Vol. VIII, No. 7 www.cubatradenews.com July 2006 Court to Cubatabaco: Go Back to Start

Ending a nine-year legal odyssey, the U.S. Supreme Cubatabaco, which since 1997 tried Court June 19 sent Empresa Cubana del Tabaco S.A. to secure the trademark for the Cohiba packing, denying review of a 2005 Appeals Court ruling name in the United States against that said Cubatabaco could not seek the rights to the New York-based competitor Cohiba name in U.S. courts, due to embargo restrictions. General Cigar Co., said it would The Supreme Court, in essence, determined that a U.S. start a lawsuit from scratch law that prohibits the recognition of again, and seek a license from Cuban trademarks is more the U.S. Treasury important than U.S. Department to do so. commitment to international Meanwhile, General Cigar trademark agreements. continues to sell Dominican-made cigars in the United States Before the denial, the Bush under the venerable Cohiba name. Administration filed an amicus brief The Supreme Court replicated the Appeals Court’s opinion urging the Supreme Court to not that Cubatabaco didn’t have specific permission from the consider the case. U.S. Treasury Department that would have allowed it to In first instance, a New York District pursue judicial protection for the trademark in the United Court in 2004 had ruled in favor of States. Cubatabaco. Continued on next page

Embargo Updatet Economy ANOTHER BANK SHUNS CUBA PLANS TO EXPORT OIL U.S. efforts to tighten the embargo apparently prompted Cuba is planning to export some of the heavy oil produced another foreign bank to cut back its Cuban business. The in the northwest of the island, Basic Industries Minister Yadira Toronto Star reported in June that HSBC Bank Canada, a García said in a recent speech to the national parliament. subsidiary of London-based HSBC Holdings plc, is canceling According to Reuters, a few foreign tankers have already accounts of customers in Cuba. shipped Cuban crude to the Far East. A spokeswoman for HSBC Bank Canada confirmed to the Up to now, state oil company CubaPetróleo has been buying Star that the bank restricted its business with Cuba residents, the entire domestic oil production to fuel Cuba’s thermoelectric to comply with U.S. Treasury Department sanctions against power plants and cement plants. However, production of “terrorist regimes.” sulphur-heavy oil is rising fast, and the Cuban government HSBC’s move comes after Canada’s Scotiabank in March Continued on next page shut down U.S. Cuba Trade & Investment News dollar accounts and Heavy oil for obtained a copy of the presidential denied U.S. dollar export? commission on Cuba’s preliminary transactions to Drilling rig report, with recommendations to customers in Cuba, on Cuba’s further tighten the embargo. The citing U.S. Patriot northern report is expected to be officially un- Act regulations. coast. As a result, veiled during the first week of July. Canadian See Phil Peters’ column and our documentation on p.3. Cont’d on next page courtesy Pebercan ‘Cubatabaco,’ from previous page General Cigar, which was taken over by Cubatabaco announced it would continue to fight for the Swedish Match AB in 2000, registered the Cohiba trademark in the United States. Cohiba name in the United States in 1981, and “Cubatabaco will now pursue its pending application for produced some cigars under the name until U.S. government permission from the Treasury Department’s 1987. General Cigar didn’t use the name Office of Foreign Assets Control, which administers the U.S. for five years. It restarted production in blockade,” Cubatabaco’s law firm said in a press release 1992, and registered the trademark again the day of the Supreme Court decision. in 1995. Cubatabaco is represented by New York’s Rabinowitz, In an earlier trademark battle over Boudin, Standard, Krinsky & Lieberman. Club rum, Cuba threatened it could begin to Cubatabaco first registered the Cohiba brand in Cuba in disregard some 5,000 U.S. trademarks registered on the 1969, but it didn’t begin exporting Cohiba cigars until 1982. island. Cuban officials haven’t made any comments since The Cubans registered the name in 115 countries. the Supreme Court’s Cohiba ruling.

‘Another Canadian bank,’ from previous page ‘Oil exports,’ from previous page businesspeople in Cuba are crying foul over U.S. trade said it wants to phase out its Soviet-era power plants. practices. From their perspective, the U.S. government is There are twice as many drilling rigs in Cuba this year as trying to impose embargo restrictions on foreign banks while last year. By 2007, Cuba wants to have 18 rigs operating. exempting U.S. exporters from these same restrictions. The global refining capacity for heavy crude has declined “The Americans are playing very unfair games,” the Star over the past two years; the price rise for light oil has been quotes Sam Raina, president of the 52-member Canadian faster than that of heavy oil. Heavy crude currently sells for Business Club in Havana. Raina says pressure by the U.S. about $10/barrel below the price of light oil. However, the government prompted HSBC Bank Canada to close his U.S. interest for heavy oil is rising worldwide as proven reserves dollar accounts and credit cards in Cuba. of conventional crude are running out. The environmental “This has all of a sudden become an issue because U.S. damage from heavy-oil spills is potentially greater, and the trade with Cuba is getting higher and higher and stronger refining process is more expensive, but high refining yields and stronger,” Raina told the Toronto Star. of valuable light and middle distillate fuels can be obtained Cuba trade advocates in Washington suggest the problem from heavy oil. aren’t the exemptions, but the extra-territoriality of U.S. laws and the lack of control by the Bush Administration over mid- , support Cuban oil quest level bureaucrats at the Treasury Department. The exploration subsidiary of Petroleos de Venezuela “It seems to me that Canada should issue an official (PdVSA) agreed to provide technical services to the Centro complaint to the United States, citing the extra-territoriality de Investigaciones del Petróleo de Cuba (Ceinpet). PdVSA of the U.S. embargo and the Canadian blocking statute,” a said its Intevep subsidiary would help Cuba increase oil Cuba trade activist told Cuba Trade News. production and improve Cuban refining processes by However, although a Canadian Helms-Burton antidote law providing technology and know-how in the areas of prohibits Canadian companies from complying with extra- exploration, production and refining. territorial U.S. embargo enforcement, the Canadian Meanwhile, Angola, Sub-Saharan Africa’s second- government has not taken any action. Canadian largest oil producer, said it would like to cooperate with businesspeople in Cuba told the Star reporter that Ottawa is Cuba in oil matters. Angola’s Oil Minister Desiderio Costa “kowtowing to American pressure.” New conservative Prime was in Havana for a work visit June 4. State company Minister Stephen Harper vowed in January to improve Sonangol is an active participant in offshore drilling. relations with Washington.

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2 Documentation: Transition Report Cuba A preliminary version of the second report of the Bush Administration’s “Commission for Assistance to a Free Cuba” circulated in Washington during the last week of June. Below, we are reprinting excerpts from the report that we believe Policy Report are most relevant to foreigners doing business with or in Cuba. President George W. Bush approved virtually all recommendations in the last report in 2004.

“This document represents the work country is necessary to the national of over 100 participants from interest and will expedite a transition to seventeen federal departments and democracy in Cuba, consider in particular agencies over the course of several whether it is engaged in a process of months. (…)” support for regime succession; “The Commission recommends the Vigorously enforce Title IV of the Cuba Fund for a Democratic Future: Libertad Act; particularly focusing $80 million over two years to increase enforcement action on traffickers support for Cuban civil society, expand involved in strategic industries such as oil, tourism, nickel, tobacco, and rum By Phil Peters international awareness, break the regime’s information blockade, and which finance Cuba’s repressive apparatus; and Cuba transition report: continue developing assistance initiatives to help Cuban civil society Encourage Cuban workers in tourism, New tone, old ideas realize a democratic transition. The mining, and other sectors who work for Commission also recommends foreign companies to keep complete A draft of the long-awaited second consistent yearly funding of Cuba wage records.” report of the Administration’s Cuba democracy programs at no less than (…) commission circulated in $20 million on an annual basis Washington in the last week of June. thereafter until the dictatorship ceases “Identify and target human The report makes no dramatic to exist. (…) rights violators change in policy. However, it adopts •Support to independent civil society (…) a new tone that seems to recognize on the island ($31 million). Amend Presidential Proclamation that, as an exercise in political •Funding for education and 5377 to permit the denial of immigrant, communication, the commission’s exchanges, including on-island as well as non-immigrant visas, to 2004 report may have worked in university training from third countries officers and employees of the Miami-Dade County but it backfired and scholarships for economically Government of Cuba or the Communist in Cuba. disadvantaged students from Cuba Party of Cuba. (…)” Consider the issue of residential identified by independent non- property claims. governmental entities and civic “Denying revenue to the Nothing could do more to give organizations at U.S. and third country Cubans reason to fear change, or to universities (including historically Castro regime bind together against an external black and faith-based institutions) ($10 (…) threat, than a U.S. statement that million). In order to undermine the regime’s “tenants” of homes in Cuba could be •Efforts to break the Castro regime’s succession strategy, it is critical that the evicted by returning former owners. information blockade and expand the U.S. Government maintain economic Yet that precise idea was advanced Cuban people’s access to independent pressure on the regime to limit its ability in the Administration’s 2004 report. information, including through the to sustain itself and repress the Cuban This year’s report does not disavow Internet ($24 million). people. Moreover, as we rapidly the 2004 statement, but it stresses that •Support for international efforts at approach the transitional moment, the Cubans alone will decide property strengthening civil society and in more economic pressure there is on the claims, and urges them to do so “on transition planning ($15 million).” regime, the greater the likelihood there the basis of fairness, equity, and (…) will be dramatic and successful change national reconciliation.” “Undermining the regime’s for the Cuban people.” A new and constructive term: succession strategy “national reconciliation.” The report “Improved Enforcement (…) says, “the Cuban community abroad (…) In making a recommendation that a should re-double their efforts to •Establish an inter-agency Law suspension of Title III of the 1996 foster reconciliation on and off the Enforcement Task Force for better Cuban Liberty and Solidarity Continued on next page enforcement of U.S. economic sanctions (LIBERTAD) Act for an individual on the Castro regime; and

3 Documentation: Transition Report from previous page “U.S. Department of Commerce Regulations: •Issue a directive to law enforcement agencies to pursue •Revise temporary sojourn license (TSL) regulations and criminal investigations, including prosecution, where possible implementing guidelines to ensure that licenses are not issued and appropriate, of Cuban Assets Control Regulation and other to maritime vessels, unless the vessel is solely registered to violations, especially for those found to have been involved transport goods and is engaged in the regular transport of bulk in organizing or facilitating unlicensed travel transactions with commodities, or unless otherwise consistent with the foreign Cuba. policy interests of the United States; •Prohibit individuals who wish to send remittances from •Revise regulations and implementing guidelines to deny going directly to third-country institutions to send such export licenses, consistent with U.S. law, for discretionary, remittances to Cuba and require instead that all remittances cosmetic, or other medical equipment sales that would be be sent through licensed U.S. remittance forwarders. Eliminate destined to be used in large-scale medical programs that cater the use of cash-card services for licensed travel to Cuba; to tourists and foreign patients and not exclusively for the (…) benefit and care of the Cuban people; •Implement new licensing criteria and reporting •Develop effective monitoring and certification requirements for travel service providers (TSPs) and Carrier requirements for medical equipment exports that ensure that Service Providers including a requirement that TSPs and CSPs these exports are used only for the use and benefit of the Cuban have an independent financial audit conducted annually. (…)” continued on next page

is a two-year, $80 million budget to strengthen civil society in Cuba. The report wisely omits any language that would (contd.) Policy Report promise near-term results from these policies. U.S. sanctions island…” pinch less and less in an economy that the CIA estimates to The report stresses repeatedly that the U.S. role will be to be growing by eight percent per year. And the future strength support rather than direct change in Cuba. This is another of Cuba’s opposition depends on other factors more response to the 2004 report, which was roundly criticized important than U.S. aid. by dissidents, the Catholic bishops, and others in Cuba The Administration envisions broad diplomatic efforts to because they perceived its aid and reform plans to be a U.S. convince other countries to insist that Cuba carry out a full design for Cuba’s future, rather than a friendly offer. Last transition to democracy. The report notes that Cuba’s May, dissident leader Oswaldo Payá warned, “We do not economic relationships with Venezuela and other “spoilers” accept transition programs made outside of Cuba.” might sustain “the Cuban dictatorship’s succession strategy It is also clear that Paul Bremer had no hand in this report. at the expense of a democratic Cuban transition and U.S. In it, the Administration states an expectation that the Cuban national interests.” military should be preserved and reformed, not disbanded. Indeed, given Cuba’s improved economic position, The new report adds detail to the substantial package of normalized relations with the United States and an end to U.S. aid that could go to a transition government. But this the embargo may not be urgent priorities for Castro’s offer might not be relevant until long after Castro leaves immediate successors. In its old age, the embargo is neither office. It would come only when Cuba meets the Helms- the carrot nor the stick that it used to be. Burton law’s definition of a transition government — release Despite extensive planning for a full transition, it seems of all political prisoners, legalization of all political activity, more likely that after Fidel Castro’s departure, we will see a a commitment to internationally supervised elections, an end socialist successor government that will decide whether, to jamming of Radio and TV Marti, freedom for trade unions, where and how fast to reform the policies it inherits. steps toward resolution of property claims, the absence of Washington will then have to decide how to use U.S. Fidel and Raul Castro from government, and more. influence to promote positive change. That influence will And what if there is no full transition? However strongly be limited by decades of policies that have blocked the Administration applauds economic liberalization in other communication between our peoples and governments, and communist countries, it will not support the model in by the all-or-nothing posture that the Helms-Burton law Cuba: “Half measures and partial reforms by an unelected imposes on U.S. diplomacy. Even after two long reports from successor regime short of free and fair elections should not the Administration’s Cuba commission, those are problems be rewarded with recognition or support from the free nations that remain to be fixed., of the world.” The new report includes additional measures to hasten Peters, a State Department official during the Reagan and political change in Cuba. There are no new travel restrictions, George H.W. Bush Administrations, is vice president of the but there is stronger enforcement of U.S. sanctions, and there Lexington Institute in Arlington, Virginia.

4 Documentation: Transition Report from previous page security apparatus and fund Castro’s interventionist and destabilizing policies in other countries in the Hemisphere. people and not diverted to tourist or foreign care institutions; Moreover, some of this revenue is derived from assets illegally •Ensure monitoring for medical equipment is undertaken expropriated from U.S. citizens after Castro came to power. for the life of the product to ensure items exported are at In addition, there is growing evidence of senior elements of intended end-use institutions. In the event that the Cuban the regime, engaging in efforts to hide personal financial assets government does not permit on-site monitoring at certain abroad to guard against a severe disruption in their stations in institutions, future exports will not be authorized to such the event of a democratic transition in Cuba. These assets, locations; including property and bank accounts, rightfully belong to •Reaffirm the U.S. Government’s export license policy of the Cuban people and should be tracked down and returned to a strict general policy of denial of Commerce export licenses, Cuba for the benefit of a Free Cuba Government. unless otherwise required by existing law; and To hasten the end of the Castro regime by disrupting the •Tighten regulations for the export of humanitarian items, regime’s sources of foreign income and identifying regime other than agricultural or medical commodities, to ensure that assets abroad, we recommend the U.S. Government: exports are consigned to entities that support independent civil •Establish an inter-agency Cuban Nickel Targeting Task society and are not regime administered or controlled Force to reinvigorate the existing nickel import certification organizations, such as the Cuban Council of Churches.” and control regime and cobalt import control regime, •Invigorate identification and targeting of regime offshore “Target Regime Foreign Income and Assets finances and assets and initiate a diplomatic effort to engage international partners and organizations to assist in developing Abroad information on and targeting regime assets abroad. Following the reductions in regime revenue as a result of •Reconvene Cuban Assets Targeting Group with the task of the first Commission report, nearly half of the regime’s current identifying additional ways to target and disrupt regime foreign foreign income is now derived from nickel exports. The income, including identification of the assets of regime revenue from these sales does not go to benefit the Cuban officials abroad, development of information on official people, but is diverted to maintain the regime’s repressive corruption and associated assets abroad. (...)” • E m b a r g o N e w s Payment bill passes House OAS CHIEF SCOLDS U.S. OVER CUBA The House of Representatives June 15 passed 406-22 José Miguel Insulza, an amendment to the Transportation and Treasury general secretary of the appropriations bill that would take back some payment Organization of restrictions for Cuban agriculture purchases. The American States Treasury Department last year told exporters they must (OAS), urged the orga- be paid by Cuba in cash before goods leave U.S. ports. nization to establish The amendment is now in conference committee where relations with Cuba. the Republican leadership likely will try to strip it from The OAS is generally the larger bill. The White House threatened June 21 it seen as an instrument would veto the entire appropriations bill if it included of U.S. control over the embargo-relaxing language. hemisphere. “It seems The amendment, sponsored by Rep. Jerry Moran (R- completely absurd to Ks.), would also allow direct payments from Cuban to me that we have no re- U.S. banks, urges the State Department to issue travel lations whatsoever visa to Cuban agriculture inspectors, and repeals Section with Cuba, while the 211, an obscure law that denies the recognition of Cuban vast majority of coun- trademarks in the United States. tries in the Americas Two other Cuba amendments attached to the Treasury have relations,” bill failed in the House. A measure sponsored by Rep. Insulza said during an Barbara Lee (D-Ca.), that would have rolled back Insulza: “No transition” OAS meeting in the restrictions on educational travel was rejected 178-236. photo courtesy OAS Dominican Republic. An amendment by Rep. Charles Rangel (D-N.Y.) that A majority of OAS member countries must agree to actually would have defunded enforcement of the embargo was establish relations. The Chilean diplomat also commented U.S. voted down 183-245. Last year, the House rejected efforts to plan for transition in Cuba by saying that “Cuba Rangel’s amendment by a wider margin, 169-250. isn’t yours, and there is no transition.”

5 Analysis: fiscal policy Rich provinces, poor provinces

To maintain order in its budget, the Cuban government issued financial caps on how much the national government will transfer to provincial governments during the 2006 fiscal year. The transfer payments, obviously based on historical experience, are an indicator as to what areas of Cuba have a strong or weak economic base. The fiscally best-performing provinces are the capital and the surrounding province of Havana. Both are expected to produce a budget surplus this year. Obviously, the capital is the economic hub of the country as well as the main tourism Central government transfer pay caps to provinces destination. The central provinces of (2006 fiscal year, mln. Pesos MN) and Ciego de Avila, which Province Amount Population* Ratio peso/cap. include the two most visited beach resorts, Pinar del Río -103.7 736,125 140.87 are close to having balanced budgets. La Habana surplus 731,304 n.a. Surprisingly, central Villa Clara, which Ciudad de La Habana surplus 2,185,897 n.a. has no major export or tourism activities, Matanzas -0.8 681,757 1.17 also belongs to the waalthier provinces. Villa Clara -75.2 815,894 92.17 Cuba’s biggest fiscal headache are the Cienfuegos -65.1 401,573 162.11 eastern provinces. Granma and Sancti Spíritus -53.5 464,754 115.11 Guantánamo receive the by far highest Ciego de Avila -17.1 421,788 40.54 transfer payments, apparently a function Camagüey -108.4 788,707 137.44 of the lack of export- and tourism oriented Las Tunas -138.1 533,549 258.83 activities. The exception to the eastern Holguín -187.9 1,033,677 181.78 rule is Holguín province, home to a Granma -273.0 833,328 327.60 dynamic nickel mining industry and a -255.0 1,048,126 243.29 fast-growing beach tourism destination, Guantánamo -197.4 514,158 383.93 with a per-capita transfer cap of only 181 Isla de la Juventud -22.0 87,030 252.79 pesos. Sources: Oficina Nacional de Estadisticas, Gaceta Oficial *2006, estimate; n.a. = not applicable advertisement NEW! Cuba Trade & Investment News ++Life is fast++ is announcing its NEWS FLASH service. Receive substantial, up-to-the minute, late-breaking news about Cuba as it happens, ...Let us help you directly to YOUR e-mail account. stay ahead... News Flash service for Cuba Trade subscribers: $75/year Standalone News Flash service: $100/year

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6 M o r e o n t h e e m b a r g o Oil industry fence-sitting on Cuba The U.S. oil industry is teetering on the edge of throwing spokesman told Washington publication The Hill that he its weight behind anti-embargo efforts. wasn’t “sure we would want to go as far as making a Karen Matusic, spokeswoman of the American comment on whether we would want the law to change.” Institute, told Bloomberg News Service that the API supports Sen. Larry Craig (R-Id.) and Rep. Jeff Flake (R-Az.) a law proposal to exempt oil from the embargo, “in the offered amendments that would allow U.S. oil companies context of increasing access to oil and gas reserves as a way to engage in exploration in Cuban waters. Sen. Pete to ensure U.S. companies’ competitiveness globally.” Domenici (R-N.M.), chairman of the Senate energy However, the API hasn’t taken an active stance on the commission, is among 12 co-sponsors of the amendment. exemption, and left it up to member companies how to Although rising gas prices increase the public pressure proceed. in favor of drilling, the pro-embargo forces in Congress, According to Bloomberg News, Houston-based Marathon organized around the U.S.-Cuba Democracy PAC, dismissed Oil Co. is lobbying Congress to exempt oil. Cuba Trade & the industry’s influence. “I think it will backfire because Investment News could not independently confirm that the oil industry is pretty radioactive in Congress right now, assertion. At least one ExxonMobil executive attended a at least from a lobbying perspective,” Mauricio Claver- February meeting in Mexico City for U.S. energy executives Carone, one of the PAC’s 25 directors and a pro-embargo to meet their Cuban counterparts. An ExxonMobil lobbyist, told The Hill.

ACADEMICS SUING OVER CUBA TRAVEL ANTI-LOBBYING BILL STILL ALIVE An “Emergency Coalition” of professors and four academics An amendment sponsored by sued the U.S. Treasury Department over restrictions against Rep. Lincoln Diaz-Balart (R-Fla.) academic travel to Cuba. The suit was filed June 13 in federal aimed against Congressional court in Washington. The Treasury Department in June 2004 activities in favor of lifting or essentially banned undergraduate students from traveling and easing the embargo failed in the severely restricted travel by scholars and researchers. The House of Representatives. The Emergency Coalition to Defend Educational Travel (ECDET) measure received 263-159 votes, represents 450 professors and other educators. but it would have needed a two- Meanwhile, the American Civil Liberties Union (ACLU) thirds majority — 286 votes — to filed a lawsuit against the state of Florida over a state law that undo current lobbying rules. The restricts academic travel to Cuba and other countries. The amendment, attached to a plaintiffs include eight academics and the faculty senate of lobbying reform bill, required Florida International University in Miami. The law, effective lobbyists and Cuban diplomats to Lincoln Diaz-Balart July 1, blocks researchers at state colleges and universities register their Congressional from using state and private funds for travel to Cuba and other contacts with the Attorney General. The mechanism Diaz- countries on the State Department’s “state sponsors of Balart chose to use is the State Department’s list of “state terrorism” list. The lawsuit, filed in federal court in Miami, sponsors of terrorism,” in which Cuba is included. Cuba is alleges that the law violates academic freedom and freedom the only country in the list that has a permanent presence in of speech, and that it infringes on the federal prerogative to Washington. A Diaz-Balart aide told AFP he would try to re- regulate travel. introduce the amendment in conference.

PRO-TRAVEL GROUP TRAVELS OFAC SHUTS DOWN MORE AGENCIES The Freedom to Travel Campaign is organizing a The U.S. Treasury Department in early June withdrew the congressional trip to Havana in July. In May, the group became licenses of La Perla del Caribe, Transeair Travel and Uno independent from its parent think tank, the Washington-based Remittance Inc. La Perla operates four offices in the Miami Center for International area and is among the larger Cuba travel and remittance pro- Policy. Campaign viders in South Florida. Uno is also based in Miami and of- Director Sarah Stephens fers remittance services only. Transeair Travel is based in said several members of Washington, D.C. Treasury’s Office of Foreign Assets Con- Congress who haven’t trol (OFAC) early this year started a campaign that eventu- taken anti-embargo ally will audit all licensed Cuba travel and remittance busi- positions before are nesses. OFAC told some 40 agencies to stop offering Cuba interested in participating. services due to irregularities.

7 8 E c o n o m y

CUBA BOOSTS MED AID TO ECUADOR Politburo member gets 12 years in prison Cuban Vice President Carlos Lage officially opened two The politburo and Central eye clinics in Ecuador that provide free eye surgery to low- Committee member who was income Ecuadoreans under the “Operación Milagro” program. stripped of his posts in April One clinic is in the capital of Cotopaxi province, the other due to “grave errors” was one in Guayas province. Each hospital can operate up to 80 convicted of “continued patients per day. Fifty Cuban doctors, nurses and technicians influence peddling” June 16 are staffing the clinics in a first stage. by a court in Havana and Ecuador is the third-largest recipient of Cuban medical aid, received a sentence of 12 after Venezuela and Bolivia. More than 1,000 Ecuadoreans years in prison. Prosecutors have received free eye surgery in Cuba under Operación had sought 15 years. Milagro, and 900 Ecuadoreans are studying medicine in Cuba. The 22-member politburo Cuba has treated 250,000 low-income patients from Latin Robinson said in a communiqué only America under the eye surgery program. that Juan Carlos Robinson Agramonte “used his influence Meanwhile, Colombia’s minister of Social Protection said to obtain benefits.” during a visit to Havana that his country wants to increase This is the first time since the revolution that a politburo cooperation in the medical field. He said his country was member was brought to justice. Robinson’s sentence particularly interested in Cuban technology and know-how coincided with a major crackdown on corruption and in early detection of illness. Colombia’s right-wing President irregularities. Alvaro Uribe just won his re-election in a landslide. According to Granma, Robinson, 50, who was supported by a defender of his choice, pleaded guilty and thanked HAVANA PREPARES FOR BIG SUMMIT the court in Havana for the treatment he received. Cuba will assume the three-year rotative presidency of the Robinson, one of the few black members in Cuba’s top Non-Aligned Movement (NAM) when it hosts a summit Sept. political institutions, rose to become a member of the 11-16 featuring UN General Secretary Kofi Annan or his Party’s elite from the eastern province of Santiago. He is representative and around 60 heads of state of the 116 member a sociologist and former university professor. nations. The Non-Aligned Movement has often taken anti-U.S. BIOFUELS PRODUCTION GETS BOOST positions; Cuba’s presidency is expected to continue this Cuba plans to boost ethanol production, taking advantage tradition. The United States has unsuccessfully tried to block of rising demand for the fuel, a Sugar Ministry official said Cuba’s presidency of NAM through its friends in the during a recent congress in Havana. organization. Ethanol production worldwide is rising from 33.5 million Among the priorities of Cuba is to get NAM to support hectoliters in 2005 to an expected 38.7 million hectoliters this ’s right to use nuclear energy for peaceful purposes. At a year. recent meeting in Malaysia, the NAM condemned the U.S. Cuba has produced 1 million hectoliters of ethanol per year. embargo against Cuba, torture in U.S. prisons, and military The ministry is planning to build seven new distilleries and aggression against other nations, namely Iraq. refurbish 11 existing ones, increasing capacity five-fold to 5 Cuba is preparing three major proposals to NAM, the million hectoliters. Cuban officials have begun to negotiate second largest world body after the United Nations. joint ventures with foreign investors, said Luis Gálvez, director The first proposal is to launch a massive literacy campaign of the Instituto Cubano de Derivados de la Caña de Azúcar worldwide, based on Cuba’s “Yo Si Puedo” method. (ICIDCA). The second initiative is to promote a system to educate and Cuba is particularly eager to obtain know-how and train doctors throughout the developing world. First-World technology for ethanol production from Brazil. Cuban officials medical education, Cuba points out, focuses mainly on private recently visited ethanol production plants in São Paulo state. practice and not the massive medical needs of Third-World The move is expected to boost Cuba’s slumping sugar communities. industry, which was cut in half three years ago by the The third proposal is to apply Cuba’s “Energy Revolution” government, responding to plummeting world prices. to other developing countries. Cuba recently decentralized Sugar prices have been on the rise again for most of this energy generation by deploying thousands of diesel generators year. Peter Baron, president of the International Sugar throughout the country, and implemented an energy savings Organization, said during the conference that the cutbacks program by distributing fluorescent light bulbs and energy- were justified, but that now the “situation is drastically efficient appliances. different.” The summit Sept. 11-16 will be attended, among others, Cuba is also experimenting with biodiesel production, using by India’s Prime Minister Manmohan Singh. the Jatropha curcas bush.

9 M o r e o n t h e E c o n o m y

CUBA JOINS RAIL VENTURE Cuba and Venezuela created a joint venture company to build Ferrolasa’s rail infrastructure throughout Latin America, as part of first project: hemispheric integration projects. Empresa para la Modernize Infraestructura Ferroviaria Latinoamericana S.A. (Ferrolasa) this railroad will be based in Caracas and take on as first project the near modernization of a 240-kilometer suburban line near Caracas, Caracas Puerto Cabello-Barquisimeto. Passenger service on the line has been interrupted since 1996; the cargo capacity is expected photo courtesy IAFE to quadruple. The Venezuelan partner — the state’s Instituto Autónomo de Ferrocarriles de Venezuela (IAFE) — will hold 51 percent, (Solcar), a subsidiary of Unión de while the Cuban partner — Empresa de Soldar Carriles (UFC) — will own the remaining 49 percent.

VETERAN MINISTER STEPS DOWN RAUL DE-PERSONALIZES SUCCESSION The State Council and politburo In what looks like a collective governing project, Raúl asked Higher Education Minister Castro said in a recent speech before high-ranking military Fernando Vecino Alegret to step officers that “the only dignified inheritor” of his brother’s role down, after 30 years in office. can be the Communist Party. Vecino was replaced by Juan Vela Raúl Castro, who just turned 75, is the designated successor Valdés, who served as president of his brother Fidel, who turns 80 in August. Fidel, in a recent of the country’s largest university, interview with a French journalist, said that he was sure that Universidad de La Habana. his brother would succeed him. However, he portrayed Raúl Valdés, a medical doctor, is a as a temporary solution because of his age. Vecino Alegret member of the Central Committee In the speech, Raúl Castro described Washington as an of the Communist Party. intelligent enemy that will try to intervene in the succession process. Washington, he said, knows about “the special trust ENGINE DEPLOYMENT DONE IN FALL a people conveys to the founding leader of a revolution. [This The deployment of diesel generators to complement Cuba’s trust] can’t be transferred like an inheritance to those who thermoelectric power plants will be finished by October, Basic occupy the main posts to direct the country.” Industries Minister Yadira García told the national parliament. The generators, deployed in 103 municipalities throughout HUNGARY, BULGARIA SEEKING TRADE the island, have a combined capacity of 1,432 megawatt, Hungary and Bulgaria signed cooperation agreements in providing half of Cuba’s electricity needs. In addition, 10 Havana.Cuba’s trade with the former members of the million energy-saving appliances have been distributed to 70 Communist bloc dropped near zero after the dissolution of percent of Cuban households, García said. the . State banks have provided more than 1.5 million small The Hungarian business delegation was led by the Economy consumer loans for the purchase of subsidized, energy-efficient and Transportation Minister. At a first bilateral meeting household appliances as part of Cuba’s “energy revolution,” planned for Budapest in fall, officials will talk about Central Bank President Francisco Soberón said. The loans total production of medical equipment, agriculture, water supply, a little more than 1 billion pesos (MN). Some 370,000 Chinese- industrial equipment, teaching aides, and modernization of made refrigerators have been sold under the program. Cuba’s railroads and urban transit. The Bulgarian delegation signed a cooperation agreement in education, science and ELECTRIC GRID GETS FIX culture. The electric grid in the province of Cienfuegos is undergoing an extensive update, official media reported. The project STATE FOOD COMPANIES INVESTING includes replacing about 1,000 utility posts, deployment of Cuban state food companies are investing $150 million to 200 transformers, installation of 45,000 breakers, construction expand and modernize food processing and storage facilities, of 205 kilometers of new lines, eight new substations, and the Minister for Food Industry told the parliament. The largest capacity increases at 14 substations. production increases include bread, soybean yogurt, pasta and Also, a 30-kilometer stretch of a 110-volt power line in vegetable oil. The biggest investments are for the remodeling Ciego de Ávila province is being replaced. The new utility of wheat processing facilities, refurbishing 342 bakeries, and poles were made in Cuba. Workers also replaced 1.9 million production of chocolate. The country is also expanding its circuit breakers in homes, and 21,000 transformers. grain storage capacity.

10 C O N F E R E N C E S & E V E N T S NewsNews fromfrom thethe

•10th International Transportation Fair (FIT), Havana, Sept. 27-30 SalesSales DepartmentDepartment •3rd International Manning, Training & Maritime Transport Fair, Havana, Sept. 28-29 ++Gregory Calhoun, CEO of Calhoun and Associates, is th •9 Int’l. Congress of Industrial Recycling, Havana, Oct. 9-13 negotiating with Alimport S.A. to sell canned and snack foods. •Metanica 2006 (Metal and Metal-mechanic industries convention), Havana, Oct. 9-13 The Montgomery, Ala.-based reseller has sent 9 million pounds •4th Int’l. Meeting on Biodiversity and Tourism, Playa Pesquero, of ham to Cuba in the past eight months.++ Oct. 26-28 ++The governor of the Argentinean province of Santa Fé •International Havana Fair (incl. U.S.-Cuba round of signed an agreement during a visit to Havana to supply Cuba negotiations), Oct. 30-Nov. 4 •11th World ‘Sports for All’ Fair, Havana, Oct. 31-Nov. 3 with powdered milk. Press reports didn’t specify the amount. In return, the province will receive Cuban drugs, including Call (941) 330-0303 or send an e-mail to 30,000 doses of a meningitis vaccine. The state also studied [email protected] for more information on the possibility of participating in Cuba’s Operación Milagro events eye surgery program.++ New Players M o r e o n t h e E m b a r g o •Havana-based Representaciones Platino S.A. obtained a FORMER DIRECTOR ACCUSES CANF license from the Foreign Trade Ministry to represent former A former director of Russian state trading company Vneshintorg in Cuba. the Cuban American Vneshintorg, among others, exports Russian food products. National Foundation •Representaciones Platino was also authorized to act as (CANF) told El Nuevo agent of Fidas Enterprises Inc. The company is based in Herald that he created a Panama. paramilitary group in the •The Foreign Trade Ministry authorized Empresa early 1990s to Exportadora de Bebidas y Refrescos S.A. to directly export destabilize Cuba and kill liquor and soda. Fidel Castro. The powerful exile organization has Cuba adds 3% fee to remittances consistently denied any The Cuban Central Bank added a three-percent links to violent attempts handling fee to financial institutions abroad that send U.S. to overthrow the Cuban dollars to Cuba, according to El Nuevo Herald. The rule government. After the was effective June 1. The fee is expected to make both death of founder Jorge remittances to family members and salary transfers to Mas Canosa in 1997, foreign employees in Cuba costlier. The purchasing power CANF, under Jorge CANF founder Mas Canosa of U.S. dollars in Cuba declined by about 30 percent since Mas Jr.’s leadership, 2004 when Cuba stopped the internal use of the greenback. steered away from some of its most radical rhetoric. José Antonio Llamas, 75, told the Miami daily he invested $1.4 million of his own money in a helicopter, 10 remote- the four men on board, including the Miami businessman. The controlled ultralight planes, seven boats, and dynamite. four were charged with conspiracy to kill Castro during the Llamas said the plot took shape during CANF’s annual Iberoamerican Summit in Venezuela. All four were cleared in meeting in Naples, Fla., in 1992. He implicated 20 CANF 1999, for lack of proof. Llamas said he decided to go public directors and Mas Canosa in the plot, but said that neither the because his three co-conspirators have died. board at large nor Jorge Mas Jr. were aware of the terror plans. Llamas resigned from the CANF in 1999, angry about the Llamas said that one of the speedboats was supposed to bring lack of support for his cause. Amid the fallout of his court Mas Canosa to Cuba in the event of a political change. Llamas case, he had to declare bankruptcy. He is accusing CANF also named three men as participants in the group who left the directors of having defrauded him of his $1.4 million and says CANF in 2001 to start the more hardline Cuba Liberty Council. he wants the aircraft and boats back. Finally, one of the men identified by Llamas as a member of The CANF in a statement printed by El Nuevo Herald called the group is also implicated in the FBI investigation into how Llamas’ statements “defamation and extortion,” talked about suspected Cuban exile terrorist Luis Posada Carriles was an orchestrated disinformation campaign by the Cuban smuggled to the United States. government, and said the newspaper was “irresponsible.” Llamas’ project fell apart when the U.S. Coast Guard in 1997 “The CANF is committed to a peaceful, non-violent stopped his La Esperanza yacht in Puerto Rico and arrested transition to democracy in Cuba,” the statement said.

11 C o m p a n y B r i e f s

The oil refinery in Cienfuego will reopen in the third quarter A group of foreign of 2007, a PdVSA executive announced. Venezuelan state oil businesspeople in Havana, company PdVSA is refurbishing the mothballed Soviet-era including representatives of refinery together with CubaPetróleo. The executive said the Ernst & Young Caribbean cost of the first phase totals $44 million. The plant will begin Services, are launching an with a production capacity to refine 65,000 barrels of English-language magazine Venezuelan oil per day. Eventually, capacity is expected to under the name “Cuba nearly double to 120,000 bpd, including domestic crude. Absolutely.” The glossy offers *** stories on culture, entertainment The Center for Genetic Engineering and Biotechnology and business. (CIGB) said it registered in Cuba the world’s first monoclonal *** antibody obtained from plants. CIGB uses the CB-Hep.1 Panama’s Copa Airlines is “plantibody,” made from tobacco, to purify its Heberbiovac- increasing the frequency on its HB hepatitis vaccine. The tobacco antibody, whose production Panama City-Havana route from 14 to 21 flights per week. is less time-consuming and costly, replaces an antibody Copa cited high demand for seats. Cuba and Panama will obtained from mice. A CIGB executive said that a number of discuss a bilateral air transportation agreement in November. foreign companies are looking for a partnership regarding the *** plantibody. Sociedad Automotriz, a subsidiary of Corporación *** Cubalse, bought an undisclosed number of cars from Chinese Part of the movie based on automaker Chery Automobile Co. The contract includes nobel prize winner Gabriel supply of parts and components, and post-sale service. The García Márquez’ novel subcompact Chery QQ will be used by an auto rental subsidiary “Memoria de mis putas of Cubalse. Chery is tristes” will be filmed in China’s eighth- Cuba. The film will be largest automaker. In produced by Los Angeles- 2007, a company based Mandalay Films controlled by (“Sleepy Hollow,” “Enemy at George Soros is the Gates”). The Colombian planning to begin author and friend of Fidel importing Chery Castro selected Cuba even automobiles in the though the novel’s plot isn’t United States. set on the island. The film will be directed by Denmark’s General Motors just Henning Carlsen; the movie script is currently being written settled a copyright by French author Jean-Claude Carri. lawsuit with Chery. Chery QQ

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