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The Guantanamo Bay Naval Station came into existence following the Cuban-American Treaty of 1903 following the Spanish-American War. At the time, the U.S. had gained effective control over all of Cuba.

The Treaty states that Cuba will lease the Guantanamo Bay area (land and water areas) to the United States, and that while Cuba retains ultimate sovereignty over the area, the United States will have absolute jurisdiction and control. Cuban merchant or non-military vessels have the right to pass through the waters of the Bay.

The whole situation is a dicey one, albeit one that the Cubans have been unwilling to deal with, fearing a war with the United States. The U.S. pays the Cubans just over $4k/yr for the lease, and each side leaves the other alone.

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