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CUBA’S REPORT

 

On Resolution 70/5 of the United Nations General Assembly entitled “Necessity of ending the economic, commercial and financial blockade imposed by the United States of America against Cuba”

 

June 2016

 

Contents

  

 

INTRODUCTION. 3

 

I. CONTINUED POLICY OF THE BLOCKADE. 4

 

1.1. Blockade Laws in Force. 4

 

1.2. President Barack Obama’s Executive Measures and their Limitations. 6

 

1.3. Prerogatives of the U.S. President to continue amending the application of the blockade without the necessity of going to Congress. 8

 

1.4. Principal Blockade Measures Applied after December 17 of 2014. 9

 

II. THE BLOCKADE VIOLATES THE RIGHTS OF THE CUBAN PEOPLE: REPERCUSSIONS ON THE MOST VULNERABLE SOCIAL SECTORS. 13

 

2.1. The Right to Health and Food. 13

 

2.2. The Right to Education, Sports and Culture. 16

 

2.3. The Right to Development 17

 

III. REPERCUSSIONS ON THE FOREIGN SECTOR OF THE CUBAN ECONOMY. 22

 

3.1. Foreign Commerce and Investments. 22

 

3.2. Finances. 26

 

IV. THE BLOCKADE VIOLATES INTERNATIONAL LAW. EXTRATERRITORIAL APPLICATIONS. 29

 

4.1. Repercussions for Cuban entities. 29

 

4.2. Repercussions for International Cooperation. 31

 

4.3. Other Extraterritorial Repercussions. 31

 

V. WORLD OPPOSITION TO THE BLOCKADE. 32

 

5.1. Opposition in the U.S. 32

 

5.2. Opposition by the International Community. 35

 

CONCLUSIONS. 39

 

 

INTRODUCTION

 

In the period between April of 2015 and April of 2016 some results have been achieved in the bilateral relations between the United States and Cuba. It can particularly be indicated the re-establishing of diplomatic relations and the re-opening of embassies that were preceded by the just action of taking Cuba off the spurious list of States sponsoring terrorism, a list on which Cuba should never have been in the first place.

 

In March of 2016, during his visit to Cuba, the President of the United States of America Barack Obama acknowledged once more that the “embargo” policy towards the Island is obsolete and must be eliminated. In his speech at the Gran Teatro de la Habana Alicia Alonso on March 22nd, President Obama stressed in reference to the “embargo” that it “only harms the Cuban people instead of helping them” and he again called on the U.S. Congress to put an end to this policy.

In spite of this, the economic, commercial and financial blockade against Cuba remains in force and the restrictions imposed by this policy continue being applied. During 2015 and 2016, the Departments of the Treasury and Commerce of the United States made several amendments to this policy’s regulations; which, even though they constitute positive steps, are not enough. 

This report synthetically shows the repercussions resulting from the application of the blockade in the period mentioned in Paragraph 1 supra.

 

Despite the new scenario, on September 11th of 2015 President Obama again renewed sanctions against Cuba under the Trading with the Enemy Act of 1917 constituting the foundation for the laws and regulations that make up the blockade, alleging foreign policy interests.

This policy has continued to be toughened in its financial and extraterritorial dimensions. It can be seen in the imposition of million-dollar fines against banks and financial institutions for having relations with Cuba and in the persecution of Cuban international financial transactions.

 

Until the conclusion of writing this report, the announced authorization of the use of the dollar in Cuba’s international transactions has not materialized, nor the possibility for U.S. banks to provide loans to Cuban importers of authorized U.S. products. Nor has the trepidation of financial institutions or that of the very U.S. suppliers diminished due to the risk of being fined for having transactions with Cuba, a country submitted to sanctions from the United States.

 

The President of the United States possesses broad executive faculties that if he used them with determination would permit him to substantially dismantle the blockade policy even though its total elimination requires a decision by Congress. 

 

The report being presented herein explains the limited scope of measures adopted by the U.S. Executive and the spectrum of actions that he could yet take to eliminate the blockade. Moreover, there have been grouped many examples of the economic and social repercussions caused by its application from April of 2015 to April of 2016. It is clearly demonstrated in the text how the blockade constitutes the greatest obstacle for the development of all the potential of the economy and the wellbeing of the Cuban people, as well as for the economic, commercial and financial relations of Cuba with the United States and the rest of the world. 

 

The economic repercussions on the Cuban people due to the application of the economic, commercial and financial blockade of the United States against Cuba during the aforementioned period, and considering the depreciation of the dollar in regards to the price of gold on the international market amount to $753,688,000,000 in spite of the reduced price of gold as compared to the previous period. Since this policy began to be applied over 50 years ago, the blockade has caused damages for over $125,873,000,000 at current prices.

 

To be able to move forward in the process towards the normalization of bilateral relations with the United States, about which the government of Cuba has reiterated its willingness on the basis of sovereign equality, non-interference in internal affairs and absolute respect for its independence, undoubtedly this would require the unilateral and unconditional lifting by the government of the United States of the economic, commercial and financial blockade applied against Cuba.

 

It is essential that the 24 resolutions adopted by the international community in the United Nations General Assembly be respected; its Member States ask for that absurd policy to end. 

 

The blockade against Cuba should never have existed and it must cease once and for all.

 

 

I. CONTINUED POLICY OF THE BLOCKADE

 

1.1. Blockade Laws in Force

 

In spite of the measures adopted by President Barack Obama since December 17th of 2014 and his repeated calls on Congress to lift the blockade, the laws and regulations supporting it continue to be in force and are being applied rigorously by U.S. government agencies, especially by the Departments of the Treasury and Commerce, and in particular by OFAC. 

 

The principal laws of Congress and the administrative provisions that establish the blockade policy are:

 

  • Trading with the Enemy Act of 1917 (TWEA): Its Section 5 (b) delegated the possibility of applying economic sanctions on the Chief Executive in times of war or in any other time of national emergency and it prohibited trade with the enemy or allies of the enemy during wars.  In 1977, the International Emergency Powers Act restricted the powers of the President to impose new sanctions in times of national emergencies.  Nevertheless, TWEA continued to be applied to Cuba even when the White House had never declared a state of national emergency in regards to Cuba.  Since then, successive U.S. Presidents have extended the application of TWEA on Cuba.  Under this legislation, the oldest of its type, the US adopted the Cuban Assets Control Regulations (CACR) in 1963, by virtue of which US nationals or persons subject to US jurisdiction are prohibited from carrying out financial transactions with Cuba, Cuban assets were frozen, importing goods of Cuban origin to the US was prohibited, along with other restrictions. Cuba is the only country affected by this legislation.  President Obama renewed the sanctions against Cuba for one more year through TWEA on September 11th of 2015.

 

  • Foreign Assistance Act (1961): This authorizes the President of the United States to establish and maintain a total “embargo” on trade with Cuba and prohibits the authorization of any aid to the Cuban government. It establishes that US government funds destined for international aid and sent to international organizations may not be used for any programs related to Cuba.  It prohibits granting any aid foreseen under this act or any other benefit covered by any other law to Cuba until the President should determine that Cuba has carried out actions directed towards returning to US citizens and firms no less than 50 percent of the value or just compensation for the properties nationalized by the Cuban government after the triumph of the Revolution. 

  • Presidential Proclamation 3447: Issued on February 3, 1962 by President John F. Kennedy, it decreed the total “embargo” of trade between the US and Cuba in compliance with Section 620 (a) of the Foreign Aid Act.

 

  • Control of Cuban Assets Regulations of the Department of the Treasury (1963): Stipulated the freezing of Cuban assets in the US, the prohibition on all financial and commercial transactions unless they should be approved by a permit, prohibition of Cuban exports to the US, prohibition on any natural or juridical person in the US or third countries from carrying out transactions in US dollars with Cuba, etc.

 

  • Export Administration Act (1979): Section 2401 (b) (1) “Control of National Security”, “Policy towards certain States”, established the Trade Control List in which the US President maintains a number of countries for which special export controls could be set up due to national security considerations.  Cuba is included on this list.

 

  • Export Administration Regulations (EAR) 1979: Established the bases for general control of articles and activities subject to EAR control, in agreement with the sanctions imposed by the US government.  They establish a general policy of denying exports and re-exportations to Cuba.

 

  • Cuban Democracy Act or the Torricelli Act (1992): Prohibits the subsidiaries of US firms in third countries from trading in goods with Cuba or Cuban nationals.  It forbids third country ships landing in any Cuban port from entering any US territory for 180 days, other than those having a permit from the Secretary of the Treasury. 

 

  • Cuban Liberty and Democratic Solidarity Act or the Helms-Burton Act (1996): Codified the provisions of the blockade, broadening its extraterritorial scope by imposing sanctions on executives of foreign enterprises that carry out transactions with nationalized U.S. properties in Cuba and threats of lawsuits in U.S. courts which has been object of an exemption, renewed year after year. Likewise it limited Presidential prerogatives for suspending this policy even though it establishes that he preserves his powers to authorize transactions with Cuba via the issuance of permits.

 

  • Section 211 of the Emergency Supplementary Appropriations Act for the 1999 fiscal year: Prohibits registering in the US any trademarks associated with nationalized products as well as the acknowledgement by US courts of the rights of Cuban firms on such trademarks. 

 

  • Trade Sanctions Reform and Export Enhancement Act (2000): Authorized the export of agricultural products to Cuba on the condition of cash payments, in advance and without any US financing.  It prohibited travel to Cuba by U.S. citizens for purposes of tourism, defining “tourism” as any activity related to travel to, from or inside Cuba that would not be expressly authorized in Section 515.560 of Title 31 of the Federal Regulations Code. In other words, it limited travel to the 12 categories authorized at the time this legislation was passed.

 

 

1.2. President Barack Obama’s Executive Measures and their Limitations

 

On December 17th of 2014 as part of his announcement on Cuba, President Barack Obama acknowledged the failure of the traditional U.S. policy towards Cuba and he promised to undertake a debate in Congress in order to lift the blockade.  Corresponding to this new approach, the President announced several executive measures directed at modifying the application of some of the aspects of the blockade. 

 

During 2015 and 2016, the Departments of the Treasury and Commerce realized several amendments to the regulations about Cuba which, although they represent positive steps, are insufficient. There are still significant obstacles for the implementation of these measures while the laws and application of the blockade policy and the numerous restrictions derived from it remain in force.

 

On the subject of travel, visits by U.S. citizens to Cuba under a general permit in the 12 categories permitted by law were authorized; re-establishing regular flights between Cuba and the United States was agreed to; the maritime transportation of passengers qualifying under the 12 categories was allowed and people-to-people educational trips for individuals were authorized. Nevertheless, the prohibition on U.S. citizens to travel freely to Cuba according to U.S. law persists.

 

In the area of telecommunications, they have authorized the export of products and services to Cuba, funding for the creation of infrastructure facilities and the possibility to set up joint enterprises with Cuban entities. Nonetheless, these measures have not been extended to other sectors of the Cuban economy which continue to be submitted to the iron-clad blockade restrictions. 

 

In terms of trade and commerce, the list of U.S. products that as of the new measures may be exported to Cuba without needing to request the authorization of the U.S. Department of Commerce is reduced to only telecommunications products and services, construction materials and equipment and tools for use in the non-State sector of the economy, including agricultural activities. The sale to Cuba of other U.S. products and services is forbidden unless they should be authorized by the Department of Commerce via approved specific permits which expire in a certain length of time.

 

Furthermore, authorizations to import Cuban goods and services into the U.S. are limited to those produced by the non-State sector and exclude key items in the Cuban economy such as tobacco. By not considering the State sector of the economy, other Cuban goods and services having recognized international prestige such as rum, nickel, biotechnological products and medical and educational services are also left off the list.  Along with that, tariffs that would be applicable to Cuban products, in the event that they would be able to enter US territory, would be the highest on the Harmonized Tariffs List of the U.S. International Trade Commission due to the fact that Cuba is situated at the most restrictive level of importation tithes to the U.S, and they do not possess most favored nation treatment, as a result of the blockade.

 

Likewise, changes to the maritime transportation regulations which allow ships participating in “humanitarian trade and commerce” with Cuba to enter U.S. ports prior to 180 days are not operational.  It is quite improbable that ships moving commercial cargos to Cuba would limit themselves to transporting only foods, medicines, medical equipment or the other U.S.-authorized exports. International practice indicates that shipping contracts are not reduced to the transport of one single type of product.

 

In the financial area changes have been made in the application of the blockade by authorization for the use of the dollar in Cuba’s international transactions and the possibility for U.S. Banks to be able to provide loans to Cuban importers of authorized U.S. products. Nevertheless, these measures have not been able to be put into practice while the trepidation of financial institutions and of the U.S. suppliers themselves to undertake these types of transactions with Cuba persists, due to the risk represented by a country being submitted to U.S. sanctions.

 

Another important limitation is the prohibition on Cuban financial institutions of opening correspondent accounts in U.S. Banks; this restriction prevents establishing direct banking relations between the two countries and makes Cuba’s commercial operations with that country more expensive due to the necessity of triangulating them and paying commissions to intermediaries. The negative repercussions of strengthening the financial persecution of Cuban transactions and their marked extraterritorial nature during the last seven years continues to manifest in the continued refusal by banks in the United States and other countries to make transfers with Cuba, even in other currencies other than the U.S. dollar.

 

1.3. Prerogatives of the U.S. President to continue amending the application of the blockade without the necessity of going to Congress

 

The President of the United States has broad executive powers to continue modifying the application of the blockade regulations, including going further than he has to date, until it would be emptied of much of its content. Although the U.S. Congress is the body empowered to revoke the laws supporting the blockade policy against Cuba and to decree its demise, this act could be preceded by the dismantling of the immense majority of the restrictions composing it via executive actions.  

 

When President William Clinton signed the Helms-Burton Act on March 12th of 1996, the blockade law against Cuba was codified along with the bundle of executive orders that sustain it. Nevertheless, that same law preserved the broad powers of the President, via the issuance of permits, to permit a number of different transactions prohibited by the blockade. 

 

Next, a list of some of the other measures that the U.S. President could adopt to modify implementation of aspects of the blockade policy against Cuba:

 

1. To make it possible for Cuban entities (banks, companies, etc.) to open correspondent accounts in U.S. banks

 

2. To revert the policy of financial persecution against Cuba

 

3. To authorize direct exports of U.S. products to Cuban companies

4.To permit imports into the U.S. of Cuban services or products that are exportable items for the Cuban economy such as tobacco, rum, biotechnological products including such products that are manufactured in third countries that contain Cuban raw materials such as nickel or sugar

 

5.To authorize U.S. companies to invest in Cuba

 

6. To authorize U.S. citizens to receive medical treatment in Cuba

 

7. To eliminate the prohibition that prevents ships that have transported goods to Cuba from entering US ports for 180 days.

 

These actions show that substantial modification of the scaffolding holding up the blockade is possible if the President uses his ample executive powers. 

 

There are just four aspects of the blockade that the President of the United States cannot act upon since they require the action of Congress for them to be eliminated or changed, since they are regulated by law:

 

1.The prohibition on U.S. subsidiaries in third countries from doing business with Cuba (Torricelli Act)​

 

2. The prohibition on carrying out transactions with US properties that were nationalized in Cuba (Helms-Burton Act)​

 

3. Preventing U.S. citizens from traveling to Cuba as tourists (Trade Sanctions Reform and Export Enhancement Act of 2000).

 

4. The prohibition on financing for sales of U.S. agricultural products to Cuba (Trade Sanctions Reform and Export Enhancement Act of 2000).​

 

The process towards normalization of bilateral Cuba-US relations necessarily needs to start with the lifting of the blockade which is the greatest obstacle for Cuba’s economic, commercial and financial relations with the US and the rest of the world as well as for the development of all the potential of the Cuban economy and the wellbeing of its people.

 

 

 

1.4. Principal Blockade Measures Applied after December 17 of 2014

 

 

The following examples of repercussions caused by this policy on Cuban and third party entities shows that the blockade has remained in force:

 

  • On 6 August 2015, OFAC levied a fine of $271,815 on the U.S. maritime insurance company Navigators Insurance Company (“Navigators”) for violating the regulations against Cuba and other countries. According to OFAC, on April 1st of 2011, “Navigators” paid $21,736 in interest for a Cuban national. 

 

  • On 18 and 23 September 2015, an Australian bank refused to make two transfers in Australian dollars to the Cubatur travel agency for payment of services for a group of 19 travelling to Cuba.

 

  • In October of 2015, SWIFT cancelled the Bankers World Online service to the Banco Financiero Internacional, due to blockade regulations

 

  • On 20 October 2015, the French bank Crédit Agricole agreed to a payment of a joint fine for $1,116,893,585 whose installments went to the Department of the Treasury ($329,593,585), to the Federal Reserve ($90.3 million), to the Financial Services Department of New York State ($385 million), to the Tax Office for the District of Manhattan ($156 million) and to the Tax Office for the District of Columbia ($156 million), for violating the regulations against Cuba and other countries. According to OFAC, between January of 2004 and June of 2008, Crédit Agricole, including its branches and predecessors, processed 173 E-transfers having to do with properties of interest for the Cuban government or its nationals, to or through financial institutions in the United States for $97,195,314.

 

  • On 27 October 2015, the U.S. Gil Tours Travel, Inc. (Gil Travel) of Philadelphia, Pennsylvania, agreed with OFAC to pay a fine of $43,875 for violations of sanctions against Cuba. According to OFAC, between 21 October 2009 and 19 August 2010, Gil Travel provided travel services to Cuba for 191 individuals who had no permit from that office. 

 

  • On 24 November 2015, the subsidiary of the U.S. company FedEx in Namibia refused to provide international Messenger services to the Embassy of Cuba in Windhoek, due to blockade regulations.

 

  • At the end of November of 2015, the U.S. PayPal company blocked the account of the German company Proticket, used by customers of the company to pay for tickets for the musical comedy “Soy Cubano” and a concert by the Cuban singer Addys Mercedes. On 19 April 2016, a court in the German city of Dortmund ruled against PayPal in a lawsuit filed by Proticket, forcing it to immediately unblock the account of a client of the Federal State of Renania North-Westphalia. If it did not do so, PayPal had to pay 250,000 Euros to said client. The company was blocking the client’s accounts because they had used the words "Cuba" or "cubano" due to the laws of the U.S. blockade against Cuba. In its opposition to the extraterritorial scope of the blockade the court declared that “in this case, only German law applies”.

 

  • On 20 January 2016, the U.S. Department of the Treasury levied a fine of $140,400 on the U.S. design company WATG Holdings Inc. (WATG), headquartered in California, for violations of the sanctions against Cuba. According to OFAC, WATG’s subsidiary in the United Kingdom, Wimberly Allison Tong and Goo, worked on the design of a hotel project in Cuba, for which it had received three payments from a company in Qatar, between October of 2009 and May of 2010, for $356,714.

 

  • At the beginning of February of 2016, authorities from the German bank Commerzbank communicated to Cuban Banks about the cessation of operations in the coming months as a result of the fine levied by the United States in March of 2015, for $1,710 million.

 

  • On 11 February 2016, Banco Popolare, Unicredit and Intensa San Paolo of Italy refused to undertake operations with the Italian company SRL Sol, the Italian distributor of Cuban Varadero-brand rum.

 

  • On 12 February 2016, it became known that the branch of the British Standard Chartered Bank in Uganda had informed Cuban doctors working at Mbarara University that they had up to February 15th to withdraw their money due to the fact that as Cubans they were not able to continue holding accounts in said bank.  The university suggested that the Cubans open accounts in the British Barclays Bank, but after they did so, bank authorities advised them that they would not be able to make any transactions to or from Cuba.

 

  • On 18 February 2016, the Bank of The Bahamas refused to make a transaction requested by the Cuban company Havanatur Bahamas because they were on the “list of OFAC sanctions”.

 

  • On 22 February 2016, OFAC levied a fine of $614,250 on CGG Services S.A. of France for violations of the blockade on Cuba. According to OFAC, between 2010 and 2011, CGG Services S.A. and a number of their subsidiaries provided services, spare parts and equipment originating in the U.S. for gas and oil explorations to ships operating in Cuban territorial waters. Furthermore, the Venezuelan subsidiary of CGG Services S.A. in the United States carried out five transactions related to the processing of information for seismic research conducted by a Cuban entity in Cuba’s Exclusive Economic Zone.

 

  • On 25 February 2016, OFAC levied a fine of $304,706 on the U.S. company Halliburton Atlantic Limited for violating the regulations against Cuba. According to OFAC, Halliburton and its subsidiaries in the Cayman Islands exported goods and services for $1,189,752 to support oil and gas exploration as well as drilling activities in the Bloque Sur Costa Adentro at Cabinda, Angola; it was alleged that the Cuban company Cuba Petróleo (Cupet) held 5 percent of the interests.

 

  • On 29 February 2016, the branch of a French bank in Italy refused to process funds in Euros for Cubana de Aviación, destined to be accredited to sales corresponding to January and February of 2016, carried out by the E-payment system BSP of the International Air Transport Association (IATA).

 

  • On18 March 2016, it became known that the Japanese bank Mitsui Sumitomo SMBC Trust refused a transfer of a Japanese citizen in order to pay for a tourist card at the Cuban consulate in that country.

 

  • On April 1st of 2016, it became known that Citibank of the United States refused client payments to the Cuban company Havanatur Argentina.

 

  • On 6 April 2016, PayPal of the United States communicated to the Cuban-Danish Association that they were closing the account of said organization due to blockade regulations against Cuba.

 

  • On 19 April 2016, it became known that the bank based in Bostwana, Stanbic Bank, a branch of the Standard Chartered Bank of Britain, rejected continuing to transfer payments to Cubadeportes that were being made by virtue of the cooperation agreement between Botswana and Cuba.

 

  • On 25 April 2016, the Turkish branch of the Dutch company providing mail and package services, TNT B.V., had communicated to the Embassy of Cuba in Ankara that, due to its merger with the U.S. company FedEx, as of February 1st they would stop their services from and to Cuba and, as of 4 April, they would not be accepting anything sent from the Netherlands under the U.S. sanction.

 

  • On 3 May 2016, it became known that funds collected by the Asociación de Cubanos in the United Kingdom had been retained by the bank of the U.S. company Eventbrite. The company had sold tickets for a classical music concert organized by the Association whose funds would be going towards the purchase and donation of a piano for the Amadeo Roldán Music Conservatory in Cuba.

 

  • In May of 2016, the Royal Bank of Canada refused to transfer payment in Canadian dollars corresponding to Cuba’s membership fee to the Association of Caribbean States.

 

  • In May of 2016, the Santander bank of Spain refused the opening of accounts for Cuban diplomats based in that country.

 

  • In May of 2016, the Caixa Bank of Spain closed current accounts and the TPV devices of the Excelencias business group due to the group’s operations with Cuba.

 

  • In May-June of 2016, the Santander bank of Spain refused to offer the service of payment for consular fees via magnetic cards using the TPV devices to General Consular Offices of Cuba in the cities of Barcelona, Santiago de Compostela and Seville. The Elavon company, belonging to US Bank provides said devices; it informed that this was because of Cuba being included on the OFAC list.

 

  • In June of 2016, the sales contract of a server t improve the functioning of the consular management system of the Cuban Consulate in Barcelona was cancelled by a Spanish company which alleged that the equipment being supplied was manufactured by the DELL company of the U.S. 

 

  • In June of 2016, the U.S. Department of Commerce issued a summons to the Huawei company of China for it to communicate all information regarding the exporting and importing of U.S. technology to Cuba and other countries under sanctions in the last five years.

 

 

II. THE BLOCKADE VIOLATES THE RIGHTS OF THE CUBAN PEOPLE: REPERCUSSIONS ON THE MOST VULNERABLE SOCIAL SECTORS

 

“The right to development is an inalienable human right by virtue of which every human person and all peoples are entitled to participate in the economic, social, cultural and political development in which they may fully carry out all the fundamental human rights and freedoms in order to contribute to and enjoy that development.”[1]

 

The blockade continues to be an absurd policy that is morally unsustainable; as the President of the United States himself has acknowledged it has not served the purpose of breaking down the decision of the Cuban people to choose their political system and control their future. In this chapter a summary of the repercussions on the rights of Cubans in the most vital sectors of the country will be shown. 

 

 

2.1. The Right to Health and Food

 

The essence of humanism and social justice that characterizes the Cuban revolution has made it possible, since its triumph in 1959, to guarantee free medical care for everyone in the country.  The growth attained in the Public Health sector throughout over 58 years is undeniable.  The indicators exhibited by Cuba which have been amply acknowledged at international forums are a demonstration of that fact.  Nonetheless, this sector has not been exempted from the rigorous application of the genocidal economic, commercial and financial blockade of the United States.

 

The accumulated monetary repercussions of this policy on Cuban public health since its beginning comes to $2,624.1 million, while in the period covered by this report, repercussions total $82,723,876.18. That represents an increase of over $5 million dollars as compared to the period between April of 2014 and April of 2015.

 

These repercussions are manifested in the impossibility of acquiring on U.S. markets the medicines, reagents, spare parts for diagnostic and treatment equipment, medical instruments and other supplies necessary for this sector to function. In most cases, the acquisition of these products has been done in geographically distant markets and this becomes more onerous since Cuba must resort to intermediaries. It also has repercussions on delays in treatment for patients. In many cases, alternative products used are of lesser quality than those available on the U.S. market and this has serious effects on treatments.

 

The blockade also has repercussions on the number of young U.S. citizens, from low-income backgrounds, who could be enrolling in medical schools or have access to post graduate courses in the various branches of the medical sciences in Cuba. 

 

Besides these quantifiable repercussions, now follow examples of great human sensitivity and which are impossible to quantify:

 

  • The repercussion on the Cuban public health system of the “brain drain” in the sector is incalculable: it occurs through the program called “Parole” for Cuban medical professionals (CMPP).

 

This program, established in 2006, only applies to doctors and other Cuban health workers who are working at an international mission outside of Cuba. Not only does this affect the patients in the third countries that are being cared for by these professionals in the country where they are serving their missions, but it also represents fewer personnel in the future who are directly contributing to the health of the Cuban people. Despite the improved bilateral relations between the two countries, this program is still in force and is representative of the aggressive policy maintained by the government of the United States towards Cuba.

 

  • The Dr. José Rafael Estrada González Institute of Neurology and Neurosurgery reports that in January of 2016 it received a delegation of officials from the U.S. corporation Medtronic which controls a significant part of sales and post-sale service for different types of medical equipment.  In particular, Medtronic sells products of interest for neurology and neurosurgery, some of them in an exclusive form, as in the case of profound cerebral stimulators for the treatment of neurological diseases.

 

Nonetheless, until now the blockade against Cuba has stood in the way of purchasing the aforementioned stimulators.During this visit, Medtronic officials confirmed that the company is not yet authorized to set up contacts with Cuba.Consequently the dozens or hundreds of Cuban patients suffering from Parkinson’s disease (and other neurological disorders) that could improve their quality of life by having these stimulators implanted, cannot receive this treatment.

 

The General Electric Company sells medical equipment for the study of the peripheral nervous system.In November of 2015, specialists in clinical neurophysiology at this institute contacted a representative of the U.S. firm to express the center’s interest in acquiring equipment of this type and to train a Cuban specialist in its handling.But in February of 2016 General Electric’s representative answered that their company was not authorized to sell their products to Cuba as a consequence of the blockade policy.

 

  • The FARMACUBA company requested 4 U.S. suppliers protection means and chemical and biotechnological products to manufacture medicines in Cuba.  Among these the SIGMA-ALDRICH multinational company which refused to answer the Cuban request due to the complications derived from the application of the U.S. blockade.

 

On the other hand, Cuba has one of the most comprehensive programs of social protection in the world; which has permitted the eradication of chronic malnutrition and infantile malnutrition in the country. It is all supported by concrete results that are acknowledged by the United Nations’ specialized agencies. The guarantee of food security for the Cuban populace, from an approach based on promoting the three pillars of sustainable development – economic, social and environmental – constitutes a priority in the strategy of the country’s development.

 

But the Food Sector continues to be one of the worst affected by the blockade policy being applied by the United States. On the basis of information collected by the Ministry of the Foods Industry and the Ministry of Agriculture of the Republic of Cuba, repercussions associated with this policy reach $605,706,289 during the period analyzed. 

 

These repercussions are manifested in the increased prices for seeds for production, fertilizers, spare parts for agricultural equipment and other consumables on the geographically distant markets which must be used since they cannot be acquired in the U.S. Added to the foregoing is the need to use intermediaries in third countries and this substantially increases expenses in the sector. In some cases, it causes substantial repercussions for food production since Cuba cannot import in the necessary time.

 

This policy also causes increased times for the existence and the time raw materials and consumables necessary for the production of eggs, milk and meat for the Cuban populace are forced to remain in national warehouses. Its goal is to foresee unexpected shortages of these products on the international market and to be able to cover this with national production. Storage time for these products, if it were possible to acquire them in the U.S., would only be two weeks.

 

But because of these repercussions, Cuba is forced to hold on to these products for approximately 90 days. In monetary terms, this leads to immobilizing a volume of goods equivalent to some $161,200,000 for the period being analyzed. If Cuba were able to acquire these products in the U.S. it would only be necessary to immobilize the equivalent of $26,900,000. Repercussions on this sector, as described above, total some $134,400,000.

 

On the other hand, the LABIOFAM company has not been able to obtain the raw materials MEM-A and FETAL BOVINE SERUM on the U.S. market; they are only sold by U.S. companies and they are needed for the production of vaccines against viruses and bacteria affecting livestock in Cuba. This situation forces the company to resort to importing these products from suppliers in European countries with the ensuing increase in transportation costs and the profit margins established by the aforementioned suppliers. 

 

The problem is even more complicated because this importation requires the Certificate of Origin to be issued by a U.S. veterinarian institution. For this reason, suppliers fear running the risk that through the control of the traceability of this certification the operation would be detected and they could be fined by OFAC. Due to this situation, the health of the bulk of Cuban livestock and the production derived from it to provide food for the Cuban populace is seriously affected by the blockade policy.  

 

2.2. The Right to Education, Sports and Culture

 

“In these objectives and goals we exhibit a vision of the future that is extremely ambitious and transforming. We aspire to a world (…) where literacy is universal, with equitable and universal access to quality education at all levels…” [2]

 

Universal, equitable and free access to quality education for all Cubans has always been a priority of the Cuban Revolution. For that reason, the Government must guarantee full enjoyment of this right as Article 39 of the Constitution of the Republic of Cuba establishes.

 

The Cuban government annually sets aside an amount of financial and human resources to be able to guarantee this right. But these efforts have been directly affected by the effects of the economic, commercial and financial blockade of the United States. In the period being analyzed, the Sector of Education has had to spend large sums of financial resources because it was impossible to acquire the essential equipment, in the U.S. market, for carrying out the educational processes.

 

Just because of the geographical relocation of commerce, the Ministry of Education of Cuba suffered losses of $1,245,000 in the period.

 

The blockade against Cuba also imposes severe adverse effects on the development of Sports. Next, will be shown some examples of the way this sector has been affected:

 

  • The National Sport and Physical Education Institute (INDER) cannot buy sports equipment in the United States that carry the trade names of Louisville, Wilson, Xbat, Rawlings, Atec, and 3N2 for baseball and softball; and Easton and W&W for archery in spite of the fact that these articles are mandatory according to official regulations of international federations. For this reason, INDER has had to import this sports equipment from a third country, thereby resulting in an increase of 20 to 30 percent on its real prices.

 

  • Steps were taken through a Spanish company to purchase a Hobie Cat 16 sailboat; whose price, if it had been bought would have been 30 percent greater. This process could not be materialized and it affected the training of the athletes in that discipline because they lacked equipment. 

 

  • The Cuban anti-doping laboratory reported that in June of 2016, OFAC withheld biological samples coming from a group of Peruvian athletes from being sent to the Island, transiting through the U.S. The samples were sent by the Peruvian Sports Institute to be analyzed at this Cuban lab, using the DHL company of Germany. Because of the application of the blockade policy, the lab which is a first-class center in Latin America in the fight against doping in sports could not obtain the economic benefits of analyzing the Peruvian samples.

 

The Cuban Revolution has maintained among its priorities the dissemination and promotion of culture as a vital element for the education and development of Cuban citizens. But the blockade continues to set up obstacles for the Culture Sector’s scope and for the development of the country’s cultural heritage. In just the period being analyzed, said policy has caused $29,483,800 dollars.

 

The U.S. market could be the principal source of supplies for a significant group of raw materials, materials, tools and equipment with which the country’s artists, artisans and designers work if the blockade did not exist. But these products have to be imported by Cuban institutions from third countries, thereby involving prices that are up to 40 percent higher.

 

Next, some examples of the negative impact of the blockade on the development of Cuban culture:

 

  • The present academic year (September 2015 to June 2016) has an enrollment of 414 students at the elementary level in the specialty of string instruments such as the bass, violin, cello and viola. The system of culture in Cuba guarantees that each of these students has an instrument for their courses. The price of a Palatino VN350 Campus ViolinOutfit - 1/2 violin is $79 in the U.S. But Cuban authorities have to buy similar instruments in a third country for $215 each.  If this instrument could be acquired in the United States, Cuba would be saving some $56,300. 

 

  • During the period analyzed, the Ministry of Culture was immersed in the restoration of the Alicia Alonso Gran Teatro de la Habana, among other projects.  The amount spent to buy the materials needed for these projects in third countries totaled $672,300. If there had been access to materials on the U.S. market, with just a price reduction of up to 15 percent, the country could have saved approximately some $100,800.

 

2.3. The Right to Development

 

“The new Agenda recognizes the need to build peaceful, just and inclusive societies that provide equal access to justice and are based on the respect for human rights, (including the right to development )(…)”[3]

 

The right to development in Cuba is limited because of the negative effects of the blockade. Sectors such as biotechnology, tourism, transportation, mining, renewable energies, telecommunications, and others, have suffered considerable losses due to this unfair policy. Next, just a few examples of application of the blockade on these sectors: 

 

The aim of the sector of biotechnology in Cuba is to develop new products, medicines, highly technological equipment and services destined to improve the health of the Cuban people, generating exportable goods and services and cutting-edge technologies for the production of food. Nevertheless, Cuba’s biotechnological industry is no stranger to the repercussions of the economic, commercial and financial blockade of the United States.

 

In spite of the fact that Cuba has received various delegations of U.S. businessmen interested in the products of Cuban biotechnology and a few actions of interest and contracts for some of them have materialized, the blockade still restricts interchanges between the two nations.  That deprives the U.S. people of receiving the benefits of the biotechnological and pharmaceutical products developed in Cuba.

 

For this important sector, the total economic repercussions instigated by this policy amount to $171,665,136. 96 during the period being analyzed in this document. Some concrete examples of these repercussions are:  

 

  • The Natural Products Center, belonging to the National Center for Scientific Research (CNIC) has found it impossible to buy spare parts for two chromatographs bearing the U.S. trade name of Agilent. They are fundamental for quality control of the products that are being researched and developed in the Pharmaceutical Chemistry Department of that center. Since the two chromatographs cannot be used, the rest of the laboratory’s equipment has been over-exploited and that has resulted in losses of $600,000.

 

  • The AICA Laboratories Enterprise reports losses for the production of carpules, injectable vials with an open bottom that are used as anesthetic capsules in odontology or for insulin doses. The machine processing these medicines comes from the Bosch Pharmaceuticals Company of the U.S. and so the laboratories of this enterprise have difficulties in acquiring spare parts and the technical assistance for their repair. This has generated a repercussion of $1,759,200.

 

Executive measures approved to date by the government of the United States have had no significant impact on the Agro-Industrial and Sugar Industry Sector either. This branch has suffered repercussions of $3,305,600 in the analyzed period.

 

The blockade caused other additional repercussions for the AZCUBA Sugar Group. They recorded an additional financing cost for importations as a result of the increased interest rates due to being a risk country. The increase was 0.5 percent last year and this represented a negative effect of $690,400. It was caused by the impossibility of acceding to external financing sources associated to U.S. institutions.  Therefore it is necessary to look for alternative finance companies that are not related to the U.S.  Those financial entities increase the interest rate because of the risk of suffering repercussions because they are having relations with Cuba, result of the application of the extraterritorial laws of the blockade. 

 

In the communications and informatics sector, including telecommunications, repercussions totaling $59,208,700 were recorded.

 

The process towards normalization of bilateral relations between Cuba and the U.S. has made it possible to establish direct interconnections in order to provide telecommunications services with operators in both countries. But the application of the U.S. blockade continues to considerably affect the communications and informatics sector on the Island.

 

The blockade policy openly affects Cuba’s free access to the network of networks and the right to expressed and accepted freedoms by the authors publishing software with General Public Licenses (GNU-GPL). Damages materialize through non-access to service or downloading of information, once it is recognized that the link-up is made from an address on the Internet (IP) granted to the Cuban .cu domain.

 

Among the many main sites for the development of this sector, which have prohibited access from Cuba, there are: http://code.google.com; http://www.ti.com; http://www.vmware.com; http://www.oracle.com; http://www.globalspec.com/ , etc.

 

As for the tourism industry in Cuba, it too has experienced severe repercussions as a result of the blockade. In the period covering the period of April 2015 to April 2016, repercussions caused by this policy totaled $2,058,250,000.

 

In 2015 the Caribbean region received visits by 28.7 million tourists; this presupposes an increase of 7 percent as compared to the previous year according to figures of the Caribbean Tourism Organization (CTO). In its 2015 report, the CTO explained that visitors spent approximately 30 billion dollars. The principal market which sends tourists to the Caribbean is still the United States, with a total of 14.3 million U.S. citizens visiting the area. That is the equivalent of a 6.3 percent increase in comparison with the previous year and close to 50 percent of the total arrivals according to the aforementioned report.   

 

It is estimated that at least 15 percent of the U.S. citizens travelling as tourists to the Caribbean would have travelled to Cuba if tourism travel was not being prohibited by the U.S. On this basis, around 2.1 million U.S. tourists might have travelled to Cuba in 2015; with the average expenditures per stay in the Caribbean estimated at $900, the Cuban tourism industry could have earned revenues of $1,890 million.

 

In matters dealing with tourism promotions, Cuba is unable to have access to U.S. advertising companies, or to that country’s promotions channels. On the contrary, in the period being analyzed, the country has been submitted to campaigns coming from the U.S. directed to discrediting its tourism industry.

 

Total damages to the construction industry sector as a result of the blockade, in the period covered by this report, totaled $30,868,200. The main reason for these losses is due to the impossibility of having access to the most efficient and light construction technologies that use fewer basic materials and energy components available on the U.S. market or which are produced by companies that are subsidiaries of companies based in the U.S.  For that reason, Cuban companies had to import products from more distant markets, with the longer transportation times generating additional costs for freight and insurance, as well as trans-shipments of materials.

 

Negative effects on the country’s construction program due to technological changes are estimated at $29,437,000. While expenses for freight and insurance totaled $855,200 that meant an increase of $599,500, as compared with the costs incurred during the 2014-2015 period. 

 

For the Cuban Institute of Radio and Television (ICRT), the negative effects of the blockade on Cuba are fundamentally seen in the impossibility of having access to the cutting-edge technology on the U.S. market. The principal distributors of equipment for radio and television bear the trade names of Sony, Panasonic, JVC, Thomsom, Harri and Ikegami and these companies do not answer Cuba’s purchase requests as a result of the blockade.

 

To be able to acquire this equipment, the ICRT must resort to intermediaries or to third countries and this increases prices by 25 to 40 percent. Even when they manage to acquire the product, it is generally impossible to even contract post-sale services as a result of the blockade and this suppresses the warranties coming with purchases of expensive equipment. 

 

The chemical industry has had repercussions on its growth as a result of the blockade against Cuba. QUIMIMPEX of Cuba, dedicated to importing products for that sector made requests to acquire raw materials and spare parts from 16 U.S. suppliers. In particular they requested chlorine valves for cylinders used in water purification from FC-TEC which refused to supply the required consumables.

 

The sector of Science, Technology and the Environment of Cuba has also been affected by the application of the U.S. blockade. Next, a description of some of the more significant repercussions for this area: 

 

  • The Center for Research on Coastal Ecosystems and the Center for Research on Biofoods are dealing with breakage in their laboratory equipment. The function of this equipment is to monitor the coastal dynamic, the quality of seawater in these areas, the quality of drinking water and waste as well as the bromatological analyses of foods and raw materials associated with scientific projects. However up to now they have not been able to find a solution for this situation because said equipment cannot be acquired on the U.S. market. Nor have they been able to acquire reagents and culture mediums that are only manufactured in the United States; this has meant that some 1570 samples could not be analyzed in 2016 to date.

 

  • The Center for Research on Coastal Ecosystems, the Center for Reasearch on Biofoods and the Center for Technological Information and Management have no access to data bases in the United States in the management of knowledge on topics of climate change, management of natural resources (water, biodiversity, beaches), animal nutrition and meteorology. 

 

Damages caused by the blockade on the sector of energy and mining is estimated at $106,352,561 in the analyzed period. This amount represents an increase of $61,266,017 if compared with the damages calculated for the preceding period. 

 

Repercussions are being manifested in the imposition of fines on third country companies for having relations with Cuba; this reaffirms the extraterritorial nature of this policy; the prohibition on access to cutting-edge technologies, to hydrocarbons and their byproducts produced in the United States; the impossibility of exporting Cuban nickel or products having some amount of Cuban nickel to the U.S. market; the increase in costs and freight for maritime transportation; repercussions on variations in exchange rates due to the impossibility of using the dollar; payment for insurance policies on cargo and transportation, etc.

 

  • For example, the ABAPET Importing Enterprise of CUPET’s Senior Executive Department imported supplies to Cuba for $122 million, fundamentally acquired in China. These products exist on the U.S. market at an import price that is 15 percent lower. If this company had been able to acquire them in that country, it would have saved some $18,300,000.

 

  • ENERGOIMPORT of Cuba contacted five suppliers in the United States to acquire electrical connectors and some other accessories and tools for the Cuban electrical power system. HUBBLLE BURNDY and HUBBLLE POWER SYSTEMS were among the U.S. companies contacted. Both of them refused to provide the requested supplies citing the blockade in force against the Island.

 

Repercussions on the transportation sector during the period covering this report reached the figure of $232,111,000. These repercussions affected several entities in the sector whose revenues and their normal performances were harmed by the economic, commercial and financial blockade against Cuba. Civil aeronautics continues to be the transportation sector that is the most severely hit by this policy, with 67.5 percent of the total.

 

The amount of economic repercussions on Cuban aviation due to the blockade is estimated at $156,648,000. The reasons are associated with revenues not earned, losses due to geographical relocation of commerce and repercussions on production and services.

 

Furthermore, the impossibility of accessing the U.S. market during this period covering the report imposed additional costs on the country in the branch of transportation because of the increased prices, freight and insurance, and inventories being immobilized, etc., for $28,107,000.

 

AVIAIMPORT for example, was unable to use the U.S. dollar as currency to pay for its operations during the period being analyzed due to blockade prohibitions. Revenues not earned amount to $575,900 as a result of the rate of currency exchange.

 

[1] Declaration on the Right to Development.  Article 1, Paragraph 1.

[2] Paragraph 7 of the document “Transforming Our World: Agenda 2030 for Sustainable Development”, approved by the Heads of State and Government at the UN Summit for the 70th Anniversary of the Organization, September 2015.

[3] Paragraph 35 of the document “Transforming Our World: Agenda 2030 for Sustainable Development”, approved by the Heads of State and Government at the UN Summit for the 70th Anniversary of the Organization, September 2015.

III. REPERCUSSIONS ON THE FOREIGN SECTOR OF THE CUBAN ECONOMY

 

3.1. Foreign Commerce and Investments

 

Repercussions of the economic, commercial and financial blockade of the United States on the area of Cuba’s foreign trade and commerce during the period between April of 2015 and April of 2016 amount to $4,106,878,558. That represents an increase of $255,962,129 when compared to the repercussions recorded in the previous period.

Revenues not earned because of the exportation of Cuban goods and services to the United States or to third countries as a result of the application of the blockade policy constitutes the indicator with the greatest losses in this sector. Only in the period being analyzed in this report, Cuba has lost revenues of $3,149,284,420 for the aforementioned reason

 

Next, it is shown how this policy negatively affects the foreign sector of the Cuban economy: 

  • Cuba can offer over 200 medical programs of internationally recognized quality to 47 health institutions on a yearly basis to approximately 15,000 foreign citizens.  But the blockade denies U.S. citizens and in some cases citizens from third countries the possibility to have access to these programs, thereby infringing on their rights.

 

The economic repercussions caused by the blockade because Cuba cannot provide greater care to patients and academic services to U.S. citizens and those from third countries is estimated at $.

  • The Center for Genetic Engineering and Biotechnology (Centro de Ingeniería Genética y Biotecnología - CIGB) has developed Heberprot-P, a new medicine that is unique for therapy of severe ulcers of the diabetic foot (UPD). Currently this therapy has benefitted over 230,000 patients throughout the world. It has 21 health registrations and over 30 patents granted.

 

Statistics report that the prevalence of diabetes in the United States is at 9.3 percent[1], equal to some 29.2 million people. According to U.S. sources, 3.5 percent[2] of them develop UPD.This means one million persons with UPD every year. Of these, 204, 296 could develop UPD complications.

 

If Heberprot-P would be exported to benefit only the 5 percent of U.S. citizens who each year develop complicated UPD, Cuba’s biotechnological industry could see revenues of over $. This contributes to minimizing the elevated number of over 70,000 amputations that are performed yearly in the United States on diabetic patients.[3]

 

  • Likewise, CIGB has introduced the immunogen GAVAC to the market, constituting an alternative for the control of ticks.  Its action is specific for different species of the Rhipicephalus genus.

 

In the State of Tamaulipas in México, on the frontier with the United States where these are endemic, a study was made showing that this vaccine had 99 percent efficacy. Also, in 2012, GAVAC was evaluated by the USDA ARS Center for Tick Research Laboratory, and tick control efficacy results were at 99.9 percent.

 

The United States imports around 1 million head of cattle each year from Tamaulipas. This means that the cattle must undergo numerous control and quarantine procedures to prevent transferring these ticks to cattle in the U.S.The chemicals involved in these procedures tend to affect the animals and they contaminate both meat and milk.

Nevertheless, with the use of the totally ecological vaccine GAVAC, risks of contamination would be reduced on both sides of the border and so would the diseases transmitted by these ticks. If the blockade did not exist, Cuba could supply the U.S. with the product, especially in the cattle-raising areas of Texas and Baja California. This would result in revenues of for Cuba, and improvements for a sector where damages caused by these ticks are calculated at around $100 million every year.

 

  • The National Center for Scientific Research (Centro Nacional de Investigaciones Científicas - CNIC), through its commercializing entity Laboratorios Dalmer S.A., has evaluated the possibilities of exporting a number of their products to the United States. This could amount to $5,384,337.89. Among the products the most noteworthy is Policosanol or PPG which has had proven effects on cholesterol and as preventive treatment for the occurrence of vascular pathologies.  Half the population of the U.S. has high cholesterol levels; especially alarming is the fact that this occurs also in 30 percent of U.S. children[4]. The blockade policy prevents U.S. patients suffering from this condition to be benefitted by Cuban-produced PPG.

 

  • The Center for Placenta Hystotherapy has also identified the possibility for U.S. citizens to have access to Cuban products such as Melagenina Plus[5], Coriodermina, and pyloactive lotion. These are effective in the treatment of vitiligo, psoriasis and alopecia. The first two of these conditions have a prevalence of 1 [6]and 3.15 percent[7] in the U.S. respectively while alopecia areata is the reason for a total of 2.4 million visits to the doctor every year in that country. Taking this into account, by not being able to export these medicines to the United States, the Cuban biotechnology sector loses revenues of $672,000.