VENEZUELA: TITLE III OF LIBERTAD ACT

C O N F I D E N T I A L CARACAS 001696

SIPDIS

PLEASE PASS TO WHA/CCA

E.O. 12958: DECL: 12/08/2018
TAGS: ETRD ETTC PREL VE
SUBJECT: VENEZUELA: TITLE III OF LIBERTAD ACT

REF: A. STATE 126578

B. 2006 CARACAS 1096

C. 2007 CARACAS 694

D. 2007 CARACAS 597

E. 2007 CARACAS 844

Classified By: Economic Counselor Darnall Steuart for reasons
1.4 (b) and (d).


1. (U) Post's response to Reftel A questions follow.


2. (C) Has the host country, in post's opinion, worked to
promote the advancement of democracy and human rights in Cuba?

Post sees no evidence that the Government of the Bolivarian
Republic of Venezuela (BRV) has undertaken policies or
actions to advance democracy, human rights, or fundamental
freedoms in Cuba over the past year.


2. (C) Has the host country made public statements or
undertaken other governmental actions, such as resolutions in
the national assemblies condemning human rights abuses in
Cuba; or actions in support of civil society in Cuba through
host country's diplomatic missions or other fora?

President Hugo Chavez is Cuba's closest ally, provides
substantial resources to Cuba and has repeatedly and publicly
praised the Cuban government. Chavez openly criticizes
countries, including the United States, for commenting on the
human rights situation in Cuba. The BRV makes it a point to
vote with Cuba and against the United States in multilateral
fora.

In 2008, the Venezuelan National Assembly passed resolutions
condemning the US embargo on Cuba and calling for the release
of the five Cuban spies jailed in the United States. Also,
the National Assembly inaugurated a Venezuelan-Cuban
friendship group within its body.


3. (C) Have there been any high-level diplomatic visits
between Cuba and the host country in the past six months?

Visits by high-level Venezuelan Officials to Cuba

In October 2008, BRV Culture Minister Hector Soto visited
Cuba to attend the opening of the 21st Havana International
Ballet, tour hurricane damaged theater facilities in Las
Tunas Province and preside over an awards ceremony. In
September, Chavez met with Fidel and Raul Castro during his
stopovers in Cuba en route to and from China. In September,
the BRV Defense Minister Gustavo Reyes Rangel Briceno led a
Venezuelan delegation on a tour through the regions
devastated by Hurricane Gustav, Pinar del Rio and Isla de la
Juventud and met with President Raul Castro. In June, Chavez
visited Havana where he met with Fidel and Raul Castro and
other top Cuban leaders, including Vice President Carlos Lage
Davila and Foreign Minister Felipe Perez Roque. In June,
Venezuelan Education Minister Hector Navarro attended the
Ibero-American Literacy and Elementary Education Congress in
Havana. In late May, Venezuelan Foreign Minister Nicolas
Maduro headed Venezuela's delegation to the 12th
Cuba-Venezuela Political Consultation Meeting.

Visits by Cuban Officials to Venezuela

Cuban President Raul Castro is scheduled to attend the ALBA
summit in Caracas on December 14. During November, Cuban
Government Minister Ricardo Cabrisas attended the Third
Extraordinary Summit of the Bolivarian Alternative of the
Americas (ALBA.) In July, Cuban Vice President Carlos Lage
Davila spoke at the 5th Petrocaribe Summit in Maracaibo (also
attended by Cuban Basic Industry Minister Yadira Garcia Vera
and Secretariat member Lina Pedraza),toured Zulia state and
opened a health center. Also in July, Cuban Foreign Minister
Felipe Perez Roque headed a delegation to the Seventh
Conference of Communication Ministers of the Non-Aligned
Movement held in Margarita Island, Venezuela. Perez Roque
and Venezuelan President Chavez addressed the audience and
denounced media dictatorships and the US media "warfare"
against Cuba.

In addition to the visits set forth above, Post is aware of
Vice Minister level and military officer visits by both
countries to the other.


4. (C) Did the host country offer or deliver humanitarian or
other assistance to the Cuban people in the wake of major
damage caused by Hurricanes Gustav (August 30) and Ike
(September 8)?

Chavez committed to providing every possible assistance to
Cuba after Hurricanes Gustav and Ike ravaged Cuba. However,
dates and dollar amounts of donations are not generally
known. The press had reported that Venezuelan volunteers,
including PDVSA employees and members of Mission Ribas,
visited Cuba to carry out renovation projects, such as the
repair of schools and homes damaged by the hurricanes. In
September, the state oil company, PDVSA, announced that 7,500
kilograms of food and 100 tons of powdered milk were sent to
Cuba by the Mission Ribas Foundation (a BRV social mission
funded by PDVSA.) In November 2008, press reports also said
that the BRV donated metal roof planks to repair houses
damaged by the hurricanes.


5. (C) What is the nature of the investments (and names, if
known) that host country businesses have in Cuba? What host
country businesses participated in the Havana Trade Fair
(November 3)?

As reported in Reftel B, state oil company PDVSA and
state-owned Venezuela Industrial Bank have offices in Havana.
In addition, PDVSA entered into a joint venture with the
Cuban Petroleum Company (CUPET) to operate the Cienfuegos oil
refinery. Chavez inaugurated the refinery in December 2007
and it is expected to produce 65,000 barrels of petroleum
products per day. In July 2008, the BRV promised to build
additional oil refineries in Cuba. In September 2008, the
Cuban government announced plans to restore the oil pipeline
connecting the city of Matanzas with Cienfuegos oil refinery
with the financial support of Venezuela. Specifics on
financing and ownership of the pipeline were not provided.
PDVSA and CUPET have also agreed to conduct joint exploration
studies in the Gulf of Mexico and other areas in Cuban
territory.

In August 2008, the Maracaibo and Caribbean Shipyard
(ASTIMARCA),a Cuban-Venezuelan joint-venture, began
operations. Formed in 2006, ASTIMARCA is owned by the
Venezuelan Ministry of Infrastructure and the Cuban Ministry
of Transportation and will primarily repair PDVSA owned oil
tankers. In July 2008, the BRV announced the formation of
Aceros del ALBA CA, a steel company, with Cuba. A joint
venture, Aceros is to produce 500,000 tons of steel a year
and be located in Monagas state. Ownership was reported to
be 51 percent Venezuelan and 49 percent by Acinox Steel
Industrial Group of Cuba.

In June 2008, the Greater Caribbean Telecommunications
Company, a joint-venture between Cuba's Telecommunications
Signal Transportation Company and Venezuela's Telecom,
outlined progress made on a project to run a fiber optic
cable on the ocean floor to connect Cuba and Venezuela.
Although still in the planning stages, Greater Caribbean
Telecommunications Company aspires to lay the first cable by
the end of 2009.

On January 2007, Cuba and Venezuela entered into a Memorandum
of Understanding (MOU) for the construction of a joint steel
factory, three oil and petroleum distillates storage
facilities, a nickel factory; the incorporation of a mixed
insurance company; and a study to evaluate the opening of a
power station in Cuba. In December 2007, the Venezuelan
social production company Petrocasa built 100 homes for the
elderly and disabled in Cuba. Petrocasa supplied
construction advice and the houses, which were made of PVC.
In July 2008, the BRV promised to build an additional 100
Petrocasas in Cuba.

We understand that the BRV and the Cuban government have
entered into various MOUs to study the feasibility of joint
ventures in several areas, including tourism, music
production, film works and the production and export of rice.
However, we have not been able to confirm establishment of
any of these joint ventures. We also understand that
Venezuelan private sector companies operate in Cuba, but we
do not have a full listing of the companies or details of
their operations. We are also unaware of BRV entities or
individuals trafficking in confiscated property in Cuba.


7. (C) Are there any bilateral trade agreements between
host country and Cuba?

In July 2008, the annual conference of the Cuba-Venezuela
Solidarity Movement was held in Caracas. During the
conference, participants stressed continued cooperation
between the countries in the areas of sports, agriculture and
education. In January 2008, during the seventh meeting of
the Cuban-Venezuelan Mixed Commission, representatives signed
agreements for 76 projects, primarily in the area of food,
agriculture and agricultural industry. Agreements were also
signed for communications, sports, health, education and
transportation projects, but neither government revealed any
details regarding the projects. According to a PDVSA press
release from January 2008, the 76 projects required an
investment of 1.3 billion USD in 2008. Among the projects
listed were 11 ethanol plants. In addition, one agreement
covered basic engineering studies for an animal feed plant.
Eighteen Venezuelan government ministries and twenty-one
Cuban ministries were tasked with carrying out these projects.

Between January and November 2007, Venezuela and Cuba signed
over 42 bilateral commercial agreements. Post calculates
that these often vague promises of joint cooperation and
projects are valued at an estimated USD 5.72 billion (Reftel
C.) Fourteen of these agreements were signed on October 15,
2007 and included petroleum exploration by PDVSA in Cuban
waters, construction of the fiber optic telecommunications
cable mentioned above, and the construction of a hotel on a
Cuban key. On February 28, 2007, during the seventh meeting
of the Cuba-Venezuela Intergovernmental Commission in Havana,
participants announced the approval of 355 cooperation
projects worth 1.5 billion USD, including an agreement to
build 11 ethanol plants that process sugar cane (Reftel D.)
On April 29, 2007, Venezuela, Bolivia, Cuba and Nicaragua
signed numerous agreements in areas such as oil, education,
health, finance, and culture to advance the Bolivarian
Alternative for the Americas and the People's Commercial
Treaty ALBA-TCP) (Reftel E.)

Cuba and Venezuela signed an additional 14 agreements in
December 2007. Several of the fourteen agreements were in
the field of energy. Two agreements covered studies to
increase the capacity of the Cienfugos refinery from 65,000
barrels per day to 108,000 barrels per day and a study to
increase the capacity of the storage facility at the
Matanazas terminal. In addition, an agreement was signed for
the exploration and development of six hydrocarbon blocks in
the Pinar del Rio province. Another agreement dealt with the
development of chemical and petrochemical plants in the Cuban
provinces of Ciego de Avila, Nuevitas and Sauga la Grande.
It is not clear what the remaining agreements covered.
According to the PDVSA press release announcing the signing
of the agreements, 27 Venezuelan-Cuban joint ventures were
operating in Cuba and the Cuban-Venezuelan Mixed Commission
invested 1.5 billion USD during 2007.

President Chavez and Castro signed the Integrated Cooperation
Agreement (ICA) between Cuba and Venezuela on October 30,

2000. Under the 2004 amended terms of the ICA, Venezuela
supplies 92,000 barrels of oil per day to Cuba in exchange
for the following services in Venezuela: dentistry,
optometry, diagnostic centers, rehabilitation units, medical
equipment and medicine. Cuba also offers services in the
following social missions: Mission Milagro (eye surgery for
the poor),Deportes Barrio Adentro (sports in the Barrio) and
Mission Barrio Adentro (health care for the poor in the
Barrio.)

Contacts allege that BRV imports from Cuba sometimes bypass
customs and tax officials and enter Venezuela via military
ports. These items are reportedly not considered in official
trade statistics compiled by the BRV tax authority.


4. (C) Are there any exchange programs between 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?

Venezuela and Cuba have wide-ranging exchange programs in
many fields, including, but not limited to, medical care,
education, sports, and journalism. According to the January
2008 PDVSA press release, 39,000 Cubans were working in
Venezuela with almost 31,000 working in the health sector. A
December 2007 PDVSA press release claimed that one in 53
Venezuelans had received medical treatment under
Cuban-Venezuelan medical programs. According the Cuban
government-controlled on-line newspaper, Granma
International, 2,400 Venezuelan doctors are enrolled in Cuban
education institutions. In January 2007, Chavez also
announced plans to send 100,000 poor Venezuelans on
all-expense paid vacations to Cuba. Venezuelans would travel
on Cuba's state-run airline Cubana de Aviacion. In March
2007, approximately 1,500 Cubans were to visit Venezuela for
tourism.
CAULFIELD