U.S. policy towards Cuba has had among its pillars, for more than six decades, the implementation of unilateral coercive economic measures. Although the fundamentals of this approach have varied somewhat over time, according to experts, the constant objective of the blockade policy has been to use the economic power of the US to undermine the Cuban socio-economic and political system and thus bring about a change of regime on the island.
The State Department Memorandum of April 1960 defined it as follows: “The only foreseeable means of alienating domestic support is through disenchantment and disaffection based on economic dissatisfaction and hardship... If the above is accepted or cannot be successfully countered, it follows that it is possible, then measures must be taken quickly to weaken the economic life of Cuba”.
To that end, barely a month after the US blockade against Cuba came into force in 1962, another provision defined its extraterritorial nature. On March 24 of that year, the Treasury Department established a ban on the entry into U.S. territory of any product made totally or partially with Cuban raw materials or products, even if they came from a third country.
The provision had a great impact on trade with Havana's important commercial partners and, in particular, the nations of Western Europe. From then on, these nations could not use the sugar or nickel they acquired for their exports to the U.S. market, which in practice was one of the first extraterritorial measures of the blockade.
This provision was added to the long list of Washington's measures against Cuba which included the prohibition of U.S. subsidiaries from trading with the Caribbean nation from any other territory.
It also limited the export of equipment, products or any technology with more than ten percent U.S. components and prohibited the entry into U.S. ports of vessels trading with Cuba.
Likewise, punitive actions were applied against institutions and nationals of other territories involved in its commercial relations.
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On February 7, 1962, then US President J. F. Kennedy, by means of Section 620a of the Foreign Assistance Act, declared the total blockade against Cuba.
Successive administrations relied on various instruments to implement it. Prominent among these is the so-called Cuban Democracy Act or Torricelli Act, enacted by former President George Bush (Sr.) in 1992. This law prohibits subsidiaries of U.S. companies in third countries from trading goods with Cuba or Cuban nationals. In addition, it prohibits third country vessels touching Cuban ports from entering U.S. territory within 180 days, except those licensed by the Secretary of the Treasury.
In 1996, the Cuban Liberty and Democratic Solidarity Act or Helms Burton Act stipulated that the blockade could cease only if Cuba consented to the transformation of its socio-economic and political system, in accordance with precise specifications described in that interferenceist text. This law codified the provisions of the blockade, broadening its extraterritorial scope by imposing sanctions on the directors of foreign companies that carry out transactions with U.S. properties nationalized in Cuba and the threat of lawsuits in U.S. courts for the same reason.
Experts agree that the Helms Burton Act, with its four titles, limited the prerogatives of the US President to lift the blockade policy as a whole.
The first of its titles internationalizes the U.S.-Cuba conflict and extends it to all the countries of the world, by prohibiting the purchase and sale of goods to Cuba, since this -according to the Helms Burton Act- is decided by Washington.
The second title is oriented to present the “aid” of the US Government to the people of Cuba so that it “transits towards capitalism”.
Title III allows former owners of property that was nationalized in Cuba, including Cuban citizens who eventually became U.S. citizens, the possibility of suing in U.S. courts those natural and legal persons who, in some way, had contact with such property, which the law qualifies as “trafficking”.
And the fourth title assures that this blockade regime will be maintained until there is a government in Cuba which, “in the opinion of the US”, is governed by “democratic norms”.
The application of Helms Burton seeks not only to affect the Cuban economy, but also to hinder the efforts of the Cuban government to reinsert itself into the world economy and the international system of trade relations.
Its provisions are designed to perpetuate the policy over time, regardless of whether the administration is Democratic or Republican, according to experts.
Although in 2000, the Trade Sanctions Reform and Export Enhancement Act provided for humanitarian exemptions for the purchase of certain basic necessities, including the sale of food, adverse and very costly terms were imposed on Cuba, due to other provisions and financial sanctions in force, such as the prohibition of the use of the US dollar and the requirement of prepayment without the participation of US banks in such transactions.
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On December 17, 2014, the presidents of Cuba and the U.S. announced the beginning of the process of normalization of bilateral relations. From that date, important steps were taken at the political and diplomatic levels, and agreements were reached that had some economic impact on the Island.
The then U.S. President, Barack Obama, eased some sanctions as a result of the negotiation process initiated with Cuba. But these measures were limited and did not substantially modify the complicated framework of provisions, regulations and laws governing the application of the blockade.
With the arrival of President Donald Trump to the White House, the scenario became more complex, as the Republican not only reversed to a large extent the modest changes made by Obama, but also took the sanctions program to new extremes with the use of instruments not previously applied. This was the case with Title III of the Helms Burton Act.
The 243 measures imposed by the Trump Administration - and in force to this day - are clearly aimed at bankrupting the Cuban state. They target the country's areas of economic strength, such as the tourism sector and the export of professional services, and exploit its vulnerabilities, such as energy dependence and the need to attract foreign direct investment.
All spheres of our society and the daily lives of citizens have been impacted by this design, accentuated in the context of the pandemic. The emphasis on hindering major sources of revenue and hindering our trade relations has been notorious in scope.
One of the measures implemented by Trump, a few days after his departure from the White House, was the reinsertion of Cuba in the List of State Sponsors of Terrorism, based on inconsistent arguments and without evidence. The Biden Administration maintains this designation by the State Department, with full knowledge that the pretexts that justified it were dishonest, according to the Cuban Foreign Ministry.
What is certain is that the presence of Cuba on the List of State Sponsors of Terrorism generates severe consequences for the country's economy, mainly in the banking-financial sector, while reinforcing the dissuasive and intimidating effects on third parties in their trade relations with the island.
Its impact is not only extremely detrimental to trade, but also to the possibilities of obtaining credits and making payments for goods and inputs essential for the country's development.
The Foreign Ministry affirms that due to the qualification as a State that allegedly sponsors terrorism, numerous companies and financial entities in the world have refused to operate with Cuba for fear of reprisals from the U.S. government, specifically from the Treasury Department.
Between January 2021 and February 2024, a total of 1064 actions were reported by foreign banks refusing to provide services to Cuban entities, including transfers for purchases of food, medicines, fuel, spare parts for the national energy system and essential consumer goods for the population.
Due to this position of several financial institutions to pay suppliers, and given the impossibility of accessing faster and more expeditious logistical routes, Cuba has had to assume high additional costs to acquire priority supplies.
Likewise, dozens of Cuban diplomatic missions have faced difficulties with the banking institutions that traditionally provided them with services, a situation that has affected the operation and sustenance of the Embassies and their consulates.
The payment of Cuba's financial obligations with several international and regional organizations has also been seriously affected.
As a result of this measure, the nationals of the countries benefiting from the ESTA system to enter U.S. territory -practically all the countries of the European Union- could not avail themselves of the visa waiver program with the U.S., but had to formally request a visa to enter that country if they visited Cuba after March 1, 2011.
The punitive effect of this provision significantly affects the travel and tourism sector to Cuba, identified as one of the key sources of revenue to the country.
Cuba's inclusion in the list has also raised the Country Risk, which undermines and discourages foreign investors' interest in participating in the Cuban economy and evidences the extremely disadvantageous conditions in which the island competes in the international market.
From March 1, 2023 to February 29, 2024, it caused damages and material losses estimated at 5,056.8 million dollars, a figure that represents an increase of 189.8 million dollars with respect to that previously reported.
This figure represents an approximate loss of more than US$421 million per month, more than US$13.8 million per day, and more than US$575,683 in damages for each hour of blockade.
At current prices, the accumulated damages during more than six decades of application of this policy amount to 164 141.1 million dollars.
According to Cuba's most recent report on the impact of the U.S. blockade, “Cuba's inclusion on the U.S. State Department's unilateral list of countries allegedly sponsoring terrorism; the possibility of taking action in U.S. courts to file lawsuits under Title III of the Helms-Burton Act; the sanctions or threats of sanctions against shipping companies; the sanctions or threats of sanctions against shipping companies The inclusion of Cuba on the U.S. State Department's unilateral list of countries alleged to be sponsors of terrorism; the possibility of taking action in U.S. courts to file lawsuits under Title III of the Helms-Burton Act; the sanctions or threats of sanctions against shipping companies, carriers, insurers or reinsurers involved in the supply of fuel to Cuba; the intense and meticulous persecution of Cuban financial transactions and the consequent obstacles to the supply of first order resources; as well as the continuity of other unilateral listings, were confirmed as the most severe measures”.
“The U.S. government has maintained in the course of the last year laws and provisions related to the blockade against Cuba and the traditional practices for its implementation, based on the historical objective of depressing the economy and wages, generating material shortages and damage to public services, causing dissatisfaction and despair among the population and subverting the legitimately established constitutional order,” the text, presented by the Foreign Ministry this week, denounces.
In the period covered by the report (March 2023-February 2024), U.S. actions were aimed at identifying and pursuing, in a surgical manner, the main sources of income of the Cuban economy, in strict application of the provisions of the Helms-Burton Act, including those stipulating its extraterritorial scope.
In that sense, “the offensive against tourism, the allegation of non-existent sonic attacks on U.S. diplomats as a justification to classify Cuba as a not very safe country, the persecution of international medical cooperation agreements, among other actions that respond to a perfected coercive design, aimed at preventing the entry of essential income to meet the growing needs of the population, stand out”.
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Cases of extraterritorial application of the blockade (March 2023-February 2024)*:
In March 2023, it became known that, due to the purchase of the Canadian company APOTEX by the US company SK Capital, the purchase of medical supplies by MEDICUBA was affected, including medicines for the treatment of cancer, allergies and other terminal diseases.
In May 2023, Banco Santander informed the general management of the Cuban company based in Spain, IC Neuronic, the decision to cancel in June 2023 the insurance policy that this entity operated with the aforementioned bank, since 2020.
In May and June 2023, Citibank Europe Bulgaria Branch withheld a transfer from the Cuban Embassy in Bulgaria for the payment of services to the telecommunications company Vivacom. In July, Citibank proceeded with the refund of the invoice payment to the Cuban diplomatic headquarters, which henceforth had to continue its operations with Vivacom through another bank.
In the first half of 2023, Japan's MUFG bank denied a transfer from the Chunichi Dragons franchise to the account of the World Baseball and Softball Confederation, a mechanism that had been operating since 2018 to obtain the income corresponding to the training of contracted Cuban athletes. The reason was the link with Cuba and the possibility of incurring a transgression to the U.S. blockade laws.
On August 17, 2023, the GS1 Aisbl organization, the administrator of internationally accepted standards for communication and information exchange between business partners in different global supply chains, informed Cuba of the impossibility for it to participate in person in the GS1 LATAM regional meeting, to be held in October 2023 in Buenos Aires, Argentina. The organization claimed that Cuba was under a sanctions regime and its participation would put GS1 staff at risk.
In August 2023, Swedbank began sending letters to its customers requesting that they not conduct transactions to or from Habanos Nordic and Cuba, stating that this entailed a risk that the bank could not assume due to the sanctions the country is under. They informed that, in case of not complying with the provision, they would be forced to limit or terminate the client's accounts and services.
In August 2023, the French association Cuba Linda, which promotes travel for rapprochement between peoples, was banned from using the SumUp payment processing and risk solutions platform, a service it had requested to facilitate the sale of bank cards at its stand at the Festival de l'Humanité. The association received a point-of-sale terminal, which was subsequently withdrawn under Article 13 of the general terms and conditions of the contract it had signed. The article cited the obligation to prevent involvement in “fraudulent activities, such as money laundering, terrorist financing or any other criminal activity”.
In September 2023, it became known that Skandinaviska Enskilda Banken AB (SEB), in Sweden, refused to continue operations with Habanos Nordic A.B., because of the risk of facing US penalties due to the blockade.
On November 21, 2023, the Treasury Department's Office of Foreign Assets Control (OFAC) imposed a penalty of US$968,618,825 on the cryptocurrency company Binance Holdings, Ltd. (“Binance”), based in the Cayman Islands, due to violations of various U.S. sanctions programs, including the blockade laws against Cuba. The company was required to pay additional amounts to the Department of Justice, the Treasury Department's Financial Crimes Enforcement Network (FinCEN) and the U.S. Commodity Futures Trading Commission (CFTC), for a total of $4.3 billion.
On December 6, 2023, BMW Group Financial Services- BMW Leasing Switzerland, informed the Cuban Embassy in Switzerland that they had to terminate their commercial relationship with the diplomatic headquarters because the Bank's legal department would not accept payments from the Cuban government, which left them with no other option but to cancel the contracts. In addition, BMW Group Financial Services cancelled the leasing contract for an official Embassy car by the AG BMW Marti dealership based in Berne, in the first week of December.
Also in 2023: Banco Comercial Portugués S.A cancelled the U.S. dollar transfer from the Cuba-Portugal Friendship Association to the AMISTUR agency in Cuba. The Association has its account in BCP Millenium and AMISTUR in Banco Financiero Internacional (BFI). The sum was 55,186 dollars, destined to the payment of the solidarity brigade returning from Cuba.
FRANSABANK FRANCE refused to process a transfer sent by the Cuban diplomatic office in Bonn, Germany, in favor of the Cuban Embassy in Algeria, alleging the “sanctions and embargoes risk policy”, making clear the prohibition of any direct or indirect transaction linked to Cuba.
The banks ING, New B, Argenta, Bpost and BNP-Paribas-Fortis, did not accept transactions with the communication “Aid to Cuba”, after the accident at the Matanzas supertanker base. These unaccepted transactions were detected thanks to the solidarity campaign “1 Euro for Cuba” deployed by Cuba Friendship Associations in Europe.
At the beginning of 2024, Cuba's voluntary contribution to the Office of the United Nations High Commissioner for Human Rights (OHCHR) for 2023 was blocked. Despite the OHCHR's efforts with the UBS bank, the latter never accepted the Cuban transfer. On several occasions this institution alleged that, since it was not a mandatory contribution that could mean loss of rights or financial default for the issuing country, they were not obliged to accept a transfer from one of the countries subject to U.S. sanctions.
In January 2024: JCC Payments Systems Ltd, a third party company working with the Bank of Cyprus for bank terminal payments and payment gateway transfers, informed the Cuban Embassy to that country, that they had proceeded to the immediate termination of the agreement with the Cuban entity, as the provision of procurement services to the organization was prohibited. As a result, the Cuban Embassy was left without terminal collection capacity.
In January 2024: The Indian Axis Bank refused to make a transfer to Cuba from the Indian company Panacea as payment for the inputs acquired from the CIGB for the production of the pentavalent vaccine. The bank alleged Cuba's inclusion on the U.S. government's List of State Sponsors of Terrorism and demanded that Panacea be clear that the payment would not be directed to any institution under the control of the Cuban military, security or intelligence corps.
In February 2024: The mail delivery company UPS refused a Slovenian citizen to send a document, claiming that the addressee, which was the Cuban Consulate based in Austria, did not comply with one or more government regulations of the countries/areas in which UPS operates.
On March 15, 2024, OFAC imposed a penalty of $3,740,442 on Switzerland-based banking company EFG International AG for violating the Cuban Assets Control Regulations and other sanctions programs. Specifically between 2014 and 2018, 727 transactions occurred towards clients in Cuba, for an amount of US$29 939 701.
* Note: Examples set forth in the Report of Cuba pursuant to United Nations General Assembly resolution 78/7, entitled “Necessity of ending the economic, commercial and financial embargo imposed by the United States of America against Cuba”.