Is EV Data Really SCI? If U.S. Department Of State Wants U.S. Companies To Shift From Incredulousness To Embracing, Then Be Practical And Transparent Rather Than Secretive And Woefully Unprepared

Let’s Go To The Videotape!  Even AP, NBC News, And Miami Herald Can’t Obtain Electric Vehicle Rental Data From United States Department Of State 

Are Daily Rental Rates For An Electric Vehicle Really Sensitive Compartmented Information (SCI)?

Officials Created An Issue Where There Was None.  Waste Of Time When Eight Questions Should Have Been Answered

If United States Department Of State Wants United States Companies To Shift From Incredulousness To Embracing, Then Be Practical And Transparent Rather Than Secretive And Woefully Unprepared

Is United States Department Of State Starring In “Waiting For Gadot”?

One additional reason United States companies may avoid engagement with micro, small, and medium-size enterprises (MSMEs) in the Republic of Cuba: The United States Department of State refusing to provide basic commercial information about its use of rented electric vehicles at the United States Embassy in Havana, Republic of Cuba.

The inexplicable lack of candor- not willing to provide the cost of the rentals or even how the electric vehicles are being charged, demonstrates a quite painful, agonizing, inadequacy of comprehending the definition of commercial information and need for commercial information and the reason for being transparent rather than embracing obstruction.

There were eight (8) fact-based questions (see below) submitted to the United States Department of State.  There were two (2) responses issued (see below)- neither answering any of the eight questions.  The following week, reporters for the Associated Press (AP) and NBC News asked for information during the daily Press Briefing at the United States Department of State- which is televised.  The United States Department of State spokesperson did not provide answers to the two reporters.  Later, a statement was provided to the two reporters and to a reporter from The Miami Herald.  Neither statement addressed any of the initially-presented eight questions.

When Brian Nichols, Assistant Secretary of State for Western Hemisphere Affairs, United States Department of State, uses the Twitter platform to deliver the following statement, United States companies are incredulous. 

• “One year ago, the U.S. announced several policy measures to empower the Cuban people. We delivered on our commitment to reunify Cuban-American families, expand travel, & restart remittances. We've also increased support to independent Cuban businesses, with more to announce soon.”  16 May 2023

When did he last convene a briefing for representatives of United States companies and United States business organizations?  The White House through its Office of Public Engagement and National Security Council (NSC) conduct outreach to individuals and organizations of Cuban descent- inviting them to gatherings in the Eisenhower Executive Office Building (EEOB).  The problem with that focus is commercial, economic, financial, and investment engagement with MSMEs is not the sole purview of individuals of Cuban descent- nor should it be viewed as so.

• The first licenses to engage with MSMEs from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury and Bureau of Industry and Security (BIS) of the United States Department of Commerce were issued to companies owned not by individuals of Cuban descent.

Likely, the “more to announce soon” will consist of engagements authorized using general and specific licenses from the OFAC and BIS, along with authorizations from the United States Department of State.

However, the most important change yet to be implemented is to authorize Republic of Cuba government-operated financial institutions to have correspondent accounts with United States-based financial institutions.

State Department, NSC, OFAC, BIS, USDA Don't Understand Requirements For Financial Plumbing To Function Efficiently.  They Excel In Creating, Maintaining, And Defending Clogs. May 16, 2023

In 2015, the Obama-Biden Administration (2009-2017) authorized United States-based financial institutions to have correspondent accounts with Republic of Cuba government-operated financial institutions, but did not authorize Republic of Cuba government-operated financial institutions to have correspondent accounts with United States-based financial institutions.  The Biden-Harris Administration (2021- ) has continued the decision despite promoting its engagement efforts with the re-emerging MSMEs.  Fixing the problem with direct correspondent banking is not a big deal.  It is a technical fix to make workable what is not malfunctioning, but is nonfunctioning.  A transaction requiring a third-country connection is not cost-effective, not efficient, and not transparent.  It is expensive, inefficient, and absent transparency.

United States Department of State
Washington DC
22 May 2023

Briefing With Matthew Miller, Spokesperson

MR. MILLER: Matt, you want to close us off?

QUESTION (Matt Lee, Associated Press):  Yeah, I just – and these will be extremely brief because I think you’ll only have a five-second answer for both.  One, do you know anything about the U.S. embassy in Cuba renting Cuban Government EV cars that are made by China?

MR MILLER:  I do not.   As I think you —

QUESTION:  Okay.  Could you —

MR MILLER:  As you seemed to anticipate.

QUESTION:  Could you – yeah.  Well, I just heard about it, so I didn’t think you would have anything, but I wanted to get it out there on the record.

MR MILLER:  Thank you.

QUESTION:  Can you – could you – or maybe not you, someone look into this and find out if it’s true and what the deal is?  I mean, it might be completely innocent.

Subsequent statement delivered later on 22 May 2023 to AP from the United States Department of State: “There is a fuel crisis currently in Cuba.  In order to maintain operations, the U.S. Embassy in Havana rented numerous electric cars that are available for rent in Havana.  They will continue to do so until the crisis abates.  There are no American-made electric cars in Cuba available for rent.   The U.S. Embassy Havana currently does not operate any electric vehicles in its motor pool in Havana. All Department of State vehicles have a lifecycle and the Embassy is currently in the process of transitioning a large percentage of its vehicles to American-made electric vehicles and expects to have that process completed sometime in 2024. The vehicle needs of Embassy Havana vary daily as does the availability of various models of electric rental vehicles, their cost, and the Embassy offices which  are in need of a vehicle.”

XXX

QUESTION (Andrea Mitchell, NBC News):  Can I just – can I just follow up on something that Matt had asked?

MR MILLER:  What – yeah.

QUESTION:  There was apparently a license, an export license, issued more than a year ago to a Maryland-based company to export an electric car and a charger to the embassy, and that four were supposed to be sent, and for some reason, apparently, Brian Nichols did not approve that. So —

MR MILLER:  I will say I’m not aware of these reports, and I think I will make it a practice not to comment on things that broke while I was at this podium that I have not had a chance to look into.

QUESTION:  Understood.

LINK TO RELATED ANALYSIS 

Why Is U.S. Embassy In Havana Renting Chinese-Built Electric Vehicles From A Cuba Government Company Rather Than Renting EVs From A U.S. Company? Company Offered To Donate Chargers. Rebuffed. May 22, 2023  

Why Is The United States Embassy In Havana, Republic Of Cuba, Renting Chinese-Built Electric Vehicles From A Republic Of Cuba Government-Operated Company? 

Why Does United States Department Of State Refuse To Provide Details? 

In January 2022, Assistant Secretary Of State Brian Nichols Refused An Offer By A Maryland-Based Company To Donate Four Electric Vehicle Chargers To The United States Embassy In Havana. 

In 2017, First BIS License Issued To A United States Company To Export An Electric Vehicle And Charger From United States To An Embassy In Havana.  BIS License Included United States Embassy; Company Reported Outreach From United States Embassy. 

In 2022, First BIS License Issued To United States Company For Exporting Electric Vehicles To Cuban Nationals And Micro, Small, And Medium-Size Enterprises (MSMEs). 

3 December 2021 from the United States Department of State: “The Biden Administration has clearly articulated the United States’ goal to accelerate and deploy electric vehicles and charging stations, create good-paying, union jobs, and enable a clean transportation future to combat climate change. However, the United States Embassy in Cuba does not operate any electric vehicles nor has any solar power charging stations at our Embassy compound or residences in Havana. At this time, it would be unlikely that the United States Embassy consider importing one or more electric vehicles for use in Cuba in the near future due to impediments in the electrical infrastructure and lack of trained mechanics on the island to service electric vehicles.”   

• Operating in the Republic of Cuba are Amsterdam, Netherlands-based Stellantis N.V.-owned Sochaux, France-based Peugeot DTSR-171 electric vans (through a Republic of Cuba-based distributor) and Yokohama, Japan-based Nissan Motor Co., Ltd., Nissan NV200e electric vans.   Republic of Cuba government-operated companies Aguas de la Habana (with ten vehicles) and ETECSA use electric vans.  These companies would not be using electric vehicles in the Republic of Cuba if mechanics were lacking.  Electric vehicles from the People’s Republic of China are available through Vehiculos Electricos Del Caribe (https://www.vedca.cu/) and Republic of Cuba government-operated Transtur 

3 February 2022 from the United States Department of State: “On behalf of Ambassador Nichols, I would like to extend our gratitude to you for your generous offer to donate and install four electric vehicle chargers for use at the United States Embassy in Cuba.  The Biden-Harris Administration has articulated the United States’ goal to accelerate and deploy electric vehicles and charging stations, and to enable a clean transportation future to combat climate change.  The United States Embassy in Cuba currently does not operate any electric vehicles at our Embassy compound or residences in Havana.  Due to impediments in the electrical infrastructure and a lack of trained mechanics on the island to service electric vehicles, it is unlikely that the United States Embassy will consider importing one or more electric vehicles for use in Cuba in the near future.  Given that your donation would largely remain unused at this time, we politely decline your kind offer.  Thank you again and best wishes on your continued efforts exporting green technologies throughout the Caribbean.” 

Fifteen months later, why was not the first thought of Brian Nichols, Assistant Secretary of State for Western Hemisphere Affairs (WHA), United States Department of State, to direct the Office of Cuban Affairs within WHA to contact again Colombia, Maryland-based Premier Automotive Export, Ltd., company which in January 2022 offered to donate and install electric vehicle chargers to the United States Embassy in Havana and which in November 2022 was the first United States-based company to obtain licenses (five since 2017) from Bureau of Industry and Security (BIS) of the United States Department of Commerce to export electric vehicles from the United States to the Republic of Cuba?  

The United States Embassy in Havana, Republic of Cuba, is renting reportedly four (4) electric vehicles manufactured in the People’s Republic of China from a Republic of Cuba government-operated company.  The following questions were posed to the United States Department of State:  

1) When was each vehicle rented?
2) How many vehicles are rented?
3) The name of the manufacturer of each vehicle?
4) From which company in the Republic of Cuba were the vehicles rented?
5) How much is the United States Department of State paying for each vehicle?
6) What is the duration for the rental of each vehicle?
7) Please provide an image of each vehicle.
8) How are the vehicles being re-charged at the United States Embassy?

The United States Department of State provided via email two statements.  Both are attributable to a United States Department of State Official: 

• 8 May 2023: “The Embassy is facing an emergency fuel crisis and is renting various electric vehicles from a local car rental agency until the crisis subsides.  There are no American made electric vehicles available to rent in Cuba.”  

• 9 May 2023: “As noted in our previous response, the Embassy is facing an emergency fuel crisis and has taken temporary measures to ensure continuity of operations.  Because of the fluid situation regarding fuel, the details you request change on a daily basis.  The rental agency is not listed on the Cuba Restricted List.  There is nothing more to share at this time.” 

During the Obama-Biden Administration (2009-2017) and then during the Trump-Pence Administration (2017-2021) Colombia, Maryland-based Premier Automotive Export, Ltd., and Miami, Florida-based Premier Automotive Export. Ltd., were awarded the first two licenses from the BIS to export electric vehicles and electric vehicle charging stations from the United States to the Republic of Cuba.  Exports to the United States Embassy in the city of Havana, Republic of Cuba, were specifically authorized by the second license.  PAE has received five BIS licenses since 2017 including the first BIS license to export an electric vehicle to an embassy located in the Republic of Cuba.  LINK.    

On 17 November 2022, the Biden-Harris Administration (2021- ) approved a license application to the BIS submitted on 22 October 2022 by PAE to export electric vehicles and chargers to republic of cuba nationals with the “ULTIMATE CONSIGNEE: Privately owned companies in the Republic of Cuba owned by Cuba Nationals.”  The BIS license is valid until 30 November 2026.   

24 January 2022
The Honorable
Brian A. Nichols
Assistant Secretary of State for Western Hemisphere Affairs
United States Department of State
2201 C Street, NW
Washington DC  20520
Dear Ambassador Nichols: (excerpts)

I am writing you today to obtain authorization for my company to donate to the United States Department of State four (4) electric vehicle (EV) chargers for use at the Embassy of the United States in the city of Havana, Republic of Cuba, and for use at the Residence of the United States Ambassador in the city of Havana, Republic of Cuba.  My company would also coordinate the installation if beneficial to expediting the process….  I previously received from the Embassy of the United States in the Republic of Cuba an inquiry about sourcing an electric vehicle. 

2- Clipper Creek LCS-40, Clipper Creek Level II Charger is a 40 Amp charger fitted with the J-1772 universal charging connector, EAR99, US$875.00, https://store.clippercreek.com/residential/hcs-40-hcs-40p-ev-charging-station 

2- Tesla Wall Connector Gen 3 (208/240V), EAR 99, US$550.00, https://www.tesla.com/support/home-charging 

One Clipper Creek EV charger would be located at the United States Embassy and one Clipper Creek EV Charger would be located at the Residence of the United States Ambassador.  One Tesla EV charger would be located at the United States Embassy and one Tesla EV Charger would be located at the Residence of the United States Ambassador. 

The reason for the donation of electric vehicle chargers from different manufacturers is twofold.  First, unknown which manufacturer and model of electric vehicle(s) will the United States Department of State purchase for use in the Republic of Cuba.  Second, the Biden-Harris Administration continues to promote favorably manufacturers and models of electric vehicles from companies with union representation for their employees.  Austin, Texas-based Tesla, Inc., is non-union.  Detroit, Michigan-based General Motors Company; Dearborn, Michigan-based Ford Motor Company; and Amsterdam, The Netherlands-based Stallantis N.V. (Chrysler, Dodge, Jeep, etc.) are union. 

Background 

On 17 November 2022, the Biden-Harris Administration (2021- ) approved a license application submitted on 22 October 2022 by Columbia, Maryland-based Premier Automotive Export, Ltd. (PAE) to the BIS to export electric vehicles and chargers to republic of cuba nationals with the “ULTIMATE CONSIGNEE: Privately owned companies in the Republic of Cuba owned by Cuba Nationals.”  The BIS license is valid until 30 November 2026.  PAE has received five BIS licenses since 2017 including the first BIS license to export an electric vehicle to an embassy located in the Republic of Cuba.  LINK.    

LINK: Home Delivery For Electric Scooters To Cuba: As Biden-Harris Administration Expands U.S. Export Opportunities, A U.S. Company Responds Quickly To Customer Requests. Next Correspondent Banking? December 04, 2022   

LINK: Ten Months After Denial, Biden-Harris Administration Approves Exports Of Electric Motorcycles, Electric Scooters To Cuba Nationals And To Privately-Owned Companies In Cuba October 05, 2022  

• On 28 September 2022, the BIS issued a license to PAE for the export of electric scooters and electric bicycles to Republic of Cuba nationals and to MSMEs.      

On 15 December 2021, the BIS denied a license application submitted on 30 September 2021 by PAE to export electric vehicles and chargers to republic of cuba nationals.  From the license application: “Specific End Use- Ordinary Cuban Nationals would be the specific End User and purchasing electric vehicle for their own personal transportation.”       

• From the BIS: “There is a general policy of denial for exports and reexports to Cuba of items subject to the EAR, as described in Section 746.2(b) of the EAR. However, there are exceptions to the general policy of denial, some of which are listed below: … Items necessary for the environmental protection of U.S. and international air quality, waters and coastlines, including items related to renewable energy or energy efficiency, are generally approved.”    

• A license exception is a general authorization to export or reexport certain items without a license under stated conditions.  Only the license exceptions, or portions thereof, listed Section 746.2(a)(1) of the EAR are available for Cuba…. Support for the Cuban People: License Exception Support for the Cuban People (SCP) “§ 740.21 Support for the Cuban People (SCP). (a) Introduction. This License Exception authorizes certain exports and reexports to Cuba that are intended to support the Cuban people by improving their living conditions and supporting independent economic activity; strengthening civil society in Cuba; and improving the free flow of information to, from, and among the Cuban people. (b) Improving living conditions and supporting independent economic activity.…. (1) Items for use by the Cuban private sector for private sector economic activities… (2) Items sold directly to individuals in Cuba for their personal use or their immediate family's personal use,” LINK   

Potential customers of PAE have inquired about installment payments for the purchase of EVs.  As monthly payments would be minimal in value, the fees for sending the funds through a third country financial institution may be a substantial percentage of the installment amount.  Flexibility to provide installment payments will further enhance the cashflow of an MSME and further connect the MSME with the United States-based company.  The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury needs to re-authorize direct correspondent banking. 

LINK TO COMPLETE ANALYSIS IN PDF FORMAT

LINKS TO RELATED ANALYSES 

State Department, NSC, OFAC, BIS, USDA Don't Understand Requirements For Financial Plumbing To Function Efficiently.  They Excel In Creating, Maintaining, And Defending Clogs. May 16, 2023

Biden-Harris Administration Issues Third Known BIS/OFAC License Authorizing Vehicle Exports From U.S. To Cuba. Payments Still Must Move Through Third Countries. May 12, 2023

Cuba Reports Creation Of 294 New MSMEs. 3.7% Are Government-Operated Companies Becoming "Private" Companies. May 10, 2023

Why Is One-Year Anniversary Of Biden-Harris Administration Approving First Investment/Financing To Private Company In Cuba A Disappointment? Cuba Has Not Published Regulations For Delivering It. May 9, 2023

Why Do U.S.-Based Financial Institutions Avoid Cuba? OFAC Uses 54 Pages To Describe "De-Risking" Reasons. Irony? They Lament The Impact Of Their Decisions. Then Why Create Them? May 7, 2023

Logic From U.S. Department Of State:  If We Permit It, Cuba Might Not Use It, So We Won’t Permit It.  And, Yes, No One Asked Cuba. And, No One Asked U.S. Banks, Companies. May 1, 2023

Biden-Harris Administration Approves Second Known License For A U.S. Company To Export Vehicles And Equipment To Private Companies In Cuba. Payment? That Remains A Problem. OFAC Doesn't Care. Apr 29, 2023

Cuba "Streamlining" Approval Process For Agriculturally-Focused Economic Associations With Foreign Capital. Still No Regulations For U.S.-Sourced MSME Private-Sector Foreign Investment/Financing Apr 27, 2023

Cuba Seeking Investors, Financing For State-Owned Companies.  U.S. Entrepreneurs Waiting Since May 2022 For Cuba Regulations To Deliver Investment And Financing To Private Companies In Cuba Apr 27, 2023

U.S. Department Of State Certifies Government Of Cuba Is "Not Cooperating Fully With United States Antiterrorism Efforts."

Pursuant to section 40A of the Arms Export Control Act (22 U.S.C. 2781), and Executive Order 13637, as amended, I hereby determine and certify to the Congress that the following countries are not cooperating fully With United States antiterrorism efforts: Cuba, Democratic People's Republic of Korea (DPRK, or North Korea), Iran, Syria, and Venezuela.  This determination and certification shall be transmitted to the Congress and published in the

Federal Register
Dated: May 8, 2023.
Antony J. Blinken, Secretary of State.
[FR Doc. 2023–10903 Filed 5–22–23; 8:45 am], BILLING CODE 4710–AD–P

AP and NBC News Also Want To Know Why U.S. Embassy In Havana Is Renting Electric Vehicles Made In China

At the end of this post is the 23 May 2023 response to AP from the United States Department of State….

United States Department of State
Washington DC
22 May 2023
Briefing With Matthew Miller, Spokesperson

MR. MILLER: Matt, you want to close us off?

QUESTION (Matt Lee, Associated Press):  Yeah, I just – and these will be extremely brief because I think you’ll only have a five-second answer for both.

One, do you know anything about the U.S. embassy in Cuba renting Cuban Government EV cars that are made by China?

MR MILLER:  I do not.   As I think you —

QUESTION:  Okay.  Could you —

MR MILLER:  As you seemed to anticipate.

QUESTION:  Could you – yeah.  Well, I just heard about it, so I didn’t think you would have anything, but I wanted to get it out there on the record.

MR MILLER:  Thank you.

QUESTION:  Can you – could you – or maybe not you, someone look into this and find out if it’s true and what the deal is?  I mean, it might be completely innocent. And then the second thing is just the whole email thing from last week, is that – that’s been resolved, right?

MR MILLER:  It has been resolved.  That was an unintentional glitch.  I’m glad that I’ve had the chance to look into this before answering.  My colleague Vedant did not —

QUESTION:  Yes.

MR MILLER:  — since it broke while he was at the podium.  It was an unintentional —

QUESTION:  Well, I didn’t —

MR MILLER:  It was an unintentional glitch.  It was an attempt – or actually, the systems team here, the IT team, was looking at ways to allow users, if they want, to select their pronouns and to be displayed in their – in their email address, and it was certainly not the intention to choose them for anyone.

QUESTION:  Okay.  So it —

MR MILLER:  And it has been resolved.

QUESTION:  So, it was fixed?

MR MILLER:  It has been resolved.

QUESTION:  It was – it was fixed that day or —

MR MILLER:  It was fixed that day.  It was fixed that day.

QUESTION:  Okay.  And then – but then there was this notice that went around offering people psychological or – help if they were offended or upset by this.  Do you know if anyone took them up on that?

MR MILLER:  I don’t, but we always look to offer whatever resources are available to State Department employees.

QUESTION:  Okay.  I’m not trying to make light of it.  I’m just asking if you know —

MR MILLER:  I don’t.

QUESTION:  — that anyone felt strongly enough about it that they went to —

MR MILLER:  I know you felt strongly about it, but I —

QUESTION:  No, I —

MR MILLER:  (Laughter.)  I don’t.  I’m not trying to bait you, I promise.

QUESTION:  I didn’t feel that strongly about it, but anyway, thank you.

MR MILLER:  Thank you.

QUESTION (Andrea Mitchell, NBC News):  Can I just – can I just follow up on something that Matt had asked?

MR MILLER:  What – yeah.

QUESTION:  There was apparently a license, an export license, issued more than a year ago to a Maryland-based company to export an electric car and a charger to the embassy, and that four were supposed to be sent, and for some reason, apparently, Brian Nichols did not approve that. So —

MR MILLER:  I will say I’m not aware of these reports, and I think I will make it a practice not to comment on things that broke while I was at this podium that I have not had a chance to look into.

QUESTION:  Understood.

MR MILLER:  So more tomorrow.  Thank you all.

QUESTION:  All right.  Thank you.

(The briefing was concluded at 2:20 p.m.)

Statement from United States Department of State provided to AP on 23 May 2023: "There  is a fuel crisis currently in Cuba.  In order to maintain operations,  the U.S. Embassy in Havana rented numerous electric cars that are  available for rent in Havana.  They will continue to do so until the  crisis abates.  There are no American-made  electric cars in Cuba available for rent.   The  U.S. Embassy Havana currently does not operate any electric vehicles in its  motor pool in Havana. All Department of State vehicles have a lifecycle and the  Embassy is currently in the process of transitioning a large percentage of its vehicles to American-made  electric vehicles and expects to have that process completed sometime in 2024. The vehicle needs  of Embassy Havana vary daily as  does the availability of various models of electric rental vehicles, their cost,  and the Embassy offices which  are in need of a vehicle."

Links To Related Analyses 

Why Is U.S. Embassy In Havana Renting Chinese-Built Electric Vehicles From A Cuba Government Company Rather Than Renting EVs From A U.S. Company? Company Offered To Donate Chargers. Rebuffed. May 22, 2023  

Home Delivery For Electric Scooters To Cuba: As Biden-Harris Administration Expands U.S. Export Opportunities, A U.S. Company Responds Quickly To Customer Requests. Next Correspondent Banking? December 04, 2022   

Ten Months After Denial, Biden-Harris Administration Approves Exports Of Electric Motorcycles, Electric Scooters To Cuba Nationals And To Privately-Owned Companies In Cuba October 05, 2022   

State Department, NSC, OFAC, BIS, USDA Don't Understand Requirements For Financial Plumbing To Function Efficiently.  They Excel In Creating, Maintaining, And Defending Clogs. May 16, 2023  

Biden-Harris Administration Issues Third Known BIS/OFAC License Authorizing Vehicle Exports From U.S. To Cuba. Payments Still Must Move Through Third Countries. May 12, 2023  

Cuba Reports Creation Of 294 New MSMEs. 3.7% Are Government-Operated Companies Becoming "Private" Companies. May 10, 2023  

Why Is One-Year Anniversary Of Biden-Harris Administration Approving First Investment/Financing To Private Company In Cuba A Disappointment? Cuba Has Not Published Regulations For Delivering It. May 9, 2023  

Why Do U.S.-Based Financial Institutions Avoid Cuba? OFAC Uses 54 Pages To Describe "De-Risking" Reasons. Irony? They Lament The Impact Of Their Decisions. Then Why Create Them? May 7, 2023  

Logic From U.S. Department Of State:  If We Permit It, Cuba Might Not Use It, So We Won’t Permit It.  And, Yes, No One Asked Cuba. And, No One Asked U.S. Banks, Companies. May 1, 2023  

Biden-Harris Administration Approves Second Known License For A U.S. Company To Export Vehicles And Equipment To Private Companies In Cuba. Payment? That Remains A Problem. OFAC Doesn't Care. Apr 29, 2023  

Cuba "Streamlining" Approval Process For Agriculturally-Focused Economic Associations With Foreign Capital. Still No Regulations For U.S.-Sourced MSME Private-Sector Foreign Investment/Financing Apr 27, 2023  

Cuba Seeking Investors, Financing For State-Owned Companies.  U.S. Entrepreneurs Waiting Since May 2022 For Cuba Regulations To Deliver Investment And Financing To Private Companies In Cuba Apr 27, 2023

Why Is U.S. Embassy In Havana Renting Chinese-Built Electric Vehicles From A Cuba Government Company Rather Than Renting EVs From A U.S. Company? Company Offered To Donate Chargers. Rebuffed.

Why Is The United States Embassy In Havana, Republic Of Cuba, Renting Chinese-Built Electric Vehicles From A Republic Of Cuba Government-Operated Company? 

Why Does United States Department Of State Refuse To Provide Details? 

In January 2022, Assistant Secretary Of State Brian Nichols Refused An Offer By A Maryland-Based Company To Donate Four Electric Vehicle Chargers To The United States Embassy In Havana. 

In 2017, First BIS License Issued To A United States Company To Export An Electric Vehicle And Charger From United States To An Embassy In Havana.  BIS License Included United States Embassy; Company Reported Outreach From United States Embassy. 

In 2022, First BIS License Issued To United States Company For Exporting Electric Vehicles To Cuban Nationals And Micro, Small, And Medium-Size Enterprises (MSMEs). 

3 December 2021 from the United States Department of State: “The Biden Administration has clearly articulated the United States’ goal to accelerate and deploy electric vehicles and charging stations, create good-paying, union jobs, and enable a clean transportation future to combat climate change. However, the United States Embassy in Cuba does not operate any electric vehicles nor has any solar power charging stations at our Embassy compound or residences in Havana. At this time, it would be unlikely that the United States Embassy consider importing one or more electric vehicles for use in Cuba in the near future due to impediments in the electrical infrastructure and lack of trained mechanics on the island to service electric vehicles.”   

• Operating in the Republic of Cuba are Amsterdam, Netherlands-based Stellantis N.V.-owned Sochaux, France-based Peugeot DTSR-171 electric vans (through a Republic of Cuba-based distributor) and Yokohama, Japan-based Nissan Motor Co., Ltd., Nissan NV200e electric vans.   Republic of Cuba government-operated companies Aguas de la Habana (with ten vehicles) and ETECSA use electric vans.  These companies would not be using electric vehicles in the Republic of Cuba if mechanics were lacking.  Electric vehicles from the People’s Republic of China are available through Vehiculos Electricos Del Caribe (https://www.vedca.cu/) and Republic of Cuba government-operated Transtur 

3 February 2022 from the United States Department of State: “On behalf of Ambassador Nichols, I would like to extend our gratitude to you for your generous offer to donate and install four electric vehicle chargers for use at the United States Embassy in Cuba.  The Biden-Harris Administration has articulated the United States’ goal to accelerate and deploy electric vehicles and charging stations, and to enable a clean transportation future to combat climate change.  The United States Embassy in Cuba currently does not operate any electric vehicles at our Embassy compound or residences in Havana.  Due to impediments in the electrical infrastructure and a lack of trained mechanics on the island to service electric vehicles, it is unlikely that the United States Embassy will consider importing one or more electric vehicles for use in Cuba in the near future.  Given that your donation would largely remain unused at this time, we politely decline your kind offer.  Thank you again and best wishes on your continued efforts exporting green technologies throughout the Caribbean.” 

Fifteen months later, why was not the first thought of Brian Nichols, Assistant Secretary of State for Western Hemisphere Affairs (WHA), United States Department of State, to direct the Office of Cuban Affairs within WHA to contact again Colombia, Maryland-based Premier Automotive Export, Ltd., company which in January 2022 offered to donate and install electric vehicle chargers to the United States Embassy in Havana and which in November 2022 was the first United States-based company to obtain licenses (five since 2017) from Bureau of Industry and Security (BIS) of the United States Department of Commerce to export electric vehicles from the United States to the Republic of Cuba?  

The United States Embassy in Havana, Republic of Cuba, is renting reportedly four (4) electric vehicles manufactured in the People’s Republic of China from a Republic of Cuba government-operated company.  The following questions were posed to the United States Department of State:  

1) When was each vehicle rented?
2) How many vehicles are rented?
3) The name of the manufacturer of each vehicle?
4) From which company in the Republic of Cuba were the vehicles rented?
5) How much is the United States Department of State paying for each vehicle?
6) What is the duration for the rental of each vehicle?
7) Please provide an image of each vehicle.
8) How are the vehicles being re-charged at the United States Embassy?

The United States Department of State provided via email two statements.  Both are attributable to a United States Department of State Official: 

• 8 May 2023: “The Embassy is facing an emergency fuel crisis and is renting various electric vehicles from a local car rental agency until the crisis subsides.  There are no American made electric vehicles available to rent in Cuba.”  

• 9 May 2023: “As noted in our previous response, the Embassy is facing an emergency fuel crisis and has taken temporary measures to ensure continuity of operations.  Because of the fluid situation regarding fuel, the details you request change on a daily basis.  The rental agency is not listed on the Cuba Restricted List.  There is nothing more to share at this time.” 

During the Obama-Biden Administration (2009-2017) and then during the Trump-Pence Administration (2017-2021) Colombia, Maryland-based Premier Automotive Export, Ltd., and Miami, Florida-based Premier Automotive Export. Ltd., were awarded the first two licenses from the BIS to export electric vehicles and electric vehicle charging stations from the United States to the Republic of Cuba.  Exports to the United States Embassy in the city of Havana, Republic of Cuba, were specifically authorized by the second license.  PAE has received five BIS licenses since 2017 including the first BIS license to export an electric vehicle to an embassy located in the Republic of Cuba.  LINK.    

On 17 November 2022, the Biden-Harris Administration (2021- ) approved a license application to the BIS submitted on 22 October 2022 by PAE to export electric vehicles and chargers to republic of cuba nationals with the “ULTIMATE CONSIGNEE: Privately owned companies in the Republic of Cuba owned by Cuba Nationals.”  The BIS license is valid until 30 November 2026.   

24 January 2022
The Honorable
Brian A. Nichols
Assistant Secretary of State for Western Hemisphere Affairs
United States Department of State
2201 C Street, NW
Washington DC  20520
Dear Ambassador Nichols: (excerpts)

I am writing you today to obtain authorization for my company to donate to the United States Department of State four (4) electric vehicle (EV) chargers for use at the Embassy of the United States in the city of Havana, Republic of Cuba, and for use at the Residence of the United States Ambassador in the city of Havana, Republic of Cuba.  My company would also coordinate the installation if beneficial to expediting the process….  I previously received from the Embassy of the United States in the Republic of Cuba an inquiry about sourcing an electric vehicle. 

2- Clipper Creek LCS-40, Clipper Creek Level II Charger is a 40 Amp charger fitted with the J-1772 universal charging connector, EAR99, US$875.00, https://store.clippercreek.com/residential/hcs-40-hcs-40p-ev-charging-station 

2- Tesla Wall Connector Gen 3 (208/240V), EAR 99, US$550.00, https://www.tesla.com/support/home-charging 

One Clipper Creek EV charger would be located at the United States Embassy and one Clipper Creek EV Charger would be located at the Residence of the United States Ambassador.  One Tesla EV charger would be located at the United States Embassy and one Tesla EV Charger would be located at the Residence of the United States Ambassador. 

The reason for the donation of electric vehicle chargers from different manufacturers is twofold.  First, unknown which manufacturer and model of electric vehicle(s) will the United States Department of State purchase for use in the Republic of Cuba.  Second, the Biden-Harris Administration continues to promote favorably manufacturers and models of electric vehicles from companies with union representation for their employees.  Austin, Texas-based Tesla, Inc., is non-union.  Detroit, Michigan-based General Motors Company; Dearborn, Michigan-based Ford Motor Company; and Amsterdam, The Netherlands-based Stallantis N.V. (Chrysler, Dodge, Jeep, etc.) are union. 

Background 

On 17 November 2022, the Biden-Harris Administration (2021- ) approved a license application submitted on 22 October 2022 by Columbia, Maryland-based Premier Automotive Export, Ltd. (PAE) to the BIS to export electric vehicles and chargers to republic of cuba nationals with the “ULTIMATE CONSIGNEE: Privately owned companies in the Republic of Cuba owned by Cuba Nationals.”  The BIS license is valid until 30 November 2026.  PAE has received five BIS licenses since 2017 including the first BIS license to export an electric vehicle to an embassy located in the Republic of Cuba.  LINK.    

LINK: Home Delivery For Electric Scooters To Cuba: As Biden-Harris Administration Expands U.S. Export Opportunities, A U.S. Company Responds Quickly To Customer Requests. Next Correspondent Banking? December 04, 2022   

LINK: Ten Months After Denial, Biden-Harris Administration Approves Exports Of Electric Motorcycles, Electric Scooters To Cuba Nationals And To Privately-Owned Companies In Cuba October 05, 2022  

• On 28 September 2022, the BIS issued a license to PAE for the export of electric scooters and electric bicycles to Republic of Cuba nationals and to MSMEs.      

On 15 December 2021, the BIS denied a license application submitted on 30 September 2021 by PAE to export electric vehicles and chargers to republic of cuba nationals.  From the license application: “Specific End Use- Ordinary Cuban Nationals would be the specific End User and purchasing electric vehicle for their own personal transportation.”       

• From the BIS: “There is a general policy of denial for exports and reexports to Cuba of items subject to the EAR, as described in Section 746.2(b) of the EAR. However, there are exceptions to the general policy of denial, some of which are listed below: … Items necessary for the environmental protection of U.S. and international air quality, waters and coastlines, including items related to renewable energy or energy efficiency, are generally approved.”    

• A license exception is a general authorization to export or reexport certain items without a license under stated conditions.  Only the license exceptions, or portions thereof, listed Section 746.2(a)(1) of the EAR are available for Cuba…. Support for the Cuban People: License Exception Support for the Cuban People (SCP) “§ 740.21 Support for the Cuban People (SCP). (a) Introduction. This License Exception authorizes certain exports and reexports to Cuba that are intended to support the Cuban people by improving their living conditions and supporting independent economic activity; strengthening civil society in Cuba; and improving the free flow of information to, from, and among the Cuban people. (b) Improving living conditions and supporting independent economic activity.…. (1) Items for use by the Cuban private sector for private sector economic activities… (2) Items sold directly to individuals in Cuba for their personal use or their immediate family's personal use,” LINK   

Potential customers of PAE have inquired about installment payments for the purchase of EVs.  As monthly payments would be minimal in value, the fees for sending the funds through a third country financial institution may be a substantial percentage of the installment amount.  Flexibility to provide installment payments will further enhance the cashflow of an MSME and further connect the MSME with the United States-based company.  The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury needs to re-authorize direct correspondent banking. 

LINKS TO RELATED ANALYSES 

State Department, NSC, OFAC, BIS, USDA Don't Understand Requirements For Financial Plumbing To Function Efficiently.  They Excel In Creating, Maintaining, And Defending Clogs. May 16, 2023

Biden-Harris Administration Issues Third Known BIS/OFAC License Authorizing Vehicle Exports From U.S. To Cuba. Payments Still Must Move Through Third Countries. May 12, 2023

Cuba Reports Creation Of 294 New MSMEs. 3.7% Are Government-Operated Companies Becoming "Private" Companies. May 10, 2023

Why Is One-Year Anniversary Of Biden-Harris Administration Approving First Investment/Financing To Private Company In Cuba A Disappointment? Cuba Has Not Published Regulations For Delivering It. May 9, 2023

Why Do U.S.-Based Financial Institutions Avoid Cuba? OFAC Uses 54 Pages To Describe "De-Risking" Reasons. Irony? They Lament The Impact Of Their Decisions. Then Why Create Them? May 7, 2023

Logic From U.S. Department Of State:  If We Permit It, Cuba Might Not Use It, So We Won’t Permit It.  And, Yes, No One Asked Cuba. And, No One Asked U.S. Banks, Companies. May 1, 2023

Biden-Harris Administration Approves Second Known License For A U.S. Company To Export Vehicles And Equipment To Private Companies In Cuba. Payment? That Remains A Problem. OFAC Doesn't Care. Apr 29, 2023

Cuba "Streamlining" Approval Process For Agriculturally-Focused Economic Associations With Foreign Capital. Still No Regulations For U.S.-Sourced MSME Private-Sector Foreign Investment/Financing Apr 27, 2023

Cuba Seeking Investors, Financing For State-Owned Companies.  U.S. Entrepreneurs Waiting Since May 2022 For Cuba Regulations To Deliver Investment And Financing To Private Companies In Cuba Apr 27, 2023

LINK TO COMPLETE ANALYSIS IN PDF FORMAT

State Department, NSC, OFAC, BIS, USDA Don't Understand Requirements For Financial Plumbing To Function Efficiently. They Excel In Creating, Maintaining, And Defending Clogs.

NSC, State Department, OFAC, BIS, And USDA Do Not Understand What Is Required For Arteries And Plumbing To Function Efficiently.  They Excel In Creating, Maintaining, And Defending Clogs. 

Disciples Of Financial Benign Neglect? Antony Blinken, Andrea Gacki, Juan Gonzalez, Brian Nichols, Gina Raimondo, Jacob Sullivan, Thomas Vilsack, And Janet Yellen.  

A Simple Technical Correction.  One-Way To Two-Way.  No Big Deal. 

The Delay Solely Harms Those Entrepreneurs In The Republic Of Cuba The Biden-Harris Administration Professes To Care Deeply About. 

When Companies Believe The White House Is Choosing To Maintain Restrictions Upon The Movement Of Funds, That Is A Flashing Red Light To Avoid Doing Anything With Cuba- License Or No License. 

Delivering direct investment and direct financing from the United States to micro, small, and medium-sized enterprises (MSMEs) located in the Republic of Cuba requires plumbing- commercial plumbing, but more specifically, financial plumbing. 

In the body, arteries pump blood in one direction- and the arteries do that efficiently primarily due to pressure and velocity.  Using the shortest pathways for the blood to move from point to point.  Any unnecessary detours delay and reduce blood flow.  The body does not flourish, it withers. 

• Daniel Patrick Moynihan, a Democratic Party member of the United States Senate from New York State (1977-2001) wrote controversially while serving in 1970 as Urban Affairs Advisor to Richard Nixon, President of the United States (1969-1974) about the concept of “benign neglect” as it related minorities.  Benign neglect is defined as “an attitude or policy of ignoring an often delicate or undesirable situation that one is held to be responsible for dealing with.”

• The Biden-Harris Administration (2021- ) is guilty of not only embracing financial benign neglect with respect to its refusal to re-authorize direct correspondent banking between the United States and the Republic of Cuba, but also adopting a python-like grip upon absurdity. 

The White House recognizes there is neither justification nor is it sensical to authorize a United States-based financial institution to have a correspondent account with a Republic of Cuba government-operated financial institution, while not authorizing a Republic of Cuba government-operated financial institution to have a correspondent account with a United States-based financial institution. 

The reality is that by authorizing 50% of what is required, the other 50% becomes unusable.  As a result, all is unusable.  Is more egregious The White House does not care or The White House does not grasp the negligence of its decision? 

Fixing the problem with direct correspondent banking is not a big deal.  It is a technical fix to make workable what is not malfunctioning, but is nonfunctioning.  A transaction requiring a third-country connection is not cost-effective, not efficient, and not transparent.  It is expensive, inefficient, and absent transparency. 

If Republic of Cuba government-operated financial institutions choose not to seek correspondent accounts with United States-based financial institutions, then MSME activity will remain constrained.   

Consequential to permit the choice- engage or the status quo.  Engagement will require efficiency and transparency, both of which have generally been avoided by the government of the Republic of Cuba.  Force them to choose. 

In the banking system, the most efficient process to move funds is through point-to-point transactions.  Straight lines rather than triangles.  Think of two one-way arteries operating adjacent to one another.  In this instance, a two-way financial autobahn. 

Perhaps, this analogy might be useful:  The United States Postal Service (USPS) contracts with companies to deliver directly invoices to customers, but the USPS does not permit customers to deliver directly their payments to the companies.  So, customers receive their invoices on time, but are not permitted to deliver their payments on time.  They must find a third-party.  That requirement results in additional expense, additional time, and additional inconvenience.    

What makes the global financial system efficient?  No speed limit on the financial autobahn and active government encouragement for financial institutions to develop ever faster methods to deliver funds. 

Today, the Biden-Harris Administration embraces an anachronistic perspective about appreciating the essence of the private sector.  Arrogance too.     

Straightforward that the more points through which funds need to interact, the more time will be required for the completion of the transaction and the cost of the transaction will increase because each point will want to be paid.  The private sector appreciates this reality.  The public sector may appreciate it, but does not care about it.  When the private sector changes its position, it is deemed to be adapting.  When the public sector changes its position, it is defined as weakness rather than embracing new realities or correcting a wrong. 

• From United States Department of State: “Regarding direct correspondent banking, U.S. regulations do of course allow for U.S. banks to establish correspondent accounts in Cuba, but not the other way around, as you [recipient] note.  Two-way direct correspondent banking would indeed likely decrease transactions costs.  However, it is our understanding that even if the United States were to authorize direct two-way correspondent banking, Cuban banks would not actually establish accounts in the United States due to outstanding legal judgements against the Cuban government that would freeze and collect any funds a state financial institution held in the United States.  Therefore, I expect you're [recipient] unlikely to see direct correspondent banking on the horizon.”  

Officials of the Biden-Harris Administration extoll the existence of general licenses from Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury and from the Bureau of Industry and Security (BIS) of the United States Department of Commerce which do not require an application.  They extoll the authorizations and self-certifications from the United States Department of Agriculture (USDA) and the United States Department of State.  They extoll too the availability of specific licenses which require an application to support MSMEs in the Republic of Cuba. 

However, these same officials lament the lack of use of the general licenses and applications for specific licenses, placing blame upon those who should be interested, but are not interested enough to pursue what is available.  Yet, they acknowledge the lack of re-authorizing direct correspondent banking is an impediment.  

The position is both lamentable and revealing because a primary reason for a lack of interest is the refusal of these same officials- who generally have no entrepreneurial background, to acknowledge their primary role in the process of stagnation. 

By adhering to the political position that re-authorizing direct correspondent banking while knowing fully the consequences of adhering to that political position, they equate stubbornness with intellectualism; serving as defender of the status quo despite incontrovertible evidence the position contributes directly to a lack of interest by those who are their primary constituency. 

If this analysis sounds bizarre, it is because it is bizarre.  The position reinforces a bureaucracy mired in a courage of its ignorance.  Believing with their limited private sector experience and virtually no entrepreneurial experience, they know best what is needed by the those seeking to engage with MSMEs in the Republic of Cuba.   

Most appalling is they take pride in their refusal to acknowledge they are wrong.  They cherish the power they have over the private sector in the United States. 

They can’t appreciate the eventual confluence of events- where their lack of common sense collides with their orgasmic fixation upon applauding simultaneously their actions and inactions. 

The BIS, OFAC, Department of State, and USDA continue to issue licenses, issue approvals, and encourage activities which do not require authorization.  That’s fine. 

The problem is this increasing quantity of licenses and promotion of activities not requiring licenses do need functioning financial plumbing.  Those using general licenses and specific licenses need to move funds directly from the United States to the Republic of Cuba and from the Republic of Cuba to the United States.    

When representatives of the Biden-Harris Administration smugly defend their position that perfectly acceptable, logical for commercial funds from the United States to the Republic of Cuba be required to transit a third country and commercial funds from the Republic of Cuba to the United States be required to transit a third country, how can these representatives be engaged on a serious basis? 

In 2015, the Obama-Biden Administration (2009-2017) authorized United States-based financial institutions to have correspondent accounts with Republic of Cuba government-operated financial institutions, but did not authorize Republic of Cuba government-operated financial institutions to have correspondent accounts with United States-based financial institutions. 

That decision was ridiculous then and remains even more so today. 

What is worse?  The initial decision in 2015 or the continued defense of the decision in 2023.  Particularly accounting for the Biden-Harris Administration focus upon supporting the re-emerging private sector in the Republic of Cuba… which requires support from the private sector in the United States… and the cost-effective, efficient, and transparent movement of funds- in two directions. 

Officials of the Biden-Harris Administration curiously question why the United States private sector does not embrace more fulsomely opportunities existing through the use of general license provisions afforded by the OFAC and BIS.  Two answers:   

• First, prior to and increasing since the Republic of Cuba was returned by the United States Department of State in January 2021 to the List of State Sponsors of Terrorism during the final days of the Trump-Pence Administration (2017-2021), United States-based companies and United States-based financial institutions remain hesitant to engage with transactions involving the Republic of Cuba.  The primary reasons: fear of running afoul of OFAC compliance requirements and the resulting OFAC financial penalties along with limited viable commercial opportunities provided in the Republic of Cuba. 

• Second, the inability to transfer funds cost-effectively, efficiently, and transparently from the United States to the Republic of Cuba and from the Republic of Cuba to the United States.  The Obama-Biden Administration could have remedied the issue.  They chose not to.  The Biden-Harris Administration can remedy the issue.  They thus far choose not to.  Consistency of nonsensical decisions. 

U.S. Banks And Third Countries  

In 2015, Pompano Beach, Florida-based Stonegate Bank (2017 assets approximately US$2.9 billion) acquired accounts for the Embassy of the Republic of Cuba in Washington, DC, and the Permanent Mission of the Republic of Cuba to the United Nations in New York after Buffalo, New York-based M&T Bank Corporation (2022 assets approximately US$200 billion) notified the embassy and mission that it would no longer provide services due to challenges with regulatory compliance for many accounts with embassies and missions.    

Stonegate Bank in 2015 received a license from the OFAC for a correspondent account at Banco Internacional de Comercia SA (BICSA), a member of Republic of Cuba government-operated Grupo Nuevo Banca SA, created by Corporate Charter No. 49 in 1993 and commenced operation in 1994.    

• According to the Republic of Cuba, “Its [BICSA] main activity is ‘enterprises’ bank’ carried through its central services and five branches based in the country’s capital, Santiago de Cuba and Villa Clara. It records all transactions in real time providing its customers with card and remote banking services while it is working on developing other methods of electronic banking.  Its institutional clients, national or foreign, receive a complete accounting and documentary service, while national entities also enjoy of significant volumes of credit facilities. Practically all sectors of the economy benefit from all this, such as that of agriculture, the food industry, the basic and light industries, transportation, aviation, fishing, construction, domestic and foreign trade, the iron and steel industry, sugar, informatics, communications and others with not only economic importance but also social, such as health, water supply, education, culture and sports.  Credit policy followed by the Bank is dictated in a collegiate way by its Credit Committee on the basis of a strict analysis and control in loan making.  The Bank counts on correspondents in the five continents, the majority are first class banks, mainly Europeans and Americans.  Equity capital of shareholders (Grupo Nueva Banca with the biggest share and Bancholding), near the USD95 millions with a balance ranging from 550 to 600 millions, make sure the Bank has a strong solvency ratio.” 

Without explanation the Obama-Biden Administration did not authorize BICSA under a license from the OFAC to have a correspondent account at Stonegate Bank, so Stonegate Bank routed transactions for approximately eighty (80) customers on a regular basis through Panama City, Panama-based Multibank (2019 assets approximately US$5 billion) which had dealings with the Republic of Cuba.  

In 2017, Conway, Arkansas-based Home BancShares (2022 assets approximately US$22.8 billion) through its subsidiary Centennial Bank purchased Stonegate Bank.  Stonegate Bank operations were absorbed into Centennial Bank.    

On 16 June 2020, Bogota, Colombia-based Grupo Aval Acciones y Valores SA (2022 assets approximately US$90.1 billion) reported that “On May 25th, Banco de Bogotá, through its subsidiary Leasing Bogotá S.A. Panamá, acquired 96.6% of the ordinary shares of Multi Financial Group [Multibank]. As part of the acquisition process, MFG’s operation in Cuba was closed and as part of the transaction. Grupo Aval complies with OFAC regulations and doesn't have transactional relationships with Cuba.”  

In June 2022, Elk Grove Village, Illinois-based Chicago, Illinois-based First American Bank (2022 assets approximately US$6 billion) acquired from Centennial Bank an operating account (and Republic of Cuba-focused branch personnel) for the Embassy of the Republic of Cuba in Washington, DC.  First American Bank has since ceased managing the account for the Embassy of the Republic of Cuba.  If BICSA is authorized by the OFAC to establish a correspondent account with First American Bank and if First American Bank were to establish a correspondent account with BICSA, there would be an opportunity for direct two-way fund transfers for authorized transactions (agricultural commodities, food products, healthcare products (medical equipment, medical instruments, medical supplies, pharmaceuticals, informational materials, travel (visa processing, overflight fees, landing fees, accommodation payments- Airbnb, etc.), remittances, and entrepreneurial activities (direct investment to and direct financing for privately-owned companies located in the Republic of Cuba, etc.).  This same scenario would apply to almost any United States-based financial institution.    

US$7+ Billion Through Third Countries 

For the period December 2001 through March 2023 (the most recently available trade data) from when the first agricultural commodity and food products were exported from the United States to the Republic of Cuba under provisions of the Trade Sanctions Reform and Export Enhancement Act (TSREEA) of 2000, the value delivered was approximately US$6,960,713,163.00.  

For the period 2003 through March 2023 (the most recently available trade data), the value of healthcare products (medical equipment, medical instruments, medical supplies, pharmaceuticals) delivered from the United States to the Republic of Cuba under provisions of the Cuban Democracy Act (CDA) of 1992 was approximately US$36,480,694.00.  

Additional tens of millions of United States Dollars in commercial payments to the Republic of Cuba for telecommunications, aircraft overflights, cargo, informational materials, artwork, aircraft landing, authorized travel, casa particulares (Airbnb), passport renewals, etc. 

All these funds moved not cost-effectively, efficiently, and transparently, but expensively, inefficiently, and absent transparency through third-country financial institutions.  Those third-country financial institutions receive a fee from each transaction.  Undeserved fees thus far on more than U$7 billion in funds. 

From OFAC Frequently Asked Questions  

742. Are financial institutions other than banks permitted to open correspondent accounts in Cuba?  Depository institutions, as defined in 31 CFR § 515.333, which include certain financial institutions other than banks, are permitted to open correspondent accounts at banks in Cuba. See 31 CFR § 515.584(a). Released on September 23, 2020    

743. Are Cuban banks permitted to open correspondent accounts at U.S. banks?  No. U.S. depository institutions are permitted to open correspondent accounts at Cuban banks located in Cuba and in third countries, and at foreign banks located in Cuba, but Cuban banks are not generally licensed to open such accounts at U.S. banks. See note to 31 CFR § 515.584(a). Released on November 8, 2017    

744. May correspondent accounts authorized pursuant to 31 CFR § 515.584(a) or used for transactions authorized by 31 CFR § 515.584(g) be established and maintained in U.S. dollars?  Yes. Correspondent accounts of depository institutions (as defined in 31 CFR § 515.333) at a financial institution that is a national of Cuba authorized pursuant to § 515.584(a) may be established and maintained in U.S. dollars. Such accounts may be used only for transactions that are authorized by or exempt from the CACR. Transactions necessary to establish and maintain such correspondent accounts —– such as originating, processing, and terminating authorized funds transfers in U.S. dollars —– are authorized.  Additionally, correspondent accounts used for transactions authorized by 31 CFR § 515.584(g), which permits banking institutions as defined in 31 CFR § 515.314(g) that are persons subject to U.S. jurisdiction to accept, process, and give credit to U.S. dollar monetary instruments presented indirectly by a financial institution that is a national of Cuba, may be denominated in U.S. dollars.  However, financial institutions that are nationals of Cuba remain prohibited from opening correspondent accounts at a U.S. financial institution. For a complete description of what these general licenses authorize and the restrictions that apply, see 31 CFR § 515.584(a) and (g). § 515.584 Certain financial transactions involving Cuba.  

• Correspondent accounts. Depository institutions, as defined in § 515.333, are authorized to engage in all transactions necessary to establish and maintain correspondent accounts at a financial institution that is a national of Cuba, provided that such accounts are used only for transactions authorized pursuant to, or exempt from, this part.  

• (g) Any banking institution, as defined in § 515.314, that is a person subject to U.S. jurisdiction is authorized to accept, process, and give value to U.S. dollar monetary instruments presented for processing and payment by a banking institution located in a third country that is not a person subject to U.S. jurisdiction or a Cuban national and that has received the U.S. dollar monetary instruments from a financial institution that is a national of Cuba for which it maintains a correspondent account and which received the U.S. dollar monetary instruments in connection with an underlying transaction that is authorized, exempt, or otherwise not prohibited by this part, such as dollars spent in Cuba by authorized travelers or a third-country transaction that is not prohibited by this part.  Note to paragraph (g): Correspondent accounts used for transactions authorized pursuant to § 515.584(g) may be denominated in U.S. dollars.” 

LINK TO COMPLETE ANALYSIS IN PDF FORMAT

Port Of Mariel Reports Readiness To Receive Neo-Panamex Vessels

Cuba Heute (Berlin, Germany) 15 May 2023: 

The administration of the Port of Mariel in the Special Economic Zone (ZEDM) in the Republic of Cuba reported the deepening of the bay to 17.5 meters to receive Neo-panamax generation vessels. The Port of Mariel located approximately forty-five kilometers west of the city of Havana, to process the newest and largest container ships transiting the Panama Canal. 

Neo-panamax-class ships have a length of 366 meters, a width of 52 meters and a draft of 15 meters.  Their maximum capacity is 14,000 twenty-foot standard container units (TEU), while the Panamax vessels can hold 5,000 TEU.  The increase in capacity was due to the widening and deepening of the Panama Canal in 2016. 

Opened in 2014, the Port of Mariel’s container operation was designed to host the new generation of container ships.  There are four super post-Panamax cranes and a 700-meter-long jetty.  However, due to a depth of thirteen meters, until today only Panamax vessels could enter the bay.  The deepening was to have been completed at the same time as the channel expansion, but the difficult topography delayed the dredging. 

For the Republic of Cuba, the increase in capacity is accompanied by a reduction in freight costs as the larger vessels are less expensive to operate due to their higher loading capacity, and it also increases the selection of cargo routes: 60% of the vessels transiting the Panama Canal are now neo-Panamax vessels, which previously could not dock at the Port of Mariel. 

The Port of Mariel is the largest and most modern port in Cuba.  Since its opening, continuous investments have been made, increasing the original capacity from 250,000 TEUs to 800,000 TEUs per year.  Capacity can be expanded to 3 million TEUs by extending the pier according to port authorities.  In addition to a highway connection, the Port of Mariel is linked to Havana by a newly built rail line.  With the recent deepening, the Port of Mariel could become a significant regional transshipment port “if circumstances allow” said the Martín José Spini, General Director of the Port of Mariel, referring to sanctions by the United States government.  With a cost of nearly US$1 billion, the port was Cuba’s largest infrastructure project in a long time with US$682 million contributed as a loan (unknown if repaid) by the Brazil Bank for Development with construction by Brazil-based Odebrecht (which has since gone out of business due to massive charges of corruption). 

The Panama Canal is the most important shipping route between Asia and The Americas.  Since 1914, it has connected the Atlantic Ocean with the Pacific Ocean, saving a route around Cape Horn of Africa or crossing of the Strait of Magellan.  The eighty-two kilometer-long lock system is one of the largest transport hubs for international merchant shipping with an average of thirty-eight vessels transiting each day.

Biden-Harris Administration Issues Third Known BIS/OFAC License Authorizing Vehicle Exports From U.S. To Cuba. Payments Still Must Move Through Third Countries.

Miami, Florida-based Fuego Enterprises Inc. has reported receiving a license from the Office of Foreign Assets Control (OFAC) and from the Bureau of Industry and Security (BIS) of the United States Department of Commerce, to export “hybrid or combustion vehicles, new and used, of different brands and sizes, with a manufacturing date between 2018 and 2023, and coming directly from the United States, may be imported.”  

“The range of vehicles includes: Microcars, Subcompact and Compact Cars, Medium and Large Size Cars, Luxury Cars of Medium and Large Size, Sports cars, Convertibles, Compact Minivan and Minivan, Mini, Compact, Midsize and Large SUVs, and Pickup Trucks.  Among the brands are Ford, Mercedes Benz, Chevrolet, Toyota, BMW, Land Rover, Tesla, Cadillac, and Nissan.  In a few days, the company reports receiving approximately thirty import requests which are being processed.  Deliveries in Havana are made between ten and twenty days after the purchase is completed.”  

Miami, Florida-based Apacargo Express reported in April 2023 the company obtained a license from the OFAC to export from the United States to the Republic of Cuba: “cars, trucks, trailers, tractors, and agricultural equipment.”  The company reported the OFAC license authorizes up to US$10 million in exports during the validity of the OFAC license.  The duration of the OFAC license has not been reported.  Unknown if the company also received a license from the BIS. 

• LINK: Biden-Harris Administration Approves Second Known License For A U.S. Company To Export Vehicles And Equipment To Private Companies In Cuba. Payment? That Remains A Problem. OFAC Doesn't Care. Apr 29, 2023

On 17 November 2022, the Biden-Harris Administration (2021- ) approved a license application submitted on 22 October 2022 by Columbia, Maryland-based Premier Automotive Export, Ltd. (PAE) to the BIS to export electric vehicles and chargers to republic of cuba nationals with the “ULTIMATE CONSIGNEE: Privately owned companies in the Republic of Cuba owned by Cuba Nationals.”  The BIS license is valid until 30 November 2026.  PAE has received five BIS licenses since 2017 including the first BIS license to export an electric vehicle to an embassy located in the Republic of Cuba.  LINK.   

• LINK: Home Delivery For Electric Scooters To Cuba: As Biden-Harris Administration Expands U.S. Export Opportunities, A U.S. Company Responds Quickly To Customer Requests. Next Correspondent Banking? December 04, 2022  

• LINK: Ten Months After Denial, Biden-Harris Administration Approves Exports Of Electric Motorcycles, Electric Scooters To Cuba Nationals And To Privately-Owned Companies In Cuba October 05, 2022 

On 28 September 2022, the BIS issued a license to PAE for the export of electric scooters and electric bicycles to Republic of Cuba nationals and to MSMEs.     

On 15 December 2021, the BIS denied a license application submitted on 30 September 2021 by PAE to export electric vehicles and chargers to republic of cuba nationals.  From the license application: “Specific End Use- Ordinary Cuban Nationals would be the specific End User and purchasing electric vehicle for their own personal transportation.”      

• From the BIS: “There is a general policy of denial for exports and reexports to Cuba of items subject to the EAR, as described in Section 746.2(b) of the EAR. However, there are exceptions to the general policy of denial, some of which are listed below: … Items necessary for the environmental protection of U.S. and international air quality, waters and coastlines, including items related to renewable energy or energy efficiency, are generally approved.”   

• A license exception is a general authorization to export or reexport certain items without a license under stated conditions.  Only the license exceptions, or portions thereof, listed Section 746.2(a)(1) of the EAR are available for Cuba…. Support for the Cuban People: License Exception Support for the Cuban People (SCP) “§ 740.21 Support for the Cuban People (SCP). (a) Introduction. This License Exception authorizes certain exports and reexports to Cuba that are intended to support the Cuban people by improving their living conditions and supporting independent economic activity; strengthening civil society in Cuba; and improving the free flow of information to, from, and among the Cuban people. (b) Improving living conditions and supporting independent economic activity.…. (1) Items for use by the Cuban private sector for private sector economic activities… (2) Items sold directly to individuals in Cuba for their personal use or their immediate family's personal use,” LINK  

Potential customers of PAE have inquired about installment payments for the purchase of EVs.  As monthly payments would be minimal in value, the cost for sending the funds through a third country financial institution would be larger than the installment amount.  Flexibility to provide installment payments will further enhance the cashflow of an MSME and further connect the MSME with the United States-based company.  

Cuba Reports Creation Of 294 New MSMEs. 3.7% Are Government-Operated Companies Becoming "Private" Companies.

Cuba Heute (Berlin, Germany) 4 May 2023: The Ministry of Economy and Planning (MEP) of the Republic of Cuba authorized the creation of 294 new micro, small, and medium-size enterprises (MSMEs).  Two hundred and eighty-two are private companies, eleven are Republic of Cuba government-owned MSMEs, and one MSME is a cooperative.  The latest round of approvals is the largest number of MSMEs created at one time. 

LINK TO LIST OF NEW MSMEs IN PDF FORMAT 

Among the newly approved MSMEs are businesses from almost every sector and all areas of the country.  They include food traders and manufacturers of products from cheese to canned fish, construction companies, bakers, catering businesses, transport service providers, manufacturers of industrial goods- furniture to optical instruments, plant installers, veterinary businesses, textile factories and Information Technology (IT) companies.  Some of the MSMEs operate in previously-closed Republic of Cuba government-owned factories with new and old equipment. 

Since the MSME laws of 18 September 2021, the number of MSMEs has increased to 7,714. Approximately 200,000 Republic of Cuba nationals currently work in MSMEs, which may employ up to one hundred workers in the Republic of Cuba and, as a separate legal entity, have tax advantages over those of self-employed workers.

LINKS To Related Analyses

Why Is One-Year Anniversary Of Biden-Harris Administration Approving First Investment/Financing To Private Company In Cuba A Disappointment? Cuba Has Not Published Regulations For Delivering It. May 9, 2023

U.S. Agricultural Commodity/Food Product Exports To Cuba Decrease By 21% In March 2023; Lower By .08% Year-To-Year. 2023 Coffee Purchases US$962,730.00. May 7, 2023

Why Do U.S.-Based Financial Institutions Avoid Cuba? OFAC Uses 54 Pages To Describe "De-Risking" Reasons. Irony? They Lament The Impact Of Their Decisions. Then Why Create Them? May 7, 2023

U.S. Department Of State Spokesperson Has Challenges Explaining Cuba's Inclusion On List Of State Sponsors Of Terrorism May 3, 2023

Logic From U.S. Department Of State:  If We Permit It, Cuba Might Not Use It, So We Won’t Permit It.  And, Yes, No One Asked Cuba. And, No One Asked U.S. Banks, Companies. May 1, 2023

Biden-Harris Administration Approves Second Known License For A U.S. Company To Export Vehicles And Equipment To Private Companies In Cuba. Payment? That Remains A Problem. OFAC Doesn't Care. Apr 29, 2023

Cuba "Streamlining" Approval Process For Agriculturally-Focused Economic Associations With Foreign Capital. Still No Regulations For U.S.-Sourced MSME Private-Sector Foreign Investment/Financing Apr 27, 2023

Cuba Seeking Investors, Financing For State-Owned Companies.  U.S. Entrepreneurs Waiting Since May 2022 For Cuba Regulations To Deliver Investment And Financing To Private Companies In Cuba Apr 27, 2023

Why Is One-Year Anniversary Of Biden-Harris Administration Approving First Investment/Financing To Private Company In Cuba A Disappointment? Cuba Has Not Published Regulations For Delivering It.

Tomorrow Should Be Celebratory.  Instead, Another Disappointment. 

One Year Since Biden-Harris Administration Approved First OFAC License Authorizing Direct Investment In And Direct Financing To A Privately-Owned Company In Cuba Owned By A Cuban National. 

Neither Direct Investment Nor Direct Financing Was Delivered. 

Government Of Cuba Has Not Published Regulations For Process To Deliver Funds.   

Diaz-Canel-Vales Mesa Administration Officials Continue To Suggest Regulations Will Be Published By End Of 2023. 

What Is The Incentive For The Biden-Harris Administration To Encourage OFAC And BIS To Issue Licenses Or Further Develop General Licenses To Deliver Direct Investment And Direct Financing Until The Government Of Cuba Issues Regulations Authorizing Delivery Of Direct Investment And Direct Financing To MSMEs In Cuba? 

10 May 2023 should be celebrating one-year since a new commercial dawn.  Hundreds of MSMEs (micro, small, and medium-sized enterprises) in the Republic of Cuba should be embracing their investors and sources of financing from the United States and delivering profit-sharing, interest, and principal payments. 

On 10 May 2022, the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury at the direction of the Biden-Harris Administration (2021- ) issued the first license authorizing direct investment in and direct financing to a privately-owned company located in the Republic of Cuba owned by the Republic of Cuba national.  There was no necessity for a license from the Bureau of Industry and Security (BIS) of the United States Department of Commerce.   

The OFAC license application was submitted on 10 June 2021 by Washington DC-based attorney Robert L. Muse (Telephone: (202) 460-3168; Email: robertmuse@robertmuse.com) who drafted the license application and shepherded the eleven-month inter-agency review process. 

The sunrise of 10 May 2022 was followed by 365 days of darkness reflecting the lack of response from the government of the Republic of Cuba- absence of regulations for the process to deliver from the United States direct investment and direct financing to MSMEs in the Republic of Cuba.    

The same government of the Republic of Cuba which for more than two years has maintained it welcomes direct investment and direct financing to MSMEs.  There remains in Havana a distance between what is welcomed and what is approved. 

The same government of the Republic of Cuba which for more than two years has maintained that the country desperately needs direct investment and direct financing.  Another example of the distance between what is sought and what is approved. 

• LINK: Biden-Harris Administration Approves First Equity Investment Since 1960 In A Private Cuban Company.  May 10, 2022    

• LINK: With U.S. Government Authorization For First Direct Equity Investment Into A Private Company In Cuba, Here Is Important Context And Details.  About The Parties; About The Message.  May 16, 2022      

• LINK: Biden Administration Will Use Cuba's Authorization Of SMSE's As Means To Expand Support For Cuba Private Sector- U.S. Investments And Loans May Be Next.  June 02, 2021  

The direct investment/direct financing delivery process should have been- and should be now, simple.  One-page form submitted confidentially by an MSME to their Republic of Cuba government-operated financial institution which includes source(s), amount(s), and term(s) of direct investment or direct financing.  No fees or taxes payable on the value of the direct investment and direct financing.  No creating a separate account.  No creating a separate entity.  That’s it. 

From a multi-decade Washington DC-based observer: “Tragically, there is no incentive for the OFAC to issue licenses or further develop general licenses for use by companies, entrepreneurs, and individuals in the United States until the government of Cuba issues regulations authorizing the delivery of direct investment and direct financing to MSMEs in Cuba.  Despite repeated assurances during more than two years from officials in Havana to the contrary, there remains no reasonable prospect that direct investments will ever be approved.  Leadership in Havana will not invest in their private sector- they prefer to continue to try to create new mixed entities formed between Cuba’s state sector and foreign corporations rather than facilitate direct private investment and direct private financing into existing MSMEs.”

LINK TO COMPLETE ANALYSIS IN PDF FORMAT

U.S. Agricultural Commodity/Food Product Exports To Cuba Decrease By 21% In March 2023; Lower By .08% Year-To-Year. 2023 Coffee Purchases US$962,730.00.

ECONOMIC EYE ON CUBA©
May 2023

March 2023 Ag/Food Exports To Cuba Decrease 21.0%- 1
59th Of 217 March 2023 U.S. Food/Ag Export Markets- 2
Year-To-Year Exports Increase .08%- 2
Cuba Ranked 55th Of U.S. 2023 Ag/Food Export Markets- 2
March 2023 Healthcare Product Exports US$400,157.00- 2
March 2023 Humanitarian Donations US$3,966,288.00- 3
Obama Administration Initiatives Exports Continue- 3
U.S. Port Export Data- 17

MARCH 2023 FOOD/AG EXPORTS TO CUBA DECREASE 21.0%- Exports of food products and agricultural commodities from the United States to the Republic of Cuba in March 2023 were US$20,475,934.00 compared to US$25,929,536.00 in March 2022 and US$28,442,805.00 in March 2021. 

March 2023 exports included among other items: Waffles and Wafers; Coffee; Cookies; Condiments; Toilet Paper; Chicken Leg Quarters (Frozen); Chicken Meat (Frozen); Chicken Legs (Frozen); Meat of Swine; Preserved Chicken Meat; Non-Alcoholic Beverages.

January 2023 through March 2023 TSREEA exports were US$77,462,731.00 compared to January 2022 through March 2022 exports of US$77,525,154.00. Total TSREEA exports since first deliveries in December 2001: US$6,981,189,097.00.

The data contains information on exports from the United States to the Republic of Cuba- products within the Trade Sanctions Reform and Export Enhancement Act (TSREEA) of 2000, Cuban Democracy Act (CDA) of 1992, and regulations implemented (1992 to present) for other products by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury and Bureau of Industry and Security (BIS) of the United States Department of Commerce.

The TSREEA re-authorized the direct commercial (on a cash basis) export of food products (including branded food products) and agricultural commodities from the United States to the Republic of Cuba, irrespective of purpose. The TSREEA does not include healthcare products, which remain authorized and regulated by the CDA.

The data represents the U.S. Dollar value of product exported from the United States to the Republic of Cuba under the TSREEA and CDA. The data does not include transportation charges, bank charges, or other costs associated with exports; the government of the Republic of Cuba reports unverifiable data that includes transportation charges, bank charges, and other costs.

COMPLETE REPORT IN PDF FORMAT

Why Do U.S.-Based Financial Institutions Avoid Cuba? OFAC Uses 54 Pages To Describe "De-Risking" Reasons. Irony? They Lament The Impact Of Their Decisions. Then Why Create Them?

THE DEPARTMENT OF THE TREASURY’S DE-RISKING STRATEGY
EXECUTIVE SUMMARY

For this study, Treasury focuses on “de-risking” as the practice of financial institutions terminating or restricting business relationships indiscriminately with broad categories of clients rather than analyzing and managing the risk of clients in a targeted manner. Such a practice is not consistent with the risk-based approach that is the cornerstone of the Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) regulatory framework for U.S. financial institutions under the Bank Secrecy Act (BSA) and implementing regulations.

As detailed in this strategy, de-risking undermines several key U.S. government policy objectives by driving financial activity out of the regulated financial system, hampering remittances, preventing low- and middle-income segments of the population, as well as other underserved communities, from efficiently accessing the financial system, delaying the unencumbered transfer of international development funds and humanitarian and disaster relief, and undermining the centrality of the U.S. financial system. As such, the strategy aims to provide potential solutions to promote financial inclusion by reducing barriers to the legitimate use of financial services as much as possible, while supporting efficient, safe, and affordable domestic and cross-border transactions.

LINK TO COMPLETE 54-PAGE REPORT IN PDF FORMAT

LINK: Another Bank Outside U.S. Reported To Cease Providing Wire Transfers To Cuba. No Reason Provided. Shows Urgent Need For Permitting Correspondent Accounts For Cuba Banks With U.S. Banks. December 04, 2022

LINK: Airbnb Successfully Lobbied Trump Administration. Airbnb Should Now Focus On Biden Administration To Advocate For Direct Correspondent Banking So Hosts In Cuba May Access Funds Directly, Efficiently. April 06, 2022  

U.S. Department Of State Spokesperson Has Challenges Explaining Cuba's Inclusion On List Of State Sponsors Of Terrorism

United States Department of State

Washington DC

2 May 2023

Press Briefing: Vedant Patel, Principal Deputy Spokesperson

QUESTION: Liz Oliva Fernandez, Belly of the Beast. Administration officials meet last week with Cuban officials to discuss counterterrorism, but the administration has Cuba on the state sponsor of terrorism list. Why is Cuba on the state sponsor of terrorism list if you are trying to work with them to fight against terrorism?

MR PATEL: So these security dialogues with Cuba, my understanding is that they are very standard and they happen at regular intervals and regular cadence. There is obviously, given the maritime boundary, important pieces of coordination that need to take place with Cuba. But these are dialogues that happen regularly, at regular intervals, and we continue to not have a change in policy as it relates to Cuba’s place on the designation list.

QUESTION: What evidence is there that Cuba sponsored terrorism?

MR PATEL: Well, the regime has a long track record of egregious human rights abuses, suppression of a free press, suppression of civil society, and other key factors that continue to keep them on that list.

Jackson, go —

QUESTION: But you can give me examples —

MR PATEL: I’m going to work the room a little bit —

QUESTION: — of terrorism because of human rights abuse.

MR PATEL: I’m going to work a little bit. Thank you. Jackson, go ahead.

QUESTION: Hi, yes. Just a follow-up on the U.S.-Cuba counterterrorism dialogues from last week.

MR PATEL: Yeah.

QUESTION: Based off your previous response, I was wondering if you’re saying that any government that commits any rights abuses deserves to be on this list?

MR PATEL: I’m not going to parse the specific participation on this list or not. Your question was about the security dialogue. The security dialogue is something that we have conducted with Cuba at regular intervals. It is an interagency dialogue; the State Department is not the only department involved. It obviously takes place in close coordination with the Department of Homeland Security and other cabinet agencies as well. So —

QUESTION: Yeah, but is it not a contradiction to be discussing counterterrorism with a country that’s currently designated a State Sponsor of Terrorism?

MR PATEL: As I said, these are talks that happen regularly at regular intervals, that there is a – obviously a nexus for this dialogue to take place between the United States and Cuba, given the maritime boundary and the waters that we share. And so that’s what this is about.

All right. Thanks, everybody.

(The briefing was concluded at 2:02 p.m.)

Logic From U.S. Department Of State: If We Permit It, Cuba Might Not Use It, So We Won’t Permit It. And, Yes, No One Asked Cuba. And, No One Asked U.S. Banks, Companies.

Here’s The Logic From U.S. Department Of State:  If We Permit It, Cuba Might Not Use It, So We Won’t Permit It.  But, No One Asked Cuba. 

United States Department of State: “Regarding direct correspondent banking, U.S. regulations do of course allow for U.S. banks to establish correspondent accounts in Cuba, but not the other way around, as you [recipient of message] note.  Two-way direct correspondent banking would indeed likely decrease transactions costs.  However, it is our understanding that even if the United States were to authorize direct two-way correspondent banking, Cuban banks would not actually establish accounts in the United States due to outstanding legal judgements against the Cuban government that would freeze and collect any funds a state financial institution held in the United States.  Therefore, I expect you're [recipient of message] unlikely to see direct correspondent banking on the horizon.” 

Biden-Harris Administration Adopts “Financial Prior Restraint” To Proactively Prevent United States Marketplace From Deciding Potential Issues And If Their Existence Precludes Engagement. 

Why Not Let Marketplace Decide?  Biden-Harris Administration Afraid Of Marketplace- Want’s To Control When It Should Get Out Of The Way. 

Irony?  Biden-Harris Administration Mistake Adopted From Obama-Biden Administration. 

“We’re The Government.  Here To Help You” … Not Reach Your Potential. 

The last twelve months disappointingly, but not surprisingly, continue to clarify the government of the Republic of Cuba views  as desirable neither direct investment nor direct financing from sources specifically authorized by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury to Micro, Small, and Medium-Size Enterprises (MSMEs) located in the Republic of Cuba and owned by Republic of Cuba nationals.  

During the last months however, the Diaz-Canel-Valdes Mesa Administration (2019- ) in the city of Havana, Republic of Cuba, has lavishly promoted the authorization of wholesale marketplaces in the Republic of Cuba, some to be constructed and operated by companies located in Argentina, Italy, and Spain, where owners, managers, and employees of MSMEs may purchase inputs. 

The existence of a wholesale marketplace for MSMEs is a required component for a private sector- the distance between the price of a product purchased by an MSME and the price of the product and service produced and sold by the MSME is the profit- which hopefully the government of the Republic of Cuba will not seek to tax and fee to minimize as such would harm the ability of MSMEs to expand- both revenue and employees. 

Republic of Cuba government-operated financial institutions are again accepting U.S. Dollar currency deposits.  “It is very useful for us as a company and more than now we need a lot of capital injection to face the crisis with the purchase of professional machinery.  This gives us the possibility of having currency input that currently could not be exchanged into currencies other than USD.”  Owner of an officially-registered MSME located in the Republic of Cuba and owned by a Republic of Cuba national.  

• Cuba Banks Again Accepting U.S. Dollar Deposits. That's Good. Better Would Be Providing Regulations For U.S.-Sourced Direct Investment And Direct Financing To MSMEs. First OFAC License Waiting... Apr 11, 2023  

After nearing three years, Denver, Colorado-based Western Union Company (2022 revenue US$4.5 billion) recommenced electronic transfers from the United States to three Republic of Cuba government-operated financial institutions located in the Republic of Cuba.  Western Union Company and Republic of Cuba government-operated Orbit S.A. have yet to authorize electronic transfers for commercial transactions and to authorize U.S. Dollar electronic transfers from accounts in the Republic of Cuba to recipients in the United States. 

• Western Union Goes National For U.S. Tranfers To Cuba.... When Will Cuba Permit U.S. Investment And Financing For MSMEs In Cuba? No Excuse For Delays. Mar 3, 2023  

• Who Or What Is Delaying Western Union From Authorizing Commercial Transfers From U.S.-Cuba And From Cuba-U.S.? Biden? Diaz-Canel? MSME's Waiting With U.S.-Based Companies And Entrepreneurs Apr 22, 2023 

Missing from the formula thus far embraced by the government of the Republic of Cuba is an essential ingredient: access to capital.  This is not solely about locating capital- finding money is not the problem.  This is about moving capital, payments, and other obligations from one point to another point cost-efficiently and transparently.    

MSMEs are seeking access to funding not available from sources in the Republic of Cuba.  They want direct investment, direct financing, loans, etc.  They want the opportunity of identifying funds from sources in the United States.  Having a wholesale marketplace is useful- but it will not thrive- and may not be sustainable absent MSMEs with funding to spend for supplies, particularly those MSMEs that want to expand and need to expand. 

On 10 May 2022 the Biden-Harris Administration (2021- ) through a license issued by the OFAC authorized the first direct investment in and direct financing to a privately-owned company in the Republic of Cuba owned by a Republic of Cuba national.  The OFAC license application was submitted on 10 June 2021.   

• Biden-Harris Administration Approves First Equity Investment Since 1960 In A Private Cuban Company May 10, 2022   

• With U.S. Government Authorization For First Direct Equity Investment Into A Private Company In Cuba, Here Is Important Context And Details.  About The Parties; About The Message. May 16, 2022    

• Biden Administration Will Use Cuba's Authorization Of SMSE's As Means To Expand Support For Cuba Private Sector- U.S. Investments And Loans May Be Next June 02, 2021 

Ironically, where the Diaz-Canel Valdes Mesa Administration reinforces distain for the private sector, the Biden-Harris Administration demonstrates commercial illiteracy from adhering to a perplexing and intellectually deficient then and perplexing and intellectually deficient now embrace of a decision by the Obama-Biden Administration (2009-2017). 

• One:  The Diaz-Canel-Valdes Mesa Administration has yet after more than two years to specifically authorize and publish regulations for the delivery of direct investment in and direct financing to a privately-owned company in the Republic of Cuba owned by a Republic of Cuba national.    

• Two:  The Biden-Harris Administration has unfortunately continued to in part mimic the dysfunctionality of the Diaz-Canel-Valdes Mesa Administration by not providing the tools required for direct investment and direct financing to be functional. 

Absence of efficient banking for MSMEs constrains their operational efficiencies and their potential.  Officials within The White House (National Security Council), the United States Department of State, United States Department of the Treasury, United States Department of Commerce, and United States Department of Agriculture know this to be true- they have heard the message consistently from individuals, companies, and organizations.   

Yet, these officials (low-level, mid-level, senior-level; career and political appointees) adhere, like Flex-Seal, Crazy Glue, and Velcro, that perfectly acceptable and logical (which is the most terrifying) for the Biden-Harris Administration to require payments (fee, percentage of transaction) to financial institutions located in third countries for every commercial transaction sent from the Republic of Cuba to the United States and for every commercial transaction sent from the United States to the Republic of Cuba.  What grade would that answer receive from a professor at Harvard Business School?     

That means fees on thus far more than US$7 billion: 

• For the period December 2001 through February 2023 from when the first agricultural commodity and food products were exported from the United States to the Republic of Cuba under provisions of the Trade Sanctions Reform and Export Enhancement Act (TSREEA) of 2000, the value delivered was approximately US$6,960,713,163.00. 

• For the period 2003 through 2023, the value of healthcare products (medical equipment, medical instruments, medical supplies, pharmaceuticals) delivered from the United States to the Republic of Cuba under provisions of the Cuban Democracy Act (CDA) of 1992 was approximately US$36,480,694.00. 

• Additional tens of millions of United States Dollars in commercial payments to the Republic of Cuba for telecommunications, aircraft overflights, cargo, informational materials, artwork, aircraft landing, authorized travel, passport renewals, etc. 

The Biden-Harris Administration continues to refuse to authorize direct correspondent banking.  Incredulously, the Obama-Biden Administration had authorized United States-based financial institutions to have correspondent accounts at financial institutions located in the Republic of Cuba, but did not authorize Republic of Cuba-based financial institutions to have correspondent accounts with financial institutions located in the United States.   

United States Department of State: “Regarding direct correspondent banking, U.S. regulations do of course allow for U.S. banks to establish correspondent accounts in Cuba, but not the other way around, as you note.  Two-way direct correspondent banking would indeed likely decrease transactions costs.  However, it is our understanding that even if the United States were to authorize direct two-way correspondent banking, Cuban banks would not actually establish accounts in the United States due to outstanding legal judgements against the Cuban government that would freeze and collect any funds a state financial institution held in the United States.  Therefore, I expect you're unlikely to see direct correspondent banking on the horizon.” 

• Remittances: Will Biden-Harris Administration Repeat Mistakes Of Obama-Biden Administration And Learn From Mistakes Of Trump-Pence Administration? No Triangles. Yes Loans. Yes Investments. May 18, 2021  

Absent direct correspondent banking and re-establishment of U-turn transactions for financial institutions located in the United States and in the Republic of Cuba, transactions relating to the export from the United States of authorized agricultural commodities, food products, healthcare products, and for authorized services- including the delivery when authorized by the government of the Republic of Cuba of MSME investment and financing, continue to require use of a financial institution located in a third country which adds time, cost, and lacks transparency.   

• Airbnb Successfully Lobbied Trump Administration. Airbnb Should Now Focus On Biden Administration To Advocate For Direct Correspondent Banking So Hosts In Cuba May Access Funds Directly, Efficiently. April 06, 2022  

On 17 November 2022, the Biden-Harris Administration approved a license application submitted on 22 October 2022 by Columbia, Maryland-based Premier Automotive Export, Ltd. (PAE) to the Bureau of Industry and Security (BIS) of the United States Department of Commerce to export electric vehicles and chargers to republic of cuba nationals with the “ULTIMATE CONSIGNEE: Privately owned companies in the Republic of Cuba owned by Cuba Nationals.”  The BIS license is valid to 30 November 2026.   

On 28 September 2022, the BIS issued a license to PAE for the export of electric scooters and electric bicycles to Republic of Cuba nationals and to MSMEs.    

On 15 December 2021, the BIS denied a license application submitted on 30 September 2021 by PAE to export electric vehicles and chargers to republic of cuba nationals.  From the license application: “Specific End Use- Ordinary Cuban Nationals would be the specific End User and purchasing electric vehicle for their own personal transportation.”     

Home Delivery For Electric Scooters To Cuba: As Biden-Harris Administration Expands U.S. Export Opportunities, A U.S. Company Responds Quickly To Customer Requests. Next Correspondent Banking? December 04, 2022 

• Potential customers of PAE have inquired about installment payments for purchase of EVs.  As monthly payments would be minimal in value, the cost for sending the funds through a third country financial institution would be larger than the installment amount.  Flexibility to provide installment payments will further enhance the cashflow of an MSME and also further connect the MSME with the United States-based company.  

Biden-Harris Administration Approves Second Known License For A U.S. Company To Export Vehicles And Equipment To Private Companies In Cuba. Payment? That Remains A Problem. OFAC Doesn't Care. Apr 29, 2023  

Conclusions 

The Biden-Harris Administration policies and regulations have, thus far, focused upon providing connective and re-connective opportunities to the re-emerging private sector in the Republic of Cuba.      

The remaining challenge to transition Biden-Harris Administration policies from aspirational to operational is recreating a cost-efficient, timely, transparent, and secure mechanism to move funds from the United States to the Republic of Cuba and from the Republic of Cuba to the United States through the re-authorization of direct correspondent banking.    

The issuance of OFAC licenses and BIS licenses in May 2022, September 2022, November 2022, and April 2023 are by implementation requiring of two-way transfers that are small in value but consistent.    

Privately-owned companies located in the Republic of Cuba will need to send funds for product purchases (recently including BIS-licensed electric vehicles), send dividend (profit sharing) payments to the source(s) of direct investment, and sending interest and principal payments to source(s) of direct financing.  

For the United States Department of State to continue to require transactions include a third-country financial institution (and the number of third-country financial institutions willing to engage with Republic of Cuba-related transactions continues to decline) is cost inefficient, less transparent, and an impediment to fulfilling the goals of the licenses issued thus far by the OFAC and BIS. 

Another Bank Outside U.S. Reported To Cease Providing Wire Transfers To Cuba. No Reason Provided. Shows Urgent Need For Permitting Correspondent Accounts For Cuba Banks With U.S. Banks. December 04, 2022

LINK TO COMPLETE ANALYSIS IN PDF FORMAT