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Office of the Press Secretary

                         BACKGROUND BRIEFING

August 26, 1994

The Briefing Room

1:40 P.M. EDT

MS. MYERS: The following will be a BACKGROUND BRIEFING.

Last Saturday, you all will recall, the President announced there will be additional restrictions on travel including charters to Cuba, as well as the elimination of remittances. The new regulations were published today in the Federal Register at 11:00 a.m. We have three pieces of paper for you -- one is the actual Department of Treasury document that was published; two is a fact sheet that will help walk you through that; and three will be a statement from [name deleted] on the record, which just gives a brief statement which you can use.

Again, his briefing will be on background. I will follow and answer any policy questions you might have on Cuba, the vacation, or any other burning topics.

Q Can we get his on-the-record statement on camera?

MS. MYERS: No, we'll just put it out on paper. He'll do the -- this will be all on background.

SENIOR ADMINISTRATION OFFICIAL: Thank you. On August 20, President Clinton announced further steps which the United States government would take to respond to the Cuban government's attempt to export a problem of its own making to the U.S., and risking the lives of Cuba's own countrymen in the process.

The additional steps announced by the President, and effective at 11:00 a.m. today, will deny the Cuban government badly needed foreign exchange. The implementing measures, which I'm prepared to discuss in more detail, will further restrict travel to Cuba for Americans and people residing in the United States. Travel aboard charter flights between Cuba and the U.S. will be limited to legal immigrants from Cuba, those covered by general license, government officials and journalists, and those covered by special license. That is traveling for clearly defined research, religious and humanitarian purposes.

Specific licenses in cases of exceptional humanitarian concern may be issued to visit family members. Additionally, licence to recognized human rights groups for purposes of investigating specific human rights violations may also be issued.

Remittances from U.S. relatives to Cuba nationals will no longer be permitted, although, again, there will be exceptions for humanitarian reasons and to facilitate the travel of lawful immigrants to the United States. Gift parcels and humanitarian donations will still be permitted, but their permissible content will be more clearly and narrowly defined.

These measures will severely curtail the flow of U.S. dollars into Cuba. The Cuban economy will no longer benefit from travel-related transactions originating in the U.S. and from cash remittances sent from the U.S. The Cuban government will no longer have access to these U.S. dollars which have for so long helped to sustain the Castro regime.

Q What do you say to those who will argue that Cubans who are -- individual Cuban families are going to suffer the most as a result of this, and that Castro is not going to feel the pinch; that you're punishing individual Cubans as opposed to the Cuban government?

SENIOR ADMINISTRATION OFFICIAL: What is happening in Cuba is the failed economic policy of Fidel Castro. People in Cuba have lost hope. Castro's repressive political regime and lack of economic freedoms and other freedoms -- freedom of speech and assembly -- have essentially denied this to the Cuban people.

Q There have been various estimates --

Q Wait a minute, whoa -- is that what you say to the people who suffer? What do you say to the people who are not going to have medicine, who are not going to have money to buy things that they need, who have become used to this kind of subsidy from relatives in Florida?

SENIOR ADMINISTRATION OFFICIAL: These humanitarian type situations will be dealt with on an extreme need, case-by-case basis. When needs are demonstrated, we certainly will institute -- we have a licensing policy in place to address the specific concerns of the types of situations that you're addressing. But let's be very clear about this major contribution to the Cuban Castro economy of up to $50 million a year or more documented going into Cuba, of which Fidel Castro is able to make significant economic use.

On top of that, the amounts generated into the economy from the travel is $100 million or more that will now be deprived to the Cuban economy. So the amounts now not going into the economy are the focus of this program, and we will be able also to address those humanitarian concerns on a case-by-case basis when demonstrated and documented.

Q What's the annual GNP of Cuba?

SENIOR ADMINISTRATION OFFICIAL: It's in the neighborhood of $10 billion, perhaps. But I will say, I'd like to check that and get back specifically. But let me say that this is the culmination of a long-term look at steps that might be taken to further restrict hard currency going into Cuba, and this comes at a time when there's been a particularly bad sugar harvest and the economy is particularly suffering.

Q I understand that, but 1.5 percent of GNP of your significant, and your this and your that -- I mean, I think we ought to head back to the question. It's 1.5 percent of Cuba's income, and it's going to be like 100 percent of some old lady in Camaguey, Cuba. What do you say to her?

SENIOR ADMINISTRATION OFFICIAL: What we say is that when these are documented as specific humanitarian problems then on a case-by-case basis, relief will be provided.

Q What would Cuba have to do in order for you to lift these new restrictions?

SENIOR ADMINISTRATION OFFICIAL: Well, let me say, the Cuban Democracy Act of 1992 was enacted after 33 years and eight Presidents, following a continued policy toward Cuba where the embargo was the cornerstone of that policy. The Cuban Democracy Act had clear parameters laid out for steps that the United States might take to use the embargo and loosen the embargo. It was a carrots and sticks approach, incentives for the Cuban people, humanitarian relief, medicine, food and adequate telecommunications; but at the same time, recognizing that sanctions were an effective tool,they could be used when it was important to enhance our policy and if some of the repressive measures of the Castro regime -- free and fair elections would be permitted -- then that could be reconsidered. But that's very clearly laid out in the CDA, which this, we believe, is consistent with.

Q What are your estimates of the total amount of remittances sent to Cuba each year from the United States? Also, do you know how many Americans travel each year to Cuba -- what breakdown they are in categories? And lastly, which people who now can travel to Cuba will not be allowed to under these new regulations?

SENIOR ADMINISTRATION OFFICIAL: Okay, go through those and I'll answer.

Q Remittances.

SENIOR ADMINISTRATION OFFICIAL: Remittances -- approximately $50 million a year through travel, remittance forwarders and through banks. That is specific documented; there may be more than that that are going through other circuitous routes. Your second question.

Q How many Americans travel to Cuba each year?


Q And do you have a breakdown -- what percentage of family, what percentage other categories?

SENIOR ADMINISTRATION OFFICIAL: My guess is as much as 90 percent of that travel will be eliminated. My estimate is that 90 percent will be eliminated.

Q And lastly, which of the people who have been able to travel will no longer be able to?

SENIOR ADMINISTRATION OFFICIAL: Travel to Cuba in the past had been limited to essentially six categories. Those that could be generally licensed were family travel, research, government officials on government business, those specifically licensed, those that are fully hosted -- that is, paid for by a government other than the United States.

Now, the change that has been effectuated by this regulation is that there is no travel to Cuban generally licensed for family visits; no travel to Cuba generally licensed for professional research. As to the charter flights, legal immigrants are now able to come from Cuba to the United States when there is a visa in their possession. U.S. and foreign government officials will still be permitted under general license to go to and from Cuba. Those are foreign government officials on official business, and U.S. government officials on official business.

Journalists had in the past been permitted to travel to Cuba under general license. They will still be permitted to travel to Cuba under general license, so long as they're on business related to journalistic activity.

Then there are a series of categories of special licenses which can be granted and that can use the charter flights when they are available. These are where there's a compelling humanitarian need -- that is where it's demonstrated, a terminal illness, life-threatening kind of situation, to go to and from Cuba; where there's a clearly-defined educational or religious activity; where there is an investigation of human rights violations by a recognized human rights organization to do professional research where the research is specifically related to Cuba, and when there is a likelihood the results of that research will be disseminated; for telecommunications purposes to establish and adequate and effective telecommunications system between the United States and Cuba consistent with the Cuba Democracy Act, and for the purchase and dissemination of informational materials as laid out in the Free Trade and Ideas Act.

Very important is that fully hosted travel -- that is where a third country or the government of Cuba pays for it -- that will no longer be permitted on the charter flights.

Q What kind of cooperation are you getting from the Canadians and the Mexicans on all of this?

SENIOR ADMINISTRATION OFFICIAL: Well, historically, the embargo on Cuba has been an embargo of the United States. We traditionally have always worked with our allies in seeking cooperation or minimizing any difficulties that might exist between us and any other country, whether in Europe or in North America. We continue to work that, but for its life, at least in recent decades, this has been a U.S. embargo.

Q Of the $50 million in annual remittances that were provided, how many Cubans were benefitting from that $50 million?

SENIOR ADMINISTRATION OFFICIAL: Your question is how many recipients were there of the $50 million? Well, there were $300 a quarter per household, meaning $1,200 a year. And so it would be something along that line. I can't give you the exact number. I can check it --

Q So we're talking about tens of thousands of Cubans.

SENIOR ADMINISTRATION OFFICIAL: I would say in the low tens of thousands.

Q Now, these people are not going to have the money that they used to have, almost all of them, unless there is some exceptional humanitarian consideration. Won't they now be encouraged to flee? Aren't you, in effect, promoting the kind of emigration policies that you're trying to prevent?

SENIOR ADMINISTRATION OFFICIAL: I think what this is is a culmination of a long series of restrictions that have been under review for a period of time, looking to additional steps, additional sanctions that could be taken with regard to the Castro regime and affect the Cuban economy. Two or three years ago, the level was $500. Before that, it was not as tightly regulated as it is. We regulate all family remittance forwarders; we regulate all financial institutions. So this is the culmination of years of look at this remittance issue and the value these remittances we're giving to the Cuban economy.

Q How do you see that regulation? Can you stop people from stuffing money in an envelope and mailing it out? What are the specifics?

SENIOR ADMINISTRATION OFFICIAL: Well, first, there's no direct mail service between the United States and Cuba, so it all goes through third countries. The principal source of mail goes through third countries. The principal source of remittances is through the 100 or so financial remittance forwarders that are regulated by the Treasury Department, mostly located in Miami and the Miami area, South Florida, and other locations throughout the United States.

They file quarterly reports with us and we audit from time to time activities that we may be suspect of. Also, financial institutions are generally licensed to transmit monies so long as they meet the very clearly defined guidelines we have as far as remittance going to Cuba.

We use the financial regulators, federal regulators and state regulators to regulate these institutions. So we have a very good handle on what is going. I am very confident that the financial institutions who have already been notified today of these requirements have this program in place. I have personally written letters to the 100 or so financial remittance forwarders, and I am confident that this is in place as well.

Q What about third countries, though? What's to prevent his question basically? Why can't they just route these things through Mexico or Canada or --

SENIOR ADMINISTRATION OFFICIAL: Well, you know, international embargoes or embargoes have been a tool of governments worldwide from time to time, and everything is not fool-proof. Clearly, that can be done. The mails are very slow, and that can be a disincentive.

There are ways to get around this or virtually any other program, but we do have enforcement programs in place. We're working with the U.S. Postal Service; we're working with the Customs Service as far as foreign mail, what's permissible under law. We have as comprehensive an enforcement regime in place with regard to these remittances, to this travel program, and to other shipment of goods, both imports and exports, or transmission of currency in any manner whatsoever.

Q Is there a penalty for violating this?

Q Is the aim of the United States to provoke an uprising in Cuba, or civil war, or what do you expect of these measures? If the people are not happy in Cuba, are they going to riot against Castro?

SENIOR ADMINISTRATION OFFICIAL: The embargo has been the cornerstone of United States policy for 35 years. Eight presidents have endorsed it. The question of hard currency flow into Cuba has been an issue that's been studied and restudied over time. The notion of a sanction being an effective remedy against this regime was specifically addressed in the Cuba Democracy Act, debated in the Congress, and in the findings and the purposes of the Cuba Democracy Act, was recognized as a purpose legitimate to pursue.

Q But what do you --

SENIOR ADMINISTRATION OFFICIAL: Someone different. Yes, in the back.

Q I have a clarification question. The remittance agencies that you're talking about in Miami, some in New York, if their only sole purpose of business was to send money to Cuba, does that mean that they are out of business? And number two, can the U.S. government keep them from maybe charging Cuban Americans to send the money via Canada, Santo Domingo or Mexico?

SENIOR ADMINISTRATION OFFICIAL: No, it does not necessarily mean that these companies are out of business. Where they have other activities that they have been pursuing, clearly they can pursue those other activities. We weren't regulating the concern, we were regulating the cash flow.

To the extent that they were dependent on cash flow for their business, they will be out of business unless they are able to send the remittances that are permitted -- namely, for purposes of lawful immigration. Whether or not they're able to sustain themself is a growing concern, and that question is a business question for them not for me. But it is not the intent to put anyone out of business. It's the intent to regulate cash flows to Cuba.

Now, your follow.

Q The other question was will you be able to regulate them from encouraging Cuban Americans to send the money via Canada, Mexico, Santo Domingo, or even traveling to those countries in order to get into Cuba?

SENIOR ADMINISTRATION OFFICIAL: We have and will have a comprehensive enforcement program in place. We have people in Miami now. We intend to continue to work with the law enforcement community and the Miami community to make these requirements clear and to address the enforcement concerns of circumvention and the use of third countries to avoid the requirements of the law and will do that. So we'll deal with that on an ongoing basis.

Q Is this an unprecedented case? Has this ever been tried before on any other country, this strategy?

SENIOR ADMINISTRATION OFFICIAL: Of regulating cash flows and remittances?

Q Yes.

SENIOR ADMINISTRATION OFFICIAL: Oh, yes. We have embargoes in place against Libya, against Yugoslavia. Each embargo is different because of the time it was imposed, because of the foreign policy and because of the unique foreign policy needs and goals we're trying to achieve.

But the notion of regulating remittances is not new. We've used it traditionally from time to time in other places. And the notion of regulating travel is also a traditional embargo measure that has been taking over the years.

Q Well, suppose that a family in Miami decides to send and envelope to their relatives in Cuba however. Can they get arrested? What is the penalty for violating this?

SENIOR ADMINISTRATION OFFICIAL: The potential penalty -- there's civil and criminal penalties available. The criminal are up to $250,000 and 10 years. But let me be real clear on this point. In pursuing a rigorous enforcement policy, we will be looking at those who would encourage wholesale circumvention. We would be interested in pursuing those who would organize a commercial venture for large-scale movements of money. And that is where we will be focusing our resources.

But at the same time, I think it's important that all Cuban Americans need to recognize that this will work so long as we have voluntary compliance and a comprehensive willingness to pursue this kind of program.

Q I never heard the answer to the question before, which seemed rather direct in terms of what it is specifically you hope to accomplish with this; what it is that you hope this does or want this to do.

SENIOR ADMINISTRATION OFFICIAL: What I can do is answer it to the extent I can and then it becomes a political question, which I would defer to my colleagues at the State Department and the White House.

But it is a recognized, respected embargo measure that has traditionally been taken in other contexts and the purpose is to deny hard currency to the Castro regime in the amounts that I've specifically stated today.

Q This is a culmination of a long study. What percentage of the $50 million and what percentage of the $100 million in travel do you think will be diverted by individuals through third countries? How much is now just going to go to Bahamas and Cayman?

SENIOR ADMINISTRATION OFFICIAL: That's hard to say, I mean, that's a very open-ended type of question. What I can say -- there no doubt has been that type of diversion at this point. What we have done is we've raised the stakes. It's going to be more difficult; new mechanisms will need to be set up. And we do and will continue to work with financial regulators, with the law enforcement community and with our own people in the Miami area to see that that doesn't happen.

Q There were suggestions in the Washington Times and perhaps some other news media today that these regulations have actually been softened over what were originally proposed, perhaps by NSC objection. What softening, if any, is there in these final --

SENIOR ADMINISTRATION OFFICIAL: Let me be real clear on that. There has been no softening in the President's statement. This is a comprehensive, fair, even-handed, across-the-board approach to addressing the policy statement the President had made.

Q By how much to you expect travel to be reduced as a result of these new restrictions?

SENIOR ADMINISTRATION OFFICIAL: Between 80 and 90 percent.

Q What about gift packages? You didn't address that.

SENIOR ADMINISTRATION OFFICIAL: The gift packages has now very clearly defined categories it will fit in. It's in the regulations. I would just direct you there. It is specifically laid out by specific item. So it's there. What that means is these gift packages can only contain those items.

Q Typically the remittances that were provided -- correct me if I'm wrong -- sons and daughters sending money back, elderly parents in Havana or elsewhere in Cuba. Is that the typical remittance?

SENIOR ADMINISTRATION OFFICIAL: The typical remittance was from one family member to another family member and the amounts varied between families. It was not always at the maximum; there were a lot more people that made these remittances than there were amounts to be given.

Q Do you see this as being permanent, or do you see this as just a response to the immigration issue that might be lifted if that clears?

SENIOR ADMINISTRATION OFFICIAL: Again, that's a question for the President --

Q Notice how your statement itself says this is to respond to Cuban government's attempt to export a problem of its own making. --

SENIOR ADMINISTRATION OFFICIAL: Do I see it as permanent? This is the embargo enforcement policy, and we will enforce it so long as it is the policy. Thank you.

END2:00 P.M. EDT