U.S. Says Companies Abroad Must Follow U.S. Cuba Restrictions

U.S. Says Companies Abroad Must Follow U.S. Cuba Restrictions

Feb. 13 (Bloomberg) -- U.S. companies are required to follow U.S. law
that prohibits doing business with Cuba even when operating in a foreign
country such as Mexico, a U.S. Treasury Department spokesman said.

``U.S. firms may not engage in economic activity with Cuba,'' or in
activity that would benefit the Cuban government, said Tony Fratto, the
Treasury's assistant secretary for public affairs, at A press conference
in Washington. ``No matter where they operate they have to remain within
the law.''

Fratto's comments contradict the Mexican Foreign Ministry's position
that U.S. companies are required to abide by Mexican, not U.S., law when
operating south of the border. The debate intensified after U.S.
executives at White Plains, New York-based Starwood Hotel & Resorts
Worldwide Inc. ordered employees at its Mexico City Sheraton hotel to
force a group of Cubans who were meeting with U.S. business executives
to leave the hotel on Feb. 3.

Mexico may fine the Sheraton hotel in Mexico City as much as $4.9
million pesos ($466,000) for enforcing a U.S. law in Mexico, said
Foreign Minister Luis Ernesto Derbez in a statement last week.

``What we're sanctioning is the fact that the hotel applied
extraterritorially a law that doesn't govern in Mexico,'' Derbez said in
a statement last week.

Starwood could have faced fines of as high as $1 million for refusing to
follow U.S. law regarding Cuba, according to the Treasury Department.

``It's not a question for the Secretary of the Treasury to rethink how
the law is enforced,'' Fratto said. ``For some countries, it's
difficult. For some companies, it's difficult.''

To contact the reporter on this story:
Thomas Black in Mexico City tblack@bloomberg.net

Last Updated: February 13, 2006 17:45 EST
http://www.bloomberg.com/apps/news?pid=10000086&sid=aJ1MkmtjvrrU&refer=latin_america