US in new crackdown on exports to Cuba

Taken from Financial Times, UK

By Edward Alden in Washington

February 23 2005

The US administration moved on Tuesday to disrupt agricultural exports to Cuba, ruling that the island nation will now have to pay cash in advance for all purchases in order to comply with US sanctions law.

The decision marked the latest effort by President George W. Bush to squeeze the government of Fidel Castro. But it immediately touched off an angry response in Congress and has set up a fight with the powerful US agricultural lobby.

But Senator Max Baucus, a Montana Democrat who has supported Mr Bush in legislative fights over taxes and trade, vowed to block any Treasury department nominees who required Senate confirmation unless the administration relents on the issue.

The ruling, issued by the Treasury department's Office of Foreign Assets Control (OFAC), which administers US sanctions policies, could shut off US exports that grew more than 50 per cent last year to reach $380m.

The OFAC said the current system, in which Cuba makes payments after receipt of the goods, was not acceptable and ruled that from now on payments must be received before the shipments leave US ports.

US farm groups said on Tuesday the ruling could immediately halt all exports to Cuba.

US rice producers, who saw sales to Cuba last year grow by 500 per cent to $64m, called the ruling “a blatant and ill-disguised frontal assault on US farmers and ranchers, who once again are the uncompensated victims of 42 years of failed foreign policy”.

Cuba is unlikely to agree to pay cash before the goods are shipped from US ports, in part because of fears of other laws that allow the US government to seize Cuban property on US soil.

Mr Baucus and 19 other senators have introduced legislation that would overturn the OFAC decision.

In recent years Congress has been willing to override the administration to permit some trade with Cuba.