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From almost the start of the defeat of the Batista dictatorship in 1959 to the present day, the Cuban state apparatus and its economic system appeared to be on the verge of collapse. It is an impossible and unsustainable system--in and of itself. But the dictates and behaviors of post global empire, even in its formative stages toward the end of the 20th century, suggested that Cuba was special. It was that territory that marked a convenient killing ground at the borderlands of empire--first between the liberal democratic and Soviet Empires, and then between the United States (and its dependencies) and China (and its). Lurking on the sidelines always were lesser states with ambitions--Venezuela, Turkey, Iran, Spain and the EU, and the like. Together the struggles and intrigues of these blocs almost always ensured that unsustainable Cuba would always be sustained. That sustaining might be only enough to keep the state from collapse--but the Cuban apparatus had trained a generation or more of Cubans to accept privation as a marker of their glory; and in any case the United States and others always had their doors open to dissidents and the surplus population for which states of deprivation would not be wholly satisfying enough.
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After the protests of 11 July 2021 and the worsening of conditions thereafter, it appeared again that the fundamental unsustainability of the Cuban model would at last claim its victim--like death finally run out of reasons to postpone the inevitable. The likelihood appeared to rise as Venezuelan oil imports became more difficult, Cuban infrastructure both collapsed and burned, and Cuba's already renegotiated debt again was effectively defaulted.
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But once again, Cuba remained more valuable alive as a failed but useful state of flux than one ripe for transformation as a failed experiment in what after 2008 became a sort of reactionary Caribbean Marxism. And that value was as important for the Chinese, Russians, and second tier group of American-wary states, as it now appears to be to the United States. And so the unsustainable continues to be sustained--not by its own efforts, but by the desires and interests of the great (and not so great) imperial regions intent on continuing to use Cuba for their own purposes. To those ends Cuban continues to deliver. Its greatest product, of course, is the invention and re-invention of itself to suit its clients--including its enemies. It is the great producer of illusion and a mirror on the affectations of the world expressed as ideology in its most refined that obscures its application in its home territories. Illusion, though, is of great value to those who seek to construct it as a simulation of the perfect manifestation of ideological principle.
First, On 26 November 2022 the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) announced the issuance of two Venezuela related General Licenses and related Frequently Asked Question revisions:
2. Venezuela-related General License 41, "Authorizing Certain Transactions Related to Chevron Corporation’s Joint Ventures in Venezuela".
3. Venezuela-related Frequently Asked Questions (FAQs 1098 and 1099).
It was reported that "Chevron Corp on Saturday received a U.S. license allowing the
second-largest U.S. oil company to expand its production in Venezuela
and bring the South American country's crude oil to the United States." (Chevron can resume key role in Venezuela's oil output, exports). Theoretically the license is meant to forclose the availability of cash from these operations to Petróleos de Venezuela, known as PDVSA (PDVSA.UL). But it is unclear how this will actually work. More importantly, any augmentation of Venezuelan productive capacity may in some way ease Cuba's own oil crisis. This is especially likely given the other near simultaneous event:the deals brokered with the current crop of Cuba's patrons. Here the exigencies of American domestic politics (inflation) and the consequences of sanctions based warfare opened an indirect path to the amelioration of the energy crisis in Cuba.
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Second, press organs reported that "China, Russia, Algeria and Turkey have pledged to restructure Cuba's debt, provide new trade and investment financing, and help ease an energy crisis, Cuban President Miguel Diaz-Canel told state-run media following a rare trip abroad last week." (Cuba says its allies have pledged help to end its economic crisis) None of this will "solve" the Cuban crisis. "Diaz-Canel said on Sunday that Algeria and Russia had agreed to provide some regular oil supplies on top of the reduced amounts arriving from ally Venezuela, but gave no figures. He said he had landed deals to fix decrepit power plants and finance the development of wind and solar energy." (Ibid). But then that has never been the point--certainly never since the 1980s. All that is necessary is to move back to a level of national privation that permits the Cuban state to repay its patrons with either the friendship or enmity they crave.
Taken together the measures may be enough to bring Cuba back to a level of privation sufficient to maintain the stability of the state. The operational unsustainability of the system itself becomes irrelevant--except to Cuban intellectuals, economists, and those who suggest the possibility of cure (either within or outside the Cuban Marxist-Leninist political-economic model). That is the key here--that solving the problem of systemic sustainability is not on the agenda; maintaining privation at a level that permits the maintenance of political stability is always on the agenda. To that end the Cuban state has refined the art of going begging, or better bartering Cuban services for donations sufficient to maintain the system well enough--and always with the promise of structural reform just over the horizon. It has world for over half a century. There are no incentives to move from this model. This is the world of Brecht's Three Penny Opera; it is the world of the King of the beggars, Mr. Peachum. And as long as the current state of Cuba provides value to those willing to contribute, this state of affairs will remain undisturbed at a fundamental level.
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The text of the OFAC Venezuelan FAQs (along with the text of general license 8K and 41) follow along with Reuters reporting on the temporary Cuban debt relief and structural aid.
No. Non-U.S. persons, including foreign financial institutions, generally do not risk exposure to U.S. sanctions for facilitating transactions or payments for or on behalf of, directly or indirectly, Chevron, its subsidiaries, joint ventures, or contractors that are authorized pursuant to Venezuela GL 41. Non-U.S. persons generally do not risk exposure to U.S. blocking sanctions under the Venezuela Sanctions Regulations, 31 CFR Part 591, for engaging in transactions with blocked persons, where those transactions would not require a specific license if engaged in by a U.S. person.
Yes, provided that such goods and services are for certain activities related to the operation and management of Chevron’s joint ventures in Venezuela, as specified in GL 41. Such activities include, among others, the production and lifting of petroleum or petroleum products produced by the Chevron’s JVs; related maintenance, repair, or servicing of the Chevron JVs; sale of petroleum or petroleum products to the United States produced by the Chevron JVs , provided that the petroleum and petroleum products produced by the Chevron JVs are first sold to Chevron; the procurement and import into Venezuela of goods or other inputs for authorized activities; and the processing of payments by U.S. financial institutions related to the foregoing activities. Please see GL 41 for a complete list of authorized activities and associated conditions.
DEPARTMENT OF THE TREASURY WASHINGTON, D.C.
OFFICE OF FOREIGN ASSETS CONTROL
Venezuela Sanctions Regulations 31 CFR part 591
GENERAL LICENSE NO. 8K
Authorizing Transactions Involving Petróleos de Venezuela, S.A. (PdVSA) Necessary for the Limited Maintenance of Essential Operations in Venezuela or the Wind Down of Operations in Venezuela for Certain Entities
(a) Except as provided in paragraphs (c) and (d) of this general license, all transactions and activities prohibited by Executive Order (E.O.) 13850 of November 1, 2018, as amended by E.O. 13857 of January 25, 2019, or E.O. 13884 of August 5, 2019, each as incorporated into the Venezuela Sanctions Regulations, 31 CFR part 591 (the VSR), that are ordinarily incident and necessary to the limited maintenance of essential operations, contracts, or other agreements, that: (i) are for safety or the preservation of assets in Venezuela; (ii) involve PdVSA or any entity in which PdVSA owns, directly or indirectly, a 50 percent or greater interest; and (iii) were in effect prior to July 26, 2019, are authorized through 12:01 a.m. eastern daylight time, May 26, 2023, for the following entities and their subsidiaries (collectively, the “Covered Entities”):
Halliburton
Schlumberger Limited
Baker Hughes Holdings LLC
Weatherford International, Public Limited Company
Note to paragraph (a): Transactions and activities necessary for safety or the preservation of assets in Venezuela that are authorized by paragraph (a) of this general license include: transactions and activities necessary to ensure the safety of personnel, or the integrity of operations and assets in Venezuela; participation in shareholder and board of directors meetings; making payments on third-party invoices for transactions and activities authorized by paragraph (a) of this general license, or incurred prior to April 21, 2020, provided such activity was authorized at the time it occurred; payment of local taxes and purchase of utility services in Venezuela; and payment of salaries for employees and contractors in Venezuela.
(b) Except as provided in paragraph (d) of this general license, all transactions and activities prohibited by E.O. 13850, as amended, or E.O. 13884, each as incorporated into the VSR, that are ordinarily incident and necessary to the wind down of operations, contracts, or other agreements in Venezuela involving PdVSA or any entity in which PdVSA owns, directly or indirectly, a 50 percent or greater interest, and that were in effect prior to July 26, 2019, are authorized through 12:01 a.m. eastern daylight time, May 26, 2023, for the Covered Entities.
(c) Paragraph (a) of this general license does not authorize:
(1) The drilling, lifting, or processing of, purchase or sale of, or transport or shipping of any Venezuelan-origin petroleum or petroleum products;
(2) The provision or receipt of insurance or reinsurance with respect to the transactions and activities described in paragraph (c)(1) of this general license;
(3) The design, construction, installation, repair, or improvement of any wells or other facilities or infrastructure in Venezuela or the purchasing or provision of any goods or services, except as required for safety;
(4) Contracting for additional personnel or services, except as required for safety; or
(5) The payment of any dividend, including in kind, to PdVSA, or any entity in which PdVSA owns, directly or indirectly, a 50 percent or greater interest.
(d) This general license does not authorize:
(1) Any transactions or dealings related to the exportation or reexportation of diluents, directly or indirectly, to Venezuela;
(2) Any loans to, accrual of additional debt by, or subsidization of PdVSA, or any entity in which PdVSA owns, directly or indirectly, a 50 percent or greater interest, including in kind, prohibited by E.O. 13808 of August 24, 2017, as amended by E.O. 13857, and incorporated into the VSR; or
(3) Any transactions or activities otherwise prohibited by the VSR, or any other part of 31 CFR chapter V, or any transactions or activities with any blocked person other than the blocked persons identified in paragraphs (a) and (b) of this general license.
(e) Effective November 26, 2022, General License No. 8J, dated May 27, 2022, is replaced and superseded in its entirety by this General License No. 8K.
Dated: November 26, 2022
DEPARTMENT OF THE TREASURY WASHINGTON, D.C.
OFFICE OF FOREIGN ASSETS CONTROL
Venezuela Sanctions Regulations 31 CFR part 591
GENERAL LICENSE NO. 41
Authorizing Certain Transactions Related to Chevron Corporation’s Joint Ventures in Venezuela
(a) Except as provided in paragraph (b) of this general license, all transactions ordinarily incident and necessary to the following activities for or related to the operation and management by Chevron Corporation or its subsidiaries (“Chevron”) of Chevron’s joint ventures in Venezuela (collectively, the “Chevron JVs”) involving Petróleos de Venezuela, S.A. (PdVSA) or any entity in which PdVSA owns, directly or indirectly, a 50 percent or greater interest, that are prohibited by Executive Order (E.O.) 13850, as amended by E.O. 13857, or E.O. 13884, each as incorporated into the Venezuela Sanctions Regulations, 31 CFR part 591 (the VSR), are authorized:
(1) Production and lifting of petroleum or petroleum products produced by the Chevron JVs, and any related maintenance, repair, or servicing of the Chevron JVs;
(2) Sale to, exportation to, or importation into the United States of petroleum or petroleum products produced by the Chevron JVs, provided that the petroleum and petroleum products produced by the Chevron JVs are first sold to Chevron;
(3) Ensuring the health or safety of personnel or the integrity of operations or assets of the Chevron JVs in Venezuela; and
(4) Purchase and importation into Venezuela of goods or inputs related to the activities described in paragraphs (a)(1)–(3) of this general license, including diluents, condensates, petroleum, or natural gas products.
Note 1 to paragraph (a)(4). Except as authorized pursuant to the Iranian Transactions Sanctions Regulations, 31 CFR part 560, or otherwise exempt, U.S. persons, wherever located, remain prohibited from engaging in any transaction or dealing in or related to goods or services of Iranian origin, including the purchase or import of Iranian-origin diluents, condensates, petroleum, or natural gas.
(b) This general license does not authorize:
(1) The payment of any taxes or royalties to the Government of Venezuela;(2) The payment of any dividends, including a dividend in kind, to PdVSA, or any entity in which PdVSA owns, directly or indirectly, a 50 percent or greater interest;
(3) The sale of petroleum or petroleum products produced by or through the Chevron JVs for the exportation to any jurisdiction other than the United States;
(4) Any transaction involving an entity located in Venezuela that is owned or controlled by an entity located in the Russian Federation;
(5) Any expansion of the Chevron JVs into new fields in Venezuela beyond what was in place on January 28, 2019; or
(6) Any transactions otherwise prohibited by the VSR, including transactions involving any person blocked pursuant to the VSR other than the blocked persons described in paragraph (a) of this general license, unless separately authorized.
(c) This authorization automatically renews on the first day of each month and is valid for a period of six months from the effective date of General License No. 41 or the date of any subsequent renewal of General License No. 41, whichever is later.
Note 2 to General License No. 41. Nothing in this general license relieves any person from compliance with the requirements of other Federal agencies, including the Department of Commerce’s Bureau of Industry and Security.
Dated: November 26, 2022
Cuba says its allies have pledged help to end its economic crisis
By Marc FrankHAVANA, Nov 27 (Reuters) - China has agreed to restructure Cuban debt and provide new trade and investment credits to the beleaguered Caribbean Island nation after a meeting in Peking between the two Communist countries’ leaders.
Cuba Economy Minister Alejandro Gil said the latter had also donated $100 million to help the country cope with basic goods shortages and an energy crisis worsened by Hurricane Ian, which decimated western Pinar del Rio province in late September.
Gil was speaking in an interview with official media traveling with President Miguel Diaz-Canel as he returned home over the weekend from a tour of Algeria, Russia, Turkey and China.
Chinese trade and investment has slowed in recent years due to Cuba’s failure to meet restructured debt payments according to analysts and diplomats, a situation worsened by tighter U.S. sanctions, the pandemic and domestic economic inefficiencies.
“We are going to find mutually acceptable formulas for the ordering and restructuring of debts,” Gil said.
Analysts estimate the debt in the billions of dollars, although no official figures are available.
Cuba last reported its foreign debt in 2019 at $19.6 billion.
China is Cuba’s most important commercial partner after Venezuela, though trade has declined from over $2 billion in 2017 to $1.3 billion last year, according to the Cuban government.
Various investment projects have also ground to a halt.
Gil said China had agreed to quickly complete a floating dock, wind power and solar energy project, among others.
President Diaz-Canel told the official media after talks in Peking that debt was at the top of his agenda with President Xi Jinping who sympathized with the difficulties Cuba was going through.
The Cuban president said his Chinese counterpart indicated “a solution must be found to all the problems with Cuba, regardless of the debt, and that this cannot be what limits development.”
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