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 000773

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E.O. 12958: DECL: 04/25/2016
TAGS: ETTC ETRD PREL CU MY
SUBJECT: CUBA: NSC-DIRECTED COUNTRY-BY-COUNTRY REVIEW
REGARDING SUSPENSION OF TITLE III OF THE LIBERTAD ACT

REF: A. SECSTATE 57782


B. 2005 KUALA LUMPUR 04256

C. 2005 KUALA LUMPUR 02208

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


1. (C) Summary: Based on our understanding of the
bilateral trade and investment ties, 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 (see Ref
C).


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, most recently,
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 recent government
high-level meetings in Havana, 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 has cordial and friendly relations with
Cuba, and both states currently are members of the
Non-Aligned Movement (NAM) Troika. Malaysia is current Chair
of the NAM, and Cuba is scheduled to be the next NAM chair in
September 2006. This results in periodic meetings between
senior Malaysian and Cuban officials. 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.


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