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Tuesday, May 31, 2011

Cuba’s Offshore Oil Development: Background and U.S. Policy Considerations


Neelesh Nerurkar
Specialist in Energy Policy

Mark P. Sullivan
Specialist in Latin American Affairs


Cuba is moving toward development of its offshore oil resources. While the country has proven oil reserves of just 0.1 billion barrels, the U.S. Geological Survey estimates that offshore reserves in the North Cuba Basin could contain an additional 4.6 billion barrels of undiscovered technically recoverable crude oil. The Spanish oil company Repsol, in a consortium with Norway’s Statoil and India’s Oil and Natural Gas Corporation, is expected to begin offshore exploratory drilling in 2011, and a number of other companies are considering exploratory drilling. At present, Cuba has six offshore projects with foreign oil companies. If oil is found, some experts estimate that it would take at least three to five years before production would begin. While it is unclear whether offshore oil production could result in Cuba becoming a net oil exporter, it could reduce Cuba’s current dependence on Venezuela for oil supplies.

In the aftermath of the Deepwater Horizon oil spill in the Gulf of Mexico, some Members of Congress and others have expressed concern about Cuba’s development of its deepwater petroleum reserves so close to the United States. They are concerned about oil spill risks and about the status of disaster preparedness and coordination with the United States in the event of an oil spill. Dealing with these challenges is made more difficult because of the longstanding poor state of relations between Cuba and the United States. If an oil spill did occur in the waters northwest of Cuba, currents in the Florida Straits could carry the oil to U.S. waters and coastal areas in Florida, although a number of factors would determine the potential environmental impact. If significant amounts of oil did reach U.S. waters, marine and coastal resources in southern Florida could be at risk.

With regard to disaster response coordination, the United States and Cuba are not parties to a bilateral agreement on oil spills. While U.S. oil spill mitigation companies can be licensed by the Treasury and Commerce Departments to provide support and equipment in the event of an oil spill, some energy and policy analysts have called for the Administration to ease regulatory restrictions on the transfer of U.S. equipment and personnel to Cuba that would be needed to combat a spill. Some have also called for more formal U.S.-Cuban government cooperation and planning to minimize potential damage from an oil spill. Similar U.S. cooperation with Mexico could be a potential model for U.S.-Cuban cooperation, while two multilateral agreements on oil spills under the auspices of the International Maritime Organization also could provide a mechanism for some U.S.-Cuban engagement on oil pollution preparedness and response.

To date in the 112th Congress, two legislative initiatives have been introduced taking different approaches toward Cuba’s offshore oil development. H.R. 372 would authorize the Secretary of Interior to deny oil leases and permits to those companies that engage in activities with the government of any foreign country subject to any U.S. government sanction or embargo. S. 405 would require companies conducting oil operations off the coast of Cuba to submit an oil response plan for their Cuba operations if they wanted to lease drilling rights in the United States. The bill would also require the Secretary of the Interior to begin efforts toward the development and implementation of oil spill response plans for nondomestic oil spills in the Gulf of Mexico, including recommendations on joint contingency plan with Mexico, Cuba, and the Bahamas. For additional information on Cuba, see CRS Report R41617, Cuba: Issues for the 112th Congress.



Date of Report: May 20, 2011
Number of Pages: 21
Order Number: R41522
Price: $29.95

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Friday, May 27, 2011

Latin America and the Caribbean: Illicit Drug Trafficking and U.S. Counterdrug Programs


Clare Ribando Seelke, Coordinator
Specialist in Latin American Affairs

Liana Sun Wyler
Analyst in International Crime and Narcotics

June S. Beittel
Analyst in Latin American Affairs

Mark P. Sullivan
Specialist in Latin American Affairs


Drug trafficking is viewed as a primary threat to citizen security and U.S. interests in Latin America and the Caribbean despite decades of anti-drug efforts by the United States and partner governments. The production and trafficking of popular illicit drugs—cocaine, marijuana, opiates, and methamphetamine—generate a multi-billion dollar black market in which Latin American criminal and terrorist organizations thrive. These groups challenge state authority in source and transit countries where governments are often fragile and easily corrupted. Mexican drug trafficking organizations (DTOs) largely control the U.S. illicit drug market and have been identified by the U.S. Department of Justice as the “greatest organized crime threat to the United States.” Drug trafficking-related crime and violence in the region has escalated in recent years, raising the drug issue to the forefront of U.S. foreign policy concerns.

Since the mid-1970s, the U.S. government has invested billions of dollars in anti-drug assistance programs aimed at reducing the flow of Latin American-sourced illicit drugs to the United States. Most of these programs have emphasized supply reduction tools, particularly drug crop eradication and interdiction of illicit narcotics, and have been designed on a bilateral or subregional level. Many would argue that the results of U.S.-led drug control efforts have been mixed. Temporary successes in one country or sub-region have often led traffickers to alter their cultivation patterns, production techniques, and trafficking routes and methods in order to avoid detection. As a result of this so-called “balloon effect,” efforts have done little to reduce the overall availability of illicit drugs in the United States. In addition, some observers assert that certain mainstays of U.S.-funded counterdrug programs, particularly aerial spraying to eradicate drug crops, have had unintended social and economic consequences.

The Obama Administration has continued U.S. support for Plan Colombia and the Mérida Initiative, but is gradually broadening the focus of those aid packages to focus more on citizen security and institution-building, rather than mainly prioritizing drug supply control efforts. Newer programs like the Caribbean Basin Security Initiative (CBSI) and the Central American Regional Security Initiative (CARSI) include an emphasis on rule of law, anti-corruption, and community and youth development programs. The Administration has appointed a coordinator within the State Department to oversee the aforementioned assistance packages, which it has termed “citizen security programs,” and is developing a comprehensive Western Hemisphere Counterdrug Strategy. In order to complement these international efforts, President Obama and his top advisers have acknowledged the role that U.S. drug demand has played in fueling the drug trade in the region and requested increased funding for prevention and treatment programs.

Congress has influenced U.S. drug control policy in Latin America by appropriating certain types and levels of funding for counterdrug assistance programs and conditioning the provision of antidrug funding on the basis of human rights and other reporting requirements. Congress has also sought to ensure that counterdrug programs are implemented in tandem with judicial reform, anti-corruption, and human rights programs. The 112
th Congress has held hearings evaluating drug assistance programs and related domestic initiatives and border security efforts.

This report provides an overview of the drug flows in the Americas and U.S. antidrug assistance programs in the region. It also raises some policy issues for Congress to consider as it exercises oversight of U.S. antidrug programs and policies in the Western Hemisphere.



Date of Report: May 12, 2011
Number of Pages: 44
Order Number: R41215
Price: $29.95

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Wednesday, May 25, 2011

Cuba: U.S. Restrictions on Travel and Remittances


Mark P. Sullivan
Specialist in Latin American Affairs

Restrictions on travel to Cuba have been a key and often contentious component in U.S. efforts to isolate Cuba’s communist government since the early 1960s. Under the George W. Bush Administration, restrictions on travel and on private remittances to Cuba were tightened. In March 2003, the Administration eliminated travel for people-to-people educational exchanges unrelated to academic coursework. In June 2004, the Administration further restricted family and educational travel, eliminated the category of fully-hosted travel, and restricted remittances so that they could only be sent to the remitter’s immediate family. Initially there was mixed reaction to the Administration’s June 2004 tightening of Cuba travel and remittance restrictions, but opposition to the policy grew, especially within the Cuban American community regarding the restrictions on family travel and remittances.

Under the Obama Administration, Congress took action in 2009 to ease some restrictions on travel to Cuba by including two provisions in the FY2009 omnibus appropriations measure (P.L. 111-8), which President Obama signed into law on March 11, 2009. The first provision eased restrictions on family travel, which the Treasury Department implemented by issuing a general license for such travel as it existed prior to the Bush Administration’s tightening of family travel restrictions in 2004. The second provision eased travel restrictions related to the marketing and sale of agricultural and medical goods to Cuba, and required the Treasury Department to issue a general license for such travel. Subsequently, in April 2009, President Obama announced that his Administration would go further and allow unlimited family travel and remittances. Regulations implementing these changes were issued in September 2009. The new regulations also included the authorization of general licenses for travel transactions for telecommunications-related sales and for attendance at professional meetings related to commercial telecommunications.

In January 2011, the Obama Administration announced a series of policy changes further easing restrictions on travel and remittances to Cuba. The measures (1) increase purposeful travel to Cuba related to religious, educational, and people-to-people exchanges; (2) allow any U.S. person to send remittances to non-family members in Cuba and make it easier for religious institutions to send remittances for religious activities; and (3) permit all U.S. international airports to apply to provide services to licensed charter flights to and from Cuba. These new measures, with the exception of the expansion of eligible airports, are similar to policies that were undertaken by the Clinton Administration in 1999, but were subsequently curtailed by the Bush Administration in 2003 and 2004.

Interest in the issue of Cuba travel and remittances is continuing in the 112
th Congress, and several initiatives have been introduced that would lift restrictions on these activities. H.R. 1886 would prohibit restrictions on travel to Cuba. H.R. 1888, in addition to removing some restrictions on the export of U.S. agricultural products to Cuba, would also prohibit Cuba travel restrictions. Two initiatives that would lift the overall Cuba embargo, H.R. 255 and H.R. 1887, also would lift restrictions on travel and remittances to Cuba. H.R. 380 would prohibit the Treasury Department from making any funds to implement, administer, or enforce regulations requiring specific licenses for travel-related transactions directly related to educational activities in Cuba. (For further information, see CRS Report R41617, Cuba: Issues for the 112th Congress.)


Date of Report: May 17, 2011
Number of Pages: 38
Order Number: RL31139
Price: $29.95

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Friday, May 20, 2011

Panama: Political and Economic Conditions and U.S. Relations


Mark P. Sullivan
Specialist in Latin American Affairs

With five successive elected civilian governments, the Central American nation of Panama has made notable political and economic progress since the 1989 U.S. military intervention that ousted the regime of General Manuel Noriega from power. Current President Ricardo Martinelli of the center-right Democratic Change (CD) party was elected in May 2009, defeating the ruling center-left Democratic Revolutionary Party (PRD) in a landslide. Martinelli was inaugurated to a five-year term on July 1, 2009. Martinelli’s Alliance for Change coalition also captured a majority of seats in Panama’s National Assembly. Panama’s service-based economy has been booming in recent years, largely because of the ongoing Panama Canal expansion project (slated for completion in 2014), but economic growth slowed in 2009 because of the global financial crisis and U.S. economic recession. Nevertheless, the economy rebounded in 2010, with a growth rate approaching 7%, and strong growth is continuing in 2011.

President Martinelli retains high approval ratings, but he has been criticized by some civil society groups for taking a heavy-handed approach toward governing and for not being more consultative. The country experienced labor unrest in July 2010 after the government approved legislation that would have weakened labor laws in several respects, but the government ultimately agreed to repeal the provisions. In February 2011, the government amended the country’s mining code to facilitate foreign investment. Indigenous groups protested the law even though President Martinelli vowed that his administration would not approve any mining concessions in indigenous areas. Ultimately, in early March 2011, President Martinelli called for the repeal of the law.

The United States has close relations with Panama, stemming in large part from the extensive linkages developed when the Canal was under U.S. control and Panama hosted major U.S. military installations. The current relationship is characterized by extensive counternarcotics cooperation; support to promote Panama’s economic, political, and social development; and a proposed bilateral free trade agreement (FTA). U.S. bilateral assistance amounted to $7.3 million in FY2010 while the FY2011 request is for $10.6 million and the FY2012 request for $2.6 million. This funding does not include assistance in FY2008 and FY2009 under the Mérida Initiative to assist Central American countries in their efforts to combat drug trafficking, gangs, and organized crime; beginning in FY2010, Panama has been receiving assistance under the successor Central America Regional Security Initiative.

The United States and Panama signed a bilateral FTA in June 2007, and Panama’s National Assembly approved the agreement in July 2007. Neither the 110
th nor the 111th Congress considered the agreement, but the 112th Congress could consider the agreement this session. Issues that have raised congressional concern relate to worker rights and to Panama’s tax transparency. In the 112th Congress, several measures have been introduced that would express support for the FTA with Panama: S.Res. 20 (Johanns) and S. 98 (Portman), both introduced January 25, 2011; and H.Res. 86 (Frelinghuysen), introduced February 11, 2011. For additional information, see CRS Report RL32540, The Proposed U.S.-Panama Free Trade Agreement; CRS Report R40622, Agriculture in Pending U.S. Free Trade Agreements with Colombia, Panama, and South Korea; CRS Report RL34112, Gangs in Central America; and CRS Report R41731, Central America Regional Security Initiative: Background and Policy Issues for Congress.


Date of Report: May 11, 2011
Number of Pages: 33
Order Number: RL30981
Price: $29.95

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Haiti’s National Elections: Issues and Concerns

Maureen Taft-Morales
Specialist in Latin American Affairs

In proximity to the United States, and with such a chronically unstable political environment and fragile economy, Haiti has been a constant policy issue for the United States. Congress views the stability of the nation with great concern and commitment to improving conditions there. Both Congress and the international community have invested significant resources in the political, economic, and social development of Haiti, and will be closely monitoring the election process as a prelude to the next steps in Haiti’s development. For the past 25 years, Haiti has been making the transition from a legacy of authoritarian rule to a democratic government. Elections are a part of that process. In the short term, elections have usually been a source of increased political tensions and instability in Haiti. In the long term, elected governments in Haiti have contributed to the gradual strengthening of government capacity and transparency.

Haiti is currently approaching the end of its latest election cycle. Like many of the previous elections, the current process has been riddled with political tensions, allegations of irregularities, and violence. The first round of voting for president and the legislature was held on November 28, 2010. That vote was marred by opposition charges of fraud, reports of irregularities, and low voter turnout. When the electoral council’s preliminary results showed that out-going President Rene Préval’s little-known protégé, and governing party candidate, Jude Celestin, had edged out a popular musician for a spot in the runoff elections by less than one percent, three days of violent protests ensued. Tensions rose as people waited to see which candidates would proceed to the second round, whether Préval would continue in office beyond the constitutional expiration of his term, or if some sort of provisional government would have to be established.

The Haitian government asked the Organization of American States (OAS) for help and delayed releasing final results, which were due out December 20, 2010, to give the OAS team of international elections experts enough time to investigate and verify the process. The team gave President Préval a report with its recommendations on January 13, 2011. The Haitian Provisional Electoral Council (CEP) released the final results of the first round of voting on February 3, sending Mirlande Manigat, a constitutional lawyer and university administrator, and Michel “Sweet Micky” Martelly, a popular singer, to the run-off race. The governing party’s candidate was eliminated from the race by a narrow margin.

After months of dispute, the second round of elections took place on March 20, 2011. The OAS electoral observation mission reported that the second round was more organized and peaceful than the first, and that incidents of ballot stuffing and voter intimidation were isolated. When final results were announced on April 16, controversy again erupted, this time over legislative races. The OAS/CARICOM mission demanded that the results for 19 legislative districts be annulled, after the CEP’s final tallies changed the outcome in favor of the ruling Inite party. The outcome of the presidential race was not challenged, and Michel Martelly is set to be sworn into office May 14.

The United States is providing $14 million in election support through the U.S. Agency for International Development (USAID). The Obama Administration considers Haiti its top priority in the Latin American and Caribbean region.

This report provides an overview of the controversies surrounding the first round of voting in late 2010, and concerns related to the second and final round of the elections. In addition to ongoing issues regarding the legitimacy of the March 20 elections, other questions have raised concerns

within the international community and Congress. These include the destabilizing presence of former dictator Jean-Claude “Baby Doc” Duvalier, and former President Jean-Bertrand Aristide, and the newly elected government’s ability to handle the complex post-earthquake reconstruction process and its relationship with the donor community.


Date of Report: May 11, 2011
Number of Pages: 21
Order Number: R41689
Price: $29.95

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