The Tokmakjian case and the snares of the law

The Tokmakjian case and the snares of the law / 14ymedio
Posted on October 2, 2014

14ymedio, Havana, Ignacio Varona, 30 September 2014 – Few expected a
magnanimous gesture from the Cuban courts toward the Canadian
businessman Vahe Cy Tokmakjian. After he was arrested in September 2011,
this 74-year-old man was turned into a test case for those thinking of
investing in the Island. "If Tokmakjian is judged too harshly, few are
going to want to put their money here," whispered many in charge of
businesses at embassies and other market and capital professionals.

The 15-year sentence for the president of the Tokmakjian Group may now
seem a gesture of strength on the part of Raul Castro, but the main
outcome is the weakening of investor confidence and the withdrawal of
capital from the island. The idea has gained strength in diplomatic and
business cliques, who placed all their hopes… and their suspicions on
the judicial process that started last June.

According to the prosecutor, Tokmakjian was tried for the crimes of
bribery, acts to the detriment of economy and contracting activity,
fraud, trafficking in hard currency, forgery of bank and business
documents, as well as tax evasion. Two other Canadian citizens, managers
in the same company,Claudio Franco Vetere and Marco Vinicio Puche, were
sentenced to 12 and 8 years in prison, respectively.

The excessive sentences fell not only on the foreign defendants.
Fourteen senior officials and Cuban executives were tried in the same
process and received sentences of between six and twenty years. Nelson
Labrada, former vice minister of Sugar, will spend the next two decades
of his life in prison, according to the ruling of the Provincial Court
of the Havana.

On learning of the sentences, relatives and defense attorneys let out a
cry of horror that had been pent up for three years. The Ontario-based
company has denounced "the lack of due process" and the CFO has
confessed that the Cuban authorities have demanded some 55 million
Canadian dollars from the group to let Tokmakjian walk the streets again.

Freedom has a price for this foreign businessman, although in the case
of the Cuban defendants little can be done to lessen their sentences. If
it is an act to make an example and stop corruption, as some say, the
severity of the punishment was greater for those who don't hold a
passport from the other side of the world.

The sentence has been made public after months of waiting and tons of
speculation. Some ventured that with the new Foreign Investment Law,
which came into force last June, the Cuban government would "pass the
case under the table" to avoid provoking fears among potential
entrepreneurs who want to settle in our land.

Others believe that only an exemplary sentence against this group would
make the rules clear and avoid future corruption. For those who believe
that the accusations against Tokmakjian are substantiated, the law that
has fallen upon him with its full weight will deter others from playing
tricks with taxes, appealing to patronage and graft, or falsifying accounts.

This second line of opinion, which considers Tokmakjian guilty and
deserving of a heavy penalty, ignores that similar actions are taken by
figures from the government itself and the family clan that rules the
destinies of the nation. "Do as I say, not as I do," the generals and
lieutenant colonels turned career businessmen seem to say. Not holding
military rank is a dangerous condition for businesses on this island.

Almost a quarter of a century's presence in Cuba was useless to the
Tokmakjian Group in making the prosecutor lenient. Their business group
calculated some 100 million dollars of the company's assets have been
confiscated during the judicial process. On top of that, the prosecutor
is about to demand some 91 million as compensation for the economic
damages allegedly inflicted on the national economy.

Only the Canadian nickel company Sherritt International was ahead of the
Tokmakjian Group with regards to commercial operations in Cuba.
Specializing in construction and mining equipment, this latter does
business worth up to 80 million a year and brings in many of the Hyundai
cars that are still circulating in our streets. The niche market they
took advantage of included replacement parts and engines for old
transport vehicles imported from the Soviet Union.

One could say that Tokmakjian fished in the troubled waters of the lack
of business rights for Cubans. He made his fortune when we couldn't,
although that's not a crime but rather an ethical omission that allowed
him to profit where nationals are banned. However, one day he upset
someone, and the courts undertook to remind him who rules in this house.

Now, with their offices in Havana closed and sealed, the Tokmakjian
Group is claiming in Canadian courts about 200 million dollars from the
Cuban government. The case promises to be an interminable sequence of
chapters where complaints, negotiations and gestures of clemency or
arrogance play out. However, what happens there is beyond the fate of
the 17 defendants who have just suffered firsthand the lack of autonomy
of the Cuban courts and the regrettable absence of separation of powers.

The harsh sentences against Tokmakjian and the others who were tried is
a direct signal to those who believe that they can make easy money in
Cuba with the approval of the authorities. The reality is a world of
snares: some are activated immediately and others take twenty years to
close on the victim.

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