March 17, 2016 / 8:18 PM / a year ago

Cuba offers olive branch ahead of Obama visit but slams embargo

U.S. 100 dollar notes are seen at a bank in this picture illustration in Seoul September 20, 2011.Lee Jae-Won/Files

HAVANA (Reuters) - Cuba made a rare gesture of reciprocity to the United States on Thursday, three days before a historic visit by U.S. President Barack Obama, but the olive branch was wrapped in spiky rhetoric against decades-old economic sanctions.

Foreign Minister Bruno Rodriguez said Cuba would remove a 10 percent tax on cash dollars in response to Washington's decision this week to relax stiff currency restrictions - but only after testing the new freedom to trade in greenbacks.

"In the coming days we will try to make transfers in dollars with banking entities in third countries and in the United States to verify such transactions can be done," Rodriguez told a news conference.

U.S. banks can now process dollar transactions for Cuba as long as neither buyer nor seller are U.S. entities, the latest dent to a U.S. sanctions regime dating back to 1960.

Obama's critics say he has conceded too much without concessions on rights or multi-party democracy in the Communist country.

Rodriguez said Obama could offer much more without going to Congress, which must approve any end to the embargo imposed three years after Fidel Castro's rebels overthrew a pro-American government in 1959.

"If you want to empower the Cuban people, lift the blockade," Rodriguez said.

He repeated that sanctions should end unilaterally, a view held even by Obama's most ardent fans on the island.

On Thursday, the White House said Obama sent a reply to a Cuban well-wisher called Ileana R. Yarza on the first direct U.S. mail flight to Cuba in half a century.

"I hope...Obama tries, as much as is within his powers, to remove the embargo before he leaves office," Yarza told Reuters. She said she celebrated Obama's 2008 election with champagne, but described the embargo as a "black page" in U.S. history.

In 2004, in response to tightened sanctions imposed by former U.S. President George W. Bush, Cuba abruptly halted the circulation of dollars and slapped a surcharge on cash exchanges.

It introduced "convertible" Cuban pesos, pegged at one to the dollar but with the 10 percent surcharge. Cuba today has two currencies, the local peso and the convertible peso.

Obama and his family visit Cuba from Sunday through Tuesday, the first trip by a sitting U.S. president since the revolution.

Obama and Cuban President Raul Castro pledged to normalize relations in 2014. The two countries reopened their embassies last year.

Obama will meet dissidents at the U.S. embassy. Among those who said they were invited are Berta Soler, an opponent of the rapprochement, and Jose Daniel Ferrer, who favors U.S. engagement.

"The message that President Obama will deliver privately and publicly is simple: We believe the Cuban people, like people everywhere, are best served by genuine democracy, when they are free to choose their leaders, express their ideas and practice their faith," said U.S. national security adviser Susan Rice.

(This version of the story was refiled to fix a typographical error and say 'publicly' instead of 'public ally' in paragraph 16)

Additional reporting by Marc Frank, Nelson Acosta and Dan Trotta in Havana, Matt Spetalnick in Washington; Editing by Tom Brown and Grant McCool

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