By Courtland Milloy, Tuesday, June 7, 8:37 PM Washington Post
HAVANA — While the Ballet Nacional de Cuba was in the District recently, I happened to be pirouetting around this town with a group of journalists from the United States. Not exactly a fair cultural exchange, but the Cuban people were gracious hosts nonetheless.
We got to dine at the homes of community activists and engage in frank talk about Cuba’s social inequities. We also met Johana Tablada, deputy director for North American Affairs in the Cuban Foreign Ministry, who offered tea and a critique of the high life she experienced while staying with friends in well-to-do Chevy Chase.
“I say, listen, maybe you have the 10 brands of cereal. Maybe you have the 100 options of clothing, which I like,” Tablada said. “But I don’t miss it when I’m here. I will go over at lunchtime and see my mom. Up in Washington, people do not stop; they do not look around. There is always something for you to consume, that consumes your life without you.”
More remarkable than Tablada’s take was the extent to which her country’s brand of socialism seems to terrify the U.S. government. An ongoing, half-century-long economic embargo aims to bring Cuba to her knees while a spurious designation of the country as a “state sponsor of terrorism” leaves the door open for regime change by force.
In April, The Washington Post reported that the new chairwoman of the House Foreign Affairs Committee, Ileana Ros-Lehtinen (R-Fla.), told a filmmaker in 2006 that she would welcome the assassination of Cuban leader Fidel Castro.
And yet, here we were for a week of eyeballing in the forbidden land, the trip sponsored by the Institute for the Study of Advanced Journalism at North Carolina A&T University. Meanwhile, up at the Kennedy Center Opera House in Washington, the Cuban ballet was performing “Don Quixote.”
What a weird diplomatic dance.
During a visit to one home on the outskirts of the city, some of us watched a taped documentary that had run on Cuban television in 2008. It was called “Raza,” about the persistence of racism. In it, a white Cuban ballet instructor claimed that the reason blacks don’t make good ballerinas was that their “glutes” were too big and their feet “too inflexible.”
Now suppose Judith Jamison and the Alvin Ailey Dance Troupe in New York could freely travel and give lie to such a notion — if only for the sake of those Afro Cuban girls who might have heard such discouraging words?
There are so many ways our countries could help one another. Instead, American arrogance and Cuban pride shortchange us all.
Heriberto Feraudy of the Cuban Artists and Writers Association told us that he liked the American people but not the U.S. policy towards Cuba. I asked what the difference is. After all, the United States is us.
“The American people don’t run the country,” Feraudy said through an interpreter. “President Obama doesn’t run the country.”
Asked who does, he said he didn’t know. All he knew was that polls show more than 70 percent of Americans favored lifting the embargo and restoring diplomatic relations with Cuba — Obama, too. And still the embargo remains.
The Cato Institute, a Washington-based think tank, says the embargo “has made the Cuban people a bit more impoverished, without making them one bit more free.”
The Cubans we met were not enslaved commie automatons. Many were intrigued by Cuba’s transitioning from guaranteed government jobs to opportunities for self-employment. Just not at any cost.
“In the past, people were losing their values over tourism, doing anything for the green paper,” said Abel Contreras, our guide from the state-owned Havanatours. “This is my own opinion. One of the best things this government has done is to give us the possibility of being ourselves, of having self-respect and not being treated like a brothel of the United States.”
That said, he noted how much the people of both countries have in common.
“You like baseball; we like baseball,” Contreras said. “We like jazz; you like jazz. You want universal health care and a good education for all; so do we. Both countries are struggling to find solutions to those problems.”
And don’t forget the food. Contreras likes black beans and rice; I like red beans and rice. Hold the political hot sauce, and our tastes are not so different after all.
http://www.washingtonpost.com/local/courtland-milloy-for-american-and-cuban-people-divide-not-that-deep/2011/06/07/AG5uVRLH_story.html#weighIn
Tuesday, June 7, 2011
Tuesday, August 24, 2010
OFAC Goes After Barclays
Barclays fined $298m for sanction breaking
Barclays faces penalty from US authorities for handling covert financial transactions involving banks in Cuba, Iran and Libya
* Andrew Clark
* guardian.co.uk, Monday 16 August 2010 20.27 BST
Barclays is to pay $298m (£190m) in fines to the US authorities for "knowingly and willfully" violating international sanctions by handling hundreds of millions of dollars in clandestine transactions with banks in Cuba, Iran, Libya, Sudan and Burma.
The British bank yesterday agreed to pay financial penalties to settle two criminal charges laid by the US department of justice, which accused Barclays of violating a "trading with the enemy" act which prohibits business with certain countries viewed as threats to national security.
Documents filed at a federal court in Washington accused Barclays of handling money transfers totalling $500m from banks in prohibited countries through its dollar clearance branch in New York between 1995 and 2006. Barclays is not alone in facing such charges: Lloyds TSB and Credit Suisse both settled with the US government last year over similar dealings with institutions in repressive regimes.
"For more than a decade, Barclays knowingly and willfully engaged in practices outside the US that caused its New York branch and other financial institutions located in the US to process payments in violation of US sanctions," says an affidavit filed by the US government, which described Barclays as a London-based institution employing 144,000 people in 50 countries with 48m customers.
Under a deferred prosecution agreement signed by Barclays' general counsel, Mark Harding, the bank has agreed to a string of measures to improve training and tighten internal procedures, and to co-operate with any further investigation by the US authorities. The bank is paying $149m to the US department of justice and a further $149m to the office of New York's district attorney.
The deal went before a Washington judge for approval yesterday. But judge Emmet Sullivan adjourned the hearing, saying he wanted Harding to appear in person: "He's the one who signed the pleadings and he should be here."
The episode is an embarrassing blot for Barclays, which has been working hard to build its presence in the US with a view to becoming a top-tier Wall Street player. Barclays bolstered its presence in investment banking two years ago by buying much of the US operation of bankrupt Lehman Brothers in a deal worth $1.75bn.
Court documents reveal that Barclays co-operated proactively with the US authorities, initially approaching the US treasury's office of foreign assets control in May 2006 to own up to four sanctions-busting transactions.
A Barclays spokesman confirmed that the bank was "in the process of seeking court approval" for a settlement with prosecutors but added: "Because this matter is pending before the court, at this time we will have no further comment."
The US government has vowed to come down hard on sanctions-busting. Cuba has been barred from business with the US since President Kennedy's tenure in the White House in the early 1960s. Sanctions have been in place against Iran since 1995 and were imposed on Sudan and Burma in 1997. Libya was on a list of "state sponsors of terrorism" until 2006, although relations have since thawed.
Prosecutors contend that foreign banks with a presence in the US have colluded in giving institutions in these repressive regimes a back-door route into the American financial system. Lloyds TSB agreed to pay $350m in January 2009 for its dealings with Libya, Sudan and Iran, while Switzerland's second biggest bank, Credit Suisse, struck a deal in December paying $536m for violating sanctions against Iran.
http://www.guardian.co.uk/business/2010/aug/16/barclays-fined-for-sanction-breaking
Letters
The blockade against Cuba and the banks
Cuba is not the object of any "international sanctions" (Barclays faces $298m fine for breaking sanctions, 17 August). It has been the target for 50 long years of a unilateral US government policy of economic, commercial and financial blockade – as your article illustrates – but one that the international community has overwhelmingly condemned for 18 consecutive years at the UN general assembly. In the successive resolutions on the issue passed over those years, the UN has called on the US to lift this illegal and inhumane measure, which is found to be in violation of basic principles of international law, the UN charter and the freedom of trade and navigation. This year the UN general assembly will no doubt ratify this position for the 19th time. One can only hope that the US government will listen to that worldwide clamour and abandon such an unhelpful policy in favour of a constructive one.
René J Mujica Cantelar
Ambassador of Cuba to the UK
• I never thought I'd rush to the defence of our reviled banks. But news that the US is still enforcing its discredited policy of sanctions on Cuba and that Barclays has been fined by the US justice department for facilitating trade with, among other countries, Cuba appals me. Recently the US has been relaxing the moratorium on Cuba and we have seen a welcome liberalisation there with the release of political prisoners and a lifting of the heavy hand of the state on private enterprise. Therefore I am shocked that Barclays should be penalised in this manner.
Benedict Birnberg
London
http://www.guardian.co.uk/world/2010/aug/23/blockade-against-cuba-barclays-bank
Barclays faces penalty from US authorities for handling covert financial transactions involving banks in Cuba, Iran and Libya
* Andrew Clark
* guardian.co.uk, Monday 16 August 2010 20.27 BST
Barclays is to pay $298m (£190m) in fines to the US authorities for "knowingly and willfully" violating international sanctions by handling hundreds of millions of dollars in clandestine transactions with banks in Cuba, Iran, Libya, Sudan and Burma.
The British bank yesterday agreed to pay financial penalties to settle two criminal charges laid by the US department of justice, which accused Barclays of violating a "trading with the enemy" act which prohibits business with certain countries viewed as threats to national security.
Documents filed at a federal court in Washington accused Barclays of handling money transfers totalling $500m from banks in prohibited countries through its dollar clearance branch in New York between 1995 and 2006. Barclays is not alone in facing such charges: Lloyds TSB and Credit Suisse both settled with the US government last year over similar dealings with institutions in repressive regimes.
"For more than a decade, Barclays knowingly and willfully engaged in practices outside the US that caused its New York branch and other financial institutions located in the US to process payments in violation of US sanctions," says an affidavit filed by the US government, which described Barclays as a London-based institution employing 144,000 people in 50 countries with 48m customers.
Under a deferred prosecution agreement signed by Barclays' general counsel, Mark Harding, the bank has agreed to a string of measures to improve training and tighten internal procedures, and to co-operate with any further investigation by the US authorities. The bank is paying $149m to the US department of justice and a further $149m to the office of New York's district attorney.
The deal went before a Washington judge for approval yesterday. But judge Emmet Sullivan adjourned the hearing, saying he wanted Harding to appear in person: "He's the one who signed the pleadings and he should be here."
The episode is an embarrassing blot for Barclays, which has been working hard to build its presence in the US with a view to becoming a top-tier Wall Street player. Barclays bolstered its presence in investment banking two years ago by buying much of the US operation of bankrupt Lehman Brothers in a deal worth $1.75bn.
Court documents reveal that Barclays co-operated proactively with the US authorities, initially approaching the US treasury's office of foreign assets control in May 2006 to own up to four sanctions-busting transactions.
A Barclays spokesman confirmed that the bank was "in the process of seeking court approval" for a settlement with prosecutors but added: "Because this matter is pending before the court, at this time we will have no further comment."
The US government has vowed to come down hard on sanctions-busting. Cuba has been barred from business with the US since President Kennedy's tenure in the White House in the early 1960s. Sanctions have been in place against Iran since 1995 and were imposed on Sudan and Burma in 1997. Libya was on a list of "state sponsors of terrorism" until 2006, although relations have since thawed.
Prosecutors contend that foreign banks with a presence in the US have colluded in giving institutions in these repressive regimes a back-door route into the American financial system. Lloyds TSB agreed to pay $350m in January 2009 for its dealings with Libya, Sudan and Iran, while Switzerland's second biggest bank, Credit Suisse, struck a deal in December paying $536m for violating sanctions against Iran.
http://www.guardian.co.uk/business/2010/aug/16/barclays-fined-for-sanction-breaking
Letters
The blockade against Cuba and the banks
Cuba is not the object of any "international sanctions" (Barclays faces $298m fine for breaking sanctions, 17 August). It has been the target for 50 long years of a unilateral US government policy of economic, commercial and financial blockade – as your article illustrates – but one that the international community has overwhelmingly condemned for 18 consecutive years at the UN general assembly. In the successive resolutions on the issue passed over those years, the UN has called on the US to lift this illegal and inhumane measure, which is found to be in violation of basic principles of international law, the UN charter and the freedom of trade and navigation. This year the UN general assembly will no doubt ratify this position for the 19th time. One can only hope that the US government will listen to that worldwide clamour and abandon such an unhelpful policy in favour of a constructive one.
René J Mujica Cantelar
Ambassador of Cuba to the UK
• I never thought I'd rush to the defence of our reviled banks. But news that the US is still enforcing its discredited policy of sanctions on Cuba and that Barclays has been fined by the US justice department for facilitating trade with, among other countries, Cuba appals me. Recently the US has been relaxing the moratorium on Cuba and we have seen a welcome liberalisation there with the release of political prisoners and a lifting of the heavy hand of the state on private enterprise. Therefore I am shocked that Barclays should be penalised in this manner.
Benedict Birnberg
London
http://www.guardian.co.uk/world/2010/aug/23/blockade-against-cuba-barclays-bank
Monday, August 16, 2010
Gov. Bill Richardson Washington Post Op Ed
Time for Western Hemisphere countries to collaborate
By Bill Richardson
Saturday, August 14, 2010; A13
Arizona's attempt to create and enforce its own immigration policy has once again amplified -- and politicized -- the immigration debate in this country. But the fallout of that debate extends beyond our borders. The anti-
immigrant push in Arizona has further alienated our neighbors throughout Latin America, who had been hoping for better relations with the United States after President Obama's election. We need to turn this opportunity to our advantage and engage with our neighbors throughout the Western Hemisphere.
Latin America has perhaps the greatest impact, in terms of trade and culture, on the daily lives of most Americans. U.S. exports to Latin America have grown faster in the past 11 years than to any other region, including Asia. Hispanics represent the biggest ethnic and most sought-after voting bloc in the United States. And nearly every country in North America, Central America, South America and the Caribbean now has a democratically elected government.
The time is right to leverage our trade and partnerships and advance a more collaborative relationship with our neighbors to the south. The Obama administration should consider these five steps:
-- First, it should aggressively lobby Congress for a comprehensive immigration law. Such legislation would include increased border security; a crackdown on illegal hires; and an accountable path to legalization that requires the 11 million immigrants here illegally to learn English, pass a background check, pay fines and get in line behind those who are trying to enter our country legally. Illegal immigrants come to our country from Central and South America and the Caribbean. This is not just an issue with Mexico; it is a hemispheric issue that needs a comprehensive response.
-- Second, as a first step to changing our policy toward Cuba, the president should issue an executive order to lift as much of the travel ban as possible. The travel ban penalizes U.S. businesses, lowers our credibility in Latin America and fuels anti-U.S. propaganda. Lifting the ban would also be a reciprocal gesture for Cuba's recent agreement, negotiated among the Catholic Church, the Spanish government and President Ra?l Castro, to release political dissidents. Obama has taken significant steps to loosen restrictions on family travel, remove limits for remittance and expand cooperation in other areas such as expanding the export of humanitarian goods from the United States into Cuba. Loosening travel restrictions is in U.S. interests and would be a bold move toward normalization of relations with Cuba.
-- Third, embark on a new Alliance for Progress with Latin America and the Caribbean, modeled on President John F. Kennedy's vision for the hemisphere. This should not be a one-sided alliance preconceived on expansion of U.S. markets, nor an agreement that imposes a U.S. solution. We need a new partnership in which we close the gap between the haves and have-nots by addressing both human and economic needs and giving more priority to the indigenous people of this hemisphere.
The United States needs to craft a hemispheric agenda that includes and emphasizes solutions to energy demands and climate change in Latin America and the Caribbean. Perhaps we need a hemispheric agreement on renewable energy that provides the technical know-how for the Americas and dramatically expands the biofuel agreement with Brazil. We also need to move quickly toward a real carbon-trading system that would reward countries that protect their forests.
-- Fourth, we should continue to seek trade agreements that are free and fair and contain strong standards on labor, the environment and human rights. Pending trade agreements with Colombia and Panama should be approved by Congress and once again establish the United States as a reliable trading partner. Additionally, the Obama administration should seek a hemispheric agreement on common labor, environmental and human rights standards. This bold move would promote our interests and image in the region.
-- Finally, we need a hemispheric accord on crime and violence. In New Mexico, we are working with law enforcement at the local, state and federal levels and on both sides of our border with Mexico to share intelligence and stop the illicit trade of narcotics, illegal guns and human trafficking. These are transnational issues that involve a coordinated effort to protect the safety of law-abiding citizens of the United States and Mexico. We must not allow the immigration debate to distract from our national responsibility to engage with our neighbors in Latin America and the Caribbean. Better hemispheric relations should be a foreign policy priority, not an afterthought.
The writer, a Democrat, is governor of New Mexico. He is former U.S. ambassador to the United Nations and former energy secretary.
http://www.washingtonpost.com/wp-dyn/content/article/2010/08/13/AR2010081304982.html?hpid=opinionsbox1
By Bill Richardson
Saturday, August 14, 2010; A13
Arizona's attempt to create and enforce its own immigration policy has once again amplified -- and politicized -- the immigration debate in this country. But the fallout of that debate extends beyond our borders. The anti-
immigrant push in Arizona has further alienated our neighbors throughout Latin America, who had been hoping for better relations with the United States after President Obama's election. We need to turn this opportunity to our advantage and engage with our neighbors throughout the Western Hemisphere.
Latin America has perhaps the greatest impact, in terms of trade and culture, on the daily lives of most Americans. U.S. exports to Latin America have grown faster in the past 11 years than to any other region, including Asia. Hispanics represent the biggest ethnic and most sought-after voting bloc in the United States. And nearly every country in North America, Central America, South America and the Caribbean now has a democratically elected government.
The time is right to leverage our trade and partnerships and advance a more collaborative relationship with our neighbors to the south. The Obama administration should consider these five steps:
-- First, it should aggressively lobby Congress for a comprehensive immigration law. Such legislation would include increased border security; a crackdown on illegal hires; and an accountable path to legalization that requires the 11 million immigrants here illegally to learn English, pass a background check, pay fines and get in line behind those who are trying to enter our country legally. Illegal immigrants come to our country from Central and South America and the Caribbean. This is not just an issue with Mexico; it is a hemispheric issue that needs a comprehensive response.
-- Second, as a first step to changing our policy toward Cuba, the president should issue an executive order to lift as much of the travel ban as possible. The travel ban penalizes U.S. businesses, lowers our credibility in Latin America and fuels anti-U.S. propaganda. Lifting the ban would also be a reciprocal gesture for Cuba's recent agreement, negotiated among the Catholic Church, the Spanish government and President Ra?l Castro, to release political dissidents. Obama has taken significant steps to loosen restrictions on family travel, remove limits for remittance and expand cooperation in other areas such as expanding the export of humanitarian goods from the United States into Cuba. Loosening travel restrictions is in U.S. interests and would be a bold move toward normalization of relations with Cuba.
-- Third, embark on a new Alliance for Progress with Latin America and the Caribbean, modeled on President John F. Kennedy's vision for the hemisphere. This should not be a one-sided alliance preconceived on expansion of U.S. markets, nor an agreement that imposes a U.S. solution. We need a new partnership in which we close the gap between the haves and have-nots by addressing both human and economic needs and giving more priority to the indigenous people of this hemisphere.
The United States needs to craft a hemispheric agenda that includes and emphasizes solutions to energy demands and climate change in Latin America and the Caribbean. Perhaps we need a hemispheric agreement on renewable energy that provides the technical know-how for the Americas and dramatically expands the biofuel agreement with Brazil. We also need to move quickly toward a real carbon-trading system that would reward countries that protect their forests.
-- Fourth, we should continue to seek trade agreements that are free and fair and contain strong standards on labor, the environment and human rights. Pending trade agreements with Colombia and Panama should be approved by Congress and once again establish the United States as a reliable trading partner. Additionally, the Obama administration should seek a hemispheric agreement on common labor, environmental and human rights standards. This bold move would promote our interests and image in the region.
-- Finally, we need a hemispheric accord on crime and violence. In New Mexico, we are working with law enforcement at the local, state and federal levels and on both sides of our border with Mexico to share intelligence and stop the illicit trade of narcotics, illegal guns and human trafficking. These are transnational issues that involve a coordinated effort to protect the safety of law-abiding citizens of the United States and Mexico. We must not allow the immigration debate to distract from our national responsibility to engage with our neighbors in Latin America and the Caribbean. Better hemispheric relations should be a foreign policy priority, not an afterthought.
The writer, a Democrat, is governor of New Mexico. He is former U.S. ambassador to the United Nations and former energy secretary.
http://www.washingtonpost.com/wp-dyn/content/article/2010/08/13/AR2010081304982.html?hpid=opinionsbox1
Tuesday, July 27, 2010
OFAC Nails UN Bank For Dealing With Cuban Diplomats to the UN
Export Law Blog (blog) - July 19
By Clif Burns
The latest monthly release of civil penalty information by the Office of Foreign Assets Control (“OFAC”) describes a penalty “settlement’ with the United Nations Federal Credit Union, which agreed to pay $500,000 to settle charges that the UNFCU “dealt in property in which Cuba or a Cuban national had an interest’ as they quaintly say it in OFAC-speak. In ordinary English this means that UNFCU engaged in banking transactions with Cubans, likely with Cuban diplomats to the United Nations.
Of course, we have to say the transactions were likely with Cuban diplomats because, given OFAC’s longstanding aversion to providing anything but the most minimal details about its penalty settlements, the notice leaves out such crucial details as whether the Cubans involved were diplomats, non-diplomatic Cuban officials, ordinary Cubans, or herds of Cuban cattle. Nor were the types of transactions involved mentioned or their amounts.
In this case, the absence of details makes OFAC look foolish by suggesting the possibility that OFAC is penalizing the UNFCU for providing banking services to Cuban diplomats posted to the U.N. Apparently, such diplomats need to travel with suitcases of Cuban pesos and pay for their meals in the U.N. cafeteria with their national currency.
If that’s what OFAC is doing, it would be in direct contravention of the U.N. Headquarters Agreement, particularly given that the UNFCU is located in the U.N. Headquarters area. Article V, Section 15(4) of that agreement provides that even with respect to diplomats from countries not recognized by the United States, such as Cuba, the U.S. must accord them the same privileges and immunities as other diplomats while within the headquarters district. If a diplomat from France can bank at the UNFCU located in the U.N. Headquarters district, so can Cuban diplomats, no matter how much OFAC hates Castro and his diplomatic lackeys.
The UNFCU website has this statement (click on “Account Restrictions”) about its ability to deal with Cuban diplomats:
Please be aware that UNFCU, under authorization from the US Treasury Department, is only permitted to operate accounts for actively employed UN staff stationed in Cuba, Iran, Burma, and for Cuban citizens who are stationed in the United States.
Based on this, perhaps what was going on and again OFAC forces us to speculate was that the UNFCU was providing banking services to Cubans at U.N. locations outside the United States. The UNFCU website’s branch listing shows that the UNFCU has branches in Geneva, Vienna, Rome and Nairobi. Of course, the UNFCU’s extra-territorial application of U.S. sanctions could create a new problem for itself because these sanctions could well violate local laws that prohibit discrimination based on national origin.
Additionally, and more significantly, the UN could always solve the problem by only providing office space to financial institutions that do not, like UNFCU, discriminate against UN members based on national origin.
By Clif Burns
The latest monthly release of civil penalty information by the Office of Foreign Assets Control (“OFAC”) describes a penalty “settlement’ with the United Nations Federal Credit Union, which agreed to pay $500,000 to settle charges that the UNFCU “dealt in property in which Cuba or a Cuban national had an interest’ as they quaintly say it in OFAC-speak. In ordinary English this means that UNFCU engaged in banking transactions with Cubans, likely with Cuban diplomats to the United Nations.
Of course, we have to say the transactions were likely with Cuban diplomats because, given OFAC’s longstanding aversion to providing anything but the most minimal details about its penalty settlements, the notice leaves out such crucial details as whether the Cubans involved were diplomats, non-diplomatic Cuban officials, ordinary Cubans, or herds of Cuban cattle. Nor were the types of transactions involved mentioned or their amounts.
In this case, the absence of details makes OFAC look foolish by suggesting the possibility that OFAC is penalizing the UNFCU for providing banking services to Cuban diplomats posted to the U.N. Apparently, such diplomats need to travel with suitcases of Cuban pesos and pay for their meals in the U.N. cafeteria with their national currency.
If that’s what OFAC is doing, it would be in direct contravention of the U.N. Headquarters Agreement, particularly given that the UNFCU is located in the U.N. Headquarters area. Article V, Section 15(4) of that agreement provides that even with respect to diplomats from countries not recognized by the United States, such as Cuba, the U.S. must accord them the same privileges and immunities as other diplomats while within the headquarters district. If a diplomat from France can bank at the UNFCU located in the U.N. Headquarters district, so can Cuban diplomats, no matter how much OFAC hates Castro and his diplomatic lackeys.
The UNFCU website has this statement (click on “Account Restrictions”) about its ability to deal with Cuban diplomats:
Please be aware that UNFCU, under authorization from the US Treasury Department, is only permitted to operate accounts for actively employed UN staff stationed in Cuba, Iran, Burma, and for Cuban citizens who are stationed in the United States.
Based on this, perhaps what was going on and again OFAC forces us to speculate was that the UNFCU was providing banking services to Cubans at U.N. locations outside the United States. The UNFCU website’s branch listing shows that the UNFCU has branches in Geneva, Vienna, Rome and Nairobi. Of course, the UNFCU’s extra-territorial application of U.S. sanctions could create a new problem for itself because these sanctions could well violate local laws that prohibit discrimination based on national origin.
Additionally, and more significantly, the UN could always solve the problem by only providing office space to financial institutions that do not, like UNFCU, discriminate against UN members based on national origin.
Friday, July 2, 2010
Who is a spy and why?
Agents
La Alborada - July 2
The FBI has charged eleven people with conspiracy to act as agents of a foreign government --Russia-- without notifying the Attorney General. That's not "spying" or "being an unregistered foreign agent," but conspiracy to act as an agent. The Associated Press interpreted the news this way: "Russian agents infiltrated US society, charges say": infiltrated not the government or the Pentagon, but society. Nothing that we have found in the news so far suggests that the accused gathered any information of significance. The indictment charges that the defendants were paid or expected to be paid by Russia for their work.
The eleven defendants were arrested and jailed. Proceedings in the matter will determine whether or not they are guilty of any of the charges brought. If they are found guilty, they will surely serve time in prison.
They will never be called "dissidents," the generic name given to a number of people in Cuba who include agents of the US government. Many of them have been jailed since 2003. The evidence against the latter, obtained in part from Cuban security agents who had been posing as collaborators and also, as was the case here, by surveillance, was summarized in a book, Los Disidentes, published soon afterwards in Cuba.
The evidence showed that the dissidents were coordinated, directed, and financed by the US Interests Section in Havana, and also from Madrid. The declared independent journalists turned out to be independent from the Cuban government, but not from the US. They were told what kind of information they should generate; on their compliance depended the support, including payment in money and kind, that they received from the Interests Section, at which they often met to coordinate their activities.
The financing of dissidents --or subversives, depending on point of view-- in Cuba by the US is no secret. Congress periodically appropriates money in the millions of dollars officially earmarked to support the dissidents. When it is the US that does this, it considers it proper and necessary, a matter of course. It sees no need to make such payments a covert operation; in fact, it announces the payments proudly. The US also helps to arrange favorable media coverage for the dissidents.
The mass media never, ever, mention the evidence of control of and payment to the dissidents arrested in 2003. It, too, considers it normal that the US should sponsor them, or pretends that there is no connection, although charges of such an arrangement have become a major factor in reporting on the alleged Russian agents.
Russia is not attempting to overthrow the US government, nor could it do so; certainly not by using the kind of information that is at issue in the current case. The US no doubt has its own agents and spies in Russia, but it is not seeking to overthrow the Russian government. The US, however, is committed by law to overthrow the Cuban government, which is the ultimate goal of the blockade. Alan Gross was in Cuba surreptitiously under a grant dedicated to such a purpose. In 2003, in fact, the Bush administration served notice to states that it did not like that they could experience the same shock and awe to which Iraq was subjected.
SInce 1959, the US has sponsored and/or sheltered a variety of terrorists, such as Luis Posada Carriles, whose goal is to overthrow the government of Cuba by force. It was because of this that Cuba sent agents to Florida to gather information on what these elements were planning. That information did not remain secret, however; Cuba turned it over to the FBI. As a result, the FBI arrested the Cuban Five, who are now serving up to two consecutive life sentences.
Whatever one thinks of the Cuban government, it should not be hard to see why the Cubans would be upset at the financing and directing of US agents on the island, to the point of imprisoning them, especially considering US policy and the circumstances of 2003.
What justifies the difference in approach to the case of those charged as Russian agents and the case of the US agents in Cuba? Essentially, it comes down to two things: 1) Because we are Good and they are Bad; and 2) Because we can do it.
The policy --and law-- as to Cuba remains in effect. There is nothing to suggest that, if the Cubans did not react to the funding and direction of dissidents on the island, the US would cease to sponsor agents there. On the contrary, there would likely be more such agents in Cuba.
The US has Cuban agents in jail, and Cuba has US agents in jail. If there is the will to improve relations between the two governments, one place to start would be to exchange them.
LA ALBORADA
Washington, DC
nuevas@earthlink.net
Cuban American Alliance Education Fund
www.cubamer.org
La Alborada - July 2
The FBI has charged eleven people with conspiracy to act as agents of a foreign government --Russia-- without notifying the Attorney General. That's not "spying" or "being an unregistered foreign agent," but conspiracy to act as an agent. The Associated Press interpreted the news this way: "Russian agents infiltrated US society, charges say": infiltrated not the government or the Pentagon, but society. Nothing that we have found in the news so far suggests that the accused gathered any information of significance. The indictment charges that the defendants were paid or expected to be paid by Russia for their work.
The eleven defendants were arrested and jailed. Proceedings in the matter will determine whether or not they are guilty of any of the charges brought. If they are found guilty, they will surely serve time in prison.
They will never be called "dissidents," the generic name given to a number of people in Cuba who include agents of the US government. Many of them have been jailed since 2003. The evidence against the latter, obtained in part from Cuban security agents who had been posing as collaborators and also, as was the case here, by surveillance, was summarized in a book, Los Disidentes, published soon afterwards in Cuba.
The evidence showed that the dissidents were coordinated, directed, and financed by the US Interests Section in Havana, and also from Madrid. The declared independent journalists turned out to be independent from the Cuban government, but not from the US. They were told what kind of information they should generate; on their compliance depended the support, including payment in money and kind, that they received from the Interests Section, at which they often met to coordinate their activities.
The financing of dissidents --or subversives, depending on point of view-- in Cuba by the US is no secret. Congress periodically appropriates money in the millions of dollars officially earmarked to support the dissidents. When it is the US that does this, it considers it proper and necessary, a matter of course. It sees no need to make such payments a covert operation; in fact, it announces the payments proudly. The US also helps to arrange favorable media coverage for the dissidents.
The mass media never, ever, mention the evidence of control of and payment to the dissidents arrested in 2003. It, too, considers it normal that the US should sponsor them, or pretends that there is no connection, although charges of such an arrangement have become a major factor in reporting on the alleged Russian agents.
Russia is not attempting to overthrow the US government, nor could it do so; certainly not by using the kind of information that is at issue in the current case. The US no doubt has its own agents and spies in Russia, but it is not seeking to overthrow the Russian government. The US, however, is committed by law to overthrow the Cuban government, which is the ultimate goal of the blockade. Alan Gross was in Cuba surreptitiously under a grant dedicated to such a purpose. In 2003, in fact, the Bush administration served notice to states that it did not like that they could experience the same shock and awe to which Iraq was subjected.
SInce 1959, the US has sponsored and/or sheltered a variety of terrorists, such as Luis Posada Carriles, whose goal is to overthrow the government of Cuba by force. It was because of this that Cuba sent agents to Florida to gather information on what these elements were planning. That information did not remain secret, however; Cuba turned it over to the FBI. As a result, the FBI arrested the Cuban Five, who are now serving up to two consecutive life sentences.
Whatever one thinks of the Cuban government, it should not be hard to see why the Cubans would be upset at the financing and directing of US agents on the island, to the point of imprisoning them, especially considering US policy and the circumstances of 2003.
What justifies the difference in approach to the case of those charged as Russian agents and the case of the US agents in Cuba? Essentially, it comes down to two things: 1) Because we are Good and they are Bad; and 2) Because we can do it.
The policy --and law-- as to Cuba remains in effect. There is nothing to suggest that, if the Cubans did not react to the funding and direction of dissidents on the island, the US would cease to sponsor agents there. On the contrary, there would likely be more such agents in Cuba.
The US has Cuban agents in jail, and Cuba has US agents in jail. If there is the will to improve relations between the two governments, one place to start would be to exchange them.
LA ALBORADA
Washington, DC
nuevas@earthlink.net
Cuban American Alliance Education Fund
www.cubamer.org
Thursday, May 27, 2010
American Businesses Hoping to Cash In On Cuba
CNBC.com
| 26 May 2010 | 01:03 PM ET
American industries of all kinds—from travel and telecom to construction and energy—would be poised to profit if the 52-year trade embargo with Cuba were lifted. Among the first businesses to cash in would be those involved with tourism, most experts agree.
“I believe U.S. travel and tourism companies will be the first to benefit,” said Larry Register, president of the Cuba Business Bureau consulting firm.
“The travel sector already is getting prepared for what might happen,” said Kirby Jones, president of the U.S.-Cuba Trade Association.
In fact, the U.S. travel industry already has seen a significant growth in Cuban tourism, even with the embargo still in place.
President Obama, who has called for “a new era” in relations with the island country, lifted nearly all restrictions on Cuban Americans' travel there in April, 2009. This year, more than 20,000 Cuban-Americans travel to their homeland each month, compared to 9,000 before the restrictions were lifted. The Bush Administration had allowed only one visit per person every three years.
Last week, the U.S. agency that enforces Cuba sanctions approved 42 new travel and other service providers, allowing them to do business with Cuba. There were no such approvals last year.
If travel restrictions to Cuba were lifted for all Americans, first-year projections suggest that 800,000 to 1 million Americans would visit, said Jones, whose Alamar Associates consulting firm staged a U.S.-Cuba tourism summit in Cancun earlier this year.
“There were 120 people there,” Jones said. “All major travel-sector tour operators came to meet with Cuban officials to discuss the potential of doing business and how it might be done.”
Cuba began developing its tourism industry after the 1989 collapse of the Soviet Union, which had granted Cuba billions of dollars in annual subsidies. Last year, more than 2.5 million tourists visited Cuba, mostly from Europe and Canada. Tourism is now Cuba’s biggest source of foreign income.
Jones, who has advised U.S. companies on Cuba since 1974, is not optimistic about an outright end to the Cuban trade embargo. But he thinks a piece of legislation moving through Congress may serve much the same purpose.
House Agriculture Committee Chairman Collin Peterson, D-Minn., is sponsor of a bill that would eliminate some of the cumbersome restrictions faced by farmers who have been selling food to Cuba since 2001.
The Trade Sanctions Reform and Export Enhancement Act of 2000 lifted part of the trade embargo, allowing the sale of food and medical supplies to Cuba’s 11 million people. Since then, a steady flow of U.S. corn, cattle, wheat, rice, apples, cereal and soybeans has made its way to Cuba, which must import 70 percent of its food.
But the reform bill mandated that Cuba had to pay cash upfront for all transactions—allowing no credit. It further stipulated that both parties to any transaction had to use a bank in a third country, disallowing any direct dealings between U.S. and Cuban financial institutions.
Even with those restrictions, U.S. exports to Cuba reached $710 million in 2008, before the global recession forced the cash-poor island to cut back 26 percent last year to $528 million.
Peterson’s bill would do two things. First, it would allow direct transactions between U.S. and Cuban banks. Farmers have long been complaining that the forced use of another foreign bank adds needless cost and prevents expansion of their business.
The second part of the bill is more controversial. It would lift the travel ban for all U.S. citizens, so the resulting increase in tourism would help Cubans generate the cash they need to buy more U.S. goods.
“They’re within 10 votes of getting this passed in the House,” Jones said. “I’ve been following this issue for 35 years and I’ve never seen anything like this. They’re not quite there yet, but it’s closer than it’s ever been.”
A lifting of travel restrictions would sound the death knell for the embargo, Jones believes.
“Right now, most U.S. companies cannot buy or sell goods with Cuba,” he said. “But the validity of having a trade embargo when a million Americans are going there every year loses all sense of logic. I can imagine the head of John Deere thinking to himself,. ‘I can’t sell tractors down there, but my son can go for spring break?’ The embargo would begin to be dismantled.”
Jones envisions an American tourism influx that would lead to ATMs, U.S. cellphone coverage, and airplane maintenance facilities.
“There are any number of areas that will be opened up if there is free and open travel to Cuba,” he said.
Travel and tourism may top the list of business sectors that would benefit from a lifting of the Cuban trade embargo, but they’re followed closely by mining, oil, telecommunications, construction supplies—and virtually everything else.
“Who wouldn’t want to do business in Cuba? They need everything.” said George Harper, an attorney whose Miami firm often deals with Cuban trade ssues.
“You name it—construction, road building, services of all kinds, banking insurance,” added Harper, who was born and raised in Cuba. “It’s an absolute gold mine for any company that wants to expand.”
Beyond travel, the two biggest sectors with potenital for doing business in Cuba are mining and energy, experts say.
Cuba’s nickel deposits are the third-largest in the world and represent its second most valuable export behind sugar. There are no nickel deposits in the United States, which imports imports all of its nickel, mostly from Canada and Australia. It’s is used widely as an alloy, much of it in the production of stainless steel products.
Copper, chromium, and cobalt also are mined in Cuba, with lesser quantities of salt, lead, zinc, gold, silver. Immense iron reserves have not yet translated into much production.
In 2004, the U.S. Geological Survey estimated that drilling off the coast of Cuba could yield 5 billion barrels of oil or more. The Brookings Institute has said that Cuban oil reserves are "equal to major fields in Alaska people want to drill."
Senators Lisa Murkowski, (R)-Alaska, and Mary Landrieu, (D)-La., drafted legislation last year that would lift the trade embargo enough for U.S. oil executives to do business in Cuba, but the bill has languished. In the meantime, a multitude of other countries have moved in.
“Cuba has entered into quite a few partnerships to aggressively explore their coast,” said Jones, of the U.S.-Cuba Trade Association. “Canada, the UK, Spain, Norway, Brazil, Russia, Malaysia, Vietnam, Venezuela – all are partnering with Cuba to get at its oil.”
The United States still has a huge advantage over other countries because of its proximity to Cuba, even if it’s late to the game. Transportation costs over 90 miles of water would be miniscule when compared to Asia or Russia.
"We feel that a greater reliance on American technology to develop their resources could have a positive influence on the Cuban culture," said Robert Dillon, spokesman for Murkowski. "American companies are the best equipped and experienced to deal with offshore drilling like this, and we feel that American oil workers are missing out."
U.S. infrastructure companies stand to gain if the trade embargo is ended or loosened, said Register of the Cuba Business Bureau. “There is need for building supplies, highway development and building renovations.”
Another area worth exploring “right now” involves U.S. telecommunication firms,” Register added.
When it eased travel restrictions, The White House also announced it would exempt U.S. telecommunications companies from the trade embargo. Companies like Verizon , Sprint and AT&T could bring better phone and internet service to the island to “promote the freer flow of information,” a White House statement said.
But the Cuban government rejected such an arrangement. An executive of the government-owned telecommunications company, ETECSA, said two obstacles would first need to be removed. The U.S. froze $160 million in ETECSA funds in 1996, and they want it back. And the agreement that forces Cuba to pay U.S. companies through third countries—the same obstacle the Peterson bill would address—would need to be rescinded.
“It may seem like the Obama administration has expanded communication possibilities,” said ETECSA exec Vivian Iglesias. “But we know that unless restrictions like the (Cuban Democracy Act) and others that have been tightened since 1992 don’t change, there can’t be any normal communication.”
“The causes that led to the theft of our funds are still in place,” she said. “If those restrictions don’t change, that prevents direct communication between the United States and Cuba.”
In October 2009, a small Miami company, TeleCuba Communications Inc., announced it had obtained U.S. permission to lay fiber-optic cable to the island, but the Miami company admitted it has not yet received permission from Cuba.
While U.S. efforts are stalled, an Italian joint venture that began 12 years ago has developed a widespread cellphone system. Italy now owns 27 percent of ETECSA. Venezuela is spending $63 million to build an undersea fiber-optic cable across the Caribbean that is expected to be completed next year.
Business opportunities may abound in Cuba, but many impediments remain before U.S. firms can take advantage.
“I don’t think the embargo will be lifted in my lifetime,” said Cuban-born Harper, the Miami attorney. “But I’m 67. Maybe in my children’s lifetimes.
“I think the Castro boys will find a way to keep it in place,” he continued. “The embargo has been a good friend of theirs. There are few other things they can rally the Cuban people behind. It would be very difficult to keep control over people if there’s a free flow of information.”
http://www.cnbc.com/id/37339627/
| 26 May 2010 | 01:03 PM ET
American industries of all kinds—from travel and telecom to construction and energy—would be poised to profit if the 52-year trade embargo with Cuba were lifted. Among the first businesses to cash in would be those involved with tourism, most experts agree.
“I believe U.S. travel and tourism companies will be the first to benefit,” said Larry Register, president of the Cuba Business Bureau consulting firm.
“The travel sector already is getting prepared for what might happen,” said Kirby Jones, president of the U.S.-Cuba Trade Association.
In fact, the U.S. travel industry already has seen a significant growth in Cuban tourism, even with the embargo still in place.
President Obama, who has called for “a new era” in relations with the island country, lifted nearly all restrictions on Cuban Americans' travel there in April, 2009. This year, more than 20,000 Cuban-Americans travel to their homeland each month, compared to 9,000 before the restrictions were lifted. The Bush Administration had allowed only one visit per person every three years.
Last week, the U.S. agency that enforces Cuba sanctions approved 42 new travel and other service providers, allowing them to do business with Cuba. There were no such approvals last year.
If travel restrictions to Cuba were lifted for all Americans, first-year projections suggest that 800,000 to 1 million Americans would visit, said Jones, whose Alamar Associates consulting firm staged a U.S.-Cuba tourism summit in Cancun earlier this year.
“There were 120 people there,” Jones said. “All major travel-sector tour operators came to meet with Cuban officials to discuss the potential of doing business and how it might be done.”
Cuba began developing its tourism industry after the 1989 collapse of the Soviet Union, which had granted Cuba billions of dollars in annual subsidies. Last year, more than 2.5 million tourists visited Cuba, mostly from Europe and Canada. Tourism is now Cuba’s biggest source of foreign income.
Jones, who has advised U.S. companies on Cuba since 1974, is not optimistic about an outright end to the Cuban trade embargo. But he thinks a piece of legislation moving through Congress may serve much the same purpose.
House Agriculture Committee Chairman Collin Peterson, D-Minn., is sponsor of a bill that would eliminate some of the cumbersome restrictions faced by farmers who have been selling food to Cuba since 2001.
The Trade Sanctions Reform and Export Enhancement Act of 2000 lifted part of the trade embargo, allowing the sale of food and medical supplies to Cuba’s 11 million people. Since then, a steady flow of U.S. corn, cattle, wheat, rice, apples, cereal and soybeans has made its way to Cuba, which must import 70 percent of its food.
But the reform bill mandated that Cuba had to pay cash upfront for all transactions—allowing no credit. It further stipulated that both parties to any transaction had to use a bank in a third country, disallowing any direct dealings between U.S. and Cuban financial institutions.
Even with those restrictions, U.S. exports to Cuba reached $710 million in 2008, before the global recession forced the cash-poor island to cut back 26 percent last year to $528 million.
Peterson’s bill would do two things. First, it would allow direct transactions between U.S. and Cuban banks. Farmers have long been complaining that the forced use of another foreign bank adds needless cost and prevents expansion of their business.
The second part of the bill is more controversial. It would lift the travel ban for all U.S. citizens, so the resulting increase in tourism would help Cubans generate the cash they need to buy more U.S. goods.
“They’re within 10 votes of getting this passed in the House,” Jones said. “I’ve been following this issue for 35 years and I’ve never seen anything like this. They’re not quite there yet, but it’s closer than it’s ever been.”
A lifting of travel restrictions would sound the death knell for the embargo, Jones believes.
“Right now, most U.S. companies cannot buy or sell goods with Cuba,” he said. “But the validity of having a trade embargo when a million Americans are going there every year loses all sense of logic. I can imagine the head of John Deere thinking to himself,. ‘I can’t sell tractors down there, but my son can go for spring break?’ The embargo would begin to be dismantled.”
Jones envisions an American tourism influx that would lead to ATMs, U.S. cellphone coverage, and airplane maintenance facilities.
“There are any number of areas that will be opened up if there is free and open travel to Cuba,” he said.
Travel and tourism may top the list of business sectors that would benefit from a lifting of the Cuban trade embargo, but they’re followed closely by mining, oil, telecommunications, construction supplies—and virtually everything else.
“Who wouldn’t want to do business in Cuba? They need everything.” said George Harper, an attorney whose Miami firm often deals with Cuban trade ssues.
“You name it—construction, road building, services of all kinds, banking insurance,” added Harper, who was born and raised in Cuba. “It’s an absolute gold mine for any company that wants to expand.”
Beyond travel, the two biggest sectors with potenital for doing business in Cuba are mining and energy, experts say.
Cuba’s nickel deposits are the third-largest in the world and represent its second most valuable export behind sugar. There are no nickel deposits in the United States, which imports imports all of its nickel, mostly from Canada and Australia. It’s is used widely as an alloy, much of it in the production of stainless steel products.
Copper, chromium, and cobalt also are mined in Cuba, with lesser quantities of salt, lead, zinc, gold, silver. Immense iron reserves have not yet translated into much production.
In 2004, the U.S. Geological Survey estimated that drilling off the coast of Cuba could yield 5 billion barrels of oil or more. The Brookings Institute has said that Cuban oil reserves are "equal to major fields in Alaska people want to drill."
Senators Lisa Murkowski, (R)-Alaska, and Mary Landrieu, (D)-La., drafted legislation last year that would lift the trade embargo enough for U.S. oil executives to do business in Cuba, but the bill has languished. In the meantime, a multitude of other countries have moved in.
“Cuba has entered into quite a few partnerships to aggressively explore their coast,” said Jones, of the U.S.-Cuba Trade Association. “Canada, the UK, Spain, Norway, Brazil, Russia, Malaysia, Vietnam, Venezuela – all are partnering with Cuba to get at its oil.”
The United States still has a huge advantage over other countries because of its proximity to Cuba, even if it’s late to the game. Transportation costs over 90 miles of water would be miniscule when compared to Asia or Russia.
"We feel that a greater reliance on American technology to develop their resources could have a positive influence on the Cuban culture," said Robert Dillon, spokesman for Murkowski. "American companies are the best equipped and experienced to deal with offshore drilling like this, and we feel that American oil workers are missing out."
U.S. infrastructure companies stand to gain if the trade embargo is ended or loosened, said Register of the Cuba Business Bureau. “There is need for building supplies, highway development and building renovations.”
Another area worth exploring “right now” involves U.S. telecommunication firms,” Register added.
When it eased travel restrictions, The White House also announced it would exempt U.S. telecommunications companies from the trade embargo. Companies like Verizon , Sprint and AT&T could bring better phone and internet service to the island to “promote the freer flow of information,” a White House statement said.
But the Cuban government rejected such an arrangement. An executive of the government-owned telecommunications company, ETECSA, said two obstacles would first need to be removed. The U.S. froze $160 million in ETECSA funds in 1996, and they want it back. And the agreement that forces Cuba to pay U.S. companies through third countries—the same obstacle the Peterson bill would address—would need to be rescinded.
“It may seem like the Obama administration has expanded communication possibilities,” said ETECSA exec Vivian Iglesias. “But we know that unless restrictions like the (Cuban Democracy Act) and others that have been tightened since 1992 don’t change, there can’t be any normal communication.”
“The causes that led to the theft of our funds are still in place,” she said. “If those restrictions don’t change, that prevents direct communication between the United States and Cuba.”
In October 2009, a small Miami company, TeleCuba Communications Inc., announced it had obtained U.S. permission to lay fiber-optic cable to the island, but the Miami company admitted it has not yet received permission from Cuba.
While U.S. efforts are stalled, an Italian joint venture that began 12 years ago has developed a widespread cellphone system. Italy now owns 27 percent of ETECSA. Venezuela is spending $63 million to build an undersea fiber-optic cable across the Caribbean that is expected to be completed next year.
Business opportunities may abound in Cuba, but many impediments remain before U.S. firms can take advantage.
“I don’t think the embargo will be lifted in my lifetime,” said Cuban-born Harper, the Miami attorney. “But I’m 67. Maybe in my children’s lifetimes.
“I think the Castro boys will find a way to keep it in place,” he continued. “The embargo has been a good friend of theirs. There are few other things they can rally the Cuban people behind. It would be very difficult to keep control over people if there’s a free flow of information.”
http://www.cnbc.com/id/37339627/
Oil for U.S. and Cuba's troubled waters
By Ken Stier, contributor
May 26, 2010: 10:45 AM ET
(Fortune) -- Among the many good reasons to jettison our failed economic embargo against Cuba is one with timely new resonance: oil.
Cuba has plenty of it -- offshore in its exclusive economic zone (EEZ) -- and exploration is about to being in earnest with American companies stuck on the sidelines.
The U.S. Geological Survey estimates the nation has about 4.6 billion barrels and nearly 10 trillion cubic feet of natural gas in the North Cuba Basin, and possibly four times that much in its portion of the Gulf of Mexico. The lower estimate would put Cuba on a par with Ecuador or Colombia.
But monetizing these resources is a real challenge: The 48-year old U.S. embargo and Washington's diplomatic muscle have thwarted any real progress so far. But this edifice is under siege. The Spanish, through their energy giant, Repsol, are bringing a deep-water oil drilling rig to Cuba this fall.
Trade sanctions dictate that the rigs can not contain more than 10% of U.S.-made components, which can include software. Most rigs worldwide typically top that. To get around the restrictions, Repsol contracted for a Chinese, purpose-built rig from Saipem, the offshore drilling unit of Italy's Eni, SpA, which will operate the rig. When Repsol first drilled off Cuba's shore in 2004, its core samples were promising enough to bring on partners for this go-round, including Norway's Statoil and India's national oil company. Repsol did not reply to repeated requests for comment.
After Repsol starts drilling, other international oil companies with concession acreage off Cuba are expected to hire the Saipem rig, explains Jorge Pinon, a Cuban energy expert, with 32 years industry experience, including a stint as president of Amoco Oil Latin America before retiring in 2003 from BP, which had taken over Amoco.
"That rig is going to hang around in Cuban waters for quite a while," says Pinon, now a Florida International University fellow. "And if any of these drilling jobs hit pay dirt and substantial reservoirs are found, then the pressure in Washington is going to be such that you will see the embargo, as far as the oil industry is concerned, falling apart."
Fears of another spill
More worrisome to some is a petroleum stampede in Cuba with American companies -- and their environmental standards -- on the sidelines
"The sobering fact that a Cuban spill could foul hundreds of miles of American coastline and do profound harm to important marine habitats demands cooperative and proactive planning by Washington and Havana to minimize or avoid such a calamity," argues a recent Brookings Institution briefing paper.
Cuba's EEZ stretches to less than 50 miles from Key West but the embargo prohibits the U.S. from offering any assistance at all; by contrast there are agreements in place with Canada and Mexico to facilitate U.S. aid.
Both Statoil and Saipem have extensive deepwater experience, but other operators in the 59 Cuban concession areas -- held by the Chinese, Vietnamese, Malaysians, Venezuelans, among others -- don't or have less stellar environmental records.
Fears of a spill like that at the BP-contracted Deepwater Horizon rig might be an argument for the U.S. to try to head off Cuban exploration, but that seems an increasingly untenable tack, especially because Havana has been offering U.S. companies part of the action for years.
0:00 /2:42Cheap oil: Careful what you wish for
A history of failed efforts
Politics have derailed earlier overtures: During a 2006 summit in Mexico between Cuban officials and U.S. oil executives, the U.S. Treasury insisted the Cubans be booted from the U.S.-owned hotel where they were staying. But industry is again quietly lobbying, and Washington seems to be listening. After trying for a year to get a license to visit Cuba, the Houston-based International Association of Drilling Contractors was recently granted one to go to Havana, which was first reported by Cuba Standard, the leading independent site for business news on Cuba.
"It's inevitable that Cuba will explore and exploit their offshore hydrocarbon resources, and it would benefit both the American public and the Cuban people to make sure it is done right," argued a recent IADC position paper circulating in Washington.
Even more potent is the lobbying heft of the Petroleum Equipment Suppliers Associations, whose members include Halliburton (HAL, Fortune 500), Fluor (FLR, Fortune 500) and Bechtel. Industry sources credit PESA for a provision in a pending energy bill that would permit extensive industry contacts with Cuba.
A member company executive confirmed the industry sees "great opportunity" in Cuba while expressing concern that the time it takes to work out suitable conditions -- tax protocols, IP and contract sanctity protection -- could leave American companies trailing their international rivals.
Lifting or relaxing the embargo is just one step the Obama administration needs to take toward opening two-way trade with Cuba. The only real exception to the embargo -- for U.S. agricultural sales approved after 2001's devastating Hurricane Michelle -- is stymied because credit-starved Cuba has to pay cash up front. Removing that restriction could double sales to roughly $1.5 billion a year.
That is part of the "tremendous authority" the president has to advance bilateral relations, argues Jake Colvin, vice president for global trade issues at the National Foreign Trade Council, which opposes the embargo.
The Council recently joined eight other leading business organizations to support the pending Freedom to Travel to Cuba Act, to better position American businesses for the eventual lifting of the embargo. Seeing Exxon Mobil (XOM, Fortune 500) invest in Cuba probably requires "fundamental change" in bilateral relations, Colvin adds.
Not everyone wants the embargo to go
That the White House, and a Democratic Congress, haven't done more to jump-start that process has frustrated some supporters who note the sway that Cuban exiles have with Washington.
Albert Fox, Jr., founder of the Alliance for Responsible Cuba Policy, points to an April 15 fund-raiser in Miami that reportedly netted $2.5 million for President Obama. The event was hosted by the singer Gloria Estefan, whose father served as a bodyguard to Cuban dictator, Fulgencio Batista, who was overthrown by Castro in 1959.
"This perception that things are loosening is just nonsense. The embargo is tighter today than it has been at any time in the last 51 years," argues Fox.
But even though calls for lifting the embargo grow louder as Cuba's current leadership appears ready to change, many warn the U.S. not to jump the gun.
"American companies need to take in to account business interests are not necessarily the national interest all the time," said Frank Calzon, executive director of the Center for a Free Cuba, and independent organization promoting a democratic transition in the island-nation. "The Cuban regime is coming to an end, there is no question that they are on their last phase now and I think this is the worst possible time for anyone to try to invest."
--Contact Ken Stier at kenfortune@earthlink.net.
http://money.cnn.com/2010/05/25/news/economy/oil_cuba.fortune/
May 26, 2010: 10:45 AM ET
(Fortune) -- Among the many good reasons to jettison our failed economic embargo against Cuba is one with timely new resonance: oil.
Cuba has plenty of it -- offshore in its exclusive economic zone (EEZ) -- and exploration is about to being in earnest with American companies stuck on the sidelines.
The U.S. Geological Survey estimates the nation has about 4.6 billion barrels and nearly 10 trillion cubic feet of natural gas in the North Cuba Basin, and possibly four times that much in its portion of the Gulf of Mexico. The lower estimate would put Cuba on a par with Ecuador or Colombia.
But monetizing these resources is a real challenge: The 48-year old U.S. embargo and Washington's diplomatic muscle have thwarted any real progress so far. But this edifice is under siege. The Spanish, through their energy giant, Repsol, are bringing a deep-water oil drilling rig to Cuba this fall.
Trade sanctions dictate that the rigs can not contain more than 10% of U.S.-made components, which can include software. Most rigs worldwide typically top that. To get around the restrictions, Repsol contracted for a Chinese, purpose-built rig from Saipem, the offshore drilling unit of Italy's Eni, SpA, which will operate the rig. When Repsol first drilled off Cuba's shore in 2004, its core samples were promising enough to bring on partners for this go-round, including Norway's Statoil and India's national oil company. Repsol did not reply to repeated requests for comment.
After Repsol starts drilling, other international oil companies with concession acreage off Cuba are expected to hire the Saipem rig, explains Jorge Pinon, a Cuban energy expert, with 32 years industry experience, including a stint as president of Amoco Oil Latin America before retiring in 2003 from BP, which had taken over Amoco.
"That rig is going to hang around in Cuban waters for quite a while," says Pinon, now a Florida International University fellow. "And if any of these drilling jobs hit pay dirt and substantial reservoirs are found, then the pressure in Washington is going to be such that you will see the embargo, as far as the oil industry is concerned, falling apart."
Fears of another spill
More worrisome to some is a petroleum stampede in Cuba with American companies -- and their environmental standards -- on the sidelines
"The sobering fact that a Cuban spill could foul hundreds of miles of American coastline and do profound harm to important marine habitats demands cooperative and proactive planning by Washington and Havana to minimize or avoid such a calamity," argues a recent Brookings Institution briefing paper.
Cuba's EEZ stretches to less than 50 miles from Key West but the embargo prohibits the U.S. from offering any assistance at all; by contrast there are agreements in place with Canada and Mexico to facilitate U.S. aid.
Both Statoil and Saipem have extensive deepwater experience, but other operators in the 59 Cuban concession areas -- held by the Chinese, Vietnamese, Malaysians, Venezuelans, among others -- don't or have less stellar environmental records.
Fears of a spill like that at the BP-contracted Deepwater Horizon rig might be an argument for the U.S. to try to head off Cuban exploration, but that seems an increasingly untenable tack, especially because Havana has been offering U.S. companies part of the action for years.
0:00 /2:42Cheap oil: Careful what you wish for
A history of failed efforts
Politics have derailed earlier overtures: During a 2006 summit in Mexico between Cuban officials and U.S. oil executives, the U.S. Treasury insisted the Cubans be booted from the U.S.-owned hotel where they were staying. But industry is again quietly lobbying, and Washington seems to be listening. After trying for a year to get a license to visit Cuba, the Houston-based International Association of Drilling Contractors was recently granted one to go to Havana, which was first reported by Cuba Standard, the leading independent site for business news on Cuba.
"It's inevitable that Cuba will explore and exploit their offshore hydrocarbon resources, and it would benefit both the American public and the Cuban people to make sure it is done right," argued a recent IADC position paper circulating in Washington.
Even more potent is the lobbying heft of the Petroleum Equipment Suppliers Associations, whose members include Halliburton (HAL, Fortune 500), Fluor (FLR, Fortune 500) and Bechtel. Industry sources credit PESA for a provision in a pending energy bill that would permit extensive industry contacts with Cuba.
A member company executive confirmed the industry sees "great opportunity" in Cuba while expressing concern that the time it takes to work out suitable conditions -- tax protocols, IP and contract sanctity protection -- could leave American companies trailing their international rivals.
Lifting or relaxing the embargo is just one step the Obama administration needs to take toward opening two-way trade with Cuba. The only real exception to the embargo -- for U.S. agricultural sales approved after 2001's devastating Hurricane Michelle -- is stymied because credit-starved Cuba has to pay cash up front. Removing that restriction could double sales to roughly $1.5 billion a year.
That is part of the "tremendous authority" the president has to advance bilateral relations, argues Jake Colvin, vice president for global trade issues at the National Foreign Trade Council, which opposes the embargo.
The Council recently joined eight other leading business organizations to support the pending Freedom to Travel to Cuba Act, to better position American businesses for the eventual lifting of the embargo. Seeing Exxon Mobil (XOM, Fortune 500) invest in Cuba probably requires "fundamental change" in bilateral relations, Colvin adds.
Not everyone wants the embargo to go
That the White House, and a Democratic Congress, haven't done more to jump-start that process has frustrated some supporters who note the sway that Cuban exiles have with Washington.
Albert Fox, Jr., founder of the Alliance for Responsible Cuba Policy, points to an April 15 fund-raiser in Miami that reportedly netted $2.5 million for President Obama. The event was hosted by the singer Gloria Estefan, whose father served as a bodyguard to Cuban dictator, Fulgencio Batista, who was overthrown by Castro in 1959.
"This perception that things are loosening is just nonsense. The embargo is tighter today than it has been at any time in the last 51 years," argues Fox.
But even though calls for lifting the embargo grow louder as Cuba's current leadership appears ready to change, many warn the U.S. not to jump the gun.
"American companies need to take in to account business interests are not necessarily the national interest all the time," said Frank Calzon, executive director of the Center for a Free Cuba, and independent organization promoting a democratic transition in the island-nation. "The Cuban regime is coming to an end, there is no question that they are on their last phase now and I think this is the worst possible time for anyone to try to invest."
--Contact Ken Stier at kenfortune@earthlink.net.
http://money.cnn.com/2010/05/25/news/economy/oil_cuba.fortune/
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