World - Patchy Blocade;Cuba

FOR almost half a century, the United States has imposed a trade embargo against Cuba. And yet it sometimes seems barely visible. Across the island, American brands are ubiquitous. Tourists can order a Coca-Cola (made in Mexico) in state-run hotels. Computers running Microsoft software have appeared in the capital’s few electronics stores. A fleet of Ford tankers refuel aeroplanes at Havana’s airport. Taking advantage of an exemption introduced in 2000, American farmers have become Cuba’s biggest source of food imports, a cash trade worth $600m a year. No wonder that some Cubans wonder whether the “blockade” which the government blames for nearly all of Cuba’s problems might be some sort of Orwellian trick. “Does it really exist?” asks a medical student in Havana. “I don’t know what to believe anymore.”
But plenty of companies that deal with Cuba have recently been reminded that the embargo is real. Last month, the United States’ Treasury’s Office of Foreign Asset Control, which is responsible for enforcing it, fined Minxia, a Maryland-based subsidiary of China’s MinMetals Corporation, $1.2m for dealing in Cuban metals. Gate Gourmet, a Swiss-American group, was ordered to pay $600,000 because it supplies in-flight meals to Cuba’s national airline.
Although the embargo has manifestly failed in its objective of removing Fidel Castro’s communist regime, in 1996 it was tightened by the Cuban Liberty and Democratic Solidarity Act (better known, after the legislators who sponsored it, as Helms-Burton). This attempts to apply the embargo to foreign companies and individuals. Its extraterritorial pretension riles even many of America’s closest allies. It has notably been invoked to ban the directors of Sherritt, a Canadian firm which runs Cuba’s nickel mines, from entering the United States. (They included a former editor of The Economist). But in deference to those allies, the Act’s draconian Title III, which gives Americans who owned property in Cuba before the revolution the right to sue foreigners who now invest there, has been waived every six months, first by Bill Clinton and then by George Bush.
A tightening of America’s bank regulation after the terrorist attacks of 2001 has become a bigger impediment to those wanting to do business in Cuba. The United States considers Cuba, along with Iran, North Korea, Sudan and Syria, to be a “state sponsor of terrorism” (though without any recent plausible evidence). Whatever they might think of the Cuban embargo, banks around the world do not want to run afoul of antiterrorism laws.
In 2004 UBS, a Swiss bank, paid a $100m fine (without admitting any liability) for providing new banknotes to Cuba and Iran. In 2007 ING of the Netherlands, which once boasted that it was the first big bank to open an office in Cuba, abruptly closed there. This year, directors at the company which has exclusive rights to import Cuban cigars to Britain, were surprised to receive a letter from Lloyds TSB, their long-time bankers, suggesting that they take their business elsewhere.
Despite all the restrictions, plenty of international companies continue to operate in Cuba. InBev, a Belgian-Brazilian brewer that recently bought America’s biggest beer maker, Anheuser-Busch, for $52 billion, has a joint-venture with Cuba’s government which claims 40% of the island’s beer market. As a director of a European company with a big investment on the island puts it, the best strategy is to “try to stay under the radar and make damned sure you are here when the United States’ government finally sees sense.”