In a matter of weeksCuba expected to join a multilateral fund soon• Page 19
Havana Club & moreCuba’s vigorous defense of trademarks •Page 21
Ferry to HavanaGerman company joins the Florida-Havana race• Page 27
Handing another trophy to the Mariel Special Development Zone and sending a signal to fellow
multinationals, Unilever NV established a joint venture with a state company to manufacture personal hygiene and home care products in Cuba.
Unilever Suchel S.A. is the 11th enter-prise opening shop at Mariel, and the sec-ond multinational. Late last year, Brascu-
FEBRUARY 2016| VOL. 24, NO. 1
CUBAN BUSINESS AND ECONOMIC NEWS
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ba, an existing joint venture involving the Brazilian subsidiary of British American Tobacco, announced it would open a $120 million cigarillo manufacturing plant at Mariel by 2018.
The agreement is a comeback of the British-Dutch consumer goods giant to the Cuban market, after ending an 18-year presence in Cuba in 2012 over control is-sues (see Analysis, page 5). The return of
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Economy
Multinational returns to Cuba, commits to Mariel | by JOHANNES WERNER
Rendering of the Mariel
Special Development
Zone
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Unilever removes doubts about Cuba, suggests Brookings Institution analyst Richard Feinberg.
“The 2012 collapse of the Unilever contract re-newal negotiations adversely affected investor per-ceptions of the business climate,” Feinberg writes in his analysis for Cuba Standard. “If the Cuban government could not sustain a good working rela-tionship with Unilever, a highly regarded, marquée multinational corporation with a global footprint, what international investor — at least one operat-ing in the domestic consumer goods markets — could be confident of its ability to sustain a profit-
able long-term operation in Cuba?”The Unilever Suchel S.A. joint venture with Cu-
ba’s Intersuchel S.A. plans to invest $35 million and build a plant that manufactures Sedal sham-poo, Rexona deodorant, Omo detergent, Lux soap, and Close-Up toothpaste at the industrial zone west of Havana, said Fabio Prado, Unilever presi-dent Mexico & Caribbean, according to a Cuban foreign ministry bulletin.
Prado and Pedro Fraga, CEO of Intersuchel,
Multinational (1)
Companies
Brazilian multinational lays out its Cuba plans
G rupo Odebrecht subsidiary Companhia de Obras e
Infraestrutura (COI) will open an operation at the Mariel Special Development Zone to offer construction and engineering services to other Mariel tenants, the Cuba director of the Brazilian construction, chemical and agro-industry conglomerate told official daily Granma in an interview.
Odebrecht would also like to build a plastics manufacturing plant at Mariel, said Mauro Hueb, superintendent-director for Odebrecht operations in the island.
Without the Brazilian multinational, Mariel may not have been built. According to Hueb, Odebrecht came to Cuba through then-President Luiz Inácio ‘Lula’ da Silva. The company then helped Cuba obtain the Brazilian government loan that made the Mariel Zone
possible, trained nearly 8,000 Cuban workers, and built the container port that anchors the Mariel Special Development Zone.
The construction services entity at Mariel will be 100% owned by his company, Hueb said. The entity will
also offer financing, feasibility studies, startup, and assisted operation. Construction of the offices, a mechanical workshop, and a concrete and steel yard at Mariel, and the import of equipment are planned to begin in the first half of this year.
Following Unilever NV and a unit of
British American Tobacco, Odebrecht is the third multinational starting operations at Mariel.
Odebrecht is also applying to set up a plastic resin production company at Mariel. That company could be either 100% privately owned or a joint venture with a Cuban state company, Hueb said.
Hueb said his company eventually wants to offer all of its lines of business in Cuba, and that he hopes the application process in Cuba will be completed.
Grupo Odebrecht is also the contractor for construction of a new terminal at José Martí International Airport at Havana that will double capacity for international flights. Construction on that project will begin “soon,” Hueb said.
In a trailblazing agribusiness venture, Odebrecht’s COI is managing a sugarmill in Cienfuegos province.
—Johannes Werner g
—Continued on page 3—
Mauro Hueb Photo Granma/Ismael Batista
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tract with Suchel. When the 15-year old contract came up for renegotiation, Cuba sought a con-trolling 51% and wanted the operation to export at least 20% of its output, says analyst Feinberg.
This time, the Unilever joint venture seems to be producing for the domestic market only. Unile-ver spokespeople did not respond to questions by Cuba Standard.
Five businesses at Mariel set up by smaller for-eign companies are 100% privately owned.
“We are very satisfied,” Prado said, according to the Cuban foreign ministry bulletin, adding that Cuba’s new foreign investment law and the benefits offered by the Mariel Special Development Zone have created the right conditions to “build power-ful projects on more solid footing”.
“What is new is the willingness of Cuban au-thorities to accede to the corporate requirements of the foreign investors,” Feinberg writes. “Finally, the Cubans appear to grasp that Cuba is a price-tak-er, and that it must fit into the global strategies of their international business partners. Certainly, Cuban negotiators can strike smart deals, but they cannot dictate the over-arching rules of the game.”
Unilever, which generated worldwide sales of $54 billion last year, also owns the Knorr and Ben & Jerry’s food brands.
BrascubaMeanwhile, the Brascuba Cigarrillos S.A. joint
venture, operated by a Brazilian subsidiary of Brit-ish American Tobacco plc, plans to build
signed the joint venture agreement at the offices of the Mariel Special Development Zone in the pres-ence of Dutch Foreign Trade and Development Minister Lilianne Ploumen. During her visit to Cu-ba, the minister was accompanied by a 77-member business delegation.
“Investing in a state-run economy such as Cuba is a long-term undertaking,” Ploumen said, accord-ing to a Dutch government release. “Particularly for the participating midsize- and small companies, this was an orientation mission. It’s exceptional that the first contracts could already be signed, but I expect more results in the longer term.”
Prado said that the joint venture plant is expect-ed to start operations in late 2017 and will employ 300 to produce for the domestic market, according to the foreign ministry bulletin.
As Cuban officials have announced before, Uni-lever likely will have to face some foreign compe-tition in the Cuban market. An executive of Thai Binh Investement Trading Corp. announced the
Vietnamese company plans to build a plant at Mariel to produce detergent and diapers.
A comeback on different termsFor Unilever, which left the island over issues
of control, this is a comeback on different terms. The joint venture at Mariel is 60% owned and con-trolled by Unilever; only 40% is owned by state partner Intersuchel. Until recently, the prevailing custom was that Cuban state companies had to be majority partners in joint ventures.
From 1994 to 2012, Unilever operated in Cuba under an international economic association con-
Multinational (2)
“Finally, the Cubans appear to grasp that Cuba is a price-taker,
and that it must fit into the global strategies of their international
business partners.”.
—Continued from page 2—
Unilever-Suchel signing ceremony at Mariel Photo Granma
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a $120 million plant at Mariel. The 20-year old joint venture will move its existing operations to the Zone, expanding production, offering more product lines, and increasing exports, Mariel Zone CEO Ana Teresa Igarza said in an interview with official daily Granma. Due to Brascuba’s good track record, the Cuban government agreed to ex-tend the joint venture by 40 years, instead of the current 20, she said.
“Brascuba is setting out to link up with domes-tic agribusiness and provide technical assistance, to increase production of Virginia tobacco, the raw material for blond cigarettes,” Igarza said.
More to comeIn the wake of the marquee Unilever deal, more
are in the making. Some 40 new foreign invest-ment projects are currently under negotiation, ac-cording to Deborah Rivas, an official with the Cu-ban Foreign Trade and Investment Ministry. She said she expects Cuban authorities to approve the new projects “in the short term”. g
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So far, these are the two biggest investments in the much-trumpeted Cuban effort to attract foreign investment, outside of traditional
tourism. Yet, neither investment is really new. Uni-lever had been operating in Cuba since the mid-1990s, only to exit a few years ago in a contract dispute with the Cuban authorities. Brascuba will be moving its operations from an existing factory to the ZED Mariel site.
What is new is the willingness of Cuban au-thorities to accede to the corporate requirements of foreign investors. Finally, the Cubans appear to grasp that Cuba is a price-taker, and that it must fit into the global strategies of their international
The global consumer products company Unilever Plc announced a $35 million investment in Cuba’s Special Development Zone at Mariel. Late last year, Brascuba, a joint venture with a Brazilian firm, Souza Cruz, owned by the mega-conglomerate British American Tobacco (BAT), confirmed it would build a $120 million facility in the same location.
Analysis
Cuban authorities show a willingess to accede to the corporate requirements of foreign investors
business partners. Certainly, Cuban negotiators can strike smart deals, but they cannot dictate the over-arching rules of the game.
Cuba still has a long way to go before it reaches the officially proclaimed goal of $2.5 billion in for-eign investment inflows per year. Total approvals last year for ZED Mariel reached only some $200 million, and this year are officially projected to reach about $400 million. For many potential in-vestors, the business climate remains too uncer-tain, and the project approval process too opaque and cumbersome. But the Brascuba and Unilever projects are definitely movements in the right di-rection. 4
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New realism (1)
From collapse to comebackIn 2012, the 15-year old Unilever joint-venture
contract came up for renegotiation. No longer sat-isfied with the 50/50 partnership, Cuba sought a controlling 51%. Cuba also wanted the JV to export at least 20% of its output.
But Unilever feared that granting its Cuban partner 51% would yield too much management control and could jeopardize brand quality. Uni-lever also balked at exporting products made in Cuba, where product costs were as much as one-third higher than in bigger Unilever plants in other Latin American countries.
The 2012 collapse of the Unilever contract re-newal negotiations adversely affected investor perceptions of the business climate. If the Cuban government could not sustain a good working re-lationship with Unilever — a highly regarded, mar-quée multinational corporation with a global foot-print — what international investor (at least one operating in the domestic consumer goods mar-kets) could be confident of its ability to sustain a profitable long-term operation in Cuba?
In the design of the new joint venture, Cuba has allowed Unilever a majority 60% stake. Fur-thermore, in the old joint venture, Unilever exec-utives complained that low salaries, as set by the government, contributed to low labor productivity. In ZED Mariel, worker salaries will be significantly higher: firms like Unilever will continue to pay the same wages to the government employment enti-ty, but the entity’s tax will be significantly smaller, leaving a higher take-home pay for the workers. Hiring and firing will remain the domain of the official entity, however, not the joint venture.
Unilever is also looking forward to currency unification, widely anticipated for 2016. Previously, Unilever had enjoyed comfortable market shares in the hard-currency Cuban convertible currency (CUC) market, but had been largely excluded from the national currency markets, which state-owned firms had reserved for themselves. With currency unification, Unilever will be able to compete head-to-head with state-owned enterprises in a single national market.
Similarly, Brascuba will benefit from the new wage regime at Mariel and, as a consumer prod-
ucts firm, from currency unification. At its old location, Brascuba considered motivating and re-taining talent to be among the firm’s key challeng-es; the higher wages in ZED Mariel will help to at-tract and retain high-quality labor.
Good time for expansionBrascuba believes this is a good time for expan-
sion. Better-paid workers at Mariel will be well mo-tivated, and the expansion of the private sector is putting more money into consumer pockets.
The joint venture will close its old facility in downtown Havana, in favor of the new facility at Mariel, sharply expanding production for both the domestic and international markets (primarily, Brazil).
A further incentive for investment today is the prospect of the lifting of U.S. economic sanctions, even if the precise timing is impossible to predict. Brascuba estimated that U.S. economic sanctions have raised its costs of doing business by some 20%. Inputs such as cigarette filters, manufactur-ing equipment and spare parts, and infrastructure such as information technology, must be sourced from more distant and often less cost-efficient sources.
Another sign of enhanced Cuban flexibility: neither investment is in a high technology sector, the loudly touted goal of ZED Mariel. A manufac-turer of personal hygiene and home care product lines, Unilever will churn out toothpaste and soap, among other items. Brascuba will produce ciga-rettes. Cuban authorities now seem to accept that basic consumer products remain the bread-and-butter of any modern economy. An added benefit: international visitors will find a more ready supply of shampoo!
The Unilever and Brascuba renewals suggest a new realism in the Cuban camp. At ZED Mariel, Cuba is allowing their foreign partners to exert management control, to hire a higher-paid, bet-ter motivated workforce, and it is anticipated, to compete in a single currency market. And thanks to the forward-looking diplomacy of Raúl Castro and Barack Obama, international investors are al-so looking forward to the eventual lifting of U.S. economic sanctions. g
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The power grid: In search of new options
By the
Numbers
Havana-born Armando Portela has a Ph.D. in
geography from the Soviet Academy of
Sciences
tribution network (4.16 kV and 13.8 kV).Years of poor maintenance, deferred up-
grades, frequent damage from hurricanes, and even widespread theft of parts and wires,
left this relatively dense network (1.8 miles of power lines per square mile of land) in
needs of an overhaul. The aging grid is not just vulnerable to the elements, but it is also out-dated, inefficient and unreliable.
Investment in power transmission has increased over the past few years; nevertheless neglect and aged structures result in failures and power inter-ruptions. In the event of an economic reanimation
as U.S.-Cuba economic relations improve, any increase in power consumption by
industry or residential custom-ers would be hindered by the
bad shape of the power grid, making an
4
Graphic/maps: Armando Portela
| by ARMANDO PORTELA
Connecting all nine major electric pow-er plants and a number of smaller gen-erators, Cuba’s power transmission
network reaches almost all corners of the main island and the Isle of Youth. It ex-tends nearly 10,000 miles, including over 1,700 miles of 220 kV power line — the backbone of the electric power system —, some 2,600 miles of 110 kV power transmission lines, and just un-der 5,800 miles of sub-transmission 33-kV power lines. There are nearly 38,500 miles of dis-
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Private jet charter firm offers Cuba connectionCalifornia-based JetSuite intro-duced private-jet charter service from 16 U.S. airports to Havana.
Passengers can charter a six-passenger JetSuite Edition CJ3, or four-passenger Phenom 100.
Due to U.S. restrictions, pas-sengers travelling to Cuba are re-sponsible for securing their own permissions to travel.
Airline connects Santo Domingo, HavanaDominican airline Pawa Domini-cana on Feb. 5 began flying from Santo Domingo to Havana.
Pawa started operations from a hub at Aeropuerto Internacional de las Américas in Santo Domin-go early last year with an invest-ment of $40 million.
Power grid (1)»
Bri
efs
Copa Air to begin flights to HolguínCopa Air will begin twice-a-week flights to Holguín in eastern Cuba in June, the Panama-based airline announced.
The first flight from the airline’s hub in Panama City to Holguín is scheduled to take off June 21.
This is the third destination in Cuba for Copa, which also offers seven daily flights to Havana and four weekly flights to Santa Clara.
upgrade urgently necessary.Weather-related events caused major power
outages over the past few years, while flow is-sues on the grid can overload the system or stop the service to large areas, as it occurred during a massive outage in 2012 originating in a faulty segment of the grid in central Cu-ba that left millions of customers without power.
There are some steps the government is taking to cope wit the problem.
State utility Unión Eléctrica for instance is speeding a $50 million investment to upgrade Ha-vana’s aging power grid, which has been blamed for recent power outages in some neighborhoods, including the tourism hot spot Old Havana and the government center of Plaza de la Revolución.
“This project was envisioned to be carried out over 10 years, but the outages have led us to do it in three years,” utility Director Ricardo Mangana said on national TV recently.
Also, a year ago the newest and most advanced 220 kV sub-station was connected to the national grid at Tuinicú, near Sancti Spíritus, 215 miles east of Havana. This sub-station was built with Chinese technology at a cost of 20 million pesos, along with five other 110 kV sub-stations in this province.
At a cost of $1.3 million, the Empresa Eléctrica in Santa Clara readied in 2010 a new 110 to 13.8 kV substation to stabilize the supply to the 210,000 inhabitants of the city.
A 12.4 miles long, 110 kV underground trans-
mission line in Varadero should be completed by the end of 2016 at a cost of 85 million pesos.
Work started in 2013 and includes three sub-stations serving 45,000 hotel rooms.
According to the World Bank, energy loss in Cuba’s grid accounted for 16% of
delivered electric power in Cuba in 2012, a high ratio by any standard. The massive instal-lation of small generating clusters (grupos elec-trógenos) after 2006 contributed to a cut in losses to 14%, but these systems rely on expensive and inefficient diesel and fuel oil, and the decentralized units are costly to operate.
Most of the large thermoelectric power plants are located close to major cities and industrial hubs, For instance, within a 60-mile radius from Havana there is an installed capacity of 1,360 megawatts. But linking all thermal plants to create a single national grid, an idea of the Soviet-era economy, became a heavy burden once the cheap oil supplies ceased to arrive from the former partner.
For decades the growth, might and reach of the national electric grid was the pride of the nation. Today, however, Cuba has little choice but to adapt to a new reality and take advantage of slowly open-ing opportunities. The heavily subsidized Sovi-et-style behemoth is simply inoperable and cannot be rebuilt to its former industrial grandeur. Other options, including renewable energies, local grids, and the “smart grid” have to be considered. g
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Obama administration opens more niches for U.S. business | by JOHANNES WERNER
Politics
In another round of the grad-ual easing of U.S. sanc-tions, the Obama ad-
ministration published amended regulations ef-fective immediately that allow U.S. companies to sell a broader range of goods to Cuba — including on credit and to state com-panies — and permit air-lines to interact with Cuba on a broader base.
NIbbling away at U.S. sanctions
In the third round of easing, the most relevant changes for businesses include:
•New types of export goods: BIS will examine license applications for exports of “items to meet the needs of the Cuban people” on a case-by-case basis, including sales to state companies. BIS lists as examples “items for agricultural production; artistic endeavor (including the creation of public content, historic and cultural works and preservation); education; food processing; disaster preparedness, relief and response; public health and sanitation; residential construction and renovation; public transportation; and the construction of infrastructure that directly benefits the Cuban people (e.g., facilities for treating public water supplies and supplying energy to the general public)”.
•Agriculture sales: BIS will now “generally approve” license applications for sales of agricultural goods not included in the exemptions list, such as insecticides, pesticides and herbicides.
•Payment for exports and financing: U.S. banks are allowed to provide financing, such as letters of credit, for new types of exports. However, statutes force OFAC to continue enforcing restrictions on sales of agricultural goods, Treasury said in a press release. Agricultural sales still have to be cash-in-advance or financed through a third-country letter of credit, payable upon arrival of goods at a Cuban port.
•General business travel: OFAC allows U.S. companies application-free travel to Cuba for export-related activities such as market research, marketing, sales or contract negotiations, accompanied delivery, installation, leasing, or servicing.
•Telecommunications: BIS says it will now “generally approve” license applications for exports of telecommunications items that “improve communications to, from, and among the Cuban people”.
•Air travel: BIS promises to “generally approve” license applications for items related to international airline operations, including the export of aircraft leased to Cuban state airlines. “The entry into blocked space, code-sharing, and leasing arrangements to facilitate the provision of carrier services by air, including the entry into such arrangements with a national of Cuba, will be authorized,” the OFAC-BIS press release said.
•Media, film and art production: OFAC now allows all professional travel related to news gathering, film production, music production and the like, as well as the employment of Cuban nationals, and the remittance of “royalties or other payments” in connection with media or arts activities.
•Conference and event organizers: OFAC now allows application-free travel for professionals to organize conferences, music events, athletic events and the like in Cuba.
Source: BIS, OFAC
After easing measures in January and September
2015, this is the third time the White House amends U.S. sanctions regula-tions since the normal-ization announcement on
Dec. 17, 2014.In the absence of substan-
tial movement in the U.S. Congress towards easing or lifting the embargo, the measure suggests President Barack Obama, during his last year in office, will continue to use his exec- u
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U.S. easing (1)
utive power to open more channels for U.S.-Cuba interaction.
Effective immediately, the De-partment of Commerce’s Bureau of Industry and Security (BIS) amended Export Administration Regulations (EAR), allowing some U.S. exports be-yond food and agricultural products. U.S. com-panies can now export goods and services used for disaster preparedness, education, agricultural production, artistic activities, food processing, and public transportation, including to state compa-nies. The Treasury Department’s Office of Foreign Assets Control (OFAC) amended Cuban Assets Control Regulations (CACR), removing restric-tions on payment and financing terms for autho-rized exports, and allowing sales to Cuban state companies.
Praise and criticism“After 50 years of regula-
tory inertia, I am pleased to see a sustained effort to ease antiquated travel and trade re-strictions toward Cuba,” said Sen. Jeff Flake (R-Az), a long-time advocate of normaliza-tion. “Hopefully, such prog-ress in the effort to normalize U.S.-Cuba relations spurs Congress to consider more permanent solutions, starting with legislation to restore the freedom of U.S. citizens to travel to Cuba.”
But one close observer of U.S.-Cuba policy says that Obama didn’t go far enough.
“Despite opening these important new avenues for business, the regulations did not go nearly far enough to calm the fears and remove the regula-tory obstacles that still impede U.S. business deals with Cuba,” American University political scientist William M. LeoGrande wrote in an analysis pub-lished in Foreign Policy magazine. “Without some notable commercial successes, the business com-munity could lose interest in Cuba and in lobbying Congress to lift the embargo, leaving Obama’s nor-malization project dead in the water.”
“Like the dog that didn’t bark, sev-eral anticipated regulatory changes were left out of the new package. The prohibition on U.S. investments (ex-
cept in telecommunications) remains intact, as does the prohibition on almost
all imports from the island, rendering trade with Cuba a one-way street that the government in Ha-vana is loathe to accept as normal.”
The politics of easing“Just as the United States is doing its part to re-
move impediments that have been holding Cubans back, we urge the Cuban government to make it easier for its citizens to start businesses, engage in trade, and access information online,” National Se-curity Council Spokesperson Ned Price said in a
statement.Obama is considering a
visit to Cuba early this year.Commerce Secretary
Penny Pritzker described the new measures as an out-come of a “regulatory dia-logue” with the Cuban gov-ernment that began during her visit to Cuba. In Octo-ber, Cuban authorities made it clear that purchases from U.S. companies were impos-sible under existing U.S. re-strictions.
“Following the first-ever U.S.-Cuba regulatory dialogue and my fact-find-ing trip to Cuba in October, we have been working tirelessly to maximize the beneficial impact of U.S. regulatory changes on the Cuban people,” she said in a prepared statement.
The first official reactions from Cuba were mixed. While applauding the expansion of the types of export goods, the permission of some credit, and the recognition of some state entities as trade partners, an article in Communist Party dai-ly Granma pointed out that the measures specifi-cally block U.S. interaction with many other state companies and entities.
“The new package of measures by the u
‘No word on dollar use’: Amended OFAC regulations
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U.S. easing (2)
Obama administration is another step ahead in bilateral relations and con-firm that it’s possible to continue sucking oxygen from the blockade that weighs on Cuba, by eliminating restrictions that are not codified by law,” the article said. “However, there’s still a path to walk, since the new measures don’t say a word about the possibility of the use of dol-lars in Cuba’s international financial transactions, something that without doubt raises the price and obstructs all business in our country.”
Implications for U.S. businessU.S. businesses cautiously applauded the steps.“There’s nothing in the new regulations that
contributes or detracts from the ability to start and operate ferry service,” said Bruce Nierenberg of Florida-based United Caribbean Lines, one of a half-dozen entrepreneurs seeking to establish Florida-Havana ferry service. “Allowing easier ex-port-import conditions helps the cargo traffic po-tential for ferry service.”
However, continuing limitations make large-scale business very difficult.
For one, in a major disappointment for U.S. agribusinesses which have been lobbying hard to lift sanctions, financing and payment restrictions still apply to agricultural exports, which will most likely continue to make up the bulk of U.S. sales to Cuba.
Also, companies seeking to sell other goods and services have to apply for a license on a case-by-case base, pro-viding proof their exports meet “the
needs of the Cuban people”. All sales to state companies that would “primarily
generate revenue for the state” will still be de-nied, OFAC and BIS said in a joint press release, citing as examples sales to state companies in the tourism industry and “those engaged in the ex-traction or production of minerals or other raw materials”.
Meanwhile, an article by semi-official news agency Prensa Latina points out how the new regulations still keep trade essentially one-way, and explained how the continued U.S. crackdown against financial institutions makes credit impos-sible.
“Although the new regulations march in the right direction, they maintain the prohibition for Cuba to use the dollar in international transac-tions, which affects even the concession of loans to Cuban entities to buy products in [the United States]. To pay for them, it would be necessary to use third-country banks with different currency, at additional cost,” the article said. “The high penal-ties by the U.S. government against banks of other countries prompt financial institutions to reject doing business with Cuba, because they fear possi-ble punishment, even if they are authorized by the Treasury Department.” g
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u
During Raúl Castro’s four-day stay in Paris, France and Cuba signed a series of agree-ments that further open the doors to invest-
ment on the island and ease Cuba’s reintegration into international finance.
This was the first official visit ever of a Cuban president to France and to a European Union member nation.
The main document is an “economic road map” that lays out long-term cooperation in tourism, transportation, infrastructure, urban develop-ment, environment, energy, and agri-food. The two sides also created a euro 200 million ($218 million) fund for development projects on the island using proceeds from a recent agreement that settles old Cuban debt with France. Finally, France will sup-port Cuban efforts to control the Zika virus in the Caribbean region.
France and Cuba agree on economic ‘road map’, $218m development fund | by JOHANNES WERNER
Economy
Pré
sidence
de la R
épublique
“In sum, all areas are now open for cooperation,” French President François Hollande said in a joint press conference after a one-on-one meeting with Castro and signing ceremony at the Élysée palace in Paris.
Hollande suggested French companies should now be “compensated” for their long presence in Cuba, after they had overcome many difficulties.
“We want to accompany Cuba in the track they have chosen, towards opening and development, an opening that passes through the econom-ic realm,” Hollande said. “French enterprises are present in Cuba, and France has been one of Cu-ba’s main trade partners for many years. I thank the companies that have located there even when it was difficult to trade with Cuba and invest there, considering the international constraints. These companies wanted to make a choice, and
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I f nothing else, President Obama’s overtures have caused Cuba’s
international trading partners to take another look at the island’s economy, chief among them France. French President François Hollande
and a sizable delegation visited Havana last May; Raúl Castro reciprocated with a trip to Paris this month.
The positive tone surrounding trade relations between Cuba and France, with
various pre-existing joint ventures such as Pernod Ricard (Havana Club rum) and the more recent announcement by shipping giant CMA CGM to build a logistics hub at Mariel, has given rise to French trade consultants dedicated to expanding their country’s presence in Havana.
The longest-standing player in the French consulting scene is Devexport. The Paris-based company run by Perrine and Fabien Buhler has been accompanying many French companies to Cuba since the late 1980s. Since opening a seven-employee office in the Miramar district of Havana in 1995, Devexport has specialized in exports
of industrial equipment, packaging material, and raw material for energy, pharmaceutlcal, railroad, agro-industry, mining, and water projects. Their client list includes large French companies such as Alstom, SNCF, Bouygues and Schneider; the company has participated in recent French trade delegations, and is a regular at the Havana International Fair.
The Buhlers have been joined by at least
France (1)
now that choice offers them a develop-ment situation where it is possible to compensate them.”
“France has been, is, and will con-tinue to be an important economic partner of Cuba,” Castro said during an official dinner later. “French com-panies accompanied us in the most difficult moments, resisting extraterri-torial pressure derived from the unjust U.S. blockade that has been maintained for more than half a century, and they have participated in the economic and social development plans of our coun-try. Important French companies have participated in the growing tourism sector, in the worldwide distribution of the classic Havana Club rum, and in the development of vaccines against infectious diseases, which demonstrates the vast opportunities for scientific and commercial coop-eration in research and development.”
The next day, Vice President Ricardo Cabrisas, Foreign Trade and Investment Minister Rodrigo Malmierca, and Mariel Zone General Director
Ana Teresa Igarza pitched investment opportu-nities and the Mariel Special Zone to 120 French executives at the Paris headquarters of business association MEDEF.
Hollande pointed out that France played a key role in Cuba’s Dec. 12 agreement with the Paris Club of creditor nations that settles debt
Malmierca, pitching opportunities in Cuba to 120 French executives
Court
esy
MED
EF
French consultants expand in Cuba
Companies
Perrine and... ... Fabien Buhler
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two competitors.Gefyra SAS, whose offices are in
Paris and Strasbourg, France, has a track record of opening difficult markets in Africa. According to
Martin Ruiz, Gefyra’s executive in charge of ventures in Cuba, his firm feels confident about doing the same with firms planning to enter Cuba.
“Gefyra SAS provides consultancy
services for international business development in complex markets,” said Ruiz. “Our methodology has proven results in difficult markets like Mali, where we have helped more than 70 French companies to develop their activities since 2013. At the moment, we are also working with the Congolese government on similar projects. Therefore, we are convinced that our methodology could be reproduced in Cuba in order to help our clients penetrate the Cuban market.”
Ruiz says that his firm plans to provide Cuba trade consulting services — such as setting up meetings with Cuban decision-makers, or market research — to French companies both large and small.
“We have strong experience in walking (small and medium enterprises) through their growth and international development, but we have also worked with multinational
companies like Bouygues, Alcatel and Airbus,” he said.
Gefyra has partnered with a French businessman with “five years of successful business development in Cuba” and 20 years of exposure to the island, Ruiz said.
Another consulting firm that has stepped forward recently is Habana Développement, which has raised its profile though business networking site LinkedIn.
“We have worked for years on investments in Cuba, but, due to the recent news, we decided to communicate more,” said Habana Développement co-founder François Viges. “This is not an ‘opportunistic’ company created in response to the diplomatic circumstances. Our network is already developed in Havana.”
Paris-based Havana Développement works with a partner company that has been based in Cuba for 20 years. Partner and co-founder Didier-Pier Florentin specializes in healthcare and biotechnology; Viges is focused on tourism and telecommunications.
The emergence of the consultancies comes at a time when attention for French exports to Cuba is rising. Last May, economist Daniela Ordonez of Paris-based trade credit insurance firm Euler Hermes published an economic study predicting that — while the United States will be the “main winner” — French exports will rise by $100
million a year until 2020.Some French companies are
already making their moves.DMS Group, a medical imaging
equipment company, is “finalizing an agreement” with a Cuban state company for distribution of its products, CEO Samuel Sancemi told newsmagazine L’Express.
“Our objective is to position ourselves before the U.S. arrives,” he said.
French companies that accompanied Hollande during his May 2015 visit are also making plans.
Montpellier-based water treatment firm SOMEZ (Société Méditerranéenne des Zéolithes) wants to form partnerships to commercialize their technology in Cuba, and from that base in the rest of Latin America, Managing Director Wilfrid Balmer told L’Express.
“Besides, Cuba is a country rich in zeolites, the crystal we use in our equipment,” Balmer said. “A local presence allows us to have access to raw material deposits.“
—Vito Echevarría g
France (2)
dating back to Cuba’s 1987 default.Castro recognized that the debt agreement cre-
ates “favorable conditions in financial relations and the execution of new projects” and opens access to mid- and long-term financing.
The Paris Club of creditor nations agreed to forgive Cuba $8.5 billion of a $11.9 billion debt, granting easy terms for payment of the remainder. As part of the Paris Club agreement, France will forgive $4 billion in accumulated interest in a grad-
ual way as Cuba will pay France $240 million of its $470 million in principal and original interest debt. France also agreed to convert $218 million into new development projects in Cuba.
“Today, thanks to the elimination of this debt, there can be another, even richer, accord between France and Cuba,” the French president said. “We want to go further, on a bilateral level, and we will progressively pardon the accumulated interest as Cuba reimburses the arrears. France will
Ruiz
‘French Consultants’, from previous page
Employees at Devexport Miramar office
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France (3)
go farther than what was agreed in the Paris Club framework.”
“We will also convert the debt that held us up to make it useful for investments, to accelerate French investment projects in Cuba,” Hollande said about the euro 200 million French-Cuban fund.
The French development agency AFD is working to identify projects and present them this year. In a memorandum of understanding between AFD and Cuba’s Foreign Trade and Investment Ministry, the two sides agree to begin negotiations for AFD to establish an office in Havana, study possible proj-
ects, and begin operations there. The process will proceed “very quickly”, said AFD General Direc-tor Anne Paugam, with the first projects expected to get underway before the end of this year. The two sides are considering renewable energy, water treatment, sustainable tourism, agriculture, food industry, transportation and urban development projects that will be funded with $218 million de-rived from the debt agreement between France and Cuba. AFD will also provide business classes through its CEFEB education center.
Another area of cooperation will be healthcare. Without releasing details, Hollande said France will support Cuban efforts in the Caribbean region to control the Zika virus.
Hollande also announced “grand cultural coop-eration”, beginning with a “month of French cul-ture” in Cuba.
The Cuban team for the five-day visit to France included Vice President Ricardo Cabrisas, Cuba’s point man for strategic economic relations, and Foreign Trade and Investment Minister Rodrigo Malmierca, as well as Foreign Minister Bruno Ro-dríguez and Deputy Foreign Minister Rogelio Si-erra Díaz.
Castro’s visit followed that of François Hollande to Havana in May. g
AFD will open an office in Havana. The French development agency funds a euro 4 million microfinance program in the Dominican Republic that benefits family businesses.
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free prices to government agencies and/or private individuals and businesses, the current policy re-mains very much attached to the dysfunctional past of state-controlled distribution, causing additional discontent and resentment among farmers.
A ‘revolutionary offensive’?What is the government planning to do? Enforce
harsher policies? Revive and reinforce Acopio-type policies and practices? Cap food prices (precios to-pados) through administrative procedures? Prevent farmers from selling directly, or through middle-men, to tourist resorts and on free markets?
Maybe we are witnessing some sort of “revolu-tionary offensive” against farmers. The last time such a “revolutionary offensive” was unleashed, in 1968, the consequences were disastrous. The effect of closing free farmers’ markets in the early 1980s were similar. Prices are not rising because of a whim by farmers, but as a direct result of major anomalies in the Cuban economy, and particularly of govern-ment policies, institutions and inner work-
Cuba’s farmers
The wrong scapegoat
For the last three months, in every Party and government meeting, we have witnessed finger-pointing against farmers, turning them into the scapegoats for all the current shortcomings: significant
shortages of supplies in local markets, high prices, farmers’ failure to meet their commitments with the local entities of the Ministry of Agriculture (MINAGRI), a growing role of so-called speculators and middlemen, lackluster performance by agricultural co-ops.
Instead of looking inward to see what’s wrong with government policies, macro- and microeco-nomics, regulations, and their implementation, bureaucrats and officials again put the blame on farmers, as they did in the early 1980s when free farmers’ markets were closed down for the first time. That precedent is floating around again in the words and minds of many officials. What’s more, if two years back everyone was happy with the official announcement that Acopio, the government food collection and distribution monopoly that forced procurement on farmers would be eliminated, its functioning and practices actually survived. Today, los contratos (the contracts). are almost a copy of the old Acopio policies: MINAGRI, by way of its agencies, demands a lion’s share of farmers’ crops at fixed and extremely low prices, while MINAGRI transportation is in charge of collecting and distrib-uting such crops; the remainder can be sold at free prices to individuals or other entities. Instead of fostering wholesale markets where farmers or mid-dlemen could sell crops, meat, animals and more at
Former Cuban intelligence officer Domingo Amuchastegui has lived
in Miami since 1994. He writes regularly on Cuba’s internal politics,
economic reform, and South Florida’s Cuban community
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ings.Allow me to bring up a small piece of memory.
In the summer of 1962, at a large meeting of “politi-cal instructors” (former political commissars) at the Ministry of the Revolutionary Armed Forces (MIN-FAR) there was a clear consensus: Acopio estaba causando tanta contrarrevolución como la propia CIA! (Acopio was causing as much counterrevolu-tion as the CIA itself). Nothing was done at the time to avoid the damage; Acopio lasted for more than 50 years.
There is a lot of talk about “standardized pric-es,” “fair prices,” precios topados, and enforcing “the contracts.” At the same time, top Cuban officials are mocking the notion of supply and demand. Every Cuban and every Cuban economist knows perfectly well that under the existing circumstances impos-ing prices on agriculture is not the solution; it’s a language that belongs to ancient and failed policies. Will Cuba see again police road blocks and truck searches to “fight” against speculators and middle-men, that is, the free circulation of merchandise?
Is any policymaker in Cuba aware that the con-tratos force farmers to sell a pound of beans for 2 CUP (non-convertible pesos) or less, when the same farmers have to pay high prices for diesel or gas, fer-tilizer, tires, spare parts, tools, and other key sup-plies (if they’re lucky enough to have access to such items)? Meanwhile, prices at the state hard-curren-cy stores are extremely high. Will these prices be lowered to make products accessible to average sal-aries? Will salaries be raised so they can meet exist-ing prices?
Just stick, no carrotAnd when will the currency unification take
place? Prices and salaries depend, essentially, on production and productivity, supply and demand, and incentives. But the official warnings and threats against farmers include no incentives — just stick, no carrot.
Providing a clear example of too much stick and too little carrot: Two-thirds of Cuba’s agricultur-al output is generated by Cooperativas de Créditos y Servicios (CCS), essentially private farmers who cooperate only in negotiating credits and services from the government, but with no direct interfer-
ence from the latter. Meanwhile, the other forms of cooperatives — Cooperativas Agro Pecuarias (CPA) and Unidades Básicas de Producción Cooperativa (UBPCs) whose deficiencies are constantly debated and well known, suffer of permanent meddling, in-terference and disruption by government agencies. Yet the government forces usufructuarios — the new generation of private farmers leasing state land in usufruct — to be tied to these dysfunctional co-operatives instead of working more freely within the CCS.
More discontent aheadMore discontent is
ahead: farmers’ crops will rot because state transportation doesn’t show up; they will not be paid by the state for months. For years, one urgent demand has been the establishment of wholesale markets, but the government contin-ues to be unresponsive. The consequences of all this are not difficult to imagine.
On Jan. 11, the leader-ship of the small farmers’ association ANAP — one of the ‘mass organi-zations’ within the Com-munist Party — came up with an appeal to its members “to strengthen their political and ideo-logical education”, some-thing that has very little to do with potatoes, to-
matoes, or meat, adding that “everything they pro-duce must reach prioritized destinations and at fair prices.”
Some doubt that these prices have anything to do with the real world.
One reader of the online edition of Communist Party daily Granma wrote a comentario
Will Cuba see again
road blocks to ‘fight’ against
speculators and
middlemen, that is, the free
circulation of goods?
Blaming farmers (1)
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about the ANAP appeal, referring to the official 24:1 exchange rate of non-convertible CUP per convert-ible CUC: “To talk about ‘fair prices’ [at the] 24:1 [ex-change rate], we have to start the analysis with the
Blaming farmers (2)
The final paragraph of the ANAP appeal has a strong flavor of
‘revolutionary offensive’
[state hard-currency] stores and salaries. This is the origin of the problem.”
Another average citizen wrote that “it’s not only 24:1, but the almost 300% taxation on much-needed items at the [state hard-currency stores]. Example: a bottle of cooking oil costs 60 CUP (one-fourth of my grandmother’s monthly pension); one kilo of powdered milk is 147.50 [CUP]. Should I continue?”
The final paragraph of the ANAP appeal has a strong flavor of “revolutionary offensive,” stressing that “we have the duty to fight and eliminate ev-ery manifestation that may undermine the devel-opment and implementation of policies aimed at providing the people with the agricultural products they need.” This is not an appeal; in Cuban terms, this is a clear announcement for drastic measures in the short term.
Stay tuned. g
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Taking another leap towards integration with international finance and access to multilat-eral credit, Cuba could join the Corporación
Andina de Fomento-Banco de Desarrollo para América Latina (CAF) in a matter of weeks, the head of the multilateral development fund told Reu-ters in an interview.
“We’re negotiating, and we hope we can an-nounce something in the coming weeks,” CAF Ex-ecutive President Enrique García said Jan. 18, ac-cording to Reuters.
Membership in CAF would be another big step in Cuba’s opening towards financial markets. Since at least 2008, Cuba has complied with terms of bilat-eral debt and renegotiated old debt with Germany, Mexico and Russia. In December, it agreed to a deal with the Paris Club of creditor nations, settling $11 billion in defaulted debt dating back to the 1980s.
CAF — Latin America’s second-largest devel-
Cuba could joinmultilateral fund within weeks | by JOHANNES WERNER
Economy/Finance
opment bank with close to $30 billion in assets – has European backing, through the membership of Spain and Portugal. Created in 1970, CAF is made up of the governments of 19 countries — 17 of Latin America and the Caribbean, plus Spain and Portu-gal, as well as 14 private banks in the region. It pro-vides credit, non-reimbursable resources, and finan-cial structuring of projects. CAF is headquartered in Caracas, with offices in Buenos Aires, La Paz, Brasilia, Bogota, Quito, Madrid, Mexico City, Pan-ama City, Asunción, Lima, Montevideo and Port of Spain.
In April, CAF held its first international work-shop on the island, jointly with the University of Havana.
García told Reuters that CAF could provide tech-nical assistance in Cuba’s efforts to attract foreign investment.
Long-term strategyCuba’s membership in CAF could be the first
step in a longer-term strategy. Washington’s
A window to multilateral finance
Corporación Andina de Fomento — Banco de Desarrollo para América Latina (CAF)
Headquartered: Caracas, VenezuelaCreated: 1970Assets: $30 billionMember nations: 19, including Spain, Portugal, Argentina, Barbados, Bolivia, Brazil, Chile, Colombia, Costa Rica, Ecuador, Jamaica, Mexico, Panama, Paraguay, Peru, Dominican Republic, Trinidad and Tobago, Uruguay and VenezuelaBank shareholders: Banco BISA, Banco Mercantil Santa Cruz (both Bolivia), Banco Davivienda, Corporación Financiera Colombiana (both Colombia), Banco de Guayaquil, Banco del Pacífico (both Ecuador), Banco de Crédito del Perú, BBVA Banco Continental, Scotiabank Perú, Banco Internacional del Perú (all Peru), Banco de Maracaibo, Banco del Caribe, Mercantil C.A. Banco Universal (all Venezuela)
Source: CAF
uEnrique García: “I hope we can announce something in the coming weeks.”
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dropping of Cuba from its list of terror-sponsoring nations means that U.S. governments won’t have to stand in the way anymore to Cuban membership in the United Nations’ World Bank and Interna-tional Monetary Fund, as well as in the Interamerican Development Bank, should Cuba request it.
However, U.S. officials under the next president may object to Cuban membership, and Cuban of-ficials have been strong critics of IMF-imposed austerity. Even though in Cuba the World Bank is less demonized than the IMF, separating the two “is technically almost impossible because they are twin institutions,” said Marlén Sánchez Gutiérrez, a professor at the University of Havana’s Center for Research on the International Economy, at a U.S. conference last year.
For that reason, Havana should first be trying to join sub-regional development banks, she suggests.That could include CAF, and, to a lesser extent, the Barbados-based Caribbean Development Bank
Development bank (1)
(CDB).“The process of transformation gives Cuba the
opportunity to rethink access to the international market,” she said. “With the obstacles we have right now, we have to focus our attention on CAF, be-cause it’s an important development bank and the United States is not a member.”
Sánchez also suggested the Cuban government look at the Shanghai-based New Development Bank created by the BRICS nations.
“We need to open new channels for talking, and identify some specific sector to engage with these institutions and maybe develop strategic alliances between different institutions,” Sánchez said, add-ing that Cuba should request observer status within development banks.
“Maybe these are not the best institutions, but it’s important for Cuba to be on the inside, and not outside.” g
More information: http://www.caf.com/en
Sánchez
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U.S. trademark decision hands victory to Cuba Ron, Pernod Ricard | by VITO ECHEVARRÍA
Law/politics
the U.S. market in the mid-1990s. That, in turn, sparked the initial rounds of litigation with Pernod Ricard.
The roller-coaster rideAs noted by Miami-based trademark attorney
Amaury Cruz, various legal complica-tions involving not just trademark law, but Office of Foreign Assets
Control (OFAC) regulations and po-litical saber-rattling on Capitol Hill as-sured a roller coaster ride for the legal
status of the Havana Club trademark in the United States.
In 2005, due to legislation passed six years earlier by Congress after lobbying by Bacardi, the issue arose whether or not Cubaexport could make the re-quired payment for the third 10-year
renewal of the Havana Club trademark.“The problem was that, as a Cuban
entity, Cubaexport is subject to the terms of the Cuban embargo and the Cuban As-
sets Control Regulations, administered by OFAC,” Cruz said.
While OFAC had previously issued a gen-eral license authorizing this type of transac-
tion, Section 211 of the 1999 Omnibus budget bill now forced Cubaexport to apply for a spe-
cific license from OFAC. The USPTO refused to accept payment by Cubaexport’s counsel.
In 1999, Bacardi & Co.’s lobbying prompted Florida Sen. Connie Mack to introduce a bill pro-
hibiting transactions of payments relative, among other things, to a trademark of a business or assets that had been confiscated by the Cuban govern-ment.
Cruz believes that Section 211 — which earned the nickname “Bacardi Protection Act” — demon-strates Bacardi’s determination to deny a post-em-bargo rum market for the Cuban government.
“The provision was included the night
Last month, the U.S. Patent and Trademark Of-fice (USPTO) handed Cuban state company Corporación Cuba Ron and its French joint
venture partner Pernod Ricard SA a victory when it issued a trademark for their label, Havana Club rum, for the U.S. market.
This measure has no commercial significance for the time being, because the U.S. embargo against Cuba is still in effect. Of course, once it’s lifted, Per-nod Ricard and Cuba Ron will be allowed to sell rum under that brand in the U.S. market.
What makes this measure newsworthy is the fact that rum maker Bacardi has long opposed the issuing of a trademark in the U.S. market. Bacardi, which is controlled by a Cuban exile family, has devoted its legal resources and political clout to prevent this from happening, resulting in a stream of legal battles over the eventual entry of Havana Club rum in the U.S. mar-ket, and even getting the U.S. government into hot water with the World Trade Or-ganization (WTO).
What also makes the USPTO move relevant is the fact that, all along, the Cuban government has taken serious-ly U.S. trademark law, using it to its advantage when the occasion arises. One reason why the Havana Club trademark fight became legend-ary was because the Cuban gov-ernment (through state entity Cubaexport) acquired it legally through the USPTO in 1976 – three years after its original holder, the Arechabala fami-ly who produced that rum brand in Cuba before the revolution, failed to have it renewed in 1973. That registration helped set the stage for the epic legal battle that en-sued later, when Bacardi obtained the Arechabala family’s remaining rights in the Havana Club brand, and started making limited amounts of the rum for u
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Trademark decision (1)
before the budget bill passed, was never presented on the floor of the Senate, and is not included in any of the bill’s legislative history,” Cruz said. “This hap-pened in the context of litigation between Cubaex-
port and Bacardi that has spawned 16 federal cases, plus disputes before the USPTO and the Trademark Trial and Appeal Board. That provision was the ba-sis for the U.S. District Court for the South-
The Cuban government, through its litigation in U.S. courts, has
earned a no-nonsense reputation when it comes to protecting its trademarks from alleged infringement. Through high-powered attorneys based in New York, it has vigorously sued a variety of cigar producers — both big and small — as a means of preventing them from exploiting the island’s worldwide reputation for fine cigars.
The best known case is the litigation state entity Cubatabaco pursued against Indiana-based General Cigar Co. a subsidiary of global cigar maker Swedish Match. General Cigar had started producing a Dominican version of the Cohiba cigar, which has been sold in the United States since the early 1980s. After a lengthy legal battle, the U.S. Supreme Court refused to intervene in the dispute in early 2015, which has reportedly ended up before the U.S. Trademark Trial and Appeal Board (TTAB). Assuming the TTAB rules in Cubatabaco’s favor, it may finally secure the Cohiba trademark in the U.S. market, thereby cancelling the pre-existing trademark General Cigar is using to sell its Dominican-made Cohiba smokes.
One attorney who represents cigar makers in Miami and elsewhere foresees more billable hours for himself and other lawyers once the U.S. embargo against Cuba is lifted.
“When the embargo ends, the lawsuits are going to fly,” Frank Herrera told New York’s Village Voice last year.
Over the years, Herrera has been representing various smaller cigar makers against the Cuban government and its legal efforts to minimize infringement, regardless of their physical location, once Cuban smokes can be sold in the U.S. market.
One of Herrera’s clients is Miami cigar maker Pepe Montagne, who launched Guantanamera Cigars in 1997. Montagne registered the name in the United States, and manufactures stogies under that brand from his facility in Nicaragua. The Cuban government wasn’t pleased with this, since it later started selling cigars under the same name, and had its attorney David Goldstein of New York law firm RBSKL fight Montagne in U.S. trademark court over the name. So far, the Cubans have prevailed in that battle.
According to the Village Voice, Goldstein convinced U.S. judges that smaller U.S. and Latin American cigar makers whose brands derive from Cuban geographic locations such as Guantanamo or Havana mislead U.S. smokers into thinking their smokes were actually from Cuba.
“Habanos is making billions off of cigar rollers who get paid $8 per month,” Herrera told the Village Voice. “Here is a Communist country going after American businessmen in American courts for trademark infringement. If you want to act like a capitalist, just be capitalist already.”
One of Herrera’s other clients is the Dominican Republic-based brand Pinar del Rio cigars (a.k.a.
PDR Cigars), which registered its trademark with U.S. authorities in 2008, and has since sold its smokes in the U.S. market. Cubatabaco had Goldstein take legal action to cancel PDR’s U.S. trademark in part due to “geographically deceptive descriptiveness”. Pinar del Rio is the western Cuban province best known for its cigars.
As noted on the USPTO website, as of late 2015, the two sides were still battling over the PDR trademark.
Back in 2011, Herrera told CubaNews what he thought were the tactics the Cuban government would use to control the international cigar market.
“They looked at every registration that looked or smelled like Cuba, so they decided to oppose those certification marks in the U.S.,” he said. “They dedicated millions of dollars to legal actions. Most of their battles have been with small labels. So rather than fight, (these small non-Cuban brands) would just abandon or default.”
Asked by CubaNews why the Cubans have been waging their legal battles through the TTAB, Herrera said, “it’s cheap, it’s easy, and they have all their forms in place,” he said. “Also, the federal courts don’t have to hear trademark cases where there are no actual damages”, which is applicable, since Cuban cigarmakers cannot sell in the United States.
RBSKL’s Goldstein declined comment for this article.
—Vito Echevarría g
Cuba’s vigorous protection of trademarks
Law
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Trademark decision (2)
ern District of New York to rule in Bacardi’s favor in the 1996 case, and for the U.S. Supreme Court to refuse to hear an appeal.”
According to Cruz, Section 211 won’t last forev-er. In 2001, the United Nations’ World Trade Or-ganization (WTO) found Section 211 to violate the United States’ obligations under international treaty law, and the WTO’s appellate body agreed in 2002, ordering the United States to “bring its measure ... into conformity with its obligation under interna-tional treaty law.”
The UPSTO decisionApparently, the
Obama administration, through OFAC, now made it easier for the Cu-ban government and Per-nod Ricard to protect the Havana Club name by issuing a specific license to Cubaexport, made ret-roactive to the time of its filing for renewal of the
trademark in 2005, to pay the filing fees. This license also authorizes Cubaexport to “en-
gage in all transactions necessary to renew and maintain the Havana trademark registration”, Cruz said. Accordingly, Cubaexport filed and paid for an additional 10-year renewal period that begins to run this year.”
Cruz asserts that one reason why this trademark registration is a huge win for the Cuban government is because it’s unlikely to be reversed after Obama leaves office.
“Decisions have been made at the USPTO and
OFAC that are likely irrevocable for at least another 10 years,” he said. “Besides, the two countries are in the process of normalizing relations and eventually dismantling the embargo. In addition, it would be difficult for the stars to align in such a way as to per-mit more political interference in the normalization process.”
Political interference in the process included not only Sen. Connie Mack’s amendment, but also a “very unusual” series of communications between then-Gov. Jeb Bush and USPTO director James Ro-gan, a George H.W. Bush appointee, according to Cruz. That interference resulted in a collateral legal dispute between Cubaexport and Bacardi about al-leged ex-parte communications, which are improp-er in legal proceedings.
“It would be very difficult to replicate these cir-cumstances,” Cruz added “Rick Scott, the current Florida governor, is term-limited. (Sen.) Marco Ru-bio could certainly play the role of Connie Mack, but is busy trying to get elected president, will likely fail and then will be out of a job.”
Meanwhile, Ian Fitzsimons, general counsel of Pernod Ricard, recently told World Trademark Re-view that, since his firm had already registered Ha-vanista, another rum brand specifically for the U.S. market, that it will have to review its next steps once the embargo is lifted.
“The U.S. rum market is 40% of the worldwide rum market, so there is a huge opportunity that we haven’t been able to exploit to date,” he said. “If that market does open up, we will be very excited about it. Havana Club is the third-biggest rum brand and the Number One Cuban rum in the world, and it has achieved that without access to that market. So there is a lot of potential there.” g
Amaury Cruz
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ETECSA to launch at-home Internet pilot project, with Chinese help | by JOHANNES WERNER
Economy/Companies
Working with a Chinese com-pany, the Cuban state telecom will launch
a pilot project to bring broad-band Internet access to homes in Havana this year, a local ETECSA executive announced.
The pilot project will be im-plemented by Huawei Technol-ogies Co. Ltd. at two popular councils in Old Havana using fiberoptic cable, said Odalys Ro-dríguez del Toro, director of the Havana division of ETECSA.
User fees will be announced later, she added.This is the first time at-home Internet service
will be available legally and to a wider public in Cu-ba. The quarter or so of Cuba’s population that can access the net does so mostly from work, school, In-ternet cafes, or public WiFi spots.
Last year, a Cuban blogger leaked a ministerial report that lays out plans to expand broadband In-ternet access, including providing fast Internet ser-vice to nearly 2 million households by 2020, and in-crease coverage of mobile broadband service to 95% of urban areas, and 90% of Cuba’s countryside.
The government wants to achieve all this while guaranteeing that broadband access won’t cost more than the equivalent of 5% of the average Cu-ban household income.
As the biggest obstacles to ramping up broad-band access, the report identifies weak fixed-tele-phony infrastructure on the last mile, “reduced ca-pacity in the national backbone” to accommodate broadband, and local fiberoptic cables without suf-ficient capillarity. The mobile telephony infrastruc-ture is lacking bandwidth capacity and suffers of low density of radio bases.
In the meantime, ETECSA will add 30 public
WiFi zones in the capital this year to the current-ly 17, Rodríguez said. New hotspots will include the downtown cruise terminal, the Pabexpo fair-grounds outside Havana that host the Havana
International Fair, and the Palacio de Con-venciones in west Havana. In the future, bars,
cafés and restaurants can apply with ETECSA for a WiFi zone, she said.
Huawei has been ETECSA’s partner in establishing 58 hotspots throughout the is-land last year, as well as in the
current expansion.
Chinese, not U.S. connectionsIn a step that reflects long-standing relationships
and political affinity, ETECSA also recently turned to the Chinese company to offer next-generation mobile telephony. Huawei will provide Cuba with smartphones, infrastructure, and technical train-ing.
“They talk about upgrading to DSL and 3G wire-less,” U.S. Federal Communications Commission (FCC) Chairman Tom Wheeler said about Cuban officials after a recent visit to the island with a U.S. delegation. “We urged them to leapfrog such linear transitions and expand to state-of-the-art services. We pledged our support and the support of U.S. companies to achieve this. It is unclear, however, just how anxious the Cuban government is to open up expanded network capabilities.”
Advances by Internet giant Google last year to help Cuba with telecommunications infrastructure were left without a public response, but a blogger close to the Cuban government pointed out the California-based company’s proximity to U.S. re-gime-change programs and NSA snooping. No Google executives were part of the recent delega-tion. g
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State oil concern Pemex has been studying the possibility of export-ing compressed natural gas to Cu-
ba, Mexican Economy Minister Ildefonso Guajardo told journalists in Mexico City, according to Mexican press reports.
Pemex made the offer during President Raúl Castro’s visit to Mexico in November, Gua-jardo said, adding that “we are just beginning to explore the issue”. The relatively modest idea is to satisfy rising needs created by industrial growth in Cuba, he said.
“What was put on the table is the readiness of Pemex to guarantee a gas offer for the need Cuba will have in this process of re-industrialization that will come because of this transformation,” Guajar-do said, referring to the U.S.-Cuba thaw, according
to El Financiero.Pemex underwent
deep change a year ago, after the Mex-ican government opened up the coun-try’s oil and gas in-dustry to foreign in-vestment, ending the monopoly Pemex has held for more than 70 years. This is forcing the company to ex-pand into new proj-ects and markets.
As part of a rap-prochement between Mexico and Cuba under President Enrique Peña Nieto and his predecessor, Mexico waived 70% of Cuba’s $487 million debt, and Mexican companies have become very active
Pemex ponders gas supplies to Cuba | by JOHANNES WERNER
Economy
in Cuba. Two Mexican companies — a paint manufacturer and a meatpacker — are among the first investors at the Mariel Special Development Zone.
CNG, not LNGTo be sure, supplying compressed natu-
ral gas, which is used to fuel industrial machines, trucks, busses and forklifts, is a far cry from what some in Cuba and Mexico have hoped Pemex could do.
In 2014, Mexico’s former ambassador in Hava-na proposed his country should form a strategic oil partnership with Cuba. Ricardo Pascoe Pierce, who belongs to the opposition Party of the Dem-ocratic Revolution (PRD), suggested that such a partnership would allow Pemex to expand abroad and decrease Mexico’s dependency on the United States. Pascoe said that during his tenure in Hava-na before 2006, Cuban authorities had offered Pe-mex a partnership to operate the then-mothballed Cienfuegos refinery; the administration of con-servative President Vicente Fox declined, “due to ideological reasons and their commitments with Washington,” Pascoe wrote.
Today, the Cienfuegos refinery is operated by a Venezuelan-Cuban joint venture.
Guajardo clarified that the proposal involves only compressed natural gas, not liquified natural gas, which the late President Hugo Chávez pro-posed Venezuela could supply Cuba as part of a plan to fuel growth of a new petrochemical indus-try in Cuba.
Mexico does not produce enough natural gas to satisfy domestic needs; the country imports natu-ral gas through a network of gas pipelines from the United States. u
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Under a barter agreement that locks in a low price, Venezuela is currently supplying the island with 90,000 barrels of crude per day, covering half of Cuba’s energy needs. In addition, state oil company PdVSA supplies crude oil to a Venezu-elan-Cuban joint venture refinery at Cienfuegos, which currently produces 52,000 barrels of fuel per day.
Venezuelan opposition politicians have an-nounced they want to end the barter agreement. The opposition has not brought up the joint ven-ture refinery, but Cuba also stands to lose Venezu-ela as a partner in the Cienfuegos refinery, in de-veloping a petrochemical hub at Cienfuegos, and in offshore exploration. g
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German ferry operator joins Florida-Cuba race | by JOHANNES WERNER
Companies
While announcing its expansion into the western hemisphere through a merger with a Canadian ferry company, Ger-
many’s FRS GmbH said it has joined at least a half-dozen candidates vying for approval with Cu-ban authorities to offer ferry service between Ha-vana and Florida.
“FRS has previously offered the Cuban govern-ment the installation of ferry service between Flor-ida and Havana as well as to provide other mar-itime services and travel products in Cuba,” FRS said in a press release Jan. 19. The company is “of-fering Cuba a long history of operational acumen and connection to the North American and Eu-ropean tourism markets,” the press release added.
FRS also said — without specifying — that it could “make financing from Germany, Spain and Canada available for Cuba.” Spanish competitor Baleària has offered the Cuban government to build infrastructure in Havana Bay; that compa-ny could tap into a Spanish government fund for Cuba.
FRS executives were part of a 60-member Ger-man business delegation in Cuba in early January led by Economy Minister and Vice Chancellor Sig-mar Gabriel.
As FRS acquired a majority interest in Vancou-ver-based Clipper Navigation Inc., the combined company plans to add a new ferry hub in Vancou-ver, connecting downtown Vancouver to Victoria, FRS said in the press release. Using two high-speed catamarans, the Canadian company also offers fast-ferry service from Seattle to Victoria.
“Together, [FRS and Clipper] are optimally po-sitioned to bring more Canadians, Europeans and travelers from the USA … to the island and help Cuba offer them a full spectrum of travel prod-ucts,” the press release said.
FRS now operates 60 vessels in 12 countries; last year, it carried more than 7 million passengers and 1.9 million vehicles on its ferry routes in Eu-rope, Northern Africa and the Middle East. Based in Northern Germany, FRS includes 24 operating subsidiaries across Europe, North America, North Africa and the Middle East, with more than 1,500 employees. The FRS fleet includes RoPax ferries, passenger ferries, high speed catamarans for vehi-cles and passengers, crew transfer vessels for the wind offshore industry, hovercrafts, water taxis, and electric-powered solar ferries. FRS also pro-vides port management and operation services.
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German ferry operator (1)
France and Greece — some in conjunction with Florida entrepreneurs — have applied with Cu-ban authorities to offer service between Havana and Florida ports. The Cuban government has not made any statements regarding its selection pro-cess and timeline.
Cuban authorities are trying to convert the for-mer container terminal at the Port of Havana into a ferry hub. In November, the government added a multi-modal facility at the Port of Havana to its “investment portfolio” wish list to foreign inves-tors.
Mid-term proposals for the site include con-struction of a customs bonded warehouse, parking and open-air cargo storage areas, security build-ings, and a passenger terminal.
U.S. ferry operators are now al-
lowed to build and operate facilities such as offices, warehouses, stores and the like in Cuba under re-cently eased U.S. sanctions, but they are still being handicapped by U.S. sanctions blocking the use of credit.
One official with the transportation ministry — also known as Mitrans — said during a telecon-ference with the Cuban embassy in Washington in October that the process of granting licenses to U.S. ferry operators is held up by infrastructure challenges the U.S. operators can’t help overcome, due to the the absence of credit. Even though they would like to, U.S. ferry operators are unable to make necessary construction and repairs, said Iván Ricardo Chacón, international relations di-rector of Mitrans.
One Florida-based ferry entrepreneur told Cuba Standard it wouldn’t be a problem to ramp up
service gradually, starting with mobile ve-hicle ramps, passenger bridges and scanners brought from the United
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Tampa Bay Rays to play in Havana March 22The Tampa Bay Devil Rays are close to finalizing a spring trip to Cuba, the Tampa Bay Times re-ported.
The ex-pected plan is for the team to play one game against the Cuban national team on March 22 in Havana.
The game may be shown on ESPN.
As Major League Baseball is struggling to leave behind rules that force Cuban athletes to de-fect if they want to join MLB teams, the Rays will be the first major-league team to play in Cu-ba since 1999, when the Baltimore Orioles made a visit.
MLB officials reportedly have checked facilities on the island to determine whether big-league teams could play in Cuba during Spring Training.
Because so many MLB teams expressed interest, Major League Baseball picked the Rays via lot-tery.
Gourriel brothers defect, expected to join MLBIn a blow to Cuba’s gradual open-ing towards allowing players to go pro abroad, Yulieski Gourriel and Lourdes Gourriel Jr. reportedly left a team hotel in the Dominican Republic after playing for a Cuban team that performed miserably in the Caribbean Series.
The brothers are expected to join the exodus of fellow Cu-ban baseball stars to the United »
Bri
efs
After record year, $1.1bln set aside for new hotelsAs tourism set a record in 2015 with 3.525 million visitor arrivals, 17.4% more than the year before, officials are setting aside $1.31 bil-lion for new hotel construction this year.
Construction of 3,790 new ho-tel rooms is planned for 2016, in addition to renovation of 5,677 existing ones, Deputy Tourism Minister Mayra Álvarez García said on national TV. Most of the new hotels will be going up in Havana, Varadero, and the northern keys, the areas of highest demand, she said.
Álvarez said that the govern-ment is offering foreign inves-tors in renovation projects to al-so manage and market the hotel. Projects that require larger invest-ments will be joint ventures with state companies, she added.
The government is planning for 3.7 million visitors in 2016, a conservative figure considering current high demand for Cuba travel in the United States.
On top of foreign visitor growth, officials expect domes-tic tourism at luxury hotels to rise 13.8% this year. Particularly Va-radero is expected to be in de-mand by Cuban vacationers.
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States, some 150 in 2015.The Gourriel brothers are
among the biggest stars in Cuba, and the Gourriel clan has a long history and big reputation in Cu-ban baseball. Lourdes, 22, is an athletic infielder and outfielder and considered among the best prospects in Cuba. Yulieski, 31, is a third baseman and widely regard-ed as the top player on the island.
Yulieski was the highlight of a new program under which the Cuban Baseball Federation al-lowed players to join profession-al teams abroad. The athletes are required to play in the Cuban na-tional series, and the Cuban fed-eration manages players’ negoti-ations and contracts, receiving a cut of the compensation.
Yulieski officially became one of the wealthiest Cubans when the Yokohama DeNa Baystars signed him on in 2014 with a mil-lion-dollar contract. However, the Japanese team canceled his con-tract mid-season last year, due to injury.
Meanwhile, his older brother Yunieski has played professionally in a minor league team in Canada.
The Gourriels’ defection comes just as Major League Baseball is trying to move away from old policies that force Cuban players to defect.
is expected to feed 755 mw into the national grid by 2030. The government plans to increase the amount of electricity generated by sugarcane biomass to nearly 14% by 2030.
U.S., Cuba hold migration talks in MiamiThe U.S. and Cuban governments held technical talks on migration Feb. 1-4 in Miami.
A State Department statement said that the two sides exchanged “information and best practic-es related to combating human smuggling and travel document fraud.”
A Cuban foreign ministry statement said that both sides agreed on “the need to approve bilateral instruments to formalize exchanges in this area, with the goal of more effectively neutraliz-ing people smugglers.”
The talks will continue, alter-nating locations between Cuba and the United States.
Nearly 8,000 Cuban emigrants are currently stranded in Costa Ri-ca, trying to set foot on U.S. soil as they fear that Washington will soon strip their immigration priv-ileges.
The U.S. government
entire island, and plans to install 140 more this year and upgrade at least 100 to 2G/3G.
The new radio bases are 2G/3G technology and can be upgraded to 4G.
ETECSA is working to introduce smartphone technology, with the help of China’s Huawei Technolo-gy.
ETECSA’s fast-growing email platform Nauta rose to 1.4 mil-lion permanent users in 2015. The number of emails handled in the system grew from 192 million in 2014 to 532 million in 2015. Offi-cials explained recent email black-outs with overloaded servers, par-ticularly during peak hours, and said that the company is investing into infrastructure to fix the issues.
Norway, Azcuba form biogas joint venture
Norway’s Optimo Finance AS formed a joint venture with state sugar holding Azcuba to design, install, and evaluate a prototype 17-mw biomass integrated gasifi-cation gas turbine at the Antonio Guiteras sugar mill in Las Tunas province.
Oslo-based Optimo is a con-sulting company working with Norway’s devlopment aid agency to provide funding of projects in countries with limited access to competitive financing.
Cuba is considered the coun-try with the highest potential to use bagasse-fired cogeneration in its energy production balance, reaching a value as high as 25%, according to a 2004 study by the World Alliance for Decentralized Energy (WADE).
The sugar industry current-ly accounts for 3.5% of nation-al electricity generation, and it
»Briefs
Col. Mario Méndez Mayedo
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Official news media published an article that described the de-fection as “an open attitude of surrender to merchants of profes-sional baseball for profit.”
Earth continues to shake in eastern Cuba
Since Jan. 17, 41 earthquakes have shaken inhabitants of east-ern Cuba and the region’s largest city, Santiago out of their routines.
No major damage has been reported.
The most recent tremor on Feb. 6 registered 3.0 on the Rich-ter scale.
Meanwhile, the Cuban gov-ernment began operating its 14th seismological measuring station in service at Moa, a nickel mining center on Cuba’s northeastern coast. The technology of the so-lar-powered station is Canadian.
The Ministry of Energy and Mining will put three more sta-tions into service throughout the island, local media reported.
ETECSA reports 3.3 million mobile phone usersTripling the number of mobile phone users since 2010, ETEC-SA reached 3.348 million mobile phone users at the end of 2015, in
addition to nearly 1.3 million fixed-line users.
The state carrier installed
104 new ra-dio bases last year, for
a total of more than 700 in the
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has said little about the crisis, be-yond restating that it fights hu-man trafficking and that it will not change its policy toward Cuban migrants.
Clad in a uniform, Interior Min-istry Col. Mario Méndez Mayedo led the Cuban delegation.
U.S.-Cuba science cooperation taking shapeU.S. and Cuban scientists have identified three areas of neurosci-ence for joint research.
During a meeting Dec. 11-13 in Havana by the American As-sociation for the Advancement of Science (AAAS) and the Cu-ban Academy of Sciences, par-ticipants signed a memorandum of understanding to join forces on magnetic resonance imaging technology and neuroinformatics, neurodevelopment, and starting planning for an international non-human primate research center in Cuba. They also discussed a
»Briefsbiomedical research fellows ex-change program for early and midcareer scientists administered by the AAAS Center for Science Diplomacy.
Meanwhile, NASA may explore the possibility of cooperating with Cuba on science projects, official media reported.
NASA could work with Cu-ban institutions on meteorology, oceanography and astronomy, said NASA researcher Brent Hol-ben. Holben, a member of NASA’s Biospheric Sciences Laboratory, was a guest at a workshop hosted by the Meteorological Center in Camagüey. He urged Cuba to join the Caribbean Aerosol Network, which studies particles suspended in the air.
Cuba performs well in environmental ranking Cuba ended up third in Latin America on a global Yale Univer-sity ranking of the most environ-mental countries.
Every two years, the Environ-
mental Policy and Law Center at Yale compiles a ranking based on an “Environ-mental Perfor-mance Index” (EPI) that emphasizes public ef-forts to protect nature such as re-ducing carbon emissions, defor-estation, air pollution, and natural resource use.
The best-performing countries in the hemisphere were Costa Ri-ca, on No. 42 of the global rank-ing, and Argentina (43), followed by Cuba (45).
With an EPI of 79.04, Cuba ex-celled mainly thanks to low car-bon emissions and pesticide use, and high use of organic products in agriculture, as well as its atten-tion to environmental factors in healthcare, forest management, natural parks, and subsidies to agriculture. g
Amid the U.S.-Cuba thaw, Washington continues to en-force its sanctions against the island.In the latest crackdown, a Cal-ifornia-based architecture firm specializing on hotel design agreed to pay $140,400 to the Office of Foreign Assets Con-trol (OFAC) to settle allegations its British subsidiary helped design a hotel project in Cuba.According to an OFAC press release, Wimberly Allison Tong
U.S. punishes architecture firmand Goo (UK) Ltd., the Brit-ish subsidiary of Irvine, Cal.-based WATG Holding Inc., performed architectural and design work for a ho-tel project in Cuba in 2009-2010 and was paid close to $285,000 by the Qatari de-velopers.In that time frame, state company Qatari Diar built the $75 million Gran Paraiso luxury resort on Cayo Largo del Sur.
Renderi
ng: M
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Designed in 2009: the Gran Paraiso.
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U.S.-Cuba telecom talks, Round 2: short on results | by JOHANNES WERNER
Politics
A14-member U.S. telecommunications del-egation spent two days in Havana for talks on using the Internet for “economic and
social development”, the Cuban foreign ministry announced in a brief statement.
This was the second meeting of its kind; no spe-cific outcomes were reported, as the Obama ad-ministration is entering its last year.
The Jan. 20-22 delegation included U.S. business executives, and was led by Amb. Daniel Sepulveda, who coordinates international policy of communi-cations and information at the State Department’s Bureau for Economic and Business Affairs.
The 14-member group also included Federal Communications Commission (FCC) chief Thom-as Wheeler, Dean Garfield, president of the Infor-mation Technology Industry Council, sanctions
enforcement bureaucrats from the Departments of Commerce and Treasury, as well as executives of Cisco Systems, Comcast, and the North America division of Swedish IT giant Ericsson.
The visit — the second after Sepulveda led a U.S. telecom delegation to Cuba in March — is part of a complicated dance in which eager U.S. telecom companies are trying to seek opportu-nities in a largely untapped market of 11 million, navigating between U.S. sanctions, Cuban fears of regime-change intents, and a state-controlled economy.
The FCC’s Wheeler said the inclusion of the business executives and conversations with private entrepreneurs in Cuba provided “real life examples of what is possible”.
Undersea cable, equipment, service“Our message was simple: we want to help,”
Wheeler said in a prepared statement. “We spoke about a new undersea cable connecting our coun-tries, commercial relations for equipment and ser-vice providers, as well as an ongoing regulatory dialog.”
There are at least a half-dozen proposals by U.S. and other companies to lay undersea cables, Sepul-veda told the Miami Herald in an interview after the visit. Cuban officials told the U.S. delegation they would take U.S. proposals under consider-ation, but that IT and telecom investments were currently not their top priority — the equivalent of saying that Cuba wants “to move move forward in its own way”, Sepulveda suggested.
He said the U.S. delegation’s response was to point out that the window of opportunity may be
Sepulveda, speaking at UCI in Havana
Photo
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closing at the end of President Barack Obama’s of term in December 2016.
“We need to have some solid wins to give con-fidence” to U.S. companies, Sepulveda told the Mi-ami Herald.
U.S. telecom inroads have been modest so far. In February last year, New Jersey-based IDT Corp. became the first U.S. carrier to provide direct long-distance calls to Cuba. In November, wireless carrier Sprint signed a roaming agreement with ETECSA, the first time a U.S. company was able to take advantage of new openings allowed by the Obama administration.
At the same time, the Cuban state carrier turned to a Chinese company to offer next-generation mobile telephony. Huawei will provide Cuba with smartphones, infrastructure, and technical train-ing, the company announced during the Havana International Fair. ETECSA also turned to Huawei to install 58 public WiFi hotspots throughout the island last year and an at-home Internet access pi-lot project in Havana this year.
Cuba’s turn to Chinese companies reflects long-standing relationships and political affinity. Meanwhile, advances by Internet giant Google last year to help Cuba with telecommunications infra-structure were left without a public response, but a blogger close to the Cuban government pointed out the California-based company’s proximity to U.S. regime-change programs and NSA snooping. No Google executives were part of the latest dele-gation.
“They talk about upgrading to DSL and 3G wireless,” the FCC’s Wheeler said about Cuban officials. “We urged them to leapfrog such linear transitions and expand to state-of-the-art services. We pledged our support and the support of U.S. companies to achieve this. It is unclear, however, just how anxious the Cuban government is to open up expanded network capabilities.”
Off the ‘exclusion list’A few days before the latest U.S. visit, the Feder-
al Communications Commission (FCC) removed Cuba from its “exclusion list”. The removal — Cuba was the last remaining country on that FCC list — allows U.S. telecom carriers to provide facili-
ties-based telephone and Internet service to Cuba without having to ask for separate FCC approval.
The step “will promote competition on the U.S.-Cuba route,” the FCC said.
“We are also working on removing certain non-discrimination requirements on the U.S.-Cu-ba route, which would give U.S. carriers more flexibility to negotiate rates with the state-owned telecommunications operator and to respond to market forces,” Wheeler added.
Blockade, Website accessCuba did not talk about any outcomes regard-
ing the visit.“Opinions were exchanged on the use of the In-
ternet for economic and social development, and the regulatory framework for Internet use,” the Cuban statement said. “The effects of the block-ade in the area of telecommunications were also mentioned, including Cuba’s difficulties to access U.S. websites that are key to the scientific-techni-cal development of Cuba, as well as the reach and limitations of the new regulations adopted by the U.S. government in this sector.”
In an agenda almost identical to the one last year, the U.S. visitors met with Deputy Commu-nications Minister Jorge Luis Perdomo Di-Lella, executives of state telecom ETECSA, and officials of the Foreign Ministry and the Foreign Trade and Investment Ministry. The group also visited a location of the Joven Clubs de Computación y Electrónica, and the Universidad de las Ciencias Informáticas just outside Havana.
Internet access in Cuba remains difficult and expensive. Access from home is practically impos-sible, but last year the government opened up more than 30 public Wi-Fi hotspots, accessible at a cost of US$2 per hour. The stated goal is to connect half the population by 2020, up from at most 25% today.
“The island remains disconnected from the In-formation Age, holding back the promise of the Cuban people,” the State Department said in a statement last year. “This state of affairs is a func-tion of policy and politics, and we are taking action to ensure that we are not part of the problem, but to instead offer incentives to find solutions”. g
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The Mariel Special Development Zone con-tinues to expand, contracting a French con-struction company for detailed designs to
complete Sector A, and starting to plan for a sec-ond and third sector.
Meanwhile, a Chinese-Cuban biotech joint ven-ture agreed to set up shop in the first sector, as did a Brazilian construction company, joining 11 for-eign and Cuban companies that have already com-mitted to the special development zone.
The Zone administrators contracted
Mariel Zone continues to expand | by JOHANNES WERNER
Economy
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Rendering of Sector A after buildout, view from west to east towards Mariel Bay. Bottom: Map of Sector A. Rendering ZEDM/map: Portela
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Mariel Zone (1)
French construction company Bouygues Bâtiment SA for “general detailed planning” of Sector A, the first area of the Mariel Zone closest to the contain-er port, Mariel Zone CEO Ana Teresa Igarza said in an interview with official daily Granma.
Sector A planning “should be concluded this year, harmonizing all initial aims we had about lo-cations of areas and developments,” she said.
The North-South road is near completion, and
construction of the East-West axis is beginning, Ig-arza said. The lots of two investors have been com-pleted, and lots for the other nine are underway.
Administrators are also “thinking about ex-panding to two more sectors,” Igarza added, refer-ring to the western areas of the vast Special Zone west of Havana.
As part of the continued expansion, Mariel Zone administrators are trying to outsource some of the development.
“We’re interested in attracting international developers that would operate in the Zone under administrative concession to develop and manage certain areas,” Igarza said. “This modality requires a presentation by the investor and a business plan that includes their development and growth pro-jection, the industries that will be established in these areas and target companies.”
Meanwhile, Cuba’s Centro de Inmunología Mo-lecular (CIM) and a Chinese company recently agreed to build a joint venture plant at Mariel to produce monoclonal antibodies, CIM President Agustín Lage said, according to official media.
Also, Com panhia de Obras e Infraestrutura S.A. (COI), a wholly owned subsidiary of Brazil’s Grupo Odebrecht, will provide construction ser-vices to companies settling at Mariel, Igarza said (see article page 2). COI, which built part of the infrastructure at Mariel, has been involved in air-port expansions in Cuba, and operates a sugar mill near Cienfuegos.
U.S. investorsIgarza said that Cleber LLC, a U.S. startup that
would like to assemble tractors at Mariel, present-ed its proposal to Mariel Zone administrators, but that, as long as approval by U.S. authorities is still pending, Cuban authorities can’t grant approval.
She also said that “many” other U.S. companies have expressed interest in establishing warehouses at Mariel for imported goods.
“We have clarified in all cases that this is not the objective of the Zone,” Igarza said. “Our objective, and we have told that not only to U.S. companies but to everyone, is to produce.”
“Perhaps when the Zone has reached maturity with established producers, we could weigh the possibility, as a country, to establish so-called free zones, free-trade zones, or a deposit area. But at this new stage, we are obliged to prioritize space to establish productive enterprises.”
Igarza also provided more detail about the op-erations of the container port, saying that Singa-pore-based PSA International, which operates the port, has a 10-year administration contract, and that “the majority” of the personnel working in the port administration is Cuban. g
There are many U.S. proposals to establish warehouses, but ‘this is
not the objective of the Zone’.
Mariel Zone General Director
Ana Teresa Igarza
Photo: Correa/Granma
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U.S. biotechnology firms or mid-sized internation-al pharmaceutical companies, as judged by size, output and products in development,” Haseltine wrote.
The author listed an impressive array of prod-ucts and technologies, including 33 vaccines, 33 anti-cancer vaccines, 18 products to treat cardio-vascular disease, and seven drugs to treat other diseases, as Cuba’s achievements in the field of bio-technology.
An all-dominating institutionEver since Cuba’s reformers created BioCuba-
Farma three years back, problems began to sur-face. The holding company wasn’t exactly a love child — my hunch is, most people in Cuba’s sci-entific community didn’t understand the need for an all-dominating institution; after all, their insti-tutions had been doing rather well. Second, it was born with serious defects; within just a
The ups and downs of BioCubaFarma
Following the official media coverage of de-bates in Cuba’s National Assembly in Decem-ber, it was evident that something important
was missing: the recently established BioCuba-Farma, a state holding company that controls the entire operations of Cuba’s diverse biotech and pharmaceutical institutions, including a growing number of joint venture factories. Together, they generate hundreds of millions of dollars every year by way of exports to Latin America, Asia, and Af-rica, and sales in China.
Until a few years ago, these institutions were completely autonomous and performing rather well with growing exports. In 2012, a first-hand re-port by Brookings Institution’s Bill Haseltine — the AIDS research pioneer and biotech entrepreneur enjoyed direct access — concluded that “Cuba’s biotechnology industry is a remarkable success.”
“Cuba’s biotechnology industry is roughly com-parable to one of the largest and most productive
Former Cuban intelligence officer
Domingo Amuchastegui has lived in Miami
since 1994. He writes regularly on Cuba’s
internal politics, economic reform, and South Florida’s Cuban
community
The very moment Cuba’s reformers three years ago created the state holding company that bundles all biotech and pharmaceutical business, problems began to surface.
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year of its existence, BioCubaFarma — along with Azcuba, the new sugar holding company, and oth-er state companies — was singled out at a session of the National Assembly for serious problems in their operations, according to Communist Party daily Granma.
After that, BioCubaFarma vanished from of-ficial media reports. In the celebrations of Sci-ence Day this January, none of the reports and interviews mentioned BioCubaFarma. Also remarkable was the ab-sence in official media reports of the key spon-sor for the establish-ment of BioCubaFarma, Dr. Fidel Castro Díaz-Balart, chief adviser in the field of science to the Council of State.
Exports declineMeanwhile, sever-
al state TV, print me-dia and website reports about the celebrations talked about a “tempo-rary decline” in biotech and pharmaceutical exports, due to an “an adverse context.” What’s behind the silence and the “ad-verse context” is difficult to figure out.
But in a more recent interview on the role of the Centro de Inmunología Molecular – a pillar of Cuba’s biotech and pharmaceutical industry since 1994 — CIM founder and Director Dr. Agustín Lage Dávila revealed that the company had to “ad-just” (in Cuban official lingo, this means cut back) their annual plans for 2015 to levels well below 2014, and focus on fewer products than before, and that CIM was unable to achieve “expected levels of growth and diversification.” That, according to semi-official website CubaInformación.
He cited three external reasons: a. The drop of the euro — the currency in which CIM sells its
products — vis-à-vis the dollar; b. The contraction of CIM’s main foreign markets: Venezuela, Brazil, Ecuador, Mexico, Angola; and c. increased regula-tory barriers in Western Europe, North America and Japan, aimed at complicating clinical testing and product registration, which favors big multi-national pharmaceutical and biotech companies. In a hint of internal problems, he conceded that CIM is also facing its own shortcomings in meet-ing these challenges.
The troubles at CIM are probably indicative of similar experiences at other biotech and pharma-ceutical institutions in Cuba whose export mar-kets are the same.
While 11 new Cuban pharmaceutical products are in the approval pipeline at 21 countries in Eu-rope and Asia, no product of significance has made it to market in Western Europe or the United States yet, and the new barriers are delaying their success even more.
These seem to be the main reasons for the offi-cial media silence surrounding BioCubaFarma.
Globalizing businessThat said, recovery is in sight. CIM, which has
three production facilities in Cuba, is rapidly glo-balizing its business. After opening three joint ventures in Argentina, Singapore and China, it is negotiating another one in Thailand. Also, a Chi-nese company agreed to set up a joint venture fac-tory for the production of monoclonal antibodies at the Mariel Zone. Even more importantly, CIM passed 13 comprehensive inspections by foreign companies, including three by Japanese pharma giant Daiichi Sankyo, allowing the continuation of clinical tests in Japan, Spain, France, Canada, and the UK.
Meanwhile, the new-drug pipeline continues to flow. Among some of CIM’s most recent achieve-ments is human erythropoietin recombinant for the treatment of chronical kidney insufficiency anemia, therapeutic anti-cancer vaccines such as CIMAVAX-EGF and Ricotumomab, and anti-body Nimotuzumab for pancreatic cancer. g
BioCubaFarma (1)
Remarkable is the
absence in official
media reports of
Dr. Fidel Castro
Díaz-Balart.
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construct or renovate privately-owned buildings, including privately-owned residences, businesses, places of worship and buildings for private sector social or recreational use; 2) tools and equipment for private sector agricultural activity; or 3) tools, equipment, supplies, and instruments” for use by the private sector entrepreneurs.
Note that this license authorizes, for example, the export of such items only to private-sector entrepreneurs in Cuba, such as auto mechanics, barbers and hairstylists and restaurateurs.
What can be sold to Cuba from the U.S.?In January 2015, the Bureau of Industry and
Security (BIS) of the Department of Commerce, under the title of Cuba: Providing Support for the Cuban People, set out a license exception autho-rizing certain exports and re-exports to Cuba with the aim of improving the living conditions of Cu-bans and supporting their incipient independent economic activity.
The items authorized under this license includes 1) building materials, equipment, and tools “to
Brown Rudnick LLP Partner Adolfo
Garcia focuses on international matters
and heads up the Cuba Initiative at his
law firm.
Although doing business in Cuba is still prohibited by the laws regulating the U.S. embargo against Cuba, certain export and import activities in connection with Cuba
have been allowed since Jan. 16, 2015 by the U.S. Departments of Treasury and Commerce. This essay focuses on those U.S. items that can be commercially sold to Cuba and the ones made in Cuba that can be sold in the United States. This is the first of three columns analyzing what U.S. companies can — and cannot — do under recently amended U.S. sanctions regulations.
Guest column
Aynel Alvarez-Guerra is a Foreign
Staff Associate at Brown Rudnick who focuses on
Latin America matters including
Cuba. A graduate of the University of
Havana Law School, Mr. Alvarez-Guerra
is authorized to practice law in Cuba and worked for the Ministry of Foreign
Affairs before he left Cuba in 2007 to
pursue a graduate legal education
A brief exam of U.S. export/import regulations concerning Cuba
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U.S. exporters will encounter enormous differenc-es with U.S. corporate laws in Cuba. Besides the existing regulations to grant business licenses to sole proprietors (which are unincorporated own-ers), Cuba has no laws regulating private enterprise.
Another license exception called consum-er communications devices allows the export or re-export of commodities and software to be sold to Cuba. Eligible items include: 1) consumer com-puters; 2) consumer disk drives and solid state storage equipment; 3) in-put/output control units; 4) graphics accelerators and graphics coprocessors; 5) monitors; 6) printers; 7) modems; 8) network access controllers and communi-cations channel control-lers; 9) keyboards, mice and similar devices; 10) mobile phones, including cellular and satellite telephones, personal digital assistants, and subscriber informa-tion module (SIM) cards and similar devices; 11) memory devices; 12) consumer “information se-curity” equipment, “software” (except “encryption source code”) and peripherals; 13) digital cameras and memory cards; 14) television and radio receiv-ers; 15) recording devices; 16) batteries, chargers, carrying cases and accessories for the equipment described above; and 17) consumer “software” (ex-cept “encryption source code”) to be used for the equipment listed in categories 1) through 16.
BIS regulations also allow the export or re-ex-port to Cuba of items sold for telecommunications, including access to the Internet, use of Internet services, infrastructure creation and upgrades.
These new regulations added a general policy of approval for exports and re-exports of items nec-essary for the environmental protection of U.S. and international air quality, waters, and coast-lines. These provisions include items related to re-newable energy or energy efficiency. The new legal frame allows U.S.-owned entities to be engaged in environmental protection-related transactions with Cuba.
What can be sold from Cuba in the U.S.?The Office of Foreign Assets Control (OFAC)
on Jan. 16, 2015 added a new section authorizing commercial imports of certain goods and services produced by independent Cuban entrepreneurs. Thus, U.S. businesses and other persons subject to U.S. jurisdiction are authorized “to engage in all transactions, including payments, necessary to import of items and services produced by indepen-dent Cuban entrepreneurs”. However, the list of
goods and services that can be imported from Cuba for sale in the United States is very limited.
The State Department on Feb. 13, 2015, published a list of categories of goods that cannot be imported from Cuba. The law pre-vents the import of goods that fall within the follow-ing categories:
1) “Live Animals and Animal Product”;
2) “Vegetable Products;” 3) “Animal or Vegetable Fats and Oils and their
Cleavage Products; Prepared Edible Fats; Animal or Vegetable Waxes”;
4) Prepared Foodstuffs; Beverages, Spirits, and Vinegar; Tobacco and Manufactured Tobacco Substitutes;”
5) “Mineral Products;” 6) “Certain Products of the Chemical or Allied
Industries;” 7) “Certain Textile and Textile Articles” (Im-
port of Cuban products using wool, fine or coarse animal hair; horsehair yarn and woven fabric or cotton is not allowed );
8) “Certain Base Metals and Articles of Base Metal;”
9) “Machinery and Mechanical Appliances; Electrical Equipment; Parts Thereof; Sound Re-corders and Reproducers, Television Image and Sound Recorders and Reproducers, and Parts and Accessories of Such Articles;”
10) “Vehicles, Aircraft, Vessels, and Associated Transportation Equipment” and
Selling to Cuba, buying from Cuba (1)
The license authorizes export
only to private-sector entrepreneurs in
Cuba.
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Selling to Cuba, buying from Cuba (2)
11) “Arms and Ammunition; Parts and Acces-sories Thereof.”
Any person subject to U.S. jurisdiction engag-ing in import transactions involving in authorized goods produced by an independent Cuban entre-preneur “must obtain documentary evidence that demonstrates the entrepreneur’s independent sta-tus, such as a copy of a license to be self-employed (licencia de cuentapropista) issued by the Cuban government or, in the case of an entity, evidence that demonstrates that the entrepreneur is a pri-
vate entity that is not owned or controlled by the Cuban government”.
This list does not supersede or excuse compli-ance with any additional requirements in U.S. law or regulation. Also, these goods may be subject to applicable duties, fees, and taxes.
To summarize, certain exports to and imports from Cuba are now allowed by the Departments of Treasury and Commerce. However, the authorized transactions are subject to conditions. g
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U.S. and Cuban claims: Myth and reality
•Cuba illegally confiscated U.S.-owned properties in the early 1960s.
Cuba legally nationalized foreign assets. Remarkably, in June 1959, the U.S. ambassador to Cuba delivered a diplomatic note to the Cuban government recognizing “that under international law a state has the right to take property within its jurisdiction for public purposes in the absence of treaty provisions or other agreements to the contrary,” and stated that the United States “understands and is sympathetic to the objectives” of the Castro regime’s land reform program because it “can contribute to a higher standard of living, political stability and social progress.”
•The U.S. certified claims belong to the U.S. government
The claims are private property and belong to whoever owns them, individuals or corporations.
I n December, U.S. and Cuban negotiators met officially for the first time to begin the process of settling U.S. claims for nationalized properties and Cuban counter-claims for economic damages.
Settlement of the claims (around $8 billion on the U.S. side and between $121 and $181 billion claimed by Cuba) is mandatory for repeal of the U.S. trade and investment embargo. Misconceptions about the claims abound. Here are prime examples, with the facts:
Guest column
Timothy Ashby, CEO of Pembury Capital Inc., is a lawyer and
entrepreneur with more than 30 years
of experience in Cuba
The legal mandate of the U.S. Foreign Claims Settlement Commission (FCSC) is to determine the validity and amounts of any individual and corporate U.S. claims against Cuba. The Commission was required to certify its findings to the Secretary of State for “possible use” in future settlement negotiations with Cuba. Claims are certified in terms of money damages owed by the Cuban government and are legally a “chose in action”: an intangible personal property right recognized and protected by the law, which has no existence apart from recognition given by the law, or which confers no present possession of a tangible object.
•Maybe the U.S. government can negotiate return of the properties?
The nationalized properties legally belong to the Cuban state. However, until compensation u
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Claims, myth and reality (1)
is paid, the claims are an encumbrance on the title of the nationalized assets, meaning the Cuban government can’t deliver “clean” title to anyone, foreign or Cuban, wishing to buy or develop the properties.
•Cuba has no intention of settling the claimsCuba has never repudiated the U.S. claims
but has consistently stated that it does not recognize the property claims of Cuban exiles, as reaffirmed during the opening round of settlement negotiations. Cuba recognizes its obligation under international law to provide compensation to U.S. nationals whose assets were taken. However, it does not recognize the FCSC valuation or the 6% per annum interest allowance. Cuba’s official policy is that it stands “ready to negotiate, on an equal footing, compensation for approximately 6,000 U.S. businesses and citizens affected by the nationalization legislation and to seek an arrangement that would also take into account the extremely serious economic and human damage inflicted on Cuba by the blockade.”
Over the past half century, the Cuban government has made repeated settlement attempts, but the United States refused to negotiate and intervened in attempts by private claimants to negotiate a settlement. When I was a senior U.S. government official from 1987 to 1990, I met regularly with Cuban counterparts on official business during which the Cubans expressed interest in negotiating a settlement. I reported these overtures to various U.S. agencies, including the White House National Security Council and the Department of State, and I personally briefed Vice President George H.W. Bush (who seemed to treat them seriously). These were deemed not worthy of an official response because “Cold Warriors” believed that the Castro government would be overthrown and the properties returned to the original owners.
•So what can we expect from the claims settlement negotiations?
Both governments are intent on agreeing on a settlement framework this year, before Barack Obama leaves office. While the U.S. government
can legally “espouse” the claims — take them in a similar way to exercising “eminent domain” — it probably won’t do so because of concerns about litigation from major corporate claimants (e.g. Office Depot, Coca-Cola, Hilton). However, the United States can be expected to try to persuade claimants to let it negotiate on their behalf to achieve a quick resolution, paying Cuban bonds worth — at best — less than 10 cents on the dollar of the original certified value of the nationalized properties.
I expect the United States and Cuba to eventually agree on a two-tier settlement strategy that includes lump-sum settlements for the bulk of smaller, individual claims, and a menu of options for corporate claimants that will allow for U.S. investments, ranging from debt-equity swap vouchers, to “rights to operate”, final project authorizations at the Mariel Special Development Zone, “preferred acquisition rights”, and payment through sovereign bonds, rather than actual restitution of seized property. Watch for “compensation funds” (such as my former Siboney company) to win approval to aggregate claims and settle with the Cubans privately for commercial rights and bonds.
As for the Cuban counterclaims: The United States will “settle” these via various forms of direct and indirect development assistance, including U.S. support for financing from the World Bank’s IFC and other multilateral organizations. Despite U.S. official statements that the Guantanamo naval base is “not on the table,” the truth is that Guantanamo is a bargaining chip for the United States. The deal will be that the base would be nominally returned to Cuban sovereignty, but will be an international free trade zone, with cruise ship and container terminals. Part of this plan will be to make Guantanamo a digital hub for the Caribbean, using a new $35 million fiber optic cable from Florida, which will go online in February 2016. g
Timothy Ashby, PhD, JD, MBA, is a Senior Counsel with the international law firm Dentons. He is also CEO of Pembury Capital Inc., and was CEO of Siboney Ltd., a company founded in 2006 to acquire and swap U.S. certified claims
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Let me start by saying that I am a nobody (I am not an “intellectual”, I am not an academic, I don’t have “Big Law” nor any economic interest backing me). My opinion is simply that, my opinion, and it is worth no more (but no less) than yours.
On the other hand, I was born in Cuba and have been going to Cuba — which I left with my parents when I was eight years old, in May 1960 — since 2002 (a week before Jimmy Carter visited the island, and as Osvaldo Payá was taking his Proyecto Varela to the Cuban legislature), I grew up in Latin America just as Cubans in the island did, and I am, first and foremost, a civil lawyer, like all of my Cuban colleagues are. Despite the fact I have been a Florida Bar member for more than 30 years, I am still essentially the same civil lawyer I was when I started practicing in Argentina.
I wanted to stipulate this to save some of you the time it takes to call me a “communist”, a “traitor”, and a “collaborator with tyranny” (I am ideologically agnostic, by the way). I also admit: I
Everybody who’s somebody has written about what has happened — what has not happened, rather — since Cuba and the United States announced their willingness to talk to each other as equally sovereign
do feel a lot more comfortable with Cubans in the island (and those who grew up in the island over the past 50 years or so, wherever they may live) than I do with most of my relatives and neighbors who grew up in the United States. Idiosyncratically and culturally, I am a lot closer to my colleagues in Cuba than I am to my colleagues in the United States.
And just to give my “non-fans” a little more ammo, Cuba will not (and should not) give anything to the United States in exchange for lifting the embargo. This is an idiotic legal hole we dug ourselves into, and it is up to us to find our way out of it.
Having said that, I now have a question for you all: Does it make any sense to pay heed to the many clairvoyants among us — the crystal ball crowd, those who, for years, have announced Castro’s Final Hour or the Revolution’s imminent demise — when you want to know whether Cuba has changed over the last year (or over the past u
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A year goes by (1)
seven years) when most of these self-appointed experts who write and talk endlessly on TV have never set foot in the island over the last 15, 20, 30, 40 or even 50 years? What can they possibly tell you about what’s going on in Cuba that you cannot find out by going to Cuba yourself, as a former Secretary of Commerce recently suggested we all should do?
People in Cuba, not accessible?These myth maniacs frozen by the Cold War
will tell you people in Cuba will not be accessible to you. But that is a blatant lie that anyone who visits Cuba can easily corroborate.
When I visit Havana I rent a room at a private home, I walk around and interact with all kinds of people (I may be under watch, I don’t know and could care less), I frequently take rides on boteros, cars that follow a fixed route and which you can hop into as long as there is a seat available, and talk to Regular Joes like me, who invariably and openly complain about everything. I also interact with as many young Cubans working for the government, or in academia, or in my legal profession, as I possibly can. And I am often invited to speak at conferences where nobody censors me, where I ask as many impertinent questions as I want to, and despite the occasional tense moment, nothing bad happens.
The same can be said about health care in Cuba, something our local “experts” in Miami frequently criticize. I was in Havana this past December 17 — I was also there a year before, the day “the new era” was announced — and uncontrolled coughing and non-stopping hiccups took me to the Clinica Cira García for a brief visit. There were about 15 people before me when I arrived at the médico de guardia, the equivalent to one of our hospitals’ ERs, most of them locals. I could experience first-hand what Cubans “must go through” under similar circumstances — or maybe not so similar, I grant you that, since Cira García is one of those places where foreigners go when sick. Still, most people in the waiting room appeared to be local.
The human warmth and kindness, as well as the professional knowledge of the doctor who saw me, was simply outstanding. And it was evident I was
not given any red-carpet treatment, but rather that the same warmth and consideration was extended to everyone else, no matter whether Cubans or foreigners. It took me less than 30 minutes to sit down with one of the doctors. Since I decided not to undergo any extensive studies to find what was wrong with me (I was traveling to Miami the next day, a Friday), they gave me a couple of shots that took care, temporarily at least, of my condition.
Since early Saturday morning, already back in Miami, I started receiving calls and emails from my friends and acquaintances in Cuba who were worried and expected me to have already gone through a full check up. It was hard for me to explain that I would have to wait till Monday to do that, the earliest I could get a date at my doctor’s office to see his assistant, rather than spend many long hours in one of our hospitals’ emergency rooms.
There are plenty of things to complain about in Cuban society — and many Cubans openly do so — but what has for years completely shredded the credibility of our deeply frustrated exile community’s in its attempts to “inform the world” of what is going on in Cuba is these myth-maniacs’ proneness to exaggerate matters to the point their tall tales can be easily shot down by anyone who is truly acquainted with Cuban reality.
So do yourself a favor and go see for yourself, and quit relying on other people’s opinions, including mine. We are facing a great opportunity for both nations, but specially for all Cubans. It should not be sacrificed on the altar of the myth maniacs among us. g
‘Go see for yourself, and quit relying on other
people’s opinions.’
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Peter Bjarkman
Cuba’s Baseball Defectors. The Inside Story
Rowman & LittlefieldLondonHardcover, 347 pagesTo be published in May
4 Baseball is a passion in Cuba, and the crisis of the once very successful socialist model — the “death of Cuban League baseball as we know it”, as Bjarkman calls it somewhat hyperbolically — and the defection of 150 top athletes to the United States last year without the possibility of continuing to contribute directly to Cuban baseball are a heartache for millions of fans. By extension, this has become a headache for the government; so, to stem the tide, let
foreign know-how filter into Cuban baseball, and put the national team on the winning street again, authorities have allowed athletes to join pro teams abroad, as long as they continue to play in the domestic league and the national team. One of the biggest beneficiaries — and one of the officially wealthiest Cubans in the island — became Yulieski Gourriel, offspring of a dynasty of baseball stars and coaches and probably Cuba’s best player right now, since signing a million-dollar contract with a Japanese pro team. But the strain of Yulieski’s triple duties soon showed, and an injury caused the Yokohama Baystars to cancel his seasonal contract. Next thing we know, at the age 31 Gourriel has joined the growing roster of Cuban defectors in MLB baseball.
In his 8th book, scheduled to be published in May, Peter Bjarkman is scrutinizing exceptional athletes such as Gourriel and the forces that push and pull them, allowing readers to draw conclusions about the future of Cuban
Bookshelf
baseball.
Bjarkman — probably the foremost expert of Cuban baseball in the United States who is close to many of the players he writes about — doesn’t spare the corporate machine that is U.S. Major League Baseball either.
He points out how the official MLB policy of forcing Cuban players to cut all ties to their homeland not only triggered the stream of talent, but also produced tales of human trafficking and violations of Cuban law. And it contributes to the destruction of the Cuban model. Bjarkman draws an unusual conclusion for the future of U.S. baseball: “Baseball’s salvation as a twenty-first-century sport depends on the continued health of alternative baseball worlds” — such as the Cuban one.
A big-league book!—JOHANNES WERNER
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EDITOR
Johannes Werner
WASHINGTON CORRESPONDENT
Ana Radelat
POLITICAL ANALYST
Domingo Amuchastegui
FEATURE WRITERS
Vito EchevarriaDoreen Hemlock
CARTOGRAPHER
Armando H. Portela
Cuba Standard Monthly (ISSN 1073-7715), founded in 1993, is published by Cuba Media LLC, PO Box 566346, Miami, FL 33256-6346.Annual subscription via PDF delivery: $398. Please visit www.cubastandard.com to learn more about our other information services.
To order a subscription, call Cuba Standard at (941) 702-8614, or send an e-mail to [email protected].
Contents may not be distributed by any means without prior written permission of the publisher. Cuba Media LLC grants authorization to photocopy items for internal or personal use, provided the appropriate fee is paid directly to Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923. For details, visit www.copyright.com.
Feb. 11-12 Feria Internacional del Libro — The annual book fair in Havana is the hemisphere’s largest. www.ccl.cult.cu; email: [email protected]
Feb. 15-19 Universidad 2016 — International congress of higher education sponsored by the Ministry of Education, at the Havana Convention Center. www.congresouniversidad.cu
Feb. 28-March 4 18th International Habanos Festival — The one and only festival about Cuban cigars, Havana. http://www.habanos.com/en/category/festival-habano/
March 13-18Feria internacional Informática La Habana 2016 — Pabexpo, Havana. Cuba’s largest fair and convention for IT and telecommunications. www.informaticahabana.cu, [email protected]
March 14-19Feria Internacional Agroalimentaria (Fiagrop) — food and agriculture fair at Rancho Boyeros, outside Havana, with cattle show and rodeo, under the auspices of the agriculture ministry. [email protected], [email protected]
March 15 3rd U.S.-Cuba Corporate Counsel Summit — Knowledge@Wharton conference in New York City. http://knowledge.whartonevents.com/cuba-counsel/
Apr i l 5-7 11 th International Construction Fair (Fecons) — organized by the ministry of construction, participants from more than 20 countries are
May 1-5 International Tourism Fair (FitCuba 2016) — Annual tourism industry fair, this year in Havana; guest of honor: Canada. www.fitcuba.com
May 17-19 Hostel Cuba 2016 — International fair of hotel and restaurant management, organized by Palco and Fira Barcelona. Pabexpo Havana. www.firacuba.com/en/hostelcuba, [email protected]
June 20-24CubaIndustria 2016 — The second annual edition of what is designed to Cuba’s largest fair with a focus on manufacturing. Palacio de Convenciones, Havana. www.cubaindustria.cu, [email protected].
Ju ly 5-7Feria Alimentos Cuba 2016 — Food industry fair organized by Palco and Fira Barcelona. Pabexpo, Havana. www.firacuba.com/en/feria-de-alimentos-cuba, [email protected]
Sept . 13-15SecurTec 2016 — International security and emergency services fair organized by Palco and Fira Barcelona. Pabexpo, Havana. www.firacuba.com/en/securtec-cuba, [email protected]
Nov. 21-26CUJAE 2016 — The 18th Scientific Convention on Engineering and Architecture. Palacio de Convenciones, Havana. www.cciacuba.com
CALENDAR OF EVENTS
If your organization is sponsoring an upcoming event, please let our readers know! Send details to Cuba Standard Monthly at [email protected]
