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Q: US Embargo with Cuba ( Answered,   0 Comments )
Subject: US Embargo with Cuba
Category: Reference, Education and News > Current Events
Asked by: blueyes425-ga
List Price: $20.00
Posted: 23 Sep 2003 07:49 PDT
Expires: 23 Oct 2003 07:49 PDT
Question ID: 259388
What is the US embargo with Cuba?  When did it start and what are the
terms of it?  What is the present situation between the US and Cuba? 
What are the issues involved with the Cuban oil and mining industries
and the Embargo?
Subject: Re: US Embargo with Cuba
Answered By: leader-ga on 23 Sep 2003 09:56 PDT
Hello blueyes425-ga:

It was a pleasure to answer your question. Since, your question is
divided into three parts, allow me to answer it in three parts.


One of the best illustrations of Cuban Embargo is located at . I have truncated the
entire history and presented in a fashion that will able you to easily
comprehend. Please, read the entire version for a detailed history
where you can learn about the Embargo in detail including efforts by
US in 1974 and 75 to build a relationship and Cuban Government
decision to allow its citizens to migrate to USA.


December 9, 1958 - Revolutionary forces led by Fidel Castro take over
the government.

February 13, 1959 - Prime Minister Cardona resigns and Fidel Castro
ascends to the office.


April 15, 1959 – Cuban Government adopts the first Agrarian Reform
Law, putting a limit on private land holdings with the state
expropriating the remainder. The government offers compensation to the
former owners based on the property's current tax assessment rate
which has not been adjusted in over 30 years.

January 1960 - Cuba expropriates 70,000 acres of property owned by
U.S. sugar companies which includes 35,000 acres of pasture and forest
land owned by United Fruit, (now United Brands and Chiquita Brands).
United Brands owns an additional 235,000 acres of land in Cuba and
several hundred thousand acres in Guatemala. In 1954 the government of
Guatemala threatened to expropriate all of United Fruit's land
holdings in that country and in an effort to protect U.S. property
interests, the United States orchestrated a successful effort to
overthrow the Arbenz government.

June 6, 1960 - Cuba requests the two US oil refineries, Texaco and
Esso, and one British refinery, Shell, to process a shipment of
Russian crude oil. The companies refuse and on June 28 Cuba orders the
refineries nationalized.

July 5, 1960 - Cuba orders the nationalization of all US businesses
and commercial properties in Cuba.


July 6, 1960 - President Eisenhower, with the authorization of
Congress, cancels Cuba's sugar quota.


August 6, 1960 - Cuba nationalizes all U.S. owned industrial and
agrarian enterprises.

September 17, 1960 - Cuba nationalizes all US banks including First
National City Bank of New York, First National Bank of Boston, and
Chase Manhattan Bank.


October 19, 1960 - The Eisenhower Administration begins employing
unilateral sanctions against Cuba by first imposing a partial embargo,
which becomes a total embargo 16 months later under President John F.


October 24, 1960 - In response to the U.S. declaration on October 19
that it will impose an embargo, Cuba announces that it will
nationalize all remaining U.S. property on the island.


April 17, 1961 - The CIA backed Bay of Pigs invasion commences with
1200 Cuban exiles landing on the southwest shore of the island. After
72 hours of fighting the Cuban forces defeat the exiles. The battle
results in 80 exiles being killed and 1122 being captured. Several of
the captured exiles are accused of crimes of brutality while working
for the Batista government, and are soon executed. The remaining
exiles are imprisoned until most are released in December 1962. Many
of the exiles engaged in the fighting had owned property in Cuba prior
to the 1959 Revolution. Their holdings included 914,859 acres of land,
9,666 houses, 70 factories, 5 mines, 2 banks, and 10 sugar mills.


February 7, 1962 - President Kennedy expands the Cuban embargo to a
total embargo except for the non-subsidized sale of food and

March 23, 1962 - The US extends the trade embargo to include all
imports of all goods made from Cuban materials or containing any Cuban
materials, even if made in other countries.


October 22, 1962 - President Kennedy announces to the world that the
Soviet Union has deployed nuclear missiles in Cuba. This incident
brings the world to the brink of nuclear war. Five days later the
Cuban Missile Crisis is resolved with the Soviet Union agreeing to
remove its missiles from Cuba and the US agreeing not to invade Cuba
and to remove US missiles from Turkey. However the incident results in
cementing a relationship between the Soviet Union and Cuba that lasts
nearly 30 years and injects over $100 billion of Soviet aid and loans
into Cuba.


May 5, 1966 - The U.S. expands the embargo as Congress passes the Food
For Peace Act which outlaws food shipments to any country that sells
or ships strategic or non-strategic goods to Cuba except for certain
circumstances in which the President may allow shipments of medical
supplies and non-strategic goods.


December 3, 1976 - Fidel Castro is elected president of the State
Council, a position which, under the new Constitution, consolidates
the previous positions of president and prime minister. The new
president now serves as head of state, head of government, and
commander in chief of the Armed Forces.


March 19, 1977 - President Carter drops both the ban on travel to Cuba
and on US citizens spending dollars in Cuba.


April 19, 1982 - The Reagan Administration reestablishes the travel
ban, prohibits U.S. citizens from spending money in Cuba.


August 22, 1986 - The U.S. Treasury Department announces new measures
tightening the embargo including "crackdowns on trading with Cuban
front companies located in Panama and elsewhere, closer controls on
organizations which organize or promote travel to Cuba," lower limits
on cash and gifts Cuban Americans send to relatives in Cuba, and
tighter regulations on companies that ship food and care packages to
Cuba from Cuban Americans.


December 8, 1991 - The Soviet Union disbands and subsequently
withdraws its personnel from Cuba and discontinues its $4 billion in
annual monetary support,( Soviet aid and loans to Cuba total over $100
billion since 1962). The Cuban economy shrinks by over 25% between
1989 and 1991, as its annual imports drop by $8.1 billion in 1989 and
$3.5 billion in 1991, causing grave shortages and strict rationing as
Cuba enters its "Special Period."


February 24, 1996 - The Cuban military shoots down two U.S. registered
civil aircraft in international airspace, killing three U.S. citizens
and one U.S. resident.


October 16, 1998 - For the seventh consecutive year the United Nations
General Assembly adopts a draft resolution on the need to end the
United States economic, commercial and financial embargo against Cuba.
This year's vote is 157 in favor to 2 against with the two opposing
countries being the United States and Israel. Israel is currently the
largest foreign citrus farmer in Cuba, the largest exporter of fruit
from Cuba, and is developing commercial real estate properties in Cuba
including a business center in Havana.

November 9, 1999 - For the eighth consecutive year the United Nations
General Assembly, by a recorded vote of 155 in favor to 2 against,
(United States, Israel), adopts a resolution on the need to end the
embargo against Cuba and to repeal all laws and measures of an
extraterritorial nature that affect the sovereignty of States and the
freedom of trade and navigation, which is in conformity with their
obligations under the United Nations Charter and international law.
(Israel, the sole country voting with the United States, to retain the
U.S. embargo, continues to be one of Cuba’s most significant investors
and trading partners operating citrus farms and building real estate
projects, including a recently completed major office park in Havana.)




There hasn’t been much progress in Cuba/US relationships. Although,
the UN assembly in 2003 voted for the twelfth consecutive time to lift
ban on Cuba by an overwhelming majority and on April 18 2001, in
Washington, the Cuba Policy Foundation releases a poll in which a
majority of Americans are said to support the idea of doing business
with Cuba and allowing travel to the island but US is obstinate in its
stance towards the policy which states that “The fundamental goal of
United States policy toward Cuba is to promote a peaceful transition
to a stable, democratic form of government and respect for human
rights. Our policy has two fundamental components: maintaining
pressure on the Cuban Government for change through the embargo and
the Libertad Act while providing humanitarian assistance to the Cuban
people, and working to aid the development of civil society in the
country.” (US Department of State).

For further details on the present situation please visit US
Department of State Present Policy webpage for Cuba at




Cuban oil and mining industries have suffered greatly due to the US
Embargo. According to Manuel Marrero Faz, senior petroleum industry
advisor to Cuba's minister of basic industry, “Last year (1998) , we
paid over $ 1.2 bn for crude oil and by-products in the international
market -- it's very difficult for a small country to pay this large
amount of money”. Cuban government officials have been presented to
oil executives in Canada's energy capital the message that the
Caribbean nation is ripe for foreign exploration.
The Cuban government has urged oil companies to ignore threats of U.S.
sanctions and consider joint ventures with Cuba's national oil company
to help boost the island's oil production, which now represents only a
small fraction of its demand. Canada is already one of the largest
foreign investors in Cuba. The economy has struggled since the
collapse of the Soviet Union amid a continuing embargo imposed by the

One of the first targets of the Cuban government today is to increase
the native production by means of cooperation with foreign companies."
Officials said Cuba, which opened its oil industry to foreigners in
1990, produces about 33,000 bpd of oil, equal to just 17 % of its
consumption. Fifteen oil companies from Canada, Britain, France,
Sweden, Germany and Spain currently operate in Cuba.
The most prominent Canadian firm producing oil and gas in the country
is Toronto-based Sherritt International Corp., which also operates in
other areas of Cuba, such as in mining, tourism and power generation.

Marrero said the U.S. embargo and the Helms-Burton Act, which seeks to
punish foreign companies operating in Cuba, actually presented unique
opportunities for small Canadian oil explorers anxious to enter a new
Marrero said the embargo had not stopped a spate of U.S. firms from
contacting CUPET in hopes of securing business in case the political
climate between the 2 countries improved.

According to a report by Republican led Cuba Foundation, lifting the
U.S. embargo against Cuba could provide U.S. energy firms $2 billion
to $3 billion annually in new revenue. The per capita energy demand in
Cuba in 2015 will become similar to that of other “comparable”
countries in the region in 1998 and could increase by 148-184 thousand
b/d by 2015. This increase will have to be met by additional imports
or increases in domestic production of crude oil or natural gas.

Though Cuba may not have the energy potential of some of its Caribbean
or Latin American neighbors, there is continued interest from foreign
oil firms in exploring for crude and natural gas on the island. 
Between 1991 and 1999, foreign investment in oil exploration and
production in Cuba increased by about $600 million.  While the growth
potential is not considered large, the country’s geographic position
near to growing markets in the U.S. and Mexico make it an interesting
possible entry point for energy project development.

Combined with a base oil import market of 100,000 b/d or more,
high-end growth possibilities of the Cuban oil import market potential
could represent gross sales business value of over $1.4 billion to
$1.65 billion a year beyond the next decade.  Electricity sector
expansion could also represent a substantial business opportunity for
American firms. Many existing Cuban power plants are also aging and in
need of refurbishment or upgrading. Finally, Cuba’s strategic location
would also make it well suited as an energy-trading entrepot in
refined products, oil storage and natural gas development and

(SOURCES: Gas& and Cuba Foundation


In recent years the government of the Republic of Cuba has sought to
exploit and expand the mining of Nickel and Cobalt, especially in the
Eastern region of their island. This action has raised several
concerns that directly or indirectly affect both the actual physical
enviorment of Cuba, as well as the social/political scene, including
the issue of Human Rights. Furthermore, the issue of trade is also
involved in this scenario as a result of the United States trade
embargo against Cuba, as codified in the Helms-Burton Legislation.
These U.S. actions have infuriated Canada--whose firms lead the ranks
of foreign investors in Cuba. Canada has initiated a complaint against
the United States under the North American Free Trade Agreement.

At present the economy of Cuba is in a severe state of crisis. With
the dissolution of the Soviet Union Cuba now finds herself in a
situation where its traditional main export (sugar) will not save the
country from further economic difficulties. Thus, the Cuban government
has sought measures in which it can diversify its stagnant economy.
Cuba has established 211 joint ventures with foreigners and attracted
some $5 billion in foreign investment deals, mostly in tourism,
communications, mining, petroleum and agriculture.
It has also included reviving and expanding the mining of Nickel and

The mining of these materials has a long history in Cuba. During the
1950's the mines supplied the American government with the majority of
the nickel and cobalt needed to fight the war in Korea. After the
Castro revolution the mines were nationalized without compensation
given to their American owners and the mines then went on to serve
Cuba's new ally, the Soviet Union. However, the collapse of the Soviet
Union has not only meant the collapse of another market it has also
meant the withdrawal of Soviet aid and technical support for the
mining industry. Furthermore, years of a centrally planned economy has
taken its toll on the condition and efficiency of these mines.
Hence, the Cuban government has once again sought foreign investment
in the mining sector. Investment has come from a variety of countries
however; it is Canada (currently Cuba's largest overall investor) that
has provided most of the investment capital. Canada, which has nickel
and cobalt resources of its own, is well tooled with the knowledge it
takes to run such an industry. Furthermore, companies such as Toronto
based Sherritt International seek to be a controlling power in the
production of nickel and cobalt.
Helms-Burton Act, the United States embargo affects non-US companies.
More specifically, Helms-Burton provides that foreign companies can be
sued in US courts if they engage in business with Cuba (or involving)
property that was previously owned by a US citizen (including those
persons who obtained US citizenship through naturalization—i.e. the
majority of Cuban-Americans today).
The mining of nickel and cobalt in Eastern Cuba has raised several
issues. Namely, due to the severe economic crisis the repressive Cuban
dictatorship has sought foreign investment capital in the form of
joint ventures to secure their government's future rule. the product
of these mines are officially banned from the United States as a
result of the US embargo against that country. Additionally, due to
the international nature of the US embargo as codified in Helms-Burton
Sherritt has been prosecuted (to a degree (although if the law is
fully implemented they can be completely prosecuted) as a result of
being accused of trafficking in stolen US property. The issue of
mining in Cuba is a complex one that needs serious attention from many
different perspectives.

(SOURCE: The Ted Case Journal Case studies )

Useful Keywords

‘cuba and US embargo’
‘cuban oil industry AND US embargo’
‘cuban mining industry and US embargo’ 

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