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Archive for the ‘Cuba Sanctions’ Category

Nov

19

What Happens in Panama Stays in Panama (including 200,000 bags of brown sugar)

Posted by George Murphy at 7:08 pm on November 19, 2013

By jonprc (Flickr: north korean ship) [CC-BY-2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons http://commons.wikimedia.org/wiki/File%3ANorth_korean_ship.jpg

We reported last July on Panamaâ€™s seizure of the North Korean vessel Chong Chon Gang sailing from Cuba to North Korea and carrying, among other things,Â disassembled Soviet-era MIG jets and missiles hidden in 200,000 bags of brown sugar. Cuba claimed it was sending these items to North Korea “for repair.” As was reported at the time, the North Korean crew tried to fend off Panamanian boarders with sticks while the vesselâ€™s captain initially claimed to have a heart attack and subsequently attempted suicide.Â The entire ordeal resulted in the rare Cuba-Panama-North Korea diplomatic tiff.Â While we explainedÂ in JulyÂ the UN sanctions against North Korea that were implicated, recent developments also provide telling aspects of U.S. sanctions policy against Cuba.

The United States has remained notablyÂ close-lipped and littleÂ has developed in almost four months since the seizure untilÂ this last week.Â On Wednesday, the Panamanian foreign minister was in Washington and was thanked by Secretary Kerry for Panamaâ€™s “very important interdiction of a North Korean ship with illicit cargo.”Â According to Panamanian media, the Panamanian foreign minister announced on Friday that Panama has granted visas to a North Korean delegation to come to Panama this week to claim the Chong Chon Gang and most of its crew.Â Â The captain, two senior officers, the disassembled weaponry and the brown sugar will not be released.Â Finally, Vice President Biden arrived yesterday in Panama to tour expansion sites of the Canal.

The upshot of the entire incident is that the United States got the best promotion of sanctions against Cuba it could have asked for.Â Panama was the one who exposed Cuba engaging in concealed international arms trafficking with North Korea.Â The United States, as a result, was not thrust into a position to defend an embargo unsupported by most ofÂ its allies, but rather could let Cuba be scolded by another Latin American country.

The United States, of course, most likely played critical behind-the-scenes intelligence and direction related to the seizure, and the recent diplomatic visits between the two countriesÂ are reminders that Panama relies heavily on U.S. support and, therefore,Â would beÂ willing to comply with the occasional Soviet-era arms seizure at the behest of the United States.Â Perhaps not coincidentally, the North Korean crew have been detained at Fort Sherman, a former U.S. military base on the Atlantic side of the Canal.

While Iran takes current front page news on U.S. sanctions policy, the activities onboard the Chong Chon Gang is a singular example of why the United States is not inclined to easeÂ sanctions meaningfullyÂ against Cuba soonÂ and will use this episode as support that sanctions should remain as is.

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Oct

23

Berman Amendment? What Berman Amendment??

Posted by Clif Burns at 10:42 pm on October 23, 2013

Category: BIS • Cuba Sanctions • OFAC

By Marrovi (Own work) [CC-BY-SA-2.5-mx (http://creativecommons.org/licenses/by-sa/2.5/mx/deed.en)], via Wikimedia Commons http://commons.wikimedia.org/wiki/File%3AAntiguo_Centro_Asturiano%2C_hoy_Museo_Nacional_de_Bellas_Artes.JPG Back in August, the Bureau of Industry and Security issued an advisory opinion relating to a request from a number of U.S. art museums regarding temporary export of artworks from the United States to Cuba, presumably to be displayed in the 2014 Havana Biennial. A simple question, one would think, easily answered by the Berman Amendment which prohibits BIS from regulating “directly or indirectly” the export of “informational materials” to Cuba. But never, ever underestimate the inventiveness of BIS in figuring out ways to prevent the Commies in Cuba from being propped up by American paintings hanging on museum walls in Havana.

The BIS advisory opinion starts promisingly by conceding that BIS would be “prohibited from Â regulating ‘information or informational material’ such as artwork.” But don’t start packing up your Rembrandts yet:

You stated in your request that the artwork would be transported to Cuba using a vessel. Please note that, pursuant to Section 746.2 of the EAR, an export license is required for the temporary sojourn of vessels to Cuba. The vessel may not travel to Cuba unless the exporter of the vessel first obtains a temporary sojourn license from BIS.

So, if you can have Scotty and the Starship Enterprise beam the artwork up to Havana, you don’t need an export license from BIS to send a painting to Cuba. Otherwise, so sad, too bad, but you’d better get permission from BIS first, Berman amendment or not. This rather defeats the part of the Berman amendment which says that BIS can’t regulate “directly or indirectly” the export of informational materials to Cuba or other sanctioned countries. Even OFAC, not a hotbed of pro-Cuba sympathy or Berman amendment enthusiasm, gets this. Section 515.550 of OFAC’s Cuban Assets Control Regulations makes clear that a vessel engaging in exempt transactions does not require a license to go to Cuba.

To add insult to injury, the advisory opinion says this:

[A]rtwork is considered “informational materials” exempt from the EAR’s jurisdiction when exported to Cuba if it is classified under Chapter subheadings 9701, 9702, or 9703 of the Harmonized Tariff Schedule of the United States (HTSUS). If the material at issue is exempt from the EAR, a BIS license is not required for its export to Cuba. Please contact the U.S. International Trade Commission if you need assistance with classifying the artwork in accordance with HTSUS.

Seriously, the person who wrote this opinion thinks that you get HTSUS classification decisions from the USITC. The USITC itself, as a quick to Google would have revealed to the author of the opinion, doesn’t think it can provide classification assistance:

Although, in principle, articles can be classified in only one place, classification often requires interpretation and judgment. U.S. Customs and Border Protection (CBP) has authority to make classification decisions and may disagree with a reasonable classification offered by the importer. Published Customs rulings (http://rulings.cbp.gov) are often useful to see how Customs looks at the issues. USITC does not issue classification decisions.

Even more bizarre, why does BIS suggest that the exporter needs to make some difficult decision to determine whether an artwork fits in a specific HTSUS tariff heading and then misdirectÂ the exporter to the wrong agency to resolve that thorny issue? Evidently to make the museums think twice before they send paintings to Havana. It’s a slippery slope after all that starts with oil paintings and ends up with weapons of mass destruction.

[Note: Â even though the advisory opinion suggests that all vessels need a license to go to Cuba, the museums could put the artwork on a boat, send it to a foreign port, and have a foreign boat transport the artwork to Cuba — an unnecessary, pointless and possibly hazardous solution.]

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Oct

18

Give That Pigeon a Cigar

Posted by Clif Burns at 1:34 am on October 18, 2013

Category: Cuba Sanctions • OFAC

Source http://http://commons.wikimedia.org/wiki/File:Pigeon_Messengers_(Harper%27s_Engraving).png [Public Domain] One of the only things that the Cuba embargo has accomplished has been an unusual burst of creativity by U.S. citizens in figuring out clever ways to smuggle Cuban cigars into the United States. Â There is, of course, the method of ordering Cuban cigars over the Internet from a Canadian merchant. Â And not to be forgotten are the helpful tobacconists in London who will relabel and repackage Cuban cigars. Â But nothing beats homing pigeons. Â Seriously, homing pigeons.

An article in today’s New York Times details an “art exhibit” entitled “Trading with the Enemy” which involves, among other things, training homing pigeons to fly from Havana to Key West with cigars strapped to their backs — flying mules, as it were.

The artist for this project, acknowledging the potential sanctions issues involved, offers a coy — or, some might say, stupid — response:

“How those cigars end up on the birds, I canâ€™t say,â€ he said, carefully. â€œIf a bird ends up in my pigeon lofts, that happens to have a cigar from Cuba, and there also happens to be a pigeon that has a video camera on it, that shows footage of birds flying from Havana to Key West with cigars â€” yeah, I canâ€™t really say how that happened.â€

The OFAC response to this dog-ate-my-homework story was equally articulate:

Oooookkkkkay

The OFAC spokesperson subsequently had second thoughts about this response:

In a statement, she added that importing or dealing in Cuban goods is generally prohibited for â€œpersons subject to the jurisdiction of the United States.â€

Oooookkkkay, so we all agree that the artist might be in deep pigeon guano if OFAC comes after him, but what about the pigeons? Are they U.S. persons under the rules? Can they sign a consent agreement? Can they be added to the SDN List as Cigar Kingpigeons?

Actually, I think it’s a good sign that the OFAC response seems to indicate that the agency has better things to do than chase stogie-toting homing pigeons. Just wait, however, until Ileana Ross-Lehtinen finds out. I can’t wait for the hearings and watching her try to put the pigeons under oath.

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Oct

2

Fun Furlough Facts

Posted by Clif Burns at 11:07 am on October 2, 2013

Category: BIS • Cuba Sanctions • DDTC • OFAC

Based on photograph By Daderot (Own work) [CC0], via Wikimedia Commons http://commons.wikimedia.org/wiki/File%3APatent_quote_-_United_States_Department_of_Commerce_-_DSC05103.JPG So, you may be wondering which export agencies are up and which are down now that the Federal Government is shutdown. The answer isn’t altogether clear at this point (still!) but here is what appears to be the current rundown of things.

Treasury. The license application page is down with a note saying that licenses won’t even be accepted during the shutdown. If you need to file a TSRA or other license, you’re just going to have to wait until the government is open even to file the license.

State. Normal operations at least through Friday, October 4. After that, licenses will be accepted and acted on only in emergency situations.

Commerce. Crickets, as they say. Nothing but the sound of crickets from that corner. The BIS website makes no mention of the shutdown which means either it’s business at usual over at BIS (not very likely) or that they are so shut down they can’t even post something on the front page of their website.

USITC. Looking for the correct HTUS code to put on an AES form? Too bad. The online version of the Harmonized Tariff is down for the duration. Now aren’t you sorry you didn’t print out all 3,456,732.12 pages of it?

Radio Marti. Well, you can’t get a license to send food to Cuba during the shutdown, but the federal government has decided that propaganda is an essential service, and Radio Marti broadcasts to Cuba will continue unabated, shutdown or not. Apparently, the Cubans need to hear about our shutdown which proves that we’re a free country or something like that. Of course, Cuba’s jamming operations are also unaffected by the shutdown, so mostly the broadcasts to Cuba will be about as effective as they always have been.

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Aug

7

There’s No Crying in Baseball (Unless OFAC Gets Involved)

Posted by Clif Burns at 5:48 pm on August 7, 2013

Category: Cuba Sanctions • OFAC

By boomer-44 on Flickr (Original version)UCinternational (Crop) [CC-BY-2.0] via Wikimedia Commons http://commons.wikimedia.org/wiki/File%3AAlfredo_Despaigne_on_March_9%2C_2013_(2).jpg

ABOVE: Alfredo Despaigne

There is no better proof that comprehensive sanctions are useless and silly than this: U.S. sanctions on Cuba are going to prevent the participation of Cuba’s national baseball team in the Caribbean Series which will take place next February in Venezuela and will not involve any U.S. teams. Founded in 1949, with Cuba as one of the original founders, Cuba played in the annual series until 1961 when Castro banned professional sports on the island.

So there was quite a bit of excitement when several months ago Cuba said it would return to the series. But just as the excitement for mighty Casey faded when he struck out, hopes were quickly dashed for Cuba’s time at bat when OFAC struck them out before they could even get to the plate. Apparently the organizers of the Caribbean Series received a letter from Major League Baseball saying that players signed with the MLB couldn’t play in the tournament if Cuba participated. Most of the Carribean league players already have MLB contracts, even if only with the minor leagues, so excluding players with MLB contracts is a non-starter. And no one knows whether OFAC licenses could be obtained at all, much less in time.

MLB’s theory about the application of the sanctions to players under contract with the League is a bit bizarre, to say the least. Last time I checked, signing a contract with the MLB does not turn the player automatically into a U.S. person (or even an honorary one). I suppose the fear is that even if the player is playing in his personal capacity as a member of one of the Caribbean leagues he is still somehow a Major League player and this would bring down the wrath of OFAC on MLB. That being said, given the huge fines that OFAC can impose and the general perception that OFAC doesn’t play fairly, I can understand MLB’s reticence to run this risk.

One thing is certain: banning Cuba from the Caribbean series will not lead the current Cuban government to abdicate; nor will itwin the U.S. any friends among ordinary Cubans.

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