CubaNews / January 2003
By Larry Luxner
Up to 300 executives of U.S. agribusiness, pharmaceutical and lumber companies — as well as state agriculture officials and various members of Congress — are expected to shell out $1,500 or more apiece to attend the U.S.-Cuba Business Conference next month.
Kirby Jones is president of both Alamar Associates and the Washington-based U.S.-Cuba Trade Association, which is organizing the Feb. 17-19 event. He said it includes two days of plenary and private meetings in Cancún, Mexico, followed by a third “fully hosted” day in Havana.
“Our focus will be on helping U.S. businessmen understand what’s involved in doing business in Cuba,” Jones told CubaNews. “It’s a how-to conference, oriented to what issues need to be addressed and with whom these executives will need to work. Cuban officials themselves will be there to sit down and talk with them.”
Event sponsors include Caterpillar Americas, Patton Boggs LLP, Alamar Associates, Americans for Humanitarian Trade With Cuba, the Port of Galveston, the GIC Group and the agriculture departments of five states: Arkansas, California, Minnesota, Texas and Virginia.
Pedro Alvarez, president of Cuban food import agency Alimport, will reportedly head a 30-member delegation of senior Cuban commerce officials to the conference.
Sen. Maria Cantwell (D-WA) has confirmed her participation in the meeting, and will likely be leading a delegation of Washington business executives to Cuba. Other lawmakers who were invited but haven’t yet confirmed include Sen. Byron Dorgan (D-ND) and Reps. Jo Ann Emerson (R-MO); George Nethercutt (R-WA) and Jeff Flake (R-AZ).
However, not everyone is thrilled with Kirby Jones and his upcoming conference.
John Kavulich, president of the older and more established U.S.-Cuba Trade & Economic Council, has warned his corporate members to exercise caution before jumping on a plane to Cancún and Havana.
“Serious questions must be raised when principals of a not-for-profit organization are seeking to capitalize on tax-exempt status for personal gain,” Kavulich told CubaNews.
A recent two-page advisory published in Kavulich’s newsletter, Economic Eye on Cuba, claims “the organizers are marketing the conference as seeking to include members of Congress. Thus, the conference has a pro-active political component, which seems unnecessary and perhaps detrimental to maintaining a commercial focus.”
Kavulich lists five “points of concern” with relation to the February event, among them “the belated disclosure in October 2002 by the organizers that in August 2002, the Office of Foreign Assets Control (OFAC) of the U.S. Treasury Department had denied authorization by the organizers to use a license issued by OFAC to a not-for-profit organization identified as a sponsor of the conference.”
Kavulich also complains that a Washington law firm — presumed to be Patton Boggs, though he doesn’t identify it by name — “permitted a letter dated Jun. 26, 2002, certifying that the conference was in compliance with OFAC regulations, to remain in use for marketing purposes through Oct. 29, when a new letter was published. The belated disclosure of material changes to the conference should be viewed as issues of veracity.”
Yet Jones says he’s done nothing wrong.
“We were originally going to have it all in Havana. But Treasury ruled that we couldn’t do that, so we published a new brochure and explained it very openly,” he said. “There was no secret. We tell people the U.S. government reinterprented the license. There’s nothing illegal about what we’re doing.”
In fact, a colorful, 8-page brochure advertising the meeting does explain the change of plans, and even warns would-be participants that “as this is a fully hosted day in Havana, please note that no items may be purchased when in Cuba.” It says that OFAC’s Cuban Asset Control Regulations, 31 CFR Section 515.420, specifically prohibit fully hosted participants from spending U.S. dollars in Cuba.
Jones said the Cuban host committee includes Havana consulting firm CONAS, the Center for Investment Promotion (CPI) and CIMEX, the island’s biggest holding firm and operators of most of Cuba’s food outlets.
“There’s nothing illegal about what we’re doing,” he insists. “OFAC specifically allows for fully hosted travel to Cuba. It is legal to do that, and that’s why we’re doing it that way.”
Daniel Waltz is an attorney with Patton Boggs, which provides legal counsel to the U.S.-Cuba Trade Association. He insists that his client’s activities are kosher.
“OFAC’s Cuba regulations are clear in stating that persons subject to the jurisdiction of the U.S. will not be considered to violate the regulations if a person not subject to jurisdiction of the United States covers the cost of all travel-related transactions in Cuba,” he explained. “That’s the way this one-day stop in Cuba is being organized. A Cuban host committee will cover those costs. Travel by participants in the conference will be lawful.”
The February conference is the third such gathering between U.S. business executives and Cuban officials. The first was the U.S.-Cuba Business Conference in Cancún a year ago, also organized by Jones. The second was the U.S. Food & Agribusiness Exhibition, held Sept. 26-30 in Havana; that event was organized by Peter W. Nathan of PWN Exhibicon, with considerable help from Kavulich.
At that meeting, Cuba signed over $85 million in business contracts and secured letters of intent for another $28 million in sales.
Joseph Green, a Miami-based executive of Caterpillar, says his company’s sponsorship of the February event is in line with its long-standing opposition to the U.S. embargo.
“Unilateral trade sanctions are not effecive, and we’re hoping to bring about a change,” Green told CubaNews. “We understand what the law is today, and we certainly wouldn’t do anything to jeopardize Caterpillar’s position. But the fact is that a number of our competitors around the world, including Komatsu and Volvo, are all selling new machines to Cuba.”
The $1,500 registration fee, which rises to $2,000 after Jan. 15, doesn’t include lodging at the official conference venue, the Westin Reg-ina Resort in Cancún ($135 a night). Nor does it include $390 that participants must pay for round-trip airfare between Cancún and Havana. Conference officials say they’ll charter a Mexican rather than a Cuban airline in order to avoid violating OFAC rules.
It’s unclear how much the one-day jaunt to Havana is costing their Cuban hosts, but Jones says it won’t exactly enrich the Castro government. “We’re arriving in the morning. we have buses, a lunch, a meeting hall, a dinner and that’s it. If we were going for a week, that’s one thing. But this is less than 12 hours. We’re talking about very little money here.”
Even if it’s all legal and above-board, Kavulich still says American executives who attend the Cancún meeting are probably wasting their time and money.
“Generally, there is no reason for a U.S. company seeking to market to Cuba products authorized by the Bureau of Industry and Security (of the U.S. Commerce Department) to visit Cuba on a fully hosted basis, as licenses are available from OFAC,” he said. Attorney Waltz he’s puzzled why Kavulich is so upset about his client’s event.
“It’s striking to me that an organization whose focus is advising U.S. businesses with respect to Cuba would be so eager to criticize others who seek to perform the same service,” he said. “I know that Kavulich issued a similar advisory last year recommending that his members not attend the conference in Cancún. To my knowledge, all the participants in that conference were delighted with the substance of what they learned.”