Mexico fines US hotel in Cuba row

Campaign News | Tuesday, 7 March 2006

Sheraton is punished for complying with US blockade

Local authorities in Mexico City have fined a US-owned hotel, at the centre of a diplomatic row, $15,000 (£8,500).

They said the branch of the Sheraton chain had discriminated against 16 Cuban officials by expelling them from its premises last month.

The delegation was ordered out to comply with a US embargo against Cuba. A US law bans American companies from doing business with the island.

The hotel denied discrimination and said it would appeal the decision.

The Cuban delegation was due to meet a group of US businessmen opposed to the embargo at the Maria Isabel Sheraton hotel in Mexico City's central Cuauhtemoc district on 4 February.

Starwood Hotels and Resorts Worldwide Inc., which owns the Sheraton chain, said the company was asked by the US Treasury Department to tell the Cubans to leave.

Separate accusations

The Mexican government launched an investigation saying the firm might have broken the law by expelling the delegation.

Foreign Minister Luis Ernesto Derbez insisted at the time that the US law could not be applied in a third country.

In Washington, State Department spokesman Sean McCormack said the Sheraton in Mexico City was a subsidiary of a US-owned hotel group and therefore subject to US laws and regulations.

The local authorities in Cuauhtemoc, who imposed the fine, have made clear its sanctions are independent from those that could be applied by the federal government.

The same authorities closed the hotel in late February, alleging the US company committed a series of irregularities such as unauthorised building work and failure to provide a menu in Braille.

The hotel appealed the ruling, insisting it complied with Mexican laws, and reopened soon after.

US says companies abroad must obey blockade

Subsidiaries of US firms must not trade with Cuba, says Bush regime

Washington 13 Feb - US companies are required to follow US law that prohibits doing business with Cuba even when operating in a foreign country such as Mexico, a US Treasury Department spokesman said today.

``US firms may not engage in economic activity with Cuba," or in activity that would benefit the Cuban government, said Tony Fratto, the Treasury's assistant secretary for public affairs, at A press conference in Washington. ``No matter where they operate they have to remain within the law."

Fratto's comments contradict the Mexican Foreign Ministry's position that US companies are required to abide by Mexican, not US, law when operating south of the border. The debate intensified after US executives at White Plains, New York-based Starwood Hotel & Resorts Worldwide Inc. ordered employees at its Mexico City Sheraton hotel to force a group of Cubans who were meeting with U.S. business executives to leave the hotel on Feb. 3.

Mexico may fine the Sheraton hotel in Mexico City as much as $4.9 million pesos ($466,000) for enforcing a U.S. law in Mexico, said Foreign Minister Luis Ernesto Derbez in a statement last week.

``What we're sanctioning is the fact that the hotel applied extraterritorially a law that doesn't govern in Mexico," Derbez said in a statement last week.

Starwood could have faced fines of as high as $1 million for refusing to follow U.S. law regarding Cuba, according to the Treasury Department.

``It's not a question for the Secretary of the Treasury to rethink how the law is enforced," Fratto said. ``For some countries, it's difficult. For some companies, it's difficult."

Mexican hotel scandal: A most lamentable event

Editorial published in Granma International Review, 9 February

WHAT has taken place in Mexico on account of orders from Washington to a hotel located in Mexico City provokes various sentiments, which range from indignation to pity.

The facts are well known: a group of Cuban officials linked to the energy sector were meeting in Mexico with their U.S. colleagues for a professional and serious discussion - among other subjects - on the possibilities of cooperation in the oil prospecting sphere, something that has been happening for some years with diverse productive sectors of the United States interested in future exchanges with our country.

This meeting had been agreed in virtue of the express interest of the U.S. side to learn of the potential of Cuba’s exclusive zone in the Gulf of Mexico, and the disposition of the Cuban government not to exclude the participation of U.S. companies in future negotiations on the theme. The meeting itself is yet further proof of the climate of mutual respect prevailing between our country and U.S. economic sectors, also evidenced in significant and increasing food purchases already standing at $500 million per year, which Cuba has paid for in cash and promptly, something which the current administration of the United States wishes to prevent at all costs at this time.

This event, as on other occasions, was taking place in Mexico, in a Mexican hotel, given that by virtue of the blockade, both sides, Cuban and American, are prohibited by the Bush government from traveling to each other’s country.

It is well known that the nationality of a subsidiary company, as in the case of the María Isabel Sheraton Hotel, is that of the country in which it is located, and independent of the nationality of the parent company. In other words, an entity registered in Mexico, under the shelter of Mexican legislation, it is in all legal effects a Mexican entity and should be ruled by the laws of Mexico and not those of the country who owns its assets or of its transnational owners. In addition to being legally unobjectionable, this has a profound practical content; above all in the present context of a globalized world, where innumerable foreign shareholders can possess companies in any country.

Taking the example of Mexico itself, a country that receives a large amount of direct foreign investment, it is fitting to ask what would happen if every country began to apply its own laws to subsidiaries operating in Mexico. It is obvious that in those conditions German laws would be applied on some companies, French on others, Japanese on others, or perhaps all of them. One does not need to make much of an imaginative effort to deduce that this would lead to absolute chaos in the receptor country, in this case Mexico, as it would have to apply the laws of 10, 20 or more countries with distinct juridical regimes and corporative cultures.

All this is clearly established so that it can be understood with absolute clarity and nobody would violate it, except the government of Bush who, as master of the world has demonstrated that he does not recognize any limit to his arrogant power.

The facts confirm it: last Friday when the first day of both delegations’ working sessions had ended, the Cuban party was informed by the Mexican hotel administration that the U.S. State Department had instructed it to evict them from the premises.

One supposes that the hotel manager thought that what had happened was very logical and reasonable. He didn’t even blink, and immediately fulfilled the order he was given. He didn’t stop to think for a second whether a foreign government had the legal capacity to give that order, or that any problem that might arise in this respect would have to be resolved under the precepts of Mexican law.

The hotel manager cannot be blamed. He simply acted with the logic of someone who feels that he is not doing anything abnormal. That such an order was shameless and abusive in the eyes of the Mexican people and the world, would never have passed through his mind.

Perhaps he even thought that evicting the Cuban officials from the hotel might please the government that vehemently condemns Cuba every year in the Geneva, and is unexpectedly silent in the face of the horrendous torture that the United States is daily committing against defenseless prisoners under its custody in Cuban territory illegally and forcefully occupied by the government that accuses it of violating human rights.

To make the act even more humiliating, the empire didn’t even bother to inform the Mexican authorities, and the order was transmitted by a duty bureaucrat in the Treasury Department. Without any doubt, a country’s sovereignty is immaterial and was not worth disturbing a higher official for.

Brookly McLaughlin, the Treasury Department statesperson could not have been more explicit in that respect. In a report published in The New York Times on February 7 she was quoted as having said that the Mexico City hotel is a U.S. subsidiary and thus is prohibited from offering services to Cuba or Cuban nationals. In this case we are simply following our usual procedures, by applying the law. She failed to explain - probably not thinking it necessary - that she was referring to the law of the United States.

According to a cable published in the Estrella Digital on February 9, another spokesperson in the State Department, Sean McCormack, stated that U.S. law is basically applied to U.S. companies or subsidiaries of U.S. groups wherever they might happen to be. It would be hard to find a clearer example of scorn for other countries’ sovereignty.

The indignation of the Mexican people and within many of its institutions was not long in coming. Demonstrations were organized to protest at the gross offense. Senators from the main political parties reacted with honor and decorum. The Tuesday, February 7 edition of La Jornada newspaper published an article offering information on the issue titled: “The extraterritorial application of U.S. law is inadmissible, Senators.”

The article began by saying: Senators from the PAN, PRI and PERRON parties yesterday demanded the government of Vicente Fox to make an energetic diplomatic reaction to the expulsion of Cuban officials from the María Isabel Sheraton Hotel, on account of this act constituting a violation of Articles 1, 14 and 16 of the Constitution, in addition to what they described as the “shame” of allowing the application of extraterritorial laws in Mexico. That is inadmissible and requires immediate clarification, they stressed. But in the midst of all this climate of unanimous condemnation of the ruling received from the North by the homeland of Juárez, what did the Mexican government say and do?

If one analyzes the statement made by Foreign Minister Derbez, whom the international press has approached to know the Mexican government position on such a flagrant scandal, one would have to feel a strange mixture of perplexity and almost pity.

In his first statement from Europe, where he was touring various countries, he acknowledged, according to an AFP cable on February 7, that the law could not in any way be applied extraterritorially, but hastened to add: “What we should do, not with the government of the United States because they have their own legislation, is to apply the corresponding sanction.”

Translated into direct and clear language what he is admitting with the most incredible indolence is that the U.S. Treasury Department can give orders to enterprises constituted and operating in Mexico; and given the case that the theme has come out in public and there was no other remedy than to take some kind of action to calm people, he blamed the enterprise that obeyed the order against the honor and dignity of Mexico.

According to the same cable in New York, Ellen Gallo, a spokesperson for the hotel chain, contradicted Mr. Derbez’ point of view by correctly affirming that it was an issue between two governments.

Another headline from Mexico’s La Jornada on February 8 published another unheard-of phrase from the Mexican foreign secretary: “The Sheraton will be sanctioned without any complaint being sent to Washington,” and the newspaper added: “Luis Derbez Bautista, who is in London on the last leg of his two-week tour of Europe, said that the decision of the María Isabel Sheraton Hotel to evict a delegation of Cuban officials from its premises did not represent a violation of national sovereignty.”

In the midst of growing internal indignation, the Mexican government was obliged to adopt a more energetic stand at such an affront to a nation educated in the example of the child heroes of Chapultepec and that of all those who have fought to preserve the highest values of the glorious Mexican people.

Foreign Secretary Derbez was evidently insecure and indecisive. The Mexican El Universo confirmed his tribulations in an article datelined February 8, titled “Foreign Relations Secretary adjusts his position toward the United States on account of Cuban evictions.” The same newspaper noted: “The Mexican government is discussing sending a diplomatic note of protest to the United States for the expulsion of a Cuban delegation from the María Isabel Sheraton Hotel, stated Luis Ernest Derbez, who warned that the federal government would not allow any foreign law to have application over national ones.

“In a radio interview, the foreign secretary said that via Jerónimo Gutiérrez, under-secretary for North America, the Mexican government has contacted the U.S. government to investigate the incident concretely and precisely. “He (the under-secretary) will bring us the information so we can decide whether or not to bring a complaint against the U.S. government.

“However, in less than four hours, Derbez changed his position, because in a press conference in London before the radio interview he had assured that the incident did not merit sending a diplomatic note to Washington, as it was the María Isabel Sheraton Hotel that proceeded in undue manner, given that the Treasury Department only gave indications.

“Moreover, he assured that the United States did not violate Mexican sovereignty by asking the enterprise to apply a US law.”

A more recent headline, La Jornada on February 9, offered new and even stranger statements: “Verbal petition to the United States to review the extraterritorial application of laws: Derbez.”

It is curious to confirm that even a timid “verbal petition” that the United States should review the application of its laws in Mexico was accompanied by an explanation that made it clear that the only guilty party for everything that took place was the hotel, and to demonstrate special pleasure with the Bush government by confirming that “relations with the United States are very positive in general terms.” Further on, Foreign Secretary Derbez blamed the press for “making a scandal out of this matter.” And he added, as if to ensure that there was no doubt of the extreme delicacy with which he made his “verbal petition” to Washington: “we have let the State Department know in a verbal manner that it would seem to us that they should review this territoriality (of their laws).”

Really, if anything was missing in these statements, it should have been to apologize for the terrible trouble caused to the State Department to have to devote a few minutes of its extremely busy time to listen to someone to whom “it would seem” that the non-application of U.S. laws in his own country “should” be reviewed.

Subsequently, there was talk of closing down the hotel, but it should be clarified that the reasons adduced to threaten taking this measure are of a merely administrative nature, as if, for example, the hotel occupied 3,000 square meters of terrain without authorization, or was operating two bars without a license or not have an emergency exit installed.

As can be appreciated none of these reasons have the remotest connection with the essential problem: the fact that the spokespersons of the expansionist state who yesterday seized more than half of its territory from Mexico, are stating that Mexican enterprises with the participation of U.S. entities have to comply with U.S. laws in Mexico and have acted in a draconian manner in line with this self-assigned prerogative.

Evaluations of this event could be very varied, but as Martí said: “There are a series of essential truths that fit on the wing of a hummingbird and are, nevertheless, the key to public peace, spiritual elevation and the grandeur of the homeland.”

From our Martí point of view, we feel tremendous sadness for everything that has happened, which expresses up to what point the United States has afforded itself the right to ignore the Mexican government and people and to act in an impugn manner with total disrespect for the grandeur of that beautiful nation of close friends.

Mexico set to close hotel that banned Cuban guests

Feb 8, 2006 - MEXICO CITY - Mexico City authorities are likely to close a Sheraton hotel in the capital that threw out Cuban officials on orders of Washington, a move that angered Mexicans who say the country's sovereignty was abused.

Municipal inspectors who carried out a check of the hotel after the Cubans' expulsion found it had infringed local safety and licensing laws, district council head Virginia Jaramillo said on Wednesday.

"I expect imminent closure of the hotel," said Jaramillo, of the left-wing Party of the Democratic Revolution.

While the hotel can challenge the closure, Jaramillo said many violations would be impossible to remedy before a five-day deadline.

The towering hotel overlooking the Angel of Independence, one of Mexico City's most important monuments, threw the Cubans out on Friday during an energy conference organized by the U.S.-Cuba Trade Association.

Starwood Hotels and Resorts Worldwide Inc., which is based in White Plains, New York, and owns Sheraton hotels, said it had been asked by the U.S. Treasury Department to tell the Cubans to go, under the U.S. embargo on the communist-run island.

Mexican officials are angry at what they see as U.S. interference in an event on Mexican soil.

Foreign Minister Luis Ernesto Derbez warned on Tuesday the hotel could face a fine of $475,000 if it had broken Mexican law by applying another country's laws here.

Jaramillo, who heads one of Mexico City's 16 administrative districts, said the hotel had carried out construction without permission and has two bars that were not licensed.

Starwood Hotels and Resorts Worldwide were not available for comment on the allegations.

Protesters waving Cuban flags and burning the American flag blocked the hotel's entrance on Tuesday, slapped unofficial closure stickers on doors and scuffled with security guards.

Mexico and Cuba protest at hotel's expulsion of Havana delegation

MEXICO CITY, Feb. 6 - Mexico and Cuba criticized the United States on Monday for demanding that the Sheraton Maria Isabel Hotel here order a group of Cuban officials, who were meeting last week with representatives of American oil companies, to check out of the hotel and leave the premises.

On Friday, the United States Treasury Department contacted the company that owns the Sheraton and warned them that they were violating federal laws against trading with Cuba by allowing the meeting to take place in their hotel.

The hotel told the Cuban representatives to leave, and sent their room deposits to the Treasury Department. The meeting was moved to a hotel not owned by an American company.

The American action has provoked a minor storm. Mayor Alejandro Encinas of Mexico City, a member of the left-wing Party of the Democratic Revolution, said Monday morning that he would ask his prosecutors to find out if the hotel had broken local antidiscrimination laws and seek to shut it down if it had.

Then, the Mexican foreign minister, Luis Ernesto Derbez, said the idea that a United States law was being enforced on Mexican soil was troubling. He said the government would take action against the hotel if it proved true. "There does not exist and neither should there exist the extraterritorial application of this law in our nation," he said.

Cuba also lambasted the United States in an editorial in the state-run newspaper, Granma, saying that forcing the Cubans to leave the Sheraton had amounted to a "petty meanness" and represented "an outrage" against Mexican sovereignty.

"The tentacles of the blockade and the United States' criminal economic war against Cuba tend to extend themselves to every corner of the planet, including to the detriment of the sovereignty and laws of other states," the editorial said.

Various Mexican politicians, among them Felipe Calderón, the candidate for president from President Vicente Fox's National Action Party, joined the chorus of criticism.

Any whiff of American intervention in Mexico tends to set off a political firestorm here. Taking umbrage at American arrogance is a national pastime for politicians. The loss of Texas, Arizona, New Mexico and California during the war with the United States in 1848 is still an issue here.

On Friday, the Treasury Department informed Starwood Hotels, which owns the Sheraton, that it was violating the Trading with the Enemy Act and the Cuban Democracy Act of 1992. These laws prohibit United States companies or their overseas subsidiaries from providing services to Cuban individuals or companies.

"The hotel in Mexico City is a U.S. subsidiary, and therefore prohibited from providing a service to Cuba or Cuban nationals," said Brookly McLaughlin, a spokeswoman for the Treasury. "In this instance, we are simply following our usual procedures, applying the law."

Judith Bryan, a spokeswoman for the United States Embassy here, said it was unclear whether the State Department had been consulted before the Treasury contacted Starwood.

Cuba is trying to entice American oil companies into deals to drill off the island's shore, just as it has with Chinese, Spanish and Brazilian oil-exploration enterprises. The meeting of largely Texan oil executives and elite bureaucrats from Havana ended Saturday. Among the companies represented were Exxon Mobil and the Valero Energy Corporation.

Ricardo Ruiz Suárez, a spokesman for the Mexico City government, said the hotel's owners could be prosecuted under several Mexican laws that ban discrimination based on national origin or ideology.

"There are laws, federal as well as local, that obligate service providers to provide those services in a general manner, without any discriminatory attitudes," he said.

From the New York Times:

US forces Mexican hotel to evict Cuban delegation

WASHINGTON 06 Feb: The Sheraton Hotel chain on Sunday confirmed that it asked an official Cuban delegation staying at one of its Mexico City facilities to leave after it was pressured to do so by the U.S. government.

"The Treasury Department demanded that we deny access to the Mexico City Sheraton to the Cuban participants" in an energy conference being held there with U.S. businessmen, Ellen Gallo - the spokesperson for Starwood Hotels and Resorts Worldwide, which owns the Sheraton chain - told EFE.

She added that the firm had retained the money paid by the Cubans for their rooms at the María Isabel Sheraton and forwarded it to the U.S. government.

The measure was ordered in keeping with the "trade embargo against Cuba, as established by U.S. law," said Gallo, referring to the laws that prohibit U.S. citizens or firms from doing business or providing services to Cubans, including hotel services.

Two top Mexican government officials - who asked to remain unidentified - told EFE that the incident is "a matter between individuals," adding that "if any of the parties has felt affected, it must turn to the authorities responsible for taking care of the proper offering of goods and services."

The Cuban officials confirmed on Friday that they had been asked to leave the hotel, and they accused the U.S. government of pressuring the hotel chain to expel them, although that claim has not been corroborated by Washington.

The Cubans were participating in a three-day meeting with U.S. energy sector executives. After leaving the Sheraton, they transferred to another hotel and the meeting continued there.

Gallo also corroborated the complaint of the head of the Cuban delegation, Basic Industry Deputy Minister Raúl Pérez de Prado, that the hotel had retained the money paid by the Cubans for their reservations.

"The money they paid was sent to the Treasury Department?s Office of Foreign Assets Control on the orders of that office," she said.

The U.S. Treasury and the State Department have not responded to several telephone calls from EFE to gather information on the incident.

A U.S. Embassy official in Mexico City refused to say whether or not Washington pressured the hotel chain, but he did state that the United States "has very clear laws about dealing with the Cuban regime."

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