The United States embargo against Cuba (described in Cuba and Latin America as el bloqueo, Spanish for "the blockade") is a commercial, economic, and financial embargo partially imposed on Cuba in October 1960. It was enacted after Cuba nationalized the properties of United States citizens and corporations and it was strengthened to a near-total embargo on February 7, 1962.
Titled the Cuban Democracy Act, the embargo was codified into law in 1992 with the stated purpose of maintaining sanctions on Cuba so long as the Cuban government continues to refuse to move toward "democratization and greater respect for human rights".[1] In 1996, Congress passed the Helms-Burton Act, which further restricted United States citizens from doing business in or with Cuba, and mandated restrictions on giving public or private assistance to any successor government in Havana unless and until certain claims against the Cuban government are met. In 1999, U.S. President Bill Clinton expanded the trade embargo even further by ending the practice of foreign subsidiaries of U.S. companies trading with Cuba. In 2000, Clinton authorized the sale of certain "humanitarian" US products to Cuba.
It has been argued that pro-embargo Cuban-American exiles, whose votes are crucial in Florida, have swayed many politicians to also adopt similar views.[2] The Cuban-American views have been opposed by business leaders who argue that trading freely would be good for Cuba and the United States.[3]
At present, the embargo, which limits American businesses from conducting business with Cuban interests, is still in effect and is the most enduring trade embargo in modern history. Despite the existence of the embargo, the United States is the fifth largest exporter to Cuba (6.6% of Cuba's imports are from the US).[4] However, Cuba must pay cash for all imports, as credit is not allowed.[5]
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U.S. arms embargo had been in force since March 1958 when armed conflict broke out in Cuba between rebels and the Fulgencio Batista government. In July 1960, in response to Cuba's new revolutionary government's seizure of US properties, the United States reduced the Cuban import quota of brown sugar to 700,000 tons, under the Sugar Act of 1948;[6] the Soviet Union responded by agreeing to purchase the sugar instead, as Cuba's new government continued to take further actions to nationalize American businesses and privately owned properties.
In response to the Cuban alignment with the Soviet Union during the Cold War, President John F. Kennedy extended measures by Executive Order, first widening the scope of the trade restrictions on February 7 (announced on February 3 and again on March 23, 1962). According to his press secretary, Pierre Salinger, Kennedy asked him to purchase 1,000 Cuban cigars for his future use immediately before the extended embargo was to come into effect. Salinger succeeded, returning in the morning with 1,201 Petit H. Upmann cigars, Kennedy's favorite cigar size and brand.[7] Following the Cuban Missile Crisis, Kennedy imposed travel restrictions on February 8, 1963, and the Cuban Assets Control Regulations were issued on July 8, 1963, under the Trading with the Enemy Act in response to Cubans hosting Soviet nuclear weapons. Under these restrictions, Cuban assets in the U.S. were frozen and the existing restrictions were consolidated.
In 1962, Cuba was expelled from the Organization of American States (OAS) "by a vote of 14 in favor, one (Cuba) against with six abstentions. Mexico and Ecuador, two abstaining members argued that the expulsion was not authorized in the OAS Charter."[8] Multilateral sanctions were imposed by the OAS on July 26, 1964, which were later rescinded on July 29, 1975. Cuban relations with the Organization of American States have improved as of 3 June 2009 (membership suspension lifted).
The restrictions on U.S. citizens traveling to Cuba lapsed on March 19, 1977; the regulation was renewable every six months, but President Jimmy Carter did not renew it and the regulation on spending U.S. dollars in Cuba was lifted shortly afterwards. President Ronald Reagan reinstated the trade embargo on April 19, 1982. This has been modified subsequently with the present regulation, effective June 30, 2004,[9] being the Cuban Assets Control Regulations, 31 C.F.R. part 515.[10] The current regulation does not limit travel of US Citizens to Cuba per se, but it makes it illegal for US Citizens to have transactions (spend money or receive gifts) in Cuba under most circumstances without a US government Office of Foreign Assets Control issued license.[11]
The 1963 U.S. embargo was reinforced in October 1992 by the Cuban Democracy Act (the "Torricelli Law") and in 1996 by the Cuban Liberty and Democracy Solidarity Act (known as the Helms-Burton Act) which penalizes foreign companies that do business in Cuba by preventing them from doing business in the US. Justification provided for these restrictions was that these companies were trafficking in stolen U.S. properties, and should, thus, be excluded from the United States.
The European Union resented the Helms Burton Act because it felt that the US was dictating how other nations ought to conduct their trade and challenged it on that basis. The EU eventually dropped its challenge in favor of negotiating a solution.[12]
After Cuba shot-down two unarmed Brothers to the Rescue planes in 1996, killing three Americans and a US resident, a bi-partisan coalition in the United States Congress approved the Helms-Burton Act. The Title III of this law also states that any non-U.S. company that "knowingly trafficks in property in Cuba confiscated without compensation from a U.S. person" can be subjected to litigation and that company's leadership can be barred from entry into the United States. Sanctions may also be applied to non-U.S. companies trading with Cuba. This restriction also applies to maritime shipping, as ships docking at Cuban ports are not allowed to dock at U.S. ports for six months. It's important to note that this title includes waiver authority, so that the President might suspend its application. This waiver must be renewed every six months and it has traditionally been. It was renewed for the last time July 17, 2006,[13] therefore the suspension of this provision will remain effective for, at least, another six months following that date.
In response to pressure from some American farmers and agribusiness, the embargo was relaxed by the Trade Sanctions Reform and Export Enhancement Act, which was passed by the Congress in October 2000 and signed by President Bill Clinton. The relaxation allowed the sale of agricultural goods and medicine to Cuba for humanitarian reasons. Although Cuba initially declined to engage in such trade having even refused US food aid in the past,[14] seeing it as a half-measure serving U.S. interests, the Cuban government began to allow the purchase of food from the U.S. as a result of Hurricane Michelle in November 2001. These purchases have continued and grown since then, even though all sales are done in cash. In 2007, the US was the largest food supplier of Cuba[15] and its fifth largest trading partner.
In some touristic spots across the island, American brands such as Coca-Cola can be purchased. Ford tankers refuel planes in airports and some computers use Microsoft software.[16] However, the origin of the financing behind such goods is not always clear in today's market where billions of dollars move around the earth every minute. The goods often come from third parties based in countries outside the US, even if the product being dealt originally has US shareholders or investors.[17] This can be seen for example with Nestle products (which have a 10% US ownership) and can be bought in "Convertible Pesos” (CUCs)-hard currency, stores that are pegged to the US dollar, Euro and other currencies.
According to the U.S. Department of State: "Cuban Assets Control Regulations are enforced by the U.S. Treasury Department and affect all U.S. citizens and permanent residents wherever they are located, all people and organizations physically located in the United States, and all branches and subsidiaries of U.S. organizations throughout the world. Regulation does not limit travel of US Citizens to Cuba per se, but it makes it illegal for US Citizens to have transactions (spend money or receive gifts) in Cuba, under most circumstances. The regulations require that persons subject to U.S. jurisdiction be licensed in order to engage in any travel-related transactions pursuant to travel to, from, and within Cuba. Transactions related solely to tourist travel are not licensable."[18] Meanwhile, Canadian and European tourists continue to visit the island.
Spurred by a burgeoning interest in the assumed untapped product demand in Cuba, a growing number of free-marketers in Congress, backed by Western and Great Plains lawmakers who represent agribusiness, have tried each year since 2000 to water down or completely erase regulations preventing Americans from traveling to Cuba. Four times over that time period the United States House of Representatives has adopted language lifting the travel ban, and in 2003 the U.S. Senate followed suit for the first time. However, each time President George W. Bush threatened to veto the bill. Faced with a veto threat, each year Congress dropped its attempt to lift the travel ban. United States nationals can circumvent the ban by traveling to Cuba from a different country (such as Mexico, The Bahamas, Canada or Costa Rica), as Cuban immigration authorities do not stamp passports. In doing so, they would risk prosecution by the U.S. government if discovered.
On October 10, 2006 the United States announced the creation of a task force made up of officials from several US agencies that will pursue more aggressively violators of the US trade embargo against Cuba, with severe penalties.[19] The regulations are still in force and are administered by the U.S. Treasury Department, Office of Foreign Assets Control. Criminal penalties for violating the embargo range up to ten years in prison, $1 million in corporate fines, and $250,000S in individual fines; civil penalties up to $55,000 per violation.
The Obama administration has made only slight changes to the restrictions on US travel to Cuba. On April 13, 2009, President Barack Obama loosened the travel ban, now allowing Cuban-Americans to travel freely to the country[20]; and on January 14, 2011 he further loosened the ban, by allowing students and religious missionaries to travel to Cuba if they meet certain restrictions.[21] The President has outlined a series of steps that Cuba could take to demonstrate a willingness to open its closed society, including releasing political prisoners, allowing United States telecommunications companies to operate on the island and ending government fees on US dollars sent by relatives in the United States. In confirmation hearings for the position of Secretary of State, Hillary Clinton said that she believed that the ban on Cuban-American family travel should be lifted.[22] Many saw this as opportunity for Cubans and Americans to engage in viable businesses together.[23] As of November 2011 US-Cuba relations remain frozen and Cuba also remains one of the four countries in the world designated as a State Sponsor of Terrorism by the United States Department of State [24]
The 1998 US State Department in the report Zenith and Eclipse: A Comparative Look at Socio-Economic Conditions in Pre-Castro and Present Day Cuba[25] argued that the U.S. embargo has added, at most, relatively small increases in transportation costs. It claims that the main problem is not the embargo but the lack of foreign currency due to the unwillingness to liberalize the economy, diversify the export base, during the years of abundant Soviet aid. Cuba also amassed substantial debts owed to its Japanese, European, and Latin American trading partners acquired during the years of abundant Soviet aid.
The US Chamber of Commerce estimates that the embargo costs the US economy $1.2 billion per year in lost sales and exports, while the Cuban government estimates that the embargo only costs the island itself $685 million annually.[26] The US has spent over $500 million broadcasting Radio Marti and TV Marti, even though the transmission signals of the latter are effectively blocked by the Cuban government.[27] The non-partisan Cuba Policy Foundation estimates that the embargo costs the US economy $3.6 billion per year in economic output.[28]
"Future students of American history will be scratching their heads about this case for decades to come. Our embargo and refusal to normalize diplomatic relations has nothing to do with communism. Otherwise, we wouldn't have had diplomatic relations with the Soviet Union throughout the Cold War, with China since Nixon, and with Vietnam despite our bitter war there. No, Cuba was pure politics. Though it started out to be a measure of an administration's resistance to Castro's politics, it very soon became a straight-jacket whereby first-generation Cuban-Americans wielded inordinate political power over both parties and constructed a veto over rational, mature diplomacy."
The embargo has been criticized for its effects on food, clean water,[30] medicine, and other economic needs of the Cuban population. Criticism has come from both Fidel Castro and Raúl Castro, citizens and groups from within Cuba, and international organizations and leaders including Barack Obama. Some academic critics, outside Cuba, have also linked the embargo to shortages of medical supplies and soap which have resulted in a series of medical crises and heightened levels of infectious diseases.[31][32] It has also been linked to epidemics of specific diseases, including neurological disorders and blindness caused by poor nutrition.[31][33] Travel restrictions embedded in the embargo have also been shown to limit the amount of medical information that flows into Cuba from the United States.[30] An article written in 1997 suggests malnutrition and disease resulting from increased food and medicine prices have affected men and the elderly, in particular, due to Cuba's rationing system which gives preferential treatment to women and children.[32]
On May 1, 2009, Venezuelan President Hugo Chávez voiced his concern over the continued embargo. While speaking about his meeting U.S. President Barack Obama at a summit days earlier, Chávez stated "if President Obama does not dismantle this savage blockade of the Cuban people, then it is all a lie, it will all be a great farce and the U.S. empire will be alive and well, threatening us."[34]
"The embargo is the perfect example used by anti-Americans everywhere to expose the hypocrisy of a superpower that punishes a small island while cozying to dictators elsewhere."
The Helms-Burton Act has been the target of criticism from Canadian and European governments in particular, who resent the extraterritorial pretensions of a piece of legislation aimed at punishing non-U.S. corporations and non-U.S. investors who have economic interests in Cuba. In the Canadian House of Commons, Helms-Burton was mocked by the introduction of the Godfrey-Milliken Bill, which called for the return of property of United Empire Loyalists seized by the American government as a result of the American Revolution (the bill never became law). Furthermore, the European Parliament in 1996 passed a law making it illegal for EU citizens to obey the Helms-Burton act. The European Council:
while reaffirming its concern to promote democratic reform in Cuba, recalled the deep concern expressed by the European Council over the extraterritorial effects of the "Cuban Liberty and Democratic Solidarity (Libertad) Act" adopted by the United States and similar pending legislation regarding Iran and Libya. It noted the widespread international objections to this legislation. It called upon President Clinton to waive the provisions of Title III and expressed serious concern at the measures already taken to implement Title IV of the Act. The Council identified a range of measures which could be deployed by the EU in response to the damage to the interests of EU companies resulting from the implementation of the Act. Among these are the following:
- a move to a WTO dispute settlement panel;
- changes in the procedures governing entry by representatives of US companies to EU Member States;
- the use/introduction of legislation within the EU to neutralize the extraterritorial effects of the US legislation;
- the establishment of a watch list of US companies filing Title III actions.
Some libertarian and conservative critics argue that the embargo actually helps Fidel and Raul Castro more than it hurts them, by providing a scapegoat to blame for all of Cuba's problems. Hillary Clinton has publicly shared the view that the embargo helps the Castros, noting that "It is my personal belief that the Castros do not want to see an end to the embargo and do no want to see normalization with the United States." Clinton said in the same interview that "we're open to changing with them," though the US government maintains its strong stance in support of the embargo while the Castros continue to oppose it.
George P. Shultz, who served as Secretary of State under Reagan, has gone as far as to call the continued embargo "insane".[36] Daniel Griswold, director of the Cato Institute's Center for Trade Policy Studies, criticized the current policy in June 2009 by stating:
"The embargo has been a failure by every measure. It has not changed the course or nature of the Cuban government. It has not liberated a single Cuban citizen. In fact, the embargo has made the Cuban people a bit more impoverished, without making them one bit more free. At the same time, it has deprived Americans of their freedom to travel and has cost US farmers and other producers billions of dollars of potential exports." [37]
Some American business leaders argue that, as long as the embargo continues, non-U.S. foreign businesses in Cuba do not have to compete with U.S. businesses and thus will have a head start when and if the embargo is ended. They openly call for an end to the embargo.[38]
Some religious leaders oppose the embargo for a variety of reasons, including humanitarian and economic hardships the embargo imposes on Cubans. Pope John Paul II called for the end to the embargo during his 1979 pastoral visit to Mexico, and again during his 1998 visit to Cuba. Patriarch Bartholomew I called the embargo a "historic mistake" while visiting the island on January 25, 2004. United States religious leaders have also opposed the embargo. A joint letter in 1998 from the Disciples of Christ and the United Church of Christ to the U.S. Senate called for the easing of economic restrictions against Cuba. Rev. Jesse Jackson, Rev. Al Sharpton, and Minister Louis Farrakhan have also publicly opposed the embargo. On May 15, 2002 former President Jimmy Carter spoke in Havana, calling for an end to the embargo, saying "Our two nations have been trapped in a destructive state of belligerence for 42 years, and it is time for us to change our relationship."
The United Nations General Assembly has condemned the embargo as a violation of international law every year since 1992. Israel routinely joins the U.S. in voting against the resolution as has Palau every year since 2004 to 2008. On October 26, 2010, for the 19th time, the United Nations condemned the embargo, 192 to 2 with 3 abstentions. Israel sided with the U.S.[39]
The Foreign Minister of the Republic of Cuba, Perez Roque called the embargo "an act of genocide". Cuba has also denounced as "theft" the use of frozen Cuban assets to pay for lawsuits filed in the US against the Republic of Cuba.[40]
In addition to the Cuban authorities, film director Michael Moore has also challenged the embargo by bringing 9/11 rescue workers in need of health care to Cuba to obtain subsidized health care.[41]
In June 2011, former Democratic presidential candidate George McGovern spoke out against the travel ban before visiting Cuba, remarking:
"It's a stupid policy. There's no reason why we can't be friends with the Cubans, and vice versa. A lot of them have relatives in the United States, and some Americans have relatives in Cuba, so we should have freedom of travel ... We seem to think it's safe to open the door to a billion communists in China but for some reason, we're scared to death of the Cubans." [42]
McGovern blamed "embittered Cuban exiles in Miami" for keeping the embargo alive all these years, because of their dislike for Fidel Castro.[42]
On February 23, 2010, U.S. Congressman Rep. Collin Peterson of Minnesota introduced a bill that would bar the president from prohibiting travel to Cuba or preventing transactions required for such trips.[43]
On Thursday, June 10, 2010 seventy-four of Cuba's dissidents signed a letter to the United States Congress in support of a bill that would lift the U.S. travel ban for Americans wishing to visit Cuba. The signers include blogger Yoani Sanchez and hunger striker Guillermo Farinas, as well as Elizardo Sanchez, head of Cuba's most prominent human rights group and Miriam Levi, who helped found the Damas de Blanco, or Ladies in White, a group of wives and mothers of jailed dissidents. The letter supports a bill introduced on Feb. 23 by Rep. Collin Peterson, a Minnesota Democrat, that would bar the president from prohibiting travel to Cuba or blocking transactions required to make such trips. It also would bar the White House from stopping direct transfers between U.S. and Cuban banks. The signers stated that:
"We share the opinion that the isolation of the people of Cuba benefits the most inflexible interests of its government, while any opening serves to inform and empower the Cuban people and helps to further strengthen our civil society.[43]"
The Center for Democracy in the Americas, a Washington-based group supporting the bill, issued a press release stating that "74 of Cuba's most prominent political dissidents have endorsed the Peterson-Moran legislation to end the travel ban and expand food exports to Cuba because in their words it is good for human rights, good for alleviating hunger, and good for spreading information and showing solidarity with the Cuban people. Their letter answers every argument the pro-embargo forces use to oppose this legislation. This, itself, answers the question 'who is speaking for the Cuban people in this debate?' - those who want to send food and Americans to visit the island and stand with ordinary Cubans, or those who don't. If Cuba's best known bloggers, dissidents, hunger strikers, and other activists for human rights want this legislation enacted, what else needs be said?"[44][45] The Center also hosts English[46] as well as the Spanish[47] version of the letter signed by the 74 dissidents.
Recent U.S. polling indicates that the American public is slightly in favor of continuing the embargo, and in favor of normalizing diplomatic relations as well. For instance, a 2007 AP/Ipsos Poll indicates that 48% of Americans favor continuing the embargo, against 40% who favor ending it. Interestingly the same poll revealed that despite overwhelmingly unfavorable opinions of Fidel Castro (6% favorable vs. 64% unfavorable), Americans believe that diplomatic relations "should" be re-established with Cuba. (61% in favor, 31% opposed).[48]
An April 2009 CNN / Opinion Research Corporation poll showed that 64% of Americans surveyed think the U.S. should lift its travel ban on Cuba, while 71% thought the U.S. should reestablish diplomatic relations with the island nation.[49]
In lieu of changing perceptions, in March 2011, former Democratic Senator Gary Hart criticized the continuing embargo, remarking "second generation Cuban-Americans are finally beginning to change their community's attitudes and make it clear they no longer are interested in holding the mighty U.S.'s foreign policy toward a tiny nearby country hostage to their parents' anger."[29]