US fines more European companies over Cuba

Campaign News | Friday, 3 September 2004

New confrontation with EU looms

Brussels, September 3: The US has imposed fines on several European companies in the last few months, including Alitalia, the Italian airline, for breaking its Cuban embargo laws, raising fears of a new trade confrontation between Washington and Brussels.

The fines, news of which emerged yesterday, follow the penalty imposed on Iberia, the Spanish airline, after it was accused of shipping Cuban goods through the US, Expansión, the Spanish sister paper of the Financial Times, has learned.

The sanctions may force the European Commission, which has strongly criticised the extra-territorial application of the Cuban embargo laws, to protest to Washington.

Brussels said yesterday it was studying the fine imposed on Iberia.

"We are opposed to any extra-territorial measure [from the US government] that affects any European interest," said a spokeswoman for Pascal Lamy, the trade commissioner.

The spokeswoman added that the European Commission had not reached a conclusion if the US applied in the Iberia case "extra-territorial measures".

The US has recently increased its pressure on Fidel Castro's communist regime in Cuba.

Colin Powell, US secretary of state, recommended in May that the embargo be strongly enforced. Since then, Washington has restricted travel and money transfers from Cuban-Americans to the island.

Between February and June, the US Treasury fined Industria Compozioni Stampate, Societa Industriale Accumulatori Romano di Lombardia, Alitalia, the Banca Commerciale Italiana and the Spanish airline.

Most of the sanctions related to the transportation or shipping of Cuban goods. Banca Commerciale Italiana was accused of "transferring funds" to Cuba in 2001 and fined $6,000 (€4,920, £3,350), while Alitalia was fined for "shipping Cuban goods for a third person".

Legal sources said all the companies have been fined under the US Cuban Assets Control Regulations, considered by EU authorities in Brussels as an extra-territorial measure.

In fact, the US Treasury fined Industria Compozioni Stampate and Societa Industriale Accumulatori Romano di Lombardia directly in Italy as neither company has subsidiaries in the US.

Both were fined $30,000. The other companies were fined through their New York or Miami representatives.

Extra-territorial application of the US Cuban embargo laws triggered a confrontation between Washington and Brussels in 1996.

Two years later, Washington and the European Commission reached an agreement by which Washington would not penalise European companies in exchange for the European Union's withdrawal of a complaint to the World Trade Organisation.

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