Informing, connecting &
inspiring a new conversation

Get Involved

#CubaNow Briefing: Cutting To The Heart Of The Embargo

David Gomez

#CubaNow Briefing

Dec 10, 2015


One week before the first anniversary of the announcement that the U.S. and Cuba would normalize relations, we saw both countries take a historic step forward as they sat down for the first time to tackle the largest obstacle between them: the settlement of billions of dollars in claims dating back to the Cuban revolution. On the U.S. side was the issue of billions in assets dating back to Fidel Castro’s nationalization of American properties. For the Cubans, an exponentially higher number was being sought as damages for the economic embargo.

The talks were a brief but momentous development, and having occurred just after news broke that Cuba is close to reaching a deal to restructure $16 billion in debt it owes to fifteen Paris Club creditors nations­, it could herald a series of economic breakthroughs in the coming year. As Brookings’ Richard Feinberg (who this week released his own report on property claims reconciliation) put it, the fact that claims talks are happening at all is a “major achievement” in U.S.-Cuba relations.

Indeed, this development is the kind that would have never happened under our old policy, despite the fact that property claims have been the dominant factor behind political support for keeping the embargo.

Opponents of normalization in Washington like to argue that trade and travel restrictions must be maintained until Cuba unilaterally decides to embrace human rights and broad democratic reforms. Yet, their insistence that Americans’ right to trade and travel be conditioned on another country’s political openness is a standard that these members of Congress have never seen fit to apply elsewhere. Lack of democratic freedoms have never stopped several of these members from traveling to countries with similarly poor records or even setting up profitable business investments with them. The fact is, when these self-anointed champions of human rights eventually do present legislation on Cuba, it is almost always all about property claims. Senator Marco Rubio’s first and only post-normalization Cuba legislation is about claims. Rep. Mario Diaz-Balart’s endless riders to curtail travel to Cuba are all about confiscated properties as well. Their hope remains that if the Castro government is squeezed hard enough, it will eventually topple and give way to new leaders willing to accept the one-sided terms outlined in the Helms-Burton Act, which codifies the embargo into law (and itself is primarily about property claims). Of course, this school of thought has never been able to articulate how an already cash-strapped country can be expected, or be willing, to pay off its debts to the United States first after its economy implodes as a result of U.S.-imposed blanket sanctions.

This week’s talks beg the question, then, of what remains to be accomplished by keeping in place what remains of the embargo. The property claims between the U.S. and Cuba may not be resolved soon, but that the first steps towards doing so have finally begun is already more progress than the embargo could ever claim credit for. When added to the continuing advancements made in the past year—including the emergence of Cuba’s new generation of tech entrepreneurs, the ever-increasing number of flights to the Island, and increased law enforcement co-operation—the promises by critics to return to the days of yesteryear ring not just hollow but entirely self-defeating.

Thank you for your support,

David Gomez
Political Director, #CubaNow

U.S. And Cuba Begin Historic Talks On Claims Settlement

With Diplomatic Ties Restored, U.S And Cuba Sit Down To Outline Billions In Claims. “U.S. and Cuban officials outlined multibillion-dollar claims against their respective countries on Tuesday as they took up the issue of settling old legal grievances that helped drive the former adversaries apart for half a century. Now that the Cold War foes have restored diplomatic ties, they have started talks on resolving claims in which the Americans are seeking upwards of $10 billion in compensation for nationalized properties. Cuba wants at least $121 billion in reparations for the U.S. trade embargo and other acts it describes as aggressions against the Communist-led island. The two sides have been meeting on a range of issues since diplomatic relations were restored in July. ‘This meeting is the first step in a complex process that may take some time, but the United States views the resolution of outstanding claims as a top priority for normalization,’ said a State Department official who participated in the daylong talks in Havana.” [Reuters, “U.S. and Cuba exchange multibillion-dollar claims on property, embargo,” 12/8/15]

American Claims Against Cuba Include Roughly $8 Billion In Assets, Plus Additional Judgments And U.S. Government Claims. “After Fidel Castro's rebels came to power on Jan. 1, 1959, Cuba nationalized all foreign businesses and reached settlements with owners from other countries. The government recognizes the U.S. claims but it cut off negotiations when bilateral relations soured. Some 5,913 U.S. corporations and individuals have been awarded $1.9 billion worth of claims for businesses, real estate and other assets. Those claims are now worth roughly $8 billion with interest. In addition U.S. state and federal courts have issued about 10 judgments totaling $2 billion against Cuba, and the U.S. government has other claims.” [Reuters, “U.S. and Cuba exchange multibillion-dollar claims on property, embargo,” 12/8/15]

Cuba Claims Damage From The Embargo Ranges From $121-$300 Billion.
 “The U.S. official declined to say whether the United States would pay reparations for damage from the embargo, which would likely raise hackles from U.S. proponents of maintaining sanctions on Cuba. Cuban law ties the settlement of the claims to U.S. reparations for damages resulting from the embargo and other acts. Cuban estimates of that damage range from $121 billion to more than $300 billion.” [Reuters, “U.S. and Cuba exchange multibillion-dollar claims on property, embargo,” 12/8/15]

Former Foreign Claims Settlement Commission Chair Mauricio J. Tamargo: “This Meeting Is An Enormously Big Deal.” “‘This meeting is an enormously big deal,’ said Mauricio J. Tamargo, the former chairman of the Foreign Claims Settlement Commission, an agency within the Justice Department that adjudicates claims against foreign governments. ‘The Cubans have up till now never recognized these claims as legitimate or something they are even prepared to discuss. It has never happened in 56 years since the revolution began and they started confiscating American property.’” [New York Times, “Cuba and U.S. to Discuss Settling Claims on Property,” 12/4/15]

Tamargo, Now A Lawyer Representing People With Claims: “If American Properties Are Compensated, Then The Embargo Should Be Lifted.” “Cuba would be unlikely to accept any deal that did not include lifting the trade embargo, which has for years been the nation’s top priority, said Mr. Tamargo, a lawyer with the firm Poblete Tamargo, which represents people with claims. If the embargo is lifted, he added, the Cubans could pay off the settlements with the increased trade revenues. The Cuban government has estimated that the American embargo cost Cuba about $121 billion in losses. ‘If American properties are compensated, then the embargo should be lifted,’ Mr. Tamargo said. ‘There is a window of opportunity for Cubans that will be gone in about a year.’” [New York Times, “Cuba and U.S. to Discuss Settling Claims on Property,” 12/4/15]

Slate’s Seth Stevenson: Despite Differences, U.S. And Cuba Have Major Interests In Resolving Claims. “Despite the distance between the negotiating partners, both sides have a real interest in getting this done, and a framework for a claims settlement might be nailed down as soon as 2016. Many observers believe President Obama craves a Cuba opening as part of his legacy, and there’s uncertainty over how the process might turn if a Republican president is elected in November. For individual claimants, a settlement might produce a windfall. For Cuba, a settlement might be one element of a grand bargain with the U.S.—including a wave of new American investment and development aid, and a radical transformation of the foundering Cuban economy.” [Slate, “The U.S. and Cuba Are Finally Meeting to Settle Old Beef Over Property Claims,” 12/8/15]

Washington Post: U.S.-Cuba Talks Over Claims “Would Have Been Hard To Imagine” Before Normalization. “U.S. and Cuban officials met in Havana on Tuesday to begin negotiating a possible settlement for $1.9 billion worth of American assets seized by Fidel Castro’s government in the early 1960s, as well as other claims built up over years of strained relations. The talks were a breakthrough and would have been hard to imagine before President Obama and Cuban President Raúl Castro announced plans last December to normalize relations…A U.S. State Department official told reporters that reaching a settlement was ‘a top priority’ for the United States. The official said Tuesday’s talks were “fruitful” and would continue in 2016.” [Washington Post, “In major breakthrough, Cuba and U.S. discuss $1.9 billion in property claims,” 12/8/15]

Cuba Expert Richard Feinberg: Just The Fact That U.S. And Cuba Sat Down To Negotiate Is A “Major Achievement.” “Cuba experts said the most important thing was that the negotiations occurred at all. ‘Merely for the two nations to sit down and talk in an orderly, professional manner about claims, after so many decades, is a major achievement,' said Richard Feinberg, a Cuba expert at the Brookings Institution who published a report this month proposing possible solutions for the two sides. ‘Settlement of U.S. claims would be a huge step forward toward fully normalizing U.S.-Cuban economic relations and would give live ammunition to those who favor lifting the economic embargo,’ Feinberg said.” [Washington Post, “In major breakthrough, Cuba and U.S. discuss $1.9 billion in property claims,” 12/8/15]

#CubaNow And TechWeek Host Cuba’s New Tech Entrepreneurs

Cuban Tech Entrepreneurs Tell Packed Miami Crowd On Goal Of Moving Cuba Forward. “Five young tech entrepreneurs from Cuba gathered in Miami for a discussion on emerging technology on the island, and they all have one thing in common - their desire to move the country forward. The entrepreneurs told a packed audience at the Dec. 7 event sponsored by #CubaNow and TechWeek that the number one obstacle they have to circumvent on a daily basis is the lack of internet.” [NBC News, “Cuba’s Emerging Tech Entrepreneurs Aim to Move Country Forward,” 12/8/15]

Revolico Founder Hiram Centelles Said Despite Government Censorship He Wanted To Spend More Time In Cuba, Where “You Can Have More Of An Impact.” “For one tech entrepreneur at the event, reaching users in Cuba became difficult after the classified website he co-founded, Revolico, was censored by the government. Afraid officials would uncover he was the creator and wanting to pursue a tech career, Hiram Centelles left for Cordoba, Spain, where he now lives. Despite continued censorship, Centelles says Revolico has around 9 million monthly users including some in Cuba and others outside the island. He says those in Cuba use alternative methods such as proxies to log onto the site. Since all his work focuses on his home country, he's considering spending more time in Cuba, explaining ‘you can have more of an impact inside the island.’” [NBC News, “Cuba’s Emerging Tech Entrepreneurs Aim to Move Country Forward,” 12/8/15]

“AlaMesa” Co-Founder Yodainer Gutierrez: Entrepreneurs Must Find Solutions With What They Have. “Yodainer Gutierrez, co-founded an app called AlaMesa,(‘tothetable’) which serves as a directory for paladares or privately owned restaurants in Cuba. Gutierrez, who also works as a freelance web designer for companies around the world, says it's important to find solutions to problems with what they have - because that's the job of an entrepreneur.” [NBC News, “Cuba’s Emerging Tech Entrepreneurs Aim to Move Country Forward,” 12/8/15]

Marta Deus On Returning To Cuba To Work On Its Burgeoning Private Sector: “Young People Are Always Thinking About Leaving But I Think Cuba Has A Future.” “Marta Deus created a cooperative that helps those who are self-employed to develop business plans, market their services, and deal with all the regulations and licenses required by the government. After spending 13 years in Spain where she received an MBA, she decided to move back to Cuba precisely to work with the burgeoning private sector. ‘Young people are always thinking about leaving but I think Cuba has a future,’ Deus said.” [NBC News, “Cuba’s Emerging Tech Entrepreneurs Aim to Move Country Forward,” 12/8/15]

#CubaNow’s Ric Herrero: Expanded Flow Of Telecom And Digital Tools To Cuba Means “You’re Going To See Incredibly Innovative And Wonderful Things.” Ric Herrero is executive director of #CubaNow, a U.S.-based organization that fosters increased communication and connections with the Cuban people. Herrero echoed the same optimistic feeling the entreneurs shared about Cuba's future. "I think the future of technology in Cuba is very promising," said Herrero. "As we expand the flow of telecommunications [and] access to telecommunications and all sorts of digital tools, you're going to see incredibly innovative and wonderful things." [NBC News, “Cuba’s Emerging Tech Entrepreneurs Aim to Move Country Forward,” 12/8/15]

One Year Into U.S.-Cuba Normalization, Changes On Both Sides Of The StraitsAP: One Year Into Normalization, Cuba A Mix Of Optimism And Fear. “In the year since Presidents Raul Castro and Barack Obama announced a rapprochement between bitter the Cold War enemies, Cuba has been transformed. A country that once seemed stuck in time suddenly faces an uncertain future of disruptive change. Particularly for those with money, property or connections, the frothy optimism is palpable, as are the expectations of greater prosperity and new freedoms. For others — the poor, the old, the vast ranks of bureaucrats who've dedicated their lives to the communist system, the dramatic dual presidential announcements of Dec. 17, 2014 and the steps toward normalization have led to feelings of fear.” [AP, “A year in, détente with US reshapes Cuba’s psychic landscape,” 12/9/15]

Former Government Agronomist Fernando Funes: Changes Are A “Breath Of Fresh Air…That Can Open A Path To A Future Of Brotherhood And Mutual Aid.” “Cubans with businesses have been buoyed since then by the prospect of better relations. Hotels, private bed-and-breakfasts and elegant restaurants have been packed, with hundreds more expected to open in the coming year. Pope Francis, who played a critical role in negotiations that led to detente, made a stop in Cuba on his way to the United States in September. U.S. Secretary of State John Kerry reopened the embassy in person in August. ‘It's a breath of fresh air, knowing that they're filing away the rough edges between the two peoples and their governments, and that can open a path to a future of brotherhood and mutual aid,’ said Fernando Funes, a former government agronomist who runs a 20-acre environmentally friendly farm supplying vegetables such as arugula and chicory to private restaurants in Havana. Those in favor of the warming in relations are hoping that the anniversary of the presidential announcements will add momentum to negotiations to connect the countries with commercial flights and direct mail, perhaps paving the way for a visit by Obama in the first half of next year.” [AP, “A year in, détente with US reshapes Cuba’s psychic landscape,” 12/9/15]

Fears That Normalization Will End Adjustment Act Leading To What May The Biggest Outflow Of Cubans Since 1980 Mariel Boatlift.
 “But for others, the changes are happening much too fast. Many fear normalization will end the guarantee of legal residency that Cubans receive the moment they touch U.S. soil. Roughly 45,000 Cubans are expected to travel by bus, boat, taxi and on foot from Ecuador and other South and Central American countries to the Texas and California borders with Mexico this year. With thousands more sailing across the Florida Straits, 2015 may witness the biggest outflow of Cubans since 125,000 fled during Mariel.” [AP, “A year in, détente with US reshapes Cuba’s psychic landscape,” 12/9/15]

Experts: Cuba Is And Will Continue To Change, But View That Americans Will “Sap Cuba’s Culture” Is Mistaken. “Cuba is indeed changing, has been for years and will continue to do so, they say, but not in the manner some Americans fear. And while an influx of American dollars could lead to more changes still, Cuba will determine its own fate. ‘Such are the two faces of our simplified understanding of the Republic of Cuba: That only we in the U.S. can save it, or that, by our very presence, we will inevitably destroy all the things that make it appealing to us,’ said Ted Henken, author of the book ‘Cuba: Nations in Focus.’” [TBO, “Experts: Influx of U.S. dollars won’t sap Cuba’s culture,” 12/6/15]

Ted Henken: View That Cuba Needs To Be Visited “Before It Changes” Is Something Of An Insult To Cubans Struggling To Make Ends Meet. “Still, scholars find it offensive when they hear some Americans lament what they expect they’ll miss about Cuba. This includes the old cars Americans consider classics but to Cubans are just old cars — their only option now and a challenge to keep on the road. And the century-old buildings so charming to gaze upon but in such disrepair they’re unsafe to occupy. And the Cubans who take to the streets hocking arts and crafts or performing music because it’s the only way they can feed their families. These are not part of a culture, scholars say, but the conditions of Cuba’s poverty. They see the day such scenes disappear as a day to celebrate rather than mourn. ‘I find the expression “before it changes” somewhere insulting to Cubans who have long suffered from being cut off from much of global capital chains, investment travel, etc.,’ Henken said in an email interview. ‘The old cars are a perfect example. Cuba doesn’t have them by choice but due to the combination of the U.S. embargo and its own inefficient and centralized economic system,’ Henken said.” [TBO, “Experts: Influx of U.S. dollars won’t sap Cuba’s culture,” 12/6/15]

First Weekly Charter From Los Angeles To Cuba Takes Off This Week. “The first weekly charter flight connecting Los Angeles to Havana departs Saturday, reflecting the continued easing of travel restrictions between the U.S. and Cuba. American Airlines will launch the weekly nonstop flight with a Boeing 737. The Fort Worth-based airline already operates several charter flights to Cuba from Tampa, Fla., and Miami but the flight from Los Angeles International Airport will be the first from the West Coast. The flights to Cuba will be sold by Cuba Travel Services. The new flight is the latest signal that the nation's airline industry is gearing up for an easing of travel restrictions to Cuba, announced by President Obama last year.” [LA Times, “First charter flight from LAX to Cuba takes off Saturday,” 12/8/15]

Miami Herald To Senators: Stop Holding Up Mexico Ambassador Post Over Cuba Politics

Miami Herald Editorial Blasts Rubio And Menendez For Holding Up Roberta Jacobson’s Nomination As Ambassador To Mexico: “The Problem Is That She Performed Her Assigned Task All Too Well.” “Unfortunately, the United States has not had an ambassador in Mexico City for four months, and some members of the Senate appear determined to keep it that way no matter how much that damages U.S. relations with Mexico. The delay in filling the position has nothing to do with Mexico or the qualifications of President Obama’s nominee for the job. The issue is Cuba. Roberta Jacobson, who was tapped for the job six months ago, is being held up because, in her role as assistant secretary of State for the Western Hemisphere, she successfully managed the policy breakthrough that resulted in the normalization of relations with Cuba. In the view of some members of the U.S. Senate — particularly GOP Sen. Marco Rubio of Florida and Sen. Robert Menendez of New Jersey, a Democrat — the problem is that she performed her assigned task all too well, helping to end more than half a century of diplomatic estrangement between the two countries.” [Miami Herald Editorial, “We need an envoy in Mexico. Vote on it!”, 12/5/15]

Miami Herald: Rubio And Menendez’s Actions “Unfair To The Nominee And Damaging To The U.S. National Interest.” “First, they bottled up her nomination in the Foreign Relations Committee for four months with delays and holds. Now they are holding up a vote on the Senate floor with similar delaying tactics. That is both unfair to the nominee and damaging to the U.S. national interest. Sens. Rubio and Menendez have the right to oppose the Obama administration’s policy on Cuba — or any other, for that matter — but it is wrong to punish Ms. Jacobson for doing her job, or to cripple U.S.-Mexico relations because of a policy dispute involving an unrelated third country.” [Miami Herald Editorial, “We need an envoy in Mexico. Vote on it!”, 12/5/15]

#CubaNow On Political Shifts In Venezuela And What It Means For The Future Of Cuba

#CubaNow’s Ric Herrero On Venezuela Elections: Changing Climate In Latin America Are An Opportunity For Cuban Government To Improve Conditions For Its Own Citizens. “Del mismo, modo, Ric Herrero, director de Cuba Now, una organización que aboga por la eliminación del embargo opinó que el gobierno cubano “lo vio venir y se ha preparado en consecuencia”. ‘La dinámica actual de América Latina debe ser una llamada de atención a los líderes cubanos de que el momento de tomar medidas audaces hacia la apertura y el crecimiento es ahora’, agregó…Por su parte, Herrero dijo que, en este nuevo contexto, solo podría esperarse que ‘los funcionarios cubanos aprovechen la oportunidad para mejorar las perspectivas de futuro de sus ciudadanos, entre ellos, de los miles de jóvenes cubanos que abandonan la isla en busca de oportunidades y protecciones que no pueden encontrar en casa’, en referencia a un éxodo que no parece detenerse.” [El Nuevo Herald, “Cuba y los resultados electorales en Venezuela,” 12/7/15]

¡No Me Digas!

Cuban Government Returns Fleeing U.S. Fugitive Who Fled To Cuba On A Stolen Boat. “U.S. Marshals have brought a fugitive back from Cuba after he journeyed there on a small boat stolen from a Florida Keys marina. The Marshals said in a news release Tuesday that Shawn Wegmann is wanted in Iowa on federal firearms charges. Authorities said Wegmann is the first U.S. fugitive returned by the Cuban government since its recent thaw in relations with the U.S. Investigators say Wegmann stole a white, 13-foot Boston Whaler from a Key West marina and arrived in Havana on Oct. 31. He was arrested by Cuban border guards. Originally his name was erroneously reported as Shawn Michael Luskey. A court hearing is set Wednesday in Miami for Wegmann, who is from Kirklin, Indiana. He is likely to be returned to Iowa to face weapons charges.” [AP, “U.S. brings fugitive from Cuba after stolen boat journey,” 12/8/15]