The Cuban government engaged in elaborate schemes, by creating offshore companies and with the help of the Panama Papers law firm, in order to get around trade restrictions in the U.S. embargo, according to a new report.
The revelation – which El Nuevo Herald is reporting were discovered through documents from the Panama Papers, as the huge Mossack Fonseca document leak has come to be known – show that at least 25 companies with ties to Cuba were registered in Panama, the Bahamas and the British Virgin Islands, according to the newspaper.
The Herald said the Cuban government used the Panamanian law firm to circumvent the embargo.
The oldest Cuba-linked documents in the papers are from the 1990s, when Soviet aid to the island nation – which amounted to billions of dollars at its peak and included Soviet oil and other goods – dwindled and then altogether stopped.
One of the offshore companies showed a relative of now-President Raúl Castro as its director.
Offshore corporations have one main purpose: to create anonymity. The leaked Mossack Fonseca documents reveal that some of these shell companies, cloaked in secrecy, have provided cover for dictators, politicians and tax evaders from around the world.
The Herald detailed the numerous zigzag steps that it took to get around the U.S. trade embargo.
In one case, Cuba was pivotal in an effort to sell Russian oil to Latin America. It did so through a company registered in Panama by a family that controls an energy conglomerate that traces its origin to Lebanon.
The Herald quoted Mossack Fonseca attorney Rigoberto Coronado as saying that the family’s company, BB Naft Trading in Panama, aimed “to handle, among other things, its relationship with oil-exporting Latin American countries and with Cuba.”
A BB Naft shareholder, Wael Bassatne, told the newspaper that there was no violation of the U.S.-Cuba trade embargo by his company because it is not registered, nor does it conduct business, in the United States.
“All the other commercial activities were not affected by any sanctions because these regulations do not exist as such,” he wrote in an email, according to the Herald, adding that “Mexico, Canada and the European Union have laws prohibiting their citizens and companies from obeying U.S. sanctions” on Cuba.
The Herald noted that BB Naft was listed in the Cuban registry of foreign companies doing business there as of April. It has Cuban addresses, the newspaper said.
The Herald reported that a related company, BB Energy, was registered in Texas as BB Energy USA in 2014.
Legal expert Peter Quinter told the Herald that generally under U.S.-Cuba trade restrictions, any company with a presence in the United States cannot do business with Cuba in any way.
The Herald said that documents include emails exchanged by Mossack Fonseca lawyers that mention BB Naft operations in Syria and Iraq.
“All the other commercial activities were not affected by any sanctions because these regulations do not exist as such,” he wrote in an email, adding that “Mexico, Canada and the European Union have laws prohibiting their citizens and companies from obeying U.S. sanctions” on Cuba.
Bassatne was quoted by the Herald as saying that BB Naft’s activities in Cuba included “the sale of spare parts and agricultural machinery.”
Other documents show that the Cuban government engaged in elaborate schemes to import and export goods and invest money overseas.
The Herald notes that more than a decade ago, Cuban economist Omar Everleny wrote about how there were “more than 100 entities with the participation of Cuban capital, founded as mixed [state-private] companies or as branches of companies based on the island” doing business overseas in “construction, agriculture, food, medicine, mining, finance and science.”
The Herald added that Everleny wrote of the irony that Cuba, which “lacks the capital for its own development, has invested in other countries.”
Everleny said the embargo prompted Cuba to create “a network of companies around the world to warehouse and market products from the sea, among them lobsters and shrimp.”
Not to mention “an international network of companies to warehouse and sell the famous Cuban cigar.”
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