Panama law firm helped Cuba thwart US embargo: report

09 Jun 2016


Leaked documents from the Panama law firm Mossack Fonseca, which is at the heart of the Panama Papers scandal, show the Cuban government has created a complex of offshore companies to import and export goods and invest funds abroad with the assistance of the Panamanian law firm.

These companies set up in offshore financial havens allowed Cuba to sidestep the US embargo in its commercial operations, say reports.

The documents reveal that starting in the early 1990s, Cuba's ministry of foreign trade, through the Compañía Panamericana SA, used Mossack Fonseca to create a string of disguised companies in Panama, the Bahamas and the British Virgin Islands that bought and sold medicines, cigars and food.

El Nuevo Herald identified at least 25 companies registered in the British Virgin Islands, Panama and the Bahamas and linked to Cuba.

It was these companies that helped Cuban economy survive the 1990s crash when Moscow's massive subsidies to the island ended, say reports.

Panamericana's former director José L. Fernández de Cossío Domínguez is named as a director of Miramar Investment Corporation Ltd, Euro Foods Ltd, Racuza SA, Caribbean Sugar Trader, Mercaria Trading SA and Sabradell SA in the leaked documents.

Fernández had recently also served as Cuba's ambassador to Japan and economic attaché at the embassy in Paris.

The news website Diario de Cuba has identified the director of foreign investments at the foreign trade ministry, Déborah Rivas Saavedra, as another of the directors of Racuza, Miramar Investment Corporation Ltd and Caribbean Sugar Trader.

The leaked documents also show that Guillermo Faustino Rodríguez López-Calleja, brother of Gen. Luis Alberto Rodríguez López-Calleja, was appointed in 1999 as a director of Pescatlan SA, a company incorporated by Mossack Fonseca in the British Virgin Islands in 1991 with an initial capital of $50,000. A letter sent to the Panamanian law firm in 1997 requested assistance for organising ''a fishing operation in the Turks and Caicos Islands with Cuban-flagged fishing boats.''

The Mossack Fonseca documents also refer to Pescatlan as a Cuban company but do not identify the true owners of the company. Its ownership was in the form of anonymous bearer shares - the owners are whoever has those shares.

There have been unconfirmed reports that Luis Alberto Rodriguez Lopez-Calleja divorced Deborah Castro Espin in recent years, but he remains in charge of Grupo de Administración Empresarial SA, (GAESA) and the government's signature port of Mariel development project. The Cuban military is estimated to control at least 60 per cent of the island's economy.

Guillermo Faustino Rodríguez López-Calleja also appears as the representative of seven foreign companies registered in Cuba: Acemex Management Company Limited; Caroil Transport Marine Limited; Nautilus Shipping Overseas Corp.; Northsouth Maritime Company Limited; Gulf Lake Enterprises Ltd.; Acando Shipping Co. Ltd.; and Gilmar Project Finance Establishment. They have addresses in the Miramar and Old Havana neighborhoods of the Cuban capital.

The Panama Papers also show that Labiofam SA, the marketing branch of Grupo Empresarial Labiofam, a Cuban government company that produces vaccines, medicines and other products for the control of carriers of diseases, owns shares in BioAsia Ltd. That company was founded with an investment of €10 million from Vietnam, southern Asia and the United Kingdom and lists Mossack Fonseca as its registered agent.

Labiofam SA bought all the shares of BioAsia Ltd. in 2009. Longtime Labiofam director José Antonio Fraga Castro, a nephew of Fidel and Raúl Castro, retired in 2014 amid the so-called ''revolutionary perfumes'' scandal, sparked when the company sought to sell perfumes inspired by Cuban revolutionary hero Ernesto ''Che'' Guevara and former Venezuelan President Hugo Chávez.

Little is known inside the island about the Cuban government's companies abroad, but Havana economist Omar Everleny wrote in the early 2000s that 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'' operating abroad in areas such as ''construction, agriculture, food, medicine, mining, finance and science.''

Everleny, recently fired from the University of Havana's Center for the Study of the Cuban Economy, noted the paradox that a country that ''lacks the capital for its own development has invested in other countries.'' The motive, he speculated, is the US embargo ''that forced the establishment of a network of companies around the world to warehouse and market products from the sea, among them lobsters and shrimp.''

Cuba currently carries out the export of products from the fishing industry through those companies. Besides, Cuban officials have created ''an international network of companies to warehouse and sell the famous Cuban cigars.''

The Cuban government also has registered companies, ships and airplanes in Panama and other countries to get around the embargo and avoid court-ordered seizures to settle its many debts abroad. Those front companies, reports say, also help Cuba carry out foreign trade transactions in US dollars, forbidden by the embargo until President Barack Obama lifted the restriction earlier this year.

''Every time something was purchased in dollars, it could not be done because the Cuban checks in dollars were automatically canceled because the dollars belong to the US Federal Reserve,'' the source said. ''So the seller had to be told that payment would be in euros from a bank in Spain, for example, and Cuba lost on the currency exchange.''

Companies registered abroad are ''legally not Cuban,'' according to the source, and could be used for dollar-denominated transactions.

Swiss lawyer Albert-Louis Dupont-Willemin appears as a director of several of the Cuban companies, among them Miramar Investment Corporation Ltd. and Pescatlan SA. The Panama Papers show Dupont-Willemin as a director of a total of 49 offshore companies in the British Virgin Islands, five in Panama and two each in the Bahamas and Seychelles islands.

The Cuban government hid its control of offshore companies by creating still other limited liability companies appearing in registries as owners of the offshore companies.

Racuza SA, a holding company incorporated in the British Virgin Islands, held all the shares of Euro Foods Ltd, which was registered in the Bahamas and in turn represented ALIMPORT.

Sabradell SA, headed by Panamericana director José L Fernández de Cossío Domínguez for a time and dissolved in 2008, was the sole owner of Resimevis Ltd, a Mossack Fonseca client since 1995 dedicated ''to general commerce of medical products and equipment.''

Companies with Cuban capital or activities on the Island:

  • BB Naft Trading SA,
  • Miramar Investment Corporation Ltd,
  • Eurofoods Ltd,
  • Racuza SA,
  • Caribbean Sugar Trader,
  • Mercaria Trading SA,
  • Sabradell SA,
  • Pescatlan SA,
  • BioAsia Ltd,
  • Resimevis Ltd,
  • Curtdale Investments Ltd,
  • Ardpoint Company Inc,
  • Tecnica Hidraulica SA,
  • Sanford Management Financial Ltd,
  • Commercial Mercadu SA,
  • Amadis Compañía Naviera SA,
  • Seagull and Seafoods SA,
  • Mavis Group SA,
  • Octagon Industria Ltd,
  • Travelnet,
  • Venus Associates Inc,
  • Acepex Management SA,
  • MIS Technologies SA,
  • Vima World Ltd,
  • Billingsley Global Corp.

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