Doing Business in Cuba is Easy, Staying Out of Jail is Hard

canadian-transport-executive-cy-tokmakjian-holds-hands-with-his-wife-helen-in-an-undated-family-photo-released-to-reuters-in-toronto-september-29-2014-reutersraffi-tokmakjianhandout-via-reuters

Before any Chamber of Commerce types flock down to Cuba to cash in on all that slave labor, there’s one thing they might want to remember.

Communist dictatorships like money. They don’t like capitalist pigs. They’re also corrupt and if you fail to pay off the right guy at the right time, no matter how many autographed photos of Fidel you have hanging on the wall, you’ll be eating bread and water, if you can get it, for the rest of your life.

Because this isn’t America. Canadian businessmen like Cy Tokmakjian found that out the hard way.

A Cuban court has sentenced Canadian executive Cy Tokmakjian to 15 years in prison. Two of his aides received sentences of 12 and 8 years, and Cuba seized about $100 million worth of the company’s assets, the Ontario-based transportation firm said in a statement.

Ontario-based Tokmakjian Group said the charges against its president, Cy Tokmakjian, 74, were concocted as an excuse to seize the automotive firm’s $100 million in assets in Cuba. The company described the case Saturday as “absurd” and a “travesty of justice.”

You’re doing business under a Communist dictatorship that massacres its own people. You were expecting justice?

“This is a tricky situation,” says Raffi. Cy, 74, the Tokmakjian Group’s founder and owner, has been a prisoner in Cuba since that day, imprisoned without charges and then accused of bribery and “economic crimes” that the family and many others insist are false and which appear to be part of a political struggle.

Cy was on good terms with Fidel Castro, who was Cuba’s president from 1959 to 2008. Things went sour for the Tokmakjian Group — and other Canadian and international businesses — when Raúl Castro, Fidel’s brother, became president.

“He is by no means the first foreign businessman to suffer such a fate in Cuba. In February, another Canadian businessman, Sarkis Yacoubian, was suddenly expelled from Cuba where he had first been held without charges like Cy and then sentenced to nine years at La Condesa. Yacoubian, who operated a $30-million transport company called Tri-Star Caribbean, was arrested in July 2011, two months before Cy, yet was only charged in April 2013, accused of bribery, tax evasion and “activities damaging to the economy.”

Yacoubian was convicted and sentenced even though he agreed to cooperate with Cuban authorities. French national Jean-Louis Autret and British businessman Stephen Purvis were also jailed, and later freed, with their assets being seized by the Cuban interior ministry.

The assets are always the endgame. When you’re doing business with Communists who believe in nationalizing assets, it’s like dining out with a tiger. No matter how well trained the tiger is, he has to overcome the natural instinct to eat what’s on your plate and eat you too.

This keeps happening in China and Russia because Communist and ex-Communist leaders still function in familiar patterns. Americans who rush in to do business in Cuba would do well to learn why Canadian businesses are headed for the exit.

While 50 per cent of Cuba’s tourists are still Canadians desperate to escape the harsh winter, other Canadian companies who once worked happily in Cuba are escaping the island.

  • Texas Patriot

    Perhaps the joys of individual freedom, human rights, and constitutional democracy (not to mention procedural due process) have not yet totally infused the infrastructure of Cuba.

    • tickletik

      “totally”?

  • Pete

    This is pretty sh_tty.

    Judging from their names both businessmen mentioned are of Armenian descent. They are not connected to some of than older or larger old boy networks. The same business set up ran by a Bush or a Clinton (or in the future by the Obamas) would have less risk.

    I have no doubt that they bribed Cuban officials. Any holier than thou person, who think it is not necessary, could be proven wrong with a simple decision tree, empirical observations and Monte Carlo simulations.

    It reminds me of the story “If This Goes On—” by Heinlein. John Lyle’s worldly roommate, Zeb Jones explains to John why his security clearances topped out and why he is not being promoted. He is not trusted. He believe all the crap about being righteous. He lives exactly how society tells him he should live and breaks no rules. Therefore the PTB have no dirt on him. So Zeb tells him to break the rules, a little. Internal security will instantly catch on, record it and now he will be trusted. Because now they have dirt on him.
    There was an article in Zerohedge about the anti-corruption drive after the change in leadership. It asserted that most every high official was engaged in some form of graft. Another story focused on the Chinese diplomat to Korea charged with spying. Spying was his crime. But he was never charged. It would hurt the government’s image. So they charge him with corruption, which he was probably guilty, and proceeded to put him in prison and throw away the key. The CCP decided admit that a member was guilty of a lesser evil and avoid pleading guilty to a greater evil. It works on the same principle as the door in the face. They also spin it as a positive by saying they prosecute people no matter their rank and position. But at least they cannot be shown to be weak or incompetent on security.
    Cuba is the same way. They probably did bribe Fidel and Fidel expected and took the bribe. But with a regime change even a soft one old bribes may not be honored. DG is correct in saying what Raul did and how he operates.
    In my corporate responsibility training about bribery and foreign governments, the corporation was definitely against bribery. They were. It ups the cost of business and they do not want to get caught by the Feds. However, they hemmed and hawed a little. If the corporation was trying get contracts or purchases in Europe or Japan, they would resist bribery to a great extent and have a better than 50% chance of reporting the attempt.
    But do not bet money against them bribing people in say the Democratic Republic of Congo or Russia if a European company is there also and greasing palms.
    Having been an expat in one of the BRICS I know of a few examples of corruption. Heck, I have seen it in the DoD in the open. It was out in the open and had nothing to do with weapons or the GSA. It was more of a liberal profession type thing.

  • reyol

    Some Canadians are descended from families that lost their property in the American Revolution. When Cuba confiscated American property in ’59, the Canadians experienced ‘Shadenfruede’. Many of them have regarded Cuba warmly ever since. Very true about “dining with a tiger”. There are no rights in a communist dictatorship; there is only the party line which can change overnight.

    • UCSPanther

      Pierre Trudeau was a huge admirer of Fidel Castro back in the day.

      I hope those two get reunited soon…

    • tickletik

      Normally I do not take pleasure in the suffering of even bad people. But in this case, it is appropriate.

      These people turned their hearts to stone for the suffering of the Cuban people and the victims of the Cuban government. They are otherwise decent people who shut their eyes and stop up their ears because in their hearts they think they can benefit if they ignore the suffering of others, and just “play along”. I have met such people before and you can never get through to them, because “a bribe blinds the eyes of the wise”.

      So yes, it is very good they go through this. They need to learn.