Cuba used offshore companies to get around U.S. embargo, report says

Cuba used offshore companies to get around U.S. embargo, report says
Published June 07, 2016 Fox News Latino

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."

Source: Cuba used offshore companies to get around U.S. embargo, report
says | Fox News Latino -
http://latino.foxnews.com/latino/money/2016/06/07/cuba-used-offshore-companies-to-get-around-us-embargo-report-says/