Cuban American lost his business bid after obtaining permanent residence in Cuba
Saul Berenthal was to become the first Cuban American investor on the
island with a plan to assemble tractors to help small farmers. But his
full embrace of his Cuban roots backfired.
The tale of Cleber LLC, a U.S. company that wants to assemble farm
tractors in the Mariel Special Development Zone near Havana, is one
example of the questions the island’s government will have to face if it
wants to attract investments from the Cuban diaspora.
President Barack Obama described the proposal in March by Cleber, owned
by Cuban American businessman Saul Berenthal and his partner, Horace
Clemmons, as the first business with 100 percent U.S. capital authorized
to invest in Cuba in more than half a century.
The goal was to assemble — and in the future produce from the ground up
— a line of tractors for small-scale farmers under the Oggun brand,
using Cuban labor for the benefit of the Cuban people, Berenthal told
the Granma newspaper, official voice of the Cuban Communist Party, in April.
The paper published a report on Berenthal and Clemmons, and praised
their idea of using the Open Source Manufacturing Model, which allows
easier sourcing of materials. The Juventud Rebelde newspaper earlier
published a report on the U.S. investors all but predicting the Cuban
government would approve their project.
But Berenthal was told during the Havana International Fair, a business
exhibition held Oct. 31-Nov. 4, that the proposal had been rejected.
Berenthal told el Nuevo Herald that the project “was not canceled. More
than anything else, it was not authorized.”
The real reason for the rejection was that Berenthal, a 73-year-old
retired software engineer who was born in Cuba and lived in the United
States since 1960, had obtained permanent residence in Cuba, according
to a knowledgeable source who asked for anonymity to speak about the issue.
“Saul got enthusiastic,” the source told el Nuevo Herald.
Berenthal’s “repatriation” put the Cuban government in a difficult
position: accept the project, even though it would break its own ban on
large investments by Cubans who live on the island, or reject it using
an indirect argument. Officials chose the second option.
Berenthal said the government told him the proposal did not meet the
Mariel requirements on technology and worker safety.
Berenthal said his repatriation had nothing to do with the government’s
decision “because they were aware from the beginning” of his efforts to
become a permanent residence. He added that the rejection of the Mariel
project “does not mean we will not continue with the project. They
suggested we contact the Agriculture Ministry.”
Berenthal’s legal residence on the island — which gave him the right to
buy property and obtain free medical care, among other perks — put him
at odds with laws that forbid Cubans who live on the island from
establishing medium or large-scale companies.
The Justice Ministry’s web pages notes that the Cuban government does
not recognize dual citizenship and follows the principle of “effective
nationality.” That means a person with dual citizenship, such as Cuban
Americans, can exercise only one when they are on the island.
“That does not mean a Cuban citizen cannot have another citizenship, but
the valid one here is ours,” the ministry notes.
Although the Cuban constitution does not recognize the right of citizens
living abroad to return and reunite with their families, they can be
allowed to re-establish permanent residence and recover the benefits the
government cancels for those it considers to have emigrated. Cubans with
U.S. citizenship who return and re-establish permanent residence are
therefore considered to be Cuban citizens only, subject to Cuban laws
The Cuban ambassador in Washington, José Ramón Cabañas, told an
interviewer in October that more than 13,000 Cubans living in the United
States had been approved for repatriation in the previous two years.
More applications were being processed, he added.
The impact on the U.S. status of Cubans who repatriate “is zero,” said
immigration lawyer Wilfredo Allen. “The problem is that Cuba controls you.”
That control means, as in Berenthal’s case, that those 13,000 Cuban
Americans who returned cannot invest their money in Cuban companies —
even though the country’s Foreign Investment Law leaves open the
possibility that Cubans with other nationalities may invest in areas
such as tourism or energy.
Private sector workers in Cuba, known as cuentapropistas
(self-employed), are licensed only to work for themselves and cannot
legally establish companies to expand their work beyond a small scale.
Larger enterprises are allowed only for the government and foreigners.
According to a report on the foreign investment law produced by the
National Organization of Cuban Law Firms, “Cuban citizens residing in
the country cannot participate as partners in a joint venture.”
The report added: “This law is designed to favor ‘foreign investors’ or
Cubans living outside the country.”
Cuban American economist Carmelo Mesa Lago said those restrictions are
counterproductive, especially at a time when the island’s economy is
Cuba’s Economy Minister Ricardo Cabrisas has said that only 6.5 percent
of investments planned for 2017 are tied to foreign capital. The Cuban
government estimates that it needs $2.5 billion in annual investments
for economic growth.
“It is totally crazy. The level (of foreign investments) they are
receiving is absolutely minimal,” Mesa Lago told el Nuevo Herald. “The
government needs investments in all sectors. They have set priorities
and have more interest in big investments than in medium investments,
and that is totally absurd.
“They need all kinds of investments,” he added. “Cubans who have the
capacity to invest, based on their profits … that should be allowed.”
Source: Cuban American investor Saul Berenthal loses bid for business
plan in Cuba | Miami Herald –