Posted April 22, 2005 by publisher in Cuba Business.
By Jeffrey Sparshott | THE WASHINGTON TIMES
Radlo Foods sold more than $1.5 million in eggs, about 3 million dozen,
to Cuba from September through February, said David Radlo, the company’s chief executive officer.
Exports from the Watertown, Mass., firm to the communist-ruled island were rising steadily until Bush administration regulations took effect at the end of March and limited the way Cuba’s government can pay U.S. food and commodity producers.
“Now we have no orders,” Mr. Radlo said, though the company is trying.
Agriculture and food companies sold almost $392 million worth of goods to Cuba last year under a special export program. Industry representatives fear the tighter rules will diminish that market.
“This is a big deal to the companies that are in this business,” said Richard Lobb, spokesman for the National Chicken Council, an industry group that listed Cuba as its seventh-largest overseas market.
Corn, rice, wheat, soybean, dairy, pork and other farm commodity
groups also are concerned.
Congress in 2000 loosened an embargo that had stifled U.S.-Cuba
trade since 1963, allowing limited exports under carefully controlled
In February, the Treasury Department’s Office of Foreign Assets
Control, which is responsible for administering and enforcing economic
embargoes and sanctions, announced a change to that law, effectively
tightening conditions for export.
The Treasury Department says the change provides a much-needed
clarification for financial institutions, and is not related to broader
policy on Cuba.
“The new guidance does not affect the ability of U.S. companies to
ship goods to Cuba,” said Molly Millerwise, a Treasury spokeswoman.
The Bush administration, though, has opposed closer commercial
relations with Cuba. President Bush last year called increasing trade with
the country the “wrong decision” because it would help maintain a
“tyrant” in power.
The privately funded group Human Rights Watch in March said the
Castro government “systematically denies its citizens basic rights to free
expression, association, assembly, movement and a fair trial.” Police
warnings, surveillance, detentions, arrests and other methods are used
to crush dissent, including well-publicized crackdowns in 2003 and 2004.
Treasury last month implemented a seemingly small change to Cuba
trade regulations. U.S. companies had been able to ship products to Cuba
and accept payment just before unloading. The new regulations require
cash or a letter of credit from a non-U.S. bank before the goods leave
an American port.
Companies say the new “cash-in-advance” definition means that Cuba
would take ownership of the goods while they are in the United States,
allowing anyone with a legal claim against Cuba, for property
expropriation for example, to try to seize the goods as payment. Terms for the
letters of credit were not changed, but such payments were never as
popular as cash because bank charges add to the expense of the transaction.
“The new regulations are an impediment, but they are not
prohibitive,” said John Kavulich, a senior policy adviser with the U.S.-Cuba
Trade and Economic Council in New York. “The statements [by exporters] have
more to do with currying favor with the government of Cuba than
actually reflecting any lost sales.”
Cuba reportedly has required companies to lobby on its behalf in
order to receive contracts.
The farm groups and their supporters in Congress say that is not
the case. Rather, the administration is trying to appeal to Florida’s
Cuban community, a politically potent force that wants Mr. Castro to
“With our farmers and processors facing difficult times ... it is
perplexing that bureaucrats, still stuck in a Cold War mentality,
continue to try and curb one-way export markets,” said Sen. Larry E. Craig,
Mr. Craig, with 29 co-sponsors, introduced legislation that would
define “cash in advance” to the agreement of farmers, ease Cuba travel
restrictions and allow direct payments from Cuba to US. banks.
Mr. Craig and his allies are trying to attach the law to a larger
bill, though they failed yesterday to include it in legislation to fund
U.S. operations in Iraq and Afghanistan.
In the meantime, U.S. farm groups are hoping that Cuba keeps buying
“Our industry has faced hard times, a lot of red ink. We cannot
afford to lose this market,” Mr. Radlo said.
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