Decree retaliates for funds awarded to pilots' families

 BY YVES COLON

 The Cuban government announced Monday that it
 would add a 10 percent tax on telephone calls to and
 from the United States in retaliation for new U.S.
 legislation that draws on frozen Cuban assets to award
 $58 million in damages to the Miami relatives of the
 Brothers to the Rescue pilots killed by Cuban MiGs in
 1996.

 The legislation, according to the Cuba decree published Monday in the
 Communist Party newspaper Granma, ``constitutes a gross act of aggression
 against the economy of our nation . . . by using Cuban funds -- arbitrarily frozen in
 the United States -- to deliver large sums to terrorist groups under the pretext'' of
 compensating the pilots' relatives.

 However, a State Department source said U.S. long-distance carriers cannot
 apply the 10 percent increase without violating the laws that regulate all economic
 transactions between the United States and Cuba.

 A State Department official said of the action: ``It's unfortunate that while the
 world continues to try to open itself to Cuba, the Cuban government is taking
 steps to isolate phone conversations among family members.''

 Cuba's decree is not expected to immediately affect telephone service. Any
 dispute between Havana, the U.S. government and the telephone carriers will
 probably be resolved later, when the next payments to Cuba are due.

 Joe Garcia, executive director of the Cuban American National Foundation,
 likened the decree to extortion.

 ``The horror of this is that there are millions of people who need to talk to their
 families,'' Garcia said. ``I think anytime that people are extorted, they suffer. The
 people from Cuba are going to suffer because they're going to have less contact
 with their families. The people from Miami are going to suffer because they want
 to keep tabs on their families.''

 If the Cuba tax stands, it would affect thousands of Cubans and Cuban-American
 exiles who communicate by telephone between the island and the United States.
 In 1999, there were 152 million minutes of calls billed between the United States
 and Canada, or about 16 million calls at about 10 minutes each.

 Mercy Perez, 32, a processor for a title company, frequently calls relatives on the
 island. She predicted that the surcharge would not stop Miami's Cuban-American
 community from keeping in touch with family members.

 But she added: ``It's going to be horrible, especially for the older people who
 watch their pennies and try to keep the calls short when they call. It's an
 outrage.''

 Cuban authorities have threatened to cut direct telephone communications with
 the United States if Washington tries to block the tax, or freezes or confiscates
 the funds raised by the tax.

 State Department officials said they are assessing the Cuban decree, which was
 announced Monday after it was approved by Cuba's Council of State.

 Cuba said the tax would remain in effect until all funds ``illegitimately'' frozen by
 the United States are returned to Havana in full, with interest.

 Several telephone companies, including AT&T, Sprint, Telefonica of Puerto Rico,
 and Worldcom, among others, provide telephone service to Cuba. The majority of
 the calls come from the United States because of better technology and lower
 costs.

 None of the companies would comment on the tax.

 Enrique Lopez, president of the AKL Group International and a technology
 consultant in Coral Gables, said of Cuba's announcement: ``This is a government
 mandate, which is different from the standard procedures that regulate
 international telecommunications. Instead of being a business or regulatory issue,
 it has now become a foreign policy issue.''

 Under normal conditions, Cuba's telecommunications department and the
 companies agree on the rate to charge callers, now an average of 80 to 90 cents
 a minute, one of the highest in the region despite the island's proximity to the
 United States.

 A call to Mexico, for example, costs about 30 cents a minute. The companies
 pay Cuba a maximum of 60 cents a minute for every call, a rate codified in the
 telecommunications provision of the Cuban Democracy Act. The companies
 collect the fees in the United States and pay Cuba its share -- 45 percent of the
 $130 million generated annually by the calls.

 Cuba is upset by terms of new legislation involving official Cuban assets that are
 frozen in U.S. banks. It is expected to be signed by President Clinton.

 Under the legislation, the Justice of the Victims of Terrorism Act, relatives of the
 pilots will receive about $58 million in compensatory damages from telephone
 revenue from Cuba that has been frozen in U.S. accounts since the 1960s.

 The relatives should have access to that money in about six weeks.

 The legislation is designed to make it easier for terrorism victims and surviving
 relatives to collect damages from assets awarded in federal court.

 The bill does not include the $137.7 million in punitive damages awarded by U.S.
 Circuit Judge James Lawrence King in 1997 in connection with the 1996
 shoot-down.