abroad and the amount of funding permitted, then the Diaz-Canel-Valdes Mesa Administration (2019- ) might reconsider commencing the process. 

Essential for the government of the Republic of Cuba to embrace a mindset appreciating the role of an independent private sector operating in an independent marketplace where marketing and operational skill determines whether a company prospers or fails, rather than trajectories and outcomes determined by third parties subject to political purity testing. 

• Risk must be rewarded, not be suspect.  Success must be rewarded, not punished.  Prosperity must be an example of the possible, not weaponized as an agency of suspicion.

What will, and not exaggerating the potential of a dinosaur extinction-level result, diminish the attractiveness of delivering direct equity foreign investment and direct financing to MSMEs will be connected directly to the government of the Republic of Cuba retaining the same subjective political multi-level, multi-jurisdiction decision-making process currently employed for evaluating the appropriateness of direct equity investment into a joint venture, economic cooperation agreement, management contract, etc., which includes a Republic of Cuba government-operated company.

• Direct equity investment into a MSME is different from direct equity investment into a Republic of Cuba government-operated company. If the government of the Republic of Cuba believes that they are the same, then the government of the Republic of Cuba is not prepared to accept direct equity investment and direct financing for MSMEs.  And going forward under these conditions will severely restrain the delivery of direct equity investment. 

• The government of the Republic of Cuba must not be deciding if an MSME needs direct equity investment, what are the terms of that direct equity investment, what will the MSME do with that direct equity investment.

• The government of the Republic of Cuba should create a transparent, easy-to-understand, list of requirements- and then leave to the MSME to self-comply by certifying compliance with a set of regulations that are the same for every MSME.

• The government of the Republic of Cuba will meaningfully doom, and provide critics with the material they seek, if the government of the Republic of Cuba determines which MSMEs are suitable for direct equity investment and direct financing originating from outside of the Republic of Cuba.

• There must be no discrimination by the government of the Republic of Cuba in terms of restricting/prohibiting the receipt by a MSME of direct equity investment and direct financing because the MSME is now or may compete with a Republic of Cuba government-operated company.

• An MSME must have no limitation as to the amount of direct equity investment and direct financing.  Provided the amounts are disclosed to the relevant Republic of Cuba government-operated entity (but remain confidential from the public to protect business strategy) and provided the MSME maintains proper accounting practices, then there should be no limitation. 

• There must be no number of employee requirement for a privately-owned company to receive direct equity investment and direct financing.  No penalty for being too small and no penalty for being too large.

• There must be no discrimination by the government of the Republic of Cuba in terms of fees, taxes, and other payments towards MSMEs versus Republic of Cuba government-operated companies.

• MSMEs must be permitted to establish operating accounts at Republic of Cuba government-operated financial institutions and establish operating accounts in financial institutions outside of the Republic of Cuba.  These accounts must be permitted to receive funds in U.S. Dollars, Euros, Lira, Pesos, Pound Sterling, Rubles, Rupees, Yen, Yuan, etc., and be permitted to send funds in U.S. Dollars, Euros, Lira, Pesos, Pound Sterling, Rubles, Rupees, Yen, Yuan, etc.  The transaction fees in the Republic of Cuba should be comparable to those of financial institutions outside of the Republic of Cuba.

• The central tenant for direct equity investment and financing: There must be no doubt that MSME funds in the Republic of Cuba may be used by an MSME to make debt payments as prescribed by the terms of investment contracts and loan agreements.

There will be failures.  Some MSMEs will have terrific ideas that are unable to be profitably executed or the marketplace may have an interest that wanes.  Some investors will lose part or all their investment; some loans will go unrepaid.  Some MSMEs will succeed beyond what an investor or investors expected; and their dividends will be large, their loans will be repaid, the MSME will expand its workforce- who will earn more money.  The marketplace must determine what happens, not the government.

• There must be transparency and efficiencies- all transactions must be delivered through financial institutions. 

Concurrently, the Biden-Harris Administration should correct the error of the Obama-Biden Administration (2009-2017) by directing the OFAC to authorize direct correspondent banking so funds move directly, efficiently, and transparently from the United States to the Republic of Cuba (delivery of direct equity investment and direct financing) and from the Republic of Cuba to the United States (receipt of dividends, profit-sharing, loan payments).

• If the OFAC authorizes by general license direct equity investment in and direct financing to MSMEs in the Republic of Cuba and authorizes direct correspondent banking there will be robust activity in moving funds directly, efficiently, and transparently from the United States to the Republic of Cuba and moving funds directly, efficiently, and transparently from the Republic of Cuba to the United States.  

• The OFAC should continue for a limited time- through the issuance of regulations by the government of the Republic of Cuba, to require specific licenses for the delivery of direct equity investment and direct financing into MSMEs. 

With the 10 May 2022 license from the OFAC authorizing for the first-time direct equity investment in and direct financing to a MSME, the next logical decision by the Biden-Harris Administration is to authorize direct correspondent banking.  The decision requires a mechanism for operability- efficient direct banking. 

Elk Grove Village, Illinois-based First American Bank (2021 assets approximately US$5 billion) will soon obtain a correspondent account with Republic of Cuba government-operated Banco Internacional de Comercia SA (BICSA), a member of Republic of Cuba government-operated Grupo Nuevo Banca SA, created by Corporate Charter No. 49 in 1993 and commenced operation in 1994.  BICSA is not among the financial institutions included in the Cuba Restricted List (CRL) maintained by the United States Department of State. 

• Once First American Bank has the correspondent account with BICSA, First American Bank should immediately seek from the OFAC a license for BICSA to have a correspondent account with First American Bank.

Since the government of Cuba in July 2022 confirmed that direct equity investment and direct financing for MSMEs are authorized, a continued embrace of the non-sensical for the Biden-Harris Administration to continue to require funds moving from the Republic of Cuba to the United States move through financial institutions in third countries- where they then take a fee from every transaction, including fees from, for example, more than US$6.7 billion since December 2001 in payments by the government of the Republic of Cuba for agricultural commodities, food products, and healthcare products (medical equipment, medical instruments, medical supplies, pharmaceuticals), and other products purchased from United States-based companies.  These transactions are authorized by the Trade Sanctions and Export Enhancement Act (TSREEA) of 2000, Cuban Democracy Act (CDA) of 1992, and OFAC and Bureau of Industry and Security (BIS) of the United States Department of Commerce regulations.  Funds from the United States to the Republic of Cuba have been required to endure the same costly and inefficient triangular payment process. 

Absent Direct Correspondent Banking, authorized transactions from the Republic of Cuba to the United States are less transparent and are multi-day rather than multi-hour and third parties earn unnecessary fees.

Direct Correspondent Banking

In June 2022, Elk Grove Village, Illinois-based First American Bank (2021 assets approximately US$5 billion) acquired the operating accounts (and Republic of Cuba-focused personnel) for the Embassy of the Republic of Cuba in Washington, DC, and the Permanent Mission of the Republic of Cuba to the United Nations in New York, New York.  In 2019, First American Bank acquired Miami, Florida-based Continental National Bank (2019 assets approximately US$490 million), the first Cuban-American-owned nationally-chartered financial institution in the United States. 

From 2017 to 2022, the accounts were managed by Conway, Arkansas-based Home BancShares (2021 assets approximately US$18 billion) through its subsidiary Centennial Bank (which operates seventy-eight branches in the State of Florida).  In 2017, Home BancShares acquired Pompano Beach, Florida-based Stonegate Bank (2017 assets approximately US$2.9 billion) which had managed the accounts since 2015.  In 2015, the Obama-Biden Administration authorized the OFAC to approve a correspondent account for Stonegate Bank with BICSA. 

Along with providing services to the embassy and mission, Stonegate Bank provided funds transfer services for OFAC-authorized and BIS-authorized transactions.  In 2015, Stonegate Bank acquired the accounts after Buffalo, New York-based M&T Bank Corporation (2021 assets approximately US$150 billion) decided to no longer diplomatic services due to challenges with regulatory compliance.

According to the Republic of Cuba, “Its [BICSA] main activity is ‘enterprises’ bank’ carried through its central services and five branches based in the country’s capital, Santiago de Cuba and Villa Clara. It records all transactions in real time providing its customers with card and remote banking services while it is working on developing other methods of electronic banking.  Its institutional clients, national or foreign, receive a complete accounting and documentary service, while national entities also enjoy of significant volumes of credit facilities. Practically all sectors of the economy benefit from all this, such as that of agriculture, the food industry, the basic and light industries, transportation, aviation, fishing, construction, domestic and foreign trade, the iron and steel industry, sugar, informatics, communications and others with not only economic importance but also social, such as health, water supply, education, culture and sports.  Credit policy followed by the Bank is dictated in a collegiate way by its Credit Committee on the basis of a strict analysis and control in loan making.  The Bank counts on correspondents in the five continents, the majority are first class banks, mainly Europeans and Americans.  Equity capital of shareholders (Grupo Nueva Banca with the biggest share and Banc holding), near the USD95 millions with a balance ranging from 550 to 600 millions, make sure the Bank has a strong solvency ratio.” 

Without explanation the Obama-Biden Administration did not authorize BICSA under a license from the OFAC to have an account at Stonegate Bank, so Stonegate Bank was required to route transactions for approximately eighty (80) customers on a regular basis through a third-country financial institution, selecting Panama City, Panama-based Multibank (2019 assets approximately US$5 billion) which had dealings with the Republic of Cuba. 

In 2020, Bogota, Colombia-based Grupo Aval (2020 assets approximately US$79 billion) reported that “On May 25th, Banco de Bogotá, through its subsidiary Leasing Bogotá S.A. Panamá, acquired 96.6% of the ordinary shares of Multi Financial Group. As part of the acquisition process, MFG’s operation in Cuba was closed and as part of the transaction. Grupo Aval complies with OFAC regulations and doesn't have transactional relationships with Cuba.” 

The Biden-Harris Administration has thus far refused to authorize direct correspondent banking despite its public statements, issued license, and implemented regulatory changes focusing upon support to the re-emerging private sector in the Republic of Cuba.      

There is no logic in approving the delivery of direct equity investments and direct financing when “direct” must be defined as moving through a third country.

LINK TO COMPLETE ANALYSIS IN PDF FORMAT

Florida Governor DeSantis Opposes ESG "Woke Capital" As Discriminating Against Religious, Political Or Social Beliefs. Why Doesn't His Position Extend To Investment In Cuba's Private Companies?

The Herald-Tribune
Sarasota, Florida
29 July 2022
DeSantis targets investment strategy that emphasizes moral values
By Zac Anderson

Gov. Ron DeSantis is taking aim at a system that helps investors base business decisions on moral values, announcing plans Wednesday to push back against "woke" capital.  “We don’t want to see the economy further politicized," DeSantis said during a press conference in Tampa. 

The governor is targeting a system used to evaluate companies on environmental, social and governance (ESG) attributes. It seeks to limit investments in companies that some view as socially, environmentally or politically problematic, such as fossil fuel providers or gun companies. 

The governor said he plans to prohibit Florida's state pension system from employing ESG evaluations when deciding what companies to invest in.  “We also are gonna prohibit Wall Street banks, credit card companies and money transmitters like PayPal from discriminating against customers for their religious, political or social beliefs," DeSantis said. "They’re using things like social credit scores to be able to marginalize people they don’t like.” 

Some of the governor's plans can be accomplished through administrative actions, but he also is working on legislation to address these issues.  The governor's office elaborated on the proposed legislation in a press release, which states that DeSantis is seeking to "amend Florida’s Deceptive and Unfair Trade Practices statute to prohibit discriminatory practices by large financial institutions based on ESG social credit score metrics." 

"This 'ESG score' is a framework created to force companies to meet ESG standards and arbitrarily includes metrics based on political affiliation, religious beliefs, certain industry engagement, and ESG benchmarks. Violations will be considered deceptive, and unfair trade practices will be punished according to the law."  The governor was joined Wednesday by incoming Florida House Speaker Paul Renner, who said a global elite is "weaponizing American capitalism against us." 

"This is a pocketbook issue and we will not relent until we start dismantling this dangerous form of ESG," Renner said.  DeSantis Watch, a left-wing organization opposed to the governor, accused him of "doing the bidding of his large corporate donors and billionaire supporters." 

“Florida is ground zero for the climate crisis but once again Ron DeSantis lacks the courage to take any real action to protect the livelihoods of the people of our state,” DeSantis Watch Constituencies Director Natasha Sutherland said in a statement. “Today’s executive order doesn’t take on corporations, it does the bidding of the worst of them by refusing to address their environmental impacts, human rights records, or levels of corruption while the state invests our public tax dollars with them." 

LINKS To MSME Investment And Financing Posts

With U.S. Government Authorization For First Direct Equity Investment Into A Private Company In Cuba, Here Is Important Context And Details. About The Parties; About The Message. May 16, 2022

Biden-Harris Administration Approves First Equity Investment Since 1960 In A Private Cuban Company May 10, 2022

First Cuban-American-Owned Nationally-Chartered Bank In The United States, Now Owned by First American Bank, Handling Cuba Embassy/UN Mission Transactions. They Do Not Want To Talk About It. Jul 21, 2022

The Ketchup Is Out Of The Bottle... Cuba Authorizes Direct Equity Investments (And Direct Financing) To Privately-Owned Companies. Now, Will Cuba Make The Regulations Realistic Or Full Of Barriers? Jul 22, 2022

Slow As Pouring Heinz Ketchup, But Coming: “…the participation of foreign capital in private businesses are also in the process of being defined, where some experiences could soon begin.”  Jul 21, 202

Electric Vehicles Are Useful For Cuba's Entrepreneurs- So Why Won't Biden Administration Authorize Their Export? Investments And Loans Are OK, So Should Be Efficient Vehicles. Jun 30, 2022

EFE Of Spain Reports "SME investment in Cuba a key goal of business forum." Unfortunately, Cuba Media Does Not Highlight SME Focus July 15, 2022 

Cuba Continues To Process Implementation Issues With MSMEs- Important Quickly For Regulations Authorizing Direct Equity Investment And Direct Financing From Abroad June 11, 2022 

Female Cuban Entrepreneurs Expand Their Clothing Company To Spain; Already In U.S.. Members Of U.S. Congress Believe Cuban Entrepreneurs Don't Exist. Regardless, They Are Dangerous. June 02, 2022

Response To A Washington Times Editorial From Those Criticized And On Behalf Of Those Criticized. May 26, 2022

Replying To A Wall Street Journal Editorial From Those Who Were Attacked And On Behalf Of Those Who Were Attacked. May 22, 2022 

Why Was Cuba Not Included In 2022 U.S. Department Of State Investment Climate Report Despite U.S. Authorizing Private Sector Investment? Yesterday's Briefing Provides Further.... Confusion. July 29, 2022

Why Was Cuba Not Included In 2022 U.S. Department Of State Investment Climate Report Despite U.S. Authorizing Private Sector Investment? Yesterday's Briefing Provides Further.... Confusion.

United States Department of State
Washington DC
28 July 2022
Briefing With Ned Price, Spokesperson

MR PRICE: So you’re right that among the 160 or so economies included in these reports, Ukraine and Russia are not featured. We weren’t in a position to collect the appropriate data for Ukraine. And of course, Russia’s invasion of Ukraine has led to dramatic shifts in the marketplace conditions in Russia. It’s no secret – and you heard from the Secretary yesterday, in fact – that some 1,000 multinational companies have left the Russian marketplace. It’s a very quickly evolving set of market conditions, evolving in a way that is not conducive to business or international investments. So we were not in a position to write a country report for Russia.
QUESTION: And my first question on implications for the other regions, the South Caucasus – so how much do you think current ongoing Russian war is affecting the region, and how much is it reflected in this report?
MR PRICE: How much is reflected in this report?
QUESTION: In these reports that were released today, because they are 2022 reports.
MR PRICE: That’s right.
QUESTION: I’m just wondering how much do they reflect current, latest situation in the region.
MR PRICE: Well, again, our goal with engagement with the South Caucasus is to move forward towards that comprehensive peace that we’ve talked about. I’m not certain that Russia’s aggression against Ukraine – I think the reports will discuss if there’s any implication for market conditions in the South Caucasus, but would need to refer you to the reports for that.
QUESTION: Sorry, that question was about – I’m sorry, I was dealing with something else, but that question was about the Investment Climate Reports?
MR PRICE: Yes. Yeah.
QUESTION: Okay. Well, in fact, Russia and Ukraine are in the Investment Climate Reports. They are listed. I haven’t gone and read them in detail, but there are a number of countries that are left out. The state sponsors of terror, terrorism, for example, are not included – North Korea, Syria, Iran, and Cuba. But of those four countries, the administration has actually moved to try to open up at least limited investment in Cuba. So why aren’t they included? And I realize that you might not be the best – the most authoritative person to speak about this. It might be a –Commerce – but why wouldn’t they? Also, Venezuela is not included; neither is East Timor. Are they just – they’re not even worth putting out? And the other question I have about this is that – why are there two sections for China, one for China and one for Hong Kong? It’s my understanding that this administration, like the previous administration, essentially said that there’s no difference anymore.
MR PRICE: So I have to correct you. There is no report for Ukraine this year. There may be a placeholder for it, but there is no report for Ukraine this year.
QUESTION: Okay, I’m looking at it right now.
MR PRICE: And there’s no report for Russia either.
QUESTION: I’m looking at it right now.
MR PRICE: You may be looking at last year’s or previous years, but —
QUESTION: Ukraine, country commercial guide, on the Commerce – on the International Trade Administration Commerce website.
MR PRICE: You may be looking at something else, but there is no —
QUESTION: This is the link that was in the release.
MR PRICE: Your colleagues in the room have also pulled it up, so – but I can tell you there is no Ukraine country report or Russia country report this year. Regardless, in countries and economies where the situation on the ground makes gathering this information particularly difficult, we don’t publish these reports. Consistent with that, there is no Ukraine report this year. The – fully suspect when it comes to Ukraine that we will see reflected the brutal implications of Russia’s aggression in future reports. When it comes to specific countries, again, when conditions aren’t amenable to gathering this data, or in some cases given unique circumstances – inclusion on the SST may be one such consideration – reports aren’t compiled annually.

LINK TO RELATED POST

In May 2022, Biden Administration Authorized Direct Investment Into Privately-Owned Companies In Cuba. Today, State Department Publishes "Business Climates" In 160 Countries. Cuba Excluded. Unhelpful. Jul 28, 2022

In May 2022, Biden Administration Authorized Direct Investment Into Privately-Owned Companies In Cuba. Today, State Department Publishes "Business Climates" In 160 Countries. Cuba Excluded. Unhelpful.

“The U.S. Department of State’s Investment Climate Statements provide country-specific information on the business climates of more than 1​60 countries and economies. They are prepared by economic officers stationed in embassies and posts around the world and analyze a variety of economies that are or could be markets for U.S. businesses of all sizes.”  

United States Department of State
Washington DC
28 July 2022

2022 Investment Climate Statements

The Department of State released the 2022 Investment Climate Statements today.  The reports help U.S. companies make informed business decisions by providing up-to-date information on the investment climates of more than 160 countries and economies that are current or potential markets for U.S. companies.  The Investment Climate Statements also serve as references for partner governments seeking to mobilize high-quality, sustainable investments to facilitate their economies’ recovery from the pandemic.

Our overseas missions are working to address the barriers to U.S. investment highlighted by the Investment Climate Statements.  The reports cover topics including (but not limited to):  Openness to Investment, Legal and Regulatory Systems, Protection of Real and Intellectual Property Rights, Financial Sector, State-Owned Enterprises, Responsible Business Conduct, Corruption, and Labor Policies and Practices.

The statements also assess how governments uphold international labor standards, combat corruption, implement policies to attract environmentally sustainable foreign direct investment, and encourage companies to practice responsible business conduct.  Readers can access points of contact within each U.S. mission for additional follow-up and consultation.

The Investment Climate Statements also form a chapter of the Department of Commerce’s Country Commercial Guides and can be read together with those guides for a broad description of the investment and business environments in foreign economies.  The Country Commercial Guides can be viewed at https://www.trade.gov/ccg-landing-page and the Investment Climate Statements at https://www.state.gov/investment-climate-statements/.

Global Overview 

The Investment Climate Statements address market conditions, including issues critical to maintaining high standards, such as labor protections, environmental considerations, and responsible business conduct.  Topics include:  Openness to Investment, Legal and Regulatory Systems, Protection of Real and Intellectual Property Rights, Financial Sector, State-Owned Enterprises, Responsible Business Conduct, ​Green Investment and Environmental Policies, and Corruption. 

A welcoming investment climate can help attract high quality, durable investment and support global recovery from the COVID-19 pandemic.  The reports highlight those areas in which countries have improved local investment conditions, as well as remaining barriers that may hinder opportunities for U.S. companies. 

Our diplomatic and consular posts overseas are working with partner countries to address these barriers, creating opportunities for Americans and U.S. businesses at home and around the world.  Transparent and predictable business climates not only attract international investors, they also help spur domestic investment and are key to long-term economic growth and development.

The Investment Climate Statements also form a chapter of the Department of Commerce’s Country Commercial Guides  and can be read together with those guides for a broad description of the investment and business environments in foreign economies. 

The Country Commercial Guide’s are prepared annually for around 140 countries by Commerce’s Global Markets/U.S. & Foreign Commercial Service (GM/US&FCS) and State’s Partner Post Program.  The Country Commercial Guides incorporate input from other U.S. Government agencies. 

Topics include: a market overview; leading sectors for U.S. exports; customs, regulations and standards; techniques for selling U.S. products and services; and business travel. The section on selling U.S. goods and services includes country-specific information on distribution and sales channels, eCommerce, trade financing, selling to the public sector, and other selling techniques. 

The Country Commercial Guides provide the foundation for a U.S. company’s research in preparing international business plans or responding to overseas market opportunities. They are also used by individual U.S. companies that are exporting or planning to export, as well as by trade partners to provide export counseling, trade promotion, and export education. 

LINKS

https://www.state.gov/investment-climate-statements/
https://www.trade.gov/ccg-landing-page

LINKS To MSME Investment And Financing Posts

With U.S. Government Authorization For First Direct Equity Investment Into A Private Company In Cuba, Here Is Important Context And Details. About The Parties; About The Message. May 16, 2022

Biden-Harris Administration Approves First Equity Investment Since 1960 In A Private Cuban Company May 10, 2022

First Cuban-American-Owned Nationally-Chartered Bank In The United States, Now Owned by First American Bank, Handling Cuba Embassy/UN Mission Transactions. They Do Not Want To Talk About It. Jul 21, 2022

The Ketchup Is Out Of The Bottle... Cuba Authorizes Direct Equity Investments (And Direct Financing) To Privately-Owned Companies. Now, Will Cuba Make The Regulations Realistic Or Full Of Barriers? Jul 22, 2022

Slow As Pouring Heinz Ketchup, But Coming: “…the participation of foreign capital in private businesses are also in the process of being defined, where some experiences could soon begin.”  Jul 21, 202

Electric Vehicles Are Useful For Cuba's Entrepreneurs- So Why Won't Biden Administration Authorize Their Export? Investments And Loans Are OK, So Should Be Efficient Vehicles. Jun 30, 2022

EFE Of Spain Reports "SME investment in Cuba a key goal of business forum." Unfortunately, Cuba Media Does Not Highlight SME Focus July 15, 2022 

Cuba Continues To Process Implementation Issues With MSMEs- Important Quickly For Regulations Authorizing Direct Equity Investment And Direct Financing From Abroad June 11, 2022 

Female Cuban Entrepreneurs Expand Their Clothing Company To Spain; Already In U.S.. Members Of U.S. Congress Believe Cuban Entrepreneurs Don't Exist. Regardless, They Are Dangerous. June 02, 2022

Response To A Washington Times Editorial From Those Criticized And On Behalf Of Those Criticized. May 26, 2022

Replying To A Wall Street Journal Editorial From Those Who Were Attacked And On Behalf Of Those Who Were Attacked. May 22, 2022 

Increased Obstacles For Citizens Of Cuba To Visit Spain And Schengen Area In Europe

SchengenVisaInfo
Prishtina, Kosovo
27 July 2022

No Schengen Visa Appointments Available Until September, Spanish Consulate in Cuba Says 

The Consulate General of Spain in Havana, Cuba, has announced persons who wish to obtain a visa in order to be able to enter Spain will not be able to do so as there are no available appointments.  The Consulate said last week there are no appointments available until September, SchengenVisaInfo.com reports. 

“Schengen visa appointments (tourism) are sold out. Until September they will not be available again, which we will announce in due course,” Consulate General of Spain in Havana wrote on its official Twitter account.  This means that all citizens of Cuba who were planning to visit Spain during August will have to change their holiday plans.  In addition, the Consulate said there are no visa appointments for relatives of European Union citizens either. This group of applicants will have to wait until November. “Visa appointments for relatives of EU citizens are sold out until November,” the Consulate added.

It is believed that the Consulate does not have any available appointments for this month as the demand has increased significantly now that the COVID-19 restrictions have been facilitated in all countries.  A Schengen visa is a short-stay visa that permits an individual to travel to any Schengen Area country for stays of up to 90 days. The Schengen visa is needed by all nationals of third countries that have not reached a visa liberalisation agreement with the Schengen states. 

Persons planning to visit Spain for tourism purposes are advised to apply for a Spanish tourist visa. In order to successfully apply for a visa, all persons must complete the Spanish visa application form, take two passport photos, and hold a valid passport.  In addition, everyone must provide copies of all the pages of the passport, their previous visas, other valid or expired travel passports, and their pages.  Moreover, those planning to apply for a Spanish visa must hold travel insurance, a round-trip flight itinerary, proof of accommodation, proof of sufficient financial means, a cover letter, as well as proof of civil status.  Depending if the applicant is employed, retired, or a student, other documents are needed too. 

Previously, SchengenVisaInfo.com reported that apart from Spain, other Schengen countries also do not have appointments available until September.  Due to the high demand and the backlog, it has been revealed that everyone wishing to apply for a visa will have to wait until new appointments are made available in September. 

From The European Union (EU): “The border-free Schengen Area guarantees free movement to more than 400 million EU citizens, along with non-EU nationals living in the EU or visiting the EU as tourists, exchange students or for business purposes (anyone legally present in the EU). Free movement of persons enables every EU citizen to travel, work and live in an EU country without special formalities. Schengen underpins this freedom by enabling citizens to move around the Schengen Area without being subject to border checks.

Today, the Schengen Area encompasses most EU countries, except for Bulgaria, Croatia, Cyprus, Ireland and Romania. However, Bulgaria, Croatia and Romania are currently in the process of joining the Schengen Area and already applying the Schengen acquis to a large extent. Additionally, also the non-EU States Iceland, Norway, Switzerland and Liechtenstein have joined the Schengen Area.” LINK

Biden Administration Should Authorize (And Promote) Export Of Electric Vehicles (cars, motorcycles, scooters, bicycles) For Use By MSMEs In Cuba. If Embassies Can Purchase From U.S., Why Not MSMEs?

On 10 May 2022, the Biden-Harris Administration (2021- ) authorized the direct equity investment in and direct financing to a privately-owned company (micro, small, and medium-size enterprise (MSME)) located in the Republic of Cuba by a Republic of Cuba national. LINK: With U.S. Government Authorization For First Direct Equity Investment Into A Private Company In Cuba, Here Is Important Context And Details. About The Parties; About The Message (May 16, 2022)

What if an MSME in the delivery sector wants their investor in the United States to provide electric vehicles?

Electrek
Quebec, Canada
25 July 2022

Electric Motorcycles Are Taking Over The Streets Of Cuba

With rising fuel costs and shortages across Cuba, the island nation has turned to electric motorcycles en masse. Nowhere is that more apparent than on the streets of Havana.  The rise in electric motorcycle usage is largely thanks to government policy, which has regulated the pricing of electric motorcycles while placing limits on imports of gasoline-powered motorcycles. 

Due to pricing policy, electric motorcycles were cheaper than gasoline-powered motorcycles for years. Eventually the government outlawed the import of gasoline-powered motorcycles all together, leaving electric as the only option for new purchases.  Pricing regulation has kept them affordable for citizens and has helped the electric two-wheelers become a dominant form of transportation in the country. 

Estimates put the total number of electric motorcycles, locally referred to as motorinas, at around 300,000. To put that in comparison, there are around 500,000 cars registered in Cuba, according to ABC News.  The most popular format for electric motorcycles in Cuba is an electric scooter. These types of motorcycles provide extra utility with step-through frames that are also useful for carrying extra stuff, especially odd-shaped cargo. 

Almost all of the electric two-wheelers come from China and are imported through Panama. But a locally produced model known as the Minerva is said to be in the works at an old bicycle factory.

While electric motorcycles were already gaining in popularity in Cuba, the local fuel shortages have continued to push more citizens toward electric motorcycles instead of gas-powered cars. As local rider Alejandro Vasallo explained:  Fuel is a lost cause, you have to look for it and queue up. Right now having an electric motorcycle here is life itself. 

This isn’t the first time Cubans have turned to electric motorcycles during fuel shortages. Back in 2019 we reported on a similar scenario where fuel shortages and spiking gas prices sent riders onto the backs of electric motorcycles. But that time it was largely everyday citizens who were taking advantage of free electric motorcycle taxi rides.  The Cuban government called on private electric motorcycle owners to help and the riders answered the call, volunteering to ferry people around cities in an unofficial electric motorcycle taxi service. 

According to Javier Capote, one of the electric motorcycle drivers: We have volunteered to do this as a service to society. It is going very well. We are very happy about it. 

After the fuel shortage hit and the Cuban government saw the impact that electric motorcycles had for its citizens, price caps were set on electric motorcycles. That allowed them to be purchased for a maximum of $1,700 at the time and their popularity skyrocketed on the island nation.  Now they are turning into a dominant form of transportation, rivaling the number of cars on the streets in many areas of Havana. 

Electrek’s Take: This kind of seems like an inevitability to me. It’s where all cities should head, and in fact where many are already well on their way. Cuba just got an extra quick shove in the right direction thanks to the heavy hand of the Cuban government.  Cars don’t fit well in cities, period. Cities weren’t built for cars. That’s why most have almost nowhere to safely walk, since streets have had to expand to fill almost the entirety of spaces between buildings.  Smaller-format vehicles like electric motorcycles are simply the correct way to reduce the physical space demanded for driving and parking larger vehicles. They are less of a danger to pedestrians than 4,000-lb. vehicles and they don’t pollute the air we all share. Bicycles (and e-bikes) would also be a great solution and should be part of the mix, but electric motorcycles are more helpful for larger streets and roads where the speed of traffic is higher.  Hopefully, this ratio of electric motorcycles to cars expands to other Western countries as well. It’s about time.

Electric Motorcycles Flood Havana Amid Diesel Shortages
By Andrea Rodriguez

19 July 2022: HAVANA (AP)- The young people come and go on their electric motorcycles at this highway outside Cuba’s capital where they perform stunts and talk about their two-wheelers, which would be largely silent if it weren’t for the music blasting from speakers.  

Cuba has been flooded in recent years with “motorinas,” as the electric scooters are called on the island, which have been promoted by the government as efficient alternatives amid extreme gas and diesel shortages, and as a solution to the country’s transportation problems.  

Authorities permitted their importation last decade – Cubans cannot import motorcycles with gasoline or diesel engines – and since then about 300,000 of them have circulated on the island, said Col. Mario Ríos Labrada, head of vehicle registry at the National Transit Directorate. In comparison there are an estimated 500,000 cars.  The motorcycles can cost between $2,000 and $5,000. Many originate in China and are imported to Cuba through Panama. Cuban officials say a locally made electric motorcycle called the “Minerva” is being produced at an old bicycle manufacturing warehouse in Villa Clara. 

“There is an ‘outbreak’ of electric motorcycles, everyone likes them,” said Ernesto José Salazar, 20, who works in a paint shop. “We got to meet up with 200 motorcycles, honking and listening to music.”  Young riders organize through social networks and spend hours discussing the benefits of a battery or where to buy tires or find the best workshop.   

“Fuel is a lost cause, you have to look for it and queue up, right now having an electric motorcycle here is life itself,” said Alejandro Vasallo, 23.  Cuban drivers face shortages of fuel, especially diesel, which is also used to power the electricity generators that feed the nation’s power grid, which collapsed this summer. Oil shortages have been caused by difficulties in Venezuela – an ally and supplier of the island – and U.S. sanctions.  

Electric scooter drivers recharge the batteries through normal power sockets and are out of luck when the supply goes down.  Authorities in Cuba promote electric motorcycles as energy efficient and as an alternative to a public transportation system plagued shortages of parts to repair broken down buses and a lack fuel.  

“Electricity will always be cheaper than diesel fuel and gasoline, and in addition, electric motors are much more efficient than combustion engines, you can save up to 70% of the cost of fuel,” Ramsés Montes Calzadilla, strategy director of the Ministry of Energy and Mines, said in an interview with news website Cubadebate. 

Electric motorcycles are changing the urban landscape in Cuba and also creating challenges: the batteries tend to catch fire and their relative silence accompanied by driver inexperience is causing traffic accidents.  The latest figures available from the Fire Department indicated that in the first half of 2020 there were 263 fires from motorcycles with gel or lithium batteries, a notable increase compared to 208 for the entire year 2019. 

RideApart
Miami, Florida
27 July 2022

Cuba's Streets Are Bustling With Electric Scooters And Motorbikes
Unsurprisingly, electric scooters are providing Cubans with much-needed mobility.
By: Enrico Punsalang

Cuba is considered by some to be a living, breathing classic car museum, with a sizable chunk of the vehicles on the road there being from the period before the Cuban Revolution. That means 1950's Cadillacs, Chevrolets, Buicks, and Fords can be seen rolling the streets on a near daily basis. Meanwhile, other vehicles consist of then-Soviet made machines, or Poland-produced Fiats. That being said, Cuba is also fast becoming an EV-focused country.

By EV, I don't mean electric cars, but rather, electric scooters and small motorbikes. Unsurprisingly, for a country that has been struggling with acquiring a thoroughly modern form of personal mobility, the country is turning to electric two-wheelers, something that is fast becoming a universally accepted way of getting around, especially in Europe and Asia. While models from mainstream manufacturers aren't likely to hit the Cuban market anytime soon, this doesn't mean that innovation from within the country can't spark a change.

At present, Cuba looks to produce its own electric two-wheelers. The plan is to convert an old bicycle factory to mass produce affordable electric scooters. Indeed, this is no novel concept, and has seen success in certain African and Asian countries. What exactly the folks at Cuba have in store, however, is not known at the moment. Nevertheless, the development of Cuba's own electric scooters and motorbikes will certainly address the need of the local populace for personal mobility.

With cars in scarce supply and reserved only for the ultra wealthy, not to mention the supply issues when it comes to gasoline, electric two-wheelers in the Cuban setting simply make sense. At present, the electric scooter user base in Cuba is growing, and it's forecasted to continue doing so. With most of the electric scooters in the Cuban market coming from China via Panama, they undeniably serve as an attractive alternative to riding bicycles or simply walking. That said, the electric scooter boom in Cuba has provided such relief that the government has stepped in and decided to cap the cost of scooters to $1,700 to keep them accessible.

Links To Republic Of Cuba EV-Related Analyses 

BIS "Returned Without Action" License Application To Donate EV Chargers To U.S. Embassy In Havana Because "Ultimate Consignee" Cancelled Transaction March 07, 2022

From U.S. Department Of State: There Is A "lack of trained mechanics on the island to service electric vehicles." So, Who Are Servicing These Vehicles? Is The Video "Fake News" February 11, 2022

U.S. Department Of State Appoints "Chief Sustainability Officer"- Mandate Text Includes Focus On "Electrifying Fleet" And "Host Partners" Does This Mean EVs For Cuba? President Biden Supports? February 10, 2022 

While Promoting EV Use In The United States, Biden-Harris Administration Refuses To Permit Exports Of EVs To Cuba For Use By Re-Emerging Private Sector- And U.S. Embassy In Havana Does Not Want One. February 08, 2022

Surprise Decision: Biden-Harris Administration Renews Trump-Pence Administration License To Export EVs To Embassies In Cuba. Company Offers To Donate EV Chargers To U.S. Embassy/Ambassador Residence  January 25, 2022 

President Biden Rejects BIS License Application To Export Electric Vehicles/Chargers To Cuba's Self-Employed, MSME's. Reversal Of "General Policy Of Approval." President Trump Authorized EV Exports.  December 20, 2021  

Beginning Today Residents Of Cuba May Purchase And Install Residential Solar Systems. Cost 55,000.00 Pesos (US$2,300.00). Call 7833-3333.  November 04, 2021  

Cuba Has Nickel And Cobalt. Vehicle Electric Batteries Use Nickel And Cobalt. Cuba Should Benefit.  September 25, 2021  

Cuba Owes Partner Canada's Sherritt International Corporation Tens Of Millions Of US Dollars. But, Both Cuba & Patient Company (And Shareholders) Anticipate Profitable Role With Electric Vehicles.  July 03, 2021  

Restriction On Sale Of Premium Gasoline May Benefit Electric Vehicles & Solar Panels; Embassies Concerned.  April 07, 2017  

Florida Company Receives License To Export Electric Vehicles To Cuba; Charging Stations From New Jersey-Based Company.  January 25, 2017

LINKS To MSME Investment And Financing Posts

With U.S. Government Authorization For First Direct Equity Investment Into A Private Company In Cuba, Here Is Important Context And Details. About The Parties; About The Message. May 16, 2022

Biden-Harris Administration Approves First Equity Investment Since 1960 In A Private Cuban Company May 10, 2022

First Cuban-American-Owned Nationally-Chartered Bank In The United States, Now Owned by First American Bank, Handling Cuba Embassy/UN Mission Transactions. They Do Not Want To Talk About It. Jul 21, 2022

The Ketchup Is Out Of The Bottle... Cuba Authorizes Direct Equity Investments (And Direct Financing) To Privately-Owned Companies. Now, Will Cuba Make The Regulations Realistic Or Full Of Barriers? Jul 22, 2022

Slow As Pouring Heinz Ketchup, But Coming: “…the participation of foreign capital in private businesses are also in the process of being defined, where some experiences could soon begin.”  Jul 21, 202

Electric Vehicles Are Useful For Cuba's Entrepreneurs- So Why Won't Biden Administration Authorize Their Export? Investments And Loans Are OK, So Should Be Efficient Vehicles. Jun 30, 2022

EFE Of Spain Reports "SME investment in Cuba a key goal of business forum." Unfortunately, Cuba Media Does Not Highlight SME Focus July 15, 2022 

Cuba Continues To Process Implementation Issues With MSMEs- Important Quickly For Regulations Authorizing Direct Equity Investment And Direct Financing From Abroad June 11, 2022 

Female Cuban Entrepreneurs Expand Their Clothing Company To Spain; Already In U.S.. Members Of U.S. Congress Believe Cuban Entrepreneurs Don't Exist. Regardless, They Are Dangerous. June 02, 2022

Response To A Washington Times Editorial From Those Criticized And On Behalf Of Those Criticized. May 26, 2022

Replying To A Wall Street Journal Editorial From Those Who Were Attacked And On Behalf Of Those Who Were Attacked. May 22, 2022

Despite No Entrepreneurial Experience, Florida Governor Ron DeSantis Excoriates Government Of Cuba For Further Creating Space For The Re-Emerging Private Sector, For Entrepreneurs.

Florida Governor Ron DeSantis Excoriates Government Of Cuba For Further Creating Space For The Re-Emerging Private Sector, For Entrepreneurs. 

Owners Of Restaurants, Airbnb Properties, Vehicle Repair, Internet Application Developers, Confection Makers, Fashion Designers… All Vessels Of Government.  None Are Real Entrepreneurs.  

The government of the Republic of Cuba (population approximately 11.3 million) reported as of 30 June 2022 there were 3,991 “private and fifty-one state MSME’s [micro, small, medium-size enterprises], as well as fifty-five non-agricultural cooperatives (CNA), which have generated more than 70,514 new jobs.”  20 September 2022 is the deadline for the “transition process of self-employed workers, with more than three contracted employees, towards a legal form, either Mipyme [Micro Peque as Y Medianas Empresas] or CNA.”  The creation of the Limited Liability Company (LLC) was authorized in 2021 for privately-owned companies. 

On 10 May 2022, the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury, issued the first license authorizing a direct equity investment in and direct financing to a privately-owned company located in the Republic of Cuba and owned by a Republic of Cuba national. 

Ron DeSantis, the 46th Governor of the State of Florida (population approximately 22 million) has no private-sector experience.  No entrepreneurial experience- nothing in the public domain about his trying to start a business, succeeding, failing, etc.  His livelihood has been provided by taxpayers (United States Department of Defense, United States Department of Justice, State of Florida). 

Disappointing then for him to opine on 22 July 2022 in a media release as to what is an entrepreneur, how an entrepreneur operates, and how an entrepreneur in the Republic of Cuba might use (or be prevented from using) and benefit (or not) from direct equity investment and direct provision of financing that originates from the United States- quite likely by individuals of Cuban descent residing in the State of Florida, particularly in and surrounding the cities of Coral Gables, Miami, and Tampa, and less so from the State of New Jersey.  Governor DeSantis knows: 

• The majority of remittances to the Republic of Cuba originate in the State of Florida (approximately 1.5 million residents of Cuban descent according to 2020 Census);  

• The majority of regularly-scheduled and charter flights to the Republic of Cuba originate in the State of Florida;  

• The majority, though not all, of inputs used by MSMEs in the Republic of Cuba originate in the State of Florida;  

• The majority of letters and packages to the Republic of Cuba originate in the State of Florida;  

• The majority (overwhelmingly so) of unauthorized direct equity investment and direct financing for MSMEs in the Republic of Cuba originate in the State of Florida and do so from individuals of Cuban descent. 

Particularly odd that Governor DeSantis is embracing a position that would require disinvestment by individuals who are certainly registered voters (and perhaps support the governor) in the State of Florida.  These individuals have since 1993 (first self-employed re-authorized in the Republic of Cuba; restaurants, etc.) and then again since 2015 (first Airbnb operating in the Republic of Cuba) been the source of substantial, and unauthorized investment to MSMEs located in the Republic of Cuba.   

Far more useful from Governor DeSantis, rather than parroting the writer(s) of editorials published by The Wall Street Journal (19 May 2022) and The Washington Times (25 May 2022), would have been to publish recommendations for the government of the Republic of Cuba. 

His advice could have been constructive- “My message to the Diaz-Canel-Valdes Mesa Administration in Havana is if Cuba wants a private sector, and I am not convinced they do, its more of a prop for them, but if they do, then the process for receiving direct equity investment and direct financing from the private sector in the United States- individuals and companies, must be transparent, must be simple to understand, must be equal for everyone, and taxes and fees must be fair so as to permit profits to be reinvested, to be repatriated, and to benefit first MSME owners and their employees rather than further support misguided decisions of the government.  The State of Florida is a magnet for entrepreneurs- Cuba should follow our example.” 

These “best practices” recommendations could have focused process, regulations that the government of the Republic of Cuba will publish as to how MSMEs will receive direct equity investments and direct financing.  He could have advocated that:   

• The government of the Republic of Cuba to publish quickly transparent and workable regulations for the delivery of direct equity investment in and direct financing to privately-owned companies owned by Republic of Cuba nationals and located in the Republic of Cuba.  

• There must be one regulation, one process for all privately-owned companies.   

• There must be no discrimination by the government of the Republic of Cuba in terms of restricting/prohibiting the receipt by a MSME of direct equity investment and direct financing because the MSME is or may compete with a Republic of Cuba government-operated company. 

• There must be no limitation as to the amount of a direct equity investment and direct financing. 

• There must be no number of employee requirement for a privately-owned company to receive direct equity investment and direct financing. 

• There must be no discrimination by the government of the Republic of Cuba in terms of fees, taxes, and other payments towards MSMEs versus Republic of Cuba government-operated companies. 

• There must be transparency- all transactions must be delivered through financial institutions with a preference for the Biden-Harris Administration (2021- ) to direct the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury to authorize direct correspondent banking so that funds may move directly, efficiently, and transparently from the United States to the Republic of Cuba (delivery of direct equity investment and direct financing) and from the Republic of Cuba to the United States (receipt of dividends, profit-sharing, loan payments).  

• The OFAC should continue to require licenses for the delivery of direct equity investment into a privately-owned company.

Governor Ron DeSantis Denounces the Cuban Regime’s Attempts to Steal from Americans with Deceitful Foreign Investment Policies

“22 July 2022: TALLAHASSEE, Fla. — Today, Governor Ron DeSantis directed the Florida Department of Economic Opportunity and Enterprise Florida to issue an alert warning Floridians not to let the communist Cuban regime steal their money through a recent scheme seeking to attract foreign investment for the “non-state sector.” Over the past year and a half, the Biden administration has rolled back American sanctions on Cuba and has failed to assist the Cuban people in their fight for freedom. This has emboldened the racketeers who run the Cuban regime to launch a kleptocratic scheme claiming that they will welcome American investment in the island’s supposed private sector, but foreign investment is meaningless when there are no property rights for Cuban citizens and when the Cuban government will limit which ostensibly private businesses will be allowed to receive foreign funds.  

Cuban citizens have no means to leverage investments to elevate their circumstances, and all Floridians who might be considering “investing” in Cuba’s “private sector” should be aware that their money will inevitably end up in the pockets of Raúl Castro, Miguel Díaz-Canel, and the rest of the Cuban mafia who will use that cash to continue to enrich themselves, impoverish their people, and further destabilize the Western Hemisphere. 

“One year ago we witnessed the largest demonstrations in decades against the Cuban regime in cities and towns across the island. With some additional pressure from our federal government, those protests may well have marked the downfall of the communist regime,” said Governor Ron DeSantis. “Unfortunately, the Biden administration stood idly by as the people of Cuba cried out for freedom, refusing even to authorize the provision of satellite internet by American companies. The weak policies of this administration have led the regime to attempt to perpetrate a financial fraud against the American people under the guise of private investment opportunities. Only when Cuba allows free elections, stops jailing people in the middle of the night for simply saying they want human rights, and ensures private property rights for its citizens should the American people feel confident that money sent across the straits will truly benefit the Cuban people and not the racketeers who run their regime like a mafia.” 

“The same regime that robbed Cubans, like my parents, of their livelihoods is now desperately begging Americans to ‘invest’ in the island,” said Lieutenant Governor Jeanette Nuñez. “This scheme is nothing more than a scam that fools only the sympathizers in the Biden administration.”  

It has been over one year since the people of Cuba began their demonstrations for libertad last summer. Governor DeSantis has been steadfast in his support of those who sought and continue to seek the downfall of the communist regime. In an effort to fill the vacuum left by the Biden administration’s tacit support for the Cuban government, Governor DeSantis held a roundtable at the American Museum of the Cuban Diaspora where he spoke about the importance of ensuring continued internet access for the people of Cuba; sent a letter to President Joe Biden urging the federal government to provide internet access into Cuba remotely to support those demanding freedom from the repressive communist government; spoke at a press conference at Congresswoman Maria Salazar’s Miami district office; met with Federal Communications Commissioner Brendan Carr; and held a townhall event at the Versailles restaurant where he and Senator Marco Rubio discussed their efforts to get the Biden administration, whose Cuba policy team is staffed with regime sympathizers, out of the way of the Floridian and American innovators and entrepreneurs who wanted to further the cause of freedom for Cuba. 

Governor DeSantis has also met repeatedly with Floridians from Venezuela, Colombia, and Nicaragua to discuss the destabilizing effects of the Cuban regime’s efforts to propagate its cruel ideology and despotic form of government in those countries and throughout the region. Most recently, Governor DeSantis condemned the spread of left-wing totalitarian ideology in the Western Hemisphere following the results of the Colombian election, lambasted the Biden administration’s recent attempts to legitimize the brutal Maduro regime in Venezuela, and called out the Iranian regime’s nefarious activities in South America. 

Governor DeSantis understands that almost all instability in the Western Hemisphere can be traced back to the Cuban regime and has previously said, “If you want to have a good Western Hemisphere and not have all of these problems in places like Venezuela and Nicaragua, then you should want to see a change in the regime in Havana because Havana has for decades spawned all kinds of disruptions and oppressions throughout the Western Hemisphere.” 

The Governor has also spoken about the broader geopolitical implications of having a hostile regime ninety miles off of Florida’s coast, saying, “A free Cuba would be in the interests of the United States of America. If you want influence of the Communist Party of China and Russia in the Western Hemisphere, then support the regime in Havana because every nefarious influence around the world comes through there. If you don’t want Chinese influence and you don’t want Russian influence, then you should want a free Cuba.” 

Governor DeSantis will continue to support the cause of freedom in Cuba, Venezuela, Nicaragua, Colombia, and throughout Latin America. Florida is proud to be an oasis of freedom and welcomes those who come here legally to escape oppression, but just as Americans shouldn’t have to flee lockdown states to enjoy their God-given liberties in the Sunshine State, so too should the people of Latin American not have to flee their homelands to escape the Cuban government or the instability it foments in our hemisphere. Floridians should not be tricked into funding the regime in Havana under the guise of foreign investment.”

Advisory: Florida Warns Against Tyrannical Cuban Regime’s Deceptive Call for Foreign Private-Sector Investments in the Communist State

Florida Department of Economic Opportunity and Enterprise Florida Issue Joint Advisory 

“22 July 2022: TALLAHASSEE, Fla. – Today, the Florida Department of Economic Opportunity and Enterprise Florida issued an advisory warning Floridians and potential foreign investors against the Cuban regime’s recent deceptive authorization allowing foreign investments in private businesses in Cuba to boost the country’s economic recovery. 

“Failed policies of the Biden administration have opened the door to this attempted scam, but in Florida, we are all too familiar with these communist antics,” said Florida Department of Economic Opportunity Secretary Dane Eagle. “Floridians and potential investors need to be warned that any investments with Cuba will go straight into the pockets of Cuba’s mafia dictators. Cuban citizens have no means to leverage private business investments to elevate their circumstances and there are no property rights for Cuban citizens. Under the leadership of Governor DeSantis, we will not enable Cuban racketeers getting richer while further oppressing the Cuban people yearning for freedom.” 

"There is no such thing as foreign investment in Cuba as bringing cash into the country only lines the pockets of corrupt regime officials,” said TJ Villamil, Senior Vice President of International Trade & Development at Enterprise Florida. “Florida businesses seeking to 'invest' in Cuba should know that their money will be stolen and used to support an authoritarian regime notorious for abusing human rights. We strongly discourage any firm conducting business in Cuba."  

The regime in Cuba is responsible for the destruction of one of the most prosperous countries in Latin America and destabilizing other states including Venezuela and Colombia. All data facts and figures coming out of Cuba should be questioned as the regime hides real information and real insights, hiding how poorly the economy is performing. 

As of the 2020 5-year American Community Survey estimates from the U.S. census bureau, over 1.5 million people of Cuban origin live in Florida, more than half of the total Cuban population in the United States. Approximately 1,022,706 Floridians were born in Cuba, out of 1,345,690 nationwide.

About DEO 

The Florida Department of Economic Opportunity combines the state’s economic, workforce and community development efforts, expediting economic development projects to fuel job creation in competitive communities and promote economic resiliency. For more information, including valuable resources for employers and job seekers, please visit www.FloridaJobs.org.”

LINK TO COMPLETE ANALYSIS IN PDF FORMAT

LINKS To Related Posts

With U.S. Government Authorization For First Direct Equity Investment Into A Private Company In Cuba, Here Is Important Context And Details. About The Parties; About The Message. May 16, 2022

Biden-Harris Administration Approves First Equity Investment Since 1960 In A Private Cuban Company May 10, 2022

First Cuban-American-Owned Nationally-Chartered Bank In The United States, Now Owned by First American Bank, Handling Cuba Embassy/UN Mission Transactions. They Do Not Want To Talk About It. Jul 21, 2022

The Ketchup Is Out Of The Bottle... Cuba Authorizes Direct Equity Investments (And Direct Financing) To Privately-Owned Companies. Now, Will Cuba Make The Regulations Realistic Or Full Of Barriers? Jul 22, 2022

Slow As Pouring Heinz Ketchup, But Coming: “…the participation of foreign capital in private businesses are also in the process of being defined, where some experiences could soon begin.”  Jul 21, 202

Electric Vehicles Are Useful For Cuba's Entrepreneurs- So Why Won't Biden Administration Authorize Their Export? Investments And Loans Are OK, So Should Be Efficient Vehicles. Jun 30, 2022

EFE Of Spain Reports "SME investment in Cuba a key goal of business forum." Unfortunately, Cuba Media Does Not Highlight SME Focus July 15, 2022 

Cuba Continues To Process Implementation Issues With MSMEs- Important Quickly For Regulations Authorizing Direct Equity Investment And Direct Financing From Abroad June 11, 2022 

Female Cuban Entrepreneurs Expand Their Clothing Company To Spain; Already In U.S.. Members Of U.S. Congress Believe Cuban Entrepreneurs Don't Exist. Regardless, They Are Dangerous. June 02, 2022

Response To A Washington Times Editorial From Those Criticized And On Behalf Of Those Criticized. May 26, 2022

Replying To A Wall Street Journal Editorial From Those Who Were Attacked And On Behalf Of Those Who Were Attacked. May 22, 2022

The Ketchup Is Out Of The Bottle... Cuba Authorizes Direct Equity Investments (And Direct Financing) To Privately-Owned Companies. Now, Will Cuba Make The Regulations Realistic Or Full Of Barriers?

Miami Herald
Miami, Florida
21 July 2022

Cuba to allow foreigners to invest in private businesses, will restart dollar exchanges
By Nora Gámez Torres

Facing a humanitarian crisis that threatens to set off new protests on the island, the Cuban government is taking the unprecedented step of authorizing foreign investment in its emerging private sector and will resume an official exchange market for the dollar, among 75 measures authorities said Thursday are meant to boost the country’s economic recovery.

In a National Assembly meeting Thursday, Economy Minister and Vice President Alejandro Gil said Cuba’s economy is recovering more slowly than it needs to and that authorities will prioritize attracting foreign investment and channeling the money reaching the country through tourists and foreign remittances.

“We are authorizing foreign investment in the non-state sector,” Gil said. The government will set priorities and limit which private businesses will be allowed to receive foreign investment. Cuba passed new laws last year allowing the creation of small and medium-sized private businesses for the first time in decades.  But it was unclear if those businesses would be able to partner with foreign investors or receive financing from abroad.

In May, the Biden administration authorized an American company to finance and invest in a private business in Cuba. But it was not known if the Cuban government would allow it.

That license was a catalyst for Thursday’s announcement, said John Kavulich, the president of the U.S.-Cuba Trade and Economic Council, who heads the U.S. company that received the authorization in May. “There was never a doubt that the government of Cuba would authorize direct equity investments and direct financing for privately owned companies located in Cuba,” he said. “The government is in desperate need of the economic activity, the jobs, the creativity, the efficiencies that are the hallmark of a robust private sector.”

Gil also also announced that Cubans and tourists on the island would be able to again exchange dollars in an official market that was shut down during the pandemic, as the economy sank and the cash-strapped government was unable to sell dollars to the population. As a result, many Cubans and international travelers ended up exchanging foreign currency, including euros and other currencies, on the black market.

Gil did not say when the service would resume nor the rates. Currently, a dollar sells for 120 Cuban pesos, the local currency, on the black market. But the government sets an official exchange rate for state enterprises at 24 pesos for a dollar. The minister said the new rate will be “different” from the official one because it needed to be grounded on “economic foundations,” all but acknowledging the current rate made little economic sense, as many economists have said. It is not known if the reopening of the exchange houses will mean that Cubans will be able to use dollars again to buy at government stores

The government will also lift limits on certain goods travelers can import, such as cellphones and computers; slash custom fees from the current 100 percent to 30 percent on taxable goods imported by travelers, and cut in half the price of international parcels. The minister defended the measures, saying they are all in tune with the socialist economic model and had been thoroughly studied. He said none of the announcements would have an immediate impact, but he was adamant that the country needed cash to address people’s needs quickly. “Everything that goes against or does not favor the capture of foreign currency and the increase in supply is not going in the direction in which we have to work, and everything that we do in that direction — not without risk — is going in a positive direction,” he said.

LINKS To Related Posts

With U.S. Government Authorization For First Direct Equity Investment Into A Private Company In Cuba, Here Is Important Context And Details. About The Parties; About The Message. May 16, 2022

Biden-Harris Administration Approves First Equity Investment Since 1960 In A Private Cuban Company May 10, 2022

First Cuban-American-Owned Nationally-Chartered Bank In The United States, Now Owned by First American Bank, Handling Cuba Embassy/UN Mission Transactions. They Do Not Want To Talk About It. Jul 21, 2022

Slow As Pouring Heinz Ketchup, But Coming: “…the participation of foreign capital in private businesses are also in the process of being defined, where some experiences could soon begin.” Jul 21, 2022

Electric Vehicles Are Useful For Cuba's Entrepreneurs- So Why Won't Biden Administration Authorize Their Export? Investments And Loans Are OK, So Should Be Efficient Vehicles. Jun 30, 2022

EFE Of Spain Reports "SME investment in Cuba a key goal of business forum." Unfortunately, Cuba Media Does Not Highlight SME Focus July 15, 2022 

Cuba Continues To Process Implementation Issues With MSMEs- Important Quickly For Regulations Authorizing Direct Equity Investment And Direct Financing From Abroad June 11, 2022 

Female Cuban Entrepreneurs Expand Their Clothing Company To Spain; Already In U.S.. Members Of U.S. Congress Believe Cuban Entrepreneurs Don't Exist. Regardless, They Are Dangerous. June 02, 2022

Response To A Washington Times Editorial From Those Criticized And On Behalf Of Those Criticized. May 26, 2022

Replying To A Wall Street Journal Editorial From Those Who Were Attacked And On Behalf Of Those Who Were Attacked. May 22, 2022

First Cuban-American-Owned Nationally-Chartered Bank In The United States, Now Owned by First American Bank, Handling Cuba Embassy/UN Mission Transactions. They Do Not Want To Talk About It.

First Cuban-American-Owned Nationally-Chartered Bank In The United States, Now Owned by First American Bank, Handling Cuba Embassy/UN Mission Transactions. They Do Not Want To Talk About It.

Cuban-American Connectivity Should Be Jumper Cable For Supporting Entrepreneurs In Cuba.

Arkansas-Based Home BancShares Ends Seven-Year Cuba Connection.
Illinois-Based First American Bank Using Its Owned Former Continental National Bank.
Home BancShares Not Commenting, No Public Filing, No Media Release.
First American Bank Not Commenting, No Public Filing, No Media Release.
Will First American Bank Seek A Correspondent Account With BICSA? Does It Have It?

In June 2022, Chicago, Illinois-based Chicago, Illinois-based First American Bank (2021 assets approximately US$5 billion) acquired the operating accounts (and Republic of Cuba-focused branch personnel) for the Embassy of the Republic of Cuba in Washington, DC, and the Permanent Mission of the Republic of Cuba to the United Nations in New York, New York, from Conway, Arkansas-based Home BancShares (2021 assets approximately US$18 billion) through its subsidiary Centennial Bank (which operates 78 branches in the State of Florida).   

In 2017, Home BancShares acquired Pompano Beach, Florida-based Stonegate Bank (2017 assets approximately US$2.9 billion) which had managed previously both accounts.  Stonegate Bank operations were absorbed into Centennial Bank.  In 2015, Stonegate Bank acquired the accounts after Buffalo, New York-based M&T Bank Corporation (2021 assets approximately US$150 billion) notified the embassy and mission that it would no longer provide services due to challenges with regulatory compliance for many accounts with embassies and missions. 

Although First American Bank has retained personnel from Centennial Bank who had managed the Republic of Cuba portfolio, First American Bank has not confirmed a) if Centennial Bank transferred its correspondent account with Republic of Cuba government-operated Banco Internacional de Comercia SA (BICSA) to First American Bank b) if First American Bank has obtained a separate correspondent account, or c) if First American Bank is managing fund transfers for authorized transactions (agricultural commodities, food products, healthcare products (medical equipment, medical instruments, medical supplies, pharmaceuticals, informational materials, travel, remittances, entrepreneurial support, etc.).  

In May 2022, the Biden-Harris Administration (2021- ) announced two decisions that materially connected their actions with previous rhetoric and for which banking is an integral component.  First, the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury issued a license authorizing the first direct equity investment in and the first direct financing to a privately-owned company located in the Republic of Cuba.  Second, the OFAC added opportunities and amended existing regulations that further provided mechanisms for engagement with privately-held companies located in the Republic of Cuba.  Both decisions require a common mechanism for operability- banking. 

With the Cuban-American roots (Miami, Florida-based Continental National Bank; 2019 assets approximately US$490 million) of First American Bank operations located in the State of Florida, there might now be expanded interest and comfort for individuals of Cuban descent residing in the State of Florida to engage with entrepreneurs residing in the Republic of Cuba. 

If the OFAC were to authorize by general license direct equity investment in and direct financing to privately-owned companies located in the Republic of Cuba, and if First American Bank was to have a Direct Correspondent Banking relationship with a financial institution(s) located in the Republic of Cuba, then likely would be a robust activity in moving funds directly, efficiently, and transparently from the United States to the Republic of Cuba and moving funds directly, efficiently, and transparently from the Republic of Cuba to the United States.    

History 

In 2015, during the Obama-Biden Administration (2009-2017), Stonegate Bank was approved by the OFAC to provide commercial operating accounts for the Embassy of the Republic of Cuba in Washington, DC, and the Permanent Mission of the Republic of Cuba to the United Nations in New York City, New York, after M&T Bank Corporation ceased doing so; and provide other types of OFAC-authorized and Bureau of Industry and Security (BIS) of the United States Department of Commerce-authorized transactions.   

Stonegate Bank also was approved by the OFAC to establish a correspondent account with BICSA, a member of Republic of Cuba government-operated Grupo Nuevo Banca SA, created by Corporate Charter No. 49 in 1993 and commenced operation in 1994.   

According to the Republic of Cuba, “Its [BICSA] main activity is ‘enterprises’ bank’ carried through its central services and five branches based in the country’s capital, Santiago de Cuba and Villa Clara. It records all transactions in real time providing its customers with card and remote banking services while it is working on developing other methods of electronic banking.  Its institutional clients, national or foreign, receive a complete accounting and documentary service, while national entities also enjoy of significant volumes of credit facilities. Practically all sectors of the economy benefit from all this, such as that of agriculture, the food industry, the basic and light industries, transportation, aviation, fishing, construction, domestic and foreign trade, the iron and steel industry, sugar, informatics, communications and others with not only economic importance but also social, such as health, water supply, education, culture and sports.  Credit policy followed by the Bank is dictated in a collegiate way by its Credit Committee on the basis of a strict analysis and control in loan making.  The Bank counts on correspondents in the five continents, the majority are first class banks, mainly Europeans and Americans.  Equity capital of shareholders (Grupo Nueva Banca with the biggest share and Banc holding), near the USD95 millions with a balance ranging from 550 to 600 millions, make sure the Bank has a strong solvency ratio.”  

Without explanation the Obama-Biden Administration did not authorize BICSA under a license from the OFAC to have an account at Stonegate Bank, so Stonegate Bank was required to route transactions for approximately eighty (80) customers on a regular basis through a third-country financial institution, selecting Panama City, Panama-based Multibank (2019 assets approximately US$5 billion) which had dealings with the Republic of Cuba.   

Absent Direct Correspondent Banking, authorized transactions from the Republic of Cuba to the United States are multi-day rather than less than multi-hour and third parties earn unnecessary fees.  Since December 2001, approximately US$6.7 billion has been transferred from the Republic of Cuba to the United States through third country financial institutions who receive a fee for every transaction relating to the export from the United States of statutorily-authorized agricultural commodities, food products, healthcare products (medical equipment, medical instruments, medical supplies, pharmaceuticals), and other products.  The Biden-Harris Administration (2021- ) has thus far refused to authorize Direct Correspondent Banking despite its public statements, issued license, and implemented regulatory changes focusing upon support to the re-emerging private sector in the Republic of Cuba.      

In 2017, Home BancShares through its subsidiary Centennial Bank acquired Stonegate Bank.  “Home BancShares, Inc. is a bank holding company, headquartered in Conway, Arkansas. Its wholly-owned subsidiary, Centennial Bank, provides a broad range of commercial and retail banking plus related financial services to businesses, real estate developers, investors, individuals and municipalities. Centennial Bank has branch locations in Arkansas, Florida, South Alabama, Texas, and New York City, with branches in Texas operating as Happy State Bank, a division of Centennial Bank. The Company’s common stock is traded through the New York Stock Exchange under the symbol “HOMB.”” 

In 2020, Bogota, Colombia-based Grupo Aval (2020 assets approximately US$79 billion) reported that “On May 25th, Banco de Bogotá, through its subsidiary Leasing Bogotá S.A. Panamá, acquired 96.6% of the ordinary shares of Multi Financial Group. As part of the acquisition process, MFG’s operation in Cuba was closed and as part of the transaction. Grupo Aval complies with OFAC regulations and doesn't have transactional relationships with Cuba.”  

24 October 2019 Media Release From First American Bank (Coral Gables, Florida): [Chicago, Illinois-based] First American Bank – a privately held, $5+ billion, full-service bank – [with sixty-one locations in Illinois, South Florida, Wisconsin] announced that Continental National Bank is now officially part of the First American Bank family. The acquisition of Miami’s first Cuban American-owned community bank was recently finalized following regulatory approvals. This strategic partnership enhances the suite of products the $457 million Continental National Bank has offered to its customers throughout greater Miami-Dade for the past 40 years while also expanding First American Bank’s presence in South Florida.  “We are proud to announce our new partnership with Continental National Bank as we continue to expand our footprint in the South Florida market,” said Thomas E. Wells, CEO, and chairman of First American Bank. “The addition of the Continental National branches brings First American’s branch count to 58 – strengthening our overall presence in South Florida. We are looking forward to welcoming our new customers and providing quality, tailored services that will help them meet their financial goals.” 

Founded by Carlos Dascal in 1974 just 14 years after fleeing Cuba, Continental National Bank is a family-owned financial institution that has served the Miami community for more than four decades with an array of financial and lending products and services. Since its first location in Miami's historic Little Havana neighborhood, the bank grew to five branches located throughout Miami-Dade.  Guillermo Diaz-Rousselot, former president of Continental National Bank, will continue in his leadership role –as Miami Market President for First American Bank.  “We are proud to be part of the First American Bank family and are confident our client base will benefit from this partnership, as we enhance the expertise and suite of products we offer,” said Diaz-Rousselot. “We believe that the values of Continental National Bank directly align with those of First American and our clients can expect the same warm welcomes and personalized service when they visit any of our locations.”  Since entering the South Florida market in 2014 with the acquisition of The Bank of Coral Gables, First American Bank has flourished.  The bank recently opened a Tampa office to serve Wealth Management and commercial loan clients in that market as well. 

15 May 2019 Media Release From First American Bank (Coral Gables, Florida): First American Bank – a privately held, full-service bank with more than $5 billion in assets – today announced that subject to regulatory approvals, it has agreed to acquire Continental National Bank, Miami's first Cuban-American owned national bank with $490 million in assets. Through this strategic partnership, First American Bank will further enhance the product offerings and personalized service Continental National Bank has offered to customers throughout greater Miami-Dade.  “We are proud to announce our new partnership with Continental National Bank as we work to expand our footprint in the South Florida market,” said Thomas Wells, CEO of First American Bank. “As a bank that has been in business for more than 40 years, this acquisition will allow us to bring more sophisticated lending products to the vibrant Hispanic exile business community that Continental National Bank has served since 1974, and we look forward to adding new tools, services, and much larger lending limits to better meet the needs of this thriving client base.” 

First American Bank, an Illinois-chartered bank with 53 locations in Illinois, Wisconsin, and Florida, specializes in a broad array of business lending including SBA export finance programs, wealth management, pension and 401(k) planning, and a variety of personal banking services. Since entering the South Florida market in 2014 with the acquisition of The Bank of Coral Gables, the company has continued to flourish under the leadership of Florida Market President Brian Hagan – serving privately held small and middle market businesses while staying true to its family-owned Midwest roots. 

Jacqueline Dascal-Chariff, Chairman of Continental National Bank, stated, “There are many synergies between our two organizations, including our shared culture of client-focused relationship banking. This transaction will allow us to maintain our business culture, while still emphasizing our ability to seek practical solutions for our community and our customer’s needs. This has been at the core of what the Continental Bank legacy has been for over 40 years.”  Founded by Carlos Dascal in 1974, Continental National Bank is an award-winning and trusted financial institution that has serviced the local community for more than four decades with an array of financial and lending products and services. Since starting with its first location in Miami's historic Little Havana neighborhood, the bank has grown to five branches located in the Doral, Hialeah, Sweetwater, and Downtown Miami areas.  Guillermo Diaz-Rousselot, President of Continental National Bank, said, “This merger will provide our customers, employees, and community the benefits of scale allowing us to expand our products and services that a large multimarket community bank, like First American, can provide. We look forward to building on the solid foundations both banks have achieved. Together, we can continue to better serve the growing demands of our client base, its individuals and businesses.” 

ABOUT FIRST AMERICAN BANK: For more than 40 years, First American Bank has been focusing on building long-term relationships with customers through high-quality solutions and exceptional customer service. With services ranging from personal products to commercial banking and wealth management, and assets of more than $5 billion, First American Bank is the largest privately-held bank in Illinois with 53 locations in Illinois, Wisconsin and South Florida. First American Bank’s size and management philosophy allow the bank to offer clients top-tier financial services tailor-made to support each customer’s goals and potential for growth. First American Bank is a Member FDIC bank. 

ABOUT CONTINENTAL NATIONAL BANK: Continental National Bank is a full-service community bank established in 1974 in Miami as the first Cuban-American-chartered national bank in the United States, serving its customers for more than 45 years. With five branches conveniently located throughout Miami-Dade County, and with more than $490 million in assets, Continental National Bank has been recognized as a top community bank. The Bank offers a full range of financial and lending products and services for retail, business, and institutional clients. 

Home BancShares
Conway, Arkansas
SEC 10-Q
31 March 2022

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS 

risks associated with our customer relationship with the Cuban Embassy and our correspondent banking relationship with Banco Internacional de Comercio, S.A. (BICSA), a Cuban commercial bank; 

Home BancShares
Conway, Arkansas
SEC 10-K
24 February 2022

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS 

These forward-looking statements involve risks and uncertainties and are based on our beliefs and assumptions, and on the information available to us at the time that these disclosures were prepared. These forward- looking statements involve risks and uncertainties and may not be realized due to a variety of factors, including, but not limited to, the following: risks associated with our customer relationship with the Cuban Embassy and our correspondent banking relationship with Banco Internacional de Comercio, S.A. (BICSA), a Cuban commercial bank; 

Our banking relationships with the Cuban Embassy and Banco Internacional de Comercia, S.A. (“BICSA”) may increase our compliance risk and compliance costs. 

U.S. persons, including U.S. banks, are restricted in their ability to establish relationships and engage in transactions with Cuba and Cuban persons pursuant to the existing U.S. embargo and the Cuban Assets Control Regulations. However, as a result of our acquisition of Stonegate Bank in 2017, we maintain a customer relationship to handle the accounts for Cuba’s diplomatic missions at the United Nations and for the Cuban Interests Section (now the Cuban Embassy) in Washington, D.C. This relationship was established in May 2015 pursuant to a special license granted to Stonegate Bank by the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) in connection with the reestablishment of diplomatic relations between the U.S. and Cuba. In July 2015, Stonegate Bank established a correspondent banking relationship with Banco Internacional de Comercio, S.A. (“BICSA”) in Havana, Cuba. 

Cross-border correspondent banking relationships pose unique risks because they create situations in which a U.S. financial institution will be handling funds from a foreign financial institution whose customers may not be transparent to the U.S. financial institution. Moreover, Cuban financial institutions are not subject to the same or similar regulatory guidelines as U.S. banks; therefore, these foreign institutions may pose a higher money laundering risk to their respective U.S. bank correspondent(s). Investigations have determined that, in the past, foreign correspondent accounts have been used by drug traffickers and other criminal elements to launder funds. Shell companies are sometimes used in the layering process to hide the true ownership of accounts at foreign correspondent financial institutions. Because of the large amount of funds, multiple transactions, and the U.S. bank’s potential lack of familiarity with a foreign correspondent financial institution’s customer, criminals and terrorists can more easily conceal the source and use of illicit funds. Consequently, we may have a higher risk of noncompliance with the Bank Secrecy Act and Anti-Money Laundering (“BSA/AML”) rules due to our correspondent banking relationship with BICSA and will likely need to more closely monitor transactions related to correspondent accounts in Cuba, potentially resulting in increased compliance costs. Our failure to strictly adhere to the terms and requirements of our OFAC license or our failure to adequately manage our BSA/AML compliance risk in light of our correspondent banking relationship with BICSA could result in regulatory or other actions being taken against us, which could significantly increase our compliance costs and materially and adversely affect our results of operations. 

LINKS To Related Posts: 

Grupo Aval In Colombia Purchases Multibank In Panama Ending Cuba Transactions For Home BancShares In Arkansas  June 20, 2020 

Commenced In 2016, Stonegate Bank's MasterCard Products Will No Longer Be Valid In Cuba As Of March 2019  February 14, 2019 

Remittances To Cuba Mentioned 16 Times In 14 Pages Of New OFAC Regulations: Biden, Blinken, Sullivan, Nichols, Gonzalez, Yellen Defend 3rd-Country Banks Taking Percentage Of Every Dollar To/From Cuba  June 13, 2022

LINK TO COMPLETE ANALYSIS IN PDF FORMAT

Slow As Pouring Heinz Ketchup, But Coming: “…the participation of foreign capital in private businesses are also in the process of being defined, where some experiences could soon begin.”

“…the participation of foreign capital in private businesses are also in the process of being defined, where some experiences could soon begin.” 

Prensa Latina
Havana, Republic of Cuba
20 July 2022

Cuba Updates Policies for Foreign Investment

Cuba updates policies for foreign investment in search of eliminating obstacles that limit access to foreign financing, vital for the performance of the economy, explained today the minister of the branch, Rodrigo Malmierca.

The head of Foreign Trade and Foreign Investment detailed to the deputies of the Economic Affairs Commission of the National Assembly of People's Power (parliament) the actions implemented after the body's accountability to the legislature, last December. In this sense, he pointed out that the efforts have been aimed at solving the difficulties inherent in the preparation of officials to face these processes, the quality of the negotiations and the agility in carrying out the procedures and everything related to the implementation of the investments.

Malmierca specified that in the first half of this year nine businesses with foreign capital were approved, one of them in the Mariel Special Development Zone (ZEDM). They are mostly small, with a capital of around 20 million dollars, the minister pointed out, adding that they correspond to the priorities of the Caribbean nation: food production, mining, industry, wholesale trade, construction, computing and telecommunications, and biotechnology.

The inclusion of projects with low investment amounts within the country's portfolio of opportunities is one of the lines of action on which we continue to work, said Malmierca, who recalled that the aspiration is to do business that contributes to municipal development. Specifically within the elements that are updated in the investment policy with foreign capital, he commented that they value the granting of sovereign guarantees for certain agreements that are of high interest to the nation.

Currently those who bet on Cuba do so at risk, but there are businesses that are of great importance and for which it is possible to support partners, he explained. The minister added that aspects related to the participation of foreign capital in private businesses are also in the process of being defined, where some experiences could soon begin. Emphasis added

In the same way, they advance in the guidelines for a possible foreign investment in wholesale and retail trade in the country. Perfecting the operation of the single window and taking it to the municipalities is another of the actions in which the ministry is working, Malmierca said. He also announced that today there are 57 projects under negotiation that have conditions to materialize, which could occur in the space of a year and commit a capital of almost five billion dollars. 

LINK: https://www.prensa-latina.cu/2022/07/20/cuba-actualiza-politicas-para-la-inversion-extranjera

LINKS To Related Posts

With U.S. Government Authorization For First Direct Equity Investment Into A Private Company In Cuba, Here Is Important Context And Details. About The Parties; About The Message. May 16, 2022

Biden-Harris Administration Approves First Equity Investment Since 1960 In A Private Cuban Company May 10, 2022

EFE Of Spain Reports "SME investment in Cuba a key goal of business forum." Unfortunately, Cuba Media Does Not Highlight SME Focus July 15, 2022 

Cuba Continues To Process Implementation Issues With MSMEs- Important Quickly For Regulations Authorizing Direct Equity Investment And Direct Financing From Abroad June 11, 2022 

Female Cuban Entrepreneurs Expand Their Clothing Company To Spain; Already In U.S.. Members Of U.S. Congress Believe Cuban Entrepreneurs Don't Exist. Regardless, They Are Dangerous. June 02, 2022

Response To A Washington Times Editorial From Those Criticized And On Behalf Of Those Criticized. May 26, 2022

Replying To A Wall Street Journal Editorial From Those Who Were Attacked And On Behalf Of Those Who Were Attacked. May 22, 2022

Political Malpractice: Seeking A Vote Knowing Preparation Lacking; Likely Defeat; Was Bipartisanly Defeated. Like Giving A Drunk Another Drink Rather Than Helping Get Sober.

NO- 260 (including 55 Democrats)
YES- 163 (including 1 Republican)

• Why was a controversial amendment relating to the Republic of Cuba submitted without hearings, without bipartisan cosponsors, without impacted exporters, without impacted financial institutions, for an issue that previously received some bipartisan support?

• Why was the only sponsor one of the most controversial members of the Democratic Caucus (and United States Congress), a member of “The Squad” (Alexandria Ocasio-Cortez of New York, Ilhan Omar of Minnesota, Ayanna Pressley of Massachusetts, Rashida Tlaib of Michigan, Jamaal Bowman of New York, and Cori Bush of Missouri)? Even if certain Democrats and Republicans supported the amendment, they would vote no so as not to provide any political value to Ms. Tlaib.

Vote Details: Office of the Clerk, United States House of Representatives https://clerk.house.gov/Votes/2022380

LINK To Yesterday’s Post: 

Here We Go Again…. Cuba Export-Focused Amendments Media Releases With No Mention Of Support From Exporters/Banks. What If Cuba Defaults? No Focus On What’s Important: Direct Correspondent Banking. July 20, 2022 

LINKS To Related Posts  

Arkansas Senator Boozman Will Re-introduce Legislation To Permit Payment Terms And Financing For U.S. Ag/Food Exports To Cuba. He Should Wait Until There Are Contracts In Place. June 30, 2021 

Are Cuba Advocates Again Ahead Of Tips Of Their Legislative/Regulatory Skis? February 27, 2021 

Five Essential Elements For Cuba Food/Ag Legislation To Be Successful In The U.S. Congress May 19, 2019 

Do U.S. Secretaries Of Agriculture & Treasury Comprehend Value Of Direct Correspondent Banking To Exporters? February 13, 2018 

Change To OFAC Banking Regulation Long Overdue; No Rationale For Delay September 26, 2016 

US Expected To Authorize Banks In Cuba To Have Correspondent Accounts With US Banks March 04, 2016

Melia Hotels International Of Spain Pays US$35,000.00 Per Month To U.S. Public Relations Firm: Focus Is Libertad Act Lawsuits; They Are A Defendant.

O’Dwyer’s
New York, New York
20 July 2022

Meliá Hotels Hires Raben Group For Report on US/Cuba Relations
By Kevin McCauley

Spain’s Meliá Hotels International has hired The Raben Group to conduct interviews with US policymakers on the status of US policy towards Cuba as it impacts foreign countries operating on the biggest island in the Caribbean.

It is specifically interested in the potential of changes to the Helms-Burton Act of 1996, which extended the US embargo on Cuba to foreign companies, in the event that Republicans win control of Congress following the 2022 midterm elections.

Meliá has 40 hotels in Cuba. They are located in Havana, Cayo Coco, Cayo Guillermo, Cayo Largo, Cayo Santa María, Holguín, Santiago de Cuba, Varadero, Camagüey, Trinidad and Cienfuegos.

Estuardo Rodriguez, Raben co-founder, leads the Cuba research and reports to Juan Ignacio Pardo, Meliá chief legal & compliance officer. Raben staffers had met with State Dept. officials including Mara Tekach, coordinator/director of the Office of Cuban Affairs; Ricardo Zuniga, deputy secretary of the Bureau of Western Hemisphere Affairs; and Danny Meza, undersecretary for Economic Growth, Energy and the Environment.

They are “to conduct due diligence to understand what circumstances policymakers and officials would be supportive of the goals of Meliá Hotels International, at no point will payment or financial support of candidates be offered or paid in return for such support,” according to the firm’s contract with Meliá. The pact covers the period from May 16 to August 15. It is worth $35K per month.

LINK To Libertad Act Lawsuit Filing Statistics

Four Cruise Lines Nearing Jury Trial.... Importance Of "One-Satisfaction" Rule And Determining Damages.

HAVANA DOCKS CORPORATION VS. CARNIVAL CORPORATION D/B/A/ CARNIVAL CRUISE LINES [1:19-cv-21724; Southern Florida District]
Colson Hicks Eidson, P.A. (plaintiff)
Margol & Margol, P.A. (plaintiff)
Jones Walker (defendant)
Boies Schiller Flexner LLP (defendant)
Akerman (defendant)

HAVANA DOCKS CORPORATION V. MSC CRUISES SA CO, AND MSC CRUISES (USA) INC. [1:19-cv-23588; Southern Florida District]
Colson Hicks Eidson, P.A. (plaintiff)
Margol & Margol, P.A. (plaintiff)
Venable (defendant)

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 CORPORATION VS. ROYAL CARIBBEAN CRUISES, LTD. [1:19-cv-23590; Southern Florida District]
Colson Hicks Eidson, P.A. (plaintiff)
Margol & Margol, P.A. (plaintiff)
Holland & Knight (defendant)

ORDER SCHEDULING TRIAL AND ORDER OF INSTRUCTIONS BEFORE CALENDAR CALL (7/19/22)

PLAINTIFF HAVANA DOCKS CORPORATION’S RESPONSE IN OPPOSITION TO DEFENDANTS’ MOTIONS TO CONFIRM THE APPLICABILITY OF THE “ONE-SATISFACTION RULE” (7/15/22)

DEFENDANTS’ REPLY BRIEF IN SUPPORT OF THEIR MOTION TO CONSOLIDATE CASES FOR DETERMINATION OF DAMAGES

LINK To Libertad Act Lawsuit Filing Statistics

Excerpts:

“The “one satisfaction rule” is an equitable doctrine that sets off damage amounts recovered by a plaintiff from a joint tortfeasor to satisfy a single, indivisible harm. It is a post-trial issue to be resolved by a court after a jury returns a damages award.”

“The motions to confirm the applicability of the “one-satisfaction rule” (the “Motions”) 1 filed by Defendants Carnival Corporation, MSC Cruises, Royal Caribbean Cruises Ltd. and Norwegian Cruise Line Holdings Ltd. (collectively, the “Defendants”) should be denied for several reasons. First, the “one-satisfaction rule” is an equitable set-off doctrine that applies after trial or judgment; it is not ripe for adjudication at this stage. Second, the “rule” is not recognized in Title III and, moreover, is foreclosed by the text of the Act. Third, the “rule” does not apply on facts of these cases because (a) Havana Docks has never been satisfied so there is nothing to set off, (b) the Defendants are not joint tortfeasors or jointly and severally liable, and (c) each Defendant’s independent and unauthorized trafficking separately harmed Havana Docks. Fourth, the “rule” does not apply to punitive damages, which the Court has found Title III’s treble damages are. And fifth, to the extent Defendants request the entry of a single or collective judgment, this is contrary to Supreme Court precedent and should be denied. For these reasons, as further explained below, the Motions should be denied.”

“Plaintiff’s Response to Consolidation is unambiguous as to its position on the one topic at issue before the Court on the instant Motion: consolidation. Given Plaintiff’s concession that the requisite elements are met here for consolidation, this Court should grant Defendants’ Motion and disregard the arguments Plaintiff makes regarding interest- and one satisfaction-related issues.”

Here We Go Again…. Cuba Export-Focused Amendments Media Releases With No Mention Of Support From Exporters/Banks. What If Cuba Defaults? No Focus On What’s Important: Direct Correspondent Banking.

Here We Go Again…. Cuba Export-Focused Amendments Media Releases With No Mention Of Support From Exporters And Banks. Fails To Focus On What’s Important: Direct Correspondent Banking. What If Cuba Defaults?

Philosophically, Intent Of Amendments Have Support From Exporters, Financial Institutions.
Exporters Do Not Want To Provide Payment Terms And Credit.
Exporters Do Need Direct Correspondent Banking.
And, What Happens To Exporters If Payments From Cuba Not Received Within One Year?

If A Committee Issues Media Releases, Useful To Have Quotes Of Support From Those Impacted Directly- And List Supporting Members From Both Political Parties.

84. “AMENDMENT TO DIVISION D OF RULES COMMITTEE PRINT 117-55 (FINANCIAL SERVICES AND GENERAL GOVERNMENT APPROPRIATIONS DIVISION) OFFERED BY MS. TLAIB OF MICHIGAN.  At the end of division D (before the short title), insert the following: SEC. __. None of the funds made available by any title in this Act may be used to implement, administer, or enforce section 908(b) of the Trade Sanctions Reform and Export Enhancement Act of 2000 (22 U.S.C.4 7207(b)).” 

137. “An Amendment To Be Offered by Representative Tlaib of Michigan or Her Designee, Debatable for 10 Minutes.  At the end of division D (before the short title), insert the following: Sec. ___.  None of the funds made available by any title in this Act may be used to implement, administer, or enforce section 908(b) of the Trade Sanctions Reform and Export  Enhancement Act of 2000 (22 U.S.C. 7207(b)).”

The Trade Sanctions Reform and Export Enhancement Act (TSREEA) of 2000 e-authorized the direct commercial (on a payment of cash-in-advance basis) export of food products (including branded food products) and agricultural commodities from the United States to the Republic of Cuba, irrespective of purpose. The TSREEA does not include healthcare products, which remain authorized and regulated by the Cuban Democracy Act (CDA) of 1992. 

The primary issues with seeking to change payment of cash-in-advance required by the TSREEA are: 

• The companies that export agricultural commodities and food products from the United States to the Republic of Cuba have never publicly supported the provision of payment terms, credit, or financing. 

• Financial institutions which would be a source for financing of the export of agricultural commodities and food products from the United States to the Republic of Cuba have never publicly supported the provision of payment terms, credit, or financing. 

• Neither representatives of exporters nor financial institutions have appeared at hearings held by the United States Congress or issued media releases to confirm they would provide payment terms, credit, and financing if permitted to do so. 

• Why?  Because of the risk of default.  Knowing that any default migrating as it would into the public domain would doom the environment for all participants. 

What might be the consequences if enactment of Amendments 84 and 137 permitting payment terms, credit, and financing, albeit for one year, and Republic of Cuba-based importers request payment terms, credit, and financing, but United States-based exporters and financial institutions refuse Republic of Cuba-based importers due to the chronic, multi-decade shortage of foreign exchange and history of not making payments as contracted, for defaulting on obligations?  To make payments to United States-based exporters, Republic of Cuba-based importers are likely to use funds that should have been used to repay exporters in other countries. 

Today, Republic of Cuba-based importers have one choice- make cash-in-advance payment to United States-based exporters as required by the TSREEA or purchase from another source.  That makes the choice binary and 100% protective for United States-based exporters.  

Cuba's Agricultural Commodity/Food Product Imports From United States Decrease 14.5% In May 2022; Decline Of 7.31% Year-To-Year July 13, 2022 

Philosophically, the intention of Amendments 84 and 137 are in line with the views of United States-based exporters and United States-based financial institutions.  They both believe they, rather than the United States government, should determine the creditworthiness of their customers.  That the risk is for management to accept or reject rather than the United States government unnaturally interfering in the private sector commercial process.  An issue with Amendments 84 and 137 is its timing.  

With respect to Amendments 84 and 137, if included in legislation that becomes law, the time-frame is for one fiscal year, until 30 September 2023.  What happens if an exporter or financial institution provides payment terms and provides financing, and the Republic of Cuba-based importer does not make payment as provided in a contract?  What if the payment(s) arrive on 30 October 2023?  Has the United States-based exporter and United States-based financial institution violated United States law?  Are there criminal penalties?  Civil penalties?  Does the issue impact the exporter and financial institution with United States government contracts?  Might there be shareholder lawsuits? 

For the above is why changing the payment of cash-in-advance as required by the TSREEA has not, including in 1999 and 2000 prior to the legislation signed into law by William Clinton, 42nd President of the United States, been supported publicly by exporters and financial institutions. 

The preference has been to promote that the Republic of Cuba was the safest export market in the world for United States companies- because payment of cash-in-advance, while limiting export volume and U.S. Dollar value, guaranteed there would be no default by a Republic of Cuba-based importer.   

Today, given the chronic shortage of foreign exchange by the government of the Republic of Cuba, inserting risk where none exists is not prudent.  United States statutes, regulations, and policies remain a meaningful contributing factor to exacerbating the Republic of Cuba’s global commercial transaction process.  However, significant factors also include commercial, economic, and political decisions by the government of the Republic of Cuba which adversely, and continually negatively impact the ability of Republic of Cuba government-operated companies and non-Republic of Cuba government-operated companies with presence in the Republic of Cuba to earn foreign exchange from which to service their respective obligations. 

The commercial, economic, and political infrastructure within the Republic of Cuba will continue to evolve and then the question as to whether to support the provision of payment terms, credit, and financing will no longer be a concern. 

Meeks, McGovern Urge Support for Financial Services and General Government Amendment #84 Expanding Agricultural Trade with Cuba 

19 July 2022: Washington, DC – Representatives Gregory W. Meeks (D-NY), Chairman of the House Foreign Affairs Committee, and Jim McGovern (D-MA), Chairman of the Rules Committee, issued the following statement in support of Amendment #84 to H.R. 8294, which funds the Treasury Department and its Office of Foreign Assets Control (OFAC), that would suspend enforcement of the prohibition on financing of agricultural sales to Cuba.  The amendment has previously been included in numerous pieces of legislation, including the Cuba Agricultural Exports Act, which had dozens of Republican cosponsors. It is identical to a bipartisan amendment submitted to the Financial Services and General Government Appropriations bill in 2017: “We strongly support this amendment to end the U.S. government’s prohibition on financing of agricultural sales to Cuba. This common-sense legislation, which has been supported from both sides of the aisle and by agriculture groups nationwide for well over a decade, would create thousands of farm jobs in the United States while providing desperately needed food at lower cost for the Cuban people.  Today, Cuba faces its most devastating economic crisis in thirty years, forcing tens of thousands of Cuban people to spend hours in line waiting for food each and every day. In the past six months, we have seen a surge of Cubans fleeing to the U.S.-Mexico border. This amendment would help ease the economic burden by suspending U.S. farm export regulations and extending credit to Cuban food buyers for one year.  Farmers across the United States have urged action to permit greater sales from the U.S. for years, and with hunger rising across Cuba, the time is right to enact a temporary suspension that would provide them new opportunities to expand their exports to this market of 11 million people. We are hopeful that both parties can once again come together and support this win-win amendment.” 

Meeks, McGovern Urge Support for Financial Services and General Government Amendment #137 Expanding Agricultural Trade with Cuba 

19 July 2022 Washington, DC – Representatives Gregory W. Meeks (D-NY), Chairman of the House Foreign Affairs Committee, and Jim McGovern (D-MA), Chairman of the Rules Committee, issued the following statement in support of Amendment #137 to H.R. 8294, which funds the Treasury Department and its Office of Foreign Assets Control (OFAC), that would suspend enforcement of the prohibition on financing of agricultural sales to Cuba.  The amendment has previously been included in numerous pieces of legislation, including the Cuba Agricultural Exports Act, which had dozens of Republican cosponsors. It is identical to a bipartisan amendment submitted to the Financial Services and General Government Appropriations bill in 2017:  “We strongly support this amendment to end the U.S. government’s prohibition on financing of agricultural sales to Cuba. This common-sense legislation, which has been supported from both sides of the aisle and by agriculture groups nationwide for well over a decade, would create thousands of farm jobs in the United States while providing desperately needed food at lower cost for the Cuban people.  “Today, Cuba faces its most devastating economic crisis in thirty years, forcing tens of thousands of Cuban people to spend hours in line waiting for food each and every day. In the past six months, we have seen a surge of Cubans fleeing to the U.S.-Mexico border. This amendment would help ease the economic burden by suspending U.S. farm export regulations and extending credit to Cuban food buyers for one year.  “Farmers across the United States have urged action to permit greater sales from the U.S. for years, and with hunger rising across Cuba, the time is right to enact a temporary suspension that would provide them new opportunities to expand their exports to this market of 11 million people. We are hopeful that both parties can once again come together and support this win-win amendment.” 

LINKS To Related Posts 

Arkansas Senator Boozman Will Re-introduce Legislation To Permit Payment Terms And Financing For U.S. Ag/Food Exports To Cuba. He Should Wait Until There Are Contracts In Place. June 30, 2021

Are Cuba Advocates Again Ahead Of Tips Of Their Legislative/Regulatory Skis? February 27, 2021

Five Essential Elements For Cuba Food/Ag Legislation To Be Successful In The U.S. Congress May 19, 2019

Do U.S. Secretaries Of Agriculture & Treasury Comprehend Value Of Direct Correspondent Banking To Exporters? February 13, 2018

Change To OFAC Banking Regulation Long Overdue; No Rationale For Delay September 26, 2016

US Expected To Authorize Banks In Cuba To Have Correspondent Accounts With US Banks March 04, 2016

LINK TO COMPLETE ANALYSIS IN PDF FORMAT

France’s Accor Had 4 Properties In Cuba; Now 1. Disagreements About Standards, Funding. SO/Havana Paseo del Prado Will Be Royalton Habana Managed By Canada’s Blue Diamond Resorts

Accor Of France Managed Four Properties In Cuba.  Now One.  Disagreements About Standards, Funding.  Latest SO/Havana Paseo del Prado, Managed Since 2018.  Will Become Royalton Habana Managed By Canada’s Blue Diamond Resorts. 

Permitting another another internationally-recognized luxury brand to exit the marketplace demonstrates financial pressures and management philosophy constraints continuing to impact government of the Republic of Cuba and a return to focus upon fewer brands and mid-market demographic.

Issy-les-Moulineaux, France-based Accor S.A. is a “multinational hospitality company that owns, manages and franchises hotels, resorts and vacation properties. It is the largest hospitality company in Europe, and the 6th largest hospitality company worldwide.  Accor, with more than 230,000 employees, operates 778,000 rooms in 5,300 locations in more than 110 countries.”  Accor S.A. had four properties under management in the Republic of Cuba.  Now, it has one. 

178-room Hotel Mercure Sevilla Havane (1995-2018)
385-room Mercure Playa de Oro (2012-2017)
518-room Pullman Cayo Coco Hotel (2015- )
250-room SO/Paseo Del Prado La Habana (2018-2022)

The Mercure Playa de Oro Varadero is owned by Republic of Cuba government-operated Gran Caribe. Disagreement as to responsibility for financing for renovations resulted Accor S.A. returning the property to Gran Caribe.  Accor S.A. had reported that the Hotel Mercure Sevilla Havane was to undergo a US$20 million renovation to become an MGallery by Sofitel property. Disagreement as to responsibility for financing resulted in Accor S.A. returning the property to its owner, Gran Caribe.

Pullman Cayo Coco Hotel (518 rooms): The property of owned by Gran Caribe. Accor S.A. has managed the property since December 2015. From Accor S.A.: “Hotels combining lifestyle and design, for business and leisure. All-inclusive 5-star resort facing the Caribbean Sea and ideally located in the hearth of the ecological park of the island of Cayo Coco. The resort has 2 sections: main hotel featuring 522 deluxe rooms and The Collection by Pullman adult only section offering junior suites, full suites and private Golden Villa. Our property offers a choice of 8 restaurants, 10 bars, 7 pools, 600-meter long private white sand beach, state of the art spa, Kids Club, banquet facilities and much more. Located off the Northern Cost of Cuba, on the Atlantic Ocean side, and part of the Jardines Del Rey archipelago that counts over 2,500 islands and cays widely renowned for its white sand beaches, calm and crystal-clear waters and natural surroundings.”

The spirited luxury brand is set to debut SO/ Havana Paseo del Prado in early 2020 and will feature signature creative touches by renowned fashion designer Agatha Ruiz de la Prada 

“Toronto, 19 September 19 2018- ​AccorHotels announces plans to further expand its presence and options for travelers in the Americas with the introduction of SO/ Havana Paseo del Prado, a new address set to open in early 2020 in Havana, Cuba. As the first SO/ property in the Americas region, the hotel will showcase the brand’s rebellious, immersive interpretation on the luxury travel experience. SO/ Havana Paseo del Prado will be located at the intersection of Paseo de Marti and Malecón, in the heart of one of the most emblematic neighborhoods of Cuba’s capital.  “We are thrilled to introduce the vivid and playful SO/ Hotels & Resorts brand into the Americas and look forward to debuting the brand’s first hotel in the region in the heart of Havana,” said Heather McCrory, AccorHotels Executive Vice President of Operations, North & Central America. “Vibrant, edgy, fashionable and bursting with local energy, SO/ hotels are an exceptional fusion of local culture, lively entertainment, outstanding food and beverage options and services, and avant-garde design with a touch of luxury. We are certain that SO/ Havana Paseo del Prado will please even the most audacious luxury travelers and become one of the most trendy and social destinations in the city.” “

“A Luxury Hotel Brand Makes its Debut in Havana: One of the fastest growing brands in the AccorHotels luxury portfolio, SO/ Hotels & Resorts is an exclusive lifestyle brand with one-of-a-kind, fashionable properties located in select high-energy and dynamic destinations worldwide. With design at the core of the SO/ brand, the hotel in Havana will unfold as a glamorous yet playful masterpiece featuring the creative signature of celebrated Spanish fashion designer Agatha Ruiz de la Prada – from the hotel’s emblem to the staff’s stylish uniforms.  "I am incredibly excited to take part in the design of the new SO/ Havana Paseo del Prado,” commented Agatha Ruiz de la Prada. “Havana is a magical and colorful city, and the design process came quite naturally. The world of Cuban dance was my central inspiration, and with that, the project came alive almost out of its own accord.”  With 10 stories above street level on a 5,000 square-meter parcel, SO/ Havana Paseo del Prado will feature 250 guest rooms, including 36 suites. Ranging in size from 34 to 64 square meters, guest rooms will consist of stylish contemporary furnishings, neutral palettes, splashes of color, innovative technology and thoughtful designer amenities.  The hotel will offer five food & beverage outlets including a specialty restaurant and rooftop bar on the ninth floor, an exclusive chocolate café bar, a lively lobby lounge and bar, and an all-day signature dining restaurant. Additional hotel features include three interior meeting rooms spanning approximately 200 square meters; a 400 square-meter SO/ SPA with six treatment rooms; a 150 square-meter SO/ FIT fitness center; and a 155 square-meter swimming pool with an adjacent pool bar. The hotel will also feature additional signature elements of the SO/ lifestyle such as the Just Say SO service and SO Parties, featuring the hottest DJs and artists.”

“In partnership with AccorHotels, SO/ Havana Paseo del Prado is part of Grupo de Turismo Gaviota, a Havana-based tourism and hospitality company boasting three decades of experience in the industry with over 85 hotels, representing more than 30,400 rooms throughout Cuba.  SO/ hotels are vibrant and highly sought-after destinations for trendy and discerning travelers. In addition to SO/ Havana Paseo del Prado, the brand will soon unveil hotels in dynamic and desirable locations including Auckland (November 2018), Kuala Lumpur (2020), Samui (2020) and Jakarta (2021.)These additions will expand an eclectic SO/ portfolio which already includes two stunning SO/ properties in Thailand, Bangkok & Hua Hin, SO/ Mauritius, SO/ Singapore and the recently opened properties including SO/ Berlin Das Stue, SO/ Vienna and SO/ St. Petersburg.” 

Blue Diamond Resorts Will Manage One of the Most Luxurious Hotels in Cuba 

“TORONTO, 18 July 2022 (GLOBE NEWSWIRE) -- As part of the ongoing efforts to strengthen and expand its portfolio within the region, Blue Diamond Resorts Cuba is pleased to announce that it will take over the operation of the most luxurious hotel in Habana which will be rebranded as Royalton Habana, with operations expected to begin on August 1st, 2022.  This 250-room city hotel offers both a privileged location and stunning views. Nestled right in the entrance to the country’s capital, Royalton Habana will provide astonishing views from inside and outside; thanks to its modern look as well as the views provided from the rooms, its three restaurants and bars, and the rooftop infinity pool that faces the Habana Bay and the San Salvador de la Punta Castle, one of the three key forts in Habana.  The property, owned by Grupo de Turismo Gaviota, one of the most important tourism companies in the Caribbean, will offer exclusive features that will make this hotel the ideal place for all types of discerning travelers.  “This new addition to our portfolio is a major milestone to our company and the region,” mentioned Mohamad Fawzi, Managing Director for Blue Diamond Resorts Cuba. “Royalton Habana will allow us to evolve in city tourism with a hotel focused on luxury with which we will be able to make our clients enjoy great experiences. We are convinced that it will become a benchmark hotel for both Blue Diamond Resorts Cuba and the region,” he added.  Although this hotel will not be the first city hotel managed by Blue Diamond Resorts Cuba, Royalton Habana will be the first city hotel within the Royalton Luxury Resorts portfolio.  Blue Diamond Resorts Cuba is consolidated throughout the Caribbean as the fastest growing hotel chain, now with 36 properties in its portfolio and more than 10,000 rooms. The company has experienced considerable growth this year. Only a few weeks ago, Blue Diamond Resorts Cuba announced that it will exclusively manage the touristic region of Cayo Largo del Sur.”   

“About Blue Diamond Resorts: Since its inception in 2011, Blue Diamond Resorts has curated an impressive portfolio encompassing 45 properties, exceeding 18,000 rooms in ten countries. Taking a proactive approach to differentiating brands under each market’s demands, the resort management company caters to a range of budgets and interests from adult-only elegant getaways to fun-filled family vacations. Award-winning, All-In Luxury® Royalton Luxury Resorts offers signature amenities including All-In Connectivity™, modern Sports Event Guarantee™, and in-suite wellness elements. Royalton Luxury Resorts’ adults-only sub-brands include Hideaway at Royalton, an adults-only experience with exclusive dining and preferred accommodations, plus the stylish lifestyle resort, Royalton CHIC, located in the Caribbean’s best beachfront locales. In Jamaica, Grand Lido Negril provides those over 21 with an upscale and luxurious naturist vacation along with a secluded shore for the utmost privacy. Memories Resorts & Spa offers a vacation designed to impress the entire family, while Starfish Resorts provides amazing value for customers in convenient locations. Planet Hollywood Hotels and Resorts invites guests to Vacation Like A Star™ with an engaging and interactive experience, plus famous pop culture items from iconic movies, music, and sports. Mystique by Royalton, a boutique-style resort collection, offers personalized vacations in strikingly beautiful locals full of endless adventures.”   

LINKS To Related Posts

Could Accor S.A. Of France Be Subject To Libertad Act Lawsuits? October 13, 2019

Wyndham’s Super 8 Worldwide Will Not Manage Resort Property In Cuba May 16, 2017

Wyndham Worldwide's Super 8 Replaces Accor To Manage Cuba Property February 15, 2017

Icelandair To Operate U.S.-Cuba Flights Using "Wet Lease" With Boeing 757-200 Aircraft

Simple Flying
St. Laurent, Quebec, Canada
18 July 2022

Icelandair Approved To Fly US-Cuba Charter Flights
By Andrew Curran

Icelandair overcame objections from US-based interests to win approval to operate wet lease charter flights between the US & Cuba this summer. The US Department of Transportation has approved an application by Icelandair to fly up to 31 round trip flights a week between the United States and Cuba on behalf of Florida-based World Atlantic Airlines. The approval for the flights this summer came despite strident objections from the Air Line Pilots Association, Swift Air, and the Allied Pilots Association. 

In mid-June, Simple Flying reported Icelandair's application to wet lease a Boeing 757-200 to World Atlantic Airlines to operate the flights. It is not the first time Icelandair has done this. For example, earlier this year, Icelandair flew between three US cities and Cuba on behalf of Miami-based Anmart Air. 

Icelandair will send a Boeing 757-200 (pictured) to World Atlantic Airlines to operate the charter flights to Cuba. Photo" Vincenzo Pace/Simple Flying  

But as that report noted, US-based aviation players don't like outside players encroaching onto what they see as their turf. Dark claims of harm to US interests and abuse of flying rights were raised. The Department of Transportation (DOT) says it considered all of the objections, including procedural aspects, market access, competitive factors, travel restrictions, and some public interest factors. But the DOT says the arguments were not persuasive enough to knock back Icelandair's application. 

"We have decided to approve Icelandair's application," says the DOT in its approval notice that gives Icelandair permission to operate the flights between July 14 and October 31. The DOT says several factors got the Icelandair application over the line; including reciprocity in Icelandair's home market; the level of Icelandair's reliance on seventh-freedom operations as compared to its third/fourth-freedom operations; the needs of the charterer (World Atlantic Airlines); and the public interest.  "We find that sufficient reciprocity exists with Iceland to support grant of the carrier's extra bilateral request as conditioned and note that there is no evidence on the record from any party to indicate that the Government of Iceland has denied seventh-freedom charter requests of US carriers," the DOT notice says.  Seventh freedom refers to the right to fly between two foreign countries, whereas third and fourth freedom flying rights deal with flying from an airline's home country to another country. One of the objections raised was that Icelandair relied too much on seventh freedom flying instead of focusing on flights to and from Iceland. In airline circles, that is a big no-no. 

"We have also considered the undue reliance claim, a factor that we take very seriously. That claim is not supported in this case," says the DOT. The US Government department also says it prefers to offer charterers like World Atlantic Airlines the maximum flexibility possible when choosing an airline and aircraft to best suit their operational needs. The DOT says World Atlantic clearly argued why Icelandair was best suited to meet its needs.  "This factor, along with our findings above supports the granting of the requested authority under our well-established public interest standards for considering requests of this nature." adds the DOT when providing some context to the decision.

Simpleflying.com
St. Laurent, Quebec, Canada
18 July 2022

Planned Wet Lease Icelandair Flights To Cuba Encounter Some Turbulence
By Andrew Curran

World Atlantic Airlines want to wet lease an Icelandair jet to fly to Cuba this summer, but some sections of the US airline industry are crying foul. 

Plans by charter carrier World Atlantic Airlines to wet lease an Icelandair Boeing 757-200 to fly seasonal services between the US and Cuba this summer have encountered fierce opposition from sections of the US airline industry. Icelandair wants to send their Boeing south pronto to begin operating 31 round trips a week between the two countries and capitalize on the peak northern summer flying season. 

In a June 3 letter to the US Department of Transportation (DOT), Icelandair asks for permission to wet lease the 197-seat aircraft on a long-term basis to World Atlantic Airlines to operate flights between July 15 and October 31, 2022. While the letter says the aircraft will "primarily" fly the US-Cuba country pair, they want wriggle room to fly the plane to other unspecified Caribbean countries. With a tight deadline, Icelandair also asks the DOT to waive the usual 45-day advance notification requirement. 

Readers will likely know Reykjavík-based Icelandair. They serve around a dozen US airports. But World Atlantic Airlines is a different matter. The Miami-based charter operator was formerly known as Caribbean Sun Airlines and operates a tight fleet of McDonnell Douglas MD-83 planes. What seems to be getting up the noses of the US airline industry is Icelandair's incursion onto their turf, namely the US - Cuba routes. 

It's not the first time Icelandair has done this. They've spent much of the last 12 months annoying their US rivals with DOT applications to fly wet lease charter flights between the US and Cuba. As recently as last year, World Atlantic Airlines was crying foul over an Icelandair's proposal to fly seasonal charter services (February - May 2022) to Cuba out of three US ports on behalf of Anmart Air. But the DOT gave Icelandair the greenlight anyway. Now, perhaps World Atlantic Airlines thinks if you can't beat them, you might as well join them. 

As Icelandair points out in its June 3 letter, the proposed service is in line with the bilateral US - Cuba air service agreement and "with comity and reciprocity between the Governments of Cuba and Iceland." 

But North Carolina-based Swift Air calls the application "Icelandair's latest attempt to establish a permanent, year-round seventh-freedom operating base in the United States so it can fly between the US and a third non-open skies country. The Application does not describe the wet lease terms at all and even leaves open which markets World Atlantic and Icelandair propose to serve." 

The Air Line Pilots Association (ALPA) has told the DOT that Icelandair's proposed operations would "do direct and substantial harm to US operators in the market." ALPA argues the US-Cuba market is not an open skies market, and US carrier operations remain severely constrained by the OFAC restrictions, which strictly limit the categories of US passengers that are allowed to travel to Cuba. Further, ALPA says Icelandair's proposed seventh freedom passenger operation (more than four daily flights) exceeds its level of Iceland-US flights and constitutes "undue reliance" on seventh freedom traffic. 

"This represents an exponential increase in Icelandair's seventh freedom passenger operations," says ALPA's submission to the DOT. "Taken on an annual basis, it exceeds Icelandair's third and fourth freedom services between the US and Iceland. As such, denial is compelled under the established doctrine of undue reliance." 

ALPA's letter sounds nice and lawyerly. But Icelandair weathered similar strident objections last year and got its proposals past the DOT. On that basis, they are probably confident of a repeat summer in Cuba season. With flights slated to start from mid-July, Icelandair and World Atlantic Airlines must be counting on a DOT decision soon.

Confiserie Sprungli Of Switzerland Truffles Using Trinitario Cocoa Beans From Cuba. Might Products Qualify For Export To The United States Like Nespresso Coffee?

“The exquisite Trinitario cocoa bean from the east of the island of Cuba, where the Atlantic Ocean meets the Caribbean Sea, is the basis of this truffle creation.  The pure natural product is blended with many years of experience to deliver an indescribable taste experience: fruits, black tea and a hint of vanilla.”

From The Company: “Since we are a traditional Zurich-based company we sell our products exclusively through our own Spruengli stores (Switzerland, Dubai, and Abu Dhabi) and via our E-Shop.  We regret to inform you that it is not our business policy to export our products through a franchising system nor do we sell any licenses.  Furthermore, we also do not have any expansion plans for the United States.  For our Cuba Auténtica Collección products we only use cocoa beans from Baracoa, Cuba.”   

“The beans are obtained by another company, Max Felchlin AG located in Schwyz, Switzerland.  Link: https://www.felchlin.com/en/company/company-portrait.  They import the cocoa beans and process them to couverture chocolate which we then use for our well-known products.”  

Bureau of Economic and Business Affairs
United States Department of State
Washington DC

Goods and Services Eligible for Importation: “In accordance with the policy changes announced by the President on December 17, 2014, to further engage and empower the Cuban people, Section 515.582 of the Cuban Assets Control Regulations (31 CFR Part 515 – the CACR) authorizes the importation into the United States of certain goods and services produced by independent Cuban entrepreneurs as determined by the State Department as set forth on the Section 515.582. The goods whose import is authorized by Section 515.582 are goods produced by independent Cuban entrepreneurs, as demonstrated by documentary evidence, that are imported into the United States, except for goods specified in the following sections/chapters of the Harmonized Tariff Schedule of the United States (HTS).”   

To date, only coffee beans (one importer) and charcoal (two importers) have been included on the list of goods authorized for export from the Republic of Cuba to the United States.  Republic of Cuba government-operated Cubaexport (under the auspice of the Ministry for Foreign Trade and Foreign Investment of the Republic of Cuba) has refused requests to authorize coffee beans for direct export to the United States and thus far refused requests to authorize bulk honey and cocoa beans for direct export to the United States.    

In August 2016, New York, New York-based Nestle Nespresso USA, Inc., a subsidiary of Vevey, Switzerland-based Nestle SA (2019 revenues approximately US$93 billion), introduced to the United States the first of multiple releases of the “Cafecito de Cuba” capsule.  The coffee beans are exported from the Republic of Cuba to Switzerland for processing and then exported to the United States and other countries for sale-at-retail.   

In January 2017 and July 2018, Hialeah, Florida-based Fogo Premium Lump Charcoal purchased a total of four twenty-foot containers of charcoal from the Republic of Cuba for distribution throughout the United States.   

In May 2019, Foley, Alabama-based GulfWise Commerce LLC, affiliated with Foley, Alabama-based Woerner Companies (2019 revenues exceeded US$40 million) purchased two forty-foot containers of charcoal from the Republic of Cuba for distribution (including through Amazon.com and True Value hardware stores) throughout the United States. 

The companies reported no transactional issues with 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, or Office of Legal Adviser (OLA) at the United States Department of State.  

LINKS To Related Posts:

Confiserie Sprungli AG & Dieter Meier Of Switzerland Use Cocoa Beans From Cuba June 20, 2018

Nestle Nespresso To Indirectly Import Coffee From Cuba To USA June 20, 2016

“Hecho En Cuba” Begins To Mean Something…. Is The Obama Administration Complying With Its Regulations? July 06, 2016

UPDATE: “Hecho En Cuba” Has Value…. Obama Administration Will Help & Accept Certification From Cuba July 14, 2016

Coffee & Charcoal Have Been Imported From Cuba; U.S. Companies Want More. Agricultural Commodities/Food Products/Healthcare Products Have Been Exported To Cuba; U.S. Companies Want More. October 02, 2021

Might Cubaexport In 2020 Permit “Independent Entrepreneurs” To Export Coffee Beans, Cocoa and Honey To The United States? January 14, 2020

EFE Of Spain Reports "SME investment in Cuba a key goal of business forum." Unfortunately, Cuba Media Does Not Highlight SME Focus

EFE (Madrid, Spain): Expanded Mexican SME investment in Cuba a key goal of business forum 

Expanded Mexican investment in Cuba by small and medium enterprises (SMEs) is a key theme of the Cuba-Mexico Business Forum, a two-day event that kicked off Thursday in Havana.  Cuban President Miguel Diaz-Canel and Prime Minister Manuel Marrero Cruz were on hand for the inauguration of the forum at the historic Hotel Nacional de Cuba, as were Mexico's undersecretary of industry and commerce, Hector Guerrero, and Mexican Ambassador to Cuba Miguel Diaz Reynoso. 

https://www.efe.com/efe/Images/logos/efe_logo_150x75alpha.png 

teleSUR (Caracus, Venezuela): The forum's inaugural session, which continues through Friday, was attended by Cuban President Miguel Diaz-Canel, Cuban Prime Minister Manuel Marrero and other high-ranking officials.  Representatives of some 150 Cuban and 80 Mexican companies on Thursday attended the opening of the Cuba-Mexico Business Forum at the Hotel Nacional de Cuba in the capital city Havana.  The inauguration of the event was in charge of the president of the Chamber of Commerce of Cuba Antonio Luis Carricarte, the Cuban Prime Minister, Manuel Marrero. The Undersecretary of Industry and Commerce of the Ministry of Economy of Mexico, Hector Guerrero will also be present at the event.  Given the impact of the COVID-19 pandemic on world economies, Guerrero described trade ties between Cuba and Mexico, Latin America's second-largest economy, as "strategic and fundamental" to the island's recovery. 

Prensa Latina (Havana, Cuba): Deputy Prime Minister Alejandro Gil told participants today at the Cuba-Mexico Business Forum that the island's economy in the first half of 2022 continues in the process of gradual recovery. https://t.co/07BS1yCAm0 — Carlo (@CarloTresero) July 14, 2022  Cuba's Deputy Prime Minister Ricardo Cabrisas said Cuba is working to overcome the economic setbacks of the past two years. "We have a long road ahead of work, opportunities and reciprocal advantages," said Cabrisas.  The forum's inaugural session, which continues through Friday, was attended by Cuban President Miguel Diaz-Canel, Cuban Prime Minister Manuel Marrero and other high-ranking officials.  Organized by the Cuban Ministry of Foreign Trade, the Center for the Promotion of Foreign Trade and Foreign Investment, the Cuban Chamber of Commerce and the Embassy of Mexico in Cuba, the forum focuses on areas of common interest such as renewable energy, biotechnological and pharmaceutical industries, tourism, transportation, and construction.

Cuba-Mexico Business Forum concludes with agreements
By Elsy Fors Garzon

Havana, July 15 (Prensa Latina) The Cuba-Mexico Business Forum concluded today with the signing of 12 documents between Mexican and Cuban companies in the textile, food, information technology, renewable energy, culture and environmental services, professionals. The signing of the letters of intent and cooperation agreements were in charge of the Cuban Minister of Foreign Trade and Foreign Investment, Rodrigo Marmierca and the Undersecretary of Industry and Commerce of Mexico, Héctor Guerrero. Businessmen from both nations held business rounds at the Hotel Nacional headquarters for two days and analyzed the opportunities to expand economic, commercial and financial relations. The meeting was attended by representatives of some 80 Mexican companies and 150 from Cuba and discussed possible economic and commercial links, in the branches of agribusiness, biopharmaceutical and medical services, energy, transportation, tourism and creative and artistic industries. The president of Cuba, Miguel Díaz-Canel, attended the inauguration, where Guerrero conveyed to Cuba an affectionate and warm greeting from the president of his country, Andrés López Obrador.