1.1 Principal measures to continue the blockade adopted by the US government.
The US government has maintained the entire framework of laws and administrative provisions that are part of the blockade’s legal basis and regulations. The basics of that policy have not been modified. This is seen in the laws and regulations in force listed below:
Trading with the Enemy Act (TWEA): Enacted as a war measure in 1917 to restrict trade with nations considered hostile, the implementation of this law was subsequently expanded to enable the president to regulate property transaction involving any US national in a foreign country whether in times of war or “any other period of national emergency declared by the president.” The first regulations of the blockade against Cuba of 1962 are based on this law.
On September 2, 2010, President Obama announced the expansion of the Trading with the Enemy Act, which, in practice, is supposed to ensure the continuation of the blockade against Cuba. A memorandum, drafted by the president to Secretary of State Hillary Clinton and Secretary of the Treasury Timothy Geithner, confirms that “the continuation of these measures regarding Cuba is convenient to US national interests.”
Foreign Assistance Act: Enacted in September 1961 by the US Congress, this law authorizes the president of that country to impose and maintain “a total blockade on trade between the United States and Cuba.” In addition, it forbids the granting of any kind of assistance to the Cuban government.
The Export Administration Act (EAA): Adopted in 1979 as a result of a review made on export regulations, this law vested the president with the authority to monitor all exports and reexports of goods and technology, particularly those which might be considered as detrimental to US national security.
Cuban Democracy Act (CDA): This law, better known as the Torricelli Act, was passed by President Bush Senior in October 1992. With this law, the US government tightened the economic measures against Cuba and provided a regulatory framework for the blockade’s extraterritoriality. This law forbids US subsidiaries in third countries to carry out any transaction with Cuba or Cuban nationals and prevents the entry of third country vessels into US territory for a period of 180 days after they have touched Cuban ports, among other restrictions.
Cuban Freedom and Democratic Solidarity Act: Known as the Helms-Burton Act, this law was adopted by President Clinton in March of 1996 with the primary objective to hinder and discourage foreign investments in Cuba and to internationalize the blockade against the Island. It codified the provisions of the blockade, limited the prerogatives of the president to suspend the implementation of this policy and expanded its extraterritoriality. This law prevented the entry into the US of foreign company executives (and their relatives) who invest in “confiscated” properties in Cuba and provided for the possibility to file lawsuits against them in US Courts.
Export Administration Regulations (EAR): These laws come under the Trading with the Enemy Act and the Exports Administration Act, and regulate exceptions to the Exports Administration Act or those which are authorized through licenses issued by the Bureau of Industry
and Security of the US Department of Commerce.
The scope of the aforementioned laws and regulations reveal that no other blockade has been as brutal and encompassing as that applied by the United States against Cuba.
1.2 Extraterritorial application of the blockade.
After more than two years of a Democrat administration that hoped to impress the world with its talk of change and renovation, the US policy against Cuba has been characterized by an intensification of the extraterritoriality of the blockade. The US government has intensified sanctions and the extraterritorial persecution of citizens, institutions and companies in third countries who establish or plan to establish economic, commercial, financial, scientific or technical ties with Cuba; thus assuming the right to make decisions regarding issues that are the sovereignty of other States.
Likewise, the dominant role played by the United States in the global economy and in strategic alliances, mergers and mega-mergers of international companies has continued to have a negative impact on Cuba and facilitated the intensification of the negative effects of the blockade, while further reducing the international economic sphere in which Cuba is allowed to operate.
The extraterritoriality of this policy is based on the following guidelines:
US subsidiaries in third countries are forbidden to have any kind of transaction with companies based in Cuba.
Companies from third countries are forbidden to export products of Cuban origin or products that have a component of Cuban origin to the US.
Companies from third countries are forbidden to sell goods or services to Cuba, whose technology contains more than 10% of US components, even though their owners may be nationals of those countries.
Third country banks are forbidden to open accounts in US dollars for Cuban juridical or natural persons or to carry out financial transactions in said currency with Cuban entities or persons.
Third country businesspersons are penalized for making investments or carrying out business with Cuba. If they do, they are denied visas to enter the US which can be extended to include their family members, and are subject to legal action before US courts in the event that operations with Cuba are related to properties associated with claims filed by US citizens (including those who were born in Cuba and acquired citizenship at a later date).
From March 2010 to April 2011 there were several multimillion dollar fines levied against US and foreign banking institutions for having conducted operations with Cuba. These types of sanctions have a detrimental effect and, in the case of banks, entail breaking relations with Cuba and/or forcing Cuban transactions to be made under more precarious conditions.
The persecution and harassment of individuals and companies in third countries has reached absurd levels, confirming the extraterritorial nature of the blockade.
In 2010, the Office of Foreign Assets Control (OFAC) of the US Department of the Treasury fined four entities for a total of 502,721,671 dollars. The largest fine (500 million) was levied against the ABN Amro Bank in Holland, for having carried out unauthorized financial transactions in which Cuba or Cuban nationals had interests.
On July 15, 2010 OFAC announced that the United Nations Federal Credit Union was fined 500,000 dollars for having carried out unauthorized financial transactions in which Cuba had interests.
On July 27, 2010, the IMECO Import Group at the Cuban Ministry of Construction signed a contract with Panamanian supplier VIBAS Import Export S.A. to buy four Komatsu graders through the TIESA Company, Komatsu distributors in Panama. Two of these graders could not be supplied due to the Komatsu America Corporation (KAC) factory’s refusal to meet the order. Komatsu America claimed that it had evidence that two other graders had previously been sent to Cuba. The failed delivery gravely affected the timeframe for executing the Ferronickel project. The cost of each grader is 235,000 dollars.
On August 16, 2010 the British bank Barclays reached an agreement with US Federal District Attorneys to pay 298,000,000 dollars for having altered financial records between 1995 and 2006 to hide financial transactions of Cuba, Libya, Sudan and Myanmar with US banks worth more than 500,000,000 dollars. According to the prosecutors, these transactions were in violation of the Trading with the Enemy Act and the International Emergency Economic Powers Act. Of the transactions carried out, 61 correspond to Cuba for a total estimated at 6,711,798 dollars.
In September 2010, OFAC requested that the Medical Education Cooperation with Cuba (MEDICC) NGO provide all information on its travel and links to Cuba for an investigation it was carrying out. At the same time, members of the Global Links Organization, which provides technical medical assistance to developing countries, received a warning from OFAC that it had overstayed its visit in Cuba.
In the last quarter of 2010 the VITRAL Paint Company had to stop production in three factories, resulting in the loss of 893,800 liters of emulsion, oil and enamel paints for a value of 2,285,800 dollars as a result of the cancelation by supplier Mexico Petroplastic of the delivery of 120 tones of rutile titanic dioxide used to produce paints for January-February 2011.
In March 2011 it was learned that a duty free store for diplomats in Spain, citing the US blockade, refused to sell cigarettes to a Cuban diplomat. The employee said that they were prohibited from selling products made by Phillip Morris to Cuban citizens, including diplomats, based on regulations set out by OFAC.
On March 21, 2011 the Portuguese company DigitalSign told the Cuban company Neuronic that it could not grant it a digital certificate since these validations were provided by VeriSign, a US company, and citing the US blockade.
On April 7, 2011 OFAC levied a fine of 22,500 dollars against the New York METLIFE insurance company for having issued a check directly to a Cuban national.
On April 17, 2011 it was learned that the US government requested explanations from the Spanish bank BBVA regarding the fact that it had declared in its annual report that it had an employee in Cuba. In addition, the US Securities and Exchange Commission requested information regarding the extent and nature of its “past, present and future” activities in Cuba and demanded that it report any contact with Cuban officials. As revealed by Wikileaks, the US government has decided to especially focus on Spanish companies with the objective of breaking their ties with Cuba, by carrying out constant harassment of these companies.
On April 25 2011 the PayPal eBay company that carries out online bank transferences canceled the delivery of funds belonging to the Cuba Support Group in Ireland that were destined for the Cuban account set up to gather donations for Haiti after the devastating earthquake that ravaged this country. PayPal offered the following statement: “PayPal would be in violation, under the Trading with the Enemy Act, if we facilitated transactions where funds benefit Cuba…and we would be subject to sanctions as outlined by OFAC.”
The Spanish company FLINT DIVISION SHEETFED informed about the need to substitute two products used in the Cuban poligraphic industry since they contained a higher percentage of raw materials of US origin than that allowed by US legislation to export to Cuba.
A European firm canceled its delivery of backhoe loaders, model R984C, destined for the Cuban nickel industry since they use a US CUMMINS motor prohibited for sale to Cuba by the manufacturers. This forced a change of excavators that had been standardized in the industry and could lead to losses not yet quantified in the areas of performance, inventory and administration time.
A loss of 14,844,128 dollars came about when Cuba could no longer buy sulfuric acid from a Mexican copper company for use in the nickel industry. In 2010, Cuba imported 410,491.632 metric tons with an average shipping cost of 73.66 dollars per ton, while the price for shipping one ton of the same product from Mexico would have been 37.50 dollars.
The European supplier of spare compressor parts for the Cobalt and Leaching Plant at the Comandante René Ramos Latour Nickel Company informed that it could no longer supply the parts since the manufacturer of the merchandise is from the United States and is not allowed to do business with Cuba. So far, this has resulted in the loss of 26,300 dollars.
As a result of the acquisition of the CENTAC company (a manufacturer of compressors for the oil industry) with US capital, the cost of buying spare parts for the existing machinery in Cuba has skyrocketed. While the cost of a compressor is around 60,000 dollars, the pieces to build one of them have been offered to Cuba by third countries at a cost of 191,000 dollars, three times the cost of the machine itself.