Another Reason From OFAC For Financial Institutions To Avoid Cuba- The Range Of A Penalty: US$1.2 Million Settlement With US$327.3 Million Potentiality.

“Enforcement Release: December 13, 2023 OFAC Settles with CoinList Markets LLC for $1,207,830 Related to Apparent Violations of the Ukraine-/Russia-Related Sanctions Regulations CoinList Markets LLC (“CLM”), a San Francisco, California-based virtual currency exchange, has agreed to pay $1,207,830 to settle its potential civil liability arising from processing 989 transactions on behalf of users ordinarily resident in Crimea between April 2020 and May 2022, in apparent violation of OFAC’s Russia/Ukraine sanctions. The settlement amount reflects OFAC determination that CLM’s apparent violations were not voluntarily self-disclosed and were nonegregious.”

“Penalty Calculation and General Factors Analysis The statutory maximum civil monetary penalty applicable in this matter is $327,306,583. 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 in this case is $3,097,000. The settlement amount of $1,207,830 reflects OFAC’s consideration of the General Factors under the Enforcement Guidelines.”

LINK TO DECISION IN PDF FORMAT

U.S. Ag/Food Exports To Cuba Decrease 26.3% In October 2023; Remain Up 4.95% Year-To-Year. US$1.1 Million In "Aerial Reflectors" And US$30 Million In Donated Goods Already Exceeds Full Year 2022.

ECONOMIC EYE ON CUBA©
December 2023

October 2023 Ag/Food Exports To Cuba Decrease 23.6%- 1
59th Of 228 October 2023 U.S. Food/Ag Export Markets- 2
Year-To-Year Exports Increase 4.95%- 2
Cuba Ranked 54th Of 228 2023 U.S. Ag/Food Export Markets- 2
October 2023 Healthcare Product Exports US$65,173.00- 2
October 2023 Humanitarian Donations US$2,745,566.00- 3
Obama Administration Initiatives Exports Continue- 3
U.S. Port Export Data- 19

OCTOBER 2023 FOOD/AG EXPORTS TO CUBA DECREASE 23.6%- Exports of food products and agricultural commodities from the United States to the Republic of Cuba in October 2023 were US$15,928,609.00 compared to US$20,852,560.00 in October 2022 and US$22,271,632.00 in October 2021. 

October 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, Fresh Cheese, Rice, Confectioner Sugar, Infant Preparations, Juices, Ice Cream, Gelatin, Mineral Water, Detergents, Toilet Paper, Sweaters, Brace Overalls, Footwear, Hair Nets, Umbrellas, Turbochargers, Air Conditioners, Weighing Machinery, Electric Self-Propelled Work Trucks, Machine For Working Hard Materials, Cooking Stove/Range/Oven Parts, Aerial Reflectors (US$1,135,439.00), Used Vehicles (US$476,625.00), Passenger Motor Vehicles (US$288,955.00).

January 2023 through October 2023 TSREEA exports were US$268,733,465.00 compared to January 2022 through October 2022 exports of US$256,057,483.00. Total TSREEA exports since first deliveries in December 2001 exceed: US$7,172,459,831.00.

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

Bacardi Spent Approximately US$690,000.00 And 251 Days Later Its Cuba Trademark Legislation Moved From House To Senate- With No Objection. Where Were Pernod Ricard Lobbyists? NGO's? Members?

Rocket Docket For Cuba-Related Legislation? 

Bacardi Spent Wisely US$690,000.00 Thus Far In 2023 

How Did Cuba Trademark Legislation Designed To Protect Hamilton, Bermuda-Based Bacardi Limited Move Through United States House Of Representatives Absent Any Opposition From Members Who Have Advocated For An Expansion Of Commercial, Economic, Financial, And Political Relations Between The United States And The Republic Of Cuba? 

Surprise Jarrold Nadler (D- 12th District, New York), Ranking Member Of The Judiciary Committee Of The United States House Of Representatives, Supported The Legislation Given His Previous Positions On Republic Of Cuba-Related Issues. 

No Objections?  Not One Member 

Where Were Lobbyists And NGO’s?  

Bacardi North America Reports 2023 Thus Far Spending US$570,000.00 On Various Issues And The Cormac Group LLC Reports Spending US$120,000.00 Lobbying On Various Issues For Bacardi North America. 

From Hamilton, Bermuda-Based Bacardi Limited (2022 Revenue Approximately US$4.6 Billion) Through Coral Gables, Florida-Based Bacardi North America (Formerly Bacardi USA, Inc.) 2023 United States Congress Lobbying Reports.  Lobbying Focuses Include: 

• “Bacardi Limited, the ultimate parent of Bacardi North America, has an indirect general interest in U.S. trademark laws.” 

• “HR 1505 and S 746, No Stolen Trademarks Honored in America Act, amending Section 211 of the Omnibus Appropriations Act of 1999 to protect the original owners of confiscated Cuban trademarks in America.” 

• “Issues related to the economic embargo of Cuba.” 

From Hamilton, Bermuda-Based Bacardi Limited (2022 Revenue Approximately US$4.6 Billion) Through Coral Gables, Florida-Based Bacardi North America (Formerly Bacardi USA, Inc.) 2023 United States Congress Lobbying Reports By Washington DC-Based The Cormac Group, LLC Which References Up To Five Lobbyists Servicing Bacardi North America.  Lobbying Focuses Include: 

• “Cuban Trademark Protection Legislation and US-Cuba relations” 

• “Cuban Trademark Protection Legislation and US-Cuba relations. H.R. 1505/S.746 - No Stolen Trademarks Honored in America Act.” 

Who Represents Paris, France-Based Pernod Ricard (2022 Revenue Approximately US$11.6 Billion) To The United States Congress (United States Senate And United States House of Representatives)?  From 2023 Lobbying Disclosures: ABI Associates, Arent Fox Schiff LLP, Ballard Partners, Brownstein Hyatt Farber Schreck LLP, Crossroads Strategies LLC, Ernst & Young LLP, And Miller Strategies LLC. 

A Few Too Many Havana Club Mojito Cocktails… And Fell Asleep? 

What May Happen In The United States Senate?  Will Marco Rubio (R- Florida) Seek To Attach An Amendment To The New Farm Bill- As He Successfully Attached Republic Of Cuba-Related Amendment To Previous Farm Bill In 2018? 

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

• 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" Oct 26, 2023  

U.S. House Of Representatives Legislation Background 

5. H.R.1505 — 118th Congress (2023-2024) No Stolen Trademarks Honored in America Act of 2023 Sponsor: Issa, Darrell E. [Rep.-R-CA-48] (Introduced 03/09/2023) Cosponsors: (18) Committees: House - Judiciary | Senate - Judiciary Committee Report: H. Rept. 118-232 Latest Action: Senate - 11/14/2023 Received in the Senate and Read twice and referred to the Committee on the Judiciary. (All Actions) 

11/14/2023- Senate; Received in the Senate and Read twice and referred to the Committee on the Judiciary.
11/13/2023-4:41pm- House; Motion to reconsider laid on the table Agreed to without objection.
11/13/2023-4:41pm- House; On motion to suspend the rules and pass the bill, as amended Agreed to by voice vote. (text: CR H5676)
11/13/2023-4:32pm- House; DEBATE - The House proceeded with forty minutes of debate on H.R. 1505.
11/13/2023-4:32pm- House; Considered under suspension of the rules. (consideration: CR H5676-5677)
11/13/2023-4:31pm- House; Mr. Issa moved to suspend the rules and pass the bill, as amended.
09/29/2023- House; Placed on the Union Calendar, Calendar No. 188.
09/29/2023- House; Reported (Amended) by the Committee on Judiciary. H. Rept. 118-232.   
05/24/2023- House; Ordered to be Reported (Amended) by Voice Vote. Action By: Committee on the Judiciary
05/24/2023- House; Committee Consideration and Mark-up Session Held Action By: Committee on the Judiciary
03/09/2023- House; Referred to the House Committee on the Judiciary.
03/09/2023- House; Introduced in House

Page H5676- 13 November 2023
1. PLEDGE OF   ALLEGIANCE; Congressional Record Vol. 169, No. 187 | PDF (257KB)
2. COMMUNICATION   FROM THE CLERK OF THE HOUSE; Congressional Record Vol. 169, No. 187 | PDF (245KB)
3. COMMUNICATION   FROM CHIEF OF STAFF, THE HONORABLE NANCY PELOSI, MEMBER OF CONGRESS; Congressional Record Vol. 169, No. 187 | PDF (245KB)
4. RECESS;   Congressional Record Vol. 169, No. 187 | PDF (245KB)
5. AFTER RECESS;   Congressional Record Vol. 169, No. 187 | PDF (245KB)
6. ANNOUNCEMENT   BY THE SPEAKER PRO TEMPORE; Congressional Record Vol. 169, No. 187 | PDF (245KB)
7. NO STOLEN   TRADEMARKS HONORED IN AMERICA ACT OF 2023; Congressional Record Vol. 169, No. 187 | PDF (259KB)

https://www.congress.gov/congressional-record/volume-169/issue-187/house-section/page/H5676 

[Pages H5676-H5677] From the Congressional Record Online through the Government Publishing Office [www.gpo.gov] 

NO STOLEN TRADEMARKS HONORED IN AMERICA ACT OF 2023
13 November 2023         

Mr. ISSA. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 1505) to modify the prohibition on recognition by United States courts of certain rights relating to certain marks, trade names, or commercial names, as amended.  The Clerk read the title of the bill. The text of the bill is as follows: H.R. 1505 

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, 

SECTION 1. SHORT TITLE. 

This Act may be cited as the ``No Stolen Trademarks Honored in America Act of 2023''. 

SEC. 2. MODIFICATION OF PROHIBITION. 

Section 211 of the Department of Commerce and Related Agencies Appropriations Act, 1999 (as contained in section 101(b) of division A of Public Law 105-277; 112 Stat. 2681- 88) is amended-- (1) in subsection (a)(2)-- (A) by inserting ``or entity of the executive branch'' after ``U.S. court''; (B) by striking ``by a designated national''; and (C) by inserting before the period ``that was used in connection with a business or assets that were confiscated unless the original owner of the mark, trade name, or commercial name, or the bonafide successor-in-interest has expressly consented''; (2) in subsection (b)-- (A) by inserting ``or entity of the executive branch'' after ``U.S. court''; and (B) by striking ``by a designated national or its successor-in-interest''; (3) by redesignating subsection (d) as subsection (e); (4) by inserting after subsection (c) the following: ``(d) Subsections (a)(2) and (b) of this section shall apply only if the person or entity asserting the rights knew or had reason to know at the time when the person or entity acquired the rights asserted that the mark, trade name, or commercial name was the same as or substantially similar to a mark, trade name, or commercial name that was used in connection with a business or assets that were confiscated.''; and (5) in subsection (e), as so redesignated, by striking ``In this section:'' and all that follows through ``(2) The term'' and inserting ``In this section, the term''. 

The SPEAKER pro tempore. Pursuant to the rule, the gentleman from California (Mr. Issa) and the gentleman from New York (Mr. Nadler) each will control 20 minutes.  The Chair recognizes the gentleman from California. 

General Leave 

Mr. ISSA. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days in which to revise and extend their remarks and to insert extraneous material on H.R. 1505. 

The SPEAKER pro tempore. Is there objection to the request of the gentleman from California?  There was no objection. 

Mr. ISSA. Mr. Speaker, I yield myself such time as I may consume.  Mr. Speaker, it is hard for the American people to believe, but it is true that foreign actors--foreign countries--have, in fact, stolen trademarks, absconded with the actual factories and the ability to produce various items and then had the gall to, in fact, use American law to sell America products that they in reality had already stolen. This is no more truer than in the case of the communist nation of Cuba. Under Fidel Castro, Cuba took everything. They took Coca-Cola. They took every possible item they could take, and then they took trade names. In some cases, like Coca-Cola, Coke continued to be produced in the United States, so it had no rights. In the case of Bacardi, Bacardi moved to Puerto Rico and began making it there and selling it in the United States. In the case of, for example, Havana Club, they found themselves without any factories, so they worked together with other producers to continue their brand. While their brand was, in fact, being produced in America, the Castro regime--and now the Cuban Government--continued to apply year after year until eventually, due to what we would consider to be a wrongful act by the United States Patent and Trademark Office, awarded this country, who had stolen and still to this day uses the factories and the lands belonging to the family that produced Havana Club, they continue to sell Havana Club. Now, to make matters worse, we are only talking about the United States because most of the world, in fact, took that brand name and was able to sell it in other countries. So the family that owned worldwide rights lost all but the United States, and if not for this piece of legislation, they and others would lose even their right here. I am delighted to join with my colleague, Ms. Wasserman Schultz of Florida, to introduce this bill. It has 17 cosponsors, and it passed through the Judiciary Committee on a bipartisan basis. We all agree that the U.S. Government should not award those who steal and exploit trademarks or any other intellectual property from its legitimate owners to then benefit from U.S. law. Allowing Cuba to propagate its misappropriations would be and is currently a travesty.  Mr. Speaker, I urge my colleagues to support this bipartisan legislation, and I reserve the balance of my time. 

Mr. NADLER. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I rise in support of H.R. 1505, the No Stolen Trademarks Honored in America Act. H.R. 1505 would build on existing law to ensure that executive agencies do not recognize, enforce, or otherwise validate the assertion of trademark rights used in connection with a business whose assets were confiscated by the Cuban regime unless the original owner expressly consented to the transfer of that mark. It also makes technical amendments to ensure that we are in compliance with certain international obligations. This legislation largely involves a long-running dispute over the rightful ownership of a specific trademark that has played out over the course of many decades. It is a tale with more twists and turns than a John Grisham novel. This bill is really about a much larger principle--that we stand with the Cuban people whose property was seized by the Castro regime, and we will not give the protection and benefits of the U.S. trademark system to the holders of stolen property. Our trademark system must not be allowed to be a vehicle for the perpetrators of stolen property to profit from their theft. I thank the gentleman from California (Mr. Issa) and the gentlewoman from Florida (Ms. Wasserman Schultz) for bringing this legislation forward. Mr. Speaker, I urge all Members to support it, and I reserve the balance of my time. 

Mr. ISSA. Mr. Speaker, I reserve the balance of my time. 

Mr. NADLER. Mr. Speaker, I yield 3 minutes to the distinguished gentlewoman from Florida (Ms. Wasserman Schultz), the cosponsor of this legislation. 

Ms. WASSERMAN SCHULTZ. Mr. Speaker, I thank the gentleman for yielding and for his longstanding support of this important legislation that really reflects the values that we stand for here in the United States of America. I particularly thank the gentleman from California (Mr. Issa) for the back and forth--depending on who is in the majority in our Chamber in each successive Congress--as we sort of trade responsibility for who leads this bill. In addition, I have also previously co-led this legislation with our former colleague, Congresswoman Ileana Ros-Lehtinen, and Mr. Diaz-Balart also joins us, as well. There is really broad bipartisan support for this bill, and I am so proud to lead this legislation on the Democratic side of the aisle. This legislation would ensure that our government is never complicit in theft and expropriation ordered by autocracies.  By prohibiting U.S. recognition of illegally confiscated trademarks, this bill stands strongly against attempts by the Cuban regime to profit from hijacked intellectual property. Representing a diaspora community as I do, I have heard countless constituents recount how their home countries stripped them of hard-earned wealth. Many Cuban families had to start from scratch when they arrived. They had property and their businesses confiscated. Our Nation has benefited immeasurably from their cultural contributions and entrepreneurial spirit. We are not just a nation of immigrants. We are a nation of innovators. We should always reward creativity and punish piracy. Our most fundamental responsibility is protecting Americans and those living in our country from being victimized by our adversaries. Our failure to do so would only embolden global despots who seek to target their exiles. I hope my colleagues join us in refusing to tolerate trademarks being held hostage, as this one is in particular, and the many others that are held hostage by the Cuban regime and other regimes, as well. I am hopeful that our friends on the other side of the Capitol, once we send this bill to them, will send it to the President of the United States for his signature. 

Mr. ISSA. Mr. Speaker, I reserve the balance of my time. 

Mr. NADLER. Mr. Speaker, this legislation makes a minor clarification to our trademark laws while serving notice to corrupt regimes across the world that America's intellectual property system must not be used to further their efforts to steal property from their own people. Mr. Speaker, I urge all Members to support this bill, and I yield back the balance of my time. 

Mr. ISSA. Mr. Speaker, in closing, I will make it very clear, if this product's trademark becomes available to its rightful owners again, the well-known company Bacardi will, in fact, have this product on the shelves again. If it is not passed, Cuba will not be able to sell under this name. In fact, these products would be prohibited if they came from Cuba. The only purpose of Cuba trying to take this was to deny Cuban Americans the ability to sell a product that they owned before it was taken from the country. There was an injustice that occurred before many in this room were born. We can only cure that injustice now by, in fact, passing this legislation. I join with the gentlewoman from Florida (Ms. Wasserman Schultz) in urging all to vote for this bill as they have in this body, and then we will work on the people across the dome. Mr. Speaker, I urge passage of this bill, and I yield back the balance of my time. 

The SPEAKER pro tempore. The question is on the motion offered by the gentleman from California (Mr. Issa) that the House suspend the rules and pass the bill, H.R. 1505, as amended. The question was taken; and (two-thirds being in the affirmative) the rules were suspended and the bill, as amended, was passed. A motion to reconsider was laid on the table. 

U.S. Senate Legislation Background 

S. 746 was introduced on 9 March 2023 by Robert Menendez (D- New Jersey), then Chairman of the United States Senate Committee on Foreign Relations.  S. 746 was referred to the United States Senate Committee on the Judiciary.   

Co-sponsors include Marco Rubio (R- Florida), Catherine Cortez Masto (D- Nevada), Mike Braun (R- Indiana), Thomas Tillis (R- North Carolina), Robert Marshall (R- Kansas), Mazie Hirono (D- Hawaii), and Todd Young (R- Indiana).   

Co-sponsors who are members of the United States Senate Committee on the Judiciary include: Senators Rubio, Hirono, and Tillis.  Ted Cruz (R- Texas) is a member of the United States Senate Committee on the Judiciary and likely to co-sponsor S. 746. 

Senators Cruz, Menendez, and Rubio are of Cuban descent. 

The language in S. 746 is identical to the language in H.R. 1505, meaning a promising candidate for moving successfully through any bicameral (United States Senate and United States House of Representatives) conference committee.  

S. 746 

“To modify the prohibition on recognition by United States courts of certain rights relating to certain marks, trade names, or commercial names. 

IN THE SENATE OF THE UNITED STATES

9 March 2023  

Mr. Menendez (for himself, Mr. Rubio, Ms. Cortez Masto, Mr. Braun, Mr. Tillis, Mr. Marshall, Ms. Hirono, and Mr. Young) introduced the following bill; which was read twice and referred to the Committee on the Judiciary 

A BILL 

To modify the prohibition on recognition by United States courts of certain rights relating to certain marks, trade names, or commercial names.  Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,  

SECTION 1. Short title.

This Act may be cited as the “No Stolen Trademarks Honored in America Act”.

SEC. 2. Modification of prohibition. 

Section 211 of the Department of Commerce and Related Agencies Appropriations Act, 1999 (as contained in section 101(b) of division A of Public Law 105–277; 112 Stat. 2681–88) is amended—

(1) in subsection (a)(2)— (A) by inserting “or entity of the executive branch” after “U.S. court”; (B) by striking “by a designated national”; and (C) by inserting before the period at the end the following: “that was used in connection with a business or assets that were confiscated unless the original owner of the mark, trade name, or commercial name, or the bona fide successor-in-interest has expressly consented”; (2) in subsection (b)— (A) by inserting “or entity of the executive branch” after “U.S. court”; and (B) by striking “by a designated national or its successor-in-interest”; (3) by redesignating subsection (d) as subsection (e); (4) by inserting after subsection (c) the following:  “(d) Subsections (a)(2) and (b) of this section shall apply only if the person or entity asserting the rights knew or had reason to know at the time when the person or entity acquired the rights asserted that the mark, trade name, or commercial name was the same as or substantially similar to a mark, trade name, or commercial name that was used in connection with a business or assets that were confiscated.”; and (5) in subsection (e), as so redesignated, by striking “In this section:” and all that follows through “(2) The term” and inserting the following: “In this section, the term”.” 

LINK TO COMPLETE ANALYSIS IN PDF FORMAT

Links To Related Analyses 

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? Nov 18, 2023  

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

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

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

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. Department Of State Explains Again Why Cuba Is A "State Sponsor Of Terrorism"

United States Department of State
Washington CC
30 November 2023

On the Release of the 2022 Country Reports on Terrorism 

Matthew Miller, Department Spokesperson 

“The Department of State issued the 2022 Country Reports on Terrorism (CRT).  Each year, the CRT provides insight on important issues in the fight against terrorism and helps the United States make informed decisions about policies, programs, and resource allocations as we seek to build counterterrorism capacity and resilience around the globe.  As the United States confronts a diverse and dynamic range of national security challenges, the U.S. government is deploying the full range of CT tools to ensure a sustainable whole-of-government and whole-of-society CT approach with allies and partners around the world.  The 2022 CRT is available on the Department’s website.

Chapter 2 -- State Sponsors of Terrorism  

This report provides a snapshot of events during 2022 relevant to countries designated as State Sponsors of Terrorism.  It does not constitute a new announcement regarding such designations. 

To designate a country as a State Sponsor of Terrorism, the Secretary of State must determine that the government of such country has repeatedly provided support for acts of international terrorism.  Once a country is designated, it remains a State Sponsor of Terrorism until the designation is rescinded in accordance with statutory criteria requiring the President to certify either that a) a designated country has not provided any support for acts of international terrorism during the previous six months and has provided assurances that it will not support acts of international terrorism in the future, or 2) there has been a fundamental change in the leadership and policies of the designated country, that the country is not supporting acts of international terrorism, and that the country has provided assurances that it will not support acts of international terrorism in the future.  A wide range of sanctions is imposed because of a State Sponsor of Terrorism designation, including the following: 

• A ban on arms-related exports and sales;
  Controls over exports of dual-use items, requiring 30-day Congressional notification for goods or services that could significantly enhance the terrorist-list country’s military capability or ability to support terrorism;
  Restrictions on U.S. foreign assistance;
  Visa processing requirements;
  Imposition of miscellaneous financial and other restrictions.

CUBA 

On January 12, 2021, the Department of State designated Cuba as a State Sponsor of Terrorism.  The Secretary determined that the Cuban government repeatedly provided support for acts of international terrorism in granting safe harbor to terrorists. 

Cuba was previously designated as a State Sponsor of Terrorism in 1982 because of its long history of providing advice, safe haven, communications, training, and financial support to guerrilla groups and individual terrorists. 

Cuba’s designation was rescinded in 2015 after a thorough review found that the country met the statutory criteria for rescission.  In 2021 the Secretary of State determined that Cuba had repeatedly provided support for acts of international terrorism in the six years since its designation had been rescinded.  Citing peace negotiation protocols, Cuba refused Colombia’s request to extradite 10 ELN leaders living in Havana after that group claimed responsibility for the 2019 bombing of a Bogotá police academy that killed 22 people and injured 87 others. 

The Cuban government did not formally respond to the extradition requests for ELN leaders Victor Orlando Cubides (aka “Pablo Tejada”) and Ramírez Pineda (aka “Pablo Beltrán”) filed by Colombia. 

In November, pursuant to an order from Colombian President Petro, the Attorney General announced that arrest warrants would be suspended against 17 ELN commanders, including those whose extradition Colombia had previously requested. 

Cuba also continues to harbor several U.S. fugitives from justice wanted on charges related to political violence, many of whom have resided in Cuba for decades.”

First Tesla Model Y Vehicle Authorized By Biden-Harris Administration Scheduled For Delivery To A Cuban National. Maryland-Based Company Received First BIS License.

2021 Tesla Model Y Long Range 4-Door Sport Utility Vehicle (SUV) With All Wheel Drive (AWD) With 317 Mile Range And One Tesla Wall Connector Gen 3 (208/240V) 

Landed 2021 Tesla Model Y Cost US$38,850.00 

Transported From Port Everglades, Florida, By Crowley Shipping 

The Tesla Will Reside At A Private Residence In Havana 

On 22 November 2023 at Port Everglades in the State of Florida, a 2021 Tesla Model Y was loaded onto a container vessel operated by Jacksonville, Florida-based Crowley Holdings, Inc. (2022 revenue US$2.2 billion) for its journey to Port Mariel, approximately thirty miles from the City of Havana, Republic of Cuba. 

• Import duty for an electric vehicle to the Republic of Cuba is based upon the value of the landed electric vehicle.  If the purchaser is a Micro, Small, or Medium-size Enterprise (MSME), the duty is 21%.  If the purchaser is an individual, the duty is 42%.

• Import duty for a gasoline-powered vehicle to the Republic of Cuba is based upon difference between the value of the landed vehicle and the resale value of the landed vehicle in the Republic of Cuba marketplace, with the difference multiplied by 32%.  For example, if the gasoline-powered vehicle landed valued of US$20,000.00 and the resale value in the Republic of Cuba marketplace is US$70,000.00, then the purchaser in the Republic of Cuba would pay 32% on the difference of US$50,000.00, which is US$16,000.00.  Thus, the import duty equates in this example to 80% of the vehicle landed value.  The resale value of the landed vehicle is determined by La Aduana General de la Republica de Cuba.   

This purchase represented the first delivery of a vehicle manufactured by Austin, Texas-based Tesla, Inc. (2022 revenue US$81 billion) from the United States to the Republic of Cuba authorized by a license issued to Colombia, Maryland-based Premier Automotive Export, Ltd. (PAE) from the Bureau of Industry and Security (BIS) of the United States Department of Commerce.

The Special Event Invitation: “John Felder, Founder and Chief Executive Officer of Colombia, Maryland-based Premier Automotive Export, Ltd. (PAE) has the honor of inviting you to a documentary premier “Driving Towards Change” that tells the story of my fifteen-year journey to become the first recipient of a license from the United States government to sell electric vehicles to Cuba.  At the event, we will also showcase the first Tesla vehicle delivered to Cuba from the United States.  This two-hour event will be at 2:00 pm on Friday, 1 December 2023, at the 2.45 Bar-Restaurante (Calle 46 & 5ta A La Hababa, Cuba).  International Jazz Artist, Chuck Holden will be performing at the event with a trio of Cuban musicians.”

During the Obama-Biden Administration (2009-2017) and then during the Trump-Pence Administration (2017-2021) PAE was awarded the first two licenses from the BIS to export electric vehicles and electric vehicle charging stations from the United States to the Republic of Cuba.  Exports to the United States Embassy in the city of Havana, Republic of Cuba, were specifically authorized by the second license.  PAE has received five BIS licenses since 2017 including the first BIS license to export an electric vehicle to an embassy located in the Republic of Cuba.   

On 17 November 2022, the Biden-Harris Administration (2021- ) approved a license application submitted on 22 October 2022 by PAE to the BIS to export electric vehicles and chargers to republic of cuba nationals with the “ULTIMATE CONSIGNEE: Privately owned companies in the Republic of Cuba owned by Cuba Nationals.”  The BIS license is valid until 30 November 2026.   

• “1. The items must be used to meet the needs of the Cuban people. 2. The items are not for resale to the Cuban government, or Cuban Government officials. 3. The items may not be reexported from Cuba to any other destination. 4. The items may not be used to enable or facilitate the export of goods or services from Cuba that primarily generate revenue for the Cuban government.”

On 28 September 2022, the BIS issued a license to PAE for the export of electric scooters and electric bicycles to Republic of Cuba nationals and to MSMEs.     

• LINK: Home Delivery For Electric Scooters To Cuba: As Biden-Harris Administration Expands U.S. Export Opportunities, A U.S. Company Responds Quickly To Customer Requests. Next Correspondent Banking? December 04, 2022  

• LINK: Ten Months After Denial, Biden-Harris Administration Approves Exports Of Electric Motorcycles, Electric Scooters To Cuba Nationals And To Privately-Owned Companies In Cuba October 05, 2022 

On 15 December 2021, the BIS denied a license application submitted on 30 September 2021 by PAE to export electric vehicles and chargers to republic of cuba nationals.  From the license application: “Specific End Use- Ordinary Cuban Nationals would be the specific End User and purchasing electric vehicle for their own personal transportation.”      

• From BIS: “There is a general policy of denial for exports and reexports to Cuba of items subject to the EAR, as described in Section 746.2(b) of the EAR. However, there are exceptions to the general policy of denial, some of which are listed below: … Items necessary for the environmental protection of U.S. and international air quality, waters and coastlines, including items related to renewable energy or energy efficiency, are generally approved.”    

• A license exception is a general authorization to export or reexport certain items without a license under stated conditions.  Only the license exceptions, or portions thereof, listed Section 746.2(a)(1) of the EAR are available for Cuba…. Support for the Cuban People: License Exception Support for the Cuban People (SCP) “§ 740.21 Support for the Cuban People (SCP). (a) Introduction. This License Exception authorizes certain exports and reexports to Cuba that are intended to support the Cuban people by improving their living conditions and supporting independent economic activity; strengthening civil society in Cuba; and improving the free flow of information to, from, and among the Cuban people. (b) Improving living conditions and supporting independent economic activity.…. (1) Items for use by the Cuban private sector for private sector economic activities… (2) Items sold directly to individuals in Cuba for their personal use or their immediate family's personal use,” LINK   

NOTE: On 24 January 2022, John Felder wrote to Brian Nichols, Assistant Secretary of State for Western Hemisphere Affairs, United States Department of State.  Excerpts: “I am writing you today to obtain authorization for my company to donate to the United States Department of State four (4) electric vehicle (EV) chargers for use at the Embassy of the United States in the city of Havana, Republic of Cuba, and for use at the Residence of the United States Ambassador in the city of Havana, Republic of Cuba.  My company would also coordinate the installation if beneficial to expediting the process….  I previously received from the Embassy of the United States in the Republic of Cuba an inquiry about sourcing an electric vehicle.”  There has yet to be a response from the United States Department of State despite several follow-up communications. 

Eleven Months After Denial, Biden-Harris Administration Approves Four-Year License To Export Electric Vehicles To Micro, Small & Medium-Size Enterprises (MSME's) In Cuba 

Original BIS License Application Background 

United States Department of Commerce- Bureau of Industry and Security, Office of Nonproliferation and Treaty Compliance- Foreign Policy Division, Washington DC- 10 November 2021  

“The Department of Commerce intends to deny the application referenced above. We are taking this action pursuant to Section 1756(a)(2) of the Export Control Reform Act of 2018 (ECRA) and in accordance with Part 750.6(a) of the Export Administration Regulations (EAR). The Department of Commerce believes that denial of this application furthers the United States policy in Section 1752(1)(B) of the ECRA, “to restrict the export of items if necessary to further significantly the foreign policy of the United States.”  We have reviewed your license application to export electric vehicles to Empresa Logistica Palco for resale to the general population in Cuba. Interagency reviewers have determined that your proposed transaction would be detrimental to U.S. foreign policy interests due to an unacceptable risk of diversion to unauthorized end uses and/or end users that primarily generate revenue for the state (including uses in the tourism industry).”    

“The attached application is rejected pursuant to Section 1756(a)(2) of the Export Control Reform Act of 2018 (ECRA), as amended, and paragraph 750.6 of the Export Administration Regulations. The U.S. Government has concluded that the export would be detrimental to U.S. foreign policy interests. Please refer to the attached official intent to deny letter dated November 10, 2021 for details regarding this denial. If you wish to rebut the intent to deny, a work item has been sent via SNAP-R that will allow you provide a rebuttal.”    

United States Department of Commerce- Bureau of Industry and Security, Office of Nonproliferation and Treaty Compliance- Foreign Policy Division, Washington DC- 15 December 2021  

“This application [500- Nissan Leaf Electric Vehicle value US$17,500,000.00] is denied pursuant to Section 1756(a)(2) of the Export Control Reform Act of 2018 and Section 750.6 of the Export Administration Regulations. The Department of Commerce, in consultation with other U.S. Government agencies, has concluded that this export would be detrimental to U.S. foreign policy interests. Refer to the formal intent to deny letter for details regarding this denial.”   

Recent Administration Policy Changes Background And Issue With Payments 

The Biden-Harris Administration policies and regulations have, thus far, focused upon providing connective and re-connective opportunities to the re-emerging private sector in the Republic of Cuba.    

The remaining challenge to transition Biden-Harris Administration policies from aspirational to operational is recreating a cost-efficient, timely, transparent, and secure mechanism to move funds from the United States to the Republic of Cuba and from the Republic of Cuba to the United States through the authorization of direct correspondent banking.  

On 10 May 2022, the OFAC issued a license authorizing direct investment in and direct financing to a privately-owned company located in the Republic of Cuba owned by a Republic of Cuba national.  Investment funds and dividends, and financing funds and interest/interest/principal payments must currently be transferred through financial institutions located in third countries.  

• 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  

The issuance of the licenses in May 2022, September 2022, and November 2022 by the OFAC and BIS will result in two-way transfers that are small in value but consistent.  Privately-owned companies located in the Republic of Cuba sending dividend (profit sharing) payments to the source(s) of direct investment and sending interest and principal payments for direct financing.  Republic of Cuba nationals and privately-owned companies located in the Republic of Cuba sending payment(s) for the purchase of an electric vehicle.  

From John Felder, Founder and Chief Executive Officer of PAE, “Essential for the OFAC to authorize direct correspondent banking so payments for electric vehicles may be transferred by citizens of Cuba with the least amount of cost, least amount of effort, least amount of time, most amount of security, and most amount of transparency.  Payments should not need to move through third-country banks.  Support two-way transactions rather than three-way transactions.”

Potential customers of PAE have inquired about installment payments for the purchase of EVs.  As monthly payments would be minimal in value, the cost for sending the funds through a third country financial institution would be larger than the installment amount.  Flexibility to provide installment payments will further enhance the cashflow of an MSME and further connect the MSME with the United States-based company.   

A significant transaction hurdle remains receiving payments in the United States from Republic of Cuba nationals residing in the Republic of Cuba who are restricted in the amount of Cuban Pesos they may exchange for convertible currencies, including United States Dollars and Euros.   

The OFAC authorizes United States financial institutions to have correspondent accounts with Cuba-based financial institutions.   

The decision by the Obama-Biden Administration not to authorize Republic of Cuba-based financial institutions to have correspondent accounts with United States-based financial institutions never made sense- the marketplace, meaning United States-based financial institutions and their customers should determine if they want to engage in direct correspondent banking.  As written, the OFAC regulations today do not provide United States companies with a viable mechanism to avoid the use (and delay and expense) of third-country financial institutions to send or receive authorized payments.  Why one way, but not both ways?    

The use of correspondent accounts is particularly critical to the re-emerging private sectors in Cuba as represented by MSMEs. 

The current requirement to move funds from the Republic of Cuba and to the Republic of Cuba through third-country financial institutions is inefficient, not transparent, and expensive- especially when considering that MSME transactions are often small which makes the fees far more onerous as a percentage of the total transaction.  This is true for vehicles and vehicle parts. 

There are discussions within the BIS, OFAC, and United States Department of State to authorize Republic of Cuba-based financial institutions to have correspondent accounts with United States-based financial institutions which would then permit the efficient, transparent, and cost-effective movement of funds for authorized transactions.   

• 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 

• 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

PAE BIS License History 

PAE has received five licenses from the BIS for the export of vehicles (gasoline and electric) to the Republic of Cuba, including for use by embassies.  The first BIS license was issued during the Obama-Biden Administration (2009-2017), the second BIS license was issued during the Trump-Pence Administration (2017-2021), and the third, fourth, and fifth BIS licenses were issued during the Biden-Harris Administration (2021- ).    

From the BIS: “There is a general policy of denial for exports and reexports to Cuba of items subject to the EAR, as described in Section 746.2(b) of the EAR. However, there are exceptions to the general policy of denial, some of which are listed below: … Items necessary for the environmental protection of U.S. and international air quality, waters and coastlines, including items related to renewable energy or energy efficiency, are generally approved.”   

• BIS License D1297862 (11/17/22- 11/30/26)- Electric vehicles and chargers to republic of cuba nationals with the “ULTIMATE CONSIGNEE: Privately owned companies in the Republic of Cuba owned by Cuba Nationals.”    

• BIS License D1290656 (9/28/22-9/30/26)- Electric scooters and electric bicycles to individuals of Cuban descent and to Micro, Small and Medium-Size Enterprises (MSMEs) in the Republic of Cuba owned by Republic of Cuba nationals.   

• BIS License D1267261 (1/24/22-1/31/26)- Sales only to embassies.  Automobiles: Gasoline powered, Pickup trucks with ICE, Electric or Hybrid Engines. Options to include 4x4, 2 or 4 door cab.  

• BIS License D1166163 (7/3/19-7/31/23)- Sales only to embassies.  Forty-one (41) different parts for gasoline powered vehicles.  

• BIS License D1076571 (1/9/17-1/31/21)- To export Nissan Leaf electric vehicle and Clipper Creek level II 40-amp electric charger with J-1772 universal charging connector to embassy of Guyana in Havana, Republic of Cuba.   

• BIS License Exception (2017/2018)- Four (4) electric scooters.  A license exception is a general authorization to export or reexport certain items without a license under stated conditions.  Only the license exceptions, or portions thereof, listed Section 746.2(a)(1) of the EAR are available for Cuba…. Support for the Cuban People: License Exception Support for the Cuban People (SCP) “§ 740.21 Support for the Cuban People (SCP). (a) Introduction. This License Exception authorizes certain exports and reexports to Cuba that are intended to support the Cuban people by improving their living conditions and supporting independent economic activity; strengthening civil society in Cuba; and improving the free flow of information to, from, and among the Cuban people. (b) Improving living conditions and supporting independent economic activity.…. (1) Items for use by the Cuban private sector for private sector economic activities… (2) Items sold directly to individuals in Cuba for their personal use or their immediate family's personal use,”   

PAE-Related Analyses Links 

Biden-Harris Administration Re-Engagement With Cuba’s Re-Emerging Private Sector Brings Urgency To Re-Authorization Of Direct Correspondent Banking, U-Turn Transactions. One-Way Does Not Work.  October 06, 2022 

Ten Months After Denial, Biden-Harris Administration Approves Exports Of Electric Motorcycles, Electric Scooters To Cuba Nationals And To Privately-Owned Companies In Cuba October 05, 2022 

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

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

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

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

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

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

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

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

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

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

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

LINKS TO RELATED ANALYSES 

Is EV Data Really SCI? If U.S. Department Of State Wants U.S. Companies To Shift From Incredulousness To Embracing, Then Be Practical And Transparent Rather Than Secretive And Woefully Unprepared May 29, 2023 

State Department, NSC, OFAC, BIS, USDA Don't Understand Requirements For Financial Plumbing To Function Efficiently.  They Excel In Creating, Maintaining, And Defending Clogs. May 16, 2023  

Biden-Harris Administration Issues Third Known BIS/OFAC License Authorizing Vehicle Exports From U.S. To Cuba. Payments Still Must Move Through Third Countries. May 12, 2023  

Cuba Reports Creation Of 294 New MSMEs. 3.7% Are Government-Operated Companies Becoming "Private" Companies. May 10, 2023  

Why Is One-Year Anniversary Of Biden-Harris Administration Approving First Investment/Financing To Private Company In Cuba A Disappointment? Cuba Has Not Published Regulations For Delivering It. May 9, 2023  

Why Do U.S.-Based Financial Institutions Avoid Cuba? OFAC Uses 54 Pages To Describe "De-Risking" Reasons. Irony? They Lament The Impact Of Their Decisions. Then Why Create Them? May 7, 2023  

Logic From U.S. Department Of State:  If We Permit It, Cuba Might Not Use It, So We Won’t Permit It.  And, Yes, No One Asked Cuba. And, No One Asked U.S. Banks, Companies. May 1, 2023  

Biden-Harris Administration Approves Second Known License For A U.S. Company To Export Vehicles And Equipment To Private Companies In Cuba. Payment? That Remains A Problem. OFAC Doesn't Care. Apr 29, 2023  

Cuba "Streamlining" Approval Process For Agriculturally-Focused Economic Associations With Foreign Capital. Still No Regulations For U.S.-Sourced MSME Private-Sector Foreign Investment/Financing Apr 27, 2023  

Cuba Seeking Investors, Financing For State-Owned Companies.  U.S. Entrepreneurs Waiting Since May 2022 For Cuba Regulations To Deliver Investment And Financing To Private Companies In Cuba Apr 27, 2023

LINK TO COMPLETE ANALYSIS IN PDF FORMAT

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