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Cuba Is Open For Business That Might Land You in Jail

If word out of Havana is to believed -- relayed aggressively in recent weeks by Cuban diplomats and trade emissaries to major investors in financial centers around the world -- a new day of investment opportunities is dawning in the cash-strapped communist state.

The sales pitch is driven by a set of new laws passed last month by the Cuban National Assembly.

The legislation provides for steep tax cuts and tax exemptions. There are a range of new guarantees of investment security.

In short, Cuba is open for business and safe for foreign investors.

Reality is at stark odds with the platitudes of the Cuban trade officials and diplomats. One example, of many:

Since September 10, 2011 a Canadian citizen, Cy Tokmakjian, President and CEO of the Tokmakjian Group of Companies, has been detained by Cuban authorities.

He is one of dozens of Cuban and foreign business executives scooped by anti-corruption investigators of the Cuban Ministry of the Interior (a ministry modeled, in the early years of the Cuban Revolution, on the Soviet KGB and East German Stasi).

The Interior Ministry investigations are a direct product of President Raul Castro's selective anti-corruption crusade. It is worth noting, that the only foreign "suspects" in the investigations are almost all European or Canadian business executives; none have come from Cuba's like-minded communist or authoritarian regimes.

Cy has been held for more than two-and-a-half years and is still awaiting his day in court. He is 73 years old, in frail health and held in La Condesa, a crudely austere, walled prison for hardened criminals located in the middle of a sugar cane plantation.

His personal assets and those of the business (in excess of $90 million) have been seized by Cuban authorities. It seems no coincidence that Cuba ensured claims made against the Tokmakjian Group exceed the value of seized assets. There have been suggestions to company representatives that additional millions sent from Canada could result in a more "lenient" outcome.

Cy is a popular and respected corporate citizen in Canada and, until his incarceration in Cuba in 2011, had operated businesses there for more than 20 years.

He was recognized by the Cuban Government -- indeed, by former President Fidel Castro -- for his integrity and his contributions to Cuba's economy through various joint ventures and closely-audited partnerships.

Throughout his detention, Cy has denied all allegations of wrongdoing.

At the same time, Cy has been pressured by the Cuban investigators to sign a variety of "confessions." His own Interior Ministry-assigned Cuban lawyers are also under great pressure to gain any possible admission of guilt.

He has been told, many times, that, if he drops International claims against Cuba or admits to minor "offenses," he would have a lenient trial and be released immediately.

The Canadian government, since 2011, has regularly requested that the Cuban government specify precise charges and allow Cy a fair trial, or, that he be released and his seized assets restored.

In recent weeks, the Cuban prosecutors finally produced a list of formal charges from original allegations that had been investigated, then abandoned by investigators over the past 2.5 years. The formal charges are considered by Cy's international legal team to be entirely without merit.

His lawyers have proposed a witness list of highly credible individuals and organizations to refute what can only be described as distortions and misrepresentations of normal, foreign business practices in Cuba. 
(for decades past and still today). It is not clear whether these formidable witnesses will be allowed to testify.

The Cuban case includes:

- allegations of "bribery" that include basic staff productivity incentives, performance bonuses, dinners and entertainment.
- Cuban allegations of "tax evasion" that ignore tax treaties (Barbados/Cuba), ignore Cuba's own tax regulations, and ignore 3 expert tax opinions (Deloitte Forensic, Deloitte Tax, and even a Cuban tax authority)

I have known Cy for some years, both as his Member of Parliament for the Toronto area riding of Thornhill and, as Canada's former Minister of State for Foreign Affairs (Americas).

And, while Minister, I discussed a wide range of trade and foreign policy issues with Cuban political leaders, diplomats and officials, topics including the then praised partnerships with Tokmakjian Group companies.

Although Canada and Cuba do not agree on all bilateral or international issues of any day, our government has worked to address thorny matters such as human rights, the rule of law, and democratic development in Cuba even as we've encouraged Canadian business and industry to work with Cuban partners to help develop the struggling national economy.

During my ministerial visit to Cuba in 2010, Cy was characterized as a valued partner by Cuban interlocutors. His companies then represented the second largest Canadian investment in Cuba after the Canadian resource company, Sherritt International.

I recall, during Canada's most recent, unsuccessful, campaign for our once-in-a-decade position on the Security Council, the Cuban Ambassador to the UN making a point of advising Latin American and Caribbean diplomats that, while Cuba does not agree with Canada on all issues, Cuba respects the transparent and principled contribution that Canada makes in international fora.

I also recall, on the day of the Security Council vote, the Cuban Ambassador actively lobbying for votes on the floor of the General Assembly with our Canadian delegation while some of our closest G7 partners sat on their hands.

Those days of honest brokering and principled dispute resolution now seem long gone.

I visited Cy in September last year at Cuba's notorious La Condesa Prison outside Havana.

His focus then as today: give me my day in court -- a fair and complete examination of unfounded allegations as well as consideration of detailed defense rebuttals and expert witnesses.

As Cy still awaits a trial date, the international financial community should ponder long and hard the investment blandishments of Cuban ministers, diplomats and trade officials.

They might also consider other foreign business executives who were swept up earlier in the Interior Ministry's anti-corruption crusade.

Very little internet scouring is required to discover the very similar cautionary tales of people such as Briton Stephen Purvis or French national Jean Louis Autret. Both men are free to tell their respective horror stories...without millions in assets that were seized by Cuba.

Their stories, like Cy's, have created a climate of uncertainly and concern among foreign companies that remain invested in Cuba. There but for blind luck, or an aggressive, anti-capitalist investigator from the Interior Ministry, could go many more respectable foreign businessmen.

Despite the Cuban National Assembly's tempting new investment legislation.

Original Published:  Huffington Post