The U.S. blockade of Cuba remains in full force
Although positive steps have been taken to modify aspects of the blockade, existing restrictions impede progress in the normalization of relations, and on September 14, the President reauthorized the 1917 Trading with the Enemy Act, the original basis of the blockade when it was established in 1962
Author: Pedro Etcheverry Vázquez | email@example.com
Author: Andrés Zaldívar Diéguez | firstname.lastname@example.org
september 16, 2016 16:09:48
Photo: Juvenal Balán
On December 17, 2014, Presidents Raúl Castro Ruz and Barack Obama announced to the world the decision to reestablish diplomatic relations between the governments of Cuba and the United States, opening the doors to future talks to benefit both nations. It might have appeared, at this historic moment, that the economic war waged by the U.S. against Cuba was coming to an end, but this was not the case.
The hostile policy remains in full force, with blockade regulations enforced by the Treasury Department’s Office of Foreign Assets Control (OFAC).
February 11, 2015, a Mexican branch of Santander Bank refused to handle a small transaction of 68,290 euros for the Central Bank of Cuba, not to acquire any product, raw material, or do business, but to pay the country’s membership dues to the Center for Latin American Monetary Research.
On March 12, the German financial institution Commerzbank was fined some 1.7 million dollars by OFAC, for maintaining economic relations with Cuba, among other alleged violations.
March 25, OFAC levied a fine of 7,658,300dollars on the U.S. company PayPal for processing transactions which allegedly involved products of Cuban origin or were of Cuban interest.
According to a Ministry of Culture report, between April, 2014, and March of 2015, the blockade caused Cuban cultural entities losses valued at 24 million dollars, principally in art education and the music industry. In the first case, the blockade has an impact on the quality of training and students’ creativity by restricting availability of basic resources like musical instruments, visual arts supplies, ballet slippers and wardrobe. In the case of music, the impact is felt in relation to live performances by Cuban artists in the United States, obstacles to selling recordings, and income from royalties.
The Ministry of Education has reported that during the same period, the blockade has caused damages of almost two million dollars. Sanctions imposed on international entities that do business with Cuba have led many to avoid exporting articles needed to enhance the teaching-learning process, obliging the country to seek such items in China, and pay higher shipping costs given the distance of this market. Remuneration paid to Cuban educational professionals working in other countries has been affected, as well, by the prohibition on using the USD in international transactions.
June 1, the U.S. company SIGMA Aldrich, a leader in the chemical and biochemical industries, refused to supply the Cuban state enterprise QUIMIMPEX products key to its development, alleging that it could not supply products, services, or technical information because of blockade regulations.
The following day, another U.S. company Columbiana Boyler, specializing in the fabrication of pressurized containers, refused to sell QUIMIMPEX cylinders needed to hold chlorine used in treating potable water in the country’s supply system, stating that the Commerce Department had not duly authorized the negotiation of the purchase.
On July 20, 2015, the governments of Cuba and the United States reestablished diplomatic relations, and their respective Interest Sections became embassies. Cuban authorities reiterated that in order to normalize relations, Washington needed to lift the blockade; return territory illegally occupied by the Guantánamo Naval Base; cease illegal radio and television broadcasts directed toward the island; and end efforts to subvert the country’s internal order.
October 27, 2015, in the United Nations General Assembly, 191 countries voted in favor of Cuba’s resolution calling for an end to the blockade, with only two against (the U.S. and Israel), and this time not even any abstentions. This constituted an overwhelming expression of condemnation of the U.S. government policy, on the part of the international community, for the 24th time since 1992 – apparently ignored again by authorities in charge of pertinent decisions, since the application of the blockade continues.
In November of 2015, four months after the reestablishment of diplomatic relations, OFAC imposed a fine of 1,116,893,585 dollars on the French bank Crédit Agricole, for processing 173 electronic transfers, linked to properties of interest to the Cuban government or Cuban citizens, to or through financial institutions located in the United States.
January 20, 2016, the U.S. design company WATG Holdings Inc. was fined 140,400 dollars for violating blockade regulations, because in October of 2009 and May of 2010, its subsidiary in the United Kingdom, Wimberly Allison Tong and Goo, had worked with a Qatari design and architecture firm on a hotel in Cuba, for which it received three payments for a total of 356,714 dollars.
In February, the French company CGG Service S.A. was fined 614,250 USD by OFAC, for providing services, replacement parts and equipment of U.S. origin for gas and oil exploration, to ships operating in Cuban territorial waters, during 2010 and 2011. OFAC additionally reported that the Venezuelan branch of CGG Services made five transactions related to the processing of information from seismic studies carried out by a Cuban entity within the country’s exclusive economic zone, noting that this was prejudicial to the sanctions’ objectives, providing a substantial economic benefit to Cuba.
At the end of February, the Treasury Department fined the U.S. company Halliburton $304,706 for violating blockade regulations. According to an OFAC report, between February and April of 2011 the company and its subsidiaries in the Cayman Islands exported goods and services worth 1.18 million dollars, to support oil and gas exploration and drilling in the southern block of Costa Adentro, in the Angolan province of Cabinda. According to OFAC, the Cuban company Cupet had interests in the consortium undertaking the work in Angolan territory.
Financial measures against Cuba since the beginning of 2015 through February 2016 were a continuation of those implemented by Obama from the beginning of his administration, reaffirming the maintenance of the economic, commercial, and financial blockade, despite the new context of bilateral relations following the announcements of December 17, 2014, and the subsequent opening of embassies.
During this brief period, the U.S. government fined eight entities in different countries for a total of $2,836,681,581. As of the aforementioned date, the number of fines levied by the Obama administration for blockade violations was 49, according to CubaMinrex/Cubavsbloqueo, and at this time the accumulated total is $14,397,416,827.
On March 15, 2016, the U.S. Departments of the Treasury and Commerce announced new modifications in the implementation of the blockade in the areas of travel, financial services, and trade. Among these was a change allowing U.S. citizens to undertake ‘people-to-people’ travel on their own, ending the previous requirement that this category of travel be organized by a licensed tour operator, making such trips costly and complicated. Nonetheless, the specific prohibition on travel for the purpose of tourism remains in place, established by law. Cuba is the only nation in the world which U.S. citizens can not visit as tourists.
Other changes announced included permission for U.S. citizens traveling in other countries to purchase Cuban products, including rum and cigars, something that was previously prohibited. Cuban citizens working in the U.S. with an appropriate visa are now allowed to receive compensation, and U.S. companies can hire Cuban citizens “under certain conditions,” although these have not been specified.
Among the most recent measures was authorization for Cuba to use the U.S. dollar in international transactions with third countries and in those permitted between Cuban and U.S. institutions. To date, this change has not been implemented. International banks continue to refuse to work with Cuba, given the U.S. sanctions that remain in place. Cuba has yet to make a single payment or deposit in U.S. dollars.
The Italian Banca Nacional del Lavoro, did not credit the account of Cubana Airlines for sales in the months of January and February, 2016 – 144,946 and 130,179 euros respectively. When questioned by the airline’s representative, the bank responded that its client was the International Air Transport Association (IATA), indicating that they would not deal with the Cuban company directly. A similar situation occurred with sales deposits for September, October, and November of 2015, which led to a lack of liquidity that affected the company’s operations. The IATA in Madrid reported that the bank was still refusing to process Cuban transactions because of blockade regulations.
Cuba’s report on the UN resolution to be considered this coming October 26, was presented in a press conference September 9, by Foreign Minister Bruno Rodríguez Parrilla. It states that the accumulated damages caused by the U.S. blockade of Cuba have reached 753,688,000,000 dollars, calculated on the basis of the price of gold, taking into consideration its depreciation. At current prices, the amount would equal at least 125,873,000,000.
The conduct of the U.S. government confirms that although positive steps have been taken to modify the implementation of some aspects of the blockade, the restrictions remaining in effect impede the progress of normalization of economic relations between the two countries, and now, on September 14, the President has reauthorized the 1917 Trading with the Enemy Act, one of the pillars upon which the economic, commercial and financial blockade was based when it was officially established in February of 1962.
i Researcher at the Center for State Security Historical Research
ii Researcher at the Center for Hemispheric and U.S. Studies at the University of Havana (CEHSEU)