Tuesday, July 31, 2018

ASCE 2018 Conference: Summary of Ernesto Betancourt Keynote Address delivered by Mark Sullivan, Congressional Research Service, Library of Congress



Another highlight of the 2018 Conference of the Association for the Study of the Cuba Economy is the Ernesto Betancourt Keynote Address. The 2018 Address was delivered by Mark Sullivan, Congressional Research Service, Library of Congress. Entitled "The Role of Congress in U.S. Policy toward Cuba," the lecture provided a fascinating overview of the interplay between the executive and legislative branches in formulating and implementing U.S. Cuba policy. The Address provided a equally fascinating look at the legal structures of the Cuban embargo from a Congressional perspective and suggested the extent to which Congress might have broad authority to constrain the foreign affairs authority of the president. In addition, the speech provided a context for considering possible new U.S. initiatives in shaping the U.S. side of U.S.-Cuba relationship.
 
This post includes a brief summary of the remarks of Mr. Sullivan's remarks (with links to key documents mentioned in the remarks). Much food for thought.

ACSE 2018 coverage: 

Conference Program HERE.

ASCE 2018 Presentation Summary: "The Challenge of Preserving the Revolutionary Moment in Changing Times--Cuba's Integration into the Global Economy "

ASCE 2018 Conference: Summary of Carlos Díaz-Alejandro Lecture, "Identity, Pluralism, and Democracy," delivered by Andrés Velasco, Former Finance Minister of Chile

 ASCE 2018: Summary of Opening Plenary "Cuban Economic and Political Situation" / Resumen del Plenario de Apertura "Situación Económica y Política de Cuba"

"Cuba After Raúl?" Program of the 28th Annual Meeting of the Association for the Study of the Cuban Economy, Miami, Florida 26-28 July/La Asociación para el Estudio de la Economía Cubana (ASCE) realizará su XXVIII conferencia anual titulada Cuba: Después de Raúl?
 ASCE 2018 Conference: Summary of Ernesto Betancourt Keynote Address delivered by Mark Sullivan, Congressional Research Service, Library of Congress



Mr. Sullivan focused his remarks on the role that Congress plays in U.S. policy toward Cuba. He wished to concentrate especially on the policy changes first undertaken during the Obama administration and thereafter the changes that has occurred through the first years of the Trump administration. In that context he emphasized that the transition from the Obama to the Trump administration was marked as much by continuity in the security area, for example, as it was marked by change in other areas.  He intended to end his discussion with a brief look at the legislative activity on Cuba in the current Congress and then a look ahead.

Mr. Sullivan started with a brief reminder of the important role that Congress has played in forming and managing U.-S. Cuban relations in its current form since the 1960's.  He reminded the audience of the initial Congressional intervention in the form of the Foreign Assistance Act of 1961, which gave the President the authority to impose a trade embargo on Cuba (Act § 620). 1961 had seen the severing of relations as well as the ill fated Bay of Pigs invasion. The trade embargo was declared by President Kennedy in 1962.  President Kennedy expanded the legal authority of the embargo under the Trading With the Enemy Act of 1917 (authorizing the President to prohibit, limit, or regulate trade and financial transactions during times of war or national emergency). The Embargo was broadened again in 1963 to include prohibitions on financial transactions with Cuba with the issuance by the Treasury Department of the Cuban Assets Control Regulations (CACR). CACR  also required the licensing of all Cuban exports by the Commerce Department.  The CACR regulatory framework of course remains the principal body of embargo regulations, now amended many times since its first enactment. 

The next significant activity occurred over a decade later in the context of a larger policy initiative of the United States that focused on the fight against global terror organizations and the states that sponsored them. Among the most significant legislative enactments of that time was the Export Administration Act of 1979, which with the Foreign Assistance Act, and the Arms Export Control Act permitted action against state sponsors of terror.  In 1982, the Reagan administration relied on these statutes to designate Cuba as a country that supported international terrorism, citing Cuba's long time support for insurgent groups in Latin America. As a consequence, Cuba became subject to the anti-terrorism sanctions restrictions of the Export Administration Regulations (EAR). 

Again, about a decade later Congress again acted. During the 1990s, three of the most well known legislative acts were passed that round out the legislative structuring of the Cuban Embargo and related policy directed toward Cuba. These were passed in the aftermath of the collapse of the Soviet Union and in the expectation that Soviet style political systems were all on the verge of collapse. These set the template for U.S. policy and continue to substantially guide (and constrain) U.S. administrations in their dealing with Cuba. Beyond these three principal regulatory measures, COngress has enacted numerous other provisions over the years imposing additional sanctions on Cuba.  These include restrictions on foreign aid, on support for international financial institutions (e.g., World Bank and IMF), and on trade, including the denial of nondiscriminatory trade treatment.  And of course, Congress has ensured a prohibition on the importation of Cuban sugar (though U.S. restrictions on sugar imports predated the 1959 Revolution).  

The first, the Cuban Democracy Act of 1992, included both sanctions against the state and measures for the support of the Cuban people. That bifurcation now marked the fundamental policy approach of Congress--a strong anti-institutional sanctions regimes coupled with efforts to foster direct invention with the Cuban people not connected to the state or PCC apparatus. Indeed, the phrase "for the benefit of the Cuban people" now enters the legal lexicon as a term of art and as a means of legislative management of executive action with respect to Cuba.  Within this calibration, U.S. foreign subsidiaries were prohibited from engaging in transactions with Cuba, but medical exports to Cuba were permitted (subject to verification that the medical products were used only for the benefit of the Cuban people. Likewise, unless specifically licensed in conformity with Treasury Department regulations, the loading or unloading of freight was prohibited from ships involved in Cuban trade within the prior half year. This restriction was effectively waived in 2016 through the issuance of a general license for ships carrying low tech consumer goods (and thus a further calibration of the "for the benefit of the Cuban people" principle of the Embargo).

The second was the Cuban Liberty and Demnocratic Solidarity Act of 1996 (the so-called "Libertad Act" or Helms-Burton Act). This enactment further projected Congressional preferences onto U.S. Cuba policy in ways that substantially restricted Presidential discretion (without Congressional approval).  It was enacted in the aftermath of the shooting down aircraft operated by the NGO Brothers to the Rescue in February 1996, which caused both a political scandal in the United States and ended any hope of what had been tentative moved toward normalization during the early Clinton administration.  It represents the legislation of U.S. foreign policy objectives for Cuba by elaborating measures that are designed to increase pressure on the Cuban state and make aid available only after what is under the terms of the act determined to be a transition to democracy.  It codified the Cuban Embargo into law including most of the CACR restrictions (eliminating substantial amounts of administrative discretion in that respect). The executive branch is now effectively prohibited from lifting the economic embargo without congressional concurrence through legislation (a reality that proved quite potent twenty years later as the Obama administration sought to move toward normalization) or until the democratic conditions set out in the statute are met.  The President, however, retains broad authority to amend the relevant regulations to the extent that the authorizing legislation continues to permit.  An important addition was Title III of the Act which provides that any person trafficking in U.S. property confiscated by the Cuban state will be liable for damages in federal court, subject however to a power of the President to waive its provisions.  Every administration since its enactment have suspended the implementation of Title III at six month intervals, most recently in June 2018.

The third was the Trade Sanctions Reform, and Export Enhancement Act of 2000. TSRA authorized agricultural exports to Cuba.  However, such trade must be done effectively on a cash basis (requiring payment of cash in advance or third country financing for agricultural exports). While it opened agricultural trade, TSRA also further restricted tourist travel to Cuba except within narrowly defined grounds (TSRA § 7209(b)). TSRA has been amended since its enactment and is not targeted specifically to Cuba  (e.g., 66 FR 36683-01 - Exports of agricultural products, medicines, and medical devices to Cuba, Sudan, Libya, and Iran).

Having outlined the fairly comprehensive scope of legislative intervention in and the shaping of U.S. Cuba policy, Mr. Sullivan then considered Cuba policy changes under the Obama and Trump Administrations.

Mr. Sullivan described the Obama administration Cuba policy as a combination of continuity and change during the first six years of that administration. The Obama administration largely continued the core U.S. dual track policy--economic sanctions against the state aimed at isolating Cuba combined with support for the Cuban people. Support measures for the Cuban people included U.S. funding for human rights activists and democracy building NGOs, government sponsored radio and television broadcasting beamed into Cuba, and authorization of private humanitarian donations to Cuba. In this respect thew administration treated medical exports under the Cuban Democracy Act and agricultural exports under TSRA as support measures for the Cuban people., along with cash remittances to Cuba. But those actions resulted in sometimes intense congressional debate, though no legislative action.

Mr. Sullivan also noted that the Obama administration appeared to focus more on the support of the Cuban people part of the dual track policy than on the sanctions part. In 2009, Mr. Obama lifted restrictions on family travel and remittances, though Mr. Sullivan noted that these changes did not occur until a month after Congress enacted legislation with provisions easing restrictions on family travel and travel to market and sell agricultural products in Cuba. That Congressional action was significant as one of the first legislative initiatives that appeared to ease rather than strengthen sanctions. In any case, the administration's actions wen much farther than the Congressional action. In addition, in 2011 the Obama administration restored a broader scope of permissible travel to Cuba (including people to people educational travel and further easing restrictions on remittances.

Yet  all of this paled in comparison to the push toward normalization that marked Obama administration policy after December 2014. Mr. Sullivan noted that this policy shift contained three parts.  The first policy change was a review of Cuba's designation as a state sponsor of terrorism.  This ultimately lead to the production of a presidential report to Congress and a rescission of Cuba's state sponsor designation in  2015. What was interesting, Mr. Sullivan noted, was that at the time no Members or Senators introduced resolutions of disapproval to block rescission, which would have been permitted. The second policy change was the restoration of diplomatic relations that occurred in July 2015.  The resulting increase in government to government contact produced numerous agreements over the next 18 months. This happened despite the fact that there were several unsuccessful efforts originating in the U.S. House of Representatives through State Department authorization bills to prevent the expansion of a U.S. diplomatic presence in Cuba.  The third and likely the most profound policy change was the effort by the Obama administration to ease U.S: economic sanctions in order to increase travel, commerce and the flow of information to and from Cuba. These required changes to U.S. embargo regulations administered by both Treasury and Commerce Departments.  Again, there were unsuccessful efforts by Members of the U.S. House to roll back some of these administrative changes and introduce new sanctions. But these changes could not exceed the scope of Presidential authority constrained by the statutory frameworks enacted since the 1960s and described above. These Congressional restrictions remained in place at the start of the Trump Administration.

Mr. Sullivan noted that the Trump administration announced its Cuba policy in July 2017.  The policy leaves most of the Obama administration changes in place, though it sought to roll back some of the efforts to normalize relations.  The roll backs touched on travel and introduced new sanctions on financial transactions with companies controlled by the Cuban military and required the publication of a prohibited persons and institutions list consisting of about 180 entities controlled by the Cuban military, intelligence or security services, with which direct transactions were now prohibited. Mr. Sullivan  described the scope and trajectory of these regulations (I describe these here). Mr. Sullivan noted that it was important to recall that the Trump Administration approach was similar  to provisions in legislation introduced but not acted upon in both houses during the 114th Congress. They were also similar to House Financial Services appropriation bills introduced during the 2016 and 2017 fiscal years but ultimately dropped.

Despite these revisions, Mr. Sullivan noted that the Trump administration also continued cooperation with Cuba in the area of security. U.S. - Cuba security cooperation, Mr. Sullivan noted, had been operational for a number of years and under several prior administrations. These continued undisturbed even during times of very strained U.S.-Cuba relations.  Cooperation relating to migration started in 1995 under the terms of a migration accord, in which the U.S. Coast Guard took the lead on the U.S. side. In 1996, the same year as the Cuban shooting down of the Brothers to the Rescue plane, the U.S. and Cuba cooperated in anti-drug efforts producing substantial narcotics seizures. In 1999, U.S. and Cuban official met to continue and augment anti-drug cooperation, as a result of which Coast Guard specialists were permitted in the U.S. Interest Section and communication increased. The Coast Guard role expanded to other areas of security and law enforcement over the years. Normalization brought intensified bilateral cooperation on other security areas and agreements were signed relating to narcotics interdiction, oil spills, law enforcement and search and rescue.

The Trump administration has not rolled these back. Mr. Sullivan noted that the President's National Security Presidential Memorandum on Cuba identified "protecting national security" as one of several interests to be advanced in relations with Cuba. Bilateral dialogue continues on migration, the most recent of which occurred in July 2018. Other issues taken up include cyber security and cyber crime, counter-narcotics policies, ant-money laundering initiatives, counter terrorism, trafficking in people, search and rescue policy, and other law enforcement matters.  Mr. Sullivan noted the State Department's June 2018 Trafficking in Persons Report [pp. 156-158] discussed positive efforts between U.S. and Cuban authorities along with challenges. Similar cooperation marks migration policies.  Mr. Sullivan noted that this cooperation is to some extent remarkable  given the political rhetoric on Cuba during the presidential election of 2016 and surrounding the President's new Cuba policy announcement the year after.  Engagement continues despite the downsizing of U.S: diplomatic presence in Cuba since October 2018 [my discussion here]; now much of it takes place in the U.S.

Mr. Sullivan also noted that the outlook for security related cooperation is good given the track record to date. However, this assessment might change over the next 2 years or so  if the overall tenor of U.S:-Cuba relations deteriorates or if the Trump administration decides to impose significant new economic sanctions.  The sense, at the moment, though, is that both states continue to believe that it is in their respective best interests to maintain at least current levels of engagement.  It also does not appear to Mr. Sullivan that Congress will attempt to curb or impede this level of cooperation, despite efforts in 2015 and 2017.  He noted as well that to date no provisions have appeared in the FY 2018 or FY 2019 defense appropriation legislation.

Mr. Sullivan then considered Cuba related legislative action in the 115th Congress, which concludes in 2018. As in past Congresses, debate about Cuba continues, especially with respect to economic sanctions. There have been numerous freestanding bills introduced that seek to ease or lift sanctions, and several bills in the House appropriation bills that would tighten or introduce new sanctions. However, the 115th Congress has rejected  efforts to cut funding for democracy and human rights based efforts; providing $20 million in each of FY 2017 and 2018.  For FY 2019 Congress continued its support even in the face of Trump Administration reluctance.  A current appropriations bill would provide $30 million, triple the request of the Trump Administration, for Cuba democracy funding. Current Senate bills would provide $15 million. Congress continues to fund Cuban broadcasting at similar levels to prior years.  Again appropriations exceed Trump administration requests.  Funding for FY 2017 and 2018 were $28 and $29 million; the Trump administration requested $13.7 million for FY 2019 for Cuban broadcasting. However, House and Senate bills for FY 2019 continue funding at $29 million.  On the other hand, to date the FY 2019 appropriations bill appears again to pit the House (with measures to tighten sanctions against Cuba) against the Senate (whose bills do not).  These differences will be resolved in Conference.

Mr. Sullivan also noted two pending broader bills with Cuba provisions.  The first is a Senate passed version of the 2018 Farm Bill that would permit funding for certain U.S. export promotion programs for agriculture products in Cuba--the Market Access Program and Foreign Market Development Cooperation Program. This would effectively take Cuba off the List of Restricted Countries - Prohibition of U.S. Assistance and Financing (Effective 06/06/2018). This would indicate Congressional willingness to consider easing of sanctions at least with respect to the agricultural sector. The other centers  on a conference report to the FY2019 National Defense Authorization Act which contains a provision requiring the Defense Intelligence Agency to report on security cooperation between the Russian Federation and Cuba.  This, according to Mr. Sullivan, reflects growing congressional concern about Russian Western Hemisphere activities.

In general, however, Mr. Sullivan explained that Congress continues to be split about Cuba.  Some Members strongly supported the Obama Administration's policies while others were strongly opposed but could do nothing legislatively. The same applied to the Trump Administration policy.  To date and currently, Congress has not been able to reach agreement strong enough to produce legislation; as a consequence domination of Cuba policy has shifted back to the President. Generally, though, over the past several years, the Senate appears to be at the center of sentiment to ease sanctions, while the House is at the center of efforts to strengthen sanctions. This can change, however, with the upcoming elections, though in what direction remains unclear. Still, currently there appears to be some pressure form Congress on the Trump administration to strengthen sanctions.  Worth noting would be for broader legislation targeting Cuban officials responsible for significant human rights abuses, corruption, or undermining democratic processes either in Cuba or Venezuela. [This would touch on the use of the Global Magnitsky Act more aggressively perhaps].

Despite these possibilities, Mr. Sullivan did not expect much legislative action on Cuba before the next elections.  In the next Congress, beginning January 2019, there might be action depending on changes in party control of either house. Mr. Sullivan thought that one of the sanctions that night receive significant Congressional support would be lifting prohibitions against private commercial financing of agricultural exports.  However, chances for broader legislation to ease or lift sanctions under the current Administration are unlikely. Looking forward down the line, Mr. Sullivan observed that it is important to remember that Congress continues to play a key role in U.S. sanctions based policy toward Cuba.  Unless Cuba adopts a democratic system of governance, congressional action would be needed to lift sanctions if policymakers ever wish to fully normalize relations between the two countries.

 Mark Sullivan is a specialist in Latin American affairs with the Congressional Research Service (CRS) of the Library of Congress, where he provides support to Members and committees of Congress for their legislative and oversight work on Latin America. He has covered a variety of countries and issues in US. relations with Latin America and the Caribbean.His academic publications have included book chapters on Operation Just Cause in Panama, US.-Venezuelan relations, and other countries. He also co-authored a 2005 study of US. policies, laws, and regulations related to Cuba that was published by the Atlantic Council.

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