U.S. Economic Sanctions on Cuba in the context of the Pandemic COVID-19

| December 2020
Facebook Twitter Email
Print Friendly, PDF & Email

Cuban Health Specialists arriving in South Africa to help curb the spread of COVID-19. Photo Credit: GovernmentZA via Creative Commons

On March 12, 2020, the World Health Organization declared COVID-19 a pandemic.1  Shortly after that, on Friday, March 26, during his participation in a virtual summit of leaders from the G20 countries, UN Secretary-General António Guterres appealed for the waiving of sanctions that could undermine countries’ capacities to respond to the pandemic.2 A few days later,the UN Special Rapporteur on the Right to Food, Hilal Elver, made a similar call for the immediate lifting of international sanctions to prevent hunger crises in countries hit by the pandemic:“The continued imposition of crippling economic sanctions on Syria, Venezuela, Iran, Cuba, and, to a lesser degree, Zimbabwe, to name the most prominent instances, severely undermines the ordinary citizens’ fundamental right to sufficient and adequate food.”She continued to stress that “it is now a matter of humanitarian and practical urgency to lift unilateral economic sanctions immediately.”3 Two months later, in May, as COVID-19 spread to all corners of the globe, the World Health Organization made a plea “in the spirit of unity and solidarity, intensification of cooperation and collaboration at all levels to contain, control and mitigate the COVID-19 pandemic.”4

In a report submitted to the UN General Assembly in mid-October, Alena Douhan, the UN Special Rapporteur on the negative impact of unilateral coercive measures on the enjoyment of human rights, found that unilateral sanctions are making it harder to fight the COVID-19 pandemic and that humanitarian exemptions are “ineffective and inadequate” in this crisis.5

All these calls have had no impact on the U.S. economic sanctions against the island nation of Cuba that started in the early 1960s6 and have evolved into a comprehensive economic blockade. The U.S. system of economic sanctions on Cuba is still in force in 2020 and includes every major method available to a sanctioning state: trade control, suspension of aid and technical assistance, freezing of the target’s financial assets, and the blacklisting of foreign companies involved in trade with Cuba.7 These restrictions are particularly damaging in light of the global pandemic.

Since June 2017, the Trump administration has taken economic sanctions to unprecedented levels in terms of their “extraterritoriality,” that is, the interference in Cuba’s trade with third countries. The tightening of economic sanctions on Cuba by the Trump administration is explicitly geared toward both bankrupting the Cuban state by targeting the Cuban economy’s areas of strengths, such as tourism and the export of professional services, and exploiting its vulnerabilities, such as the need to attract foreign direct investment and its energy dependence. All of this has had an impact on Cuba’s economic performance and the living standards of all Cubans. The Trump administration has deliberately tried to stop oil imports, thus affecting public transportation and electric power supply, and has disrupted the flow of remittances and drastically reduced traveling between the two countries. U.S. sanctions have even blocked the use of critical cyber platforms in Cuba during the pandemic, such as Zoom, that would otherwise be employed to facilitate training for doctors and telemedicine services not only in Cuba but around the world.

Despite these sanctions, Cuba has been quite successful in controlling the pandemic.  As of November 26, 2020, the island nation of 11.5 million people had roughly 8,075 confirmed cases and 133 deaths, a recovery rate of 92.8 percent of all confirmed cases and a fatality rate of 1.6 percent of all total cases.  These positive results have been possible in part because access to health care is universal and provided by the state.  There are nine physicians per thousand people in Cuba, one of the highest ratios in the world. The island is renowned for its focus on prevention, community-oriented health care, and preparedness to fight epidemics. Cuba’s successful response to the disease is also due to the longstanding development of its biotech industry, which allowed it to develop considerable expertise and to produce medicines to support its healthcare system.

Internationally, Cuba has responded to requests for collaboration on the COVID-19 virus by sending fifty-two medical brigades to thirty-nine different countries and territories affected by the disease—a total of 3,800 cooperation workers. These specialists have joined Cubans who had already been offering their services in fifty-nine countries around the world prior to the outbreak of the pandemic,8 not only in Africa, Asia, Latin America, and the Caribbean but also in Europe and the Middle East. Within Cuba, COVID-19 was contained through the implementation of a number of policies that went into effect quickly: tourism was suspended and the borders were closed from March 24 to October 15 (the country’s major airport recently reopened on November 15), medical students and social workers were sent door to door throughout the country to check for those who were symptomatic, and neighborhood doctors monitored their patients closely.  Bleach and additional cleaning supplies, which are often in short supply in Cuba, were made more readily available along with basic foods and household goods provided at subsidized prices.

 

U.S. Sanctions on Cuba in Times of COVID-19 

 

Despite the fact that the U.S. government may authorize sales to Cuba of medicines and medical equipment, in practice major medical manufacturers in the United States do not export their products to Cuba.

There are various “chill factors” that prevent U.S. pharmaceutical companies from taking advantage of this possibility. There is a network of ever-changing U.S. government regulations and corresponding interpretations. The extensive licensing requirements involve a complex application process.  There is then a considerable time lag, and even after applying, receiving final authorization is uncertain. The U.S. government allows such medical exports only if a number of prerequisites are met. These include: that there is no reasonable likelihood that the item exported will be used for the purposes of torture or human rights abuses, that it will be not re-exported, and that it would not be used in the production of any biotechnology product.9 In addition, there is the burden of the application process, and the costs of complying with the regulations, along with the risk of harsh penalties if the U.S. Department of the Treasury’s Office of Foreign Assets Control(OFAC) finds any violation, even if it is inadvertent.  There is also a chilling effect that goes beyond the actual restrictions: even for transactions that are apparently legal, banks and other companies often choose not to do business at all with a sanctioned country to avoid any risk of penalties. In sum, the mechanisms for getting licenses, humanitarian exemptions, and humanitarian aid are not transparent enough. This traditionally results in over compliance by U.S. companies, all these factors actively discourage companies from seeking licenses.

As Cuba tackled the impact of COVID-19 and international organizations called for global solidarity and the easing of sanctions, in April the U.S. government hinted that it was willing to be more flexible in granting licenses for medical exports.10

However, United Nations human rights experts have noted that U.S. economic sanctions continue to require a complicated licensing process for the export and re-export of goods to Cuba.  This undermines the efficiency of buying medicine, medical equipment and technology from the United States, given that the issuance of licenses or clearance for exemptions can take several months at best. The OFAC Fact Sheet, which provides guidance on humanitarian exemptions for Cuba, has not eased or changed the burdensome procedures. As UN human rights experts noted, “U.S.-origin donations of medicines and medical equipment to Cuba, such as testing kits and respiratory devices, require a specific license, which takes time and a tremendous amount of paperwork. Additionally, the licensing process requires onerous end-user verification requirements for the exportation of medical supplies, instruments, and equipment.11

 

As Cuba Deals with COVID-19, Sanctions Continue to Increase and Blacklists Continue to Grow

 

In addition to the export restrictions, the financial blacklists affect Cuba’s economy and healthcare system. Under the Trump administration, the Cuba Restricted List12 has been expanded frequently, and there are now more than two hundred Cuban entities listed.  U.S. companies, and many non-U.S. companies and persons as well, are subject to severe penalties for transacting business with any of these entities. In June, for example, OFAC blacklisted the Cuban financial institution Fincimex, which serves as an intermediary for family remittances to Cuba, which are a major source of revenue for the country. As a result of the listing, the French bank Crédit Mutuel halted services to Fincimex, thus affecting the flow of remittances to Cuba. For that same reason, Western Union halted the processing of remittances and had closed more than four hundred offices in Cuba by the end of November 2020. At the same time, OFAC expanded its list of Cuba Specially Designated Nationals (SDN) and Blocked Persons13 to target Cuba’s banking system by adding the London-based Havana International Bank, Ltd. While targeting Cuba’s banking and finances is not a new action by the U.S. government, it has had a particular impact on  the Cuban healthcare system during the pandemic because there are additional costs and burdens needed to circumvent these restrictions in order to import the necessary equipment and drugs to deal with the COVID-19 health emergency.

The blacklisting of Cuban state companies and the “chilling effect” put strain on the overall financial situation of the Cuban state. The state budget must allot resources for imports in all areas. Undermining the state’s overall income directly affects its ability to buy the medicines and equipment needed to address the current health emergency.

 

The Extraterritoriality of U.S. Sanctions Continues

 

U.S. sanctions affect not only U.S. nationals but also entities from third countries seeking to do business with Cuba.  In 1992 and 1996, the Torricelli law and the Helms-Burton law expanded the extraterritorial provisions of the sanctions, in part by asserting authority over foreign subsidiaries of U.S. companies.

In March 2020, a shipment of COVID-19 aid from Asia’s richest man, Jack Ma, was blocked as a result of the extraterritorial reach of U.S. sanctions. On March 21, Ma’s foundation announced that it sent masks, aid ventilators, gloves, and diagnostic kits to twenty-four countries in Latin America, and Cuba was one of them. However, the selected cargo carrier, Colombia-based Avianca, declined to carry the aid to Cuba because Synergy Aerospace Corp. (“Synergy”), a majority shareholder, is incorporated in the state of Delaware and therefore falls under the laws of the United States. Avianca had suspended passenger service to Havana since January 2020 for the same reason.

In April 2020, two firms based in Switzerland—IMT Medical AG and Acutronic Medical Systems AG—refused to sell ventilators to Cuba, invoking the commercial, financial, and economic sanctions of the United States; both companies had been acquired by U.S. company Vyaire Medical Inc and immediately suspended trade relations with Cuba.14 PostFinance Switzerland has recently suspended all money transfers to Cuba, thus preventing Swiss associations from collaborating with Cuban medical entities. Both Medicuba-Suiza and the Switzerland-Cuba Association denounced the fact that banks such as UBS, Credit Suisse, ZKB, ABS, and Migros Bank have blocked the transfer of donations intended to support the emergency shipment of medical supplies, diagnostic reagents, and protective equipment for health personnel.15

On November 18, the U.S. Transportation Department denied exemptions for two charter flight companies to deliver humanitarian cargo to Cuba, including personal parcels containing food, medicine, hygiene, and other medical supplies. One U.S. operator, Skyway, argued the flights should be permitted to address coronavirus pandemic impacts, as Reuters reported “ The Transportation Department said the State Department determined the flights did not fall within exemption guidelines and said they “would not be in the foreign policy interests of the United States”16

 

Attempts to Undermine Cuba’s International Prestige and Sources of Funding

 

Cuban medical missions abroad are both a source of revenue to fund the universal healthcare system for Cuba and a source of international prestige for the island. In response to the pandemic, Cuba has provided international assistance by sending over 3,500 medical professionals to more than twenty-five countries in 2020.  In this context, the U.S. State Department has included Cuba on a list of nations that do not collaborate in the fight against human trafficking and considers the doctors who collaborate in missions in countries dealing with the COVID-19 pandemic as “victims of human trafficking.”

In addition, a bill was introduced in the U.S. Senate—the “Cut Profits to the Cuban Regime Act of 2020”—that was meant to undercut Cuba’s medical missions program, which sends trained medics all around the developing world to assist in general healthcare services. The bill, if passed, will require the U.S. State Department to publish a list of nations contracting with the Cuban government for their medical services.  It would consider that as a factor in including said nations in the Department’s annual Trafficking in Persons (TIP) Report.  This will open the door for further extraterritoriality of U.S. law in the form of secondary sanctions and other measures against any country on that list.

It is clear that the United States government is paying little attention to the calls of multilateral organizations to ease sanctions on Cuba in the context of the fight against COVID-19. To the contrary, the Trump administration has continued to tighten punitive measures against Cuba, impacting Cuba’s economy as a whole, and making it increasingly difficult to find trading partners and conduct financial transactions related to the provision of healthcare.  Cuba has reached out internationally to assist with the pandemic in other countries; U.S. sanctions have quickly followed.


—Raúl Rodríguez

Raúl Rodríguez is a full professor and currently  Director of   the Center for Hemispheric and United States Studies at the University of Havana . Dr Rodriguez is a member of the working group on US Studies of the Latin american Council on Social Sciences and he has been a visiting professor in U.S., Canadian and European Universities    

 

NOTES

Facebook Twitter Email
  1. World Health Organization, “WHO Announces COVID-19 Outbreak a Pandemic,” March 12, 2020, https://www.euro.who.int/en/health-topics/health-emergencies/coronavirus-covid-19/news/news/2020/3/who-announces-covid-19-outbreak-a-pandemic.
  2. “Remarks at G-20 Virtual Summit on the COVID-19 Pandemic,” United Nations Secretary-General, March 26, 2020, https://www.un.org/sg/en/content/sg/speeches/2020-03-26/remarks-g-20-virtual-summit-covid-19-pandemic.
  3. COVID-19: Economic sanctions should be lifted to prevent hunger crises – UN expert,https://www.ohchr.org/EN/NewsEvents/Pages/DisplayNews.aspx?NewsID=25761&LangID=E.
  4. Seventy-third world health assembly a73/conf./1 rev.1 Agenda item 3 18 May 2020https://apps.who.int/gb/ebwha/pdf_files/WHA73/A73_CONF1Rev1-en.pdf.
  5. Report of the Special Rapporteur on the negative impact of unilateral coercive measures on the enjoyment of human rights. Negative impact of unilateral coercive measures on the enjoyment of human rights in the coronavirus disease pandemic, Alena Douhan, https://www.undocs.org/en/A/75/209.
  6. Morley, Morris H.: “The United States and the Global Economic Blockade of Cuba: A Study in Political Pressures on America Allies,” Canadian Journal of Political Science, Vol. 17, No.1., Mar., 1984, pp. 25-48.
  7. Margaret P. Doxey, Economic Sanctions and International Enforcement, 2nd ed. (New York: Oxford University Press, 1980), pp. 14-15.
  8. The United States Strengthens its campaign against Cuba’s international medical cooperation.  Declaration of the Ministry of Foreign Affairs Cuba, http://www.minrex.gob.cu/en/united-states-strengthens-its-campaign-against-cubas-international-medical-cooperation.
  9. Denial of Food and Medicine: Impact of the US Embargo on Health and Nutrition In Cuba. A Report for the American Association of World health, p. 48    https://medicc.org/ns/documents/The_impact_of_the_U.S._Embargo_on_Health_&_Nutrition_in_Cuba.pdf.
  10. Nora Gámez Torres, “U.S. Won’t Offer Sanctions Relief to Cuba amid Coronavirus Pandemic. Here Is Why,” Miami Herald, 2020, https://www.miamiherald.com/news/nation-world/world/americas/cuba/article242053286.html.
  11. US must lift its Cuba embargo to save lives amid COVID-19 crisis, say UN expertshttps://www.ohchr.org/EN/NewsEvents/Pages/DisplayNews.aspx?NewsID=25848&LangID=E.
  12. The Cuba Restricted List https://www.state.gov/cuba-sanctions/cuba-restricted-list/.
  13. Cuba designation update 7/30/2020, Office of foreign assets control specially designated nationals list update​ https://www.treasury.gov/resource-center/sanctions/OFAC- e enforcement/Pages/20200730.aspx.
  14. US Blockade Condemned as Medical Aid blocked for the second time  https://morningstaronline.co.uk/article/w/us-blockade-cuba-medical-aid-blocked-second-time.
  15. Transfers and donations from Switzerland for Cuban public health blocked, https://oncubanews.com/en/cuba/transfers-and-donations-from-switzerland-for-cuban-public-health-blocked/.
  16. U.S. agency denies exemptions for Cuba cargo relief flights: statement, David Shepardson, Reuters,  November 18, 2020, https://www.reuters.com/article/us-usa-cuba-flights/u-s-agency-denies-exemptions-for-cuba-cargo-flights-statement-idUKKBN27Y2QL.

Category: Online Exclusive, Roundtable: Latin American Responses to COVID-19

Comments are closed.