SPAIN/CUBA: TITLE III OF LIBERTAD ACT

C O N F I D E N T I A L MADRID 002188

SIPDIS

SIPDIS

DEPARTMENT FOR WHA/CCA

E.O. 12958: DECL: 12/03/2017
TAGS: ETRD ETTC PREL SP CU
SUBJECT: SPAIN/CUBA: TITLE III OF LIBERTAD ACT

REF: A. STATE 158678

B. 2006 MADRID 3008

C. MADRID 1915

Classified By: Deputy Chief of Mission Hugo Llorens. Reasons 1.4 (b) a
nd (d).


1. (U) The information in this message is keyed to questions
posed in reftel A,
paragraph 5.


2. (SBU) What is the nature of investments (and names, if
known) that host country businesses have in Cuba?
Information on Spanish foreign investment in Cuba is limited,
in part because Spanish companies avoid publishing such data
(ref B). Spain's Ministry of Economy and Finance reports
that over the last 12 years, Spanish investment in Cuba
amounted to roughly euros 4.7 billion (6 billion dollars).
The biggest Spanish investments are in the tobacco and
tourism sectors. Nine of the twelve foreign companies that

invest in the tourism sector in Cuba are Spanish. There
follow below names of Spanish companies active in Cuba
listed by sector.
Tourism: Globalia Hoteles, Sol Melia, NH Hoteles, Marsans,
Iberostar Group, Barcelo, Occidental, and RIU.
Financial Sector: BBVA, Banco Sabadell, Caja de Ahorros del
Mediterraneo, and Caja Madrid. (These institutions have
small representative offices that presumably do mostly
trade finance.)
Energy and other utilities: Repsol YPF, Aguas de Barcelona,
Endesa, and Iberdrola
Tobacco: Altadis
Airlines: Iberia
Dairy: Penasanta, S.A.
Note: In terms of actual money invested, the overwhelming
majority comes from the tourism companies and the tobacco
firm, Altadis. Repsol does some exploration work in Cuba,
and the other companies mentioned have representative
offices but mostly perform services contracts.


3. (U) Are there any bilateral trade agreements between
host country and Cuba? Although not necessarily strictly
"trade" treaties, the following agreements may be of
interest.
Agreement between the Kingdom of Spain and the Republic of
Cuba on Air Transportation, signed in Havana, April 22,

2005. See Boletin Oficial de Espana (BOE - Spain's
equivalent of the Federal Register),06/09/2006 - Section 1.
Agreement between the Kingdom of Spain and the Republic of
Cuba on Mutual Customs Assistance, signed in Havana, August
8, 2001. See BOE 17/03/2003 - Section 1.
Agreement between the Kingdom of Spain and the Republic of
Cuba on the Promotion and Protection of Investment, signed
in Havana on May 27, 1994. See BOE 06/10/2000 - Section 1.
Complementary Agreement on Tourism, signed in Havana on
September 10, 1978. See BOE 02/03/1987 - Section 1.
Agreement between the Republic of Cuba and the Kingdom of
Spain, signed in Madrid on October 3, 1985. See BOE
13/02/1986.
Note: Spain exported euros 630 million worth of goods and
services to Cuba in 2006, up from euros 487 million in

2005. Spain imported good and services from Cuba worth
euros 139 million in 2006, only about two million more than
in 2005. Spain exports mostly mechanical and electrical
equipment, appliances, hotel equipment, construction
equipment, automotive spare parts, chemicals and
foodstuffs. Spain imports mostly tobacco, liquor and fresh
fish from Cuba. The strong Spanish export performance in
Cuba is somewhat surprising as Spain's official export
credit agency (CESCE) does not guarantee export credits to
Cuba. During 2007, there have been discussions about
resuming export credit guarantees, but that would first
require a debt agreement between Spain and Cuba. Thus far,
Post is not aware such an agreement has been reached.
However, on September 29, 2007 the Spanish government did
announce it would resume foreign assistance to Cuba. There
is an active Hispano-Cuban Business Committee that promotes
trade between the two countries.


4. (SBU) Are there any exchange programs between the host
country and Cuba, including but not limited to: scholarships
for host country nationals to study in Cuba; Cuban-paid
medical travel for host country nationals; and Cuban doctors
working in host country? Post is not aware of any such
exchange programs. Again, Spain signed an agreement in
September to re-start cooperation with Cuba that had been
suspended following EU sanctions imposed in 2003. The Joint
Cuban/Spanish Development Cooperation Commission will
establish the parameters for Spanish cooperation in Cuba, but
it seems no aid will flow immediately from Spain to Cuba.


5. (C) Has the host country, in Post's opinion, worked to
promote the advancement of human rights and democracy in
Cuba? The Spanish Government shares our interest in a
peaceful transition to democracy in Cuba but differs
markedly from us on how to achieve this end. The Spanish
favor
engagement and are averse to confrontation with the GOC on
human rights issues. Foreign Minister Moratinos has said
publicly that the dialogue on human rights and the
re-initiation of
development assistance for Cuba followed "parallel paths."
We continue to remind the Spanish that the engagement which
they see as a catalyst for change can in fact be a lifeline
for a moribund dictatorship, and that they should demand
concrete progress from the GOC in exchange for engagement.
--MFA officials have told us Spanish diplomats in Havana meet
weekly with dissidents.
--Referencing ongoing direct talks with the GOC on human
rights, Secretary of State for Latin American Affairs
Trinidad Jimenez defended Spain's policy of greater
engagement during her September meeting in Madrid with
Southcom Combatant Commander Admiral Stavridis. She
suggested there were elements within the regime who favored
change and explained Spain's approach is to maintain contact
and try to be in a position to encourage positive change when
the time comes.
--When DCM questioned Spain's decision not to invite
dissidents to the National Day celebration hosted October 12
by the Spanish Embassy in Havana, Spanish officials told him
that Cuban law might be unjust in its treatment of the
dissidents, but said that was not something Spain could
change.


6. (SBU) Have there been any high-level diplomatic visits
between Cuba and the host country in the past six months?
Foreign Minister Moratinos visited Cuba in April 2007.
Spanish Secretary of State for International Cooperation
Leire Pajin traveled to Havana September 29 to sign the
renewed assistance agreement (ref C). Her visit prompted
editorials in support of increased engagement as well as
calls for more public debate on Spain's policy. Though Spain
excluded dissidents from its October 12 National Day
celebration in Havana, Trinidad Jimenez met with Cuban
dissidents in Miami the week of November 26. The "Consensus
Cubano" was reportedly satisfied and its spokesman was quoted
in Spanish media as saying such dialogue with the GOS could
contribute greatly to the transition to democracy in Cuba.
AGUIRRE