 So I think we're gonna get started if everyone could take their their seeds get their coffees or waters Bring them to their tables We're gonna get started here Great. So welcome. Welcome everybody. Welcome to CSIS. Thanks for weathering the cold weather the rain this morning I know it can be a nuisance here in DC. I want to thank you all for joining us today We're we're truly grateful to have you with us. I'm thrilled to be co-hosting today's event with my colleague Elizabeth Newhouse The director of the Cuba project at the Center for international policy Before we get to senator flake's remarks, I just want to offer a brief Explanation of what makes today's conference titled getting to normal a legal pathway For us Cuba policy reform different from all Cuba Gatherings that take place periodically here in DC It's interesting as I look in the crowd. I see a lot of familiar flake faces. Welcome to everybody Folks that have covered Cuba for a long time So I just want to sort of justify why on a rainy morning in Washington DC We're here to talk about Cuba Let me start by telling you a bit about what this conference is not shooting for Today's event will not focus on Debating if normalized relations should or should not be the goal of the bilateral relationship To be clear this conference will not be taking a position on that question Instead our goal today will be to answer a question that is seldom asked Which is if the president of the United States were interested in normalizing relations with Cuba How could this actually take place? legally Diplomatically and practically and There are a series of questions that follow from that broader theme such as What would be the process who needs to be involved? What are the legal steps and are there case studies around the world? We could look to for guidance In a lot of ways this conference is an outgrowth of a series of discussions among myself Elizabeth and our good friend Robert Muse Who's moderating our main panel discussion today and who has worked on Cuba issues for decades? They're political and legal knowledge They're political and legal knowledge in my own policy background together raised the questions we're hoping to address through this event Those conversations and as a result this conference developed at a fascinating time for the US and Cuba most recently Panama the host of the 2015 summit of the Americas invited Cuba to participate for the first time despite objections by the White House and This might to be might be or might prove to be a decision-forcing moment pushing the administration To set a course for the final two years of the president's term Ultimately, this could amount to an opportunity for the long stagnant bilateral relationship But the same issues that have traditionally Muddied the waters are still relevant the embargo the Cuba 3 The state of human rights in Cuba continues to be dubious at best The island still depends on Venezuelan aid It seems to be on increasingly shaking ground as the Venezuelan economy fully or further deteriorates and as many of you know Tomorrow's the five-year anniversary of US contractor Alan Gross's imprisonment on the island But we're here not to talk about these issues not to dig into those issues Today, even though they do provide important context for this and any discussion of the bilateral relationship so what we're here to offer is an exercise one that I think is long overdue and Exploration of the what if rather than a debate over the should we I Couldn't feel more strongly that this is the right moment to engage in this conversation This morning sessions will be thought-provoking My hope is that we all leave here with a more robust understanding of the process of change in a relationship Often treated as a foregone conclusion So once again, I want to thank you all for being here at this conference today And now I'd like to introduce our keynote speaker and give you all a sense of how today will proceed I'm honored to have US senator Jeff flake of Arizona here with us as our keynote speaker So I thank you for joining us sir senator flake has a long history on US Cuba policy issues And he's a vocal proponent of lifting the travel ban actually when we were walking in Senator reminded me of the work. He's been doing for many years and of the work. I think we shared When I was working for senator Luger on the foreign relations committee and those are pleasant memories still It's like pushing a a boulder up a up a hill But he recently participated in a congressional trip to Cuba and his profile on the issue looms large Without a doubt the senator has invaluable insights to share and I'm grateful that he was able to join us today Senator flake is also graciously agreed to take some questions from the audience following his remarks when that segment ends at 945 We will have a quick break before beginning the panel discussion introduced by Elizabeth new house and moderated by Robert muse unfortunately Our luncheon keynote speaker ambassador Tom Pickering is unable to be here today He was called away to China on pressing business at the 11th hour and his presence though Will be missed, but I think that we have a very good panel and a very Interesting set of folks here as well across section of all the folks that have done Cuba for so many years So I know that the conversation and the questions will be very very good But in lieu of his remarks We'd like to use the luncheon as an opportunity to engage in a lively discussion of the morning's proceedings So I'd like to thank you all once again for being here today I'd like to remind you all that today's session is on the record and we're live webcasting the proceedings To our online audience. I'd like to welcome c-span as well And thank you for your coverage and without further delay senator flake the floor is yours Well, thank you Carl. I appreciate it. It's nice to be here at CSIS I'm reminded that I first came to Washington in the late 80s as an intern In senator Deconcini's office Democrat from Arizona. I've had to purge that for my resume No senator Deconcini was working on Africa politics in particular the the agreement that was coming together in southern Africa by which the country of Namibia could obtain its independence and I've relied a lot on the The work of CSIS at that time. I believe the staffer who worked on it with Sean McCormick That's something probably you guys don't remember but but I do about CSIS in the late 80s I've always been impressed with the scholarship and the the research that has gone on here But it's it's so it's great to be here this morning It's never a bad time to review a policy that has failed to produce results for 50 years But even given that this is certainly a timely conference today given some recent developments I people often ask Where my interest in Cuba came from I did mention that my early work in in Africa Cuba was always There somehow the agreement to for Namibian independence to happen and my wife and myself We spent a year in Namibia In 1989 through 90 the year that Namibia gained its independence from South Africa But that agreement only came about after an agreement for the Cuban troops to leave Angola And so it seems to be a kind of an issue that's followed me around Wherever I've been in in my career But people ask, you know an Arizona senator. Why are you involved like this? and I tell them well I took a poll among Cuban-Americans in Arizona and Both of them said go right ahead. We like what you're doing So it's never been about that issue about a constituency or Arizona doesn't have you know farm produce We sell to Namibia. There's not a lot of trade or travel back and forth But for me, it's always been just an issue of freedom Americans should be able to travel wherever they want unless there's a compelling national security reason otherwise There is none here there hasn't been for a long long time Several weeks ago senator Tom Udall, and I traveled to Havana Among other things we were interested in seeing the scope and the impact of the economic changes that the Cuban government has been pursuing As you're no doubt aware the Cubans have loosened restrictions on private enterprise They're looking to expand the use of cooperatives and they have passed a new foreign investment law But also as you're no doubt aware Though expanding the the private sector is a very positive development and one that that looks to be more Irreversible than changes in the past the current regime is far from having seen the light on capitalism I was reminded of this one. I took a delegation down there in I think 2006 and Since I was heading the delegation you always have the conundrum when you have meetings official meetings You have a gift and exchange a gift with the government and with cubits an issue because There's a gift ban and there's issues of what you can give or trade or whatever else And so you don't want to take cuff links from the capital or things like that So I thought well, I'll just take care of that myself So I got a couple of books that I gave to government officials as we met with them One was Milton Friedman's capitalism and freedom Adam Smith's wealth of nations and other was Hernando de Soto's mystery of capital and I got kind of bemused looks back Probably wasn't a very good thing to do, but I enjoyed the reaction that I received But you know the Cuban government certainly hasn't seen the light Or hasn't realized that they're gonna have a full throated defense of capitalism But they have taken measures that I think Because of some other developments that I'll talk about in a minute are far more Irreversible are are likely to last and have a positive effect for the long term the country remains cash strapped as Carl mentioned continued support from Venezuela is anything but certain These reforms I believe are based on a realistic assessment of their precarious economic situation now these economic arrangements have all the clunkiness that You would associate with a communist state trying to achieve economic activity through the right mix of government control and state planning But I can tell you from years of traveling to the island that the level of tension and the level of rhetoric are noticeably lower and that is a good thing in previous trips back in 2002 3 4 there was noticeable tension and and provocative actions on the part of both the Cuban government and ourselves they The Cuban intersection that we have right along the Malacan We had a ticker there like a stock ticker that just spewed out provocative messages to the Cuban people and Cubans responded by wrecking hundreds of flags Right in front of it The intersection is still there the flag poles are still there the ticker is gone And so are the flags and there hasn't been a protest or demonstration there in in quite a while Back home here. That's it. The suggestion is that the administration is ready to take further steps to modernize US Cuba policy These rumors have reached a fever pitch. I for one as a Republican I want to be the first to say that the changes that the president has advanced with respect to lifting restrictions on Cuban American travel and limitations on remittances are a good thing they are well done and In my view have done a lot to advance The policy that we would all like to see with Cuba Loosening restrictions on US remittances has coincided well with the expansion of opportunities for Cuban entrepreneurs I believe this timely infusion of funding has done more to transparently improve the options of everyday Cubans and Change the equation on that island than the now hundreds of millions of dollars that we've spent on USAID boondoggles or beaming jammed programming to the island I have always felt that These programs this hundreds of millions of dollars that we have spent have done more to create jobs in Miami than freedom in Cuba This administration has taken further steps to create a context in which the two countries can at least interact for example resuming conversation on migration and Rotating the chief of mission to the intersection US intersection there that has had previous experience in Cuba. These are good things Here's hoping that the administration Will do more from my perspective. Oh the changes we really need Are some leadership from Congress as Carl said I've long supported lifting the Cuba Embargo wholesale I would do the whole thing, but I focus mostly on the travel ban We formed the the Cuba study group as soon as I got to Congress In 2001 myself and Bill Dela Hunt had a bipartisan group for every Republican we added to it We added a Democrat as well, and that was a very effective organization. We were able to Pass legislation twice that would prohibit funding for enforcement of the travel ban The only way we could get legislation to the floor at that time We passed it out of the house it passed in the Senate We just couldn't get the president to sign it Now we have a president that will sign it and it's difficult to pass So we've kind of been in a conumbra here and I've lamented that fact more than than than once But we have the administration considering taking additional steps as I said and when they do They will certainly have my support and the support of other Republicans In in Congress as well as a lot of Democrats at a minimum There are things that could be done to increase the flexibility of US citizens to travel the Cuba We could expand the people to people categories Significantly we could move the needle on internet access as well. I've always felt that We could do more just allowing Americans to travel if we want Cubans to have more access to to internet to have more access to electronic devices to which they could more easily access Information that we want them to access that happens organically Happens free of charge To the government when Americans are free to travel to Cuba Instead of us trying to do clumsy programs administered by USAID that really not only expose Contractors to risk But cheapen USAID's mission Around the rest of the world So so I hope that we'll continue to work on the travel issue It goes without saying that we need to pivot away from the quasi Covert programs like I mentioned Cuba Twitter This debacle gives the US a black eye All around the world not just in Cuba or the Western Hemisphere I've always felt that we shouldn't let Cuba write our foreign policy We've had an issue with both Republicans and Democrats in the White House Where we'll take the position that we will take measures like further lifting of the travel ban or Loosening the economic embargo when Cuba takes certain measures. I think that's the wrong calculus That is based on an assumption that That the Cuban government wants that to happen. I Have never been convinced Although at times they want it times they don't they seem to get spooked when we do make some changes to better Relationships with with the Cuban people and with the government And so we shouldn't base our policy based on what we think the Cubans want or don't want We ought to base our policy on what's good for our national security and what has a history of working elsewhere in the world So we shouldn't put Cuba in charge of our foreign policy. We ought to enact what we know is right If the past has been any sort of prologue, we can't write the script for Cuba Only the Cuban people can but we can have an influence and it's time to think about our Influence in Cuba and realize that it's changing the economic model as we all know as every Cuban realizes has been a failure The private sector in Cuba is now growing and a new generation is in the wings Let me just close by saying that clearly the elephant in the room when it comes to what happens next in Cuba With respect to bilateral relations is a continued detention of former USAID contractor Alan Gross Senator Udall and I had the opportunity to meet with Alan while we were in Havana I won't characterize that discussion any further than to say that he really wants to come home After five years, he wants and needs to come home And I sincerely hope that the administration is doing everything that we can to make that happen Again, I appreciate the chance to be here this morning and I now look forward to being grilled by Carl So thank you for having me here I'm gonna try to grill you for about 10 minutes Now, you know you mentioned a little bit in your opening remarks That things had changed could you could you describe a little bit the environment when you were down there? What makes it so different because again, you know people talk about Cuba and there've been moments waves Where we've seen that there's an opportunity and then that goes away that being I mean really going further back You know the brothers to the rescue or the issue with Alan grows Where we've had opportunities and there's an opening or a willingness to do things differently in the United States and in Cuba We perceive and then it shuts. What's so different about the situation right now? Well, I mentioned one of the differences is there's the level of rhetoric and kind of tension between the countries has Has bettered. I don't think it was productive of that period of time we had When the US intersection was in the business of basically trying to provoke the Cubans at every step I don't think it did us with him any good Today that that has lessened but significantly The amount of private entrepreneurship that is happening there is significant You can characterize the government's approach and what they're trying to do you can Criticize the the the new forward investment law and I do and everybody does those measures Have their limits But what is undeniable is that? private entrepreneurship Largely because of the change in policy allowing Cuban Americans to travel freely to the island some 400,000 a year trips a year and Lifting limits on remittances allowing direct investment by family members and others in Enterprises there You get the sense when you travel to Cuba now that Unlike you know during the so-called special period where the government face the decline of Soviet Subsidies and had to rely on private businesses restaurants to you know give some Level of economic growth as soon as that you know the pressure lessened then they pulled back You get the sense today that that would be extremely difficult if not impossible for the government to do The level of investment the level of entrepreneurship and the taste that people now have of that Is is irreversible? I think that's the feeling I get From my experience in the Senate and one of my colleagues here was my counterpart for years with Senator Biden full-norm strongest here as well There's a knowledge or an understanding of Cuba based on sort of the champions of one side of the bait Champions of another side and you seem to be a champion for the issues that have to do with reforming the policy Changing certain aspects of it you mentioned USAID and reforming that you mentioned travel and reforming that are there others because For years we've had You know folks in the House and folks in the Senate being on one side of the discussion that being the ones of keeping sort of the the issue where it is and and not reforming and and Justified by their by rationale that they don't want to reward the Cuban government Are there other senators on the Republican side in particular? That shared your views on this issue there are and we saw that reflected in votes that we took you know Six eight years ago now there have been a lot of changes in Congress But the longer you go Just because of time You have more people just saying all right it's it's time You know 48 years wasn't long enough at 52 is you know, and so just a passage of time has changed some calculation and the Discussion about what is a reward for the Cubans and what is not is changing. I think as well I hope it is I mentioned that our policy Is too has been too based on what we think the Cubans want or what we perceive as their interest And I think their interest changes. I think at some point. They're all ready to relax or the travel ban, but then I Think sometimes if we threw open the gates let Americans travel the Cubans would certainly impose restrictions of their own Because they want the revenue and not the influence that I've always thought if somebody's gonna limit my travel It ought to be a communist, you know Not not my own government. I mean that that's their prerogative. That's their purview. It shouldn't be ours And as far as reward, I've always say thought Joked but only half joking that the biggest punishment to the Castro regime would be to Allow spring break in Cuba allow Americans to travel there. They may wave the white flag after that But but we have to have to think in different ways about Rewards and punishments, but I think the default ought to be what is in our national interest What has history proven to be effective in other countries? To change other governments and we ought to look at that rather than trying to divine whether this benefits or hurts The Cuban government. So and I do think there are many in Congress ready to make that calculation And there's also you take an issue like internet access When I talk to those who are very opposed to to what I've been talking about here and and very much want to punish the regime There's agreement I think for everybody that internet access is a good thing For Cubans, there are steps that can be taken that don't involve sending contractors down to clandestinely set up programs or whatever else, but there are things small Changes that we can make to regulations that we have that would let that happen organically or evolve Just just given the course of events and I think that there are ways that we can work Across the aisle that way not just across the aisle, but across this isn't just a partisan thing obviously But it seems like there could be a bipartisan moment in the lighting so this yeah, and I think it would be welcome I think the American public wants to see Republicans and Democrats working together on these difficult issues But on the technology issue in particular when you were there Did you feel that there was a willingness from the Cuban side or did you? Or was your idea met with opposition on Technology and the proliferation of technology well, I think I mean the Cuban government First and foremost Everything is about control. They want to have as much control for as long as they can The question is you know, can they can they Exercise that control and still given give the Cuban people what they want and expect now and It was fascinating this time you ask about what's changed There's always ways that people get around restrictions that are there or find ways to to access entertainment or recreation that they they like and the the recent phenomenon down there is Something called the they call it the packet the Spanish word for packet Where somebody will download basically a package of entertainment whether it's game of thrones or some Mexican novellas or whatever else and and people will come to a central place Under Wi-Fi and download that and and it let me tell you virtually every Cuban it seems in Havana has access to this somehow and the Cuban Cuban government knows it and Well, it doesn't sanction it it allows it because I think it kind of fills the gap that they aren't filling and as long as They don't assume that people are are downloading political things or whatever else then they simply let it go so I I think that Things that we can do to allow internet access for example to allow US cell phone companies to to operate I'm sure the Cuban government Fears that they want to restrict it, but you come to a point where you can't anymore just like on the travel issue I think the Cuban government would obviously like the revenue, but not the influence so they would try to You know decide who to allow in but you just can't do that for very long in the end freedom wins out And and so I think we just ought to give it more opportunity Before I open it up for a couple questions from the audience just a quick question on the travel Bill, I'm assuming you're going to reintroduce it in the in the new Congress Do you get a willingness from the administration that if you're able to pass it through Congress that they would sign it that the president would sign that that's certainly by expectation and The administration has taken you know measures on its own to relax a travel ban and to increase opportunities for people to people contact and so it's my assumption that they would be But I don't want to speak for the administration Let me get some questions from from the audience. Let me first go here with Ted Thank you, Senator flake Ted Pocome from Brookings institution I have a specific question on a subject that didn't come up in your remarks Which is the fact that Cuba is still listed on the state sponsors of terrorism list and a lot has changed in Cuba to indicate That they really don't belong on that list and I'm wondering how you look at that issue And if you have any specific recommendations for the president who could take steps on his own to address that How would that be received in Congress? That that's a tough one whenever you try to go the other direction Given the threats that are out there and the perceptions, but I felt for a long time that That that list ought to mean something and in this case it doesn't The That is an impediment to Certainly modernizing relations with Cuba I Don't think that for the reasons that we have Those rules and regulations. I don't think that Cuba belongs on that list. So I've advocated for a long time John McCollough from the Fund for Reconciliation and Development First to thank you for the struggles that you engaged in as a house member and wishing you luck Equal success in mobilizing your Republican colleagues and Democratic colleagues in the Senate now I want to press a bit on the travel. You referred to broadening licenses Do you mean to For people to people do you mean that that you see OFAC continuing to License but for broader categories or do you mean that there should be a general license for people to people and other Purposeful travel that would allow all Americans to have the same kind of Liberty that Cuban Americans have Yes, I think it's it's particularly since the Cuban government has relaxed restrictions on travel Cubans abroad That you know, that's always been one of the excuses that's been used You know, why should we allow travel of Americans there where the Cubans won't allow travel elsewhere? They've largely lifted those restrictions and not completely but largely and so I would advocate a general license for purposeful travel And just are people to people contact that that's That that's what would do the most I think Given the president's limitations on what he can and can't do Although I'm not sure there are many limitations on executive action these days That's a discussion for another day No, but let me press you on that. I just have one question on that I mean, I I don't want you feel uncomfortable with me asking this But the environment in Congress if the president takes more executive action Given the environment that that has already been established with the reforms or The measures that he's taken on immigration It just seems like it's gonna be an uphill battle to do more of that because of that Would you agree with that or I would I do think it becomes more difficult? Okay? Any other questions one here Philip runner American University Thank you for coming this morning and thank you for all your efforts speaking of immigration the immigration ice Has reported that there's the largest number of Cubans Who have been detained on the sea this year then in previous years almost the beginning of another? Exodus of sorts are dangerous One of the attractions is the Cuban Adjustment Act And I wonder if there's any discussion among your colleagues About ending the Cuban Adjustment Act I will say there is discussion But no consensus in any way I think we're a ways from that but there there are discussions It's not just those who are apprehended at sea those who are crossing the southern border a significant increase and And so with that there those discussions are happening, but we're no closer to resolution on that I have a question a tweeted question, and I think this is going to be our last question unless someone really has a burning Question to pose Jill would you like to One of our followers asks what do you think is most likely to change in the short term not what should but what could I? Still think through executive action Broadening of categories or a general license for purposeful travel It's been made more difficult by recent executive actions, but I still think that's the most likely short term Change Well, I want to thank you for taking the time I know I tried to get you before session starts in the morning, so I want to thank you for coming This has been very enlightening Thank you for sharing your impressions You know, it's really great to have someone as thoughtful as you on these issues Obviously, this is an issue that is sort of stagnated that hasn't moved There are different reasons for that But having folks that are sort of pushing the limit on both sides of the aisle is also is always very important So I appreciate what you're doing. Well, thank you. Let me just say look around the room I see people who have been involved in this issue That have supported efforts that we made you know for the past 14-15 years on this and and some who've been involved to see the ambassador there are a lot longer than that So I appreciate the good work of a lot of people in this room on this. Thank you, sir So we're gonna have a short break just so we can put up the The the chairs and table for the next panel should be about 10 minutes and then we'll start off with Elizabeth and with Robert Oh, that's his that's his yeah Yeah, I'll keep mine. Do you want to help me put this down here? Do you want to help me put this down here? Yeah, um Got it great Good morning. First. I want to thank Carl And senator flake for the terrific presentation And add a warm welcome to carls on behalf of the center for international policy We're delighted to have you take part and what should be a very interesting program that will try to do something different from the usual cuba conference Though many of us indeed feel that us cuba relations should be normalized We are not here to press for that or to make the case But rather to show how it could be done if and when a u.s president decides it is in the national interest Typically foreign affairs are an executive function and congress mostly stays out of the process, but cuba is different The passions it can work up in segments of this country are nothing short of extraordinary Thus in the mid 1990s to an unprecedented degree congress began legislating specifically around cuba with such laws as the cuba democracy act of 1992 And the elaborately named cuban liberty and democratic solidarity act of 1996 Commonly known as the helmsburton act Those laws followed directly from the end of the cold war and the disappearance of soviet subsidies to the cuban economy With the subsidies gone The cuban economy went into freefall and it was widely predicted that popular discontent would soon sweep the government from power This belief was so widespread That miamians will remember neighbors with packed bags ready to return to a new cuba A south florida radio station offered a prize for predicting the exact date Of fidel castros fall and a prominent miami author titled a book castros final hour in 1992 Members of congress took up the idea that castros end Could be hastened by exacerbating cuba's distress Thus each of the laws passed by congress had as a principal feature restrictions on cuban trade and investment Because the embargo already prohibited u.s. Commerce with cuba The new laws were aimed at third country activity and predictably were met with protests From the eu canada and mexico It was widely argued at the time that congress had usurped the president's authority to make cuba policy This morning a panel of experts will examine some of those laws And indicate the extent to which they diminish a president's historical perspective To determine u.s cuba policy And consider how far a president can go to normalize relations Robert muse Our first speaker and the moderator and the intellectual inspiration for this conference Is the lawyer whose work for the past 20 years has focused on u.s laws regarding cuba His work is notable for among other things showing that congress's attempts to strip the president of authority over the embargo largely failed That the codification provision of the helms-burton act that was meant to freeze the embargo in place Did only that froze it in place It lost lost left untouched the president's authority through rulemaking Licensing and other actions to determine u.s policies relating to cuba and cubans Muse's explication of the limits on congressional action involving cuba Contributed importantly to such things as the bookings report of 2008 Which urged the next u.s president who turned out to be obama To use his executive authority To allow constructive engagement in areas of u.s national interests Notably the restitution restitution of people to people travel Most recently an article muse wrote for america's quarterly copies of which are available here Describes presidential authority to to engage with cuba in such areas as basic trade And to remove some of the elements of u.s policy that most aggrieve cuba Including its continued present presence on the state department's terrorist sponsoring list And the extension of u.s export and other controls to third country transactions with cuba Today robert muse has asked his panel to climb a little higher and dig a little deeper And to consider what normalized relations would actually look like and how we could get there One day a president will decide to pursue normalization and may find useful the legal pathway laid out here Thank you robert muse Thank you as many of you know, I think elizabeth is the new director of The cip center for international policies cuba program Uh succeeding wane smith who's here this morning, but i'm pleased to Tell you that wane stays on as senior fellow. Is it way? Well, we're glad to have you remain with us This conference event had its origins in hillary clinton saying not long ago that she favored normalized relations with cuba it was one of the first times a Nationally prominent political figure has used that word normalization Her reasoning was that the uh current policy of embargo serves to in her Verb prop up the government of cuba and if we remove the embargo then we remove this source of uh Support for the government by cubans aggrieved at some of our policies the uh paper i've left on your tables deals with The first aspect of normalization of relations i'm going to propose a three stage continuum here the first step is to Remove take down some of the most punitive measures directed at cuba. They include things like Our extraterritorial application of our export laws Which prevented cuba in the last year or two from buying a european airbus Because there was more than 10 u.s content in that aircraft It also meant the cuba had to go to great lengths and expense to find an oil Exploratory rig that didn't have us components above 10 percent almost impossible in the world of deep-sea drilling So number one Is the first stage? Is taking down the punitive elements of the embargo Stage two is What i'll call baseline normal in terms of trade and Specifically in terms of trade. It's Really economy class Using the metaphor of air travel You take down the punitive aspects of our current policy and we've sort of let cuba out of the cargo hold Now we put them into economy class But it bears the grand title in trade terms most favored nation In fact, it's baseline normal In trade terms as jake We'll discuss in a moment First class consists of free trade agreements and other such modern Trade protocols, but stage two is get to baseline normal and then Stage three in which our last two speakers Will discuss what are Stage three being Best and brightest relations between nations. What do they look like? Uh, they're often characterized in the case of us in canada with a free trade agreement It also extends to mexico They can take the form of preferential visa treatment. We have that arrangement with EU countries Best and brightest relations will be discussed by dan wittle in the field of environmental cooperation and by christine farley Who's a president at oral argument in spring court who will talk about Best relations in the fields the field of intellectual property protection and the current instrument that governs intellectual property protections is the 1929 inter american convention So we're in need of an overhaul there since that document Was ratified we have cyber issues domain names a range of intellectual property issues that are going to require new arrangements with cuba so uh We'll start with mark feldman and he's going to provide shape to the Constitutional legal dimension of presidential power To normalize relations with cuba. I'm not going to do Biographic introductions you can find those at the rear but sufficient to say that uh mark was for some time our chief lawyer In the international affairs realm as acting and deputy legal advisor at the state department He will be followed by jake colvin who's going to talk a bit about trade Baseline trade and maybe a bit further Matthew aho will delve into the very difficult issue of bank transactions involving cuba You'll notice those of you who skim my article that it was too complicated for me. So I left it for him Then Gustavo arnavott who was our executive director at the inter american bank not long ago. We'll talk about international financial membership of cuba and then as I say we'll finish with dan whittling christine farley mark Thank you very much Robert i'm very honored and pleased to to be here Good morning to all Robert has asked me to discuss as briefly as I can What the president can do on his own authority Under the constitution and standing legislation to improve our relations with cuba As a teacher of foreign relations law. I know this to be a complex and Fluid subject Um, I'm hoping to develop a paper that we can circulate to you that will give you the jurisprudential background to summarize that very briefly before moving into the The bottom line here what we have done in the past with cuba and what we might do in the future Let me just say that this has been debated the president's Power as against congressional power the conflict between the two of them For control of u.s. Foreign policymaking Dates back to the very earliest days of the republic I think it was alexander hamilton and then john marshal and finally the supreme court in the 30s that said while the congress Rain supreme and domestic affairs the president is the uh soul organ of the nation and dealing with foreign countries and there is a line of cases That's basically says when it comes to external matters The president is king But there's a more current line of cases Applied primarily to protect Economic interests domestic economic interests like the property Uh civil liberties and states rights Where beginning with the famous steel seizure cases in the German administration The court has said that the powers of the president are not fixed but fluctuate with the powers and the Implementation of the execution of those powers by congress Um, so that means that when we talk about traditional areas of Presidential power and particularly in the cuban context Helms Burton casts a very long shadow and it will it will influence the debate And if a case should ever come to the supreme court that would certainly be Something that would have to it would be you know a central concern Um Just to to recall some of the more dramatic examples of things presidents have done on their own authority Think about the yalta and potstown agreements which reshaped Europe after real war to think about president truman's proclamation on the continental shelf Which you know laterally without congressional authorization extended u.s jurisdiction over the Tibetan subsoil Many many miles off u.s coasts under international waters In the context of cuban I personally during my government service participated in Negotiations of executive agreements on a variety of sensitive subjects Perhaps the most interesting was the high and important from a policy point of view was the hijacking agreement, which the nixon administration negotiated as an executive agreement with Castro I don't have time to go into that this morning, but if there's interest you can go into it later I also participated in negotiating In the Carter administration motives for vending with cuba on Maritime boundaries, which we did for one year as an executive agreement And then we did something called a maritime boundary agreement Which we submitted for to the senate for advice and consent as a treaty But knowing that was not likely to happen We also made an executive agreement apply under the we considered the executives the president's authority To make boundary agreements per visual boundary agreements By executive authority alone And that remains in force today On the basis of Exchanges of diplomatic notes every two years so all of these things were done by executive agreement I would say Looking forward coming to our agenda for this morning The four areas most relevant where that is clear the constitutional practice and legal precedent say the president has Primary authority are in the areas of recognition and diplomatic relations international claims maritime boundaries and law enforcement all of these areas are potential avenues for some progress on relations with cuba beginning With diplomatic relations president eisenhower Suspended diplomatic relations and closed the embassy way back on january 3 1961 But that action did not affect u.s. Recognition of the cast of the communist regime in cuba the united states has Long before that date and to this very day the united states has consistently recognized The cast of regime as the du jour regime Of the du jour government Of cuba this same thing applies in iran Where we have not had diplomatic relations since the seizure of the embassy back in 1979 The united states has always recognized The current regime as the du jour government Of iran under the constitution The president under article 2 the president has plenary authority. We at least we in the executive branch always believed When it comes to matters of recognition and normal and the suspension and or renewal of diplomatic relations Way back in 1933 FDR Established unilaterally unilaterally established relations with the soviet union And made a comprehensive claim settlement by executive agreement jimmy carter did the same thing with china in 1979 A few years of all in the same general time frame He made an agreement a claim settlement agreement with the ayatoll In In iran the So it's my conclusion That it is a matter of executive discretion The president could Formalize our relations replace the Interest section with an embassy restore the embassy Now the senate doesn't have to confirm a nominee For ambassador if they if there should be a problem there the president Can run the embassy by appointing a chargé de ferre But the executive does need appropriated funds to run the embassy so there you can't say there is no congressional oversight of Of this matter Historically resumption of diplomatic relations with communist regimes Has been linked with an executive agreement Providing a comprehensive claims settlement Because both countries typically want such linkage The u.s. To obtain compensation for american claimants the other government to terminate or avoid litigation in u.s. Courts The pattern with the soviet union with eastern europe china was very limited compensation Maybe 30 cents on the dollar or less for american claimants paid out of Foreign assets of foreign governments assets frozen in the united states These executive agreements based on the president's sole authority Have been upheld by the supreme court as the supreme law of the land now congress in I'll take this section 204 is it In the helmsburton It's 207 This is a very curious provision Sense of congress it is the sense of the congress that a satisfactory resolution of property claims by a cuban government Recognized by the united states Remains an essential condition For the full resumption of economic and diplomatic relations Between the united states and cuba one. Do they wonder do they not know that we already recognize The government in havana i don't know But this is sense of the congress The congress has not made this a it is not attempted to make to dictate as a matter of law This policy Maybe this is a recognition on congress's part that this is a matter of presidential discretion Under article two perhaps The We have a more fundamental problem though when it comes to Negotiating a claims agreement with cuba There isn't enough money The the claims amount to billions of dollars the frozen assets are very limited It's hard to imagine cuba appropriating money To pay american claimants So is there another options i think there could be if us sanctions Were relaxed and if the cubans were prepared to create the right opportunities for Private investment American Entities with large claims against cuba Might be able to recoup some of their losses through new investment But absent a comprehensive claims to settlement settlement the investors would have to worry about political risk Both in the united states And in cuba big problem What could the president do on his own authority Robert asked me to focus on this and it's my conclusion that the president could not Make an exact in Dube on his own authority an executive agreement which looks like a traditional by letter of investment treaty Because that exposes the united states government the treasury to reciprocal liability for cuban claims But that doesn't mean he can't negotiate a framework except Agreement i think the president does have authority Uh to negotiate an executive a formal executive agreement with cuba Which would provide a framework for cuban guarantees To american investors who voluntarily subscribed to the terms of these arrangements That agreement could spell out The protections cuba is prepared to offer It could provide impartial dispute settlement It could even provide funding For the uh, let's say an claims tribunal It could provide funding for uh, not just for the expenses, but it could provide funding for The awards if any had to be issued Where would the money come from it could come from contributions from cuba and from the investors um Commercial insurance political risk insurance, uh could play a role in this. I've done that in private practice For some for some clients There is a Closy precedent not directly employed not going quite this far but in the clinton administration The the the executive negotiated an agreement with germany and with other Countries in europe relating to holocaust claims and these agreements which were Binding on the two governments Provided in the case of germany for the the germans to us to fund Claims pool that would then be distributed by an impartial process created under that agreement In this particular case The supreme court held that a calis the california statute That was it deemed inconsistent With the policy of that agreement was unconstitutional There was the the executive agreement Which it really didn't have any rules of decision for the court synod Policy document from as far as the united states law is concerned was held to be supreme the supreme law of the land on The radical six binding on the states a very interesting precedent, but it was applied to four decision in Conclusion and i am running out of time here i want to sound One note of caution on this question of presidential power and congressional power As we speak and this came up earlier the nation is deeply divided over President obama's actions on immigration And the supreme court is about to decide The case has already been argued Whether the president can disregard a statute Allowing an american citizen born in jerusalem To insist on a u.s. Passport that describes his A place of birth as jerusalem Such a statement in a formal diplomatic communication would be inconsistent With long established u.s. Recognition policy Since the time of harry truman every administration since harry truman's recognition of israel has adopted the position that the status of jerusalem remains to be determined By negotiation of the parties in the area At oral argument however the court was sharply divided on ideological grounds Contrary to traditional expectations the conservative justices were strongly resistant To the government's foreign policy concerns the liberals were supportive The justice is also directed a surprising amount of attention to current events in the middle east It was a very interesting Day to be in court We have to wait for the decision, but my worry is that the political divisions That we have now will have in the coming years between a democratic president and a republican congress Might be reflected in a more political judicial process than we have ever seen Uh That could influence constitutional jurisprudence in coming years. We'll just have to see Thank you mark I want to make a brief comment about executive authority senator flake brought it up When this event was conceived There was no Criminition that barack obama was going to use executive powers to at least regularize five million Uh people in the united states Does this bleed over into executive action over cuba? To some extent, but I would argue not greatly foreign relations are a reserved area of presidential prerogative This has been true for As mark said for 200 years Bold endeavors by presidents are necessary in foreign relations when uh Richard nixon made the decision to normalize relations with cuba that was not subject to a national referendum It's something that Historically great discretion has been proposed in the president number two Immigration of course is a domestic issue and this is an extremely controversial Cuba if it figures at all in the daily thoughts of most americans it never reaches Uh Probably two on a scale of 100 in issues of great Concerned so not only is the public not much interested in the issue of cuba But on balance most polls would show broad support for normalizing relations with cuba So I take the point and I take mark's final point Particularly to heart that we live in an ever more politicized environment where there are Uh Rades into one another's constitutionally allocated authority both by congress and executive and Not surprisingly in recent years. This has always been true. Uh, the supreme court Periodically legislates and performs executive functions, whether they'll admit it or not Carl Should we go to questions or keep going? Should we go to the next Yeah, so we'll reserve questions for Jake uh vice president national foreign trade council Thank you. Um, thank you to carl and csis to cip and also to bob, you know bob been Is an expert in this field and it has been um Provided a lot of advice for us and for me personally on cuba issues And so I really appreciate all of that Uh for those of you who don't know the national foreign trade council We're a trade association based here in washington dc We promote open markets and international trade on behalf of our multinational member companies We run the usa engage coalition which promotes economic and diplomatic engagement of the world And which holds up us cuba policy is the greatest example of failed unilateral us sanctions policy I wanted to make three brief points here today. The first is that Authority exists for the president to permit additional two-way trade with cuba To discuss how a president might go about using that authority in the short term And to emphasize that the long-term trade relationship will depend on a lot more than altering or lifting sanctions policy So on the first, I think policy makers and practitioners Dating back to the clinton administration But even more so over the past four to five years I've done a great job in laying the intellectual basis for the idea that the authority exists for the president to License additional exports and imports to and from cuba So when I was writing a paper a couple of years ago on executive authority I interviewed the um serena mo who is a former ofac deputy general counsel and she said Helmsburton left in place the ability to issue regulations and licenses either general or specific If that weren't the case no little leaguers could go to cuba and no aid could be given to cuba without an act of congress And I think more recently bob in the article that you have before you does a good job of laying out the argument That the president has executive authority to license trade Um, I think so then second how would the president go about using that authority in the short term? The most elegant solution would be for the president to rip off the band-aid all at once and allow Cuban imports and license to license cuban imports and exports Sort of all at once and to get back to that. I think what bob referred to as baseline normalcy of most favored nation treatment I think that's unlikely given the history of the u.s. Cuba relationship, which has been at best incremental Um, I think the reality will be in the short term More incremental steps will be taken. Um, and I'd like to suggest maybe just one here And so my suggestion would be for the treasury department to grant licenses for e-commerce platforms like ebay and etsy and payment services like paypal and visa To enable cuba nationals wherever they're located in the world to sell on platforms to Customers that include the u.s citizens This would be a wedge to enable cuban entrepreneurs to engage the u.s. Marketplace And I think it's not only a good step for us trade policy But it also would help to reframe the debate about internet access in cuba that we talked that senator flake talked about earlier You know what we've what i've seen And one of the things that I do is I run a project at nftc called the global innovation forum that engages entrepreneurs In conversations about the global marketplace And what we've seen is that technology enabled businesses those that are connected to the internet grow faster Almost a hundred percent of them engage in the global marketplace as opposed to just locally uh, and that reliable internet access propels economic development on on a Very micro level of firms of and individual entrepreneurs of just two or three people Um And so finally I think Short-term moves aside the long-term opportunity will depend more than an end to sanctions or a significant Exemption from sanctions for for imports and exports You know shutting off sanctions isn't like turning on a spigot for foreign investment in trade And I think Longer term the extent of trade and investment that occurs will depend on three things The first is economic development and so trade will rise as gdp and disposable incomes rise Second is the policies of the cuban government and so if you're going to trade with cuba same as if you're going to invest with cuba You're going to care about their customs facilities and procedures Their import import permit requirements the extent and reliability of internet access The extent and reliability of domestic infrastructure roads and things like that Tariffs transparency and these are doing business Their ability and willingness to protect intellectual property rights, which I think we'll hear about in a little bit In my sense is that cuba doesn't always score high on in all of these areas And in part I think that's probably due to a lingering ambivalence about its relationship to the global economy And so if you're not sure that you want to engage in the global economy You're probably not going to do a good job trading it And then the last thing that I think it depends on are the attitudes of the us and cuban governments A closer trade relationship will require more than a thaw. It's not enough to just stop to decide that you're going to stop being enemies Trade deals are often as much about reflecting Political alliances as about economics if you look at say the case of us and vietnam So I think you know you could get pretty quickly back to this baseline normalcy with most favorite nation status But if you want a closer relationship That requires maybe not friendship, but certainly A mutual decision that you want better diplomatic relations as well Just to give you maybe I'll end with just an example of how this works mechanically with vietnam In 2001 the united states and vietnam signed a bilateral investment treaty In 2007 the two countries signed a trade investment framework agreement Which is essentially a precursor to a full fledged trade agreement and right now The united states and vietnam are negotiating A full fledged trade agreement called the trans-pacific partnership with other countries in the asia pacific Now all of that was preceded by a fundamental rebalancing of the us-vietnamese relationship I think in cuba's case is mark pointed out the ability to negotiate investment Provisions are implicated as well by by claim settlement issues. And so it makes it even more difficult But I think you know just deciding that if the u.s Government decides one day that the embargo has run its course and the president decides to Use the authority that he or she has to change The trade in relationship That doesn't necessarily mean we're going to be like the us and vietnam or the us and the dominican republic overnight That's going to take a lot of time. So thank you Thank you jake On to matthew whom I first met at the council of americas when he was doing some of the most interesting work on the intricacies of telecommunications banking and so on Matthew Thanks, bob. Thank you csis And the other groups that are involved in putting this together bob gave me the complicated task of trying to discuss Banking and financial services related issues I'd like to begin by saying that this This issue the issue of banking and financial services In my opinion really needs to be pushed to the very front of the line If we're going to approach anything close to normal Regardless of white house policy Since 2009 as we all know president obama has taken several executive actions unilaterally To increase contact between americans and cubans by promoting cuban american travel Obviously the flow of remittances from cuba to united states has grown dramatically He's attempted to increase the free flow of information to the cuban people By authorizing us telecoms companies to negotiate things like international roaming agreements And also internet communications technologies for example As of 2011 it's been legal for cubans in cuba To sign on to a wi-fi connection and use gchat or microsoft chat messengers Another pillar has been the uh a desire to try to support cuban entrepreneurs in the rise of Private economic activity in cuba This involves allowing americans to send money to the island as well as to engage in training programs and other things Regardless of all of these the executive intent here The fundamental issue Is that to sustain all these activities? it's required that providers such as Travel service providers that sell airline tickets or carrier service providers that handle charter flights Have the ability to access Basic financial services bank accounts to engage in wire transfers And without this it's really impossible for the white house to actually implement Its policies regardless of intent So to just to give you a sense of where we stand right now, and this is still relatively new, but it's happening as we as we speak um the Groups uh everything from diplomatic missions To companies authorized to sell plane tickets are having an increasing Problem accessing even basic banking services I'll run through some examples that are actually happening right now I have a client uh who About four or five months ago Got a letter from his bank in the southeast united states. He'd had a relationship with this bank for about 30 years He is uh remittance forder. He's licensed by OFAC to engage in in in activities In fact, he is you know the one of the companies that makes it possible for the white house to carry out its policies of sending money to cuba He got a letter out of the blue And it gave him 10 days to close all of his bank accounts They didn't give an opportunity to appeal it. It was just you have 10 days to close your accounts We appreciate your 30 year relationship with us But uh, we've decided as a matter of bank policy that we're not gonna bank remittance forders of any kind anymore About a year ago. I think it's more than a year now. Um the cuban interest section washington dc here announced that um It was gonna have to cancel consular services at its interest section because Um, it had been dropped by its bank in in upstate new york Again, this is a bank that had a relationship going on with uh, you know providing this this licensed activity for 30 plus years But as a matter of bank policy the bank decided we're not going to bank diplomatic missions at all The result was briefly a collapse of people to people travel And even now I have clients who are trying to get Visas to go to visit Gravely ill family members who have been unable to get those those visas because the the payment system is Is is so difficult I have clients who have called and asked me Whether it would be possible for them to drop a quarter of a million dollars in cash At the interest section in an armored truck here in washington because they couldn't get a wire transfer to go through The answer the question, you know, it's the the I mean it's almost absurd that these questions are rising But these are the things that people are are asking Um, and it's not at all uncommon at this point for uh, for companies to be operating almost on a cash basis Um So the cuban interest section is another example And then lastly this is one of my personal favorites. It came in a couple weeks ago I got a panicked phone call from a client who has a license to engage in people-to-people Activities Because a wire transfer from north carolina To the northeast united states Was being held up no one knew where or how but being held up it didn't arrive Because we were told The word cuba Was in in on the actual swift wire transfer instructions These banks have automated systems. They screen the words. They see the word cuba bingo, you know, you've got your wire your wire blocked But the issue was This is not a transaction that was ever subject to us sanctions This is a transaction going from a from a non-profit organization in one state in the united states to a non-profit organization in another state in the united states Getting held up and I know of an organization Yeah, yeah, so, um The bottom line of all the anecdotes is to just inject the the element of of perceived risk by banks if banks perceive The risks to be too high to deal with An account holder that has an OFAC license or a company that's trying to send money to purchase An import from cuba or an expert from the united states to cuba Uh It doesn't matter what the white house decides to do because At the end it's not going to where the rubber hits the road. They're going to be a lot of roadblocks So I want to move along quickly But the the the idea that banks are are dealing and grappling with these risks and that these these risks have become more complex Is new it's growing And there has to be a way to reduce perceived risks um The bottom line if licensed entities can't um Access banking services white house policies will be undercut I don't want to get into the risk discussion too much because it's very multi-dimensional It's difficult and banks evaluate risk differently. It's quite subjective Needless to say the the the basic legal and regulatory risk is at the is at the center of this The state and federal regulations And OFAC compliance regulations Are complex they require A tremendous amount of expense on the part of organizations that are trying to engage in licensed activities um Compliance is costly and failure to To comply even if it's you know A mistake on a wire transfer instruction Can lead to Tremendous fines Millions if not even in some cases billions of dollars of fines This Potential Risk the risk of being fined a billion dollars or more um has the effect of um of really throwing off Kilter the the risk reward balance that banks In the u.s. And overseas are are facing if You know the accounts are probably quite small The uh the you know the profit from engaging in these activities is in high and if the potential risk is billions You're just going to decline the business So anyway in terms of reduction We've been talking a lot and thinking a lot about well. How do we reduce the risk to banks if if this is going to really gum up the Works, how do we make things move move more smoothly? We don't I don't have an answer for it. I don't think anyone has a full answer Sit around you know debating this recently quite a bit But we do know that there are certain steps that the president can take that would Certainly would go a long way to helping I know we don't discuss the merits of any individual policy decision at this forum But let's begin with the state sponsors of terrorism list um When dealing with a sanctioned entity uh banks are already assigning a pretty high level of risk to that entity That can be you know Syrian militia or north Korea or what have you if you're if you're if you're sanctioned that's high Um banks are grappling with a whole variety of other Issues counter terrorism any money laundering etc But when you add a state sponsor of terror to this web Of of perceived risk it really is I think in many cases the straw that breaks the camel's back and um and it's You know a banking executive can simply point it and say we're not going to deal with state sponsors of terrorism um so That's one place to begin Another is is is is a clarity from the white house about what its policies are and and and a desire to see its policies implemented and carried out um, I think there can be certainly rhetorical The administration can be more vocal about saying we want people to people travel to be happening We want remittances to be happening and those businesses that are involved in sending funds That are licensed and legal are not and should not be punished by federal agencies And um, so I think you know and and in injecting a degree of of discretion prosecutorial discretion and clarity at the enforcement level So, you know, these are a few it's complicated. I look forward to questions. Um, but the bottom line Uh, obviously, it's in the mutual benefit of the u.s. Government banks account holders companies that are engaged in these activities To collaborate to find uh solutions and current and future policies toward cuba Cannot effectively be implemented in the current risk environment. There has to be something done to address it Thank you, uh I think it's now is a good point to go to questions and then we'll resume What's Gustavo christine welcome aboard uh and down so, uh How do you want to handle that past your microphone? Yeah, if folks have questions just raise your hand and and we'll get to you with a microphone There's one over there with the gentleman with the glasses John mccullough fun for reconciliation development. Um, mr. Feldman two specific legislatively There was a move and I don't know how it's what control it has to say that people who are Now u.s citizens cubans who have become u.s citizens retroactively Were covered by Whatever exists for american citizen property in cuba how much of a factor is that The second is whether within this parameter of presidential authority the president could announce tomorrow that Everything that is produced by the non-state sector In cuba was exempted from the embargo and every purchase by the non-state sector. That is co-ops as well as self-employed Whether that was raw materials machine tools Technical advice that that also could be exempted from the embargo would those specific things be within presidential authority Well, I will defer to robert on the technical details there my understanding on the first point Is that helmsburton which provides a framework for assessment of claims Against cuba that that extends to Claims by That would not have traditionally been recognized as Claims for which the united states was diplomatically responsible that is to say that Let's say for example, there was a taking by the cuban government of property of cuban nationals in cuba Historically, the united states government would not be and then that person Migrated to the other states historically the united states government would not represent that person diplomatically the the Question the second question Uh relates to whether the you know the broader question that robert has addressed And that is the premises I understand that of our discussion about helmsburton is that the president has authority to modify the regulations And presumably that would implicate an incremental Adjustment and not a comprehensive adjustment that that would raise much more difficult questions under helmsburton I'm not prepared to address that broader question today, but maybe robert is In in the handout I talk about trade Under current regulations all imports from cuba are prohibited. It's a specific section of the cuban asset control regulations But the president can't amend that and has in areas like allowing cuban medical products to come into the us The problem is if you could do it wholesale you could do it incrementally in the case of non State producers in cuba or you could do it wholesale but You run into problems of tariffs pretty quickly because unless the president goes further And establishes most favorite nation trade status with cuba any cuban import would be subject to The old tariff schedules They're still in effect, but applied to very very few countries and they're very odd Something like and they reflect trade union and different sectoral interests over many many years Rot iron is subject to something like the Full value the the duty you pay if you bring it into the us Without most favored nation treatment You say is the full value of the wrought iron plus a 300 percent duty It clearly keeps it out. I looked at this in relation to some of cuban exports at one point Things like agricultural products usually get pretty Decent tariff treatment Things that many people are interested in potentially rums cigars and cuban beer I think the duty on cuban beer would be something like five cents a liter So it's negligible But you do have to walk cherry pick your way through to determine imports into the us that could meet The duty requirements that arise from non most favored nation treatment Jake may have something to add to this or not. I we can go to Jake wisely Back here, I'll hold on Peter quorum, the national security archive. Thank you for the speakers so far. I'm looking forward to the next several for For matthew and robert. What are the what are the sanctions that relate to banking that are specific to the terrorism list And do those go away If q was taken off the list and what are the Issues about banking that remain with the embargo overall and helmsburton I think it's an excellent question. I've tried To work this out matthew's gone further into this wilderness than anyone who's survived to tell the tale I think if you take cuba off the terrorist sponsoring list many many things devolve off of that Including the ability to sue the nation of cuba and that's created judgments against cuba becoming more and more complicating It also requires certain ofac licensing Because they're on the terrorist list and if you violate an ofac regulation the downside is very very heavy So if you take them off the list, I think you make substantial progress in reducing legal risk, but also attitudinally changing How banks are viewing this because Do you want to be the bank? There was a case recently in new york where Victims of a rocket attack in israel sued a bank and claimed the bank Should have known that one of its account holders actually was a front for hamas And they had provided the money to fire the rocket So by being on the terrorist sponsoring list just in clouds cuba in Suspicion and mistrust now matthew can Give you a fuller answer No, I mean, I fully agree with bob on this. I mean another interesting example And I think that attitudinally or politically The we saw recently several months back client was a midwest bank based in minneapolis And they had carved out a niche Becoming a remittance forwarder not for cuba But for somalia because of the large somali community in minneapolis st. Paul Similar to cuba they operate they operate with an ofac license And Issues affecting remittance forwarders generally and this is to anywhere because the law requires Not only that a bank know its customers, but in many cases its customers customers And that that's a very high threshold for banks to reach In the case of Of of this bank They were fully compliant with ofac for years sending remittances to to somalia on behalf of somali folks in minneapolis And ofac, of course had provided all the necessary clearances One day they received a letter from the local It was a local officer from the justice department Completely different agency the nofac inquiring about about their activities and and inquiring about variety of different any money laundering and counterterrorism issues And Rather of course than face scrutiny From the justice department for this They shut down remittances for a period at which point one of their local representatives quickly Became very vocal in the house And cobbled together. I think what what became an effective political and bureaucratic solution to the problem in other words There were representatives of congress that were willing to take on this cause Stand with the bank and you know, they were able to at least put it together a stopgap measure the point being Somalia is not a state sponsor of terrorism It's easier to get representatives to to apply political pressure to to search for solutions If you don't have that label and it's a it's a starting point. We we we can't Perceived risks by the banks is it is very complicated. It's hard to get to the bottom of it But what we do know it's like an onion We do know that the state's sponsor of terrorism I think if you take that that last layer off it'll allow us to begin to get to some of the the finer points and the other issues that are there I think we can move on to the next segment if you'd like is there another question I think On to gustavo who's going to talk about the inner american bank and then Thank you, Bob. Let me let me start off by underscoring something that Carl and Elizabeth mentioned at the beginning of their Interventions, which is that the purpose of this conference is not to talk about whether or not united states should try to normalize relations with with cuba I was specifically asked To talk about under a current u.s. Law and under the charters of various international financial institutions What is possible? I for one don't see Uh, I don't think it's realistic at all that there would be in the near term certainly any kind of Effort by the United States try to normalize relations. I certainly don't see any kind of a unilateral lifting on the part of the united states Of the executive to the full extent possible or or certainly with the uh with the uh consent of the congress To lift that embargo anytime soon For a number of different reasons Not the least of which is that I believe that Cuba has for a number of years held the key to a better relationship With the united states and it has chosen not to despite part of stations to the contrary Has chosen not to exercise that key. Uh, bob did mention that secretary clinton in her book questioned the usefulness Of the embargo, but she also Correctly pointed out that at various times in the history of the united states These would be cuba when the united states has gotten close to doing certain things Importantly under the under the administration for her husband Cuba would take we were getting close cuba would do certain things that would make it make it at least politically very difficult For the executive to to move on And so this is all by way of saying that you know, it really it takes to the tango When this the cuban context it takes to the sasa Um, and so and the reason I mentioned this is because Regardless of whatever The law provides or the charters provide as i'll explain in a minute One cannot ignore the political diplomatic and strategic context in which any of these actions would that would take place Now let me move on Helms burden i'm going to talk about The prohibitions or limitations under helms burden as well as the various charters Of the various international financial institutions such as the world bank The idb or the imf although because of my background and worked at the idb I will focus primarily on on the idb helms burden is a law That to a surprising degree Ties the hands of the executive and it's in the bilateral relationship between the united states and cuba bilateral also multilateral section 104 of that act specifically Deals with the membership of cuba in any of those international financial institutions that I mentioned and it requires that until the president Certifies that cuba has a democratic government. It requires the secretary of treasury Which is who is the governor of any of these institutions the governor on the behalf of the united states to instruct The united states executive directors at these institutions to vote against cuba's membership Now what's curious about that language Is that the executive directors? At these institutions have nothing to do with cuba's membership or the membership of any of any country In these institutions it's actually the governor himself or herself Uh that would vote because this is a decision that's taken at the governor's level So what do we make of this? You know if we are to construe section 104 narrowly Or literally Then it is inoperative, right? It just doesn't make any sense It just it's a it's a useless provision in the term because like I said, the US executive directors would never be involved In deciding whether or not cuba or any other country can become a member of the Of those institutions. They certainly in preparation for the possibility of membership of cuba or anyone anyone else They certainly would work Behind the scenes and at meetings, etc But at the end of the day, it's up to the governors to make that determination Now if this issue were litigated, I suppose that a good argument could be made That the intention of the drafters of helmsburton was that what they really meant Was for the governor to vote against cuba joining these institutions And I will leave it up to others and litigators to decide, you know, which way that would that would How that would be decided, but but I just want to point out that's the specific That's what the language under section 104 of the helmsburton now Let's just assume that we have a broad interpretation. Let's assume that What was really meant and what everyone agrees is that the governors should exercise Their authority to vote against cuba becoming a member If cuba wanted to become a member of the ifc The world bank At least those two institutions Sorry, the IMF or the ifc of the world bank and I'll deal with the adb separately And if you wanted to do that and a majority of Of the other countries wanted cuba to join Then there's actually Even with the u.s governor voting against cuba's membership There's actually a little the sys could do at a practical level At that level, okay In the case of the adb it's a little bit different because Although And by the way, just like at the just like at the world bank and the IMF It takes a simple majority Also at the adb a simple majority of the governors of the shares represented by those governors the case of the of the imf The quota is represented by the by the governors To vote in favor of membership of one of one country or another However, there's an interesting wrinkle in the case of the adb Which is that the quorum requirements for meetings of the id of adb governors Requires that 75 percent of the shares be represented For a quorum because the united states owns 30 percent of the bank the united states Could deny a quorum for any such meeting and so Effectively the united states has a veto In the case of the adb of cuba joining and it's It's it's it's I would have a difficult time imagining a situation where every other country wants cuba to become a member except the united states And they call for a governor's meeting and everyone you know comes to washington wherever it is where this means to take place And the united states simply doesn't show up It's just something that is so unlikely to happen that we can dismiss it as even a possibility You know quite frankly So again when it comes to the adb the united states does have an effective veto of cuba becoming a member um now um This assumes as I said under that scenario that I had the fetical That the majority of other countries would want cuba to become a member um Now section 104 of the thomas burton also provides That in a case where cuba is a member and A loan or other assistance is provided to cuba Contrary to the vote of the us representative. Let's say in this case. It would be the u.s executive director. Let's say at the adb Then what the law requires the treasury department to do is to cut back cuba's Contributions to the capital of the bank by an amount equivalent to the value of that loan or assistance So say it's a terminal loan to cuba to do whatever The u.s government opposes that If the united states has capital paid in capital contributions that are due under helmsburton The treasury is supposed to hold back that 10 million dollars when it makes its next capital contribution or before it Before before it it finishes making all these capital contributions if capital contributions are not due and payable Or they're simply there are no paid in portions of capital to have to be paid Then it goes to the callable capital and what that means without getting into much into the weeds is that Whatever the callable capital obligation of the united states is Under the last capital increase it would be cut back by 10 million dollars using that example The reason i'm mentioning this is because this is a consideration that I think other countries would have to consider In allowing cuba to become a member or not more broadly And this is I think what we get into the practical issues Is that if there's ever the need as i'm sure there will be on the part of any of these multilateral investment development banks To have a capital increase Under us law the congress has to approve any such increases in capital because us law protects the Against the illusion of us interest in any of these institutions Other countries where members of these institutions certainly that they be are aware of this And that's a that's a consideration that they had to take Into they had to think about what in connection with of allowing cuba to become a member I don't know how much time bob. I have Let me end there and i'm happy to come back To uh, you know deep into these issues or continue talking about under the chart of the idb The way that would work and also the pros and cons of cuba becoming a member of any of these institutions Gustavo, could you finish with a brief comment on what the advantages to cuba would be And potentially the united states if they were to join the inter-american bank So again, this assumes that we have the right the right conditions in place and now cuba becomes a member of the adb The benefits are huge cuba will have Access to capital on very cheap terms of access to phenomenal technical assistance Access to grants also it's important to point out the convening authority of an institution like the idb That is so highly regarded in the region. I think the idb could put together A phenomenal investor conference to bring in investors consultants and others To look at possibilities of investing in cuba now on the flip side cuba Any other member would have to subject itself to the conditions imposed by the idb in connection with all these loans And these are fairly rigorous There are many of these but in general the idb wants to make sure that it gets paid back Which is always going to be risky with a country like like cuba There is a possibility that cuba if it were to enter the idb Would join a number of countries under something called the funds for special operations or the fso Which is a separate capital base separate from the ordinary capital of the bank The reserve for those countries that have the greatest needs Nicaragua example is one of them gyanna on duras Or These countries now a practical question is that whether those countries would raise any concerns about cuba Joining the fso At a time when those resources of course are limited I don't see that happening without the fso being replenished in order to allow that It would certainly I think be unfair to the other countries and then you get into the question about the congress Of course having to agreeing to that kind of replenishment And whether or not that can happen just depends on what else is going on, you know at that time and our budget deficits, etc Thank you Next we go to christine hate farley She's going to talk about Sorry I thought we would end with down Who's going to talk about the environment? Christine I would refer you to the biographies for the depth and scope of her scholarship In the area of intellectual property, but also to her great credit. She's practiced law. She's now a professor at american university Thank you. I'm delighted to be here I understand that the intersection of people who have a sophisticated cuba policy understanding And a sophisticated intellectual property policy understanding Is very small And I don't see that person in the room So i'm going to and I don't have a sophisticated understanding of cuba policy So that being said i'm going to kind of rapidly run through What I have identified as some of the major issues And i'm sorry. I can't give you the full landscape Nor the full background Because this is a really complex area So I thought I would tell you about some pending cases some pending legislation and and make a bit of a forecast for you On the pending legislation front It's really a joke here Maybe some of you are aware that in 2002 the world trade organizations appellate body ruled that Section 211 of the omnibus appropriations act of 1998 violated certain provisions of the wto Trips agreement, which is the intellectual property agreement of the wto And the united states was given a reasonable amount of time To bring that law into compliance with the agreement And that was 2002. So here's the legislative update There it is There has been no development on that front So this is still an outstanding issue That has made no progress in 12 years On pending litigation, there's been a lot of activity And there are There are There are cases that have been litigated for decades that that are important that I want to tell you about Again, you will be aware of various default judgments against cuba There is a pending case in the dc circuit court of appeals, which is harris versus cuba In which the plaintiff is seeking to execute his judgment against cuba upon 61 patents and 44 trademarks So this is a very interesting invocation of intellectual property Into one of these default judgments There are a number of major issues in the case One is really a cuba policy issue, which is whether or not there's jurisdiction under the foreign sovereign immunities act The other issue is whether Patents and trademarks can be or probably properly considered as frozen property And Probably there will be a ruling on the jurisdiction question Also pending Is still two cases That involve some of the most famous trademarks coming out of cuba One case on coheba The trademark for cigars and one case on havana club the trademark for rum In the coheba case Just a month ago There was a petition for cert in the supreme court on that case and what's interesting about that is that is The second petition for cert in this case But this petition comes from the federal circuit, whereas the last petition came from the the second circuit And the issue presented to the court is Whether the cuban asset control regulations Bars the cuban trademark owner from opposing and cancelling Trademarks in the united states patent and trademark office And what the petition for cert says is that there's a circuit split on this question The federal circuit ruled this summer that That the The carc does not prohibit a party from opposing or cancelling registrations in the trademark office And according to the cert the second circuit ruled quite the opposite What's interesting about this circuit split is that it's a circuit split in the same case, right? This is the same case that has been appealed to two different circuits So this is a case to watch obviously If the supreme court does not grant cert This case will go back to the trademark office And it looks I would say Very favorable for the cuban party in this case given the prior Rulings and given what the the federal circuit has said The last time The party was in this position of having Some Positive outlook That was exactly when we got section 211 passed. So You know, this is again a case to watch Including whether there will be any legislative action Um, Havana club Has also been pending for a number of decades. In fact, Havana club has also been litigated in two federal circuits Has also involved two federal agencies and has also been pending for two decades There's a lot of duality here In 2006 The u.s. Patent and trademark office Ordered the cancellation of the cuban registration of Havana club And what's interesting is that the cuban owner petitioned the commissioner that the commissioner of trademarks to review that order of cancellation And that petition for review has not yet been denied Since 2006 so that that is still pending. Um, it has not fully been resolved So on to kind of issue spotting In much of the litigation involving trademarks And there's been more litigation involving trademarks than copyrights or patents and and i'll explain why in a moment There have been a lot of arguments based upon a very little known International convention, which is the general inter-american convention for trademarks and commercial protection of 1929 And i've been writing a bit about this treaty And it's it's a sleeping treaty is what it is It's still in force between cuba and the united states and nine other latin american countries And very few trademark attorneys in the united states are aware of it. It hasn't really been Invoked as much as it could have been And it was really a treaty that At the time it was drafted I think the u.s. Trademark bar had its eye on the cuban market for u.s. Goods So I think that should our relations normalize it will become a treaty Which more people will know about and i'll say that Now the reason there have been This this flurry of litigation around trademarks is because Trademark protection is territorial And that is why we have this Weird situation where we have parallel trademarks in cuba and the united states, right? It's possible to have one word for the same good Be protected as a trademark in cuba by one party and in the united states by another party obviously if Relations normalize that will be a big issue And so that's why we've had attempts Um, and we have had some success of different parties Owning marks in the united states that are Identical to those marks owned by other parties for the same goods in in cuba So looking forward to normalized relations I can only expect that there will be more disputes Already there have been a number of applications for trademarks filed in the united states Involving geographical terms from cuba Especially in the area of cigars And those have been routinely recently at least routinely rejected by the trademark office But I can imagine with more travel to cuba there will be more interest and exploiting Cuban cigar brands and cuban cigar attributes or other geographical attributes So I I expect that This may this intersection of knowledge about cuba and intellectual property might be a place of growth in future. Thank you Thank you, christine. I've Asked Dan to speak last In the hope that he I should explain. He's with environmental defense fund has been for some years and has pioneered The most important environmental projects currently at Work on the island in the marine field of Fisheries conservation and so on I've kept Dan to last because I hope he's going to lead us into this bright new dawn of Normalized relations with cuba and what they might look like in the field of environmental cooperation Thank you, robert and thanks cis for having me today. Um I was going to talk about the bright new dawn until senator flake mentioned spring break in havana And uh, you know this normalization means spring break in havana or varadero. Um, that's quite a specter. I'll let you chew on Without normalization, there is very little Interaction between government agencies in the u.s. And their counterparts in cuba on the environment After the bp oil spill The cuban government came to to me to environmental defense fund and a couple other groups asking for real time information on the oil spill Because of the lack of diplomatic relations eventually over the course of several weeks there began To be a channel channel of communication I think even a noa Vessel was allowing cuban waters to take some samples But without normalization, there's not much going on in terms of government to government There has been a long history of scientific exchange between academic institutions and NGOs Such as mine, but it's been piecemeal fragmented and gradual so Many people often ask me isn't the embargo The environment's best friend in cuba I mean, isn't that why the environment in cuba is in such great shape and I would say No, u.s. Policy gets in the way of environmental protection in cuba Particularly with respect to our shared resources the florida straits, but many many resources ecosystems that we share That said there are many challenges if you think about what a normalized world looks like There are many challenges for the environment when I was in cuba with bill riley the former chief of the epa and former chair of obama's oil spill commission We were Very impressed with the rules and regulations in place in haven't in place in cuba with respect to offshore oil Very impressive on paper What bill riley said is once oil revenues start flowing Then it's a game changer Then the the the will to implement and enforce those rules will be tested and the the same thing goes with You know if if there's a if there's a surge of american tourism In cuba there'll be a demand for golf courses marinas gated communities even There'll be an explosion in fishing boats new marinas The recreational fishing potential in cuba is tremendous in a time when overfishing is a mounting concern in cuba waters You know will this uh surge in tourism result in more caribbean style development sun and sand You know more cancun or more costa rica where ecotourism is really the brand That cuba puts out there cuba has phenomenal land use planning You know will that be diminished when Relations are normalized will will the pressure to to develop in coastal areas just be so great that land use rules fall On the other hand there are many opportunities with normalized relations as i mentioned i think the u.s policy gets in the way You know more american visitors uh americans demand a high quality tourism product they they like bird watching and ecotourism So so in many respects The cuba could become more like a costa rica less like a cancun but it has so much more to offer in terms of Of of white american tourists you know want to do uh art history music etc sports Also, we would see much greater transfer of technology Wastewater treatment pollution controlled geographic information Systems that would help and assist cuba to do better planning Uh also i think uh the renewable energy potential in cuba is quite high The u.s under normalized relations could could be a great friend An ally to cuba in developing its its wind its solar its biofuels etc especially in in light of the Issues with with uh With oil and it in cuba's dependence upon venezuela in the future of that oil pipeline In terms of how How we get to normalization how the u.s government would would move forward there is precedent. Uh, there are several u.s Agreements on environmental cooperation in the case of uh the north american agreement in tandem with nafta There's a pretty impressive agreement on environmental cooperation. There are two good models with peru and chile as well and i would suggest that As we move forward with normalization that we start with these umbrella Agreements and the the north american agreement is a is a good example. Maybe start there. That's the agreement we have with mexico and canada If you look at the preamble of that that agreement it reaffirms the sovereign right of states to exploit their own resources Pursuant to their own environmental and developmental policies It also reaffirms their responsibility To ensure that activities within their borders do not cause damage To the environment outside of their borders. That's a very important principle in terms of us cuba Relations on the environment The notion that we are dealing with two separate states and that the environmental and economic development programs Will in fact be different It's also important that we recognize how interrelated our environments are Usually i talk i start my talk with With a discussion of just how connected we are ecologically. We you know our marine ecosystems in the florida straits are extremely tightly connected our commercial fisheries in florida depend upon good fisheries management in cuba, etc The objectives of the north american agreement on environmental cooperation. I will just mention a few One is to promote sustainable development based upon cooperation and mutually supportive environmental and economic policies To increase the cooperation between parties to better preserve florida fauna and the great biodiversity in these countries In the case of nafta and our trade agreements with chili and peru. It's critical that Environmental policy does not create trade distortions or trade barriers And finally another objective is to strengthen cooperation on development and improvement of environmental laws. I'm a lawyer Although i work mostly with cuban scientists and my own team is comprised mostly of scientists The way i got started in cuba is looking at cuba's very impressive suite of environmental and natural resource management laws A Environmental framework that could and should be updated and would benefit if there was cooperation between our two countries And i'll mention the us peru cooperation agreement. It lists a number of mechanisms for cooperation. I'll just mention a couple Basic exchanges of professionals technicians specialists, etc from ngos academic institutions and governments In cuba right now us cuba relations allows the exchange The interchange of of ngos and academic institutions, but again as i mentioned not government agencies who are In charge of managing the resource on either side of that line The ultimate goal is is transfer of knowledge and common best practices when it comes to environment and In resource management And and then finally i'll just mention there are a number of areas of cooperation that we've already begun But that are in serious need of enhancement Hurricane preparedness and response there is some government-to-government relation there that could be expanded oil spill prevention and response There is actually an agreement now between the us and cuba It involves mexico jamaica and the bahamas It's a significant step forward and coordinating on oil spill prevention and response We could take that one step further and have a bilateral agreement with the cuba like our mexis agreement with mexico And then there are opportunities on fisheries management. That's what my group does. We're trying to End over fishing in cuba. We're trying to manage Better the migratory marine life in the Gulf of mexico There are international conventions that cuba could become a part of the icath which manages highly Pelagic and migratory species. There's a lot of work to be done on coral reefs There's a there's a sanctuary program that noah has with mexico called the sister sanctuaries There's so much more that we share with cuba. We should expand that program into cuban waters We share this deep water coral network extending all the way from where I live in north carolina into cuban waters But there's been no science done yet on that now on those corals in cuban waters And then finally, I think there's a great opportunity under normalized relations for groups like mine World wildlife fund the nature conservancy the sierra club To have a greater presence in cuba perhaps have an office in cuba So that we can continue to provide You know assistance training exchange Also, there's a there's a great opportunity to expand The environmental community in cuba. There's several good environmental groups the foundation of uh, Antonio Nunez Jimenez is a leading example of a really strong environmental and natural resources NGO and groups like that could proliferate and in in a scenario of normalized relations Thank you We'll have questions now for relating to gas christine and dan anyone See dan erickson back Thank you. Uh, the question is actually for the whole panel not just the last three Um, my name is dan erickson. I work at the state department. Uh, I really appreciate this panel is very interesting It was refreshingly technocratic Uh, if I could use that phrase, um, and I know that uh, everyone clearly kind of got instructions to stay on the more technocratic Lane, which I think is good. Well, I did want to bring it back to one of the core political questions Which is on democracy and human rights, uh in cuba People can kind of debate how far cuba is moving in that Field or whether the united states should continue to try to advance democracy and human rights Some people think we should some people think we shouldn't Either way, it's probably going to remain a core, uh, us foreign policy goal And I wanted to kind of better understand how some of the different proposals that were laid out here Fit into that question. Is it the view of the panelists? Um, that undertaking some of the steps that you've outlined would actually help the situation in cuba with regard to democracy and human rights Um, is it the view that it may or may not help? But in fact some other core us national interests would be advanced Uh, I think dan elude to that in the environment, but I'd like to hear about some others And then I think the the kind of macro question and I have bob muses article here with a picture of the President uh on the front, uh, is why should the president choose to kind of revamp and roll the dice on cuba policy if the future benefits are Hypothetical, uh, but the costs uh are clear. Thank you What do we start with, uh What What might the benefits to the united states be of normalization dan is talked, I think eloquently in the environmental area Uh, jake could speak to, uh Trade and the benefits to the u.s. Uh trade sector Uh, we can take of some other allocations I would uh say one of the great benefits of normalization and it's not much talked about Is senator flake alluded to it That we exist today in a very curious Realm of compromised civil rights and liberties in the united states We can't go to cuba The united states government sits in judgment on projects that are proposed Uh, these things to me are fundamentally unamerican. So one of the first, uh advantages of normalization would be Felt domestically at home within Essential u.s values Let I think jake might speak for a minute about some of he's followed this for many years of some of the Trade advantages to the united states and and then dan i'm not neglecting your question about the impact Any of this might have it within cuba and some of the values your department and others share. We'll come back to that So Well, I maybe I will address your question a little bit more directly if that's okay I thought you know, I think engaging economically in cuba can support Broadly the idea of democracy and human rights Goals that you sort of shared goals I think you know the proposal that I laid out for Enabling cuban entrepreneurs to engage on online platforms to sell to the united states and elsewhere around the world Supports economic freedom it enables cuban entrepreneurs to to access the global marketplace It democratizes the global marketplace for cubans Um, I think generally trade agreements and and I was I was listening to um to dan and christine talk about ip and environments trade agreements Longer term um present a really useful framework for dealing with a host of issues under that umbrella and so dan mentioned the economic cooperation agreements that are part of or Concerned two agreements like nafta and the us chili free trade agreement in the u.s. Proof free trade agreements Labor is also included in that Transparency is also included in that and so you know as you get into these negotiations You deal with issues that do have an impact on workers and on and on freedoms So I think for all of those reasons Economic engagement and working towards these long-term trade agreements Is really useful The one thing that the one I think big omission that I Forgot to add in my opening remarks was that at least when it comes to market access to changing tariffs That's the place where congress does have a role. It's congress is prerogative to to change tariffs. And so as you talk about Deepening the economic relationship and and working towards say a full-fledged trade agreement, which I realize how um Ridiculous that sounds given the current state of the relationship, but over the longer term that will require congress congress's involvement mark you had question That's been asked and it's It's really the a different agenda than what we were invited to address But I'm happy uh to address it Starting point I think is senator flakes point That the embargo is for 50 years into the embargo. It has failed to achieve The objectives for which it was designed now. I think that the course the embargo was fully justified back in the day when castra was supporting girl movements in the hemisphere and elsewhere and Welcoming a soviet military presence in cuba, but that's a long time ago Gustavo's is a gustavo point was is very well taken that cuba Has not really cooperated in Providing conditions for normalization I the way I see it the primary u.s. Interest In cuba right now Is to provide as much as it's not within our control But to provide a political diplomatic environment For the cubans to decide that they want to move on their own To loosen up the restrictions the somewhat authoritarian if not totalitarian restrictions on their own society The cubans are I think Are somewhat in the same position as the authorities in terra right now They're afraid uh of that reproche wall would weaken their system in place In cuba, that's my take. I'm not some political sciences, but That's my judgment. We are not getting anywhere with our current policy. I think that's established And I would hope That we could begin to take moves That might encourage the cubans to enter into a relationship with us that would benefit the cuban people as well as american The america's posture in the world. I think you're We're entering a phase I think it's pretty clear that the cuban our cuban embargo policy has become a burden On our relations with the rest of the hemisphere And it's going to become more costly in the future as I see it Gustavo Let me see if I can answer this question also on a technocratic level So one of the requirements of being a member of the world bank Is that you're a member of the of the imf And almost by definition Becoming being a member of the imf would subject cuba to certain conditions That would quite frankly expose cuba's policies The fundamental contradictions that exist currently in cuba Whether or not this would have political implications in cuba or not You know, I don't know But that would certainly be one of the advantages to cuba being a member of the imf providing the kind of information They had to require etc. By the way cuba left in 1964 Because they were about to be kicked out of the imf for a failure to comply with a number of different provisions Requirements of members including the provision of of information and at the same time they had to leave the world bank With respect to the id id b and I didn't have a chance to talk about this earlier so If you you know cuba was an original member, uh, cuba, I'm sorry signed their charter of the id b back in 1959, but they never Ratified the agreement. They never took the steps to subscribe for shares, etc. That's why cuba has never been a member of the id b Having lost the opportunity to become a member at the at the original, you know, when the charter was a was a Was signed Cuba would have to come in through another provision, which is that membership is open to members of the oas now There's a debate we can have as to whether or not cuba is a member cuba In principle is a member cuba's membership was suspended in 1962 I believe it was that suspension was reversed in 2009, but subject to the condition that cuba agree To certain obligations under the oas charter including Signing the inter-american human rights charter or something that they they have derided something They have said specifically they're not willing to do and as of today cuba has taken a very negative stance towards joining the oas And so my reading of the charter of the id b is that currently cuba would not be able to join The id b simply because it doesn't even itself consider A member of the oas and at the end of the day the id b would would defer to the oas providing a certificate Some kind of certification that cuba is a member of the oas, and i'm not sure that they'd be willing to do that in the in the current context Thank you. Do we have other questions? Can I jump in? Oh, sorry christine go ahead Maybe dad wants to as well So intellectual property law The purpose of intellectual property law is to promote the development of human expression and research and development of sciences and also To facilitate the sharing of human expression and research So I think it definitely relates to human rights objectives Anybody who knows anything about cuba knows that the sciences and the arts are absolutely flourishing in cuba But most us intellectual property lawyers would be very surprised to know That intellectual property law is also flourishing in cuba The cubans are very sophisticated About intellectual property law and their laws are As harmonious with the united states laws as any other countries So they're very up to date and we just have the embargo, which is which is now providing the block of that sharing of research and expression and I don't see how that can Be consistent with the goals of of human rights I'll add real quickly A clean and healthy environment is a basic human right. I think that's why widely agreed upon and understood around the world That's reflected in article 26 of cuba's constitution Uh, I would know that our own constitution does not give citizens a right to a clean and healthy environment Progress has has been made to some extent at least under the body of environmental law that started in 1997 and continues I think that environmental cooperation would Do three things essentially. I think it would increase awareness of the importance Of cuba's environment biodiversity natural heritage both inside of cuba and outside of cuba I think there's not that much awareness even in the us about how important cuba is to the region environmentally and ecologically number two, I think it would increase Environmental standards and living conditions in cuba. I would result in Implementation of these laws we discussed And then finally, I think and this is already happening in cuba. I think environmental cooperation will lead to greater public participation and decision making Uh, and particularly an environmental decision making take uh fisheries management, for example The cuban government is in the process of trying to update its fisheries management You know rules So that they're more sustainable You're not going to achieve sustainable fisheries management in cuba unless fishermen and coastal communities participate in that process and buy into that process and again, we're already seeing that so I think environmental cooperation can only advance that further The only thing I would add. I mean, I think that the white house has already taken very important steps To promote the free flow of information to the cuban people to support private Economic activity in cuba and all of these have an important democracy and human rights component to them The issue is that if groups carrying out those missions Are impeded By their inability to access financial services and banking It's you know That itself is a problem and addressing that problem first I think can can can take things that the white house has already authorized and make them far more effective on the island Do we have other questions for this panel? My name is Dan Nichols with nga a national geospatial intelligence agency and um a couple of items that the panel brought up earlier went bought by in a blur and um, I thought we could maybe revisit one or two of them one is Mr. Aho you mentioned that There the us or excuse me the cuban interest section Had a 30 year relationship with the bank and then that relationship was halted and the question that I have is What prompted the cessation of that relationship? and then I have three other questions that all revolve around the same topic But not a small one which has to do with the state-sponsored terrorism issue What are the arguments for keeping cuba on the state-sponsored terrorist list And when were they put on and why were they put on? Maybe I should begin with the terrorist sponsoring list. We'll come back to matthew Cuba was put on the list. I'm pretty sure in 1982 And there were express reasons for being put on the list that principally its support for in marxist Insurrectionary movements in central america sandinistas mfl in and el Salvador and is an interesting legal note the supreme court upheld the embargo based on affidavits from the department of defense principally Saying there's a national security Element to this cuban support for these liberation movements as cuba styled them. So they were put on the list in 1982 They've been on ever since fidel castro said in 19 Approximately 1995 we're broke and we're out of the revolution business here at least as far as exporting it And I think that has held true ever since the current Uh The current stated reasons by the state department for keeping cuba on the list become Ever more difficult to tease out each year There's It said that well, there are some farc Relationships, but in fact cuba is hosting the negotiations between farc and the government of colombia There's some comment periodically wayne smith has Spoken on this issue for many years about some etta basque separatists living in cuba Well, they're living there at the request of the spanish government that doesn't particularly want these hard men back home, right? So we're left then With very little, uh, there is a comment periodically that cuba Is harboring fugitives from u.s. Justice That alone does not constitute support for international terrorism I've written on that subject if you're interested. So As long ago as the clinton administration Richard nutcio clinton's principal cuba advisor Not long after leaving that job said to the miami herald that Everybody agrees cuba doesn't belong on this list But there's a political cost Perceived cost and taking it off if somebody wants to correct me and and Give objective details of why cuba might be on that list. I'd be happy to hear it But I haven't heard that from state department itself for some years. I don't mean this to sound like advocacy I mean it to sound like frustration at this point, so I hope that's answered your question matthew Yeah, on the on the banking issue. I think the key thing To remember and I've had discussions with the bank about this is that the decision To cease providing services to the cuban diplomatic mission was a business Decision it wasn't a political decision. They had had a functioning relationship. It was a profitable relationship for the bank But in the ever more complicated, uh Risk compliance You know Evaluation process The bank took a decision That it was no longer going to provide services to diplomatic missions of any kind Um, it it considered those types of accounts diplomatic accounts to rise above a risk threshold that it was comfortable with the I think almost more interesting Uh component to that sort of issue is that since The diplomatic mission was dropped and in mind you this is a case in which the u.s. Government is prepared to provide assurances Not only to the bank, but also provide licenses to the mission itself Is the fact that um for over a year now The u.s. Government has reached out to dozens of banks in an effort to find a replacement Talking here about a checking account So that they can stop receiving cash And as of now, uh, at least in the case of interest section There has not been a bank large or small us or non us that's been willing to take on these accounts um And it's again it boils down to risk and to banks proceed risks And I think an important thing to tease out which is that If the risk, uh matrix Reaches a level of complexity which it's almost incomprehensible the issue is that It's the unknown It's the bank that you know was doing everything complying with o-facking gets a letter from the justice department It's the fact that there is no rule book that is you know that is that is clear enough and and and compelling enough that That a bank would follow it and and this is you know, it started with the interest section I assure you it's bleeding into other areas. Um, some of the big dollar clearing house banks are getting very anxious about Wire transfers, I've gotten several calls in the last few weeks about wire transfers that just disappear And these are from groups that have licenses that have been you know that have been engaged in these activities for many years And you know, it's not that the money doesn't resurface It does but figuring out where it is and why it never reached its recipient Is an issue and I think in the next few months we're going to see this play out in a variety of different areas I'd like to return to the tariff sponsoring list just for a minute to make the point It's not cost-free to the united states Is matthew's been describing uh, one of the reasons to take cuba off the list is Cuba can be sued it loses diplomatic immunity or the sovereign immunity Because it's on the list. This has resulted in dozens of lawsuits being filed in miami. They're awarded by default They're not defended by the government of cuba And then these cases are now starting to hit the international financial markets. They're trying to seize dollar transfers They're going after accounts. They're Illustrative case is a man that has a judgment. I believe for close to four billion dollars Against cuba default judgment. He got it in the Dade County court And that's based on his father committing suicide. I believe after their Car dealership and gasoline station was nationalized in cuba in 1960 I believe All these years later a four billion dollar freshly delivered judgment against cuba That lawyer was quoted only a few days ago is saying he hopes to harvest 20 million dollars Out of these dollar accounts, which in many cases represent legitimate trade between cuba's buying wheat from Argentina the dollars all dollars come through the new york depository system so these Ravenous packs of lawyers are now trying to grab this money. They have an interest in doing it They get 33 and a third percent of anything they can grab as you know on a contingency arrangement So it is not it's further complicating Attempts to do the good things the president has done Support people to people travel that requires the payment for hotel rooms in cuba These transfers are being held up. So I would ask the u.s. government to Start intervening in these cases file a statement of interest There's a legal procedure for doing it and say the cases are baseless because you have to demonstrate cuba was a terrorist sponsoring nation at the time of the Complained of action cuba was listed in 1982 this man committed suicide in 1960 or 61 Now one of those lawsuits meets the basic jurisdictional requirement of the statute which uh Mark Feldman was very much involved in the foreign sovereign immunities act. So that requires our government moving on this And ideally they will This is a follow-up and before you before you go This is the last question because we're at noon now and uh, we're gonna wrap up. So go on This is a question on the follow up. Oh, this is james williams with the trempa group. Um, this is a follow up on the banking question um, given all that You know and sort of this is not just a cuba problem. Although their case is probably the most severe example of this If what are the is there are there steps, right? So say the state sponsor of terrorism list goes say there's more sanction relief Is that still gonna be enough is that gonna be enough To incentivize a bank to want to take this to count because at some point all these other steps are totally untenable If cuba can't even get a bank like how are we gonna have trade relations with a country without a bank? right and so Are there things beyond that the need to happen for you know, I think just make it worthwhile enough or What are we looking at here in terms of the future prognosis? James, I wish that I knew the answer to that question. Um, I think that there are other people in this room Even potentially some from the u.s. Government who wish they could answer that question. Um You know, it's one of the one of the important differences between cuba and the united states And this frustrates the cubans to no end. I assure you is that the u.s. Government can't tell a bank to take the accounts You know, it's the bank has the right to make its own business decision about whether or not it services a customer And There's a risk reduction side which obviously needs to be met the removal of cuba from the state sponsors of terrorism list I think we're in consensus would remove some element of risk, but there are others Where we reach that tipping point? Um on the risk side, I can't tell you for sure On the reward side because from a business decision, it's cost benefit on the benefit side Um, you know A lot of these groups are already working in a high fee area You know groups are willing to pay high costs for a banking relationship On a higher much higher than normal costs But you know, it's not If you're let's take if you're a large bank, you know, let's say that you're I don't want to name a specific large bank Let's take a large bank And this would be a very small portion of your overall portfolio And you run a foul somehow of OFAC Uh licensing provisions The issue is that it's not the funds in question in those particular accounts that are at risk It's the assets of your bank all the other assets And so name a bank that's going to put, you know Millions or billions of dollars of assets in one area on the line for this Small other area I'm not sure So We don't have a full answer. I will say that there are cases very there are success stories. Um, I think you know Western union is clearly a success story. They have continued operations. They have global operations in some You know in some complicated and complex and complex area Uh, and and they've been successful They spend a quarter of a billion dollars a year on compliance So, you know, maybe it's that maybe the niche is the answer, but it's going to be A combination of different things and assurances from the from the from the u.s. government Would would go a long way Jake quickly Just real quickly. I do think that I'm something that Matt talked about before was there's this threshold issue though that would make a lot of difference in terms of removing them from the Terrorists what banks face is um, sort of OFAC officials speaking out of both sides of their mouths. They'll go To banks and say well, yes, it's okay if you do the cuba if you do this business with cuba But then they'll go back to them and say and by the way, iran is on the state sponsors of terrorism list And you have to divest yourself of all accounts related to iran And so just by virtue of being associated with these other bad actors on the terrorism list There is this additional amount of risk that banks face And they don't tend to differentiate and so removing them from the state sponsors of terrorism terrorism list would I think diminish that risk? Well, I want to thank everyone on this panel. I think it's been most informative. Thank you So in closing in elizabeth, could you please join me up here? My co-host here the director of the cuba project at the center for international policy I want to thank all of you for coming. I think This was a lively useful bipartisan mixed very diverse Group which I think already Symbolically means something when dealing with cuba We got all kinds of different views. I think it was important in that regard I think we did what we said we were going to do For the most part it was a technocratic Panel as was said and I think folks views came up at the end So if the president of the united states were interested in normalizing relations with cuba, I think This panel would be a great starting point. So thank you. I invite you all to lunch And I look forward to seeing you at other events. Thank you