Bush regime seeks to curtail food sales to Cuba

Campaign News | Friday, 3 December 2004

New rules may halt limited breach in blockade

WASHINGTON - U.S. food and agricultural products sold to Cuba may soon be barred from leaving American ports until Havana makes the cash payments required by law. The change could disrupt a multimillion-dollar business, industry experts said Thursday.

"From a logistical standpoint, the change is unpleasant but workable," said John Kavulich, head of a U.S. group that monitors business between the two countries. "Might Cuba decrease purchases to show its displeasure? Perhaps."

Since the U.S. sales to the communist nation began in 2001, Havana has paid most of the $714 million in purchases after the cargo arrived in Cuba. But Bush administration officials are reviewing the law to determine if payments must occur before the shipments leave the United States.

"We expect to issue guidance in the near future," said Molly Millerwise, a Treasury Department spokeswoman. "We're working with our counterparts to clarify the policy for shipping agricultural goods to Cuba."

Sales of U.S. food and agricultural products to Cuba are allowed under a 2000 law known as TSREEA that requires American sellers to receive cash payments, a move designed to prevent Havana from establishing credit lines with U.S. firms. The law allows Cuba a 72-hour window to make the payment.

But it's not clear whether the cash-in-advance provision means payment in advance of the shipment or in advance of obtaining possession of the cargo, referred to as "cash against documents."

Some banks have delayed crediting the Cuban payments to the accounts of U.S. exporters because of concerns about possible violations of the U.S. legislation, said officials at the Treasury and State departments.

"We want to comply with the law," said a State Department official from the Bureau of Western Hemisphere Affairs, which is pushing to change the current system. "We need to do what the law says. We have to get everyone on the U.S. government on the same page."

Officials at the Cuban Interests Section in Washington could not be reached for comment.

Most of the U.S. business deals with Cuba have been conducted as "cash against documents" transactions, meaning Cuba must pay for the shipments within 72 hours of arrival there, and the goods cannot be unloaded until payment is confirmed by the banks. Cuba has generally complied with the 72-hour payment requirement, making for a fairly smooth operation.

But the proposals to change the system have raised concerns that they could jeopardize a profitable arrangement. Over the past two years, the United States has become a significant supplier of food and agricultural products for Cuba. The island ranks as the 22nd largest export market for those types of goods.

Industry experts said that while a change would affect the vast majority of the U.S.-Cuba transactions, it would only impact a small number of U.S. corporations.

Some members of Congress who oppose trade and travel restrictions on Cuba criticized the Bush administration's move to tighten the sales transactions.

"This is the most shortsighted, convoluted thing I've ever heard," Rep. Jo Ann Emerson, R-Mo, said. "This will have an enormous impact because obviously it can't just apply to Cuba."

Emerson joined 14 other legislators in a bipartisan letter sent to Treasury Secretary John Snow on Nov. 22, saying any tightening of the trade rules "would defy the will of the Congress to allow cash trade in agricultural products with Cuba."


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