Rum Wars

U.S. law says that it should be the policy of the United States to seek a “peaceful transition to democracy and a resumption of economic growth in Cuba through the careful application of sanctions directed at the Castro government and support for the Cuban people.” 22 U.S.C. § 6002(1). Last year, the President reversed this paradigm.

U.S. policy toward Cuba is accomplished in a variety of ways and balancing of equities. The President can use targeted sanctions to deny the Cuban police state money to carry out its dirty deeds against the people of Cuba. Concomitant with increasing and enforcing economic sanctions is helping the Cuban people through a variety of ways including increased travel, remittances, and other humanitarian tools. Rather than seek out balance between these two competing issues, the Obama administration as tipped the scales in favor of the regime.

The law means little to this White House. It has shown, time and time again, that if the Congress, or the law, stands in their way, they will find other means to press their agenda. So why the Cuba fixation? Hard to tell. Cuba may be the largest Caribbean nation, however, it is an island with very little economic potential for American taxpayers. In the overall scheme of things, Cuba is a political headache and, at best in the near term, economic basket case. Even Cuba’s more rational political minds are a paranoid lot, caught between the old guard and scared of their own shadows.

Havana Cuba rum is, essentially, contraband. It should be banned from entry to the United States. Anyone who purchases it is fueling the police state that has terrorized the people of Cuba, and elsewhere, for decades.

Obama’s Cuba curiosity is either a case of political voyeurism or payback to powerful special interests that invested millions of dollars to force a change in U.S. policy. For $3 or $4 million, two embassies were opened and the regulations amended, some illegally, to make it easier for Americans to travel to Cuba and engage in transactions with the regime. For the few sectors of the U.S. economy that could make some money off any of this, it is may be somewhat profitable in the near-term but is it a boondoggle at most, a fire sale, at best. Why? Because Cuba is a political and economic pressure cooker. When it blows, and it will explode, the change will not be pleasant or, as U.S. law requires, peaceful. 22 U.S.C. § 6002(1).

This week, the U.S. Patent and Trademark Office will allow Cuba to register a trademark for Havana Club rum. As with most things with Communist Cuba, it stole the trademark from a Cuban family that was forced to leave Cuba when the Communist took over. The decision is embedded below. The protracted legal battle with Bacardi is sure to take an interesting turn in the weeks and months ahead. I mention this case not so much because of the rum war, but rather, the Treasury license that made this possible.

Here again, and I’m only guessing, the White House appears to have pressured senior political Treasury officials who, in turn, urged the Office of Foreign Assets Control (OFAC), to issue a license to Communist Cuba that allows the regime to pay the fees necessary to register the stolen trademark. If U.S. law requires that we economically isolate the regime, why are we licensing activities that will put more money in the pockets of regime officials? Worse, why are we engaging in activities that, essentially, condone trafficking in stolen property?

I could go on and on with several legal arguments that would tear to shreds this transaction, however, I don’t want to bore you. However, I do believe that this OFAC license is a prelude to even more Cuba sanctions-easing via regulations later this year. If you’re contemplating engaging in any transactions with Cuba, consult a lawyer that understands these laws and regulations. Just because the government says you can do certain things with respect to Cuba, you may be exposing yourself to legal liabilities that they are not telling you about.

The good news is Bacardi intends fight this decision. I expect a lot more Cuba-related litigation in the months and years ahead. No matter how ardently advocates of engaging with Cuba seek to whitewash and policy launder, you can’t ignore the injuries that decades of Communism have inflicted on the people of Cuba and the Americas.

73023981 – Havana Club Bacardi Trademark Dispute

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