What Cuba needs from the United States

As tens of thousands of euphoric Cubans greet President Obama and his family in Havana on March 21, the President will be doing more than solidifying a new era in U.S.-Cuban diplomatic relations. He also will be inaugurating what has the potential to become a mutually beneficial trade and business partnership – an enterprise that, given sufficient time, will spur jobs and growth in both countries.

Realizing this potential, however, has two imperatives. First and foremost, the U.S. Congress must end the disastrous trade embargo that has served only to hurt the Cuban people, hamstring American companies and undercut our reputation and credibility throughout the world. Second, U.S. private and public leaders must recognize that this new dynamic is very much a two-way street. The U.S.-fueled acrimony that has characterized our bilateral relationship must be replaced with one attribute prized by the Cuban people: mutual respect.

Congress’ refusal to sweep aside the last vestiges of the embargo has made trade with Cuba a one-way boon for foreign companies, many of which stand to realize substantial profits from increased U.S. travel alone. Until this myopic boycott is ended, U.S. businesses will continue to be handcuffed; an unfortunate reality that will hurt multiple sectors of our economy – from travel, tourism, hospitality, and transportation to agriculture, medical products, telecommunications, and technology.

Commentary published by CNBC. Read the entire article here.

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Air Date: February 18, 2016

Scott Gilbert was featured on Stand Up! with Pete Dominick, a SiriusXM radio show hosted by stand-up comedian and politics enthusiast Pete Dominick and produced by Alfred Schulz, Melanie Starling, and Chris Hauselt. The interview discussed U.S. President Barack Obama’s announcement regarding his scheduled visit to Cuba on March 21-22. President Obama will become the first sitting U.S. President to visit Cuba in 88 years.

In an interview with StandUp! guest host Josh Zepps of HuffPostLive, Mr. Gilbert discusses the Obama Administration’s substantial efforts to reverse more than half a century of myopic and demonstrably failed U.S. foreign policy, likening the historic impact of President Obama’s scheduled visit to the enthusiastic way that the people of West Berlin embraced President Kennedy in 1963.

The focus of the three-hour SiriusXM Insight program each day ranges from current events, politics, environmental issues, veterans affairs to parenting.

Listen to the segment below.


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Attorneys as Insurer Claim Handlers: No Special Privileges

Insurers increasingly are using law firms rather than traditional in-house personnel as claim handlers, particularly on major claims by business insureds. Insureds are impacted in two significant ways.

First, law firms tend to be quite aggressive about denying coverage claims, which is perhaps not surprising given their ethical obligation to be “zealous advocates.”

Second, in the event of coverage litigation, insurers argue that the activities of their law firm claim handlers are immune from discovery based on the attorney-client privilege or the work-product doctrine.

Insurers’ increasing use of law firms as claim handlers represents an intentional strategy to stack the deck in the insurers’ favor at the point of claim. It dramatically undercuts the value of the insurance that businesses rely on to protect themselves from claims and losses. It results in unfair denials of covered claims. It imposes enormous unjustified costs on insureds. It shields insurer business decisions from proper scrutiny.

A federal magistrate judge got it right in requiring an insurer’s outside counsel to turn over her work files in a case I handled for an insured. He concluded that “opinion work product is discoverable in this case because [the insured] has demonstrated that the mental impressions and opinions of [the attorney claim handlers] are at issue and the need for the material is compelling.” Perhaps not coincidentally, soon after this ruling, the case settled.

Insurers should not be permitted to shield their ordinary business functions from scrutiny in this fashion. Insurer claim-handling should always be conducted in the sunshine, regardless of the fact that attorneys may have performed it.

Here are some key reasons why:

Claim-handling is a business function that insurers owe to their insureds, not a legal function for the benefit of the insurers. The business function includes investigating claims and losses, defending the insured against potentially covered third- party claims, evaluating the scope of potentially applicable coverage, and the like. Claim-handling under insurance policies is distinct from represent-ing insurers’ legal interests in eliminating or minimizing their coverage obligations. Insureds pay premiums to buy insurance protection, not lawsuits with their insurers.

Attorneys’ ethical obligations to their insurer clients are incompatible with insurers’ claim-handling obligations to their insureds. Attorneys are obligated under rules of professional conduct to “zealously” represent their clients’ interests. Insurance claim-handlers, in contrast, are legally obligated to carry out their duties in good faith. They must act, not with an eye to denying every possible claim or seeking advantage for the insurer, but rather in a fair and evenhanded manner. It is a fundamental prin¬ciple of insurance law that in handling claims for coverage, insurers must place their insureds’ interests at least on a par with their own.

Insurers cannot have it both ways: If attorney claim-handlers are acting in a legal capacity on behalf of insurers, the insurers are in breach of their fundamental claim- handling obligations and are subject to substantial damages for bad faith. If attorney claim-handlers are not acting in a legal capacity but are merely performing the insurers’ business obligations, there is no basis for insurers to argue that the attorney-client privilege or the work-product  doctrine apply.

Understanding how insurers handled claims is relevant to rebutting the insurers’ denials of coverage, and relevance is the standard for discoverability in litigation. In the event of coverage disputes, determining the what, when, where, why, and how of insurer claim-handling is crucial to the insureds’ ability to fairly rebut insurer coverage positions and defenses. It is beyond dispute that insurer claim-handling is at least potentially relevant to insureds’ claims for coverage. That is the standard test of discoverability.

Claim-handling has traditionally been per-formed by nonlegal personnel and shouldn’t be rendered confidential just because insurers are willing to pay law firms’ substantial hourly rates to conduct it. Claim-handling traditionally has been performed by in-house claim personnel who are not necessarily lawyers. Since being a lawyer is not a necessary qualification for a claim handler, insurers should not be permitted to shield claim-handling from discovery merely because the insurer is willing to pay law firms’ substantial hourly rates to perform it. It would impermissibly empower insurers to decide the scope of discovery against them.

Insurers retain lawyers as claim-handlers before there is any dispute. Insurers increasingly are retaining lawyers as claim handlers immediately upon receiving notice of claims, before they have conducted any investigation or analysis of the claims. They have no basis at that stage to believe that the claims are not covered or that legal disputes will ensue. They may even be acting in bad faith by assuming claims are not covered without any basis. In any event, they cannot preclude discovery merely because disputes or litigation could or later do occur.

Insurers say their policies are clear, so they don’t need attorney claim handlers. Insurers contend that their policies are clear to avoid the universal rule that ambiguous policy language drafted by insurers must be construed in favor of coverage. If insurers contend that only lawyers can evaluate coverage under policies the insurers drafted, they effectively admit that the policies are inherently ambiguous and must be construed against them. Either the policies are clear, in which case insurers don’t need lawyers to construe and apply them, or the policies are (at best for the insurers) ambiguous, in which case they must be construed against the insurers and in favor of coverage. Again, insurers cannot have it both ways.

Insurers can obtain separate counsel to rep-resent their legal interests. It is a red herring for insurers to argue that permitting discovery of the activities of attorney claim handlers interferes with insurers’ ability to obtain confidential legal advice and analysis. Nothing prevents insurers from hiring separate counsel to provide them with legal advice and analysis. But they cannot hide their ordinary business activities behind a veil of secrecy simply because they are, again, willing to pay attorneys to perform those business activities.

No party to an ordinary contract can shield its business activities from scrutiny by the simple expedient of hiring lawyers to perform them. Because fairly construing and applying insurance policies is the essence of insurers’ business obligations to their insureds, insurers have even less claim to confidentiality than other parties to commercial disputes.

Insurer claim-handling activities, whether performed by lawyers or nonlawyers, should be fully transparent. In the event of coverage litigation, insureds should be granted full access to claim-handling documents, communications, and information generated by their insurers. Insurers should not be permitted to invoke the attorney-client privilege or the work-product doctrine as both a sword and a shield to gain unfair business and litigation advantages over their insureds.

A version of this post originally appeared in Of Counsel: The Legal Practice and Management Report. Vol. 35, No. 1, January 2016.

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On January 26, 2016, the U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”) and U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) announced new amended regulations intended to further promote U.S. policy toward engaging and empowering the Cuban people.  The new amendments increase export opportunities, facilitate authorized travel, and broaden the scope of authorized transactions related to professional meetings and other events, disaster preparedness and response projects, and professional media and artistic productions in Cuba.

A summary of the new OFAC and BIS amendments is below:

Removing financing restrictions for most types of authorized exports.

  • The amendments remove restrictions on payment and financing terms for authorized non-agricultural exports and permit U.S. banks to provide financing, including by issuing a letter of credit for such exports. Under previous regulations, payment and financing terms for all authorized exports were restricted to cash-in-advance or third-country financing.

Additional amendments to increase support for the Cuban people and facilitate authorized exports.

  • OFAC is expanding an existing general license to authorize certain travel-related transactions incident to the conduct of market research, commercial marketing, sales or contract negotiation, accompanied delivery, installation, leasing, or servicing in Cuba of items permissible for export under BIS regulations.
  • BIS now will generally approve license applications for export of the following:

    1. commodities and software to organizations that promote independent activity intended to strengthen civil society in Cuba;
    2. commodities and software to U.S. news bureaus in Cuba whose primary purpose is the gathering and dissemination of news to the general public;
    3. telecommunications items that would improve communications to, from, and among the Cuban people;
    4. certain agricultural items (such as agricultural commodities not eligible for a license exception, such as insecticides, pesticides, and herbicides); and
    5. items necessary to ensure the safety of civil aviation and the safe operation of commercial aircraft engaged in international air transportation.
  • BIS is also creating a case-by-case licensing policy that will apply to exports of items to meet the needs of the Cuban people, including exports to state-owned entities that provide goods and services to the Cuban people.  Exports eligible for this licensing policy would include, for example, items for agricultural production, education, and construction of infrastructure that directly benefits the Cuban people (e.g., facilities for treating public water supplies and supplying energy to the general public).

Additional amendment to facilitate carrier service by air and with Cuban airlines.

  • The amendments authorize entry into blocked space, code-sharing, and leasing arrangements to facilitate the provision of carrier services by air, including entry into such arrangements with a Cuban national.

Expanding authorizations within existing travel categories to facilitate travel to Cuba for additional purposes.

  • Airline and vessel crew personnel.  The amendments authorize certain personnel who are operating or servicing vessels or aircraft transporting authorized travelers between the U.S. and Cuba to engage in travel-related and other transactions in Cuba to facilitate that transport.
  • Information and informational materials.  The amendments authorize travel-related and other transactions incident to the exportation, importation, or transmission of information, including the filming or production of movies and television programs; music recordings; and the creation of artworks by certain persons in Cuba.  The amendments also expand an existing general license to authorize transactions relating to the creation and dissemination of informational materials, including employment of Cuban nationals and the remittance of royalties or other payments.
  • Professional meetings.  The amendments authorize by general license travel-related and other transactions to organize professional meetings or conferences in Cuba.  The previous general license authorized only attendance at such meetings or conferences.
  • Public performances, clinics, workshops, athletic, and other competitions and exhibitions.  Similar to the change to the professional meetings category, the amendments authorize transactions related to organizing, rather than just attending, these events.  The amendments remove requirements that U.S. profits from certain events be donated to certain organizations and that certain events be run at least in part by U.S. travelers.
  • Humanitarian projects.  The amendments expand the list of authorized humanitarian projects to include disaster preparedness and response.
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Air Date: January 20, 2016

Scott Gilbert was featured on Stand Up! with Pete Dominick, a SiriusXM radio show hosted by stand-up comedian and politics enthusiast Pete Dominick and produced by Alfred Schulz, Melanie Starling, and Chris Hauselt. The interview discussed the agreement that the U.S. government made with the Iranian government to free four Americans, and a fifth prisoner in a separate deal, from Iran’s infamous Evin Prison on January 16, 2016. Mr. Gilbert discusses his involvement with the Hekmati family in dealing with Amir’s imprisonment and recent release, and the impact of this diplomatic effort as Iran takes steps to come to the world table and be more involved economically.

The focus of the three-hour SiriusXM Insight program each day ranges from current events, politics, environmental issues, veterans affairs to parenting.

“Our last guest was the DC-based attorney and founder & president of Reneo Consulting, LLC, Scott D. Gilbert. Mr. Gilbert worked with Cuban and U.S. officials to secure the release of American aid worker Alan Gross last year, and now his client Amir Hekmati has been released from 3.5 years in prison thanks to similar work between the U.S. and Iran.”

Listen to the segment below.


“Read the entire blog post here.

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Air Date: January 7, 2016

Scott Gilbert was featured for the third time on Stand Up! with Pete Dominick, a SiriusXM radio show hosted by stand-up comedian and politics enthusiast Pete Dominick and produced by Alfred Schulz, Melanie Starling, and Chris Hauselt. The interview discussed what has changed since President Obama’s declaration of normalized relations between the U.S. and Cuba on December 14, 2014, including Mr. Gilbert’s assessment of where we stand today. The segment also briefly touched on Guantanamo Bay, and Mr. Gilbert outlined what U.S. companies can and should be doing now to position themselves in Cuba, despite the fact that the trade embargo remains intact. The focus of the three-hour SiriusXM Insight program each day ranges from current events, politics, environmental issues, veterans affairs to parenting.

Scott D. Gilbert is the Washington D.C.-based attorney and managing director of Reneo Consulting LLC, whose pro bono work on U.S./Cuban relations led to the release of aid worker Alan Gross and has helped de-ice the ocean of political difference between the two countries. He joined Pete this morning to discuss where things are now, one year removed from the moment President Obama began lifting the restrictions on relations and travel to the island nation.”

Listen to the segment below.


Read the entire blog post here.

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FCC Takes New Steps to Facilitate Opportunities for Telecom Service between the U.S. and Cuba


Facilitating increased telecommunications services between the U.S. and Cuba has been a cornerstone of President Obama’s new policy toward Cuba.  Soon after the President’s December 17, 2014 announcement regarding this new policy, the U.S. Departments of Treasury and Commerce amended their regulations to broaden opportunities for U.S. companies to provide telecom services and infrastructure to Cuba.  Slow action by the U.S. State Department and the Federal Communications Commission (“FCC”) to amend their Cuba telecom policies, however, has continued to pose obstacles to U.S. telecom providers seeking to do business in Cuba.

In recent weeks, the State Department and FCC have taken long-awaited steps to eliminate these remaining barriers.  These actions will bring FCC regulations more in line with President Obama’s Cuban telecom initiatives and facilitate new opportunities for U.S. telecom companies to do business in Cuba.

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Opinion: U.S. companies should heed new rules relaxing travel and trade with Cuba

Will the Obama Administration’s new rules open the floodgates to Cuba for American business next month or even next year? No. Full and fair free trade with Cuba won’t happen until Congress finally repeals Helms-Burton, the myopic and failed U.S. trade embargo.

To be sure, the new regulatory amendments put forth this month are an important and necessary step in the right direction. Building on the Administration’s historic first round of amendments relaxing embargo restrictions in January, the September changes create the most significant opening in decades for Americans seeking to do business in Cuba.

Read the entire article here

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Scott Gilbert on Stand Up with Pete Dominick

Air Date: July 6, 2015

Scott Gilbert was featured for the second time on Stand Up with Pete Dominick, a Sirius-XM radio show hosted by stand-up comedian and politics enthusiast Pete Dominick and produced by Alfred Schulz, Melanie Starling, and Chris Hauselt. The interview discussed the recent announcement that the U.S. and Cuba have reestablished diplomatic relations after 50 years. The focus of the three-hour program each day ranges from current events, politics, environmental issues, veterans affairs to parenting.

“We welcomed back Scott D. Gilbert, the DC-based attorney and managing director of Reneo Consulting LLC who played an important role in freeing American aid worker Alan Gross from detainment in Cuba. Since then, Gilbert has proven to be a valuable conduit between the Cuban and American governments during a time when once-cold relations have begun to rapidly thaw.”

Listen to the segment below.


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Lifting the embargo on Cuba: Why we need to act now

Ironically, while the long-overdue thaw in U.S.-Cuba relations has encouraged and even accelerated foreign investment in Cuba, the vast majority of U.S. businesses, still shackled by the embargo on Cuba, cannot compete in that marketplace.  This is not about leveling the playing field for American companies; it is about just letting them onto the field.

The embargo is a vestige of an archaic foreign policy. Arguably, it was a failed policy from the get-go, accomplishing nothing except to deepen the suffering of average Cubans who themselves had little or no participation in the political activities that rankled the U.S. for six decades.

Read the entire article here.

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