When You're US$70 Billion In Debt... Should You Open An Office In Havana?

The Honorable Alejandro Garcia Padilla (D), Governor of the Commonwealth of Puerto Rico (population 3.5 million), visited the Republic of Cuba to participate (as an observer) in the 4 June 2016 Summit of the Association of Caribbean States (ACS).  Governor Garcia Padilla is the first serving governor of Puerto Rico to visit the Republic of Cuba.

During his visit, the Governor reported that the Commonwealth of Puerto Rico was seeking to establish a representative office in the city of Havana, Republic of Cuba, for the purpose of promoting "trade and cultural exchanges."

The Commonwealth of Puerto Rico exported agricultural commodities, food products and healthcare products to the Republic of Cuba valued at US$1,082,168.00 during the period 2003 through 2014 of which US$1,037,563.00 consisted of healthcare products.  There were no commercial exports in 2015 or thus far in 2016.  During the period 2000 through 2014, product donations from Puerto Rico to the Republic of Cuba were valued at US$1,008,863.00.

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

To establish an office in the Republic of Cuba, the Commonwealth of Puerto Rico, which is severely restrained by financial issues (US$70 billion debt; US$2 billion due 1 July 2016; seeking assistance from the United States Congress) could:

1) Rent office space (US$3,000.00 per month), purchase/import a vehicle (US$30,000.00), have a citizen of Puerto Rico reside in Havana (US$60,000.00), lease an apartment (US$2,000.00 per month) hire a Republic of Cuba national as an assistant (US$10,000.00).  The first year cost would be approximately US$160,000.00.

2) Retain (US$3,000.00+ per month) a consultancy/law firm that has a presence within the Republic of Cuba and then have representatives of the Commonwealth of Puerto Rico visit as required (US$10,000.00).  The first year cost would be approximately US$46,000.00.

3) Create a reciprocal agreement with the Chamber of Commerce of the Republic of Cuba whereby it would represent the interests of the Commonwealth of Puerto Rico in the Republic of Cuba and the Commonwealth of Puerto Rico would represent the interests of the Chamber of Commerce in Puerto Rico.  Each party would contribute its staff and invoice the other party for out-of-pocket expenses.  This type of relationship might require a license from the OFAC.

Speaker Of The House Paul Ryan Wants To Rescind Starwood Hotel Management Agreement

The Honorable Paul Ryan (R- WI)
Speaker of the United States House of Representatives

ACHIEVING U.S. SECURITY THROUGH LEADERSHIP & LIBERTY
9 June 2016

Excerpts….

“The Obama administration took office with the misguided goal of conducting closer engagement with America’s adversaries.  They extended an open hand to governments in Cuba, Iran, North Korea, Russia, Syria, and Venezuela, and made damaging concessions often from a position of weakness. In the process, they have emboldened those regimes, alienated our allies, and left America in a more vulnerable strategic position. Now we must take immediate action to repair alliances and partnerships around the globe and to be clear about how the United States treats friends and foes.”

“Finally, in our own backyard we will continue to work with our friends and stem the influence of foes. Our relations with Canada and Mexico are crucial, especially in managing trans-border trade and countering trans-border threats. But we cannot blindly follow the administration’s normalization plan with communist Cuba, a regime that is fundamentally opposed to U.S. policy and that represses an entire population only 90 miles from our coastline. Instead, we will work to restore U.S. leverage, hold the Castro regime accountable, and make sure any further accommodations are met first with real concessions from the Cuban government. A first step should be to ban financial transactions with the Cuban military.”

“Our leverage to promote democracy and human rights should never be squandered. The Obama administration sought to normalize relations with the Castro regime in exchange for the promise of democratic and human rights progress in Cuba.  One year into the agreement, which included reopening the American embassy in Havana, the Castro regime is as repressive as ever. In the first two months of 2016 alone, the Cuban Commission for Human Rights registered 2,588 political arrests.  Nevertheless, President Obama reneged on his vow to refuse to travel to Cuba until human rights had improved.”

Stamford, Connecticut-based Starwood Hotels & Resorts Worldwide (2015 revenues exceeded US$5.7 billion) will be managing three properties in the Republic of Cuba (Gran Caribe-owned Hotel Inglaterra; Habaguanex-owned Hotel Santa Isabel and Gaviota-owned Hotel Quinta Avenida, which will be re-branded as a Four Points by Sheraton).  Gaviota is controlled by the Revolutionary Armed Forces of the Republic of Cuba. 

Bethesda, Maryland-based Marriott International (2015 revenues exceeded US$14 billion), which is acquiring Starwood Hotels & Resorts Worldwide, is also in discussions with Republic of Cuba government-operated companies to identify properties to manage within the Republic of Cuba.

Members of the Board of Directors of Marriott International include:

J.W. Marriott, Jr., Executive Chairman and Chairman of the Board.

From National Public Radio (NPR), 5 April 2012: “Mitt Romney has been far and away the best-funded of the Republicans running for president. In addition to his own campaign chest, he has the wealthiest superPAC backing him, Restore Our Future.  Among the donors to Restore Our Future, are hotel tycoons J.W. and Richard Marriott. Each gave $750,000 so far this campaign cycle.”

The Honorable W. Mitt Romney, Former Republican Nominee for President of the United States [Note: Representative Ryan was the Republican Nominee for Vice President of the United States with Governor Romney in 2012], Former Governor of the Commonwealth of Massachusetts

Arne Sorenson, President and Chief Executive Officer; Vice Chairman of the President’s Export Council

US Department of Commerce Requests Funding For 2016/2017 Staffing In Cuba

United States Department of Commerce
International Trade Administration
Budget Estimates, Fiscal Year 2017
Congressional Submission

Expansion of International Field

The International Field program expansion ($8.2 million of total export expansion) includes 12 Foreign Service Officers (FSOs) and 32 Locally Engaged Staff (LES) located in international markets of U.S. commercial significance to advance U.S. commercial interests, identify opportunities for U.S. exports, clarify local regulations and standards, resolve disputes with foreign local government officials, and counsel companies on the best strategies to succeed in overseas markets.

This initiative will ensure growing support to U.S. companies in core markets. Additionally, it will support the goals of continued increased exports and foreign direct investment attraction; advancement of key regional trade priorities to expand market clusters tied to the Asia Rebalance, such as India and China; Doing Business in Africa, such as South Africa; and opening a presence in Cuba (pending legislative changes that would allow trade promotion engagement). Final staffing allocations will be based on internal analysis and a planning tool developed in partnership with an external consultant.

Additional resources will also help U.S. firms to take more advantage of trade agreements, reductions in barriers to trade, and the growth of the global middle class-creating stability and ongoing market opportunities for U.S. firms. In addition, this will have immediate impacts on the future development of the highly successful U.S.-China Joint Commission on Commerce and Trade (JCCT), the more recently launched U.S.-India Strategic & Commercial Dialogue (S&CD), and the President’s Advisory Council on Doing Business in Africa (PAC-DBIA). These programs are part of GM’s [Global Markets] commercial diplomacy efforts and present medium to long-term market openings. For example, a third party contractor estimated that the maximum possible economic impact of just seven commercial diplomacy Successes in FY 2015 equaled $444 million in increased U.S. exports with an impact on total U.S. economic output of $940 million, which is sufficient to sustain or create 3,539 jobs.

Global Markets will use the additional funding to assist more clients, and serve those clients better through greater industry expertise; more in-depth assistance; and quicker response times. Global Markets succeeds when U.S. companies can compete and win in foreign markets. In FY 2014, 83% of GM clients surveyed reported that they were highly likely to recommend the agency’s services; and 73% reported that the organization’s services and assistance met their objectives.

USDA Requests US$1.5 million For 2016/2017 Staffing In Cuba

The United States Department of Agriculture (USDA) has requested an appropriation of US$1.5 million to provide payments for USDA Foreign Agricultural Service (FAS) staffing within the Embassy of the United States in Havana, Republic of Cuba.  The request was unanimously approved on 19 May 2016 by the United States Senate Committee on Appropriations; the request requires approval Committee on Appropriations in the United States House of Representatives and then approval by the United States Senate and United States House of Representatives.

From The USDA:

“With the normalization of relations between the United States and Cuba, USDA requires permanent in-country presence there to effectively carry out the USDA mission and advance U.S. agricultural and national security interests. On May 19, the Senate Appropriations Committee unanimously approved a fiscal 2017 appropriations bill that includes $1.5 million to support President Obama’s budget request for USDA staffing in Cuba.”

“In 2017, FAS will conduct its activities and programs through offices in Washington, D.C. and at 94 overseas locations, including Cuba. The overseas offices represent and advocate for U.S. agricultural interests; provide reporting on agricultural policies, production, and trade for more than170 countries; assist U.S. exporters, trade groups, and State export marketing officials in their trade promotion efforts; and help to implement technical assistance and trade capacity building programs that contribute to increased food security. The Budget provides an appropriated funding level of $197 million for FAS activities in 2017, including increased funding for International Cooperative Administrative Support Services, opening an overseas post in Cuba, and pay costs, including for locally employed staff. Agriculture will play an important role as the U.S. and Cuba expand relations, acting as a bridge that can foster cooperation, understanding, and the exchange of ideas. USDA needs an in-country presence in Cuba to cultivate key relationships, gain firsthand knowledge of the country’s agricultural challenges and opportunities, and develop programs of mutual benefit to both countries.”

The USDA has not indicated how the US$1.5 million would be distributed- salaries, housing, transportation, programs, etc.

From The FY 2017 Agriculture Appropriations Bill S. 2956

The Foreign Agricultural Service [FAS] was established March 10, 1953, by Secretary's Memorandum No. 1320, supplement 1. Public Law 83-690, approved August 28, 1954, transferred the agricultural attaches from the Department of State to the Foreign Agricultural Service.

The mission of FAS overseas is to represent U.S. agricultural interests, to promote export of domestic farm products, improve world trade conditions, and report on agricultural production and trade in foreign countries. FAS staff are stationed at 98 offices around the world where they provide expertise in agricultural economics and marketing, as well as provide attache services.

FAS carries out several export assistance programs to counter the adverse effects of unfair trade practices by competitors on U.S. agricultural trade. The Market Access Program [MAP] conducts both generic and brand-identified promotional programs in conjunction with nonprofit agricultural associations and private firms financed through reimbursable CCC payments.

The General Sales Manager was established pursuant to section 5(f) of the charter of the Commodity Credit Corporation and 15 U.S.C. 714-714p. The funds allocated to the General Sales Manager are used for conducting the following programs: (1) CCC Export Credit Guarantee Program (GSM-102), including facilities financing guarantees; (2) Food for Peace; (3) section 416b Overseas Donations Program; (4) Market Access Program; and (5) programs authorized by the Commodity Credit Corporation Charter Act including barter, export sales of most CCC-owned commodities, export payments, and other programs as assigned to encourage and enhance the export of U.S. agricultural commodities.

COMMITTEE RECOMMENDATIONS

The Committee recommends $202,645,000 for the Foreign Agricultural Service, including a direct appropriation of $196,571,000. The Committee recommendation includes $1,500,000, as requested in the budget, to establish an overseas post in Cuba.

DOT Approves First Round Of Regularly-Scheduled Commercial Flights; Havana To Be Announced Later

U.S. Transportation Secretary Foxx Approves U.S. Airlines To Begin Scheduled Service to Cuba

WASHINGTON – As part of the Obama Administration’s efforts to normalize relations with Cuba, the U.S. Department of Transportation (DOT) has approved six domestic airlines to begin scheduled flights between Miami, Fort Lauderdale, Chicago, Philadelphia, and Minneapolis/St. Paul and Cuba as early as this fall.  

“Last year, President Obama announced that it was time to ‘begin a new journey’ with the Cuban people,” said U.S. Transportation Secretary Anthony Foxx.  “Today, we are delivering on his promise by re-launching scheduled air service to Cuba after more than half a century.”

On February 16, 2016, Secretary Foxx and Department of State Assistant Secretary for Economic and Business Affairs Charles Rivkin signed a non-legally-binding arrangement to re-establish scheduled air service between the two countries.  At the time of the signing, the administration announced that scheduled service would begin later in 2016.

The carriers receiving the awards are American Airlines, Frontier Airlines, JetBlue Airways, Silver Airways, Southwest Airlines, and Sun Country Airlines.

The five U.S. cities that will receive new scheduled service to Cuba are Miami, Fort Lauderdale, Chicago, Minneapolis/St. Paul, and Philadelphia.  The nine Cuban cities are Camagüey, Cayo Coco, Cayo Largo, Cienfuegos, Holguín, Manzanillo, Matanzas, Santa Clara, and Santiago de Cuba.

Under the new arrangement, each country has the opportunity to operate up to 10 daily roundtrip flights between the U.S. and each of Cuba’s nine international airports, other than Havana, for a total of 90 daily roundtrips.  Longer term, the arrangement also provides for up to 20 daily roundtrip flights between the U.S. and Havana. 

Collectively, U.S. carriers have requested nearly 60 flights per day to Havana, thus requiring DOT to select from among the proposals.  A decision on the Havana routes will be announced later this summer. 

Interested parties may view the DOT’s decision, track the progress of the case, and view the publicly available documents online at regulations.gov, Docket DOT-OST-2016-0021.

Click Here For Complete Order

Western Union Expands Operations In Cuba

Western Union Pioneers Digital Money Transfer to Cuba

Tuesday, June 7, 2016 08:30 AM

Mobile app and online offerings solidify Western Union’s more than 15 years of serving Cuba

ENGLEWOOD, Colo. & HAVANA--(BUSINESS WIRE)-- The Western Union Company (NYSE: WU), a leader in global payments, today pioneered mobile and online money transfers to Cuba via the Western Union app and wu.com in the U.S., paving the way for a new generation of tech-savvy customers to move money into Cuba in minutes.*

The move solidifies Western Union’s more than 15 years of serving Cuba and reflects its commitment to bring access to its global omni-channel strategy to the Cuban diaspora in the United States.

Consumers using wu.com or the mobile app in the U.S. can select the new “Send to Cuba” option to send and track their money transfers, until they are paid out in minutes in local currency (Cuban convertible pesos) at Western Union’s extensive network of 420 Agent locations in Cuba. Western Union is represented across every one of Cuba’s 16 provinces and 168 municipalities through its principal Agent, Fincimex.

“Western Union has been helping Cubans in the U.S. to send money to their loved ones back home for more than 15 years,” said Odilon Almeida, Western Union president of the Americas and European Union. “Pioneering a new way for our U.S. customers to send money into Cuba via wu.com and our mobile application is yet another milestone in servicing this historic island nation.”

“We expedited activation of our digital money transfer convenience for senders in the Cuban diaspora as we know first-hand the value of remittances to the economic security of families and funding of small businesses. Expanding accessibility and moving money in minutes is what underpins our entire omni-channel strategy.”

Western Union’s four-star rated1 mobile app for iOS and Android is fast and free to download. The app’s streamlined design makes transfers easy to make and track to nearly 500,000 agent locations worldwide, including 420 in Cuba. For convenience, contact information can be saved on the app for quick repeat sending.2

Western Union has now enabled consumers in 29 countries to send money transfers to Cuba.

“Digital money transfer is an area of focus across the world for Western Union led strongly by the United States. More than 55 percent of our total wu.com outbound money transfer services now originate via mobile,” Almeida explains.

Speeding up the pace of digital money transfer into Cuba is good news for both senders and receivers. Hispanics are more likely to use their mobile phones more often than non-Hispanics to transfer money to someone else.3 Remittances to Cuba from all countries were estimated at $1.2 billion in 2013 and 2014, according to a February 2015 report by the Inter-American Dialogue. The majority of money transfers to Cuba are from the U.S., where preferences for mobile and online money transfer services are increasing, especially by younger consumers (under 35 years old).4

According to the Economic Commission for Latin America and the Caribbean (ECLAC), remittances currently reach 62 percent of Cuban households, sustain about 90 percent of the retail market and provide thousands of jobs.5 “Remittances [to Cuba] are the major source of capitalization for small businesses catering to the growing visitor demand,” notesGuillermo J. Grenier, Ph.D. Professor of Sociology, Florida International University and principal investigator of the FIU Cuba Poll, which has been measuring the relationships between the Cuban diaspora in Miami and US/Cuba policy since 1991.

Consumers are looking for different options to send money, and Western Union offers fast and easy to use digital platforms to meet their needs. Western Union has been investing in a technology backbone to improve the customer experience and has optimized money transfer systems to link cash and digital to enhance speed, reliability and convenience, so customers can have choices for sending money to Cuba and the rest of the world.

* Date available will be displayed on receipt. Service and funds availability depends on certain factors including the Service selected, the select ion of delayed delivery options, special terms applicable to each Service, amount sent, destination country, currency availability, regulatory issues, consumer protection issues, identification requirements, delivery restrictions, agent location hours, and differences in time zones (collectively, “Restrictions”).

About Western Union

The Western Union Company (NYSE: WU) is a leader in global payment services. Together with its Vigo, Orlandi Valuta, Pago Facil and Western Union Business Solutions branded payment services, Western Union provides consumers and businesses with fast, reliable and convenient ways to send and receive money around the world, to send payments and to purchase money orders. As of December 31, 2015, the Western Union, Vigo and Orlandi Valuta branded services were offered through a combined network of over 500,000 agent locations in 200 countries and territories and over 100,000 ATMs and kiosks, and included the capability to send money to over one billion accounts. In 2015, The Western Union Company completed 262 million consumer-to-consumer transactions worldwide, moving $82 billion of principal between consumers, and 508 million business payments. For more information, visit www.westernunion.com.

Minister of Agriculture Of The Republic Of Cuba Visits The United States

H.E. Gustavo Rodriguez Rollero, Minister of Agriculture of the Republic of Cuba, visited the United States from 1 June 2016 to 3 June 2016.  He traveled to Washington, DC, and to Iowa, where he accompanied The Honorable Thomas Vilsack, United States Secretary of Agriculture.

Agriculture Secretary Tom Vilsack to Host Cuban Agriculture Minister, Delegation in Iowa

Des Moines, June 3, 2016 – FRIDAY, Agriculture Secretary Tom Vilsack will host Cuban Minister of Agriculture Gustavo Rodriguez Rollero and a delegation of Cuban officials in Iowa. Since President Obama announced that the United States would resume diplomatic ties with Cuba, Secretary Vilsack has traveled twice to the island and will now welcome the Cuban minister to the U.S. for a tour of Iowa’s diverse farms, agribusinesses, and research facilities. Vilsack will hold a press availability at Aaron Heley Lehman’s Family Farm in Polk City, Iowa on Friday morning.

Both President Obama and Secretary Vilsack have recognized that food and agriculture can serve as a bridge to foster collaboration between the two countries, and both Cuban and American farmers and ranchers have expressed interest in expanding commercial opportunities. To strengthen this bridge, on his second trip to Cuba in March, Vilsack signed a Memorandum of Understanding with Minister Rodriguez that establishes a framework for sharing ideas and research between the two countries. In addition, Vilsack announced that USDA will allow the 22 industry-funded Research and Promotion Programs and 18 Marketing Order organizations to engage in cooperative research and information exchanges with Cuba about agricultural productivity, food security and sustainable natural resource management.

While most U.S. commercial activities are prohibited, the Trade Sanctions Reform Act (TSRA) of 2000 permits the export of U.S. agricultural commodities, though U.S. agricultural exports to Cuba are limited by U.S. restrictions on government export assistance, cash payments, and extending credit. U.S. agricultural exports have grown significantly since trade was authorized in 2000. In 2014, Cuba imported over $2 billion in agricultural products including $300 million from the United States. However, from 2014 to 2015, U.S. agricultural exports to Cuba fell 48 percent to $148.9 million, the lowest since 2002, giving the United States just a 10 percent market share as Cuba's fourth largest agricultural supplier, behind the EU, Brazil, and Argentina.