Sanctions at work

I can understand the argument that the embargo is a good policy because it squeezes hard currency flows to Cuba. I don’t agree with it, especially in all its far-flung applications that affect regular citizen contact, and most especially now that the CIA’s most recent estimate for Cuba’s economic growth is 11.1 percent for 2006. (Seemed high to me, too.) But I can understand the argument.

What I can’t understand are Treasury actions that seem to have nothing to do with any real impact on hard currency flows and that seem to be pure harassment of Americans in contact with Cuba. That’s a harsh thing to say, considering that Treasury’s Office of Foreign Assets Control (OFAC) is on the front lines of the fight against terrorists, but what else can one say about the following two cases?

First, there’s a 2004 action to restrict Americans who would edit or publish materials that originate in Cuba. After a court fight, that action now seems to have been revoked, according to lawyers involved in the case. As a result, a field guide to Cuban birds, a collection of Cuban short stories, a discussion among Cuban and U.S. archaeologists, and a book about a little-known slave revolt in 19^th century Cuba can now proceed to publication.

Then there’s this August 2006 OFAC announcement (pdf, one page) that stipulates that companies that help Cuban Americans send remittances to relatives must have those remittances paid to to Cuban recipient in dollars, or in one of four other foreign currencies, but not in Cuba’s convertible peso. That, the State Department affirmed to Treasury, would be “contrary to U.S. foreign policy.” As a result, the recipient has to change the money into convertible pesos; the company can’t perform that service. Big deal. Between this and other regulations affecting remittances, it’s no wonder that a black-market cottage industry of companies and individual entrepreneurs is delivering remittances every day through third countries. Just as in Cuba, people find a way around government restrictions that block normal, beneficial private economic activity – in this case, family charity.

If someone wants to send in a comment that would illuminate how these measures do have a significant foreign exchange impact, or have some strategic importance, it would be welcome.

Measures such as these are trivial in Cuba’s economic context, and they are trivial when compared to the Administration’s declared purpose of changing Cuba’s political order. They make our policy seem trivial in light of the situation in Cuba – generational change in the leadership is a certainty, economic reform a possibility, and there’s a national debate on economic policy – but our government plods on, shunning contact, deploying accountants and enforcers, letting the big foreign policy issue wait until one man passes from the scene.

One more thing: the IRS is chasing piano virtuoso Chucho Valdes for $5,466.10 in taxes on 2003 earnings.