Commerce Appropriations Bill Prohibits Exports to Cuban Military

capitolhillcubans

Last month, the must-pass Transportation Appropriations bill was introduced in the House with language prohibiting the use of confiscated property for new travel -- by airplane or vessels -- to Cuba.

This morning, that language passed the full House Appropriations Committee's markup of the legislation.

The Transportation Appropriations language poses the question:

Should the Castro regime be allowed to use stolen property for its commercial benefit? 

Also this morning, the House Appropriations Committee released its must-pass bill funding the Commerce and Justice Departments ("CJS").

The bill includes a provision ensuring that none of the exports authorized under the Obama Administration's new "Support for the Cuban People" category (under Commerce Department regulations) can be funneled through entities owned or controlled by the Castro regime's military or security services.

The Commerce Appropriations language poses the question:

Should exports to Cuba be funneled through Castro's military and security services? 

Surely, the answer to both is no.

Below is the provision in Commerce Appropriations:

SEC. 540. (a) No funds made available in this Act may be used to facilitate, permit, license, or promote exports to the Cuban military or intelligence service or to any officer of the Cuban military or intelligence service, or an immediate family member thereof.

(b) This section does not apply to exports of goods permitted under the Trade Sanctions Reform and Export Enhancement Act of 2000 (22 U.S.C. 7201 et seq.).

(c) In this section—

(1) the term ‘‘Cuban military or intelligence service’’ includes, but is not limited to, the Ministry of the Revolutionary Armed Forces, and the Ministry of the Interior, of Cuba, and any subsidiary of either such Ministry; and

(2) the term ‘‘immediate family member’’ means a spouse, sibling, son, daughter, parent, grandparent, grandchild, aunt, uncle, niece, or nephew.

Cubaeconomía: La reanudación del comercio con Cuba es lenta

Cubaeconomía

Elías Amor Bravo, economista

Nadie dijo que iba a ser rápido. Esta afirmación viene a cuento de unas declaraciones de la Secretaria de Comercio de EEUU, Penny Pritzker: “La reanudación del comercio con Cuba es lenta”, hechas en diferentes medios que permanecen atentos al clima de las negociaciones entre Estados Unidos y Cuba desde que el diciembre del año pasado el presidente Obama diera los primeros pasos en esa dirección.

Para empezar, el avance de las negociaciones comerciales se ha visto condicionado por el restablecimiento de las relaciones diplomáticas, un asunto que las autoridades de la Isla han decidido convertir en una trinchera inexpugnable, para airear unas pretendidas diferencias con EEUU en materia de derechos humanos. Para vergüenza internacional, el régimen castrista intenta reivindicar un modelo propio de derechos humanos para contraponerlo al que plantean las autoridades estadounidenses en la negociación que se corresponde con la Carta de Naciones Unidas. Mientras tanto, el tiempo pasa.

Lo que tal vez nadie ha advertido, hasta la fecha, es que la apertura comercial castrista a Estados Unidos se pretende producir en un momento especialmente complicado para el entramado institucional de la economía de la Isla. Esta misma semana se ha anunciado por Venezuela una reducción a la mitad del petróleo que entrega a Cuba, lo que significa una notable reducción en el principal mecanismo que equilibra la balanza comercial deficitaria del régimen. Menores ingresos, suponen menor capacidad de compra a nivel internacional, menos solvencia y credibilidad. En suma, un peligroso acercamiento a un desequilibrio externo que los cubanos recuerdan con pavor, como el que trajo el derrumbe de Berlín.

Washington pretende en este contexto de debilidad estructural de la economía castrista, aumentar las ventas a Cuba, pensando en el hipotético potencial de la isla como uno de los principales mercados en la región latinoamericana. Lo cierto es que, incluso en las difíciles y complicadas condiciones actuales, EEUU vendió a Cuba por importe de 2.340 millones de dólares en 2014, e incrementar ese nivel de exportaciones va a exigir mucho más que voluntad política y buenas relaciones diplomáticas. La contraparte, lo que Cuba puede vender a EEUU está por determinar.

En ese sentido, la nueva política hacia Cuba del presidente Barack Obama, puede suponer un peligroso salto en el vacío para los intereses estadounidenses, si previamente el régimen castrista no hace los deberes en materia económica, a lo que se niega de forma sistemática. De nada servirá que el llamado “embargo económico” pueda ser desmantelado, si luego las ventas a Cuba se estancan o en el peor de los casos, simplemente no se pueden pagar. Es evidente que hay mucho en juego, realmente mucho más que la apertura de embajadas o el deshielo de las relaciones entre los dos países. Unas cuantas botellas de ron, algunos cigarros habanos y la oferta hotelera son activos insuficientes para compensar un futuro comercio equilibrado entre los dos países. Ni siquiera el recurso a las remesas de las familias podría contribuir a que el potencial de compra de la economía castrista aumente.

Por eso, Pritzker ha sido sensata al declarar que, a pesar de la buena voluntad de su departamento, en aras al aumento del comercio bilateral, será un proceso lento y no inmediato.

El problema, evidentemente, no está en Estados Unidos. El problema, como viene siendo habitual, está en el régimen de La Habana.

Algunos de esos problemas son bien conocidos. Otros menos. Por ejemplo, la obsesión totalitaria del régimen castrista por el control de la economía. Es de tal magnitud que lleva al gobierno a controlar todas las importaciones, y no disponer de mecanismos para facilitar las exportaciones de la producción de la incipiente iniciativa privada que existe en la Isla, casi toda localizada en un pujante sector servicios que está mostrando una extraordinaria vitalidad. Las autoridades de Estados Unidos reconocen con discreción que mientras la estructura actual de la economía dependa en exclusiva de entidades del gobierno, poco, muy poco van a avanzar las relaciones comerciales entre los dos países.

Desde Estados Unidos se ha planteado en alguna de las negociaciones la posibilidad que las entidades importadoras del gobierno de la isla, todas de propiedad estatal, se encarguen de facilitar la exportaciones estadounidenses y al mismo tiempo, dejar que los empresarios estadounidensescontacten directamente a la iniciativa privada de la Isla y hagan negocios sin pasar por el circuito gubernamental. Una propuesta a la que el régimen castrista ha hecho un absoluto rechazo. En tales condiciones, todo va a ir muy lento. Mucho más de lo que se piensa. El régimen castrista ha demostrado en más de medio siglo, una extraordinaria capacidad para controlar los tiempos. No hay razón alguna para ser diferente, y mucho menos cuando se puede perder todo. Absolutamente todo.

Secretaria de Comercio de EEUU: 'La reanudación del comercio con Cuba es lenta'

EL MUNDO

RUI FERREIRA

Las autoridades estadounidenses han decidido promover el comercio con Cuba como una forma de incentivar el desarrollo económico de la isla comunista. "Nuestro trabajo no está completo", ha dicho la secretaria de Comercio de Estados Unidos, Penny Pritzker, al anunciar que piensa viajar a La Habana tan pronto se reanuden las relaciones diplomáticas a nivel de embajador entre ambas naciones.

Para Washington un incremento de las ventas a Cuba apenas favorece a los empresarios estadounidenses, pero sí tiene el potencial de colocar a la isla como uno de los principales mercados en la región latinoamericana. Aunque las exportaciones globales de Estados Unidos alcanzaron una cifra récord de 2.340 millones de dólares el año pasado, "necesitamos ampliar nuestra exportaciones aún más", ha enfatizado la funcionaria en un discurso ante una audiencia de empresarios de Tampa, al centro de Florida.

Pese al embargo económico, en 2014 Estados Unidos vendió a Cuba unos 100 millones de dólares en alimentos y productos agrícolas, los únicos billetes permitidos de momento tras un permiso especial expedido por el ex presidente Bill Clinton en el año 2000, dentro de un paquete de ayuda de emergencia a la región caribeña después que sufriera tres huracanes ese año.

"La nueva política hacia Cuba del presidente Barack Obama, permitirá a la comunidad empresarial ser la cara de un cambio positivo en Cuba", ha enfatizado la subsecretaria, dejando entrever que el embargo económico podía ser parcialmente desmantelado tan pronto se reanuden las relaciones entre embajadas como acordaron los dos países en diciembre del año pasado cuando anunciaron el deshielo de sus relaciones.

Pritzker ha subrayado que su ministerio tiene el "importante rol de facilitar el comercio bilateral ya que creemos que el lado económico de la relación puede muy importante". Sin embargo, ha admitido, la reanudación del comercio es un proceso lento y no inmediato. "No es algo que se logre durante un fin de semana", ha asegurado.

Nueva ley de inversiones cubana

El Gobierno cubano anunció el sábado que ha aprobado una nueva ley de inversiones. Sin embargo todavía no la ha publicado en la Gaceta Oficial, por lo que no se conocen grandes detalles. Lo poco que se sabe indica que los impuestos a las empresas extranjeras dispuestas a invertir en la isla ha bajado de 30% a 15% y durante los primeros ocho años de operaciones no pagarían tributos.

Un escollo en el intercambio comercial con Estados Unidos sería, en opinión de Matthew Borman, subsecretario de Comercio y asistente de la Oficina de Industria y Seguridad, el hecho de que el Gobierno cubano controla todas las importaciones y no dispone de un mecanismo para la exportación de la producción de la incipiente iniciativa privada, un sector en el cual EEUU está sumamente interesado. "Reconocemos que la estructura actual está a cargo de entidades del gobierno. Si tomamos la posición de que el gobierno cubano no toque nada, entonces nada va a ocurrir", ha dicho Borman, quien participó en la reunión.

Una solución, ha puntualizado el funcionario, sería que las entidades importadoras del Gobierno de la isla se encarguen de facilitar la exportaciones estadounidenses y dejar que el empresario estadounidense contacte directamente a la iniciativa privada y haga negocios sin pasar por el circuito gubernamental.

"Si las exportaciones de Estados Unidos son únicamente para el uso del gobierno cubano, entonces la respuesta es un no rotundo. Tiene que involucrar la iniciativa privada", ha subrayado.

Cuba no exporta nada a Estados Unidos, solo importa, porque los empresarios estadounidenses pueden vender gracias al permiso excepcional dado por Clinton en el año 2000. Si los dos países quieren formalizar sus relaciones económicas necesitan de un acuerdo bilateral que es lo que Pritzker pretende logar en La Habana tan pronto se normalicen las relaciones.

El embargo económico, establecido a inicios de los años 60 del siglo pasado solo puede ser derogado por el Congreso. Sin embargo, Obama dispone de algunas prerrogativas ejecutivas que pueden debilitarlo, como prometió en diciembre cuando anunció el acuerdo de normalización junto a su homólogo cubano Raúl Castro.

Agribusiness Should Come Clean About 'Trade' With Cuba

capitolhillcubans

By Mauricio Claver-Carone in The Hill:

Agribusiness should come clean about 'trade' with Cuba

Whether the embattled Export-Import Bank of the United States ("Ex-Im Bank"), which finances and insures U.S. exports, is a needed facilitator or a government agency doling out “corporate welfare” is a debate still raging in Washington. So it’s somewhat ironic that the agribusiness conglomerates who have benefited most from the Ex-Im Bank’s export credits and loan guarantees are lining up to drive the final nail in the bank’s coffin.

Building on the perceived momentum of President Obama’s December announcement that his administration and Cuba are seeking to “normalize” relations, the newly formed U.S. Agriculture Coalition on Cuba ("the Coalition") is pushing Congress to instruct the Ex-Im Bank to finance expanded agricultural sales to the Castro dictatorship in Cuba. Yet Cuba ranks among the world’s worst credit-risks and debtor nations.

While Obama says he will use his executive authority to ease the U.S. embargo and travel restrictions, the extent of that authority is uncertain. Congress codified the embargo and tourism ban into law in 1996 and 2000 and only Congress can actually change the law.

Chaired by Minnesota-based Cargill Inc., the Coalition is eyeing a more immediate “prize”: lifting the prohibition on Ex-Im Bank financing exports of agricultural products to Cuba. It's one thing to lobby to do business with one of the world's last remaining totalitarian dictatorships for the sake of profit; it’s quite another to peddle the deceit to the American public that trade with Cuba serves some public interest here or in Cuba. The Coalition ought to be more forthright about its goals.

Minnesota Sen. Amy Klobuchar (D) delivered the Coalition’s rallying call during its launch at the National Press Club in Washington: "We see Cuba as a market of 11 million people; 11 million new customers that can buy American products." Unfortunately, Klobuchar is not "seeing" the facts very clearly. For five decades, every single "foreign trade" transaction with Cuba has been made with a Cuban-government entity. The Cuban government’s exclusive right to trade and control investment is enshrined in Article 18 of Fidel Castro's 1976 Constitution.

Congress authorized “cash-in-advance” sales of U.S. agricultural product to Cuba in the 2000 Trade Sanctions Reform and Export Enhancement Act. More than 250 privately-owned American companies have since sold $4 billion in agricultural products to Cuba. All of those sales were to a single buyer: the Cuban government. That’s hardly surprising, Cuba is a totalitarian state. The only trade and investment partner on the island is the government, run by Fidel and Raul Castro.

Obama's Secretary of Agriculture Tom Vilsack also waxed enthusiastically about the “opportunities” for agricultural sales to Cuba. Yet, his Department’s report on Cuba notes, “The key difference in exporting to Cuba, compared to other countries in the region, is that all U.S. agricultural exports must be channeled through one Cuban government agency, ALIMPORT." Exporting to Cuba is not about trading with small or mid-size farmers, businesses and manufacturers around the island, as the Coalition would like Americans to believe.

It should be no surprise that U.S. products end up on the shelves of government-owned stores that accept only “hard currencies,” such as the U.S. dollar or Euro, with huge price mark-ups. Shoppers at these “dollar stores” are mainly tourists. Little imported food or medicine ever makes it into stores where Cubans shop; neither is it available on ration cards.

But the coalition doesn't care that ALIMPORT is the only "Cuban market.” It only cares that Cuba’s one customer can buy enough to ensure a profit for exporters. So the question becomes: Is that customer credit-worthy?

The Paris Club is a group of 19 nations that extend credit to trade partners. Cuba ranks No. 2 on the Club’s list of most indebted nations. (Greece, with more than five times Cuba's economic output, is the world’s most indebted nation.) Creditors’ claims against Cuba now total $35.193 billion (a $5 billion increase from the previous year). Moody's Investors Service gives Cuba's sovereign debt a Caa2 rating, which translates into "very high credit risk." How have European and Canadian investors in Cuba fared? In 2000, there were 400 foreign companies operating in Cuba as minority partners in joint ventures with the Castro regime. Today, there are less than 200. The British news service Reuters reports that Cuba “failed to make some debt payments on schedule beginning in 2008, and then froze up to $1 billion in the accounts of foreign suppliers by the start of 2009." During the same time, CEOs of various foreign companies doing business in Cuba were arrested. Some are still sitting in jail, even though no charges have been filed against them.

Lastly, let’s not forget the nearly 6,000 unpaid, certified claims, worth nearly $7 billion arising from the Castro government’s confiscation of American-owned business and properties.

This is the Cuban government the new Coalition wants Congress to authorize the Ex-Im Bank to finance and American taxpayers to subsidize. That may serve the selfish interests of Cuba's dictatorship, Cargill and a few other agribusiness conglomerates, but it’s a heavy price for the American and Cuban people to pay for “normalization.”

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Claver-Carone is a director of the U.S.-Cuba Democracy PAC and host of the foreign-policy show "From Washington al Mundo" on Sirius-XM's Channel 153. He is an attorney who formerly served with the U.S. Department of the Treasury and has served on the full-time faculty of The Catholic University of America's School of Law and adjunct faculty of The George Washington University's National Law Center.

Vivan los Yumas! Entusiasmo x aumento de las remesas

AmericaTeVeCanal41

The U.S's new policy shift on trade with Cuba and the impact on U.S. businesses - WSJ

No gold rush for Cuba despite diplomatic thaw

Pensions & Investments

By Rick Baert

A slight thaw in U.S.-Cuba relations has some observers thinking that down the road, U.S. asset owner interest in the Caribbean nation could heat up. 

“Every now and then I get a call from someone in private equity or infrastructure asking when we can invest in Cuba,” said Julia E. Sweig, Nelson and David Rockefeller senior fellow for Latin America Studies and director for Latin America studies at the Council on Foreign Relations, a Washington-based think tank. “But regulations regarding that aren't out yet.”

Institutional investment in Cuba “could be years away,” said Greg Behar, senior vice president, director of global equity investment strategy at Northern Trust Asset Management, Chicago. “It'd be in the bullpen for frontier markets.”

What sparked interest in Cuba, 53 years after the U.S. broke off diplomatic relations, was the Dec. 17 announcement by President Barack Obama and Cuban President Raul Castro that they would begin a process to normalize relations between the two countries. Along with establishing a U.S. embassy in Havana, the agreement would lift some U.S. travel restrictions and give U.S. banks access to the Cuban financial system. However, the agreement does not end the 52-year U.S. embargo against trade with Cuba, nor does it change Cuba's designation as a state sponsor of terrorism, made by the U.S. State Department in 1982.

It's the embargo — which would require an act of Congress to remove — and the terrorism sponsorship designation that has U.S. institutional investors silent on Cuba as a potential investment destination. Sources at money managers, asset owners and investment consultants contacted for this story would not comment on the potential for future investment in Cuba.

Given the half-century of animosity between the U.S. and Cuba, there would “definitely” be political risk in institutional investment in Cuba, said Brenden Woods, partner and co-head of infrastructure and real assets at alternative investment consultant StepStone Group, San Diego. “But I wouldn't necessarily say it's higher than any other emerging market. You may see adoption of developed-market investment structures like public/private partnerships, but implementation of those structures may require some observation before commitment. It'd definitely be a material consideration. It'll probably be a little bit of who jumps first, then you'll see a little follow-the-leader.”

Too soon

Officials at two public pension funds that have small allocations to frontier markets said, on condition of anonymity, that it's too soon to say whether they would allow their external managers to invest in Cuba. But one of the executives said there could eventually be opportunities for private equity investments there.

The ban even has an effect on investors in countries which have no ban on Cuba because of the financial weight the U.S. holds. “Of course, no one will talk about it,” said Sebastiaan Berger, the Hague, Netherlands-based CEO of CEIBA Investments Ltd. CEIBA is a real estate investment manager focusing on development of Cuban commercial and hotel real estate. “That wall will crumble. There already have been pension funds elsewhere investing in Cuba, but everyone's secretive about it because of the ridiculous regulations that are in place.”

The terrorism-sponsorship designation “is now under formal review as part of a review of U.S.-Cuban relations,” said Philip Peters, president, Cuba Research Center, Alexandria, Va., a think tank focusing on Cuban-American relations. “Because of this designation, the movement of money to and from Cuba is monitored by the U.S. Treasury, making investment by anyone, foreign or U.S., very difficult. Few banks want to deal with them. That would all go away once the designation was removed, making Cuba a lot more attractive for investment.”

Northern Trust's Mr. Behar said Cuba would also need to shore up its economic and financial infrastructure, including the creation of a stock exchange, and would need to be open to all foreign investment before being included in indexes and portfolios of frontier markets strategies.

Mr. Peters and others said Cuba would provide fertile ground as a frontier market in need of huge amounts of foreign investment, with sectors running the gamut from real estate and infrastructure to commodities and energy.

Potential opportunities in Cuba are “almost everywhere, because Cuba needs everything,” said Ms. Sweig.

Growth areas

Mr. Berger said some sectors prime for investment in Cuba, in addition to tourism, are air, ground and sea transportation of any kind; oil and gas exploration; nickel mining; cement production; “almost anything you can think of” in industrial and service sectors; and a wide array of construction and infrastructure needs.

“All of these are areas for growth,” Ms. Sweig said, but she cautioned: “Just because the Obama administration changed its policy doesn't mean that Cuba will change its policies top to bottom. Cuba has foreign investment guidelines and national priorities ... this doesn't mean Cuba will be open for business tomorrow.”

Currently, foreign investment in Cuba is done under a 2014 Cuban law allowing joint ventures with the Cuban government directly or with one of the country's state-run businesses. Investments are directed to portfolio projects chosen by the Cuban government, with most steered to sectors that generate hard currency. Cuba has two currencies, a non-convertible peso and a peso that can be converted, but only in Cuba. “Some foreign investors who've been there a long time have gotten returns,” Mr. Peters said. “The question is what would have to happen to get the returns. In basic finance, the math works out, but will the returns come in a currency that can't be converted in foreign exchange?” Mr. Castro has called for a unified currency, “and if it's fully convertible on the world market, this problem goes away,” he said.

Ms. Sweig said the Cuban government normally holds at least 51% of a joint venture, “but supposedly they've become more flexible with that ownership share.”

One potential target for private equity investment is entrepreneurial cooperative businesses in Cuba that operate independent of the government.

“Individually operated and small-sized businesses have seen big growth” since a 2010 law that liberalized rules for opening private businesses, said Mr. Peters. That law helped increase the number of Cubans operating private businesses to 500,000 today from 150,000 in 2010. “Those people are receiving investment on the family level with seed capital to start small businesses like restaurants, car repair shops and tailors,” he said.

Lots of inquiries

Since Mr. Obama announced resumption of diplomatic relations with Cuba, CEIBA has received a lot more inquiries from potential investors, said Mr. Berger. He expects CEIBA will benefit from its longtime expertise in Cuba, but he also acknowledged CEIBA is a relatively small manager and there'll be plenty of room for other money managers. CEIBA manages $110 million in assets, including “a small amount” from European pension funds he would not identify.

Cuba might be seen as following the same path as communist-led nations China and Vietnam in moving to a more open economic market, but Mr. Peters warned that Cuban officials won't admit to that.

“Cuban officials have been in touch with the Vietnamese and Chinese. They've seen up-close how China and Vietnam have evolved in terms of private capital and investment,” Mr. Peters said. “No Cuban will say that they're following a blueprint from anyone, but I'm sure they've learned a lot from watching them.”