November 1, 2011
The Honorable Barack Obama
President of the United States
The White House
Washington, D.C. 20500
Dear Mr. President:
We are extremely concerned over what seems to be a lack of a coordinated effort by the Administration to prevent a State Sponsor of Terrorism, just 90 miles from our shores, from engaging in risky deep sea oil drilling projects that will harm U.S. interests as well as extend another economic lifeline to the Cuban regime.
Spain’s state-owned energy company, Repsol, has entered into an agreement with the Cuban regime to drill off Cuba’s coast. A Chinese-built deep water oil rig will be used for this project – the Scarabeo 9. Despite the fact that the oil rig has not reached Cuban territorial waters, or the Western Hemisphere for that matter, the Department of Interior has been actively providing assistance, guidance, and technical advice to Repsol. This is inconsistent with numerous U.S. foreign policy and national security objectives with regards to Cuba.
The Trading with the Enemy Act (TWEA) as implemented by 31 C.F.R. § 515.201, prohibits certain transactions involving property in which Cuba or a Cuban national has any interest whatsoever, directly or indirectly. The support that the Department of Interior is providing to Repsol appears to be in contravention of TWEA, as such assistance will result in a financial windfall to the Cuban regime. It may also facilitate processes that could lead to an environmental disaster off U.S. shores and the greater Caribbean.
The Director of the Bureau of Safety and Environmental Enforcement for the Department of Interior at a recent Senate Energy and Natural Resources Committee hearing, indicated that Interior, in coordination with the U.S. Coast Guard, will conduct an examination of the rig just before it enters Cuban waters. However, in conjunction with this examination, we request that the Department of Commerce’s Bureau of Industry and Security (BIS) also be involved and conduct its own review and inspection to ensure that no U.S. laws or regulations are being violated, including the TWEA and the Export Administration Act (EAA).
We are concerned by reports that the Scarabeo 9 may have been designed specifically to avoid U.S. economic sanctions against Cuba. While the EAA and the Export Administration Regulations (EAR) generally prohibit virtually all exports and reexports of U.S. – origin goods, software and technology to Cuba, we need clarity on how the Administration is applying the sanctions and EAR to foreign produced items incorporating 10 percent or less controlled U.S. content.
According to press reports, the Scarabeo 9 includes a U.S. origin blowout preventer and may contain other controlled, U.S. origin items, and possible advanced computer software that may be in violation of EAR section 734.4, the de minimis U.S. content rule regarding technology found on this structure. What information or assurances has the Administration sought or received from Repsol to ensure that the oil rig complies with existing U.S. sanctions against Cuba?
Recently, your Administration announced a settlement with a Texas company, Flowserve, for alleged violations stemming from transactions that included, among others, the exports of pumps, valves, and related component parts and supplies from the United States indirectly to Iran. According to the Federal Register notice, several of Flowserve’s foreign affiliates engaged in transactions involving property in which Cuba or a Cuban national had an interest. The company has agreed to remit $2.5 million to BIS to settle apparent violations of the EAR arising from the same course of conduct. We would appreciate additional information about this matter to learn what U.S. oil drilling or related technologies may have made their way to Cuba and if any of this technology could be used for the Scarabeo 9 project.
The Export Administration Regulations clearly state that the only items allowed to be exported to Cuba are donations of medical equipment, agricultural exports, and telecommunications equipment. Thus, even if the de minimis rule does not apply, the broader prohibitions against exports to Cuba must still be enforced.
We are concerned that sensitive U.S. technology can fall in the hands of a regime that supports terrorism and as such, this Committee would appreciate a response to the matters raised in this letter as soon as possible.
Thank you very much for your attention to this matter.
U.S. Rep. Ileana Ros-Lehtinen (R-FL)
U.S. Rep. Albio Sires (D-NJ)
U.S. Rep. Mario Diaz-Balart (R-FL)
U.S. Rep. David Rivera (R-FL)
The Honorable Barack Obama
President of the United States
The White House
Washington, D.C. 20500
Dear Mr. President:
We are extremely concerned over what seems to be a lack of a coordinated effort by the Administration to prevent a State Sponsor of Terrorism, just 90 miles from our shores, from engaging in risky deep sea oil drilling projects that will harm U.S. interests as well as extend another economic lifeline to the Cuban regime.
Spain’s state-owned energy company, Repsol, has entered into an agreement with the Cuban regime to drill off Cuba’s coast. A Chinese-built deep water oil rig will be used for this project – the Scarabeo 9. Despite the fact that the oil rig has not reached Cuban territorial waters, or the Western Hemisphere for that matter, the Department of Interior has been actively providing assistance, guidance, and technical advice to Repsol. This is inconsistent with numerous U.S. foreign policy and national security objectives with regards to Cuba.
The Trading with the Enemy Act (TWEA) as implemented by 31 C.F.R. § 515.201, prohibits certain transactions involving property in which Cuba or a Cuban national has any interest whatsoever, directly or indirectly. The support that the Department of Interior is providing to Repsol appears to be in contravention of TWEA, as such assistance will result in a financial windfall to the Cuban regime. It may also facilitate processes that could lead to an environmental disaster off U.S. shores and the greater Caribbean.
The Director of the Bureau of Safety and Environmental Enforcement for the Department of Interior at a recent Senate Energy and Natural Resources Committee hearing, indicated that Interior, in coordination with the U.S. Coast Guard, will conduct an examination of the rig just before it enters Cuban waters. However, in conjunction with this examination, we request that the Department of Commerce’s Bureau of Industry and Security (BIS) also be involved and conduct its own review and inspection to ensure that no U.S. laws or regulations are being violated, including the TWEA and the Export Administration Act (EAA).
We are concerned by reports that the Scarabeo 9 may have been designed specifically to avoid U.S. economic sanctions against Cuba. While the EAA and the Export Administration Regulations (EAR) generally prohibit virtually all exports and reexports of U.S. – origin goods, software and technology to Cuba, we need clarity on how the Administration is applying the sanctions and EAR to foreign produced items incorporating 10 percent or less controlled U.S. content.
According to press reports, the Scarabeo 9 includes a U.S. origin blowout preventer and may contain other controlled, U.S. origin items, and possible advanced computer software that may be in violation of EAR section 734.4, the de minimis U.S. content rule regarding technology found on this structure. What information or assurances has the Administration sought or received from Repsol to ensure that the oil rig complies with existing U.S. sanctions against Cuba?
Recently, your Administration announced a settlement with a Texas company, Flowserve, for alleged violations stemming from transactions that included, among others, the exports of pumps, valves, and related component parts and supplies from the United States indirectly to Iran. According to the Federal Register notice, several of Flowserve’s foreign affiliates engaged in transactions involving property in which Cuba or a Cuban national had an interest. The company has agreed to remit $2.5 million to BIS to settle apparent violations of the EAR arising from the same course of conduct. We would appreciate additional information about this matter to learn what U.S. oil drilling or related technologies may have made their way to Cuba and if any of this technology could be used for the Scarabeo 9 project.
The Export Administration Regulations clearly state that the only items allowed to be exported to Cuba are donations of medical equipment, agricultural exports, and telecommunications equipment. Thus, even if the de minimis rule does not apply, the broader prohibitions against exports to Cuba must still be enforced.
We are concerned that sensitive U.S. technology can fall in the hands of a regime that supports terrorism and as such, this Committee would appreciate a response to the matters raised in this letter as soon as possible.
Thank you very much for your attention to this matter.
U.S. Rep. Ileana Ros-Lehtinen (R-FL)
U.S. Rep. Albio Sires (D-NJ)
U.S. Rep. Mario Diaz-Balart (R-FL)
U.S. Rep. David Rivera (R-FL)
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