Another 3 business men jailed in Cuba under dubious circumstances

Why Western businessmen doing business with the Castro regime are on a fool's errand.

Automobile executive Cy Tokmakjian sentenced to 15 years prison in Cuba

On Saturday, September 28, 2014 the news came out that a Cuban court had sentenced Canadian executive Cy Tokmakjian to 15 years in prison on corruption charges. The sentence amounts to a life sentence. Cy Tokmakjian is currently 74 years old and has been jailed in Cuba since 2011. Two other executives from the Tokmakjian Group - Canadians Claudio Vetere and Marco Puche - were sentenced to eight and 12 years in prison.

The Tokmakjian Group, of which Cy was the chief executive officer (CEO) said the court had seized its assets in Cuba, worth about $100 million. The company went on to say that the entire process fell short of international due process standards:

"Lack of due process doesn't begin to describe the travesty of justice that is being suffered by foreign businessmen in Cuba."

This is not the first time that this has happened, and there is a systematic method to the Castro regime's madness. The judicial system in Cuba is not independent and is subject to the whims of the dictatorship under guidelines following a communist Soviet model. Human Rights Watch describes the reality of the Cuban legal system:

The Constitution of the Republic of Cuba explicitly states that the courts are "subordinate in the line of authority to the National Assembly... and the Council of State," a supreme executive branch body, and that the Council of State may issue the courts instructions. This structure robs Cuban courts of even the semblance of independence and impartiality.

British investor Stephen Purvis smiles on way to trial in Cuba

Since the rule of law does not exist in Cuba the question that arises is what is the political calculation for the dictatorship? British investor, Stephen Purvis, who was jailed for 15 months and who the Castro regime confiscated 17.3 million dollars of his company's assets in an August 2013 letter to The Economist explained what may be behind these arrests:

I spent time with a number of foreign businessmen arrested during 2011 and 2012 from a variety of countries, although representatives from Brazil, Venezuela and China were conspicuous in the absence. Very few of my fellow sufferers have been reported in the press and there are many more in the system than is widely known. As they are all still either waiting for charges, trial or sentencing they will certainly not be talking to the press. Whilst a few of them are being charged with corruption many are not and the accusations range from sabotage, damage to the economy, tax avoidance and illegal economic activity. It is absolutely clear that the war against corruption may be a convenient political banner to hide behind and one that foreign governments and press will support. But the reasons for actively and aggressively pursuing foreign business are far more complicated.  Why for example is the representative of Ericsson in jail for exactly the same activities as their Chinese competitor who is not? Why for example was one senior European engineer invited back to discuss a potential new project only to be arrested for paying technical workers five years ago when he was a temporary resident in Cuba?

A more fundamental question for investors in places like Cuba and North Korea is: "What were you thinking?" Cuba is a communist dictatorship and by definition communism argues for abolishing all private property, and claims that everything that is owned is owned by all members of society. In practice this means that it is "owned" by a governing elite and in the case of Cuba this means the Castro family and a small ruling clique overseeing a huge fortune.

If you want to experience human rights abuses in a communist prison then doing business in Cuba or North Korea is probably a good idea otherwise it seems to be a fool's errand.