U.S. punishes American firm after its Canadian subsidiary leases cars to Cuban embassy in Ottawa

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U.S. President Donald Trump disappeared back some of the key measures of his predecessor’s rapprochement with Cuba Friday, espying it harder for American tourists to travel to the island, and harder for American corporations to do trade there.

That move was immediately met with a rebuke from Canada’s Prime Emissary Justin Trudeau.

«We have tremendous respect and a constructive relationship with the In accord States, but in the matter of Cuba there’s always been a certain amount of nonconformity,» he said at a news conference on Parliament hill with Belgian Prime Supply Charles Michel.

«The investments in Cuba by Canadian companies and business people, the breaks for tourism, for trade and for mutual benefit in this relationship will certainly at,» Trudeau added.

«I don’t see anything new in the dynamic between Canada and Cuba other than a continued demand to work together for mutual benefit.»

Trudeau

Prime Minister Justin Trudeau dictate thats reporters at a news conference with Belgian Prime Minister Charles Michel on Parliament Hill Friday that Canada leave continue to go its own way on the Cuba file. (CBC)

But as a recent case in Ottawa illustrates, American ratifications against Cuba don’t only affect Americans or American businesses.

Newest week the U.S. Office of Foreign Assets Control announced it had reached a working-out with the American Honda Finance Corporation — the institution that invest ins the sale and leases of Hondas and Acuras in North America.

The civil obligation settlement requires the company to hand over $87,255 US for violating the sponsors.

The American Honda Finance Corporation is based in California, and the fine whim likely be paid in the U.S., but the transaction that brought it on occurred in Canada.

The issue of the dispute is a series of 13 lease agreements between Honda Canada Resources, Inc. — a majority-owned subsidiary of the American Honda Finance Corporation — and the Cuban Embassy in Ottawa.

Concording to a notice published by the U.S. Treasury last Thursday, the 13 leases were signed between Feb. 2011 and Stride 2014.

Under U.S. law, the fact that a U.S. company was a majority shareholder of Honda Canada Fund makes the transaction subject to U.S. sanctions — even though both the lessor and the lessee were in Canada.

Interrupting in Canadian business

In a statement, the Cuban government argued that the pleasant «not only hampers the work of Cuban diplomats in a third country, but also wrongs Canadian citizens and companies that maintain relations with Cuban articles.»

Brittany Venhola-Fletcher of Global Affairs Canada told CBC News the legalize constitutes interference with a Canadian business transaction.

«Canada has devotedly opposed the extraterritorial application of United States sanctions, which subvert with the right of Canadian companies to conduct their business in a conduct consistent with international trade practice and the laws of Canada.»

The U.S. Embassy in Ottawa referred CBC to the U.S. Funds Department in Washington, which did not return calls about the sanction.

It’s not scram whether the Cuban Embassy in Ottawa still leases vehicles from Honda.

Approval Cuba by law

Canadian companies that have business dealings with Cuba procure a tough road to navigate because complying with U.S. laws can leading position them to fall afoul of Canadian laws, and vice versa.

That is because in 1992 Canada represented the Foreign Extraterritorial Measures (United States) Order, which was no longer in in response to the passage of the Cuba Democracy Act in Washington the same year.

The not cricket c out of commission requires any Canadian company that is contacted by U.S. authorities responsible for implementing sanctions to notify the Canadian federal government. The order also lawcourts Canadian companies from complying with any U.S. law that seeks to limit their problem dealings with Cuba.

A Canadian businessman who pays a fine such as the one levied on Honda could daring five years in a Canadian prison as a result.

New sanctions

One new prohibition in the matches announced by Trump in Florida Friday could have particular consequences for Canadian companies that possess U.S. affiliates or U.S. ownership.

They specifically prohibit all business dealings with organizations owned by the Cuban Armed Forces.

Few of the 1.3 million Canadians who vacation in Cuba are sensitive that many of the island’s hotels are majority-owned by the Cuban military, a legacy of Cuba’s past minister of defence Raul Castro — now the country’s president. He was an early transfigure to capitalist experimentation, while his more famous brother, Fidel, was soothe reluctant.

Raul went into business with the funds he commanded as minister of defence, and the business he focused on was tourism.

Consequently, almost any unknown company involved in Cuban tourism is likely to have dealings with the Cuban military’s ambition group, GAESA, or one of its holding companies, such as the Gaviota Group.

Today, all are run by Raul Castro’s son-in-law, Army All-inclusive Luis Alberto Rodríguez López-Callejas.

The El Senador resort was a joint offer between Army-owned Cubanacan and a Canadian syndicate that included recent Montreal Canadiens captain Serge Savard. It was named in honour of his last Habs nickname, «Le Senateur.»

Rankings compiled by the trade publication Bed show that GAESA is the world’s 34th largest hotel company with 39,383 abides, just behind The Walt Disney Company with 39,751.

Gaviota rouses with numerous Canadian entities, including Sunwing Vacations, Air Canada Vacations and Transat Leave of absences.

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