Janelle Irwin Taylor
U.S. Senator Marco Rubio is asking the Secretary of Treasury a laundry list of questions pertaining to President Barack Obama’s plans to normalize some relations with Cuba.
Last month, Obama announced a list of changes to the U.S. policy in Cuba including establishing banking relations with Cuba and allowing U.S. companies to export construction and telecommunications equipment.
Rubio, along with Dan Coats, a Senator from Indiana, sent a letter to Secretary of Treasury Jacob Lew Wednesday asking for details on how the agency will lawfully implement the president’s plan.
“We are deeply concerned that several aspects of the President Obama’s new approach to Cuba, especially those related to unilaterally easing U.S. sanctions, violate the letter and spirit of several U.S. laws (sic), and increase the moral and financial risk to the American taxpayer and financial system of doing business through Cuba’s government-controlled financial system,” the senators wrote.
They called the difference between Obama’s plan and current laws restricting trade, travel and other relations with the island nation “stark.”
“On December 17, the President announced that ‘U.S. institutions will be permitted to open correspondent accounts at Cuban financial institutions to facilitate the processing of authorized transactions,’” Rubio and Coats added. “As you know, Section 7207 of the Trade Sanctions Reform and Export Enhancement Act (TSREEA) explicitly prohibits U.S. assistance and financing to Cuba. Moreover, it contains no Presidential waiver.”
The letter asks what legal authority the department has to establish banking relations in Cuba and raises doubt over whether the move would expose Americans and the government to potential threats. In an example, Rubio and Coats point out that, “Less than three years ago, Cuba blocked access to the Cuba-based correspondent bank accounts of its European trading partners and confiscated their cash.” They want to know if the Administration can guarantee that won’t happen to U.S. accounts?
The two GOPers are also concerned about exporting telecommunications equipment to Cuba.
“While Congress has authorized certain transactions to improve telecommunications services between the United States and Cuba, U.S. law prohibits U.S. investments in Cuba’s domestic telecom infrastructure,” they write.
Again, the question posed is, what authority does the agency have to do this?
The same question is being posed regarding loosened travel restrictions.
“Under the travel codification, trips related to activities that are primarily tourist-oriented — including self-directed educational activities intended only for personal enrichment — are illegal,” begging the question, “how will Treasury enforce violations of travel for self-directed educational activities and by groups that sponsor people-to-people trips, which seek to engage primarily in tourist activities?”
The two conclude by asking one final question.
“The fact that the Administration has been unable to answer these and many other questions almost a month after the President’s announcement, raises serious concerns about the process which preceded it. We thus would like to know whether the Treasury Department was even consulted regarding these significant policy changes regarding Cuba, and if so, on what date.”
Rubio and Coats ask the Treasury to answer their questions promptly.
Here is the complete letter:
January 14, 2015
The Honorable Jacob J. Lew
Secretary of the Treasury
United States Department of the Treasury
Dear Secretary Lew:
We are deeply concerned that several aspects of the President Obama’s new approach to Cuba, especially those related to unilaterally easing U.S. sanctions, violate the letter and spirit of several U.S. laws, and increase the moral and financial risk to the American taxpayer and financial system of doing business through Cuba’s government-controlled financial system. We ask that you explain in detail how the Treasury Department plans to implement the President’s announcement under current law.
On December 17, the President announced that “U.S. institutions will be permitted to open correspondent accounts at Cuban financial institutions to facilitate the processing of authorized transactions.”
As you know, Section 7207 of the Trade Sanctions Reform and Export Enhancement Act (TSREEA) explicitly prohibits U.S. assistance and financing to Cuba. Moreover, it contains no Presidential waiver. Also, Section 103 of the LIBERTAD Act prohibits any financing of transactions involving confiscated property belonging to U.S. nationals.
Given these stark differences between the letter of the law and the Administration’s announcement, we ask that you provide clear answers to the following questions:
- What legal authority does the Administration have to allow establishment of correspondent accounts in Cuba, and the use of U.S. credit and debit cards by travelers to Cuba?
- How would the opening of correspondent accounts and the use of U.S.-backed credit cards expose U.S. financial institutions and affect legal action from Americans who have outstanding judgments rendered against the Cuban government by U.S. courts?
- How would these regulatory changes impact U.S. obligations to protect U.S. trademark holders, namely those who had their intellectual property confiscated?
- Less than three years ago, Cuba blocked access to the Cuba-based correspondent bank accounts of its European trading partners and confiscated their cash. Can the Administration ensure that this will not happen to U.S. accounts?
The President also announced that “Telecommunications providers will be allowed to establish the necessary mechanisms, including infrastructure, in Cuba to provide commercial telecommunications and internet services.”
While Congress has authorized certain transactions to improve telecommunications services between the United States and Cuba, U.S. law prohibits U.S. investments in Cuba’s domestic telecom infrastructure.
Specifically, the Cuban Democracy Act of 1992 (22 USC 6004) includes a direct prohibition on “investment in domestic telecommunications services.” Moreover, it states that an “investment” in the domestic telecommunications network within Cuba “includes the contribution (including by donation) of funds or anything of value to or for, and the making of loans to or for, such network.” The LIBERTAD Act subsequently reinforced this “no investment” in telecom prohibition (22 USC 6032(g)).
- What legal authority does the Administration have to allow U.S. investments in Cuba’s telecommunications infrastructure?
- How would such investments affect legal action from Americans who have outstanding judgments rendered against the Cuban government by U.S. courts?
Also, as part of the President’s announcement, general licenses will be issued for all 12 categories of authorized travel in the existing categories. However, TSREEA codified the ban on tourist activities, which are defined as any activity not expressly authorized in the 12 categories of travel set forth in the regulations. It further specified, “as such regulations were in effect on June 1, 2000.” At the time of codification, non-academic educational travel (“people-to-people”) was only permitted via specific license.
- Under what authority will the President license travel beyond the June 1, 2000 levels?
Under the travel codification, trips related to activities that are primarily tourist-oriented — including self-directed educational activities intended only for personal enrichment — are illegal.
- How will Treasury enforce violations of travel for self-directed educational activities and by groups that sponsor people-to-people trips, which seek to engage primarily in tourist activities?
- How do certain travel activities, including staying at confiscated properties by U.S. travelers, not violate the ban on trafficking, and “indirect financing,” of confiscated property in LIBERTAD?
The fact that the Administration has been unable to answer these and many other questions almost a month after the President’s announcement, raises serious concerns about the process which preceded it. We thus would like to know whether the Treasury Department was even consulted regarding these significant policy changes regarding Cuba, and if so, on what date.
We appreciate your prompt answers to these questions.
Sincerely,
Marco Rubio
Daniel Coats
