We are on the cusp of our July 4th holiday here in the U.S., when we remember the revolutionary origins of our country and celebrate our independence with baseball, beer, and displays of fireworks accompanied by a spirited rendition of Tchaikovsky’s 1812 Overture.
Because we’re eager to finish the work week, we’re circulating our Cuba Central News Blast a little early so you can read the news now and all of us can join the party.
We start with Chip Beck, a U.S. citizen with ties to the CIA and the Navy. According to this blog post on Wikistrat, between 1998 and 2001, while he was working as a freelance journalist, Beck traveled to Havana and received significant cooperation from the Cuban government as he investigated the disappearance of Americans in Asia, Africa, and Central America during the Cold War. It’s a great story.
In Beck’s account of his five trips to the island, he describes familiar sounding offers by Havana to sit down and negotiate with Washington without preconditions, so long as the U.S. recognized Cuba as a sovereign nation. He concludes by quoting a conversation he had on the Malecón with a Cuban he identifies only as a single mom with a college degree.
She said, “If you tell a Cuban what to do, he will do the opposite just to spite you. If you [Americans] stop telling us what to do, things will work out exactly like you want.”
Needless to say, this was very good advice which, a dozen years later, we’re still waiting for the U.S. government to heed.
Instead, President Obama, the 11th president in charge of foreign relations with Cuba’s revolutionary government, pursues the stale and failed policy he inherited from his predecessors. On one track, he has made some important moves to promote two-way travel, family reconciliation, and modest forms of bilateral cooperation. But, on the second track, he aggressively enforces the embargo with its international overreach to shut down Cuba’s access to finance and global trade.
As of last week, for example, his Administration had already imposed penalties totaling $4.9 billion against 22 banks for violating U.S. sanctions against doing business with Cuba. That record was shattered by a penalty meted out against BNP Paribas, which pled guilty to two charges, agreed to pay a nearly $9 billion fine, and accepted bans for one and two years respectively on certain dollar clearing and processing activities – all for violations of sanctions against countries including Cuba. This led the Bank of Ireland, which has “long-standing customers with legitimate business interests in Cuba,” to tell them it would no longer clear their transactions to or from Cuba, as the Independent reported.
At a time when tens of thousands of Cubans (like our friend Barbara Fernández) are working hard to take advantage of economic reforms – in cooperatives and private businesses – in order to live more prosperous and independent lives, tightening the screws on a policy that disregards their nation’s sovereignty and increases their daily struggles makes no sense.
Eric Schmidt, Google’s Executive President, who just wrapped up a visit to Cuba during which he voiced support for an open Internet, underscored the contradictory goals of U.S. policy in a blog post about his trip.
“The ‘blockade’,” he writes, “makes absolutely no sense to US interests: if you wish the country to modernize the best way to do this is to empower the citizens with smart phones (there are almost none today) and encourage freedom of expression and put information tools into the hands of Cubans directly.”
We were in Cuba at the same time as Google and heard Cubans express similar ideas. They want an Internet opening to complement their economic opening. They want workers, especially working women, to be able to get online and connect to their jobs from home. They want a more lively public debate. Just as Cubans are now free to travel overseas, they want to be able to access more information without having to leave. Dumping restrictions – whether on technology, U.S. travel, or finance – imposed by the U.S. would put what Cubans want in greater alignment with the ostensible goals of U.S. policy and help them get it.
Writing about the architects of our nation and their ideals, former Senator Gary Hart described what the Founders saw in history’s great republics: civic duty, popular sovereignty, resistance to corruption, and a sense of the commonwealth; what we own in common that binds us together. Every time we visit the island, we see Cubans who share these ideals as well.
July 4th is a great day to celebrate the virtues of our system, which are many, but it can also be an occasion for some humility. In Cuba’s case, that means to stop telling them what to do, and showing respect to Cubans and their ability to figure out their future and how they want to live for themselves.
If you need help figuring out why, when we celebrate Independence Day, we set off fireworks to music commemorating Russia’s defense of Moscow against Napoleon, listen here.
Eric Schmidt, Executive Chairman of Google, and Jared Cohen, Brett Perlmutter, and Dan Keyserling of Google Ideas, traveled to Cuba last week “to promote the virtues of a free and open Internet,” Reuters reports. Google Ideas is “a think/do tank that explores how technology can enable people to confront threats in the face of conflict, instability or repression.”
The story was first reported on 14ymedio, the new digital journal created by dissident blogger Yoani Sánchez. The story notes that this was the first visit by Google executives to the island and that Schmidt had expressed interest in traveling there in a 2013 interview with the Wall Street Journal.
Yoani Sánchez has collaborated with Google in the past, for example, by visiting Google headquarters and participating in a Google Hangout in October 2013.
State newspaper Granma wrote that “there would be nothing surprising about this news in any other country in the hemisphere.” Cubans do not have access to Google’s products, such as Google Analytics and the web browser Chrome, because of the U.S. embargo, Granma reports.
As CNN reported, Schmidt reflected on the trip, saying:
“Our visit confirmed that the government recognizes some of the benefits of increasing access for Cubans, but it has not gone far enough in implementing the policy reforms needed to open the country to the web.”
Currently, Internet access in Cuba is limited mostly to the government, as well as foreign companies and hotels, reports Reuters. AFP reports that the only individuals who can access Internet in their homes are doctors, journalists, and others with government authorization.
The Google delegation met with students attending polytechnic schools, toured the University of Information Sciences, and also met with some editors and journalists at 14ymedio, according to 14ymedio.
BNP Paribas to pay $8.97 billion for violating U.S. sanctions against Cuba, Iran, Sudan
The French bank BNP Paribas, accused of violating U.S. sanctions against Cuba, Iran, and Sudan, agreed on Monday to plead guilty to these charges and pay the U.S. a fine of $8.97 billion, reports Reuters. According to the Wall Street Journal, the almost $9 billion fine is the largest ever imposed for sanctions violations.
Investigators found that sanctions violations, committed by removing the names of illegal clients from wire transfers within the American system, took place from 2002-2012. The New York State regulator, led by Benjamin Lawsky, said in a press release on Monday:
“Through a series of egregious schemes to evade detection and with the knowledge of multiple senior executives, BNPP employees concealed more than $190 billion in transactions between 2002 and 2012 for clients subject to U.S. sanctions, including Sudan, Iran, and Cuba.”
$2.24 billion of the fine will be paid to the New York’s Department of Financial Services. The bank pled guilty on Monday to separate charges of conspiracy and falsifying business records. The Wall Street Journal reports that a hearing for BNP Paribas’ guilty plea will take place on July 9. BNP is “the seventh bank to settle a criminal sanctions violation case but the first to plead guilty,” reports the New York Times.
The bank will be banned for a year, starting in January 2015, from “dollar clearing,” or “process[ing] payments in dollar denominations,” the New York Times reports. BNP will not be able to “move dollars into or out of the United States” or convert foreign currencies into dollars, reports Foreign Policy, a punishing sanction since the terms of most international trade are in dollars. Furthermore, BNP will fire thirteen employees, including a chief operating officer. No individuals are facing criminal charges.
Cuba Standard reports that “the cost [of this ruling] to Cuba is likely high.” It will set back banking in Cuba in several ways, and:
“Observers believe this will prompt the Cuban government and its business partners to reduce dollar transactions to those impossible to avoid – thus raising transaction costs even more – seek business with banks less vulnerable to U.S. threats, and cause other large western banks to pull out or abstain from doing business with Cuba.”
Representative Ileana Ros-Lehtinen (FL-27) praised the results of the investigation in a press release and said that the U.S. should take similar action against other sanctions violators:
“We can be sure, however, that is just the tip of the iceberg when it comes to banks willing to assist regimes evad[ing] U.S. sanctions. … This is why the U.S. must make it a priority to enforce the sanctions which we have worked so hard with our partners to create and impose, and continue to impose strict penalties against those who violate them.”
Cuba’s Ministry of Foreign Relations (MINREX) stated that the U.S. punishment of BNP “qualifies as an illegal and extraterritorial application of U.S. law against a foreign entity.” MINREX said further:
“Once again, the U.S. government ignores the overwhelming international rejection of this criminal and failed policy against our nation. With actions like this one, it also ignores the growing demands of various sectors of U.S. society for a fundamental change in policy toward Cuba.”
Cuban Americans for Engagement (CAFE), a group that advocates for improved U.S.-Cuba relations, visited Washington last week, meeting with representatives of both the U.S. and Cuban governments, reports Progreso Semanal.
They met with representatives of the U.S. Department of Agriculture about increased agricultural trade with Cuba, and Representatives Joe García (FL-26) and Jim McGovern (MA-2).
At the Cuban Interests Section, the group spoke to Ambassador José Ramón Cabañas, Cuba’s Chief of Mission to the U.S., about lowering fees for consular services, making the repatriation process more transparent, allowing widespread and inexpensive Internet access, and encouraging Cuban investment in Cuba.
CAFE board members also met with Scott Gilbert, Alan Gross’s lawyer, who reiterated the urgency of Gross’s situation and the need for U.S. government action to secure his release.
Heberprot-P, a drug that helps treat diabetic foot ulcers, has been patented in 30 countries, including the United States, Cuban state news agency ACN reports. The drug was developed by Cuba’s Center for Genetic Engineering and Biotechnology (CIGB). The patent will last until 2022, ACN says, and CIGB is working on having variants of the drug available before that time.
As recently as late April, the U.S. government had not allowed Heberprot-P to enter the U.S. because of the embargo, even though U.S. groups had been attempting since October 2013 to get special approval for the drug. The Cuba Central News Blast team explored this issue in October 2013.
The other countries in which the drug is patented include: Canada, Argentina, Australia, Singapore, South Korea, South Africa, Russia, China, India, Indonesia, Ukraine, Mexico, Malaysia, Japan, and Cuba.
Antonio Comin, a Miami resident, was sentenced to 20 years in prison for illegally smuggling Cubans into the United States, reports AFP. Comin was originally detained in September 2012, when his boat, holding 21 Cubans, ran out of gas in the middle of the Florida Strait.
In October 2013, the U.S. Department of Justice indicted Comin and eleven others on several smuggling charges. The press release by the Justice Department said that the men were accused of smuggling a total of 69 people into the U.S., from 50 of whom they made a profit. AFP reports that in addition to Comin, seven others so far who faced indictments have been sentenced, with prison terms ranging between 1.5 and eight years.
CUBA’S FOREIGN RELATIONS
On Friday, June 27, the captain and two other officers of the Chong Chon Gang ship were acquitted in a Panama court of charges related to an attempt to transport undeclared weapons from Cuba to North Korea, reports the Associated Press. Panamanian forces seized the North Korean ship in July 2013, finding weapons, including anti-aircraft and missile systems, buried under several tons of Cuban sugar. Find our complete coverage of the Chong Chon Gang incident here and here.
The ruling on Friday, in addition to acquitting the three officers still held in Panama, acquitted the other 32 crew members, who were released in February 2014, reports AFP. According to AFP, a court statement said that Judge Carlos Villareal made the decision to acquit all crew members involved because the incident “was of international character and outside Panamanian jurisdiction.”
Judge Villareal allowed for the return of the more than 200,000 bags of sugar that had been on the boat, reports AFP. He ordered that the weapons remain in the possession of the Panamanian Treasury, reports the Havana Times.
The United Nations (UN) ruled earlier this year that Cuba violated the UN arms embargo on North Korea.
Prosecutors in the corruption case against Canadian businessman Cy Tokmakjian, of the Tokmakjian Group transportation company, are seeking a 15-year prison sentence for the defendant, reports Granma. Tokmakjian was arrested in 2011 during Raúl Castro’s crackdown on corruption. His trial began in mid-June, as we reported here.
According to the Associated Press, a report on the case in Granma, Cuba’s state newspaper, revealed the names of the two other Canadian citizens and over a dozen Cubans involved in the case. The report said prosecutors were seeking the harshest sentence, 20 years, for Nelson Ricardo Labrada Fernández, former Vice Minister of the Ministry of Sugar. The prosecution said it was seeking eight to twelve years for the other Cuban and Canadian Tokmakjian employees and contacts.
The Tokmakjian Group alleges that Tokmakjian’s trial was “stacked against him,” and that what the Cuban court called corrupt dealings were really legitimate, reports the AP.
Amado Boudou, Vice President of Argentina, arrived in Cuba on June 27, the day before Cuba’s Foreign Investment Law went into effect, and announced Argentina’s interest in investing in Cuban industry, Granma reports. Boudou said that foreign investment would stimulate Cuba’s economy and create jobs, which, in turn, would encourage Latin American integration.
While in Cuba, Boudou also met with Manuel Marrero, Minister of Tourism, according to Granma, and Cuba’s Vice President, Miguel Díaz-Canel, reports Radio Cadena Agramonte.
Also on Friday, while in Cuba, Boudou was charged with “bribery and conducting business incompatible with public office” by an Argentine federal court, reports the Associated Press. He could face between one and six years in prison, as well as a lifelong ban on holding elective office. Boudou maintains that he is innocent.
Cuba is allowing some of its baseball players to sign contracts with foreign leagues in an effort to cut down on defections to the U.S., reports Reuters. In April, we reported that Cuba would raise the salaries of those who remain in-country, and was debating allowing them to play in foreign leagues.
Reuters reports that many Cuban baseball players will likely go to Japan — Frederich Cepeda and Yulieski Gourriel have already signed contracts with teams in the Nippon Professional League — and that Cuba will also allow foreign scouts onto the island for the first time. Now, all that prevents Cubans from participating in Major League Baseball in the U.S. is the embargo, Reuters reports.
Cuba and the European Union (EU) will conduct a second round of negotiations at the end of August as they work toward a bilateral agreement, reports Europa Press. Europa Press citing a “European source” said that the EU and Cuba are working toward “political dialogue, cooperation, and trade.”
The first round took place in April during which the two parties agreed to a road map for the negotiations, as the AP reported at the time.
In February, the EU and Cuba began working to establish closer ties. Europa Press says negotiations to reach the cooperation agreement could take between one and two years.
Roberto Veiga and Lenier González, two former editors of the Catholic magazine Espacio Laical, announced in a public letter on June 30 that they will start a new digital project, entitled Cuba Posible, reports the Havana Times. Veiga and González resigned from Espacio Laical in June, citing divisions that the magazine had created within the Catholic Church.
Veiga and González wrote that Cuba Posible would address “the practice of human dignity by every compatriot through the responsible exercise of liberty, equality and solidarity; the development of culture and the education of all citizens; [and] the economic progress of the country.”
Veiga and González wrote that they decided to embark on this new project because:
“We firmly believe that the restoration of trust among Cubans, and between Cuba and the world, and the depolarization of the political field, will open the doors of the future. Cuba Posible will work hard to build a better country.”
“We will facilitate debates, channeling these debates and especially the dialogue, which is where the project can become more than just a digital space. We will encourage dialogue among people in a gathering of friends where civil society can participate, as can Cubans living abroad and foreigners.”
The Nuevo Herald reports that Cuba Posible will be independent from the Catholic Church.
A study carried out by the Havana Consulting Group finds that home prices in Cuba have dropped slightly since reforms legalized the purchase and sale of houses, and that home sales have significantly increased, reports Café Fuerte. According to the report, in 2013 88,000 homes were sold in Cuba, compared with 45,000 in 2012. The growth in home sales has been influenced by lower prices, as well as the supply created by Cubans who have left the country definitively and, since the sale and purchase of homes was legalized in November 2011, have been able to sell their homes instead of turning them over to the state. The greatest drop in housing prices occurred in the provinces of Matanzas (27.47%), Havana (19.80%), and Cienfuegos (16.04%).
Havana remains Cuba’s biggest real estate market with 19% of the country’s population and 18% of housing capacity. More than 50% of homes for sale are in Havana. Havana also has the highest average price of homes at 31,157.59 CUC. In Havana, the prices of homes vary greatly by neighborhood, with the most expensive in Playa and Old Havana, and the least expensive across the bay in Regla. Some of the most expensive homes are valued at one million CUC.
Despite growth in sales, Cuba’s housing deficit has continued to climb, with an estimated shortage of some 700,000 homes.
Phil Peters explores the ins-and-outs of Cuba’s real estate market in a report for the Brookings Institution.
In a stark contrast with Cuba’s real estate market, only fifty cars and four motorbikes have been sold in Cuba in the past six months following the legalization of such sales, reports the Associated Press. In January, a new law went into effect allowing Cubans to buy vehicles from state dealerships without having to obtain permission from the government beforehand.
The car prices are prohibitive, since the majority of Cubans work state jobs that pay roughly $20 per month. The AP reports that a car that would cost $13,600 in the U.S. costs $42,000 in Cuba, and a car that would cost $53,000 in the U.K. costs $262,000 in Cuba. In January of this year, the announced prices of new cars led to widespread disappointment on the island, because most had been marked up by 400% or more. This disappointment was shared by nearly all sides of Cuban society – as Havana Times reported at the time:
“On various social networks, a State journalist published calculations that estimate that, to purchase a car, a person would need to save 5,790 full salaries in the course of 482 years, concluding that ‘they went off the deep end with these prices – we’re going to be the world’s laughing stock.'”
There are eleven dealerships selling cars in Cuba, reports Cubadebate. The AP reports that dealerships sell both new and used cars, and that the majority of those purchased are used, as they cost much less.
Profits from the past six months totaled $1.28 million, 75% of which Cuba’s government has said will go toward its public transportation system, reports Reuters.
Cuba’s state telecommunications company, ETECSA, will eliminate the mandatory minimum payment of 5 Convertible Pesos (CUC) for cell phone service starting in November, reports Café Fuerte. Mayra Arevich Marín, president of ETECSA, told Cuba’s media Wednesday that she predicts the new measure will increase demand. She also explained:
“It didn’t happen sooner because it was necessary to make a series of investments to assure that when the measure went [into effect] we would have created all of the infrastructure for new lines.”
Official statistics indicate that there were 2,104,600 cell phone service customers in Cuba at the close of 2013. That number has grown in the first part of 2014 and is expected to near 3 million by the end of year, reports Café Fuerte.
The construction of a railroad connecting Havana and Mariel Port was completed on Tuesday, July 1, the International Railway Journal reports. The track stretches 65 kilometers and is Cuba’s first new railway in over two decades. Trains are currently running on the tracks, but the ceremony for the opening of the railroad will not take place until July 26.
How Cuba’s Gay Rights Activists Are Starting a Revolution With One Simple Act, Carolina Drake, World.Mic
Cubans staged a “kiss-in” as part of the ongoing LGBT rights movement on the island. The piece also gives a short history of LGBT rights in Cuba, describing shifting perceptions.
OFAC Gores Red Bull for Skateboarding in Havana, George Murphy and Clif Burns, ExportLawBlog
ExportLawBlog breaks down OFAC’S case against Red Bull North America, Inc.
Cuba: is foreign investment the future?, Russell White, Latin America Bureau
White analyzes Cuba’s new foreign investment law and asks if the legislation will succeed in bolstering investor confidence, or if the “scars” of the past are too “hard to erase.”
Hola Cuba!, Tom Risen, U.S. News & World Report
Risen reports on the increased U.S. travel to Cuba, talking to Americas Quarterly editor Chris Sabatini about the importance of people-to-people trips, despite their often rigid structure.
Republican Party No Longer Has Tight Grip On Cuban-American Vote, Bill Clinton Says, Serafin Gómez, Fox News Latino
Gómez reports on Clinton’s fundraising speech in Florida, where he referred to Cuban Americans’ turn toward the Democratic Party. The Democratic Party needs to get out the Cuban American and Latino vote, the former president says. In June, with the publication of her memoir, former Secretary of State Hillary Clinton expressed her support for lifting the embargo.
Illegal, but was it wrong?, Phil Peters, The Cuban Triangle
Phil Peters focuses on the Cuba-related transactions that resulted in massive penalties this week for French bank BNP Paribas, noting that the prosecutors did not cite commercial activity as threatening “national and hemispheric security,” adding: “as a foreign policy matter, for all we know the United States brought this case against a bank that was financing routine imports to Cuba — food, consumer goods, construction materials, etc.”
The new realities of running a business in Cuba, Jonathan Wolfe, Christian Science Monitor
Wolfe highlights the bureaucratic challenges faced by those working in Cuba’s newly approved cooperatives and also examines the benefits such as higher wages and more autonomy in business decisions.
Cuban Carmen Jones revives musical theatre on island, Sarah Rainsford, BBC News
Sarah Rainsford reports on how Cuba is reinvigorating the island’s once-vibrant musical theatre scene with the performance of a re-imagined version of the Broadway musical Carmen Jones.
Intriguing Photos of Cuba Show the Country in a New Light, Amanda Gorence, Feature Shoot
Photographer Rose Marie Cromwell’s striking photos combine “images of everyday Cuban rituals with images that capture the country in new ways, far from the traditional representations photographed over the years.”
We Said, “No Car Pictures”, Kainaz Amaria and David Gilkey, NPR
NPR photographer David Gilkey talks about his experience taking photos in Cuba for last week’s special series, “Heirs of the Revolution.” Although he wanted to avoid the stereotypical car photos that surface in any Google search for “Cuba,” he found that “Cuba’s cars are impossible to ignore.” Here, he presents some of the more unique car photos that he wound up taking.