PANAMA/CUBA RELATIONSHIP: TITLE III LIBERTAD ACT

O N F I D E N T I A L PANAMA 002357 SIPDIS SIPDIS FOR WHA/CEN TELLO FOR WHA/CCA E.O. 12958: DECL: 11/29/2016 TAGS: ETRD ETTC PREL PM CU SUBJECT: PANAMA/CUBA RELATIONSHIP: TITLE III LIBERTAD ACT RESPONSE REF: STATE 191752 Classified By: Charge d'Affaire Luis Arreaga for Reasons 1.4(b)(d) ¶1. (U) Post answers to reftel questions are based on information obtained by the GoP's Comptroller General's offices, the GoP Ministry of Foreign Relations, the administrative offices of the Colon Free Zone, various industry and third country publications and conversations with various Panamanian business executives. -------------- Nature of Panamanian Investments in Cuba -------------- ¶2. (C) Question 1: What are the nature of investments (and names, if known) that host country businesses have in Cuba? ¶3. (U) According to an investment study prepared by Spain's Society for Industrial Promotion and Reconversion (SPRI),of the 43 foreign companies operating in Cuba, six are Panamanian. ¶4. (U) The SPRI study states that Panamanian companies participate in 18 cooperative production projects in Cuba, second only the Spain, which has 29 such projects. ¶5. (U) Copa Airlines maintains offices in Havana and has approximately 20 weekly non-stops flights from PANAMA City to Havana. According to various business executives, Copa Airlines is the only major Panamanian company operating in Cuba. ¶6. (U) According to the GoP's Ministry of Commerce and Industry (MICI),Panamanian exports to Cuba have declined from a high of $4.3 million in 1998 to $469,590 in 2005. According to MICI, Panamanian exports to Cuba have rebounded, totaling $429,038 for just the first six months 2006. Principal exports to Cuba are cosmetics, beauty supplies, juices, vegetable extracts and aluminum. ¶7. (U) According to MICI, Cuban exports to PANAMA have ranged from a high of $1,151,673 in 2000 to a low of $142,877 in ¶2002. However, during 2005 Cuban exports to PANAMA jumped to $15.7 million; of which $15.3 million was cement products (fueled by Panama's construction boom). According to MICI, Cuban exports have continued at this increased level during the first six months of 2006, totaling $8.0 million. ¶8. (SBU) The bulk of Panamanian/Cuban commerce occurs through the Colon Free Zone (CFZ). According to the CFZ, of the approximately 2,400 companies operating in the CFZ, approximately 95 do business with Cuba. Cuban companies and 
Panamanian shell companies owned by Cubans or the GOC use the Colon Free Zone as a transit point to import U.S. and other goods to Cuba to circumvent the U.S. trade embargo. As of 2004, Cuban companies owed various companies in the CFZ approximately $200 million for goods previously delivered. According to the Colon Free Zone, during 2004, approximately, $195 million of goods were re-exported to Cuba. ¶9. (U) The GoP does not compile statistics on the amount of foreign direct investment made by Panamanian companies in other countries. -------------- Bilateral Trade Agreements -------------- ¶10. (C) Question 2: Are there bilateral trade agreements between the host country and Cuba? ¶11. (U) On January 27, 1999, the GoP, under the Ernesto Perez Balladares administration, and GOC signed an Agreement for the Reciprocal Promotion and Protection of Investments which, among other things, guarantees that each country shall grant the other investment protections and rights no less than those received by any other third country. ¶12. (U) On August 31, 2000, the GoP, under the Mireya Moscoso administration, and GOC signed an Agreement Relating to Airlines Services between their Respective Territories and Onward Destinations. -------------- Exchange Programs -------------- ¶13. (C) Question 3: Are there any exchange programs between host country and Cuba, including but not limited to: scholarships for host country national to study in Cuba; Cuban-paid medical travel for host country nationals; and Cuban doctors working in host country? ¶14. (U) On February 16, 1999, the GoP, under the Balladares administration, and GOC signed an Agreement for Cultural and Educational Cooperation. ¶15. (U) On March 17, 2006, the GoP, under the Torrijos administration, and GOC signed a Memorandum of Understanding eliminating the need for visas to travel between PANAMA and Cuba for persons holding diplomatic, official, consular or special passports. The Memorandum of Understanding states that the purpose of eliminating the visa requirement is to facilitate travel and exchanges between officials of both countries in order to contribute to an expansion in bilateral cooperation. ¶16. (U) Operacion Milagro PANAMA is actively supported by the GoP. According to GoP figures, as of March 31, 2006, 655 Panamanians have bee treated by Cuban doctors in PANAMA and 750 more are scheduled for treatment. The GOC sponsors both free travel to Cuba and free eye care. Operacion Milagro receives the personal support of First Lady Vivian Fernandez de Torrijos, who personally travels to the airport to visit Panamanian departing for Cuba. The First Lady, along with the GoP Vice Minister of Health, Dora Jara, supervises and coordinates all Operacion Milagro activities. The GOC has two eye doctors working in PANAMA on a rotating basis. These doctors perform pre-screening of Operacion Milagro patients at GoP health facilities. Both GoP and GOC officials frequently discuss expanding the reach of Operacion Milagro in Panama. The GoP goes out of its way to praise Operacion Milagro, whether in presidential speeches, by sponsoring full-page newspapers ads extolling the virtues of Operacion Milagro and on the websites of its various government agencies. The GoP lists Operacion Milagro as one of greatest accomplishments. ¶17. (U) PANAMA and Cuba have student exchange programs. There are currently approximately 400 Panamanian medical students at the Latin American School of Medicine in Cuba. -------------- Promotion of Democracy and Human Rights -------------- ¶18. (C) Question 4: Has the host country, in Post's opinion, worked to promote the advancement of democracy and human rights in Cuba? This can include: public statements or other governmental actions, such as resolutions in the national assemblies condemning human rights abuses in Cuba; statements in support of democracy following the July 31, 2006 handover of power from Fidel to Raul Castro; actions in support of civil society in Cuba through host country's diplomatic missions or other fora. ¶19. (C) The GoP has not made any public statements in support of democracy or human rights in Cuba during 2006. The GoP appears to have done little to support the advancement of democracy or human rights in Cuba. The GoP is strengthening its relationship with Cuba through increased government-to-government contact and through exchange programs such as Operacion Milagro. The GoP does not support any proactive steps to further democracy upon President Castro's death or as a result of the transfer of power to Raul Castro. The GoP, however, advocates lifting the USG trade embargo on Cuba. -------------- Diplomatic Visits -------------- 20 (C) Question 5: Have there been any high-level diplomatic visits between Cuba and host country in the past six months? ¶21. (U) The GoP and GOC re-established diplomatic relations on August 20, 2005 after diplomatic ties were severed in August 2004. ¶22. (U) On March 16-18, 2006, GoP ForMin Navarro lead a diplomatic and trade mission to Cuba. He was accompanied by Health Minister Camilo Alleyne and Colon Free Zone Users Association President Severo Souza. ¶23. (U) In July 2006, Civil Aviation Authority Director Eustacio Fabrega visited Cuba to discuss bilateral aviation matters. ¶24. (U) On September 14-16, 2006, President Martin Torrijos and ForMin Samuel Lewis Navarro attended the 14th Non-Aligned Nations Summit in Havana. ¶25. (U) Panamanian companies attended the 24th Annual International Trade Fair in Havana, Cuba held October 30-November 4, 2006. ¶26. (U) On November 3-10, 2006, members of the Cuban Civil Aviation Authority attended the Latin American Civil Aviation Conference in Panama. ¶27. (U) During the week of November 13, 2006, the President of Panama's legislature Elias Castillo visited Cuba during which he and the President of the Cuban National Assembly Ricardo Alarcon signed an accord to reinforce inter-legislative relations. ¶28. (U) During the week of November 20, 2006, Alarcon visited Panama to meet with President Torrijos, ForMin Navarro and members of the Panama-Cuba Parliamentary Group. Alarcon also attended the Latin America and Caribbean Congress for the Independence of Puerto Rico held in Panama. Arreaga