- The Washington Times - Tuesday, September 17, 2002

The always-contentious issue of trade with Cuba is expected to become even more so in coming weeks.

In a move sure to infuriate U.S. exporters and much of Congress, Bush administration officials agreed last week to begin examining transactions between the United States and Cuba to make sure companies are not offering Cuba financing or taking other steps that violate U.S. law. This means the administration is likely to ask U.S. companies for what is typically private information about exports sent to Cuba, including price data and proof of payment.

The move for stricter enforcement of the law on exports to Cuba followed a July request from seven House Republicans who argued that recent sales should get "intense scrutiny" to ensure the law was followed. It also comes as Congress seeks to prevent enforcement of various trade and travel restrictions against Cuba by ammending this year's crop of appropriations bills.

With debate on these amendments expected in coming weeks, both pro- and anti-embargo groups plan a series of lobbying events in Washington today and tomorrow to win support for their causes.

In recent years, momentum to ease the 42-year-old embargo against Cuba has been building steadily in Congress. Passage of the Trade Sanctions Reform and Export Enhancement Act two years ago allowed U.S. companies to sell more than $100 million worth of food and medicine directly to the Cuban government this year, and a clear congressional majority in favor of trade with Cuba has led farm groups and others to believe they are close to neutralizing the embargo.

An early poll of farm exporters suggests that companies are likely to see a new government inquiry into recent sales as a potential roadblock to future sales. Beyond the extra paperwork requirement, industry representatives say the inquiry appears to be an effort by the administration to discourage exports to Cuba and would provide business-confidential information to those who oppose trade with Cuba and are looking for new ways to criticize these sales.

"It's meant to have a chilling effect on U.S. companies," said Cuba Policy Foundation President Sally Grooms Cowal, who has worked with Congress this year on legislation to ease sanctions.

"To me, it looks like they're trying to circumvent the law by harassing U.S. companies." Mrs. Cowal added that the inquiry is more likely to hurt small exporters, who would have more difficulty complying with additional federal requirements.

But Dennis Hays, executive vice president of the Cuban American National Foundation, rejected that complaint, saying last week that the administration is only trying to assess whether the law is being followed. "Why would any company resist complying with the law?" he asked.

Rep. Jeff Flake, Arizona Republican, a leading member of the House Cuba Working Group that is seeking to roll back elements of the embargo, criticized the plan as a waste of government resources.

"The U.S. Department of Treasury is already busy chasing down grandmothers from Iowa who participate in biking tours in Cuba, and now the government wants to start investigating farmers who want to sell rice to the island?" Mr. Flake asked. "Don't we have better things to do?"

Pro-sanctions members see things differently. Under the enhancement act, U.S. companies were permitted to sell food and medicine to Cuba for cash but were barred from providing financing to Cuba.

When the government began approving such exports this year, several pro-sanctions members of Congress complained that there was no effort to examine the transactions for evidence of financing. They also demanded that Washington examine whether Cuba is enjoying any indirect benefits from U.S. farm subsidies, even though the law does not explicitly deal with subsidies.

Industry sources insist the transactions are consistent with the law, but some sources say there is anecdotal evidence that Cuba may have bought more U.S. food and medicine than it thought possible, given the money it was spending a sign that some companies may have offered Cuba lower prices.

"It is imperative to know the genuine amounts that are being paid by the Castro dictatorship for U.S. agricultural shipments and whether those payments reflect the benefit of any forms of U.S. agricultural subsidies," the members wrote in a July 10 letter to State. "We must also know whether payment-in-full is received prior to shipment or whether any forms of loans are being extended to the Castro dictatorship."

The seven signatories, all Republicans, included six House committee or subcommittee chairmen Dan Burton of Indiana, chairman of the Government Reform Committee; Christopher Cox of California, chairman of the Policy Committee; Henry J. Hyde of Illinois who chairs the House International Relations Committee; Ileana Ros-Lehtinen of Florida chairman the HIRC subcommittee on International Operations and Human Rights; Cass Ballenger of North Carolina, who chairs the HIRC Western Hemisphere subcommittee; and Christopher H. Smith of New Jersey, chairman of the House Veterans' Affairs Committee. Also signing was Lincoln Diaz-Balart of Florida, an influential member of the Rules Committee and longtime supporter of the embargo against Cuba.

Last week administration officials defended the decision to honor the request of these powerful members, arguing that the enhancement act clearly prohibits financing exports to Cuba, and so the government should examine the matter.

"We are working with Treasury and Commerce to develop an interagency response to Congress, to ensure that the financing provisions of the law are being respected," said Daniel W. Fisk, deputy assistant secretary of state for Western Hemisphere affairs.

Sources said last week that officials were getting ready to prepare a series of letters to U.S. companies that have exported food or medicine to Cuba, the first of which would advise exporters to adhere to the requirements of the law. A later letter, sources said, would ask companies for documents that detail transactions with Cuba.

No timeline was announced, but observers said the administration was expected to begin the inquiry in coming weeks.

As the administration plans these enforcement steps, anti-embargo senators are still working to pass three amendments that would temporarily prevent the government from enforcing restrictions on trade with and travel to Cuba. Each is attached to the corresponding House bill, after that chamber approved these Cuba provisions in July by wider margins than last year.

The amendments would only stop enforcement of trade and travel restrictions for one year, opening the door to later enforcement if similar measures are not passed next year.

Nonetheless, Secretary of State Colin L. Powell and Treasury Secretary Paul H. O'Neill quickly warned House leaders that they would recommend a presidential veto of any bill containing language that would ease the embargo. Officials such as Mr. Fisk insist the veto threat is real and that the Cuba language is likely to trigger President Bush's first veto.

Last week, a more mundane obstacle to easing the embargo surfaced: limited time in Congress.

With homeland security on its plate, followed by a possible debate on a resolution authorizing action against Iraq, House and Senate staff began predicting the need for an omnibus spending bill. This could prompt leaders to strip out controversial measures such as the Cuba language, quickly pass legislation to keep the government running and go home to their districts for a few weeks of election campaigning.


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