Author: Poblete Tamargo LLP

In a recent interview with Radio Martí, Mauricio Tamargo further discusses ways in which the Cuban government could finance debt with US companies in order to pay American certified claims.

Tamargo explains, “If we lift the embargo, Cuba will make lots of money with their business and will sell many of their products here in the United States, and if they can finance the debt.”

The Cuban government could use the proceeds from exports to pay the $7 billion outstanding claims. Tamargo compares similar deals with Vietnam and Russia that were successful. Solving such financial discrepancies are key in establishing business relations internationally which is generally the main motivator in reaching an agreement.

Experts have considered the possibility that the two countries reach an agreement on debt investment, giving American entrepreneurs the amount as an investment in certain Cuban companies.

Tamargo does note that given the state of the Cuban economy, such alternative means of financing should not be ruled out.

The original article (in spanish) can also be found here.

In an article published by the Pittsburgh Post-Gazette, Mauricio Tamargo discusses the ability of the Cuban government to make payment on US certified claims.

Between 1965 and 1972, the US Foreign Claims Settlement Commission (“FCSC”) certified claims against Cuba now worth more than $7 billion, including interest. During bilateral talks in Havana last month, State Department officials raised the issue stating that “the resolution of outstanding US claims remains a priority for the US government.”

Former chairman of the settlement commission, and attorney at Poblete Tamargo, LLP, Mauricio Tamargo, discussed the difficult challenges that may unfold. “It will be a problem for the Treasury Department, which will be in charge of figuring out who is teh rightful holder of each claim,” he states.

Tamargo explains that American law is clear, Cuba must make restitution before the trade embargo can end, a condition of the Helms-Burton act from 1996.

“Cuba does not get a free ride. If you wish to do commerce with the United States, you must respect the property rights of its citizens,” Tamargo says.

Tamargo goes on to say, “Cuba clearly has the money, even if it didn’d, it could easily finance [$7 billion] because once the trade embargo gets lifted Cuba will make a lot of money.”

Cuba continues to assert that they suffered greatly from the embargo estimating damarges as high as $180 billion, a figure that Tamargo explains is a posturing tactic by the Cuban government to minimize and gain some sort of negotiating tool.

Critics who feel that Cuba is not financially capable of paying the claims in full have proposed alternative options to total payment of the American claims stating that Cuba is not likely to accept the valuations made by the FCSC.

Regardless, it will end up to Congress, not the Obama administration, to make decisions on lifting the embargo.

For more information on Cuba’s ability to Pay US Certified Claims, read Tamargo’s article “Can Cuba Afford to Pay?”.

The original article published by the Post-Gazette can be found here.

On November 6, 2015, the House Committee on Foreign Affairs held a Subcommittee Hearing titled: Deplorable Human Rights Violations in Cuba and Venezuela led by South Carolina Representative Jeff Duncan.

Testimony was heard from two panels, with Panel 1 containing witnesses on Cuba and Panel II made of witnesses on Venezuela. 

Below is a summary of talking points from witnesses testifying on human rights violations in Cuba. 

Remarks by Antonio Rodiles – Cuban Dissident

Mr. Rodiles is the Director of State de SATS, a forum created in 2010 by a group of young artists, intellectuals and professionals that aim to encourage debate about social, cultural and political issues in Cuba. He is also a coordinator of Forum of Rights and Freedoms in Cuba. Rodiles discussed the Castro regime and the ongoing alliance between Russia and Iran, which continues to protect “neo-castroism”. He explained that the communist regime will adapt to the international community in order to stay alive, even if they “must pretend to be free marketers.” Citing the increase in human trafficking in Cuba and other repressive actions by the Cuban government Mr. Rodiles concluded that President Obama’s policy has given legitimacy and additional resources to a regime that will continue to adapt.

Remarks by Sylvia G. Iriondo – President of Mothers and Women Against Repression (MAR por Cuba)

Ms. Iriondo spoke of the open communication between the Obama Administration and Castro Regime, with negotiations for normalization beginning more than two years ago in secret talks which led to the December 17th announcement. She cites multiple human rights violations that have continued despite the concessions Obama has made to the Castro government. Specifically, returning Cuban spies involved in violent crimes, taking Cuba off of the US list of Sponsors of Terrorism while many fugitives wanted by the FBI are welcomed in Cuba. She goes on to discuss the political and social repression that was violently unleashed by the Castro regime before and after the visit of Pope Francis, including the repeated beatings and harrassment of the Ladies in White, who peacefully demonstrate their desire for religious freedom. Ms. Iriondo also discusses the increase in arbitrary political detentions. She concludes that the Obama policy has only emboldedned and enabled the Castro regime.

Remarks by Presbyter Mario Felix Lleonart Barroso – Pastor at Ebenezer Baptist Church in Villa Clara, Cuba

Reverend Barroso’s testimony focused on the violent actions taken by the Castro government in preventing the expression of religion throughout the island. Despite claims of “religious freedom” the Cuban regime continues to trample on the countries religious rights citing personal experiences that he and his family have been subjected to. Reverend Barroso has been blocked from traveling to urban communities, denied attempts to study Theology, arrested on numerous occasions for no legitimate reason, been placed under a “house arrest” and all attempts of travel outside of the country have been made incredibly difficult with the few occasions resulting in unnecessary search and seizure upon return. Members of his church have also been threatened, coerced, and blackmailed. The Cuban government continues to deny the church the required work permits to fix damages to the church facility. He also explains that his family has had numerous property items confiscated as well as being subjected to cell phone interference by the Castro regime.

 For full testimony and further hearing information, please visit the following website.

In an article published in the Miami Herald, US agricultural food exports to Cuba are discussed as the United States works to open trade with the Island. Recent reports have shown a large decrease in exports from the Agricultural sector to Cuba in spite of the ongoing efforts to normalize relations with Cuba.

 Exports of Food and agricultural products to Cuba were authorized under a 2000 trade law. According to data taken from the US-Cuba Trade and Economic Council, exports this year have dropped despite the new efforts by the Obama administration to normalize relations. Taking a look at the numbers, in August 2014, the value of food and agriculture exports to Cuba were approximately $14.4 million, those same exports in August of 2015 only valued around $2.3 million.

Jason Poblete, an international regulatory lawyer with Poblete Tamargo, LLP comments on these numbers in relation to overall diplomatic efforts between the two nations.

“The concessions made by the president were significant — and yet you don’t see any evidence of Cuba reforming their economy or addressing US concerns such as certified claims or human rights,” said Poblete. “My sense is that nothing that has happened this year is going to move the needle in any appreciable way. They’re playing a political game of chicken, hoping Congress will ease sanctions, especially the credit prohibitions.”

 For the complete article go here. 

In a recent article published by Bloomberg BNA, author Lenore Adkins discusses the current status of certified claim holders against Cuba. 

The majority of claims that were certified by the Foreign Claims Settlement Commission (“FCSC”) were from the 1960s and 1970s following the takeover and nationalization of Cuba by the Castro regime. The FCSC, which concluded the first Cuba Claims program in 1972, no longer has the authority to update claimant information. Over the years, ownership to the vast majority of certified claims has changed hands as original claimants have passed and companies have come and gone.

Former FCSC chairman, and attorney with Poblete Tamargo, LLP, Mauricio Tamargo, discussed the out of date information as a possible complicaiton to payouts if the government receives the monetary funds to disburse.

 “When a company splits or merges with others, it is up to the proper party to submet new information about claim ownership,” said Tamargo.

Tamargo explains that in the majority of the claims, the current rights holders aren’t known, which is why he has been advocating for Congress or the Secretary of State to authorize a limited program for the commission to update the certified claim holder successor as the current claim holder.

“The whole system is not desigend to go 55 years unpaid,” Tamargo said.

Tamargo also argues that the Cuban government should pay the claims in full, including interest, as officials could borrow money now in anticipation of Congress lifiting the embargo and use it to pay off the debt.

“They have quite a bit of commerce going on. If you factor in that the total settlement agreement will include lifting the embargo, as it surely will, then one can anticipate that the Cubans are going to have a lot of revenue.”

 

The complete article can be found here.