Analysis: Is there anything ‘new’ in Cuba’s new foreign investment law?
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By José Manuel Pallí, Esq.
For the past few days, everyone, in and out of Cuba, has been commenting
on a law — Cuba’s ‘new’ foreign investment law — no one seems to have
fully read yet.
An American friend from Massachusetts, finding me all worked-up with
that very same topic, wistfully asked me why on earth is that law so
important when, on the one hand, Cuba remains a small communist country
where few would entertain investing in, and, on the other hand, it is
forbidden to us in the United States to invest in it anyways. I
explained to him, who is spending his annual swallow stay in Miami, that
this is not America: this is “Cuban America” (where else in the USA
would you need to clarify that your friend is “an American”?…).
Is my friend right? Is this just much ado about nothing? The “normal”
source for seeking confirmation or advice in this regard should be any
of those colleagues of mine who practice law in Cuba, many of them
excellent lawyers who I presume are behind some of the changes the new
law may entail, since I know first-hand of their concern with the
excessive “administrativización” (what we call bureaucratization) of
Cuba’s laws, and this is one field where Cuban bureaucrats have, for
years, run amok.
And yet, here I am, a Florida lawyer who happens to also be a lawyer in
Argentina (and seldom writes about Floridian or Argie laws) writing
about Cuban laws. Why? Because, on the one hand, my colleagues in Cuba
(whose collective voice is only heard behind heavy curtains there) are
as eerily quiet as ever, and on the other hand “Cuban America” prevents
the rest of the country from having the kind of “normal” relation with
Cuba, its people and its laws that it could and should have.
In any event, no lawyer, whether in Cuba or here, can seriously comment
on any given law without first reading the full text of it. In the case
of Cuba’s foreign investment law, the text based on which valid comments
could be made is the one published in Cuba’s Gaceta Oficial, and such
publication is still pending.
It could also prove useful to read the law, once it is published and
becomes “the” law, in the context of the other documents Cuba has
announced as companions to the law itself, a Reglamento or regulatory
act (an improvement on the previous foreign investment law, which
lacked one) and a series of “sectorial policies” that will serve as a
guide to what kind of foreign investment Cuba is likely to welcome in
any given sector of its economy, since what we presently “know” about
the law indicates the Cuban government’s approval to most foreign
investments is still a requirement (as it is in many other countries)
and remains highly discretionary. Diluted administrativización may be in
store, but not the kind that would get Cuba a Top 10 ranking in any
among the plethora of indexes that grade (mostly arbitrarily) the
different nations’ environment for business purposes.
The fact is Cuba’s previous foreign investment law (enacted in 1995) is
not a bad law at all, although as is the case with all laws, if it is
not applied to all those subject to it in a fair and unprejudiced way,
it is irrelevant, no matter how well crafted. It does have a chapter
(the 11th) that is a ridiculous attempt to put a corset on labor
relations between foreign investors and their Cuban employees, and I am
still hoping to see it gone by the time I get to read the law published
at the Gaceta Oficial de Cuba (little more than a wishful thought of
mine, I know…).
But if most of the comments and analysis already made regarding this
“new” law — both in Cuba and here in Miami — based on a draft version
prove to be accurate, I am afraid it may all end up being much ado about
nothing indeed, and even give the hardliners who have historically
driven U.S. policy towards Cuba, and who absurdly claim all changes
Cuba has made over the past six years to its socio-economic model are
cosmetic in nature, new ammunition to preserve the status quo. If this
is all there is to it, the Miami Herald’s headline once the law is
published may well read:
“Cuba’s “new” foreign investment law: brought to you by Revlon”…
Source: Analysis: Is there anything ‘new’ in Cuba’s new foreign
investment law? « Cuba Standard, your best source for Cuban business