Martin Rice Of Missouri Donates Rice Valued At US$18,000.00 To Cuba

In May 2016, Bernie, Missouri-based Martin Rice Company donated 20 metric tons (one container with a value of approximately US$18.000.00) of long grain enriched rice sourced from the State of Missouri to Republic of Cuba government-operated Empresa Cubana Importadora Alimentos (Alimport), under the auspice of the Ministry of Foreign Trade of Cuba (MINCEX), for distribution to charities within the Republic of Cuba.

The Trade Sanctions Reform and Export Enhancement Act (TSREEA) of 2000 re-authorized the direct commercial (on a cash basis) export of food products (including branded food products) and agricultural products (commodities) from the United States to the Republic of Cuba, irrespective of purpose. 

Since the first exports under TSREEA in December 2001, the government of the Republic of Cuba has purchased more than US$5.2 billion in agricultural commodities and food products from United States-based companies.  

Government of Vietnam-operated Vinafood 1 and Vinafood 2 have provided payment terms to Alimport of up to two years to pay for rice (25% to 30% broken).  

United States producers can provide rice (25% to 30% broken); payment terms, however, without the use of United States government export programs, would remain cash-on-delivery to 30 days; and for credit-worthy customers, generally not exceed sixty days to ninety days.

Governor Jay Nixon (D) of Missouri To Visit Cuba; Visit Was Postponed From March 2015

Media Release:

Jefferson City, MO

Gov. Jay Nixon will lead a delegation of Missourians representing agriculture, business, education and government on a trade mission to Cuba from May 29 to June 1. With the recent progress toward normalization of relations between the United States and Cuba, the trade mission will focus on growing Missouri exports to the island nation of 11 million, especially agricultural products.

The delegation will include First Lady Georganne Nixon, Missouri Department of Agriculture Director Richard Fordyce and Missouri Department of Economic Development Director Mike Downing. Other members of the trade delegation include Dr. Carlos Vargas, President of Southeast Missouri State University; Gary Wheeler, of the Missouri Soybean Association; Silvia Hollis, of Mid-Continent Aircraft, Hayti; Thorstein Holt, of Holtec Gas Systems, Chesterfield; Brady Moses, of SatCommX, Lampe; Jeffrey Fort, of MOM Brands Sales, St. Louis; and several representatives of Martin Rice, of Bernie.  

“The growth of Missouri exports has gone hand in hand with our revitalized economy,” Gov. Nixon said. “Cuba represents a market of 11 million consumers that has been largely untouched by U.S. exports for more than 55 years. Missouri is moving forward to take advantage of this opportunity, particularly when it comes to rice, one of the staples of the Cuban diet.”

Cuba formerly was a significant export destination for Missouri-grown rice. Missouri produces a high-quality, long-grain rice that has proven to be a high-value crop for farmers in the southeast part of the state, the Governor said, and increasing rice exports would be another boost for the regional and state economies.

As part of the focus on Missouri exports, Gov. Nixon will visit the new deep-water port at Mariel, Cuba, which has expanded capacity to receive large cargo ships. Missouri products, particularly grain, often are transported down the Mississippi River by barge to the Gulf of Mexico and then to overseas markets by sea-going cargo ships. As part of his trade mission to the Republic of Panama in March, the Governor went to the newly expanded Panama Canal, a major transportation route for U.S. grain exports.

In addition to meeting with Cuban government officials in Havana, Gov. Nixon will be briefed by Deputy Chief of Mission Scott Hamilton and other high-ranking officials at the U.S. Embassy on progress toward facilitating and increasing trade between the U.S. and Cuba. He is also scheduled to address an entrepreneurial forum coordinated by the Cuban Chamber of Commerce and the Ministry of Trade and Investment, which will include Cuban companies and members of the Missouri delegation.

Travel costs for the Governor and First Lady will be covered by the Hawthorn Foundation, a nonprofit organization dedicated to promoting economic growth in Missouri; state taxpayer funds will not be used.

Gov. Nixon has made creating opportunities for Missouri businesses to sell their products around the globe and promoting Missouri as an ideal location for investment by foreign companies a top economic development priority for his administration. The Governor has led successful trade missions to China (October 2011); Brazil (April 2012); the Republic of China (Taiwan) and the Republic of Korea (March 2013); Western Europe (June 2013, March 2015 and June 2015); Canada (March 2014 and August 2015); Columbia and Peru (February 2016); Panama (March 2016); and Israel (March 2016).

In March 2015, Mrs. Nixon represented the State of Missouri in leading a trade mission to Cuba with members of the U.S. Agriculture Coalition for Cuba (USACC), including 95 current and former government officials, industry representatives, and agriculture leaders including two former U.S. Secretaries of Agriculture. It was the first official trade mission from the United States after President Obama announced the decision to normalize diplomatic relations with Cuba in December 2014. The Governor was unable to travel on that trade mission because of the funeral of State Auditor Thomas Schweich.

Revel Cash Management Application Operational In One Havana Restaurant; Second This Week & Ten More Soon

California-based technology companies are finding a back-door into the Republic of Cuba marketplace.

San Francisco, California-based Revel Systems (2015 estimated revenues US$75 million; 400 employees; approximately US$1 billion market capitalization) has agreements to sell its cash management application to twelve privately-owned restaurants (paladares) in the Republic of Cuba. 

The application will be used with independently-acquired iPad tablets (US$269.00 to US$1,229.00) manufactured by Cupertino, California-based Apple, Inc. (2015 revenue US$234 billion). 

The names of the restaurants have not yet been disclosed.  Needham, Massachusetts-based TripAdvisor LLC (www.tripadvisor.com) lists 650 restaurants (government-operated and non-government-operated) in the city of Havana.  The Ministry of Tourism of the Republic of Cuba reports approximately 1,800 paladares operating in the Republic of Cuba.

Revel Systems (www.revelsystems.com), which has its applications installed in more than 20,000 transacting terminals, markets software that enables tablet computers to function as cash registers- “a point of sale solution for single and multi-location businesses.” 

Each application is delivered via the Internet and installed on an iPad.  The restaurants pay a minimum of US$119.00 per month (US$1,428.00 annually) for the application (which may be customized at a higher pricing); payment by bank wire transfer or Palo Alto, California-based PayPal Holdings, Inc. (2015 revenues approximately US$9 billion) Internet portal (www.paypal.com), meaning that the payment(s) can be made by a third party residing in the United States on behalf of the restaurant located in the Republic of Cuba. 

From Revel Systems, “Our monthly fee is all inclusive of our license, software, support, add-on modules and cloud hosting.  And as we make additions to the software (every 3 months) all of that is all-inclusive in this price.  So this is an ongoing fee for an ever-expanding software set that will allow their business to focus on doing what they love while we focus on enabling them to grow their business and make it more profitable.  Customers do not need to sign on for a year, unless it is part of a promotion, standard contracts are month to month.” 

http://revelsystems.com/pos-systems/type/restaurant/

About Revel Systems

Revel Systems software offers a POS solution for restaurant, retail and enterprises with integrated payroll, inventory tracking, customer relationship management and more. With the introduction of the Revel Marketplace, Revel iPad POS System users can now integrate directly into third-party enhancements, including mobile payments, online ordering, gift or reward cards and advanced financial software suites.

Point of Sale, POS, POS for Retail, POS for Restaurants, POS for Quick Service, POS for Grocery, Omni-Channel, Store solutions, Enterprise Management System, Enterprise Reporting, Inventory Management, Customer Relationship Management (CRM), Mobile, eCommerce, Integration to External Systems, POS Hardware, Configuration Management, End to End Implementation Services, SaaS, Cloud Based, Payment Processing, Taxation, Shipment Processing, Device Based, Menu Board, Mobile Device Management, Label Printing, Loyalty Programs, Gift Card, Digital Signage

U.S. Technology Companies’ Backdoor To Cuba

The government of the Republic of Cuba remains unlikely to directly purchase technology hardware and software from United States-based companies.

A challenge for United States-based communications/telecommunications companies and the United States government remains today as has since the implementation of the Cuban Democracy Act (CDA) in 1992 (telecommunications services and facilities) and successive regulatory changes during the Bush, Clinton, Bush, and Obama Administrations, particularly since 17 December 2014- how to answer the following question from the Ministry of Communications of the Republic of Cuba:

“If we purchase your equipment, how do we know the equipment will not be compromised before it arrives or have an ability to be compromised from abroad after its installation?  Will you augment the specifications of equipment so we may monitor all voice, text, data and email traffic flowing through the equipment?”  

In January 2016, Daniel Sepulveda, Deputy Assistant Secretary of State and U.S. Coordinator for International Communications and Information Policy led an official fourteen-member delegation to the Republic of Cuba which included Thomas Wheeler, Chairman of the Federal Communications Commission and representatives of Information Technology Industry Council, California-based Cisco Systems, Pennsylvania-based Comcast, and the North American headquarters of Ericsson.

From FCC Chairman Wheeler: “Ambassador Daniel Sepulveda from the State Department led our delegation which also included representatives from the Department of the Treasury as well as representatives of the technology community. The inclusion of the private sector in the talks advanced the dialog with real life examples of what was possible.” 

Soon after completion of the visit, Republic of Cuba government-operated ETECSA reported that it would install broadband services within the area of Old Havana using equipment sourced from China-based Huawei Technologies Co Ltd.  In November of 2015, the same company had reported an agreement to market mobile devices, parts, accessories and to train repair personnel.  The government of China has extended substantial financial credits to the government of Cuba; and there is bilateral military and intelligence cooperation. 

But, there’s a backdoor not necessarily subject to an intense review by the government of the Republic of Cuba. 

United States-based air carriers, United States-based hospitality companies, and the 201 categories of authorized self-employed that are and will operate within the Republic of Cuba (Casas Particulares- Bed & Breakfasts; Paladares; Services; there are an estimated 500,000/600,000 licensed/unlicensed full-time/part-time self-employed) have and will continue to directly and indirectly import technology for their use. 

And an increasing number of the Republic of Cuba's 11.3 million citizens are using wireless devices equipped with Mountain View, California-based Alphabet Inc.'s (2015 revenues US$75 billion) Android operating system and Apple Inc.'s iOS. 

The White House Continues To Maintain Secrecy About Next Week's Invitation-Only Event About Cuba

Update……

After two days of requests, The White House Press Office and the National Security Council Press Office continue to refuse to provide information relating to a third-party privately-organized invitation-only gathering scheduled for 25 May 2016 in the Old Executive Office Building (OEOB) within The White House complex which will focus upon commerce with the Republic of Cuba.

The meeting will be hosted by the Obama Administration, managed by The National Security Council, and scheduled to include senior-level representatives of Departments and Agencies of the United States Government (including the Acting Director of the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury).  No participant has been disclosed.

The guest list includes representatives of United States companies, consultancies, lobbyists, and organizations.  No participant has been disclosed.

An individual representing a Washington, DC-based Republic of Cuba-focused advocacy group, which was reported to have retained a Washington, DC-based lobbying entity for Republic of Cuba-focused activities, was reported by an invitee as the only non-United States government representative addressing the gathering.

On 20 May 2016, Washington, DC-based Business Forward, which has extensive relationships throughout the Obama Administration, was identified as the undisclosed third-party organizer of the invitation-only gathering.  Business Forward did not make the disclosure publicly and it has not been reported publicly. 

The gathering is not disclosed in any of the event platforms used by Business Forward; the gathering is consistent with the organization’s “Fly-in Events: Attend a half-day briefing in Washington, D.C. with the President’s top advisors and members of Congress.”

http://www.politico.com/story/2012/04/courting-the-wh-dont-call-it-lobbying-075168

http://thehill.com/business-a-lobbying/271349-obama-friendly-business-group-given-great-white-house-access

http://www.businessfwd.org/

From an executive of a United States-based company that has engaged in commerce with the Republic of Cuba, and was neither informed of the gathering nor invited to the gathering: “If accurate, there are fundamental questions of transparency and openness (Sunshine Acts).  Not a good narrative.”

The Obama Administration should not be “renting” meeting space in The White House complex, creating parallels to how guests were selected to overnight in the Lincoln Bedroom during the Clinton Administration.

When United States government officials participate in privately-organized events at public venues, the private sector participants may be paying a fee to the organizer.  For example, if a for-profit or not-for-profit entity organizes an event at a hotel or conference center, anyone who makes payment may attend.  And, United States government representatives may deliver remarks- keynote, speaker, on a panel, etc.  In these instances, the identities of the organizer(s), the speaker(s) and often the participants, are publicly available- and are so long before the event. There is transparency.

When the Obama Administration deliberately maintains secrecy- even after inquiries, about an event being organized at The White House by an outside entity, and permits the outside entity to determine who is invited and who will deliver remarks… on issues of importance to many individuals, consultancies, companies and organizations, a conclusion is The Obama Administration wants to determine who is considered of value by selectively enhancing reputations. 

For most individuals and entities in Washington, DC, the sentences “I just spoke to an invitation-only gathering at The White House” and “I just came from a private briefing at The White House” have political, reputational, and financial value.  And will be used in marketing materials and in interviews for a long time.

The Obama Administration should make attending this gathering available to everyone- and not selectively permit any one organization to benefit by having a role specifically designed to bring it value… at the expense of all those who have a professional interest in issues relating to the Republic of Cuba.

The White House Convening Secret Cuba Business Meeting Next Week

The White House Press Office and the National Security Council Press Office have refused to provide information relating to a gathering scheduled for next week in the Old Executive Office Building (OEOB) which will focus upon commerce with the Republic of Cuba.

The meeting, which has been “organized” by an unidentified entity, will be hosted by the Obama Administration, passively or actively managed by The National Security Council, and including senior-level representatives of Departments and Agencies of the United States Government, representatives of United States companies, consultants, lobbyists, and representatives of United States organizations.  No participant has been disclosed.

From an executive of a United States-based company that has engaged in commerce with the Republic of Cuba, and was neither informed of the gathering nor invited to the gathering: “If accurate, there are fundamental questions of transparency and openness (Sunshine Acts).  Not a good narrative.”

Want To Open An Office In Cuba? There Are 200 In Front Of You

The government of the Republic of Cuba, primarily through the Embassy of the Republic of Cuba located in Washington, DC, the Ministry of Foreign Trade (MINCEX) of the Republic of Cuba, and the Chamber of Commerce of the Republic of Cuba has reportedly received inquiries from more than two hundred (200) United States-based companies seeking to establish an office in the Republic of Cuba, primarily within the city of Havana.

The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury "authorizes persons subject to U.S. jurisdiction to may establish and maintain a physical presence in Cuba, such as an office, warehouse, or retail outlet, in Cuba to engage in transactions authorized by or exempt from the CACR in the following categories: entities engaging in non-commercial activities authorized by section 515.574 (Support for the Cuban People); entities engaging in humanitarian projects set forth in section 515.575(b) (Humanitarian projects); private foundations or research or educational institutes engaging in transactions authorized by section 515.576; news bureaus; exporters of certain goods authorized for export or reexport pursuant to 31 CFR §§ 515.533 and 515.559; entities providing mail or parcel transmission services; providers of telecommunications or internet-based services; entities organizing or conducting certain educational activities; religious organizations; and providers of carrier and certain travel services. These persons may employ Cuban nationals in Cuba as well as persons subject to U.S. jurisdiction in Cuba (and such persons may maintain a domicile in Cuba). These persons may open and maintain bank accounts to facilitate authorized transactions. For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.573. Persons subject to U.S. jurisdiction that do not meet the terms of the general license may apply to OFAC for a specific license. Such applications will be reviewed on a case- by-case basis.  Additional authorizations from the Cuban government may also be required."

The government of the Republic of Cuba has an application process with meaningful requirements that generally must be fulfilled in advance of establishing a presence; there are always exceptions based upon the perceived importance of the company and/or the mission of the company. 

Representatives of the government of the Republic of Cuba have reported that the process may take up to two years.

There are companies (and individuals- consultants, travel providers, etc.), including from the United States, and other countries who are are marketing that they have a "presence" while in reality may be operating within the offices of another authorized entity (which may or may not be permitted), or operating out of a hotel room or a private residence.  These unauthorized activities should be avoided.

EY Caribbean Professional Services Ltd has provided five (5) pages of a November 2015 report, "Doing Business With Cuba: A Regulatory Overview By EY" which details the process for any company seeking to establish an office in the Republic of Cuba.

Click Here For Complete Text

May 2016 Economic Eye On Cuba- March Exports Decreased 69%; 1st Quarter Decreased 29%

ECONOMIC EYE ON CUBA©
May 2016

Coffee Added To Authorized Import List- 1
March Food/Ag Exports Decreased 69%; 1st Quarter Decreased By 29%- 2
Healthcare Product Exports- 4
Humanitarian Donations- 5
Artist Products Exports Valued At US$23,101.00- 5
Credit Card Processing Terminals Exported Valued At US$3,906.00- 5
U.S. Port Export Data- 16
Updated Speaking Schedule- 17
Blog Post List- 18

NOTE: This issue was delayed due to some data questions relating to port exports.

Complete Report in PDF Format

Obama Administration Continues To Advocate For Certified Claimants

What to expect from the Obama Administration during its remaining days? 

A focus upon expanding regulations, persuading the government of the Republic of Cuba to authorize more initiatives, and negotiating a settlement of the certified claims. 

Some advocates in Washington, DC, may argue that if President Obama agrees to a claims settlement the momentum for further legislative and regulatory ‎changes will be weakened- the process will continue to be one of incrementality rather than "the big bang theory" where the United States Congress votes to repeal all relevant statutes... that's a foolish argument.

The bilateral relationship has never been about a moment; it's always been about a series of moments… with each building upon the predecessor moment.

The Obama Administration may seek to use a portion of the funds obtained during the last eight years‎ from global financial institution settlements to offset some or all of the principal amount of approximately US$1.9 billion for the 5,913 certified claimants.  The value is approximately US$8 billion with interest.

If the Obama Administration makes a payment to the certified claimants essentially on behalf of the government of the Republic of Cuba, might those who have civil judgements in the United States against the government of the Republic of Cuba seek to seize ‎the funds?  Someone may try.

The challenge will be for the government of the Republic of Cuba to recognize there will be no monetary reparations to offset for their potentially US$121 billion to US$800 billion in claims against the United States.

President Obama may have a time window upon the expiration of the‎ Defense Authorization Act this fall; there is a provision in the 2015/2016 law that precludes President Obama from changing the lease for Guantanamo Bay. This could be a component of non-monetary reparation.

There is no more important issue for the Obama Administration to resolve by 20 January 2017 than settling the certified claims; and that process has been made easier due to the decision by Connecticut-based Starwood Hotels and Resorts Worldwide (being acquired by Maryland-based Marriott International), which controls a certified claim valued at US$51 million, to engage with the government of the Republic of Cuba.

Without a settlement of the certified claims, every Obama Administration initiative becomes less secure and more tenuous in terms of post-Obama Administration survival.  A settlement of the certified claims would create momentum in the United States Congress that could not be derailed… and that may cause concern for some in the government of the Republic of Cuba, where a slight derailment of energy might be welcomed to slow the process of re-engagement.

US & Cuba To Hold 3rd Bilateral Commission Meeting On 16 May 2016... Compare The Media Release From Each Government- What Is Mentioned And What Is Not Mentioned

United States and Cuba to Hold Third Bilateral Commission Meeting in Havana, Cuba

Media Note
Office of the Spokesperson
Washington, DC
May 12, 2016

The United States and Cuba will hold the third Bilateral Commission in Havana, Cuba on Monday, May 16. Following the successful visit of President Obama to Havana in March 2016, Secretary Kerry asked Ambassador Kristie Kenney, the Counselor of the U.S. Department of State, to lead the delegation.

The Secretary places a top priority on deepening our dialogue with the Government of Cuba, the primary mechanism for which is the Bilateral Commission. Deputy Assistant Secretary John S. Creamer will also attend for the United States. The Cuban delegation will be led by Josefina Vidal, the Foreign Ministry’s Director General for U.S. Affairs.

The meeting will provide an opportunity to review progress on a number of shared priorities since the last Bilateral Commission meeting in November 2015, including progress made during the President’s historic trip to Cuba in March.

The United States and Cuba expect to plan continued engagements on environmental protection, agriculture, law enforcement, health, migration, civil aviation, direct mail, maritime and port security, educational and cultural exchanges, telecommunications, trafficking in persons, regulatory issues, human rights, and claims for the remainder of 2016.

Cuba and United States to hold Third Meeting of the Bilateral Commission

HAVANA, May 12th, 2016. The third meeting of the Cuba-United States Bilateral Commission will be held next Monday, May 16th, in Havana.

The Cuban delegation will be headed by Director General for United States affairs at the Ministry of Foreign Affairs, Josefina Vidal Ferreiro, and United States delegation will be led by Counselor to the Secretary of State, Kristie Kenney.

During this meeting, the parties will review the accords of the second Commission, held on November 10th, 2015, in Washington, and the results achieved since then.

Likewise, the meeting will serve to define the actions both parts will carry out during the rest of the year to advance the process to improve the relations, including, the celebration of technical meetings and the adoption of cooperation agreements on issues of common interest, the realization of high-level visits in both ways and the celebration of dialogues on issues of bilateral and multilateral interest in which we have similar positions.

The need to lift the blockade, to return the territory illegally occupied by the Guantanamo Naval Base to Cuba, and to eliminate other policies which are harmful to Cuba’s sovereignty, will be reiterated by the Cuban delegation as essential to have normal relations between Cuba and the United States.

The Bilateral Commission was created in August, 2015, as a mechanism to follow up the ties between the two countries following the re-establishment of the diplomatic relations. The first meeting was celebrated on September 11th, 2015.

Want To Have A Legislative Victory? Then Be Specific... Define Payment Terms

Want To Have A Legislative Victory?

Then Be Specific… Define Payment Terms

An increasing number of United States-based companies, advocacy groups, lobbyists, and Members of Congress are supporting a repeal of the Trade Sanctions Reform and Export Enhancement Act (TSREEA), signed into law in October 2000 by President William J. Clinton and first implemented in November 2001 by President George W. Bush. 

The TSREEA re-authorized the direct export of food products and agricultural commodities from the United States to the Republic of Cuba, albeit on cash-in-advance payment terms.

Since the first exports in December 2001, the government of the Republic of Cuba has purchased more than US$5.1 billion in TSREEA-authorized products.

The Cuban Democracy Act (CDA) of 1992 regulates the export from the United States of medical equipment, medical instruments, medical supplies, medicines and pharmaceuticals to the Republic of Cuba; there are no restrictions on payment terms.

Primary impediments to moving revisionist TSREEA-legislation through the United States Congress have been a) the absence of the government of the Republic of Cuba stating what payment terms it would seek if permitted to do so for food products and agricultural commodities and b) the absence of United States-based companies that have, are or desire to export food products and agricultural commodities to the Republic of Cuba stating publicly what payment terms they would provide, today, to Republic of Cuba government-operated entities.

Is the issue for the government of the Republic of Cuba about simply wanting the prohibition on payment terms to be removed from the TSREEA or is there a grander progressive strategy? 

Once the TSREEA restrictions are removed, and normal commercial terms are permitted (from companies and from financial institutions), will the response from the government of the Republic of Cuba be, “this is good, but….”  This is especially likely if the payment terms offered by United States-based companies are reflective of the Republic of Cuba’s commercial payments legacy with non-United States-based companies and governments.

The “but” being the Republic of Cuba remains as a discriminated party because of an inability by it and United States-based companies and United States-based financial institutions to access programs administered by the United States Department of Agriculture (USDA), Export-Import Bank (Ex-Im), Overseas Private Investment Corporation (OPIC), and Small Business Administration (SBA), as well as, remaining subject to provisions of Platt Amendment (Lease for Guantanamo Bay) of 1901; Trading With The Enemy Act of 1917; Cuban Democracy Act of 1992; Libertad Act of 1996; Trade Sanctions Reform And Export Enhancement Act of 2000; and Cuban Assets Control Regulations (CACR).  So, friends in the United States, you have more work to do…

Government of Vietnam-operated Vinafood 1 and Vinafood 2 have provided payment terms to Republic of Cuba government-operated Empresa Cubana Importadora Alimentos (Alimport), under the auspice of the Ministry of Foreign Trade of Cuba (MINCEX), of up to two years to pay for rice (25% to 30% broken); and there have been reports of payment arrears.  United States-based producers can provide this product.  Payment terms, however, without the use of United States government programs, would be, according to United States-based companies, cash-on-delivery to 30 days; and for credit-worthy customers, generally not exceed sixty days to ninety days.

The United Kingdom Trade & Investment Office reported in February 2016 that “despite the increasing opportunities for UK companies in Cuba, the market still offers challenges which include: very slow decision-making, with most important business decisions being referred to high-level government; all sales in Cuba are public sales, controlled by heavy regulation; payment delays are common; standard practice for the Cuban state to expect to buy on credit terms of 1 to 2 years; potentially increased market competition due to easing of US sanctions.”

For United States-based companies, the lack of public statements relating to what payment terms they would be prepared to offer to Alimport and other Republic of Cuba government-operated companies has created an unnecessary self-inflicted credibility wound.  Is Minnesota-based Cargill, Arkansas-based Riceland Foods, Maryland-based Perdue Grain and Oilseed, Georgia-based AJC International, and Illinois-based PCS Sales among others prepared to provide payment terms of 180 days to 720 days?  

The Obama Administration has authorized payment terms for other products, including agricultural equipment.  What payment terms is Illinois-based Caterpillar willing to provide to Republic of Cuba-based authorized entities?  Specifics would encourage other companies to follow and present the government of the Republic of Cuba with commercial opportunities- and commercial accountability. 

There is some self-serving incrementalism to the process.  Advocates advocate for removing the TSREEA payment terms knowing that as a result the government of the Republic of Cuba may, perhaps, incrementally increase selected commodity purchases.  Then, the advocates pivot to seeking for the government of the Republic of Cuba and for United States-based companies access to programs administered by the United States government.  A multi-year advocate full-employment initiative.

That’s not going to happen until the government of the Republic of Cuba has created a financial payments record of compliance with United States-based companies and United States-based financial institutions.   

There would be far greater support for a TSREEA-related legislative initiative if those United States-based companies that have and are and desire to export food products and agricultural commodities from the United States to the Republic of Cuba would be on-the-record with what payment terms they would offer for contracts with Alimport and other Republic of Cuba government-operated entities.

Memories seem selective… 

In 1999 and throughout 2000, United States-based companies were not supportive of including authorization for payment terms other than payment of cash in advance.  This was due to a concern that with the Republic of Cuba’s commercial credit issues- delays and defaults in payments to companies and to governments, and despite best intentions there would likely be a delay or default to a United States-based company; and there was fear that a Chief Executive Officer (CEO) having to explain to reporters during a television interview on CNBC why the company provided payment terms to a Republic of Cuba government-operated entity and there was delay or default that impacted quarterly earnings… would simultaneously watch the share price of the company decrease and with it the expectation that other companies would provide payment terms to Republic of Cuba government-operated entities.

The position of United States-based companies was that advocacy would be more productive if there was no risk to the companies; they would have the benefit of exports and would be able to promote that the Republic of Cuba was “the safest export market in the world.”  Always known was there would be a limit to which the government of the Republic of Cuba would spend valuable currency when long-term financing options were available through non-United States-based government programs.   

The government of the Republic of Cuba put pressure upon United States-based advocacy groups to lobby for payment terms other than cash in advance to be included in the TSREEA.  The United States-based companies prevailed.

When President Clinton signed the TSREEA into law in 2000, the government of the Republic of Cuba responded that it would not purchase a grain of rice or a kernel of corn because of the payment restrictions.  The result was a year during which the United States business community and advocacy groups ignored the Republic of Cuba; the feeling was after a two-year effort (initially led by United States-based rice producers) to achieve a change in United States law, there would be some moment of gratitude from the government of the Republic of Cuba.  There wasn’t. 

It was the fall of 2001, after a hurricane, that the government of the Republic of Cuba shared that it would make a “one-off” purchase of some products to replenish stockpiles damaged during the hurricane.  The list of products to be purchased included wood. 

The Bush Administration worked cooperatively with the United States business community to arrange for the timely export of the first commodities in December 2001 (corn and poultry valued at US$4,318,906.00).  And the wood? … it would not be purchased until 2003.  

What does the government of the Republic of Cuba want, and need, but may not receive for a while? 

Rescind relevant provisions:

Platt Amendment (Lease for Guantanamo Bay) of 1901
Trading With The Enemy Act of 1917
Cuban Democracy Act of 1992
Libertad Act of 1996
Trade Sanctions Reform And Export Enhancement Act of 2000
Cuban Assets Control Regulations (CACR)

United States Department of Agriculture (USDA)
Commodity Credit Corporation
Export Credit Guarantee Program
Facilities Guarantee Program

Export-Import Bank (ExIm)
Export Working Capital Program
Working Capital Guarantee Program
Loan Guarantee Program
Direct Loan Program
Finance Lease Guarantee Program

Overseas Private Investment Corporation (OPIC)
Direct Loans and Loan Guarantees

Small Business Administration (SBA)
Export Express Program
International Trade Loan Program

Are Cuba's Hotel Operators Balancing Supply vs. Demand Or Becoming Greedy And Risking Reputational Harm

Are Cuba’s Hotel Operators Balancing Supply Vs. Demand Pricing?  Becoming Greedy?  Precipitating Backlash?

Hotel Mecure Sevilla Habane Has Increased Prices 50% Since 2015; Expects Increase Of 56% By November 2016 For A Total One Year Increase Of 133%... With No Change In Guest Experience

Hotel Mercure Sevilla Habane (operated by Paris, France-based AccorHotels) located in the city of Havana, Republic of Cuba, was US$120.00 per night (with buffet breakfast) in 2015, is US$180.00 per night (with buffet breakfast) since the beginning of 2016, and will be US$280.00 per night (with buffet breakfast) by November 2016, representing an increase of 133% in twelve months.

Might there be a negative result in that the customer experience has not improved 50%, 56% or 133%. The concept of supply and demand is at play, but there should be a concern about reputational damage from a perception of price-gouging... and creating a negative social impact upon employees who are Republic of Cuba nationals.

The increase in room rates at hotels located throughout Havana are primarily impacting visitors subject to United States law, as restrictions implemented by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury upon individual and group itineraries necessitate Havana-based land and sea arrivals/departures amongst other activities.

Individuals subject to United States law have the highest net profit margin of any visitor to the Republic of Cuba. 

A substantial increase in hotel room rates without a corresponding increase in the quality of hotel services is unsustainable and inadvisable. 

An opinion from a hotel industry executive: “… the incumbent hotels will take advantage of the short-term supply and demand imbalance while new hotels will obtain their fair-market share; the aging properties will be forced to upgrade (and improve guest experience) to survive or decrease their rates.”

Unsustainable because with an increase in cruise ship activity, visitors will be able to have the services that they desire, are comfortable with, and equate with value, without feeling taken advantage of by either Republic of Cuba government-operated properties or properties managed by companies located outside of the Republic of Cuba, in this instance, AccorHotels. 

Melia Cohiba and Melia Habana, hotels located in Havana that are managed by Palma de Mallorca, Spain-based Melia Hotels International, have also increased room rates substantially as have the hotels Saratoga (rack rate nearing US$500.00 per night), Parque Central, Nacional (reported at more than US$500.00 per night), Capri, Inglaterra, Telegrafo, Plaza and Presidente.  There may be a reputational impact upon AccorHotels and Melia Hotels International.  A room at the Habana Libre was reported at US$450.00 per night.

NOTE: Some owners of homes that are licensed to host guests, Casa Particulars, have increased pricing per night from 60% to 100% during the last twelve months.  Guests are generally more forgiving to owners of private residences as there is a belief that supporting private enterprise is worth the sometimes difference between price and value.

With the implementation of regularly-scheduled commercial airline service between the United States and the Republic of Cuba, there will also be opportunities for travelers to make day-trips and avoid hotels. 

Inadvisable because a substantial increase in gross revenues and lack of corresponding increase in the guest experience, or the salaries of Republic of Cuba nationals who work at the property, does nothing to encourage the government of the Republic of Cuba to make changes to the operations of its hospitality sector; rather, the hospitality sector is at risk of becoming another revenue stream to redirect to other priorities of the economy with property maintenance neglected based upon a belief that regardless of the guest experience the demand for hotel rooms is sustainable so pricing can continue to increase irrespective of corresponding quality issues.

Stamford, Connecticut-based Starwood Hotels & Resorts Worldwide (2015 revenues exceeded US$5.7 billion) will be managing three properties in the Republic of Cuba (Gran Caribe-owned Hotel Inglaterra; Habaguanex-owned Hotel Santa Isabel and Gaviota-owned Hotel Quinta Avenida, which will be re-branded as a Four Points by Sheraton).  Gaviota is controlled by the Revolutionary Armed Forces of the Republic of Cuba.  Bethesda, Maryland-based Marriott International (2015 revenues exceeded US$14 billion), which is acquiring Starwood Hotels & Resorts Worldwide, is also in discussions with Republic of Cuba government-operated companies to identify properties to manage within the Republic of Cuba.

When Starwood Hotels & Resorts Worldwide begins management of its properties, and Marriott International begins management of its properties, there will be equilibrium between the price of a room and the guest experience… as the traditional model is to have the guest experience be perceived as exceeding the price of the room. 

Thus, properties that are perceived as maintaining an imbalance between price and value will be avoided, resulting in potentially fewer visitors to the Republic of Cuba.

T-Mobile Joins Verizon, Sprint, AT&T With Cuba Roaming Agreements

Un-carrier reaches interconnect and roaming agreement with Cuban telecom to offer roaming for customers traveling to Cuba

Bellevue, Washington — May 9, 2016 —T-Mobile [NASDAQ: TMUS] today announced it has signed an interconnect and roaming agreement with Empresa De Telecomunicaciones De Cuba, S.A. (ETECSA), the Cuban telecommunications company. The new deal enables the Un-carrier to do its part to open communications between the U.S. and the island nation, delivering more affordable voice calling for customers who want to keep in touch with friends and family in Cuba, as well as voice, text and data roaming for customers traveling to Cuba starting this summer.
 
“The historic opening of Cuba is a natural opportunity for us to take action, and we are.  That’s the Un-carrier way!” said John Legere, president and CEO of T-Mobile.  “We have more customers of Cuban descent than any other wireless provider – so connecting them with family and friends in Cuba is a message we heard loud and clear!”
 
More than a third (36.6%) of Cuban-born wireless customers are with T-Mobile, more than AT&T and triple the number of Verizon customers. And, customers in Cuban-American hubs like Miami are choosing T-Mobile and MetroPCS nearly twice as often as AT&T or Verizon. Not surprisingly, Cuba is the #1 requested addition to T-Mobile’s international roaming on social media. Naturally, the Un-carrier is listening and responding to its customers.
 
As a result of today’s agreement, T-Mobile Simple Choice customers will be able to: Call landlines and wireless phones in Cuba from the U.S. for just $0.60 per minute – 65 percent less than today – with the popular monthly “Stateside International Talk” feature ($15 per month) and Use voice, text, and data while traveling in Cuba, starting this summer. 

For more information on T-Mobile’s industry-leading global roaming services, please visit www.t-mobile.com/international.
 
About T-Mobile

As America's Un-carrier, T-Mobile US, Inc. (NASDAQ: TMUS) is redefining the way consumers and businesses buy wireless services through leading product and service innovation. The Company's advanced nationwide 4G LTE network delivers outstanding wireless experiences to more than 65.5 million customers who are unwilling to compromise on quality and value. Based in Bellevue, Washington, T-Mobile US provides services through its subsidiaries and operates its flagship brands, T-Mobile and MetroPCS. For more information, please visit http://www.t-mobile.com.

ETECSA also has roaming agreements with New York-based Verizon Wireless, Kansas-based Sprint, and Texas-based AT&T.

The Commercial & Political Impact Of Cruise Ships From The U.S. To Cuba

Full Cruise Ship Schedule Could Mean US$300 Million In Revenues To Cruise Operators

Full Cruise Ship Schedule Could Deliver US$88 Million To Cuba

Delays with Authorizations From Cuba Could Reduce Revenues To Cuba By US$40+ Million

On 1 May 2016, Miami, Florida-based Carnival Corporation & plc (2015 revenues US$15.7 billion), through its Fathom subsidiary, commenced seven-day itineraries with the 700-passenger MV Adonia (launched in 2001; 594ft; 30,000 tons; 356 staterooms) directly from/to the United States (Port of Miami, Florida) for individuals subject to United States law who are authorized to visit the Republic of Cuba under regulations (twelve categories) issued by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, DC.  The first sailing carried 700 passengers for a load factor of 100%.

The April 2016 decision by the government of the Republic of Cuba to change policy relating to the means by which individuals of Cuban descent may visit the Republic of Cuba was politically significant, but equally important were the reasons:  Not doing so jeopardized the implementation (already delayed) of regularly-scheduled cruise ship schedules; jeopardized the global political and public relations value already received from marketing by the cruise ship companies; and jeopardized significant revenues that would be earned, directly and indirectly, by the government of the Republic of Cuba.

Since 17 December 2014, approximately sixteen (16) companies (United States-based and non-United States-based) have announced intentions to operate OFAC-authorized (even when not departing from or returning to the United States) and non-OFAC-authorized (at this time) Republic of Cuba-focused itineraries.  Some of the companies may not initiate schedules reflecting initial marketing efforts.  

To date, Carnival Corporation & plc and Marseille, France-based Companie du Ponant have reported receiving required approvals from the government of the Republic of Cuba to operate itineraries originating and ending in the United States.

Geneva, Switzerland-based MSC Cruises SA (US citizens not permitted by company)
Guilford, Connecticut-based Pearl Seas Cruises
Ipswich, United Kingdom-based Fred Olsen Cruise Lines
Lakewood, Colorado-based Haimark Line (filed Chapter 11 bankruptcy)
London, United Kingdom-based Noble Caledonia
London, United Kingdom-based Thomson Cruises
Marseille, France-based Companie du Ponant (for authorized travelers)
Miami, Florida-based Carnival Corporation & plc
Miami, Florida-based Norwegian Cruise Lines Holdings Ltd.
Miami, Florida-based Royal Caribbean
Monaco, Monte Carlo-based Star Clippers (for authorized travelers)
New York, New York-based Group IST
New York, New York-based Lindblad Expeditions-National Geographic
Park Helena, Alabama-based International Expeditions
Piraeus, Greece-based Celestyal Cruises (for authorized travelers)
Seattle, Washington-based Zegrahm Expeditions

Thus far, Fathom has announced eighteen (18) sailings from 1 May 2016 through 13 November 2016.  Depending upon passenger demand and the infrastructure capacity of the Republic of Cuba (immigration processing, customs processing, port facilities, ground transportation, etc.), the number of sailings is likely to expand from eighteen (18) to twenty-six (26) and as many as forty (40) encompassing the 2016/2017 sailing season (May through April).

To The Companies

If Fathom operates its announced and potential twelve-month schedule at full capacity, the company could deliver 12,600 to 28,000 passengers to the Republic of Cuba with per person pricing from US$1,908.00 to US$8,975.00, which includes “estimated taxes, fees and port expenses” of US$208.00 per person.  Fathom expects to operate near or at capacity for its scheduled/anticipated 2016/2017 sailing season.

If each Fathom sailing operates at full capacity, the total revenue from each sailing could range from US$1.8 million to US$2.5 million with a total 2016/2017 sailing season gross revenue estimate of US$39 million to US$86 million.  The gross revenue estimate does not include incidental passenger expenditures while aboard the vessel.  

If those companies having announced intentions to operate OFAC-authorized itineraries receive required approvals from the government of the Republic of Cuba to implement their respective sailings for the 2016/2017 season, and the vessels operate near or at capacity, more than 100,000 individuals subject to United States law could arrive to the Republic of Cuba by 150 or more cruise ship sailings.

If those companies having announced intentions to operate OFAC-authorized itineraries receive required approvals from the government of the Republic of Cuba to implement their respective sailings for the 2016/2017 season, combined gross revenues for the companies could be US$300 million.   

To The Republic Of Cuba

Projected sailing season gross revenues to the Republic of Cuba (government-operated entities and self-employed) if the cruise ship operators engage their intended schedules and use their desired vessels could be US$80 million or more.  Large vessels could spend more than US$400,000.00 per sailing.

Projected sailing season total per passenger expenditures (souvenirs, snacks, meals, gratuities, etc.) while they are in the Republic of Cuba (at government-operated entities and at self-employed operations) could be US$8 million to US$16 million or more.  The average per person per port expenditure in Caribbean Sea-area countries is US$75.00.  Individuals subject to United States law are authorized to return from the Republic of Cuba to the United States with merchandise not exceeding US$400.00 in value, provided that no more than US$100.00 of the merchandise consists of alcohol or tobacco products and the merchandise is imported for personal use only.

Policy Observations:

The implementation of regularly-scheduled cruise schedules from the United States to the Republic of Cuba is the third leg of land, sea and air efforts by the Obama Administration to cement its regulatory policy changes- the goal is to make the initiatives big and loud so that they are harder to dislodge.

For the cruise ship industry, the Republic of Cuba provides another destination- and new destinations attract new passengers which result in more revenue and greater economic benefit to the United States.  

There is a multiplier economic impact for cruise ship passengers.  They may use credit cards to make payment for their cruise (banks earn interest and customers earn points/miles); may use airlines to reach the port of departure; may stay in a hotel prior to departure and upon returning to the point of departure; may dine in restaurants; may use a taxi; may purchase sundries and souvenirs.  The ports have additional activity.  The vessels purchase provisions, including fuel.  

Since 17 December 2014, President Obama has used visitors as an army, airlines as an air force, cruise ships as a navy and, to a lesser extent thus far, companies as marines to create a beachhead in the Republic of Cuba that can't be pulled or pushed off the island- either by political forces in the United States or in the Republic of Cuba. The armada is digging in; not quite with a permanent foundation, but closing in....

In Internet terms, The Obama Administration is creating CubaLegacy 2.0- too big to roll back, too visible to hide, too collaborative, too many participants to remove, too bilateral to untangle... The perfect presidential legacy vehicle.

The government of the Republic of Cuba needs to do its part. More cruise line companies need to be authorized. A ferry needs to be tested. Imports of products from the United States need to increase. A distribution center needs to be authorized.  Tractors need to be assembled.  Coffee needs to be exported.  Currencies need to be unified.  Certified claims need to be settled.  There are 262 days remaining (visit www.cubatrade.org to view the countdown clocks).

President Obama wants to bring change to the Republic of Cuba far more and far faster than President Raul Castro wants change to arrive in the Republic of Cuba.  For both men, the issue is legacy.

That's where the similarity ends- President Obama wants more and needs more so that there can be more- and he can continue with regulatory changes and, perhaps, limited (though unlikely) legislative changes by 20 January 2017.  

President Castro wants to withstand everything that is coming his way, yet find a means to gain value from it and not be perceived as rejecting it by governments and companies that are needed to fund what the government of the Republic of Cuba requires; a complex series of juggling maneuvers.