Cuba Reserved Its Telecommunications Industry for the United States
Isbel Díaz Torres
HAVANA TIMES – A year ago, when the Cuban government issued a new foreign investment law that benefitted foreign companies interested in investing on the island, some people wondered whether the information and telecommunication industries would be included in the bargain (given ETECSA’s terrible performance as a company).
Some days later, Cubadebate invited Deborah Rivas, Director General for Foreign Investment at the Ministry of Foreign Trade, and Armando Cuba, the head of the ministry’s legal department, to clarify this and other points.
Let us recall that, at the time, without anyone knowing it, the secret conversations between Raul Castro and Barack Obama were taking place.
The response of these officials was clear and explicit: “the communications industry has not been included in the policies that have been prioritized to draw foreign investment at this moment.” In other remarks, they added that it was a question of “national security.”
After decades of confrontation, conscious of US strategies aimed at using communications to destabilize the Cuban government, it was clear to everyone that such “national security” issues referred to the United States.
In mid-January of this year, after the unforgettable declarations of December 17, 2014, the US government put into effect a series of measures that encompassed a broad range of operations, including telecommunications.
“With a view to offering efficient and adequate services for telecommunication between the United States and Cuba, a new, general OFAC license will facilitate the establishment of commercial telecommunication facilities to link third countries and Cuba, and to operate within Cuba as well,” the note announced.
This way, they authorized the commercial export of certain items that will supposedly contribute to “the Cuban people’s ability” to communicate under a new kind of commercial license (“Support for the Cuban People”), which eliminates the need for a different kind of license.
This included the possibility of selling certain communication devices, software, applications, hardware and services, as well as products used for establishing and updating communication-related systems.
Other additional Internet-based communication services and the export and re-export of communication products will also be authorized by the new, general OFAC license.
The sale and donation of communication devices and software will also be authorized under the exception clause of “Consumer Communication Devices (CCD)” and will be exempt from the license they had required to date.
One would think the Cuban government would be hard pressed to admit these things, if it wishes to be true to its historical and sick paranoia, it’s supposed anti-capitalism and its current and self-restrictive investment policies, that is. But, lo and behold, it isn’t!
After the round of conversations of January 23, involving MINREX’s Director General for the United States and Roberta Jacobson, US State Department Undersecretary for Western Hemisphere Affairs, everything has become much clearer.
With respect to telecommunications, Cuba announced that it was willing to receive US telecommunication companies in order to explore the possibility of conducting business in spheres that are beneficial for both parties.
On February 20, a Services Agreement for the Operation of International Telecommunications (just entered into by ETECSA and the US company IDT Domestic Telecomom Inc. (IDT), was announced.
On March 11, ETECSA published a very brief note announcing that a direct telecommunications connection between the two countries was put into operation – “initially”, it will only provide phone services, indicating that these services will be expanded in the future.
Finally, on March 24, a delegation headed by Ambassador Daniel Sepulveda, Deputy Assistant Secretary of State and U.S. Coordinator for International Communications and Information Policy, and made up by officials from the Federal Communications Commission, traveled to Havana to work towards broadening Internet connectivity on the island.
So, it’s clear that the Cuban government reserved the country’s information and telecommunication industry portfolio for the United States, waiting to announce these decisions after the secret dialogues were made public.
All the while, a man like Alan Gross was kept in prison for five years for working towards this opening of the country to Internet services, and Cuban State Security launched its “anti-Zunzuneo” campaign to justify its salary and keep the public entertained.
As for me, I think it’s great that Internet access should be broadened (though I have my doubts about who stands to benefit down here). I only wish to point out, particularly to the “well behaved Left”, that what we have been warning about year after year is happening almost word for word.
We won’t be seeing an emancipatory initiative that integrates South countries over here. Cuba isn’t choosing Mexican, Dominican, Venezuelan or even Brazilian companies, but IDT, the largest US international phone services provider.
Cuba’s political and military elite does like to think big!
Cuba is in fact opening itself up to the predatory and consumerist First World, for whom Cuba is no more than a place of recreation where it can send its golf-playing tourists and its destructive transgenic seeds.
The worst part is that they, the ones making the speeches on TV, know this more than we do.
Dan,
Just look up these videos of ex wives or ex girlfriends of Fidel Castro’s sons:
Idalmis Menendez, ex wife of Alex
https://www.youtube.com/watch?v=ZXB7rGS5n5c
Dashiell Torralba, ex girlfriend of Antonio Castro
https://www.youtube.com/watch?v=V7oK3zj1vd4
The show and talk about the lifestyle of Fidel Castro.
Note that the bad taste of Fidel doesn’t mean the house isn’t opulent. “Punto Zero” is a multi-house compound.
There is another thing you should realize: there are two ways to be rich:
– have a lot of money to pay for what you want
– have someone else (in this case the Cuban government) pay for what you want.
Fidel Castro is rich in both ways. He uses airplanes, helicopters owned by the regime. Nobody refuses anything when Fidel wants it.
On Fidel Castro’s lifestyle with yachts, private islands, …. I would like to refer you to these two interviews with an ex bodyguard of his:
Source: BBC
Bodyguard reveals lifestyle of Fidel Castro – YouTube – https://www.youtube.com/watch?v=Ad5WoVIkLXE
Source: French TV
THE INTERVIEW – Juan Reinaldo Sanchez, Fidel Castro’s former bodyguard – France 24 – http://www.france24.com/en/20140614-interview-juan-reinaldo-sanchez-fidel-castro-former-bodyguard-cuba-communism-secret-fortune/
What is described beats “small town dentist” by far.
The person who reported this from the cocktail party was Juan Juan Almieda, son of General Juan Almeida Bosque, a senior member of the Castro regime and a veteran of the Moncada Barracks Assault and the Sierra Maestra. Juan junior would not have made up such a story and risked his personal priveleges for a lie. I believe the report.
The other companies listed are described in the link as being owned by Raul & Fidel, in other places they are described as follows:
“Telefónica Antillana S.A., an obscure Cuban government agency,”
Universal Trade & Management Corporation S,A -Panama based company long associated with Cuba’s embargo avoidance network
Banco Financiero Internacional, S.A. (BFI) – bank entity, inscribed as a joint-stock company under Decree-Law No. 84, of October 13, 1984.
Negocios en Telecomunicaciones – Argentina based firm, privately held
Banco Internacional de Comercio – The bank was incorporated in 1993 and is based in La Habana, Cuba. Banco Internacional De Comercio S.A. operates as a subsidiary of Grupo Nueva Banca, S.A
Grupo Nueva Banca, S.A, founded in 1993 and is based in Havana, Cuba.
None of these companies list their chief executives. So while it is possible the Castro’s don’t own them outright, they are at the very least in some cases government agencies, who directors are appointed by the Castros, or State authorized corporations whose directors answer to the Castros.
This paper by Maria Werlau, http://www.ascecuba.org/c/wp-content/uploads/2014/09/v15-werlau.pdf , documents the extensive international business holdings of the Castro regime. Again, whether the firms are personally owned by the Castros (and some of them are) or owned by the Cuban State, which in turn is “owned” by the Castros, makes little to no difference.
Then the next question is why ? What do they do with the money ? Do Raul and Fidel have chalets in Gestaad ? Do they have luxurious yachts equipted with wine cellars and helicopters ? I know Fidel like some special ham from Spain, but I could afford that. Pictures of his living room when he is entertaining a world leader look like the level of a small town dentist in the US. So, what would be the point of this absurd, but widespread allegation that the Castros own these state assets if they never spend any money ?
More than “cocktail party” conversation. The Castro ownserhip of Rafin, the BFI and other companies is widely reported and considered highly credible.
The evidence that Rafin is Raul and Fidel inversiones is based on a reported cocktail party conversation. I am not saying that it is not true, but I have never seen or heard of any corroborating documentation.
Is there evidence showing that Raul and Fidel own the other companies as well? I’ve not heard that assertion before?
Rafin: 27% owned by Fidel and Raul Castro. Juan Juan Almeida confirmed this.
BFI is controlled by the Castros.
All searches I did confirm the same: the Castros control ETECSA 100%
Castro brothers ? Any evidence to back that up,or is that like the Forbes – billionaire Fidel claim ?
Isbel, now we’re getting into the “real” money! Telecommunications is way on the top for generating
incredible amounts of cash. The comments, from all sides, makes this situation HBO material.
All in all, if what some are writing is true, there could be some upset folk in Cuba!
As has been noted, a 27% interest in ETECSA is owned by the private investment firm RAFIN SA, which is owned by Raul and Fidel Castro.
The other 73% of ETECSA is held by a handful of other holding companies such as Telefónica Antillana S.A with 51%, Universal Trade & Management Corporation S,A (Utisa) with 11%, Banco Financiero Internacional with 6.15%, Negocios en Telecomunicaciones with 3.8% and Banco Internacional de Comercio with 0.9%.
Can you guess who owns those companies? Raul & Fidel.
In May 2010, Rafin, S.A., created a joint venture with South Pacific Holdings, Ltd., which is believed to be controlled by unknown Russian finance players.
http://www.capitolhillcubans.com/2011/02/raul-fidel-inc-rafin-sa.html
From the Bloomberg website, I found this information about RAFIN SA:
Rafin S.A. operates as a diversified financial services company. It offers services including financing export and import operations and investments; financial leasing; discounting commercial bills; monetary funds administration; financial engineering and management on economic and financial policy matters; debt refinancing; and financial backing of international trading operations. The company was founded in 1997 and is based in Havana, Cuba. Rafin, S.A. does not have any Key Executives recorded.
Ave. del Puerto s/n esq. a Obrapía
Municipio Habana Vieja
Havana, Cuba
Founded in 1997
Phone: 53 7 66 6646
Fax: 53 7 33 6901
I suspect that US companies like AT&T, Verizon, Comcast, etc. are also interested in Cuba and that Cuba is open to offers of others. Cuba already has an unspecified agreement with Orange and a Chinese delegation recently visited Cuba.
Regardless, a deal with one or several foreign companies is not the only option open to Cuba — you might be correct, but I hope not.
ETECSA has several shareholders in addition to Rafin — what is known about them?
http://laredcubana.blogspot.com/2014/12/who-owns-etecsa-and-who-runs-show.html
Isbel, you are confusing two separate issues. Ownership and control of Cuba’s telecom system will remain in the hands of ETECSA, in other words, the Castro regime. The recent announcements concerning the establishment of telecommunications connection between the US & Cuba were just that: establishing connections between two countries which did not have such connections. Cuba has for many years had telecommunications connections with other countries in Europe, South & Central America, Canada, Africa, and Asia.
Now that the Obama administration has announced its intention to remove the US embargo on Cuba, direct telecom connections are now being established between the US and Cuba. Why would Cuba chose to use a Brazilian company to connect to the US? For years, third-party intermediaries were used, as higher costs to consumers. The whole point to ending the embargo, is to allow direct commercial relations.
So unless you want to pull up the draw-bridges and isolate Cuba from the whole world, then Cuba needs to connect to the largest telecommunications centre in the world, the USA.
Actually it doesn’t: it reserved it for the Castro brothers that own most of ETECSA. No US company can do anything in Cuba without a deal with them.