CUBA: NSC-DIRECTED COUNTRY-BY-COUNTRY REVIEW

C O N F I D E N T I A L SECTION 01 OF 02 KUALA LUMPUR 002222

SIPDIS

SIPDIS

E.O. 12958: DECL: 12/06/2016
TAGS: ETTC ETRD PREL CU MY
SUBJECT: CUBA: NSC-DIRECTED COUNTRY-BY-COUNTRY REVIEW
REGARDING SUSPENSION OF TITLE III OF THE LIBERTAD ACT

REF: KUALA LUMPUR 773

Classified By: Economic Counselor Colin S. Helmer. Reasons 1.4 (b) and
(d).



1. (C) Summary: Based on the information available
to post, it appears no Malaysian
entities would be subject to Title III sanctions against
persons trafficking in confiscated properties in Cuba. Per
Ref A request, this message provides post's analysis of
Malaysian policies and actions with respect to Cuba, for use
in assessing whether to waive Title III of the LIBERTAD Act.
There has been no substantive change since Ref B. Post does
not believe a decision to waive or not to waive Title III
will have a significant impact on Malaysian relations with
Cuba; they will remain cordial. However, imposing sanctions
against a Malaysian entity would be perceived as a negative
political act, and would likely result in more vocal
opposition to U.S. policy toward Cuba than Malaysia has
demonstrated in the past. End Summary.

Investment and Bilateral Trade
--------------


2. (U) Malaysia has a very limited economic relationship
with Cuba. Total bilateral trade for 2005 was $2.7 million,
up from $1.8 million in 2004. Trade reached a peak of $6
million in 2002, mainly because Malaysia extended a
$10-million credit for Cuban imports of Malaysian palm oil.
The two countries signed a memorandum of understanding for
scientific cooperation in 2002 that is designed to advance
cooperation on biotechnology, primarily at a university
level. The same year a Malaysian firm (Bioven) headed by
Mukhriz Mahathir, son of former Prime Minister Mahathir,
signed a joint venture with Cuba's Heber Biotec to
manufacture and distribute Cuban biotechnology products,
such as vaccines, in Southeast Asia. We have been able
to find only a few investments under this arrangement.
The initial one was a RM 250,000 ($66,000) project to
develop a meningococcal vaccine. The vaccine has not
yet come onto the market.


3. (U) In November 2005, Bioven announced that it would
collaborate with Cuba's Center for Molecular Immunology
(CIM) on clinical trials hoping to lead to production of an
anti-cancer vaccine. Bioven will have exclusive marketing
rights for any products in the Southeast Asian region and
to member countries of the Organization of the Islamic
Conference. In conjunction with helping to set up Bioven's
trials, Cuban doctors and researchers presented a workshop
in Kuala Lumpur. Bioven also inked a deal with Heber
Biotech to produce a shrimp growth stimulator to enhance
Malaysia's prawn industry. Malaysian investment in Cuba is
non-existent, according to Malaysia's Ministry of
International Trade and Industry. Malaysia and Cuba signed
a bilateral trade agreement in 1997.


4. (U) Malaysia's relationship with Cuba in science,
biotechnology and health is otherwise limited. In February
2004, the Universiti Sains Malaysia signed five memoranda of
agreement with research institutions in Cuba. There were a
few media announcements of medical or technical
collaboration in 2004 and 2005 but there has been no
further news.


5. (U) Trinidad Holdings Sdn. Bhd., a trading group based
in Kuala Lumpur, has been the exclusive Malaysian
distributor for Cuban cigars since 1993, through an
agreement with the Pacific Cigar Company Ltd Hong Kong.
In the past three years, the company added Cuban wine,
beer, and ice cream to its list of products.
The products are distributed mainly to hotels and
restaurants.


Exchange Programs
--------------


6. (U) Malaysia reportedly agreed to boost ties between
Malaysian and Cuban universities during government
high-level meetings in Havana last spring, but there has
been no mention of any agreement in the Malaysian media.
Cuba and Malaysia occasionally conduct sports, cultural
and medical exchanges but they are few in number and scope,
and do not seem to be organized under a formal structure.
For example, in April, Cubano Festival 2006, sponsored by
the Cuban Embassy, began with a local performance
by the Afro Cuban All Stars. The three-month festival
includes visits by other musicians and displays by
Chinese-Cuban artists. This is the second Cuban

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cultural festival to take place in Malaysia.

Promotion of Democracy
--------------


7. (C) The Government of Malaysia has undertaken no
policies or actions of which we are aware to advance
democracy, human rights and fundamental freedoms in
Cuba. Malaysia is a vocal advocate of non-interference
in the internal affairs of other states. Malaysia
established diplomatic relations with Cuba 31 years
ago.

High-Level Visits in the Past 6 Months
--------------


8. (U) Malaysia maintains friendly relations with
Cuba, and both states currently are members of the
Non-Aligned Movement (NAM) Troika. In September,
Malaysia's chairmanship ended and Cuba assumed the
role of Chair of NAM. Malaysia's Prime Minister
Abdullah Badawi traveled to Havana for the official
handoff. The Third Joint Commission Meeting (JCM)
between Malaysia and Cuba took place in Havana on
April 3-5, 2006. The MFA Secretary General headed
the Malaysian delegation to a senior officials meeting
April 3-4, while Foreign Minister Syed Hamid Albar
co-chaired the ministerial level meeting that followed
on April 5. During his visit Hamid reportedly
discussed bilateral relations, and regional issues
such as the NAM, with his counterpart Foreign Minister
Felipe Perez Roque. Hamid reportedly also met with
Fidel and Raul Castro. During the JMC, Malaysia and
Cuba reportedly agreed to create a joint
computer services business, and to boost ties between their
universities. However, the embassy is not aware of any
new joint Cuba-Malaysia developments in either of
these areas.


9. (C) Malaysia objects in principle to the imposition of
economic sanctions and consequently supports Cuba's
opposition to U.S. economic sanctions on Cuba. We would
expect Malaysia to protest in principle the imposition of
Title III sanctions on any country. The protests would
become more vehement if a Malaysian entity were singled out
for sanctions. Malaysia could be expected to respond to
sanctions by maintaining or even increasing its support for
Cuba in the UN and other organizations.
LAFLEUR