United States Expands Pressure Campaign Against Cuba

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In March of 2016. President Barack Obama visited Cuba after brokering a deal that would be the start of normalising relations between the two countries. Since the embargo came into effect in 1962, the US has applied immense economic pressure to break down the communist regime led by Fidel Castro. The main points of this deal was to ease trade and travel restrictions on Cuba, remove the country from its list of state sponsors of terrorism and restore diplomatic relations. Continued isolation for Cubans had been insufficient in removing their leaders, so it was time for a new tactic. Several US senators at the time were critical of this new relationship, especially Senators Marco Rubio (R-FL) and Robert Menendez (D-NJ), who were outspoken in their views of collaborating with the Cuban government. This experiment was short-lived as the next administration reversed all policies that the Obama administration negotiated with the island nation. Close to ten years after this reversal, Cuba has run out of oil, lost its largest benefactor Venezuela, and its former president Raul Castro was recently indicted on charges of conspiracy to kill US nationals, four counts of murder and two counts of destruction of aircraft. All of these examples are indicators to apply pressure on the Cuban government, but one of the most significant is the most recent sanctions placed on a military-based conglomerate called GAESA.

The Cuban company Grupo de Administración Empresarial SA, or GAESA, was established in the 1980s when defence minister Raúl Castro convinced his older brother, President Fidel Castro, to allow him to make changes to the military’s business interests. After the collapse of the Soviet Union, Fidel allowed the military, via GAESA, to take over state-run sectors of the economy, like tourism, in an effort to save the country from economic collapse. By investing in support for hospitals, education and government food rations, the conglomerate was able to prop up the economy to survive the continued US embargo. A leak of financial statements last year provides more insight on the power of this country. GAESA dominates Cuba’s strategic and profitable economic sectors through its affiliates: 

• Gaviota (Grupo de Turismo Gaviota S.A.) is one branch that controls a large share of the tourism economy. This includes travel agencies, hotels, tourist attractions, and shops in Old Havana.

• CIMEX and TRD Caribe are retail and wholesale trade companies, respectively. Some of the companies are supermarkets, currency exchanges, real estate companies, and internet services. 

• RAFIN S.A. and the Banco Financiero Internacional (BFI), which is essentially the Cuban financial system as BFI is one of the country’s largest commercial banks.

Here is a breakdown of GAESA and its affiliates from the New York Times:

This article also states that “GAESA functions as a state within a state. It does not allow the Cuban government to audit its accounts. Any profits made, GAESA keeps, hoarding money away from Cuba’s central bank and funneling it back to the military ruling class.” Another research has determined that “GAESA’s gross profits on sales represent close to 37% of Cuba’s GDP, which means that more than one-third of the country’s total value added is generated within the military conglomerate…The GAESA military-run business conglomerate reports liquid dollar reserves of USD 14.5 billion, confirming the scale of the financial resources under its control.” An entity this powerful, it is clear why the United States placed more sanctions on Cuba this week.

Brigadier General Ania Guillermina Lastres Morera, who runs GAESA and is a member of the Communist party’s central committee, was sanctioned by the United States on 21 May. The US has also detained Adys Lastres Morera, the Florida-based sister of Brigadier General Morera after revoking her US green card. Secretary Marco Rubio stated on X.com that “Morera was managing real estate assets and living in Florida, while also aiding Havana's communist regime, until I terminated her permanent resident status.” A secondary sanction was also included to expand towards international companies that conducted business with Cuba. In addition to GAESA and Brigadier General Morera, sanctions included Moa Nickel, a Cuban joint venture with Canada’s Sherritt International. The Canadian company immediately announced that it would withdraw from the venture. As the United States continues its pressure campaign to bring down the ruling class of Cuba, the negotiations are becoming difficult to find a resolution. Cuban diplomats are willing to keep talking but it was recently noted that the US aircraft carrier Nimitz and its escort warships entering the southern Caribbean Sea, which feels fairly reminiscent of Cuba’s recent demise of its most important benefactor.