CUBA SOLIDARITY GROUP MAY FORCE SANCTIONS SHOWDOWN

UNCLAS LONDON 002340

SIPDIS

SIPDIS

TRESAURY FOR OFAC

E.O. 12958: N/A
TAGS: ETTC ELAB CU UK
SUBJECT: CUBA SOLIDARITY GROUP MAY FORCE SANCTIONS SHOWDOWN
WITH HILTON HOTELS

REF: (A) LONDON 525 (B) LONDON 764


1. Summary: Hilton Hotels in the UK believes its efforts to
obey US sanctions on Cuba, while simultaneously respecting UK
law banning discrimination based on nationality, will soon be
tested by a pro-Cuban government NGO. The NGO will seek to
check a Cuban delegation into a Hilton hotel in the UK.
Hilton has also lost conference business from two major UK
unions who are not satisfied by Hilton's attempts to walk a
line between US and UK law. Hilton has requested a license
from Treasury's Office of Foreign Assets Control (OFAC) to do
business with Cubans in the UK. Post has sought to help
Hilton by explaining to UK audiences what is and is not
covered by US sanctions. See action request in para 6. End
Summary.


2. Hilton VP for Communications Linda Bain contacted
EconCouns June 7 to update post on the Cuba Sanctions issue.
She and Hilton International CEO Ian Carter with the UK
parliament's All Party Cuba Committee at the latter's
invitation on May 22. When Carter and Bain arrived they
discovered the Committee had also invited the Cuban
Ambassador and the Cuba Solidarity Movement, an NGO that
militates on behalf of the Castro regime. According to Bain,
the Committee was not hostile, but considered inadequate
Hilton's policy of instructing its UK staff to honor local
law forbidding discrimination on the basis of nationality.
They want Hilton to go further and declare that they will not
enforce US sanctions on Cuba in their UK hotels. Carter
explained that Hilton could not go on record as defying US
law. Committee members said they would protest the US
sanctions with the relevant minister as soon as Gordon Brown
forms his new cabinet.


3. The representatives of the Cuba Solidarity Movement were
more hostile. They told Hilton "they were getting what they
deserved." They strongly hinted they would force a test case
by attempting to register Cubans at a UK Hilton Hotel.
Hilton suspects this could happen around the time of the
annual Cuban holidays of the National Revolutionary Festival
on July 25 - 27.


4. Bain again noted they are hoping for a favorable ruling
on their license request from OFAC to allow them operate in
conformance with UK law. Bain also reported that two
important trade union customers of Hilton, the GMB and UNISON
have said they will cancel all conference and other business
with Hilton until this issue is resolved.


5. Comment: Hilton's case has been linked in the UK with a
reported decision by Barclay's Bank UK to close its Cuban
accounts. Barclay's action is interpreted as a response to
US pressure, even an illegal attempt to extend US law
extraterritorially. Lumped with the Hilton case, it serves
to raise resentment against the US whenever they are raised.
Embassy has sought to defuse with UK audiences the issue of
the extraterritorial reach of US sanctions on Cuba, while
stressing the reasons we impose sanctions. Drawing on
assurances from OFAC, for example, that it played no role in
Barclay's decision to close its Cuba business, we have
briefed Members of Parliament and the Trade Union Congress
that the US does not impose its sanctions obligations
extraterritorially on non-US persons. We explained that if
Barclays has shuttered its Cuba operations, it was a business
decision, perhaps (we hope) driven by the higher complexity
of doing business there in the face of US sanctions. This
does not constitute extrat
erritorial sanctions, however. End Comment


6. Action Request: Hilton's case is likely to come to a head
soon and will have an impact on other US hotel chains, and
not just in the UK. Request Department work with OFAC to
adjudicate Hilton's license request as soon as possible. End
Summary and Action Request.

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