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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 12:12 | 2010-12-17 21:09 | 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

`