    [House Hearing, 114 Congress]
    [From the U.S. Government Publishing Office]

               CUBA: ASSESSING THE ADMINISTRATION'S SUDDEN SHIFT

    =======================================================================

                                    HEARING

                                   BEFORE THE

                          COMMITTEE ON FOREIGN AFFAIRS
                            HOUSE OF REPRESENTATIVES

                        ONE HUNDRED FOURTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                FEBRUARY 4, 2015

                                   __________

                               Serial No. 114-15

                                   __________

            Printed for the use of the Committee on Foreign Affairs

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    Available via the World Wide Web: http://www.foreignaffairs.house.gov/
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                          COMMITTEE ON FOREIGN AFFAIRS

                     EDWARD R. ROYCE, California, Chairman
    CHRISTOPHER H. SMITH, New Jersey     ELIOT L. ENGEL, New York
    ILEANA ROS-LEHTINEN, Florida         BRAD SHERMAN, California
    DANA ROHRABACHER, California         GREGORY W. MEEKS, New York
    STEVE CHABOT, Ohio                   ALBIO SIRES, New Jersey
    JOE WILSON, South Carolina           GERALD E. CONNOLLY, Virginia
    MICHAEL T. McCAUL, Texas             THEODORE E. DEUTCH, Florida
    TED POE, Texas                       BRIAN HIGGINS, New York
    MATT SALMON, Arizona                 KAREN BASS, California
    DARRELL E. ISSA, California          WILLIAM KEATING, Massachusetts
    TOM MARINO, Pennsylvania             DAVID CICILLINE, Rhode Island
    JEFF DUNCAN, South Carolina          ALAN GRAYSON, Florida
    MO BROOKS, Alabama                   AMI BERA, California
    PAUL COOK, California                ALAN S. LOWENTHAL, California
    RANDY K. WEBER SR., Texas            GRACE MENG, New York
    SCOTT PERRY, Pennsylvania            LOIS FRANKEL, Florida
    RON DeSANTIS, Florida                TULSI GABBARD, Hawaii
    MARK MEADOWS, North Carolina         JOAQUIN CASTRO, Texas
    TED S. YOHO, Florida                 ROBIN L. KELLY, Illinois
    CURT CLAWSON, Florida                BRENDAN F. BOYLE, Pennsylvania
    SCOTT DesJARLAIS, Tennessee
    REID J. RIBBLE, Wisconsin
    DAVID A. TROTT, Michigan
    LEE M. ZELDIN, New York
    TOM EMMER, Minnesota

         Amy Porter, Chief of Staff      Thomas Sheehy, Staff Director

                   Jason Steinbaum, Democratic Staff Director

                                        (II)

                                C O N T E N T S

                                  ----------
                                                                       Page

                                   WITNESSES

    The Honorable Roberta S. Jacobson, Assistant Secretary, Bureau of
      Western Hemisphere Affairs, U.S. Department of State...........     6
    Mr. John E. Smith, Deputy Director, Office of Foreign Assets
      Control, U.S. Department of the Treasury.......................    12
    Mr. Matthew S. Borman, Deputy Assistant Secretary of Commerce for
      Export Administration, Bureau of Industry and Security, U.S.
      Department of Commerce.........................................    20

              LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

    The Honorable Roberta S. Jacobson: Prepared statement............     8
    Mr. John E. Smith: Prepared statement............................    14
    Mr. Matthew S. Borman: Prepared statement........................    22

                                    APPENDIX

    Hearing notice...................................................    66
    Hearing minutes..................................................    67
    The Honorable Edward R. Royce, a Representative in Congress from
      the State of California, and chairman, Committee on Foreign
      Affairs:
      Letter from the White House dated January 30, 2015.............    69
      The Wall Street Journal article entitled ``The U.S.-Cuba Deal
        Heightens the Spy Threat''...................................    71
    The Honorable Eliot L. Engel, a Representative in Congress from
      the State of New York:
      Statement for the record by Alan P. Gross......................    73
      Statement for the record on behalf of the Honorable Barbara
        Lee, a Representative in Congress from the State of
        California...................................................    75
    The Honorable Ileana Ros-Lehtinen, a Representative in Congress
      from the State of Florida:
      Letter to the Honorable Barack Obama, President of the United
        States of America, from officials of Cuban-American
        communities in the State of Florda dated February 3, 2015....    76
      National Review Online article entitled ``Yes, Cuba Is a State
        Sponsor of Terror''..........................................    78
      The Hill article entitled ``U.S.-Cuba policy: Myth vs.
        reality''....................................................    81
      National Review Online article entitled ``Call Cuba to
        Account''....................................................    83
    The Honorable Gerald E. Connolly, a Representative in Congress
      from the Commonwealth of Virginia: Prepared statement..........    86
    Written responses from the Honorable Roberta S. Jacobson to
      questions submitted for the record by the Honorable Edward R.
      Royce..........................................................    87
    Questions submitted for the record by the Honorable Eliot L.
      Engel to Mr. John E. Smith.....................................    88
    Questions submitted for the record by the Honorable Eliot L.
      Engel on behalf of the Honorable Barbara Lee...................    89
    Written responses from the Honorable Roberta S. Jacobson to
      questions submitted for the record by the Honorable Ileana Ros-
      Lehtinen.......................................................    90
    Written responses from the Honorable Roberta S. Jacobson to
      questions submitted for the record by the Honorable Paul Cook,
      a Representative in Congress from the State of California......    93

               CUBA: ASSESSING THE ADMINISTRATION'S SUDDEN SHIFT

                                  ----------

                          WEDNESDAY, FEBRUARY 4, 2015

                           House of Representatives,

                         Committee on Foreign Affairs,

                                Washington, DC.

        The committee met, pursuant to notice, at 10:08 a.m., in
    room 2172, Rayburn House Office Building, Hon. Ed Royce
    (chairman of the committee) presiding.
        Chairman Royce. This hearing will come to order.
        Today we look at the Obama administration's sudden shift on
    Cuba policy. And sudden it was. Members of Congress were left
    in the dark. Most of the administration--including the State
    Department--was left in the dark. Instead, talks with the Cuban
    regime were conducted by two White House officials.
    Unfortunately the White House was unwilling to provide these
    key witnesses today. This committee, charged with oversight of
    our foreign policy, is handicapped when those officials most
    involved in policy making are unavailable. The administration's
    growing track record of secret negotiations, whether this is on
    the subject of Iran or the release of the five Taliban
    commanders, is increasingly troublesome.
        Had the White House consulted more widely, it may have
    heard that Havana is facing the threats of losing Venezuelan
    oil subsidies and mounting public pressure for basic reforms
    within the country. This could have been used to leverage
    meaningful political concessions on human rights in Cuba by
    that regime. But this was a one-sided ``negotiation,'' with the
    U.S. making a series of concessions to Havana.
        The release of 53 political prisoners is one area in which
    the administration did secure a commitment from the Cuban
    Government. But in an odd twist, the administration kept these
    names secret for weeks. Only after bipartisan pressure from the
    committee was the list ever released, and human rights
    advocates can now track whether these individuals are put back
    in jail, harassed, or monitored.
        Of course, 4 years ago, Raul Castro promised to release all
    political prisoners. Yet in a recent Freedom House report, we
    read that: ``Systematic use of short-term `preventable'
    detentions--along with harassment [and] beatings,'' are used to
    intimidate the opposition, to isolate dissidents, and maintain
    control. Advocates put the number of political arrests in Cuba
    last year at over 8,000.
        Assistant Secretary Jacobson, I appreciate very much your
    meeting with dissidents while you were in Havana last month.
    But I am very concerned that your Cuban counterparts are
    attempting to link your discussions to a commitment that the
    U.S. cease all democracy programs.
        Indeed, Castro is making even more demands. Last week, the
    dictator called for the return of the U.S. Naval station, an
    end to U.S. broadcasts, and ``just compensation,'' in his
    words. There is little debate over the importance of this
    facility for the U.S. Navy to conduct counternarcotics,
    intelligence, and humanitarian missions. And of course, our
    broadcasts are vital until a free media is allowed to operate.
    I hope the State Department is here today to assure us that
    none of Castro's demands are being considered.
        In defending this policy change, the President has compared
    our economic relationship with Cuba to that of China and
    Vietnam. But in China and in Vietnam, while Communist, at least
    foreign firms can hire and recruit staff directly, without
    their paying directly to the government.
        Not so in Cuba, which is more like North Korea than it is
    Vietnam or China. A Cuban worker at the foreign-owned resort
    receives only a fraction of their salary, as little as 5
    percent. So in the regimes that the Castro brothers or the Kim
    family run, the method is the same; extract hard currency for
    foreign businesses and invest it in the security apparatus.
        Instead of dismantling a 50-year-old failed policy, as it
    claims, the administration may have given a 50-year-old failed
    regime a new lease on life to continue its repression at home
    and militant support for Marxist regimes abroad.
        Before going to Mr. Engel, I am now going to yield my
    remaining time to Ileana Ros-Lehtinen, the chairman emeritus of
    this committee. Born in Havana, Chairman Ros-Lehtinen fled Cuba
    as a refugee at age 8. Her years of work on this committee have
    been marked by a tireless commitment to freedom and democracy
    for people around the world.
        Ms. Ros-Lehtinen. Thank you so much, Mr. Chairman, and I
    strongly second your grave concerns about the way that foreign
    policy is being run from the White House by secretly
    negotiating with the Castro regime while keeping the Congress,
    the American people, even our own diplomats in the dark.
        This foreign policy decision is in line with the
    President's other examples of Executive overreach and bypassing
    consultations with Congress. Just like the Taliban 5 trade with
    Bergdahl, the President has established a dangerous precedent
    that the United States does, in fact, negotiate with
    terrorists, putting a target on every American's back and
    jeopardizing our national security.
        Ever since the secret negotiations began of June 2013, this
    is what the Castro regime has been doing since day one of the
    talks as the U.S. establishes diplomatic relations. Just a few
    examples.
        July 15, 2013, a North Korean flagged cargo ship called
    Chong Chon Gang was caught in Panama after it left Cuba heading
    to North Korea. After inspections, the shipment included
    various components of surface-to-air missile systems and
    launchers, MiG-21 jet fighter parts and engines, shell casings,
    rocket propelled projectiles as the cargo hide under 200,000
    bags of sugar. October 6, 2013, over 135 democracy activists
    arrested in 1 day throughout Cuba. Also arrested was the leader
    of the Ladies in White, Berta Soler, who was dragged through
    the streets by her hair, and her husband, Angel Moya, was
    arrested.
        November 4, 2013, a Cuban artist, a young man called
    Critico, was on the verge of death due to a hunger strike.
    January 24, 2014, Dr. Oscar Elias Biscet, arrested. He was
    awarded the Presidential Medal of Freedom by President Bush.
    June 12, 2014, Jorge Luis Garcia Perez Antunez and Yris Perez
    Aguilera, Ladies in White, leader Berta Soler and Angel Moya,
    and others arrested. July 16, 2014, Cuba and Russia agreed to
    reopen the Lourdes missile--the Lourdes spying facility. In
    fact, in 2014, Mr. Chairman, it led to almost 9,000 arrests of
    pro-democracy leaders in 1 year. Almost a 40-percent increase
    from 2013, while we were in negotiations.
        In 2013, 2014 and last month, while the U.S. delegation
    arrived in Havana, Russia's spy ship docked in Cuba, and just
    last week, last week, the Castro regime sentenced a Cuban
    rapper, a young man known as El Dkano, to a 1-year prison
    sentence, and check out the charge: ``Dangerousness likely
    leading to a crime.'' That is an actual charge in Castro's
    Cuba. And 2 days ago, just to wrap it up, Mr. Chairman, a Cuban
    pro-democracy activist, Arelis Palacio, was brutally beaten all
    over her face and body, and she told state security, ``I would
    rather die than remain quiet and accept this.''
        All of this happened while the U.S. was secretly
    negotiating with the Castro regime. Shame on us.
        Thank you.
        Chairman Royce. We go now to our ranking member, Mr. Eliot
    Engel of New York.
        Mr. Engel. Thank you very much, Chairman Royce. Let me
    thank you, firstly, for calling this hearing. As a former
    chairman of the Western Hemisphere Subcommittee, I follow Cuba
    closely. For many years, I have worked with Ileana Ros-Lehtinen
    and others trying to bring freedom to Cuba.
        Let me also thank our witnesses for their testimony today
    and for their dedicated service to our country. Thank you, to
    the three of you, for coming.
        First and foremost I am delighted that Alan Gross is
    finally home after 5 long years. I first met his wife Judy back
    in December 2009. One of my sons went to school with one of the
    Gross' children. So I have always felt a connection to the
    Gross family. Alan's release from prison was long overdue, and
    I am overjoyed that he has been reunited with his family.
        As we all know, President Obama announced several major
    changes in U.S. policy toward Cuba, but this is not the end of
    the story. The onus is now on the Cuban Government to respond
    by moving forward with real reform. And what exactly does this
    mean? To me it means free and fair elections, respect for the
    rule of law, an independent press, and upholding the values
    enshrined in the Inter-American Democratic Charter. It also
    means releasing each and every political prisoner currently
    jailed in Cuba and ending the harassment of political
    activists. We want to see the formation of political pluralism
    there. Only then will we be comfortable with Cuba moving along
    the path to democracy.
        President Obama has the authority the reestablish relations
    with Cuba, and to make the regulatory changes that he announced
    on December 17. At the same time, however, Congress has the
    authority to maintain or eliminate the trade embargo on Cuba,
    and again, normalizing relations with Cuba cannot be a one-way
    street. It cannot be. It has got to be give and take on both
    sides, and at this time, I believe that Congress must see a
    greater political opening in Cuba before lifting the embargo.
        Last month Chairman Royce and I sent a letter to Secretary
    Kerry. We asked for the names of the 53 political prisoners the
    Cuban Government committed to releasing. I was very grateful
    for Secretary Kerry's rapid response to our letter with a full
    list of the released prisoners. To be sure, the release of
    these 53 prisoners was a very positive step. Unfortunately, a
    few of these prisoners were subsequently detained because of
    their political activism. While these individuals are no longer
    in jail, we must be vigilant in ensuring their safety. I urge
    the State Department to use its talks with Cuban officials to
    continue pushing for the release of all political prisoners.
        Finally, let me say that the upcoming Summit of the
    Americas in Panama presents an important opportunity for all of
    the countries in the region. We will be eager to hear from
    Cuban civil society leaders, along with other independent civil
    society leaders from throughout the Americas. I hope to be
    there, and I hope that we will have a delegation, a bipartisan
    delegation, going there too. I urge the Panamanian Government
    and all regional leaders to be as open and transparent as
    possible in allowing for civil society participation at the
    summit.
        And one request before I close, Mr. Chairman, I ask
    unanimous consent to submit for the record two statements; one
    on behalf of Alan Gross, and the second from our colleague
    Representative Barbara Lee, a former Foreign Affairs committee
    member, along with her questions for the record.
        Chairman Royce. Without objection.
        Mr. Engel. Thank you, Mr. Chairman.
        I would like to close again by thanking our witness for
    being here today. I look forward to hearing from each of you,
    and thank you again, Mr. Chairman, for holding this important
    hearing.
        Chairman Royce. Thank you, Mr. Engel.
        We go now to Mr. Jeff Duncan, chairman of the Subcommittee
    on Western Hemisphere for 1 minute.
        Mr. Duncan. Thank you, Mr. Chairman, and in addition to the
    other comments, I remain deeply skeptical of the Obama
    administration's unilateral Cuba policy shift. In addition to
    circumventing Congress, failing to consult any Cuban dissidents
    or civil society, and ignoring the wisdom and advise of
    seasoned American foreign service officers, the President's
    made his decision to embark on a new course in Cuba, using
    political speech writers on the National Security Council staff
    to craft his policy change.
        Mr. Chairman, I want to associate myself with your remarks
    and those of the gentlelady from Florida, Ms. Ros-Lehtinen,
    emphasizing my deep concern for the President's lack of
    transparency and the manner and process used to develop this
    policy change.
        Yesterday, witnesses in testimony in the Senate hearing
    recognized that the Western Hemisphere--excuse me--recognized
    that Russia is one of the most--openly challenged the United
    States in regard to Cuba; these are external actors that have
    influence in the region.
        And in view of the events that I thought the gentlelady
    from Florida spelled out, the U.S. must protect the United
    States' national security interest in any future negotiations
    with the Cuba Government, including maintaining U.S. permanent
    rights to the U.S. Naval station in Guantanamo Bay.
        And with that, I yield back.
        Chairman Royce. Thank you. I now recognize the ranking
    member of the Subcommittee on the Western Hemisphere who also
    is the one other Cuban-born member of this committee. Mr. Sires
    also was born in Havana. Were you about 11 when you----
        Mr. Sires. Yes.
        Chairman Royce. Well, thank you. Mr. Albio Sires.
        Mr. Sires. Thank you, Mr. Chairman.
        Yeah, I did come to this country when I was 11 years old in
    1962, and I experienced some of this government's tactics, but
    I am--my biggest disappointment with this whole process has
    been that I always felt that the embargo and the pressure that
    we were putting on Cuba would lead to some changes in Cuba. I
    really don't see how what we negotiated is going to lead into
    anything. You know, it is just beyond me that a signature on a
    piece of paper somehow relieves this dictator of this pressure.
        People are not going to benefit. You still have to go
    through the government for anything. Even if you want to put a
    church in Cuba, you have to go through the government. They
    have to okay this church. And do we think that we are going to
    be able to invest and do economic progress for the Cuban
    people? I don't see that happening.
        And I would like to associate myself with the chairman's
    comments and my ranking member's.
        I just don't see where we are headed with this. I know it
    is the last 2 years of the President. I know that he has a
    history to build, but I was disappointed in the fact that we
    are not using this as a pressure point on a government that has
    been so brutal. There are thousands of people in jail. I deal
    with these people today. My district has the second largest
    concentration of Cuban Americans in this country. I probably
    get more intel from the people on Hudson Avenue in Union City
    than I get from some of the briefings that I get in this place.
        So I thank you, Mr. Chairman.
        Chairman Royce. Thank you, Mr. Sires.
        This morning we are pleased to be joined by witnesses from
    the Departments of State and Treasury and Commerce.
        Ms. Roberta Jacobson is the Assistant Secretary of State
    for the Bureau of Western Hemisphere Affairs, and formerly
    served as the deputy assistant secretary for Canada and for
    Mexico.
        Mr. John Smith is the Deputy Director of the U.S.
    Department of the Treasury's Office of Foreign Asset Control,
    that is OFAC, and previously he served as an expert to the
    United Nations Al-Qaida and Taliban Sanctions Committee from
    2004 to 2007.
        Mr. Matthew Borman currently serves as the Deputy Assistant
    Secretary of Commerce for Export Administration.
        Without objection, the briefers' full prepared statements
    will be made part of the record. Members will have 5 calendar
    days to submit statements and questions and any extraneous
    material that any of these members of this committee want to
    put in the record.
        So, Ms. Jacobson, if you would please summarize your
    remarks in 5 minutes, and than we will hear from the other two
    witnesses.

       STATEMENT OF THE HONORABLE ROBERTA S. JACOBSON, ASSISTANT
         SECRETARY, BUREAU OF WESTERN HEMISPHERE AFFAIRS, U.S.
                          DEPARTMENT OF STATE

        Ms. Jacobson. Thank you very much, Chairman Royce, Ranking
    Member Mr. Engel, and members of the committee. And thank you
    for the opportunity to testify today on the new approach to
    U.S.-Cuba policy. I want to say that I appreciate this
    committee's engagement in the western hemisphere, and I know
    all of your strong commitments to democratic values, human
    rights, and social and economic opportunities in the Americas
    and in Cuba.
        I want to thank you also for support in welcoming the long
    overdue return of Alan Gross to his family. During Mr. Gross' 5
    long years of detention, the administration has worked closely
    with many Members of Congress in both Houses and from both
    parties to secure his release. As the President and the
    Secretary have said, we are also grateful for the essential
    roles of Canada, Pope Francis, and the Vatican in reaching an
    agreement that made Mr. Gross' freedom possible.
        On December 17th, the President announced a new policy
    toward Cuba, one that will better enable us to effectively
    advance our values and help the Cuban people move into the 21st
    century. Other previous approaches to relations with Cuba over
    half a century, though rooted in the best of intentions, failed
    to empower the Cuban people. Instead, it isolated us from our
    democratic partners in this hemisphere and around the world. In
    addition, the Cuban Government used this policy as an excuse
    for restrictions on its citizens, and as a result, those most
    deprived were the Cuban people itself.
        Our new approach is designed to promote every Cuban's
    universal rights, as well as our national interests, and we are
    already seeing signs that our updated approach gives us a
    greater ability to engage other nations in the hemisphere in
    advancing respect for fundamental freedoms in Cuba.
        Ultimately, it will be the Cuban people who drive economic
    and political reforms. That is why we lifted restrictions to
    make it easier for Cuban Americans to travel and send
    remittances to their families in Cuba and open new pathways for
    academic, religious, and people-to-people exchanges. Our new
    steps build on this foundation by increasing authorized travel
    and commerce and the flow of information to, from, and within
    Cuba.
        Nobody represents America's values better than the American
    people, and increased people-to-people contact will empower the
    Cuban people and reduce their dependency on the Cuban state.
        The regulatory changes we announced will increase financial
    resources to support the Cuban people and the emerging Cuban
    private sector, and they enable U.S. companies to expand
    telecommunications and Internet access within Cuba. U.S. policy
    will no longer be a barrier to connectivity in Cuba.
        Two weeks ago I made a historic trip to Cuba, one that
    helped me understand the burden and hope embodied in this
    policy when average Cubans and Cuban Americans wished me luck
    or said, ``God bless you,'' and encouraged our efforts. During
    talks, we were clear that our Governments have both shared
    interests and sharp differences. On practical issues, such as
    establishing direct mail service, counternarcotics, or oil
    spill mitigation, we agreed to continue dialogue and deepen
    cooperation, but this administration is under no illusions
    about the nature of the Cuban Government.
        I also raised with Cuban officials our concerns about their
    harassment, use of violence, and arbitrary detention of Cuban
    citizens peacefully expressing their views. I met with
    dissidents, entrepreneurs, and independent media voices to talk
    about what they need from their government and from us.
        We will continue to use our diplomatic efforts to encourage
    our allies, now more likely to work with us, to take every
    opportunity to support increased respect for human rights and
    fundamental freedoms in Cuba. As the President has said, the
    United States believes that no Cuban should face harassment, or
    arrest, or beatings simply because they are exercising a
    universal right to have their voices heard, and we will
    continue to support civil society there.
        I encourage Members visiting Cuba to expand their
    engagement with independent civil society voices in Cuba. They
    offer us valuable insights and a diversity of views. And I
    raised several elements in Havana that presently inhibit the
    work of our U.S. intersection, including travel restrictions on
    our diplomats, limits on staffing, local access to the mission,
    and problems receiving shipments. The successful resolution of
    these issues will enable a future U.S. Embassy to provide
    services commensurate with our diplomatic missions around the
    world. I hope you won't object to having seen our diplomats in
    action most recently, if I take this opportunity to salute
    their tireless efforts to advance our interests on the island.
    They are dedicated public servants.
        We have only just begun this effort to normalize relations,
    and we appreciate that there is a diversity of views in the
    U.S. Congress on this effort toward Cuba. We hope that we can
    work together to find common ground toward our shared goal of
    enabling the Cuban people to freely determine their own future.
        Thank you very much.
        Chairman Royce. Thank you.
        [The prepared statement of Ms. Jacobson follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                   ----------

        Chairman Royce. Mr. Smith.

      STATEMENT OF MR. JOHN E. SMITH, DEPUTY DIRECTOR, OFFICE OF
        FOREIGN ASSETS CONTROL, U.S. DEPARTMENT OF THE TREASURY

        Mr. Smith. Thank you, Chairman Royce, Ranking Member Engel,
    and members of the committee. Thank you for the invitation to
    appear before you today to discuss our recent amendments to the
    Cuban Assets Control Regulations. I will be addressing the key
    changes we made to our regulations that Treasury's Office of
    Foreign Assets Control, or OFAC, made on January 16th to
    implement the changes to U.S. policy toward Cuba announced by
    the President the month before. These amendments ease sanctions
    related to Cuba in a number of key areas, including travel,
    remittances, financial services, and trade, and they are
    intended to have a direct and positive impact on the lives of
    the Cuban people. Cuba is the only OFAC sanctions program that
    restricts travel to a country. The recent regulatory amendments
    ease the travel restrictions by generally licensing certain
    travel within the 12 existing categories of travel in our
    regulations. This means that the travelers who satisfy the
    criteria of the general licenses may travel to Cuba and conduct
    travel-related transactions there without requesting individual
    authorization from OFAC. Travel to Cuba for tourist activities
    remains prohibited.
        These expanded general licenses are intended to lessen the
    burden on authorized travelers, making it easier for Americans
    to travel to Cuba to interact with the Cuban people, provide
    humanitarian assistance, and engage in certain educational and
    cultural activities.
        The regulatory amendments also authorize airlines to
    provide air carrier services to, from, and within Cuba in
    connection with authorized travel. Air carriers wishing to
    provide services will still need to secure regulatory approvals
    from other concerned U.S. Government agencies, such as the
    Departments of Transportation and Homeland Security. Travel
    agents and tour group operators may now also provide travel
    services in connection with authorized travel. These changes
    are intended to make authorized travel easier and less
    expensive by reducing the paperwork burden for, and increasing
    competition among, those providing travel and carrier services.
        To improve the speed, efficiency, and oversight of
    authorized payments between the United States and Cuba, OFAC
    has authorized U.S. banks to establish correspondent accounts
    at financial institutions in Cuba, and to allow travelers to
    use their credit and debit cards while in Cuba.
        Within the context of trade, OFAC has also modified the
    regulatory interpretation of the term ``cash in advance,''
    which describes the financing requirement for trade between the
    United States and Cuba that is imposed by statute. OFAC has now
    revised its interpretation of the term to allow the export of
    American-produced agricultural, medical, and other authorized
    goods to Cuba so long as payment is received by the U.S.
    exporter prior to the goods' arrival to a Cuban port. This
    change should increase authorized U.S. exports to Cuba.
        Cuba has an Internet penetration of approximately 5
    percent, one of the lowest in the world. In order to better
    facilitate the free flow of information to, from, and among the
    Cuban people, OFAC eased restrictions to better provide
    efficient and adequate telecommunications services between the
    United States and Cuba, and to increase access to
    telecommunications and Internet-based services for the Cuban
    people.
        As I conclude, I should make one thing absolutely clear.
    Even with these changes I have described, most transactions
    between the United States and Cuba, most imports, most exports,
    and most other activities, remain prohibited. As OFAC
    implements these recent changes, we will continue to enforce
    the Cuba sanctions program vigorously, using all of our
    available tools, and take action against violators as
    appropriate.
        The President's December 17th announcement laid out a new
    course for our relations with Cuba, driven by a hope for a more
    positive future for the Cuban people. OFAC's amendments to the
    regulations, in concert with the regulatory revisions my
    colleague at Commerce will highlight, mark significant changes
    to our Cuba sanctions policy that implement the new changes
    announced by the President. These changes are intended to
    directly benefit the Cuban people and help them to determine
    their own future.
        Thank you, and I am happy to answer any questions.
        [The prepared statement of Mr. Smith follows:]

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    STATEMENT OF MR. MATTHEW S. BORMAN, DEPUTY ASSISTANT SECRETARY
     OF COMMERCE FOR EXPORT ADMINISTRATION, BUREAU OF INDUSTRY AND
                 SECURITY, U.S. DEPARTMENT OF COMMERCE

        Mr. Borman. Mr. Chairman, Ranking Member Engel, members of
    the committee, thank you for the opportunity to appear before
    the committee today to describe the Department of Commerce's
    regulatory revisions to implement the Cuba policy changes
    announced by the President on December 17th.
        As the President noted, these changes are intended to
    create more opportunities for the American and Cuban people,
    promote positive change in Cuba, and influence outcomes
    throughout the western hemisphere.
        On January 16th, the Department of Commerce's Bureau of
    Industry and Security (BIS) amended the Export Administration
    Regulations to authorize the export and re-export of certain
    items to Cuba that are intended to improve the living
    conditions of the Cuban people, support private sector economic
    activity, strengthen civil society in Cuba, and improve the
    free flow of information to, from, and among the Cuban people.
        BIS amended the regulations to expand two existing general
    authorizations, or license exceptions in the Commerce
    regulations, create a new license exception, and describe a
    licensing policy.
        Under the embargo on trade with Cuba, all items that are
    subject to Commerce regulations require a license for export or
    re-export to Cuba unless authorized by a license exception. BIS
    administers export and re-export restrictions on Cuba
    consistent with the goals of the embargo and with relevant
    laws. Thus, BIS may issue licenses for specific transactions or
    make types of transactions eligible for license exceptions that
    support the goals of the United States' policy while the
    embargo is in effect. Only items of lower technological
    sensitivity that are subject to limited export restrictions are
    eligible for these license exceptions.
        The first license exception that was expanded is the
    license exception related to gift parcels. The change here is
    to allow consolidated shipments of gift parcels to go under
    this license exception. Previously they required individual
    licenses. This change will enable more donations to the Cuban
    people because individuals who wish to donate eligible items to
    the Cuban people will no longer have to search for a license
    consolidator.
        BIS also expanded license exception Consumer Communications
    Devices (CCD) to now also authorize the commercial sale of
    commercial communication devices such as cell phones, mobile
    phones, computers, radios, and digital cameras. Previously
    these were only authorized under the license exception if they
    were donated. Now they can also be sold commercially.
        The new license exception that we created is Support for
    the Cuban People, or SCP. This license exception enables the
    export and re-export to Cuba of items intended to empower the
    nascent Cuban private sector by supporting private economic
    activity. Authorized items include building materials for
    private sector use, tools and equipment for private sector
    agricultural activity, and goods for use by private sector
    entrepreneurs such as auto mechanics, barbers, hair stylists,
    and restaurateurs. This license exception is intended to meet
    the President's goal of supporting the Cuban private sector and
    facilitate Cuban citizens' lower-priced access to certain goods
    to improve their living standards and gain greater economic
    independence from the state.
        Other provisions of the license exception SCP authorize the
    temporary export by persons leaving the United States of items
    for their use in archeological, cultural, ecological,
    educational, historic preservation, scientific, or sporting
    activities. It authorizes the export and re-export of certain
    donated items for use by the Cuban people engaged in the
    activities I just mentioned, and the export and re-export of
    items to human rights organizations, individuals, or
    nongovernment organizations that promote independent civil
    activity.
        These provisions implement the President's goals of
    harnessing the power of people-to-people engagement and of
    helping the Cuban people reach for a better future.
        As the President observed, nobody represents America's
    values better than the American people.
        To implement the President's goal of empowering the Cuban
    people by increasing their access to information, particularly
    through the Internet, and their ability to communicate with one
    another and with people in the United States and the rest of
    the world, license exception SCP authorizes the export to Cuba
    of items for the establishment and upgrade of
    telecommunications-related systems, in addition to the consumer
    communication devices authorized by license exception CCD. A
    related provision of license exception SCP authorizes the
    export and re-export to Cuba of certain items for use by news
    media personnel and U.S. news bureaus engaged in the gathering
    and dissemination of news to the general public.
        Lastly, this rule recognizes that environmental threats are
    not limited by national borders, and circumstances may warrant
    the export or re-export of certain items to Cuba to protect the
    U.S. and international air quality, water quality, and
    coastlines. Although pre-existing licensing policy provided the
    flexibility necessary to authorize such transactions, we have
    now amended the regulations to make explicit the general policy
    of approving such exports.
        In summary, these regulatory revisions implement the
    President's recently announced Cuba policy changes consistent
    with the comprehensive embargo the United States maintains on
    trade with Cuba. The changes support the President's goal of
    the United States becoming a better partner in making the lives
    of ordinary Cubans a little bit easier and more free, and is in
    line with U.S. national security interests. And I would also be
    pleased to answer questions.
        Thank you.
        Chairman Royce. Thank you. Thank you.
        [The prepared statement of Mr. Borman follows:]

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                        ----------

        Chairman Royce. I would like to go to Assistant Secretary
    Jacobson with a question, because administration negotiators
    stated that they did not seek human rights concessions in
    exchange for taking steps toward normalization; and now you
    know our concern about the State Department and you not being
    included in this on the front end, being kept in the dark on
    it, but the reality is that pro-democracy and human rights
    activists in Cuba have lamented that human rights weren't
    integral to these secret negotiations. In fact, the lead Cuban
    Government negotiator, who would be now your counterpart, he
    said, ``Change in Cuba is not negotiable.'' We have no, you
    know, indication here that the Cuban Government intends to give
    ground, and so if the regime refuses to ease its repression on
    the people in Cuba, how do our concessions advance the
    interests of the Cuban people?
        Ms. Jacobson. Let me be clear, Mr. Chairman, on part of
    this. I think it is crucial to understand that there really
    were no concessions from the Obama administration. Moving
    forward with the establishment of diplomatic relations is not a
    gift or a concession to governments. It is a channel of
    communication. As you know, having Embassies in countries is
    often not seen by governments as a gift. Quite the contrary. We
    are quite irritating to governments sometimes, and in fact, it
    is not necessarily something that the Cuban Government wanted,
    but we think it is--the things that were announced on December
    17th are a much more effective way to pursue our own national
    interests.
        So we believe that we can more effectively pursue the human
    rights policies, and the democracy policies that we want in
    empowering the Cuban people, and in having that direct channel
    with the Cuban Government to convey those concerns and to work
    with allies around the hemisphere who no longer fear
    association with a policy they did not support because of this
    policy.
        Chairman Royce. Well, but if I could just point out, what
    you are leaving out of the equation here is the fact that under
    these initiatives that the White House took without the State
    Department, but the White House took, the White House is now
    increasing the amount of dollars that flow into Cuba,
    specifically, these flow into the regime and helps the regime's
    bottom line at a time when the regime, as you could have told
    the White House, is now--now faces being cut off in terms of
    the subsidy from Venezuela. So at the very time that you think
    we would exert leverage, you have a situation instead where you
    have got sort of a lifeline. I mean, that is--that is my
    concern.
        Let me go to another question I had, and that is last week,
    Raul Castro stated that normalizing bilateral relations with
    the U.S. would not be possible until the U.S. returns the Naval
    station at Guantanamo Bay to Cuba. Is the administration
    considering transferring this military asset back to the Cuban
    people? And I will remind you, when we talked with the State
    Department before on negotiations on another subject, the State
    Department spokesman said unequivocally that the United States
    is not considering the release of any member of the Cuban 5,
    one of whom was convicted for his part in killing four
    Americans, for Alan Gross. So we have got a little history of
    hearing one thing and then finding out another after the fact.
    But on this question on Guantanamo if you could----
        Ms. Jacobson. Sure. The issue of Guantanamo is not on the
    table in these conversations. I want to be clear that what we
    are talking about right now is the re-establishment of
    diplomatic relations, which is only one first step in
    normalization. Obviously the Cuban Government has raised
    Guantanamo. We are not interested in discussing that. We are
    not discussing that issue or a return of Guantanamo.
        We also, I want to be clear, you know, we didn't return the
    Cuban agents for Mr. Gross. We returned the Cuban agents for an
    intelligence agent that we wanted back.
        Chairman Royce. Let me ask you one last question. For years
    the Castro regime has perceived broadcasting by our Office of
    Cuba Broadcasting as a threat. Last week the Cuban Government
    referred to these as illegal, and Castro has demanded that the
    broadcast be stopped.
        To what extent have our broadcasts been discussed as part
    of these talks?
        Ms. Jacobson. The Cuban Government has always raised radio
    and TV Marti both in the migration talks, and they raised them
    again as part of a list of things that they object to in the
    normalization talks, but we have no plans to end those either.
        Chairman Royce. Well, I know that Cuba is demanding that
    they be shut down. I am hoping to hear you say that we are
    demanding that Cuba drop its jamming. But thank you. I am going
    to go to Mr. Engel because my time is up. Thank you.
        Mr. Engel. Thank you.
        Secretary Jacobson, let me just give you a broad leeway,
    because you have answered some of this, but I want to hear
    more. How do you answer the critics who say that we gave away
    the store? That we have--we had leverage and we just tossed it
    away. Didn't get concessions in exchange, and if we didn't,
    doesn't it show you the true intentions of the Castro regime?
    Raul Castro has reportedly said--touted the fact that he gave
    up nothing, and essentially we made all the concessions. How do
    you answer that?
        Ms. Jacobson. I appreciate the question, Congressman. I
    really do, because I think it is important--there is nothing in
    what we decided on the 17th that we believe is a concession to
    the Cuban Government. It is true that we have begun to talk
    about diplomatic relations. It is also true that we are going
    to try and move forward with Embassies in each other's
    countries. We strongly believe that having an Embassy in Havana
    will enable us to do more things that help us more effectively
    empower the Cuba people, not high necessarily on the Cuban
    Government's list of desires.
        We also believe that by allowing American companies to
    engage in telecommunications sales and acting to get greater
    information into Cuba to work with the entrepreneurs who I sat
    down with while I was there, we can begin to increase the pace
    at which people separate themselves from the state, also not
    something that the Cuban Government has on its list of
    priorities. I think that they may tout this as support for
    their government, but we have diplomatic relations with lots of
    governments around the world with whom we sharply disagree. It
    is a channel. It is a mechanism. It is not, as somebody said
    yesterday on the Senate side, it is not the Good Housekeeping
    Seal of Approval, and we will continue to speak out on human
    rights, to support democracy activists, but we believe that
    this policy had become such an irritant in our work with other
    Latin American countries, with our European allies, that it
    also enables us to work more effectively with them in bringing
    about that support in Cuba.
        Mr. Engel. Well, thank you. I mentioned in my statement
    that I was pleased with the release of the 53 political
    prisoners, but obviously much more remains to be done on the
    human rights front in Cuba. The Havana-based Cuban Commission
    on Human Rights and National Reconciliation reported 8,899
    short term detentions in the year 2014, and that was a 39-
    percent increase over 2013.
        So what is the Obama administration's strategy for pushing
    the Cuban Government to improve its human rights record? Are we
    working with other governments in the region and in the
    European Union to urge the Cuban Government to put an end to
    short-term detentions and harassment of dissidents?
        Ms. Jacobson. I think that is a really important point,
    because I think this question of short-term detentions is a
    crucial one. We obviously have seen a shift from longer-term
    sentences to short-term detentions. That number has gone way up
    in the last year. It is of enormous concern to us, and we have
    made it clear both to the Cuban Government directly now in
    these talks and others, and also with allies to international
    organizations that it is unacceptable. We do believe, and we
    have had those conversations already, that the new policy
    enables us to work better with other governments. The reaction
    of many governments in the region was: We strongly support your
    policy shift. It has changed the dynamic. What can we do to
    help? As we prepare for the Summit of the Americas, which you
    mentioned, we believe that Cuban civil society activists and
    independent human rights activists will have an opportunity to
    interact with Latin American leaders for the first time. All of
    those things, I think, will help.
        That same national commission has noticed a drop in short-
    term detentions in January. Not a trend. I want to be clear
    about that. We cannot know whether that is the beginning of a
    trend, and we will be watching that very carefully because it
    must end. Not just come down, but it must end.
        Mr. Engel. Well, you mentioned civil society. I want to ask
    my final question about civil society and the Summit of the
    Americas. What conversations have you had with your Panamanian
    counterparts to ensure that there is robust participation from
    Cuban civil society at the Summit of the Americas, and then in
    your discussions with Cuban Government officials in Havana, did
    you urge them to allow for civil society leaders from the
    island to participate in the summit? Did you encourage Cuban
    political dissidents to participate in the summit?
        Ms. Jacobson. The answer to all those questions is yes. We
    have had extensive conversations with the Panamanian
    Government, with the nongovernmental organizations that will be
    organizing the civil society forum, with other NGOs around the
    hemisphere, including in the United States, as well as making
    sure that the rules for the civil society summit are not the
    same as in previous years. Previously it had been that you
    could only participate if you were an NGO registered with the
    OAS, which would preclude Cuban independent organizations. That
    will not be the case this year so that Cuban dissidents and
    independent organizations may be invited.
        Mr. Engel. Thank you.
        Thank you, Mr. Chairman.
        Chairman Royce. We go now to Ileana Ros-Lehtinen.
        Ms. Ros-Lehtinen. Thank you so much, Mr. Chairman.
        As we know, the U.S. has been negotiating in secret with
    this sadistic dictatorship for now 20 months, because it is
    still secret. For 18 of those months, the White House
    negotiated in super secret to trade three convicted spies for
    an innocent American. Even if you say that that was not a swap,
    that is just so disingenuous.
        Assistant Secretary Jacobson, this week in the Senate, just
    yesterday, you testified, ``This policy is not based on the
    Castro regime changing,'' and you have said more or less that
    now, ``we have no illusions over that.''
        So let me get this straight. We are telegraphing to the
    Castro regime ahead of time that it doesn't have to change. We
    have no illusions that it is going to change. So we are going
    to get further concessions from this administration. What is
    the point of negotiations, then, if we say we are negotiating,
    we have no illusions, let's see where this leads us?
        Now, the media has been reporting just this week that
    arrests in Cuba for last month in January decreased to only
    178, making it seem like the arrest of peaceful pro-democracy
    activists, 178 of them, is a low number. Only in Castro's Cuba
    could the arrest of 178 people in 1 month be considered a
    victory.
        Now, for the President's State of the Union address last
    month, I invited Marlene Alejandre, the daughter of our Armando
    Alejandre. They were also kept in the dark about this trade/
    non-trade, this swap/non-swap. Her father was murdered by the
    Castro regime when his Brothers to the Rescue plane was shot
    down over international waters, and on December 17th, the
    President released and pardoned Gerardo Hernandez, a Cuban spy
    who was convicted in our U.S. courts for conspiracy to commit
    murder for his connection to the shootdown.
        So the Alejandre family wanted me to ask you these
    questions, Assistant Secretary Jacobson: How will I explain to
    my three little girls that their U.S. Marine Vietnam veteran
    grandfather was denied the only justice for his murder when
    Gerardo Hernandez was set free, pardoned, and returned to Cuba?
    Next question: Why was the U.S. so willing to give Gerardo
    Hernandez the opportunity to father a child while he was in
    prison? Very interesting, when some of the victims of the
    shootdown will never be able to have children of their own.
        Now as if negotiating in secret is not bad enough, the
    Castro regime continues to defy this administration, as the
    chairman has pointed out and the ranking member, setting
    preconditions publicly on the negotiations, such as demanding
    the return of the land of Guantanamo, which is so vital to U.S.
    national security interests. It is so pathetic for this strong,
    wonderful, generous country to look so weak when negotiating
    with the Castro regime.
        Isn't it true that Cuba owes American taxpayers at least $8
    billion in certified claims for the unlawful taking of
    property, of businesses, of unpaid debts owed to the American
    citizens? Isn't it true that Cuba has failed to pay these
    claims for close to 60 years, and isn't it true that U.S. law
    requires that these claims be resolved before relations be
    normalized?
        So I urge all of your departments to explain how illegally
    confiscated properties will be resolved. U.S. claim holders
    deserve their claims to be protected. Don't you agree? And,
    Assistant Secretary Jacobson, it is important to note what the
    Castro regime will do with this new assistance that President
    Obama is going to provide on telecommunications.
        Now, in 2012, Pope Benedict visited the island, as you
    know. The Castro regime responded with rounding up and
    arresting hundreds of civil society individuals, and he blocked
    the phones of the opposition leaders, and as we know, Castro
    held an American jailed for 5 years for trying to provide
    Internet equipment to the Jewish community in Cuba. So the
    track record is clear about Castro and his hatred of this
    telecommunication equipment, and in this latest misguided
    talks, the Castro regime asked the U.S. Interests Section to
    stop providing Internet services for the Cuban people. So his
    track record is clear. It has no intent of opening up the
    Internet or telecommunications opportunities. In fact, if given
    that opportunity, it is probably going to be used to further
    oppress the people of Cuba.
        And then just one last thing, and you can answer it
    whenever you can in writing. Did Secretary Kerry lie to the
    United States Congress when he told us that we would not free
    up these convicted murder--these convicted spies, or was he
    kept out of the dark of these negotiations? And were you part
    of the negotiations from the start, or did you enter them later
    on? But I have run out of time.
        Thank you.
        Chairman Royce. Well, I am just going to suggest a little
    response in writing, and that way we can go to Mr. Brad Sherman
    of California.
        Mr. Sherman. Thank you.
        It is said that our policy toward Cuba for the last 50
    years has failed. This comes from an American view that it is
    all about us, that the only thing--that if Cuba isn't better,
    it must be our policy that would have been the difference. Our
    policy is exactly different, or has been for the last 50 years,
    than Europe and Canada's policy. Maybe it is their policy that
    failed to bring democracy to Cuba, maybe it is ours.
        Ms. Jacobson, Cuba got caught smuggling 240 tons of weapons
    to North Korea, violating U.N. sanctions. Cuba is not
    cooperating in the U.N. investigation. Are these reasons to
    keep Cuba on the State Sponsors of Terrorism List?
        Ms. Jacobson. Congressman, we are undertaking the review of
    the State Sponsors of Terrorism List right now. We are
    evaluating all of the information.
        Mr. Sherman. I know that. Please.
        Ms. Jacobson. We also made clear when we were looking at
    that incident with the Chong Chon Gang that we did not think
    Cuba's--we did think Cuba's behavior violated the sanctions
    regime. The only entity that was sanctioned, as you know, as a
    result of that investigation was the North Korean company,
    which can no longer operate.
        Mr. Sherman. I have got to reclaim my time. I have got----
        Ms. Jacobson. Okay.
        Mr. Sherman [continuing]. So many questions.
        Ms. Jacobson, Americans paid in blood for Cuban
    independence. We got a base in Guantanamo that is valuable to
    our national security. Are you prepared, and hopefully this is
    a yes-or-no question, to say right now: This administration
    will not abandon, return, or fail to pay the modest fee so that
    we can have that Naval base for the next 2 years?
        Ms. Jacobson. I don't see that discussion taking place.
        Mr. Sherman. That is not what I am asking for. That was in
    your testimony.
        What--can you make a commitment--because you have got to
    see it from our side here. We were shocked. So you telling me
    that you are not thinking of something means I got to get ready
    to get shocked tomorrow.
        The administration was so angry that they hadn't been
    consulted on bringing one guy to speak here--it was not a lot
    of consultation on this huge change in Cuba policy.
        Would the administration object to language in an
    appropriations bill designed to make it impossible for this
    administration to give back the Naval base?
        Ms. Jacobson. That issue is not on the table with the----
        Mr. Sherman. Would the--it could be--it could be on our
    table. Would you object?
        Ms. Jacobson. I don't know the answer to that as it is a
    matter of Executive policy.
        Mr. Sherman. Okay. Let me go on to Mr. Smith. We have got
    the Cuban Liberty and Democracy Solidarity Act. It doesn't
    allow us to deal with certain properties that have been seized
    by Americans. You have got new regulations on travel, credit
    cards, et cetera. How do you plan to make sure that American
    travelers aren't breaking the law by staying at hotels that
    were confiscated from Americans or otherwise violating the
    Cuban Liberty and Democracy Solidarity Act?
        Mr. Smith. One thing I should say at the start about that,
    the act, though, is that the act--what that does is say that
    you can't provide a loan or credit or provide financing to
    further those transactions involving confiscated property. It
    doesn't say that you can't have--you can't stay at a hotel or
    engage in any other kind of activities.
        Mr. Sherman. Does the credit card company extend a loan
    when you use a credit card to pay for a hotel stay at a
    confiscated property?
        Mr. Smith. A credit card company may extend a loan to the
    traveler when you stay there.
        Mr. Sherman. So you are extending the loan to facilitate
    staying at the hotel. You think that is in conformity with the
    act?
        Mr. Smith. Certainly. We have the provision of the act that
    is replicated in our regulations. We will follow to the letter
    what is in the act, because we have it in our regulations. We
    will follow that. But nothing that we have authorized would
    abridge those provisions of the act.
        Mr. Sherman. I would just close by saying I might be more
    favorably impressed by the policy if it hadn't been such a
    complete shock and if Congress had been involved, and this U.S.
    Government will work better if we coordinate on foreign policy
    and have one national foreign policy that reflects the views of
    both elected bodies instead of a view of Congress as simply an
    annoying body that has to be consulted now, and then. I yield
    back.
        Chairman Royce. We go now to Mr. Chris Smith of New Jersey.
        Mr. Smith of New Jersey. Thank you so much, Mr. Chairman,
    for calling this extraordinarily important hearing. You know, I
    say to our distinguished witnesses, and welcome to the
    committee, The Washington Post has done several editorials,
    one, Obama Gives the Castro Regime in Cuba an Undeserved
    Bailout, pointing out that with the Soviet Union and certainly
    now Venezuela less able to prop them up, now potentially U.S.
    funds will do that. Secondly, President Obama's Betrayal of
    Cuban Democrats, and the fact that we should have listened to
    Berta Soler, the Ladies in White, who will be testifying here
    tomorrow at a hearing I am chairing. She, along with Antunez
    and Ms. Fonseca, two of those are going back, two of those
    individuals. Talk about bravery, speaking to the Senate, now
    speaking to the House, and they are going back. And yet the
    Post, which is hardly a conservative bastion, talks about a
    betrayal of Cuban democrats. And in another editorial it said
    with no consequences in site, Cuba continues to crack down on
    free speech.
        I would ask you, if you would, now an assessment, since it
    has been in effect, the negotiations and the publicity or
    visibility of them, are there any second thoughts? And I say
    that, 2012, Ileana Ros-Lehtinen and I had a hearing, and we
    heard from Dr. Biscet, who spent 11 years in prison. And the
    same type of scenario is playing out for even some of the 53
    that were freed. Five have been rearrested. He was in and out
    of prison constantly. It is part of the harassment and the
    modus operandi, and we understand, and maybe you can verify it,
    that some 100 to 200 additional prisoners over the last 6 weeks
    have been arrested.
        Is that true or is that is not? Some comments have been
    made that the ICRC may get to go to Cuba. That is not the
    issue. They need to go to the prisons, and the last time
    Armando Valladares was able to negotiate that, when he walked
    point in the 1990s, and I was with him in Geneva at the Human
    Rights Commission, when he secured that, representatives went
    into the prisons, interviewed people; and everybody, including
    family members, were severely retaliated against. The ICRC has
    to have unfettered access to the prisons. Meeting with Fidel
    Castro or anybody under him just doesn't cut it. I would like
    to go again. I have tried repeatedly. Madam Secretary, maybe
    you can help facilitate that. I want to go to the prisons and
    lead a delegation to the prisons. I have been to prisons in the
    Soviet Union. I have been to prisons in East bloc countries, as
    well as in Asia. Cuba is the one that won't let me or others
    into the prisons. Please help us with that. If you could answer
    those questions.
        Let me ask you, in the negotiations there are many
    convicted felons, including Joanne Chesimard who gunned down
    Werner Foerster in my State in cold blood, shot in the back of
    the head gangland style having escaped from prison, convicted,
    a fugitive felon, and yet she got asylum there. Was that part
    of the negotiations, the discussions, or was it not?
        Finally, just let me ask with regards to, with the time I
    have, please answer those, and I will come back.
        Ms. Jacobson. Okay. Let me say that the whole point of this
    new policy is not that we are telescoping to the Cuban
    Government that they don't have to change or that we expect
    them to change right away. Certainly we want those practices to
    change. We simply are not naive about how quickly they may
    change, and so our efforts are to empower the Cuban people to
    take their lives into their own hands. I had not heard that 100
    to 200 people had been arrested. There were certainly as many
    as 50 or more arrested around the time of Tania Bruguera,
    performance artist. To the best of my knowledge, most, if not
    all, have been released, although there are severe constraints
    on them; and none of them should have been arrested, just as
    there are still political prisoners in Cuba who should be
    released. I want to be clear about that, and the fact that a
    downturn in detentions is not good enough----
        Mr. Smith of New Jersey. The game they play, Madam
    Secretary, is that they arrest, rearrest and let out. Like when
    Antunez goes back. Seventeen years in prison. He has been
    tortured.
        Ms. Jacobson. Right. I completely agree.
        Mr. Smith of New Jersey. Dr. Biscet testified here by way
    of phone, and he said don't lift the embargo because you have
    got to get real substantive concessions.
        Ms. Jacobson. Agreed, and I saw Oscar Biscet when I was on
    the island, and I have the utmost respect and admiration for
    him and his views on this. Let me also say that every time I
    talk with the Cuban Government, I mention the case of Joanne
    Chesimard. I am a daughter of New Jersey. I grew up with this
    case and other fugitive cases.
        Mr. Smith of New Jersey. What is their response?
        Ms. Jacobson. We have not gotten a positive response on
    Joanne Chesimard.
        Mr. Smith of New Jersey. What did they say?
        Ms. Jacobson. They have said that they are not interested
    in discussing her return. Now, on other cases, we have made
    some more progress. There have been felons, accused felons,
    expelled to the United States. This is a very high priority for
    us, and we are frustrated that we have not made progress. There
    are other cases that we will continue; all of these cases, we
    will continue to pursue. We are going to have further dialogue
    on fugitives and law enforcement because this is critical to
    us. That is part of what we hope we will do better on in having
    conversations that are more expansive with our Justice
    Department colleagues. This is a critical part of having a
    channel.
        Mr. Smith of New Jersey. Just one last thing. We all know
    the Castro brothers have pushed this as a major diplomatic win
    for them. I would have hoped, and I think we all would have
    hoped, that human rights concessions would have been first
    before being recognized diplomatically.
        Chairman Royce. We go now to Mr. Greg Meeks of New York.
        Mr. Meeks. Thank you, Mr. Chairman. Madam Secretary, it is
    good being with you. Let me first go on record as saying that I
    wholeheartedly agree with the President's change in direction.
    I think that it is clear that over 50 years, nothing has
    changed with the policy that we had, and time says that you
    don't do the same thing over and over again and you get the
    same result. So I wholeheartedly agree and think that the time
    is finally there for a change in policy. I should also say that
    I do feel the passion of, for example, my good friend, the
    ranking member of the Western Hemisphere in listening to his
    opening statement, because clearly the passion that he has is
    for the people of Cuba. And in listening to his opening
    statement, you know, some of the questions he had, I hope that
    there is that kind of dialogue that goes forth because this
    should be about trying to make sure there is not only a better
    day and a better change in our policy, but also a better day
    for the Cuban people.
        So in that regard, and I have been down all of, been to
    Cuba several times and all other places in Latin America and
    the Caribbean, et cetera, and I have found that one of the
    major obstacles that we have had in the region is Cuba and our
    Cuban policy. It has caused a kind of friction, et cetera. They
    have all said to me that we needed to change. In fact, when I
    look at it, I think about multilateral relations as opposed to
    unilateral relations. We were the only country in the world,
    the only country in the world, all our major allies, everybody
    that had sanctions against Cuba, unlike, for example, this
    administration has been successful in putting together huge
    sanctions. When we work together, I think we are more
    successful. I think that is part of what has taken place, even
    Iran now with the P-5+1, even in Russia with the Russian
    sanctions. It is when we work closely with everyone. And I
    would like that to happen right here in our own hemisphere, but
    we need to work more closely with our allies.
        Our closest and biggest allies, when I talked to them in
    Latin America, I asked what is the one thing that we should do
    in Latin America that would make it better for all of us that
    share this hemisphere? They said change our Cuban policy. Now,
    that being said, can we now, with the changing dynamics or with
    the new policy, after that, what realities with our allies and
    can we put additional pressure; or will they work with us to
    change and make human rights an issue high on their agenda so
    that we can make a difference in the lives of the people that
    are living on the island?
        Ms. Jacobson. Congressman, I think that is a critical
    point. And the next part of the question, we support your
    policy on Cuba. This is a very important day in Latin America,
    and for your relations with us, how can we help is, well, you
    can start raising the issue of human rights and democracy in
    Cuba much higher on your agenda. And we believe that this is
    going to be a very important turning point in countries'
    engagement, especially countries which have a history of
    working on these issues in the region that have been afraid to
    work with us too closely because of not wanting to appear
    aligned with our previous policy.
        That has been evident in working on the summit where we
    were able to work strongly now with countries to highlight the
    democratic governance and citizens participation themes in the
    summit and accelerate planning on the civil society dialogue.
    It has been very evident even when I was in Cuba 2 weeks ago
    and we invited Ambassadors, not from this hemisphere--I spoke
    with them separately at one point--but we invited Ambassadors
    from Europe and Asia, for example, to a reception with
    dissidents and human rights activists. They never come to those
    receptions in the past, almost universally. There are few
    countries that have routinely come. They all came, and they
    were able to interact with dissidents for the first time. The
    dissidents had access to a wider range of diplomats than they
    had ever before. That is what we are hoping for.
        Mr. Meeks. Let me ask because I see I am running out of
    time, so I am going to ask two questions real, real quick. One,
    given that, and I know that there has been talk, has there been
    any real reactions directly from the Cuban civil society after
    the announcement? So I would like to know if there has been
    that, as well as, you know, when I was down there, one of the
    problems that I had was getting on the Internet. The Internet
    now will be open; and what, if any, impact would having an open
    Internet have on the civil society?
        Ms. Jacobson. Yeah. I mean, I think that would be huge. On
    Cuban civil society, I think the thing that struck me in both a
    small meeting with Cuban dissidents and then a much larger one,
    including many members, 12 members of the 57 who were released
    4\1/2\ years ago are not able to travel. They are not permitted
    by the Cuban Government to travel, so I was able to see many of
    them. That has to change. They need to be able to travel.
        But what I was struck by, I also met with El Critico, Angel
    Yunier, one of the younger members of this group. I was struck
    by the diversity of youth. Some support these measures and the
    change in policy, and some are obviously very strongly opposed,
    and I think that has to be respected, and we want to hear from
    and continue to support all of them.
        The second thing is on the Internet, I think that is really
    crucial, and I don't know whether the Cuban Government will
    allow that opening. They have said they will. They have said
    they are interested in telecommunications. It is obviously
    critical to economic progress, but I think that is why we have
    to aggressively try and make it possible for our companies to
    provide that service and see whether the Cubans are willing,
    without the excuse that the Americans are the reason they can't
    do it.
        Chairman Royce. We go now to Mr. Dana Rohrabacher of
    California.
        Mr. Rohrabacher. Thank you very much, Secretary Jacobson.
    This is a difficult task for you to be here. I think one of the
    main concerns that we have here is that instead of changing the
    Castro regime into a more democratic regime, the President is
    acting as if he has the right to rule by dictate and over his
    presidency is changing our country to be more like Castro than
    having Castro change to be more like a free and open society.
    Ruling by dictate and having secret negotiations is not what
    America is all about. That is not the way we make policy here,
    and many of us are very disappointed. This isn't the first case
    of this however, but dealing with a regime that is odorous--is
    ``odorous'' a word? Odorous, is that the word I want? There it
    is. Onerous and odorous. I think it is both. There you go. But
    we have a regime that stinks one way or the other and is
    oppressive one way or the other that we are dealing with, but
    yet we have had secret negotiations and deals that are
    announced to us, and you are here to explain it.
        So let me ask this: When you said there are no concessions,
    you mean we go into an agreement with a regime, and we have had
    50 years of American policy changed, and there are no
    concessions from the Cuban Government?
        Ms. Jacobson. I don't think there were concessions from the
    U.S. Government in going into----
        Mr. Rohrabacher. We have changed 50 years of American
    policy. Isn't that a concession enough? All right. Thank you.
    Let me ask you this; with the changes that we can expect, is
    there any agreement that part of this ending of U.S. policy, of
    making a stand that there be a more democratic and open society
    before we have a more expanded relationship with them, is there
    any agreement part of this that there will be, for example,
    independent unions, say we are going to have more economic
    activity? Was there any type of concession--well, the word
    ``concessions.'' Is there an agreement that they are going to
    permit independent unions in Cuba?
        Ms. Jacobson. There were no agreements ahead of time on
    that.
        Mr. Rohrabacher. Okay. So we are going to open up economic
    trade. There are no unions, then we have also heard that maybe
    the money that is going into the pockets--supposedly into the
    pockets of the working people--is actually going to be
    transferred directly to the government; or that money might go
    directly to the government and then be handed out to the
    working people. Is that right? We agreed to that?
        Ms. Jacobson. We believe that on balance, the Cuban people
    will benefit more from this than the government will.
        Mr. Rohrabacher. That is not the question, whether you
    think it and whether we think it. Do you think the Cuban people
    want, that people who are going to be working for these
    companies that now we have permitted to go into Cuba, that the
    Cuban people want their government to take their pay and just
    give them back a pittance?
        Ms. Jacobson. I am sure they don't.
        Mr. Rohrabacher. Okay. Fine. Whose side are we on? On the
    side of the people who are taking the money from the central
    government. Are there going to be opposition parties, new
    opposition parties?
        Ms. Jacobson. We are going to continue to support those who
    want to have their voices heard peacefully----
        Mr. Rohrabacher. There have been no concessions on their
    part, so we have changed five decades of U.S. policy, and they
    still won't have any independent unions or opposition parties.
    I can't imagine that they are going to have opposition
    newspapers, and the rallies--listen, this is a regime. The
    Castro brothers came in, and once they were in power, they
    murdered the patriots who overthrew the Batista regime. They
    personally did. The fellow that we were negotiating with took a
    pistol and went and took these patriots out and shot them in
    the head by the hundreds. And after that, they decided to have
    a relationship with the Soviet Union, which was then our main
    enemy, and encouraged the Soviet Union to put missiles that had
    nuclear weapons on them and encouraged them to use them on the
    United States. This is the regime we are dealing with, not to
    mention the criminals that they have given safe haven to. Now,
    how we can change five decades of policy by dictate from our
    President here? And then to hear there were no concessions on
    their side is disillusioning on our part and upsetting. Thank
    you very much.
        Ms. Ros-Lehtinen [presiding]. Thank you, Mr. Rohrabacher.
    And now we go to Mr. Sires of New Jersey.
        Mr. Sires. Thank you. Mr. Smith or Mr. Borman, can you tell
    me what percentage of the Cuban businesses are owned privately?
        Mr. Borman. I can't tell you a precise percentage, but
    certainly there are over 200 categories of private sector
    economic activity that are authorized by the Cuban Government,
    so we recognize that it is----
        Mr. Sires. Authorized by the Cuban Government?
        Mr. Borman. That they are legal, and there are private
    businesses.
        Mr. Sires. Mr. Smith, you?
        Mr. Smith. I don't have any additional details.
        Mr. Sires. I can tell you. About 15 percent. Eighty-five
    percent of the businesses in Cuba are owned by the military.
    The hotels are owned by the military. The bed and breakfasts
    are run by the families of the military. The umbrella agency
    that approves all the business is the son-in-law of one of the
    Castros. So when you say to me that the Cuban people, which is
    what I am interested in, are going to benefit by doing business
    with the Cuban people, you are not reaching very many people.
    You know, the private sector runs the hot dog stand, maybe. But
    we are talking about the big businesses which employs people
    are run by the generals. And if you want to put a big business
    in Cuba, you want to build a McDonald's and you need 100
    employees, you have to go to the government, and you need 100
    employees, you have to go to the government, and they give you
    the rate, and they give you the employees. And those employees
    are people who are part of the government system. So the people
    that are fighting for liberty and are fighting for democracy on
    the island are basically left out. These are the things you
    have to negotiate away from the Cuban Government.
        So if your intention really is to help the Cuban people,
    the ordinary Cuban people, you are not helping them. This is a
    society that has upheld themselves with this kind of business
    that they run.
        Mr. Borman. So just to be clear, the changes that we have
    made in our regulations are designed exactly to get items to
    the 15 percent. That is the way the regulations are structured
    so those items that can now be exported without individual
    licenses have to go to the true private sector.
        Mr. Sires. In terms of millions of dollars, Mr. Smith, this
    whole change, what do you think is going to benefit the Cuban
    Government, how many millions?
        Mr. Smith. We don't have a figure on any millions that
    would benefit the Cuban Government. I think the changes have
    been focused on private entrepreneurs, the small-scale
    business, private business that we are talking about. Again, I
    would repeat that most of the transactions between the United
    States and Cuba remain prohibited under these changes. We have
    just carved out a few areas that, as Mr. Borman talks about,
    are focused on the private entrepreneurs.
        Mr. Sires. I mean, if we go in to sell wheat to Cuba, are
    we going to buy sugar from Cuba? There is no real crop of sugar
    in Cuba anymore. Cuba used to be the leading world supplier of
    sugar. Cuba does business with the rest of the world. This
    whole idea that you have to grow this in some sort of a
    corporate has ruined the entire economy. There is no real free
    business in Cuba. Even the people that you deal with that you
    say they got 200 licenses, the Cuban Government can remove
    those license at a drop.
        Ms. Jacobson. It is true, Mr. Sires, but if I could, I met
    with seven or eight of these entrepreneurs, people really
    trying to run their own businesses, restaurateurs, a barber,
    women making soap, women doing decoration on clothes, and you
    can see people beginning to separate their own economic future
    from the government and having trouble because they can't get
    the supplies. The state doesn't want to provide them the
    supplies. That is who we are trying to help.
        Mr. Sires. But yet the elite in Cuba have all the supplies,
    and this is what I am trying to break. This is what runs the
    island, the generals, the people you see them driving in the
    cars. You see them living in the houses that were repossessed
    from people who worked hard in the business before the Castro
    takeover. I just don't see where we have any more leverage to
    get some of these changes to help the Cuban people.
        I was just talking to my colleague. My aunt came from Cuba
    a couple years ago. I don't have a birth certificate. I asked
    her, when you go to Cuba, can you please get me a birth
    certificate. I don't know what my mother did with it. When she
    went to the municipal building what they said to her, we can't
    give you a birth certificate because we have him classified as
    a terrorist. I left at the age of 11, so I am a terrorist. And
    I don't want to share the story of what happened to my cousin
    who has a son who was educated in Russia to become an engineer.
    It is too tragic to even share that story with you because my
    feelings are that these people are just dictators. They are
    brutal dictators. People forget that Raul Castro, Che Guevara
    sent out the firing squads in Cuba that killed thousands of
    people, and I see people wearing a Che Guevara shirt. I am
    sorry. Thank you.
        Ms. Ros-Lehtinen. Thank you, Mr. Sires. Mr. Chabot, of
    Ohio.
        Mr. Chabot. Thank you, Madam Chairman, and thank you for
    calling this very important hearing to discuss the
    administration's new Cuba policy. I believe that President
    Obama's announcement to unilaterally change U.S. policy toward
    Cuba sets a dangerous precedent. In fact, it furthers an
    ongoing pattern of his utter disregard for Congress, but that
    is the way this administration operates. It gives a backhand to
    the elected representatives of the American people, and treats
    Congress like the proverbial mushrooms; keep them in the dark
    and feed them manure.
        Ms. Jacobson, you said there were no concessions, and this
    wasn't necessarily something that the Cuban Government wanted.
    Those statements on their face, they are just not credible. You
    also said that the Obama administration was under no illusion
    about the nature of the Cuban Government. Well, I would submit
    that the administration is just about as naive about the nature
    of the Cuban Government, apparently as it was about ISIS when
    the President famously described them as the JV, or junior
    varsity. Tell that to the families of those who have been
    brutally massacred by those barbarians.
        This Cuban policy, this new policy, is, in my view,
    tragically flawed. And the way it was brought about with such
    utter disregard--which you are hearing on both sides of the
    aisle--utter disregard for the elected Representatives of the
    American people, is disgraceful, and it is just as flawed.
        Now, I would like to yield the balance of my time to the
    gentlelady from Florida, who as we all know was born in Cuba,
    and feels just as passionately about this as anybody in this
    place. Ileana Ros-Lehtinen.
        Ms. Ros-Lehtinen. Thank you so much, Mr. Chabot. And
    following up on your thought about the victims of brutality,
    wherever those victims are, I wanted to give Ms. Jacobson the
    opportunity, Assistant Secretary Jacobson, to answer the
    Alejandre family questions. How can Marlene Alejandre explain
    to her daughters why their grandfather who was killed by the
    Castro regime, his life meant nothing, and the person who was
    in jail as a co-conspirator for the murder of her father was
    pardoned, set free and returned to Cuba and received a hero's
    welcome. What does she say to her girls?
        Ms. Jacobson. Let me start out by saying I can never bring
    back her grandfather, and I can never do more than express my
    sadness and my condolences to her at the start. That is
    something that should not have happened.
        Ms. Ros-Lehtinen. When she was told by you and others that
    a trade would not take place, a trade by any other name--this
    was a swap, was it not? You talk about----
        Ms. Jacobson. Madam Chair, I just want to say an exchange
    of intelligence agents between two countries is something that
    this government and previous administrations have done many
    times.
        Ms. Ros-Lehtinen. But had the State Department not met with
    the family, and didn't the State Department time and time and
    time again tell her that Gerardo Hernandez would not be set
    free by this administration? Yes or no?
        Ms. Jacobson. To the best of my knowledge----
        Ms. Ros-Lehtinen. Did Secretary Kerry state right here to
    us that such a swap would not take place.
        Ms. Jacobson. That a swap for Alan Gross would not take
    place we affirmed and we did not do.
        Ms. Ros-Lehtinen. You just call it something else and say
    we were always telling the truth.
        Ms. Jacobson. We don't believe that is what took place.
        Ms. Ros-Lehtinen. Was the family under the impression,
    because you gave it to them, that that exchange would not take
    place, that Gerardo Hernandez would serve the complete
    sentence? Did you give that impression at any time or anyone in
    the State Department?
        Ms. Jacobson. Certainly I regret if the family felt
    additional pain because of an impression that we had left.
        Ms. Ros-Lehtinen. An impression, so that is all that they
    had to have. They had a false impression, that all this time
    while you were meeting with them, while you were meeting with
    them, you were already cooking up this swap, whatever you call
    it, that Gerardo Hernandez, for all intents and purposes, what
    happened is he was set free. He was pardoned by President
    Obama. He was returned to Cuba. He was given a hero's welcome,
    but that was just the impression that they got. It was a false
    impression because you were never going to do that. While you
    met with them. Don't you at least feel a little bit bad that
    you were lying to them?
        Ms. Jacobson. Well, in the first place, no one who met with
    the family ever lied to the family about what our
    understanding--Gerardo Hernandez was in jail on a lifetime----
        Ms. Ros-Lehtinen. My time is over. I am going to enjoy
    listening to the families when they hear that testimony coming
    from you. It is just pathetic. Thank you. Now Ms. Bass of
    California. Thank you, Mr. Chabot.
        Ms. Bass. Thank you very much, Madam Chair. Let me just say
    before I begin, that this is, I find it particularly difficult
    to talk about Cuba because I want to acknowledge the
    experiences and the family situations of my colleagues, Mr.
    Sires, and also Ms. Ros-Lehtinen. But, you know, to talk about
    it and understand and acknowledge what your families went
    through, you know, I understand. I do, though, support what has
    happened in changing our relation with the island. And one of
    the things that I have always felt is that as an American, I
    want to be able to travel anywhere in the world, and I did
    recently go to Cuba specifically looking at a drug that the
    Cubans have invented for diabetes, and I want to talk about
    that in a minute. I have a couple of questions.
        I know that this April there is the Summit of the Americas,
    and I wanted to know what the reaction has been from the
    international community about Cuba's participation, and other
    world leaders, regarding this policy change?
        Ms. Jacobson. Congresswoman, we have really seen
    universally from the hemisphere and those participating in the
    Summit that they strongly support the policy, that they think
    it changes the whole dynamic in the hemisphere for the United
    States on other objectives that we have, high priorities for
    us. It changes the entire debate. President Santos of Colombia
    called it historic. Dilma Rousseff said it changes the entire
    debate, President Rousseff of Brazil. They feel strongly that
    the policy of isolating Cuba was not the right one. We
    obviously disagreed with them for many years, but we found that
    it was isolating us in conversations and impeding our ability
    to have conversations on human rights and democracy not just in
    Cuba because they would not really engage on that issue, but
    also our ability to engage with them on human rights and
    democracy issues broadly speaking throughout the hemisphere,
    and we know that this is a concern in other countries in the
    hemisphere.
        Ms. Bass. Okay. You know, about the trip that I mentioned
    that I recently took. It was the Congressional Diabetes Caucus
    went specifically because in Cuba they have developed a drug
    that is called Heberprot-P, and it basically is a drug that
    reduces the need for amputations in diabetics. As I understand,
    and I think my question is directed to Mr. Smith, as I
    understand, this drug has been approved for a clinical trial,
    but because of our policy it is not approved to be marketed in
    the U.S., which means that a company is not going to invest in
    a clinical trial if they can't market it. So I am wondering if
    the changes that have been made in the law would allow for
    this. And basically what the Cubans are reporting, but we
    obviously have to test it and see if it is correct, they have
    been able to reduce the need for amputations by 70 percent, and
    we have tens of thousands of people in the United States who
    are diabetics who wind up losing their limbs, their feet,
    because of diabetes. Are you aware of what I am talking about?
        Mr. Smith. Madam, I am. Nothing in the recent changes
    changes our policy with respect to those types of drugs. But
    they are not prohibited from coming into the United States flat
    out. Those companies can apply to OFAC for a specific license.
    We have a long history of evaluating those license
    applications. We receive them. We refer them to other agencies
    in the United States Government, including the State Department
    and often the Food and Drug Administration. And we evaluate
    whether any additional U.S. activity with respect to those
    drugs makes sense. And then we can grant what is called a
    specific license to authorize it.
        Ms. Bass. The other pressure that I feel coming from
    California is from the agricultural industries, and I am
    wondering if the policy changes would lead to our ability to
    export. There is a number of companies in California that are
    interested in exporting agricultural goods as well as
    livestock.
        Mr. Smith. So what we have heard over time is that, even
    though there are certain categories of transactions and goods
    that have been authorized, including agricultural products, we
    have heard from exporters and many Members of Congress that our
    previous financing rules didn't help the situation and didn't
    help them to be competitive with their counterparts in other
    countries. So what we did is, we made a change to provisions in
    a statute that deals with the term ``cash in advance,'' and
    basically we have made it more advantageous for U.S. exporters
    to export their products. This is what they have been asking
    for--to make them more competitive--and what many Members of
    Congress have been asking us to do.
        Ms. Bass. Thank you.
        Ms. Ros-Lehtinen. Thank you so much, Ms. Bass. And we will
    go to Judge Poe of Texas.
        Mr. Poe. Let me start with the presumption that Cuba is a
    violator of human rights. I think we all know that, especially
    the folks in Cuba. The policy of the President, I think, I
    don't want to go into the issue of whether, with or without
    Congress' approval, the President made some decisions. I want
    to cut to the one issue that I have a question about. What is
    the purpose of the current U.S. policy toward Cuba? That we
    basically have no contact with them. We don't trade with them
    generally. This policy that we have been talking about that has
    been implemented for 50-something years, what is the purpose?
    What is the goal of that policy? Is that clear?
        Ms. Jacobson. You mean the previous policy?
        Mr. Poe. Well, the previous policy until it was changed by
    this President, tweaked a little bit.
        Ms. Jacobson. The goal of the previous policy was that via
    isolation of Cuba and keeping our distance from that
    government, we would hope to bring about change in the regime
    and simultaneously we would hope to empower the Cuban people to
    be able to make that change.
        Mr. Poe. Change the regime? Change their communism? Change
    what?
        Ms. Jacobson. Certainly change their behavior toward their
    own citizens.
        Mr. Poe. So our goal is that Cuba internally changes the
    treatment of Cuban citizens? I am not trying to catch you on
    semantics. I am just trying to see what our goal is. Our goal
    is to do this so that the Cuban people are treated like they
    should be?
        Ms. Jacobson. In terms of international human rights
    standards and that sort of thing, yes.
        Mr. Poe. And would you say that has not worked?
        Ms. Jacobson. I would.
        Mr. Poe. Fifty years doing something and if it doesn't
    change, that policy or that goal has not been achieved because
    the Cubans are treated, I think, just as bad as they ever have
    been.
        Ms. Jacobson. I believe so, yes, sir.
        Mr. Poe. Let me ask you this: Is the policy, is our goal
    ever to do what--our relationship with Cuba, whatever that may
    be in the future. Is that for America's benefit or for Cuba's
    benefit? As we look at changes toward Cuba, is this because we
    want to help American businesses, for example, or Americans to
    be able to travel; is that the goal that we are moving toward,
    or are we looking to a goal of what is still best for the
    Cubans?
        Ms. Jacobson. Our goal is to do what is in our national
    interest and to help the Cuban people to be able to do what
    they wish, to be able to make their own decisions.
        Mr. Poe. So it is both?
        Ms. Jacobson. Yes. I would say the first priority is to do
    what is in our national interest, which includes our core
    values of democracy and universal human rights.
        Mr. Poe. Would our policy have anything to do with helping
    trade from the United States?
        Ms. Jacobson. Certainly.
        Mr. Poe. Let me give you an example. I am from Texas. I
    represent a lot of, not as many as I used to, but a lot of rice
    farmers. When I got elected to Congress, I thought rice came in
    a box. I have learned a lot about rice farming. There is long
    grain; there is short grain; there is two seasons, all that
    stuff. Historically, Texas rice farmers traded internationally
    with Iran, Iraq, and Cuba. Bummer. You can see that that hasn't
    worked out so well. They want to trade long grain rice to Cuba.
    The Cubans want to buy long grain rice. They want that as
    opposed to California short grain rice. Well, they do. Set
    aside all the other issues. Would that not be in the best
    interests of the United States and American exporters that we
    would facilitate trade with Cuba?
        Ms. Jacobson. You are going to get me into some trouble
    because I am not sure I can set aside all the other issues, but
    if I really could in a vacuum, it would be in our interests. I
    am not sure we always do those things in a vacuum, though.
        Mr. Poe. Oh, I understand that. There is a lot of other
    issues to be involved. What I am saying is having this barrier,
    to me, of trade hurts Americans. I don't know about the Cubans.
    They get their rice from Vietnam. Oh, I am out of time. I have
    some other questions that I would like to submit for the record
    to be answered.
        Mr. Ros-Lehtinen. Without objection.
        Mr. Poe. Thank you very much.
        Ms. Ros-Lehtinen. Thank you, Judge Poe. And we will go to
    Mr. Cicilline of Rhode Island.
        Mr. Cicilline. Thank you, Madam Chair, and thank you to the
    witnesses. I too want to begin by acknowledging the experiences
    and passionate leadership on Cuba-American relations by
    Chairwoman Ros-Lehtinen and Mr. Sires, and thank you for being
    so open with your experiences at this committee. I think it
    adds to our understanding of these really complicated issues.
        I think all members of this committee are equally and
    deeply committed to help the Cuban people achieve freedom and
    democracy, and I think the difference of opinion is what is the
    best strategy for bringing that about, and I really thank the
    witnesses for being here today, and I expect that you will
    continue to keep Congress informed throughout these discussions
    with the Cuban Government. And I am hopeful, and I think most
    Americans are hopeful that the President's efforts to engage in
    real and substantive negotiations with the Cuban Government
    will ultimately advance the national security interests of the
    United States and benefit the Cuban people. But I think like
    most Americans, I remain very deeply concerned about the long
    record of human rights abuses and the denial of basic freedoms
    that have been caused at the hands of the Cuban dictatorship.
    And while our current policy has failed to bring about lasting
    change in Cuba, as we update our policy, I think we have to be
    sure that we are doing it in a measured, comprehensive, and
    thoughtful way that is aligned with the current reality. My
    hope is that the President's efforts here are met with honest
    engagement by the Cuban Government toward a more open, free,
    and tolerant society for the Cuban people.
        So my questions really are, I have really three questions,
    and I invite you to respond to them. The first is, there has
    been a lot of talk about what the neighbors and our allies in
    the region have for a long time identified as a problem, the
    Cuba-U.S. policy. So what is really the kind of best way that
    we can engage some of these partners in the region who now can
    point to a change in policy to really use them in a way to help
    bring about the kind of liberties and democracy in Cuba that we
    all want? What's the strategy for effectively engaging others
    in the region to be partners in this work now that the policy
    has begun to change? The second is, how can we as a Congress
    best advance this issue of human rights which continues to be a
    very, very serious issue in a variety of different ways? How do
    we play a role enforcing real progress and helping establish
    progress on the human rights issue?
        And, finally, to build on Mr. Sires' question, how do we
    ensure that this economic engagement that is intended here,
    which is, of course, intended to support the Cuban people, does
    not instead fortify the government at a particularly critical
    time? How do we protect against an unintended consequence where
    we think we are helping entrepreneurs in the private sector
    strengthen, but at the same time are, in fact, helping the
    government at a moment when others are beginning to retract
    some of their support? I invite you to respond to those
    questions, please.
        Ms. Jacobson. Thank you. A couple of things. On engaging
    our allies, there is a couple of thoughts I have about that.
    One is that all of the countries in the region, as well as our
    European allies and others, have Embassies on the island. Many
    of them were hesitant, if not outright refused to engage with
    many of the democracy activists for years. I am very optimistic
    if not having seen concrete results already that they have lost
    that fear with our change of policy. I think that is hugely
    important. Their rhetoric outside the country is important in
    dialogues, but engaging with these activists and supporting
    them on the island I think is just as important. These people
    are often accused of being our tools. I think that others need
    to embrace them openly and talk to them, work with them, engage
    with them, hear from them, and we are saying that to them.
        The other thing is in terms of Congress, I hope as many as
    possible will have real congressional delegations that will go
    to the island and see as many in Cuban civil society, and that
    includes in the arts, in the democracy area, as well as
    entrepreneurs and hear from the ones I heard from, how they are
    trying to keep those funds from going to the Cuban Government,
    but how they believe they are making their own way
    independently even if some of those funds are going to the
    Cuban Government, because I think the psychology of those
    entrepreneurs is a breaking away from the state that is worth
    that price. The Cuban Government went through the period of
    decline of the Soviet Union where it dropped GDP by 30 percent,
    and they survived, so I think this is important that we support
    those efforts.
        Ms. Ros-Lehtinen. Thank you so much, Mr. Cicilline.
        Mr. Cicilline. I yield back. Thank you.
        Ms. Ros-Lehtinen. And we turn to Mr. Salmon of Arizona.
        Mr. Salmon. Thank you. Ms. Jacobson, when specifically--I
    am looking for a date--did you find out about the White House-
    Cuba negotiations and the content of the President's
    announcement?
        Ms. Jacobson. What I can tell you, Representative Salmon,
    is that I was aware from throughout that the Embassy of the
    White House was undertaking efforts to secure the release of
    Alan Gross because we were working on the Gross case with the
    family.
        Mr. Salmon. I understand that, but when did you find out
    specifically about the negotiations that have been going on for
    the past year? What date did you find out about those?
        Ms. Jacobson. It was about 6 weeks or 2 months before the
    announcement that I knew more of the content of those
    discussions.
        Mr. Salmon. Okay. And when did you find out about the
    announcement itself?
        Ms. Jacobson. When the actual date of the announcement was
    decided, I knew about it.
        Mr. Salmon. You found out simultaneously with the
    announcement being made?
        Ms. Jacobson. No, no, no, no, no. As that was being
    decided, I knew about that. In other words, I knew about the
    decision to announce the new policy about 6 weeks as it was
    being decided before, and so the date of the announcement I
    knew about as that was being decided at the White House.
        Mr. Salmon. Okay. Can you tell me what resources, what U.S.
    resources were used to ensure that Gerardo Hernandez, convicted
    of killing four U.S. citizens and a member of the Cuban 5,
    could artificially inseminate his wife? What resources were
    used for that?
        Ms. Jacobson. What I can tell you on that is that we have
    always, the State Department, from my perspective, have always
    facilitated the visits of his wife to the prison in California
    when he was incarcerated.
        Mr. Salmon. Right.
        Ms. Jacobson. So those were the resources that we expended
    in terms of her visit.
        Mr. Salmon. I understand that he was able to artificially
    inseminate his wife, and that was facilitated by the U.S.
    Government.
        Ms. Jacobson. Beyond our efforts to facilitate her visits,
    the rest was done by the Department of Justice, and I would
    have to defer to the Department of Justice.
        Mr. Salmon. I would like to know that. I think it is
    incredulous that it would be a U.S. priority to make sure
    Hernandez fathered a child while he was in incarceration, so I
    will wait for an answer on that.
        Last question, these secret negotiations went on for over a
    year and reportedly consisted of seven meetings, so when you
    went to Havana last month for talks, the Cubans made it very,
    very clear they would not allow our diplomats to speak to
    dissidents, and normalization was not possible without the
    return of our Naval base in Guantanamo Bay, as well as other
    nonstarters that we have talked about today. So what did we
    really accomplish, other than maybe getting a T-shirt that I
    have had meetings for over a year and all I got was this lousy
    T-shirt?
        Ms. Jacobson. Well, I guess I would start out by saying we
    got an intelligence asset out of Cuba who was languishing in
    jail there, and we got Alan Gross home, and you know that. But
    beyond that, the beginning of this process of normalization
    starts with diplomatic relations, which is only the first
    start. Normalization is going to take years, and we made it
    very clear that it includes things like property claims, which
    has to be part of this discussion, judgments against the Cuban
    Government, which have been adjudicated in U.S. courts which
    has to be part of this. So that is a much longer process, and
    we haven't acceded to any of the things----
        Mr. Salmon. No, and I don't expect that we will acquiesce
    to any of----
        Ms. Jacobson. It is the start of the process.
        Mr. Salmon. I understand, but what was your response when
    they said we are not going to do anything on normalization
    until you do these things?
        Ms. Jacobson. Well, but what they meant by normalization is
    the end of that year's long process, not restoration of
    diplomatic relations, which is the first part. So I am
    presuming that they mean they won't have full normalization
    until all those things are done, but they will have a
    restoration of diplomatic relations.
        Mr. Salmon. Thanks. I yield back.
        Ms. Ros-Lehtinen. Thank you very much, sir. Mr. Connolly of
    Virginia is recognized.
        Mr. Connolly. I thank the chair. Ms. Jacobson, I believe in
    politics and in diplomacy in a very simple adage, don't give it
    away for nothing. I am very troubled by the abrupt change in
    U.S. policy to Cuba at precisely a moment where we actually
    have leverage. For 50 years, one could argue the Castro
    brothers have loved U.S. policy because it has helped keep them
    in power. Fair enough. But that was then. This is now. Things
    have changed. They are hurting. The economy is hurting. Their
    oil supplier is hurting. And as they look out to the future, it
    is very difficult to see a viable Cuban economy without major
    change, including a change in the relationship with us.
        Now, I take your point about diplomatic exchange, and I put
    that aside, but the liberalization in trade and tourism and
    investment, and, indeed, the President has called to begin the
    process of dismantling the embargo that has been in place for
    half a century. I need to understand what we got in return?
    Where is the reciprocity? Why wouldn't the United States use
    its good offices and its leverage with respect to human rights,
    with respect to press freedoms, with respect to religious
    freedoms, with respect to political dissidents. In our
    briefings from State Department personnel, the answer we got
    when we asked that question was we are not doing that. To me, I
    must admit, that is shocking and I think a disappointment to
    many that we wouldn't use the leverage we finally had to some
    good point. And I wonder if you would address that, because I
    think we have squandered leverage.
        Ms. Jacobson. First I want to start out by saying that what
    liberalization there has been in regulations, and my colleagues
    would certainly specify on all this, is very specific, and I
    think Mr. Smith has repeatedly noted that most transactions
    still remain prohibited.
        Mr. Connolly. If I may, fair enough, but the promise of the
    President, he said explicitly, we are going to start the
    process of dismantling the embargo. So Cubans see promise, not
    just here and now, but a pathway toward the dismantlement of a
    policy we have had in place for a half a century.
        Ms. Jacobson. And the President said he would like to see
    the debate over that. There is no doubt. But the Cubans keep
    demanding this in part because it is still there, so they know
    that this is not a big liberalization yet.
        In addition, I think the most important thing that we have
    made clear to them is we are not letting up on human rights. If
    you were to try and be transactional about this with the Cuban
    Government, the problem with that is that they won't trade for
    anything, and we will end up still not helping the Cuban
    people. The goal of these policies is not to do something that
    relies on the Cuban Government agreeing to give us something
    for a human rights concession. We want to try and go directly
    to the Cuban people. Now, it is true, they may not let the
    telecommunications companies work for more Internet access, but
    what has been news all over Cuba and every Cuban knows, is that
    we are restarting our relations, and the bogeyman of the U.S.
    being their problem is no longer credible.
        Mr. Connolly. Again, my time is limited. I appreciate that,
    and I wouldn't deny that there are lots of people who see lots
    of hope in what has now been started. But my question is really
    more specific. What is the reciprocity? What did we get out of
    this other than the aspirations that things will get better
    with this change because they weren't getting better under the
    old regime? I can't think of a single thing--the release of Mr.
    Gross, of course--but in terms of a policy shift, a concession,
    I can't think of a single one you have announced.
        Ms. Jacobson. I believe that we also will get some things
    that matter in opening our Embassy and hopefully the ability to
    travel throughout the country and see more people and support
    more people. We can't really move outside Havana right now.
        Mr. Connolly. That is what you hope to negotiate.
        Ms. Jacobson. But that is necessary for opening an Embassy.
    That is part of this. I also think that, you know, we will have
    all of these dialogues that they want to have for cooperation,
    that will be part of those discussions as well. It is to come.
    I agree.
        Mr. Connolly. Madam Chairman, I know my time is up, but I
    want to underline, I always think it is a mistake in foreign
    policy to give it away for nothing.
        Ms. Ros-Lehtinen. Thank you, Mr. Connolly, and now we turn
    to Mr. Duncan, the chairman of our Subcommittee on the Western
    Hemisphere.
        Mr. Duncan. Thank you, Madam Chairman.
        You know, if trade and lifting the sanctions is seen as a
    cure-all of foreign policy for the Obama administration with
    regard to oppressive regimes like Cuba, then why did the
    administration impose more sanctions on Venezuela the very same
    week as the policy shift in Cuba? Is this an indication that we
    may see similar normalized relations with North Korea,
    Venezuela or other oppressive regimes?
        Ms. Jacobson. The sanctions that were imposed on Venezuela
    this past week were, in fact, additional visa sanctions. We----
        Mr. Duncan. In December, the same week as the President
    started normalizing relations with Cuba he imposed some
    sanctions on Venezuela.
        Ms. Jacobson. If you are talking about the signing of the
    legislation that was passed by Congress, that includes both
    visa sanctions and assets freezes. It is not a trade sanction
    bill.
        Mr. Duncan. Are we going to see any more normalizations?
    Are there going to be other surprises? We didn't see Cuba
    coming. What are we going to do with Venezuela, North Korea or
    any of the others? Are you anticipating any of that?
        Ms. Jacobson. I can't speak outside my region, but I don't
    expect you to see any surprises on Venezuela. We have been
    consulting on that, and I expect to continue, nor any surprises
    on Cuba. We will continue to consult on that.
        Mr. Duncan. I think you were surprised over the Cuba talks
    and you weren't brought in or read into it until late in the
    discussions, but let's move on because many of the people that
    I speak with about this policy shift on Cuba, some even here in
    Congress, talk about, and point to, the freedom now afforded
    Americans to travel to Cuba.
        So what I ask is, is the same freedom of travel a two-way
    street? Is the same freedom of travel afforded to the Cuban
    people to travel to the United States? In this policy shift,
    all American travelers really stay, unless it is family travel,
    they stay at hotels owned by the Cuban military. Only state-
    owned enterprises can accept credit cards. Article 18 of the
    Cuban constitution requires all foreign commerce to be
    controlled by the state. So how does increasing commerce with
    Castro's monopolies help the Cuban people?
        Ms. Jacobson. Let me start out by saying on travel by
    Cubans, we are looking at that really carefully. Since the 2013
    decision by the Cuban Government to allow more people to
    travel, it has gotten better. You have been able to have some
    dissidents here to speak in front of this House who have never
    been able to before, but it is, by far, not good enough. There
    are still people who can't travel, and they should be able to.
    They should all be able to travel freely.
        Let me say that on the trade portion, I will go back to
    what I said. We understand that there will be some benefits to
    the Cuban Government. We really do believe, again, because of
    people that we have talked to who are entrepreneurs, because of
    activists, because of artists, because of some of the small
    agricultural folks working, that they will benefit more than
    the government will if we are able to implement these
    regulations and get them the equipment they need that the
    government won't provide them.
        Mr. Duncan. Right. They will benefit from maybe some
    economic transaction. I will give you that. We will see.
        How about other freedoms for the Cuban people? What was
    negotiated in this? Freedom of speech? Freedom of religion?
    Economic freedom? Freedom of assembly and protest? And I point
    to Ms. Berta Soler's testimony yesterday. I think Chris Smith
    talked about it, but she said,

            ``The truth is the Government of Cuba represses our
            right to freedom of religion and association, and so we
            go out, participate in religious activities on Sundays
            and then are detained. The government is constantly
            repressing activists who are trying to gather together
            to discuss issues that are important to them.''

        So the right to peacefully assemble and protest against a
    repressive government is still there. So I ask this: What did
    the U.S. barter in exchange for this new policy shift other
    than Alan Gross' release that benefits the Cuban people and
    ultimately gives them more freedoms? I mean, that is what I am
    about. I want this to be about the Cuban people. If we are
    truly going to pursue a policy to normalize relations, it ought
    to be about the Cuban people and not the Castro regime, and the
    Castro regime is the only one that I see that benefits from
    this economically through the businesses they own and operate.
    I don't see where private property rights are really going to--
    you know, maybe. You mentioned that earlier. I think somebody
    asked that question, but private property rights and the claims
    by American Cubans--Cuban Americans and Cuban people in general
    that own property that was nationalized by the Federal
    Government.
        How are we going to address that? I think the private
    property rights is so important and is sort of left out of this
    discussion, and you and I talked about this in my office the
    other day. I think that is critical. So I would like you to you
    talk about the freedoms for the American people--I mean, the
    Cuban people--in the remaining 20 seconds that I have.
        Ms. Jacobson. Thank you, Mr. Chairman, and I agree with you
    that all of those things are what we are seeking as an end. I
    think we all agree that is the goal here.
        Mr. Duncan. So tell me how this policy gets us to that
    goal?
        Ms. Jacobson. The policy gets us to this goal, number one,
    by having a lot more people able to work with us on it from
    outside Cuba than ever before. We were alone. We were not
    joined by anyone else. We are more effective with allies.
    Number two, we believe that there were no concessions here.
    Some of these things are things that we are doing that deeply
    worry the Cuban Government because they may not be able to
    control them, and we don't believe that anything we did on
    December 17th, as the President and the Secretary have said,
    were concessions to the government.
        Mr. Duncan. Well my time is up, but the concessions for the
    Cuban people are important, and I yield back.
        Ms. Ros-Lehtinen. Thank you so much.
        I will now yield to Mr. Lowenthal of California.
        Mr. Lowenthal. Thank you, Madam Chair, and I would like to
    preface my remarks by saying that I have been touched listening
    to both the experiences of those that have been the most
    affected by the repressive regime, and that has been--I join
    with Congressman Cicilline and Congresswoman Bass in saying
    that I have been touched by the testimony of both Congressman
    Sires and Ros-Lehtinen, who talk about their families and some
    of the impacts.
        But having said that, I am very supportive of our re-
    engagement and the restoration of diplomatic relations. I say
    that not because I support many of the repressive issues that
    take place, but I say that as someone who represents one of the
    largest if not the largest Vietnamese American communities in
    the United States, people who escaped also an intolerable
    situation, who I believe, while certainly very, very against
    the existing regime in Vietnam, have benefited by having, I
    think, greater ability to communicate some of their concerns,
    and they have had it by having the U.S. Ambassador to Vietnam
    come to a community which is not at all supportive of that
    government and really have a dialogue and be able to express
    some of their concerns. I see that as a very, very positive
    step.
        So my questions are, as we go forward, will there be a
    strategy also to reach out to the Cuban American community in
    the United States who have been suffering a great deal and who
    have the relatives? So that is my first question.
        Ms. Jacobson. Absolutely. Absolutely, sir. And we have
    begun to do that knowing that the views in that community are
    diverse as well, and seeing that activists within Cuba, among
    the four points they could agree on, was that the Cuban
    Diaspora has to be taken into consideration.
        Mr. Lowenthal. I think that is so important, and I really--
    if anyone else wants--I really think that is very important,
    and I also would like to know what people have--what we see
    as--as we move forward there is more trade and more tourism,
    how are we going to deal with--when many of those tourists go
    back to Cuba and speak out against their government that is in
    Cuba, have we talked some of those issues?
        Ms. Jacobson. We certainly considered that in terms of
    Cubans coming to the United States, and when that travel policy
    was liberalized, there was an enormous concern among activists
    that if they left and spoke freely, they either wouldn't be
    able to go home, perhaps, or if they went home, they would
    never be able to travel again.
        The fact that some of them have now been able to travel
    repeatedly, I think, is a good sign, but everyone still is
    fearful.
        Mr. Lowenthal. As I am, and so with that I----
        Ms. Jacobson. And we raised that issue.
        Mr. Lowenthal. Does anyone else have any issues or want to
    respond to any--some of the issues--as the policies begin to
    change, what you see in the future as some of the consequences.
    Not so much the reasons--I am wanting to move forward. Where do
    we go from here? What do you see things that we need to look at
    as this policy has changed now?
        Mr. Borman. Well, the two points I would make is, one, we
    certainly, with the Treasury, are doing a lot of outreach to
    all segments of the American public so they understand what the
    current--the new changes are; and then, secondly, we will be
    watching very carefully to see how they actually play out in
    practice, because coming back to the 15 percent of the Cuban
    population or the Cuban economy that is private sector, we are
    really looking to strengthen and grow that with these
    opportunities. So that is something we will certainly be
    looking at very carefully.
        Mr. Smith. I would echo those comments. I think the
    implementation is what we are going to be looking at over the
    next few months, and years, actually, and to see what the
    effects are and what we need to do to make these----
        Mr. Lowenthal. As a member also, because of my own concerns
    and also because of the concerns of the communities I
    represent, I have joined--I have been a very active member of
    the Tom Lantos Human Rights Commission. I have adopted
    prisoners of conscience in Vietnam, actually put pressure on
    the Vietnamese Government to begin to release some of these
    prisoners. I would like to see some of the same efforts even be
    increased as we go forward with our changed policy in Cuba.
        And thank you, and I yield back.
        Ms. Ros-Lehtinen. Thank you, Mr. Lowenthal, and we go to
    Mr. Brooks of Alabama.
        Mr. Brooks. Thank you, Madam Chairman.
        I believe that America's policies should be consistent
    throughout the globe as best that we can do so, and by way of
    example, I would like to just make a quick comparison between
    Cuba and Saudi Arabia, looking at some of this similarities
    between the countries, some of the differences, and also the
    disparate ways in which each is treated by the United States
    Government.
        On trade, American/Cuban trade is very limited, as we all
    know. Less than $500 million per year in exports by America to
    Cuba. But America/Saudi trade is very robust. Roughly $80
    billion per year, perhaps higher.
        On travel, travel to Cuba, very limited by the United
    States Government. Saudi Arabia, quite the opposite.
        On Embassies and diplomatic interaction, in Saudi Arabia we
    have an Embassy and very significant diplomatic interaction. In
    Cuba, we have no Embassy and little to no diplomatic
    interaction.
        I could go on and on, but I think it is fair to say that
    the United States treats Cuba substantially differently than
    Saudi Arabia.
        As I have listened to the witnesses and member comments
    concerning Cuba and why Cuba must be treated differently, I
    can't help but emphasize some of the similarities and
    differences that have been pointed out.
        On the issue of freedom of religion, as bad as Cuba may be,
    and we have heard some comments as to how bad it is, the
    question is, is Saudi Arabia worse? One member commented that
    some religious observance requires Cuba Government consent. Yet
    in Saudi Arabia, open worship by Christians is a criminal
    offense, as is missionary work. If a Muslim dares question
    whether Islam is a true religion, he is severely punished. Raef
    Badawi being a recent example, facing 1,000 lashes and 6 to 10
    years in prison, assuming, of course, that the lashing does not
    kill him.
        On the issue of dictatorial governments, one would again be
    hard-pressed to determine which family government, that of
    Cuba's or the Saudi's is more dictatorial. I think you could
    have a very robust debate concerning that issue.
        On the issue of terrorism, bearing in mind that 15 of the
    19 9/11 terrorists were Saudis, and also bearing in mind that
    so much terrorism funding originates in Saudi Arabia, in
    fairness, much of it opposed by the Riyadh regime, but,
    nonetheless, still a lot of money for terrorism comes from the
    country of Saudi Arabia, one could have a lively debate again
    concerning which country poses a greater threat to world peace.
        Given so many similarities, and also some differences, but
    with Saudi Arabia being treated so much better by the United
    States of America, what factors, in your mind, justify treating
    Cuba so much worse than Saudi Arabia that supports the 50-year
    policy that the United States has had with respect to Cuba?
        Ms. Jacobson. Thank you, Congressman. I think that our own
    view has been pretty clearly laid out by the President on the
    17th, and the Secretary certainly made a number of comments
    that we believe that Cuba, not on its merits necessarily in
    terms of its behavior, but on the effectiveness of policy
    argument, the efficiency and what is in our national interest,
    merits a change in that policy, and so it was announced in
    December.
        I can't necessarily make that comparison between Saudi
    Arabia and Cuba, but I will say that we believe very strongly
    that the values and the ideals of the United States need to be
    pursued aggressively all over, the world, and that they are
    best pursued, and you could expect this from a diplomat at the
    State Department via diplomatic relations and having Embassies.
    Those aren't concessions or gifts. We do them effectively when
    we have a presence, and that is why we want to have that
    presence in Cuba.
        Mr. Brooks. I am running short of time. Let me ask this
    final question.
        Americais always faced with a very difficult choice. On the
    one hand, we can be open, hoping that our relations with this
    country will slowly but surely cause them to accept freedoms
    that we cherish in America, or we can be very restrictive, as
    we have been with Cuba, North Korea, and some other nations, in
    hopes that the punishment will be sufficient.
        What do you think long term is best for Cuba?
        Ms. Jacobson. I think we are most effective when we have
    allies with us, and we were alone vis-aa-vis Cuba. So I believe
    the openness with allies to the Cuban people, not the Cuba
    Government, will be effective.
        Ms. Ros-Lehtinen. Gentleman's time is expired.
        Mr. Deutch of Florida is recognized.
        Mr. Deutch. Thank you, Madam Chairman and Ranking Member
    Engel for working so quickly to ensure that this committee was
    able to hear from the administration on the policy shift.
        I represent South Florida where the administration's
    announcement has a tremendous impact, and let me first say that
    in the immediate term, I have serious concerns about the Castro
    regime's continuing human rights abuses, as many of my
    colleagues have brought up today, and I hope that we expect and
    demand more of them.
        Coinciding with the administration's announcement, one of
    the major South Florida's newspapers, The Sun Sentinel,
    published an in-depth feature called Plundering America, which
    exposed the way in which underground criminal networks have
    exploited U.S. policy toward Cuba.
        Madam Chairman, the United States opened its doors to the
    Cuban people so they could have a better life free from the
    oppressive Castro regime, and the overwhelming majority of
    those who have come here have made incredible contributions to
    this country and become a deep part of the fabric of our
    society. What great examples we have here on this panel with
    our colleagues and my friends, Chairman Emeritus Ros-Lehtinen
    and Representative Sires, but policies that were put in place
    to ensure that those who sought refuge in the U.S. would still
    be able to see their families or send remittances are being
    taken advantage of by a small minority for criminal gain.
    Individuals engaged in organized criminal activity have turned
    our humanitarian policy into an underground criminal enterprise
    by using their ability to return to and from Cuba to engage in
    illicit fraud activities, particularly, the report noted,
    Medicare fraud, and are transporting large sums of cash back to
    the island and evading arrest as the Cuban regime will not
    extradite these fugitives.
        As The Sun Sentinel notes, they have turned our open-door
    policy into a revolving door, enabling, and I quote, ``Crooks
    from the island to rob American businesses and taxpayers of
    more than $2 billion over two decades.''
        As the administration rebalances its relationship with
    Cuba, I hope we are not ignoring the years of criminal activity
    that the Castros have turned a blind eye to, at best. We need
    to know what extent--to what extent the regime or people
    connected to the regime have been or will continue to be
    involved in these illegal crime rings.
        Assistant Secretary Jacobson, I would like to know if your
    initial round of talks with the Cubans included any discussion
    of extradition of fugitives from Cuba; and if not, when and how
    will this issue be raised?
        Ms. Jacobson. Thank you, Congressman, and it certainly did
    include the discussion of fugitives. It did not specifically
    include the question of extradition. As you know, we have a
    very old extradition treaty that has not been used in many
    years. I have no idea whether we will get back eventually to
    actually using it. But it certainly included the question of
    fugitives and the desire to have much more in-depth
    conversation about law enforcement and fugitive issues in the
    future.
        Mr. Deutch. Can you just elaborate a bit on the extradition
    you referred to, the situation that we have now, but in the
    talks----
        Ms. Jacobson. Right. Let me----
        Mr. Deutch [continuing]. How did the talks focus on that?
        Ms. Jacobson. I just want to be clear that the morning of
    the talks that I had were on the diplomatic restoration. The
    afternoon of the talks were on a whole series of subjects on
    which we are going to have experts, who are not me, have much
    more substantive conversations about what we want, right, and
    that is one of the subjects.
        Mr. Deutch. And when--what will be the context of those
    discussions and when will they take place?
        Ms. Jacobson. Right. We are going to try and set those up
    as quickly as possible. Part of that conversation already began
    in the migration talks, because we take with us our lawyers and
    the Department of Justice, and we talk about fugitives in the
    context of the migration talks. So we have actually begun that
    one, but we will have a separate conversation on law
    enforcement and fugitives, basically, as we can set these up in
    the time schedule.
        The Cubans are a little bit overwhelmed by our new wanting
    to have dialogues on lots of different subjects. They have
    accepted the idea of having that, and we will get them set up
    as soon as we can with our Justice Department colleagues.
        Mr. Deutch. Thank you.
        Mr. Smith, understanding that much of this falls under law
    enforcement agencies' purview, has your office looked at where
    the money coming from these Cuban criminal networks--where all
    of that money, which usually comes back to Cuba in cash goes,
    or the role of Cuban Government in sponsoring or even training
    these individuals or what is being done to impede their
    activities?
        Mr. Smith. OFAC does work with our law enforcement
    colleagues on a variety of issues that relate to sanctions.
        With respect to any particular issues with regard to money
    flows or anything that might impact the U.S. law or U.S.
    sanctions, I couldn't talk about anything that we would
    actually be looking at.
        Mr. Deutch. Can you speak to the specific situation that
    was described at great length in these newspaper reports?
        Mr. Smith. I think most of what you described at great
    length from the newspaper reports and the details from the
    newspaper reports, I would refer to the Department of Justice.
    I think that they would have the primary equities there and the
    primary statutes that would be involved.
        What we would do at OFAC is, we enforce the sanctions laws,
    and very little, from what I have seen, would impact our
    regulations that we would enforce.
        Mr. Deutch. Thank you.
        Thank you, Madam----
        Ms. Ros-Lehtinen. Thank you. Gentleman's time has expired.
        Mr. DeSantis of Florida.
        Mr. DeSantis. Thank you, Madam Chairman.
        Secretary Jacobson, you said in response to Chairman
    Royce's question what we did not make concessions to the Cuban
    Government, but yet later in your answers you have conceded
    that the increased economic activity will have some benefit to
    the Cuban Government. So that is a concession. Is it not?
        Ms. Jacobson. It is a benefit they may receive.
        Mr. DeSantis. Especially given their two main patrons,
    Venezuela and Russia, they are reeling with a change in world
    oil prices, and I think the Castro government very much wants
    any type of patronage they can get, and I think as Mr. Sires
    pointed out, you know, money that goes into that country is
    going to be controlled by the government, and if you are going
    to argue differently, why is it that we are really the only
    country that has these restrictions. So you have open
    relations, Switzerland, Australia, whoever. How come with all
    those ties, the Cuban people have not benefited, because you
    said in your testimony in response to a question of Mr. Poe
    that the Cuban people are not better off after 50 years of our
    policy.
        My question is if the other policies of all the other
    countries in the world are so good, why haven't the Cuban
    people benefited from those policies?
        Ms. Jacobson. Congressman, I think part of the problem in
    terms of actual sort of economic policy in Cuba is that they
    have not modernized their system, opened their system, made a
    foreign investment law that adequately attracts investment to
    have those other countries be part of it.
        Mr. DeSantis. And they said that they are not going to
    change. Raul Castro said they are not changing. He said this is
    a victory for the Cuban revolution, and we are not going to
    change. So I don't see where you get that the people of Cuba
    are somehow going to benefit more than the regime. I think the
    regime will benefit from this, but until there is a change, I
    think the benefits are going to be bottled up at the top.
        Ms. Jacobson. But remittances also go directly to Cuban
    people. We raised the remittance amounts, in addition. One of
    the reasons that they haven't rushed to us to implement the
    telecommunications provisions or the Internet provisions, you
    know, they have been very, very wary of all of this is because
    they know full well that they probably won't be able to control
    it, and that the benefits may well reach the Cuban people.
        Mr. DeSantis. And so they are probably not likely to do--
    let me ask you this: When you took your trip, were you given
    access to any of the places where political prisoners are being
    held, view that?
        Ms. Jacobson. I was not.
        Mr. DeSantis. Okay. Is there any discussion--has the
    administration trying to get property returned that was
    confiscated both of American citizens when Castro took power,
    including Cuban Americans who were exiled?
        Ms. Jacobson. We made clear in the conversations that the
    issue of expropriated properties has to be part of
    normalization.
        Mr. DeSantis. What was their response?
        Ms. Jacobson. They agreed that that has to be part of the
    conversation and responded that they had issues they wanted to
    raise with us about losses under the embargo.
        Mr. DeSantis. And one of the issues, I know they wanted is
    GTMO. Can you categorically state that on January 20th, 2017,
    at 12 o'clock p.m., a date that a lot of my constituents are
    looking forward to, that GTMO will still be under U.S. control,
    the Naval base?
        Ms. Jacobson. I am certain that Guantanamo will still be a
    U.S. base, but I can't tell you a hypothetical about what may
    be part of these normalization talks. But it is not on the
    table for us right now, and I don't envision that, but I am not
    a high enough ranking person to know, and it is--I am not from
    the Department of Defense. Et cetera, to know whether it could
    be in the future, and--but I can't----
        Mr. DeSantis. Well, I am just talking about over the next 2
    years as this administration is in power, but I understand it
    is not going to be----
        Ms. Jacobson. I can't envision that.
        Mr. DeSantis. Cuba is a state sponsor of terrorism. The
    Federal statutes, in order to be removed from that list, there
    are certain criteria. One of them is that the government has to
    provide assurances that they will not support international
    terrorism.
        Has the Cuban Government provided those assurances, and if
    so, are they credible?
        Ms. Jacobson. Cuba has repeatedly rejected international
    terrorism, and we are in the process right now as we review
    this of also looking at their statements and evaluating whether
    they have or whether they will give such assurances.
        Mr. DeSantis. Well, I am concerned, because if they say
    they are not going to change, they have been a state sponsor of
    terrorism. To me, that is a declaration to the contrary.
        My final question is: Does the administration believe that
    the President has the authority to unilaterally lift the
    embargo?
        Ms. Jacobson. Clearly not or he wouldn't have welcomed and
    encouraged the debate in Congress.
        Mr. DeSantis. Well, but we have been down this road before,
    because he said he couldn't do things a number of times, and
    then turns around and does them. So I just think it is
    important to get this on the record. The statute is very clear
    about what would have to happen in order to have any type of
    waiver of these restrictions, and there is no evidence that any
    of those criteria have been met up to this point. Is that
    accurate?
        Ms. Jacobson. I am sorry. A waiver of--to have lifting of
    what kind of restrictions? Of the embargo?
        Mr. DeSantis. Any type of provisions that can be waived
    requires there are certain provisions that are listed that must
    occur in order for the President to act.
        Ms. Jacobson. To act to lift the embargo, the President was
    clear in the State of the Union that he wants that to be
    debated in Congress.
        Ms. Ros-Lehtinen. Gentleman's time has expired.
        Mr. DeSantis. Yield back.
        Ms. Ros-Lehtinen. Thank you, Mr. DeSantis.
        Mr. Castro of Texas.
        Mr. Castro. Thank you, Chairwoman, and like many of my
    colleagues, I have been moved by the testimony of Ms. Ros-
    Lehtinen and also my colleague Albio Sires, who are Cuban
    American, and many Cuban Americans, particularly of a more
    senior generation lost their family members, lost property,
    lost their livelihoods in their country, and for many years I
    think much of our foreign policy toward Cuba was in great
    deference to that fact, and when you hear the stories that is
    very understandable.
        I do think with the President's change in normalization in
    diplomatic relations toward Cuba that the power of American
    culture and the power of our technology and our democracy will
    ultimately win out, and I think that in many ways, this was a
    start of a new revolution in Cuba, and as the Castro brothers
    are in the winter of their reign, I see this as positioning the
    United States for when they are gone.
        And so with that in mind, let me ask you, how does it
    position our country vis-aa-vis Cuba once these folks are no
    longer in power?
        Ms. Jacobson. Thank you, Congressman. I think, you know,
    this really is the question. One of the things that is critical
    is the next generation of activists, of leaders, we want to
    keep faith with them. I thought one of the most important
    things in this policy is how we work with the current human
    rights activists and democracy leaders, the new entrepreneurs
    and artists and expand civil society. How do we encourage them
    when Tania Bruguera wanted to have performance art in
    Revolutionary Square and asked Cubans to speak openly, 300
    artists wrote in support of her effort. Many of them had never
    made a political statement before. So it is the idea of
    expanding people's engagement in civil society, which is novel,
    and is important in preparing for what comes next in Cuba.
        Mr. Castro. Sure. And I know in places like China, for
    example, they can't access social media sites, but they have
    access to the Internet. Many in Cuba have no access even to the
    Internet. Is that right?
        Ms. Jacobson. Absolutely.
        Mr. Castro. And also--and I don't know. I got here a little
    bit late, because like many of my colleagues, I have two
    committee meetings at the same time, but let me ask you, what
    becomes of the wet foot/dry foot policy?
        Ms. Jacobson. At this point, Congressman, we have no plans
    to change that law, and it would--the law, obviously, is in on
    the books. That would be have to be changed by Congress. We
    have no plans to request such a change.
        Mr. Castro. Okay. Thank you.
        I yield back, Chairwoman.
        Ms. Ros-Lehtinen. Thank you, Mr. Castro.
        Mr. Emmer of Minnesota.
        Mr. Emmer. Thank you, Madam Chair, and thank you to the
    panel.
        It is interesting, I hear often in the past few weeks that
    if something hasn't been working for 50 years, you should look
    at changing it, but nobody seems to go directly to the issue,
    except some of the comments I have heard today about how
    nothing has changed within the country, and I am interested in
    a couple of things, because much of it has been covered
    already, but the President broke with policy by appointing a
    couple of White House aids to conduct these secret
    negotiations. I am interested, and I think it is probably Ms.
    Jacobson, because you seem to have at some point been brought
    in and made aware of what was going on, what happened that
    caused that moment in time where the President decided to
    appoint these two to negotiate secretly with the Cubans, and
    why? Why did he break from policy?
        Ms. Jacobson. I can't--I can't answer that question on
    behalf of the President.
        What I can tell you is that one of the two people engaged
    in those discussions is a foreign service officer on loan to
    the White House, a foreign service officer who is one of our
    foremost experts on Cuba, having served there and on the Cuba
    issue at the State Department.
        Mr. Emmer. But you don't know what suddenly sparked now is
    the time that this has to happen?
        Ms. Jacobson. I think there has long been a concern within
    the administration that the policy was not effective in
    empowering the Cuban people.
        Mr. Emmer. So let me ask you this, then, Ms. Jacobson,
    because many of the questions are--I mean, I heard from
    Representative Connolly and others, what did we get?
        If I understand your testimony today, these secret
    negotiations included, for instance, discussions about the
    brutalization of families. In other words, how you are going to
    compensate these families for their personal loss during the
    Castro takeover and since, and there has been a promise that
    that will be part of the negotiations before actual--there will
    be a proposal to ``dismantle the embargo.''
        Ms. Jacobson. What has to be part of full normalization of
    relations, that is, making the relationship with Cuba look like
    every other normal one, and that is the full range of things,
    not just diplomatic relations, is a process and a resolution of
    this longstanding issue of claims, which the Foreign Claims
    Settlement Commission has, and judgements, yeah.
        Mr. Emmer. Got it. All right. So--and I just want it on the
    record so I understand, because you have separated between
    diplomacy and complete normalization, which would be lifting
    the embargo and things that the President says he cannot do as
    the Executive, only Congress.
        Ms. Jacobson. Right.
        Mr. Emmer. When we talk about the diplomacy, opening an
    Embassy, hopefully getting to travel across the island, which
    right now has not been assured, that is diplomacy, and these
    few things that the administration can do without Congressional
    approval.
        The next step, my understanding from your testimony today
    is, there has been a promise that there will be, as part of any
    agreement moving forward, any final agreement, an understanding
    as to how these families will be compensated, not only for
    their personal loss, but for their property losses. Is that
    correct?
        Ms. Jacobson. There will be a process with the Cuban
    Government to come to resolution of those issues.
        Mr. Emmer. So you may not require that they be reimbursed
    or compensated for loss of----
        Ms. Jacobson. I don't--I think in all of these kinds of
    cases, and I will ask my colleagues if they have any comment,
    but it may be Department of Justice that would be placed to
    answer this, in all of these kinds of things, it has to be
    agreed between--mutually between two countries to resolve
    those----
        Mr. Emmer. I understand, but you led us to believe, at
    least you led me to believe, that when these discussions were
    taking place, these are issues that were, in fact, raised and
    have been discussed, and it would lead me to believe, listening
    to questions here today, that there are things that are going
    to be required if Congress is ultimately going to approve a
    full normalization.
        Ms. Jacobson. Right, and that means a satisfactory
    resolution, which means we have to be satisfied, but the Cuban
    Government will have to be satisfied, too, for an agreement.
        Mr. Emmer. And that would include this harboring of
    murderers and thieves and criminals by the Castro regime?
        Ms. Jacobson. The question of fugitives--if you mean the
    question of fugitives or----
        Mr. Emmer. I added it to--you put all of these together
    today, and I see my time is running out.
        My point is that you made it sound as though these are all
    going to be necessary requirements to a final agreement if it
    is actually going to be fully normalized, and I believe my time
    is expired, Madam Chair.
        Ms. Ros-Lehtinen. Thank you so much. Thank you.
        Mr. Clawson of Florida.
        Mr. Clawson. Thank you for coming today.
        I would like to ask a question or two about this deal's
    impacts on religious freedom in Cuba. I represent South
    Florida, Southwest Florida, and of the, you know, 94 percent of
    the Jewish folks left after the revolution, some of them came
    to my district. So this is a question I am sure that is on a
    lot of their minds of those that remain that are family
    members. But there is also other religious folks that have been
    persecuted in Cuba. Christians. We don't talk about Mormons
    much, but there are two Mormon branches, I understand, in Cuba,
    and other religious minorities as well. So I am wondering about
    the impact of this deal on tolerance for religion in general,
    and will missionaries and other folks from different sects be
    allowed to go now and help their brothers and sisters on the
    island?
        Ms. Jacobson. Well, I think--I think it is really
    important, Congressman. The regulations--and I could let my
    colleagues--this really expands the ability of religious groups
    to go, because what we have done is make the religious missions
    part of this, the religious opportunities general license, and
    so we are hoping that there are a lot more religious groups
    that are able to go and see counterparts in Cuba and have that
    interaction.
        In terms of the tolerance for religious freedom in Cuba, I
    certainly hope that there will be an impact certainly by having
    their brethren come and work with them and support them.
        I visit the Jewish community every time I go to Cuba, and I
    visited this time with the church, and there was recently, you
    know, obviously the announcement of a new church to be built, a
    new Catholic church to be built in Cuba, but it is a very
    important part of what we are hoping to stimulate as part of
    civil society.
        Mr. Smith. I could just add to that, that in the past, many
    Americans had to come to OFAC and seek what is called a
    specific license to be able to go to Cuba to engage in
    religious activities, and one of the changes that we made was
    to authorize that in our regulations, which means that people
    may now go to Cuba for religious activities or for religious
    purposes without coming to this government agency to seek
    approval first.
        Mr. Borman. And there are two pieces on our side. One is
    that for those trips that are now generally authorized for
    religious purposes, the things that the travelers want to bring
    with them also can be done under a general authorization rather
    than coming and waiting for a specific authorization from us.
        And another piece of our license exception allows building
    materials to be exported for private sector use, including
    building of churches, for example, again, without individual
    licenses under this general authorization.
        Mr. Clawson. I hope that we will have measurables here. I
    am always worried about bait and switch and using some other
    aspect of the law to really get around things that are
    uncomfortable, and I personally just think it is hard to have a
    meaningful life for a lot of folks if they don't have a
    meaningful religious experience. So I am hoping that the
    administration will follow up here to where we actually see
    meaningful, opening and meaningful religious awakening on the
    island for so many that want it.
        Ms. Jacobson. Thank you, sir.
        Mr. Clawson. I have no more to say. I yield back.
        Ms. Ros-Lehtinen. Thank you, Mr. Clawson.
        Mr. Weber of Texas.
        Mr. Weber. Well, thank you, Madam Chair, and, gentlemen, I
    apologize. You all haven't seemed to be getting a lot of the
    questions, and so let me just ask you all a couple of quick
    questions. Are you all going to be okay while I question her?
        Mr. Borman. Yes, sir.
        Mr. Smith. Yes.
        Mr. Weber. Okay. Thank you very much.
        Ms. Jacobson, let me start out by saying I have really
    appreciated your professionalism and your demeanor and your
    attitude. You have done a good job, and I appreciate that.
        Are the State and Treasury regulations now fully in
    compliance with the intent of Congress, Ms. Jacobson, when it
    passed the Trade Sanctions Reform and Export Enforcement Act of
    2000?
        Ms. Jacobson. Yes, sir, we believe they are.
        Mr. Weber. You believe that they are?
        Going forward, and I understand you said the President
    wants--he doesn't want the dialogue that is happening in
    Congress, and I appreciated Joaquin Castro, my colleague over
    here from Texas' comments earlier about moving forward past the
    current regime. That was an interesting take, but going
    forward, will the ag trade, and I have rice farmers in Texas in
    my district and other producers as well, and five ports. So
    they are very interested in the trade part of this. Will the
    trade of ag products be able to be conducted without a lot of
    input, and some would say interference, from the
    administration?
        Ms. Jacobson. I think that is a great question, and we know
    that there is an enormous amount of interest in that. I
    actually may defer to my colleague on some of this.
        Mr. Weber. They will feel good about that.
        Ms. Jacobson. They will, and it will give me a chance to
    have a little bit of water. So----
        Mr. Weber. Okay. Yes, Mr. Smith.
        Mr. Smith. Well, we made changes in the current set of
    regulations that changed the financing terms to what the ag
    exporters had requested. And so, it should be easier for them
    to be able to send----
        Mr. Weber. Without a lot of red tape?
        Mr. Smith. Without coming in to OFAC for any requirements.
        Mr. Weber. Okay. Good. Mr. Borman, any input?
        Mr. Borman. Well, one thing that we were not able to
    address in our changes were--is the TSRA requirement that there
    be a license that is no more restrictive than a licensed
    exception. So that piece stays in place, but that is a--
    currently a 12-day process.
        Mr. Weber. 12-day process? Okay.
        Mr. Borman. For somebody who wants to make an ag export,
    comes in and waits--submits an application to us and gets an
    answer yes or no in 12 days.
        Mr. Weber. Okay. Well, then other than changing the cash-
    in-hand rule, what other changes in OFAC, do you know, are in
    the offing? Anybody?
        Mr. Smith. When you say other than----
        Mr. Weber. That would actually give us potentially new
    opportunities for ag products in particular.
        Mr. Smith. So the other thing that we did was we allowed
    U.S. banks to establish correspondent accounts at Cuban banks.
    And what helped with that and with the ag trade is, right now
    if you want--an American exporter has to get payment from a
    Cuban exporter, and then it has to go through a third country
    and then come to the United States. Now under this rule, they
    won't. They can pay directly and the payment can be faster and
    easier and make ag exporters more competitive.
        Mr. Weber. Okay.
        Mr. Borman. And then--sorry. I am going to take another
    shot, but I think also the travel general licenses now make it
    easier for people who want to investigate business
    opportunities in the ag sector to go to Cuba without coming in
    and waiting for an OFAC license.
        Mr. Smith. In many of the cases before, exporters would
    have to come into OFAC to seek what is called a specific
    license to travel down there. Now, they don't have to for a
    variety of activities that they would use associated with
    trade, like the marketing and the export, the delivery, all of
    that can be done without coming into us to seek that license.
        Mr. Weber. Okay, that is an improvement, and then, Ms.
    Jacobson, I am going to come back to you. Joaquin asked about
    the dry foot/wet policy. Tell me what that is.
        Ms. Jacobson. It is--the Cuban Adjustment Act allows that
    Cuban citizens who arrive on U.S. soil are permitted to adjust
    their status here and remain, whereas those who may be
    interdicted by the Coast Guard are--if they have no protection
    concerns, may be returned.
        Mr. Weber. That is what I figured. Well, that is my
    questions, and I thank you all for your testimony.
        Ms. Ros-Lehtinen. Thank you very much, Mr. Weber.
        We were going to go to a second round of questions for the
    three of us left in case you wanted to ask another question.
        The chair recognizes herself.
        The Foreign Claims Commission has found that there are
    almost 6,000 U.S. claims that are judged to be qualified for
    compensation by the Castro dictatorship. The adjudicated value
    of those claims, by adding a 6 percent simple interest,
    according to this commission, makes the total principal value
    of American claims to over $8 billion today. I don't think the
    State Department will enforce Helms-Burton by investigating,
    trafficking, and confiscated U.S. property, nor enable U.S.
    property owners to secure compensation for the unauthorized use
    of property subject to a claim.
        Do you think that you will or won't, and I also worry that
    the administration will use our influence to go even further.
    We will--will we try to help Cuba get membership into the World
    Bank? Into the IMF? Into the IDB? Other multilateral
    development banks? And will we prevent any assistance, any
    financing, or any other benefit from these institutions until
    U.S. property claims have been resolved to the satisfaction of
    American owners?
        And, lastly, if you could tell us what are the three
    conditions according to U.S. law under Helms-Burton for the
    embargo to be lifted, and I know the President is going to
    present us legislation to free up the embargo, what of those
    three conditions have been met that would satisfy the embargo--
    or justify the embargo being lifted?
        So first on the claims on what we are going to do, if we
    are going to help Cuba get into these organizations, and then
    the three conditions under Helms-Burton?
        Ms. Jacobson. Let she start out by saying I have been
    cognizant of the importance of resolution of the claims issues
    and the judgements from the very beginning of this process. It
    is very important that those be resolved. The State Department
    as well as other government agencies, the Justice Department
    under which the Autonomous Foreign Claims Settlement Commission
    acted to adjudicate and assign values to those claims. We
    believe very strongly that that has to be part of future
    conversations over the next years, however long normalization
    may take. Those are extremely difficult, obviously, to have
    with any foreign government as those commissions' dealings have
    proven, but we intend to pursue that certainly as part of our
    discussion. I raised that in the very first conversation
    knowing that we weren't going to talk about it that day deeply,
    but it must be part of full normalization.
        Second, on the international financial institutions, there
    is obviously very specific language in the law about this. We
    feel that we are not in a position right now where Cuba is, you
    know, eligible for membership, certainly, and there are lots
    of----
        Ms. Ros-Lehtinen. You say right now. Do you foresee that
    Cuba will be moving in that direction?
        Ms. Jacobson. I think, Madam Chairman, we all hope for the
    day when there would be logical membership, because it will be
    a free and open Cuba with an open economic system that would be
    a logical member, but I don't know exactly at what point. We
    also hope that at some point in the future, they may ask for
    help to open their system. They are not right now. So----
        Ms. Ros-Lehtinen. But just as we said that we weren't going
    to swap spies and we did, even though you--a rose by any other
    name, but you call it something else, will we be advocating for
    Cuba's inclusion in these international organizations that
    would allow it to give it credit to continue to oppose the
    people?
        Ms. Jacobson. We are not advocating for their membership,
    but we also want to make sure that at some point in time, it
    may be useful to have organizations like the IMF, not give them
    help, but help them open their economy, which is what they do.
        Ms. Ros-Lehtinen. Because we are keeping them--these
    institutions are keeping them from opening the economy.
        Ms. Jacobson. No, no, no, but they don't necessarily have--
    --
        Ms. Ros-Lehtinen. Let's go to the three conditions under
    Helms-Burton. What are the three conditions that would allow
    the lifting of the embargo, and what of those three have been
    met by the Castro regime?
        Ms. Jacobson. I am sorry. I don't have them in front over
    me. The three conditions in the legislation?
        Ms. Ros-Lehtinen. Well, I hope that when you are
    negotiation with the Castro regime you keep in mind U.S. law.
    U.S. law is the LIBERTAD Act of 1996. The President is calling
    for the lifting of the embargo. Please go and check that out,
    because that is U.S. law, and we are hoping that you will abide
    by that.
        Ms. Jacobson. Absolutely.
        Ms. Ros-Lehtinen. And with that, Mr. Clawson has a follow-
    up question.
        Mr. Clawson. I believe that good leadership requires all
    stakeholders to be taken into account. Companies go off track
    when they only think about shareholders, and in government, I
    think it is even more important that we keep all stakeholders
    take them into account and that they are consulted. This felt
    like a sad decision to me because it seemed to bypass a normal
    conversation with all stakeholders with respect to Cuba,
    stakeholders that live in our country, family members and
    others that got surprised, as you did as stakeholders that work
    on the front line, and I kind of want to be on the record on
    that, because I think when we bypass stakeholders, we make
    unfair decisions that are narrow in their bandwidth, and this
    doesn't feel--this decision doesn't feel fair because of the
    process or lack of process that we went through to get here
    surprising people that have stakes in the game of Cuba. So I
    wanted to be on the record on that.
        I also think makes your job on the front lines a lot more
    difficult, and I can't imagine surprising folks that work for
    me, bypassing them and cutting a deal with somebody that--
    without them knowing it. It feels like that undercuts your
    authority in the future, and maybe you see that different, but
    I just don't know how that is not the case.
        So I want to say thank you for hanging in there. I think
    your jobs just got tougher, not easier, and I want to express
    my appreciation for you all and the service you do our country,
    and even in times made more difficult like now by leadership,
    and then along those lines I want to say thanks for hanging in
    there today. It is not easy coming up here, and, you know, you
    get it from both sides in our case. So you seem to have done it
    with humor and hung in there and kept your, you know, your
    sense of humor here, and for that, most of all, I express my
    appreciation to you all for making time for us. Thank you.
        Ms. Ros-Lehtinen. Gentleman yields back, and I request
    unanimous consent to submit for the record a letter from South
    Florida State and Local Elected Officials to President Obama to
    express their profound disappointment over the December 17th
    announcement, an Agreement for Democracy in Cuba, which is a
    10-point roadmap from the people of Cuba toward a real
    transition to democracy, op eds from the former staff director
    of this committee, Dr. Yleem Poblete, and questions for the
    record from Congressman Mario Diaz-Balart. And with that, our
    committee is adjourned.
        [Whereupon, at 12:47 p.m., the committee was adjourned.]

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