And back go we again. Cuba. Sanctions.
President Donald Trump’s issuance of a National Security Presidential Memorandum on Strengthening the Policy of the United States Toward Cuba on June 16 signaled a sweeping shift from the Obama-era Cuba policy that concentrated on ending the US’s longstanding sanctions program on Cuba and the Castro regime. That day, in a speech given in Miami, the president emphasized that the latest update in policy is motivated by a desire to restrict the flow of US currency to the military, security and intelligence apparatuses of the Castro regime.
This is from the Global Trade Cuba Sanctions 2017 post, in late October, authored by Doreen Edelman. Ms. Edelman, a few weeks later, wrote also the November update on the same issue, appearing in Export Compliance Matters and we added the Cuba list to Global Wizard Denied Persons.
The introduction of the Cuba Restricted List seeks to channel funds away from the Cuban military, intelligence, and security services. The State Department prohibits U.S. persons from engaging in direct financial transactions with the 180 entities and sub-entities currently on this new list. For purposes of this prohibition, a person engages in a direct financial transaction by acting as the originator on a transfer of funds whose ultimate beneficiary is on the Cuba Restricted List or acting as the ultimate beneficiary on a transfer of funds whose originator is on the Cuba Restricted List.
The Cuba Restricted List consists of ministries, holding companies, hotels, tourist agencies, marinas, stores, soft-drink manufacturers, rum distributors, and entities serving the defense and security sectors.
Of particular note on the Restricted List are the large military-run corporations that dominate the Cuban economy, including GAESA, CIMEX, and Gaviota. The three major holding companies control most of Cuba’s retail business and tourism sectors, along with the now-blacklisted Habaguanex S.A., which runs hotels and commercial entities in Old Havana. The Restricted List also targets a new cargo port and special trade zone outside the city of Mariel, the Mariel Special Economic Development Zone’s container terminal, which has been the focus of Cuba’s efforts to draw foreign investment in manufacturing and distribution. (The List includes Almacenes Universales and Terminal de Contenedores de Mariel, S.A., the two companies that run the terminal).
Other blacklisted enterprises include the state-owned rum companies Ron Caney and Ron Varadero; the soft-drink manufacturers Tropicola, Najita, and Jupina; the Gaviota-owned PhotoService, which prints photographs and sells camera batteries; the high-end jewelry store Coral Negro; and the newly opened Manzana de Gomez luxury shopping mall. Blacklisted hotels include the Manzana Kempinski, which opened this year as Cuba’s first hotel to meet the international five-star standard.
We’d like to also point you to an article on the impact of these changes from a business perspective. So much of Cuba’s business enterprises are owned by the government, and specifically the military, and that’s factored into the policy. It also affects those businesses that are not, of course.