Dorgan Seeks Frustrated Creditor Status

Wednesday, July 8, 2009
Last week, the Russian Federation's Audit Chamber revealed that the Cuban regime failed on three occasions to pay installments on the US$355 million credit deal it signed with Russia on Sept. 28, 2006.

This is just the latest episode in a saga that, in 2009 alone, includes:

1. Reports by Mexico's La Jornada and Spain's El Pais newspapers that hundreds of foreign companies that transact business with the Cuban regime's authorities, have had their accounts frozen since January 2009 by the regime-owned bank that is solely empowered to conduct commercial banking operations in convertible currencies, Banco Financiero Internacional, S.A. ("BFI").

2. "Cuba has rolled over 200 million euros in bond issues that were due in May, as the country's central bank asked for another year to repay foreign holders of the debt, financial sources in London and Havana said this week." Reuters, June 9, 2009.

As a reminder, in Castro's Cuba, you can only do business with the government, as private business activity severely restricted.

Yet, the National Journal reports this morning:

Sen. Byron Dorgan, D-N.D., will offer legislation today to change a provision in the 2000 law that allows agriculture trade with Cuba so that the Treasury Department cannot require the government of Cuba to pay for food before it is shipped, Dorgan said Tuesday.

During the Senate Appropriations Committee markup of the FY10 Agriculture appropriations bill, Dorgan said he had considered offering his Cuba amendment to the bill, but that he had been told that some members of the committee "would have an apoplectic seizure" so he will instead offer it today on the Financial Services and General Government appropriations bill.

Dorgan noted that the Treasury Department had initially allowed Cuba to follow the normal commercial pattern of making payment before goods arrive in the country, but that in 2005 the Bush administration decided that "cash in advance" meant payment for the goods before they left the country.

Dorgan said he would introduce the measure because he has failed in his attempts to convince Treasury officials to change their position. "Someone down at Treasury apparently still can't hear," Dorgan said. "We've had meeting after meeting after meeting."

EDITOR'S NOTE: The U.S. can also join this ever-growing club of Castro's frustrated creditors by supporting Senator Dorgan's legislation.