FRANCE: INPUT FOR LIBERTAD ACT REVIEW

C O N F I D E N T I A L SECTION 01 OF 03 PARIS 002699 SIPDIS SIPDIS WHA/CCA E.O. 12958: DECL: 04/24/2016 TAGS: ETRD ETTC PREL FR CU SUBJECT: FRANCE: INPUT FOR LIBERTAD ACT REVIEW REF: A. STATE 57782 ¶B. PARIS 2267 PARIS 00002699 001.2 OF 003 Classified By: Acting PolCouns Bruce Turner, reasons 1.4 (b) and (d). ¶1. (C) Summary and comment: France maintains a variety of investments in Cuba and is Cuba's 12th ranked supplier, down from fifth in 2001. France does not have a modern bilateral trade agreement with Cuba, and exchanges between the two countries are limited. France adheres to EU positions on Cuba, monitors the human rights situation closely, and since 2003 has cosponsored resolutions criticizing the Castro regime's human rights record at the UN Human Rights Committee. A strong message on human rights delivered to visiting Cuban Foreign Minister Felipe Perez Roque in October 2005 seems to have marked a decided shift in French policy away from its previous approach of "constructive dialogue." There have been no high-level visits between France and Cuba since the October 2005 meeting. Post judges France to have made strong efforts to promote democracy in Cuba and recommends a suspension of Title III of the Libertad Act. End summary and comment. NATURE OF INVESTMENTS -------------- ¶2. (C) As per questions posed in ref A, below are the main fields of French investment in Cuba. TOURISM: According to information from the French Finance Ministry, the tourism industry accounts for the largest investments in Cuba. Hotel/resort operator Accor operates one hotel in Havana and two in Varadero. Pansea Hotels and Resorts operates a hotel in Havana, although it had foreseen running eight units when it arrived in 1999. Construction on the first block of four units is scheduled to begin in 2006. Club Med left Varadero in May 2003 and has not yet followed through with another complex in Holguin. Tour operator Nouvelle Frontiers books over 20,000 visitors each year. Fram Voyages, Vacances Transat, Look Voyages, Jet Tours and Kuoni France have all increased their tour operations. ENERGY: Engineering firms Babcock, Spie, Alstom (modernizing thermal plants and a gas refinery),Schneider Electric (supply services),and BEICIP-Franlab (industrial and energy engineering) have all participated in projects in Cuba. Energy company Total maintains operations in Cuba. Having left the exploration business after an unsuccessful foray ten ;years ago, Total concentrates on off-shore exploitation and retail distribution of petroleum products in partnership with the national oil company Cupet. The Compagnie Generale de Geophysique has a contract with the Ministry of Industry to provide services for seismic data for Cupet. FINANCE: Devexport has diverse interests in energy (electricity and oil),mining (nickel),transport, agriculture, hydrology, and pharmaceuticals. CONSUMER GOODS: Pernod Ricard maintains a monopoly to export Cuban rum worldwide through Havana Club International, its joint venture with Cubaron. It is constructing a rum distillery in Havana for an estimated investment of USD 70 million. Perrier-Vittel, through its subsidiary Los Portales, sells more carbonated and non-alcoholic beverages in Cuba than any other firm. BANKING: The banks Societe Generale and BNP Paribas provide financial services. Oceor, a subsidiary of the Caisse d,Epargne, received authority in 2003 to open an office in Cuba. CONSTRUCTION: Bouygues Batiment is not an investor per se, but has become the largest foreign construction firm in Cuba over the last 8 years, with 9 hotels built in Havana, Holguin and los Cayos. TELECOMMUNICATIONS: Telecommunications firm Alcatel controls about half the fixed-line distribution, all of the radio installations and a third of the copper cable network. It has been active in developing a fiber optic network and multiprocessor hub. It is interested in the mobile telephony market as well. TOBACCO: Altadis, a joint venture with Spain, holds 50 percent of the marketing share of Habanos cigars, and has formed a mixed enterprise with Cubatabaco to produce smaller-sized cigars. TRANSPORT: The aviation firm Air France operates 7 flights weekly. Corsair operates a weekly Paris-Cayo Coco-Varadero PARIS 00002699 002 OF 003 charter flight. Star Airlines flies Paris-Santiago de Cuba once a week in the high season (December-May),and Air Caraibes inaugurated a twice-weekly flight in December 2005 between Pointe a Pitre, Guadeloupe; Fort de France, Martinique; and Havana. Maritime port operator CMA-CGM has entered into a joint venture with the Cuban operator Coral Container Lines for transportation services between Santiago de Cuba and Kingston as well as Kingston-Havana. SNCF (which also sold used train cars) and ALSTOM participate in the modernization of the local train operator's fleet. RATP has rehabilitated part of the Cuban bus system. Peugeot, Citroen, and Renault sell directly to the Cuban automotive market, accounting for 35-40 percent of all new vehicles sold. COLAS has been negotiating for several years with the Ministry of Transport to produce emulsion for the roads in Cuba, but has been unable to finalize a deal. TRADE: Trading firms Sucden (which also was studying in 2004 a project for rehabilitating a sugar refinery),Louis Dreyfus, and Soufflet operate in Cuba to trade primary goods (sugar, cereals, grains and milk products). SUGAR: Paper producer Seribo acquired a 15 percent stake in the mixed enterprise Bagacem (Papeles Cubanos de MINAZ has the remaining 85 percent) to process sugar-cane husks for furniture and panels. The project was estimated to entail an investment of USD 7.5 million, but has not yet been finalized. BILATERAL TRADE AGREEMENTS -------------- ¶3. (C) France does not have a modern bilateral trade agreement with Cuba, but in 1929 did sign a Treaty for Commerce which grants MFN tariff rates, subject to numerous exceptions, notably with respect to preferential agreements with the U.S. Of the 14 bilateral treaties or agreements currently in effect, some have trade-related provisions. The other agreements are: 1904 Intellectual Property Rights 1925 Extradition Treaty 1939 Stamp Tax Treaty 1951 Industrial Property 1967 Indemnities for French Goods, Rights and Interests 1968 Rules of Origin 1975 Economic and Industrial Cooperation 1975 Cultural and Scientific Cooperation 1993 Air Transport 1996 Customs Fraud 1997 Investment Protection and Promotion 1998 Judicial Cooperation in Penal Affairs 2000 Prisoner Exchanges EXCHANGES -------------- ¶4. (C) Despite the 1975 treaty for cultural and scientific cooperation, the French Embassy in Cuba reports that cultural exchanges have not been particularly significant. Cooperation under the treaty has focused on three areas: institutional (customs, judiciary),economic (agriculture, water, transport, housing),and scientific (health, research, agronomy, meteorology). An Alliance Francaise operates in Cuba, welcoming several thousand students since its creation in 1951. As for exchanges, four post-doctoral mathematics students received scholarships to study in France, while an estimated 78 others pursued various university-level studies in France without French aid. EFFORTS TO PROMOTE DEMOCRACY -------------- ¶5. (C) Post believes that France has made strong efforts to promote the advancement of human rights in Cuba. France adheres to the EU's Common Position on Cuba, and the GoF monitors the human rights situation in Cuba closely. MFA officials have consistently stressed that they share both the U.S. assessment of the human rights situation and the U.S. goal of supporting peaceful evolution to democracy, and politicians on both sides of the political spectrum have spoken out against the oppression of the Castro regime. The MFA reports that the French Embassy in Havana meets regularly with Cuban dissidents, and that such meetings have increased in the last year. In October 2005, French Foreign Minister Philippe Douste-Blazy delivered a scathing message to Cuban Foreign Minister Felipe Perez Roque in a meeting completely dedicated to the human rights situation in Cuba and demanded the release of all dissidents. Notably, recent discussions indicate that the GoF has all but abandoned the approach of "constructive dialogue" it had previously touted due to the lack of improvement in the human rights situation in Cuba (ref B),and MFA AS-equivalent for WHA Daniel Parfait expects to travel to Miami this summer to meet with members of the PARIS 00002699 003 OF 003 Cuban community there. Additionally, France cosponsored the resolution condemning the human rights situation in Cuba at the UN Human Rights Committee in 2003, 2004, and 2005. HIGH-LEVEL VISITS -------------- ¶6. (C) The MFA indicates that there have been no high-level delegations between France and Cuba since Douste-Blazy's October dressing-down of Perez Roque. Please visit Paris' Classified Website at: http://www.state.sgov.gov/p/eur/paris/index.c fm Stapleton