PANAMA/CUBA RELATIONSHIP: LIBERTAD ACT, TITLE III

C O N F I D E N T I A L PANAMA 000834 SIPDIS SIPDIS FOR STATE WHA/CEN TELLO FOR STATE WHA/CCA E.O. 12958: DECL: 05/21/2017 TAGS: ETRD ETTC PREL PM CU SUBJECT: PANAMA/CUBA RELATIONSHIP: LIBERTAD ACT, TITLE III RESPONSE REF: A. STATE 65523 ¶B. PANAMA 02357 Classified By: Classified By: A/DCM Brian Walch for Reasons 1.4(b)(d) ¶1. (U) Post provides the following information in response to Ref. A request. Responses are keyed to the specific questions identified in Ref. A. Ref. B is Post's information covering the May-November 2006 time period. Post's answers to REFTEL A questions are based on information obtained from 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 to Spain, which has 29 such projects. ¶5. (U) Panama-based Copa Airlines maintains offices in Havana and has approximately 20 weekly non-stop 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 declined from a high of $4.3 million in 1998 to $469,590 in 2005. Panamanian exports to Cuba rebounded during 2006, totaling $1.0 million. 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 2006 Cuban exports to Panama jumped to $20.7 million; of which $19.9 million was clinker (the principal ingredient in most cement products),principally for use in Panama's booming construction industry. ¶8. (SBU) The bulk of Panamanian/Cuban commerce occurs through Panama's 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 CFZ as a transit point to import U.S. and other goods to Cuba to circumvent the U.S. trade embargo. As of 2004 (the most recent data available),Cuban companies owed various companies in the CFZ approximately $200 million for goods previously delivered. According to the CFZ, approximately, $195 million of goods were re-exported to Cuba during 2004. ¶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 then President Ernesto Perez Balladares' Administration, and GOC signed an Agreement for the Reciprocal Promotion and Protection of Investments that, among other things, guaranteed that each country would 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 then President Mireya Moscoso's 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 current President Martin 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 stated that the purpose of eliminating the visa requirement was to facilitate travel and exchanges between officials of both countries in order to contribute to an expansion in bilateral cooperation ¶16. (U) The GOP actively supports the GOC's Operation Miracle (Operacion Milagro) eye surgery program. According to the GOP, approximately 4,000 Panamanians have been treated by Cuban doctors in Panama and in Cuba. The GOC sponsors both free travel to Cuba and free eye care. Operation Miracle has received the personal support of First Lady Vivian Fernandez de Torrijos, who has traveled to the airport to visit Panamanians departing for Cuba. The First Lady, along with the GOP Vice Minister of Health, Dora Jara, has supervised and coordinated all Operation Miracle activities. The GOC has two eye doctors working in Panama on a rotating basis. These doctors perform pre-screening of Operation Miracle patients at GOP health facilities. Both GOP and GOC officials frequently discuss expanding the reach of Operation Miracle in Panama. The GOP praised Operation Miracle, in presidential speeches, by sponsoring full-page newspapers ads extolling the virtues of Operation Miracle, and on the websites of its various government agencies. The GOP listed Operation Miracle as one of greatest accomplishments in a full-page GOP-paid ad regarding its social development achievements. On March 2, 2007, GOP FM Samuel Lewis Navarro and GOC FM Felipe Perez visited the jointly-operated Panamanian-Cuban Eye Surgery Treatment Center in Veraguas, Panama to highlight the work of Operation Miracle. ¶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 2007. 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 Operation Miracle. 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. While it claims to press the GOC in private to facilitate democracy on the island, the GOP in its conversations with USG officials emphasizes the need for stability in Cuba and downplays encouraging democracy. 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) Panamanian companies attended the 24th Annual International Trade Fair in Havana, Cuba held October 30-November 4, 2006. ¶23. (U) On November 3-10, 2006, members of the Cuban Civil Aviation Authority attended the Latin American Civil Aviation Conference in Panama. ¶24. (U) During the week of November 13, 2006, the President of Panama's National Assembly, Elias Castillo, visited Cuba. He met with the President of the Cuban National Assembly Ricardo Alarcon and signed an accord to reinforce inter-legislative relations. ¶25. (U) During the week of November 20, 2006, Alarcon visited Panama to meet with President Torrijos, FM 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, an event at which President Torrijos called for placing Puerto Rico on the path to independence. ¶26. (U) From January 2-6, 2007, President Torrijos visited Cuba, ostensibly on a "private" trip, to highlight Operation Miracle, visit Panamanian medical students and have his middle child, Daniel, receive medical treatment for cerebral palsy. ¶27. (U) From February 27-March 3, 2007, the GOP hosted the First Bilateral National Commission Panama/Cuba. GOC FM Felipe Perez lead the GOC delegation. During the meeting four bilateral agreements were signed regarding the transfer of criminals, judicial cooperation, recognition of university level degrees, and documenting and archiving historical diplomatic documents. EATON