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May 14, 2009 

Despite Embargo, Cuba Imports Daiquiri Mix from USA

The AP published a story this evening entitled "Despite embargo, Cuba imports daiquiris from US" describing the types of products sold from the U.S. pursuant to the "agricultural waiver" of the U.S. embargo on Cuba. The story's lede states: "Jugs of daiquiri mix. Gourmet nuts. Rolls of newsprint. Not exactly humanitarian aid, but still among the items sold to Cuba under an agricultural waiver carved out of the decades-old U.S. trade embargo."

While the article notes that large quantities of grain, chicken and other food products are sold by U.S. companies to Cuba, the article also states that the "the waiver is so broad that it includes beer, soda and a host of inedible items such as beauty products, artwork, utility poles, kitchen cabinets and Alabama newsprint."

This article is not entirely correct when it implies that so-called "luxury" food or some of the inedible items are not eligible to be sold to Cuba under U.S. law. The article also contains some other inaccurate information regarding the types of products eligible for the so-called "agricultural waiver." In addition, as discussed below, any bartender would know that the article's headline is missing a key word.

First a little history. The so-called "agricultural waiver" of the Cuba embargo is not unique to the U.S. sanctions on Cuba and dates back to a January 5, 1999 announcement by President Clinton that the U.S. would initiate certain actions to enhance support of the Cuban people to promote transition to democracy. Under President Clinton's initiative, the Department of Commerce's Bureau of Export Administration (as it was then known) was authorized to approve, on a case-by-case basis, applications for exports of food and certain agricultural commodities for sale to independent non-governmental entities in Cuba.

President Clinton subsequently announced in April 1999 that the U.S. would lift sanctions on commercial sales of most agricultural commodities and food products to Iran, Libya and Sudan since such products should not be used as a foreign policy tool and that medical and agricultural products would not be included in future sanctions programs imposed by President.

During the next two years, there were efforts underway in Congress to codify the Clinton Administration's policy and to extend the policy to Cuba. For example, in June 1999, Representative George Nethercutt (R-WA) offered an amendment to the FY 2000 agriculture appropriations bill to “prohibit unilateral economic sanctions against a foreign government, lift current sanctions as they relate to agriculture and medical supplies, and provide for a national security waiver.” In August 1999, the ‘‘Food and Medicine for the World Act” was introduced in Senate as an amendment to the FY2000 agriculture appropriations bill. In March 2000, the Senate Foreign Relations Committee held a mark up of S. 1771, the ‘‘Food and Medicine for the World Act.’’ During the mark up, the name was changed to ‘‘Trade Sanctions Reform and Export Enhancement Act.’’

In October 28, 2008, the Trade Sanctions Reform and Export Enhancement Act language was included in the FY 2001 appropriations bill for Agriculture, Rural Development, Food and Drug Administration, and Related Programs (Title IX of H.R. 5426) and ultimately became known as the Trade Sanctions Reform and Export Enhancement Act of 2000, commonly known as TSRA (Pub. Law 106-387). TSRA codified the lifting of U.S. sanctions on commercial sales of food, agricultural commodities, medicines and medical devices to Iran, Libya, North Korea and Sudan, and extended this policy to Cuba (sales of medicines and medical devices to Cuba were previously authorized by the Cuban Democracy Act of 1992). TSRA did not permit such exports to go unregulated, however, and required that such exports be made to licenses or license exceptions.

TSRA defined “agricultural commodities” using the meaning given to that term in section 102 of the Agricultural Trade Act of 1978 (7 U.S.C. 5602). This definition includes a wide range of food commodities, feed, fish, shellfish and fish products, beer, wine and spirits, soft drinks, livestock, fiber, including cotton, wool, and other fibers, tobacco and tobacco products, wood and wood products (including lumber and utility poles), seeds, and reproductive materials such as fertilized eggs, embryos, and semen. It also includes certain fertilizers and organic fertilizers that are not otherwise controlled. A complete list of eligible items can be found in a list (pdf) published and maintained by the Department of Agriculture.

On July 12, 2001, BIS and OFAC published regulations implementing TSRA. The implementing regulations expanded the definition of "agricultural commodities" to include vitamins and minerals, food additives or supplements, and bottled drinking water. The regulations also clarified that the term "agricultural commodities" does not include furniture made from wood, clothing manufactured from plant or animal materials, agricultural equipment pesticides, insecticides, herbicides or cosmetics.

BIS implemented TSRA for exports and reexports of agricultural commodities to Cuba by creating License Exception Agricultural Commodities (AGR) to permit exports and reexports to Cuba. Under License Exception AGR, exporters must submit a notification to the Commerce Department regarding the proposed export. That notification is referred for vetting and review to the Departments of State and Defense. If the three agencies approve the notification, the exporter receives an authorization to ship the products to Cuba using license exception AGR.

According to the U.S. Department of Agriculture, the U.S. now supplies about 30 percent of Cuba’s food and agricultural import requirements.

Now, back to the article. First, the so-called "waiver" of the Cuban sanctions is not a true waiver. Rather, it is an exemption from U.S. sanctions that still requires advance notification and review by the U.S. Government to ensure that the products qualify under TSRA. Second, a similar exemption to the sanctions programs on Iran and Sudan (and previously Libya) has been in place since 1999 and has been codified since 2000. Third, the definition of the term "agricultural commodities" that Congress included in TSRA is broad and legally permits the commercial sales of daiquiri mix, nuts, newsprint, beer, utility poles and similar articles.

However, some of the items mentioned in the article may not be legally sold to Cuba. For example, cosmetics and other beauty products are not eligible to be sold to Cuba under TSRA, unless they are derived from plant material. Similarly, kitchen cabinets, even if made from wood, are ineligible to be exported to Cuba.

In addition, artwork is excluded from the scope of the U.S. embargo on Cuba and other sanctioned countries by the 1994 "Berman Amendment", which restrict the President's authority to regulate the importation or exportation of information or informational materials.

Finally, the article's headline of the article is not entirely accurate since an important word is omitted. The headline should read "Despite embargo, Cuba imports daiquiri mix from US", since the company mentioned in the article only exports the fruit mix for the drink and not the rum, the essential ingredient in a daiquiri.

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