How Canada’s Sherritt & Cuban Gov. Manage their Partnership
Via a discreet business relationship based in Barbados
Barbados offers them the discretion they need to protect themselves from the United States’ Helms-Burton Act.
HAVANA TIMES – To sustain business with the Cuban regime, the Canadian mining giant Sherritt International uses multiple ways to evade Washington’s sanctions. With real business acrobatics performed from Switzerland to the Cayman Islands, the company protects itself from the Helms-Burton Law, the U.S. tool of choice to hinder Havana’s financial movements.
Registered in Barbados, the subsidiary company known under the acronym Sicog (Sherritt International Cuba Oil & Gases Limited) is one of the tools used by both parties to preserve the secrecy of their transactions, as businessman William Pitt explains to 14ymedio. Pitt is an observer of the regime’s mining businesses, whose family was expropriated multiple properties of oil value in 1960.
The Official Gazette published on October 25, 2023, referred to Sicog as a “Barbadian company.” Sherritt’s name is omitted in all the articles of the section, which renewed the authorization for the company to remain registered in the National Registry of Foreign Commercial Representations.
The text also defined – with great ambiguity – Sicog’s competencies: “the commercialization and exploitation of oil in Cuba, as well as the management of investments in the areas of oil, nickel, tourism, agriculture, sugar and financing, practically all the areas that bring hard currency to Cuba, except the commercialization of medical services.
The regime does not allow Sicog to “import and export directly on a commercial basis, nor to distribute and transport goods within the national territory.”
Although Sherritt is not mentioned in the section dedicated to Sicog, in the same Gazette authorization is granted to another subsidiary of the Canadian company: Sherritt International Investments Limited, also based in Barbados.
According to the Gazette, Sherritt International Investments Limited has similar powers to those of Sicog: “to attend to investments in Cuba in the areas of oil, nickel and electricity.” However, it is prohibited from importing and exporting, as well as “issuing commercial invoices.”
“Barbados is a tax haven,” notes Pitt, although the country has recently amended its legislation with the creation of a corporate tax – very low, with a maximum of 5.5% – seeking its exclusion from the tax haven blacklist. “In that country, there are no requirements for an annual general meeting, no reporting, accounting or auditing requirements for companies. All that is required is a shareholder and a director who don’t even have to be residents. In fact, they can be the same person or entity.”
Although Sherritt is obliged – by Canadian stock exchange regulations – to report certain data, companies like Sicog contribute to the mining giant limiting its public disclosures and operating with little transparency.
The advantageous discreetness offered by Barbados to the regime and Sherritt is unparalleled. “All private information, such as the register of directors and offices, or the register of shareholders, is kept away from the public. Corporate documents related to the company can be stored anywhere in the world,” adds the businessman.
Sicog has only one shareholder, which Pitt says entitled the company “not to conduct work or annual meetings. It can also easily change its name, another mechanism to avoid sanctions, without consulting other parties.
Sherritt is interested in three types of business with Cuba: energy, oil and gas, and mining, Pitt lists. The company has been withdrawing from other sectors in which it used to have interest, such as hotels and other tourist centers. The island has millions in debt to the Canadian giant that is paid through the so-called “cobalt swap” of 2022, which allows it to exploit this mineral in its plants in Moa (Holguín).
Sherritt built the Varadero, Boca de Jaruco and Puerto Escondido power plants – three jewels in the energy crown in western Cuba – in which it has a 33% share in partnership with state-owned Energas.
In Varadero, Pitt explains, Sherritt and Energas operate a plant connected to an electricity substation with a capacity of 173 megawatts (MW). “The plant has two mutually integrated facilities that process gas obtained from oil wells near the plant into clean, dry gas that is used to fuel the turbines.”
Puerto Escondido, on the other hand, consists of “two crude gas processing plants, a gas turbine, and electric generator with a power capacity of 20 MW.” Finally, Boca de Jaruco, 50 kilometers from Havana, is the largest of the three facilities and the plant that produces the fifth most electricity in Cuba. Its structure is similar to Varadero’s and its capacity is 313 MW. “This plant sends natural gas produced by the wells through pipelines to Havana to supply the natural gas used as fuel for cooking by more than 280,000 families and restaurants in the Cuban capital”.
Despite Sherritt’s efforts to keep its interests afloat in Cuba, the island has proven to be a difficult and fruitless project.
With two hurricanes and a comprehensive crisis that affected the entire industry, 2024 was a catastrophic year for the facilities operated by the Canadian giant in Cuba. With constant outages already happening since the beginning of the year – the expected deficit for this Wednesday was 1,270 MW – it does not look like 2025 is going to be much different.
Translated by LAR for Translating Cuba
Well, what is it? Is Sherritt International a Canadian mining company operating in Cuba, or is Sherritt International a “Barbadian company.” operating in Cuba, as the article alludes? It seems both.
The article states: “The advantageous discreetness offered by Barbados to the regime and Sherritt is unparalleled.” I am sure the Canadian Revenue Agency (the federal government tax collecting department) doesn’t appreciate this public “discreetness”.
“Barbados offers them the discretion they need to protect themselves from the United States’ Helms-Burton Act.” Same sentence but remove “United States’ Helms-Burton Act” and insert in its place: Canadian Revenue Agency. Barbados offers the same discretion.
The Canadian mining company uses multiple ways to evade Washington’s sanctions and in similar ways uses multiple manipulations to evade paying Canadian corporate taxes.
Any corporate mining company whether Canadian or otherwise operating in Cuba is profit motivated. It has to be otherwise why would it be spending huge amounts of capital to mine if it wasn’t making a profit for its shareholders.
Those shareholders certainly are not the poverty stricken Cubans struggling to survive on a daily basis. Cuban workers working for Sherritt International in Cuba are paid according to what the totalitarian government dictates not what the workers’ skills are worth on the open market.
That is the wage contract negotiated between Sherritt International and Fidel Castro many years ago when the mining company was a wholly owned Canadian company based in Canada and before the implementation of the Helms- Burton Act.
I doubt very much if the wage scale paid by Sherritt to Cuban skilled workers has changed since then. With the same ideological totalitarian cadres in government today dictating the entire Cuban economy, why would they change a Castro past policy if it doesn’t monetarily suit them directly?
“Despite Sherritt’s efforts to keep its interests afloat in Cuba, the island has proven to be a difficult and fruitless project.” Sherritt has been operating in Cuba for decades.
I doubt it very much Sherritt’s Cuba operations are “fruitless”. Why would a profit oriented mining company keep operating for decades in a fruitless environment, and constantly having to dodge and evade American’s Helms- Burton Act?
Is the company being operated in Cuba “fruitless” (I assume at a profit loss) for tax purposes, or does Sherritt International see some sort of eventual profit potential in the future? I don’t know.