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Viewing cable 04MADRID4554, SPAIN/CUBA: REVIEW REGARDING SUSPENSION OF TITLE

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Reference ID Created Released Classification Origin
04MADRID4554 2004-12-01 12:58 2010-12-17 21:30 CONFIDENTIAL Embassy Madrid
This record is a partial extract of the original cable. The full text of the original cable is not available.
C O N F I D E N T I A L SECTION 01 OF 02 MADRID 004554

SIPDIS

WHA/CCA FOR WHITAKER AND ZUNIGA BROWN

E.O. 12958: DECL: 11/30/2014
TAGS: ETTC PREL CU SP
SUBJECT: SPAIN/CUBA: REVIEW REGARDING SUSPENSION OF TITLE
III OF THE LIBERTAD ACT

REF: SECSTATE 248337

Classified By: Political Counselor Kathy Fitzpatrick; reasons 1.5 (B) a
nd (D)

1. (C) Summary. Spain is among the most important foreign
investors in Cuba and the ruling Socialist party has
continued the Popular Party's policy of encouraging further
investment and trade with Cuba. On human rights issues, the
GOS has broken with the Aznar administration's emphasis on
support for democracy activists in favor of seeking greater
dialogue with the Castro regime. Within the EU, Spain has
led the effort to end the EU policy of inviting dissidents to
EU national day events, calling the invitations a major
impediment to normal contact with the Cuban authorities.
Despite our displeasure over the direction of Spanish policy
towards Cuba, we should consider whether it is in our
interest to deepen our divisions with the EU over Cuba by
authorizing Title III actions against Spanish entities, given
EU countries' tendency to defer to Spain on Cuba issues.
Madrid considers itself a bridge between Cuba and the EU and
has emphasized this purported role to overcome the objections
of countries that insist on a strong, principled EU position
on Cuba. Even EU countries that have resisted Spanish
efforts to weaken EU positions on Cuba may feel compelled to
support an EU partner faced with U.S. legal action. End
Summary.

//SPAIN SEEKS TO EASE EU "RESTRICTIVE MEASURES" ON CUBA//

2. (C) As a member of the EU, Spain is a party to the EU
Common Position on Cuba, which guides EU diplomatic relations
with Cuba and links improved bilateral relations to an
improvement in Cuba's human rights record. Spanish officials
have repeatedly stated their commitment to the Common
Position. However, over the last six months, and in
particular since September, the GOS officials have emphasized
their rejection of Aznar's activism on behalf of Cuban
opposition figures and have advocated the "modification" of
the EU's "Restrictive Measures" against Cuba. Madrid's
primary objective is to end the policy of inviting Cuban
opposition figures to EU national day celebrations, which the
GOS cites as the main obstacle to normal diplomatic ties.
The GOS asserts that normal diplomatic relations would enable
the GOS to positively influence Cuban officials and would not
preclude robust relations with dissidents.

3. (C) We strongly disagree with GOS efforts to weaken the EU
Restrictive Measures and believe we should do whatever
possible to block Madrid's initiative within the EU. Spanish
officials have responded to our criticism of their actions on
the Restrictive Measures by stating their intention to
promote continued, and even increased contacts with Cuban
opposition figures. In public statements on Cuba, both
President Zapatero and FM Moratinos have stressed the need
for the GOC to institute democratic reforms as a precondition
for greater support for Cuba by the EU. Spain's latitude on
Cuba is hemmed in by EU partners, such as the Czech Republic,
that reject weakening EU measures and instead support a
strong, principled stand in support of pro-democracy
activists. This political landscape would probably shift to
our disadvantage in the event of legal action against a
Spanish company under Title III.

4. (C) Regardless of the government in power, Spain plays a
leading role on Cuba issues within the EU. Under Aznar,
Spain was a key player in solidifying EU support for a
strong, principled defense of human rights issues (even as
his government pursued continued Spanish investment in Cuba
and opposed the U.S. embargo). With the shift in Spain's
Cuba policy under Zapatero, we still see EU countries
deferring to Spain on Cuba policy, though this time in a
negative direction. The GOS understands its leverage on Cuba
within the EU and, if Title III action were taken against a
Spanish company, it would seek to rally its EU partners to
its defense, and perhaps even undermine broader EU support
for the Common Position. Countries that have resisted
Madrid's attempts to water down EU policy towards Cuba could
feel undermined by a USG decision to permit legal action
against Spanish companies.

//MAJOR SPANISH INVESTMENTS IN CUBA//

5. (U) Spanish businesses are well aware of the potential of
U.S. legal action against them under the Libertad Act and
take care to obscure precise invormation regarding their
investments in Cuba. However, we have obtained the following
general information regarding the major Spanish investors in
Cuba:

-- Grupo Sol Melia: Hotel/Tourism industry. Locations in
Cuba include Havana, Varadero, Cayo Largo, Cayo Santa Maria,
Ciego de Avila, Cayo Largo del Sur, Cayo Guillermo, Playa
Esmeralda, and Santiago de Cuba. The total investment amount
is unknown, but press reports indicate Sol Melia will invest
USD 50 million in two hotels in 2004-2005.

-- Inversiones Ibersuizas: Commercial investment firm.
Investments in Cienfuegos and Santiago de Cuba. According to
press reports, Inversiones Ibersuizas has invested a total of
USD 150 million in various Cuban projects.

-- Occidental Hotels and Resorts: Hotel/Tourism. Investments
in Havana and Play Yuraguanal. Investment amount unknown.

-- Grupo Pinero: Hotel/Tourism. Investment in Varadero.
Investment of at least USD 2 million, according to press
reports.

-- Iberostar: Hotel/Tourism. Investments in Varadero, Cayo
Coco, and Trinidad. Investment amount unknown.

-- Barcelo: Hotel/Tourism. Investments in Varadero and Cayo
Largo del Sur. Investment amount unknown.

-- NH Hoteles: Hotel/Tourism. Investment in Havana.
Investment amount unknown.

-- Grupo Riu: Hotel/Tourism. Investment in Varadero.
Investment amount unknown.

-- Hotetur: Hotel/Tourism. Investment in Varadero and
Havana. Investment amount unknown.

-- Aguas de Barcelona: Utility. Investment in Havana in
joint venture with Aguas de La Habana. Investment of at
least EUROS 5 million in 2002. Subsequent investment amounts
unknown.

-- Grupo Altadis: Tobacco. Unspecified location. Investment
amount unknown

-- Grupo Freixenet: Wine/Alcoholic Beverages. Unspecified
location. According to press reports, Freixenet has invested
USD 200,000 to help the Cuban wine industry.

-- Repsol YPF: Energy. Investment in Cuban territorial
waters. According to press reports, total Repsol investment
is USD 25-40 million.

-- Iberia Airlines: Transportation industry. Investment in
Varadero. Investment amount unknown.
MANZANARES