Is there anything ‘new’ in Cuba’s new foreign investment law?

Analysis: Is there anything 'new' in Cuba's new foreign investment law?

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By José Manuel Pallí, Esq.



For the past few days, everyone, in and out of Cuba, has been commenting

on a law — Cuba's 'new' foreign investment law — no one seems to have

fully read yet.



An American friend from Massachusetts, finding me all worked-up with

that very same topic, wistfully asked me why on earth is that law so

important when, on the one hand, Cuba remains a small communist country

where few would entertain investing in, and, on the other hand, it is

forbidden to us in the United States to invest in it anyways. I

explained to him, who is spending his annual swallow stay in Miami, that

this is not America: this is "Cuban America" (where else in the USA

would you need to clarify that your friend is "an American"?…).



Is my friend right? Is this just much ado about nothing? The "normal"

source for seeking confirmation or advice in this regard should be any

of those colleagues of mine who practice law in Cuba, many of them

excellent lawyers who I presume are behind some of the changes the new

law may entail, since I know first-hand of their concern with the

excessive "administrativización" (what we call bureaucratization) of

Cuba's laws, and this is one field where Cuban bureaucrats have, for

years, run amok.



And yet, here I am, a Florida lawyer who happens to also be a lawyer in

Argentina (and seldom writes about Floridian or Argie laws) writing

about Cuban laws. Why? Because, on the one hand, my colleagues in Cuba

(whose collective voice is only heard behind heavy curtains there) are

as eerily quiet as ever, and on the other hand "Cuban America" prevents

the rest of the country from having the kind of "normal" relation with

Cuba, its people and its laws that it could and should have.



In any event, no lawyer, whether in Cuba or here, can seriously comment

on any given law without first reading the full text of it. In the case

of Cuba's foreign investment law, the text based on which valid comments

could be made is the one published in Cuba's Gaceta Oficial, and such

publication is still pending.



It could also prove useful to read the law, once it is published and

becomes "the" law, in the context of the other documents Cuba has

announced as companions to the law itself, a Reglamento or regulatory

act (an improvement on the previous foreign investment law, which

lacked one) and a series of "sectorial policies" that will serve as a

guide to what kind of foreign investment Cuba is likely to welcome in

any given sector of its economy, since what we presently "know" about

the law indicates the Cuban government's approval to most foreign

investments is still a requirement (as it is in many other countries)

and remains highly discretionary. Diluted administrativización may be in

store, but not the kind that would get Cuba a Top 10 ranking in any

among the plethora of indexes that grade (mostly arbitrarily) the

different nations' environment for business purposes.



The fact is Cuba's previous foreign investment law (enacted in 1995) is

not a bad law at all, although as is the case with all laws, if it is

not applied to all those subject to it in a fair and unprejudiced way,

it is irrelevant, no matter how well crafted. It does have a chapter

(the 11th) that is a ridiculous attempt to put a corset on labor

relations between foreign investors and their Cuban employees, and I am

still hoping to see it gone by the time I get to read the law published

at the Gaceta Oficial de Cuba (little more than a wishful thought of

mine, I know…).



But if most of the comments and analysis already made regarding this

"new" law — both in Cuba and here in Miami — based on a draft version

prove to be accurate, I am afraid it may all end up being much ado about

nothing indeed, and even give the hardliners who have historically

driven U.S. policy towards Cuba, and who absurdly claim all changes

Cuba has made over the past six years to its socio-economic model are

cosmetic in nature, new ammunition to preserve the status quo. If this

is all there is to it, the Miami Herald's headline once the law is

published may well read:



"Cuba's "new" foreign investment law: brought to you by Revlon"…



José Manuel Pallí is president of Miami-based World Wide Title. He can

be reached at jpalli@wwti.net; you can find his blog at

http://cubargiejoe.com



Source: Analysis: Is there anything 'new' in Cuba's new foreign

investment law? « Cuba Standard, your best source for Cuban business

news -

http://www.cubastandard.com/2014/04/06/analysis-is-there-anything-new-in-cubas-new-foreign-investment-law/