OFAC fines U.S. companies for buying explosives from Cuban military

The Office of Foreign Assets Control (OFAC) of the U.S. Treasury Department fined two companies for doing business with the Unión Latinoamericana de Explosivos (Ulaex), belonging to the Cuban military consortium Grupo de Administración Empresarial, S.A. (Gaesa), the entity informed on Thursday.

OFAC revealed the economic agreements reached with Newmont Corporation and Chisu International Corporation for the purchase of explosives manufactured by Ulaex S.A., a company of the Ministry of the Revolutionary Armed Forces of Cuba (Minfar).

The Cuban company is managed by Gaesa, whose executive president is Major General Luis Alberto Rodríguez López-Calleja, Raúl Castro's son-in-law sanctioned by the United States, and "senior advisor" to President Miguel Díaz-Canel.

OFAC announced a $141,442 settlement with Newmont, a multinational mining company based in Denver, Colorado. The company "has agreed to resolve potential civil liability for four apparent violations of the Cuban Assets Control Regulations (CACR)." Between June 2016 and November 2017, the Newmont Suriname subsidiary purchased explosives and detonation accessories of Cuban origin.

OFAC will also receive $45,908 for the same reason from Chisu, a company located in Parkland, Florida, which is affiliated with a distributor of explosives and accessories for mining operations.

"Between June 2016 and November 2017, Chisu and its subsidiaries in Suriname and Panama purchased Cuban-origin explosives and related accessories originating from the Cuban entity Unión Latinoamericana de Explosivos (Ulaex) on four occasions on behalf of a U.S. company for the U.S. company's mining project in Suriname," OFAC stated.

According to the Procuba Commercial Directory, Ulaex S.A. is a joint venture between Gaesa and the Canadian company Orica Mining Services. It is directed by Reinaldo Guerrero Fernández and "has been supplying for 24 years to the Ministry of Construction, the Ministry of Energy and Mines, the Ministry of Tourism" and other entities of the Cuban domestic market. It also sells electric and non-electric detonators, industrial explosives, blasting accessories, and other products in the Central American and Caribbean market.

Ulaex S.A. has been operating since 1995 and has its production plant in the town of La Campana, in the municipality of Manicaragua in Villa Clara province, the state-owned economic weekly Opciones reported in 2012. At that time, "more than eight countries in Central America and the Caribbean" used its products and services, especially Grand Cayman, Panama, St. Vincent and the Grenadines, and Suriname.