A sampling of some United States-based companies and their direct and indirect commercial relationships with non-United States-based companies that have commercial relationships with entities within the Republic of Cuba; and United States-based companies and their direct and indirect commercial relationships with entities within the Republic of Cuba; and other commercial relationships and commercially-relevant matters.

MERRILL LYNCH HSBC PERMITS EQUITY PURCHASES IN COMPANIES WITH CUBA PRESENCE- New York City, New York-based Merrill Lynch & Co., Inc. (2000 assets managed exceed US$1.8 trillion) and London, United Kingdom-based HSBC Holdings plc (1999 assets exceeded US$400 billion) have established a 50%-50%, US$1 billion partnership to “create the first global online banking and investment services company.  The company will serve individual customers across the world except in the United States….”  The partnership, thus far referred to as Merrill Lynch HSBC, will have its headquarters in London, United Kingdom.  However, Merrill Lynch HSBC has commenced operations in Canada and has client service centers located in the cities of Toronto, Montreal, and Vancouver.  Customers may purchase stocks, bonds, securities, mutual funds, placements, etc., listed in Canada, the United States, and Hong Kong among other countries.  Merrill Lynch & Co., Inc., will thus receive revenues from customer transactions in Canada-based companies (and eventually companies in other countries).
 

In 1998, Merrill Lynch & Co, Inc. purchased Toronto, Canada-based Midland Walwyn Capital, Inc., one of the last major independent brokerages in Canada.  Midland Walwyn Capital, with a then market value of approximately US$700 million, had 1,800 employees distributed amongst 170 branches throughout Canada and other countries.  Information provided by Midland Walwyn Capital is distributed within the United States by a subsidiary, Midland Walwyn Capital Corporation.  Midland Walwyn Capital reported that the company had “undertaken an underwriting liability or has provided advice for a fee with respect to the securities of” Toronto, Canada-based Sherritt International Corporation.  Midland Walwyn Capital also reported that “its directors and/or employees may from time to time have a position in the securities” of Sherritt International Corporation.

The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., authorizes companies subject to United States law to have non-controlling investments in third country companies that have commercial activities within the Republic of Cuba provided that the investments do not result in control in fact of the third country company and provided that a majority of the revenues of the third country company are not produced from commercial activities within the Republic of Cuba [OFAC 4 March 1994].  Some Canada-based companies with Republic of Cuba-related commercial activities include:
 

1) Mississauga, Ontario, Canada-based York Medical Inc., a licensing and development company established for the purpose of commercializing innovative life-sciences products and technologies.  The company is actively seeking to in-license complementary products and technologies in oncology.  All products in development by York Medical are available to be licensed for the major world markets.  In April 2000, York Medical Inc., reported that the European Patent Office granted a patent on one of the products licensed by York Medical, Inc., from Republic of Cuba government-operated Centro de Inmunologia Molecular (Molecular Immunology Center (CIM).  The Washington, D.C.-based United States Patent and Trade Mark Office issued a Patent on the humanized and chimeric version of this monoclonal antibody (MAb) in 1999.   York Medical is developing a family of oncology products based on this monoclonal antibody targeting solid tumors including head, neck, breast and lung.  These humanized monoclonal antibody products were originally developed by CIM and are currently in various stages of clinical evaluation within the Republic of Cuba.  Dr. Agustin Lage, Director of CIM, is a member of the Board of Directors of York Medical Inc.  Dr. Lage is the brother of H.E. Dr. Carlos Lage, a Vice President of the Council of State of the Republic of Cuba and Executive Secretary of the Council of Ministers of the Republic of Cuba.  For information, contact York Medical at telephone (905) 629-9761; Facsimile (905) 629-4959; E-mail: dallan@yorkmedical.on.ca

2) Toronto, Canada-based Sherritt International Corporation (1999 revenues approximately US$260.61 million) which has been sanctioned by the government of the United States under provisions of the 1996 Libertad Act for “trafficking” in an asset (nickel assets located in Moa, Holguin Province, Republic of Cuba) upon which there was a claim certified by the USFCSC.  Sherritt International Corporation has substantial investments within the Republic of Cuba in the nickel, oil, gas, and electricity generation sectors, and smaller investments in communications, tourism, and agricultural sectors.

3) Toronto, Canada-based Visa Gold Explorations, Inc., through its wholly-owned subsidiary, Visa Gold Resources, Inc., which has approval from the government of the Republic of Cuba to recover artifacts and treasure from a specific area located off the coast of the Republic of Cuba.

4) North Vancouver, Canada-based Leisure Canada, Inc., through its North Vancouver, Canada-based Wilton Properties subsidiary, plans to invest approximately US$400 million to develop within the Republic of Cuba hotels, marinas, golf courses, equestrian riding centers, cruise ship facilities, tennis courts, convention centers, health spas, retail facilities, and eco-tourism facilities in through a joint venture with Republic of Cuba government-operated Gran Caribe S.A., one of the three largest Republic of Cuba government-operated tourism companies.  In 1997, then San Francisco, California- based BancAmerica ROBERTSON STEPHENS Investment Management, an investment banking company with assets of US$2 billion specializing in emerging growth companies, purchased a 26.2% (fully diluted) investment in Leisure Canada.  The investment was made through a registered offshore fund, ROBERTSON STEPHENS Orphan Fund, located on Grand Cayman, Cayman Islands.  BancAmerica ROBERTSON STEPHENS Investment Management announced in November 1998 that it was being purchased by a group of investors, which included the company’s original founders.  BancAmerica ROBERTSON STEPHENS has since changed its name to BancBoston Robertson Stephens, Inc., and is a wholly owned subsidiary of Boston, Massachusetts-based FleetBoston Financial.  The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C. authorizes companies subject to United States law to have a non-controlling investments in third country companies that have commercial activities within the Republic of Cuba provided that the investments do not result in control in fact of the third country company and provided that a majority of the revenues of the third country company are not produced from commercial activities within the Republic of Cuba [OFAC 4 March 1994].  Other investors in Leisure Canada include Paris, France-based Societe General and Paris, France-based LCF Rothschild.  Leisure Canada reports no current revenues from operations within the Republic of Cuba, but expects that within the next two years more than 51% of its revenues will be from operations within the Republic of Cuba.  In February 1999, Leisure Canada, Inc., announced the appointment of Mr. Simon F. Cooper as a member of the Board of Directors.  Mr. Cooper is President of Toronto, Canada-based Marriott Lodging Canada and is Senior Vice President-Lodging, Canada Region for Washington, D.C.-based Marriott International, Inc. (1999 global revenues exceeded US$8 billion).  Undisclosed is whether Mr. Cooper and/or Marriott International, Inc., has now or plans to have a financial interest in Leisure Canada.  Mr. Cooper previously served as President and Chief Operating Officer of Toronto, Canada-based Delta Hotels and Resorts (a subsidiary of Calgary, Alberta, Canada-based Canadian Pacific Limited), which had managed properties within the Republic of Cuba, but in 1998 ceased all activity within the Republic of Cuba.  Leisure Canada and Paris, France-based Meridien Gestion SA (a subsidiary of London, United Kingdom-based Forte Hotels which itself is a subsidiary of London, United Kingdom-based Granada Group Plc) which manages Le Meridien Hotels & Resorts have an agreement to develop the Le Meridien Village in Jibacoa.  Leisure Canada, Inc. and London, United Kingdom-based PGA Golf Management Ltd. (PGAGM) have a joint venture agreement to establish professional golf within the Republic of Cuba by assisting in the organization of amateur golf within the Republic of Cuba through the development of PGA of the United Kingdom and Ireland golf academies to provide for the coaching of amateur golfers and professional golfers and for the training of both amateur golfers and professional golfers.  The joint venture will merchandise the PGA of the United Kingdom and Ireland brand and market media rights.  Established in 1992, PGAGM (which shares a similar name but is not controlled by Palm Beach Gardens, Florida-based PGA of America) is a subsidiary company of the PGA of the United Kingdom and Ireland, the oldest professional golf association in the world.  Ponte Vedra Beach, Florida-based PGA tour is also not affiliated with the PGA of the United Kingdom and Ireland.  The PGA of the United Kingdom and Ireland, and/or the PGA of any other country, the PGA tour in Europe can add a PGA Tour-sanctioned golf tournament within the Republic of Cuba to its tour schedule.  PGAGM provides development, operational and management consultancy to the golf industry.  PGAGM reports that the company has previous experience working within the Republic of Cuba through Europe-based companies.  The final round of the European Challenger Tour was held 28 October 1999 to 31 October 1999 at the Varadero Golf Course.  The Republic of Cuba’s first professional golf championship since 1959 was sponsored by Palma de Mallorca, Spain-based Sol Melia S.A. (1999 revenues US$610 million) which manages fifteen hotels within the Republic of Cuba.  In August 2000, Sol Melia reported that the company was purchasing Madrid, Spain-based Hoteles Tryp which manages four hotels within the Republic of Cuba.  Sol Melia S.A. has an agreement with PGAGM to sponsor at least one tournament annually in Varadero (which currently has the Republic of Cuba’s only 18-hole professional golf course).

5) Toronto, Canada-based Holmer Gold Mines Limited owns 50% of the Loma Hierra silver mine located in Pinar del Rio Province, Republic of Cuba.  The remaining 50% is owned by Republic of Cuba government-operated GeoMinera S.A., which is affiliated with the Ministry of Basic Industry of the Republic of Cuba.  A recently completed feasibility study completed by Holmer Gold Mines Limited on the Loma Hierro silver mine confirmed that the project is economically viable based on an open-pit, vat-leach silver mine.

LEHMAN BROTHERS TO BECOME MAJOR SHAREHOLDER IN PARENT COMPANY OF TELECOM ITALIA- New York City, New York-based Lehman Brothers Holdings Inc. (1999 assets exceeded US$10 billion), a global investment bank, is expected to become a member of the controlling-shareholder syndicate of Ivrea, Italy-based Olivetti S.p.A. (1999 revenues approximately US$27 billion).  Olivetti S.p.A., through a subsidiary, Rome, Italy-based Telecom Italia S.p.A. (1999 revenues approximately US$15 billion), has an interest in a telecommunications joint venture located within the Republic of Cuba.  With a purchase of 3% of the shares of Olivetti S.p.A., Lehman Brothers Holdings Inc. will become the second-largest shareholder in Olivetti S.p.A.  In September 2000, Lehman Brothers Holdings Inc. was one of three “Joint Bookrunning Managers” for a Guaranteed Exchangeable Bond offering by Telecom Italia S.P.A. in the amount of approximately US$2.1 billion.  Also participating as one of the three “Joint Bookrunning Managers” was New York City, New York-based Merrill Lynch International Incorporated (a subsidiary of New York City, New York-based Merrill Lynch & Co., Inc. (1999 assets managed exceeded US$1.5 trillion).
 

The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C. authorizes companies subject to United States law to have a non-controlling investment in a third country company that has commercial activities within the Republic of Cuba provided that the investment does not result in control in fact of the third country company and provided that a majority of the revenues of the third country company are not produced from commercial activities within the Republic of Cuba. [OFAC 4 March 1994]

Telecom Italia S.p.A. and Republic of Cuba government-operated Empresa Nacional de Telecommunicaciones de Cuba S.A. (ETEC S.A.) are shareholders in a joint venture (ETEC S.A.) which is controlled by the Ministry of Information and Communications of the Republic of Cuba.  ETEC S.A. has a total capital value of US$1.44 billion.  Amsterdam, The Netherlands-based Stet International Netherlands N.V. (a subsidiary of Telecom Italia S.p.A.) has a 29.29% interest in ETEC S.A., valued at US$422.33 million.

In July 1997, then New York City, New York-based ITT Corporation and STET International Netherlands N.V. signed an agreement whereby STET International Netherlands N.V. would pay approximately US$25 million to ITT Corporation for a ten-year right (after which the agreement may be renewed) to use assets (telephone facilities and telephone equipment) within the Republic of Cuba upon which ITT Corporation has a claim valued at US$130.7 million certified by the Washington, D.C.-based United States Foreign Claims Settlement Commission (USFCSC).

PEOPLE TO PEOPLE INTERNATIONAL TO SPONSOR AGRICULTURE DELEGATION TO CUBA- Spokane, Washington-based People to People International is sponsoring a visit to the Republic of Cuba from 6 April 2001 to 14 April 2001.  The delegation, “Agriculture, Development, And Economic Leaders To The Republic Of Cuba,” will be led by Mr. William A. Messina, Jr., Executive Coordinator of the Gainesville, Florida-based International Agricultural Trade and Development Center at the University of Florida.  In 1999, Mr. Messina was awarded the U.S. Department of Agriculture Special Honor Award by The Honorable Dan Glickman, Secretary of Agriculture, for “outstanding service to U.S. and Florida agriculture for research on the economic challenges and opportunities associated with resumption of trade with Cuba.”  The visit (US$3,490.00 per person) will focus upon 1) Agricultural Production and Marketing 2) Economic Development and 3) Technology Transfer and Information Systems Utilization.  People to People International has received a license for the visit from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C.  For information, please contact (800) 669-7882 extension 422.

U.S. ORIGIN CONSUMER ELECTRONIC PRODUCT IMPORT PROHIBITION EXPANDED- On 24 October 2000, the General Administration of Customs (GAC) of the Republic of Cuba under law 24-2000 prohibited the non-commercial entry to the Republic of Cuba of video cassettes, video cassette recorders/players, video cassette recorder/player parts, video cassette recorder/player accessories, and compact disc recorders/players from the United States.  The GAC reported that the law was necessary due to continuing circumvention of existing laws governing the non-commercial importation of electronic consumer products.  Travelers entering the Republic of Cuba from third countries, via the United States, are also subject to law 24-2000.  Video cassette recorders/players, video cassette recorder/player parts, video cassette recorder/player accessories, and compact disc recorders/players are only sold within the Republic of Cuba to non-Republic of Cuba nationals through Republic of Cuba government-operated U.S. Dollar retail stores. Video cassettes, video cassette recorders/players, video cassette recorder/player parts, video cassette recorder/player accessories, and compact disc recorders/players are available within the Republic of Cuba through the “black market” at prices averaging 300% of retail cost within the United States.
 

In April 2000, the GAC prohibited VHS video tapes (pre-recorded and blank) from the United States to be imported to the Republic of Cuba.  Customs Resolution 3-2000 states that travelers entering the Republic of Cuba from third countries, via the United States, are also included.  Non-Republic of Cuba nationals arriving in the Republic of Cuba will have their United States-origin VHS video tapes held by Republic of Cuba customs officials, then returned to them upon departure from the Republic of Cuba.  Republic of Cuba nationals will have their United States-origin VHS video tapes confiscated, if found.  The reason(s) for the new measure may include 1) efforts to force authorized users of VHS video tapes to make purchases from Republic of Cuba government-operated U.S. Dollar retail stores, thus earning revenues previously unobtainable and 2) desire to restrict certain types of content from being distributed within the Republic of Cuba.  United States-origin VHS video tapes for commercial use are exempt from Customs resolution 3-2000.

OFAC MAY PERMIT U.S. U.S. BANK FOREIGN SUBSIDIARIES TO ENGAGE IN CUBA TRANSACTIONS- The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., is discussing proposals to authorize foreign subsidiaries of United States-based financial institutions to participate in Republic of Cuba-related transactions with respect to the exports of agricultural commodity products and healthcare products to the Republic of Cuba within the provisions of the “Trade Sanctions Reform and Export Enhancement Act of 2000” (P.L. 106-387).  The issue is being addressed by under the auspice of the Inter-Agency Review Process which includes representatives of The White House (National Security Council), United States Department of State, United States Department of the Treasury, United States Department of Commerce, and United States Department of Agriculture. Representatives of United States-based companies are invited to present recommendations (in writing or by arranging a meeting).
 

The “Trade Sanctions Reform and Export Enhancement Act of 2000” (P.L. 106-387) was signed into law on 28 October 2000 by The Honorable William J. Clinton, President of the United States of America.  The “Trade Sanctions Reform and Export Enhancement Act of 2000” authorizes the continuation (and partial expansion) of healthcare product exports (with certain restrictions) from the United States to the Republic of Cuba and authorizes agricultural commodity product exports from the United States to Republic of Cuba government-operated entities within the Republic of Cuba and to non-Republic of Cuba government-operated entities within the Republic of Cuba.  Provisions of the legislation take effect on 28 February 2000.

YOUNG PRESIDENTS’ ORGANIZATION SEEKING DELEGATION VISIT TO CUBA IN DECEMBER 2001- A delegation of members (including spouses and children) of Irving, Texas-based Young Presidents’ Organization (YPO) is seeking to visit the Republic of Cuba in December 2001.  The YPO is seeking a license from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., to permit a United States registered passenger cruise ship to dock at the port of Havana, Republic of Cuba, for approximately 20 hours as part of an “educational tour.”  The cruise ship will visit other Caribbean Sea-area countries.  Both spouses and children would be participating in the “educational tour.”
 

The YPO was established in 1950 and has 160 local chapters worldwide with a combined membership of approximately 9,000.  Criteria for membership in the YPO is: applicants must be approved for membership before their 44th birthday; applicants hold one or more of the following titles- President, Chairman and Chief Executive Officer, Managing Director, Managing Partner, or Publisher; corporation (including not-for-profit, academic institution, and government entities) must have at least 50 full-time employees; revenues must be at least US$8 million annually (financial institutions must have assets of at least US$160 million); total compensation of all employees (excluding compensation of the applicant) must exceed US$1 million; and corporation must have a value of US$10 million.

HERBIE HANCOCK AND HARRY BELAFONTE ATTEND ANNUAL HAVANA JAZZ FESTIVAL- Musician Mr. Herbie Hancock and the singer/actor Mr. Harry Belafonte attended the annual Havana Jazz Festival in the Republic of Cuba under licenses issued by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C.

U.S. GOVERNMENT PROHIBITS OFFICIAL TRAVEL ON CUBANA AIRLINES- The United States Department of State in Washington, D.C., issued the following determination on 1 December 2000: “Serious concerns about the operation of the Cuban flag carrier, Cubana de Aviacion, particularly regarding its safety standards and maintenance regime, have caused the U.S. Interests Section to prohibit its personnel from domestic and international travel on [Republic of Cuba government-operated] Cubana de Aviacion. Americans who are required to travel by air within Cuba may wish to defer their travel or consider alternate means of transportation.”  Although not stated in the determination by the United States Department of State, the determination would seem to also apply to all Republic of Cuba government-operated air carriers.
 

Individuals subject to United States law traveling to the Republic of Cuba under the auspice of a general license or a specific license from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., should contact their insurance provider to learn whether the determination by the United States Department of State jeopardizes personal insurance coverage or company insurance coverage for individuals subject to United States law who are not employees of the United States government traveling on Republic of Cuba government-operated air carriers.

Separately, the United States Department of State reported the following: The Federal Aviation Administration (FAA) in Washington, D.C., under the United States Department of Transportation in Washington, D.C., “has completed an exchange of information” with Republic of Cuba government-operated Instituto de Aeronautica Civil de Cuba (IACC) and “found that security procedures at the four airports where” United States-based charter airlines serve the United States- “Havana, Holguin, Camaguey, and Santiago de Cuba, meet the” Montreal, Canada-based “International Civil Aviation Organization (Annex 17) standards.”

U.S. COMPANIES MAY SETTLE CLAIMS WITH PAYMENTS, EQUITIES, ETC.; TRAVEL TO CUBA- A United States-based company which has a claim certified by the Foreign Claims Settlement Commission (USFCSC) in Washington, D.C., may settle the claim and may travel to the Republic of Cuba to inspect the status of the claim.  The Libertad Act signed into law in March 1996 by The Honorable William J. Clinton, President of the United States of America, does not deviate from international law in permitting the resolution of investor disputes, including expropriations, between corporations and sovereign governments, such as the government of the Republic of Cuba.  In addition, a United States-based company which does not have a claim certified by the Foreign Claims Settlement Commission (USFCSC) in Washington, D.C., may obtain the rights to a claim from a United States-based company with a claim certified by the USFCSC.
 

The Libertad Act does not restrict the type of claim settlement agreement which may be offered by the government of the Republic of Cuba and accepted by a United States-based company.  Suggestions for types of claim settlement agreements, which could be assignable to others, from representatives of United States-based companies have included:  1) Cash payments 2) Bonds 3) Debt equity swaps 4) Import duty waivers and 5) Tax holidays.

The Libertad Act authorizes any individual subject to United States law with a claim certified by the USFCSC, to negotiate an agreement (payment, equity, etc.) to fully resolve or partially resolve with third parties (including Republic of Cuba government-operated entities) who are using assets within the Republic of Cuba upon which there is claim certified by the USFCSC.  A United States-based company or individual subject to United States law may obtain (transfer, purchase, etc.) a claim from another party and then enter into an agreement with a third-country entity to resolve the claim so as to provide one-time value or a continuing value from the resolution of the claim.
 

There are 5,911 claims which have been certified by the USFCSC as of June 1972.  Of these claims, 30 United States companies hold 56.85% of the total value, which is approximately US$1,851,197,358.00 (not including any interest calculations).  The USFCSC has permitted interest to be accrued in the amount of 6% per annum.

In July 1997, then New York City, New York-based ITT Corporation and STET International Netherlands N.V. signed an agreement whereby STET International Netherlands N.V. would pay approximately US$25 million to ITT Corporation for a ten-year right (after which the agreement may be renewed) to use assets (telephone facilities and telephone equipment) within the Republic of Cuba upon which ITT Corporation has a claim valued at US$130.7 million certified by the USFCSC. Rome, Italy-based Telecom Italia S.p.A. (1999 revenues approximately US$15 billion), a subsidiary of Ivrea, Italy-based Olivetti S.p.A. (1999 revenues approximately US$27 billion) and Republic of Cuba government-operated Empresa Nacional de Telecommunicaciones de Cuba S.A. (ETEC S.A.) are shareholders in a joint venture which is controlled by the Ministry of Information and Communications of the Republic of Cuba.  ETEC S.A. has a total capital value of US$1.44 billion.  Amsterdam, The Netherlands-based Stet International Netherlands N.V. (a subsidiary of Telecom Italia S.p.A.) has a 29.29% interest in ETEC S.A. valued at US$422.33 million.

New York City, New York-based Citibank N.A., a subsidiary of New York City, New York-based Citigroup Inc. (1999 assets exceeded US$500 billion) is a substantial shareholder in New Orleans, Louisiana-based Cuban American Nickel which has a claim certified by the USFCSC in the amount of US$88.30 million.  [Separately, Citigroup has a claim certified by the USFCSC in the amount of US$6.20 million].  Havana, Republic of Cuba-based Moa Bay Mining, a subsidiary of Cuban American Nickel, had obtained a loan in 1957 to finance development in Holguin Province, Republic of Cuba, and in the United States (State of Louisiana).  In 1961, the assets of Moa Bay Mining within the Republic of Cuba were nationalized by the government of the Republic of Cuba.  A predecessor company (Freeport Sulfur) then-affiliated with New Orleans, Louisiana-based Freeport-McMoRan Cooper & Gold, Inc. (1999 revenues exceeded US$1 billion), distributed assets to settle outstanding debt, including the debt of Cuban American Nickel.  The principal asset of Cuban American Nickel is the US$88.30 million claim against the government of the Republic of Cuba.  Other shareholders in Cuban American Nickel include: Pittsburgh, Pennsylvania-based Mellon Bank, N.A., a subsidiary of Pittsburgh, Pennsylvania-based Mellon Financial Corporation (1999 assets exceeded US$500 billion); Buffalo, New York-based HSBC Bank USA (formerly Marine Midland Bank), a subsidiary of London, United Kingdom-based HSBC Holdings plc (1999 assets exceeded US$400 billion); Wilmington, Delaware-based Bankers Trust, a subsidiary of Frankfurt, Germany-based Deutsche Bank AG; and three Louisiana-based banks.  The United States Department of State in Washington, D.C., not acting at the request of the shareholders of Cuban American Nickel, sanctioned Toronto, Canada-based Sherritt International Corporation (1999 revenues approximately US$260.61 million) under provisions of the Libertad Act for “trafficking” in an asset upon which there was a claim certified by the USFCSC- nickel assets located in Moa, Holguin Province, Republic of Cuba.  Sherritt International Corporation has substantial investments within the Republic of Cuba in the nickel, oil, gas, and electricity generation sectors, and smaller investments in communications, tourism, and agricultural sectors.  Reportedly, there were no material discussions to resolve the matter between representatives of Sherritt International Corporation, the shareholders of Cuban American Nickel, and officials of the United States Department of State.

An attorney representing Central Santa Lucía, L.C., a limited liability company registered in the State of Florida, reports that the company is using the “trafficking” provisions of the Libertad Act to seek restitution from Palma de Mallorca, Spain-based Sol Melia S.A. (1999 revenues US$610 million) which manages fifteen hotels within the Republic of Cuba, including two hotels on the disputed land.  [In August 2000, Sol Melia reported that the company was purchasing Madrid, Spain-based Hoteles Tryp which manages four hotels within the Republic of Cuba].  According to the attorney, Central Santa Lucia, L.C., has shareholders who are “a large, mostly Cuban-American family” [who were Republic of Cuba nationals when the government of the Republic of Cuba expropriated their property] and is the successor company to Republic of Cuba-based entities that “have owned the land (100,000 acres) since 1857, on which” Sol Melía S.A.; Montreal, Canada-based Air Transat; Dusseldorf, Germany-based LTI-International Hotels; Kingston, Jamaica-based SuperClubs Super-Inclusive Resorts; Paris, France-based Accor S.A.; and Paris, France-based Club Mediterranee S.A. “are all trafficking (beachfront hotels)” in Holguín Province, Republic of Cuba.  “This is the underlying situation for the United States Department of State’s Libertad Act Title IV actions in progress.”  There have been discussions (including at least one discussion attended by officials of the United States Department of State) between representatives Central Santa Lucia, L.C., and representatives of Sol Melia S.A., but the discussions have yet to result in a resolution of the matter.  Currently, the representatives of Central Santa Lucia, L.C., are requesting that the United States Department of State sanction Sol Melia S.A. under the Title IV provision of the Libertad Act.  Title IV sanctions include denial of entry (except for medical treatment) to the United States by senior-level executives, officers, and substantial shareholders of Sol Melia S.A.  [NOTE: The Committee on Corporate Claims, which consists of a majority of the United States-based companies with the largest claims certified by the USFCSC, opposed, based upon principals of international law, the inclusion in the Libertad Act of individuals who were Republic of Cuba nationals at the time their assets were expropriated by the government of the Republic of Cuba.]

In 1999, Stamford, Connecticut-based Lone Star Industries, Inc. (1998 revenues US$347.1 million), received a license from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., for representatives to visit the Republic of Cuba for the purpose of visiting a cement plant in Mariel, 20 kilometers west of the city of Havana.  A date for the visit (which was expected to include meetings with representatives of the Ministry of Foreign Affairs of the Republic of Cuba and the Ministry of Basic Industry of the Republic of Cuba).has yet to be confirmed.  This was one of several licenses issued, reportedly since 1992, by the OFAC to United States-based companies having a claim registered with the USFCSC for the purpose of authorizing representatives of the company to visit the Republic of Cuba to inspect the claim.  Lone Star Industries has a claim certified by the USFCSC in the amount of US$24.90 million.  Lone Star Industries Inc. was acquired in 1999 by Wiesbaden, Germany-based Dykerhoff AG (1998 revenues of approximately US$2 billion) for US$1.19 billion, plus the assumption of US$50 million in debt.  Dykerhoff AG now has nominal control of the claim certified by the USFCSC by Lone Star Industries Inc.  Monterrey, Mexico-based Cemex SA de CV. (1999 revenues approximately US$4.5 billion), the third-largest cement producer in the world, provided technical assistance from 1994 through 1996 to a Republic of Cuba government-operated cement plant also located in Mariel.  Cemex SA de CV. had signed a ten-year agreement with the government of Mexico-owned Mexico Bank for Foreign Trade (Bancomext) and Republic of Cuba government-operated UEC (Cement Producers Association of the Republic of Cuba) to provide technical assistance at their jointly-owned cement plant located in Mariel, constructed by the government of the Republic of Cuba in the 1970’s.  In 1994, Bancomext had received a 50% interest in the cement plant in a swap for debt owed to Mexico by the government of the Republic of Cuba.  The ten-year agreement had provided Cemex SA de CV. exclusive rights to export the cement and clinker produced by the five other Republic of Cuba government-operated cement plants located in the Republic of Cuba.  In 1996, Cemex SA de CV. “officially” ceased activities within the Republic of Cuba.  Republic of Cuba cement production:      Year  Cement Production In Tons  1994  1,085,000 Tons  1995  1,456,000 Tons  1996  1,438,000 Tons  1997  1,701,000 Tons  1998  1,713,000 Tons  1999  2,000,000 Tons

The policy of the government of the United States with respect to travel to the Republic of Cuba by representatives of companies with claims certified by the USFCSC has changed over the years.  For example, on 27 January 1997, the U.S.-Cuba Trade and Economic Council wrote to the OFAC seeking the criteria for which the OFAC would grant a license to a United States-based company having a claim certified by the USFCSC for the specific purpose of authorizing representatives of the claimant to visit the Republic of Cuba to visually inspect the claim.  On 28 February 1997, the OFAC responded (CU-155302) “Travel for the purpose you have described does not fall into any categories in 515.560 [Cuban Assets Control Regulations, 31 C.F.R. Part 515] for which a specific license may be issued.  After consultation with the Department of State, it has been determined that it would be inconsistent with current policy to authorize travel transactions by U.S. persons for the purpose described in your letter.”

UNITED STATES DAIRY EXPORT COUNCIL DELEGATION PLANNING CUBA VISIT IN FEBRUARY 2001- The Arlington, Virginia-based United States Dairy Export Council (USDEC) is planning to sponsor a visit to the Republic of Cuba in February 2001.  The delegation would include dairy farmers, dairy processors, and dairy exporters.  The USDEC was created in 1995 to “provide a comprehensive resource for United States dairy exporters.”  The USDEC receives some funding from the Market Access Program (MAP) of the Foreign Agricultural Service (FAS) of the United States Department of Agriculture in Washington, D.C.  The MAP is designed to support the development, maintenance and expansion of commercial export markets for United States agricultural products.

CROWLEY MARITIME CORPORATION SEEKING U.S.-CUBA ROUTINGS- Jacksonville, Florida-based Crowley Liner Services, a subsidiary of Oakland, California-based Crowley Maritime Corporation (1999 revenues approximately US$1.2 billion), is seeking licenses from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., and Bureau of Export Administration (BXA) of the United States Department of Commerce in Washington, D.C., to provide regularly-scheduled common carrier services between the United States and the Republic of Cuba, specifically for the transportation of United States-produced agricultural products.  The company is seeking to operate both 1) regularly-scheduled common carrier services that include the Republic of Cuba in existing multi-destination routings and 2) common carrier services between the United States and the Republic of Cuba.  Crowley Maritime Corporation operates more than thirty oceangoing vessels (ships and barges) with a combined capacity exceeding 30,000 twenty-foot equivalent units.  Information about Crowley Maritime Corporation and its subsidiaries: Crowley Liner Services, Crowley Marine Services, Crowley Logistics and Crowley Petroleum Transport may be found on the Internet at http://www.crowley.com.
 

The “Trade Sanctions Reform and Export Enhancement Act of 2000” signed into law on 28 October 2000 by The Honorable William J. Clinton, President of the United States of America, did not nullify Section 6 (b) of the Cuban Democracy Act (CDA) signed into law in 1992 by The Honorable George W. Bush, President of the United States of America, which authorized the OFAC to license vessels (no distinction between United States-flagged vessels or non-United States-flagged vessels) to operate between the United States and the Republic of Cuba.  With respect to implementation of the “Trade Sanctions Reform and Export Enhancement Act of 2000,” the OFAC may license the transport agricultural commodities, medicine, medical devices or other products directly from the United States to the Republic of Cuba.  Since 1992, the OFAC has authorized licenses for direct shipping from the United States to the Republic of Cuba.  The CDA states that a vessel “which enters a port or place in Cuba to engage in the trade of goods or services may not, within 180 days after departure from such port or place in Cuba, load or unload any freight at any place in the United States, except pursuant to a license by the Secretary of the Treasury.”

ETEC S.A. PLANS YELLOW PAGES, OFAC AUTHORIZES U.S. COMPANIES TO ADVERTISE- Republic of Cuba government-operated Empresa de Telecomunicaciones de Cuba S.A. (ETEC S.A.), a joint venture operated by the Ministry of Communications of the Republic of Cuba, will publish the Republic of Cuba’s first Yellow Pages, to be included within the 2001 ETEC S.A. telephone directory.  The Yellow Pages will be organized by products and services, and have a sub-organization by province.  ETEC S.A.’s in-house publication, En Linea, reported that the company expected to sell more than US$800,000.00 in Yellow Pages advertisements.  ETEC S.A. began publishing national telephone directories in 1996 (prior to which the last national telephone directories were published in the early 1980’s).  Telephone directories are published for the city of Havana and for the remainder of the Republic of Cuba under three categories: Western Region, Central Region, and Eastern Region.  ETEC S.A. reported distributing 456,000 telephone directories in 2000.  The payment terms for Yellow Pages advertisements for the 2001 telephone directory are 50% of the cost due immediately and 50% upon publication in March 2001.
 

In 1997, the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., confirmed that United States-based companies may provide camera-ready artwork to Republic of Cuba-based publications and make payments to Republic of Cuba-based publications for the placement of advertisements in Republic of Cuba-based publications.  This 20 June 1997 response to the U.S.-Cuba Trade and Economic Council was based upon 14 May 1997 correspondence written on behalf of a member of the organization who was interested in placing an advertisement in the inaugural English-language monthly edition of Negocios en Cuba, a business publication published by the Republic of Cuba government-controlled Prensa Latina News Agency.  The OFAC also permits United States companies to produce, deliver, and receive payment for, completed commercials and programming to be aired on Republic of Cuba-based television stations and Republic of Cuba-based radio stations, and to purchase Republic of Cuba-produced programming for use in the United States and other countries.

Rome, Italy-based Telecom Italia S.p.A. (1999 revenues approximately US$15 billion), a subsidiary of Ivrea, Italy-based Olivetti S.p.A. (1999 revenues approximately US$27 billion) and ETEC S.A. are shareholders in a joint venture which is controlled by the Ministry of Information and Communications of the Republic of Cuba.  ETEC S.A. has a total capital value of US$1.44 billion.  Amsterdam, The Netherlands-based Stet International Netherlands N.V. (a subsidiary of Telecom Italia S.p.A.) has a 29.29% interest in ETEC S.A. valued at US$422.33 million.
 

One Column (in centimeters)	Havana	Western Region	Central Region	Eastern Region
1x5	US$240.00	US$108.00	US$153.00	US$124.00
1.5x5	US$350.00	US$157.00	US$227.00	US$182.00
2x5	US$415.00	US$186.00	US$265.00	US$215.00
3x5	US$510.00	US$229.00	US$326.00	US$265.00
4x5	US$650.00	US$292.00	US$416.00	US$338.00
5x5	US$745.00	US$335.00	US$476.00	US$387.00
6x5	US$840.00	US$378.00	US$537.00	US$436.00
7x5	US$910.00	US$409.00	US$582.00	US$473.00
8x5	US$930.00	US$418.00	US$595.00	US$483.00
10x5	US$1,100.00	US$495.00	US$704.00	US$572.00
Two Columns (in centimeters)
4x10	US$1,150.00	US$575.00	US$760.00	US$670.00
6x10	US$1,300.00	US$595.00	US$885.00	US$720.00
8x10	US$1,600.00	US$720.00	US$1,060.00	US$885.00
10x10	US$1,850.00	US$840.00	US$1,230.00	US$1,025.00
12x10	US$1,920.00	US$875.00	US$1,280.00	US$1,070.00
14x10	US$1,960.00	US$900.00	US$1,305.00	US$1,095.00
16x10	US$1,990.00	US$915.00	US$1,340.00	US$1,120.00
Three Columns (in centimeters)
12x20.5	US$4,230.00	US$2,040.00	US$2,710.00	US$2,380.00
25x20.5	US$6,300.00	US$2,990.00	US$3,600.00	US$3,290.00

OFAC REVIEWING DIRECT PAYMENTS, MARKETING REPRESENTATIVES, SUBSIDIARIES, INSURANCE- Representatives of the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., the Bureau of Export Administration (BXA) of the United States Department of Commerce in Washington, D.C., the United States Department of State in Washington, D.C., and The White House are reviewing drafts of the regulations which will govern the “Trade Sanctions Reform and Export Enhancement Act of 2000 (H.R. 4461)” signed into law on 28 October 2000 by The Honorable William J. Clinton, President of the United States of America. Representatives of United States-based companies are invited to present recommendations (in writing or by arranging a meeting) to the OFAC. The OFAC is reportedly expected to finalize the regulations by 31 December 2000.
 

The “Trade Sanctions Reform and Export Enhancement Act of 2000” authorizes the continuation (and partial expansion) of healthcare product exports (with certain restrictions) from the United States to the Republic of Cuba and authorizes agricultural commodity product exports from the United States to Republic of Cuba government-operated entities within the Republic of Cuba and to non-Republic of Cuba government-operated entities within the Republic of Cuba.  Provisions of the legislation take effect on 28 February 2000.

The OFAC is considering the following issues, among others, with respect to drafting the regulations for the “Trade Sanctions Reform and Export Enhancement Act of 2000”  1) Re-authorize direct correspondent banking services so that entities within the Republic of Cuba may electronically transfer payments directly from the Republic of Cuba to the United States.  With agricultural product exports having low profit margins, companies within countries that have direct correspondent banking services with the Republic of Cuba will have an immediate transactional competitive advantage. 2) Permit full-time or part-time marketing representatives (United States nationals, non-United States nationals, and Republic of Cuba nationals) within the Republic of Cuba to assist with the identification of export opportunities and to assist with the coordination of export-related transactions. 3) Continue to define “United States Company” as including non-United States-based subsidiaries of United States companies. 4) Authorize representatives of United States-based insurance companies to visit the Republic of Cuba in conjunction with the provision of insurance services.
 

Currently, when a Republic of Cuba-based entity seeks to purchase a product (agricultural, books, magazines, newspapers, music, motion picture, farm, food, informational materials, medical equipment, medical instruments, medical supplies, medicated products, medicines, pharmaceuticals) authorized by the OFAC and/or by the BXA, the funds must be transferred to a third-country financial institution from which the United States-based company must then obtain the funds, or cash must be delivered from the Republic of Cuba to the United States.

The required triangular-payment system results in transaction cost increases of 5% to 15%, which, according to United States-based companies, have been significant enough that Republic of Cuba-based entities conclude transactions with non-United States-based suppliers.  Assisting United States-based companies in obtaining funds from Republic of Cuba-based entities on a timely basis would be the Republic of Cuba’s membership (1990) in S.W.I.F.T., a global bank-owned cooperative supplying secure messaging services and interface software to 6,766 financial institutions (banks, brokers, investment managers, securities depositories and clearing organizations, and stock exchanges) in 189 countries (including the United States). Banks within the Republic of Cuba connected to S.W.I.F.T. are: Republic of Cuba government-operated Banco Central de Cuba, Republic of Cuba government-operated Banco Financiero Internacional, S.A., Republic of Cuba government-operated Banco Internacional de Comercio S.A., Republic of Cuba government-operated Banco de Credito Y Comercio, Republic of Cuba government-operated Banco Popular de Ahorro, Republic of Cuba government-operated Banco Metropolitano S.A., Republic of Cuba government-operated Banco Nacional de Cuba, and Republic of Cuba government-operated Banco Exterior de Cuba.

ITS OF LONDON MAY BE AUTHORIZED TO INSPECT U.S. AGRICULTURAL EXPORTS TO CUBA- London, United Kingdom-based Intertek Testing Services (1999 revenues approximately US$490 million) may be authorized by the government of the Republic of Cuba to provide agricultural product inspections for United States exports to the Republic of Cuba.  The government of the Republic of Cuba may require agricultural commodity exports from the Republic of Cuba to be certified (quality and quantity) prior to entering the Republic of Cuba.  London, United Kingdom-based Caleb Brett, a wholly-owned subsidiary of Intertek Testing Services (ITS), has a representation agreement with Republic of Cuba government-operated Cubacontrol S.A. (under the auspice of the Revolutionary Armed Forces of the Republic of Cuba).  Cubacontrol S.A. provides inspection and laboratory services; custom brokerage; freight forwarding; and security services.  Caleb Brett reports that the company provides the following services:
 

Inspection Services	Independent quality and quantity inspections of ship and shore, railcars, storage locations, pipelines and more.
Laboratory Services	Independent Analysis for a complete range of commodities, including crude oil, petroleum products and chemicals.
Laboratory Equipment and Products	A listing of commonly tested products and laboratory equipment.
Laboratory Facilities Management	Information regarding Caleb Brett’s expertise in providing manpower and facilities management services.
Oil Condition Monitoring	A Condition Monitoring Program can save time and money.  Your Engine Talks- We Listen.
Technical and Calibration	Marine Surveying, Flow Measurement, Tank Calibration and Loss Control.
Agricultural Services	Quality and Quantity certification services for a variety of agricultural products.

Caleb Brett has its agricultural commodity headquarters for The Americas located in Webster, Texas, and has offices providing quality and quantity certification services for agricultural products located in Metairie, Louisiana, and in Essington, Pennsylvania.  Caleb Brett, established in 1885, has 309 offices and 155 laboratories located in 70 countries.  ITS [established in 1885] operates in “91 countries directly and in a further 16 countries through agents.  ITS has over 8,500 employees and about 7,000 subcontractor specialists, working in 236 laboratories and 471 offices.”  ITS has operated within the Republic of Cuba since 1966 and in 1997 established an office in the city of Havana.  ITS is establishing an office in Santiago de Cuba (860 kilometers east of Havana), the second-largest city within the Republic of Cuba.  ITS reported that gross revenues from operations within the Republic of Cuba in 1999 were approximately US$2 million.  ITS reports that the company certifies the quality and quantity of 50% of all products entering the Republic of Cuba and that the company certifies the quality and the quantity of 95% of all products entering the Republic of Cuba from Canada.  A primary client of ITS is Republic of Cuba government-operated Alimport.
 

Alimport is responsible for the importation of food products for use by the Republic of Cuba’s 11.2 million citizens.  In 1999, Alimport purchased 1) approximately US$750 million in food products from companies located in Canada, France, Brazil, New Zealand, Argentina, Mexico, Vietnam, and the People’s Republic of China among other countries.  Among the products imported were powdered milk, cooking oil, rice, wheat, soy, corn, beans, peas, poultry, and vitamins and 2) approximately US$250 million in food products and fertilizers for use by 1) Republic of Cuba government-operated U.S. Dollar retail stores 2) Republic of Cuba government-operated companies 3) Republic of Cuba-based joint ventures and 4) the tourism sector.

UNITED STATES AIRLINES CONSIDER INVESTMENT IN MEXICANA, WHICH HAS CUBA OPERATIONS- The government of Mexico is planning to sell up to 25% in each of two the airlines controlled by Mexico City, Mexico-based, government of Mexico-controlled CINTRA S.A. de C.V.  The airlines are Mexico City, Mexico-based Aeromexico (the largest airline in Mexico) and Mexico City, Mexico-based Mexicana de Aviacion SA de CV (the fourth oldest airline in the world). Aeromexico does not service the Republic of Cuba.  Mexicana (and a wholly owned subsidiary airline) does service the Republic of Cuba.
 

Mexicana operates a daily flight between Mexico City, Mexico, and the city of Havana, Republic of Cuba, using Boeing 727 aircraft and Airbus A-320 aircraft.  Mexicana has an office located in Havana.  Mexicana provides “heavy maintenance” for aircraft operated by Republic of Cuba government-operated Cubana de Aviacion.  Mexicana has fifty-seven aircraft.

Cancun, Mexico-based Aerocaribe (established in 1975) is a wholly owned subsidiary of Mexicana.  Aerocaribe provides service between Havana, the resort area of Varadero (140 kilometers east of Havana) and Cancun (with connections to other cities) using Boeing DC-9-14 aircraft.  Aerocaribe has twenty-seven aircraft.

United States-based airlines expected to have an interest in purchasing a portion of Aeromexico and/or Mexicana include: Elk Grove Township, Illinois-based United Airlines, Inc. (1999 revenues exceeded US$17 billion), Dallas/Fort Worth Airport, Texas-based American Airlines (1999 revenues exceeded US$19 billion), Atlanta, Georgia-based Delta Air Lines (1999 revenues exceeded US$14 billion), and Houston, Texas-based Continental Airlines, Inc. (1999 revenues exceeded US$7 billion) has a 28% interest.  The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., authorizes companies subject to United States law to have non-controlling investments in third country companies that have commercial activities within the Republic of Cuba provided that the investments do not result in control in fact of the third country company and provided that a majority of the revenues of the third country company are not produced from commercial activities within the Republic of Cuba [OFAC 4 March 1994].
 

Aeromexico is a member of the SkyTeam Alliance, which includes Delta Air Lines.  Mexicana is a member of the Star Alliance, which includes United Airlines.

United Airlines, American Airlines, Delta Air Lines, and Continental Airlines each have Carrier Service Provider (CSP) licenses from the OFAC which authorize the transportation of passengers and cargo between the United States and the Republic of Cuba.
 

Only Dania Beach, Florida-based Gulfstream International Airlines (1999 revenues exceeded US$80 million) within which Continental Airlines, Inc., has a 28% interest, has chosen to operate regularly scheduled charter flights between the United States and the Republic of Cuba using its own aircraft.  Aircraft owned by American Airlines, United Airlines, and Delta Air Lines have been chartered by other CSP’s for regularly scheduled charter services between the United States and the Republic of Cuba.  Gulfstream International Airlines has a code-share agreement with St. Paul, Minnesota-based Northwest Airlines Corporation (1999 revenues exceeded US$10 billion).  Gulfstream International Airlines has a connection agreement and operates the TWA Connection from San Juan, Puerto Rico, with St. Louis, Missouri-based Trans World Airlines, Inc. (1999 revenues exceed US$3 billion).  Gulfstream International Airlines has a code-share agreement with Panama City, Panama-based COPA airlines.  New York, New York-based American Express Travel Related Services Company, Inc., has a Travel Service Provider (TSP) license from the OFAC.

Since 1962, Delta, Continental, and United Air Lines have had route authorities from the following cities: Delta- Havana to Houston, Los Angeles, New Orleans, San Francisco, and San Juan; Continental- Havana to Fort Lauderdale, West Palm Beach, United- Havana to Miami, Key West, Baltimore, Boston, Dallas, Houston, Los Angeles, New Orleans, New York, Newark, Philadelphia, San Francisco, San Juan, St. Croix, St. Thomas, and Washington, D.C.; and Camaguay to Miami, Baltimore, Boston, Dallas, Houston, Los Angeles, New Orleans, New York, Newark, Philadelphia, San Francisco, San Juan, St. Croix, St. Thomas, and Washington, D.C.

Individuals subject to United States law traveling to the Republic of Cuba should only use travel agents that have been licensed by the OFAC.  Tico Travel, 161 East Commercial Boulevard, Fort Lauderdale, Florida  33334.  Telephone: (954) 493-5335 or (800) 493-8426; Facsimile: (954) 493-8466; E-mail: tico@gate.net; Internet: http://www.destinationcuba.com.

MEMBERS OF CONGRESS FROM ILLINOIS EXPECTED TO VISIT CUBA IN FEBRUARY 2001- A delegation of four members of the United States House of Representatives are expected to visit the Republic of Cuba in February 2001:
 

Member of Congress	District Offices In The State Of Illinois
The Honorable Judy Biggert (R-13th)	Clarendon
The Honorable Ray LaHood (R-18th)	Jacksonville, Peoria, Springfield
The Honorable David D. Phelps (D-19th)	Decatur, Eldorado
The Honorable John M. Shimkus (R-20th)	Centralia, Collinsville, Springfield

Representative Biggert, Representative LaHood, and Representative Phelps are members of the Committee on Agriculture of the United States House of Representatives.  Representative Shimkus is a member of the Committee on Commerce of the United States House of Representatives.

SIU DELEGATION TO VISIT CUBA IN 2001 WELCOMES BUSINESS REPRESENTATIVES- A delegation of approximately forty individuals under the auspice of Carbondale, Illinois-based Southern Illinois University (SIU) which was scheduled to visit the Republic of Cuba in November 2000, is now reviewing four dates for the delegation to visit the Republic of Cuba in 2001: A) 20 February 2001 to 2 March 2001 B) 8 march 2001 to 18 March 2001 C) 16 April 2001 to 26 April 2001 and D) 14 May 2001 to 24 May 2001.  The focus of the delegation will be on education, agriculture, healthcare, and public policy.  While representatives of United States-based companies were not included among the members of the delegation scheduled to visit the Republic of Cuba in November 2000, SIU is interested in including representatives of United States-based companies as members of the delegation scheduled to visit the Republic of Cuba in 2001. For information, contact Mr. John Haller, Vice President for Academic Services at SIU: Telephone: (618) 536-3331; Facsimile: (618) 536-3404; and e-mail: jhaller@notes.siu.edu

CARGOLUX OF LUXEMBOURG MAY IN FUTURE HAVE CARGO AGREEMENT WITH CUBANA AIRLINES- Luxembourg Airport, Grand Duchy of Luxembourg-based Cargolux Airlines International S.A. (Cargolux) may in the future have a cargo agreement with Republic of Cuba government-operated Cubana de Aviacion (Cubana) when the volume of cargo warrants the use of Boeing 747-400 aircraft, according to a representative of the company.  Cargolux (1999 revenues US$644 million) is “Europe’s largest all-cargo airline, operating a modern fleet of B747-400 freighters on a worldwide network, covering more than 30 destinations on scheduled all-cargo flights.  The company has more than 60 offices in 46 countries and also offers an extensive trucking network in Europe and the US as well as charter and aircraft maintenance services. Cargolux employs more than 1200 staff worldwide.”  In the United States, Cargolux has offices the cities of San Francisco, Houston, New York City, Huntsville, Seattle, and Miami.

CITIBANK AND CHASE MANHATTAN BANK CUSTODIANS FOR SHARES IN RAO NORILSK NICKEL- According to Moscow, Russian Federation-based RAO Norilsk Nickel (1999 revenues US$2.9 billion), which is considering a project within the Republic of Cuba, approximately 10% of its shareholders are located outside of the Russian Federation.  RAO Norilsk Nickel has 188,999,874 shares outstanding with a current per share price of US$8.15, resulting in a market capitalization for RAO Norilsk Nickel of approximately US$1,540,348,973.00.  The 10% interest in RAO Norilsk Nickel is currently valued at approximately US$154,034,897.00.  Nominees (custodian) for some of the shareholders include: New York City, New York-based Citibank, N.A., a subsidiary of New York City, New York-based Citigroup Inc. (1999 assets exceeded US$500 billion) and Moscow, Russian Federation-based Chase Manhattan Bank International, a subsidiary of New York City, New York-based Chase Manhattan Corporation (1999 assets exceeded US$350 billion).  Unavailable is information confirming whether a subsidiary(s) of Citigroup Inc. or Chase Manhattan Corporation are shareholders in RAO Norlisk Nickel on their own account. The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C. authorizes companies subject to United States law to have a non-controlling investments in third country companies that have commercial activities within the Republic of Cuba provided that the investments do not result in control in fact of the third country company and provided that a majority of the revenues of the third country company are not produced from commercial activities within the Republic of Cuba. [OFAC 4 March 1994].  In 1999, RAO Norilsk Nickel reported that the company’s global export share was approximately 17% of nickel, approximately 5% of cobalt, and approximately 3.5% of copper.  The company also produces approximately 40% of the world’s platinum group metals.  In 1998, according to RAO Norilsk Nickel, the Republic of Cuba ranked 12th amongst world nickel producers with approximately 3%.  On 1 November 2000, Mr. Yuri Kotlyar, Chairman of RAO Norilsk Nickel, reported that the company had presented a feasibility study to Republic of Cuba government-operated Caribbean Nickel S.A. (under the auspice of the Ministry of Basic Industry of the Republic of Cuba) and was awaiting a response from Caribbean Nickel S.A.
Mr. Kotlyar said that any project within the Republic of Cuba would be approved only if financially viable because, “We have to think about the interests of our shareholders, including foreign ones.”  In May 1999, RAO Norilsk Nickel signed a Letter of Intent with Caribbean Nickel S.A. to complete construction (and then to operate) at the Las Camarioca nickel plant, which is located in Holguin Province (850 kilometers east of the city of Havana).  Las Camarioca nickel plant was approximately 70% completed when the U.S.S.R. collapsed in 1991 and construction was suspended.
 

In February 2000, Melbourne, Australia-based Western Mining Corporation (WMC) announced that the company would cease discussions to implement a joint venture agreement for nickel plus cobalt mining and refining within the Republic of Cuba.  The joint venture agreement had been the largest (in potential value) signed thus far in the mining sector with a Republic of Cuba government-operated company.  In 1997, Republic of Cuba government-operated Caribbean Nickel S.A. (under the auspice of the Ministry of Basic Industry of the Republic of Cuba) signed a joint venture agreement valued at US$650 million with Melbourne, Australia-based Westminer Holdings Ltd., a subsidiary of WMC, to construct a nickel plus cobalt plant and refinery in the Pinares de Mayari area of Holguin Province, 850 kilometers east of the city of Havana. The venture, in which WMC held 65% of the shares, had yet to begin construction due to previously low nickel prices and a lack of financing.  WMC reported that the project within the Republic of Cuba, along projects in Uzbekistan and the Philippines, “are unlikely to provide sufficient returns so as to add shareholder value” but that the project within the Republic of Cuba while being of value, was not suitable for the current focus of WMC.   WMC reported spending approximately US$17.73 million during the last six years on the project within the Republic of Cuba. WMC reported that the company was not prepared to invest the millions of dollars required to create pilot technology at the project.  A subsidiary of Sydney, Australia-based Chase Manhattan Bank Australia (CMBAL), Sydney, Australia-based Chase Manhattan Nominees Ltd. (CMN), an indirect wholly-owned subsidiary of Chase Manhattan Corporation, has served since 1988 as the nominee (custodian) for outstanding shares of WMC.  The current holdings by CMN in WMC is 7.66%, valued approximately US$200 million.  The total value of the assets of CMN is reported as approximately US$70 billion.  Individual entities (corporations) using the services of CMN normally have a minimum asset value of US$100 million placed with CMN.  WMC has American Depository Receipts (ADR’s) listed on the New York City, New York-based New York Stock Exchange (NYSE).  According, to CMBAL, individuals subject to United States law may use the services of CMN.

HAVANA LISTED AS 19th MOST EXPENSIVE CITY OF 155 CITIES SURVEYED- Surrey, United Kingdom-based Inbucon Limited has published an update of its Worldwide Living Costs Survey (WLCS), which is prepared biannually.  The WLCS includes 155 cities and the index is prepared against a base of 100 for the city of London, United Kingdom, and “calculated from six international cost-of-living indices and is based on the consumption needs of a married couple with two schoolchildren.”  The city of Havana ranks 19th of 155 cities surveyed.  The most expensive cities from the United States were Washington, D.C. (37th) and Boston, Massachusetts (53rd).  Some factors are not included in the WLCS, such as housing rental costs, taxes, and social security payments.  The WLCS is calculated from up to seven published sources of data, which are then analyzed by country and city through a process of weighted averages.  Only cities where three or more values are published are included in the Index.  The WLCS is calculated such it represents the cost of living for an expatriate family of four (two parents and two children) living as they would in their home country.  The WLCS is exclusive of any housing costs for living in that country.  Data sources for the WLCS include, but are not limited to: United Nations Index, NFTC (Washington) Index, and Wiesbaden Index (produced by the German Government).  The exchange and inflation rate information is taken from Multi-National Employer which is published in the United Kingdom.
 

Rank	Country	City	Index	Annual Inflation
1	Libya	Tripoli	171.79	Not Available
2	Syria	Damascus	146.17	-2.70%
3	Japan	Tokyo	137.38	-0.70%
4	Japan	Osaka-Kobe	128.08	-0.70%
5	Congo DR (Zaire)	Kinshasa	124.67	-10.00%
6	Norway	Oslo	111.44	3.30%
7	Russian Federation	St. Petersburg	107.19	20.20%
8	Hong Kong	Victoria	106.94	4.50%
9	Congo	Brazzaville	106.64	Not Available
10	Angola	Luanda	103.85	Not Available
11	Gabon	Libreville	103.74	0.60%
12	Switzerland	Geneva	103.32	2.00%
13	Chad	N'Djamena	101.07	Not Available
14	United Kingdom	London	100 Base	3.30%
15	Uruguay	Montevideo	99.97	5.20%
16	Denmark	Copenhagen	99.91	3.30%
17	Israel	Tel Aviv	99.75	2.10%
18	Sweden	Stockholm	99.63	1.00%
19	Cuba	Havana	99.12	Not Available
20	Taiwan	Taipei	97.8	1.50%
21	Germany	Hamburg	97.17	1.90%
22	Finland	Helsinki	95.99	3.50%
23	Brazil	Sao Paulo	95.89	5.60%
24	Germany	Munich	95.22	1.90%
25	Italy	Palermo	94.94	2.60%
37	United States	Washington, D.C.	90.95	3.70%
53	United States	Boston	88.26	3.70%
62	United States	New York	86.85	3.70%
81	United States	Atlanta	82.97	3.70%
94	United States	Chicago	81.46	3.70%

NORTH CAROLINA AGRICULTURAL BUSINESS DELEGATION VISITING CUBA IN DECEMBER 2000- A twenty-four member agricultural business delegation from the State of North Carolina is scheduled to visit the Republic of Cuba from 10 December 2000 to 15 December 2000 under a license from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C.    The agricultural business delegation reported receiving the license from the OFAC within ten days of sending the license request to the OFAC.  The purpose of the visit by the agricultural business delegation to the Republic of Cuba is to identify export opportunities.  The agricultural business delegation will include representatives of companies in the following categories: poultry, pork, powdered milk, vegetable, sweet potato, and tobacco.  The agricultural business delegation will be led by Mr. Willard B. Cobb, Jr., International Marketing Director of the Raleigh, North Carolina-based Department of Agriculture of the State of North Carolina.

UNITED STATES OCEAN TRANSPORTATION COMPANIES SEEK OPERATING AUTHORITY TO CUBA- United States-based ocean transportation companies are seeking operating authority from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., to transport agricultural commodities directly from the United States to the Republic of Cuba.  A shipment (container, bulk, etc.) from the United States to the Republic of Cuba would likely be included on a vessel having additional Caribbean Sea-area country destinations.
 

The “Trade Sanctions Reform and Export Enhancement Act of 2000” signed into law on 28 October 2000 by The Honorable William J. Clinton, President of the United States of America, did not nullify Section 6 (b) of the Cuban Democracy Act (CDA) signed into law in 1992 by The Honorable George W. Bush, President of the United States of America, which authorized the OFAC to license vessels (no distinction between United States-flagged vessels or non-United States-flagged vessels) to operate between the United States and the Republic of Cuba.  With respect to implementation of the “Trade Sanctions Reform and Export Enhancement Act of 2000,” the OFAC may license the transport agricultural commodities, medicine, medical devices or other products directly from the United States to the Republic of Cuba.  Since 1992, the OFAC has authorized licenses for direct shipping from the United States to the Republic of Cuba.  The CDA states that a vessel “which enters a port or place in Cuba to engage in the trade of goods or services may not, within 180 days after departure from such port or place in Cuba, load or unload any freight at any place in the United States, except pursuant to a license by the Secretary of the Treasury.”

UNITED AIRLINES, AMERICAN AIRLINES, DELTA AIR LINES MAY FIND USE FOR CARGO FLIGHTS- With an expansion of categories for products authorized for export from the United States to the Republic of Cuba, and existing competition from non-United States-based cargo (air, sea, rail, and freight forwarder) companies, there may be market-based demand for United States-based cargo transportation companies to provide cargo transportation services from the United States to the Republic of Cuba.  Elk Grove Township, Illinois-based United Airlines, Inc. (1999 revenues exceeded US$17 billion), Dallas/Fort Worth Airport, Texas-based American Airlines (1999 revenues exceeded US$19 billion), Atlanta, Georgia-based Delta Air Lines (1999 revenues exceeded US$14 billion), and Dania Beach, Florida-based Gulfstream International Airlines (1999 revenues exceeded US$80 million) within which Houston, Texas-based Continental Airlines, Inc. (1999 revenues exceeded US$7 billion) has a 28% interest, each have Carrier Service Provider (CSP) licenses from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., which authorize the transportation of passengers and cargo.  Neither Atlanta, Georgia-based United Parcel Service of America, Inc. (1999 revenues exceeded US$24 billion) nor Memphis, Tennessee-based FedEx Corporation (1999 revenues exceeded US$17 billion) have CSP licenses nor does either company operate direct delivery services or indirect delivery services between the United States and the Republic of Cuba.  General (privately-owned) aviation aircraft subject to United States law (controlled by an entity subject to United States law) to be used for travel (passengers and/or cargo) to the Republic of Cuba are required to obtain a Temporary Sojourn License from the Bureau of Export Administration (BXA) of the United States Department of Commerce in Washington, D.C.
 

The OFAC and the BXA authorize the following categories of products to be exported (sold and/or donated) from the United States to the Republic of Cuba: agricultural commodities, artwork, entertainment (motion pictures, television programs, music, etc.), farm supplies, food, informational materials, medical equipment, medical instruments, medical supplies, medicated products, medicines, pharmaceuticals, publications, and camera-ready artwork for advertising purposes, etc.  The OFAC authorizes the following categories of products to be imported from the Republic of Cuba to the United States: artwork, entertainment (motion pictures, television programs,  music, etc.), informational materials, and publications.

The “Trade Sanctions Reform and Export Enhancement Act of 2000” signed into law by The Honorable William J. Clinton, President of the United States of America, on 28 October 2000, authorizes the continuation of healthcare product exports (with certain restrictions) from the United States to the Republic of Cuba and authorizes agricultural commodity products exports from the United States directly to Republic of Cuba government-operated entities within the Republic of Cuba and to non-Republic of Cuba government-operated entities within the Republic of Cuba.  The law will take effect 120 days after the date of enactment of the legislation.
 

Only Gulfstream International Airlines has chosen to operate regularly scheduled charter flights between the United States and the Republic of Cuba.  Aircraft owned by American Airlines, United Airlines, and Delta Air Lines have been chartered by other CSP’s for regularly scheduled charter services between the United States and the Republic of Cuba.  Gulfstream International Airlines has a code-share agreement with St. Paul, Minnesota-based Northwest Airlines Corporation (1999 revenues exceeded US$10 billion).  Gulfstream International Airlines has a connection agreement and operates the TWA Connection from San Juan, Puerto Rico, with St. Louis, Missouri-based Trans World Airlines, Inc. (1999 revenues exceed US$3 billion).  Gulfstream International Airlines has a code-share agreement with Panama City, Panama-based COPA airlines.  New York, New York-based American Express Travel Related Services Company, Inc., has a Travel Service Provider (TSP) license from the OFAC.

In April 2000, Gulfstream International Airlines signed an exclusive agreement with Republic of Cuba government-operated Cubapacks International S.A. (a subsidiary of Republic of Cuba government-operated Corporacion Cimex S.A.) for package delivery services from the United States to the Republic of Cuba, which was scheduled to commence on 1 May 2000, although the package delivery service has yet to commence operation.  Gulfstream International Airlines reported that the company expected year-one gross revenues from the service of approximately US$300,000.00 to US$400,000.00.

Since 1962, Delta, Continental, and United Air Lines have had route authorities from the following cities: Delta- Havana to Houston, Los Angeles, New Orleans, San Francisco, and San Juan; Continental- Havana to Fort Lauderdale, West Palm Beach, United- Havana to Miami, Key West, Baltimore, Boston, Dallas, Houston, Los Angeles, New Orleans, New York, Newark, Philadelphia, San Francisco, San Juan, St. Croix, St. Thomas, and Washington, D.C.; and Camaguay to Miami, Baltimore, Boston, Dallas, Houston, Los Angeles, New Orleans, New York, Newark, Philadelphia, San Francisco, San Juan, St. Croix, St. Thomas, and Washington, D.C.

Individuals subject to United States law traveling to the Republic of Cuba should only use travel agents that have been licensed by the OFAC.  Tico Travel, 161 East Commercial Boulevard, Fort Lauderdale, Florida  33334.  Telephone: (954) 493-5335 or (800) 493-8426; Facsimile: (954) 493-8466; E-mail: tico@gate.net; Internet: http://www.destinationcuba.com.

TNT POST GROUP HAS PACKAGE DELIVERY AGREEMENT WITH CUBAPOST- Amsterdam, The Netherlands-based TNT Post Group NV (1999 revenues approximately US$8 billion) has an agreement with Republic of Cuba government-operated Cubapost for the delivery of packages within the Republic of Cuba.  TNT Post Group NV expects to also commence package delivery services from the Republic of Cuba to other countries.  Cubapost has dedicated an office with one employee to manage the agreement with TNT Post Group NV.  TNT Post Group NV sends packages for delivery to the Republic of Cuba through Santiago, Chile, using Panama City, Panama-based Copa Airlines flights (Monday through Thursday).  The TNT Post Group NV office in Santiago, Chile, is the Control Station for tracing and linehauls to the Republic of Cuba.  Package delivery from the United States to the city of Havana, Republic of Cuba, is three days to four days.  Package delivery from the United States to other locations within the Republic of Cuba is three days to five days.
 

Rates (Approximate In U.S. Dollars)* From Cuba To United States	Weight
US$37.45	8 ounces
US$57.40	1 pound
US$59.85**	2 pounds
US$69.72	3 pounds
US$285.46	40 pounds
US$444.36	70 pounds

*Rates are discounted up to 60% depending upon customer usage patterns.

**Global Express Service (US$89.10) and Global Express Service With Priority (US$124.10)

Cubapost operates EMS-Cubapost, a domestic and international (150 countries) document/package delivery service.  The following are rates from EMS-Cubapost for documents from the Republic of Cuba.  Rates for packages are slightly higher:
 

Rate (United States)	Rate (Canada and Mexico)	Rate (All Other Countries)	Weight (Kilos)
	US$18.00	US$21.00 To US$25.00	250 Grams
US$35.00	US$27.00	US$34.00	5 Kilos
US$43.00	US$36.00	US$45.00	1.0 Kilos
US$59.00	US$52.00	US$66.00	2.0 Kilos
	US$209.00	US$237.00	20 Kilos

KUEHNE AND NAGEL HAS TRANSITORY SHIPPING AGREEMENT WITH CUBANACAN EXPRESS- Republic of Cuba government-operated Cubanacan Express (the package delivery subsidiary of Republic of Cuba government-operated Corporacion Cubanacan) and Mississauga, Canada-based Kuehne and Nagel International Ltd. (a subsidiary of Schindellegi, Switzerland-based Kuehne and Nagel International AG, 1999 revenues approximately US$3.6 billion) have a transitory shipping agreement under which each company will represent the other company:  Kuehne and Nagel International AG will handle logistics (customs, insurance, shipping mode, etc.) in the 82 countries (although not including the United States, United States territories, or Spain) served by Cubanacan Express and Cubanacan Express will handle logistics for Kuehne and Nagel International AG (although not including the United States, United States territories, or Spain) within the Republic of Cuba.  Cubanacan Express expects that the transitory shipping agreement will result in approximately US$20,000.00 per month in additional revenues.  Cubanacan Express expects 2000 gross revenues of US$1 million, a 12% increase from gross revenues reported in 1999. Currently, Kuehne and Nagel International AG provides freight forwarding services to Corporacion Cubancan for purchases primarily of construction materials, hotel supplies, and food products.
 

Kuehne and Nagel International AG is one of the world’s largest freight forwarding (ocean freight, air freight, railway, ship brokerage, warehousing, seaworthy packing) companies, with 13,000 employees located in 480 offices in 82 countries.  The company also has a travel agency subsidiary and provides insurance.  Kuehne and Nagel International AG has representative offices throughout the United States, and KN Nestor Reyes (a division of Kuehne & Nagel, Inc.), located in Carolina, Puerto Rico.

In the United States, Kuehne and Nagel International AG has an Aid & Relief Department located at New York City, New York-based John F. Kennedy International Airport which handles the shipment of products (thus far only for donations) to the Republic of Cuba that are licensed by the Bureau of Export Administration (BXA) of the United States Department of Commerce in Washington, D.C., and by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., primarily for nongovernmental organizations (NGO’s) including New York City, New York-based National Council of Churches of Christ in the United States of America, by routing shipments from the United States through A) Mexico using Mexico City, Mexico-based Mexicana de Aviacon SA de CV B) Canada using ground transportation or railway transportation to Montreal, Canada, then Republic of Cuba government-operated Cubana Airlines or a any one of four sea container companies to the Republic of Cuba or C) Canada using ground transportation or railway transportation to Halifax, Nova Scotia, then any one of four sea container companies to the Republic of Cuba.

DHL INTERNATIONAL RENEWS REPRESENTATION AGREEMENT FOR FIVE YEARS- Brussels, Belgium-based DHL International Limited and Panama City, Panama-based UTISA (a subsidiary of the Ministry of Information and Communications of the Republic of Cuba) renewed their representation agreement for an additional five years.  DHL International Limited commenced operations within the Republic of Cuba in 1990.  DHL International Limited headquarters for Republic of Cuba operations is in the city of Havana and there are branch offices in the city of Santiago de Cuba (860 kilometers east of Havana) and in the resort area of Varadero (140 kilometers east of Havana).  DHL International Limited also has representatives in all provincial capitals of the Republic of Cuba and in resort areas within the Republic of Cuba.  DHL International Limited owns a minority share in Redwood City, California-based DHL Worldwide Express, Inc., and the founders (and their families) of DHL International Limited own a minority share of DHL Worldwide Express, Inc. Bonn, Germany-based government of Germany-operated Deutsche Post AG (2000 revenues expected to be approximately US$25 billion) controls 51% of DHL International Limited and Cologne, Germany-based Deutsche Lufthansa Aktiengesellschaft owns 25% of DHL International Limited.  The founders and their families reportedly own the remaining 24% of DHL International Limited.  DHL Worldwide Express has authorization from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., to provide delivery services between the United States and the Republic of Cuba. DHL Worldwide Express, Inc., which is controlled by individuals subject to United States law, receives revenues from DHL International Limited for package delivery services to the Republic of Cuba.  The delivery services are limited to 2-pound packages containing documents, brochures, videotapes, compact discs, etc. DHL Worldwide Express sends packages from the United States to the Republic of Cuba through Mexico City, Mexico, where the packages are transferred from the operational control of DHL Worldwide Express, Inc., to the operational control of DHL International Limited.  The packages are then sent by commercial aircraft (Mexico City, Mexico-based Aeromexico and Mexico City, Mexico Mexico-based Mexicana de Aviacion SA de CV) to the Republic of Cuba.  The cost of sending a one-pound package from the United States to the Republic of Cuba is approximately US$81.00.  The cost of sending a one-pound package from the Republic of Cuba to the United States is approximately US$39.00.  The delivery time for packages sent from the United States to Havana, Republic of Cuba, is four days.  The delivery time for packages sent from Havana, Republic of Cuba, to the United States is three days.  In 1998, DHL International Limited delivered from various countries approximately 80,000 packages to the Republic of Cuba.  In 1998, DHL International Limited sent approximately 32,000 packages from the Republic of Cuba to various countries.  Republic of Cuba government-operated Seguros Internacionales de Cuba S.A. (ESICUBA) has an agreement with DHL International Limited to insure packages sent by DHL International Limited from the Republic of Cuba to other countries. Neither Atlanta, Georgia-based United Parcel Service of America, Inc. (1999 revenues exceeded US$24 billion) nor Memphis, Tennessee-based FedEx Corporation (1999 revenues exceeded US$17 billion) currently operates direct delivery services or indirect delivery services between the United States and the Republic of Cuba.

TELECOM ITALIA VALUES ETEC S.A. COMMUNICATIONS JOINT VENTURE AT US$1.44 BILLION- According to Rome, Italy-based Telecom Italia S.p.A. (1999 revenues approximately US$15 billion), which is a subsidiary of Ivrea, Italy-based Olivetti S.p.A. (1999 revenues approximately US$27 billion), Republic of Cuba government-operated Empresa Nacional de Telecommunicaciones de Cuba S.A. (ETEC S.A.), a joint venture which is controlled by the Ministry of Information and Communications of the Republic of Cuba, has a total capital value of US$1.44 billion.  Amsterdam, The Netherlands-based Stet International Netherlands N.V. (a subsidiary of Telecom Italia S.p.A.) has a 29.29% interest in ETEC S.A., which is valued at US$422.33 million, less than the US$599 million that Stet International Netherlands N.V. paid for its interest in ETEC S.A.  According to Telecom Italia S.p.A., (A) “In 1995, [Amsterdam, The Netherlands-based] STET International Netherlands N.V. acquired an indirect participation of 12.25% in Empresa Nacional de Telecomunicaciones de Cuba S.A. (‘ETEC S.A.’), the operator for national and international wire telecommunications in Cuba, by purchasing, for approximately Lit. 500 billion (approximately US$294 million at 1995 exchange rate), 25% of the Mexican company CITEL S.A. de C.V., which owned 49% of ETEC S.A.  In February 1997, STET International Netherlands transformed its indirect interest in ETEC S.A. into a direct investment and increased such interest to 29.29%.  The acquisition price for such further stake (17.04%) in ETEC S.A. amounted to US$305 million.  In 1999, ETEC S.A. had revenues of US$249 million compared with US$223 million in 1998.  The net income was US$144 million in 1999 (+11% compared to 1998 results).  These results were achieved despite the closing of all links with the main USA carriers (with the exception of Sprint) as a consequence of the civil action between the USA and Cuban governments.”  (B) “Etec S.A., the exclusive provider of the domestic fixed and mobile phone services, closed the six-month period [January 2000 through June 2000] with revenues of US$142 million, +23% compared to the first half of 1999, and a net income of US$87 million, an increase of 23% compared to that of the same period of the previous year.  In April [2000], telephone connections with the main American operators were restored following the positive conclusion to the judicial proceedings which had let to the blocking of funds owed by them to the Cuban company.”
 

During a recently completed internal restructuring of Telecom Italia S.p.A., New York-based Chase Manhattan Corporation (1999 assets exceeded US$350 billion), through a subsidiary, provided valuation services to Telecom Italia S.p.A., which included a review of international operations.  New York City, New York-based Merrill Lynch & Co., Inc. (1999 assets managed exceeded US$1.5 trillion) has served as an advisor to Telecom Italia S.p.A.

In July 1997, New York City, New York-based ITT Corporation and STET International Netherlands N.V. signed an agreement whereby STET International Netherlands N.V. would pay approximately US$25 million to ITT Corporation for a ten-year right (after which the agreement may be renewed) to use assets (telephone facilities and telephone equipment) within the Republic of Cuba upon which ITT Corporation has a claim valued at US$130.7 million certified by the United States Foreign Claims Settlement Commission in Washington, D.C.  Such an agreement is permitted under a provision of the Libertad Act, signed into law in March 1996 by The Honorable William J. Clinton, President of the United States of America.  The provision within the Libertad Act authorizes any individual subject to United States law with a claim certified by the Foreign Claims Settlement Commission in Washington, D.C., to negotiate an agreement (payment, equity, etc.) to fully resolve or partially resolve with third parties (including Republic of Cuba government-operated entities) who are using assets within the Republic of Cuba upon which there is claim certified by the Foreign Claims Settlement Commission in Washington, D.C.

Miami, Florida-based Florida Atlantic University; Miami, Florida-based University of Florida; and Miami, Florida-based Florida International University are included amongst the current sixty-six partners (including Telecom Italia S.p.A.) in the NAP (network access point) of the Americas, LLC. “An interim NAP will be operational by year-end in downtown Miami, and the nearby permanent home of the tier-one, carrier neutral access point will be operational by the second quarter of 2001.  A network access point is a high-speed Internet data exchange and connection point that ties Internet access providers together and enables interaction between geographic regions and among customers of various providers.  Construction is currently underway at the future permanent home of the NAP of the Americas in the Park West/Overtown area of Miami.  The NAP is developed and operated by Terremark Worldwide Inc. (AMEX:TWW), and will be the first such facility designed specifically to provide enhanced connectivity for all the Americas.  NAP of the Americas, LLC is an initiative that includes 66 telecommunications companies, including 360networks, AT&T, Broadwing, Cable & Wireless, CyberGate, Enron Broadband Services, EPIK Communications, FPL Fibernet, Global Crossing, Level (3), Metromedia Fiber Network, Net2Phone, NetRail, NEXTLINK, Telecom Argentina, Telia and Williams Communications.  The initiative's purpose is to develop a Tier-One Network Access Point (NAP) in South Florida.  A NAP is a high-speed, Internet data exchange and connection point that ties Internet access providers together to facilitate Internet traffic between customers of various providers and geographic regions.  The NAP of the Americas will handle Internet traffic between the Americas, the Caribbean and Europe into the U.S. through its downtown Miami location.  The initiative has been facilitated by EPIK Communications, the wholly owned subsidiary of St. Augustine, Florida-based East Coast Industries, Inc. (NYSE:FLA).  EPIK is a “carrier's carrier” providing high capacity telecommunications circuits, dark fiber and collocation services to competitive local exchange carriers, wireless carriers, Internet Service Providers, long distance companies and other carriers.” [underline added]

In January 2000, Mr. Robert Anestis, Chief Executive Officer of East Coast Industries, Inc. (1999 revenues of approximately US$270 million, with a market capitalization of approximately US$1.6 billion), reported that the company would have an interest toward the Republic of Cuba said, “Everybody expects there will be a change in policy with respect to trade with Cuba.  We believe that we're in a great position to benefit.  If Cuba opens, there will be a great deal of additional freight shipping through the ports in south Florida to and from Cuba."  Florida East Coast Industries, Inc., conducts operations through four wholly owned subsidiaries, Flagler Development Company (Flagler), Florida East Coast Railway Company (FECR), International Transit, Inc.  (ITI) and EPIK Communications Incorporated (EPIK). Flagler owns, develops, leases and manages approximately 6 million square feet of commercial space and owns approximately 17,000 acres of land, all in Florida.  FECR is a regional freight railroad that operates 351 miles of main line track, from Jacksonville to Miami.  ITI provides truckload service, intermodal drayage and transportation logistics and brokerage services.  EPIK, based in Orlando, Fla., is a carrier's carrier that provides bandwidth capacity, dark fiber leases and collocation services to telecommunications providers.

500 MEDICAL STUDENTS FROM THE UNITED STATES AUTHORIZED TO ATTEND CLASSES IN CUBA- The United States Department of State in Washington, D.C., has authorized 500 individuals subject to United States law to receive medical training and, perhaps, medical certification, in the Republic of Cuba. The government of the Republic of Cuba proposed that 250 African-Americans and 250 Hispanic-Americans (including Native Americans) from low-income families within the United States receive no-cost medical training in the Republic of Cuba.  However, medical certificates obtained within the Republic of Cuba would not be valid within the United States.  Recipients of medical certificates obtained within the Republic of Cuba would need obtain certification by recognized federal, state, and local United States-based healthcare agencies.

MICHIGAN FARM BUREAU DELEGATION, INCLUDING MEMBERS OF CONGRESS, VISIT CUBA- A fifteen-member delegation under the auspice of the Lansing, Michigan-based Michigan Farm Bureau visited the Republic of Cuba from 6 November 2000 to 10 November 2000. The delegation was led by Mr. Dan Wyant, Director of the Department of Agriculture of the State of Michigan, Mr. Jack Laurie, President of the Michigan Farm Bureau, and Mr. Robert Green, Executive Director of the Michigan Bean Commission, and included two Members of Congress: The Honorable James A. Barcia (D- Michigan) and The Honorable David Camp (R- Michigan); and producers of dry beans and sugar beets.  The Governor of the State of Illinois is The Honorable John Engler (R).  According to the Michigan Farm Bureau, the State of Michigan produces annually approximately 5 million hundredweight of dry beans.  According to the Michigan Farm Bureau, Republic of Cuba government-operated Alimport (under the auspice of the Ministry of Foreign Trade of the Republic of Cuba) purchases annually approximately 4 million hundredweight of dry beans.  For 1999, Alimport reported that the Republic of Cuba consumed a combined 180,000 tons (of which 100,000 tons are imported from Mexico, Argentina, and Canada) of dried beans, peas, and lentils.  The imported dry beans consist of 50% black beans, 40% red beans (primarily pinto beans), and 10% navy beans.  For 1999, Alimport also reported importing 1.2 million tons of cereals and 420,000 tons of rice.
 

Alimport is responsible for the importation of food products for use by the Republic of Cuba’s 11.2 million citizens.  In 1999, Alimport purchased 1) approximately US$750 million in food products from companies located in Canada, France, Brazil, New Zealand, Argentina, Mexico, Vietnam, and the People’s Republic of China among other countries.  Among the products imported were powdered milk, cooking oil, rice, wheat, soy, corn, beans, peas, poultry, and vitamins and 2) approximately US$250 million in food products and fertilizers for use by 1) Republic of Cuba government-operated U.S. Dollar retail stores 2) Republic of Cuba government-operated companies 3) Republic of Cuba-based joint ventures and 4) the tourism sector.

FOUR SEASONS HOTELS EXECUTIVE VISITS CUBA- Mr. Manilo Marescott, Director of Development for Toronto, Canada-based Four Seasons Hotels, Inc., visited the Republic of Cuba in May 2000 to visit hotels, meet with representatives of the Ministry of Tourism of the Republic of Cuba, and meet with representatives of Republic of Cuba government-operated companies.  A representative of the company last visited the Republic of Cuba in 1993.  If Four Seasons Hotels, Inc., were to manage a property within the Republic of Cuba, the company would likely have a small equity position in the entity that would own the property to be managed by Four Seasons Hotels, Inc. The company has on occasion been contacted by non-Republic of Cuba-based companies having an interest in developing a Four Seasons Hotels, Inc., property within the Republic of Cuba.  The normal duration of a management contract signed by Four Seasons Hotels, Inc., is fifty-seven years.  The normal duration of management contracts and of joint ventures within the Republic of Cuba is twenty years. Four Seasons Hotels currently manages 48 properties throughout the world.  The company reported total revenues from all managed hotels of CA$2.3 billion (approximately US$1.5 billion) and consolidated revenues of CA$277 million (approximately US$188.3 million).  Boston, Massachusetts-based Putnam Investments, Inc. (1999 assets managed exceeded US$350 billion), which is a subsidiary of New York City, New York-based Marsh & McLennan Companies, Inc. (1999 assets exceeded US$5 billion), holds approximately 8% of the shares in Four Seasons Hotels, Inc.  The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., authorizes companies subject to United States law to have non-controlling investments in third country companies that have commercial activities within the Republic of Cuba provided that the investments do not result in control in fact of the third country company and provided that a majority of the revenues of the third country company are not produced from commercial activities within the Republic of Cuba [OFAC 4 March 1994].

NESTLE S.A. JOINT VENTURE PRODUCING DIET CARBONATED BEVERAGES- Los Portales S.A., a joint venture between Vevey, Switzerland-based Nestle S.A. (1999 revenues exceeded US$42 billion) and Republic of Cuba government-operated Coralsa S.A. (a division of the Ministry of Food Processing of the Republic of Cuba) reported that the company had commenced production of diet carbonated beverages under the Fiesta brand.  Previously, the only diet carbonated beverages available within the Republic of Cuba were Diet Coke produced by Atlanta, Georgia-based The Coca-Cola Company (1999 revenues US$18 billion) and Diet Pepsi produced by Purchase, New York-based PepsiCo, Inc. (1999 revenues US$20 billion).  Mr. Juan Miguel Vara, Director of the Los Portales bottling facility located in Pinar del Rio (162 kilometers east of the city of Havana), reported that said the facility would commence monthly production with 10,000 cases (twelve 1,500 millimeter plastic bottles per case) of Fiesta Diet Cola.  Los Portales S.A. total revenues (from its bottling facility in Pinar del Rio) from the sales of carbonated beverages and from bottled water in 2000 are expected to be approximately US$12 million, exclusively within the Republic of Cuba.  In 1999, Mr. Alain Sauvage (a citizen of France), President of Los Portales S.A., reported that its Ciego Montero brand water and its Lavissima brand water had 1) combined market share of 95% of the Republic of Cuba’s U.S. Dollar market (retail stores, restaurants, hotels, etc.) 2) combined gross sales of more than 20 million units and 3) combined gross revenues of US$18 million in 1998.  Los Portales S.A. also packages (bottles and cans) three beverage brands owned by Republic of Cuba government-operated Corporacion Cimex S.A.: Cachito brand, TropiCola brand, and Najita brand, which had combined U.S. Dollar market sales (Republic of Cuba government-operated retail stores, Republic of Cuba government-operated restaurants, Republic of Cuba government-operated hotels and non-Republic of Cuba government-operated hotels, etc.) of 70 million units in 1998.  Mr. Sauvage reported that bottled water is being consumed primarily by non-Republic of Cuba nationals, while 84% of flavored carbonated beverages are consumed by Republic of Cuba nationals, with demand for flavored carbonated beverages increasing at an annual rate of one-half liter per person, or approximately 5.5 million liters nationally (the Republic of Cuba has a population of approximately 11.2 million).  SILSA, located in Havana, is the representative office for Nestle S.A. within the Republic of Cuba.
 

Nestle S.A. reports that approximately 14% of its shareholders are individuals subject to United States law and that no individual shareholder located in any country owns more than 3% of the total share capital.  The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., authorizes companies subject to United States law to have non-controlling investments in third country companies that have commercial activities within the Republic of Cuba provided that the investments do not result in control in fact of the third country company and provided that a majority of the revenues of the third country company are not produced from commercial activities within the Republic of Cuba [OFAC 4 March 1994].

GOVERNOR VENTURA OF MINNESOTA MAY VISIT CUBA WITH MIDWESTERN STATE GOVERNORS- The Honorable Jesse Ventura, Governor of the State of Minnesota, is considering a visit to the Republic of Cuba.  The Honorable George H. Ryan, Governor of the State of Illinois, is interested in leading a delegation of governors from Midwestern States of the United States.  According to an individual involved in the initial discussions for a visit to the Republic of Cuba, such a visit would “… like to be predicated upon returning with some sort of orders for food and medical products from the Cuban government.”  Governor Ryan, accompanied by representatives of Illinois-based companies, visited the Republic of Cuba from 23 October 1999 to 27 October 1999 under a license from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C.  Representatives of Illinois-based companies participating in that visit included: 1) Mr. Allen Andreas, Chairman and Chief Executive Officer of Decatur, Illinois-based Archer Daniels Midland Company (1999 revenues exceeded US$14 billion) 2) Mr. Jorge Guerra, Vice President, Regional Business Practice Committee of Deerfield, Illinois-based Baxter International (1999 revenues exceeded US$6 billion) Mr. Dough Crew, Manager- Government Affairs, Peoria of Illinois-based Caterpillar Inc. (1998 revenues exceeded US$20 billion) and 3) Mr. William Sand of the Moline, Illinois-based John Deere Foundation affiliated with Moline, Illinois-based Deere & Company (1999 revenues exceeded US$11 billion).

MILWAUKEE, WISCONSIN, LATEST CITY TO ESTABLISH “SISTER CITY” AGREEMENT IN CUBA- Milwaukee, Wisconsin, expects to sign a “sister city” agreement with the town of Nuevitas, Republic of Cuba, in February 2001.  Nuevitas is located in Camaguey Province (534 kilometers east of the city of Havana).  The United States Department of State in Washington, D.C., issued visas for a visit to the United States by Mr. Francisco Lopez, a Provincial Coordinator of the Republic of Cuba government-operated Institute for International Friendship of the Republic of Cuba, and to Mr. Salvador Tejon, a member of the Municipal Assembly of Camaguey Province.  According to Mr. Tejon, Nuevitas is the location of a power generation facility, a concrete factory, a barbed wire factory, a fertilizer factory, and other industries.  Since 1995, when the city of Madison, Wisconsin, established a “sister city” agreement with the city of Camaguey (the capital of Camaguey Province), reportedly more than 250 residents of Madison have visited the Republic of Cuba.  More than thirty cities and towns within the United States have established or are establishing “sister city” agreements with cities and towns within the Republic of Cuba.  In 1993, Mobile, Alabama, established the first “sister city” agreement with the Republic of Cuba since 1959.  H.E. Eusebio Leal, Historian of the City of Havana and a member of the National Assembly of People’s Power of the Republic of Cuba, has visited Mobile, Alabama.
 

City or Town Within The United States	City or Town Within The Republic of Cuba
Mobile, Alabama	Havana
Pittsburgh, Pennsylvania	Matanzas
Milwaukee, Wisconsin	Nuevitas
Bloomington, Indiana	Santa Clara
Madison, Wisconsin	Camaguey
Tacoma, Washington	Cienfeugos
Oakland, California	Santiago de Cuba
Philadelphia, Pennsylvania	Cardenas
Richmond, California	Regla
Seattle, Washington	To Be Announced
West Hollywood, California	To Be Announced

USDA REPORTS ON CANADA FOOD EXPORTS TO CUBA- The Global Agricultural Information Network (GAIN), a service of the Foreign Agricultural Service (FAS) of the United States Department of Agriculture (USDA) in Washington, D.C., has issued a report on food product exports from Canada to the Republic of Cuba.  The following U.S. Dollar value conversions in millions of U.S. Dollars were based upon the following exchange rates used in the GAIN report: CA$1.00=US$.6800 in August 2000; CA$1.00=US$.6730 in 1999; CA$1.00=US$.6743 in 1998; and CA$1.00=US$.7223 in 1997.  Due to the decreasing value of the Canadian Dollar against the U.S. Dollar during the period 1997 through 2000, the actual value of agricultural exports from Canada to the Republic of Cuba have generally decreased during the period 1997 through 1999.
 

Agricultural Product	1999 Value	1998 Value	1997 Value
Vegetables and Vegetable Products	US$57.4 million	US$47.8 million	US$31.2 million
Dried Peas & Beans	US$55.3 million	US$42.9 million	US$26.7 million
Poultry Meat	US$10.7 million	US$20.4 million	US$13.7 million
Fresh or Frozen Pork	US$5.8 million	US$5.1 million	US$2.9 million
Beef (Frozen)	US$2.6 million	US$1.6 million	US$1.3 million
Beef (Fresh or Chilled)	US$67,300.00	US$67,430.00	0.0
Other (Other Meat, Fat, Offal)	US$2.8 million	US$1.6 million	US$1.0 million
Wheat and Meslin	US$11.3 million	US$8.6 million	US$10.0 million
Corn	US$5.7 million	0.0	US$3.9 million
Milk, Cream Concentrated, Sweetened	US$5.4 million	US$5.7 million	US$6.4 million
Cheese and Curd	US$2.5 million	US$5.4 million	US$650,070.00
Butter, Oils from Milk	US$2.0 million	US$2.3 million	US$1.0 million
Whey, Other Milk Products	US$134,600.00	US$67,430.00	0.0
Milk, Cream, Not Sweetened/Concentrated	0.0	0.0	US$72,230.00
Prepared Meats	US$3.1 million	US$5.4 million	US$3.0 million
Sausage & Similar Meat Products	US$2.1 million	US$4.5 million	US$2.4 million

The GAIN report included that “In 1999, total Canadian merchandise exports to Cuba reached C$396 million [US$266.5 million], but only accounted for slightly more than one-tenth of one percent of total Canadian exports to the world of C$354 billion [US$238.2 billion].  Total Canadian imports from Cuba in 1999 (C$306 million) [US$205.9 million] represented less then one-tenth of all Canadian imports worth C$320 billion [US$215.3 billion].”  Note: U.S. Dollar values inserted for comparison purposes.
 

Canada Exports To Cuba	1999	1998	1997
Total Merchandise (Includes Agricultural)	US$266.5 million	US$325.0 million	US$262.9 million
Agricultural (As Percentage Of Merchandise Exports)	US$115.4 million (43.3%)	US$113.2 million (34.8%)	US$83.0 million (31.6%)

“TRADE SANCTIONS REFORM AND EXPORT ENHANCEMENT ACT” SIGNED INTO LAW- On 28 October 2000, The Honorable William J. Clinton, President of the United States of America, signed into law H.R. 4461, which includes the “Trade Sanctions Reform and Export Enhancement Act of 2000.”  The “Trade Sanctions Reform and Export Enhancement Act of 2000” authorizes the continuation (and partial expansion) of healthcare product exports (with certain restrictions) from the United States to the Republic of Cuba and authorizes agricultural commodity products exports from the United States to Republic of Cuba government-operated entities within the Republic of Cuba and to non-Republic of Cuba government-operated entities within the Republic of Cuba.  Provisions of the legislation take effect 120 days after the date of enactment of the legislation.

ARCHER DANIELS MIDLAND COMPANY SEEKS TO EXPORT RICE TO CUBA- Mr. Martin L. Andreas, Senior Vice President and Assistant to the Chief Executive Officer of Decatur, Illinois-based Archer Daniels Midland Company (1999 revenues exceeded US$14 billion), reported that the company is seeking to sell rice, as well as, vegetable oils, soybean protein, and vitamins to the government of the Republic of Cuba.  Earlier in 2000, Archer Daniels Midland Company commenced trading in rice with a sale of 15,000 tons to the government of Iraq under the New York City, New York-sponsored United Nations “Oil-For-Food” program.
 

In September 2000, Archer Daniels Midland Company hosted Mr. Pedro Alvarez Borrego, president of Republic of Cuba government-operated Alimport (under the auspice of the Ministry of Foreign Trade of the Republic of Cuba) visited the United States along with three representatives of the agricultural sector from the Republic of Cuba and one representative of the Ministry of Foreign Trade of the Republic of Cuba.  Alimport is responsible for the importation of food products for use by the Republic of Cuba’s 11.2 million citizens.  In 1999, Alimport purchased 1) approximately US$750 million in food products from companies located in Canada, France, Brazil, New Zealand, Argentina, Mexico, Vietnam, and the People’s Republic of China among other countries.  Among the products imported were powdered milk, cooking oil, rice, wheat, soy, corn, beans, peas, poultry, and vitamins and 2) approximately US$250 million in food products and fertilizers for use by 1) Republic of Cuba government-operated U.S. Dollar retail stores 2) Republic of Cuba government-operated companies 3) Republic of Cuba-based joint ventures and 4) the tourism sector.  The delegation from the Republic of Cuba also included: 2) Mr. Alexander Perez Cartaya, Director- Charter and Shipping Division of Alimport 3) Dr. Alvaro Garcia Uriarte, General Director of the Republic of Cuba government-operated Centro de la Industria Alimenticia (Food Industry Research Institute) of the Ministry of Food Industry of the Republic of Cuba 4) Mr. Juan Jose Ferro Castro, Director of the Republic of Cuba government-operated Union de Empresa de la Industria de la Carne (Union of Meat Industry) under the auspice of the Ministry of Food Industry of the Republic of Cuba and 5) Mrs. Maria de la Luz B’Hamel, Director- Area de Politica Comercial, of the Ministry of Foreign Trade of the Republic of Cuba.

RICE COMPANY AND AGRICULTURE ORGANIZATION REPRESENTATIVES CONTINUE TO VISIT CUBA- Representatives of a United States-based rice company visited the Republic of Cuba during the week of 23 October 2000 for meetings with representatives of the government of the Republic of Cuba to discuss exports of rice from the United States to the Republic of Cuba.  [The U.S.-Cuba Trade and Economic Council has agreed not to identify the company as executives of the company do not want their competitors to be aware of their interest toward the Republic of Cuba].  Representatives of Stuttgart, Arkansas-based Riceland Foods, Inc., have visited the Republic of Cuba; and in July 2000, the company donated a quantity of rice which provided approximately 400,000 servings of cooked, long grain rice.  Representatives of the Arlington, Virginia-based USA Rice Federation (USA Rice) have also visited the Republic of Cuba.  Mr. John G. Laurie, Midwest Region Director and Executive Committee Member of the Park Ridge, Illinois-based American Farm Bureau Federation (AFBF) is scheduled to visit the Republic of Cuba from 7 November 2000 to 10 November 2000 with a delegation of farmers from the State of Michigan interested in exporting dry edible beans and other agricultural commodities to the Republic of Cuba. The AFBF, established in 1919, represents approximately 2,800 county farm bureaus whose total membership exceeds 4.8 million.

MUSEUMS IN NEW YORK CITY AND IN BOSTON MARKET “EDUCATIONAL” TOURS TO CUBA- The American Museum of Natural History in New York City, New York, and the School of the Museum of Fine Arts in Boston, Massachusetts, are marketing, separately, “educational” tours to the Republic of Cuba which are licensed by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C.  The OFAC has significantly expanded the number of licensed “educational” tours to the Republic of Cuba within the “people-to-people” provisions of travel regulations issued by the OFAC in January 1999.  All individuals subject to United States law are permitted to take part in an “educational” tour to the Republic of Cuba provided that they participate in the activities arranged by the entity subject to Untied States law having a license from the OFAC to conduct the “educational” tour to the Republic of Cuba.  The “educational” tour marketed by the American Museum of Natural History from 18 January 2001 to 28 January 2001 is sold-out.  Study Leaders are Dr. Ross MacPhee, Curator in the Division of Vertebrate Zoology at the American Museum of Natural History, and Ms. Clare Flemming, Course Manager of Distance Learning Programs at the American Museum of Natural History.  The “educational” tour marketed by the School of the Museum of Fine Arts is scheduled for 5 January 2001 to 12 January 2001.  According to a brochure, the School of the Museum of Fine Arts, “… is the first U.S. art school to offer classes in Cuba.  Spend seven days in ‘The Pearl of the Caribbean’ sketching, drawing, painting, taking photographs, and making video.  Museum School faculty member and Cuban native, Marcos Carvajal, will provide art instruction and lead tours of Cuba’s many museums, galleries, architectural and historic sites.  All levels and abilities are welcome.”  For information, please contact the American Museum of Natural History at telephone (212) 769-5700 or the School of the Museum of Fine Arts at telephone (617) 267-1219.
 

Washington, D.C.-based National Geographic Society is marketing four 11-day educational tours (“Discovering the Soul of Cuba”) of the Republic of Cuba.  This is the first time that a nationally recognized travel-related organization has publicly marketed Republic of Cuba-related travel opportunities.  Travel arrangements are being coordinated by Washington, D.C.-based Academic Travel Abroad, Inc., under the auspice of a license issued by the OFAC.  The tours are 3 March 2001 to 13 March 2001; 17 march 2001 to 27 March 2001; 21 April 2001 to 1 May 2001; and 7 April 2001 to 17 April 2001 (photography expedition).  For additional information, please contact telephone: (888) 966-8687.

CUBA PARTICIPATES IN “THE 28th INCENTIVE TRAVEL & MEETING EXECUTIVES SHOW” IN CHICAGO- The United States Department of State in Washington, D.C., authorized visas for travel to the United States by Republic of Cuba nationals to participate in The 28th Incentive Travel & Meeting Executives Show held as one of the two portions of “The Motivation Show 2000” at the McCormick Place Complex in Chicago, Illinois, from 10 October 2000 through 12 October 2000.  Several years ago, the United States Department of State reportedly denied visas for travel to the United States by representatives of the Bureau of Conventions of the Republic of Cuba to attend an exhibition similar to The 28th Incentive Travel & Meeting Executives Show.  Weehawken, New Jersey-based Marazul Tours, Inc. (a Travel Service Provider licensed by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C.), paid for a 200 square foot corner exhibition booth on behalf of Marazul Tours and Marazul Charters, Inc. (a licensed Carrier Service Provider from the OFAC), within which the representatives from the Republic of Cuba were included.  There was signage for the Republic of Cuba-based companies at the exhibition booth and printed information was distributed, including brochures describing travel regulations issued by the OFAC.  The representatives from the Republic of Cuba included:
 

1) Republic of Cuba government-operated Bureau of Conventions of the Republic of Cuba (Buro de Convenciones de la Republica de Cuba).

2) Republic of Cuba government-operated Havanatur (a tour operator which coordinates the travel arrangements for the majority of individuals subject to United States law visiting the Republic of Cuba.

3) The 278-room Golden Tulip Parque Central located in the city of Havana, Republic of Cuba.  The Golden Tulip Parque Central Hotel, which commenced operations in November 1998, is a joint venture between Republic of Cuba government-operated Cubanacan S.A. and, reportedly, a group of seven individuals, including nationals from Spain.  Dallas, Texas-based Pegasus Solutions, Inc. (Nasdaq: PEGS; 1999 revenues US$38 million) receives commissions for reservations made through its global network for the Golden Tulip Parque Central Hotel.  The Golden Tulip Parque Central Hotel is currently managed by Hilversum, The Netherlands-based Krasnapolsky Hotels and Restaurants N.V. (which owns Golden Tulip Hotels).  The Golden Tulip Worldwide brand has been marketed (franchised, reservations, etc.) by Omaha, Nebraska-based Utell International since 1996.  Utell International has been a wholly owned subsidiary of Pegasus Solutions, Inc., since April 2000.  In September 2000, Krasnapolsky Hotels and Restaurants N.V. was expected to conclude the sale of its 65 owned/managed properties under the Golden Tulip Hotels brand to Madrid, Spain-based NH Hoteles.

4) The 416-room Novotel Miramar Hotel located in the city of Havana, Republic of Cuba.  The Novotel Miramar Hotel is managed by Evry Cedex, France-based Accor S.A. and owned by Republic of Cuba government-operated Gaviota S.A. (a subsidiary of the Revolutionary Armed Forces of the Republic of Cuba).  Accor S.A. and Minneapolis, Minnesota-based Carlson Companies (1999 revenues exceeded US$31 billion) are partners in Carlson-Wagonlit Travel, the second-largest travel network in the world with 4,100 locations in 125 countries.

5) Palma de Mallorca, Spain-based Sol Melia S.A. (1999 revenues US$610 million) which manages fifteen hotels within the Republic of Cuba.  In August 2000, Sol Melia reported that the company was purchasing Madrid, Spain-based Hoteles Tryp which manages four hotels within the Republic of Cuba.

6) Viajes Iberia, a travel agency subsidiary of Madrid, Spain-based Iberia Lineas Aereas de Espana (Iberia Airlines) which has flights between Spain and the Republic of Cuba and has a maintenance joint venture and a cargo handling joint venture with Republic of Cuba government-operated Corporacion de Aviacion Cubana (CACSA).

According to a media release from the organizers of The 28th Incentive Travel & Meeting Executives Show “A reported 1,433 companies occupied a total of 180,550 square feet of exhibit space and 36,399 representatives from the marketing, management, and sale promotion fields registered to attend the world’s largest collection of incentive merchandise and travel, of which more than 90% were from organizations that currently use incentives and promotional products and play an active role in the purchasing decision.  ‘The Motivation Show 2000’ is the nation’s marketplace for ideas to motivate consumers to buy, sales people to sell and employees to work more productively… is the most diverse presentation of incentives, promotional products, corporate gifts and travel and meeting services every featured under one roof… [and] provides a forum for industry newcomers and experienced professionals alike to meet, exchange ideas and keep abreast of the latest techniques in effective incentive marketing and performance improvement.  ‘The Motivation Show 2000’ is a collaborative effort of the Incentive Marketing Association (IMA), Society of Incentive & Travel Executives (SITE), Meeting Professionals International (MPI), National Association for Employee Recognition (NAER), Association of Retail Marketing Services (ARMS), Incentive Manufacturers Representatives Association (IMRA), Promotion Marketing Association (PMA), and Sales & Marketing Executives Chicago (SMEC).”

LEGISLATION BEFORE U.S. CONGRESS PROVIDES EXPANSIVE EXPORT PRODUCT CATEGORIES- The United States Senate is expected to pass the “Trade Sanctions Reform and Export Enhancement Act of 2000” which has been passed by the United States House of Representatives.  The “Trade Sanctions Reform and Export Enhancement Act of 2000” authorizes the continuation of healthcare product exports (with certain restrictions) from the United States to the Republic of Cuba and authorizes agricultural commodity products exports from the United States directly to Republic of Cuba government-operated entities within the Republic of Cuba and to non-Republic of Cuba government-operated entities within the Republic of Cuba.  The Honorable William J. Clinton, President of the United States of America, is expected to sign the legislation into law.  Certain provisions of the legislation will take effect 120 days after the date of enactment of the legislation.
 

The term “agricultural commodity” within the “Trade Sanctions Reform and Export Enhancement Act of 2000” has the meaning given the term in section 102 of the Agricultural Trade Act of 1978 (7 U.S.C. 5602): “any agricultural commodity, food, feed, fiber, or livestock (including livestock as it is defined in section 1471 (2) of this title and insects), and any product thereof.”  Insects may include bees and butterflies.  [Some insects are used as control agents for biological research or biotechnological research].  Seeds, fertilizer, and organic fertilizer are included in the definition of products authorized for export to the Republic of Cuba within the “Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriation Act of 2000” which includes the “Trade Sanctions Reform and Export Enhancement Act of 2000.”  The term “livestock” means cattle, sheep, goats, swine, poultry (including egg-producing poultry), equine animals used for food or in the production of food, fish used for food and other animals designated by the Secretary of Agriculture (at the Secretary’s sole discretion) that A) are part of a foundation herd (including producing dairy cattle) or offspring; or B) are purchased as part of a normal operation and not to obtain additional benefits under this subchapter.

The term “medical device” within the “Trade Sanctions Reform and Export Enhancement Act of 2000” has the meaning given the term “device” in section 201 of the Federal Food, Drug, and Cosmetic Act (21 U.S. C. 321).  The term “device” means an instrument, apparatus, implement, machine, contrivance, implant, in vitro reagent, or other similar or related article, including any component, part, or accessory, which is (1) recognized in the official National Formulary, or the United States Pharmacopoeia, or any supplement to them, (2) intended for use in the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention of disease, in man or other animals, or (3) intended to affect the structure or any function of the body of man or other animals, and which does not achieve its primary intended purposes through chemical action within or on the body of man or other animals and which is not dependent upon being metabolized for the achievement of its primary intended purposes.  The term “medicine” within the “Trade Sanctions Reform and Export Enhancement Act of 2000” has the meaning given the term “drug” in section 201 of the Federal Food, Drug, and Cosmetic Act (21 U.S. C. 321).  The term “drug” means (A) articles recognized in the official United States Pharmacopoeia, official Homeopathic Pharmacopoeia of the United States, or official National Formulary, or any supplement to any of them; and (B) articles intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in man or other animals; and (C) articles (other than food) intended to affect the structure or any function of the body of man or other animals; and (D) articles intended for use as a component of any article specified in clauses (A), (B), or (C) of this paragraph.  A food or dietary supplement for which a claim, subject to sections 343(r)(1)(B) and 343(r)(3) or this title or sections 343(r)(1)(B) and 343(r)(5)(D) of this title, is made in accordance with the requirements of section 343(r) of this title is not a drug solely because the label or the labeling contains such a claim.  A food, dietary ingredient, or dietary supplement for which a truthful and not misleading statement is made in accordance with section 343(r)(6) of this title is not a drug under clause (C) solely because the label or the labeling contains such a statement.

PROVISIONS OF TRADE SANCTIONS REFORM AND EXPORT ENHANCEMENT ACT OF 2000- The United States Senate is expected to pass the “Trade Sanctions Reform and Export Enhancement Act of 2000” which has been passed by the United States House of Representatives.  The “Trade Sanctions Reform and Export Enhancement Act of 2000” authorizes the continuation of healthcare product exports (with certain restrictions) from the United States to the Republic of Cuba and authorizes agricultural commodity products exports from the United States directly to Republic of Cuba government-operated entities within the Republic of Cuba and to non-Republic of Cuba government-operated entities within the Republic of Cuba.  The Honorable William J. Clinton, President of the United States of America, is expected to sign the legislation into law.  Provisions of the legislation will take effect 120 days after the date of enactment of the legislation.
 

The “Trade Sanctions Reform and Export Enhancement Act of 2000” provides that “… no United States Government assistance, including United States foreign assistance, United States export assistance, and any United States credit or guarantees shall be available for exports to Cuba…”

The “Trade Sanctions Reform and Export Enhancement Act of 2000” provides that “No United States person may provide payment or financing terms for sales of agricultural commodities or products to Cuba or any person in Cuba, except in accordance with the following terms: A) Payment of cash in advance or B) Financing by third country financial institutions (excluding United States persons or Government of Cuba entities), except that such financing may be confirmed or advised by a United States financial institution.  Nothing in this paragraph authorizes payment terms or trade financing involving a debit or credit to an account of a person located in Cuba or of the Government of Cuba maintained on the books of a United States depository institution.”

The “Trade Sanctions Reform and Export Enhancement Act of 2000” does not prohibit United States-based insurance companies from providing insurance coverage for exports of healthcare products and for exports of agricultural commodities from the United States to the Republic of Cuba.

The “Trade Sanctions Reform and Export Enhancement Act of 2000” provides for the Bureau of Export Administration (BXA) of the United States Department of Commerce in Washington, D.C., to issue one-year licenses for “contracts entered into during the one-year period of the license and shipped within the 12-month period beginning on the date of the signing of the contract, except that the requirements of such one-year licenses shall be no more restrictive that license exceptions administered by the Department of Commerce or general licenses administered by the Department of the Treasury…”

The “Trade Sanctions Reform and Export Enhancement Act of 2000” authorizes the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury to authorize on a case-by-case basis by a specific license for travel to, from, or within Cuba for the commercial export sale of agricultural commodities.  Since 1996, the OFAC has licensed visits to the Republic of Cuba by representatives of United States-based healthcare companies for the purpose of identifying export opportunities.

DIRECT SHIPPING CONTINUES TO BE AUTHORIZED BETWEEN THE UNITED STATES AND CUBA- The “Trade Sanctions Reform and Export Enhancement Act of 2000” does not nullify Section 6 (b) of the Cuban Democracy Act (CDA) signed into law by The Honorable George W. Bush, President of the United States of America, in 1992 which authorized the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., to license vessels (no distinction between United States-flagged vessels or non-United States-flagged vessels) to operate between the United States and the Republic of Cuba.  With respect to implementation of the “Trade Sanctions Reform and Export Enhancement Act of 2000,” the OFAC may license the transport agricultural commodities, medicine, or medical devices directly from the United States to the Republic of Cuba.  Since 1992, the OFAC has authorized licenses for direct shipping from the United States to the Republic of Cuba.  The CDA prohibits a vessel “which enters a port or place in Cuba to engage in the trade of goods or services may not, within 180 days after departure from such port or place in Cuba, load or unload any freight at any place in the United States, except pursuant to a license by the Secretary of the Treasury.”

HOW OFAC WRITES REGULATIONS FOR LEGISLATION CRITICAL TO IMPACT ON U.S. EXPORTS- The United States Senate is expected to pass the “Trade Sanctions Reform and Export Enhancement Act of 2000” which has been passed by the United States House of Representatives.  The “Trade Sanctions Reform and Export Enhancement Act of 2000” authorizes the continuation of healthcare product exports (with certain restrictions) from the United States to the Republic of Cuba and authorizes agricultural commodity products exports from the United States directly to Republic of Cuba government-operated entities within the Republic of Cuba and to non-Republic of Cuba government-operated entities within the Republic of Cuba.  The Honorable William J. Clinton, President of the United States of America, is expected to sign the legislation into law.  Provisions of the legislation will take effect 120 days after the date of enactment of the legislation.
 

The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., is expected to implement regulations for the “Trade Sanctions Reform and Export Enhancement Act of 2000” that encourage exports of agricultural commodities to the Republic of Cuba through sales to Republic of Cuba government-operated Alimport (under the auspice of the Ministry of Foreign Trade of the Republic of Cuba) which imports agricultural commodities for use by the 11.2 million citizens of the Republic of Cuba.  In 1999, Alimport purchased 1) approximately US$750 million in food products from companies located in Canada, France, Brazil, New Zealand, Argentina, Mexico, Vietnam, and the People’s Republic of China among other countries.  Among the products imported were powdered milk, cooking oil, rice, wheat, soy, corn, beans, peas, poultry, and vitamins and 2) approximately US$250 million in food products and fertilizers for use by 1) Republic of Cuba government-operated U.S. Dollar retail stores 2) Republic of Cuba government-operated companies 3) Republic of Cuba-based joint ventures and 4) the tourism sector.  The OFAC is not expected to implement regulations that encourage exports of agricultural commodities to Republic of Cuba government-operated companies for use within the tourism sector within the Republic of Cuba or for resale at Republic of Cuba U.S. Dollar retail stores, although the “Trade Sanctions Reform and Export Enhancement Act of 2000” does not prohibit such sales.  United States-based companies may initially focus upon seeking export opportunities to the Republic of Cuba that exclude the tourism sector within the Republic of Cuba due to potential United States-based public sector concern(s) toward United States-based companies engaging in non-humanitarian-based commercial transactions.

The OFAC is likely to implement regulations for the “Trade Sanctions Reform and Export Enhancement Act of 2000” with respect to the export of medicine and medical devices to the Republic of Cuba that will continue to be primarily governed by provisions of the Cuban Democracy Act (1992) which require that medicine and medical devices be sold “for the use of the Cuban people” and not be used for biotechnological research, re-exported, used for torture, or sold in Republic of Cuba government-operated U.S. Dollar retail stores.  Specific provisions of the CDA were not rescinded by the “Trade Sanctions Reform and Export Enhancement Act of 2000.”  Since 1992, the OFAC and the Bureau of Export Administration (BXA) of the United States Department of Commerce in Washington, D.C., have primarily licensed exports of medicine and medical devices to Republic of Cuba government-operated MediCuba (under the auspice of the Ministry of Public Health of the Republic of Cuba).

OFAC MAY RE-AUTHORIZE DIRECT BANK TRANSFERS FROM CUBA FOR IMPORT PAYMENTS- The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., may re-authorize direct correspondent banking services (which could use the S.W.I.F.T. system) between the United States and the Republic of Cuba.  When a Republic of Cuba-based entity seeks to purchase a product (agricultural, books, magazines, newspapers, music, motion picture, farm, food, informational materials, medical equipment, medical instruments, medical supplies, medicated products, medicines, pharmaceuticals) or pay for a service (air charter services, airline over-flight, exhibitions, money transfer, package delivery, telecommunications, travel services) authorized by the OFAC and/or by the Bureau of Export Administration (BXA) of the Department of Commerce in Washington, D.C., the funds must be transferred to a third-country financial institution from which the United States-based company must then obtain the funds, or cash must be delivered from the Republic of Cuba to the United States.
 

The required triangular-payment system results in transaction cost increases of 5% to 15%, which, according to United States-based companies, have been significant enough that Republic of Cuba-based entities conclude transactions with non-United States-based suppliers.  Assisting United States-based companies in obtaining funds from Republic of Cuba-based entities on a timely basis would be the Republic of Cuba’s membership in S.W.I.F.T., a global bank-owned cooperative supplying secure messaging services and interface software to 6,766 financial institutions (banks, brokers, investment managers, securities depositories and clearing organizations, and stock exchanges) in 189 countries (including the United States). The Republic of Cuba joined S.W.I.F.T. in 1990 through Republic of Cuba government-operated National Bank of Cuba after obtaining approval from S.W.I.F.T. for computer software compatible with S.W.I.F.T. as the S.W.I.F.T. ST-2OO computer operating system used at the time was manufactured within the United States. Banks within the Republic of Cuba connected to S.W.I.F.T. are: Republic of Cuba government-operated Banco Central de Cuba, Republic of Cuba government-operated Banco Financiero Internacional, S.A., Republic of Cuba government-operated Banco Internacional de Comercio S.A., Republic of Cuba government-operated Banco de Credito Y Comercio, Republic of Cuba government-operated Banco Popular de Ahorro, Republic of Cuba government-operated Banco Metropolitano S.A., Republic of Cuba government-operated Banco Nacional de Cuba, and Republic of Cuba government-operated Banco Exterior de Cuba.

Additionally, United States-based companies have asked the OFAC to re-authorize direct correspondent banking services from the United States to the Republic of Cuba.  When a United States-based entity seeks to purchase a product (artwork, books, magazines, newspapers, music, motion picture, photographs, informational materials) or pay for a service (telecommunications, travel services, airline over-flight, exhibitions) authorized by the OFAC and/or by the BXA the funds must be transferred to a third-country financial institution from which the Republic of Cuba-based entities must then obtain the funds, or cash must be delivered from the United States to the Republic of Cuba.

U.S.-FOOD & AGRIBUSINESS EXHIBITION EXPECTED TO BE LICENSED- With the enactment of the “Trade Sanctions Reform and Export Enhancement Act of 2000,” the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., is expected to license the U.S. Food & Agribusiness Exhibition to be held in the city of Havana, Republic of Cuba.  In May 2000, Mr. Peter W. Nathan, President of Westport, Connecticut-based PWN Exhibicon International L.L.C., received a license from the OFAC valid for one year for the purpose of “explor[ing] arrangements for a potential U.S. Food and Agribusiness Exhibition in Cuba” and “multiple trips to Cuba, as necessary, in order to assess, arrange and coordinate the potential exhibitions.  A separate license would be required to conduct and participate in the prospective exhibitions.”  However, the OFAC, at the at the direction of the United States Department of State, then denied a license to PWN Exhibicon International L.L.C. to conduct and participate in a U.S. Food & Agribusiness Exhibition.  PWN Exhibicon International L.L.C. (telephone: (203) 222-8660) previously presented the U.S. Healthcare Exhibition in Havana in January 2000 which included 300 representatives of 97 United States-based companies.

NEW ORLEANS COMPANY ORDERING VESSELS; MENTIONS FUTURE CUBA OPERATIONS- New Orleans, Louisiana-based St. Jude Scheepvaart USA (an affiliate of New Orleans, Louisiana-based Sonchia Chartering Company), has ordered 10 cargo vessels with a combined value of US$60 million (financing obtained from Germany-based entities) from the Shanghai, People’s Republic of China-based Jiangnan Shipyard.  The vessels are to be primarily used for the transportation of agricultural products from the United States to Caribbean Sea-area countries.  According to Mr. Timothy Gillick, a shareholder in St. Jude Scheepvaart USA, “We are designing a flexible ship that can operate on the Mississippi, in the shallows of Suriname and central Mexico, and, eventually, into Cuba.”  Each of the 79.64-meter vessels (designed by Emden, Germany-based ABH Design Group) are 3,400 dwt (dead weight) with 4,260 cubic meters of capacity.  The vessels have a 5 meters draft, a 15.4-meter beam, and 1,800 cubic meter tanks.  The vessels will have two hatches, each with a capacity to hold 21,000 cubic meters of grain, which is, reportedly, equal to the capacity of two “normal size” barges.

INCOMING PRESIDENT OF ICC, VISITING CUBA, IS FORMER CHAIRMAN AND CEO OF US WEST- Mr. Richard D. McCormick, current Vice President and incoming President of the Paris, France-based International Chamber of Commerce (ICC), served as Chairman, President, and Chief Executive Officer of Denver, Colorado-based US West, Inc., from 1991 to 1999.  US West is now a division of Denver, Colorado-based Qwest Communications International, Inc. (1999 revenues exceeded US$18 billion).  Mr. McCormick will become President of the ICC on 1 January 2001.  Mr. McCormick will attend the ICC-sponsored Latin America Regional Meeting on Trade and Investment in Latin America in the city of Havana, Republic of Cuba, from 19 October 2000 to 20 October 2000.  The ICC has 7,000 members in 134 countries.  Mr. McCormick is also a member of the Board of Directors of Elk Grove Township, Illinois-based UAL Corporation (1999 revenues exceeded US$18 billion); Hartford, Connecticut-based United Technologies Corporation (1999 revenues exceeded US$24 billion); and San Francisco, California-based Wells Fargo & Company (1999 assets exceeded US$150 billion).
 

United Airlines, Inc. (a subsidiary of UAL Corporation) has a Carrier Service Provider (CSP) license from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., for the provision of services between the United States and the Republic of Cuba.  Since 1962, United Air Lines has held route authorities from the following cities: Havana to Miami, Key West, Baltimore, Boston, Dallas, Houston, Los Angeles, New Orleans, New York, Newark, Philadelphia, San Francisco, San Juan, St. Croix, St. Thomas, and Washington, D.C.; and Camaguay to Miami, Baltimore, Boston, Dallas, Houston, Los Angeles, New Orleans, New York, Newark, Philadelphia, San Francisco, San Juan, St. Croix, St. Thomas, and Washington, D.C.

Farmington, Connecticut-based Otis Elevator Company (a subsidiary of United Technologies Corporation) and Farmington, Connecticut-based Carrier Corporation (a subsidiary of United Technologies Corporation) sold, with authorization of the United States government, products through third-country subsidiaries (including in Mexico) to entities within the Republic of Cuba from prior to 1959 through 1992, when provisions of the Cuban Democracy Act prohibited third-country subsidiary commerce transactions unless specifically licensed by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., and/or by the Bureau of Export Administration (BXA) of the United States Department of Commerce in Washington, D.C.

HITECH RESOURCES CANCELS AGREEMENT TO PURCHASE 25% OF OMICRON HOLDINGS- According to the text of an 11 October 2000 media release from Vancouver, Canada-based Hitech Resources Corporation, the company reported that due to “… its decision to invest in Global Capital Partners, combined with uncertainties resulting from an inability to obtain a precise and timely ruling on a US company investing in Cuba via a non-US company, Omicron Holdings and Hitech Resources Corporation (Pink Sheets: HIRC) have mutually agreed to cancel their Agreement dated September 1, 2000.”  According to a media release, “Global Capital Partners operates a highly diversified international investment banking and securities network. Global Capital Partners owns Colorado based EBI Securities Corporation, a full service investment banking and brokerage firm with 16 offices in 15 cities and Global Capital Markets Inc., a New York based investment banking and brokerage firm…”   The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., permits a U.S. business or individual subject to U.S. law to make a secondary market investment in a third-country business which has commercial dealings within the Republic of Cuba provided that the investment does not result in control-in-fact of the third-country business by the U.S. investor and the third-country company does not derive a majority of its revenues from business activity within the Republic of Cuba.  Secondary market investment that falls short of a controlling interest in such a business is not prohibited.  [4 March 1994].
 

In September 2000, Hitech Resources Corporation, which is a publicly-held company trading on the United States Over-The-Counter (OTC) markets (Pink Sheets: NIRC) reported plans to purchase for US$12 million a 25% interest in London, United Kingdom-based Omicron Holdings PLC which has a non-operational nickel mining concession within the Republic of Cuba that is expected to require a total capital expenditure of US$282 million (2001 through 2005) with profitability based upon a nickel cash cost of US$1.41 pound FOB Republic of Cuba.  Hitech Resources Corporation was incorporated in the State of Delaware on 17 February 1999 using the registered agent Wilmington, Delaware-based Incorporators Ltd.  The company was capitalized with 100 million shares at .000100 par value (US$10,000.00).  Initially, Hitech Resources was established to invest in Internet-based information directories (yellow pages) in Los Angeles, California.  When these opportunities did not materialize, the company decided to seek investments elsewhere. Hitech Resources Corporation currently obtains no revenues from interests within the United States.

A feasibility study agreement signed between Omicron Holdings PLC and Republic of Cuba government-operated Commercial Caribbean Nickel S.A. on 1 November 1997 is 50% completed as of 15 May 2000 and financial closure is expected in the second quarter of 2001.  Through 31 December 1999, a subsidiary of Omicron Holdings PLC had spent US$2.48 million for an initial pre-feasibility study, completion of phase I of the bankable feasibility study, the purchase of a drill hole database on the project, and equipment.  Thus far, the investment by Omicron Holdings PLC in the non-operational mining concession within the Republic of Cuba represents 13.8% of the total expenditures by the company since 1996 on projects within the Republic of Cuba, Mozambique, and Zimbabwe.

ALSTOM S.A. OF FRANCE CONFIRMS US$20 MILLION CONTRACT TO MODERNIZE POWER PLANT- Paris, France-based Alstom S.A. (1999 revenues approximately US$18 billion), considered to be the world’s second-largest power turbine manufacturer, reported that the company has a US$20 million contract with Republic of Cuba government-operated Union Electrica de Cuba (a division of the Ministry of Basic Industry of the Republic of Cuba) to modernize the thermo-electric plant located in Matanzas Province (120 kilometers east of the city of Havana).  The plant will be adapted to use high sulfur oil produced within the Republic of Cuba. Alstom S.A. is one of the non-Republic of Cuba-based companies to participate in a three-year (commenced in 1997) plan valued at US$167 million to modernize eleven U.S.S.R.-constructed 100-megawatt generators and three 125-megawatt Czechoslovakia-built generators, which provide a combined 45% of the current installed power generation capacity of the Republic of Cuba.  New York City, New York-based The Bank of New York, Inc. (1999 assets exceeding US$50 billion) is the depository for American Depository Receipts (ADR’s) for Alstom S.A. listed on the New York Stock Exchange.
 

Year	% Of Domestic Electric Power Generation
2001	90% (expected)
2000	70% (estimate)
1999	41%
1998	30%
1997	20%

Other companies that have participated, or are participating, in the three-year plan include: Iberdrola Ingenieria y Consultoria (a subsidiary of Madrid, Spain-based Iberdrola S.A.); Paris, France-based Babcock Enterprise; Paris, France-based Davexport (affiliated with the government of France and which specializes in obtaining supplies for large construction and investment projects); and Prague, Czech Republic-based CKD Energy (a subcontractor for Prague, Czech Republic-based Skodaexport).

U.S. COMPANY OPERATING IN CANADA PURCHASING INTEREST IN CUBA MINING CONCESSION- Vancouver, Canada-based Hitech Resources Corporation, which is a publicly-held company trading on the United States Over-The-Counter (OTC) markets (Pink Sheets: NIRC) is planning to purchase for US$12 million a 25% interest in London, United Kingdom-based Omicron Holdings PLC which has a non-operational nickel mining concession within the Republic of Cuba that is expected to require a total capital expenditure of US$282 million (2001 through 2005) with profitability based upon a nickel cash cost of US$1.41 pound FOB Republic of Cuba.  Hitech Resources Corporation was incorporated in the State of Delaware on 17 February 1999 using the registered agent Wilmington, Delaware-based Incorporators Ltd.  The company was capitalized with 100 million shares at .000100 par value (US$10,000.00).  Initially, Hitech Resources was established to invest in Internet-based information directories (yellow pages) in Los Angeles, California.  When these opportunities did not materialize, the company decided to seek investments elsewhere.  Hitech Resources Corporation currently obtains no revenues from interests within the United States.
 

A feasibility study agreement signed between Omicron Holdings PLC and Republic of Cuba government-operated Commercial Caribbean Nickel S.A. on 1 November 1997 is 50% completed as of 15 May 2000 and financial closure is expected in the second quarter of 2001.  Through 31 December 1999, a subsidiary of Omicron Holdings PLC had spent US$2.48 million for an initial pre-feasibility study, completion of phase I of the bankable feasibility study, the purchase of a drill hole database on the project, and equipment.  Thus far, the investment by Omicron Holdings PLC in the non-operational mining concession within the Republic of Cuba represents 13.8% of the total expenditures by the company since 1996 on projects within the Republic of Cuba, Mozambique, and Zimbabwe.

The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., permits a U.S. business or individual subject to U.S. law to make a secondary market investment in a third-country business which has commercial dealings within the Republic of Cuba provided that the investment does not result in control-in-fact of the third-country business by the U.S. investor and the third-country company does not derive a majority of its revenues from business activity within the Republic of Cuba.  Secondary market investment that falls short of a controlling interest in such a business is not prohibited.  [4 March 1994].
 

According to a 12 September 2000 media release by Hitech Resources Corporation, the company “has signed an Agreement with Omicron Holdings PLC (‘Omicron’), an England and Wales Corporation, with substantial holdings and mining venture projects in Cuba and Mozambique, most notably the Caribbean Ferro-Nickel mines in Cuba.  Under the terms of the Agreement, Hitech intends to make a secondary market investment in Omicron, whereby the company will own no more than twenty-five (25%) of Omicron.  This investment is supported by a legal opinion which supports this type of third party investment in Cuba by a U.S. company.  Omicron's corporate strategy will include the specific development of the Ferro-Nickel mines in Cuba with the intention of bringing the project to a bankable stage within the next 10-12 months and to confirm the potential of producing 120,000 tons of ferro-nickel annually to be backed by reserves available for almost 150 years.  Omicron can state that with its patented Mintek [South Africa] technology to process ferro-nickel in Cuba, it has access to approximately 25% of the world's seprolite ferro-nickel deposits.  The corporate strategy will also restrict expenditures on Omicron's mining concessions in Mozambique which includes the Beira Iron Project, the Beira Free Zone, the Moatize Coal Mine and an Electric Power Station.  All efforts will be made to locate joint venture partners and operators who will bring the necessary financial capabilities to bring these projects to a bankable stage.  A Confidential Information Memorandum (produced by London, United Kingdom-based Robert Fleming & Company Limited) providing details on both Omicron and its projects is available by request at the Hitech head office in Vancouver.  Also, further to the Company's last press release a new CUSIP number (43365E207) has been assigned Hitech Resource Corporation along with the new trading symbol ‘HIRC’ effective September 12, 2000.”

BUSINESS DELEGATION FROM GEORGIA, INCLUDING CONAGRA, VISITING CUBA- The Honorable Thomas T. Irvin, Commissioner of Agriculture of the State of Georgia, is leading a 21-member delegation including representatives of sixteen Georgia-based companies to the Republic of Cuba from 7 October 2000 to 12 October 2000 to meet with representatives of the Ministry of Foreign Trade of the Republic of Cuba, representatives of the Ministry of Agriculture of the Republic of Cuba, representatives of Republic of Cuba government-operated Alimport (under the auspices of the Ministry of Foreign Trade of the Republic of Cuba), representatives of Republic of Cuba government-operated port facilities, and visit Republic of Cuba government-operated food production/processing facilities.  The delegation includes a representative of Omaha, Nebraska-based ConAgra, Inc. (1999 revenues exceeded US$28 billion).  The delegation is visiting the Republic of Cuba under the auspice of a license from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C.  Alimport is responsible for the importation of food products for use by the Republic of Cuba’s 11.2 million citizens.  In 1999, Alimport purchased 1) approximately US$750 million in food products from companies located in Canada, France, Brazil, New Zealand, Argentina, Mexico, Vietnam, and the People’s Republic of China among other countries.  Among the products imported were powdered milk, cooking oil, rice, wheat, soy, corn, beans, peas, poultry, and vitamins and 2) approximately US$250 million in food products and fertilizers for use by 1) Republic of Cuba government-operated U.S. Dollar retail stores 2) Republic of Cuba government-operated companies 3) Republic of Cuba-based joint ventures and 4) the tourism sector.  Commission Irvin reported that had he accepted all of the inquiries, the delegation could have included representatives of 200 Georgia-based companies.  If the visit is successful, he said that a follow-up visit is likely.  In a 3 October 2000 media release, Commissioner Irvin said, “Georgia poultry is now going through other countries before it gets to Cuba and that’s not economically beneficial to our agribusinesses.”  In July 2000, Commissioner Irvin said that chicken products from the United States were “being diverted by Canada and sent down to Cuba already… It’s not good sense to let that continue.”  Mr. Andres Villegas, International Trade Director for the Department of Agriculture of the State of Georgia, later clarified this statement, saying that Commissioner Irvin had 1) no specific information as to from where within the United States chicken products were being sold to Canada-based companies and then being sold to Republic of Cuba government-operated entities and 2) no specific information that United States-based companies knew that their products were diverted, only that Commissioner Irvin had heard the information through colleagues.  Commissioner Irvin initially spoke about potential trade between Georgia-based companies and entities within the Republic of Cuba during the annual meeting of members of the Southern Association of State Departments of Agriculture (SASDA) in June 2000.
 

Name	Product(s)
Fieldale Farms (Baldwin, Georgia)	poultry products
Pike Creek Turf, Inc. (Adel, Georgia)	turf grass producer for golf courses
Crider Poultry, Inc. (Metter, Georgia)	poultry
AJC International (Atlanta, Georgia)	frozen meat and poultry products
Mirasco, Inc. (Atlanta, Georgia)	meat and poultry products
ConAgra (Atlanta, Georgia)	poultry products
PM Global Foods (Atlanta, Georgia)	meat and poultry
AFC Enterprises (Atlanta, Georgia)	restaurant franchise operator for Church’s Fried Chicken, Popeye’s Fried Chicken, Seattle Coffee, and Cinnabons
American Protein (Cumming, Georgia)	animal feed
Fresh Frozen Foods (Jefferson, Georgia)	frozen vegetables
Ag South (Statesboro, Georgia)	transportation logistics
Wayne Farms/Conti Group (Gainsville, Georgia)	poultry products
Gerber Agri International LLC (Marietta, Georgia)	poultry products
Interra International (Atlanta, Georgia)	poultry products
US Poultry & Egg Export Council (Stone Mountain, Georgia)	representing United States poultry industry
Packers Provision Company of Puerto Rico	poultry trading company
A&D Sales (no location provided)	no information reported
FAR Trading Company (Atlanta, Georgia)	no information reported

U.S. WHEAT ASSOCIATES DELEGATION VISITING CUBA, FIFTH VISIT IN THREE YEARS- A five-member delegation from the Washington, D.C.-based U.S. Wheat Associates, Inc., an “export market development organization representing the United States wheat industry,” is visiting the Republic of Cuba from 8 October 2000 to 15 October 2000.  The delegation is visiting the Republic of Cuba under the auspice of a license from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C.  According to the United States Department of Agriculture in Washington, D.C., the government of the Republic of Cuba imported a combined approximately 950,000 tons of wheat and flour in 1999.

CARGILL OF MINNESOTA EXECUTIVES VISIT CUBA- Six executives of Minneapolis, Minnesota-based Cargill, Incorporated (1999 revenues exceeded US$46 billion) visited the Republic of Cuba from 1 October 2000 to 5 October 2000 to meet with representatives of Republic of Cuba government-operated Alimport (under the auspice of the Ministry of Foreign Trade of the Republic of Cuba), representatives of the Ministry of Agriculture of the Republic of Cuba, and with representatives of the Ministry of Foreign Trade of the Republic of Cuba.  The delegation visited the Republic of Cuba under the auspice of a license from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C.
 

The delegation included Mr. Van Yeutter, Washington, D.C.-based International Business Development Director for Cargill, Incorporated.  Mr. Yeutter previously visited the Republic of Cuba in April 2000 with representatives of Cargill, Incorporated.  Mr. Yeutter is the son of The Honorable Clayton K. Yeutter, a former United States Secretary of Agriculture and a former United States Trade Representative.  Secretary Yeutter is a member of the Board of Directors of Omaha, Nebraska-based ConAgra, Inc. (1999 revenues exceeded US$28 billion).

Alimport is responsible for the importation of food products for use by the Republic of Cuba’s 11.2 million citizens.  In 1999, Alimport purchased 1) approximately US$750 million in food products from companies located in Canada, France, Brazil, New Zealand, Argentina, Mexico, Vietnam, and the People’s Republic of China among other countries.  Among the products imported were powered milk, cooking oil, rice, wheat, soy, corn, beans, peas, poultry, and vitamins and 2) approximately US$250 million in food products and fertilizers for use by 1) Republic of Cuba government-operated U.S. Dollar retail stores 2) Republic of Cuba government-operated companies 3) Republic of Cuba-based joint ventures and 4) the tourism sector.
 

In September 2000, Decatur, Illinois-based Archer Daniels Midland Company (1999 revenues exceeded US$14 billion) hosted Mr. Pedro Alvarez Borrego, president of Alimport, during a visit to the United States along with three representatives of the agricultural sector from the Republic of Cuba and one representative of the Ministry of Foreign Trade of the Republic of Cuba.   The delegation from the Republic of Cuba included: 2) Mr. Alexander Perez Cartaya, Director- Charter and Shipping Division of Alimport 3) Dr. Alvaro Garcia Uriarte, General Director of the Republic of Cuba government-operated Centro de la Industria Alimenticia (Food Industry Research Institute) of the Ministry of Food Industry of the Republic of Cuba 4) Mr. Juan Jose Ferro Castro, Director of the Republic of Cuba government-operated Union de Empresa de la Industria de la Carne (Union of Meat Industry) under the auspice of the Ministry of Food Industry of the Republic of Cuba and 5) Mrs. Maria de la Luz B’Hamel, Director- Area de Politica Comercial, of the Ministry of Foreign Trade of the Republic of Cuba.  Members of the Board of Directors of Archer Daniels Midland Company include The Honorable John R. Block, a former United States Secretary of Agriculture, and The Rt. Hon. M. Brian Mulroney, a former Prime Minister of Canada.

ALTADIS COMPLETES PURCHASE OF 50% INTEREST IN HABANOS S.A. FOR LESS THAN REPORTED- Madrid, Spain-based Altadis S.A. (Alliance Tabac Distribution) has reported that a new purchase price has been established for the 50% interest in Republic of Cuba government-operated Habanos S.A., the exclusive worldwide marketer of Republic of Cuba-produced cigars.  In December 1999, Altadis S.A. reported that the company would purchase a 50% interest in Habanos S.A. for US$500 million (consisting of credit for outstanding debt by Habanos S.A. to Altadis S.A., financing for tobacco harvests within the Republic of Cuba, and goodwill).  Established in 1994, Habanos S.A. reportedly has twenty-three distributors throughout the world and a retail franchise of sixty-nine Casa del Habanos within the Republic of Cuba and other countries.  On 2 October 2000, Altadis S.A. reported that the company will pay Habanos S.A. US$438,994,000.00 plus US$38,195,000.00 if certain unspecified cash flow targets are achieved for the 2001 to 2003 period.
 

Altadis S.A. was established in October 1999 as a result of the merger of Tabacalera S.A., and Paris, France-based Seita S.A.  New York City, New York-based J.P. Morgan & Co. Incorporated (1999 assets exceeded US$200 billion) through Madrid, Spain-based J.P. Morgan Espana S.A. and Paris, France-based J.P. Morgan & Cie S.A., served as the advisor to both Tabacalera S.A. and to Seita S.A. for merger, then valued at US$3.3 billion.  Altadis S.A. cigar brands reportedly controlled 26% of the worldwide cigar market in 1999.  Prior to their merger, Tabacalera S.A. and Seita S.A. were, respectively 1) the two largest purchasers of Republic of Cuba-produced cigars, approximately 40% of the 126 million Republic of Cuba-produced cigars reportedly exported in 1998 2) the two largest sources of financing for Republic of Cuba-produced tobacco, approximately US$50 million (US$40 million from Tabacalera S.A. and US$10 million from Seita S.A.) for the 1998-1999 tobacco harvest and 3) the two largest purchasers of Republic of Cuba-produced tobacco leaf, almost all of the 13,000 tons exported.  The government of Spain held a 3.2% share in Tabacalera S.A.  In 1999, Seita S.A. purchased Fort Lauderdale, Florida-based Consolidated Cigar Holdings, Inc., which produces non-Republic of Cuba-produced cigar brands Montecristo and H. Upmann, and the brands Dunhill and Dutch Masters, among others.  Seita S.A. ownership of Consolidated Cigar Holdings Inc., positioned the company to become the distributor within the United States for Republic of Cuba-produced cigar brands Montecristo, H. Upmann, and Por Larranaga.

APC OF NORWAY REPORTS WATER PURIFICATION UNIT CONTRACT- Lierstranda, Norway-based Apex Process Contracting AS (APC) reports that the company has signed an agreement with Republic of Cuba government-operated Instituto Nacional de Recoursos Hidraulicos to provide AquaCure water purification units for a pilot project in conjunction with the Ministry of Public Health of the Republic of Cuba.  APC is only focusing on drinking water.  Partial funding for the pilot project (total value of the pilot project is approximately US$20,000.00) is provided by Norway-based Latin American Health Fund, a non-governmental organization (NGO).  APC plans to install water purification units in two communities within Havana Province at residences, schools (with 100 students) and clinics, and larger facilities (with 327 people).  An APC unit has already been installed at a school within Havana Province.  Mr. Tore Brastad, General Manager of APC, reported that if the pilot project was successful, APC might consider manufacturing/assembling water purification units within the Republic of Cuba.  APC, which was established in 1994, has developed, tested, and sold water purification systems for the following business areas: horticulture, drinking water, aquaculture, and food and beverages.  According to the company “production and development takes place in Norway and in the United States.”  Prescott, Arizona-based Vortex, Inc., provides approximately 10% of the technical development for APC products.  The technology used by APC is based upon a combination of ultraviolet (UV) irradiation and ozonation.

NATIONAL GEOGRAPHIC SOCIETY MARKETING TOURS OF CUBA LICENSED BY THE OFAC- Washington, D.C.-based National Geographic Society is marketing four 11-day educational tours (“Discovering the Soul of Cuba”) of the Republic of Cuba.  This is the first time that a nationally-recognized travel-related organization has publicly marketed Republic of Cuba-related travel opportunities.  Travel arrangements are being coordinated by Washington, D.C.-based Academic Travel Abroad, Inc., under the auspice of a license issued by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C.  The tours are 3 March 2001 to 13 March 2001; 17 march 2001 to 27 March 2001; 21 April 2001 to 1 May 2001; and 7 April 2001 to 17 April 2001 (photography expedition).  The first three tours (US$3,950.00) will be led by Ms. Elizabeth Newhouse, Director of Travel Publishing at the National Geographic Society.  The fourth tour (US$4,100.00) will be led by Mr. David Alan Harvey, a photographer of more than 30 articles for National Geographic magazine. Ms. Newhouse and Mr. Harvey co-authored the book, Cuba, published by the National Geographic Society.  Since 1999, the OFAC has dramatically increased the number of United States-based companies and United States-based organizations authorized to provide travel-related services for individuals subject to United States law seeking to visit the Republic of Cuba under various provisions of the “people-to-people” program which encourages interaction amongst Republic of Cuba nationals and individuals subject to United States law.  For additional information, please contact telephone: (888) 966-8687 or on the Internet at http://www.nationalgeographic.com.
 

Members of the Board of Directors of the National Geographic Society include Mr. J. Willard Marriott, Jr., Chairman and Chief Executive Officer, Washington, D.C.-based Marriott International (1999 revenues exceeded US$8 billion) and Mr. Dennis Patrick, President of the AOL Wireless division of Dulles, Virginia-based America Online, Inc. (1999 revenues exceeded US$4 billion).

America Online has signed a merger agreement with New York City, New York-based Time Warner, Inc. (1999 revenues exceeded US$26 billion).  Atlanta, Georgia-based Cable News Network (CNN), a subsidiary of Time Warner, Inc., has a bureau in the city of Havana, Republic of Cuba.

In February 1999, Mr. Simon F. Cooper, President of Toronto, Canada-based Marriott Lodging Canada and Senior Vice President-Lodging, Canada Region for Marriott International, Inc., was elected to the Board of Directors of North Vancouver, Canada-based Leisure Canada, Inc., which through its North Vancouver, Canada-based Wilton Properties subsidiary, plans to invest approximately US$400 million to develop within the Republic of Cuba hotels, marinas, golf courses, equestrian riding centers, cruise ship facilities, tennis courts, convention centers, health spas, retail facilities, and eco-tourism facilities in through a joint venture with Republic of Cuba government-operated Gran Caribe S.A., one of the three largest Republic of Cuba government-operated tourism companies.

US$34.7 MILLION IN TELECOMMUNICATIONS PAYMENTS TO CUBA THUS FAR IN 2000- The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., approved in US$34,735,815.00 in payments for the period January 2000 through June 2000 from United States-based telecommunications companies to Republic of Cuba government-operated Empresa de Telecomunicaciones de Cuba S.A. (ETECSA), a joint venture operated by the Ministry of Communications of the Republic of Cuba within which Brussels, Belgium-based Stet International (a subsidiary of Rome, Italy-based Telecom Italia) has a 29.29% interest).  Direct dial telephone services were re-authorized by the Cuban Democracy Act signed into law by President George Bush in 1992.  Direct dial telephone services were implemented in 1994.
 

Company	Payments To ETECSA For From 1 January 2000 Through June 2000	Total 1999 Payments To ETECSA
New York City, New York-based AT&T Corporation (formerly American Telephone & Telegraph Company)	US$17,331,979.00
Miami, Florida-based IDB Worldcom Services, Inc. (formerly IDB Communications, Inc.)	US$  1,234,773.00
Washington, D.C.-based MCI International, Inc. (formerly MCI Communications Corporation)	US$  4,373,238.00
Tulsa, Oklahoma-based WilTel, Inc., (formerly WilTel Underseas Cable, Inc.)	US$     897,435.00
Clinton, Mississippi-based WorldCom, Inc. (formerly LDDS Communications, Inc.)	US$  4,496,465.00
Kansas City, Kansas-based Sprint Communications Company, L.P. (formerly Global One, and prior to that, Sprint Incorporated)	US$  6,033,989.00	US$14,785,594.00
San Juan, Puerto-based Telefonica Large Distancia de Puerto Rico, Inc. (TLDI)	US$     267,936.00	US$     416,770.00
Total Payments To ETECSA	US$34,735,815.00	US$15,202,364.00

In 1998, the OFAC approved a total of US$86,009,863.00 in payments to ETECSA as its share of the revenues generated from United States-origin telephone calls, which average in cost from approximately US$.60 to approximately US$3.00 per minute.  In February 1999, ETECSA suspended direct dial telephone service agreements with AT&T Corporation; AT&T de Puerto Rico; IDB WorldCom Services, Inc.; MCI International; Worldcom, Inc.; and Wiltel due to nonpayment of a then US$19 million in combined payments due from these companies for the last three months of 1998 and which were due to be paid to ETECSA by 31 January 1999.  For several weeks, customers within the United States then experienced difficulties with direct dial calls to the Republic of Cuba.  However, the United States-based telephone companies then re-routed telephone calls through third countries, and ETECSA continued to receive revenues from the telephone calls, although in some cases less than previously earned.  The companies had been withholding payments due to having received writs of garnishment pending appeal of a lawsuit seeking to use the funds to collect damages (US$187.6 million) awarded in 1997 by a United States Federal Court in Miami, Florida, against the government of the Republic of Cuba in conjunction with a lawsuit commenced by relatives of three individuals subject to United States law of Cuban descent who were killed as a result of a shoot down by aircraft operated by pilots under the direction of the Revolutionary Armed Forces of the Republic of Cuba in February 1996.  ETECSA said agreements with Sprint International and TLDI were not suspended as they maintained their payments.  Sprint is the provider of the Republic of Cuba’s Internet connections with other countries, and TLDI does limited Republic of Cuba transactions.  In August 1999, the United States Court of Appeals in Atlanta, Georgia, overruled the United States Federal Court in Miami, Florida.  In March 2000, the payments were then re-authorized.  ETECSA has now re-established the 1,020 direct dial circuits.  Approximately 135 million minutes worth of telephone calls were placed between the United States and the Republic of Cuba in 1998, with approximately 90% of the telephone calls being placed from the United States to the Republic of Cuba.  ETECSA has not chosen to establish direct dial long distance telephone service agreements with companies other than the existing United States-based telecommunications companies, although other companies have sought agreements with ETECSA.  The Washington, D.C.-based Federal Communications Commission (FCC) reported the following United States IMTS Settlement Payments (traffic transiting the United States is not included):
 

Year	Payments To Republic Of Cuba
2000 (six months)	US$34,735,815.00
1999	US$15,202,364.00 (Payments Routed Through Third Countries)
1998	US$85,289,932.00
1997	US$72,817,731.00
1996	US$63,710,520.00
1995	US$50,450,938.00
1994	-0-Direct Dial Service Re-Established Per CDA
1993	-0- Calls Routed Through Third Countries
1992	-0- Cuban Democracy Act (CDA) Implemented
1991	US$9,993,109.00
1990	US$4,765,113.00
1989	US$13,697,166.00
1988	US$13,352,239.00
1987	US$12,831,523.00
1986	US$11,521,391.00
1985	US$12,018.417.00
Total	US$400,476,258.00

VOLVO, MERCEDES-BENZ, FORD, BRIDGESTONE AT INTERNATIONAL TRANSPORTATION FAIR- Stuttgart, Germany-based Mercedes-Benz AG (a subsidiary of Stuttgart, Germany-based DaimlerChrysler Aktiengesellschaft) and Goteborg, Sweden-based AB Volvo were the largest (500 square meters) and second-largest exhibitors, respectively, at the Republic of Cuba’s annual International Transportation Fair held from 20 September 2000 to 24 September 2000 in the city of Havana.  On display was one passenger van manufactured by Dearborn, Michigan-based Ford Motor Company (1999 revenues exceeded US$163 billion).  In 1999, Ford Motor Company purchased the automobile operations of AB Volvo.  On display were tires manufactured by Tokyo, Japan-based Bridgestone Corporation.  Both Mercedes-Benz AG and AB Volvo have joint ventures within the Republic of Cuba.  Other exhibitors included: Paris, France-based Peugeot S.A.; Paris, France-based PSA Peugeot Citroen; Turin, Italy-based Fiat S.p.A.; Tokyo, Japan-based Mitsubishi Motors Corporation; Tokyo, Japan-based Fuji Heavy Industries, Limited’s Subaru; and Toyota City, Japan-based Toyota Motor Corporation.

BMW ENTERING CUBA MARKET- Panama City, Panama-based Eberhard Transamerica Group (ETG), a distributor within the Americas and Caribbean Sea-area countries for Munich, Germany-based Bayerische Moteren Werke AG (BMW), has awarded exclusive distribution rights for the Republic of Cuba to Panama City, Panama-based Motores Internacionales de Caribe S.A. (2000 revenues expected to exceed US$80 million, 1999 revenues reportedly exceeded US$80 million, 1998 revenues reportedly exceeded US$60 million).  According to ETG, the focus will be toward sales to members of the diplomatic community, businesses, and the tourism sector.  ETG reported that an agreement had been signed with an unnamed Republic of Cuba government-operated company to establish BMW service centers in the city of Havana and in other areas of the Republic of Cuba.
 

Motores Internacionales de Caribe S.A. specializes in importing vehicles (such as those of Tokyo, Japan-based Mitsubishi Motors Corporation and Tokyo, Japan-based Fuji Heavy Industries, Limited’s Subaru) to the Republic of Cuba and is the partner of the first joint venture vehicle dealership to be established within the Republic of Cuba after the collapse of the then U.S.S.R. Motores Internacionales de Caribe, S.A., has provided Republic of Cuba government-operated Cubazucar with millions of U.S. Dollars to finance sugar harvests.

Eberhard Transamerica Group S.A. (through a subsidiary, Sunset International) represents Osaka, Japan-based Daihatsu Motor Co., Ltd, within the Republic of Cuba.  Sunset International reportedly exported 300 Cuore mini-vehicles to the Republic of Cuba in 1998.  Eberhard Transamerica Group S.A. reported that the company has sold 10,000 vehicles to the Republic of Cuba since 1995, primarily through Motores Internacionales de Caribe, S.A.

Stuttgart, Germany-based Mercedes-Benz AG (a subsidiary of Stuttgart, Germany-based DaimlerChrysler Aktiengesellschaft) and Goteborg, Sweden-based AB Volvo currently have the majority market share of the luxury vehicle market within the Republic of Cuba, however this presence is secondary compared with the sales of commercial vehicles (passenger buses, trucks, heavy equipment, and heavy equipment motors) within the Republic of Cuba.

In 1995, Unecamoto (the automotive division of the Ministry of the Steel and Mechanical Industries of the Republic of Cuba) and Cairo, Egypt-based Mr. Karim Ghabbour (whose family-owned companies have dealings with Mercedes-Benz AG) established MCV Comercial S.A. which 1) has been re-motorizing heavy agricultural and other transportation equipment with Mercedes-Benz AG engines for five years 2) has six Mercedes-Benz AG service centers within the Republic of Cuba and 3) has an interest in a bus assembly (200 annually) production agreement between Unecamoto and Joinville, Santa Catarina, Brazil-based Busscar Onibus S.A. (1999 revenues approximately US$220 million).  The bus chassis are being purchased from a Brazil-based subsidiary of Gotenborg, Sweden-based AB Volvo and the bus bodies are being provided by Busscar Onibus S.A.  In September 1999, MCV Comercial S.A. reported that the company expected gross revenues in 1999 of approximately US$45 million, compared with gross revenues of approximately US$35 million in 1998.  In November 1998, Unecamoto and Volvo Penta (a subsidiary of AB Volvo) established a joint venture, Unevol S.A., to refit locomotives, ships, construction machinery, and buses with used Volvo engines, as well as, producing some engine parts and eventually assembling buses and other equipment within the Republic of Cuba. Volvo Penta controls 60% of the joint venture and Unecamoto controls 40% of the joint venture.

UNITED AIRLINES, DELTA AIRLINES JOIN AMERICAN AIRLINES WITH OFAC LICENSES- Joining their competitors, Atlanta, Georgia-based Delta Air Lines (1999 revenues exceeded US$14 billion) and Elk Grove Township, Illinois-based United Airlines, Inc. (1999 revenues exceeded US$17 billion) have received Carrier Service Provider (CSP) licenses from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C.  Dallas/Fort Worth Airport, Texas-based American Airlines (1999 revenues exceeded US$19 billion) and Dania Beach, Florida-based Gulfstream International Airlines (1999 revenues exceeded US$80 million.) have had licenses for many years.  Only one of the companies have chosen to operate regularly-scheduled charter flights between the United States and the Republic of Cuba.  Aircraft owned by American Airlines, United Airlines, and Delta Air Lines have been chartered by other CSP’s for regularly scheduled charter services between the United States and the Republic of Cuba.  Gulfstream International Airlines operates daily regularly scheduled direct charter flights between the United States and the Republic of Cuba.  With one-hour advance baggage check-in, and flight departures and arrivals in the afternoon, the flights are designed to meet the requirements of an increasing number of representatives of United States-based companies who have obtained licenses from the OFAC to visit the Republic of Cuba and for the shipment of packages to the Republic of Cuba.  Houston, Texas-based Continental Airlines, Inc. (1999 revenues exceeded US$7 billion) has a 28% interest in Gulfstream International Airlines.  Gulfstream International Airlines operates a code-share agreement and connection agreement with Continental Airlines.  Gulfstream International Airlines has a code-share agreement with St. Paul, Minnesota-based Northwest Airlines Corporation (1999 revenues exceeded US$10 billion).  Gulfstream International Airlines has a connection agreement and operates the TWA Connection from San Juan, Puerto Rico, with St. Louis, Missouri-based Trans World Airlines, Inc. (1999 revenues exceed US$3 billion).  Gulfstream International Airlines has a code-share agreement with Panama City, Panama-based COPA airlines.  New York, New York-based American Express Travel Related Services Company, Inc., has a Travel Service Provider (TSP) license from the OFAC.
 

Since 1962, Delta, Continental, and United Air Lines have had route authorities from the following cities: Delta- Havana to Houston, Los Angeles, New Orleans, San Francisco, and San Juan; Continental- Havana to Fort Lauderdale, West Palm Beach, United- Havana to Miami, Key West, Baltimore, Boston, Dallas, Houston, Los Angeles, New Orleans, New York, Newark, Philadelphia, San Francisco, San Juan, St. Croix, St. Thomas, and Washington, D.C.; and Camaguay to Miami, Baltimore, Boston, Dallas, Houston, Los Angeles, New Orleans, New York, Newark, Philadelphia, San Francisco, San Juan, St. Croix, St. Thomas, and Washington, D.C.

+25% IN TSP LICENSES, +32% IN CSP LICENSES, +7% IN RF LICENSES IN 13 MONTHS- The number of United States-based companies requesting and receiving Carrier Service Provider (CSP) licenses, Travel Service Provider (TSP) licenses, and Remittance Forwarder (RF) licenses from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., have increased 32%, 25%, and 7% respectively, during the last thirteen months.  There has also been a 21% increase in the total number of United States-based companies receiving licenses, increasing from 115 to 146. The two largest funds transfer companies in the United States have RF licenses: Englewood, Colorado-based Western Union Financial Services, Inc. (a subsidiary of Atlanta, Georgia-based First Data Corporation, 1999 revenues exceeded US$5 billion), and Minneapolis, Minnesota-based MoneyGram Payment Services, Inc. (a subsidiary of Phoenix, Arizona-based Viad Corp, 1999 revenues exceeded US$2 billion).  The following table compares values reported by the OFAC as of 7 September 2000 with values reported by the OFAC as of 12 August 1999 in (  ):
 

State	Travel Service Provider (TSP)	Carrier Service Provider (CSP)	Remittance Forwarder (RF)	Total Licenses
California	15 (8)	1 (1)	9 (6)	25 (15)
Colorado			1 (1)	1 (1)
Florida	91 (75)	21 (17)	70 (69)	182 (161)
Georgia	1 (0)			1 (0)
Illinois	2 (1)	1 (0)	1 (0)	4 (2)
Louisiana	3 (2)	1 (0)	2 (2)	6 (4)
Massachusetts	1 (0)			1 (0)
Minnesota			1 (1)	1 (1)
Nevada	1 (1)			1 (1)
New Jersey	8 (7)	1 (0)	7 (7)	16 (14)
New York	4 (3)	1 (0)	2 (2)	7 (5)
Puerto Rico	3 (3)		3 (3)	6 (6)
Tennessee	1 (0)			1 (0)
Texas	3 (1)	1 (1)	2 (1)	6 (3)
Virginia	1 (1)			1 (0)
Washington, D.C.	3 (0)	1 (0)	1 (0)	5 (0)
Total	137 (103)	28 (19)	99 (92)	264 (214)
% Change	+25%	+32%	+7%	+19%

INTERPUBLIC GROUP OF COMPANIES SETTLES LAW SUIT FOR USE OF ERNESTO GUEVARA IMAGE- Mr. Alberto Diaz Gutierrez, a Republic of Cuba national, has settled a law suit against Lowe Lintas & Partners Worldwide, a subsidiary of London, United Kingdom-based The Lowe Group (a subsidiary of New York City, New York-based The Interpublic Group of Companies, Inc., 1999 revenues exceeded US$5 billion) and London, United Kingdom-based Rex Features Ltd. (which provided the photograph to Lowe Lintas & Partners Worldwide) for unauthorized use of a photograph of Dr. Ernesto “Che” Guevara in an advertising campaign two years ago (since discontinued) for Smirnoff vodka (a subsidiary of London, United Kingdom-based Diageo PLC, 1999 revenues approximately US$18 billion).  Mr. Diaz reported that the settlement, approximately US$50,000.00, would be donated to the Ministry of Public Health of the Republic of Cuba.  The particular photograph has been used for many years on tee-shirts, books, postcards, and posters sold at Republic of Cuba government-operated U.S. Dollar retail stores throughout the Republic of Cuba; and has been used on watches marketed by Bienne, Switzerland-based The Swatch Group AG; skis manufactured by Riedim Innkreis, Austria-based Fischer Gesellschaft m.b.H.; and by the musical group “Rage Against the Machine.”

MEMBERS OF THE NATIONAL ASSEMBLY OF PEOPLE’S POWER VISIT WASHINGTON, D.C.- The following members of the National Assembly of People’s Power of the Republic of Cuba are visiting Washington, D.C., from 14 September 2000 to 17 September 2000 to participate in activities hosted by the Washington, D.C.-based Congressional Black Caucus: 1) The Honorable Pedro Saez Montejo (a member of the Political Bureau of the Communist Party of the Republic of Cuba and First Secretary of the Communist Party in La Habana Province); 2) The Honorable Ramon Pez Ferro (president of the International Relations Commission, a member of the Central Committee of the Communist Party of the Republic of Cuba, and fought with H.E. Dr. Fidel Castro Ruz, President of the Republic of Cuba, during the Cuban revolution); 3) The Honorable Leonardo Martinez (president of the Productive Activities Commission); 4) The Honorable Ana Maria Moreno (secretary of the Health Commission); 5) The Honorable Nicolas Echeverria (vice president of the Productive Activities Commission); and 6) Mr. Miguel Alvarez (senior advisor on United States Affairs to H.E. Ricardo Alarcon, President of the National Assembly of People’s Power of the Republic of Cuba and member of the International Relations Commission).

BRAZIL NATIONAL DEVELOPMENT BANK FINANCING ADDITIONAL BUS IMPORTS BY CUBA- Rio de Janeiro-based Brazil National Development Bank (BNDES) granted a US$14.97 million loan (at an annual interest rate of 7.4%) to Republic of Cuba government-operated Unecamoto (the vehicle division of the Ministry of the Steel and Mechanical Industry) and Republic of Cuba government-operated Fintur (the finance company subsidiary of the Ministry of Tourism of the Republic of Cuba) for the purchase of 125 partially-assembled tourism buses which will be completed within the Republic of Cuba.  Unecamoto must repay the US$14.97 million within five years, with first payments beginning in eighteen months.  BNDES reported that a Brazil-based subsidiary of Gotenborg, Sweden-based AB Volvo would provide the bus chassis and Joinville, Santa Catarina, Brazil-based Busscar Onibus S.A. (1999 revenues approximately US$220 million) would provide the bus bodies.  Republic of Cuba government-operated Veracuba (a subsidiary of the Ministry of Tourism of the Republic of Cuba) and Republic of Cuba government-operated Transtur (a subsidiary of the Ministry of Tourism of the Republic of Cuba) will purchase the completed buses from Unecamoto.  In 1999, Dearborn, Michigan-based Ford Motor Company (1999 revenues exceeded US$163 billion) purchased the automobile operations of AB Volvo for approximately US$6.4 billion. Executives at Ford Motor Company and at AB Volvo said at the time of the purchase that agreements within the Republic of Cuba and sales of vehicles to the Republic of Cuba would not be affected by the sale of the automotive division.  In September 1999, BNDES approved a US$5 million loan to Unecamoto for the purchase from Busscar Onibus S.A. of 200 partially assembled commuter buses to be completed within the Republic of Cuba.  Busscar Onibus S.A. assembles buses in Brazil using chassis produced by Stuttgart, Germany-based Mercedes-Benz AG, a subsidiary of Stuttgart, Germany-based DaimlerChrysler AG.  Mr. Edson Andrade, Vice President of Busscar Onibus S.A., said in May 2000 that the company would establish a joint venture to assemble urban buses within the Republic of Cuba using chassis manufactured by Mercedes-Benz AG.  He said that Busscar Onibus S.A. would invest US$5 million (which may have been increased to US$8 million according to a September 2000 report) to upgrade the Empresa de Omnibus Urbanos de La Habana (a subsidiary of Unecamoto) located in Guanay, near the city of Havana, Republic of Cuba.  Empresa de Omnibus Urbanos de La Habana has also assembled Volvo tourism buses on an experimental basis.
 

In 1998, Mercedes-Benz AG and Busscar Onibus S.A. signed a multi-year contract valued at US$200 million with the Ministry of Transportation of the Republic of Cuba for parts to assemble 1,400 urban buses (at a rate of 300 or more per year).

Mr. Andrade reported that this agreement has since been renegotiated because of the new joint venture agreement, but gave no further details.  H.E. Alvaro Perez Morales, Minister of Transportation of the Republic of Cuba, recently reported that the Republic of Cuba required approximately 7,000 buses to bring non-tourism-related, Peso-based public transportation to optimum levels.  Republic of Cuba government-operated companies reportedly have purchased 125 tourism buses on an annual basis in recent years from various suppliers, including AB Volvo and Busscar.  Both Mercedes-Benz AG and AB Volvo have established joint ventures within the Republic of Cuba.
 

In 1995, Unecamoto and Cairo, Egypt-based Mr. Karim Ghabbour, whose family-owned companies have dealings with Mercedes-Benz AG, established MCV Comercial S.A. which 1) has been re-motorizing heavy agricultural and other transportation equipment for five years 2) has six service centers across the country to maintain Mercedes Benz AG engines, supply spare-parts, etc., and 3) reportedly has an interest in the Busscar Onibus S.A. venture.  In September 1999, MCV Comercial S.A. reported that the company expected gross revenues in 1999 of approximately US$45 million, compared with gross revenues of approximately US$35 million in 1998.

In November 1998, Unecamoto and Volvo Penta (a subsidiary of AB Volvo) established a joint venture, Unevol S.A., to refit locomotives, ships, construction machinery, and buses with used AB Volvo engines, as well as, producing some engine parts and eventually assemble buses and other equipment within the Republic of Cuba.  Volvo Penta controls 60% of the joint venture and Unecamoto controls 40% of the joint venture.  Mr. Alfredo Uguet, President of Unevol S.A., said that the company was well financed, equipped with the latest technology, and would operate within the Republic of Cuba and within other countries.  Unevol S.A. expects to establish office and assembly/production facility in Moa, Holguin Province (800 kilometers east of the city of Havana).  Moa is the location of nickel mining.  Since 1995, the Ministry of Transportation of the Republic of Cuba has operated Rex, an “authorized Volvo workshop agent” which rents Volvo AB vehicles within the Republic of Cuba.

ARCHER DANIELS MIDLAND COMPANY TO HOST AGRICULTURAL DELEGATION FROM CUBA- Decatur, Illinois-based Archer Daniels Midland Company (1999 revenues exceeded US$14 billion) is hosting five representatives of the agricultural sector from the Republic of Cuba on Wednesday, 13 September 2000, to Friday, 15 September 2000.  The delegation will meet with researchers, producers, and marketers, and visit food product facilities; and attend a gathering of agricultural representatives sponsored by The Chamber of Commerce for Decatur and Macon County and the Macon County Farm Bureau.  Prior to arriving in Illinois, three members of the delegation from the Republic of Cuba will visit Texas as guests of the Waco, Texas-based Texas Farm Bureau.  After departing Illinois, the delegation from the Republic of Cuba will return to the Republic of Cuba.  Archer Daniels Midland Company procures, transports, stores, processes and merchandises agricultural commodities and products.  Archer Daniels Midland Company, a member of the U.S.-Cuba Trade and Economic Council, processes oilseeds, corn, wheat, cocoa beans, milo, oats, barley and peanuts for two end uses, either food or feed ingredients.
 

The delegation from the Republic of Cuba includes 1) Mr. Pedro Alvarez Borrego, President of Republic of Cuba government-operated Alimport 2) Mr. Alexander Perez Cartaya, Director- Charter and Shipping Division of Alimport 3) Dr. Alvaro Garcia Uriarte, General Director of the Republic of Cuba government-operated Centro de la Industria Alimenticia (Food Industry Research Institute) of the Ministry of Food Industry of the Republic of Cuba 4) Mr. Juan Jose Ferro Castro, Director of the Republic of Cuba government-operated Union de Empresa de la Industria de la Carne (Union of Meat Industry) under the auspice of the Ministry of Food Industry of the Republic of Cuba and 5) Mrs. Maria de la Luz B’Hamel, Director- North American Department, of the Ministry of Foreign Trade of the Republic of Cuba.  Mrs. de la Luz will visit Washington, D.C., before returning to the Republic of Cuba.

Alimport (which operates under the auspice of the Ministry of Foreign Trade of the Republic of Cuba) is responsible for the importation of food products for use by the Republic of Cuba’s 11.2 million citizens.  In 1999, Alimport purchased approximately US$750 million in food products from companies located in Canada, France, Brazil, New Zealand, Argentina, Mexico, Vietnam, and the People’s Republic of China among other countries.  Among the products imported were powered milk, cooking oil, rice, wheat, soy, corn, beans, peas, poultry, and vitamins.
 

In 1998, Archer Daniels Midland Company received an inquiry (which could not be acted upon) on behalf of Alimport to purchase 1,000,000 kilograms of defatted soy flour and 1,000,000 kilograms of texturized defatted soy flour, with a then combined value of US$1.778 million.

In October 2000, Procesadora de Soya S.A., a joint venture between Toronto, Canada-based Sherritt International Corporation (1999 revenues approximately US$260.61 million) and the Ministry of Food Industry of the Republic of Cuba, will commence operation of the Republic of Cuba’s first soybean processing facility.  The US$22 million facility located along the western shore of the bay of the city of Santiago de Cuba (860 kilometers east of the city of Havana) is expected to use imported soybeans to annually produce animal feed, flour, and cooking oil with a combined retail value of US$50 million.

During the last several years, representatives of Archer Daniels Midland Company have visited the Republic of Cuba both individually and within delegations sponsored by others under the auspice of licenses issued by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C.  Mr. G. Allen Andreas, Chairman and Chief Executive Officer of Archer Daniels Midland Company, visited the Republic of Cuba in 1999 with The Honorable George H. Ryan, Governor of the State of Illinois.  Archer Daniels Midland Company was the exclusive Vitamin/Food Sponsor of the U.S. Healthcare Exhibition held in the city of Havana, Republic of Cuba, in January 2000.  The gathering included more than 300 representatives of 97 United States-based companies.  In 1999, Archer Daniels Midland Company donated 100 metric tons of powered soy beverages for distribution to children within the Republic of Cuba through Caritas Cubana, a non-governmental organization (NGO) affiliated with the Roman Catholic Church. In 1998, Archer Daniels Midland Company donated 260 metric tons of soy-based products through the Federal Association of the Order of Malta, an international Catholic relief organization.
 

The OFAC, at the direction of the United States Department of State, recently denied a license to PWN Exhibicon International L.L.C. to present a U.S. Food & Agribusiness Exhibition in the city of Havana, Republic of Cuba.  In a letter to Mr. Peter W. Nathan, president of Westport, Connecticut-based PWN Exhibicon International L.L.C., Mr. R. Richard Newcomb, Director of the OFAC, wrote, “the approval of your request would not be consistent with current United States foreign policy.” However, in May 2000, the OFAC issued a license valid for one year to PWN Exhibicon International L.L.C. for the purpose of “explor[ing] arrangements for a potential U.S. Food and Agribusiness Exhibition in Cuba” and “multiple trips to Cuba, as necessary, in order to assess, arrange and coordinate the potential exhibitions.  A separate license would be required to conduct and participate in the prospective exhibitions.”

Since January 1999, the OFAC has licensed representatives of United States-based food companies and representatives of United States-based food trade organizations to visit the Republic of Cuba for the specific purpose of identifying current food export opportunities, including meetings with representatives of Alimport, NGO’s, religious organizations, Republic of Cuba nationals who own home-based private restaurants, and Republic of Cuba nationals who own farms, among others.  Members of the United States Congress have visited the Republic of Cuba and met with representatives of Alimport, NGO’s, religious organizations, Republic of Cuba nationals who own home-based private restaurants, and Republic of Cuba nationals who own farms, among others.
 

According to the Bureau of Export Administration (BXA) of the United States Department of Commerce in Washington, D.C., Internet site (http://www.bxa.doc.gov), the “BXA may approve, on a case-by-case basis, applications for exports of food (both solids and liquids) and certain agricultural commodities for sale to independent non-governmental entities (i.e., individuals and other entities that are not controlled, owned or operated by the Cuban government) in Cuba.  For purposes of the new initiative, ‘independent non-governmental entities’ is defined to include religious groups, private farmers, and private sector undertakings such as family restaurants.  Agricultural commodities that may be authorized for sale under the new policy include, but are not limited to, insecticides, pesticides, herbicides, seeds and fertilizer. Agricultural equipment is not eligible for consideration under this policy.”

CARNIVAL CORPORATION INCREASING INDIRECT MINORITY PRESENCE IN CUBA- Manchester, United Kingdom-based Airtours PLC, within which Miami, Florida-based Carnival Corporation (1999 revenues exceeding US$1 billion) has a 26% interest, is planning to purchase 50% of Palma, Majorca, Spain-based Hotetur Club S.L.  The owners of Hotetur Club S.L., Spain-based nationals Mr. Geraldo Diaz and Gonzalo Pascual, also own Spain-based Spanair (an airline and Spain-based Viajes Marsans (a travel agency).  Hotetur Club S.L. has a commercial presence within the Republic of Cuba.  Also, Carnival Corporation, which currently has a 50% interest in Genoa, Italy-based Costa Crociere, is purchasing the remaining 50% interest from Airtours PLC.  In 1997, Carnival Corporation and Airtours PLC jointly purchased Costa Crociere.  Since 1996, Carnival Corporation has owned 26% of Airtours PLC.  From 1995 until 1998, Genoa, Italy-based Costa Crociere operated the “Costa Playa” cruise ship which visited the Republic of Cuba and a subsidiary of Costa Crociere developed and managed the US$11 million passenger ship facility at the Port of Havana.  In 1998, the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., required Carnival Corporation to cease both the operation of the “Costa Playa” to the Republic of Cuba and the management of the passenger ship facility.  The OFAC authorizes companies subject to United States law to have non-controlling investments in third country companies that have commercial activities within the Republic of Cuba provided that the investments do not result in control in fact of the third country company and provided that a majority of the revenues of the third country company are not produced from commercial activities within the Republic of Cuba [OFAC 4 March 1994].

TRIBUNE COMPANY AND A.H. BELO CORPORATION TO ESTABLISH NEWS BUREAUS IN CUBA- The Chicago Tribune owned by Chicago, Illinois-based Tribune Company (2000 revenues to exceed US$6 billion) and The Dallas Morning News owned by Dallas, Texas-based A.H. Belo Corporation (1999 revenues exceeded US$1 billion) have been authorized by the government of the Republic of Cuba to establish bureaus within the city of Havana, Republic of Cuba.  Tribune Company owns newspapers including the Los Angeles Times, Chicago Tribune, Newsday, The Baltimore Sun, Sun-Sentinel, and The Hartford Courant; television and radio stations; and the Chicago Cubs baseball team of the National League under the auspices of Major League Baseball.  A.H. Belo Corporation owns newspapers including The Dallas Morning News, The Providence Journal, The Press-Enterprise, and Messenger-Inquirer; and television and radio stations.  In 1997, the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., authorized United States-based media companies to establish bureaus (with a specific license from the OFAC) within the Republic of Cuba.  Since 1998, Atlanta, Georgia-based Cable News Network (a subsidiary of New York City, New York-based Time Warner, Inc., 1999 revenues exceeded US$26 billion) has had a bureau in Havana, Republic of Cuba.  In 1998, New York City, New York-based Associated Press re-established a bureau in Havana, Republic of Cuba, which had been closed since 1969 by the government of the Republic of Cuba.  The New York Times (a subsidiary of New York City, New York-based The New York Times Company, 1999 revenue exceeded US$3 billion) had a bureau in Havana, Republic of Cuba until 1965, when closed by the government of the Republic of Cuba.  Other United States-based newspapers, including the Washington, D.C.-based The Washington Post (a subsidiary of Washington, D.C.-based The Washington Post Company, 1999 revenues exceeded US$2 billion) and Miami, Florida-based Miami Herald (a subsidiary of San Jose, California-based Knight Ridder, 1999 revenues exceeded US$3 billion), have sought authorization from the government of the Republic of Cuba to establish bureaus in Havana, Republic of Cuba.

PRESIDENT CLINTON AND PRESIDENT CASTRO MEET (BRIEFLY) IN NEW YORK CITY- The Honorable William J. Clinton, President of the United States, and H.E. Dr. Fidel Castro Ruz, President of the Republic of Cuba, met briefly during the Millennium Summit of the United Nations in New York City on 6 September 2000.  President Castro sought the introduction, which included both gentleman shaking hands with one another and reportedly exchanging greetings, although the exact subject matter has been shared publicly by neither President Clinton nor President Castro.  This was reportedly the first time that President Castro has spoken with a President of the United States since the 1959 revolution in the Republic of Cuba.

CAPITAL RESEARCH CONTROLS 10.41% OF MITSUBISHI MOTORS WHICH EXPORTS TO CUBA- Los Angeles, California-based Capital Research & Management Co. (assets managed US$370 billion) is the second-largest shareholder (10.41%) of Tokyo, Japan-based Mitsubishi Motors Corporation, which exports vehicles to the Republic of Cuba.  Stuttgart, Germany-based DaimlerChrysler Aktiengesellschaft will become the largest shareholder (with  at least 34%) in Mitsubishi Motors Corporation by the end of 2000.  The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., authorizes companies subject to United States law to have non-controlling investments in third country companies that have commercial activities within the Republic of Cuba provided that the investments do not result in control in fact of the third country company and provided that a majority of the revenues of the third country company are not produced from commercial activities within the Republic of Cuba [OFAC 4 March 1994].  During the July 1999 Pan American Games, Tele-Rebelde, one of the two Republic of Cuba government-operated television stations within the Republic of Cuba, broadcast commercials for products from companies including Mitsubishi Motors Corporation; London, United Kingdom-based British American Tobacco plc; Milan, Italy-based San Pellegrino SPA; London, United Kingdom-based Unilever PLC; Seoul, South Korea-based LG Electronics Inc.; Tokyo, Japan-based Mitsubishi Motors Corporation; Osaka, Japan-based SANYO Electric Co., Ltd.; Amsterdam, The Netherlands-based Royal Philips Electronics; and Osaka, Japan-based Daihatsu Motor Co., Ltd.  The advertisement for Mitsubishi Motors Corporation vehicles was paid for by Panama City, Panama-based Motores Internacional del Caribe S.A., the exclusive distributor of Mitsubishi Motors Corporation vehicles (among other vehicle brands) and consumer electronic products from Osaka, Japan-based Sharp Corporation within the Republic of Cuba.

GLOBALSTAR USA SEEKING WIRELESS ROAMING OPERATING AUTHORITY TO CUBA- Walnut Creek, California-based Globalstar USA, reported on 9 August 2000 that the company had expanded coverage area to countries within The Americas and to countries within the Caribbean Sea-area.  Globalstar USA customers may access service coverage in seventy countries.  Globalstar USA is a wholly owned subsidiary of London, United Kingdom-based Vodafone AirTouch Plc (NYSE: VOD).  Separately, Globalstar USA confirmed that the company had applied to the Washington, D.C.-based Federal Communications Commission (FCC) and to the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., for authorization to include the Republic of Cuba for international roaming service.  Globalstar USA reports that the company has also applied to Republic of Cuba government-operated Empresa de Telecomunicaciones de Cuba S.A. (ETECSA), within which Brussels, Belgium-based Stet International (a subsidiary of Rome, Italy-based Telecom Italia), has a 29.29% interest.  ETECSA is a joint venture company operated by the Ministry of Communications of the Republic of Cuba which manages the national telephone system.

ADDENDUM/CORRECTION- Palma de Mallorca, Spain-based Sol Melia S.A. (1999 revenues US$610 million) has provided updated information relating to the number of hotels and the number of hotel rooms operated by the company within the Republic of Cuba.  In the 31 July 2000 item published in the ECONOMIC EYE ON CUBA?, “SOL MELIA TO CONTROL 36% OF HOTEL ROOMS IN CUBA WITH PURCHASE OF HOTELES TRYP,” the number of hotels within the Republic of Cuba managed by Sol Melia S.A. was reported as fourteen and the total number of hotel rooms within the Republic of Cuba managed by Sol Melia S.A. was reported as 4,759.  Sol Melia S.A. now reports that the company manages fifteen hotels with a combined 5,068 hotel rooms within the Republic of Cuba.  The updated information is contained within the following update:  Sol Melia S.A. is purchasing Madrid, Spain-based Hoteles Tryp.  Sol Melia owns, leases, manages, or franchises 262 hotels (with a combined 71,240 rooms) in 28 countries.  Hoteles Tryp, which is privately held, manages and markets sixty-two hotels in four countries.  Sol Melia expects to have a total of 28 properties within the Republic of Cuba by 2004.  Sol Melia reports two additional hotels are near completion.  Hoteles Tryp manages and markets four hotels (with a combined 2,146 rooms) within the Republic of Cuba.  Hoteles Tryp expects to have a total of 7,500 rooms under management by 2001.  Upon completion of the purchase of Hoteles Tryp, Sol Melia, in 2001, will manage and market a total of 12,568 hotel rooms, or approximately 37% of the approximately 34,000 hotel rooms within the Republic of Cuba as reported by the Ministry of Tourism of the Republic of Cuba.  However, since many of the hotel rooms managed and marketed by Republic of Cuba government-operated companies (Gran Caribe, Corporacion Cubanacan, Gaviota, Horizontes, Habaguanex S.A.) are of one-star quality and two-star quality based upon United States criteria, Sol Melia may  manage and market more than 50% of all three-star quality to five-star quality hotel rooms based upon United States criteria, within the Republic of Cuba by 2004. Sol Melia reported that in 1999 the company’s fourteen properties within the Republic of Cuba handled approximately 300,000 tourists of the 1,602,781 million tourists visiting the Republic of Cuba.  Before the announcement regarding Hoteles Tryp, Sol Melia reported that the company expected to handle approximately 500,000 tourists of the 1.8 million tourists expected to visit the Republic of Cuba in 2000.  Uncertain is how the government of the Republic of Cuba will respond to a consolidation of control within the tourism industry which will reduce its control over a sector that has become the largest source of U.S. Dollars for the government of the Republic of Cuba and an increasing incubator of changes in the relationship between management and employee, especially in terms of compensation packages which remain outside of specially authorized norms.  Traditionally, the government of the Republic of Cuba has reacted with concern toward any non-Republic of Cuba-based company which may obtain a dominate sector position within the Republic of Cuba, regardless of whether that dominance is a direct result or indirect result of tangential transactions.

THE NEW YORK TIMES ACCEPTS CUBA ADVERTISEMENT- On 20 August 2000, New York City, New York-based The New York Times (1999 revenues exceeded US$3 billion) published on page A20 an advertisement by Toronto, Canada-based Blyth & Company Travel for a seven-day cruise to the Republic of Cuba.  United States magazines continue to increase their acceptance of advertisements for products produced in the Republic of Cuba and for third-country travel (often “fully hosted”) to the Republic of Cuba including 1) Forbes magazine (published by New York, New York-based Forbes Inc.) 2) Condé Nast Traveler (published by New York, New York-based The Conde Nast Publications, Inc.) and 3) The Ritz-Carlton Magazine (The Ritz-Carlton Hotels Company LLC is a wholly owned subsidiary of Washington, D.C.-based Marriott International, Inc. (1999 revenues exceeded US$8 billion)).
 

The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., for all practical purposes, presumes that individuals subject to United States law traveling to the Republic of Cuba on a “fully hosted” basis to most probably be in violation of OFAC regulations.  Extreme caution should be taken as there is no longer a presumption of innocence, there is now a presumption of guilt and fines can be assessed.  Criminal penalties for violations range up to 10 years in prison, US$1,000,000.00 in company fines, and US$250,000.00 in individual fines.  Civil penalties for violations range up to US$55,000.00.  With the OFAC providing licenses to individuals subject to United States law to travel to the Republic of Cuba in an increasing number of categories, especially for business travel, “fully hosted” travel to the Republic of Cuba is becoming, in many instances, unnecessary.  An individual subject to United States law traveling to the Republic of Cuba under the “fully hosted” general license provision is not permitted to travel to the Republic of Cuba directly from the United States.  A “fully hosted” traveler must travel to the Republic of Cuba by way of third countries.  Officials at the United States Department of State, officials at the OFAC, officers of the United States Customs Service, and officers of the Immigration and Naturalization Service, have confirmed that any individual subject to United States law returning to the United States after visiting the Republic of Cuba on a “fully hosted basis” is being subjected to increased scrutiny, especially high profile groups, such as individuals attending “fully hosted” conferences.  The term “fully hosted” means that all expenses within the Republic of Cuba (including travel to and from the Republic of Cuba if using a Republic of Cuba government-operated air carrier, for example, Cubana Airlines) on behalf of the individual subject to United States law are paid for by an individual or entity not subject to United States law.  No direct or indirect payments are permitted. A “fully hosted” traveler may return to the United States with an unlimited amount of informational materials (books, magazines, newspapers, music tapes, etc.) and an unlimited amount of artwork. A “fully hosted” traveler may not return to the United States with any other Republic of Cuba-produced products (such as cigars, rum, coffee, tee-shirts, etc.).  The OFAC and the United States Customs Service confirm that “fully hosted” travelers should expect the following:  A letter from an individual or entity not subject to United States law (or a letter from a United States-based law firm) confirming that the individual subject to United States law was “fully hosted” will not be accepted as “proof” that a visit was “fully hosted.”  A) The individual subject to United States law will be required to produce receipts for all daily expenses within the Republic of Cuba which demonstrate that all of the expenses were paid by an individual or entity not subject to United States law.  B) At the entry point to the United States, the United States Customs Service may make a photocopy of the passport of the individual subject to United States law.  The passport number may be entered in a permanent database.  C) The individual subject to United States law will be required to submit a signed letter confirming, under penalty of perjury, that all daily expenses incurred within the Republic of Cuba on behalf of the individual subject to United States law were paid for by an individual or entity not subject to United States law.  D) The OFAC may send a letter to the individual subject to United States law requiring additional proof that the visit to the Republic of Cuba was “fully hosted.”  Individuals subject to United States law traveling to the Republic of Cuba should only use travel agents that have been licensed by the OFAC.  Tico Travel, 161 East Commercial Boulevard, Fort Lauderdale, Florida  33334.  Telephone: (954) 493-5335 or (800) 493-8426; Facsimile: (954) 493-8466; E-mail: tico@gate.net; Internet: http://www.destinationcuba.com.

PEGASUS SOLUTIONS RECEIVES COMMISSIONS FROM GOLDEN TULIP HOTEL IN CUBA- Dallas, Texas-based Pegasus Solutions, Inc. (Nasdaq: PEGS; 1999 revenues US$38 million) receives commissions for reservations made through its global network for the 278-room five-star Golden Tulip Parque Central Hotel located in the city of Havana.  The Golden Tulip Parque Central Hotel, which commenced operations in November 1998, is a joint venture between Republic of Cuba government-operated Cubanacan S.A. and, reportedly, a group of seven individuals, including nationals from Spain.  The Golden Tulip Parque Central Hotel is currently managed by Hilversum,  The Netherlands-based Krasnapolsky Hotels and Restaurants N.V. (which owns Golden Tulip Hotels).  The Golden Tulip Worldwide brand has been marketed (franchised, reservations, etc.) by Omaha, Nebraska-based Utell International since 1996.  Utell International has been a wholly owned subsidiary of Pegasus Solutions, Inc., since April 2000.  In September 2000, Krasnapolsky Hotels and Restaurants N.V. is expected to conclude the sale of its 65 owned/managed properties under the Golden Tulip Hotels brand to Madrid, Spain-based NH Hoteles.  Golden Tulip Worldwide has more than 400 independent hotels located in more than 50 countries, including in the United States: Maryland (1), Florida (4), New York (2), and California (1).  Golden Tulip Worldwide is affiliated with American Airlines’ American AAdvantage (which provides members with 500 miles credit for a qualifying stay at any Golden Tulip Hote), Northwest Airlines’ WorldPerks (which provides members with 500 WorldPerks Bonus Miles for every stay at a Golden Tulip Hotel), AVIS, and American Express.  Pegasus Solutions Inc., is “a leading provider of end-to-end reservation distribution solutions to the hotel industry worldwide.  Its services include the hotel industry’s leading central reservation system; the world’s largest third-party marketing and reservation representation service; the world’s leading electronic distribution switching service that connects more than 32,000 hotels to the Internet and to the global distribution systems (GDS); the world’s leading hotel commission processing service; one of the leading consumer travel Web sites, TravelWeb.com; and data warehousing and database marketing and consulting services.  Pegasus’ customers comprise more than 85,000 travel agencies around the world, including eight of the 10 largest U.S.-based travel agencies; approximately 35,000 hotel properties around the globe and nine of the 10 largest hotel companies in the world based on total number of guest rooms; and more than 85 Web sites/services have their hotel reservations Powered by Pegasus™.  In addition to its corporate headquarters in Dallas, Texas, Pegasus has 40 offices in 39 countries, including regional hubs in Phoenix, Arizona, London and Singapore.”

FORBES, COND? NAST, AND MARRIOTT PUBLICATIONS ACCEPT CUBA ADVERTISEMENTS- United States magazines continue to increase their acceptance of advertisements for products produced in the Republic of Cuba and for third-country travel to the Republic of Cuba.  1) In the July 2000 issue of Forbes magazine (published by New York, New York-based Forbes Inc.) there is an advertisement for “Authentic Cuban Cigars Delivered Anywhere” by Toronto, Canada-based Havana Cigar Company.  The advertisement states that Visa, Mastercard, and American Express may be used for payment and that “Authenticity, satisfaction and delivery- guaranteed!” 2) In the July 2000 issue of Condé Nast Traveler (published by New York, New York-based The Conde Nast Publications, Inc.) there are two advertisements for travel to the Republic of Cuba using the services of Toronto, Canada-based Blyth & Company Travel.  3) The Spring 2000 issue of The Ritz-Carlton Magazine (published by Phoenix, Arizona-based SCG Custom Publishing, Inc.) has an advertisement for “Authentic Cuban Cigars Delivered Anywhere” by Toronto, Canada-based Havana Cigar Company.  The advertisement states that Visa, Mastercard, and American Express may be used for payment and that “Call us for authentification of your Cuban-label cigars.  Authenticity, satisfaction and delivery- guaranteed or money refunded immediately.”  The Ritz-Carlton Hotels Company LLC is a wholly owned subsidiary of Washington, D.C.-based Marriott International, Inc. (1999 revenues exceeded US$8 billion).

STARWOOD TO EARN REVENUES FROM CUBAN RESTAURANT IN SHERATON IN CHINA- Republic of Cuba government-operated Ficsene (a subsidiary of the Ministry of Internal Trade of the Republic of Cuba) and People’s Republic of China government-operated Construction Materials Company have established a joint venture, Linda Habana, to manage a Cuban-theme restaurant (music, dancing, and other cultural activities) at the 500-room Sheraton Great Wall Hotel in Beijing, People’s Republic of China.  White Plains, New York-based Starwood Hotels & Resorts Worldwide, Inc. (1999 revenues exceeded US$3 billion) has managed the Sheraton Great Wall Hotel since its construction in 1983, but does not have an equity interest in the property.  In April 1998, the 798-room Sheraton Hong Kong Hotel & Towers in Hong Kong, People’s Republic of China, opened a Casa del Habano retail cigar store.  Starwood Hotels & Resorts Worldwide, Inc., manages and partially-owns the Sheraton Hong Kong Hotel & Towers.  The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., authorizes companies subject to United States law to have non-controlling investments in third country companies that have commercial activities within the Republic of Cuba provided that the investments do not result in control in fact of the third country company and provided that a majority of the revenues of the third country company are not produced from commercial activities within the Republic of Cuba [OFAC 4 March 1994].
 

Within the Republic of Cuba, the Lai Lai Chinese restaurant located in the resort area of Varadero (140 kilometers east of the city of Havana) is a joint venture between Republic of Cuba government-operated Rumbos S.A. and a People’s Republic of China government-operated company.  H.E. Barbara Castillo, Minister of Internal Trade of the Republic of Cuba, recently signed an agreement with Construction Materials Company for the purchase of US$5 million in products. Minister Castillo is the fifth minister-level representative of the government of the Republic of Cuba to visit the People’s Republic of China in 2000.

On 25 November 1999, Hong Kong, People’s Republic of China-based Grand Hyatt Hong Kong was the location of a gathering (cigar fashion show) hosted by Hong Kong, People’s Republic of China-based Pacific Cigar Company, the exclusive distributor of Republic of Cuba-produced cigars within countries on the Asian continent.  The Grand Hyatt Hong Kong is managed by Chicago, Illinois-based Hyatt Hotels & Resorts (1999 revenues exceeded US$3 billion).  The Grand Hyatt Hong Kong is owned by Hong Kong, People’s Republic of China-based New World Development Limited. Hyatt Hotels & Resorts was permitted by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., to own and to manage the Park Hyatt Toronto, a US$75 million property located in Toronto, Canada, that had a Casa del Habano retail cigar store on the premises (with a multi-year lease) when Hyatt Hotels & Resorts first evaluated the property for purchase.  Madrid, Spain-based Altadis (Alliance Tabac Distribution) has a 50% interest in Republic of Cuba government-operated Habanos S.A., the exclusive worldwide marketer of Republic of Cuba-produced cigars.  Habanos S.A. owns the Casa del Habano retail cigar store franchise, of which there are approximately 69 located throughout the world.  Habanos S.A. owns 100% of some of the Casa del Habano retail cigar stores (mainly those located within the Republic of Cuba), has an equity interest in others, and in others has no equity interest, only receiving a franchise fee.

Bala Cynwyd, Pennsylvania-based Tinder Box International, Ltd., which owns the Tinder Box brand name, has a franchisee located in Winnipeg, Canada, which sells Republic of Cuba-produced tobacco products.  According to Tinder Box International, Ltd., approximately 75% of the tobacco products sold in the Winnipeg, Canada, retail store are of Republic of Cuba origin.  Tinder Box, Inc., has two company-owned retail stores within the United States and 128 franchisee-owned retail stores within the United States; and a franchisee-owned retail store in Santiago, Chile.  Franchisees pay Tinder Box International, Ltd., a one-time franchise fee of US$30,000.00 and between 4% and 5% of gross revenues per Tinder Box retail store under a ten-year franchise agreement.  Tinder Box International, Ltd., provides advertising support to franchisees.

The Nassau Marriott Resort and Crystal Palace Casino located in Nassau, the Bahamas, has featured a nightly one hour and forty-five minute joint performance offering a musical review of Cuban culture and Bahamian culture by 38 Republic of Cuba nationals and 22 Bahamian nationals.  The Nassau Marriott Resort and Crystal Palace Casino is managed by Washington, D.C.-based Marriott International, Inc. (1999 revenues exceeded US$8 billion), which operates 1,300 properties in 56 countries.  The Nassau Marriott Resort and Crystal Palace Casino is owned by Wichita, Kansas-based Mr. Philip Ruffin.

The Wyndham Aruba Beach Resort & Casino, which is managed by Dallas, Texas-based Wyndam International, Inc., has hosted a nightly show, “An Evening In Havana- No Passport Required.”  The owner of the Wyndham Aruba Hotel & Casino is a Venezuela-based company.  The Wyndham Aruba Hotel & Casino has compensated Republic of Cuba government-operated Artex S.A., which, in turn, has compensated the performers who are Republic of Cuba nationals.

INTERNET USED BY UNITED STATES CITIZENS TO OBTAIN PRODUCTS AND SERVICES FROM CUBA- The government of the Republic of Cuba reports that there are now more than 200 Internet sites (with a combined 16,000 pages) owned by Republic of Cuba government-operated companies and Republic of Cuba government-operated entities.  One Internet site not owned by the government of the Republic of Cuba, http://www.cubamall.com, is owned by a Canada national, is operated from Canada, is registered in the United States, and has a toll-free telephone number.  Republic of Cuba-produced products (cigar brands including Hoyo de Monterrey Double Corona (US$500.00 for twenty-five, including shipping costs) and Cubita brand coffee (230 grams for US$10.00 including shipping costs) are shipped to the United States using overnight delivery services, including Atlanta, Georgia-based United Parcel Service of America, Inc. (1999 revenues exceeded US$27 billion) from Canada.  According to a representative of http://www.cubamall.com, there have been no difficulties with shipments, which currently amount to approximately US$500.00 per week.  Some of the Republic of Cuba-focused product Internet sites and Republic of Cuba-focused travel Internet sites display information regarding restrictions and prohibitions for individuals subject to United States law (at http://www.cubamall.com: “Our guarantee is valid for all customers on the planet, including the United States.  We ship to every country without problem.  However, we do need remind US customers that Cuban products are not legal in the United States.”).  The Internet site http://www.cubamall.com accepts United States-issued credit cards (Visa and Mastercard) and United States-issued charge cards (American Express), and other forms of payment, for purchases through indirect payment channels.

WASHINGTON BALLET TO PERFORM IN CUBA IN OCTOBER 2000- The Washington, D.C.-based Washington Ballet has received a license from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., to participate at an International Dance Festival sponsored by the Republic of Cuba government-operated National Ballet of the Republic of Cuba in the city of Havana from 23 October 2000 to 29 October 2000.

U.S. COMPANY EARNS REVENUE FROM HABANOS S.A. PARTICIPATION IN TRADE SHOW- New York City, New York-based Lockwood Publications, Inc., managed EuroTab2000, an international trade show for the tobacco industry held this year from 15 June 2000 to 17 June 2000 in Amsterdam, The Netherlands, at which Republic of Cuba-based Habanos S.A. was an exhibitor.  EuroTab2000 featured 131 exhibitors from throughout the world.  Lockwood Publications, Inc. (established in 1872) markets tobacco-related publications, tea-related publications, coffee-related publications, and manages trade shows related to the principal topics of company publications.  Habanos S.A. reported having a 25-square meter exhibit featuring eighteen Republic of Cuba-produced cigar brands.  The published price for a 25-square meter exhibit was US$7,875.00.  Lockwood Publications reports that the company did not seek to obtain a license from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., in order to accept the payment for the exhibit from Habanos S.A.  Madrid, Spain-based Altadis (Alliance Tabac Distribution) has a 50% interest in Republic of Cuba government-operated Habanos S.A., the exclusive worldwide marketer of Republic of Cuba-produced cigars.  The 50% interest in Habanos S.A. was purchased by Altadis in 1999 for the equivalent of US$500 million (consisting of credit for outstanding debt by Habanos S.A. to Altadis, financing for tobacco harvests within the Republic of Cuba, and goodwill).  Altadis was established in October 1999 as a result of the merger of Tabacalera S.A., and Paris, France-based Seita S.A.  New York City, New York-based J.P. Morgan & Co. Incorporated (1999 assets exceeded US$200 billion) through Madrid, Spain-based J.P. Morgan Espana S.A. and Paris, France-based J.P. Morgan & Cie S.A., served as the advisor to both Tabacalera S.A. and to Seita S.A. for merger, then valued at US$3.3 billion.  Habanos S.A., established in 1994, reportedly has twenty-three distributors throughout the world and a retail franchise of sixty-nine Casa del Habanos within the Republic of Cuba and other countries.  Tabacalera S.A. and Seita S.A. are, respectively 1) the two largest purchasers of Republic of Cuba-produced cigars, approximately 40% of the 126 million Republic of Cuba-produced cigars reportedly exported in 1998 2) the two largest sources of financing for Republic of Cuba-produced tobacco, approximately US$50 million (US$40 million from Tabacalera S.A. and US$10 million from Seita S.A.) for the 1998-1999 tobacco harvest and 3) the two largest purchasers of Republic of Cuba-produced tobacco leaf, almost all of the 13,000 tons exported.  The government of Spain holds a 3.2% share in Tabacalera S.A.  In 1999, Seita S.A. purchased Fort Lauderdale, Florida-based Consolidated Cigar Holdings, Inc., which produces non-Republic of Cuba-produced cigar brands Montecristo and H. Upmann, and the brands Dunhill and Dutch Masters, among others. Seita S.A. ownership of Consolidated Cigar Holdings Inc., positioned the company to become the distributor within the United States for Republic of Cuba-produced cigar brands Montecristo, H. Upmann, and Por Larranaga.

SOL MELIA TO CONTROL 37% OF HOTEL ROOMS IN CUBA WITH PURCHASE OF HOTELES TRYP- Palma de Mallorca, Spain-based Sol Melia S.A. (1999 revenues US$610 million) is purchasing Madrid, Spain-based Hoteles Tryp.  Sol Melia owns, leases, manages, or franchises 262 hotels (with a combined 71,240 rooms) in 28 countries.  Hoteles Tryp, which is privately held, manages and markets sixty-two hotels in four countries.  Sol Melia manages and markets fifteen hotels (with a combined 5,068 rooms) within the Republic of Cuba. Sol Melia expects to have a total of 28 properties within the Republic of Cuba by 2004.  Hoteles Tryp manages and markets four hotels (with a combined 2,146 rooms) within the Republic of Cuba.  Hoteles Tryp expects to have a total of 7,500 rooms under management by 2001.  Upon completion of the purchase of Hoteles Tryp, Sol Melia, in 2001, will manage and market a total of 12,259 hotel rooms, or approximately 37% of the approximately 34,000 hotel rooms within the Republic of Cuba as reported by the Ministry of Tourism of the Republic of Cuba.  However, since many of the hotel rooms managed and marketed by Republic of Cuba government-operated companies (Gran Caribe, Corporacion Cubanacan, Gaviota, Horizontes, Habaguanex S.A.) are of one-star quality and two-star quality based upon United States criteria, Sol Melia will actually manage and market perhaps 40% of all three-star quality to five-star quality hotel rooms based upon United States criteria, within the Republic of Cuba.  Sol Melia reported that in 1999 the company’s fourteen properties within the Republic of Cuba handled approximately 300,000 tourists of the 1,602,781 million tourists visiting the Republic of Cuba.  Before the announcement regarding Hoteles Tryp, Sol Melia reported that the company expected to handle approximately 500,000 tourists of the 1.8 million tourists expected to visit the Republic of Cuba in 2000.  Uncertain is how the government of the Republic of Cuba will respond to a consolidation of control within the tourism industry which will reduce its control over a sector that has become the largest source of U.S. Dollars for the government of the Republic of Cuba and an increasing incubator of changes in the relationship between management and employee, especially in terms of compensation packages which remain outside of specially authorized norms.  Traditionally, the government of the Republic of Cuba has reacted with concern toward any non-Republic of Cuba-based company which may obtain a dominate sector position within the Republic of Cuba, regardless of whether that dominance is a direct result or indirect result of tangential transactions.
 

Reportedly, Sol Melia has considered or is considering being acquired by a United States-based hospitality company.  If such a transaction were to occur, regulations administered by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., would require the United States-based hospitality company to divest the properties within the Republic of Cuba managed and marketed by Sol Melia.  For example, from 1995 until 1998, Genoa, Italy-based Costa Crociere operated the “Costa Playa” cruise ship which visited the Republic of Cuba and a subsidiary of Costa Crociere developed and managed the US$11 million passenger ship facility at the Port of Havana.  In 1997, Miami, Florida-based Carnival Corporation (1999 revenues exceeded US$1 billion) purchased Costa Crociere, a transfer of ownership which required Carnival Corporation to cease both the operation of the “Costa Playa” to the Republic of Cuba and the management of the passenger ship facility.  The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., authorizes companies subject to United States law to have non-controlling investments in third country companies that have commercial activities within the Republic of Cuba provided that the investments do not result in control in fact of the third country company and provided that a majority of the revenues of the third country company are not produced from commercial activities within the Republic of Cuba [OFAC 4 March 1994].

Individuals subject to United States law hold approximately 16% of the publicly traded shares of Grupo Sol Melia.  The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., authorizes companies subject to United States law to have non-controlling investments in third country companies that have commercial activities within the Republic of Cuba provided that the investments do not result in control in fact of the third country company and provided that a majority of the revenues of the third country company are not produced from commercial activities within the Republic of Cuba [OFAC 4 March 1994].

Of the 50,000 worldwide members of the Sol Melia “Club Amigos” travel agent incentive program, 13,000 are located in the United States.  The Sol Melia frequent guest program, “MaS Programme,” affiliations include American Airlines’ American AAdvantage (which provides members with 500 miles credit for a stay at any Sol Melia hotel, including those within the Republic of Cuba), Continental Airlines’ OnePass, United Airlines’ Mileage Plus, AVIS, and American Express.  In the United States, Sol Melia has commenced construction of a two-phase (the first phase valued at US$107 million) property, Paradisus Coco Beach All-Inclusive Beach Resort in Rio Grande, Puerto Rico.  The first phase will include 491 rooms and the second phase will include 491 rooms.  Sol Melia manages one hotel in Miami, Florida, and one hotel in Orlando, Florida.  The Americas Division of Sol Melia is headquartered in Miami, Florida.

In 1999, Sol Melia reported that 1) properties within the Republic of Cuba accounted for 17.69% of total management fees from worldwide operations and 2) properties within the Republic of Cuba accounted for 1.47% of total worldwide revenues.  In 1999, Sol Melia reported having no assets located within the Republic of Cuba.  Sol Melia restructured its operations in 1999 as a result of purchases of other hotel companies and, as a result, the values of revenues, fees, and assets changed compared with values reported in 1998.

Sol Melia reported that, in 1998, the company derived approximately 11.8% of its gross revenues from Republic of Cuba-related operations.  In 1998, the percentage of Sol Melia’s total assets located within the Republic of Cuba was less than 2% from equity in two properties within the Republic of Cuba, one located in the resort area of Varadero (140 kilometers east of the city of Havana) and the other located in Havana.  Toronto, Canada-based Sherritt International Corporation (1999 revenues approximately US$261 million) has a 25% indirect interest in the hotel in Varadero and a 12.5% indirect interest in a hotel in Havana.  Sherritt International Corporation is the third-largest investor within the Republic of Cuba, having investments in the nickel, oil, gas, electricity generation, communications, tourism, and agricultural sectors.  Both hotels are managed by Sol Melia.  In 1999, the equity in the two properties would seem to have been 1) sold or transferred to an entity non affiliated with Sol Melia, possibly to Republic of Cuba government- operated Cubanacan S.A. for additional management contract considerations or 2) sold or transferred to the Escarrer family of Palma de Mallorca, Spain, which controls approximately 65% of Sol Melia.  Sol Melia previously reported contradictory information regarding management fees from properties within the Republic of Cuba as a percentage of total revenues of the company: A) operations of the company within the Republic of Cuba, in terms of management fees earned, represented 1.36% (1,500 million Pesetas) of the total worldwide management fees (110.000 million Pesetas) received by Sol Melia in 1999 and B) operations of the company within the Republic of Cuba, in terms of management fees earned, represented approximately 6% to 7% (approximately 7,500 million Pesetas) of the total worldwide management fees (110.000 million Pesetas) received by Sol Melia in 1999.

ZYWEL OF TAIWAN SELLS TELECOMMUNICATIONS EQUIPMENT TO CUBA- Hsin-Chu, Taiwan-based ZyXEL Communications Corporation (TAI: 2391.TW) reports that the company has sold telecommunications equipment (not specified by type of equipment or by value of equipment) to Republic of Cuba government-operated Empresa de Telecomunicaciones de Cuba S.A. (ETECSA).  Established in 1989, ZyXEL Communications Corporation supplies complete network access solutions for Internet/Intranet/VPN (virtual private network)/Extranet applications, including broadband access devices, routers, ISDN terminal adaptors, and modems to customers (governments, corporations, telephone companies, internet service providers, financial institutions) in more than 150 countries.  In the United States, Placentia, California-based ZyXEL Communications, Inc., is a wholly owned subsidiary of ZyXEL Communications Corporation.  Three customers of ZyXEL Communications Corporation include companies that have or have had commercial relationships with ETECSA: Paris, France-based Alcatel S.A. (1999 revenues exceeded US$20 billion), Rome, Italy-based Telecom Italia (1999 revenues exceeded US$27 billion), and Beijing, People’s Republic of China-based China Telecom.

FINLINE TECHNOLOGIES OF CANADA SIGNS AGREEMENT FOR WIRELESS CABLE- Waterloo, Canada-based Finline Technologies Ltd. (1999 revenues approximately US$400,000.00) has signed a memorandum of understanding with Republic of Cuba government-operated Grupo de la Electronica of the Republic of Cuba (a subsidiary of the Ministry of Information and Communications of the Republic of Cuba).  Finline Technologies Ltd. is listed on the Canadian Venture Exchange (CDNX:FIN) and was incorporated in 1989 and has eighteen employees.  The company began its interest in the Republic of Cuba in February 2000.  Grupo de la Electronica is “a technology organization operating in 6 countries which owns companies in the areas of consumer electronics, telecommunications, informatics, and automatics.”  The memorandum of understanding outlines the formation of a 50%-50% joint venture agreement, which is expected to be signed by 16 October 2000.  The joint venture will “market and own MMDS [Multipoint Multi-channel Distribution Systems] Wireless Cable solutions and other wireless technologies within the Republic of Cuba and other countries.”   The joint venture will deploy within the Republic of Cuba MMDS systems for the provision of voice, wireless telephony, video, broadcast television, and high-speed data services at speeds exceeding 1.5 Mbps in the 2.5 gigahertz to 2.7 gigahertz spectrum using microwave transmitters which can link with fiber-optic systems or satellite-based systems, such as Intelsat.  Finline Technologies Ltd. reports that the joint venture, once established and operational, could provide up to 40% of company revenue by 2001.  While Finline Technologies Ltd. is expected to seek financing from international capital markets, Paris, France-based Alcatel S.A. (1999 revenues exceeding US$20 billion) may, among other companies, have an interest in participating in the financing required for the various phases (5 years to 10 years) of the joint venture, costs of which may exceed US$200 million.  Alcatel S.A. has sold telecommunications equipment to Republic of Cuba government-operated Empresa de Telecomunicaciones de Cuba S.A. (ETECSA), including US$50 million in sales in 1996.  Also in 1996, Stockholm, Sweden-based Telefonakiebolaget LM Ericsson (1999 revenues approximately US$26 billion) sold US$85 million in telecommunications equipment to ETECSA.
 

According to Mr. Ramiro Valdez Menendez, President of Grupo de la Electronica, “We chose to partner with Finline in this initiative because of their advanced technology and international depth and experience in wireless systems. Finline's MMDS and wavelet compression technology will position Cuba as a world leader in communications infrastructure. We look forward to a very prosperous relationship with Finline in Cuba and other countries which we have relationships with.” Finline Technologies Ltd. is a designer and manufacturer of broadband wireless systems, focusing on MMDS “Wireless Cable” solutions for the provision of video, voice, and high-speed internet services. Finline Technologies Ltd. has deployed its systems and components worldwide to operators in fourteen countries on five continents.  The company has constructed one-way digital television networks in Iceland, Bolivia, Canada, Brazil, and in the United States (Richardson Electronics, Real Choice TV, and US Wireless).  According to the company, “Finline Technologies Ltd. is a world leader in the provision of Turn-Key MMDS (Multipoint Multichannel Distribution Systems) Wireless Cable systems for the MMDS provision of broadcast television, high-speed data, and wireless telephony.  With MMDS systems and components operational on five continents, Finline Technologies Ltd. is well positioned to service the emerging Global demand for this revolutionary technology.  Equipment of Finline Technologies Ltd. is manufactured in NTSC, PAL or SECAM formats.”

The government of the People’s Republic of China is providing up to US$200 million in “soft” credits for ETECSA to purchase telecommunications equipment from People’s Republic of China-government-operated Gran Dragon Telecommunications S.A., and its joint venture, Gran Caiman Telecommunications S.A., with Republic of Cuba government-operated Empresa Productora de Tecnica Electronica (Copextel, a subsidiary of the Ministry of Information and Communications of the Republic of Cuba).

In December 1999, Gran Dragon Telecommunications S.A. and Republic of Cuba government-operated Empresa Productora de Tecnica Electronica (Copextel, a subsidiary of the Ministry of Information and Communications of the Republic of Cuba) established a joint venture, Gran Caiman Telecommunications S.A., to produce telephones and telecommunications equipment for ETECSA and for export to countries in The Americas.

From 1997 through 1999, Gran Dragon Telecommunications S.A. installed a digital telecommunications system, donated by the government of the People’s Republic of China, on the Isla de la Juventud (150 kilometers south of the city of Havana).  In November 1998, Gran Dragon Telecommunications S.A. signed a contract valued at US$300 million to supply telecommunications equipment ETECSA.

Brussels, Belgium-based Stet International (a subsidiary of Rome, Italy-based Telecom Italia), has a 29.29% interest in ETECSA, a joint venture operated by the Ministry of Communications of the Republic of Cuba.  In July 2000, Telecom Italia reportedly “requested” that the Minister of Information and Communications of the Republic of Cuba, H.E. Ignacio Gonzalez Planes, provide ETECSA with the operational agreement for a new cellular communications band system within the Republic of Cuba to be based on Europe-based systems.  Companies from France, Italy, Spain, and Canada are amongst those seeking the operational agreement.  Officials of the Ministry of Communications of the Republic of Cuba are recommending that all interested companies present sealed bids for the operational agreement.  Stet International may be considering selling its interest in ETECSA if the operational agreement is not granted to ETECSA.  The Ministry of Communications of the Republic of Cuba is considering selling an additional 15% to 19% of ETECSA.  Stet International paid approximately US$291 million for its 29.29% interest in ETECSA.

On 1 August 2000, ETECSA reported the completion of the installation of the last branch of a digital microwave link in the central province of Cienfuegos, thus linking all provinces with a national network that should be digitized by the end of April 2001.  During the last six years, ETECSA has placed into operation fifty digital switching stations.

Currently operating a cellular concession within the Republic of Cuba is Cubacel, a joint venture between Mexico-based Telecommunications Internacionales de Mexico (TIMSA) and Panama City, Panama-based UTISA, which is controlled by the Ministry of Communications of the Republic of Cuba.  In February 1998, a wholly owned subsidiary of Toronto, Canada-based Sherritt International Corporation (1999 revenues approximately US$260.61 million), Sherritt International Communications, Inc., purchased 75% of the shares of TIMSA for US$38.25 million, thereby giving Sherritt International Communications, Inc., a 37.5% share of Cubacel.  Cubacel, which was established in 1993, has a twenty-year exclusive contract to provide both analog cellular service within the 800 MHz band and digital cellular service within the 800 MHz band throughout the Republic of Cuba.  Cubacel reported 5,000 subscribers in September 1999, compared to 4,000 subscribers in 1998.  Sherritt International Corporation reported revenue and operating earnings from its cellular telephone business within the Republic of Cuba increased by 15% in 1999, reflecting a reported 29% increase in the subscriber base.  Cubacel reported 1999 gross revenues of approximately US$20 million, compared to US$16 million in 1998.  The gross profit in 1999 was reported to be approximately US$7.5 million.

In July 1998, H.E. Dr. Carlos Lage, a Vice President of the Council of State and Executive Secretary of the Council of Ministers of the Republic of Cuba, reported that US$900 million would be invested through the year 2004 to upgrade telecommunications within the Republic of Cuba, specifically focusing upon: 1) digitalization of the telecommunications system in all major cities within the Republic of Cuba and 2) an increase in the number of telephones per resident from 3 units per 100 citizens to 9 units per 100 citizens.  In May 2000, Vice President Lage reported that A) there were currently 3.5 telephone lines to 4 telephone lines per 100 citizens of the Republic of Cuba, of which 40% were using digital switching equipment B) by 2004 there would be 1.64 million operational telephone lines and B) by 2004 there would be more than 10 telephone lines per 100 citizens, of which 92% in the city of Havana and 78% in other areas of the Republic of Cuba would be using digital switching equipment.

For information, contact Mr. Einar Fiskvatn, President and Chief Executive Officer; telephone: (519) 746-1023; facsimile: (519) 746-1131; e-mail: finline@finline.com; Internet: http://www.finline.com

U.S. COLLECTION AGENCY REQUESTED TO ASSIST WITH CUBA DEBTS- Tampa, Florida-based Gruman Worldwide Limited reports that it continues to receive requests for assistance from non-United States-based entities seeking to collect commercial debts of Republic of Cuba government-operated companies and from individual Republic of Cuba nationals.  Gruman Worldwide Limited is the “largest attorney network in the world dedicated to international commercial recoveries.”  Recent requests have included: 1) a claim in the amount of US$7,145.95 against Republic of Cuba government-operated Cubana de Aviacion for lost luggage, cleaning services, and other airport services.  Gruman Worldwide Limited as been retained by the Airport Authority of Sweden to collect the claim.  2) a claim in the amount of DM64,633.00 (approximately US$30,829.00) from the Customs Authority of Belgium for a shipment from the Republic of Cuba for which duty was not paid by Republic of Cuba government-operated Alfa Universal.  3) a claim from the Dresden State Savings Bank against a Republic of Cuba national for a loan that was never repaid.  Subsequently, the Republic of Cuba national returned to the Republic of Cuba.  According to Gruman Worldwide Limited, “… we have been retained to collect these debts, but are unable to do so because we can not travel to Cuba and make arrangements for a local agent there.  We have had a number of other cases in recent years, but they were all closed, and such closure without any meaningful collection action is most deleterious to our reputation in Europe.  We have plenty of competitors who do not hesitate to point this out to our European clients.”

GEORGIA COMMISSIONER OF AGRICULTURE LEADING DELEGATION TO CUBA IN OCTOBER 2000- The Honorable Thomas T. Irvin, Commissioner of Agriculture of the State of Georgia, is planning to lead a delegation of approximately 20 Georgia-based agricultural companies (poultry, pork, beef, etc.) to the Republic of Cuba in October 2000.  Commissioner Irvin spoke about potential trade between Georgia-based companies and entities within the Republic of Cuba during the annual meeting of members of the Southern Association of State Departments of Agriculture (SASDA) in June 2000.  Last month, Commissioner Irvin said that chicken products from the United States were “being diverted by Canada and sent down to Cuba already… It’s not good sense to let that continue.”  Mr. Andres Villegas, International Trade Director for the Department of Agriculture of the State of Georgia, later clarified the statement, saying that Commissioner Irvin had 1) no specific information as to from where within the United States chicken products were being sold to Canada-based companies and then being sold to Republic of Cuba government-operated entities and 2) no specific information that United States-based companies knew that their products were diverted, only that Commissioner Irvin had heard the information through colleagues.

MAYOR OF OAKLAND, CALIFORNIA, VISITS CUBA- The Honorable Jerry Brown, Mayor of the city of Oakland, California, visited the Republic of Cuba from 23 July 2000 to 29 July 2000.  Oakland and the Republic of Cuba’s second-largest city, Santiago de Cuba (860 kilometers east of the city of Havana), have established a “sister city” program.  Mayor Brown was governor of the State of California from 1975-1983.  More than thirty cities and towns within the United States have established or are establishing “sister city” relationships with cities and towns within the Republic of Cuba.  In 1993, Mobile, Alabama, established the first “sister city” relationship with the Republic of Cuba since 1959.

SOUFFLET OF FRANCE TO ASSIST WITH BREAD PRODUCTION IN CUBA- Nogent Sur Seine, France-based Groupe Soufflet is establishing a cooperation agreement with the Republic of Cuba government-operated Milling Union of the Ministry of Food Processing of the Republic of Cuba to produce specialty breads for the tourism industry.  Groupe Soufflet will provide equipment and raw materials to produce the breads within the Republic of Cuba.  Groupe Soufflet currently exports instant bread mixture (add water, knead, heat) for use in hotels and restaurants within the Republic of Cuba.  Groupe Soufflet provides financing to the Milling Union of the Republic of Cuba for projects including a recently completed flour mill located in the city of Havana and a recently established chain of more than one hundred bakeries throughout the Republic of Cuba.  Through Groupe Soufflet, the Republic of Cuba imports approximately 40% of its grains used to produce bread for distribution to Republic of Cuba nationals, for sale at Republic of Cuba government-operated U.S. Dollar retail stores, and for use in the tourism sector.  In the United States, Groupe Soufflet has an office in Minneapolis, Minnesota.

OFAC LICENSES U.S. PAVILION AT “SALUD PARA TODOS” EXIBITION IN APRIL 2001- On 19 July 2000, the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., at the direction of the United States Department of State in Washington, D.C., issued a license to Westport, Connecticut-based PWN Exhibicon International L.L.C. (telephone 203-222-8660; facsimile 203-222-8335; E-mail: pwnathan@aol.com; Internet http://www.pwnexhibicon.com) to present a United States Pavilion at the 23 April 2001 to 27 April 2001 bi-annual “Salud Para Todos” (Health For All) Exhibition in the city of Havana, Republic of Cuba, sponsored by the Ministry of Public Health of the Republic of Cuba.

OFAC LICENSES SECOND U.S. HEALTHCARE EXHIBITION FOR 2002- On 19 July 2000, the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., at the direction of the United States Department of State in Washington, D.C., issued a license to Westport, Connecticut-based PWN Exhibicon International L.L.C. (telephone 203-222-8660; facsimile 203-222-8335; E-mail:  Internet http://www.pwnexhibicon.com) to present a second U.S. Healthcare Exhibition in 2002 in the city of Havana, Republic of Cuba.
 

The first U.S. Healthcare Exhibition, held in the city of Havana, Republic of Cuba, from 25 January 2000 to 29 January 2000, had 97 companies as exhibitors with a combined participating representation of the exhibitors exceeding 300 individuals.  Approximately 8,000 Republic of Cuba nationals visited the U.S. Healthcare Exhibition. The U.S. Healthcare Exhibition was the single largest grouping of United States-based companies to visit the Republic of Cuba for a commercial exhibition in more than forty years and the single largest grouping of representatives of United States companies to visit the Republic of Cuba at one time under license from OFAC.

Exhibitors included: exclusive vitamin/food sponsor, Decatur, Illinois-based Archer Daniels Midland Company (1999 revenues exceeding US$14 billion); Cincinnati, Ohio-based The Procter and Gamble Company (1999 revenues exceeded US$38 billion); St. Paul, Minnesota-based 3M (1999 revenues exceeded US$15 billion); Rochester, New York-based Eastman Kodak Company (1999 revenues exceeded US$14 billion); Deerfield, Illinois-based Baxter International Inc. (1999 revenues exceeded US$6 billion); Minneapolis, Minnesota-based Medtronic, Inc. (1999 revenues exceeded US$4 billion); Indianapolis, Indiana-based Eli Lilly & Company (1999 revenues exceeded US$10 billion); Franklin Lakes, New Jersey-based Becton Dickinson and Company (1999 revenues exceeded US$3 billion); Portsmouth, New Hampshire-based Nova Technology Corporation; Dublin, California-based Zeiss Humphrey Systems (a subsidiary of Oberkochen, Germany-based Carl Zeiss Stiftung); Miami, Florida-based Sandy Hark Boiler Sales (1999 revenues US$11 million); and Chicago, Illinois-based Ferris Manufacturing Company.

The U.S. Healthcare Exhibition received bipartisan support in the United States Congress and was inaugurated by a Member of the United States House of Representatives.  Among the dignitaries visiting the U.S. Healthcare Exhibition was The Honorable Vicki Huddleston, Chief of the United States Interests Section in Havana, who also hosted a reception and commercial briefing at her official residence for exhibitors.

United States-based healthcare product companies (and United States-based subsidiaries of non-United States-based companies) that manufacture, distribute, and/or market the following classifications of products were eligible to participate as exhibitors.  Products exhibited at the U.S. Healthcare Exhibition included: Medical equipment, medical instrument, medical supply, medicine, medicated products, pharmaceutical, medical devices, hospital equipment, laboratory equipment, ambulances, physical therapy equipment, medivac equipment, training programs, training materials, and informational materials (including videos, books, etc.). NOTE: Healthcare products used in biotechnological research/production were not eligible.

The Bureau of Export Administration (BXA) of the United States Department of Commerce in Washington, D.C., included a four-page guidance about the U.S. Healthcare Exhibition on the Internet at http://www.bxa.gov under the section “The News from BXA.”

The BXA authorized participants in the U.S. Healthcare Exhibition to distribute free samples of their products to attendees, defined as officials of the government of Cuba, members of non-governmental organizations (e.g., charitable or religious organizations) and other individuals not affiliated with the government of Cuba, and Cuban nationals.  Exhibitors were required to obtain a license from the BXA for the distribution of:  Informational Materials (newspaper and magazine articles, sales brochures, sales information on diskettes, video tapes, etc., no proprietary information may be distributed such as schematics); Vitamins And Over-The-Counter Nutritionals (over-the-counter nutritional and food supplements); Non-Prescription Medicines; Prescription Medicines; General Medical Supplies (includes such items as bandages, gauze, surgical gloves, etc.); and Medical Instruments (including accessories, related software, or component parts).

The BXA authorized participants in the U.S. Healthcare Exhibition to store their products after the completion of the U.S. Healthcare Exhibition at a secured warehouse located in the Wajay Zona Franca (Free Trade Zone), adjacent to the Jose Marti International Airport in Havana, which is managed by Republic of Cuba government-operated Almacenes Universales S.A.  PWN Exhibicon International L.L.C. secured the storage authorization at a substantial discount (reduced 66%) on storage fees to make cost-effective the transportation of healthcare products by exhibitors to Cuba toward increasing sales opportunities for those healthcare products.  The storage fees are as follows:  Product Handling: US$.19 Per Kilogram (2.2 pounds), Cargo Transportation To And From Free Trade Zone Minimum Charge of US$70.00 Per AWB Or B/L; Customs Services:  As Per Direct Customs Fees, Document And Inspection Services; Documents Fee:  US$25.00 Per Shipment, Invoices And Reports Of Cargo To And From Free Trade Zone; Storage Fee: US$.25 Per Kilogram (2.2 pounds) Per Week.

Exhibitors did not need return exhibited products to the United States prior to any consummated sale to authorized entities within Cuba.  In addition, exhibitors may arrange storage for any products that will be donated to authorized entities within Cuba.  The newly constructed 25,000 square foot warehouse is managed by Toronto, Canada-based P.I. Di Luca & Associates, the company that also constructed the building.  The coordination of product storage services for the U.S. Healthcare Exhibition is being provided by the Havana office of Mississauga, Canada-based WLVW Logistics GMBH, exclusive agent for Osnabruck, Germany-based Hellmann Worldwide Logistics, Inc. (1998 revenues exceeding US$2 billion and 15,000 employees worldwide).  Miami, Florida-based Hellmann Worldwide Logistics, Inc., was established in 1988, and has 18 offices throughout the United States.

SPECIAL NOTE ON DENIAL OF U.S. FOOD & AGRIBUSINESS EXHIBITION: The OFAC, at the direction of the United States Department of State, recently denied a license to PWN Exhibicon International L.L.C. to present a U.S. Food & Agribusiness Exhibition in the city of Havana, Republic of Cuba.  In a letter to Mr. Peter W. Nathan, president of PWN Exhibicon International L.L.C., Mr. R. Richard Newcomb, Director of the OFAC, wrote, “the approval of your request would not be consistent with current United States foreign policy.”  However, in May 2000, the OFAC issued a license valid for one year to PWN Exhibicon International L.L.C. for the purpose of “explor[ing] arrangements for a potential U.S. Food and Agribusiness Exhibition in Cuba” and “multiple trips to Cuba, as necessary, in order to assess, arrange and coordinate the potential exhibitions.  A separate license would be required to conduct and participate in the prospective exhibitions.”  According to Mr. Nathan, “I was surprised and deeply disappointed that the OFAC has denied this license after previously granting a license to ‘arrange’ for a U.S. Food & Agribusiness Exhibition in Havana.  In January 1999, the Clinton Administration permitted exports of food and agricultural products to Cuba.  The U.S. Food & Agribusiness Exhibition will, just as the U.S. Healthcare Exhibition was specifically licensed by the OFAC to do in January 2000, promote export opportunities for United States companies.  If the U.S. Food & Agribusiness Exhibition is ‘not consistent with current United States foreign policy,’ then the conclusions must be a) the Clinton Administration did not intend for the policy change of January 1999 to be meaningful and b) the Clinton Administration does not want United States companies to sell food and agricultural products to Cuba.”  Since January 1999, the OFAC has licensed representatives of United States-based food companies and representatives of United States-based food trade organizations to visit the Republic of Cuba for the specific purpose of identifying current food export opportunities, including meetings with representatives of Republic of Cuba government-operated Alimport (under the auspice of the Ministry of Foreign Trade of the Republic of Cuba), non-governmental organizations (NGO’s), religious organizations, Republic of Cuba nationals who own home-based private restaurants, and Republic of Cuba nationals who own farms, among others.  Members of the United States Congress have visited the Republic of Cuba and met with representatives of Alimport, non-governmental organizations (NGO’s), religious organizations, Republic of Cuba nationals who own home-based private restaurants, and Republic of Cuba nationals who own farms, among others.  According to the Bureau of Export Administration (BXA) of the United States Department of Commerce (telephone 202-482-3283) in Washington, D.C., Internet site (http://www.bxa.doc.gov), the “BXA may approve, on a case-by-case basis, applications for exports of food (both solids and liquids) and certain agricultural commodities for sale to independent non-governmental entities (i.e., individuals and other entities that are not controlled, owned or operated by the Cuban government) in Cuba.  For purposes of the new initiative, ‘independent non-governmental entities’ is defined to include religious groups, private farmers, and private sector undertakings such as family restaurants.  Agricultural commodities that may be authorized for sale under the new policy include, but are not limited to, insecticides, pesticides, herbicides, seeds and fertilizer. Agricultural equipment is not eligible for consideration under this policy.”

INTERNATIONAL TRADE COMMISSION ECONOMISTS VISIT CUBA- Two economists from the Washington, D.C.-based International Trade Commission (USITC), Mr. Jonathan Coleman and Mr. James Stamps, visited the Republic of Cuba from 16 July 2000 to 23 July 2000.  They met with officials of the government of the Republic of Cuba, representatives of the diplomatic community, representatives of non-Republic of Cuba-based companies with commercial activities within the Republic of Cuba, and Republic of Cuba nationals.  The USITC is “an independent, quasi-judicial federal agency that provides objective trade expertise to both the legislative and executive branches of government, determines the impact of imports on United States industries, and directs actions against certain unfair trade practices, such as patent, trademark, and copyright infringement… and investigate[s] and publish[es] reports on United States industries and the global trends that affect them” has commenced a general fact-finding investigation to assess the economic impact on the United States of United States sanctions on the Republic of Cuba.  The investigation, The Economic Impact of U.S. Sanctions with Respect to Cuba (Inv. No. 332-413), was requested by the Committee on Ways and Means of the United States House of Representatives.  The USITC will include the following in its report: 1) an overview of U.S. sanctions with respect to Cuba 2) a description of the Cuban economy, Cuban trade and investment policies, and trade and investment trends 3) an analysis of the historical impact of U.S. sanctions on both the U.S. and Cuban economies, especially on affected sectors, and to the extent possible, on U.S. exports, imports, employment, consumers, and investment and 4) an evaluation of the current impact on U.S.-Cuban bilateral trade, investment, employment, and consumers of the economic sanctions on trade and investment with Cuba, with particular attention to the effects on U.S. services, U.S. agriculture, and other sectors for which the impact is likely to be significant.  The economic analysis will include information on the above factors to the extent data are available and using, as appropriate, a combination of quantitative and qualitative analyses.  A report will be submitted to the Committee on Ways and Means of the United States House of Representatives by 15 February 2001.  A public hearing in connection with this investigation will be held on 19 September 2000, at 9:30 a.m. at the USITC Building, 500 E Street S.W., Washington, D.C.  Requests to appear at the public hearing should be filed no later than 5:15 p.m. on 29 August 2000, with Ms. Donna R. Koehnke, Secretary, United States International Trade Commission, 500 E Street S.W., Washington, D.C.  20436; Telephone: (202) 205-2000.

OFAC DENIES LICENSE FOR U.S. FOOD & AGRIBUSINESS EXHIBITION IN CUBA- The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury (telephone 202-622-2510) in Washington, D.C., at the direction of the United States Department of State (telephone 202-647-9273) in Washington, D.C., has denied a license to Westport, Connecticut-based PWN Exhibicon International L.L.C. (telephone 203-222-8660) to present a U.S. Food & Agribusiness Exhibition in the city of Havana, Republic of Cuba.  In a letter to Mr. Peter W. Nathan, president of PWN Exhibicon International L.L.C., Mr. R. Richard Newcomb, Director of the OFAC, wrote, “the approval of your request would not be consistent with current United States foreign policy.”  However, in May 2000, the OFAC issued a license valid for one year to PWN Exhibicon International L.L.C. for the purpose of “explor[ing] arrangements for a potential U.S. Food and Agribusiness Exhibition in Cuba” and “multiple trips to Cuba, as necessary, in order to assess, arrange and coordinate the potential exhibitions.  A separate license would be required to conduct and participate in the prospective exhibitions.”
 

According to Mr. Nathan, “I was surprised and deeply disappointed that the OFAC has denied this license after previously granting a license to ‘arrange’ for a U.S. Food & Agribusiness Exhibition in Havana.  In January 1999, the Clinton Administration permitted exports of food and agricultural products to Cuba.  The U.S. Food & Agribusiness Exhibition will, just as the U.S. Healthcare Exhibition was specifically licensed by the OFAC to do in January 2000, promote export opportunities for United States companies.  If the U.S. Food & Agribusiness Exhibition is ‘not consistent with current United States foreign policy,’ then the conclusions must be a) the Clinton Administration did not intend for the policy change of January 1999 to be meaningful and b) the Clinton Administration does not want United States companies to sell food and agricultural products to Cuba.”

Since January 1999, the OFAC has licensed representatives of United States-based food companies and representatives of United States-based food trade organizations to visit the Republic of Cuba for the specific purpose of identifying current food export opportunities, including meetings with representatives of Republic of Cuba government-operated Alimport (under the auspice of the Ministry of Foreign Trade of the Republic of Cuba), non-governmental organizations (NGO’s), religious organizations, Republic of Cuba nationals who own home-based private restaurants, and Republic of Cuba nationals who own farms, among others.  Members of the United States Congress have visited the Republic of Cuba and met with representatives of Alimport, non-governmental organizations (NGO’s), religious organizations, Republic of Cuba nationals who own home-based private restaurants, and Republic of Cuba nationals who own farms, among others.

According to the Bureau of Export Administration (BXA) of the United States Department of Commerce (telephone 202-482-3283) in Washington, D.C., Internet site (http://www.bxa.doc.gov), the “BXA may approve, on a case-by-case basis, applications for exports of food (both solids and liquids) and certain agricultural commodities for sale to independent non-governmental entities (i.e., individuals and other entities that are not controlled, owned or operated by the Cuban government) in Cuba.  For purposes of the new initiative, ‘independent non-governmental entities’ is defined to include religious groups, private farmers, and private sector undertakings such as family restaurants.  Agricultural commodities that may be authorized for sale under the new policy include, but are not limited to, insecticides, pesticides, herbicides, seeds and fertilizer. Agricultural equipment is not eligible for consideration under this policy.”

The OFAC did issue a license to PWN Exhibicon L.L.C. to present the U.S. Healthcare Exhibition from 25 January 2000 to 29 January 2000 in the city of Havana.  The U.S. Healthcare Exhibition had 97 companies as exhibitors with a combined participating representation of the exhibitors exceeding 300 individuals.  Approximately 8,000 Republic of Cuba nationals visited the U.S. Healthcare Exhibition. The U.S. Healthcare Exhibition was the single largest grouping of United States-based companies to visit the Republic of Cuba for a commercial exhibition in more than forty years and the single largest grouping of representatives of United States companies to visit the Republic of Cuba at one time under license from OFAC in more than forty years.  Mr. Alfonso Sanchez Diaz, President of Republic of Cuba government-operated MediCuba (responsible for primary imports of healthcare products for the government of the Republic of Cuba) reported that the current value of the Republic of Cuba annual market for products exhibited at the U.S. Healthcare Exhibition was approximately US$25 million, although in the future it could be in the hundreds of millions of U.S. Dollars, as he said that it was in the 1980’s.  With a listing of products that MediCuba will purchase in 2000, Mr. Sanchez visited with exhibitors during each day of the U.S. Healthcare Exhibition.  He said that the U.S. Healthcare Exhibition had been a “tremendous success” with some contracts having been signed and interest in signing many more if prices were competitive and if the Bureau of Export Administration (BXA) of the United States Department of Commerce in Washington, D.C., licensed the sales.  The U.S. Healthcare Exhibition received bipartisan support in the United States Congress and was inaugurated by a Member of the United States House of Representatives.  Among the dignitaries visiting the U.S. Healthcare Exhibition were The Honorable Vicki Huddleston, Chief of the United States Interests Section in Havana, who also hosted a reception and commercial briefing at her official residence for exhibitors, which was attended by members of the diplomatic community (including Ambassadors from France, United Kingdom, Germany, and South Africa among other countries) and representatives of non-Republic of Cuba-based financial entities.

CUBA REPORTEDLY IMPORTING CHICKEN FROM UNITED STATES THROUGH CANADA- On 5 July 2000, The Honorable Thomas T. Irvin, Commissioner of Agriculture of the State of Georgia, said that chicken products from the United States were “being diverted by Canada and sent down to Cuba already… It’s not good sense to let that continue.”  Mr. Andres Villegas, International Trade Director for the Department of Agriculture of the State of Georgia, later clarified the statement, saying that Commissioner Irvin had 1) no specific information as to from where within the United States chicken products were being sold to Canada-based companies and then being sold to Republic of Cuba government-operated entities and 2) no specific information that United States-based companies knew that their products were diverted, only that Commissioner Irvin had heard the information through colleagues.  In June 2000, Commissioner Irvin, according to Mr. Villegas, was “in the beginning stages of planning a trade mission” to the Republic of Cuba.  Commissioner Irvin spoke about potential trade between Georgia-based companies and entities within the Republic of Cuba during the annual meeting of members of the Southern Association of State Departments of Agriculture (SASDA).  Commissioner Irvin has now confirmed that he will lead a delegation to the Republic of Cuba in the “not too distant future.”

CLARIFICATION: Mr. Gustavo Machin, First Secretary of the Cuban Interests Section in Washington, D.C., has asked for a clarification of remarks he was quoted as making in the 26 June 2000 to 2 July 2000 issue of the ECONOMIC EYE ON CUBA©. The item “CUBA MOVING TOWARD A FREE MARKET ECONOMY” AMONG STATEMENTS BY CUBA DIPLOMAT was based upon a media release issued by Durham, North Carolina-based Webb Patterson Communications, Inc., that quoted Mr. Machin as saying “Cuba is moving toward a free market economy, and North Carolina businesses could be a part of that economy sooner rather than later.”  Mr. Machin visited North Carolina to meet with representatives of North Carolina-based companies. He was also quoted as saying that “We used to buy more than 80% of our imports from the United States and we look forward to the day when we can return to that status.”  Mr. Machin reports that he said that the Republic of Cuba “has introduced some mechanisms of a market economy, but that does not mean that the country will become a market economy as the United States defines it.”  Mr. Machin said that the quoted statement regarding imports from the United States was accurate.

MINISTER OF INFORMATION AND COMMUNICATIONS QUIETLY VISITS UNITED STATES- H.E. Ignacio Gonzalez Planes, Minister of Information and Communications of the Republic of Cuba, is quietly visiting the United States for meetings to discuss, in part, the establishment of a fiber optic cable between the United States and the Republic of Cuba.  The Washington, D.C.-based Federal Communications Commission (FCC) continues to authorize United States-based companies to upgrade the quality of long distance telephone services being provided between the United States and the Republic of Cuba.  Some of the at least six regional sea-bed fiber-optic telecommunications cables being installed or planned to be installed from 1999 through 2001 outside of the 12-mile territorial waters of the Republic of Cuba contain a short “stub” which will permit connection to the Republic of Cuba when permitted by the FCC.

AMERICAN AIRLINES BENEFITS AS IBERIA AIRLINES OF SPAIN ESTABLISHES TWO JOINT VENTURES- Madrid, Spain-based Iberia Lineas Aereas de Espana (Iberia Airlines) has establish two 50%-50% joint ventures with Republic of Cuba government-operated Corporacion de Aviacion Cubana (CACSA).  Both joint ventures are expected to be operational within six months.  The reported total combined investment for both joint ventures is US$2.5 million.  One joint venture (with reported initial capital of US$400,000.00), Empresa Logisticade Carga Aerea S.A., between Cargosur (a subsidiary of Iberia Lineas Aereas de Espana) and Aerovaradero (a subsidiary of CACSA), will construct and operate a new cargo terminal at the city of Havana’s Jose Marti International Airport.  One joint venture (with reported initial capital of US$100,000.00), Empresa Cubano-Hispana de Mantenimiento de Aeronaves IBECA S.A., between Iberia Tecnologia (a subsidiary of Iberia Lineas Aereas de Espana) and Cubana de Aviacion (a subsidiary of CACSA), will maintain aircraft operated by CACSA including: A) Cubana de Aviacon leases two Blagnac Cedex, France-based Airbus Industrie-manufactured A-320 aircraft B) Cubana de Aviacon leases two Seattle, Washington-based The Boeing Company (1999 revenues exceeded US$57 billion) built McDonnell Douglas DC-10 aircraft from Paris, France-based Air Outremer (AOM).  Zurich, Switzerland-based Swissair has a controlling interest in AOM, which has operated in the Republic of Cuba market for several years C) Cubana de Aviacon owns four previously-owned Paris, France-based Aerospatiale-built ATR-300 aircraft.
 

1) Dallas/Fort Worth Airport, Texas-based American Airlines, Inc. (1999 revenues exceeded US$19 billion) and Hounslow, Middlesex, United Kingdom-based British Airways Plc jointly purchased a combined 10% share in Iberia Airlines, within which American Airlines owns approximately 2% of Iberia Airlines.

2) American Airlines permits the 33 million members of its Advantage Program to accrue mileage for airline partner travel to/from/through the Republic of Cuba, including earning 500 miles per stay at any one of the hotels within the Republic of Cuba managed by Madrid, Spain-based Grupo Sol Melia S.A.

3) American Airlines has a Carrier Service Provider (CSP) license from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C.  A CSP license authorizes a company to provide air carrier services between the United States and the Republic of Cuba.

4) Miami, Florida-based Airline Brokers Co., Inc., a licensed Carrier Service Provider (CSP) by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., is using aircraft chartered from American Airlines, Inc., for regularly-scheduled charter flights between Miami, Florida’s Miami International Airport and the Republic of Cuba.

5) American Airlines screened the motion picture “Buena Vista Social Club” on selected international flights during the month of October 1999.  Ms. Veronica Lopes, Managing Director of In-Flight Products for American Airlines, said “…we've chosen recent award-winning foreign films that may not be as well known as some of the domestic films currently in circulation.  We think our customers will enjoy seeing something different.”  The media release from American Airlines described “Buena Vista Social Club” as “both eclectic and emotionally charged, an insightful look at the unique music and music-makers of Cuba.”

6) Iberia Airlines included mention of its service to the Republic of Cuba in an advertisement in The New York Times on 1 July 1998 which showed a map that included two routings between Spain and the Republic of Cuba (city of Havana and resort area of Varadero).  The text of the advertisement said that Iberia is “working with American Airlines” and its customers can access “... anywhere American Airlines flies in the U.S. to any of Iberia’s 95 worldwide destinations.”

UNITED STATES REPORTEDLY DOES NOT OBJECT TO PARIS CLUB FORMAL DISCUSSIONS WITH CUBA- After months of informal discussions, representatives of the Paris Club of Creditor Nations will meet in July 2000 to consider establishing formal debt restructuring discussions with the government of the Republic of Cuba, perhaps beginning by October 2000.  Reportedly, the government of the United States does not oppose the establishment of formal debt restructuring discussions, although the United States will not be a party to the formal debt restructuring discussions.  Formal debt restructuring discussions were expected to begin after April 2000, but were delayed due to the decision by the government of Germany to negotiate a bilateral debt restructuring agreement with the government of the Republic of Cuba, thus weakening the negotiating position of the Paris Club of Creditor Nations.  According to one Republic of Cuba-based non-Republic of Cuba national, “There are a number of problems, ranging from Cuba's ongoing efforts to negotiate debt on a bilateral basis, to the value of transferable Ruble debt owed the former European communist countries, and Cuba’s traditional opposition to [Washington, D.C.-based International Monetary Fund] IMF-style restructuring agreements.”  Republic of Cuba debt defaults began in the early 1980’s. The government suspended all principal and interest payments in 1986. Formal debt restructuring discussions with the Paris Club of Creditor Nations were suspended in 1989.  The government of the Republic of Cuba is not a member of the IMF, Washington, D.C.-based World Bank, or any international lending organization.  Informal discussions with the Paris Club of Creditor Nations resumed in 1994.  The Paris Club of Creditor Nations established, without the United States, a Technical Committee on Cuba Debt in 1998.  Mr. Francis Meyer, Chairman of the Paris Club of Creditor Nations, visited the Republic of Cuba in September 1999, during which an agreement was reached to commence technical discussions for debt restructuring.  Due to lack of repayment of its government-to-government debt and private sector debt, the government of the Republic of Cuba has been required to rely primarily on short-term credits with annual interest rates as high as 22%.  The government of the Republic of Cuba has renegotiated some of its smaller government debt with countries in The Americas; in 1999 restructured US$750 million in commercial debt with Japan-based companies; and restructured approximately US$500 million in short-term debt with seven countries, including Japan, Italy, Germany, Portugal, and the United Kingdom.  The Central Bank (CB) of the Republic of Cuba reported that 81.9% of the US$11.078 billion foreign debt was principle, the remainder interest, and that US$8.138 billion was past due.  The CB reported that 55.7% of the debt was official debt, 24% owed bank and other financial institutions, and 15% owed private companies. The CB reported that 18.5% of the debt was owed Japan, 14% was owed to Argentina, 10.8% was owed to Spain, 10.4% was owed to France, 10% was owed to the United Kingdom, and the remainder owed to other countries.  The government of the Republic of Cuba prefers to negotiate unilateral debt restructuring agreements because the government of the Republic of Cuba believes that the repayment terms obtained from unilateral debt restructuring agreements will be more advantageous than would a Paris Club of Creditor Nations negotiated multilateral debt restructuring agreement.  If the government of the Republic of Cuba is unable to meet the terms of a particular unilateral debt restructuring agreement, there would not necessarily be multilateral ramifications, as there most certainly would be if repayment terms were not met for a Paris Club of Creditor Nations negotiated multilateral debt restructuring agreement.  With individual governments continuing to seek export opportunities, likely is a continuation of the ability of the government of the Republic of Cuba to place nominal attention to the Paris Club of Creditor Nations.

REPRESENTATIVES OF UNITED STATES OLYMPIC COMMITTEE VISIT CUBA- Mr. William J. Hybl, president of the United States Olympic Committee (USOC), visited the Republic of Cuba from 7 July 2000 to 10 July 2000.  Mr. Hybl was accompanied by Mr. Hernando Madronero, Managing Director- International Relations, for the USOC, among others.  The purpose of the visit was to explore opportunities for cooperation between the USOC and the Republic of Cuba Olympic Committee.  A Cooperation Agreement (drug usage, training, competition) was signed between the USOC and the Republic of Cuba Olympic Committee on 8 July 2000.

CORRECTION: In the 19 June 2000 to 25 June 2000 issue of the ECONOMIC EYE ON CUBA©, the reported (by the Republic of Cuba government-operated Central Bank of the Republic of Cuba) total imports for the Republic of Cuba in 1998 was incorrect.  The corrected Republic of Cuba’s total trade figures for 1999 and for 1998:
 

Year	Total Trade	Total Imports	Total Exports
1999	US$5.7 Billion	US$4.3 Billion	US$1.4 Billion
1998	US$5.721 Billion	US$4.181 Billion	US$1.54 Billion

UNITED STATES SENATORS TO VISIT CUBA ON 14 JULY 2000- Four members of the United States Senate are scheduled to visit the Republic of Cuba from 14 July 2000 to 16 July 2000. The delegation includes: The Honorable Max Baucus (D- Montana), The Honorable Robert J. Kerrey (D- Nebraska), The Honorable Pat Roberts (R- Kansas), and The Honorable Daniel K. Akaka (D- Hawaii).

U.S. PER DIEM RATE FOR CUBA DECREASES FROM US$195.00 TO US$158.00 AS OF JULY 2000- The Office of Allowances (202-663-1121) within the Office of Operations of the Bureau of Administration of the Under Secretary of Management of the United States Department of State in Washington, D.C., has decreased the Per Diem rate for individuals subject to United States law traveling to the Republic of Cuba.  Per Diem rates within the Republic of Cuba are based upon the Per Diem Rate For Foreign Areas issued by the United States Department of State.  Individuals subject to United States law traveling to the Republic of Cuba (with the exception of individuals subject to United States law traveling to the Republic of Cuba on a “fully hosted” basis) under the auspice of an specific license from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., or a general license from the OFAC had been authorized to spend up to US$195.00 per day for hotels, meals, ground transportation, etc.  Not included in the US$195.00 per day spending limit were expenses for telephone calls.  Individuals who are full-time journalists traveling to the Republic of Cuba under a general license from the OFAC were also permitted to spend above the US$195.00 for expenses “incidental to journalist activities.”  Exemptions to the US$195.00 per day authorization could be requested from the OFAC.  “Fully hosted” travelers are not subject to spending limits while within the Republic of Cuba.  A decrease in the Per Diem generally reflects an evaluation by the United States Interests Section in the city of Havana, Republic of Cuba (which represents the United States Department of State within the Republic of Cuba) that prices within the Republic of Cuba have decreased.  Since June 1999, individuals subject to United States law traveling to the Republic of Cuba under a general license from the OFAC or a specific license from the OFAC have been permitted to spend at parity with representatives of the United States government traveling to the Republic of Cuba on official business.  From 1985 through May 1999, individuals (non-employees of the United States government) subject to United States law traveling to the Republic of Cuba under a general license from the OFAC or a specific license from the OFAC were permitted to spend US$100.00 per day (no distinction with respect to lodging and meals).  The United States Interests Section has negotiated discount hotel rates with five hotels in the city of Havana including 1) Republic of Cuba government-owned hotels managed by Republic of Cuba government-operated companies and 2) Republic of Cuba government-owned hotels managed by non-Republic of Cuba-based companies.  The discounted hotel rates are only for use by United States government personnel visiting the Republic of Cuba on official business.  The new Per Diem rate reflects newly-reduced discounted hotel rates obtained by the United States Interests Section for use by United States government personnel visiting the Republic of Cuba on official business, not the retail hotel rates necessarily paid by individuals subject to United States law traveling to the Republic of Cuba under the auspice of a general license from the OFAC or a specific license from the OFAC and, reportedly a correction in changing a rate attributed to the Marina Hemingway Hotel of US$192.00 in 1999 to US$80.00 in 2000.  Per Diem values for travel to the city of Havana from 1995 through August 1999:
 

Effective Date	Lodging	Meals & Incidentals	Total Per Diem	% Change From Previous Year
1 July 2000 to Present	US$80.00	US$78.00	US$158.00	-24%
1 June 1999 to 1 July 2000	US$113.00	US$82.00	US$195.00	+6.16%
1 June 1999 to 1 December 1996	US$102.00	US$81.00	US$183.00	+15.85%
1 December 1996 to 1 November 1995	US$90.00	US$64.00	US$154.00	-0-

The following is the Per Diem values in effect since 1 July 1992 for travel to areas within the Republic of Cuba other than the city of Havana and within the United States territory at Guantanamo Bay, Republic of Cuba.
 

Effective Date	Lodging	Meals & Incidentals	Total Per Diem	% Change From Previous Year
1 July 1992 to Present	US$69.00	US$56.00	US$125.00	-0-

bDearborn, Michigan-based Ford Motor Company (1999 revenues exceeded US$163 billion) may purchase a controlling interest in Seoul, South Korea-based Daewoo Motor Co. (1999 revenues approximately US$30 billion).  The National Revolutionary Police (NRP) of the Ministry of Interior of the Republic of Cuba has purchased Daewoo Tico model vehicles.  Other Daewoo Motor Co. vehicle types imported by the Republic of Cuba include: Daewoo Espero, Daewoo Cielo, and Daewoo Damas (microbus).  Toronto, Canada-based Tri-Star Caribe, Inc., is the sales agent in the Republic of Cuba for the heavy equipment division of Seoul, South Korea-based Daewoo Corporation, which is not being purchased by Ford Motor Company.  In 1999, the Ministry of Construction of the Republic of Cuba began testing a bulldozer manufactured by Daewoo Corporation that was donated by Tri-Star Caribe, Inc.   During the last four years, Tri-Star Caribe, Inc., has marketed ambulances, armored vans, and other types of light vehicles and heavy vehicles within the Republic of Cuba.

“CUBA MOVING TOWARD A FREE MARKET ECONOMY” AMONG STATEMENTS BY CUBA DIPLOMAT- Mr. Gustavo Machin, First Secretary of the Cuban Interests Section in Washington, D.C., was quoted in a media release by Durham, North Carolina-based Webb Patterson Communications, Inc., as saying that “Cuba is moving toward a free market economy, and North Carolina businesses could be a part of that economy sooner rather than later.”  Mr. Machin visited North Carolina to meet with representatives of North Carolina-based companies.  He was also quoted as saying that “We used to buy more than 80% of our imports from the United States and we look forward to the day when we can return to that status.”

FIRST FOOD EXPORTS TO CUBA LIKELY TO BE SOY, RICE, POWERED MILK, AND WHEAT- Republic of Cuba government-operated Alimport (under the auspice of the Ministry of Foreign Trade of the Republic of Cuba) will initially import for use by Republic of Cuba nationals four types of bulk food commodities from the United States, if permitted to do so by the United States government.  The four types of bulk food commodities are soy, rice, powered milk, and, wheat.  The total value of the bulk food commodity exports by the end of the twelfth month during which such exports are authorized, is expected to be between US$25 million and US$45 million.  Alimport imported approximately US$750 million in food products in 1999 for use by Republic of Cuba nationals.  Alimport is expected to purchase (although in significantly reduced quantities primarily due to non-commercial related issues) soy, rice, powered milk, and wheat from producers in the United States regardless of whether United States-based financing is permitted by the United States government because 1) representatives of the producers of these commodities have visited the Republic of Cuba 2) representatives of trade organizations representing the producers of these commodities have visited the Republic of Cuba and 3) Members of Congress representing the states within which these commodities are produced have visited the Republic of Cuba.  The government of the Republic of Cuba will reward the efforts of the producers of soy, rice, powered milk, and wheat who sought authorization from the United States government to permit such exports.  Short-term substantial exports of food products from the United States are not expected regardless of whether United States-based financing or non-United States-based financing is permitted as 1) Alimport has existing contractual arrangements and 2) the government of the Republic of Cuba has commercial, economic, and political relationships with existing suppliers of food products that may, when taken together, supercede food product import decisions based solely on price differentials.

UNITED STATES-BASED FINANCING FOR FOOD IMPORTS COULD SAVE CUBA 8%- Republic of Cuba government-operated entities are currently paying up to 22% in annual interest costs to finance imports, including some food purchases for use by Republic of Cuba nationals.  Republic of Cuba government-operated entities are required to provide guarantees to non-Republic of Cuba-based companies providing such financing, including the use of 1) assets outside of the Republic of Cuba 2) assets within the Republic of Cuba and 3) guarantees from Republic of Cuba government-operated banks, including Banco Financiero Internacional.  Average reported interest rates paid by Republic of Cuba government-operated entities in 1999 and thus far in 2000:
 

Term of Financing	Annual Interest Rate
6 Months	18% to 19%
12 Months	21% to 22%

If Republic of Cuba government-operated Alimport (under the auspice of the Ministry of Foreign Trade of the Republic of Cuba) was able to access financing from United States-based companies for bulk food commodities for use by Republic of Cuba nationals, the cost of financing may be up to 8% below the actual total cost of financing currently paid by Republic of Cuba government-operated companies when factoring in lower transportation costs.  The potential savings could derive from favorable pricing for larger export quantities given that the Republic of Cuba could place increased savings from lower transportation costs into larger purchases which, according to some United States-based companies, may result in move favorable interest rates for Republic of Cuba government-operated companies.
 

One source of third-country financing for United States bulk food product exports to the Republic of Cuba will be British Virgin Islands-based Caribbean Finance Investments Limited (CariFin), a joint venture between London, United Kingdom-based Commonwealth Development Corporation (CDC) and Republic of Cuba government-operated New Bank Group.  CariFin has had an office in the city of Havana, Republic of Cuba since 1997.  CariFin reports that it would be prepared to provide Alimport with up to US$40 million in financing for the purpose of bulk food commodities from the United States at annual interest rates ranging from 18% to 22%, depending upon term of repayment and form of third-party guarantee (Alimport normally provides such a guarantee through a Republic of Cuba government-operated bank).  In February 1999, Mr. William White, the Republic of Cuba-based representative of the CDC, said that the CDC would manage up to US$100 million in credits to the Republic of Cuba by the end of 1999, and, perhaps, up to US$200 million in credits in the near future, mainly provided through CariFin.  In February 1999, CariFin had US$5 million in capital, a US$15 million line of credit from the CDC, and various private sector lines of credit, including a line of credit from the London, United Kingdom-based Barclays Bank plc expected to reach US$20 million in 1999.  CariFin focuses upon providing short-term credits and other types of short term financing, while serving as the banking agent of the CDC in the administration of medium term loans.  The CDC provided 30% of the US$15 million in capital to a joint venture with Paris, France-based Pansea and Republic of Cuba government-operated Cubanacan S.A. to construct eight small luxury hotels.  The CDC provided US$30 million in medium term credits to various Republic of Cuba government-operated companies in 1998, mainly to purchase technology.  In April 2000, Mr. Jeroen Kohnstamm, Secretary General of Amsterdam, Netherlands-based Factors Chain International, reported that CariFin had become a member of Factors Chain International, the “world’s largest factoring network.”  Mr. Kohnstamm said that Factors Chain International (1999 value of operations of approximately US$600 billion) had 150 members located in 50 countries, and that the organization guarantees, provides credit for, and in general facilitates international trade, among other services.  Mr. Kohnstamm said that CariFin membership in the organization would result in lower import costs for the Republic of Cuba as his organization would cover risk; and increased Republic of Cuba exports, along with prompt payment, as Republic of Cuba government-operated companies would now have access to Factors Chain International’s trade facilities, among other benefits.  For additional information, please contact: Telephone: 011 537 24 4468; Facsimile: 011 537 24 4140; E-mail: Havana@cdc.com.cu; Internet: http://www.carifin.com.cu

170,000 TONS OF PEAS IMPORTED BY CUBA IN 1999- According to Mr. Timothy McGreevy, Executive Director of the Moscow, Idaho-based USA Dry Pea and Lentil Council, a not-for-profit trade organization, the Republic of Cuba imported 170,000 metric tons of peas in 1999.  The United States produced approximately 250,000 metric tons of peas in 1999 in the states of Washington, Idaho, Montana, and North Dakota.

“STAR WARS: THE PHANTOM MENACE” MOTION PICTURE TO BE SHOWN IN CUBA- The producer, Mr. George Lucas, has donated his motion picture, “Star Wars: The Phantom Menace” to Republic of Cuba government-operated ICIAC for viewing at cinemas throughout the Republic of Cuba.  Mr. Lucas could have received payment from the ICIAC.  The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., authorizes United States companies to 1) produce, deliver, and receive payment for, completed commercials and programming to be aired on Republic of Cuba-based television stations and Republic of Cuba-based radio stations 2) purchase Republic of Cuba-produced programming for use in the United States and other countries and 3) provide camera-ready artwork to Republic of Cuba-based publications and make payments to Republic of Cuba-based publications for the placement of advertisements in Republic of Cuba-based publications.

CERTIFIED CLAIMANTS OBTAIN LICENSES FROM THE OFAC TO VISIT CUBA- The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., is providing licenses to representatives of United States-based companies with claims certified by the Washington, D.C.-based Foreign Claims Settlement Commission.  As of June 1972, there were 5,911 United Sates-based companies with claims certified by the Foreign Claims Settlement Commission.  The total value of the claims certified by the Foreign Claims Settlement Commission is US$1,851,197,358.00 of which 30 United States-based companies hold 56.85% of the total value.  The United States Foreign Claims Settlement Commission has permitted interest to be accrued in the amount of 6% per annum.

CHASE MANHATTAN, AT&T, AND BELL SOUTH RE SHAREHOLDERS IN COLOMBIA COMPANY- Bogotá, Colombia, based Chase Manhattan International Finance Limited (a wholly-owned subsidiary of New York, New York-based The Chase Manhattan Corporation, 1999 assets exceeded US$350 billion); New York, New York-based AT&T Corp. (1999 revenues exceeded US$53 billion); and Atlanta, Georgia-based BellSouth Corporation (1999 revenues exceeded US$25 billion) are shareholders in Bogotá, Colombia-based Celmovil S.A., a wireless operator.  Chase Manhattan International Finance Limited has 6% of the shares, AT&T Corp. has 10% of the shares, and BellSouth Corporation in May 2000 obtained 33.8% of the shares from Bogotá, Colombia-based Valores Bavaria S.A.  BellSouth Corporation is negotiating to purchase the shares currently held by Chase Manhattan International Finance Limited and AT&T Corp., and additional shares owned by Valores Bavaria S.A., a consolidation of shares which will eventually provide BellSouth Corporation with more than 50% of the shares in Celmovil S.A.  Customers of Celmovil S.A. currently use services provided by the company to place telephone calls from Colombia to the Republic of Cuba.  BellSouth Corporation provides “telecommunications, wireless communications, cable and digital TV, directory advertising and publishing, and Internet and day services” to customers in 19 countries.  BellSouth Corporation receives revenues from wholly owned subsidiaries, partially-owned companies, or affiliated companies in countries including Argentina, Brazil, Chile, Germany, India, Israel, Panama, Peru, and Venezuela, when individuals place telephone calls to the Republic of Cuba or receive telephone calls from the Republic of Cuba.  Chile BellSouth (which is 100%-owned by BellSouth Corporation) advertises rates for telephone services between Chile and the Republic of Cuba.  The OFAC authorizes companies subject to United States law to have non-controlling investments in third country companies that have commercial activities within the Republic of Cuba provided that the investments do not result in control in fact of the third country company and provided that a majority of the revenues of the third country company are not produced from commercial activities within the Republic of Cuba [OFAC 4 March 1994].  Members of the Board of Directors of BellSouth Corporation include Mr. Leo F. Mullin, President and Chief Executive Officer, of Atlanta, Georgia-based Delta Air Lines, Inc. (1999 revenues exceeded US$14 billion).  Since 1962, Delta Air Lines has had route authorities between the United States and the Republic of Cuba from the following cities: Havana to Houston, Los Angeles, New Orleans, San Francisco, and San Juan.  Caracas, Venezuela-based Aeropostal-Alas de Venezuela (ALAS), which services the Republic of Cuba, has a code-sharing agreement with Delta Air Lines.  In the 6 April 1998 issue of the Atlanta Business Chronicle, Mr. E. Todd Clay, a spokesperson for Delta Air Lines, said that when commercial service to the Republic of Cuba is re-authorized, the company will “like other Caribbean and Latin American countries, . . . look at the opportunities there.”

DHL INTERNATIONAL ESTABLISHES OFFICE IN SANTIAGO DE CUBA- Brussels, Belgium-based DHL International Limited has established an office in the city of Santiago de Cuba, 860 kilometers east of the city of Havana.  Santiago de Cuba is the second-largest city in the Republic of Cuba.  DHL International Limited also has offices in Havana and at the resort area of Varadero, 140 kilometers east of Havana.  The office in Santiago de Cuba will reduce, and, in some cases eliminate, a surcharge currently levied on packages delivered to the Provinces located in the eastern portions of the Republic of Cuba.  The surcharge currently is US$10.00 for packages up to three kilograms; US$20.00 for packages up to ten kilograms; US$30.00 for packages up to twenty kilograms; and then US$1.00 for each additional kilogram above twenty kilograms.  Package delivery rates between Santiago de Cuba and other countries  (including the United States) will now be the same as those charged for packages delivered between Havana and other countries (including the United States).  The new DHL International Limited office is located at AHUELERA 516, ESQ A y CLARIN, Santiago de Cuba, Cuba.  Telephone 011 53 226-54750.  Brussels, Belgium-based DHL International Limited owns a minority share in Redwood City, California-based DHL Worldwide Express, Inc.  Government of Germany-operated Deutsche Post AG owns 25% of DHL International Limited.  DHL Worldwide Express has authorization from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., to provide delivery services between the United States and the Republic of Cuba.  DHL International Limited commenced operations within the Republic of Cuba in September 1990 through an agreement with Panama City, Panama-based UTISA, which is controlled by the Ministry of Information and Communications of the Republic of Cuba.  DHL Worldwide Express, which is controlled by individuals subject to United States law, receives revenues from DHL International Limited for package delivery services to the Republic of Cuba.  The delivery services are limited to 2-pound packages containing documents, brochures, videotapes, compact discs, etc.  DHL Worldwide Express sends packages from the United States to the Republic of Cuba through Mexico City, Mexico, where the packages are transferred from the operational control of DHL Worldwide Express to the operational control of DHL International Limited.  The packages are then sent by commercial aircraft (Aeromexico and Mexicana de Aviacion SA de CV) to the Jose Marti International Airport in the city of Havana for delivery.  The cost of sending a one-pound package from the United States to the Republic of Cuba is approximately US$81.00.  The cost of sending a one-pound package from the Republic of Cuba to the United States is approximately US$39.00.  The delivery time for packages sent from the United States to Havana, Republic of Cuba, is four days.  The delivery time for packages sent from Havana, Republic of Cuba, to the United States is three days.  In 1998, DHL International Limited delivered from various countries approximately 80,000 packages to the Republic of Cuba.  In 1998, DHL International Limited sent approximately 32,000 packages from the Republic of Cuba to various countries.  Republic of Cuba government-operated International Insurance Company (ESICUBA) has an agreement with DHL International Limited to insure packages sent by customers of DHL International Limited from the Republic of Cuba to other countries.  Neither Atlanta, Georgia-based United Parcel Service of America, Inc. (1999 revenues exceeded US$24 billion) nor Memphis, Tennessee-based FedEx Corporation (1999 revenues exceeded US$17 billion) currently operates direct delivery services or indirect delivery services between the United States and the Republic of Cuba.

CORRECTION: UNITED AIRLINES REPRESENTATIVE DID NOT VISIT CUBA- A item in the 5 June 2000 to 11 June 2000 issue of the ECONOMIC EYE ON CUBA© contained an error.  Ms. Yvonne Ramos, Director- International Affairs, of Elk Grove Township, Illinois-based United Airlines, Inc. (1999 revenues exceeded US$17 billion) did not visit the Republic of Cuba from 9 June 2000 to 10 June 2000.  A participant listing provided by organizers of the “fully hosted” visit to the Republic of Cuba included Ms. Ramos.  While Ms. Ramos confirmed that United Airlines did make payment to the organizers of the “fully hosted” visit to the Republic of Cuba, neither Ms. Ramos nor any other representative of United Airlines visited the Republic of Cuba.  A statement issued by United Airlines said in part “A number of news reports have stated that United Airlines was a participant in the visit to Cuba… These reports are incorrect.  No United representative joined the U.S. delegation and the company was not a participant in the business summit.”  Officials of the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., have stated that any individual subject to United States law returning to the United States after visiting the Republic of Cuba on a “fully hosted” basis is subject to increased scrutiny, especially high profile groups, such as individuals attending “fully hosted” conferences.  Some marketing materials prepared by attorneys regarding “fully hosted” travel to the Republic of Cuba have not mentioned (and, in one known instance, deleted similar language from a previous text) that caution should be taken as there is no longer a presumption of innocence, there is now a presumption of guilt and fines can be assessed.  However, few individuals subject to United States law having traveled to the Republic of Cuba on a “fully hosted” basis have reported receiving inquiries from the OFAC, although there is no timetable under which the OFAC must initiate such inquiries. With the OFAC providing licenses to individuals subject to United States law to travel to the Republic of Cuba in an increasing number of categories, especially for business travel, “fully hosted” travel to the Republic of Cuba is becoming, in many instances, unnecessary.  Since 1962, United Air Lines has held route authorities from the following cities: Havana to Miami, Key West, Baltimore, Boston, Dallas, Houston, Los Angeles, New Orleans, New York, Newark, Philadelphia, San Francisco, San Juan, St. Croix, St. Thomas, and Washington, D.C.; and Camaguay to Miami, Baltimore, Boston, Dallas, Houston, Los Angeles, New Orleans, New York, Newark, Philadelphia, San Francisco, San Juan, St. Croix, St. Thomas, and Washington, D.C.  Since 1962, Atlanta, Georgia-based Delta Air Lines, Inc. (1999 revenues exceeded US$14 billion) has held route authorities between the United States and the Republic of Cuba from the following cities: Havana to Houston, Los Angeles, New Orleans, San Francisco, and San Juan.  Since 1962, Houston, Texas-based Continental Airlines, Inc. (1999 revenues exceeded US$7 billion) has held route authorities from Havana to Fort Lauderdale, Florida; and from Havana to West Palm Beach, Florida.

UNITED AIRLINES AND AMERICAN AIRLINES CHARTERING AIRCRAFT FOR CUBA FLIGHTS- Miami, Florida-based Airline Brokers Co., Inc., a licensed Carrier Service Provider (CSP) by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., is using aircraft chartered from Elk Grove Township, Illinois-based United Airlines, Inc. (1999 revenues exceeded US$17 billion) and Dallas/Fort Worth Airport, Texas-based American Airlines, Inc. (1999 revenues exceeded US$19 billion) for regularly-scheduled charter flights between Miami, Florida’s Miami International Airport Havana, Republic of Cuba’s Jose Marti International Airport.  The roundtrip airfare is US$299.00 plus US$50.00 in airport fees in Miami, Florida, and US$20.00 in airport fees in the Republic of Cuba. Individuals subject to United States law traveling to the Republic of Cuba should only use travel agents that have been licensed by the OFAC.  For additional information, contact Tico Travel, 161 East Commercial Boulevard, Fort Lauderdale, Florida  33334.  Telephone: (954) 493-5335 or (800) 493-8426; Facsimile: (954) 493-8466; E-mail: tico@gate.net; Internet: http://www.destinationcuba.com.
 

Day Of Week	Cities Serviced	Airline Company	Aircraft Type
Monday	Miami-Havana-Miami	American Airlines	Boeing 757
Friday	Miami-Havana-Holgiun-Santiago de Cuba-Holgiun-Havana-Miami	American Airlines	Boeing 757
Saturday	Miami-Havana-Miami	United Airlines	Boeing 767

Airline Brokers Co., Inc., reported that the following flights would soon begin operation: Miami-Holguin-Miami and Miami-Santiago de Cuba-Miami.

GULFSTREAM INTERNATIONAL AIRLINES NEW DAILY FLIGHTS TO CUBA ASSIST PACKAGE DELIVERIES- Dania, Florida-based Gulfstream International Airlines (1999 revenues approximately US$80 million) is the first licensed Carrier Service Provider (CSP) by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., to operate daily regularly-scheduled direct charter flights between the United States and the Republic of Cuba.  [SEE ATTACHED LETTER AND INFORMATION]. With one-hour advance baggage check-in, and flight departures and arrivals in the afternoon, the flights are designed to meet the requirements of an increasing number of representatives of United States-based companies who have obtained licenses from the OFAC to visit the Republic of Cuba and for the shipment of packages to the Republic of Cuba.

Frequency	Cities Serviced	Aircraft Type
Every Day	Miami/Havana/Miami	50-seat Dash-7 turboprop aircraft

Houston, Texas-based Continental Airlines, Inc. (1999 revenues exceeded US$7 billion) has a 28% interest in Gulfstream International Airlines.  Gulfstream International Airlines operates a code-share agreement and connection agreement with Continental Airlines.  Since 1962, Continental Airlines has held route authorities from Havana to Fort Lauderdale, Florida; and from Havana to West Palm Beach, Florida.  Gulfstream International Airlines has a code-share agreement with St. Paul, Minnesota-based Northwest Airlines Corporation (1999 revenues exceeded US$10 billion).  Gulfstream International Airlines has a connection agreement and operates the TWA Connection from San Juan, Puerto Rico, with St. Louis, Missouri-based Trans World Airlines, Inc. (1999 revenues exceed US$3 billion).  Gulfstream International Airlines has a code-share agreement with Panama City, Panama-based COPA airlines.  Gulfstream International Airlines also currently operates regularly-scheduled passenger flights between Miami, Florida’s Miami International Airport and Havana, Republic of Cuba’s Jose Marti International Airport, Republic of Cuba using Boeing-727 aircraft leased from Miami, Florida-based Falcon Air Express, Inc., and Boeing-727 aircraft leased from Miami, Florida-based Miami Air, Inc.  The roundtrip airfare is US$299.00 plus US$50.00 airport fees in Miami, Florida, and US$20.00 in airport fees in the Republic of Cuba.  The company also charters its 50-seat Dash-7 turboprop aircraft manufactured by Toronto, Canada-based De Havilland and 19-seat Beechcraft 1900-R turboprop aircraft manufactured by Wichita, Kansas-based Raytheon Aircraft (a division of Lexington, Massachusetts-based Raytheon Company, 1999 revenues exceeded US$19 billion).  Gulfstream International Airlines reports transporting approximately 4,000 passengers each month between the United States and the Republic of Cuba.  In April 2000, Gulfstream International Airlines signed an exclusive agreement with Republic of Cuba government-operated Cubapacks International S.A. (a subsidiary of Republic of Cuba government-operated Corporacion Cimex S.A.) for package delivery services from the United States to the Republic of Cuba beginning on 1 May 2000.  Gulfstream International Airlines reported that the company expects year-one gross revenues from the service of approximately US$300,000.00 to US$400,000.00.  Individuals subject to United States law traveling to the Republic of Cuba should only use travel agents that have been licensed by the OFAC.  Tico Travel, 161 East Commercial Boulevard, Fort Lauderdale, Florida  33334.  Telephone: (954) 493-5335 or (800) 493-8426; Facsimile: (954) 493-8466; E-mail: tico@gate.net; Internet: http://www.destinationcuba.com.

OFAC REPORTS 82,000 INDIVIDUALS TRAVELED TO CUBA IN 1999 ON CHARTER FLIGHTS- The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., reported that approximately 82,000 individuals subject to United States law traveled from the United States to the Republic of Cuba in 1999 using the regularly-scheduled direct charter flights operating from Miami International Airport and, during the month of December 1999, also from John F. Kennedy International Airport in New York City, and general aviation charter flights from other cities.
 

Year	Number Of Travelers
1999	82,000
1998	55,900

In March 2000, Mr. Eduardo Bencomo, President of Republic of Cuba government-operated Corporacion Cimex S.A., the largest Republic of Cuba government-operated U.S. Dollar-earning company, reported that 124,000 individuals of Cuban descent who are subject to United States law visited the Republic of Cuba in 1999, primarily using the travel services of Republic of Cuba government-operated Havanatur, a subsidiary of Corporacion Cimex S.A.  During each of the last five years, the number of individuals subject to United States law authorized by a general license (no specific documentation from the OFAC is required) or specific license from the OFAC to travel to the Republic of Cuba has increased on average 9% to 11%.  During each of the last five years, the number of individuals subject to United States law traveling to the Republic of Cuba, but not authorized by the OFAC to do so, has increased on average 19% to 21%.  Approximately 22,000 individuals subject to United States law traveled to the Republic of Cuba in 1999 without authorization from the OFAC.  Approximately 92% of individuals subject to United States law visiting the Republic of Cuba in 1999 were of Cuban descent whose specific purpose was to visit immediate family members for a self-defined “humanitarian purpose” or under the auspice of a specific license issued by the OFAC.  Individuals subject to United States law of Cuban descent who have immediate family members residing within the Republic of Cuba are permitted one visit under a general license from the OFAC every twelve months for a self-defined “humanitarian purpose.”  Approximately 8% of individuals subject to United States law traveling to the Republic of Cuba under a general license from the OFAC or specific license from the OFAC in 1999 were business representatives, journalists, academicians, cultural groups, students, athletes, and humanitarian groups amongst an expanding number of categories.  The estimated number (with authorization of the OFAC and without authorization of the OFAC) of business travelers subject to United States law visiting the Republic of Cuba from 1994 through 1999 follows:
 

Year	Estimated Number Of Business Travelers
2000 (estimate)	3,400
1999	2,800
1998	2,500
1997	2,000
1996	1,500
1995	1,300
1994	500

U.S. CHAMBER OF COMMERCE PRESIDENT COMMENTS ABOUT PRESIDENT CASTRO- Mr. Thomas J. Donohue, President of the Washington, D.C.-based U.S. Chamber of Commerce, said that “after 7½ hours with [H.E. Dr. Fidel] Castro [Ruz], I had to remind myself that he was a gangster.”  Mr. Donohue also said “Raul Castro makes Fidel Castro look like Mary Poppins.”  H.E. General Raul Castro Ruz, the younger brother of President Castro, is the First Vice President of the Council of State of the Republic of Cuba and Minister of Defense of the Republic of Cuba.  Mr. Donohue made the remarks at a one-day conference in Washington, D.C., on 15 June 2000 sponsored by the New York City, New York-based World Policy Institute.  The U.S. Chamber of Commerce has invited, and the government of the Republic of Cuba has approved, a twenty-five member delegation of private farmers and owners of home-based restaurants, beauty salons, shoe repair, bicycle repair, etc., and representatives of the Republic of Cuba government-operated Chamber of Commerce of the Republic of Cuba, to visit the United States, possibly in September 2000.  The delegation would visit United States-based companies and, where available, participate in training programs.  The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., has not yet issued a license for the visit by the delegation.  During his remarks on 15 June 2000, Mr. Donohue said that if the OFAC did not issue a license, the U.S. Chamber of Commerce would find a means to sponsor the visit by the delegation.

GEORGIA COMMISSIONER OF AGRICULTURE MAY PARTICIPATE IN TRADE MISSION TO CUBA- The Honorable Thomas T. Irvin, Commissioner of Agriculture of the State of Georgia, is, according to a representative, “in the beginning stages of planning a trade mission” to the Republic of Cuba.  Commissioner Irvin spoke about potential trade between Georgia-based companies and entities with