Wednesday, April 30, 2014

Cuba Is Open For Business That Might Land You in Jail

Peter KentPC MP, Thornhill

Cuba Is Open For Business That Might Land You in Jail
Posted: 04/29/2014 6:03 pm

If word out of Havana is to believed -- relayed aggressively in recent
weeks by Cuban diplomats and trade emissaries to major investors in
financial centers around the world -- a new day of investment
opportunities is dawning in the cash-strapped communist state.

The sales pitch is driven by a set of new laws passed last month by the
Cuban National Assembly.

The legislation provides for steep tax cuts and tax exemptions. There
are a range of new guarantees of investment security.

In short, Cuba is open for business and safe for foreign investors.

Reality is at stark odds with the platitudes of the Cuban trade
officials and diplomats. One example, of many:

Since September 10, 2011 a Canadian citizen, Cy Tokmakjian, President
and CEO of the Tokmakjian Group of Companies, has been detained by Cuban

He is one of dozens of Cuban and foreign business executives scooped by
anti-corruption investigators of the Cuban Ministry of the Interior (a
ministry modeled, in the early years of the Cuban Revolution, on the
Soviet KGB and East German Stasi).

The Interior Ministry investigations are a direct product of President
Raul Castro's selective anti-corruption crusade. It is worth noting,
that the only foreign "suspects" in the investigations are almost all
European or Canadian business executives; none have come from Cuba's
like-minded communist or authoritarian regimes.

Cy has been held for more than two-and-a-half years and is still
awaiting his day in court. He is 73 years old, in frail health and held
in La Condesa, a crudely austere, walled prison for hardened criminals
located in the middle of a sugar cane plantation.

His personal assets and those of the business (in excess of $90 million)
have been seized by Cuban authorities. It seems no coincidence that Cuba
ensured claims made against the Tokmakjian Group exceed the value of
seized assets. There have been suggestions to company representatives
that additional millions sent from Canada could result in a more
"lenient" outcome.

Cy is a popular and respected corporate citizen in Canada and, until his
incarceration in Cuba in 2011, had operated businesses there for more
than 20 years.

He was recognized by the Cuban Government -- indeed, by former President
Fidel Castro -- for his integrity and his contributions to Cuba's
economy through various joint ventures and closely-audited partnerships.

Throughout his detention, Cy has denied all allegations of wrongdoing.

At the same time, Cy has been pressured by the Cuban investigators to
sign a variety of "confessions." His own Interior Ministry-assigned
Cuban lawyers are also under great pressure to gain any possible
admission of guilt.

He has been told, many times, that, if he drops International claims
against Cuba or admits to minor "offenses," he would have a lenient
trial and be released immediately.

The Canadian government, since 2011, has regularly requested that the
Cuban government specify precise charges and allow Cy a fair trial, or,
that he be released and his seized assets restored.

In recent weeks, the Cuban prosecutors finally produced a list of formal
charges from original allegations that had been investigated, then
abandoned by investigators over the past 2.5 years. The formal charges
are considered by Cy's international legal team to be entirely without

His lawyers have proposed a witness list of highly credible individuals
and organizations to refute what can only be described as distortions
and misrepresentations of normal, foreign business practices in Cuba.
(for decades past and still today). It is not clear whether these
formidable witnesses will be allowed to testify.

The Cuban case includes:

- allegations of "bribery" that include basic staff productivity
incentives, performance bonuses, dinners and entertainment.
- Cuban allegations of "tax evasion" that ignore tax treaties
(Barbados/Cuba), ignore Cuba's own tax regulations, and ignore 3 expert
tax opinions (Deloitte Forensic, Deloitte Tax, and even a Cuban tax

I have known Cy for some years, both as his Member of Parliament for the
Toronto area riding of Thornhill and, as Canada's former Minister of
State for Foreign Affairs (Americas).

And, while Minister, I discussed a wide range of trade and foreign
policy issues with Cuban political leaders, diplomats and officials,
topics including the then praised partnerships with Tokmakjian Group

Although Canada and Cuba do not agree on all bilateral or international
issues of any day, our government has worked to address thorny matters
such as human rights, the rule of law, and democratic development in
Cuba even as we've encouraged Canadian business and industry to work
with Cuban partners to help develop the struggling national economy.

During my ministerial visit to Cuba in 2010, Cy was characterized as a
valued partner by Cuban interlocutors. His companies then represented
the second largest Canadian investment in Cuba after the Canadian
resource company, Sherritt International.

I recall, during Canada's most recent, unsuccessful, campaign for our
once-in-a-decade position on the Security Council, the Cuban Ambassador
to the UN making a point of advising Latin American and Caribbean
diplomats that, while Cuba does not agree with Canada on all issues,
Cuba respects the transparent and principled contribution that Canada
makes in international fora.

I also recall, on the day of the Security Council vote, the Cuban
Ambassador actively lobbying for votes on the floor of the General
Assembly with our Canadian delegation while some of our closest G7
partners sat on their hands.

Those days of honest brokering and principled dispute resolution now
seem long gone.

I visited Cy in September last year at Cuba's notorious La Condesa
Prison outside Havana.

His focus then as today: give me my day in court -- a fair and complete
examination of unfounded allegations as well as consideration of
detailed defense rebuttals and expert witnesses.

As Cy still awaits a trial date, the international financial community
should ponder long and hard the investment blandishments of Cuban
ministers, diplomats and trade officials.

They might also consider other foreign business executives who were
swept up earlier in the Interior Ministry's anti-corruption crusade.

Very little internet scouring is required to discover the very similar
cautionary tales of people such as Briton Stephen Purvis or French
national Jean Louis Autret. Both men are free to tell their respective
horror stories...without millions in assets that were seized by Cuba.

Their stories, like Cy's, have created a climate of uncertainly and
concern among foreign companies that remain invested in Cuba. There but
for blind luck, or an aggressive, anti-capitalist investigator from the
Interior Ministry, could go many more respectable foreign businessmen.

Despite the Cuban National Assembly's tempting new investment legislation.

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Source: Cuba Is Open For Business That Might Land You in Jail | Peter
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