President required to inform Congress 45 days before directive takes effect
BY MIMI WHITEFIELD
After 33 years of designating Cuba a state sponsor of terrorism, the United States is removing its Caribbean neighbor from a list of terrorist nations in another sign of warming relations between the two countries.
President Barack Obama sent a message to Congress on Tuesday saying Cuba would be removed from the list because it had not provided any support for international terrorism during the preceding six months and that Cuba had provided assurances that it would not support acts of international terrorism in the future.
The State Department began a review of whether Cuba should still have a place on the list of state sponsors of terrorism on Dec. 17, the day Cuba and the United States announced they planned to put more than a half century of hostility behind them and work toward normalizing relations. It forwarded its recommendation to the president last week.
In accordance with U.S. law, Obama is required to inform Congress 45 days before the directive takes effect. Congress doesn’t have to validate his decision but it could decide to take action to override his recommendation.
‘Important step forward’
Rep. Ileana Ros-Lehtinen, R-Fla., promptly condemned the action, calling it “a miscarriage of justice borne out of political motivations not rooted in reality.”
But Maryland Sen. Benjamin Cardin, who became the ranking Democrat on the Senate Foreign Relations Committee after New Jersey Sen. Bob Menendez — an outspoken critic of White House Cuba policy — stepped aside, called the State Department’s recommendation “an important step forward in our efforts to forge a more fruitful relationship with Cuba.”
Pedro Freyre, a Miami lawyer, said removing Cuba from the list “means the removal of a whole range of legislative and legal restrictions.”
A 2006 state law, for example, doesn’t allow any money that goes to a Florida state university, including grants from private foundations, to be used to organize, direct or coordinate travel to any country designated a state sponsor of terrorism. Scholars have complained that the restriction has complicated their research efforts.
Cuba’s presence on the list made banks reluctant to handle the accounts of its diplomatic missions in Washington, D.C. and at the United Nations. The two missions have been working on a cash basis for more than year after their former banker, M&T Bank, told them it was getting out of the business of handling the accounts of foreign missions.
No other bank has come forward because of fears of regulatory retaliation and they have had good reason to be cautious. The French bank BNP Paribas, for example, was fined $8.9 billion for concealing U.S. dollar transactions with Sudan, Iran and Cuba, and other banks have received heavy fines for transactions involving countries on the list.
Cuba’s removal from the terror list should make it easier for its missions to find a bank.
Number of hurdles
Removal from the list is also a first step toward Cuba’s gaining “much-needed access” to financial markets and having representation in multilateral financial institutions, said Jason Marczak, deputy director of the Atlantic Council’s Adrienne Arsht Latin America Center.
“Eventual membership in the International Monetary Fund and access to development assistance through the World Bank will be instrumental in facilitating Cuba’s full integration into the international financial system and supporting a stronger economy in which Cubans can thrive and U.S. businesses can invest,” he said.
But there are a number of hurdles along that path, including U.S. sanctions that “prevent the U.S. from voting for Cuba’s ascension into international financial institutions,” Marczak said. Congress would have to vote to lift them.
Craig Alexander, senior vice president and chief economist of Canada’s TD Bank Group, said the new relationship with Cuba could also increase some Canadian companies’ interest in doing business with the United States.
Canadian businesses active in Cuba have limited their U.S. business activities, he said. “Now they can engage more with U.S. companies without running into regulatory problems. This actually makes doing business easier.”
Cuba was added to the list of state sponsors of terrorism on March 1, 1982, because of its training and arming of communist rebels in Africa and Latin America.
In its most recent report on worldwide terrorism in 2013, the State Department said: “There was no indication that the Cuban government provided weapons or paramilitary training to terrorist groups.”
Opponents of removing Cuba from the terrorism list, however, have made much of two clandestine weapons shipments.
Sanctioning of company
In 2013, a North Korean freighter coming from Cuba and about to transit the Panama Canal was found to be transporting two MIG-21 jets and other undeclared war materiel under sacks of brown sugar.
The North Korean shipping company that carried the cargo was sanctioned by the United Nations for violating restrictions on trafficking of weapons systems but Cuba was not.
Last month a Hong Kong-registered vessel headed to Cuba carrying an unregistered cargo of ammunition and gunpowder was impounded in the Colombian port of Cartagena and the captain ordered arrested. China has insisted it was part of normal trade.
Ben Rhodes, a deputy national security adviser and one of the architects of the new Cuba policy, said removal from the list doesn’t mean the United States is in agreement with a country’s political system or foreign policy or what it does. “It’s a very practical review of whether or not a government is sponsoring terrorism,” he said.