[News] Cuba Embargoed: U.S. Trade Sanctions Turn Sixty
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Cuba Embargoed: U.S. Trade Sanctions Turn Sixty
February 2, 2022
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*Washington D.C., February 2, 2022 –* On the eve of the 60^th
anniversary of President John F. Kennedy’s executive order imposing “an
embargo on all trade with Cuba,” the National Security Archive today
posts a collection of previously declassified documents that record the
origins, rationale, and early evolution of punitive economic sanctions
against Cuba in the aftermath of the Castro-led revolution. The
documents show that the initial concept of U.S. economic pressure was to
create “hardship” and “disenchantment” among the Cuban populace and to
deny “money and supplies to Cuba, to decrease monetary and real wages,
[and] to bring about hunger, desperation, and the overthrow of [the]
government.” However, a CIA case study of the embargo, written twenty
years after its imposition, concluded that the sanctions “have not met
any of their objectives.”
The selected declassified records chart the secret deliberations of both
President Dwight D. Eisenhower, who cut sugar imports from Cuba and
restricted U.S. exports, and President Kennedy, who imposed a full trade
embargo against the island nation on February 3, 1962. They also examine
the “lard” scandal that led the Lyndon B. Johnson administration to add
food and medicine to the embargo, Henry Kissinger’s considerations of
using the embargo as a bargaining chip to potentially normalize
relations, and the Jimmy Carter administration’s resistance to
congressional efforts to lift restrictions on the trade of food and
medicine to maintain leverage in negotiations with the Castro government
on engagement. A secret 1982 CIA case study, “US/OAS Sanctions Against
Cuba (1962-Present),” concluded that early on the trade sanctions were
“significantly damaging to Cuba’s growth and general development,” but
that the embargo had failed to meet its objectives and the political
costs outweighed its benefits.
In his comprehensive chronology of the 60-year evolution of the embargo,
American University Professor William M. LeoGrande describes it as “a
complex patchwork of laws, presidential proclamations, and regulations
that Fidel Castro once called ‘a tangled ball of yarn.’” According to
Peter Kornbluh, who directs the Archive’s Cuba Documentation Project,
“the endless embargo has become an enduring symbol of perpetual
hostility in the U.S. posture toward Cuba.”
proclamation
<https://nsarchive.gwu.edu/sites/default/files/2022-02/Embargoimage2_0.jpg>
A Brief Chronological History of the U.S. Embargo Against Cuba
*William M. LeoGrande*
The U.S economic embargo against Cuba—or “el bloqueo” (the blockade), as
Cubans refer to it-- is not a single law, but a complex patchwork of
laws, presidential proclamations, and regulations that Fidel Castro once
called “a tangled ball of yarn.” It has evolved over the sixty years
since President John F. Kennedy put it in place, loosening and
tightening from one administration to the next, depending on the
president’s preference for using hard power or soft power in dealing
with Cuba.
1960
President Dwight D. Eisenhower imposed the first economic sanctions
against Cuba’s revolutionary government, though they fell short of a
full embargo. When Fidel Castro nationalized U.S. and British oil
companies for refusing to refine Soviet oil, Eisenhower retaliated by
cutting off Cuban sugar sales to the United States, sales that comprised
some 80 percent of Cuban sugar exports. Castro then nationalized most
U.S. businesses on the island, and Eisenhower banned all U.S. exports to
Cuba except food and medicine. These sanctions were part of a U.S.
broader strategy to overthrow Castro, including support for his internal
opponents and preparations for an exile invasion.
1962-1963
After the failure of the Bay of Pigs invasion, President John F. Kennedy
used the authority of the Foreign Assistance Act to impose a complete
embargo on all trade with Cuba. The following year, under the authority
of the Trading with the Enemy Act, he extended the embargo to cover all
financial transactions unless licensed by the Secretary of the Treasury.
The Treasury Department developed the Cuban Assets Control Regulations
(CACR
<https://www.ecfr.gov/current/title-31/subtitle-B/chapter-V/part-515?toc=1>)
to catalogue what transactions were allowed. Kennedy’s sanctions, like
Eisenhower’s, were part of a broader program aimed at regime change that
included sabotage and paramilitary attacks launched from the United States.
1964
President Lyndon Johnson’s policy of “economic denial” focused on making
the embargo multilateral. The United States bribed and strong-armed
members of the Organization of American States to join the embargo
<https://www.oas.org/consejo/MEETINGS%20OF%20CONSULTATION/Actas/Acta%209.pdf>
cutting off diplomatic and economic relations with Cuba. Only Mexico
refused. Europeans did not openly join the embargo, but quietly
cooperated by cutting back trade with Cuba. Johnson also prohibited food
sales to Cuba, which Kennedy exempted from the embargo, and rejected
Attorney General Robert F. Kennedy’s argument
<https://nsarchive2.gwu.edu/NSAEBB/NSAEBB158/index.htm> that travel
should be exempted because prohibiting it was un-American.
1975
Faced with growing resistance in the OAS, the United States joined a
majority of members voting to end the mandatory sanctions
<http://www.oas.org/CONSEJO/MEETINGS%20OF%20CONSULTATION/Actas/Acta%2016.pdf>
against Cuba, which led a number of states to restore normal relations.
The U.S. vote was part of Secretary of State Henry Kissinger’s abortive
effort to normalize U.S.-Cuban relations. The United States also lifted
the embargo on trade between Cuba and the subsidiaries of U.S. companies
operating in third countries, and lifted the prohibition on ships
trading with Cuba docking in the United States.
1977
President Jimmy Carter also hoped to normalize relations with Cuba, and
as a first step he lifted the ban on travel completely and authorized
Cuban Americans to send remittances to family on the island. He also
considered lifting the embargo on food and medicine, but decided against
it because it would allow Cuba to resume sugar sales, giving a major
boost to its economy. Later in the year, when Cuba asked to buy several
dozen medicines available only from U.S. suppliers, National Security
Adviser Zbigniew Brzezinski convinced Carter to refuse because of Cuba’s
military support for Angola and Ethiopia.
1982
President Ronald Reagan imposed new sanctions to punish Cuba for its
support of revolutionary movements in Central America. He reimposed the
ban on travel for most U.S. residents, banned most Cubans from traveling
to the United States, prohibited the import from third countries of any
product containing Cuban nickel, and named Cuba to the State
Department’s list of State Sponsors of International Terrorism
<https://www.everycrsreport.com/reports/RL32251.html>, where it remained
until 2015. Most of the sanctions resulting from inclusion on the
terrorism list were already part of the Cuba embargo, being listed made
international financial institutions more reluctant to do business with
Cuba.
1988
An amendment
<https://www.historians.org/publications-and-directories/perspectives-on-history/may-2004/sleeping-with-the-enemy-ofac-rules-and-first-amendment-freedoms>
by Representative Howard Berman (D-CA) to the International Emergency
Economic Powers Act (IEEPA) and the Trading with the Enemy Act exempted
from U.S. sanctions against any country the import or export of
“publications, films, posters, phonograph records, photographs,
microfilms, microfiche, tapes, or other informational materials.” This
has enabled Cuban artists and writers to sell their work freely in the
United States.
1989-1991
As President George H. W. Bush and Soviet leader Mikhail Gorbachev
negotiated the end of the Cold War, the United States pressured the
Soviet Union to cut off economic aid to Cuba, worth some $3 billion
annually, as a condition of U.S. aid to the Soviet Union. Gorbachev
refused, but when the Soviet Union collapsed, the new president of
Russa, Boris Yeltsin, agreed to the U.S. demand, sending Cuba into a
decade-long depression known as the “Special Period.”
1992
With the Cuban economy reeling, the U.S. Congress passed the Cuban
Democracy Act (CDA) <https://home.treasury.gov/system/files/126/cda.pdf>
to tighten the embargo in hopes of finally bringing about regime change.
Presidential candidate Bill Clinton endorsed the CDA and President Bush
signed it into law. The CDA reimposed the ban on trade between Cuba and
subsidiaries of U.S. companies in third countries, cutting off some $700
million in trade, mostly in food and medicine. It restored the
prohibition on ships trading with Cuba docking in the United States for
180 days and gave the president the authority to cut foreign aid to any
country aiding Cuba. The CDA also authorized food donations, the sale of
telecommunications services and equipment, and medical sales, but with
such strict regulatory requirements that very little trade was realized.
Finally, it specified that the embargo should only be lifted when Cuba
had become a democracy, and authorized U.S. government support for Cuban
dissidents to bring that about.
1994
During the “rafters” migration crisis, President Bill Clinton cut off
family remittances and halted air travel between the United States and
Cuba to punish Castro for allowing Cubans to leave, and to pacify Cuban
Americans angry over Clinton’s policy of interning Cuban migrants
rescued at sea in Guantánamo Naval Station rather than admitting them to
the United States.
1996
After the Cuban air force shot down two small planes, killing four Cuban
Americans from the Brothers to the Rescue exile organization, Clinton
signed the Cuban Liberty and Democratic Solidarity Act
<https://home.treasury.gov/system/files/126/libertad.pdf>, which wrote
the embargo into law and specified that it could only be lifted once
Cuba became a multi-party, free-market democracy, and compensated U.S.
citizens and Cuban Americans for property nationalized after the triumph
of the revolution. To discourage foreign investment Cuba, Title III of
the law allowed anyone who lost property in Cuba to sue in U.S. federal
court anyone “trafficking” (making any beneficial use) of that property,
thereby opening foreign investors in Cuba to the risk of litigation. The
law allowed the president to waive activation of Title III, so it did
not go into effect until President Donald Trump decided
<https://www.akingump.com/en/news-insights/trump-administration-authorizes-lawsuits-against-companies-that.html>
not to renew the waiver in 2019.
1998-1999
In response to the 1998 visit to Cuba by Pope John Paul II, Clinton
restored charter air service and family remittances, and eased travel
regulations to allow U.S. residents—Cuban American Catholics in
particular-- to go to Cuba to see the Pope. A year later, he authorized
expanded air service, and “donative” remittances, enabling anyone in the
United States to send remittances to Cuba. Most importantly, he
inaugurated “people-to-people”
<https://www.everycrsreport.com/files/20011029_RL31139_a2f0b0f96bb1b9440f6bc749a7dd47ac45dc1489.pdf>
travel, allowing U.S. residents to visit Cuba for a wide variety of
cultural and educational purposes. People-to-people quickly became the
main avenue for non-Cuban American travel. By the end of the Clinton
administration, Cuban Americans were sending some $800 million dollars
in remittances to Cuba annually, and some 250,000 U.S. residents were
visiting the island.
2000
Lobbying by Americans for Humanitarian Trade with Cuba, an alliance of
some 600 business organizations and 140 religious and human rights
groups organized by the Chamber of Commerce, succeeded in eliminating
the embargo on agricultural sales to Cuba in the Trade Sanctions Reform
and Export Enhancement Act
<https://home.treasury.gov/system/files/126/tsra.pdf>. To mollify Cuban
American opponents, Congressional leaders agreed to prohibit any U.S.
government or private sector financing of such purchases. They also
agreed to ban “tourism,” defined as any travel to Cuba not included in
the 12 previously authorized categories of legal travel. Despite the
credit restrictions, Cuba began buying food from U.S. producers in 2002,
averaging about $300 million in trade annually
<https://crsreports.congress.gov/product/pdf/R/R46791> since.
2003-2004
Cuban Americans played a key role in President George W. Bush’s 2000
election victory in Florida and he was especially responsive to their
demands to tighten the embargo. He appointed a Commission for Assistance
to a Free Cuba
<https://2001-2009.state.gov/p/wha/rt/cuba/commission/2004/c12237.htm>
to map out how to “bring about an expeditious end of the Castro
dictatorship.” Following its recommendations, Bush abolished
people-to-people travel and stepped up enforcement targeting people who
violated travel regulations, even inadvertently. He restricted academic
exchanges so severely that only a handful of study abroad programs
between U.S. and Cuban universities survived and Cuban travel to the
United States virtually ceased. Cuban American travel to the island was
limited to one trip every three years, and the limits on family
remittances were reduced significantly. These regulations
<https://www.everycrsreport.com/files/20050510_RL31139_943aaaaf60791474ad176dc52f9110f3e90845d4.pdf>
cut travel to Cuba by half, reduced humanitarian assistance from some
$10 million annually to $4 million, and shrank remittances from $1.25
billion annually to about $1 billion.
2009-2011
President Barack Obama ran in 2008 on a platform that declared U.S.
hostility toward Cuba a failed policy and promised something different.
Just months after inauguration, he lifted all limits
<https://obamawhitehouse.archives.gov/blog/2009/04/13/reaching-out-cuban-people>
on Cuban American travel and remittances. When a Congressional attempt
to legalize all travel to Cuba failed in 2010, Obama restored
people-to-people travel
<https://obamawhitehouse.archives.gov/the-press-office/2011/01/14/reaching-out-cuban-people>
and reversed Bush’s limits on academic exchanges the following January.
2015-2016
On December 17, 2014, President Obama
<https://obamawhitehouse.archives.gov/the-press-office/2014/12/17/statement-president-cuba-policy-changes>
and Cuban President Raúl Castro announced their intention to restore
diplomatic ties and move toward normal relations. Over the next two
years, Obama approved five major packages of reforms to the Cuban Assets
Control Regulations, each one loosening the embargo further (January
2015
<https://www.treasury.gov/press-center/press-releases/Pages/jl9740.aspx>,
September 2015
<https://www.treasury.gov/press-center/press-releases/Pages/jl0169.aspx>,
January 2016
<https://home.treasury.gov/system/files/126/fact_sheet_01262016.pdf>,
March 2016
<https://home.treasury.gov/system/files/126/cuba_fact_sheet_03152016.pdf>,
October 2016
<https://home.treasury.gov/system/files/126/cuba_fact_sheet_10142016.pdf>):
* The regulatory changes expedited travel by eliminating the need to
get a prior “specific” travel license from the Treasury Department,
and allowing individual travelers to design their own educational
“people-to-people” trips.
* Obama restored normal mail service and commercial air links with
destinations across the island. They facilitated commerce by
allowing business contracts with the Cuban government for
telecommunications services, cruise line visits, hotel management,
and other transactions that “meet the needs of the Cuban people.”
* He allowed two-way trade with Cuban private businesses and U.S.
investments in the telecommunications and pharmaceutical industries.
* He authorized the U.S. export of goods to protect the environment,
support scientific and cultural cooperation, help private farmers
and businesses, and promote civil aviation safety.
* Of particular importance, Obama lifted the prohibition on so-called
“u-turn” international financial transactions-- a key element of the
embargo’s extraterritorial reach. All international transaction
involving U.S. dollars must be cleared through a U.S. financial
institution, even if neither party in the transaction is a U.S.
person or company. The embargo prohibited U.S. banks from processing
such transactions. Banks violating this restriction were subject to
millions of dollars in fines by the Treasury Department, making it
nearly impossible for Cuba to engage in international transactions
involving U.S. dollars.
2017
Donald Trump appealed to Cuban American voters in 2016 by promising to
reverse Obama’s opening to Cuba and he kept that promise. In June 2017,
he returned to a policy of hostility and regime change. In a new set of
regulatory changes
<https://home.treasury.gov/system/files/126/cuba_fact_sheet_11082017.pdf>
he tightened the embargo and ordered stepped-up enforcement. He
abolished individual people-to-people travel, limiting it to tours
conducted by licensed U.S. tour providers. He also banned most
transactions by U.S. residents and companies with Cuban companies
managed by the armed forces, including a large number of hotels, tourist
services, and retail stores (designated by the State Department on a
Restricted Entities list
<https://www.state.gov/cuba-sanctions/cuba-restricted-list/>). However,
most existing commercial contracts were left undisturbed.
2019-2020
As the 2020 presidential campaign began, Trump took a series of measures
to further tighten the embargo (June 2019
<https://home.treasury.gov/system/files/126/cubafact_sheet_20190604.pdf>,
September 2019
<https://home.treasury.gov/system/files/126/cuba_fact_sheet_20190906.pdf>,
September 2020
<https://home.treasury.gov/system/files/126/cuba_fact_sheet_20200923.pdf>,
October 2020
<https://home.treasury.gov/system/files/126/cuba_fact_sheet_20201026.pdf>):
* He imposed new limits on family remittances and eliminated
non-family “donative” remittances entirely. He prohibited U.S.
remittance service providers from dealing with their Cuban
counterpart, FINCIMEX, because it was managed by the armed forces.
The result was to end all wire transfers of remittances from the
United States.
* He abolished the people-to-people travel category entirely,
eliminated the general license for travel to professional meetings
and cultural and artistic performances in Cuba, thereby eliminating
most cultural and scientific exchange.
* New regulations banned U.S.-based cruise ships from visiting Cuba
and prohibited U.S. travelers from staying in any hotel “controlled
by the Cuban government,” which was almost all of them. Travelers
were thus limited to private B&Bs.
* Extending the embargo’s extra-territorial reach, Trump reimposed the
ban on international financial “u-turn” transactions, and allowed
Title III of the Cuban Liberty and Democratic Solidarity Act to go
into effect, setting off a wave of litigation against U.S. and
international companies doing business with Cuba.
* In 2019, the State Department returned Cuba to the list of State
Sponsors of International Terrorism.
2021
During the 2020 campaign, Joe Biden promised to roll-back the Trump
sanctions that hurt Cuban families, especially the restrictions on
remittances and family travel. Once in office, despite his repeated
pledges to restore remittances services, he did nothing, leaving all of
Trump’s sanctions in place. In December, the State Department reaffirmed
<https://www.state.gov/reports/country-reports-on-terrorism-2020/cuba/>
Cuba’s inclusion on the list of State Sponsors of International
Terrorism. After July protest demonstrations in Cuba, the Biden
administration imposed six sets of new individual sanctions targeting
senior officials and units of the Interior Ministry and armed forces,
the national police, and the military police for violating human rights.
Some were subject to so-called Global Magnitsky sanctions
<https://www.state.gov/sanctioning-cuban-security-forces-in-response-to-violent-repression-of-protests/>,
freezing their assets in the United States and banning their entry.
Other targeted individuals were simply excluded from receiving U.S.
visas
<https://www.state.gov/announcement-of-visa-restrictions-against-cuban-officials/>.
These sanctions were largely symbolic since none of the people targeted
have assets in the United States (if they did, the embargo would freeze
them) and none were likely to be applying for visas.
In June 2021, the United Nations General Assembly, for the 29^th time
since 1992, adopted <https://news.un.org/en/story/2021/06/1094612> by a
vote of 184 to 2, the annual resolution calling on the United States to
lift the embargo. The United States voted no. In its report to the
United Nations, Cuba estimated <http://www.cubaminrex.cu/es/node/4749>
the cumulative cost of the embargo over six decades at $148 billion dollars.
* * *
William M. LeoGrande is Professor of Government at American University
in Washington, DC, and co-author with Peter Kornbluh of /Back Channel to
Cuba: The Hidden History of Negotiations between Washington and Havana/
<http://uncpress.unc.edu/books/13863.html> (University of North Carolina
Press, 2015).
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