Friday, June 29, 2007

The Moran Amendment Debate

The Congresional Record, June 28,2007


Accordingly, the House resolved itself into the Committee of the Whole House on the State of the Union for the further consideration of the bill (H.R. 2829) making appropriations for financial services and general government for the fiscal year ending September 30, 2008, and for other purposes, with Mr. Hastings of Florida in the chair.

The Clerk read the title of the bill.

The CHAIRMAN. When the Committee of the Whole rose on the legislative day of Wednesday, June 27, 2007, a request for a recorded vote on the amendment by the gentleman from Indiana (Mr. Souder) had been postponed and the bill had been read through page 146, line 22.


Mr. MORAN of Kansas. Mr. Chairman, I offer an amendment.

The CHAIRMAN. The Clerk will designate the amendment.

The text of the amendment is as follows:

Amendment offered by Mr. Moran of Kansas:

Page 146, insert the following after line 22:


Sec. 901. None of the funds made available in this Act may be used to administer, implement, or enforce the amendment made to section 515.533 of title 31, Code of Federal Regulations, that was published in the Federal Register on February 25, 2005.

The CHAIRMAN. Pursuant to the order of the House of Wednesday, June 27, 2007, the gentleman from Kansas (Mr. Moran) and a Member opposed each will control 5 minutes.

The Chair recognizes the gentleman from Kansas.

Mr. MORAN of Kansas. Mr. Chairman, I have an amendment today that I would like the Committee to consider, which is a prohibition against the expenditure of funds.

In the year 2000, this Congress passed legislation that altered our trading relationship with Cuba . That legislation, the Trade Sanctions Reform Act of 2000, was put in place that would allow for the sale of agricultural commodities, food, and medicine to Cuba for cash in advance. That legislation was signed into law and was operational; and from that period of time, we have sold nearly $1.5 billion of agriculture commodities, food, and medicine to Cuba for cash in advance.

In the year 2005, the administration published a final rule clarifying the definition of cash payments in advance; and by that rule, it disrupted the sale of agriculture commodities, food, and medicine to Cuba . The change being that rather than payments in advance at the time the goods were delivered, the commodities were delivered in Cuba , the administration's rule requires that the payment be made before the commodities leave a United States port, a matter of days or weeks by advancing the payment.

This is contrary to our normal trading relationships, the norms within the international community, and has been disruptive and is an indication of our unwillingness to be a reliable provider of agriculture commodities to Cuba .

This amendment that I offer today prohibits the funding of the implementation or the enforcement of that rule promulgated by the administration in the year 2005, and so it would return us to the days following the passage of the original legislation, the Trade Sanctions Reform Act of 2000, that would once again say that cash in advance is payment when the commodity arrives in port in Cuba . And this change in rules has had an effect upon our ability of American farmers and agriculture producers to supply, to sell, for cash the things we produce in this country, a detrimental effect upon the farm economy. It is estimated that exports fell approximately 10 percent in value from 2004 to 2005. Wheat, which is important in my home State of Kansas, was decreased by 18 percent; rice by 38 percent; cotton by 87 percent; lumber by 100 percent; dairy products by 55 percent; seafood by 100 percent; course grains by 74 percent; and poultry decreased by 27 percent. And the goal is to try to restore those markets, once again be a more reliable supplier of food to the Cuban people, and to make certain that American agriculture is not harmed by our policy or is harmed less by our policy.

These are unilateral sanctions, Mr. Chairman, as you know. And unilateral sanctions are probably not effective in and of themselves when it is only the United States that fails to trade with Cuba . So, again, a rather modest modification in our policy, changing it to the days of the policies enacted by Congress before the administration changed the rules.

Mr. Chairman, I reserve the balance of my time.

Mr. LINCOLN DIAZ-BALART of Florida. Mr. Chairman, I rise to claim the time in opposition to the amendment.

The CHAIRMAN. The gentleman is recognized for 5 minutes.

Mr. LINCOLN DIAZ-BALART of Florida. Mr. Chairman and colleagues, this OFAC, Office of Foreign Assets Control, regulation clarifying the Trade Sanctions Reform and Export Enhancement Act of 2000, this regulation that the amendment before us seeks to prohibit enforcement of, stemmed from requests by U.S. financial institutions that were becoming concerned by the increasingly slow rate of payment for agricultural sales by the Cuban regime. The financial institutions requested OFAC to clarify the legislative intent of cash in advance, which is in the law, in order to protect the interests of those financial institutions on their claims.

The Cuban regime's entity in charge of agricultural purchases has an abysmal record of not paying its creditors and has been known to extort or seek to extort agricultural associations in order to increase the regime's lobbying pressure in favor of the unconditional lifting of sanctions, which is sought by the regime. The regime promises more agriculture purchases if agriculture interests lobby Congress for what the regime seeks, an end to sanctions. In effect, the opening of mass U.S. tourism and trade finance.

Currently, Mr. Chairman, the Cuban regime's foreign debt represents close to 800 percent of its GDP, and it is ranked by international credit agencies as the second worst, if not the worst, credit risk in the world. Countries throughout the world are taking extreme measures to obtain restitution for billions of dollars they are owed, which the Cuban regime refuses to pay.

In one example, a 15,000-ton Cuban regime-owned ship was held in the port of Conakry in Guinea, while a Canadian company armed with legal judgments pursued partial payment for the Cuban Government's defaulted debt.

And those are the types of actions, Mr. Chairman, that U.S. companies and ultimately U.S. taxpayers would inevitably have to resort to if Congress were to authorize credit for sales to the Cuban regime. The Congress, Mr. Chairman, must not allow the American taxpayer to become another victim of the Cuban regime's nonpayment to its creditors.

Mr. Chairman, I reserve the balance of my time.

Mr. MORAN of Kansas. Mr. Chairman, again I would point out that this amendment today does not change the law and that all sales to Cuba must be for cash in advance. There is no agricultural credit through the United States Government that can be offered to Cuba to assist in the sale of purchases by Cuba nor can any U.S. financial institution be engaged in the activity leading up to the sale of these commodities to Cuba .

So we do not change the law. It is simply a matter of definition. And at least in my estimation, the definition was changed for purposes of making those sales less likely to Cuba , thereby harming farmers, ranchers, and producers across the United States.

Mr. Chairman, I reserve the balance of my time.

Mr. LINCOLN DIAZ-BALART of Florida. Mr. Chairman, I would ask my friend from Kansas if he has any further speakers.

Mr. MORAN of Kansas. I have no further speakers.

Mr. SERRANO. Mr. Chairman, I move to strike the last word.

I rise in strong support of the gentleman's amendment. And under different circumstances, I would simply say I accept it and that would be the end of it, but that is not going to be the end of it.

I rise in support because I think there are a couple of things we have to know and we have to remember. First of all, there is a law in place since 2000, the Trade Sanctions Reform and Export Enhancement Act, which allowed agricultural products to be sold to Cuba .

Now, here is where the irony comes in. In 2005 the Treasury Department issued regulations requiring that the payments for exports to Cuba must be either received by the U.S. exporter or by a third-country bank prior to the goods leaving the port in the United States rather than upon arrival in Cuba . Now, that is the only country we do that with.

Now, what is the irony here? The part of the argument that has always been made is that we should work in this Congress to help or to force Cuba into a political change, a political change which would mirror our democratic system, our electoral process, and also, I am sure, our capitalist system. Well, the irony of this is that it is capitalism at its best to allow credit to take place between two nations. It is anti-capitalism to suggest that the only way that we can sell products to you is if you pay ahead of time prior to looking at the product. I mean, we wouldn't do that. Picture going into a store and their saying you can't look at the product, you can't test the product, you can't do anything: you have to pay ahead of time.

So there is a contradiction here that doesn't make sense. What the gentleman wants to do is simply put Cuba on par with every other country.

Now, if we were here for the first time, as we were in 2000, creating a new way to trade with Cuba , then all these arguments, I think, would be in place, whether we want to do that or not, what kind of government they have. But we already have that in place. We already have that in place. And we should note that the reason we have this in place is not because anti-embargo people like me ruled the day in 2000, it's because farmers in this country and business people in this country, but especially the farming community, felt that it was important for American business to be able to sell some products to Cuba . That has not changed our political stance on Cuba . Cuba still has an embargo imposed by the U.S. We still do not have relations with Cuba . Nothing has really changed since 2000 except the ability to sell products.

Now the gentleman wants to put Cuba on an even keel with the rest of the world. I think it's a proper way to go. I think it's good for our business community. I think it's good for trade with Cuba . And I support the gentleman's amendment.

I will be asking Members on this side and on both sides to vote for his amendment if it comes to a vote.

Mr. Chairman, I yield back the balance of my time.

Mr. MORAN of Kansas. I would ask the gentleman from Florida if he has additional speakers or wishes to allow me to close.

Mr. LINCOLN DIAZ-BALART of Florida. I would inquire of the chairman as to how much time I have remaining.

The CHAIRMAN. The gentleman from Florida has 2 minutes remaining. The gentleman from Kansas has 45 seconds.

Mr. LINCOLN DIAZ-BALART of Florida. Mr. Chairman, I would simply reiterate that this clarifying regulation by OFAC stems from concerns and requests of U.S. financial institutions that were concerned because of a pattern they were noticing of delays in payment. So this regulation is precisely to carry out the legislation and implement the legislation of the year 2000 as, again, is a consequence and pursuant to the request of U.S. financial institutions that sought protection, and through clarification.

So with that in mind, I oppose the amendment by the gentleman from Kansas.

Mr. Chairman, I yield back the balance of my time.

The CHAIRMAN. The gentleman from Kansas is recognized for 45 seconds.

Mr. MORAN of Kansas. Mr. Chairman, thank you for your courtesies.

Again, I would ask for adoption of this amendment. I offered the amendment on the House floor in July of 2000 that ultimately resulted in the passage of the Trade Sanctions Reform Act.

I admit that I came here in support of farmers in Kansas who thought it was useful to them and beneficial to them economically to be able to sell to Cuba . And over time, I have tried to examine this issue, and it has become something broader. I think there is a greater benefit in the efforts to change the nature of Cuba and to enhance the opportunities that Cubans have for greater personal freedom by an economic relationship between our two countries.

And so, although it was initially an economic issue with me and it remains important to the agriculture community, I think it also benefits the opportunity that we can enhance Cubans for greater freedom and personal liberty within their own country.

Mr. Chairman, I yield back the balance of my time.

The CHAIRMAN. The question is on the amendment offered by the gentleman from Kansas (Mr. Moran).

The amendment was agreed to.

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