United States embargo against Cuba
The United States embargo against Cuba (in Cuba called el bloqueo, "the blockade") is a commercial, economic, and financial embargo imposed by the United States on Cuba. An embargo was first imposed by the United States on Cuba on October 19, 1960 (almost two years after the Batista regime was deposed by the Cuban Revolution) when the U.S. placed an embargo on exports to Cuba except for food and medicine after Cuba nationalized American-owned Cuban oil refineries without compensation. Cuba nationalized the refineries following Eisenhower's decision to cancel 700,000 tons of sugar imports from Cuba to the U.S. and refused to export oil to the island, leaving it reliant on Soviet crude oil. All American oil companies refused to refine Soviet oil, leading the Cuban government to nationalize the refineries. The refinery owners were never compensated for the Cuban nationalization of their property. Today the refineries are owned & operated by the state-run company, Unión CubaPetróleo. On February 7, 1962 the embargo was extended to include almost all imports. Currently, the Cuban embargo is enforced mainly through six statutes: the Trading with the Enemy Act of 1917, the Foreign Assistance Act of 1961, the Cuban Assets Control Regulations of 1963, the Cuban Democracy Act of 1992, the Helms–Burton Act of 1996, and the Trade Sanctions Reform and Export Enhancement Act of 2000. The stated purpose of the Cuban Democracy Act of 1992 is to maintain sanctions on Cuba so long as the Cuban government refuses to move toward "democratization and greater respect for human rights". The Helms–Burton Act further restricted United States citizens from doing business in or with Cuba, and mandated restrictions on giving public or private assistance to any successor government in Havana unless and until certain claims against the Cuban government were met. In 1999, President Bill Clinton expanded the trade embargo by also disallowing foreign subsidiaries of U.S. companies to trade with Cuba. In 2000, Clinton authorized the sale of "humanitarian" U.S. products to Cuba.
Despite the Spanish-language term bloqueo (blockade), there has been no physical, naval blockade of the country by the United States after the Cuban Missile Crisis in 1962. The United States does not block Cuba's trade with third parties: other countries are not under the jurisdiction of U.S. domestic laws, such as the Cuban Democracy Act (although, in theory, foreign countries that trade with Cuba could be penalised by the U.S., which has been condemned as an "extraterritorial" measure that contravenes "the sovereign equality of States, non-intervention in their internal affairs and freedom of trade and navigation as paramount to the conduct of international affairs."). Cuba can, and does, conduct international trade with many third-party countries; Cuba has been a member of the World Trade Organization (WTO) since 1995.
Beyond criticisms of Human rights in Cuba, the United States holds $6 billion worth of financial claims against the Cuban government. The pro-embargo position is that the U.S. embargo is, in part, an appropriate response to these unaddressed claims. The Latin America Working Group argues that pro-embargo Cuban-American exiles, whose votes are crucial in Florida, have swayed many politicians to also adopt similar views. The Cuban-American views have been opposed by some business leaders who argue that trading freely would be good for Cuba and the United States.
At present, the embargo, which limits American businesses from conducting business with Cuban interests, is still in effect and is the most enduring trade embargo in modern history. Despite the existence of the embargo, the United States is the fifth largest exporter to Cuba (6.6% of Cuba's imports are from the US). Cuba must, however, pay cash for all imports, as credit is not allowed.
The UN General Assembly has, since 1992, passed a resolution every year condemning the ongoing impact of the embargo and declaring it to be in violation of the Charter of the United Nations and international law. In 2014, out of the 193-nation assembly, 188 countries voted for the nonbinding resolution, the United States and Israel voted against and the Pacific island nations Palau, Marshall Islands and Micronesia abstained. Human rights groups including Amnesty International, Human Rights Watch, and the Inter-American Commission on Human Rights have also been critical of the embargo. Critics of the embargo say that the embargo laws are too harsh, citing the fact that violations can result in 10 years in prison.
- 1 History
- 2 Details of embargo
- 3 Easing the embargo
- 4 Socio-economic effects of the embargo
- 5 Criticism of embargo laws and rules
- 6 2010 Bill to end the travel ban
- 7 Reestablishment of diplomatic relations
- 8 Polling data and public opinion
- 9 See also
- 10 References
- 11 External links
The United States imposed an arms embargo on Cuba on March 14, 1958 during the armed conflict between rebels led by Fidel Castro and the Fulgencio Batista regime. The arms embargo had more of an impact on Batista than the rebels. After the Castro socialist government came to power on January 1, 1959, Castro made overtures to the United States, but was rebuffed by the Dwight D. Eisenhower administration, which by March began making plans to help overthrow him.
In May 1960, the Cuban government began to openly purchase regular armaments from the Soviet Union, citing the US arms embargo. In July 1960, the United States reduced the Cuban import quota of brown sugar to 700,000 tons, under the Sugar Act of 1948; and the Soviet Union responded by agreeing to purchase the sugar instead.
In October 1960, a key incident occurred in which a private American oil refinery in Cuba refused to refine a shipment of Soviet crude oil, and the Cuban government responded by nationalizing all three Cuban refineries, which were all American-owned. This prompted the Eisenhower administration to launch the first trade embargo—a prohibition against selling all products to Cuba except food and medicine. The Cuban regime responded with nationalization of all American businesses and most American privately owned properties on the island. No compensation was given for the seizures, and a number of diplomats were expelled from Cuba.
The second wave of nationalizations prompted the Eisenhower administration, in one of its last actions, to sever all diplomatic relations with Cuba, in January 1961. The U.S. partial trade embargo with Cuba was continued, under the Trading with the Enemy Act 1917.
The Bay of Pigs invasion and Cuba's declaration of Marxism
After the Bay of Pigs Invasion in April 1961, which had been largely planned under the Eisenhower administration, but which Kennedy had been informed of and approved during the months preceding his presidency and in his first few months as president, the Cuban government declared that it now considered itself Marxist and socialist, and aligned with the Soviet Union. On September 4, 1961, partly in response, Congress passed the Foreign Assistance Act, a Cold War Act (among many other measures) which prohibited aid to Cuba and authorized the President to impose a complete trade embargo against Cuba.
On January 21, 1962, Cuba was expelled from the Organization of American States (OAS) by a vote of 14 in favor, one (Cuba) against with six abstentions. (See Cuban relations with the Organization of American States for details of the proceedings.) Mexico and Ecuador, two abstaining members, argued that the expulsion was not authorized in the OAS Charter. (Multilateral sanctions were imposed by the OAS on July 26, 1964, which were later rescinded on July 29, 1975. Cuban relations with the Organization of American States have since improved, and as of June 3, 2009, membership suspension was lifted.)
President John F. Kennedy extended measures by Executive order, first widening the scope of the trade restrictions on February 8, 1962 (announced on February 3 and again on March 23, 1962). These measures expanded the embargo to include all imports of products containing Cuban goods, even if the final products had been made or assembled outside Cuba.
On August 3, 1962 the Foreign Assistance Act was amended to prohibit aid to any country that provides assistance to Cuba.
On September 7, 1962 President Kennedy formally expanded the Cuban embargo to include all Cuban trade, except for non-subsidized sale of food and medicines.
The Cuban Missile Crisis
Following the Cuban Missile Crisis (October 1962), Kennedy imposed travel restrictions on February 8, 1963, and the Cuban Assets Control Regulations were issued on July 8, 1963, again under the Trading with the Enemy Act in response to Cubans hosting Soviet nuclear weapons. Under these restrictions, Cuban assets in the U.S. were frozen and the existing restrictions were consolidated.
Temporary lapse of restrictions, and reinstatement
The restrictions on U.S. citizens traveling to Cuba lapsed on March 19, 1977; the regulation was renewable every six months, but President Jimmy Carter did not renew it and the regulation on spending U.S. dollars in Cuba was lifted shortly afterwards. President Ronald Reagan reinstated the trade embargo on April 19, 1982. This has been modified subsequently with the present regulation, effective June 30, 2004, being the Cuban Assets Control Regulations, 31 C.F.R. part 515.
The current regulation does not prohibit travel by U.S. citizens to Cuba per se, but it makes it illegal for U.S. citizens to have transactions (spend money or receive gifts) in Cuba under most circumstances without a US government Office of Foreign Assets Control issued license. Since even paying unavoidable airfare ticket taxes into a Cuban airport would violate this transaction law, it is effectively impossible for ordinary tourists to visit Cuba without breaking the monetary transaction rule.
The embargo was reinforced in October 1992 by the Cuban Democracy Act (the "Torricelli Law") and in 1996 by the Cuban Liberty and Democracy Solidarity Act (known as the Helms–Burton Act) which penalizes foreign companies that do business in Cuba by preventing them from doing business in the U.S. Justification provided for these restrictions was that these companies were trafficking in stolen U.S. properties, and should, thus, be excluded from the United States.
The European Union resented the Helms Burton Act because it felt that the U.S. was dictating how other nations ought to conduct their trade and challenged it on that basis. The EU eventually dropped its challenge in favor of negotiating a solution.
After Cuba shot down two unarmed Brothers to the Rescue planes in 1996, killing three Americans and a U.S. resident, a bi-partisan coalition in the United States Congress approved the Helms-Burton Act. The Title III of this law also states that any non-U.S. company that "knowingly trafficks in property in Cuba confiscated without compensation from a U.S. person" can be subjected to litigation and that company's leadership can be barred from entry into the United States. Sanctions may also be applied to non-U.S. companies trading with Cuba. This restriction also applies to maritime shipping, as ships docking at Cuban ports are not allowed to dock at U.S. ports for six months. It's important to note that this title includes waiver authority, so that the President might suspend its application. This waiver must be renewed every six months and traditionally it has been.
In response to pressure from some American farmers and agribusiness, the embargo was relaxed by the Trade Sanctions Reform and Export Enhancement Act, which was passed by the Congress in October 2000 and signed by President Bill Clinton. The relaxation allowed the sale of agricultural goods and medicine to Cuba for humanitarian reasons. Although Cuba initially declined to engage in such trade (having even refused U.S. food aid in the past, seeing it as a half-measure serving U.S. interests), the Cuban government began to allow the purchase of food from the U.S. as a result of Hurricane Michelle in November 2001. These purchases have grown since then[dubious ], even though all sales are made in cash. In 2007, the U.S. was the largest food supplier of Cuba, which nevertheless is largely self-sufficient, and its fifth largest trading partner.
In some tourist spots across the island, American brands such as Coca-Cola can be purchased. Ford tankers refuel planes in airports and some computers use Microsoft software. The origin of the financing behind such goods is not always clear. The goods often come from third parties based in countries outside the U.S., even if the product being dealt originally has U.S. shareholders or investors. This can be seen, for example, with Nestle products (which have a 10% US ownership) that can be bought in Cuba with Cuban convertible pesos (CUCs). These CUC pesos are hard currency that are traded in foreign exchange against the US dollar, Euro and other currencies.
Details of embargo
Impacts of the embargo
In November 1991, the Cuban ambassador, Ricardo Alarcon, in a speech to the UN General Assembly, cited 27 recent cases of trade contracts interrupted by US pressure. The British journal Cuba Business claimed that British Petroleum was seemingly dissuaded by US authorities from investing in offshore oil exploration in Cuba despite being initially keenly interested. The Petroleum economist claimed, in September 1992, that the US State Department vigorously discouraged firms like Royal Dutch Shell and Clyde Petroleum from investing in Cuba. This pressure did not work in all cases. According to the Mexican Newspaper El Financiero, the US ambassador to Mexico, John Negroponte travelled to meet two Mexican business men who had signed a textile deal with Cuba on October 17, 1992. Despite the representation, the deal went ahead and was eventually worth $500 million in foreign capital. All of this happened before the signing of the Cuban Democracy Act.
Restrictions on tourism by U.S. citizens and residents
Cuban Assets Control Regulations require that persons subject to U.S. jurisdiction be licensed in order to engage in any travel-related transactions pursuant to travel to, from, and within Cuba. Transactions related solely to tourist travel are not licensable.
Spurred by a burgeoning interest in the assumed untapped product demand in Cuba, a growing number of free-marketers in Congress, backed by Western and Great Plains lawmakers who represent agribusiness, have tried each year since 2000 to water down or lift regulations preventing Americans from traveling to Cuba. Four times over that time period the United States House of Representatives has adopted language lifting the travel ban, and in 2003 the U.S. Senate followed suit for the first time. Each time President George W. Bush threatened to veto the bill. Faced with a veto threat, each year Congress dropped its attempt to lift the travel ban before sending legislation to the president. Some United States nationals circumvent the ban by traveling to Cuba from a different country (such as Mexico, The Bahamas, Canada or Costa Rica), as Cuban immigration authorities do not routinely stamp passports, but instead stamp a Cuban visa page which is provided, and not permanently affixed to the passport. In doing so, however, U.S. citizens still risk prosecution and fines by the U.S. government if discovered. Until July 20, 2015 there was no U.S. Embassy or consulate in Cuba and United States representation was limited to a United States Interests Section.
The United States Treasury Department's Office of Foreign Assets Control (OFAC) considers any visit of more than one day to be prima facie proof of violation. OFAC also holds that U.S. citizens may not receive goods or services for free from any Cuban national, eliminating any attempts to circumvent the regulation based on that premise. On July 25, 2011, OFAC declared that the "people to people" relaxation of restrictions on travel conceded by the Obama administration should not be mistakenly interpreted as promoting tourism.
On October 10, 2006, the United States announced the creation of a task force made up of officials from several U.S. agencies that will pursue more aggressively violators of the U.S. trade embargo against Cuba, with severe penalties. The regulations are still in force and are administered by the U.S. Treasury Department, Office of Foreign Assets Control. Criminal penalties for violating the embargo range up to ten years in prison, $1 million in corporate fines, and $250,000 in individual fines; civil penalties up to $55,000 per violation.
Easing the embargo
On April 13, 2009, President Barack Obama eased the travel ban, allowing Cuban-Americans to travel freely to Cuba; and on January 14, 2011, he further eased the ban, by allowing students and religious missionaries to travel to Cuba if they meet certain restrictions.
On July 16, 2012, the Ana Cecilia became the first officially sanctioned direct ship to sail from Miami to Cuba. It carried food, medicine and personal hygiene goods sent by Cuban-Americans to family members.
In 2014, the Obama administration announced its intention to re-establish relations with Cuba. In January 2015, the Administration lightened restrictions on U.S. citizen travel to Cuba. While restrictions on travel for missionary work and education have been loosened, visits for tourism remain banned. President Obama and President Raúl Castro of Cuba met on April 11, 2015, which was the first meeting between distinct leaders of the two countries in over fifty years. In May 2015, several American companies reported they had been granted licenses to establish ferry travel between Florida and Cuba, with a U.S Department of Treasury spokeswoman confirming they had begun issuing licenses. So far the general ban on travel to Cuba remains in effect for Americans, so the ferry service will not be accessible to Americans who have not received special approval for travel to Cuba.
On September 21, 2015, the Commerce and Treasury Departments took additional coordinated actions in support of the President’s Cuba policy. These actions included a rule published by the Commerce Department’s Bureau of Industry and Security (BIS) that amended the terms of existing license exceptions that are available for Cuba, increased the number of license exception provisions that are available for Cuba, created a new Cuba licensing policy to help ensure the safety of civil aviation and the safe operation of commercial passenger aircraft, and made the deemed export and deemed reexport license requirements for Cuba consistent with other sanctioned destinations.
Investment in Cuba by Americans
The U.S. Government allowed two American men from Alabama to build a factory that will assemble as many as 1,000 small tractors a year for sale to private farmers in Cuba. The $5 million to $10 million plant would be the first significant U.S. business investment on Cuban soil since 1959. They expect to start making deliveries in 2017.
Socio-economic effects of the embargo
The U.S. Chamber of Commerce estimates that the embargo costs the U.S. economy $1.2 billion per year in lost sales and exports, while the Cuban government estimates that the embargo has cost the island itself $753.69 billion. The self-proclaimed non-partisan Cuba Policy Foundation estimates that the embargo costs the U.S. economy $3.6 billion per year in economic output.
The 1998 U.S. State Department report Zenith and Eclipse: A Comparative Look at Socio-Economic Conditions in Pre-Castro and Present Day Cuba attributed Cuba's economic penury not as a result of the embargo, but instead the lack of foreign currency due to the unwillingness of Cuba to liberalize its economy and diversify its export base during the years of abundant Soviet aid. Cuba also amassed substantial debts owed to its Japanese, European, and Latin American trading partners during the years of abundant Soviet aid.
According to critics, one of the major problems with the embargo is that the United States is the only major country that has such an embargo against Cuba in place. Cuba still receives tourists and trade from other countries making the embargo appear both illegitimate and pointless.
Criticism of embargo laws and rules
The UN General Assembly has, from 1992, passed a resolution each year criticizing the ongoing impact of the embargo.
The embargo has been criticized for its effects on food, clean water, medicine, and other economic needs of the Cuban population. Criticism has come from both Fidel Castro and Raúl Castro, citizens and groups from within Cuba, and international organizations and leaders. Some academic critics, outside Cuba, have also linked the embargo to shortages of medical supplies and soap which have resulted in a series of medical crises and heightened levels of infectious diseases. It has also been linked to epidemics of specific diseases, including neurological disorders and blindness caused by poor nutrition. Travel restrictions embedded in the embargo have also been shown to limit the amount of medical information that flows into Cuba from the United States. An article written in 1997 suggests malnutrition and disease resulting from increased food and medicine prices have affected men and the elderly, in particular, due to Cuba's rationing system which gives preferential treatment to women and children. Cuban Foreign Minister Felipe Pérez Roque called the embargo "an act of genocide", quoting a classified State Department memo dated April 6, 1960 that called on the US to use every tool at its disposal to bring down Fidel Castro through hunger and disease.
On May 1, 2009, Venezuelan President Hugo Chávez, while speaking about his meeting U.S. President Barack Obama at a summit days earlier, stated "if President Obama does not dismantle this savage blockade of the Cuban people, then it is all a lie, it will all be a great farce and the U.S. empire will be alive and well, threatening us." In June 2009, Moisés Naím wrote in Newsweek: "The embargo is the perfect example used by anti-Americans everywhere to expose the hypocrisy of a superpower that punishes a small island while cozying to dictators elsewhere."
The Helms-Burton Act has been the target of criticism from Canadian and European governments in particular, who object to what they say is the extraterritorial pretensions of a piece of legislation aimed at punishing non-U.S. corporations and non-U.S. investors who have economic interests in Cuba. In the Canadian House of Commons, Helms-Burton was mocked by the introduction of the Godfrey-Milliken Bill, which called for the return of property of United Empire Loyalists seized by the American government as a result of the American Revolution (the bill never became law). The European Council has stated that it:
while reaffirming its concern to promote democratic reform in Cuba, recalled the deep concern expressed by the European Council over the extraterritorial effects of the "Cuban Liberty and Democratic Solidarity (Libertad) Act" adopted by the United States and similar pending legislation regarding Iran and Libya. It noted the widespread international objections to this legislation. It called upon President Clinton to waive the provisions of Title III and expressed serious concern at the measures already taken to implement Title IV of the Act. The Council identified a range of measures which could be deployed by the EU in response to the damage to the interests of EU companies resulting from the implementation of the Act. Among these are the following:
- a move to a WTO dispute settlement panel;
- 'changes in the procedures governing entry by representatives of US companies to EU Member States;
- the use/introduction of legislation within the EU to neutralize the extraterritorial effects of the US legislation;
- the establishment of a watch list of US companies filing Title III actions.
Some critics say that the embargo actually helps the regime more than it hurts it, by providing it with a bogeyman for all of Cuba's misfortunes. Hillary Clinton publicly shared the view that the embargo helps the Castros, noting that "It is my personal belief that the Castros do not want to see an end to the embargo and do no want to see normalization with the United States." Clinton said in the same interview that "we're open to changing with them."
In a 2005 interview, George P. Shultz, who served as Secretary of State under Reagan, called the embargo "insane". Daniel Griswold, director of the Cato Institute's Center for Trade Policy Studies, criticized the embargo in a June 2009 article:
The embargo has been a failure by every measure. It has not changed the course or nature of the Cuban government. It has not liberated a single Cuban citizen. In fact, the embargo has made the Cuban people a bit more impoverished, without making them one bit more free. At the same time, it has deprived Americans of their freedom to travel and has cost US farmers and other producers billions of dollars of potential exports.
Some American business leaders openly call for an end to the embargo. They argue, as long as the embargo continues, non-U.S. foreign businesses in Cuba that violate the embargo, do not have to compete with U.S. businesses, and thus, will have a head start when and if the embargo is lifted.
José Azel, a Senior Research Associate at the Institute for Cuban and Cuban-American Studies, University of Miami and the author of the recently published book, Mañana in Cuba (Tomorrow in Cuba) took a different view:
Currently over 190 nations engage economically and politically with Cuba while the United States remains alone in enforcing its economic sanctions policy. If indeed U.S. policy is deemed as one case of failure to change the nature of the Cuban government, there are 190 cases of failure on the same grounds. By a preponderance of evidence (190 to 1) the case can be made that engagement with that regime has been a dismal failure.
Some religious leaders oppose the embargo for a variety of reasons, including humanitarian and economic hardships the embargo imposes on Cubans. Pope John Paul II called for the end to the embargo during his 1979 pastoral visit to Mexico. Patriarch Bartholomew I called the embargo a "historic mistake" while visiting the island on January 25, 2004. A joint letter in 1998 from the Disciples of Christ and the United Church of Christ to the U.S. Senate called for the easing of economic restrictions against Cuba. While also opposing the embargo, the General Secretary of the National Council of Churches stated, "We did not understand the depth of the suffering of Christians under communism. And we failed to really cry out under the communist oppression." Rev. Jesse Jackson, Rev. Al Sharpton, and Minister Louis Farrakhan have also publicly opposed the embargo. On May 15, 2002 former President Jimmy Carter spoke in Havana, calling for an end to the embargo, saying "Our two nations have been trapped in a destructive state of belligerence for 42 years, and it is time for us to change our relationship." The US bishops called for an end to the embargo on Cuba, after Pope Benedict XVI's 2012 visit to the island.
The United Nations General Assembly has condemned the embargo as a violation of international law every year since 1992. Israel is the only country that routinely joins the U.S. in voting against the resolution as has Palau every year from 2004 to 2008. On October 26, 2010, for the 19th time, the General Assembly condemned the embargo, 187 to 2 with 3 abstentions. Israel sided with the U.S., while Marshall Islands, Palau and Micronesia abstained.
It's a stupid policy. There's no reason why we can't be friends with the Cubans, and vice versa. A lot of them have relatives in the United States, and some Americans have relatives in Cuba, so we should have freedom of travel ... We seem to think it's safe to open the door to a billion communists in China but for some reason, we're scared to death of the Cubans.
Barack Obama discussed easing the embargo during his 2008 campaign for president of the U.S., though he promised to maintain it. In December 2014, he called the embargo a failure, asking the U.S. Congress to enact legislation to lift it entirely.
2010 Bill to end the travel ban
On February 23, 2010, U.S. Congressman Rep. Collin Peterson of Minnesota introduced a bill that would bar the president from prohibiting travel to Cuba or preventing transactions required for such trips.
On June 10, 2010 seventy-four of Cuba's dissidents signed a letter to the United States Congress in support of a bill that would lift the U.S. travel ban for Americans wishing to visit Cuba. The signers included Yoani Sánchez, Guillermo Farinas, Elizardo Sánchez, and Damas de Blanco founder Miriam Levi. The letter supported a bill introduced by Democrat Minnesota Representative Collin Peterson, that would bar the president from prohibiting travel to Cuba and from blocking transactions required to make the trip. The bill also prohibited the president from stopping direct transfers between U.S. and Cuban banks.
Reestablishment of diplomatic relations
In concert with a prisoner exchange with Cuba, Presidents Barack Obama and Raúl Castro announced moves on December 17, 2014 to reestablish diplomatic relations and to loosen travel and economic policies. Cuba released Alan Gross, an American prisoner, on humanitarian grounds and exchanged an unnamed American spy for the three remaining members of the Cuban Five. Obama also announced a review of Cuba's status as a terrorist state and an intention to ask Congress to remove the embargo entirely. Cuba agreed to release 53 political prisoners and to allow Red Cross and UN human-rights investigators access. On May 29, 2015, according to the U.S. State Department, "Cuba's designation as a state sponsor of terrorism was rescinded".
Under the announced changes by the President, there will be an increased ability to transact with Cuban nationals and businesses, including Cuban financial institutions. Additionally, permitted U.S. banks will now be able to open accredited accounts in Cuban banks.
Polling data and public opinion
In January 2012, an Angus Reid Public Opinion poll showed 57% of Americans called for ending the travel ban that prevents most Americans from visiting Cuba, with 27% disagreeing and 16% were not sure.
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- Sanctions against Iran
- Sanctions against Japan
- Sanctions against Russia
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