One of the things that pops out from the State Department’s Naughty List of Cuban businesses is all the beverage companies on it, which seems odd. I mean, honestly, how much can American tourists spend on TropiCola? How much of that will wind up in the pockets of Cuban spies and the Cuban military? Is the Cuban military going to crumble when it can’t sell TropiCola to American tourists?
On the list are Najita (orange soda), Cachito (sparkling lemonade), TropiCola, and rum producers Ron Caney and Ron Varadero. Havana Club Rum, the gold standard of Cuban rum, is, inexplicably, not on the Naughty List.
The relevant regulation here is the new section 515.209 of the Cuban Assets Control Regulations (“CACR”) which forbids “direct financial transactions” with any entity on the Naughty List. But don’t pin your hopes on the word “direct” because we’re talking OFAC here and we’re in the Upside Down where direct actually means indirect. When you buy TropiCola from a street vendor, that’s a direct transaction in the Upside Down where OFAC lives and an indirect transaction in the normal world.
For purposes of this prohibition, a person engages in a direct financial transaction by acting as the originator on a transfer of funds whose ultimate beneficiary is an entity or subentity on the State Department’s List of Restricted Entities and Subentities Associated with Cuba (“Cuba Restricted List”) … , including a transaction by wire transfer, credit card, check, or payment of cash.
So, when you give cash to bar in Havana to purchase a Cuba Libre made with Caney Rum and TropiCola, the ultimate beneficiaries are, arguably, TropiCola and Ron Caney. Perhaps an argument could be made that since both companies have already been paid, they aren’t the ultimate beneficiary of your payment to the bar. But, if section 515.209 of the CACR only applies when you buy Tropicola or Caney Rum directly from the bottler, why include them on the Naughty List? What U.S. tourist will ever deal directly with the bottler?
And since we made a trip to the Upside Down, I am compelled to add one thing: #JusticeForBob (spoiler alert!).
Copyright © 2017 Clif Burns. All Rights Reserved.
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