U.S. DOLLAR INCREASES 5% IN VALUE AGAINST THE PESO- Republic of Cuba government-operated Cajas de Cambio S.A. (CADECA) sold the Convertible Peso, equal to US$1.00, for 21 Pesos and purchased the U.S. Dollar for 21 Pesos as of 16 April 2000.  CADECA had sold the Convertible Peso for 21 Pesos and purchased the U.S. Dollar for 20 Pesos, since 27 January 2000.  The official international exchange rate of one Peso to one U.S. Dollar, in effect for more than thirty years, remained unchanged.  The government of the Republic of Cuba maintains a fixed exchange rate for its international dealings and a more flexible exchange rate for domestic use. The government of the Republic of Cuba does not fluctuate the value of the Peso for commercial transactions regardless of any fluctuation with the value of the U.S. Dollar or other currencies on the international market.  The Peso and the U.S. Dollar circulate freely in the Republic of Cuba.
 

CADECA Buy	CADECA Sell	From / To
21	21	16 April 2000 to 23 April 2000
20	21	27 January 2000 to 15 April 2000
21	21	24 December 1999 to 23 January 2000
21	22	2 October 1999 through 23 December 1999
20	22	13 September 1999 to 1 October 1999
20	20	1 September 1999 to 12 September 1999
20	21	13 August 1999 through 31 August 1999
22	22	16 June 1999 to 12 August 1999
22	21	13 April 1999 through 15 June 1999
21	21	15 March 1999 to 12 April 1999
20	21	4 March 1999 to 14 March 1999
21	21	19 February 1999 to 3 March 1999
21	20	13 January 1999 to 18 February 1999

TRAN$CARD REPORTEDLY USED TO SEND US$30 MILLION TO CUBA IN 1999- 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 individuals subject to United States law (primarily individuals of Cuban descent) were increasingly using electronic funds transfer systems to send funds to Republic of Cuba nationals.  A total of approximately US$400 million in remittances from throughout the world were sent to the Republic of Cuba in 1999.  For example, Mr. Bencomo reported that offices operated by Republic of Cuba government-operated Fincimex S.A., a subsidiary of Corporacion Cimex S.A., disbursed US$30 million within the Republic of Cuba in 1999 using the services of Toronto, Canada-based Tran$card Canada Limited.  On 26 July 1993, the government of the Republic of Cuba authorized Republic of Cuba nationals to use U.S. Dollars for transactions within the Republic of Cuba.  Remittances sent from the United States to the Republic of Cuba under licenses (general and specific) from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., from 1993 through 1998 were estimated to be approximately US$275 million on an annual basis.  In March 1996, the OFAC eliminated the sending of remittances from the United States to the Republic of Cuba under a general license and began requiring individual licenses; and remittances would only be permitted for purposes of emigration or in extreme humanitarian need.  In March 1998, the OFAC re-authorized under a general license individuals subject to United States law to who have relatives residing within the Republic of Cuba to send up to US$300.00 every four months (US$1,200.00 annually).  In January 1999, the OFAC authorized any individual subject to United States law to send up to up to US$300.00 every four months (US$1,200.00 annually) to any Republic of Cuba national, provided that the Republic of Cuba national is not a senior-level official of the Communist Party of the Republic of Cuba or a senior-level official of the government of the Republic of Cuba. The OFAC permits remittances to be transferred from the United States to the Republic of Cuba through Family Remittance Forwarders (FRF) licensed by the OFAC, or by United States-based depository institutions licensed by the OFAC, or through individuals traveling to the Republic of Cuba under a license (general or specific) issued by the OFAC.

US$15.2 MILLION IN UNITED STATES TELECOMMUNICATIONS PAYMENTS TO ETECSA IN 1999- The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., approved in 1999 a total of US$15,202,364.00 in payments 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% interest).
 

Company	1 July 1999 Through 31 December 1999	1 January 1999 Through 30  June 1999	Total 1999 Payments To ETECSA
Sprint Communications Company (formerly Global One, and prior to that, Sprint Incorporated)	US$11,377,229.00	US$3,408,365.00	US$14,785,594.00
Telefonica Large Distancia de Puerto Rico, Inc.	US$     246,922.00	US$   169,848.00	US$     416,770.00
Total Payments To ETECSA In 1999			US$15,202,364.00

In February 1999, ETECSA suspended direct dial telephone service agreements with New York City, New York-based AT&T Corporation; San Juan, Puerto Rico-based AT&T de Puerto Rico; Miami, Florida-based IDB WorldCom Services, Inc.; MCI International; Telefonica Large Distancia de Puerto Rico, Inc. (TLDI); Worldcom, Inc.; Kansas City, Kansas-based Sprint Communications Company, L.P.; and Tulsa, Oklahoma-based 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.  AT&T, MCI, WilTel, LDDS, and IDB, 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 Telefonica Larga Distancia of Puerto Rico 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.  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.  ETECSA received approximately US$85 million (excluding the US$19 million paid in March 2000) in 1998 as its approximately 45% share of the revenues generated from United States-origin telephone calls, which average in cost from approximately US$.60 to approximately US$3.00 per minute.  For additional information, please contact: Mr. Enrique J. Lopez, President and Chief Executive Officer, ALK Group, Inc., Telephone: (305) 567-0084; Facsimile: (305) 567-0085; E-mail: aklgroup@consultant.com

CUBA REDUCES E-MAIL RATES AND INTERNET ACCESS RATES BY 50%- In an effort to increase revenues through higher usage, Republic of Cuba government-operated Empresa de Telecomunicaciones de Cuba S.A. (ETECSA), a joint venture operated by the Ministry of Communications and Electronics of the Republic of Cuba within which Brussels, Belgium-based Stet International (a subsidiary of Rome, Italy-based Telecom Italia) has a 29% interest), has reduced e-mail rates and internet access rates by 50%, the first such reduction since ETECSA began offering the service in 1996.  A reported 20,000 Republic of Cuba nationals have an Internet account.  Access to the Internet is generally restricted by the government of the Republic of Cuba to offices of the government of the Republic of Cuba and to Republic of Cuba government-operated companies.  The Republic of Cuba does not yet have ISDN lines.  Republic of Cuba government-operated Infocom, a subsidiary of ETECSA which is the primary provider of e-mail service and internet service which are paid in U.S. Dollars, reported that new monthly rates were has follows, plus US$.05 charge per minute for local telephone calls.  Customers are required to purchase one of the following packages:
 

Hours Per Month	Cost Per Month In U.S. Dollars	Cost Of Additional Hours
5	US$15.00	US$3.00
15	US$30.00	US$3.00
40	US$60.00	US$3.00
100	US$100.00	US$1.00

IBERDROLA S.A. NOT EXPECTED TO PURCHASE FPL GROUP IN FLORIDA- Due to reported opposition by the Board of Directors of Madrid, Spain-based Iberdrola S.A. (1999 revenues approximately US$5.8 billion), the second-largest power generation company in Spain, reportedly will not seek a commercial relationship (merger, purchase, stock swap, alliance, etc.) with Juno Beach, Florida-based FPL Group (the parent of Florida Power & Light, 1999 revenues exceeding US$6 billion), the largest supplier of electricity in the State of Florida.  In September 1999, Iberdrola S.A., through a subsidiary, Iberdrola Ingenieria y Consultoria (IBERINCO), obtained a contract valued at approximately US$3.15 million with Republic of Cuba government-operated Union Electrica de Cuba to participate in the modernization of three 100-megawatt U.S.S.R.-constructed power generators.  IBERINCO also signed an agreement with Republic of Cuba government-operated INEL, an engineering subsidiary of Union Electrica de Cuba for unspecified projects in Spain and in the Americas.  IBERINCO recently participated, with Europe-based TLMACE, in the modernization of unit #5 at the Camaguey thermo-electric power generator, a project financed by the Republic of Cuba-based Havana Finance Company (a joint venture between Madrid, Spain-based Caja Madrid and Republic of Cuba government-operated Banco Popular de Ahorro).  A subsidiary of Iberdrola Electric, Iberdrola Ingenieria y Consultoria signed a contract in 1998 with Union Electrica Cubana to modernize a 125-megawatt generator at the October 10th thermo electric plant, located in Nuevitas Camaguey, 550 kilometers east of the city of Havana. The company said the project, in which other foreign companies will participate, would be financed by Havana Finance Company.

DRESDNER BANK AND DEUTSCHE BANK DISCONTINUE MERGER DISCUSSIONS- Frankfurt, Germany-based Dresdner Bank AG and Frankfurt, Germany-based Deutsche Bank AG have discontinued their merger discussions.  Hamburg, Germany-based Dresdner Bank Lateinamerika AG (a subsidiary of Dresdner Bank AG) is expected to establish an office this year in the city of Havana, Republic of Cuba.  Dresdner Bank Lateinamerika AG will be the first Germany-based financial institution to establish a representative office within the Republic of Cuba.

CUBANACAN AND CIMEX ESTABLISH FIRST “STRATEGIC BUSINESS ALLIANCE”- In what may yet become the first merger of two Republic of Cuba government-operated companies, Republic of Cuba government-operated Cubanacan S.A. (1999 revenues of approximately US$300 million) and Republic of Cuba government-operated Corporacion Cimex S.A. (1999 reported revenues of approximately US$900 million) have announced the establishment of a “strategic business alliance.”  The two companies have some overlapping subsidiaries, such as vehicle rental, travel agencies, U.S. Dollar retail stores, and food service, among others.  Combining purchasing, administrative, and marketing (including sales and purchase of advertising) could save both companies significant amounts of funds.  However, there might also be personnel redundancies, resulting in reduction in levels of employment.  In addition, combining some activities of subsidiaries when pursuing financing may provide a more attractive balance sheet from which to negotiate.  Corporacion Cimex S.A. is registered in Panama City, Panama, although the company primarily operates within the Republic of Cuba.  Corporacion Cimex S.A., originally an import-export company, currently has approximately 100 subsidiary companies (there were 28 subsidiary companies reported in 1993 and in 1994) including U.S. Dollar retail operations (a combined 1,200 including supermarkets, service stations, fast food outlets, photo developing, car washes, and kiosks) credit card and charge card processing, vehicle service stations, vehicle rental, package delivery service, cable and satellite television distribution, travel agency, and real estate.  Cubanacan S.A. subsidiaries include the largest of the four Republic of Cuba government-operated hotel companies which reportedly control 37% (fifty-seven properties) of the Republic of Cuba’s approximately 34,000 hotel rooms (primarily one-star properties and three-star properties based upon United States accepted criteria).  Cubanacan S.A. also operates marina, a travel agency, a tour operator, a vehicle rental agency, restaurants, a taxi company, package delivery service, and U.S. Dollar retail stores.

CANADA COMPANY EXPORTING MATCHES TO CUBA- Nisku, Alberta, Canada-based Cougar Match Corporation (1999 revenues of approximately US$700,000.00) reports that the company exports matches for use in hotels within the Republic of Cuba.  Cougar Match Corporation is reportedly the only company manufacturing matches in Canada.

THAILAND RICE SALE CANCELLED DUE TO LACK OF LETTER OF CREDIT- The government of Thailand confirmed that a planned 100,000 ton sale of 25% broken rice to Republic of Cuba government-operated Alimport (under the auspice of the Ministry of Foreign Trade of the Republic of Cuba) has been cancelled due to the refusal of Alimport to provide a confirmed Letter of Credit for the purchase.  Alimport may yet purchase some rice from Thailand.  In February 2000, the government of Thailand reported that 150,000 tons (at a then reported price of approximately US$225.00 per ton) of 25% broken rice would be sold to Alimport with payment terms of 365 days, although all of the rice was expected to be delivered to the Republic of Cuba by the end of 2000.  Under the agreement, expected to have been concluded in March 2000, Alimport was to receive 15,000 tons of rice to 20,000 tons of rice each month.  Alimport is expected to obtain required quantities of rice from its two regular suppliers, Vietnam and the People’s Republic of China (which has exported 15,000 tons of rice per month to the Republic of Cuba thus far in 2000).

CANADA’S RESERVE ROYALTY CORPORATION HAS OIL EXPLORATION AGREEMENT- Calgary, Alberta, Canada-based Reserve Royalty Corporation, which develops Petroleum reserves and natural gas reserves, reported that the company had royalty interests in 2.6 million acres of land within the Republic of Cuba.  This was the first time Reserve Royalty Corporation had been identified as one of the companies, the majority of which are small Canada-based companies, involved in developing the petroleum reserves and natural gas reserves within the Republic of Cuba.  Other companies include: Oil for Development Cuba; Perperco; Caribbean Oil Exploration; Alturas Resources Bahamas Limited; Macdonald Oil International; Genoil Merchant Banking- Intra Group Restricted; Sherritt International (Cuba) Oil and Gas; Cubacan Exploration; Taurus Oil A.B.; Braspetro Oil Services Company (a unit of government of Brazil-operated Petroleo Brasileiro SA, known as Petrobras).

CUBA REPORTS INVESTING US$3.04 BILLION IN TOURISM INDUSTRY FROM 1990 THROUGH 1999- H.E. Carlos Gomez, Vice Minister of Tourism of the Republic of Cuba, reported that in order for the Republic of Cuba to be prepared to accommodate an expected 5 million tourists by the end of 2010, the tourism industry within the Republic of Cuba would require a minimum of US$6.6 billion during the next ten years to develop hotels, non-hotel-based activities for tourists (golf courses, theme parks, aquatic activities, etc.), and necessary infrastructure.  Vice Minister Gomez reported that US$3.8 billion was invested within the Republic of Cuba’s tourism industry from 1990 through 1999, of which 20% (US$760 million was provided by non-Republic of Cuba-based sources).  The Republic of Cuba currently has approximately 34,000 hotel rooms of varying quality (primarily one star and two star based upon United States hotel rating standards), compared to 78,000 rooms reportedly required to accommodate 5 million tourists by 2010.

CANADA’S CIDA TO PROVIDE US$525,000.00 FOR COASTAL ENVIRONMENTAL PROJECT- Ottawa, Canada-based Canadian International Development Agency (CIDA) will provide CA$750,000.00 (approximately US$525,000.00) to Dalhousie University and Saint Mary’s University to implement a five-year coastal zone management educational project within the Republic of Cuba.  The project will include the establishment of a national interdisciplinary master’s degree program in integrated coastal zone management.  For additional information, please contact Ms. Robin Walsh, Office of the Minister for International Cooperation of Canada; Telephone: (819) 997-6919.

EFFORT BY CUBA TO EXPORT US$ MILLION IN HAWKSBILL TURTLE SHELLS FAILS AT CITES- The government of the Republic of Cuba failed in an effort to export 15,200 pounds (valued at US$4 million) of already in inventory hawksbill turtle shells to Japan in a one-off auction, and capture 500 hawksbill turtles on an annual basis.  The request was opposed by the Convention on Trade in Endangered Species (CITES) held in Nairobi, Kenya.  Conservationists from around the world argued that the re-establishment of international trade in hawksbill turtle shells would encourage the stockpiling of all turtle shells by other countries and an increase in unauthorized capture hawksbill turtles.  The hawksbill turtle was placed on the “Critically Endangered” list of species in 1996.  The species has been on CITES Appendix I since 1977.  Trade in tortoise shells has been identified as the principal cause of the reduction in hawksbill turtles.  The government of the Republic of Cuba argued that due to its conservation efforts, the Republic of Cuba has a hawksbill turtle population of 15,000.  Opponents report that approximately 60% of the reported 15,000 hawksbill turtles residing within the Republic of Cuba actually migrate from 11 other Caribbean Sea-area countries to the Republic of Cuba to feed during part of each year.
 

Mr. John S. Kavulich II, President of the U.S.-Cuba Trade and Economic Council, has accepted an invitation from Washington, D.C.-based The American Chamber of Commerce of Cuba in the United States, Inc. (AmCham Cuba) to give a presentation on “Cuba Today From A U.S. Business Perspective” on Tuesday, 16 May 2000, at 12:00 p.m. at the National Press Club in Washington, D.C.  Mr. Peter W. Nathan, President of Westport, Connecticut-based PWN Exhibicon International L.L.C., the company that organized the U.S. Healthcare Exhibition held in Havana, Republic of Cuba, in January 2000, will give a presentation about genesis of the U.S. Healthcare Exhibition.  PWN Exhibicon International L.L.C. is a member of the U.S.-Cuba Trade and Economic Council.  For information, please contact Ms. Phoebe Lansdale at telephone (202) 833-3648; Facsimile telephone (202) 358-3549; or E-mail: amchamcuba@aol.com
 
 

The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., presumes that all individuals subject to United States law traveling to the Republic of Cuba on a “fully hosted” basis to 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) 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.”
B) 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.
C) 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.
D) 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.
E) 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.