US embassy cable - 05MADRID2131

C O N F I D E N T I A L SECTION 01 OF 02 MADRID 002131 
 
SIPDIS 
 
DEPARTMENT FOR EUR/WE AND WHA/CCA 
 
E.O. 12958: DECL: 06/06/2015 
TAGS: ETRD, ETTC, PREL, CU, SP 
SUBJECT: SPAIN/CUBA: TITLE III OF THE LIBERTAD ACT 
 
REF: A. A) SECSTATE 96300 
     B. B) MADRID 2114 
     C. C) 2004 MADRID 4554 
 
Classified By: Political Counselor Kathy Fitzpatrick; reasons 1.4 (B) a 
nd (D) 
 
1. (U) Spain is among the most important foreign investors in 
Cuba and the ruling Socialist party has continued the Popular 
Party's policy of encouraging further investment and trade 
with Cuba.  On human rights issues, the GOS has broken with 
the Aznar administration's emphasis on support for democracy 
activists in favor of seeking greater dialogue with the 
Castro regime.  Within the EU, Spain successfully advocated 
the suspension of the EU's policy of inviting dissidents to 
EU national day events, calling the invitations a major 
impediment to normal contact with the Cuban authorities. 
 
2. (C) The EU decision to suspend the Restrictive Measures 
will be reviewed this month in Brussels and the GOS will 
likely try to claim that the suspension has had a positive 
effect in Cuba and should be maintained (Ref B).  Spanish 
officials claim that their policy of engagement won the GOC's 
release of 14 political prisoners in 2004, as well as the 
GOC's decision to allow former political prisoner Raul Rivero 
to exit Cuba (and take up residence in Spain) and to permit 
the May 20 opposition gathering in Havana to take place.  The 
GOS also takes credit for two meetings in Havana in the first 
six months of 2005 between EU chiefs of mission and Cuban 
opposition figures.  MFA officials insist that these 
meetings, part of what they describe as a "structured 
dialogue" between the EU and Cuban democracy activists, are 
important symbols of EU support for human rights and 
democratic reforms in Cuba. 
 
3. (C) Post continues to engage GOS interlocutors to convey 
the USG's strong concern that increased EU engagement with 
the regime has strengthened, not weakened, Castro's hold on 
political power at the expense of the opposition.  However, 
it is not likely that the Zapatero government will veer from 
its current Cuba policy in the near to medium term.  Madrid 
has a substantial political and economic stake in Cuba and 
appears resigned to Castro's continued leadership. 
Therefore, Zapatero will continue to favor a strategy that 
limits the possibility of EU conflict with Castro and will 
subordinate human rights concerns to its broader interests. 
The GOS will also seek to maintain its role as the key EU 
interlocutor with Havana.  Cuban Foreign Minister Felipe 
Perez Roque visited Madrid in March to meet with high level 
GOS officials, including President Zapatero and Fidel Castro 
has been invited to participate in the Ibero American Summit 
in Salamanca, Spain in October.  While some in Spain, 
including the Popular Party, oppose this increased level of 
engagement, all political forces would oppose the 
implementation of Title III of the Libertad Act with regard 
to Spanish companies. 
 
4. (U) Spanish businesses are well aware of the potential of 
U.S. legal action against them under the Libertad Act and 
take care to obscure precise invormation regarding their 
investments in Cuba.  However, we have obtained the following 
general information regarding the major Spanish investors in 
Cuba: 
 
-- Grupo Sol Melia: Hotel/Tourism industry.  Locations in 
Cuba include Havana, Varadero, Cayo Largo, Cayo Santa Maria, 
Ciego de Avila, Cayo Largo del Sur, Cayo Guillermo, Playa 
Esmeralda, and Santiago de Cuba.  The total investment amount 
is unknown, but press reports indicate Sol Melia will invest 
USD 50 million in two hotels in 2004-2005. 
 
-- Inversiones Ibersuizas: Commercial investment firm. 
Investments in Cienfuegos and Santiago de Cuba.  According to 
press reports, Inversiones Ibersuizas has invested a total of 
USD 150 million in various Cuban projects. 
 
-- Occidental Hotels and Resorts: Hotel/Tourism.  Investments 
in Havana and Play Yuraguanal.  Investment amount unknown. 
 
-- Grupo Pinero: Hotel/Tourism.  Investment in Varadero. 
Investment of at least USD 2 million, according to press 
reports. 
 
-- Iberostar: Hotel/Tourism.  Investments in Varadero, Cayo 
Coco, and Trinidad.  Investment amount unknown. 
 
-- Barcelo: Hotel/Tourism.  Investments in Varadero and Cayo 
Largo del Sur.  Investment amount unknown. 
 
-- NH Hoteles: Hotel/Tourism.  Investment in Havana. 
Investment amount unknown. 
 
-- Grupo Riu: Hotel/Tourism.  Investment in Varadero. 
Investment amount unknown. 
 
-- Hotetur: Hotel/Tourism.  Investment in Varadero and 
Havana.  Investment amount unknown. 
 
-- Aguas de Barcelona: Utility.  Investment in Havana in 
joint venture with Aguas de La Habana.  Investment of at 
least EUROS 5 million in 2002.  Subsequent investment amounts 
unknown. 
 
-- Grupo Altadis: Tobacco.  Unspecified location. Investment 
amount unknown 
 
-- Grupo Freixenet: Wine/Alcoholic Beverages. Unspecified 
location.  According to press reports, Freixenet has invested 
USD 200,000 to help the Cuban wine industry. 
-- Repsol YPF: Energy.  Investment in Cuban territorial 
waters.  According to press reports, total Repsol investment 
is USD 25-40 million. 
 
-- Iberia Airlines: Transportation industry.  Investment in 
Varadero.  Investment amount unknown. 
 
 
 
MANZANARES