Report by Cuba on resolution 74/7 of the United Nations General Assembly. " Necessity of ending the economic, commercial and financial blockade imposed by the United States of America against Cuba".
July 2020
Contexts
Introduction. 2
1. Continuity and intensification of the bockade policy. 5
1.1 Blockade laws in force. 5
1.2 Principal blockade measures applied from April 2019 to March 2020. 7
1.3 Implementation of the Helms-Burton Act. Lawsuits filed. 10
2. The Blockade violates the rights of the Cuban people. 13
2.1 Adverse effects of the blockade on the most vulnerable social sectors. 13
2.2 Adverse effects on the economic development 22
3. Adverse effects on the foreign sector of the Cuban economy. 30
3.1 Adverse effects on foreign trade. 30
3.2 Adverse effects on the financial and banking sectors. 33
4. The blockade violates the International Law. Extraterritorial implementation 37
4.1 Adverse effects on the Cuban entities. 37
4.2. Other extraterritorial adverse effects. 38
5. World opposition to the blockade. 41
5.1 Opposition in the United States. 41
5.2 Opposition by the international community. 49
ConclU.S.ions. 57
Introduction
This report covers the period from April 2019 to March 2020, marked by a serious setback in the bilateral relations between Cuba and the United States and a progressive tightening of the economic, commercial and financial blockade.
During this period, the numerous regulations and provisions issued by the U.S. government against Cuba reached unprecedented levels of hostility. The possibility of establishing lawsuits under Title III of the Helms-Burton Act; the increased persecution of Cuba's financial and commercial transactions; the ban on flights from the U.S. to all Cuban provinces, except Havana; the persecution and intimidation of companies that send fuel supplies to Cuba; and the campaign to discredit Cuban medical cooperation programs, are some of the most distinctive examples.
During this period, and contrary to the provisions of General Assembly resolution 74/7 and many previous ones, there were around 90 coercive economic actions and measures imposed by the United States Government against Cuba, with the intention of intervening in the country’s internal affairs and in clear violation of the freedom of international trade and navigation. Of this total, about half were concrete actions of blockade, which included fines and other types of sanctions against U.S. or third country entities, insertion of Cuban companies in unilateral lists, extension of laws and proclamations on the blockade, announcements related to the implementation of Titles III and IV of the Helms-Burton Act and regulatory changes. Another group of measures evidenced the extraterritorial implementation of the blockade or corresponded to State Department decisions against our country.
Particularly alarming are the five packages of measures adopted in 2019 to monitor and impose punitive measures against companies, ships and shipping companies that transport fuel to Cuba. In this regard, illegitimate sanctions were imposed against 27 companies, 54 vessels and 3 individuals linked to the sector, none of them of U.S. origin, or subject to the jurisdiction of that country. These aggressive actions by the U.S. government are a qualitative leap in the intensification and implementation of non-conventional measures in times of peace. This is a new open and brutal violation of the rules and principles on which the system of international relations is based, including international trade rules. The United States Government has dedicated itself to threatening and blackmailing the companies that supply fuel to Cuba, and those that engage in its international transport, without having any legal or moral authority to do so.
All these measures have a strong impact on Cuba’s economic activities, particularly those related to foreign trade operations and foreign investments. This situation has forced Cuba to adopt temporary emergency measures, which are only possible in an organized country with a united and supportive population, ready to defend itself from foreign aggression and to preserve the social justice achieved. The actions undertaken are aimed at boosting the Cuban economy and mitigating the effects of the blockade. These include more than twenty provisions aimed at strengthening the socialist state enterprise.
No citizen or sector of the Cuban economy escapes the effects of the blockade, which hinders the development that any country has the right to build in a sovereign manner. That is why this unilateral policy is the main obstacle to the implementation of Cuba’s National Economic and Social Development Plan until 2030 (PNDES, in its Spanish acronym), as well as to the achievement of the 2030 Agenda and its Sustainable Development Goals (SDG).
For Cubans living abroad, the blockade regulations are also daily obstacles. They are prevented from opening bank accounts, using certain credit cards or carrying out normal transactions, just because they have Cuban nationality.
As part of its aggressive escalation, the U.S. government also put strong pressure on a group of countries, particularly in Latin America and the Caribbean, with the aim of dismembering the support for the draft resolution against the blockade submitted by Cuba to the United Nations General Assembly on 6 and 7 November 2019. Despite these maneuvers and blackmail, the voting demonstrated, once again, the overwhelming support of the international community for the Cuban cause.
The blockade constitutes a massive, flagrant and systematic violation of the human rights of all Cubans. Because of its express purpose and the political, legal and administrative scaffolding on which it is based, it qualifies as an act of genocide under the 1948 Convention on the Prevention and Punishment of the Crime of Genocide.
From April 2019 to March 2020, the blockade has caused losses to Cuba by an estimated USD 5,570,300,000. This accounts for an increase of about USD 1,226 billion over the previous period. For the first time, the total amount of damages caused by this policy in one year exceeds the barrier of five billion dollars, which illustrates the extent to which the blockade has intensified at this stage. The damage calculated does not take into account the actions of the U.S. government in the context of the COVID-19 pandemic, because it exceeds the end of the period under review.
At current prices, the accumulated damage over almost six decades of implementation of this policy amounts to USD 144,413,400,000. Taking into account the depreciation of the dollar against the value of gold on the international market, the blockade has caused quantifiable damages of over USD 1,098,008,000,000. This value represents a growth of 19 percent over the previous period, as a result of the increase in the price of gold by 18.3 percent.
In this context, the scourge of a global pandemic such as the COVID-19 has posed significant challenges for Cuba, and the country’s efforts to combat it have been significantly limited by the regulations of the U.S. blockade. The genocidal nature of this policy has been reinforced in the midst of the confrontation with the new coronavirus, since the U.S. government has used it, and in particular its extraterritorial component, to deliberately deprive the Cuban people of mechanical ventilators, masks, diagnostic kits, protective glasses, suits, gloves, reagents and other inputs necessary for the management of this disease. The availability of these resources can make the difference between life and death for patients who are carriers of the virus, as well as for the health personnel who care for them.
This has not been enough for the U.S. government, which has also launched a crusade to try to discredit and hinder the international medical cooperation that Cuba offers, spreading slanders and going so far as to require other countries to refrain from requesting it, even in the midst of the health emergency created by COVID-19 in the world.
Despite its actions, the U.S. government has not been able to prevent that until July 1st, 2020, more than 3 thousand Cuban collaborators, organized in 38 medical brigades, contribute to the fight against this pandemic in 28 countries and 3 non-autonomous territories. These efforts have also been joined by the more than 28 thousand Cuban health professionals who were already providing their services in 59 nations before COVID-19.
In addition to the above actions, the terrorist attack perpetrated against the Cuban Embassy in the United States on April 30, 2020, is also a case in point. The complicit silence of the U.S. government and its inability to denounce or make a public statement about this terrorist act is evidence of its commitment to inciting violence and messages of hatred against Cuba and its nationals, a conduct that encourages the execution of acts of this nature. The political passivity of the U.S. government in the face of an assault rifle attack on a diplomatic mission in the country’s capital calls into question the fulfillment of its obligations under the 1961 Vienna Convention on Diplomatic Relations.
On May 12, 2020, the U.S. Department of State notified Congress of its decision to list a group of countries, including Cuba, among those certified under Section 40A (a) of the Arms Export Control Act as “countries not fully cooperating” with U.S. anti-terrorism efforts during 2019. With this action, the U.S. government intends to hide its record of state terrorism against Cuba, which has been a permanent instrument of its aggressive policy towards the island.
In the current situation, in which humanity is facing an economic and social crisis accentuated by the COVID-19 pandemic, whose dimensions nobody is able to predict with certainty, it is more necessary than ever that the international community demands the lifting of the blockade imposed by the government of the United States against Cuba, which constitutes the most complex and prolonged system of unilateral coercive measures ever imposed against any country.
1. Continuity and intensification of the blockade policy
1.1 Blockade laws in force
The successive measures implemented against Cuba and the repeated amendments to the Cuban Assets Control Regulations (CACR) applied by the U.S. government during the period covered by this report, confirm the validity of the laws and regulations which support the blockade policy. U.S. state and government agencies, including the U.S. Departments of the Treasury and Commerce, strictly apply the legislation of Congress and administrative provisions that establish the blockade policy. The main ones are set out below:
Section 5(b) of the Trading with the Enemy Act of 1917 (TWEA) 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 wartime. In 1977, the International Emergency Economic Powers Act restricted the powers of the President to impose new sanctions in times of national emergency situations. Nevertheless, the TWEA continued to be applied to Cuba and successive United States presidents have extended its implementation. Under this legislation, the oldest of its type, the U.S. adopted the Cuban Assets Control Regulations (CACR) in 1963. Cuba is the only country affected by this legislation. In 2017, 2018 and 2019, President Trump renewed the sanctions against Cuba under this law.
The Foreign Assistance Act (1961) 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 the U.S. government funds destined for international aid and sent to international organizations may not be used for programs related to Cuba. It prohibits granting any aid 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 U.S. citizens and companies not less than 50% 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, decreed a total “embargo” of trade between the U.S. and Cuba in compliance of with Section 620 (a) of the Foreign Assistance Act.
Cuban Assets Control Regulations of the Department of the Treasury (1963) stipulated the freezing of all Cuban assets in the U.S., the prohibition of all financial and commercial transactions unless they should be approved by a license, the prohibition of Cuban exports to the U.S., the prohibition of any natural person or legal entity in the U.S. or third countries from carrying out transactions in U.S. dollars with Cuba, etc.
Export Administration Act (1979), in its Section 2401 (b) (1) “National Security Controls”, “Policy Toward Individual Countries”, established the Trade Control List in which the U.S. 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 basis for the general control of export items and goods, in agreement with the sanctions imposed by the U.S. government.
The Cuban Democracy Act or Torricelli Act (1992) prohibits subsidiaries of U.S. companies in third countries from trading in goods with Cuba or Cuban nationals. It prohibits third country ships landing in any Cuban port from entering U.S. territory for 180 days, other than those having license from the Secretary of the Treasury.
The Cuban Liberty and Democratic Solidarity Act or Helms-Burton Act (1996) codifies the provisions of the blockade and extends its extraterritorial scope, by imposing sanctions on directors of foreign companies who carry out transactions with U.S. properties nationalized in Cuba and the possibility of filing lawsuits in U.S. courts. It likewise limited the President’s prerogatives to suspend the blockade. For the first time in history, on May 2, 2019 the U.S. government announced that it would allow lawsuits to be filed in U.S. courts under this legislation.
Section 211 of the Emergency Supplemental Appropriations Act for the 1999 fiscal year prohibited the acknowledgement by U.S. courts of the rights of Cuban companies to trademarks associated with nationalized properties.
The Trade Sanctions Reform and Export Enhancement Act (2000) authorized the export of agricultural products to Cuba on the condition of cash payment, in advance and without U.S. financing. It prohibited travel to Cuba by U.S. citizens for tourism purposes, 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. It limits travel to the 12 categories authorized at the time this legislation was passed.
1.2 Principal blockade measures applied from April 2019 to March 2020
From April 2019 to March 2020 the U.S. Departments of the Treasury and Commerce, in agreement with the policy of hostility proclaimed by Donald Trump government, introduced regulatory changes under the laws of the blockade against Cuba. In addition to the effects of these modifications, mainly in the travel and finance sectors, mechanisms were introduced to persecute Cuba’s operations in third countries, which bring about a highly dissuasive and intimidating effect on foreign counterparts, with the consequent damage to the Cuban economy.
During the period covered by this report, the Office of Foreign Assets Control (OFAC) imposed 12 penalties on U.S. and third-country entities for violating the Cuban Assets Control Regulations. The amount of these penalties exceeded USD 2,403,985,125.
The main blockade actions recorded during the period under review are set out below:
On April 5, 2019, the Office of Foreign Assets Control (OFAC) of the Department of the Treasury included 34 vessels owned by the Venezuelan oil company PDVSA, as well as two other foreign companies, on its list of Specially Designated Nationals (SDN) for sending crude oil to Cuba.
On April 9, 2019, the OFAC imposed a sanction to the Standard Chartered Bank, a British-based entity in the banking-financial sector. This bank had to pay USD 639,023,750 for apparent violations of the Cuban Assets Control Regulations and other sanctions programs.
On April 11, 2019, the OFAC imposed sanctions on the British-based oil sector companies, 2H OFFSHORE and ACTEON GROUP Ltd., for violations of the Cuban Assets Control Regulations. The amount to be paid by both entities was USD 227,500 and USD 213,866, respectively.
On April 12, 2019, the OFAC penalized 4 companies and 9 vessels operating in the Venezuelan oil sector, some of which would have transported oil to Cuba.
On April 15, 2019, the OFAC imposed penalties on the financial banking sector companies UniCredit Bank AG (Germany), UniCredit Bank Austria (Austria) and UniCredit Bank SpA (Italy), for a total of USD 1,300,000,000. These institutions allegedly made bank transfers in violation of the Cuban Assets Control Regulations.
On April 17, 2019, U.S. Secretary of State Mike Pompeo announced the total activation of Title III of the Helms-Burton Act as of May 2, 2019. This opened up the possibility of taking action in U.S. courts for any court cases filed against foreign investors and those who maintain commercial relations with Cuba under this law.
On April 24, 2019, the Department of State updated the List of Restricted Cuban Entities, by including 5 new entities, for a total of 216. In July, a new update of this list was announced, with the addition of 2 new entities, for a total of 218. The list was updated for the third time on November 15, 2019, with the addition of 5 new entities, for a total of 223.
On June 4, 2019, the OFAC and the Bureau of Industry and Security (BIS) of the Department of Commerce announced regulatory changes in the policy towards Cuba, mainly aimed at the travel sector. The measures included the elimination of “people to people” travel and the implementation of a policy of denying licenses for passenger transport (cruises), recreational vessels and private aircraft. It was also provided that U.S. travellers arriving in Cuba under any of the 12 authorized categories may not conduct direct financial transactions with companies included on the List of Restricted Cuban Entities.
On June 13, 2019, the OFAC imposed penalties on the U.S. companies EXPEDIA GROUP INC., HOTELBEDS U.S.A INC. and CUBASPHERE INC. for violations of the Cuban Assets Control Regulations. All three penalties corresponded to transactions related to travel or travel services to Cuba.
On July 3, 2019, the Department of the Treasury included the company CUBAMETALES on the List of Specially Designated Nationals (SDN), in view of the involvement of the Cuban entity in oil import activities from Venezuela.
On September 6, 2019, the OFAC updated the Regulations for the Control of Cuban Assets by imposing a limit of up to one thousand dollars per quarter on family remittances, eliminating donor remittances (non-family) and suspending transfers related to Cuba that originate and are destined outside the United States. (U-Turn transactions).
On September 13, 2019, President Donald Trump extended the validity of the Trading with the Enemy Act for another year in the case of Cuba.
On September 17, 2019, the OFAC included 3 individuals (2 Colombian and 1 Italian) and 17 companies (12 based in Colombia, 4 in Panama and 1 in Italy) on the List of Specially Designated Nationals (SDN), alleging that they were involved in the transport of oil to Cuba.
On September 24, 2019, the OFAC included 4 companies (3 Panamanian and 1 Cypriot) and 4 vessels related to the transport of Venezuelan oil to Cuba on the List of Specially Designated Nationals.
On October 1, 2019, the OFAC imposed a penalty of USD 2,718,581 on the company GENERAL ELECTRIC (GE), based in Boston, Massachusetts, for apparent violations of the Cuban Assets Control Regulations.
On October 18, 2019, the Bureau of Industry and Security of the Department of Commerce announced amendments to the Export Administration Regulations (EAR). The new measures included a general policy of denying licenses for the leasing of aircraft to Cuban state-owned airlines; preventing the re-export to Cuba of foreign items containing more than 10 percent U.S. components; revising the Licensing Exception “Support for the Cuban People” so that certain donations cannot be made to the government of Cuba and the Cuban Communist Party; eliminating the authorization for the export of promotional items that “generally benefit the government of Cuba”, as well as new restrictions on the export of telecommunications-related goods.
On October 25, 2019, the Department of Transportation announced the suspension of all U.S. airline flights from the U.S. to Cuba, with the exception of those to Havana's José Martí International Airport. With this measure, which came into effect on 10 December, all U.S. flights to nine Cuban airfields were suspended.
In October 2019, the most important leaders of the Spanish hotel chain MELIÁ HOTELS INTERNATIONAL S.A., including its Chief Executive Officer, received notifications from the State Department informing them of the ban on entry to the United States, as a result of the application of Title IV of the Helms-Burton Act.
On November 26, 2019, the OFAC announced the inclusion of the Cuban company Corporación Panamericana S.A. on the List of Specially Designated Nationals.
On December 3, 2019, the OFAC issued an official communication announcing the inclusion of 6 vessels (one with Panamanian flag and the other Venezuelan) in the List of Specially Designated Nationals for transporting crude oil to Cuba.
On December 9, 2019, the OFAC announced the application of coercive measures against the companies ALLIANZ GLOBAL RISKS U.S. INSURANCE COMPANY, based in the United States, and CHUBB LIMITED, based in Switzerland, for the amount of USD 170,535 and USD 66,212, respectively. The measures were due to apparent violations of the Regulations for the Control of Cuban Assets, for carrying out transactions and other operations related to travel insurance to Cuba.
On January 10, 2020, the Department of Transportation suspended all charter flights between the U.S. and Cuba, except those to Havana’s José Martí International Airport. In addition, a limit was imposed on the number of charter flights to this airport.
On February 25, 2020, President Donald Trump issued a notice extending for one year the State of National Emergency relating to Cuba, declared by President William Clinton on March 1st, 1996.
On February 26, 2020, the new regulations of the U.S. company WESTERN UNION came into force, which eliminates the possibility of sending remittances to Cuba from third countries.
1.3 Implementation of the Helms-Burton Act. Lawsuits filed
Since its entry into force in 1996, the Cuban Liberty and Democratic Solidarity Act, also known as the Helms-Burton Act, codified the blockade against Cuba and strengthened its extraterritorial scope. In addition to seeking the imposition of a government in Cuba directly subordinate to Washington’s interests, this legislation sought to internationalize the blockade by means of coercive measures against third countries, in order to interrupt their trade and investment relations with Cuba.
Its Title III allows former owners of properties that were nationalized in Cuba, including Cuban citizens who eventually became U.S. citizens, the possibility of suing in U.S. courts those who had any contact with such properties, which the law called “trafficking”. This term includes, according to the law itself, anyone who “transfers, distributes, dispenses, brokers, or otherwise disposes of confiscated property, or purchases, receives, possesses, or otherwise obtains control of it, or makes improvements to, or invests in a confiscated property; or if after the date of enactment of this Act, assumes the management, lease, possession, or use of confiscated property or has an interest in confiscated property; enters into a business arrangement using or otherwise benefiting from confiscated property; causes or directs trafficking described in the paragraphs or by another person, or engages in or benefits from such trafficking; or otherwise conducts trafficking through another person, without the authorization of any United States national who holds a claim to the property.”
The possibility to sue alleged beneficiaries of “trafficking” had been consistently suspended every six months since 1996 by all U.S. presidents, including President Donald Trump himself. With the purpose of suffocating the Cuban economy and increasing the needs of the population, the Helms-Burton Act has transcended as a mechanism of brutal and illegal pressures by the U.S. government, not only against Cuba, but also against third countries, their governments and companies. Its claims are illegitimate and contrary to International Law.
For the first time in 23 years, legal proceedings under the Helms-Burton Act were initiated on May 2, 2019. As of March 31, 2020, a total of 25 lawsuits had been filed, of which 3 were withdrawn and 22 are still ongoing. This policy has affected U.S. and third-country companies that have done or are doing business with Cuba. Some examples are listed below:
On August 27, 2019, five new lawsuits were filed against cruise companies. HAVANA DOCKS filed lawsuits against MSC CRUISES SA (Swiss company) and its U.S. subsidiary, as well as against ROYAL CARIBBEAN CRUISES and NORWEGIAN CRUISE LINE HOLDINGS (both U.S. companies). The latter two companies were also sued by Javier García Bengochea, who claims to own some quays in the port of Santiago de Cuba.
On September 26, 2019, the technology and logistics company AMAZON and the company FOGO CHARCOAL were sued in a Miami court by Daniel Gonzalez, grandson of Manuel Gonzalez Rodriguez, alleged former owner of a portion of nationalized Cuban land where artisanal charcoal is produced, which is then exported to the world and sold through AMAZON on its digital platform.
On September 30, 2019, Robert Glen filed a lawsuit against the U.S. companies TRIP ADVISOR, ORBITZ, TRIP NETWORK, CHEAPTICKETS and KAYAK, as well as against the Dutch company BOOKINGS.COM, in the Federal Court of Delaware. The plaintiff claims to be the heir of nationalized land in Varadero, related to hotels operated by the companies IBEROSTAR, MELIÁ, BLAU and STARFISH, which are in the database of the aforementioned online reservation companies. A few days later, on October 4, 2019, Robert Glen filed another lawsuit in the District Court of Delaware against the companies VISA and MASTERCARD, alleging that they facilitate payments or transactions through credit cards at the above-mentioned hotels.
On January 14, 2020, Marlene Cueto Iglesias filed a lawsuit against PERNOD RICARD (a French company) in the United States District Court for the Southern District of Florida. The plaintiff claims to be the heir of the company COÑAC C.I.A., nationalized in 1963. The claim is based on the defendant’s alleged property rights in the Havana Club brand.
On April 17, 2020, the heirs of Roberto Gomez Cabrera filed a lawsuit in the Southern District Court of Florida. The defendant is the Canadian company TECK RESOURCES LIMITED. Plaintiffs allege that since 1996 the company has operated several mines at El Cobre and its locations, which were allegedly owned by Roberto Gomez Cabrera.
It is important to note that Cuba, as part of a legitimate process of economic and social transformation, which included the property regime, carried out a series of nationalizations in accordance with the current international law. In addition, the Cuban government compensated all those Cuban citizens whose expropriated property was not the result of criminal conduct in violation of the legal system, and those who did not incur in such conduct as a result of the nationalizations.
With respect to foreign citizens whose properties were nationalized, Cuba concluded global compensation agreements with all the States whose nationals were affected, with the exception of the United States.
Law 80 on the Reaffirmation of Cuban Dignity and Sovereignty, approved by the Cuban National Assembly of People’s Power in December 1996, establishes that U.S. regulations are inapplicable and have no value or legal effect on the Cuban national territory. It reaffirms the willingness of the government of Cuba to seek adequate and fair compensation for the assets expropriated from natural and legal persons who at that time held U.S. citizenship or nationality. It also offers full guarantees to foreign investors in Cuba, while Article 5 states that the government shall be empowered to adopt “such additional provisions, measures and facilities as necessary for the total protection of current and potential foreign investments in Cuba and the defense of their legitimate interests in the face of actions derived from the Helms-Burton Act.”
Similarly, the Constitution of the Republic provides that “the State promotes and provides guarantees for foreign investment as an important element for the economic development of the country, on the basis of the protection and rational use of human and natural resources, as well as respect for the national sovereignty and independence.”
2. The blockade violates the rights of the Cuban people
2.1 Adverse effects of the blockade on the most vulnerable social sectors
As previously mentioned, the blockade constitutes the main obstacle to the implementation of the National Economic and Social Development Plan (PNDES), the 2030 Agenda and its Sustainable Development Goals (SDG) in Cuba. Even those sectors where our country has been internationally recognized, such as health and education, among others, are not exempt from the severe impact caused by the U.S. policy against the Island.
The health sector has invariably remained among the priorities of the Cuban government, which in 2019 allocated the 27.5 percent of the budgeted social spending to this area. Despite the efforts made to guarantee access to free and quality care, protection and recovery services to all citizens, the impact of the blockade on this sector is substantial. From April 2019 to March 2020, this policy has caused losses to this area estimated at USD 160,260,880. The accumulated damage during almost six decades of implementation of this policy reaches the figure of USD 3,074,033,738 in the health sector.
The blockade denies access to U.S. medical technologies or with more than 10 percent of components coming from that country, which has negative repercussions on the health care of Cubans. In many cases it is not possible to obtain the new technologies that allow for more accurate diagnosis, treatment and rapid recovery of patients with less invasive interventions. This policy also affects the implementation of important National Health Programs, such as the Maternal and Child Care Program, Seriously Ill Patient Care Program, Comprehensive Cancer Control Program, as well as other different programs aimed at the prevention and control of Non-Communicable Diseases, among others.
The negative impact of the blockade is aggravated and even crueler in the current context of combating the COVID-19 pandemic. This policy puts additional pressure on our public health system by making it difficult to purchase urgently needed materials, equipment and other inputs to save lives.
It is emphasized the case of a donation of mechanical pulmonary ventilators, diagnostic kits, masks and other medical supplies needed to confront COVID-19, sent by the Chinese company ALIBABA, which could not arrive in Cuban territory. The contracted transport company refused to send the cargo to Cuba, claiming that its main shareholder was a U.S. company, so it was subject to the blockade regulations.
Another regrettable example is that the Swiss companies IMT MEDICAL AG and ACUTRONIC MEDICAL SYSTEMS AG alleged the sanctions of the blockade to refuse to deliver to Cuba high-tech mechanical pulmonary ventilators, essential for the treatment of patients affected by the new coronavirus. These two companies, considered world leaders in the development and manufacture of this medical equipment, have done business with Cuba in the past. They were both purchased by the Illinois-based VYAIRE MEDICAL INC. Company, U.S.A, and therefore have been forced to suspend all commercial relations with our country.
It became also known in April 2020 that the Swiss banks UBS, Banque Cler and the Cantonal Bank of Basel refused to transfer donations made by the Swiss solidarity organizations MediCuba-Suisse and Asociación Suiza-Cuba, simply because the name of the Island was mentioned in the transaction record. These donations were intended to support the emergency aid project #CubavsCovid19, which sought to raise funds for the shipment of reagents for diagnostic tests and protective equipment needed in the work to combat the COVID-19 pandemic.
On the other hand, the U.S. government, with its decision to attack the Cuban medical cooperation, threatens the enjoyment of the right to health of millions of human beings, who have benefited from the work of Cuban doctors in the four corners of the world. During the period under review, the effects of the bilateral agreements signed by Cuba with several countries in the American region have seriously affected medical care for 67 million people. On many occasions, the international community has recognized the professionalism and altruism of more than 400,000 Cuban health workers who have carried out missions in 164 nations for 60 years.
This discredit campaign carried out by the U.S. government is immoral under any circumstances, but it is particularly offensive to Cuba and the world in the midst of a global pandemic like COVID-19. In this scenario, while the current U.S. administration is harshly criticizing and accusing the island, more than thirty Cuban medical brigades have been sent to various countries and territories affected by the coronavirus, with the purpose of contributing to the fight against this disease. Cuba is convinced that this current scenario calls for cooperation and solidarity, so it also shares the results of scientific research with other countries, as is the case of the Recombinant Interferon Alpha-2B drug, which has proven to be effective in the treatment of COVID-19.
As stated in previous reports, Cuba is denied the right to acquire technologies, raw materials, reagents, diagnostic tools, medicines, devices, equipment and spare parts necessary for the better functioning of its public health system. Not having the right medicine or technology to provide due treatment to a disease at the time needed to save a life, causes suffering and despair to patients and their families. That pain can never be quantified.
During the analyzed period, the Import and Export Company of Medical Products (MEDICUBA S.A.) contacted the seven companies that are part of its Supplier Portfolio[1] and other 50 companies. In February of this year, when the Cuban company approached its suppliers asking to update the documentation to give continuity to the trade relations, five of these companies did not respond. Only ELI LILLY and BAYER responded, the former refusing to continue as a MEDICUBA supplier, while the latter reported that it had to apply for a new OFAC license for the new contracts. For this reason, MEDICUBA was forced to contract the Mesigyna contraceptive and the Loperamida drug (indicated for the symptomatic control of acute and chronic diarrhea) in other markets. This generated a considerable shortage of these drugs in our country and, consequently, important additional expenses.
Other examples of the damages caused by the blockade on the health sector in the period analyzed are as follows:
On July 16, 2019, the airline EMIRATES rejected a shipment of the drug Carbidopa-levodopa contracted by MEDICUBA from the Indian manufacturer and supplier APEX DRUG HOUSE, arguing that they could not transport goods destined for Cuba. This situation considerably delayed the delivery of said drugs, having to urgently look for other commercial alternatives. Carbidopa-levodopa is a drug used to treat the symptoms of Parkinson's disease, such as muscle stiffness, tremors, spasms and poor muscle control.
On August 30, 2019, Sanzyme Private Limited of India refused to accept shipping documents for a MEDICUBA business transaction involving the purchase of the drug Progesterone 50 mg, resulting in delays in shipping and delivery. Progesterone is used in the Assisted Reproduction Program to prevent premature birth or threatened abortion, and for the treatment of premenstrual syndrome and hormonal imbalance in women, such as amenorrhea and dysfunctional uterine bleeding.
On December 3, 2019, NUTRICIA Company refused to deliver to the supplier of MEDICUBA an order for nutritional supplements and foods for medical use, which are special in the dietary management of disorders and diseases, alleging the activation of Title III of the Helms-Burton Act. NUTRICIA is a multinational company established in the Netherlands, which operates through well-known trademarks such as NUTRICIA, COW&GATE, MILUPA, SHS, GNC and ENRICH.
During the period under review, MEDICUBA contacted 50 American companies to assess the possibilities of importing medicines, equipment and other inputs needed for our Public Health System. The vast majority did not respond and three of them (WATERS CORPORATION, DEXCOM and the U.S. subsidiary of ROYAL PHILIPS N.V.) answered arguing that they could not establish commercial links with Cuban entities due to the blockade.
In the case of ROYAL PHILIPS N.V., they were asked for 80 units of the CVX-300 Excimer Laser System, used for coronary angioplasty, also called percutaneous coronary intervention, a minimally invasive procedure used to open obstructed arteries in the heart. The company responded that it is not in a position to do business with MEDICUBA because of regulatory and export control restrictions imposed by the U.S. government.
Most of the companies contacted by MEDICUBA did not respond to this Cuban entity’s requests. As a result, it was not possible to acquire medicines and equipment marketed by these companies, which would have been very beneficial to the Cuban health system, particularly in areas such as oncology and pediatrics. These include the following:
JANSSEN PHARMACEUTICA, a subsidiary of JOHNSON & JOHNSON: Abiraterone Acetate was requested for the treatment of castration-resistant prostate cancer. No response was obtained.
PFIZER PHARMACEUTICALS: was asked for Palbociclib, for the treatment of hormone-sensitive metastatic breast cancer, as well as Sunitinib, for the treatment of metastatic renal carcinoma, and Crizotinib, for the treatment of lung cancer. No response was obtained.
MERCK SHARP & DOHME CORP. (MSD) PHARMACEUTICALS was requested Pembrolizumab (PD-L1 Antibody) for the treatment of metastatic melanoma, lung cancer, bladder cancer, Hodgkin's lymphoma and others. This company was also asked for the Golimumab drug, which is the most advanced biological drug for the treatment of rheumatoid arthritis, psoriatic arthritis and ankylosing spondylitis, conditions in which the immune system attacks the joints causing pain, stiffness and movement restrictions. No response was obtained.
SEATTLE GENETICS was requested Brentuximab vedotin for the treatment of refractory Hodgkin lymphoma after transplantation. No response was obtained.
BAXTER INTERNATIONAL INC. was requested the arterial and venous pediatric lines, hydrophobic filters, 6fr and 6.5fr transitory hemodialysis catheters of for young children, pediatric dialyzers, 500cc dialysis bags and 25 to 28cm Tenckhoff catheters used for newborns and infants with acute renal failure. No response was obtained.
NANOSTRING TECHNOLOGIES U.S. Company was contacted for the acquisition of equipment with Illumina technology, which allows sequencing the whole genome of a malignant tumor and defining molecular alterations related to specific treatments. It is also used for the molecular diagnosis of other diseases. No response was obtained.
The blockade affects in a heart-rending way the people with disabilities, as they are a vulnerable population group within the population, which particularly suffers from the restrictions imposed by this U.S. policy.
Cuba is denied the acquisition of hearing aids with state-of-the-art technology, including batteries and spare parts, since these have some U.S. components. It is almost impossible to have access to different alarm equipment created for deaf people, such as baby alarms, alarm clocks, wristwatches, light bells, among others, since the most affordable equipment has in its composition more than 10 percent of U.S. components.
The donation made by the U.S. organization Joni & Friends could not be delivered to more than 400 members of the Cuban Association of People with Physical and Mobility Disabilities (ACLIFIM), based in the provinces of Holguín and Ciego de Ávila, due to U.S. travel restrictions to Cuba.
The food and agriculture sector is the basis for achieving food security and sovereignty, two goals that are among the priorities of the Cuban government and are directly linked to the fulfillment of the 2030 Agenda for Sustainable Development.
Although the Cuban State allocates considerable resources and efforts to this sector, being the production of food a priority to meet the demands of the population, the effects of the blockade in this area are significant. From April 2019 to March 2020, damages amounting to approximately USD 428,894,637 have been recorded.
Many of these impacts would have been avoided if Cuban companies were able to access the U.S. market. This would be very advantageous given their prices and proximity. In addition, it should be taken into account that U.S. industries are capable of supplying Cuban entities with many of the raw materials, materials and equipment needed to modernize their production lines.
Some examples of the impacts caused in this area are mentioned bellow:
The Bravo Cuban Company was affected for not being able to acquire 2,700 tons of meat on the U.S. market, at a price of USD 2,213 per ton. The company was forced to resort to other suppliers with higher prices, incurring additional costs of around USD 1,296,000.
The food importing company, ALIMPORT, registered significant damage due to the high prices of frozen chicken in geographically distant markets, compared to the U.S. market, which was inaccessible during the period analyzed. The prices of this product in the markets to which the Cuban entity had access fluctuate between 350 and 600 dollars above the price per metric ton in the U.S. market.
Difficulties in fuel supply to Cuba, as a result of the persecution unleashed by the U.S. government in the period under review, caused interruptions in the production cycles of several entities in the agro-food sector, as well as in crops, as evidenced in the following examples:
In the Los Portales factory, located in the province of Pinar del Río, production was paralyzed for 77 days, since its warehouses were full of finished products, but did not have the necessary fuel for their transportation. This resulted in at least 2 million boxes of soft drinks and water being left unproduced and unmarked, equivalent to a loss of USD 10,900,000.
Between November and December 2019 it was not possible to plant 12,399 hectares of rice due to the unavailability of fuel. Because of this, 30,130 tons of rice were not produced for consumption. Similarly, more than 195,000 tons of food were not produced. In addition, more than 2 million liters of milk and 481 tons of meat were not collected, which had a negative impact on the diet of the Cuban population.
Education, sports and culture are among the sectors of great social impact which have traditionally been affected by the restrictions of the blockade. During the period under review, as in previous years, the main impacts reported in these areas are related to additional payments for freight to transport products acquired in distant markets, to the obstacles to receive the payments for professional services offered abroad, and to the difficulties in accessing external financing. Added to this are the limitations associated with the lack of fuel, resulting from the measures applied by the U.S. government.
The services of free and inclusive education, to which the Cuban State allocated 23.7 percent of the social spending budgeted for 2020, are affected as a result of the blockade by various deficiencies and inadequacies that limit the teaching and learning process at the different educational levels. Between April 2019 and March 2020, the impact on this sector is estimated at USD 21,226,000.
Among the main impacts on the education sector in the period analyzed are the following:
All educational levels were affected during the 2019-2020 school year with difficulties in the transportation of workers and students due to the fuel deficit. This led to a readjustment of curricula and teaching hours. A total of 52 educational institutions were affected by this. Due to the fuel-related effects in more than 100 residential educational centers, students' departure to their homes was extended to 45 days.
In higher education, the main problems recorded are related mainly to difficulties in accessing technology and equipment for teaching and scientific research and the loss of income from services provided, among other factors that affect the development of academic and scientific activity in Cuban universities and research centers. In this sense, the case of Las Tunas University is remarkable, where the financing of 444 thousand dollars foreseen for the second stage of the RENERT international Project, which is developed between the university and the CUOMO Foundation, has not been received. The amount was deposited in the bank of the counterpart for its transfer to Cuba. This operation was blocked by a banking entity and the funds remain withheld. The project consists of the use and exploitation of renewable energy sources in Las Tunas province, for the benefit of local development of rural and coastal communities.
The sphere of sport, which constitutes one of the greatest conquests of the Cuban Revolution, has not been spared from the onslaught of the blockade policy. CUBADEPORTES Company has experiences a decrease in its capacity to import sports equipment of American brands, many of them of obligatory use, according to the stipulations of the official regulations of the International Federations. From April 2019 to March 2020, the impact on the sphere of sport is estimated at approximately USD 9,995,000.
Some of the most significant impacts of the period are mentioned bellow:
By the end of 2019, CUBADEPORTES Company reported an amount of accounts receivable of more than half a million dollars. This is due to serious difficulties in the collection of services rendered, derived from the financial persecution by the U.S. government against third country banking entities that carry out operations with Cuban entities.
On April 8, 2019, the U.S. government announced its decision to cancel the agreement signed in December 2018 between the Major League of Baseball (MLB) and the Cuban Baseball Federation (FCB, in its Spanish acronym), on the grounds that current U.S. law prohibits trade with entities associated with the Cuban government. The announcement came less than two weeks after the start of the 2019 baseball season, and only a few days after the FCB released the names of 34 Cuban baseball players considered eligible to sign with the MLB.
In previous editions of the Caribbean Series, Cuba had had to participate in the “guest” category due to opposition by the U.S. to accept it as a full member of the Caribbean Baseball Confederation. Although an agreement between the U.S. government and that entity was expected to be reached by 2019, the hostile escalation against Cuba prevented the Cuban team from participating in the Caribbean Series held in February 2020 in Puerto Rico. It was also announced that Cuba would not be able to participate in the next edition of that event, which will take place in Mexico.
The culture sector continues to be affected by the implementation of the U.S. blockade policy against Cuba. From April 2019 to March 2020, damages amounted to USD 22,150,000.
For almost sixty years, the policy of the U.S. government has blocked the circulation of Cuban art around the world, persecuting and censoring its action, as well as extending its strategy of isolation to large international information corporations and art distribution circuits. At the same time, it tries to make visible and legitimize anti-Cuban products, and promotes apparent artists who are totally unknown, in order to discredit the work of the true exponents of the Cuban culture, the vast majority of whom live and work in Cuba.
The following facts highlight among the effects on the cultural sector during the period under review:
The commercialization of films is notably affected due to the impossibility of exhibiting Cuban films in the United States. If the Cuban film industry had attended the American Film Market in Los Angeles, which is a way to access the film market and potential buyers for home video windows and institutions in the non-commercial circuit, it is estimated that it would have been able to obtain at least 260 thousand dollars in revenues.
The Cuban Agency for Music Copyright (ACDAM, in its Spanish acronym) has stopped receiving some USD 19,428 in royalties, since some companies with accounts in banks with U.S. interest or participation have retained the funds and are refusing to make transfers to Cuban banks.
Some clients included in the portfolio of the Recordings and Musical Editions Company (EGREM, in its Spanish acronym), such as Cubamusic S.R.L., from Italy; World Circuit and Plaza Mayor, both from the United Kingdom; and Ultra Record, from the United States, had difficulties when trying to make direct payments to this Cuban entity, which prevented it from receiving all the revenues invoiced during the period.
2.2 Adverse effects on the economic development
As previoU.S.ly stated, the blockade is the main obstacle to Cuba's economic development, to the implementation of the National Economic and Social Development Plan (PNDES) and, therefore, to compliance with the 2030 Agenda and its 17 Sustainable Development Goals.
From April 2019 to March 2020, there was an impressive increase in the impact of the blockade on the production and service sectors, which amounted to USD 610,200,000. This figure is more than 7.7 times the one recorded in the previous stage. This increase was mainly due to the unprecedented and aggressive measures of the U.S. government aimed at suffocating the Cuban economy, particularly its efforts to hinder the arrival of fuel to the island.
Transforming the costs of the blockade into the country's capacity to pay would provide an additional source of substantial and sustained financing, which would give greater dynamism to the investment programs linked to the strategic sectors defined in the National Economic and Social Development Plan (PNDES). In this way, the necessary conditions would be created to gradually achieve sustained growth in annual gross domestic product.
As part of its policy of harassment to prevent the economic development of our country, at the beginning of this year and in an unprecedented way, the U.S. government took action within the framework of the evaluation of Cuba's cooperation program proposals with the United Nations Population Fund (UNFPA), the United Nations Development Program (UNDP) and the United Nations Children's Fund (UNICEF). The objective of this maneuver was to hinder the adoption of Cuba's Country Programs with the aforementioned United Nations entities for the period 2020-2024, which would directly affect the Island’s efforts to implement the 2030 Agenda and its Sustainable Development Goals in the coming years.
Once again, Cuba had the support of an important group of countries that rejected the U.S. attempts to politicize the work of these bodies and allowed Cuba's Cooperation Programs to be approved by consensus and without modifications.
The blockade directly affects Cuba’s right to development. No branch of the Cuban economy escapes the effects of this policy.
The biopharmaceutical industry, a strategic sector of the Cuban economy, is not exempt from the repercussions of the blockade, and is affected every year in terms of research, development, production and marketing of its products, which leads to considerable economic losses. From April 2019 to March 2020, this industry suffered damages by an estimated USD 161,000,000.
The intensification of the blockade policy during this period not only limits academic and scientific exchange, but also deprives the American people of the benefits of internationally recognized biotechnological and pharmaceutical products developed in Cuba.
This last aspect is evident in the following examples:
The Center for Genetic Engineering and Biotechnology (CIGB, in its Spanish acronym), reports income lost due to the non-exportation to the United States of the drug Heberprot-P, the only one of its kind in the world for the treatment of diabetic foot ulcers (DFU). Under the hypothesis that only 8 percent of U.S. patients who develop a complex DFU each year use this drug, Cuba would have received approximately USD 114,912,000 under this item in 2019.
The Proctokinase, a drug for the treatment of acute hemorrhoids, has also been the object of interest for its commercialization in the United States. It is estimated that some 5 million Americans would benefit from this Cuban product. Considering a 5 percent penetration in this market, it is estimated that potentially 10 million dollars have not been received under this item.
Another Cuban biotechnology product that could be of great interest to U.S. companies, especially those dedicated to the production and trade of cattle and their products, is the GAVAC vaccine, which fights the cattle tick. It is estimated that losses due to the non-exportation of this product to the United States amount to USD 1,125,000.
This sector has also been significantly affected by the additional costs derived from the geographical relocation of trade and the need to resort to intermediaries to purchase products of U.S. origin, as evidenced in the following examples:
The Finlay Vaccine Institute reported a total of 15 operations carried out in the period under review, where it was necessary to import merchandise of U.S. origin through suppliers from third countries. The total sum of the operations amounted to USD 894,693. If these operations had been carried out through a U.S. company, the Cuban entity would have saved approximately USD 178,938.
The Cuban Neuroscience Center (CNEURO) has incurred high costs due to the need to use an intermediary to acquire products of U.S. origin in other markets. Because of the nature of the purchase, the use of an intermediary makes the expenses for these operations 20 percent higher. During the period analyzed, the additional expenses recorded by CNEURO amounted USD 213,942 only in this respect.
From April 2019 to March 2020, the U.S. blockade against Cuba has continued to affect Cuban tourism in areas related to travel, services, operations and logistics, which have been reflected in losses of around USD 1,888,386,675.
The imposition of new measures by the Department of State, particularly to regulate the travel of U.S. citizens to Cuba, such as the prohibition of regular and charter flights to the island’s international airports, with the exception of Havana’s José Martí International Airport, is equivalent to a reduction in the flow of visitors from the United States of approximately 420,000 passengers, which brings about adverse effects on revenue collection.
If the blockade were not in place, it is estimated that the annual number of U.S. visitors to Cuba would be able to reach at least 2 million, which would make the United States the main market for travelers coming to the island. If we subtract from this figure those who did travel to Cuba during the period (251,621), it is estimated that approximately 1,748,379 people did not travel from the United States to the island due to the blockade. If these people had been able to visit Cuba, it is estimated that the Cuban tourist industry would have received some USD 1,798,000,000 from the U.S. market.
Some examples of the impact on this sector are as follows:
Until June 4, 2019, there was a 35 percent increase in the number of visitors to Cuba on board cruise ships. From the following day onwards, the measure adopted by the U.S. government to prohibit the entry of U.S. cruise ships to Cuban ports came into force and it is estimated that the real impact at the end of that year was that about 727,819 cruise passengers stopped arriving in the country by that route. The International Cruise Association (CLIA) estimated that the reserves affected amounted a total of 800,000 which had a negative impact on the income obtained under this item. This measure caused a considerable impact on the Cuban economy, since in only six months (from July to December 2019), USD 12,356,941 were not received.
The elimination of licenses for “people-to-people” travel, together with other measures restricting travel to Cuba, contributed to the decrease in the number of passengers with ground services, both in groups and individuals, which caused a decrease in income to the country in this regard. In the HAVANATUR Celimar travel agency alone, 9 million dollars less were received than in 2018 due to this reduction in U.S. visitors.
The CUBATUR travel agency suffered monetary and financial effects amounting to USD 616,742, as a result of expenditures on banking services and exchange rate variations, as well as the closing of bank accounts in third countries, the retention of funds and the cancellation of credit card processing services.
The International Group of Tour Operators and Travel Agencies HAVANATUR S.A., which also faced all the monetary-financial impacts mentioned above, also reported the damages to which its agencies based in Canada are subject due to the processing of credit cards. The fees that the card processing agencies imposed on these entities were 3.79 percent, which is 1.6 percent higher than the average charged to other tour operators based in that country. HAVANATUR was affected by a total of USD 21,426,557.
The economic damages caused by the blockade to the communications and information technology sector, including telecommunications in Cuba for the period from April 2019 to March 2020, are estimated at USD 64,274,042. As in previous years, the Telecommunications Company of Cuba S.A. (ETECSA) continues to be the entity with the greatest impact, accounting for approximately 97 percent of the total amount.
The blockade is the main impediment to a better information flow and wider access by Cubans to the Internet and information and communication technologies (ICTs). By turning connectivity in the country more difficult and expensive, conditioning access to platforms and technologies, and using cyberspace to try to subvert the Cuban political and legal system, this policy is negatively affecting the development of communications in Cuba.
Some of the impacts recorded in this area are mentioned below:
ETECSA cannot interconnect with international operators directly in the United States, where the main interconnection nodes are located, and is therefore obliged to extend the international network with nodes in the United Kingdom, Jamaica and Venezuela. This leads to additional costs of about USD 10,637,200.
As a result of the activation of Title III of the Helms-Burton Act, the company AMERICAN AIRLINES decided to suspend direct postal service between the United States and Cuba. Consequently, the Grupo Empresarial Correos de Cuba (GECC) had to look for an alternative to guarantee the Universal Postal Service in the national territory and decided to direct it through Panama, as an intermediary country. This action increased the price of tariffs, which represented losses for the Cuban postal operator amounting to USD 6,736.
On September 11, 2019, while the President of the Republic of Cuba, Miguel Díaz-Canel Bermúdez, was reporting on the causes of the difficult energy situation that the country was going through, the social network Twitter blocked the official accounts of some of the main news media on the Island: Mesa Redonda, Cubadebate, Granma, as well as the Ministry of Communications and other Cuban press media and journalists. The main objective of this action was to avoid the dissemination of the President’s message on this digital platform and to prevent users to pronounce and debate on the subject.
In addition to the impacts caused by the blockade on the communications sector, in the context of the COVID-19 pandemic, Cuban representatives have faced numerous difficulties in participating in meetings and other virtual events convened by agencies of the United Nations System, given that Cuba has restricted access to several of the digital platforms used for these purposes, such as Zoom and Microsoft Teams.
In the period between April 2019 and March 2020, the effects of the blockade on the Cuban industry reached USD 95,529,125. Some of the most significant effects on this sector are related to the income lost from exports of goods and services, as the following examples show:
The main exportable item of the Cuban company ACINOX COMERCIAL is steel billets. The impossibility of accessing the U.S. market has caused damage to this company, since the price of this product in the United States is generally higher than in other markets. In the period under review, a total of 52,643.72 tons were exported. If these had been destined for the United States market, the income of this company would have increased by USD 526,437.
The Empresa Comercializadora, Importadora-Exportadora de la Industria Ligera, (ENCOMIL, in its Spanish acronym) was affected by an estimated USD 297,700, due to the refusal of foreign banks to transfer to Cuba the funds received from the export of goods during the period, because of fear of possible reprisals by the U.S. government for violating the restrictions of the blockade.
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