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N A
T I O N A L |
Havana.
September 27, 2005 |
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The effect of the blockade on investment and
cooperation has been considerable. Examples of this
are:
The company VECO Canada Ltd in which
Americans have shares was prevented from joining
with CUPET S.A. in projects to develop
infrastructure and technological capacity for
distributing and storing fuel in Cuba. After
talks had started and various proposals had been
put forward, the Canadian firm was obliged to
withdraw from the project.
Electronic watering equipment was purchased
from a European company for the sum of 5 million
83 thousand euros, from an OPEP loan. Due to the
fact that the patent of the Valmont watering
equipment technology is American, it was
necessary to produce the machines in a third
country in order to avoid the manufacturer being
penalized or fined. Because of this , the
machines were not ready for the winter sowing
season of 2004 – their arrival was planned for
September -, and the last ones arrived in
February 2005, which caused a considerable delay
to agricultural production.
In the first three months of 2005, a donation
should have been received, by way of an
international cooperation, of three electricity
generating plants, worth more than 30 million
dollars per turbo generator, aimed at easing the
country’s energy problems. This badly needed
donation could not be received because
difficulties arose regarding authorization for
the goods to be sent to Cuba, due to the fact
that the components were from the US, and
because the maintenance service was not
guaranteed.
As a result of the threat of closing
companies and banning business transactions in
the United States, 3 operators of the duty-free
zone had to change their names; other operators,
due to the fact that they supplied accessories
and machinery from the United States to Cuba,
had to import goods from a third country, with
the corresponding increases in price brought
about by this action. There was also the case of
a company located in the duty-free zone of
Berroa, to the east of Havana, which had to
change its legal representative because this
person possessed a Cuban work permit and made
business trips to the United States.
For obvious reasons the names and other
details are omitted in several cases so as not
to make it easy for the United States to
persecute them.
1.4 Section 211 of the
United States’ Omnibus Consolidated and Emergency
Supplemental Appropriations Law for Fiscal Year 1999
and new trademark-related violations.
For the seventh consecutive time before the
United Nations, Cuba denounces the implementation of
Section 211 of the Omnibus Consolidated and
Emergency Supplemental Appropriations Law, which
prevents Cuban holders or their heirs, including
foreign companies with interests in Cuba, from
having their trade marks or trade names registered
and protected in Cuba recognised or receive benefit
from them in US territory, claiming these are
connected to former property nationalised by the
Cuban government.
It is well worth recalling that this measure was
approved by the US Congress in October 1998, as part
of a process lacking in transparency and designed to
benefit the Bacardi company. Though based outside
the United States, this company has many interests
in the country and uses its considerable political
clout to maintain and strengthen the economic, trade
and financial blockade imposed on Cuba.
It is no accident that Section 211 extends the
ambit of the Helms-Burton Act into the area of
intellectual property rights; as known, Bacardi was
among the companies that backed this Act.
The implementation of Section 211 has very
negative implications not only in a bilateral
context but also in a multilateral context.
Bilaterally speaking, it tightens the economic,
financial and commercial blockade imposed on Cuba,
since its aim is to prevent any expansion of foreign
investment in Cuba that has to do with putting Cuban
products, whose names and trade markets enjoy much
prestige worldwide, on the international market.
Until Section 211 was approved and in spite of the
blockade, both Cuba and the United States had
recognized the rights of natural or legal holders of
intellectual property in either country.
The implementation of this Section by a New York
court prevented a ruling favourable to a company
with Cuban and French interests (Havana Club
Holding) from being handed down. The court case had
been going on since 1996 — in other words before
Section 211 was passed— over Bacardi’s appropriation
of the right to use the trade mark Havana Club in
the United States by fraudulently marketing in that
country a rum produced outside Cuba.
In compliance with its international obligations
and in spite of the policies of blockade and
hostility perpetuated by the US government, Cuba has
honoured and continues to protect the rights of
hundreds of US companies which keep the registration
of more than 5000 trade marks, trade names and
patents up to date in Cuba.
In January 2002, following an appeal advanced by
the European Union, the WTO Appeal Body concluded
that Section 211 violates the obligations of the
National and Most Favoured Nation Treatment of the
Agreement on TRIPS and urged the United States to
bring this piece of legislation into line with its
obligation within a reasonable period of time.
The government of the United States must abide by
this decision and has made arrangements with the
European Union to postpone compliance with the
verdict. The most recent deadline was 30 June 2005;
this period of grace was supposedly granted to give
US authorities time to work with Congress to adjust
the legislation.
At different WTO bodies —particularly during
periodic meetings of the Dispute Settlement
Mechanism— Cuba has expressed its concern over the
successive grace periods granted, calling on the US
government to abide by the verdict of the WTO’s
Appeal Body and to repeal Section 211, the only
possible way to settle the dispute.
The continued existence of Section 211, in
violation of intellectual property rights protected
by specific international conventions and agreements,
betrays the double standard of the US government
with respect to intellectual property rights and
raises serious questions about the ethical
foundations of the US government’s position on this
matter within the WTO.
The US government’s repeated postponement of its
obligation to abide by the verdict of the WTO
demonstrates it lack of political will, at a
particularly difficult juncture in multilateral
trade negotiations, to contribute to the
effectiveness of the procedures for settling
disputes in that organisation.
Draft amendment S.691 presented 4 April 2005 by
Senator Pete Domenci (R-NM) and backed by anti-Cuban
senators such as Mel Martínez (R-FL) seeks to make
cosmetic changes to Section 211 in order to keep it
in effect without really following the
recommendations of the WTO. The draft amendment is
echoed in the House of Representatives by (Draft
amendment HR-1689) introduced on 19 April 2005 by
representative Tom Feeney (R-Fl) and co-sponsored by
congresspersons opposed to ending the blockade on
Cuba such as Ileana Ros-Lehtinen and Dan Burton.
In January 2004, the US Patents and Trademarks
Office (USPTO), turned down Bacardi’s request to
cancel the Havana Club trademark that has been
registered under the Cuban company CUBAEXPORT since
1976, ratified by the partial ruling of the New York
court handed down in 1998. This ruling has been
appealed by Bacardi before the courts, clearly
demonstrating this company’s interest in usurping
the trademark and having Section 211 prevail.
New York’s Court of Appeals for the Second
Circuit recently ratified the unprecedented decision
not to recognize the Cuban tobacco company
CUBATABACO’s legitimate trademark rights; this
company owns the prestigious Cuban cigar brand "Cohiba".
In addition to perpetuating US government
policies, this decision disregards the United States’
international obligations with respect to trade and
the protection of trademarks. The logic of this
Court of Appeals is that the international
obligations of the United States with respect to
Cuba should be governed by the illegitimate and
unilateral norms of the hostile economic, commercial
and financial blockade imposed on the island, a
policy which has been systematically rejected by
nearly everyone in the international community.
Cuba warns the international community that if
the United States maintains Section 211 and
undertakes other measures to usurp internationally
prestigious Cuban trademarks protected by
international conventions and treaties, a climate of
uncertainty and a questioning of these rights could
be the result, concretely affecting not only Cuba
but also the economic and commercial interests of
entities in the United States itself.
1.5 Examples of the
impact of the extraterritorial application of the
blockade
The ferocious persecution of any foreign company
or commercial or banking institution which
establishes or seeks to establish economic,
commercial or financial relations with Cuban
institutions has continued to produce negative
results during this period and has had its toll on
all of the country’s spheres. What follow are some
examples of this.
FOOD SECTOR
In August 2004, as part of a social programme
aimed at providing soy yogurt to all Cuban
children aged 7 to 13, Cuba purchased equipment
from the Brazilian company MEBRAFE in order to
modernize all of the UNION LACTEA’s
refrigeration facilities. The equipment
purchased included 14 Danish SABROE
refrigeration compressors, which cost Cuba $
339,389, a price already 40 % higher than that
which could have been paid buying these
compressors in the US market. Denmark’s SABROE
was bought over by the American company York and
York’s distributor in Brazil received
instructions from the US head office to prohibit
the sale of compressors to Cuba.
In March 2005, the Canadian representative of
the US company International Flavors and
Fragances informed the Canadian company Reuven
International that it would no longer sell it
fragrances for the production of instant foods
destined to the Canadian – Cuban joint venture
company Coracan S.A., a decision which has
affected the production of instant beverages in
Cuba since last May. These products were being
purchased from the Canadian company Reuven
International as they could not be purchased
directly from the United States, something which
already increased costs by 8 %.
Since 2004 to date, the government of the
United States has forbidden the European
laboratory Intervet Holanda from selling Cuba
vaccines for avian diseases, claiming these
contain 10 % or more antigens produced in the
United States. This prohibition includes the
Marek vaccine, designed for a specific type of
avian disease and a vaccine for other diseases
such as Gumboro, New Castle, bronchitis and
Reovirus. Cuba is forced to purchase these
vaccines through third countries, paying more
than what it did when it purchased them from the
WINCO firm — $ 9.50 (as opposed to $ 7) for
every unit of the Marek vaccine and $ 150 (as
opposed to $ 68) for every unit of the quadruple
vaccine. By undertaking measures to reduce the
number of birds in Cuba, the United States hopes
to undermine an important source of food
products for the Cuban people.
This year, Cuba is producing or importing
3,000,000 pressure cookers and the same number
of rice cookers, to distribute these to all
households (selling the units at subsidized
prices) and improve the standard of life of the
population. In the case of the pressure cookers,
attempts at purchasing raw materials —needed to
produce one of the cooker’s components or the
finished product— from three Mexican companies
failed, as described below:
1) In March 2005, FENOL, a product used
in the manufacture of the cooker’s handle,
was ordered from the VAFE S.A. DE C.V. firm.
After advancing an offer, the firm was
forced to withdraw it because the product is
made in the United States.
2) A decision was then made to use
polypropylene to produce the handles. The
INDELPRO S.A. firm was approached. This firm
made a good offer ($ 1,200 a ton), which the
supplier withdrew on finding out the buyer
was Cuba.
3) Contracts for the purchase of 185,000
units (EKSO brand) were immediately signed.
The money was transferred from MOTOINSA to
the Mexican bank BANAMEX, a branch of the US
bank CITYBANK. The transaction was thwarted
as a result of US government pressures.
HEALTH SECTOR
With respect to cancer treatment, Cuba has
been unable to purchase spare pieces and
radioactive sources for two automatic deferred
charge units used to treat gynaecological
tumours (brachitherapy units), purchased from
the Canadian company MSD NORDION, as the
latter sold the trademark to the American firm
VARIAN. As a result of this, 120 patients were
unable to receive this kind of treatment (the
best option available) until these units were
replaced with others of European make.
In 2004, RADIOMETER, a Danish company
producing gasometers —used in intensive care
units employed by hospitals to analyze blood
gas contents—which has had direct links with
the Cuban import company MEDICUBA for over 35
years, was forced to remove its representative
from Havana after being bought over by the US
company DONAHER, something which has increased
spending in the Cuban health system by $
200,000 a year.
In October 2004, specialists from the
Hermanos Ameijeiras Hospital approached
representatives of the Japanese Hitachi High
Technologies Corporation to purchase a new
electron microscope to replace a 20-year-old
unit which is still being used in the
hospital’s Pathological Anatomy laboratory.
Hitachi executives said they could not sell
the microscope to Cuba because their company’s
policy was that of respect towards the
blockade imposed on our country by the United
States. The sale of one electron microscope at
$ 400,000 was not sufficiently attractive for
the company to interest it in changing its
commercial policy. Representatives invoked the
impossibility of offering training as the
crucial problem. Even though Cuban engineers
could be trained at the company, the
representatives argued that obtaining
commercial export licences through the US
Chamber of Commerce was a tricky and
potentially very expensive process.
EDUCATION SECTOR
The companies SIGMA and CLONTEC denied the
Faculty of Biology of the University of Havana
the possibility of purchasing a series of
reagents used to extract DNA and RNA from
biological samples (especially useful for
studies with biotechnological applications).
Even though the purchase was being financed by
a project with Swedish funds, the supplier
turned down the request invoking the blockade.
The Pharmaceuticals and Food Products
Institute, the Faculty of Chemistry and the
Faculty of Biology of the University of Havana
have not been able to purchase
spectrophotometers and their spare parts to
carry out laboratory practices. The Institute
had purchased $ 13,000 dollars in equipment
from the European firm LKB-Pharmacia. After
the company was bought over by a US firm, a
subsidiary in Spain refused to supply Cuba
with its spare pieces. When the halogen lamps
in these units ($ 12 a lamp) expired, a
professor tried to purchase new lamps from the
abovementioned subsidiary in Spain; the
possibility was denied her once her
nationality was confirmed.
In February and April 2005, Cuba was not
allowed to connect to the super-computer of
the University of Minas Gerais in Brazil, a
service which, allegedly, explicitly excludes
countries blockaded by the United States. The
denial of access to super-computers located in
Latin American universities limits cooperative
work with other international academic groups
and research work in such spheres as computer
sciences, nanotechnology, neurosciences and
meteorology. For instance, the computational
chemistry team of the Faculty of Chemistry of
the University of Havana, denied access to
super-computers and specialized software, sees
its work, and exchanges with other research
teams around the world, severely limited in
scope.
TOURISM SECTOR
At the beginning of July 2004, the Canadian
company VIP INTERNATIONAL CORPORATION, which
represented the Cuban hotel branch GRAN CARIBE
in the Global Distribution Systems (for hotel
reservations and other services), reported
that, as of the 31st of the month,
it would discontinue its services, as the
reservations must be made via US-based
companies, and the US government had decided
to discontinue processing these reservations.
Losses in reservations were calculated at $
300,000.
On 2 December 2004, the hotel and travel
company CENDANT CORPORATION, with head offices
in the United States, bought over the company
EBOOKERS, one of the United Kingdom’s largest
online reservations company, which processed
reservations for Cuba’s GRAN CARIBE hotel
branch. The service was discontinued on 1
January 2005 as a result of provisions
surrounding the US blockade.
Another US company took over two other UK
online reservations companies (OCTOPUS and
TRAVELBAG), limiting the number of
alternatives for making reservations in Cuba
even more.
FINANCES
Following instructions given by its head
offices in the United States, the Canadian
company Paymentech Canada unexpectedly decided
to unilaterally discontinue processing VISA
credit card payments made by Hola Sun Holidays
Ltd. and Canada Inc. (Caribe Sol), by virtue
of blockade policies. The affected companies,
which facilitate Canadian tourism to Cuba,
have had to hire lawyers to get back the funds
which were retained by Paymentech Canada and
to obtain repair for damages caused by this
decision which, among other things, forced
these two companies to find a completely new
charging system for the thousands of customers
that purchase the tourist packages they offer.
In addition to this, VISA cards had to be
excluded as a form of payment, there being no
other available processing centre. Legal costs
have already exceeded the sum of 100,000
Canadian dollars ($ 80,000), and the judicial
processes for damages and violations of
Canadian law are still in their initial phases.
On 6 April 2005, the company SEISA received
a communiqué from Spain’s Banco Sabadell
Atlantico, which informed it that the bank
transfer made on 10 November 2004 on behalf of
SEISA to pay for commercial services offered
by one of its suppliers (SUR CONTINENTE, a
Chilean entity attached to the Bilbao Vizcaya
Bank) had been frozen. The transfer was
for a sum of $ 32,918, blocked by the US
Treasury Department.
On 4 March 2005, Octubre Holdings S.A.
asked COOP Bank in Geneva, Switzerland, to
transfer the equivalent of $ 400,000 in
Canadian dollars to Galax Inc.’s account with
the National Bank of Canada. By mistake, COOP
made the transfer in US dollars to the Bank of
New York and, consequently, these funds were
frozen on 10 March 2005.
TRANSPORTATION SECTOR
The Navegación Caribe Company has witnessed
a reduction in the port and other services it
offers foreign vessels (chiefly cruise ships),
reporting losses of $ 1,130,000. In addition
to this, it has been forced to pay extra to
obtain sare pieces and materials to repair and
maintain its vessels from third countries, as
these cannot be obtained in the US market.
This has meant higher freightage and
intermediary costs, a total of $ 63,800,000
extra.
ZIM, a foreign shipping company, was
recently asked to quote its Havana-Chile
freightage rates; it replied that it could not
provide us with any information nor offer the
service by virtue of the Torricelli Act, as
this company’s vessels frequently sail to US
ports. Cuba was forced to accept a higher rate,
offered by another foreign company. ZIM
transports 40-feet containers for $
2,700/container, while the other company
charged Cuba $4,500/container.
The blockade has caused Cuban fishing
companies losses of $ 3,593,400, $ 615,100 of
which can be chalked up to extra freightage
costs. With this money, $ 5, 246 tons of fish
for the population could have been purchased.
In December 2004, the Transcargo-Panalpina
company, an international transportation
company (whose correspondent is Transcargo)
was forced to carry out a transhipment in a
third country while transporting 1,800
vehicles from Asia to Cuba. This increased the
costs of the operation by $ 360,000. This was
the result of the need to avoid potential
interference in the transaction, including the
ultimate confiscation of the goods by US
federal or regional authorities, by virtue of
extraterritorial regulations imposed on Cuba
by the United States.
CIVIL AVIATION
Cuba’s Civil Aviation Institute was unable
to rent a PW 127 motor. This paralyzed an ATR
air vessel of European make for 17 days,
resulting in economic damages of $ 126,000.
In September 2004, the Swedish airline
company NOVAIR, which had signed an agreement
with CUBANA DE AVIACION to begin renting the
latter an Airbus 330 air vessel as of February
2003, notified Cuba that its maintenance
company, SR TECHNICS, had expressed concerns
over continuing to offer its services in
Havana, as this constituted a violation of the
US Trade Department’s regulations. On 30 April
2005, Cuba ceased renting the A330 and CUBANA
was forced to rent a more expensive vessel in
order to meet its commitment to customers,
paying an extra $ 2,000,000.
In November 2004, the US company ARINC
warned the Canadian airline company AIR
TRANSAT that it could not continue offering
check-in services to CUBANA at Montreal’s
airport through its IMUSE SYSTEM, as this
constituted an indirect benefit for Cuba and
the government of the United States maintained
an "embargo" on the island. The company told
AIR TRANSAT that if it committed any "future
violation", it would itself lose this service.
Finally, on 19 March 2005, ARINC unilaterally
deprived the Canadian companies HANDLEX and
ADM (Aeroports de Montreal) of access to hired
services for CUBANA DE AVIACION. As a result
of this, travellers must endure delays in the
check in process (which is manual, that is to
say, involving a boarding pass, the labelling
of luggage, etc.), CUBANA’s corporate image
and competitiveness are besmirched and, in
addition to this, the company is forced to
undertake exceptional measures to guarantee
the safety of flights. ARINC is the sole
provider of these services at Montreal’s
Dorval airport; the extraterritorial
implementation of US legislation is thus
coupled with abuses stemming from monopolistic
control over services.
OIL
In the last quarter of 2004, during the
First Convention on Earth Sciences held in
Cuba from 5 to 8 April 2005, the Integrated
Exploration Systems company based in Germany
was to give a 2-hour presentation on the
company’s software technology, a 2D and 3D
modelling programme for oil systems. Cuba is
interested in acquiring this programme, as the
costs of producing similar models in other
countries more than exceed those offered by
IES. The growing off-coast oil exploration
efforts Cuba is undertaking require the use of
models, based on an ever-growing number of
seismic lines, year round. These high-tech
tools would be economically advantageous for
Cuba and yield more reliable exploration
results.
In the end, IES notified Cuba that it could
not provide it with its software, alleging
that, even though IES is not owned by the
United States and its base of operations is
Germany, a part of IES has US assets, such
that the firm cannot have any kind of
relations with Cuban companies. In addition to
this, IES also decided not to participate in
the Convention on Earth Sciences held this
past April.
There are 40 platforms and vessels around
the world that could have submitted a tender
for the drilling of the deep-water
(1,600-meter) oil exploration well off Cuban
coasts. Only 3 companies were willing to work
in Cuba’s Exclusive Economic Zone. The
equipment and pieces of US manufacture which
were part of the platform hired had to be
replaced (as their use was not authorized),
something which caused delays and increased
costs.
OTHER SECTORS
Sports such as shooting have been seriously
affected as a result of the prohibition on the
purchase of materials and instruments from
third countries that have trade relations with
the United States. Some examples worthy of
mention are:
- The hurdles thrown in the way of Cuba’s
Skeet team in their attempts at purchasing "Bereta"
rifles (of Italian manufacture).
- The impossibility of obtaining high-quality
ELEY bullets (made in England), munitions
which are needed to obtain highly effective
results.
Cuba cannot purchase spare parts for pieces
of equipment employed in Cuba’s Anti-doping
Laboratory. This has at times forced Cuba to
close down its labs and it has caused damages
of $ 397,000. Some of the needed pieces are
made in Europe, as is the case with the as2000
auto-injector (made in Italy), but, since they
are part of the isotopic mass spectrometer
which is manufactured in the United States,
Cuba is not permitted to purchase them.
In March of this year, SEISA, a company
which commercializes integrated security
systems, received a communiqué from one of its
regular supplies, KIDDE de Mexico S.A. de C.V.,
which supplies it with dry chemical powder;
KIDDE informed SEISA that it would no longer
supply it with this chemical, as the KIDDE PLC
Group, to which KIDDE de Mexico belongs, had
been bought over by a US company and had
received instructions to terminate its
contracts with certain countries, including
Cuba. As a result of this, 2 deliveries from
last year’s contract were cancelled. The
discontinuation of the supply of this product
means an additional 15 cents paid for every
kilogram of the 150 tons imported every year,
representing an extra cost of $ 22,500 a year.
At the end of 2004, the Mexican company CCL
Container S.A. de C.V. de Mexico, from which
Cuba had ordered lithographed aluminium tubes
for cigars, was taken over by a US company.
Following this, the company’s foreign branch
increased its prices to less than competitive
levels, toughened financial conditions for
negotiation, failed to comply with a contract
for the sale of $ 1,100,000 tubes and, finally,
announced its decision to break relations with
the Cuban counterpart. The company ECIMETAL
had to redistribute the 4,000,000 tubes
ordered among other suppliers, losing a nearby
market and the possibility of selling more
supplies. As a result of this, the Cuban
company paid $ 43,200 extra for the supplies.
When Cuba found it necessary to use a
herbicide known as Plateau, which has yielded
extraordinary results in Brazilian sugar cane
plantations, the Cuban company QUIMIMPORT
attempted to purchase this product from the
German company BASF, which had registered the
product in Cuba. Even though the product had
been patented by a world-leading German
agrochemical company, Cuba was not able to
purchase the product because its active
ingredient is synthesized in Puerto Rico, a
country deprived of its right to self-determination,
whose territory is controlled like a colonial
possession by the United States.
In mid-2004, Cuba decided to purchase 4
high-tech FLYGT pumps, produced by the Swedish
company ITT-FLYGHT, a subsidiary of the US
transnational ITT. Its installation was to
substantially improve the servicing of
drinking water to some 250,000 people, 95 % of
them living in the Arroyo Naranjo municipality,
20 % in Boyeros and some areas of 10 de
Octubre, all of them Havana. Following the
initial commercial contacts, ITT refused to
sell its products to Acueducto Sur.
On 28 December 2004, the company Maquimport
requested a quote on 47 products produced by
the US subsidiary Rockwell Automation Power
Systems based in Canada. The products of
interest were to be used as replacement pieces
in Holguin’s Aluminium Packages Production
Plant (ENVAL). On 6 January 2005, the manager
for imports and exports of this company
replied to the request with an e-mail
explaining that, as is known, the United
States maintains an embargo on the shipment of
products or technologies to Cuba from any part
of the world. As the products of interest were
made in the United States or contained US
technology, they saw themselves obliged to
turn down the Cuban company’s request.
(Continued... 1,
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