PESO REMAINS STEADY- Republic of Cuba government-operated Cajas de Cambio S.A. (CADECA) sold the Convertible Peso, equal to one U.S. Dollar, for 24 Pesos across the country, and purchased the U.S. Dollar for 22 Pesos in the city of Havana, tourism resort area of Varadero, the Republic of Cuba's second-largest city, Santiago de Cuba, and in most other provinces. The unofficial exchange rate remained 25 Pesos to the U.S. Dollar in areas distant from CADECA offices. The official international exchange rate of 1 Peso to 1 U.S. Dollar, in effect for more than thirty years, remained unchanged. The government maintains a fixed exchange rate for its international dealings and a more flexible exchange rate for domestic use. The Peso and the U.S. Dollar circulate freely in Cuba.

EMPLOYING CUBAN NATIONALS- Non-Republic of Cuba companies must use a Republic of Cuba government-controlled employment agency (such as Cubalse S.A.) to contract Republic of Cuba nationals as employees. The companies pay directly to the agency, in U.S. Dollars, the monthly salary of each employee. The agency then pays the workers in Pesos. For example, an average monthly wage for a skilled worker is 300 Pesos to 500 Pesos. The company pays the agency US$300.00 to US$500.00 per month. Workers almost always receive a U.S. Dollar bonus or U.S. Dollar-based bonus (usually in the form of products) in addition to their monthly salary. These bonuses can be worth upwards of US$100.00 per month. Sometimes the bonuses are paid officially and sometimes are paid unofficially. In the newly-established Free Trade Zones, companies are permitted to have the terms of the bonus payments included in each employment contract.

INSURANCE- Republic of Cuba government-controlled insurance agencies (such as ESICUBA) offer various policies at rates generally lower than in the United States. Republic of Cuba citizens are fully-covered by the government of the Republic of Cuba so any type of group insurance coverage is not required, unless there are non-Republic of Cuba citizens working for the company. Vehicle Insurance: One year's coverage against all risks costs 7% of the vehicle purchase price and 5% of accessories value, and includes US$100,000.00 coverage against civil actions. Additional US$5.00 to insure all drivers. There is no deductible and rates are reduced over time if no claims have been filed. Health Insurance: Health insurance costs vary by age and risk. Smoking is not considered at this time, but sources report that this may change. No medical examination is required. Individuals must sign a legally-binding document detailing any pre-existing medical conditions. A policy covering US$100,000.00 in medical expenses for a forty-five-year-old woman with no problematic pre-existing medical conditions is US$1,026.00 per year. Medical services are provided by U.S. Dollar-only hospital wards, clinics, and pharmacies. The policies have no deductible and include pharmaceutical coverage up to US$300.00 per year. Property Insurance: To insure the contents of a residence costs between .80% and 2% of the value, depending upon the location of the dwelling, coverage requested, and the type of security system in the dwelling.

OFFICE AND RESIDENCE RENTALS AND SALES- Since the revolution, non-Republic of Cuba citizens have not been permitted to own property within the Republic of Cuba. They were required to rent office and residences through Republic of Cuba government-controlled Cubalse. Residence and office space within the city of Havana currently ranges from US$4.50 to US$12.00 per square meter per month in addition to US$.50 to US$1.00 per square meter for outside space. With few individual operating water and electric meters, Cubalse charges a set service fee beginning at US$50.00, depending upon office or residence size and use. Cubalse reports that there is currently a four to six-month waiting list for residence and office space. The lack of office and residence rentals has caused many non-Republic of Cuba companies and their non-Republic of Cuba employees to rent, unofficially, from Republic of Cuba citizens, often at 25% to 50% of the official Cubalse-set price. A new real estate and rental law is expected to be adopted this year by the National Assembly of the Republic of Cuba. Non-Republic of Cuba citizens will be permitted to purchase property, although there may be a provision that requires 1) the property can only be resold to Cubalse or another Republic of Cuba government-controlled company or 2) Cubalse or another Republic of Cuba government-controlled company will have a first right of refusal to purchase the property before other interested parties are permitted to make an offer. Republic of Cuba citizens will be authorized to rent their property provided that they comply with certain regulations and pay taxes. The Ministry of Tourism of the Republic of Cuba estimated that in 1996 almost 15% of the 1,100,000 visitors to the country stayed in private residences. Four joint ventures have been established thus far to construct and/or renovate residences and offices. The first joint venture office building, La Lonja del Comercio de la Habana, located in Havana Vieja (Old Havana), has an average per square meter monthly rental rate of US$17.00. Units in the first joint venture condominium project, scheduled to be completed in eighteen months and located in the fashionable Miramar district of Havana, are being sold for US$1,450.00 to US$1,850.00 per square meter. A second joint venture, Residencial Olkos Paradiso (http://www.irinfo.es/remaxoikos), which plans to construct condominiums, penthouses, and single residences, has advertised properties for US$902.00 per square meter. The company has also advertised time-sharing options for 200 bungalows and apartments of 100 square meters with 2 to 3 bedrooms for US$5,500.00 per week.

COMMUNICATIONS- The Republic of Cuba is gradually developing a modern telecommunications system. ETECSA, which is 51% controlled by the government of the Republic of Cuba and 49% controlled by Stet (an Italian government-controlled company) and Grupo Domos (a Mexican company) provides commercial and residential services. ETECSA INTERTELL is the U.S. Dollar-only telephone system provider. CUBACEL, a joint venture between a Mexican company and the Ministry of Communications of the Republic of Cuba, provides cellular communications. UTISA, a Republic of Cuba government-controlled company, provides paging (voice and tone, US$35.00 per month) and two-way radio communications (Midland brand). MOVITEL TRUNKING, a Republic of Cuba government-controlled company, provides expanded, long-range, dispatch assisted and operator assisted, two-way radio communications.

Type of rate Single line Extension Switchboard line Extension Telex line

Installation US$150.00 US$30.00 US$150.00 US$30.00 US$150.00

Equipment US$40.00 US$40.00 US$40.00 None None

Deposit US$100.00 None US$100.00 None US$200.00

Type of service Single line Extension Switchboard line Telex line

Local US$10.00 US$3.00 US$10.00 US$70.00

Other US$180.00 US$3.00 US$3.00 None

Location North America Central America and Mexico Caribbean South America Other Countries Local Local

Direct Dial US$2.45 US$3.40 US$3.40 US$4.45 US$5.85 US$.05 and up (Havana) US$1.50 to call eastern Cuba

Operator Assisted US$3.71 US$5.07 US$5.07 US$6.63 US$8.78 US$.15 and up (Havana) US$2.25 to call eastern Cuba

Cubacel provides cellular telephone service throughout the city of Havana, between Havana and tourism resort area of Varadero, within the tourism resort area of Varadero, and within the city of Santiago de Cuba. Roaming is not automatic and for users established in Havana who then travel to the city of Santiago de Cuba, the Cubacel office in Santiago de Cuba must provide an additional telephone number. The initial one-time start-up fee is US$120.00 and a one-time deposit can range up to US$400.00. The monthly service fee is US$40.00 for one telephone, with discounts for multiple users (US$30.00 for ten or more). Per minute or fraction thereof rates, charged for incoming telephone calls and outgoing telephone calls, are weekdays US$.40 from 8:00 a.m. to 7:59 p.m. and US$.30 from 8:00 p.m. to 7:59 a.m.; and weekends and holidays US$.30. Cubacel charges its customers the Etecsa Intertell long distance telephone rates plus the corresponding local per minute rate. Users wishing temporary roaming ability will pay up to US$100.00 as a deposit, US$3.00 per activation day, US$.90 per minute usage, and, if required, US$7.00 per day for equipment rental. Various brands of cellular telephones are available for purchase, ranging in price from US$285.00 to US$2,500.00, including the Ericsson AH-10 at US$400.00.

INTERNET- The Republic of Cuba commenced generally-available commercial Internet access at the end of 1996. The Ministry of Science, Technology and the Environment of the Republic of Cuba and the Ministry of Communications of the Republic of Cuba regulate Internet access. Internet access is available to non-Republic of Cuba citizens for US$265.00 per month, and local per minute telephone charges. The one-time initial telephone line installation charge begins at US$300.00. An increasing number of Republic of Cuba government-controlled companies have begun to both access the Internet (more than 2,000) and to establish "home pages" on the Internet.

INTERNATIONAL DELIVERY SERVICE- DHL provides two-day to three-day service for documents from the Republic of Cuba to Mexico, to the United States, and to Canada for US$39.00 for up to .5 kilograms, up to US$231.00 for 20 kilograms and US$25.00 per .5 kilograms above 20 kilograms. For packages from the Republic of Cuba, to the United States, and to Canada, rates begin at US$45.00 for up to .5 kilograms, up to US$242.00 for 20 kilograms and US$25.00 per .5 kilograms above 20 kilograms. United States laws and regulations permit documents to be sent from the United States to the Republic of Cuba and from the Republic of Cuba to the United States.

GROUND TRANSPORTATION- With the continuing difficulties with public transportation services due to fuel shortages, vehicle shortages, and spare parts shortages, most non-Republic of Cuba citizens visiting the Republic of Cuba use either use taxis (30 minute trip between downtown Havana and the Jose Marti International Airport is US$17.00) or rent vehicles (US$40.00 to US$400.00 per day) or arrange for a Republic of Cuba citizen with a vehicle to provide transportation (US$25.00 to US$50.00 per day). Fuel costs US$.90 per liter for special, US$.75 per liter for regular, and US$.45 per liter for diesel. Tune-ups, spare parts, and repairs provided by Republic of Cuba government-controlled service stations and joint ventures are generally 10% to 30% more expansive than similar services obtained within the United States. REX (an authorized Volvo agent), a venture with a Republic of Cuba government-controlled Cubalse, rents sedans and limousines. A collision damage waiver (CDW) for the 940 GL is US$20.00 per day. The CDW is included with the 940 GL with a driver and 960 Limousine with a driver. Rex rates:

Vehicle Type Volvo 940 GL Volvo 940 GL with a driver Volvo 960 Limousine with a driver

3 Hours US$150.00 US$150.00 US$240.00

Daily US$750.00 US$200.00 US$400.00

Week US$3,000.00 US$1,000.00 US$1,800.00

Month US$4,000.00 US$6,500.00

VEHICLE PURCHASE- Fiat, Peugeot, Citroen, Nissan, Toyota, Mercedes Benz, General Motors, Mitsubishi, Ford, Subaru, International Harvester, Chrysler, and Diahatsu among other vehicle brands are available within the Republic of Cuba. Retail prices include a 100% import tax. The rate is calculated in part by the length of time during which the vehicle has been in the Republic of Cuba. Upon entry into the country, the tax is 100%, after six months decreasing to approximately 70%, then gradually to 40%. Embassies, joint ventures, media organizations, non-Republic of Cuba companies with offices in the Republic of Cuba, and Republic of Cuba government-controlled companies may import and purchase vehicles with a reduced tax or no tax. The general rule is that the price of the vehicle and the amount of tax paid is negotiable. Vehicle leasing is not yet permitted, although sources report that this may change soon. Republic of Cuba citizens are not permitted to purchase any vehicle without authorization from their place of employment. With increasing vehicle-related crimes, alarm systems are becoming more necessary.

Brand Fiat Panda 100 Tempra SX 1600 Punto SX Turbo Uno 1700 Cinquecento Coupe Brava Lancia Ducato Panorama (minibus) Ducato 14Q Peugeot 205 Junior 205 GDL 306 SLD 306 SL 405 SR (automatic) 406 SVDT 605 SV (used-16, 875 miles) 806 SRDT (van) 806 SR (van) 306 XND (used-9,375 miles) Toyota Bus Tercel Corona Camry 4 Runner Mitsubishi Montero GL Lancer GL (automatic) Lancer EL Subaru Impreza sedan 1.8 GL Vivio (miniauto)

Fuel Type gas gas gas diesel gas gas gas gas diesel diesel gas gas diesel gas gas diesel gas diesel gas diesel diesel gas gas gas diesel diesel gas gas gas gas

Retail Cost US$12,115.00 US$22,915.00 US$23,220.00 US$15,600.00 US$10,120.00 US$40,000.00 US$27,000.00 US$48,000.00 US$30,000.00 US$23,100.00 US$16,355.00 US$18,530.00 US$22,925.00 US$19,015.00 US$20,120.00 US$44,100.00 US$32,000.00 US$45,480.00 US$32,000.00 US$19,000.00 US$23,000.00 US$24,000.00 US$44,000.00 US$53,400.00 US$40,125.00 US$23,625.00 US$23,520.00 US$21,840.00 US$21.845.00 US$11,800.00

HOUSEKEEPING, LAUNDRY AND DRY CLEANING- The current rate for a Republic of Cuba-national to provide general housekeeping duties is US$5.00 per day. The city of Havana's first non-hotel-operated laundromat and dry cleaner will provide washing and drying for US$3.00 per load. Dry-cleaning rates, in U.S. Dollars, are as follows:

Item Dress shirt Slacks Suit Coat Man's Coat Woman's Suit

72 hours US$1.75 US$2.00 US$3.50 US$5.00 US$3.60

48 hours US$2.45 US$3.50 US$4.40 US$6.60 US$5.40

24 hours US$3.60 US$4.50 US$6.00 US$7.65 US$6.00

8 hours US$4.60 US$5.70 US$9.00 US$11.85 US$9.25

Ironing US$1.40 US$1.70 US$2.00 US$3.00 US$2.35

ENTERTAINMENT- The number of night clubs, bars, and dance clubs in the city of Havana, tourism resort area of Varadero, and in other cities throughout the Republic of Cuba are rapidly increasing. Cover charges for night clubs generally range from US$5.00 to US$20.00. The famous Tropicana charges US$30.00 to US$50.00 depending upon location of seating, dinner, drinks, etc. At a typical night club, a can of soda or beer can cost between US$1.00 and US$3.00. An alcoholic beverage can cost between US$3.00 and US$5.00. There are also more plays, ballets, modern and classic dance, concerts, and other cultural-related events taking place throughout the country. For US$50.00 per month, non-Republic of Cuba citizens can obtain a 12-channel cable television service which includes CNN, HBO, Cinemax, and ESPN among other programing. Republic of Cuba citizens unofficially obtain the channels by using homemade satellite dishes. USA TODAY, The New York Times (including the Sunday issue), The Wall Street Journal, Cosmopolitan magazine, People magazine, and many other publications are available on newsstands and by home delivery.

DINING- A few years ago, hot dogs, hamburgers, pizza, and Chinese food were virtually nonexistent in the Republic of Cuba. Today, all are readily available, for U.S. Dollars, and take out and home deliveries are routine. With the continuing increase in visitors to the Republic of Cuba and expatriates residing in the Republic of Cuba, the government of the Republic of Cuba has entered the restaurant business through its controlled companies and has permitted the limited development of a small private sector wherein individual families can operate restaurants, although with significant restrictions (the restaurants must be located in the family dwelling, only family members may be hired, seating capacity is restricted, and shell fish and beef may not be served, although many of the "paladars" as the restaurants are known to make these products available to selected customers). There are now more than 1,000 home-based restaurants within the Republic of Cuba. There are now almost 200 Republic of Cuba government-controlled and joint venture (those located in hotels which are themselves joint ventures) restaurants in the city of Havana catering to tourists, the resident expatriate community, and Republic of Cuba nationals who have earned U.S. Dollars or receive U.S. Dollars from relatives living abroad (estimated at US$300 million to US$500 million annually). Thus far, Republic of Cuba governnment-controlled companies have not shown an interest in establishing joint ventures to operate restaurants, preferring to license the rights or obtain a franchise. Republic of Cuba government-controlled companies such as Cemex, Cubalse, and Cubanacan (the tourism company which operates the Canada-based Pizza Nova restaurant at the Marina Hemingway and the famous El Aljibe chicken restaurant (through its Palmares restaurant subsidiary among others), operate two fast food chains, Burgui (modeled after Burger King) and El Rapido (operated by Cemex) which sells hot dogs, fried chicken, hamburgers, french fries, ice cream, and sandwiches. Republic of Cuba government-controlled companies also operate hundreds of kiosks and street carts serving sandwiches, ice cream, and small pizzas. Home-based pizza parlors now number in the thousands throughout the country. A family restaurant catering to Republic of Cuba nationals will price a typical Cuban meal of pork, rice, beans, vegetable, salad, desert, and beverage at less than 70 Pesos, or approximately US$4.00. A Republic of Cuba government-controlled restaurant catering to non-Republic of Cuba citizens will price a typical Cuban meal from US$4.00 to US$8.00 and a hotel restaurant will price a typical Cuban meal at US$10.00 or more. The cost of a ham and cheese sandwich, for example, can range in price from US$.20 to US$5.00. The cost of a glass of rum can range from US$.75 to US$10.00 (depending upon the age- 1, 3, 5, 7, 15, 25). Republic of Cuba-produced beer costs from US$.80 to US$3.00 per can, while the cost of a cane of soda or juice ranges from US$.75 to US$3.00.

GROCERY AND PRODUCT SHOPPING- Five years ago, non-Republic of Cuba citizens were permitted to purchase domestically-produced food products which were generally unavailable to Republic of Cuba citizens, imported food products, imported sundries, imported cleaning supplies, imported clothing, etc., from a single modern supermarket in the city of Havana managed by Republic of Cuba government-controlled Cubalse. Today, while that supermarket remains the largest and another is under construction, some substantive changes have taken place. The individuals who shop at the supermarket now include many Republic of Cuba citizens- many times the majority of the shoppers. The store now has the same computerized scanning cash registers as found in any United States supermarket. The variety of products has increased, although such products a peanut butter may appear one day and not reappear for six months. Prices are expensive, with average markups of 240% over cost, although the concept of discounting and sales have begun to appear as Republic of Cuba government-controlled companies become more competitive with each other. 1996 revenues of all Republic of Cuba government-controlled retail operations was estimated at US$750 million. Today in the city of Havana there are dozens of smaller "7-Eleven" type 24-hour convenience stores, more than 50 Republic of Cuba government-managed markets where private vendors sell their produce at prices generally established by supply and demand, and hundreds of Republic of Cuba government-operated fish, meat, produce markets and stands, all selling for products for U.S. Dollars. Similar U.S. Dollar-only food product, sundry, cleaning supply, clothing, etc., retail stores are also located throughout the country. Peso markets are also available to non-Republic of Cuba citizens and are reasonable in price, although quality and availability of certain products remains problematic. The following is a list of some items and their cost at the U.S. Dollar supermarket in Havana and the U.S. Dollar-equivalent cost at local Peso produce markets or other non-Republic of Cuba government-controlled markets or from unofficial vendors. NA- not legally available, lb- per pound, msb- medium-size box:

Item Milk- liter Toilet paper- roll Roast Beef- lb Chicken- lb Ground Beef- lb Fish- lb Pork- lb Salami- lb Ham- lb Eggs- dozen Apples- lb Plums- lb Cheese- lb Rice- lb Juice- liter Pasta- lb Cooking Oil- liter Olive Oil- liter Vinegar- liter Household Cleaner- liter Spray Cleaner- liter Laundry Detergent- msb

U.S. Dollar Price US$1.25 US$.30 US$6.00 US$1.60 US$1.80 US$2.50 to US$8.00 US$2.30 US$9.00 US$5.00 US$2.72 US$2.30 US$3.50 US$3.50 and up US$1.50 US$1.20 to US$2.40 US$1.00 to US$1.20 US$2.20 US$10.00 US$2.25 US$2.20 US$5.20 US$2.00 to US$3.00

Produce Market Or Other Source US$.80 NA NA US$1.00 NA US$.50 to US$2.00 US$1.10 NA US$2.50 US$1.20 NA NA NA US$.20 to US$.25 NA NA NA NA NA NA NA NA

INTERNATIONAL TRAVEL BY A CUBAN NATIONAL- Republic of Cuba citizens who wish to travel outside of the Republic of Cuba must be prepared to pay substantial fees. According to Bufete International, a Republic of Cuba government-controlled law firm and consulting company, each traveler must obtain a standard form letter of invitation from the non-Republic of Cuba citizen or company. This standard form letter is obtained from the Embassy of the Republic of Cuba in the host's country. The government of the Republic of Cuba charges US$150.00 to process the letter. Each traveler must obtain an exit visa for which the government of the Republic of Cuba charges US$150.00. Each traveler must have a Republic of Cuba government-issued passport which can cost up to US$100.00, depending upon when required. If the Republic of Cuba national spends more than one month outside of the country, they are required to pay US$40.00 per month to the Embassy of the Republic of Cuba located in the country in which they are visiting.

MARRYING A CUBAN NATIONAL- A non-Republic of Cuba citizen who wishes to marry a Republic of Cuba national must be prepared to pay substantial fees and sometimes wait a substantial amount of time. According to Bufete International, a Republic of Cuba government-controlled law firm and consulting company, the following documents are required: 1) US$625.00 paid to Bufete International for marriage ceremony and issuance of two marriage certificates 2) US$140.00 paid to Bufete International for processing of foreign residency for Republic of Cuba national 3) US$90.00 paid to the Embassy of the Republic of Cuba in the country of the non-Republic of Cuba national for endorsement of the non-Republic of Cuba national's birth certificate and 4) US$80.00 paid to the Embassy of the Republic of Cuba in the country of the non-Republic of Cuba national for endorsement of a certificate for the non-Republic of Cuba national certifying single status.