OFAC Fines Binance US$968.6 Million For Transactions In Five Countries, Including Cuba. Maximum Penalty Was US$592.1 Billion- More Than Combined Wealth Of Musk, Bezos, Ellison, And Some From Buffet.

OFAC Fines Binance US$968.6 Million For Transactions In Five Countries, Including Cuba.  Maximum Penalty Was US$592.1 Billion Which Is More Than The Combined Wealth Of Musk, Bezos, Ellison. 

The Maximum Penalty Would Require Combined Wealth Of Elon Musk (US$251 Billion); Jeff Bezos (US$161 Billion); Larry Ellison (US$158 Billion); And Some From Warren Buffet (US$121 Billion). 

OFAC Accepted Approximately 1/600th Of The Maximum Penalty. Comparable To Reducing A Maximum Driving While Intoxicated (DWI) Fine From US$1,000.00 To Approximately US$1.50.

And OFAC Reserves The Right To Seek Maximum Penalty If Company Violated Settlement Agreement.

“OFAC Settles with Binance Holdings, Ltd. for $968,618,825.00 Related to Apparent Violations of Multiple Sanctions Programs” (11/21/23) 

Excerpts: 

“Binance Holdings, Ltd. (“Binance”), a Cayman Islands virtual currency exchange with affiliates around the world, has agreed to pay $968,618,825.00 to settle its potential civil liability for 1,667,153 apparent violations of multiple sanctions programs administered by the Office of Foreign Assets Control (OFAC).” 

“The maximum statutory penalty amount in this case is $592,133,829,398.00. OFAC determined that the Apparent Violations were not voluntarily self-disclosed and egregious. Accordingly, under OFAC’s Economic Sanctions Enforcement Guidelines, 31 C.F.R. part 501, app. A (the “Enforcement Guidelines”), the base penalty for the Apparent Violations equals the statutory maximum. The settlement amount of $968,618,825.00 reflects OFAC’s consideration of the General Factors under the Enforcement Guidelines and Binance’s agreement to retain a Monitor for a five-year term, pursuant to the provisions set forth in OFAC’s Settlement Agreement, a copy of which can be found here.” 

“As a result of the conduct described above, between approximately August 2017 and October 2022, Binance processed 1,667,153 virtual currency transactions — totaling approximately $706,068,127.00 — in violation of § 560.204 of the Iranian Transactions and Sanctions Regulations, 31 C.F.R. part 560 (ITSR); § 542.207 of the Syrian Sanctions Regulations, 31 C.F.R. part 542; § 3(a) and § 7(a) of Executive Order (“E.O.”) 13722 of March 15, 2016, § 510.206 and § 510.212 of the North Korea Sanctions Regulations, 31 C.F.R. part 510; § 1(a)(iii) and § 3(a) of E.O. 13685 of December 19, 2014 (E.O. 13685), § 589.207 and § 589.213 of the Ukraine-/Russia-Related Sanctions Regulations, 31. C.F.R. part 589; § 515.201 of the Cuban Assets Control Regulations, 31 C.F.R. part 515; § 1(a)(iii) and § 4(a) of E.O. 14065 of February 21, 2022; and Section 206(a) of the International Emergency Economic Powers Act, 50 U.S.C. § 1701 et seq.” 

“Cuba: Respondent matched and executed 9,315 trades, totaling $1,535,225.00, in virtual currency and futures products between U.S. persons and persons located in Cuba, in apparent violation of the prohibition on the transfer of prope1ty or property interests subject to U.S. jurisdiction in which Cuban nationals have an interest, § 515.201 of the Cuban Assets Control Regulations, 31 C.F.R. part 515;” 

LINK To OFAC Enforcement Release

LINK To Settlement Agreement 

LINK To Complete Analysis In PDF Format

Link To Related Analysis 

US$4.4 Billion Potential Reasons For U.S. Banks To Ignore Biden Administration Requests To Support Private Sector In Cuba. OFAC Again Swings Mightily Its Sword of Damocles. Nov 7, 2023

Cruise Lines Respond To Plaintiff In Libertad Act Title III Lawsuit Before Court Of Appeals. New Word: "usufruct" And Definition Of "necessary" And Significance Of 26 Times.

HAVANA DOCKS CORPORATION VS. CARNIVAL CORPORATION D/B/A/ CARNIVAL CRUISE LINES [Consolidated to 1:19-cv-23591; 1:19-cv-21724; Southern Florida District; 23-10171, 11th Circuit Court of Appeals]

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. [Consolidated to 1:19-cv-23591; 1:19-cv-23588; Southern Florida District]; Judgement Entered 12/30/22; 23-10171, 11th Circuit Court of Appeals]. 

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

HAVANA DOCKS CORPORATION V. NORWEGIAN CRUISE LINE HOLDINGS, LTD. [Consolidated to 1:19-cv-23591; 1:19-cv-23588; Southern Florida District]; Judgement Entered 12/30/22; 23-10171, 11th Circuit Court of Appeals]. 

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

HAVANA DOCKS CORPORATION VS. ROYAL CARIBBEAN CRUISES, LTD. [Consolidated to 1:19-cv-23591; 1:19-cv-23588; Southern Florida District]; Judgement Entered 12/30/22; 23-10171, 11th Circuit Court of Appeals]. 

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

LINKS:

Reply Brief Of Defendant-Appellant Carnival Corporation (11/20/23)

Joint Motion For Leave To Increase The Word Limit For The Reply Brief Of Defendants-Appellants Norwegian Cruise Line Holdings, Ltd, Royal Caribbean Cruises, Ltd, MSC Cruises S.A. Co., MSC Cruises (USA), Inc., And MSC Cruises, S.A (11/13/23)

Brief Of Daniel W. Fisk As Amicus Curiae In Support Of Appellee And Affirmance (10/6/23)

Libertad Act Title 3 Lawsuit Filing Statistics 

10/10/2023- Received paper copies of EAppendix filed by Appellee Havana Docks Corporation in 23-10151, Appellee-Cross Appellant Havana Docks Corporation in 23-10171. 10 VOLUMES - 2 COPIES [23-10151, 23-10171] [Entered: 10/11/2023 11:15 AM]

10/10/2023- Received 4 paper copies of EBrief, filed by DANIEL W. FISK AS AMICUS CURIAE IN SUPPORT OF APPELLEE AND AFFIRMANCE in 23-10151, 23-10171. [23-10151, 23-10171] [Entered: 10/12/2023 04:09 PM]

11/13/2023- TIME SENSITIVE MOTION for excess words/pages filed by RCL. Motion is Opposed. [120] [23-10171] (ECF: Paul Clement) [Entered: 11/13/2023 10:05 AM]

11/20/2023- Reply Brief filed by Appellant-Cross Appellee CCL. [23-10171] (ECF: Kannon Shanmugam) [Entered: 11/20/2023 11:44 AM] 

Excerpts From Reply Brief Of Defendant-Appellant Carnival Corporation 

Pursuant to Federal Rule of Appellate Procedure 28(i) and 11th Circuit Rule 28-1(f), Carnival Corporation adopts and joins in full the arguments made by Royal Caribbean Cruises, Ltd.; MSC Cruises S.A.; MSC Cruises S.A. Co.; MSC Cruises (USA), Inc.; and Norwegian Cruise Line Holdings, Ltd., includ[1]ing their arguments that (1) the cruise lines did not traffic in “property” that was “confiscated”; (2) the cruise lines’ activities were “incident” and “neces[1]sary” to “lawful travel”; (3) Havana Docks is not a “United States national”; (4) the cruise lines did not “knowingly” and “intentionally” traffic in confis[1]cated property; (5) the damages award violates the one-satisfaction rule and the Due Process Clause of the Fifth Amendment to the United States Consti[1]tution; and (6) the district court erred by trebling the interest it awarded. 

Havana Docks also argues that, even if a court could revisit the non-conclusive aspects of the certified claim, the historical facts prove that it had a right to conduct passenger operations. See Br. 44-46. It contends that, because the concession granted usufruct rights “greater than the rights granted by a simple lease” and the Helms-Burton Act “specifically recognizes that ‘any leasehold interest’ is a protected property interest within the scope of the Act,” “so too are the usufruct rights” in the concession. Havana Docks Br. 45-46. But even if its legal citations concerning usufruct rights under American law were somehow relevant to the question of Cuban law, that merely establishes the undisputed proposition that the usufruct rights granted by the concession constitute a cognizable interest under the Helms-Burton Act. 

Fourth, even if Carnival could be held liable to Havana Docks, the award of approximately $109 million in damages should be vacated and remanded as contrary to the one-satisfaction rule and the Due Process Clause. With respect to the one-satisfaction rule, Havana Docks musters no persuasive reason to permit infinite recoveries under a statute designed to place traffickers in the shoes of the Cuban government. And with respect to the Due Process Clause, neither the age of the relevant precedents nor the need for deterrence justifies the exorbitant award. 

Carnival did exactly what the Executive Branch intended American businesses to do. And the result of Carnival’s cruises was to expose Cubans to Americans, and vice versa. The judgment below should be reversed.1 

There is no dispute that the Helms-Burton Act places a plaintiff with a certified claim in “a privileged position” in some respects. Havana Docks Br. 40. The question is the extent of that privileged position, and Ha[1]vana Docks’ reliance on the limited presumption in favor of holders of certified claims is at odds with the statutory text and the canon of constitutional avoid[1]ance. See 22 U.S.C. § 6083(a)(1). 

In effect, Havana Docks contends that Article III courts must ac[1]cept every stray description of a property interest in a certified claim. See Havana Docks Br. 40-42. But the Helms-Burton Act requires only that a court “accept as conclusive proof of ownership of an interest in property a certifica[1]tion of a claim to ownership of that interest.” 22 U.S.C. § 6083(a)(1). As ex[1]plained in Carnival’s opening brief (at 30-31), that presumption is limited to (1) the existence of an interest and (2) the value of that interest.

In its statement of the facts, Havana Docks cites a handful of financial records indicating that Havana Docks collected a small amount of fees related to passengers during a brief period of time. See Br. 9-10. But Havana Docks never actually argues that those cryptic records prove it had a legal right to conduct passenger operations. Because Havana Docks had no interest in “property” that allowed it to conduct passenger operations at the terminal, the judgment below should be reversed. 

Even if Havana Docks had the right to conduct passenger operations, that right would have expired in 2004. See Carnival Br. 32-35; Royal Carib[1]bean Br. 35-45. Havana Docks argues that it can recover for conduct that oc[1]curred between 2016 and 2019 because the certified claim has no time limit and the concession is indefinitely tolled. Neither point is correct. 1. The certified claim (which has no time limit) does not replace the concession (which does) for all purposes. 

This Court’s decision in Glen v. Club Méditerranée, S.A., 450 F.3d 1251 (2006), is not to the contrary. See Havana Docks Br. 52. As Carnival explained in its opening brief (at 35), the Court did not hold that a plaintiff acquires a limitless interest in property when its limited interest is confiscated. 

And Havana Docks argues that Carnival’s use of the ter[1]minal was not “necessary” to any lawful travel because it was not strictly nec[1]essary. See Br. 88-91. All of those arguments are unavailing. 

Section 102(h) of the Helms-Burton Act provides that “[t]he eco[1]nomic embargo of Cuba, as in effect on March 1, 1996, including all restrictions under [the Cuban Assets Control Regulations], shall be in effect upon the en[1]actment of this Act, and shall remain in effect, subject to section 6064 of this Act.” 22 U.S.C. § 6032(h). Havana Docks argues that the foregoing provision is a “one-way ratchet” that allowed the Executive Branch to tighten, but not loosen, the regulations as they existed in 1996. Br. 61-62, 65-67. The district court correctly rejected that argument. See Doc. 477, at 118. 

Section 102(h) merely clarifies that the Helms-Burton Act does not dis[1]turb the existing regulations. It provides that the regulations are “in effect” on the day of the Helms-Burton Act’s enactment and “shall remain in effect” thereafter. That language simply prevented any inference that the new stat[1]ute had superseded the existing regulations. Accordingly, there is no reason to conclude that Congress “alter[ed] the fundamental details of a regulatory scheme in vague terms” by freezing the existing regulations in place. Whit[1]man v. American Trucking Associations, 531 U.S. 457, 468 (2001). 

Five administrations have modified the relevant regulations without ob[1]jection from the courts or Congress. OFAC has modified its Cuba regulations at least 26 times over the last three decades, see OFAC, Cuba Sanctions (last visited Nov. 20, 2023), including 13 re[1]visions to the travel provision alone, see 31 C.F.R. § 515.560; see also Kucik Br. 6. This Court has recognized that “the regulations have been alternately loos[1]ened and tightened in response to specific circumstances.” Odebrecht Con[1]struction, Inc. v. Secretary, 715 F.3d 1268, 1276 n.1 (2013) (internal quotation marks and citation omitted). And since the passage of the Helms-Burton Act, Congress has acknowledged—without any objection—an amended version of the regulations. See Trade Sanctions Reform and Export Enhancement Act of 2000, Pub. L. No. 106-387, § 910, 114 Stat. 1549A-67, 1549A-71-72. The Court should not abandon 30 years of practice on the theory that Havana Docks has “discover[ed] in a long-extant statute an unheralded power.” Util[1]ity Air Regulatory Group v. EPA, 573 U.S. 302, 324 (2014). 

For similar reasons, it is irrelevant how the Cuban government charac[1]terized Carnival’s activities in Cuba. See Havana Docks Br. 74. All that mat[1]ters is whether the shore excursions actually complied with the terms of OFAC’s general licenses.

Carnival’s use of the terminal was also “necessary to” the conduct of its lawful travel. In ordinary speech and in context, “necessary” means “im[1]portant, helpful, or appropriate.” And even if “necessary” meant “indispensa[1]ble,” docking at the terminal was indispensable for Carnival’s voyages to Ha[1]vana. 

In any event, Carnival’s use of the terminal was strictly necessary because it was impossible for Carnival to dock anywhere else in Havana. See Carnival Br. 45-46. Havana Docks repeats the district court’s reasoning that, if docking somewhere else in Cuba were possible, then docking at the terminal was not “necessary.” See Br. 90-91. But like the district court, Havana Docks has identified nothing in the statute or regulations restricting the category of lawful travel to specific Cuban cities. Nor does Havana Docks address Carni[1]val’s argument that the statute refers to the use of property that is “necessary to the conduct of such travel,” 22 U.S.C. § 6023(13)(B)(iii) (emphasis added), which most naturally refers to the travel that Carnival actually undertook. See Carnival Br. 45-46. If the Helms-Burton Act prohibited the use of confiscated property simply because a defendant could travel somewhere else in Cuba, it is hard to imagine what transaction or use of property would ever be necessary to lawful travel. 

Even if Carnival were liable under the Helms-Burton Act, the damages award would be excessive for two reasons. First, the one-satisfaction rule pre[1]vents multiple recoveries for the same injury, which is what Havana Docks has obtained here. See Carnival Br. 50-54; Royal Caribbean Br. 78-82. Second, the damages award is unconstitutionally excessive under the Due Process Clause. See Carnival Br. 54-55; Royal Caribbean Br. 84-85.

Bacardi Condemns Decisions By Government Of Cuba, And Companies Operating In Cuba, Robustly Uses U.S. Political Process, But Defends Its US$474 Million Business In Russian Federation. Consistency?

Politico Brussels (17 November 2023)- “BOOZE BANDITS: When the West imposed sanctions on Moscow, hundreds of foreign firms pulled out of the Russian market. But, somehow, in a country with a historic predilection for alcohol, the booze keeps flowing. Jim Beam bourbon and Macallan Scotch whisky are still being imported by the team that marketed them in Russia before the war in Ukraine, a POLITICO investigation finds. More from Sergey Panov and Douglas Busvine here.” 

Politico Pro (15 November 2023)- “Yet some changed their mind: Bermuda-based Bacardi, for example, resumed supplies after a pause, and its local business even reported an 8 percent increase in 2022 sales to 32.6 billion rubles (€431 million at the prevailing exchange rate). Profits trebled.  The family-owned company, which has been branded by Ukraine’s anti-corruption watchdog as an international sponsor of Putin’s war, has doubled down by expanding its contract bottling operations in Russia. The first bottles of its Oakheart rum were produced in the Tula region, to the south of Moscow, in October.” 

The Kyiv Independent (10 August 2023): Ukraine designates Bacardi as 'international sponsor of war' 

LINKS To Related Analyses 

Eight Senators, Two Representatives Supporting Trademark Legislation To Benefit Bacardi. But, Does Legislation Help Resolve 5,913 Certified Claims Against Cuba? March 12, 2023 

In Terminal 4 At Madrid-Barajas Airport, "Havana Club" From Cuba Has A Display, Bacardi From Bermuda Has A Display. No "Havana Club" From Bacardi. July 08, 2022 

U.S. Federal Court Rules Bacardi Must Use USPTO Rules For "Havana Club" Trademark Issue. April 08, 2022 

In Belarus, Minsk Airport Duty Free Stores, Bacardi Outselling Havana Club March 24, 2022 

At Vnukovo International Airport In Moscow, Havana Club Rum Has A Presence, But Bacardi Has More Real Estate In The Duty Free Shop. For Cigars, It's All About Cuba's Brands. March 18, 2022 

Despite Russia Relationship With Cuba, Vnukovo Airport Features Havana Club And Bacardi- With Captain Morgan Separating Them December 26, 2022 

With Three Days Remaining In 2021, Bacardi Sues United States Patent And Trademark Office For In 2016 Authorizing The Registration Of "Havana Club" Rum December 29, 2021 

Irony: Bacardi Assets Seized In 1960 By Cuba. Venezuela And Cuba Are Allies. Venezuela Seizes U.S. Company Assets. Bacardi Marketing Venezuela Rum Benefits Venezuela Financially & Politically November 03, 2021

U.S. Agricultural Commodity/Food Product Exports To Cuba Decrease 46.7% In September; Remain Up 7.4% For Year. US$1.5 Million In Used Vehicles Thus Far In 2023.

ECONOMIC EYE ON CUBA©
November 2023

September 2023 Ag/Food Exports To Cuba Decrease 46.7%- 1
51st Of 225 September 2023 U.S. Food/Ag Export Markets- 2
Year-To-Year Exports Increase 7.4%- 2
Cuba Ranked 53rd Of 225 U.S. Ag/Food Export Markets- 2
September 2023 Healthcare Product Exports US$0.00- 2
September 2023 Humanitarian Donations US$4,099,435.00- 3
Obama Administration Initiatives Exports Continue- 3
U.S. Port Export Data- 17

SEPTEMBER 2023 FOOD/AG EXPORTS TO CUBA DECREASE 46.7%- Exports of food products and agricultural commodities from the United States to the Republic of Cuba in September 2023 were US$20,317,573.00 compared to US$38,167,679.00 in September 2022 and US$20,281,503.00 in September 2021. 

September 2023 exports included: Chicken Meat (Frozen), Chicken Leg Quarters (Frozen), Chicken Legs (Frozen), Meat Of Swine (Fresh), Preserved Chicken Meat, Meat Of Swine, Processed (Frozen), Meat Of Swine (Frozen), Pig Fat (Frozen), Preserved Chicken Meat (Paste), Coffee Roasted Decaffeinated, Nursing Nipples, Umbrellas, Freezers, Chain Saws, Gas Powered Grass & Weed Trimmers, Fork Lifts (US$152,710.00), Electric Food Mixers (US$5,474.00), Used Vehicles (US$593,526.00), Bodies for Passenger Automobiles (US$78,000.00), Motorcycles (US$34,000.00), Trailers And Semi-Trailers (US$17,000.00),

January 2023 through September 2023 TSREEA exports were US$252,804,856.00 compared to January 2022 through September 2022 exports of US$235,204,923.00. Total TSREEA exports since first deliveries in December 2001 exceed:US$7,156,531,222.00.

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

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

The data represents the U.S. Dollar value of product exported from the United States to the Republic of Cuba under the TSREEA and CDA. The data does not include transportation charges, bank charges, or other costs associated with exports; the government of the Republic of Cuba reports unverifiable data that includes transportation charges, bank charges, and other costs.

COMPLETE REPORT IN PDF FORMAT

US$4.4 Billion Potential Reasons For U.S. Banks To Ignore Biden Administration Requests To Support Private Sector In Cuba. OFAC Again Swings Mightily Its Sword of Damocles.

A Week Shy Of One Year [See Below] Since Previous Analysis, The OFAC Again Swings Mightily Its Sword of Damocles.

When The Biden-Harris Administration (2021- ) Questions Why United States-Based Financial Institutions Generally Recoil At Engagement With Specifically-Authorized Republic Of Cuba-Related Transactions, Including Those Specifically Authorized By Law Rather Than Executive Branch Policy And Regulatory Initiatives, This Is A Primary Catalyst:

“The statutory maximum civil monetary penalty applicable in this matter is $4,399,759,685…  Apparent Violations were voluntarily self-disclosed and were non-egregious…. The settlement amount of $206,213 reflects OFAC’s consideration of the General Factors under the Enforcement Guidelines.”

Yes, A Potential Fine Of Approximately US$4.4 Billion For Voluntarily-Disclosed Transactions Totaling US$549,134.89 During A Five-Year Period.

What Incentive Does Any United States-Based Financial Institution Have To Support Re-Engagement Transactions For Privately-Owned Companies In The Republic Of Cuba, Individual Entrepreneurs, When An OFAC Penalty Could Bankrupt The Financial Institution?

United States Department of the Treasury
Washington DC
6 November 2023

Enforcement Release

OFAC Settles with daVinci Payments for $206,213 Related to Apparent Violations of Multiple Sanctions Programs

“Swift Prepaid Solutions, Inc. d/b/a daVinci Payments (daVinci), a financial services and payments firm based in Buffalo Grove, Illinois, has agreed to remit $206,213 to settle its potential civil liability for 12,391 apparent violations of OFAC sanctions on Crimea, Iran, Syria, and Cuba. Between November 15, 2017 and July 27, 2022, daVinci, which manages prepaid reward card programs, enabled reward cards to be redeemed from persons apparently resident in sanctioned jurisdictions. The settlement amount reflects OFAC’s determination that daVinci’s conduct was non-egregious and was voluntarily self-disclosed.

Description of the Apparent Violations

DaVinci provides digital or physical payment reward card programs for corporate, non-profit, and government clients through an online platform. These programs allow daVinci’s clients to issue payment cards to select recipients, typically as part of a loyalty, award, or promotional incentive for employees, customers, and other beneficiaries.

DaVinci’s clients funded the card programs themselves through an issuing bank, with daVinci  providing the digital or physical prepaid cards to authorized users. Upon receiving a list of card recipients from its clients, including names and email addresses, daVinci would send an email containing a token to each authorized user, inviting each to redeem the token for a prepaid card.  To redeem the token, users would go to daVinci’s website and provide their names, addresses, and email addresses. Users could not enter an address in a sanctioned jurisdiction and were screened against sanctions lists. Once screened and verified, funds would be released by the issuing bank to the users’ prepaid cards and the cards would be issued by daVinci to the users, who could then use the cards with merchants who accepted cards via third party credit card networks.

Between March 2020 and February 2022, in the course of a compliance review and subsequent investigation, daVinci discovered that on 12,378 occasions it had redeemed prepaid cards for users with Internet Protocol (IP) addresses associated with Iran, Syria, Cuba, and Crimea. After daVinci began preventing access to its platform from IP addresses associated with these sanctioned jurisdictions, the company further discovered it had redeemed prepaid cards for 13 card recipients who had used email addresses with suffixes (sometimes called top-level domains) associated with sanctioned jurisdictions (e.g., Syria is .sy, Iran is .ir) during the redemption process and who were apparently resident therein.

Over the course of the relevant time period, this absence of comprehensive geolocation controls led daVinci to process 12,391 redemptions totaling $549,134.89 for cardholders apparently located in sanctioned jurisdictions, resulting in apparent violations of the Cuban Assets Control Regulations, 31 C.F.R. § 515.201; the Iranian Transactions and Sanctions Regulations, 31 C.F.R. 2§ 560.204; the Ukraine-/Russia-Related Sanctions Regulations, 31 C.F.R. § 589.287; and the Syrian Sanctions Regulations, 31 C.F.R. § 542.207 (the “Apparent Violations”).

Penalty Calculations and General Factors Analysis

The statutory maximum civil monetary penalty applicable in this matter is $4,399,759,685. OFAC determined that the Apparent Violations were voluntarily self-disclosed and were non-egregious. Accordingly, under OFAC’s Economic Sanctions Enforcement Guidelines (“Enforcement Guidelines”), 31 C.F.R. part 501, app. A, the base civil monetary penalty applicable in this matter equals the sum of one-half of the transaction value for each Apparent Violation, which is $274,950. The settlement amount of $206,213 reflects OFAC’s consideration of the General Factors under the Enforcement Guidelines.

OFAC determined the following to be aggravating factors:  (1) DaVinci failed to exercise due caution or care when it redeemed prepaid digital reward cards or users who appeared to be in sanctioned jurisdictions. DaVinci knew or had reason to know of redeemers’ IP addresses and email address suffixes but did not incorporate this information into its compliance program or controls. OFAC determined the following to be mitigating factors: (1) OFAC has not issued a Finding of Violation or Penalty Notice to daVinci in the five years preceding the earliest date of the transactions giving rise to the Apparent Violations.  (2) DaVinci undertook  a number of significant remedial measures, including by proactively conducting an internally initiated review, implementing IP blocking of access to its platform from sanctioned jurisdictions, conducting real-time screening and blocking of email address suffixes, and instituting independent third-party testing at regular intervals.  (3) DaVinci cooperated with OFAC’s investigation.

Compliance Considerations

This enforcement action underscores the importance of obtaining and using all available information to verify a customer’s identity or residency, including by using location-related data, such as IP address and top-level domains, for sanctions compliance purposes. As appropriate, firms providing services through online platforms should integrate such information into a risk-based sanctions compliance program to prevent the provision of services to persons in sanctioned jurisdictions. This case further demonstrates the potential shortcomings of controls that rely on customer-provided information, rather than a holistic information-gathering system that can mitigate evasion or misrepresentation. The action further highlights the value of conducting proactive, self-initiated reviews to identify compliance gaps, disclose any potential violations to OFAC, and taking steps to remediate deficiencies, including by instituting periodic independent testing to ensure adequate controls.

OFAC Enforcement and Compliance Resources

On May 2, 2019, OFAC published A Framework for OFAC Compliance Commitments

(Framework) in order to provide persons subject to U.S. jurisdiction, as well as foreign entities that conduct business in or with the United States or U.S. persons, or that use goods or services exported from the United States, with OFAC’s perspective on the essential components of a sanctions compliance program. The Framework also outlines how OFAC may incorporate these components into its evaluation of apparent violations and resolution of investigations resulting in

settlements. The Framework includes an appendix that offers a brief analysis of some of the root causes of apparent violations of U.S. economic and trade sanctions programs OFAC has identified during its investigative process. 

Information concerning the civil penalties process can be found in the OFAC regulations governing each sanctions program; the Reporting, Procedures, and Penalties Regulations, 31 C.F.R. part 501; and the Enforcement Guidelines. These references, as well as recent civil penalties and enforcement information, can be found on OFAC’s website at https://ofac.treasury.gov/civil-penalties-and-enforcement-information.  For more information regarding OFAC regulations, please go to: https://ofac.treasury.gov/.”

LINK TO OFAC REGULATIONS- WHAT BANKS CAN DO WITH CUBA

Link To Related Analysis

LINK: Facing Extinction Like Javan Rhino? Non-U.S. Banks Engaging With U.S. And Non-U.S. Entities For Authorized Transactions Involving Cuba Due To Risk Of OFAC Penalties. Since 2015, Only Two U.S. Banks. October 17, 2022

A CFO, “We Have A US$10,000.00 Transaction From The U.S. To Cuba And A US$10,000.00 From Cuba To U.S.  If We Make A Mistake, A Potential US$14.7 Million OFAC Penalty.  Should We Do It?  What, Am I Nuts?”

Number Of Financial Institutions In The United States Processing Cuba-Related Transactions Remains Less Than Inspiring- And Harmful For Those Engaging In Authorized Transactions.  Since 2015, Two Financial Institutions Have Included Cuba 

An increasing number of financial institutions located in third countries are refusing to process transactions which include a sender located in the Republic of Cuba or a recipient located in the Republic of Cuba. 

This posture has metastasized despite the presentation by the sender or recipient of authorizations and opinions from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury, Bureau of Industry and Security (BIS) of the United States Department of Commerce, and Office of the Legal Adviser (OLA) at the United States Department of State.  Why?

• The fear of the cost for an unintentional violation of OFAC transaction compliance regulations

• The inclusion by the OFAC in violation settlement agreements with financial institutions and companies of both the value of the agreed upon financial settlement and the statutory maximum civil monetary penalty. 

Why is the value of the agreed upon financial settlement and the statutory maximum civil monetary penalty problematic?  Because the statutory maximum monetary penalties in four most recent Republic of Cuba-connected OFAC violations were 35, 89, 266, and 1,473 times the actual imposed monetary penalty. 

It is those multipliers which serves as a financial Sword of Damocles, a disincentive for an increasing number of financial institutions from willingness to engage with Republic of Cuba-related transactions regardless of assurances from the United States government.  For example:   

• The OFAC fined a United States-based company US$116,048.60 for a violation according to the OFAC “self-disclosed… and constituting a non-egregious case.”  According to the OFAC, the “statutory maximum civil monetary penalty applicable in this matter is US$4,062,841.00.”    

• The OFAC fined a Switzerland-based company US$720,258.00 for a violation “self-disclosed… and constituting a non-egregious case.”  According to the OFAC, the “statutory maximum civil monetary penalty applicable in this matter is US$64,062,841.00.” 

• The OFAC fined a Monaco-based financial institution subsidiary of a France-based financial institution US$401,039.00 for a violation “self-disclosed… and constituting a non-egregious case.”  According to the OFAC, the “statutory maximum civil monetary penalty applicable in this matter is US$106,853,346.00.”

• The OFAC fined a United States-based company “that provides an online virtual currency exchange and hosted wallet services” US$24,280,829.20 for 116,421 apparent violations.  “The statutory maximum civil monetary penalty applicable in this matter is US$35,773,364,108.57.  OFAC determined that the Apparent Violations were not voluntarily self-disclosed and were non-egregious.  Accordingly, under OFAC’s Economic Sanctions Enforcement Guidelines (“Enforcement Guidelines”), the base civil monetary penalty amount applicable in this matter equals the applicable schedule amount, which is US$485,616,584.00.  The settlement amount of US$24,280,829.20 reflects OFAC’s consideration of the General Factors under the Enforcement Guidelines.”

 What’s The Solution For Non-United States-Based Financial Institutions?

For non-United States-based financial institutions, the Biden-Harris Administration (2021- ) would need to direct the OFAC reinstate what had been authorized prior to 2019 when the Trump-Pence Administration (2017-2021) reversed a 2015 decision of the Obama-Biden Administration (2009-2017). 

“U-turn” transactions were authorized by the OFAC for financial institutions to process United States Dollar transactions relating to the Republic of Cuba provided they originated and terminated outside the United States and neither the originator nor the beneficiary were persons subject to United States jurisdiction.  Thus, along with the absence of direct correspondent banking, there are two layers of impediments to sending, delivering, and settlement of fund transfers. 

What’s The Solution For United States-Based Financial Institutions?

For non-United States-based financial institutions, the OFAC would also need to reinstate U-turn transactions along with authorizing Republic of Cuba government-operated financial institutions to have Correspondent Accounts with United States-based financial institutions.

By United States law and by regulation, the implementation of Direct Correspondent Banking requires transparency by the participating United States-based financial institution and transparency by the non-United States-based financial institution.  Activity must comply with regulations of the Financial Crimes Enforcement Network (FinCEN) of the United States Department of the Treasury and provisions of the 2001 USA Patriot Act.  If the government of the Republic of Cuba accepts Direct Correspondent Banking, a result will be an increased transparency, accountability, and efficiency for financial institution operations within in the Republic of Cuba. 

In 2016, the OFAC authorized United States-based financial institutions to have correspondent accounts with Republic of Cuba government-operated financial institutions.  However, the OFAC did not authorize Republic of Cuba government-operated financial institutions to have correspondent accounts with United States-based financial institutions. 

Officials of the Obama-Biden Administration refused to provide an explanation as to the basis for their decision and to this day officials of the Biden-Harris Administration maintain that same silence. 

The result of their decision required all transactions authorized by United States laws (1992 Cuban Democracy Act (CDA) and 2000 Trade Sanctions Reform and Export Enhancement Act (TSREEA), regulations, and policies to travel to and from third countries.  The consequences have included inefficiency, increased cost, less transparency, and a financial windfall for financial institutions in third countries who receive a fee for every transaction. 

The TSREEA re-authorized the exports of agricultural commodities and food products on a cash-in-advance only basis.  TSREEA exports value since the first transaction in December 2001, exceed US$6.8 billion.  The CDA re-authorized exports of healthcare products (medical equipment, medical instruments, medical supplies, pharmaceuticals) with payment terms and financing authorized.  CDA exports value since 2003 exceeds US$30.5 million.

For perspective, since 1992, the value of these third-country transactions exceeds US$7 billion- not including the value of annual electronically-delivered remittances- which have been estimated to range up to US$1 billion on an annual basis.

U.S. Banks Doing What

In 2015, Pompano Beach, Florida-based Stonegate Bank (2017 assets approximately US$2.9 billion) acquired 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 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. 

Stonegate Bank was also approved for a correspondent account at 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. 

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 Bancholding), 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 a correspondent account at Stonegate Bank, so Stonegate Bank routed transactions for approximately eighty (80) customers on a regular basis through Panama City, Panama-based Multibank (2019 assets approximately US$5 billion) which had dealings with the Republic of Cuba.

However, on 16 June 2020, Bogota, Colombia-based Grupo Aval (2021 assets approximately US$110 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 [Multibank]. 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.”

In 2017, Conway, Arkansas-based Home BancShares (2021 assets approximately US$18 billion) through its subsidiary Centennial Bank purchased Stonegate Bank.  Stonegate Bank operations were absorbed into Centennial Bank.   In June 2022, Chicago, Illinois-based Chicago, Illinois-based First American Bank (2021 assets approximately US$6 billion) acquired from Centennial Bank an operating account (and Republic of Cuba-focused branch personnel) for the Embassy of the Republic of Cuba in Washington, DC.  If First American Bank seeks a correspondent account with BICSA and if BICSA is authorized by the OFAC to establish a correspondent account with First American Bank, there would be an opportunity for two-way fund transfers for authorized transactions (agricultural commodities, food products, healthcare products (medical equipment, medical instruments, medical supplies, pharmaceuticals, informational materials, travel (visa processing, overflight fees, landing fees, accommodation payments- Airbnb, etc.), remittances, entrepreneurial activities (direct investment to and direct financing for privately-owned companies located in the Republic of Cuba, etc.).   

LINK TO COMPLETE ANALYSIS IN PDF FORMAT

Biden-Harris Administration Statement About Cuba At United Nations General Assembly Vote Should Have Been Accurate Rather Than Suggestively Misleading. Not The First Time.

Biden-Harris Administration Statement About Cuba At United Nations General Assembly Vote Should Have Been Accurate Rather Than Misleading.  Not The First Time- 23 February 2023 Too. 

Link To Cuba United Nations General Assembly Resolution 

Associated Press (2 November 2023): “The vote on the resolution in the 193-member General Assembly tied the record for support for the Caribbean island nation: The vote was 187 in favor, with the United States and Israel opposed, and Ukraine abstaining. Somalia, Venezuela and Moldova didn’t vote.  The “yes” vote was up from 185 last year and 184 in 2021, and it tied the 2019 vote of 187.” 

“2 November 2023 

Ambassador Paul Folmsbee
Senior Advisor for Western Hemisphere Affairs
New York, New York

AS DELIVERED (emphasis added) 

Thank you, Mr. President. And thank you members of the General Assembly.  The United States stands resolutely with the Cuban people. We strongly support their pursuit of a future with respect for human rights and fundamental freedoms. 

Approximately 1,000 political prisoners remain behind bars in Cuba – more than at any point in Cuba’s recent history. Nearly 700 of those detentions owe to the historic July 11, 2021, protests during which members of civil society including human rights defenders, as well as minors of age, exercise their freedom of expression and right of peaceful assembly. We share the Cuban people’s dream of democracy in Cuba and join international partners in calling for the Cuban government to immediately release all those unjustly detained. 

Despite Cuba’s membership in the UN Human Rights Council, the Cuban government has delayed responding to requests to send independent experts to Cuba, who would help advance respect for human rights, including freedom of expression, freedom of religion, or belief, and the freedom to assemble peacefully. Some of these requests have remained pending for 10 years. 

Sanctions are one set of tools in our broader effort toward Cuba to advance democracy and promote respect for human rights and fundamental freedoms in Cuba. We therefore oppose this resolution. 

We recognize the challenges the Cuban people face. That is why U.S. sanctions include exemptions and authorizations relating to the exports of food, medicine, and other humanitarian goods to Cuba.  The United States remains a significant source of humanitarian goods to the Cuban people and one of Cuba’s principal trading partners. In 2002* [*2022] alone, U.S. companies exported over $295 million worth of agricultural goods to Cuba, including food, to help meet the needs of the Cuban people. 

The United States opposes this resolution. We encourage this body to urge the Cuban government to adhere to its human rights obligations and listen to the Cuban people and their aspirations to determine their own future.  Thank you, Mr. President.” 

Clarifications

The Trade Sanctions Reform and Export Enhancement Act (TSREEA) of 2000 re-authorized the direct commercial (on a cash basis) export of food products (including branded food products) and agricultural commodities from the United States to the Republic of Cuba, irrespective of purpose.  

The Cuban Democracy Act (CDA) of 1992 re-authorized the direct commercial (on a cash basis or with payment terms) export of healthcare products (medical equipment, medical instruments, medical supplies, and pharmaceuticals) to the Republic of Cuba. 

The export of agricultural commodities and food products and healthcare products are NOT a component of United States sanctions which the Biden-Harris Administration (2021- ) benevolently conveys upon the 11.3 million residents of the Republic of Cuba.  The TSREEA and CDA are statutes, laws, passed by the United States Congress and signed into law by the president of the United States. 

In 2022, United States-based companies exported US$328,536,988.00 in products using provisions of the TSREEA.  Link To Statistics In PDF Format 

Related Tweets From United States Department Of State 

Misleading Tweet By Biden-Harris Department Of State Emulates Trump-Pence Department Of State.  So Much For Wanting To Be Different.  Channeling Michael Kozak. February 25, 2023 

Two Tweets From US Assistant Secretary Of State Michael Kozak Devoid Of Important Context And Details; He's Done It Before April 11, 2020 

Clarification To Tweet From Michael Kozak, US Assistant Secretary Of State About U.S. Exports To Cuba September 24, 2019 

Export Data 

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

The data represents the U.S. Dollar value of product exported from the United States to the Republic of Cuba under the TSREEA. The data does not include transportation charges, bank charges, or other costs associated with exports; the government of the Republic of Cuba reports unverifiable data that includes transportation charges, bank charges, and other costs.

HEALTHCARE PRODUCT EXPORTS- Exports of healthcare products (medical equipment, medical instruments, medical supplies, pharmaceuticals) to the Republic of Cuba are subject to provisions of the Cuban Democracy Act (CDA) of 1992, which require end use-verification, but are not subject to cash-in-advance payment requirements. Exports have included: Medicaments (penicillin and insulin); Dentifrices (toothpastes); Laboratory regents; Ultrasonic scanning equipment; Artificial limbs; Medical appliances; Surgical appliances (dental); Ophthalmic (eye); Cannulae (tubing) and gelatin capsules.

HUMANITARIAN DONATIONS- Donated items are neither included in TSREEA nor CDA calculations. These items are generally delivered to the Republic of Cuba using air carriers or containers on vessels; do not include personal deliveries (by travelers on flights and through third countries). A substantial quantity and U.S. Dollar value of items categorized as “humanitarian” are transported from the United States to the Republic of Cuba using air carriers; thus, the information is not documented.

 25 February 2023: Tweet By Biden-Harris Department Of State Emulates Trump-Pence Department Of State.  So Much For Wanting To Be Different.  Channeling Michael Kozak.

Tweet Published By The Embassy of the United States, Havana, Republic of Cuba (22 February 2023): “En 2021, Estados Unidos autorizó más de 4.200 millones de dólares en exportaciones humanitarias a Cuba. En 2022, autorizamos 7.600 millones de dólares de exportaciones humanitarias. Estas exportaciones tienen como objetivo ayudar directamente al pueblo cubano.”

English Translation (Google): “In 2021, the United States authorized more than $4.2 billion in humanitarian exports to Cuba. In 2022, we authorize $7.6 billion of humanitarian exports. These exports are intended to directly help the Cuban people.”

Follow-Up Email From The United States Department of State: “The 2022 figure is 7.6 billion dollars, the 2021 figure is 4.2 billion.  These are figures reflect the combined value of all goods authorized for export from the US to Cuba including food, medicine, and everyday goods.  These are not strictly confined to purchases from US companies but include humanitarian donations by individuals and organizations.  The authorized figure does not necessarily reflect actual exports or donations.”

For perspective:

Agricultural Commodity/Food Commercial Exports Delivered To Cuba

2022- US$328,536,988.00

2021- US$304,774,413.00

For the period 2001 through 2022, from when the first agricultural commodity and food products were exported from the United States to the Republic of Cuba under provisions of the Trade Sanctions Reform and Export Enhancement Act (TSREEA) of 2000, the value delivered was US$6,903,726,366.00. 

Healthcare Products Commercial Exports Delivered To Cuba

2022- US$9,226,763.00

2021- US$487,886.00

For the period 2003 through 2022, the value of healthcare products (medical equipment, medical instruments, medical supplies, pharmaceuticals) delivered from the United States to the Republic of Cuba under provisions of the Cuban Democracy Act (CDA) of 1992 was US$36,419,340.00.

Donations Delivered To Cuba

2022- US$30,083,306.00

2021- US$11,074,090.00

For the period 2014 through 2022, the value of humanitarian donations delivered from the United States to the Republic of Cuba was US$68,682,418.00.

Why did not the United States Department of State not include the details, the context, in its initial tweet?  Because the intention was to deliberately mislead to the benefit of the Biden-Harris Administration (2021- ) and to the detriment of the Diaz-Canel-Valdes Mesa Administration (2019- ). 

• The message was designed to embarrass, humiliate the government of the Republic of Cuba.  That objective is perfectly acceptable when using facts to support the goal.  That objective is profoundly objectionable when using the imperator, the credibility of the government of the United States government.

• The misuse of data in this manner permits the government of the Republic of Cuba to justifiably respond- it is accused by the United States Department of State of lying and misusing statistics and here the United States Department of State engages in equally egregious behavior.

This official statement from the United States Embassy in Havana, Republic of Cuba, is a repeat of what previous administrations have done- be reckless with the facts, and present information that they know fully is misleading.  It’s disrespectful.  It's disgraceful.

The Biden-Harris Administration knows that the Bureau of Industry and Security (BIS) of the United States Department of Commerce has since the Bush-Cheney Administration (2001-2009) and during the Obama-Biden Administration (2009-2017), and Trump-Pence Administration (2017-2021) encouraged companies, organizations, and individuals who are exporting products from the United States to the Republic of Cuba- whether commercial (sold) or donated, not be required to seek a BIS license (if one is required) for the precise U.S. Dollar value of a particular shipment. 

Rather, to reduce paperwork, the exporter is encouraged to bundle expectations.  For example, if a company has an order for US$2 million in poultry, then the exporter might seek a license value of US$75 million or more or less so that if there are subsequent orders within the validity of the BIS license (usually three years to four years) additional BIS licenses are not required.  Same is true for donations- if an organization is hopeful to have US$10 million, then include US$100 million or more or less in the BIS license application.

One example of how the data in the Tweet published on 22 February 2023 by the United States Department of State is misleading- the US$7.6 billion value is more than the value of all agricultural commodity, food product, healthcare product, and donations since December 2001.  

Spain-Based Melia Hotels International, Largest Operator In Cuba, Issues Third Quarter Report. "Positive Trending" International, "Shrinking Domestic" Markets

Meliá Hotels International Results- Meliá closed a positive 3rd quarter, with an increase of +16.1% in revenue (€1,478.3M) and +71.6% in net profit (€108.6M) in the year to September.

Cuba saw a positive evolution in international tourism, as opposed to a shrinking domestic market, with rates suffering the negative impact of the devaluation of the Cuban peso. There was a slight increase in flight operations and an improvement in the nationality mix, led by the Tour Operation segment. In the months to come, foreign markets are expected to continue growing and occupancy levels are set to improve. 

In Cuba, evolution was as expected. On the one hand, international tourism maintained a positive trend, whereas the domestic maket is still showing a contraction. This trends, together with the devaluation of the Cuban peso, has implied significant drops in average rates. The positive note is given by the slight increase in air operations, where increased connectivity allowed for a positive mix of foreign markets. At the segment level, our tour operator partners continue to be the leaders in the destination, followed by our direct clients.

Third Quarter Media Release in PDF

Third Quarter Results Statement in PDF

Third Quarter Data Release in Excel

Cuba Loses Trifecta In U.S. House Of Representatives With New Staff Appointment

Cuba Loses Trifecta In U.S. House Of Representatives

Punchbowl
Washington DC
2 November 2023

“Some news on the staffing front: Johnson is bringing back Josh Hodges as his national security adviser. Hodges worked for Johnson in 2017-18 before decamping for the Trump administration. Hodges worked at the Energy Department, USAID and served two stints on the National Security Council, where he eventually became the senior director for Western Hemisphere affairs.”

From LinkedIn (Josh Hodges)

”Special Assistant to the President and Senior Director for Western Hemisphere Affairs- National Security Council, The White House.  Oct 2020 - Feb 2021

Acting Assistant Administrator/SDAA, USAID, Latin America and the Caribbean.  May 2020 - Oct 2020

Director of Western Hemisphere Affairs Director of Western Hemisphere Affairs.  Jan 2020 - May 2020

Deputy Senior Director for Information Statecraft & Director of Strategic Communications.  Nov 2018 - Jun 2020  

Returning to the National Security Council (NSC) after serving there from 2018 until the Spring of 2020, served as senior advisor and special assistant to the President of the United States and the senior director for the Western Hemisphere at the NSC. A commissioned officer of the White House, supporting, the National Security Advisor, and the Deputy National Security Advisor on wide-ranging issues related to the Western Hemisphere. Attend Deputies Committees and Principals Committees (PC), and chair senior U.S. interagency working group meetings on select security issues and challenges. Returning to the National Security Council (NSC) after serving there from 2018 until the Spring of 2020, served as senior advisor and special assistant to the President of the United States and the senior director for the Western Hemisphere at the NSC. A commissioned officer of the White House, supporting, the National Security Advisor, and the Deputy National Security Advisor on wide-ranging issues related to the Western Hemisphere. Attend Deputies Committees and Principals Committees (PC), and chair senior U.S. interagency working group meetings on select security issues and challenges.

Served as Acting Assistant Administrator (Senior Official Performing the Duties of) and Senior Deputy Assistant Administrator in USAID’s Bureau for Latin America and the Caribbean (LAC), advancing the U.S. national security priorities and coordinating with international partners.

Oversee USAID programs and activities to help to make the U.S. and the Western Hemisphere more peaceful, secure, and prosperous by strengthening the capacity of governments and private entities to improve governance and democracy, combat crime, and create an economic environment in which the private sector can flourish and create jobs.

Throughout the region, USAID has 13 field offices, 4 regional programs, and Washington-based programs focusing on Cuba, Ecuador, and Venezuela. Our programs in LAC help to generate economic prosperity, reduce crime and violence, support civil society, defend universal rights, and protect the environment while fostering business growth. USAID works closely with host governments (national and municipal), other U.S. Government agencies, civil society, the private sector, development banks, and international organizations to help achieve enduring results.Served as Acting Assistant Administrator (Senior Official Performing the Duties of) and Senior Deputy Assistant Administrator in USAID’s Bureau for Latin America and the Caribbean (LAC), advancing the U.S. national security priorities and coordinating with international partners. Oversee USAID programs and activities to help to make the U.S. and the Western Hemisphere more peaceful, secure, and prosperous by strengthening the capacity of governments and private entities to improve governance and democracy, combat crime, and create an economic environment in which the private sector can flourish and create jobs. Throughout the region, USAID has 13 field offices, 4 regional programs, and Washington-based programs focusing on Cuba, Ecuador, and Venezuela. Our programs in LAC help to generate economic prosperity, reduce crime and violence, support civil society, defend universal rights, and protect the environment while fostering business growth. USAID works closely with host governments (national and municipal), other U.S. Government agencies, civil society, the private sector, development banks, and international organizations to help achieve enduring results.”

Mario Diaz-Balart (R- 26th District)
United States House of Representatives
Committee on Appropriations
Chairman- Subcommittee on State, Foreign Operations, and Related Programs

María Elvira Salazar (R- 27th District)
United States House of Representatives
Committee on Foreign Affairs
Chairwoman- Subcommittee on the Western Hemisphere, Civilian Security, Migration and International Economic Policy

Southwest Airlines Cancelling Flights From Fort Lauderdale To Havana, Cuba, Joining Other Airlines Cancelling United States-Cuba Routes Due To Lack Of Passengers.

Southwest Airlines cancelling flights between Fort Lauderdale, Florida, and Havana, Republic of Cuba, due to a lack of profitability for the route….

“SOUTHWEST AIRLINES EXTENDS FLIGHT SCHEDULE WITH NEW INTERNATIONAL OPTIONS AND MOST-EVER DEPARTURES

• Southwest announces enhanced international service from Orlando, subject to governmental approvals

• The carrier’s published schedule grows to all-time high of 4,526 departures

DALLAS—Oct. 26, 2023—Southwest Airlines Co. (NYSE: LUV) today extended its flight schedule through Aug. 4, 2024, bringing new international service and expansive growth throughout its network.”

“Bottom line, Cuba remains accessible for our South Florida Customers who are willing to consider connecting in Tampa, where we maintain daily service with our bags fly free, no change fees, points and travel funds do not expire value differentiators that platform our friendly way of doing business. Tampa is a far larger operation for Southwest and benefits Customers on more of our network.” Southwest Airlines Spokesperson

LINK To Southwest Airlines Media Release

Will Cuba FMD/MAP Provisions In 2018 Farm Bill Be Retained In 2023 Farm Bill? In Five Years, Only 4.4% Uses Of Programs. In 2018, Advocates Said "Important"

Will Cuba FMD/MAP Provisions In 2018 Farm Bill Be Retained In 2023 Farm Bill? 

Farm Bill Would Have Expired; Now By 17 November 2023 For United States Congress To Decide 

Problem? In Five Years, Four Uses Of FMD And MAP Programs Which Were Defined As “Laying The Groundwork” And “Important” By Legislative Advocates.  Ninety Entities Could Have Used FMD And MAP.

During 2018, legislative advocates maintained that inserting a Market Access Program (MAP) and Foreign Market Development (FMD) provision in H.R. 2, the five-year Agriculture Improvement Act, known as the Farm Bill, signed into law on 20 December 2018 by Donald Trump, 45th President of the United States, was critical to “laying the groundwork” for increasing exports of agricultural commodities and food products to the Republic of Cuba.  Statements from members of the United States Congress included: “… an important first step to regaining our presence in Cuba.”      

LINK: Cuba Was 55th Largest Agricultural Commodity/Food Export Market In 2022. Increased 7.7% From 2021 To 2022; Up 40.2% In December 2021. Surprise: US$288,000.00 In Cigarettes From Tampa, Florida. Feb 9, 2023    

Approximately seventy United States-based entities (primarily trade promotion organizations) annually are identified by the United States Department of Agriculture (USDA) as receiving funding for MAP and approximately twenty entities are identified as receiving funding for FMD.   

LINK: Defining Anemic: In Five Years, 2018 Farm Bill USDA Provision For Cuba Had No Use Of FMD And Two Uses Of MAP. Approximately 90 U.S.-Based Entities Could Have Participated. That’s A 2.2% Use Rate. Feb 3, 2023   

Leading to the enactment of the 2018 Farm Bill, most observers reasonably concluded that legislative advocates- within the United States Congress and organizations in Washington DC and outside of the beltway would have prominently teed-up at least one high-profile applicant to publicize in advance they would use the provision if it became law or at least one high-profile applicant to immediately and publicly request funding when the 2018 Farm Bill became law on 21 December 2018.   

NOTE: The global pandemic, COVID-19, commenced in early 2020 and continued to impact travel worldwide through 2022- and in some countries into early 2023.  The government of the Republic of Cuba did implement arrival restrictions during these periods; and the United States implemented travel restrictions during these periods.  Thus, there were non-marketplace disincentives for commerce-related visits to the Republic of Cuba by delegations from the United States.  However, they remained unconstrained 2019, 2022, and 2023.

The cash-in-advance terms were supported by United States-based exporters while opposed by United States-based agricultural commodity and food product trade promotion organizations.  United States-based exporters were concerned in 2000 and remain concerned in 2023 that with Republic of Cuba government-operated entities maintaining a chronic inability to abide by payment terms other than cash-in-advance, more prudent to retain a perhaps smaller market share with no payment issues rather than a larger market share with endemic, and necessarily publicly-disclosed payment issues.     

The most significant impact of an anemic number of MAP/FMD requests and usage in 2018, 2019, 2020, 2021, 2022, and 2023 is what the lack of interest portends for other legislative efforts in the United States Congress relating to the Republic of Cuba, particularly those focused upon changes to cash-in-advance payment terms for agricultural commodity and food product exports from the United States to the Republic of Cuba required by the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSREEA).  The question opponents will ask: “If authorizing MAP/FMD for Cuba was so important, why have so few organizations used it?”     

The cash-in-advance terms were supported by United States-based exporters while opposed by United States-based agricultural commodity and food product trade promotion organizations.  United States-based exporters were concerned in 2000 and remain concerned in 2023 that with Republic of Cuba government-operated entities maintaining a chronic inability to abide by payment terms other than cash-in-advance, more prudent to retain a perhaps smaller market share with no payment issues rather than a larger market share with endemic, and necessarily publicly-disclosed payment issues.     

Under the Market Access Program, USDA provides competitive, cost-share assistance to U.S. exporters and agricultural, fish, and forest product trade organizations for international marketing and promotion of U.S. commodities and products. More information about the program and the FY 2024 funding opportunity is available at:  https://www.fas.usda.gov/programs/market-access-program-map.   

Under the Foreign Market Development Program, USDA partners with nonprofit agricultural and forest product trade associations to build longer-term international demand for U.S. commodities. More information about the program and the FY 2024 funding opportunity is available at: https://www.fas.usda.gov/programs/foreign-market-development-program-fmd.”  

LINK TO COMPLETE ANALYSIS IN PDF FORMAT

Links To Related Analyses 

USDA Accepting Applications For 2024 Export Programs- Cuba Again Authorized For Participation. Since 2018 Farm Bill, FMD And MAP Focus On Cuba Remains Anemic. Will 2024 Be Different?  March 20, 2023 

Defining Anemic: In Five Years, 2018 Farm Bill USDA Provision For Cuba Had No Use Of FMD And Two Uses Of MAP. Approximately 90 U.S.-Based Entities Could Have Participated. That’s A 2.2% Use Rate.  February 03, 2023 

Cuba Provision In Farm Bill A Confliction Of Accuracy By Senators Heitkamp & Rubio; OFAC Rule Making Could Be Problematic.  June 29, 2018 

Members Of U.S. Senate Advocate For Regulatory Changes To Commercial Relationship With Cuba. But, A Significant Part Of What They Seek In Washington Await Decisions In Havana.  March 16, 2023

U.S. Ag/Food Exports Increase 35.8% In August 2023; Up 17.9% Year-To-Year. Puddings, Coffee Extract, Cleaning Preparations (US$1.1 Million), Used Excavating Machines, Used Tractors, Car Parts. Oct 5, 2023

Surprises? U.S. Ag/Food Exports To Cuba Increased 37.6% In July; Up 14.8% Year-To-Year. Coin Operated Washing Machines, Refrigerant, Microwave Ovens, Manicure/Pedicure Preps, Vehicles, Tires, Sugar Sep 20, 2023

U.S. Ag/Food Exports Increase 35.8% In August 2023; Up 17.9% Year-To-Year. Puddings, Coffee Extract, Cleaning Preparations (US$1.1 Million), Used Excavating Machines, Used Tractors, Car Parts.

ECONOMIC EYE ON CUBA©
October 2023

August 2023 Ag/Food Exports To Cuba Increase 35.8%- 1
44th Of 225 August 2023 U.S. Food/Ag Export Markets- 2
Year-To-Year Exports Increase 17.9%- 2
Cuba Ranked 52nd Of U.S. 2023 Ag/Food Export Markets- 2
August 2023 Healthcare Product Exports US$0.00- 2
August 2023 Humanitarian Donations US$2,735.263.00- 3
Obama Administration Initiatives Exports Continue- 3
U.S. Port Export Data- 17

AUGUST 2023 FOOD/AG EXPORTS TO CUBA INCREASE 35.8%- Exports of food products and agricultural commodities from the United States to the Republic of Cuba in August 2023 were US$39,913,983.00 compared to US$29,383,675.00 in August 2022 and US$27,656,565.00 in August 2021.

August 2023 exports included among other items: Chicken Leg Quarters (Frozen); Chicken Meat (Frozen); Chicken Legs (Frozen); Meat of Swine; Preserved Chicken Meat; Rice; Puddings; Grapes; Coffee; Coffee Extract; Cookies; Waffles and Wafers; Beer; Palm Oil; Hams; Pasta; Corn Chips; Yeasts; Carbonated Soft Drinks; Salt; Sugar; Compressors; Immersion Heaters.

January 2023 through August 2023 TSREEA exports were US$232,487,283.00 compared to January 2022 through August 2022 exports of US$197,037,244.00. Total TSREEA exports since first deliveries in December 2001 exceed:US$7,136,213,649.00.

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

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

The data represents the U.S. Dollar value of product exported from the United States to the Republic of Cuba under the TSREEA and CDA. The data does not include transportation charges, bank charges, or other costs associated with exports; the government of the Republic of Cuba reports unverifiable data that includes transportation charges, bank charges, and other costs.

COMPLETE REPORT IN PDF FORMAT

Cuba: Acknowledging Impact Was Not Necessarily A Shrewd Political Statement. For Biden Administration, If It's Working, Why Change It? For Plaintiffs, Libertad Act Doing What It Was Designed To Do.

Newsweek
Washington DC
3 October 2023

Excerpt from Interview with Carlos Fernandez de Cossio, Deputy Minister of Foreign Affairs of the Republic of Cuba:

"His fourth and final recommendation was for Biden to "suspend the possibility of courts taking action on demands placed for people that claim property in Cuba against investors." Such action is codified in Title III of the 1996 Helms-Burton Act, but Trump took the unprecedented move of allowing lawsuits to proceed for those claiming their property was confiscated during the Cuban Revolution that took place nearly 65 years ago.

"Trump was the first one who allowed it, and Biden, with a surprising loyalty, has followed what Trump decided in that moment," de Cossío said. "It's in [Biden's] hands to change that and stop putting such a deterrent effect on people who want to do business with Cuba, not only investors but in the business of buying and selling [various goods].""

The Trump-Pence Administration (2017-2021) on 2 May 2019 made operational Title III of the Cuban Liberty and Democratic Solidarity Act of 1996 (known as “Libertad Act”). Title III authorizes lawsuits in United States District Courts against companies and individuals who are using a certified claim or non-certified claim where the owner of the certified claim or non-certified claim has not received compensation from the Republic of Cuba or from a third-party who is using (“trafficking”) the asset.   

44 Lawsuits Filed (15 certified claimants & 29 non-certified claimants)

Link To Libertad Act Title III Lawsuit Filing Statistics

Links To Related Analyses

U.S. Supreme Court Refuses Request By Expedia To Dismiss Libertad Act Lawsuit. Thus Far, U.S. Supreme Court Has Refused All Libertad Act Titlle III Requests. Case Returns To District Court. Oct 2, 2023

Plaintiff In Four Cruise Line Libertad Act Lawsuit Files Appellate Brief: "underscores the need for strong deterrence to counteract the lure of doing business in Cuba" Sep 29, 2023

Misunderstanding? Cuba Government: Cuban-Americans' PYME Financing, Yes.  PYME Investment, Yes.  PYME Ownership, No.  PMYE Need For Direct Banking With United States, Not Necessary. Sep 29, 2023

Cuba Government Delaying Private Company Investment/Financing Regulations Is Costing Earning Potential For U.S. And Other Country Sources. Success Should Not Be Feared. Sep 25, 2023

Libertad Act Lawsuit Against Expedia: "The Court rejects Defendants' argument that the Amended Complaint should be dismissed because Plaintiff failed to plead around the Lawful Travel Exception." Sep 21, 2023

Surprises? U.S. Ag/Food Exports To Cuba Increased 37.6% In July; Up 14.8% Year-To-Year. Coin Operated Washing Machines, Refrigerant, Microwave Ovens, Manicure/Pedicure Preps, Vehicles, Tires, Sugar Sep 20, 2023

Biden Administration To Issue New/Revised MSME Policies. Reversing Trump Administration Decision But Not Obama Administration Decision. Bank Responsibility? OFAC Penalties?  Sep 18, 2023

In A Rarity... Cuba Deputy Foreign Minister Meets With U.S. Assistant Secretary Of State. Precursor To New U.S. Policy Announcement(s)? Rumors Swirl... Sep 16, 2023

President Biden Continues One-Year Extension Of Trading With The Enemy Act Provisions Relating To Cuba Sep 13, 2023

Default Judgement Against Government Of Cuba For US$2.595 Billion Issued By U.S. District Court In Colorado. Sep 6, 2023

JetBlue And Other Airlines To Suspend All Flights From The United States To Cuba- Lack Of Demand. Sep 1, 2023

Paris Club Of Creditor Nations Reported To Propose New Repayment Schedule For Cuba Which Has Not Maintained A Previous 76% Write-Off From 2015. Aug 31, 2023

Cuba Minister Of Foreign Affairs Said That Only U.S. Vessels Are Permitted For U.S. Exports To Cuba. That Was Inaccurate. Aug 23, 2023

U.S. Supreme Court Refuses Request By Expedia To Dismiss Libertad Act Lawsuit. Thus Far, U.S. Supreme Court Has Refused All Libertad Act Titlle III Requests. Case Returns To District Court.

MARIO DEL VALLE, ENRIQUE FALLA, MARIO ECHEVARRIA V. EXPEDIA, INC., HOTELS.COM L.P., HOTELS.COM GP, ORBITZ, LLC, BOOKING.COM B.V., BOOKING HOLDINGS INC.  Initial defendants were: TRIVAGO GMBH, BOOKING.COM B.V., GRUPO HOTELERO GRAN CARIBE, CORPORACION DE COMERCIO Y TURISMO INTERNACIONAL CUBANACAN S.A., GRUPO DE TURISMO GAVIOTA S.A., RAUL DOE I-5, AND MARIELA ROE 1-5, [1:19-cv-22619 Southern Florida District; 20-12407 11th Circuit Court of Appeals; Dismissed (8/10/23)]

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

Link: Libertad Act Title III Lawsuit Filing Statistics

United States Supreme Court
Washington DC
3 October 2023

CERTIORARI DENIED: 22-1169 EXPEDIA GROUP, INC., ET AL. V. DEL VALLE, MARIO, ET AL.

Court of Appeals Docket #: 20-12407 Docketed: 06/24/2020
Termed: 11/22/2022
Nature of Suit: 3890 Other Statutory Actions    
Mario Del Valle, et al v. Trivago GMBH, et al    
Appeal From: Southern District of Florida    
Fee Status: Fee Paid    

Case Type Information:
     1) Private Civil
     2) Federal Question
     3) -

Originating Court Information: District: 113C-1 : 1:19-cv-22619-RNS

     Civil Proceeding: Robert N. Scola, Junior, U.S. District Judge
     Date Filed: 06/24/2019        
     Date NOA Filed:            
     06/24/2020            

07/05/2022- Supplemental Authority filed by Appellees BKNG and Booking.com B.V.. [20-12407] (ECF: Michael Duffy)
11/22/2022- Opinion issued by court as to Appellants Mario Del Valle, Enrique Falla and Angelo Pou. Decision: Reversed and Remanded. Opinion type: Published. Opinion method: Signed. The opinion is also available through the Court's Opinions page at this link http://www.ca11.uscourts.gov/opinions.
11/22/2022- Judgment entered as to Appellants Mario Del Valle, Enrique Falla and Angelo Pou.
12/13/2022- Petition for rehearing en banc (with panel rehearing) filed by Appellees EXPE, Hotels.com GP, LLC, Hotels.com L.P. and Orbitz, LLC. [20-12407] (ECF: David Shank)
12/14/2022- Received paper copies of E-PFR filed by Appellees EXPE, Hotels.com GP, LLC, Hotels.com L.P. and Orbitz, LLC.
01/31/2023- ORDER: The Petition(s) for Rehearing are DENIED and no Judge in regular active service on the Court having requested that the Court be polled, the Petition(s) for Rehearing En Banc filed by Appellees EXPE, Hotels.com L.P., Hotels.com GP, LLC and Orbitz, LLC are DENIED.
02/08/2023- Mandate issued as to Appellants Mario Del Valle, Enrique Falla and Angelo Pou.
05/01/2023- Extension for filing certiorari GRANTED by U.S. Supreme Court.
06/02/2023- Notice of Writ of Certiorari filed as to Appellee EXPE. SC# 22-1169.
07/10/2023- Checked status of certiorari 22-1169 filed as to Appellee EXPE - Pending.

Plaintiff In Four Cruise Line Libertad Act Lawsuit Files Appellate Brief: "underscores the need for strong deterrence to counteract the lure of doing business in Cuba"

HAVANA DOCKS CORPORATION VS. CARNIVAL CORPORATION D/B/A/ CARNIVAL CRUISE LINES [Consolidated to 1:19-cv-23591; 1:19-cv-21724; Southern Florida District; 23-10171, 11th Circuit Court of Appeals]

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. [Consolidated to 1:19-cv-23591; 1:19-cv-23588; Southern Florida District]; Judgement Entered 12/30/22; 23-10171, 11th Circuit Court of Appeals]. 

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

HAVANA DOCKS CORPORATION V. NORWEGIAN CRUISE LINE HOLDINGS, LTD. [Consolidated to 1:19-cv-23591; 1:19-cv-23588; Southern Florida District]; Judgement Entered 12/30/22; 23-10171, 11th Circuit Court of Appeals]. 

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

HAVANA DOCKS CORPORATION VS. ROYAL CARIBBEAN CRUISES, LTD. [Consolidated to 1:19-cv-23591; 1:19-cv-23588; Southern Florida District]; Judgement Entered 12/30/22; 23-10171, 11th Circuit Court of Appeals]. 

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

Link: 09/29/2023- Appellee's Brief filed by Appellee-Cross Appellant Havana Docks Corporation. [23-10171]
Link: Libertad Act Title 3 Lawsuit Filing Statistics 

excerpts…

“ARGUMENT: I. The District Court Correctly Applied The LIBERTAD Act To Hold The Cruise Lines Liable For Trafficking In Property Confiscated From Havana Docks By The Cuban Government.

A. The Cruise Lines Used “Property” Confiscated By TheCuban Government To Which Havana Docks Owns A Certified Claim. 1. The Certified Claim And The LIBERTAD Act’s Conclusive Presumption Establish That The Cruise Lines Used Havana Docks’ Confiscated Property. 2. The Cruise Lines’ Efforts To Avoid The Certified Claim And The Conclusive Presumption Are Meritless.  a. The LIBERTAD Act Validly Forecloses The Cruise Lines’ Collateral Attack On Havana Docks’ Certified Claim. b. Havana Docks’ Concession Did Not “Expire” In 2004, As It Was Confiscated And Ceased To Exist In 1960.  

B. The Cruise Lines’ Use Of Havana Docks’ Confiscated Property Was Neither Incident To “Lawful Travel” To Cuba Nor “Necessary” To The Conduct Of Such Travel.  1. The Cruise Lines Did Not Engage In “Lawful Travel” To Cuba. a. The Cruise Lines’ Activities In Cuba Were Not Incident to “Lawful Travel” Under The LIBERTAD Act.  b. The Cruise Lines’ Activities In Cuba Were Not Incident to “Lawful Travel” Under The CACR.  2. The Cruise Lines’ Use Of Havana Docks’ Confiscated Property Was Not “Necessary” To Their Travel To Cuba.

… If anything, the cruise lines’ decision to use Havana Docks’ confiscated property with actual knowledge of Havana Docks’ certified claim and their own potential liability under the LIBERTAD Act only underscores the need for strong deterrence to counteract the lure of doing business in Cuba (and thereby propping up the country’s repressive and hostile regime). See NCL Dkt. 449, at 20-29 (summarizing evidentiary record of cruise lines’ knowledge of Havana Docks, the LIBERTAD Act, and their potential liability). As noted above in the Statement of Facts, the cruise lines docked their massive ships hundreds of times on the very same piers in the very same terminal confiscated from Havana Docks and identified in the certified claim, disembarked almost a million tourists there for shore tours run by the Cuban regime, and put at least $130 million in hard currency into that regime’s pockets.

The cruise lines also reaped more than a billion dollars in net revenues for opening up this new tourist market: from 2015 to 2019, Cuba cruises generated net revenues of roughly $112 million for Carnival, $272 million for MSC, $330 million for Royal, and $300 million for Norwegian. Dkt. 445-7, at 2, 5; Dkt. 477, at 90. And regardless of whether the cruise lines “lost money, made money, or merely broke even,” Carnival Br. 55, they were unmistakably positioning themselves to make vast sums of money as first movers in a potentially lucrative Cuban tourism market. Cf. TXO Prod. Corp. v. Alliance Res. Corp., 509 U.S. 443, 459-62 (1993) (assessing substantive due process challenge to punitive damages in part by reference to potential, not actual, injury or gain from defendant’s conduct). Insofar as the cruise lines repackage their “lawful travel” argument as part of their substantive due process argument, see Carnival Br. 54-55, it is no more persuasive. As the district court explained, “[t]here is simply no evidence in the record in any of these cases that the United States government encouraged or licensed Defendants to engage in trafficking of Plaintiff’s property.” 

In the final analysis, the cruise lines have no one but themselves to blame. They could have avoided trafficking liability under the LIBERTAD Act altogether by securing Havana Docks’ authorization. See 22 U.S.C. § 6023(13)(A). But they made no effort to do so, and now must bear responsibility for the consequences of that choice.”

From an attorney not participating in this Libertad Act Title III lawsuit: “The United States Supreme Court grants approximately one hundred of the 7,000 certiorari petitions it receives each year.  Of those one hundred cases, several are mandatory jurisdiction (e.g. lawsuits between states, California and Arizona arguing over Colorado River water).  Then there are the cases that the United States Supreme Court has remanded but has agreed to review substantively when a procedural element is cleared up, then there are the inevitable death penalty appeals, abortion issues, civil liberties, voting rights, congressional redistributing, and all the other matters in which the young law clerks are most interested.  Then there will be in the year ahead many executive privilege claims (i.e. indicting in four jurisdictions a former president and active presidential candidate).  In the end the United States Supreme Court may accept only a couple of essentially commercial cases (e.g. suits for damages against corporations).  So, the odds are realistically about 1%, or even less that certiorari will be granted in such cases, particularly if the United States government is content with the statute and its outcome, as the United States Department of State is with Title III of the Cuban Liberty and Democratic Solidarity Act of 1996 (Libertad).  So why get involved?  The odds of prevailing at the United States Courts of Appeal is generally less than 10% because a lower court cannot be reversed except under the very high standard of “clear error” in applying the law.  The short message is- don’t lose in the lower court and consider carefully settling if you do.”

LINK To Related Analysis 

New Filings To Court Of Appeals For Cruise Line Libertad Act US$439.2 Million Verdict.  Arguing About Definition Of "Amici" And Planning For 2024 Request By Loser(s) For U.S. Supreme Court Review? Aug 14, 2023

Misunderstanding? Cuba Government: Cuban-Americans' PYME Financing, Yes. PYME Investment, Yes. PYME Ownership, No. PMYE Need For Direct Banking With United States, Not Necessary.

Cuba Government Official: PYME Financing, Yes.  PYME Investment, Yes.  PYME Ownership, No.  PMYE Need For Banking With United States, Don’t Understand Why. 

Really?  So Government Of Cuba Is Accepting With The Inefficiency And Expense Of Transferring Commercial Funds Through Third Countries?  Owners Of PYMEs Would Beg To Disagree.

An Unfortunate Convergence When An Official In Cuba And Biden-Harris Administration Share Common Ground. 

Miami Herald (22 September 2023):  “Cuba’s government is considering allowing Cuban Americans to invest in and own businesses on the island, Havana officials told representatives of U.S. companies and Cuban Americans from Miami who met Cuban leader Miguel Díaz-Canel on Friday.  Cuban officials said they are “contemplating it and working on legislation to get it done,” when asked about the possibility by several people attending the closed-door event at the Cuban mission to the United Nations, said Miami lawyer Ralph Patiño, who was present during the exchange.” 

Whether defined as PyME (pequeña y mediana empresa; small and medium enterprise), or MSME (micro, small and medium-size enterprise), or SME (small and medium-size enterprise), there has within the Republic of Cuba during the last five years been a dramatic re-emergence in the private sector: The number of private businesses, what those private businesses are doing, and how those private businesses are operating.  There has also been an increase in Republic of Cuba government-operated companies, enterprises, and organizations transitioning to “private” status.  

WLRN
Miami, Florida
29 September 2023

excerpts…

[00:00:00] Speaker 1 I'm Tim Padgett. Welcome back to the South Florida. Round up on our end…. This week, scores of private entrepreneurs from Communist Cuba visited Miami to get tips from their Cuban-American counterparts and maybe network some investment relationships. It was another sign that Cuba's government has come to the realization that private enterprise is about the only thing now that can save the island's wrecked economy. Officials in Havana, of course, blame the U.S. economic embargo against Cuba for that disaster. But either way, it's forcing them to consider deeper changes. I spoke about this with Carlos Fernandez.  He's vice minister of Cuba's Foreign Relations Ministry. He joined me from New York. Mr. Vice Minister, thank you for speaking with us.

[00:00:56] Speaker 2 (de Cossio) It's a pleasure. Thank you for having me.

[00:01:54] Speaker 1 Mr. Vice Minister, in spite of this attack, how would you describe bilateral relations between Cuba and the U.S. at this moment? Do you feel they've improved under President Biden, especially after President Trump's harder line against Cuba?

[00:02:07] Speaker 2 The line that is being applied is a loyalty to the policy or reinforcement of the aggressive measures against the Cuban economy. And the government of Biden has kept the most aggressive of those in place. In spite of that, there have been some steps in areas like migration, some level of cooperation in law enforcement, including in terrorism, by the way, and in environmental science, arts, culture, education, which are important, but they are not what one can say the essence of the bilateral relationship.

[00:02:41] Speaker 1 Well, that brings me to Cuban President Miguel Diaz-Canel speech last week at the U.N. General Assembly in which he criticized the U.S. for what he called its merciless economic warfare against Cuba. Diaz-Canel was obviously referring to the embargo. Why do you feel the U.S. keeps the embargo in place after more than 60 years?

[00:03:01] Speaker 2 Well, that's a question that we normally try to ask the U.S. government. Cuba is not an enemy of the United States. There's no hostile action by Cuba against the United States. There are political disagreements. Yes, we have political disagreements with reality in the U.S., as the U.S. has it with Cuba. And that's part of international relations all over the place. The reason seems to be, we're told by politicians in the U.S. that are political calculations, that it's difficult for them because votes in this election next year, all of which seems to us illegitimate reasons to continue to have a policy aimed at strangling the economy, the livelihood of the population of the whole country.

[00:03:39] Speaker 1 But the U.S., including the Biden administration, insists that it's hard to lift the embargo when Cuba remains what it calls a repressive dictatorship, one that has more than a thousand political prisoners locked up, most of them people who took part in large anti-government protests two years ago. Would it not be a positive step toward lifting the embargo if Cuba were to release most, if not all, of those prisoners?

[00:04:04] Speaker 2 Thousands of people participated in the demonstration in Cuba over two years ago. Thousands and a few hundred were prosecuted. The ones that were prosecuted were not prosecuted because of what they think or what they said or what they shouted or why they expressed. They were prosecuted for vandalizing, for attacking people, for assaulting a police station, for overturning police cars and civilian cars. And that in Cuba is a crime, as I suspect is in the United States.

[00:04:28] Speaker 1 I understand. But for the record, international human rights groups say between 507 hundred were prosecuted for the 2021 protests and that many were merely marching or demonstrating.

[00:04:38] Speaker 2 People have been put in jail for the events of January 6th in the United States who were not even present at the place just because they were accused of inciting people to go to Capitol Hill on January six, 2021.

[00:04:51] Speaker 1 At the same time, Cuba's serious economic crisis just keeps getting worse. And we're seeing record numbers of Cubans especially. Younger Cubans leaving the island. Do you feel all the blame for that rests on the U.S. and the embargo, or is the Cuban government now recognizing its own economic mistakes and mismanagement?

[00:05:11] Speaker 2 There's a combination of factors. First, we have the effects of COVID, and we have to remember that we shut the country. That depends on tourism as a main source of income, and we shut it totally. We have not recovered yet. But there's an extraordinary and artificial impact of that, which is the U.S. economic blockade, which is aimed at making the economy unworkable. And then you add to that, which is also true, that we have issues of structure in our economy that we need to improve and that we are trying to transform under very big difficulties. And we have had mismanagement, inefficiencies in what we do, which we recognize that we have to improve.

[00:05:45] Speaker 1 That, of course, brings us to the dynamic growth we're seeing in Cuba's private sector since the communist government legalized those small and medium sized businesses known as Pemex two years ago. This seems an area where the U.S. and Cuba can find common ground. Both governments have approved U.S. investment in Cuban private enterprises, but Cuba says it's waiting for the U.S. to soften the embargo and make bilateral banking available. While the U.S. says it's waiting on Cuba to present clear investment rules before it can do that. When do you see all of this getting resolved?

[00:06:18] Speaker 2 I think there's a misunderstanding. Cuba is not waiting for the U.S. to act in any measure. The growth of the private sector in Cuba is a national decision by Cuba. We're taking on our own, regardless of what the United States does. We have conceived the private sector in the past few years as part of our economic development as and as an actor in the Cuban economy. Now, this sector also suffers from the economic blockade, but Cuba does not need a bilateral banking relationship with the United States for the private sector in Cuba to prosper.

[00:06:49] Speaker 1 Most of the Cuban private sector tells us they do need it. But there's been a tendency in the past for the Cuban government to let the private sector grow and then all of a sudden clamp down on it and rein it in. Is that sort of thing finally over?

[00:07:03] Speaker 2 Well, we have approved is medium and small sized enterprises. We're not, at least for the moment, conceiving in our economic overview to have big monopolies and big concentrations of property and big concentration of wealth and big concentrations of capital. What we want is to an expansion as many as possible and add a level playing field for all, for many to have opportunity to flourish, not to have a few who concentrate and become monopolies in any sector. That is our aim. Now, this is the new reality in Cuba and regulation is coming behind it.

[00:07:38] Speaker 1 Including clear rules for foreign investment in the private sector.

[00:07:41] Speaker 2 Yes, we are trying to regulate what is becoming the normal reality. But corporate law still has to be approved a law for corporations in Cuba. What is following what's happening? When we began this three years ago, there was no clear picture of where this was going. Which were the sectors that were going to grow? Which were the territories in the country where they're going to grow the most, which was going to be their export exposure because many of them work within Cuba, but some need to import and some wish to export. That reality has to show itself so that we can regulate something that is appropriate to what's really happening.

[00:08:17] Speaker 1 Last week in New York, President Diaz-Canel also told Cuban-Americans they may be welcome in the future to own businesses in Cuba. That would seem to represent a big thaw between Havana and Miami.

[00:08:30] Speaker 2 I'm surprised by what you're saying, because I was at that meeting and the president never said that. Whoever reported that either was not present or is not or did not get a good recollection of what happened in that place. The president said that they are welcome, not not just as of this meeting that we have in place, a policy that he personally has defended that invites Cubans that live abroad in the U.S. or in Europe and Latin America, in Asia, to invest in Cuba, to be part of the economy and to participate and contribute to the Cuban economy. That is a message he ratified at that meeting. Opening actual business in Cuba for people who reside in Cuba. Cubans that live abroad can participate like a Canadian, like a Spaniard. But if you want to establish a company to be a resident in the place, and this is a law that is not only particular to Cuba, many countries around the world, if you want to establish a company, you have to be a resident in the place where you are.

[00:09:24] Speaker 1 Okay. Thank you for clarifying that. Mr. Vice Minister, we've been talking about the growth of the private sector in Cuba. Do you feel that the economic liberalization that's taking part there could lead to more political liberalization in Cuba, especially, for example, letting parties other than the Cuban Communist Party run in elections?

[00:09:46] Speaker 2 We we are not aiming at that. If you call liberalization, having money, participate in politics and having parties serve as machines so that politicians. Can be moved and then corporations and the wealthy have the capacity to finance and buy political favors. That is something we're not conceding in Cuba. We're not looking at that.

[00:10:09] Speaker 1 But you still don't think a healthy pluralism could come of it?

[00:10:12] Speaker 2 We believe that if parties, which is happens in many countries, become machineries so that money and capital can be the engine of political advancement. That is something we are not considering in Cuba. We don't think it's healthy or will be useful or appropriate for a country.

[00:10:28] Speaker 1 I see. Mr. Vice Minister, I also need to ask you about the recent controversy regarding Cuban mercenaries going to fight for Russia against Ukraine. The Cuban government insists it has broken up a ring that was trafficking those Cubans to Russia. Critics have said the Cuban government actually knew before about the mercenaries going there to fight and encouraged it. How do you respond to that? And what is the state of Cuba's relations with Russia now after Havana distanced itself recently from Moscow's Ukraine campaign?

[00:11:00] Speaker 2 This is a ring that was first detected by us, followed by us, and that was treated as through different violations of the law. One is human trafficking in which you penalize the trafficker and the person who's trafficked you treat as a victim. For us, that was not enough. And we incorporate another law, the use of another law that we have in Cuba, which is against mercenaries, which is which prohibits Cubans to take up arms against another country. So we applied that to show that we go after the trafficker and we also go after the person who is willingly attempting to involve himself in a military conflict in another country. Before we made this public. We spoke with the government of Russia, with which we have a good relationship. We spoke with the government that Ukraine, with the US government, with the European Union, with several other governments in which we talked about this. We explained our concern and we also asked for information if they had.

[00:12:02] Speaker 1 But it was just a few months ago that Cuba was signing major investment deals with Russia in the hope of getting some economic support, especially for fuel, which your government this week admitted Cuba just doesn't have enough of to meet its needs. This Russia based mercenary scandal hasn't compromised that friendship at all.

[00:12:20] Speaker 2 Our relationship with with Russia is a good relationship. We don't believe it's damaged, even though on some issues we might not have an exact point of view.

[00:12:29] Speaker 1 Vice Minister Fernandez de Cassio, thank you for speaking with us.

[00:12:33] Speaker 2 Thank you very much for this opportunity.  

[00:12:35] Speaker 1 That was my conversation yesterday with Carlos Fernandez.  He's vice minister of Cuba's Foreign Relations Ministry. Still to come, Miami-Dade County is racing to get rid of septic tanks. This is the South Florida round up on Lauren.

Links To Related Analyses 

Cuba Government Delaying Private Company Investment/Financing Regulations Is Costing Earning Potential For U.S. And Other Country Sources. Success Should Not Be Feared.  Sep 25, 2023

Surprises? U.S. Ag/Food Exports To Cuba Increased 37.6% In July; Up 14.8% Year-To-Year. Coin Operated Washing Machines, Refrigerant, Microwave Ovens, Manicure/Pedicure Preps, Vehicles, Tires, Sugar  Sep 20, 2023

Biden Administration To Issue New/Revised MSME Policies. Reversing Trump Administration Decision But Not Obama Administration Decision. Bank Responsibility? OFAC Penalties?  Sep 18, 2023

WestJet Cargo Does From Canada To Cuba What FedEx And UPS Does Not (Yet) Do. But, Cuba's Private Sector Expansion Might Change That...

WestJet Cargo Launches Inaugural Flights to Havana, Cuba
27 September 2023

WestJet Cargo is excited to announce its new cargo route to Havana, Cuba, commencing on September 23, 2023. This expansion marks WestJet Cargo's first venture into the Cuban capital.  Operating one weekly flight on the YYZ – HAV route, WestJet Cargo offers 20-tonne cargo capacity per flight per week, addressing the growing demand for cargo transport in Canada.  WestJet Cargo is fully equipped to handle various cargo types, including General Cargo, Perishables, and select Dangerous Goods, ensuring secure and efficient cargo transportation to Havana.  This milestone underscores WestJet Cargo's dedication to expanding its network and delivering top-tier cargo services to Havana, Cuba.

About WestJet Cargo: A dedicated division of the WestJet Group of Companies, WestJet Cargo provides air cargo services to businesses, freight forwarders, shippers and individual customers. Providing safe, reliable air-shipping for customers and businesses, WestJet Cargo utilizes the expansive network of WestJet’s wide and narrow-bodied aircraft and its newly introduced fleet of four dedicated Boeing 737-800 Converted Freighters (BCF) to meet the diverse needs of its cargo customers.  For more information on WestJet Cargo please visit: https://www.westjetcargo.com/en-ca

Cuba Government Delaying Private Company Investment/Financing Regulations Is Costing Earning Potential For U.S. And Other Country Sources. Success Should Not Be Feared.

OFAC Authorized First Investment/Financing License Into A Cuba Private Company In May 2022.   

Because Of The Delay By Government Of Cuba In Authorizing The Delivery Of The Investment/Financing, The Private Company In Cuba Has Continued To Expand And Grow The Business.  The United States-Based Investor/Financer Has Forgone Income From Dividends And Interest.   

Why Won’t President Miguel Diaz-Canel Permit MSMEs To Accept Investment And Financing?  Re-introducing “Success” Into the Marketplace Carries Political Risk Because Not Everyone Will Be Successful And Measuring Success Has Many Variables.

The Government Of Cuba Eagerly Accepts Investment And Financing From Many Sources. 

On 10 June 2021, Washington DC-based attorney Robert L. Muse submitted a first-of-its-kind application to the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington DC.   

On 10 May 2022, after an eleven-month inter-agency review, the Biden-Harris Administration (2021- ) approved that first-ever application which would authorize the first direct investment in and the first financing to a private company located in the Republic of Cuba which owned by a Republic of Cuba national.     

• Useful to note that the United States- based source of the direct investment and direct financing was not an individual of Cuban descent. 

From the inception of the idea to seek a license from the OFAC at the beginning of 2021, the goal was when the OFAC license was issued- and there was confidence that it would be issued, the existence of the OFAC license would be publicly disclosed.  

The reason was singular:  The objective of the U.S.-Cuba Trade and Economic Council has always been to publicize what has been authorized so others may benefit from the effort devoted to making possible what others may have only thought about.  The publication about the first-ever electric (and non-electric) vehicle (cars, trucks, motorcycles, scooters, bicycles) export licenses (five since 2017) issued by the Bureau of Industry and Security (BIS) of the United States Department of Commerce to Colombia, Maryland-based Premier Automotive Export Ltd., reinforces that mandate to inform.  Assisting Westport, Connecticut-based PWN Exhibicon International LLC which organized in 2002 the first-ever OFAC licensed U.S.-Food & Agribusiness Exhibition in the Republic of Cuba and included 923 representatives of United States-based companies.  This event remains to-date the single-largest commercial event in the Republic of Cuba licensed by the OFAC.  

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

• 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 Administration Will Use Cuba's Authorization Of SMSE's As Means To Expand Support For Cuba Private Sector- U.S. Investments And Loans May Be Next June 02, 2021  

Since the first OFAC license was issued authorizing direct investment in and direct financing to a private company located in the Republic of Cuba, there is known to have been only one other- obtained within the last weeks.  That license has not been made public.  Unknown is how many applications are pending.   

• One reason for the delay by the Biden-Harris Administration issuing additional licenses?  The absence of regulations issued by the government of the Republic of Cuba which would authorize the delivery of direct investment and direct financing to private companies located in the Republic of Cuba. 

Whether defined as PyME (pequeña y mediana empresa; small and medium enterprise), or MSME (micro, small and medium-size enterprise), or SME (small and medium-size enterprise), there has within the Republic of Cuba during the last five years been a dramatic increase in the number of private businesses, what those private businesses are doing, and how those private businesses are operating.  There has also been an increase in Republic of Cuba government-operated companies, enterprises, and organizations transitioning to “private” status.  

To date, and deeply unfortunate, is a private sector marketplace within the Republic of Cuba that functions within an environment more aligned with “if it is not prohibited, then it is authorized” rather than “here are the regulations and those regulations are continually updated to reflect the changing dynamic of the private sector.”   

Nearing three years and the government of the Republic of Cuba has yet to publish regulations which explicitly describes the process by which a private company located in the Republic of Cuba may receive direct investment and direct financing from outside of the Republic of Cuba. 

The document, which could be on one 8-inch by 10-inch sheet of paper, would be electronically notarized and submitted to the financial institution where the private company maintained its operating checking account.  The information provided would include the source(s) and amount(s) of the investment, the source(s) and amount(s) of the financing.  Any changes to the investment terms or the financing terms would be provided to the financial institution.  That should be all that is required.  The private company would not be required to pay any fees other than the normal incoming electronic funds transfer fees.   

The government of the Republic of Cuba must refrain from over-complicating the process; but, that is fundamental to its DNA, so politically a heavy lift.  This is because the primary political goal is to maintain equality- and a competitive private sector will, by its DNA, result in inequality. 

On 22 September 2023, Miguel Diaz-Canel, President of the Republic of Cuba (2019- ) met in New York City at the Permanent Mission of the Republic of Cuba to the United Nations with approximately forty private sector representatives- individuals, companies, and organizations.  That number should have been quadrupled- unknown if the anemic showing was due to a lack of invitations or a lack of responses to invitations.  Unfortunately, President Diaz-Canel did not use the opportunity to announce regulations for delivering direct investment to and direct financing for private companies located in the Republic of Cuba.  That was the singular message the audience was seeking.  Another in an increasingly lengthy list of missed opportunities.   

Until the government of the Republic of Cuba publishes the regulations for the delivery of direct investment and direct financing to a private company, the OFAC license issued on 10 May 2022 remains just that- issued but not implemented. 

The recipient of the OFAC license has maintained consistent contact with the United States Department of State as to the status of the implementation of the OFAC license.  The United States Department of State supports the decision to await the publication of regulations by the government of the Republic of Cuba rather than deliver the direct investment and direct financing and, absent specific authorization by the government of the Republic of Cuba, risk the operational status of the private company located in the Republic of Cuba.  The private company located in the Republic of Cuba also supports the decision to await the publication of regulations by the government of the Republic of Cuba. 

The worst kept secret is the amount of funds delivered to private companies (particularly residences used for guests and restaurants) located in the Republic of Cuba outside of authorized OFAC regulations.  These primarily originate from the State of Florida, State of New Jersey, State of Texas, State of New York, and State of California. 

• Cuba Banks Again Accepting U.S. Dollar Deposits. That's Good. Better Would Be Providing Regulations For U.S.-Sourced Direct Investment And Direct Financing To MSMEs. First OFAC License Waiting... Apr 11, 2023  

These funds also originate with individuals of Cuban descent residing outside of the United States including in Spain, Panama, Mexico, and Venezuela. 

While understandable from a micro economic perspective, this outside Republic of Cuba regulatory authorization and outside of OFAC regulatory authorization is unhelpful from a macroeconomic perspective.   

Desire to assist family, friends, colleagues is understandable.  However, there are consequences.   

Why should the government of the Republic of Cuba implement regulations for the delivery of direct investment and direct financing when both are entering the Republic of Cuba without them?  The incentive is nonexistent.  

By not making contingent the publication of regulations which would define the mechanism for the delivery of direct investment and direct financing into a private company located in the Republic of Cuba, well-intentioned individuals are removing any leverage upon the government of the Republic of Cuba.     

There is an argument to be considered for the Biden-Harris Administration to refrain from further regulatory and policy changes designed to impact private companies located in the Republic of Cuba under the government of the Republic of Cuba publishes regulations for the delivery of direct investment and direct financing. 

The Obama-Biden Administration (2009-2017), Trump-Pence Administration (2017-2021), and Biden-Harris Administration, endured the worst-case political scenario in the Republic of Cuba.  With the death in November 2017 of Fidel Castro, there was a presidential succession to his brother, Raul Castro, a presidential transition to his brother, Raul Castro, a presidential retirement, another presidential succession, to Miguel Diaz-Canel, and then another presidential election.  

There was no moment- a decades-in-the-making anticipatory moment, where the commercial, economic, financial, humanitarian, military, and political infrastructure within the Republic of Cuba would implode and each of those infrastructures would change and change profoundly.  

The Biden-Harris Administration seems attentive to both altering and reversing some decisions implemented during the Trump-Pence Administration, some of which were themselves reversals of some decisions implemented during the Obama-Biden Administration.   

In addition, the Biden-Harris Administration has implemented (and plans to continue to implement) new regulations and policies which it believes can result in both a less inhospitable environment for private companies operating in the Republic of Cuba and increased engagement by those private companies with individuals, organizations, and companies located in the United States. 

This all sounds good.  A triumphal kumbaya moment for career employees within the United States government.  

Unfortunately, and this is not a surprise to them as the refrain has been repeated to nearing exhaustion by companies, financial institutions, individuals, and organizations… 

• Absent direct correspondent banking, commercial funds from the United States to the Republic of Cuba and commercial funds from the Republic of Cuba to the United States will continue to require a third country.  This means to send funds, there will be three financial institutions involved- the sender, the intermediary, and the receiver.  Each financial institution will take a fee.  Many commercial fund transfers for private companies located in the Republic of Cuba are small amounts- so the three fees as a percentage of the overall transaction are substantial. 

In 2015, the Obama-Biden Administration authorized United States-based financial institutions to maintain correspondent accounts with Republic of Cuba government-operated financial institutions.  However, for a reason(s) that to this day remain disturbingly obtuse, the Obama-Biden Administration did not authorize Republic of Cuba government-operated financial institutions to maintain correspondent accounts with United States-based financial institutions.  The result, fund transfers must navigate an inefficient, insecure, and costly three-country journey. 

• Western Union Goes National For U.S. Tranfers To Cuba.... When Will Cuba Permit U.S. Investment And Financing For MSMEs In Cuba? No Excuse For Delays. Mar 3, 2023  

• Who Or What Is Delaying Western Union From Authorizing Commercial Transfers From U.S.-Cuba And From Cuba-U.S.? Biden? Diaz-Canel? MSME's Waiting With U.S.-Based Companies And Entrepreneurs Apr 22, 2023  

Some representatives of the Biden-Harris Administration maintain that Republic of Cuba government-operated financial institutions will not want to establish correspondent accounts with United States-based financial institutions and that United States-based financial institutions will not want to establish correspondent accounts with Republic of Cuba-based financial institutions. 

The first OFAC and BIS licenses for most of the significant commercial engagements during the twenty-nine years have been initiated by individuals, organizations, and companies not connected with individuals of Cuban descent.  A mistake for the Biden-Harris Administration to view the United States-Republic of Cuba private sector commercial and financial landscape as a singular, membership-based domain. 

The goal of the Biden-Harris Administration should be to unlock potential and then evaluate the response.  Not prejudge the response.  Because responses change as the environment changes.  Permit the private sector to determine what they require rather than instruct them on what tools they need to operate.  The philosophy should be more about “if we permit it, they will eventually use it” rather than “we will permit it only after they ask for it.” 

Permitting, as the Obama-Biden Administration did, individuals subject to Republic of Cuba jurisdiction to establish accounts at United States-based financial institutions is laudable.  And expanding, as the Biden-Harris Administration is now doing, how those accounts may be used is equally important.   

However, these opportunities remain hamstrung by the fact that transferring funds into or out of the United States-based accounts and into or out of the Republic of Cuba requires three financial institutions to touch the transaction- and each touch means a fee. 

If the Biden-Harris Administration wants to meaningly assist with connecting the private sector in the Republic of Cuba and private sector in the United States, then authorize the other half of what the Obama-Biden Administration did in 2015. 

For financial transactions, straight lines are essential.  A triangle only serves political interests and reinforces inefficiencies, lack of transparency, and excessive costs- which a re-emerging private sector in the Republic of Cuba can not afford and should not be asked to pay.

LINK TO COMPLETE ANALYSIS IN PDF FORMAT

Libertad Act Lawsuit Against Expedia: "The Court rejects Defendants' argument that the Amended Complaint should be dismissed because Plaintiff failed to plead around the Lawful Travel Exception."

MARIO ECHEVARRIA, ESTHER SANCHEZ, CONSUELO CUEVAS, AND CARMEN FLORIDO V. EXPEDIA, INC., HOTELS.COM L.P., HOTELS.COM GP, LLC, ORBITZ, LLC, BOOKING.COM B.V., AND BOOKING HOLDINGS, INC.  Initial defendants were: TRIVAGO GMBH, BOOKING.COM B.V., GRUPO HOTELERO GRAN CARIBE, CORPORACION DE COMERCIO Y TURISMO INTERNACIONAL CUBANACAN S.A., GRUPO DE TURISMO GAVIOTA S.A., RAUL DOE I-5, AND MARIELA ROE 1-5, [1:19-cv-22621; Southern Florida District].  Lawsuit dismissed with leave to amend on 16 November 2020.

Rivero Mestre LLP (plaintiff)
Manuel Vazquez, P.A. (plaintiff)
Baker & McKenzie, LLP (defendant- Booking Holdings, Booking.com. B.A.)

Link: ORDER DENYING DEFENDANTS' MOTIONS TO DISMISS (8/15/23)

The Court rejects Defendants' argument that the Amended Complaint should be dismissed because Plaintiff failed to plead around the Lawful Travel Exception.

Link: DEFENDANTS EXPEDIA GROUP, INC., HOTELS.COM L.P., HOTELS.COM GP, LLC, AND ORBITZ, LLC’S ANSWER TO PLAINTIFF’S THIRD AMENDED COMPLAINT (8/28/23)

AFFIRMATIVE AND OTHER DEFENSES Pursuant to Rule 8(c) of the Federal Rules of Civil Procedure, the Expedia Entities affirmatively state the following defenses. By listing a defense or issue below, the Expedia Entities do not admit that they bear the burden of proof on the issue or defense, and reserve its right to contend that Echevarría bears the burden of proof on the issue. 1. Echevarría’s action is barred because Echevarría did not acquire ownership of the claims to the property at issue before March 12, 1996. See 22 U.S.C. 6082(a)(4)(B). 2. Echevarría’s action is barred because the alleged transactions and uses of the property at issue were incident to lawful travel to Cuba and necessary to the conduct of such travel. See 22 U.S.C. § 6023(13)(B)(iii). 3. Echevarría’s action is barred by the Due Process Clause of the Fifth Amendment because Echevarría is seeking to hold the Expedia Entities liable for conduct that was authorized by OFAC, U.S. Department of Treasury, under the Cuban Assets Control Regulations (“CACR”), 31 CFR Part 515. 4. The damages that Echevarría seeks to recover are unconstitutional because they are wholly disproportionate, grossly excessive, and bear no relationship to any conduct and dealings that the Expedia Entities had with respect to the property at issue. 5. Echevarría’s claim for damages is barred because Echevarría is seeking to recover from other entities the same damages, arising from the same property and facts, that it is seeking to recover from the Expedia Entities. In the alternative, any recovery or compensation that Echevarría receives from other sources must be set off against any recovery that it receives from the Expedia Entities. 6. Echevarría’s action is barred for failure to state a claim upon which relief can be granted. 7. Echevarría’s action is barred because it is premised on conduct undertaken by a foreign government and outside the United States. 8. Echevarría’s action is barred by the act of state doctrine, which must be applied here because it has constitutional underpinnings. 9. Echevarría’s action is barred in whole or in part by the applicable statute of repose. See 22 U.S.C. § 6084. 10. Echevarría’s action is barred in whole or in part by Article II of the U.S. Constitution to the extent that Echevarría’s claim seeks to impose liability for foreign policy decisions made by the Executive Branch. 11. Echevarría’s action is barred in whole or in part by the Eighth Amendment. 12. Echevarría’s action is barred because the Helms-Burton Act is unconstitutionally vague. 13. Echevarría’s action is barred by the doctrine of unclean hands. 14. Echevarría’s suit is barred due to lack of standing and a failure to present a justiciable case or controversy, in that Echevarría has not suffered an injury-in-fact that is fairly traceable to conduct by the Expedia Entities. 15. Echevarría’s suit is barred in whole or in part by the First Amendment. PRAYER For these reasons, the Expedia Entities ask the Court to enter judgment that Echevarría take nothing, dismiss Echevarría’s suit with prejudice, assess costs against Echevarría, and award the Expedia Entities all other relief the Court deems appropriate.

Related Court Cases

MARIO ECHEVARRIA, ESTHER SANCHEZ, CONSUELO CUEVAS, AND CARMEN FLORIDO V. EXPEDIA, INC., TRIVAGO GMBLJ, A GERMAN LIMITED LIABILITY COMPANY, BOOKING.COM B.V., A DUTCH LIMITED LIABILITY COMPANY, GRUPO HOTELERO GRAN CARIBE, CORPORACION DE COMERCIO Y TURISMO INTERNACIONAL CUBANACAN S.A., GRUPO DE TURISMO GAVIOTA S.A., RAUL DOE 1-5, AND MARIELA ROE 1-5, [1:19-cv-22620; Southern Florida District].  Lawsuit dismissed with leave to amend on 16 November 2020.

Rivero Mestre LLP (plaintiff)
Manuel Vazquez, P.A. (plaintiff)
Baker & McKenzie (defendant- Booking Holdings, Inc., Booking.com B.V.)
Scott Douglas & McConnico LLP (defendant- Expedia, Inc., Hotels.com GP, LLC, Hotels.com L.P., Orbitz, LLC)
Akerman LLP (defendant- Expedia, Inc., Hotels,com GP, LLC, Hotels.com L.P., Orbitz, LLC)

MARIO DEL VALLE, ENRIQUE FALLA, MARIO ECHEVARRIA V. EXPEDIA, INC., HOTELS.COM L.P., HOTELS.COM GP, ORBITZ, LLC, BOOKING.COM B.V., BOOKING HOLDINGS INC.  Initial defendants were: TRIVAGO GMBH, BOOKING.COM B.V., GRUPO HOTELERO GRAN CARIBE, CORPORACION DE COMERCIO Y TURISMO INTERNACIONAL CUBANACAN S.A., GRUPO DE TURISMO GAVIOTA S.A., RAUL DOE I-5, AND MARIELA ROE 1-5, [1:19-cv-22619 Southern Florida District; 20-12407 11th Circuit Court of Appeals; Dismissed (8/10/23)]

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

Surprises? U.S. Ag/Food Exports To Cuba Increased 37.6% In July; Up 14.8% Year-To-Year. Coin Operated Washing Machines, Refrigerant, Microwave Ovens, Manicure/Pedicure Preps, Vehicles, Tires, Sugar

Thus far in 2023…. US$450,869.00 in refrigerant recovery liquid. US$6,097.00 in coin operated washing machines. US$11,040.00 in microwave ovens. US$606,207.00 in used vehicles (1,500 cc to 3,000 cc). US$151,768.00 in new vehicles (1,500 cc to 3,000 cc). US$2,342,281.00 in coffee. US$1,234,503.00 in Cookies. US$694,773.00 in Waffles and Wafers. US$240,723.00 in beer. US$66,568.00 in manicure and pedicure preparations. US$13,259.00 in radial tires. US$13,008.00 in bed sheets. US$15,810.00 in carpets. US$33,530.00 in footwear. US$353,064.00 in hams. US$10,027.00 in cane sugar. US$20,617.00 in pesticides. US$13,165.00 in salt. US$27,840.00 in shampoo. US$6,806.00 in pet food.

ECONOMIC EYE ON CUBA©
September 2023

July 2023 Ag/Food Exports To Cuba Increase 37.6%- 1
50th Of 225 July 2023 U.S. Food/Ag Export Markets- 2
Year-To-Year Exports Increase 14.8%- 2
Cuba Ranked 55th U.S. 2023 Ag/Food Export Markets- 2
July 2023 Healthcare Product Exports US$0.00- 2
July 2023 Humanitarian Donations US$3,330,731.00- 3
Obama Administration Initiatives Exports Continue- 3
U.S. Port Export Data- 17

JULY 2023 FOOD/AG EXPORTS TO CUBA INCREASE 37.6%- Exports of food products and agricultural commodities from the United States to the Republic of Cuba in July 2023 were US$32,313,837.00 compared to US$23,468,476.00 in July 2022 and US$19,832,195.00 in July 2021.

July 2023 exports included among other items: Chicken Leg Quarters (Frozen); Chicken Meat (Frozen); Chicken Legs (Frozen); Meat of Swine; Preserved Chicken Meat; Pacific Salmon; Fresh Cheese; Grapes; Coffee; Cookies; Waffles and Wafers; Tomato Ketchup; Beer; Skipjack Tuna; Palm Oil; Hams; Pasta; Corn Chips; Yeasts; Carbonated Soft Drinks; Pesticide; Salt; Sugar.

January 2023 through July 2023 TSREEA exports were US$192,573,300.00 compared to January 2022 through July 2022 exports of US$167,653,569.00. Total TSREEA exports since first deliveries in December 2001 exceed:US$7,096,299,666.00.

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

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

The data represents the U.S. Dollar value of product exported from the United States to the Republic of Cuba under the TSREEA and CDA. The data does not include transportation charges, bank charges, or other costs associated with exports; the government of the Republic of Cuba reports unverifiable data that includes transportation charges, bank charges, and other costs.

COMPLETE REPORT IN PDF FORMAT