Cuba Business

Cuba trade more made more difficult due to increased scrutiny

Posted November 25, 2004 by publisher in Cuba Business.

By Rafael Lorente | Sun Sentinel

The Bush administration might force Cuba to pay cash in advance of shipment for any food the island purchases from U.S. companies in the future—a change that could jeopardize millions of dollars a year in agricultural sales.

Until recently, the practice has been for Fidel Castro’s government to pay for agricultural shipments in transit or after they arrived at a Cuban port, but before formal title for the goods exchanged hands. But some in the administration argue that is not what Congress intended when it passed a law in 2000 allowing cash-only food sales to Cuba.

The law stipulated that Cuba purchase food products with cash in advance, and not on credit, which some administration officials interpret as payment before the goods leave the United States.

Since the law was signed by President Clinton, Cuba has purchased almost $715 million in agricultural products from the United States. So far this year, Cuba ranks 22nd among export markets for agriculture, with $314.7 million in sales.

Already, because of the scrutiny on the agricultural sales by the Treasury Department’s Office of Foreign Assets Control, several sales are on hold. U.S. banks are waiting on word from Washington before releasing Cuban funds to American companies.

Several members of Congress have written a letter to Treasury Secretary John Snow protesting any changes.

“Though there is not a need for tightening requirements on these U.S. sales to Cuba, it is certain that requiring payment prior to shipments, a prepayment, will end all U.S. agriculture sales to Cuba. ... Even if Cuba would be willing to continue to buy U.S. goods, a change from the current practice would increase costs, create tremendous logistical problems, negatively impact the price for agricultural products and generally make U.S. exports less competitive,” said the letter, signed by Rep. Jo Ann Emerson, R-Missouri, and several other members from both parties.

The letter raises the possibility that once Cuba has paid for goods sitting at a U.S. port, those goods could be confiscated in order to settle legal claims against Cuba pending in U.S. courts.

Advocates of changing the policy say it is about accountability and protecting U.S. companies from inadvertently breaking the law, not about stopping the sales or confiscating property.

“We want to see proof that [Castro’s] paying in cash only,” said Rep. Ileana Ros-Lehtinen, R-Miami. “It would be a good thing because there’s very little enforcement that can be done after the fact.”

John Kavulich, president of the U.S.-Cuba Trade and Economic Council, which monitors trade between the two countries, said that if the change goes through, it is not likely to lead to confiscations because sales that are authorized by the United States are exempt from seizure. Kavulich said the Bush administration is simply following its policy of looking for ways to make it tougher and more expensive for the Cuban government to do business.

“It’s increasing the inconvenience, increasing the unpleasantness,” he said.

Kavulich said Cuba has sometimes been slow to pay U.S. companies, often waiting well past the customary 72-hour period after the goods arrive in port.

An official with Alimport, Cuba’s food importing agency, declined to comment Tuesday. Officials at the Treasury, the State Department and the White House also declined to comment.

Havana Bureau Chief Vanessa Bauza contributed to this report.

Rafael Lorente can be reached at .(JavaScript must be enabled to view this email address) or 202-824-8225 in Washington.

Member Comments

On November 25, 2004, waldo wrote:

Same O Same Bloqueo B.S.!

On November 25, 2004, YoungCuban wrote:

If I was Cuba I would not buy one red potatoe from the U.S.!

This is ridiculous, cant the U.S. just stop trying to rule the world for once?

Any day now ladies and gentlemen we will be forced to say Hail Bush as this country and it’ government brains are taking us into a Nazi style of living.

Hitler wanted to conquer the world,now the U.S. is following in his foot steps!

Cuba for over 40 years has been able to survive without the help of the U.S. and with that said,Cuba should look into continuing to survive without the U.S. or any company from the U.S. as there is always some sort of bogus obstacle for Cuba to jump over.

On November 26, 2004, waldo wrote:

RIGHT ON! Young Cuban. The FOURHT RITCH is on its way. Iran next.