Diplomatic Briefing

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Newsline: U.S. punishes American firm after its Canadian subsidiary leases cars to Cuban embassy in Ottawa

U.S. President Donald Trump rolled back some of the key measures of his predecessor’s rapprochement with Cuba, making it harder for American tourists to travel to the island, and harder for American corporations to do business there. That move was immediately met with a rebuke from Canada’s Prime Minister Justin Trudeau. But as a recent case in Ottawa illustrates, American sanctions against Cuba don’t only affect Americans or American businesses. The U.S. Office of Foreign Assets Control announced it had reached a settlement with the American Honda Finance Corporation — the institution that finances the sale and leases of Hondas and Acuras in North America. The civil liability settlement requires the company to hand over $87,255 US for violating the sanctions. The American Honda Finance Corporation is based in California, and the fine will likely be paid in the U.S., but the transaction that brought it on occurred in Canada. The cause of the dispute is a series of 13 lease agreements between Honda Canada Finance, Inc. — a majority-owned subsidiary of the American Honda Finance Corporation — and the Cuban Embassy in Ottawa. According to a notice published by the U.S. Treasury, the 13 leases were signed between Feb. 2011 and March 2014. Under U.S. law, the fact that a U.S. company was a majority shareholder of Honda Canada Finance makes the transaction subject to U.S. sanctions — even though both the lessor and the lessee were in Canada. In a statement, the Cuban government argued that the fine “not only hampers the work of Cuban diplomats in a third country, but also harms Canadian citizens and companies that maintain relations with Cuban entities.” Brittany Venhola-Fletcher of Global Affairs Canada told CBC News the sanction constitutes interference with a Canadian business transaction. “Canada has consistently opposed the extraterritorial application of United States sanctions, which interfere with the right of Canadian companies to conduct their business in a manner consistent with international trade practice and the laws of Canada.” The U.S. Embassy in Ottawa referred CBC to the U.S. Treasury Department in Washington, which did not return calls about the sanction. It’s not clear whether the Cuban Embassy in Ottawa still leases vehicles from Honda.

https://ca.news.yahoo.com/u-punishes-american-firm-canadian-090000381.html

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