Thursday, March 19, 2009

Bipartisan Senate group take aim at Cuba embargo provisions

Daily Kos

by kos

Wed Mar 18, 2009 at 02:22:03 PM PDT

Remember Jersey Sen. Bob Menendez's quixotic stand on behalf of regressive Cuba sanctions a few weeks ago?

There he was, Senator Bob Menendez, Democrat of New Jersey, holding forth from the well of the Senate making his Alamo stand against some very innocuous provisions to allow Cuban-American family members travel to Cuba and for American agricultural producers to carry out the business they already do with Cuba more efficiently during a time of economic recession.

Most analysts I speak with say this was a picture of a man trying to put his finger in a dike, knowing it was about to burst. Senator Menendez is, you see, the highest ranking Cuban American in Congress and, with the Diaz-Balart brothers and Rep. Lehtinen in the minority, the last hope for defending the embargo against Cuba in the 111th Congress.

The dike metaphor is apt. Obama ran on rethinking Cuba policy, and won Florida. The Cuban-American community is itself split between the geezers still clinging to a generations-long failed embargo policy, and the younger crowd eager for change. Respected foreign policy experts are eager for a more rational Cuba policy, including Republicans like Dick Lugar. And farm state legislators from both parties are eager to open up a new market for their farmers' goods.

In other words, the embargo is not long for the world, with proponents dwindling in size and relegated mostly to the minority. Hence, Menendez's last stand, protesting a technical change in the definition of "cash-based sales" of medical and agricultural goods to Cuba that the Bush Administration had implemented to effectively block such sales to the island. Menendez dropped his efforts to hold up the Omnibus after he was promised that the Bush-era definition would remain.

A bipartisan group of Senators, writing Treasury Secretary Timothy Geithner, is now demanding that Treasury tear up any such deal with Menendez and adhere to the letter of the law:

The Trade Sanctions Reform and Export Enhancement Act (TSRA) of 2000 authorized agricultural exports to Cuba by payment of cash in advance or third‐country bank letters of credit. For several years, until early 2005, such cash‐based sales were taking place and working well. After goods shipped from U.S. ports, the Cuban buyers initiated payments, routing them through third‐country banks, as required by the law. There were no reported instances in which a Cuban buyer took possession of U.S. goods prior to completing payment to the U.S. seller, a fact acknowledged by the Treasury Department during the confirmation hearing of Deputy Secretary Kimmitt in July 2005.

Despite this fact, [the Office of Foreign Assets Control] issued a rule in February 2005 that defined "payment of cash in advance" as payment prior to shipment of goods. The change in definition has brought all cashbased sales to a halt, rendering the cash in advance provision useless and undermining Congress’s intent to facilitate agriculture sales to Cuba. Your March 5, 2009 letter stated that OFAC will continue to use this definition. This is contrary to the intention of the provisions included in the Omnibus legislation to halt this use.

I'm less interested in this accounting dispute than the politics of the letter. Notice, the Cuban hardliners flex their muscle with their remaining influential member (Menendez is in the Democratic leadership as chair of the DSCC), and rather than cower from their offensive, the response is swift, fierce, and from a bipartisan coalition that spans the political spectrum. The letter above, which is reproduced in full under the fold, was signed by:

Baucus (D-MT)
Bingaman (D-NM)
Bond (R-MO)
Cantwell (D-WA)
Crapo (R-ID)
Enzi (R-WY)
Harkin (D-IA)
Johnson (D-SD)
Landrieu (D-LA)
Lincoln (D-AR)
Lugar (R-IN)
Murray (D-WA)
Pryor (D-AR)
Roberts (R-KS)
Tester (D-MT)

It's not every day that you get Murray and Harkin on the same page with the likes of Enzi and Crapo. Baucus is a key force on the issue, chairman of the Finance Department which would likely have a big role in killing off the embargo, as well as Dick Lugar, the ranking member of the Foreign Relations committee and perhaps the most respected foreign policy voice in the entire Senate.

As the folks at the Havana Note (a project of the New America Foundation) write:

The 2008 presidential election showed that the Cuban American community in South Florida no longer has a lock on Florida's electoral vote, liberating the president from having to continue a policy of isolation that makes no sense for America. This letter, and its strong showing of support in the Senate, reveals that the Congressional control that pro-embargo members had is crumbling around them [...]

The new reality is that there is no political obstacle to a decisive shift on U.S. Cuba policy. Not in Florida and not on Capitol Hill. Now the question is about political will in the White House.

March 16, 2009
Secretary Timothy F. Geithner
Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, D.C. 20220
Dear Secretary Geithner,

We are concerned by a March 11 Office of Foreign Assets Control (OFAC) notice outlining its
planned implementation of provisions passed in the Omnibus Appropriations Act of 2009. The intent of those provisions was to facilitate already legal agricultural trade with Cuba.

The Trade Sanctions Reform and Export Enhancement Act (TSRA) of 2000 authorized agricultural
exports to Cuba by payment of cash in advance or third‐country bank letters of credit. For several years, until early 2005, such cash‐based sales were taking place and working well. After
goods shipped from U.S. ports, the Cuban buyers initiated payments, routing them through third‐country banks, as required by the law. There were no reported instances in which a Cuban buyer took possession of U.S. goods prior to completing payment to the U.S. seller, a fact acknowledged by the Treasury Department during the confirmation hearing of Deputy Secretary Kimmitt in July 2005.

Despite this fact, OFAC issued a rule in February 2005 that defined "payment of cash in advance" as payment prior to shipment of goods. The change in definition has brought all cash based sales to a halt, rendering the cash in advance provision useless and undermining Congress’s intent to facilitate agriculture sales to Cuba. Your March 5, 2009 letter stated that OFAC will continue to use this definition. This is contrary to the intention of the provisions included in the Omnibus legislation to halt this use.

We are troubled to see OFAC continue this practice. Its March 11 notice mistakenly suggests that the "ordinary commercial meaning" of "cash in advance" requires payment prior to shipment of goods. Such an interpretation is legally inaccurate. The American Law Division of the Congressional Research Service has studied this issue in depth and concluded that, "[I]t would appear difficult to find legal support for OFAC’s interpretation that ‘payment of cash in advance’ requires payment be received prior to shipment. As a review of four traditional methods of payment indicates, it appears customary within the international trade and finance community to place the emphasis on the legal transfer of control, rather than on the date of shipment... OFAC’s interpretation appears to limit the available payment options to those that are considered risky, undesirable, and underutilized...."

In your Questions for the Record during consideration of your nomination earlier this year, you committed to "... taking great care to follow congressional intent and working closely with members of Congress to ensure that OFAC’s activities with regard to Cuba are achieving its important objectives without unnecessary hurdles or unreasonable administrative delays." We urge you to stand by that pledge.

We look forward to working closely with you on this matter.

Sincerely,

Senator Max Baucus
Senator Richard Lugar
Senator Jeff Bingaman
Senator Mike Enzi
Senator Tom Harkin
Senator Pat Roberts
Senator Blanche Lincoln
Senator Mike Crapo
Senator Jon Tester
Senator Kit Bond
Senator Patty Murray
Senator Mark Pryor
Senator Mary Landrieu
Senator Maria Cantwell
Senator Tim Johnson

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JG: U.S. Senator Robert Menendez, Democrat from corruption ridden New Jersey, is a bona-fide member of the "I-Hate-Cuba" crowd in the United States Senate. He is in bed with the three fascists Miami-Dade Republican Congressmen and woman. All four are fossils and they do not even realize that the country is leaving them behind to live in perpetual ignominy.

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