WORLD TRADE  
ORGANIZATION  TN/MA/W/82 
17 January 2007 
 (07-0218) 
Negotiating Group on Market Access Original:   Spanish 
  
 
MARKET ACCESS FOR NON-AGRICULTURAL PRODUCTS 
 
Detrimental Effects on other WTO Members of the Measures and Laws
 
Regulating the Economic, Commerc ial and Financial Blockade  
Imposed on Cuba by the United States  
 
Communication from Cuba 
 
  The following communication, dated 15 January 2 007, is being circulated at the request of the 
delegation of Cuba. 
 
_______________ 
 
 
 On 15 May 2006, Cuba presented document TN/MA/W/71 ( Non-Tariff Barriers Imposed by 
the United States Impeding and Prohibiting Cuba's Trade ), which demonstrated the inconsistency of 
the laws and measures regulating the blockade agai nst Cuba with the principles and rules governing 
the Agreements of the World Trade Organization (WTO).   The blockade imposed by the United States is openly designed to crush the Cuban Revolution 
and to attempt to undermine the sovereignty of the Nation for interventionist purposes.  In order to 
achieve its policy objectives, the United States unilate rally applies sanctions based on criteria that are 
neither commercial nor economic.  The laws and measures governing the blockade do not only, 
directly or indirectly, impede Cuba's economic, tr ade and financial performance but also affect other 
WTO Members' trade because of their extraterritori al nature.  This is a matter that deserves the 
Organization's attention. 
 
 Cuba submitted document TN/MA/W/71 in view of  the fact that paragraph 14 of Annex B to 
the Decision adopted by the General Council on 1 A ugust 2004 encourages all participants to make 
notifications on non-tariff barriers, and to proceed with identification, examination, categorization, 
and ultimately negotiations on non-tariff barriers. 
 
 In this document, Cuba denounced the blockade imposed by the United States and demonstrated both its inconsistency with the WTO pr inciples, rules and obligations and its violation 
of Cuba's rights as a full Member of the Organizat ion and the right of other Members to maintain 
normal trade relations with Cuba.  The blockade therefore transcends the bilateral dimension and 
constitutes an issue of multilateral concern. 
  By using the term "embargo", the United States seeks to lend legitimacy to its policy and to minimize the extraterritorial implications of the blockade measures, while intensifying harassment 
and persecution of any foreign comme rcial or banking firm or institution that establishes or seeks to 
establish relations with Cuban institu tions, thus affecting the interest s of citizens and enterprises in 
third countries. 
 TN/MA/W/82 
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   This extraterritorial policy prohibits: 
 
• Subsidiaries of United States companies based in third countries from carrying out 
any form of transaction with companies in Cuba; 
 
• third-country companies from exporting to  the United States any product of Cuban 
origin or products containing Cuban inputs; 
 
• third-country companies from selling to Cuba goods or services using technology that 
contains more than 10 per cent of United States components even where their owners 
are third-country nationals; 
 
• ships carrying goods to or from Cuba from entering United States ports, irrespective 
of the country of registration; 
 
• third-country banks from opening accounts in United States dollars for Cuban legal or 
natural persons or from carrying out financ ial transactions in that currency with 
Cuban entities or persons; 
 
• third-country businessmen from making invest ments or doing business with Cuba in 
connection with property claimed by Unite d States nationals or Cuban-born persons 
who have acquired United States citizenship. 
  Failure to comply with the above provisions entails severe penalties and sanctions on the part 
of the United States Government.  
Examples of Detrimental Effects on Trade
 
  On 31 January 2003, the British daily newspape r "The Times" published an article on the ban 
imposed by the United States, under the strict trade laws, on the marketing of a malt Scotch whisky matured in Cuban casks.  Accordin g to U.S. officials, "Glenfiddich Havana Reserve", a luxury 
product priced at £60.00 a bottle, violated the legisl ation prohibiting all trade with Cuba, although the 
product is distilled in Dufftown, in the Highla nds (United Kingdom), and output is limited to 
1,800 crates per year.  The article cites the mana ger of the company Grant and Sons, who explained 
that it was not a Cuban product but a Scotch whisky , any trace of anything Cuban being so small as to 
be negligible.  The manager added that the U.S. ac tion was taken "on principle", thus highlighting the 
extraterritorial nature of the Helms Burton Act. 
 
 In February 2003, the British firm ITS Caleb Br ett, which had maintained trade links with the 
Cuban enterprise Servicios Internacionales de Supe rvisión CUBACONTROL S.A. for over 25 years, 
decided to suspend all relations with Cuba, pursuan t to the U.S. Treasury Department's Cuban Assets 
Control Regulations.  ITS Caleb Brett circulated instructions to its offices all over the world to 
disregard orders from Cuba and to refrain from handling any shipment to or from Cuba. 
  The blockade has also impeded the deliver y of Cuban exports, essentially health-related 
products, to their destinations.  The Foreign Trad e Standards (FTS) agency, a branch of ITS Caleb 
Brett (United Kindgom) in the United States, failed to respond to Cuba's request for its agents to act 
as representatives of the FTS in Cuba in providing urgently needed certification of a Cuban product to 
be delivered to a third country. 
  In manifestly extraterritorial application of the blockade policy against Cuba, the United 
States Department of the Treasury arbitrarily maintains on the list of "Specially Designated Nationals"  TN/MA/W/82 
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  from Cuba a group of Japanese companies which incl udes Kyoei International.  As a result, firms 
such as Toyota and Mitsubishi cannot submit direct offers to Cuba, given the importance of their 
relations with the U.S. market, for fear of suffering the same fate.   Sales of Cuban nickel to Japan are also r estricted because customer firms in Japan are 
required to register with the Japanese Ministry of  Industry and International Trade and to undergo a 
lengthy and complex process aimed at identifying steel mills that export to the United States. 
  In early February 2003, "Fairplay Daily News " featured an online news item announcing that 
Ceres Terminals, Inc., a U.S. company operating the Fairview Cove container terminal in Halifax, 
Canada, refused to assess stowage costs for the Italia n shipping line Costas because the latter puts into 
port at Havana.   In 2004, the Cuban Engineering and Projects Ce ntre ordered software  and related services 
from the German company IES GMBH.  Although the operation took place in Germany and there 
were no U.S. citizens among the executives, the firm  was compelled to withdraw its offer because the 
products contained components of U.S. origin.   Also in 2004, the company Quimimport sou ght to purchase an herbicide called Plateau 
through the German firm BASF, which had registered  the product in Cuba.  Although the herbicide is 
patented by a German company known to be a worl d leader in the agrochemical sector, Quimimport 
was unable to buy the product because its active ingredient is synthesized in Porto Rico. 
  As a shipment of hydrogen sulphide ordered by Quimimport in a third country in 2004 was being loaded, the U.S. manufacturer learnt that Cu ba was the final destination of the product, and 
delivery to the intermediary was cancelled. 
 
 In October 2004, the representatives of th e Japanese company Hitachi High-Technologies 
Corporation were requested to provide an electr onic microscope costing approximately US$400,000 
for a Cuban health institution.  After protracted dealings between the par ties, the Hitachi executives 
confirmed that it would not be possible to coopera te with Cuba because the company's policy was to 
observe the "embargo" imposed by the United Stat es;  the obstacle of after-sales service was put 
forward as the reason for their decision not to cooperate. 
  Imports of heat-resistant tiles for ovens used  in cement production ceased when the Mexican 
company Refractarios Mexicanos, which ordinarily supplied Cuba with such tiles, was bought up by the U.S. company Harbison Walker Refractories, which broke off trade relations with Cuba.  
Although this firm in turn was bought up in 2000 by an Austrian company which declared that it 
would resume trade relations with Cuba, no cont ract has as yet been signed, mainly because of 
difficulties in accessing financing.   The Netherlands entity ePayment-Cuba, which acted as an e-commerce payment gateway, announced in June 2005 that it was withdrawing from the business, since it was prohibited under the 
blockade from continuing to provide those services to  Cuba.  As a result, transactions were halted for 
three months, affecting sales to the tune of US$10,000.   On 12 October 2005, the company Archer Daniels Midland (ADM) was fined US$13,750 for alleged violations of the rules governing the blocka de against Cuba which were said to have occurred 
between February and March 2000.  According to OFAC, the company Finora Canada Ltd., a 
Canada-based subsidiary of ADM, had signed contracts with a Cuba n government entity and carried 
out various export transactions.  TN/MA/W/82 
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   The negotiations conducted in January 2006 with the Canadian branch of one of the four 
leading independent U.S. record distributors at th e MIDEM fair in Cannes, France, were suspended 
when the company's legal department stated that "a very costly investigation would be necessary to 
determine the legal mechanisms and aspects that would enable the company to sell the Cuban product 
in Canada, and especially in the United States". 
 
 The Brazilian supplier Orion had to withdr aw from the contract for the repair of 
Turbogenerator No. 1 at the Moa Nickel S.A. factor y, because the firm is a subsidiary of a U.S. 
company, which impeded the operation, with threats of reprisals and dismissal of those in Brazil who 
had been involved in negotiating the contract with Cuba. 
 
 The refusal of Cytec Canada, a company originating in the United States, to supply the solvent extraction reagent Cyanex 272, which it had been decided to use in the new technology for the 
expansion of the cobalt refinery CO REFCO5, delayed the project for the expansion of the refinery by 
about seven months and increased refining cost s by about US$2.20/lb of nickel and cobalt. 
 
 The company Dresser-Rand Group Inc., which is based in New York and manufactures 
turbines and compressors for the energy industry, publicly announced in April 2006 that it would 
most likely face U.S. Government sanctions because of its Brazil-based subsidiary's business dealings 
with the Canadian-Cuban joint venture company, Moa Nickel S.A., which operates in the mining 
sector.  In July 2005, Dresser-Rand instructed its  subsidiary to suspend negotiations with the 
company.  In September 2006, the Office of Forei gn Assets Control of the U.S. Treasury Department 
(OFAC) stated that it had imposed a fine amounting to US$171,305.87.   The ALCOA company in Spain has been una ble to process an order for 2,000 tonnes of 
aluminium sections because its corporat e headquarters are in the United States. 
 
 The purchase of an air traffic control simulato r ordered for Cuba by the International Civil 
Aviation Organization (ICAO) from the Canadian firm ADACEL proved impossible because the General Manager and the Chief Fina ncial Officer, who are U.S. nationals, said that it was against their 
country's laws to enter into any kind of contract  with Cuba.  This firm produces simulators using 
Canadian technology and therefore does not require authorization from the U.S. Department of the 
Treasury.  Since it does not have a simulator, the Empresa Cubana Aeroportuaria y Servicios 
Aeronáuticos (ECASA) has to spend approximately  US$250,000 a year on the retraining of air traffic 
controllers abroad.   On 4 May 2006, U.S. Congresswoman Ileana Ros-Lehtinen (Republican-Florida) introduced 
Bill H.R. 5292 "To exclude from admission to the Un ited States aliens who have made investments 
contributing to the enhancement of the ability of C uba to develop its petrol eum resources, and for 
other purposes".  This bill proposes the prohibition of bank loans, specific licences or export permits and the denial of loans to foreign companies maki ng related investments evaluated at US$1 million or 
more.  A week later, Representative Mel Martínez  (Republican-Florida) introduced Bill S. 2795, 
which had the same title as and a text similar to the bill intr oduced by Ms Ros-Lehtinen. 
 
 The blockade not only affects trade in goods but also has an impact on trade in services and 
on banking transactions in particular.  Because of the blockade, Cuba is subject to the conditions 
which its country risk rating imposes in financial te rms.  There are also other detrimental effects 
stemming from the extraterritorial application of the blockade measures, which are particularly 
stringent against Cuban payments and assets. 
  TN/MA/W/82 
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   For example, new OFAC regulations on the syst em of fines applicable to banking institutions 
violating U.S. laws on sanctions against various countries, including Cuba, entered into force on 
13 February 2006.  Violators may be subject to ci vil investigation or criminal investigation and 
indictment, which further increases the pressure on th ird-country banks to comply with the blockade 
measures. 
 
 In recent years, these measures have been exte nded to other countries and to the U.S. business 
sector as well.  The above examples reveal the in consistency of the position of the United States 
Government, which seeks to present the blockade against Cuba as a "bilateral matter" and an 
"embargo" that applies solely to individuals and entities under the country's jurisdiction. 
 
 The core operational principle of the Worl d Trade Organization is non-discrimination.  
Consequently, Cuba sees this as the appropriate foru m to rule on the illegitimacy of the laws and 
measures regulating the blockade imposed on it by the United States, since they violate the rights of a full Member of this Organization and those of third countries. 
 
 In view of the Members' commitment to cr eate and develop an organization founded on 
binding rules, operating on the basis of reciprocity  and mutual benefit, and capable of ensuring the 
elimination of discriminatory treatment in interna tional trade relations, the absence of a multilateral 
reaction in the face of this situation would imperil the system's ability to demonstrate its effectiveness 
and its credibility. 
 
 It is for this Negotiating Group, whose mandate it is to eliminate non-tariff barriers to trade, 
to consider the detrimental effects of the bl ockade policy which the United States Government 
imposes on Cuba and other WTO Members.  
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