|
|
Country and Currency Austria- Shilling Denmark- Krone Norway- Krone Sweden- Krone Australia- Dollar Canada- Dollar United States- Dollar Portugal- Escudo Holland- Gilder Belgium- Franc France- Franc Switzerland- Franc United Kingdom- Pound Italy- Lira Germany- Mark Finland- Markka Spain- Peseta Mexico- Peso Japan- Yen |
Exchange 12.1920 6.5908 7.2055 7.8414 1.3330 1.4006 1.0000 175.2600 1.9465 35.7022 5.8461 1.4387 1.6118 1715.0080 1.7296 5.2187 146.5377 8.4491 118.0592 |
Re-Exchange 11.7883 6.3812 6.9726 7.5870 1.2901 1.3560 1.0000 169.4448 1.8847 34.5581 5.6590 1.3924 1.6652 1659.0240 1.6747 5.0543 141.8731 8.1726 114.2916 |
GOVERNMENT ESTABLISHES CENTRAL BANK- The Council of State of the Republic of Cuba approved Decree Law 172 on 28 May 1997 which creates a Central Bank of the Republic of Cuba and relegates the National Bank of the Republic of Cuba to commercial activity. H.E. Francisco Soberon, Minister-President of the National Bank of the Republic of Cuba, was named President of the Central Bank of the Republic of Cuba, and he maintains the rank of Minister. Granma, the official daily newspaper of the government of the Republic of Cuba, reported that "it has become necessary to divide the central bank functions and commercial activity carried out by the National Bank since 1960, and create a Central Bank to effectively contribute to the economic and financial transformations underway in the country." The Central Bank will be a legally autonomous entity whose purpose is to "protect the purchasing power of the national currency, support the balanced development of the economy, and insure the normal functioning of internal and external payment systems." The Central Bank will control the printing of currency, regulate the money supply and credit, establish interest rates, supervise all financial institutions, establish internal exchange rates, position the eventual convertibility of the Peso, represent the government of the Republic of Cuba before all international financial institutions, and negotiate foreign debt. The National Bank of the Republic of Cuba will become a commercial bank and maintain the register, control, service, and attention to the country's established US$10.4 billion foreign debt contracted up to the date of the creation of the Central Bank, in order to avoid legal and administrative difficulties associated with officially transferring the debt to the Central Bank.
CENTRAL BANK PRESIDENT COMPLETES EUROPEAN TOUR- H.E. Francisco Soberon, Minister-President of the Central Bank of the Republic of Cuba, returned to the island from a tour of Holland, Belgium, France, Switzerland, and the United Kingdom where he met with banking and government officials. Minister Soberon also attended the 67th annual meeting of the International Payments Bank, during which he had meetings with the Presidents of the Central Banks of Canada, France, Venezuela, and the People's Republic of China.
GOVERNMENT ISSUES NEW BANKING REGULATIONS- The Council of State of the Republic of Cuba approved Decree Law 173 on 28 May 1997, which further codified existing banking regulations governing the increasing number of Republic of Cuba government-controlled banks and financial companies, and reiterated the restrictions for non-Republic of Cuba government-controlled banks and financial companies to "facilitation of investment and trade." Granma, the official daily newspaper of the government of the Republic of Cuba, reported that all licenses issued to banks and financial institutions by the National Bank of the Republic of Cuba would be transferred to the Central Bank of the Republic of Cuba, which is authorized to issue additional licences and would establish a central register. Foreign banks are permitted to establish representative offices on the island, solely to provide investments and to serve foreign clients. Currently, there are 13 foreign banks with offices on the island. Sources continue to confirm, however, that foreign banks and financial institutions will, slowly, be permitted to expand the range of services which they provide to their clients, and to begin providing services to Republic of Cuba government-controlled companies. One of the Republic of Cuba government-controlled banks, the National People's Saving Bank, as well as some new banks, have begun to offer citizens checking accounts, bank cards, debit cards, automatic teller machine access, time deposits, etc. More than twelve new Republic of Cuba government-controlled banks and financial institutions have been established within on the island during the last two years. Mr. Mario Hernandez, Director of Monetary and Financial Policy of the National Bank of the Republic of Cuba, told a hearing in 1996 at the National Assembly of the Republic of Cuba that the increase in the number of "autonomous" Republic of Cuba government-controlled banks and financial institutions would result in increased competition to attract domestic capital and, thus, greater financial efficiencies.
MONEY LAUNDERING REGULATIONS UPDATE- Regulations to detect money laundering went into effect at all Republic of Cuba government-controlled banks, financial institutions, and companies. The regulations are similar to those required for United States banking and financial institutions. All entities must now report all transactions of US$10,000.00 or more, efforts to convert large amounts of currency, and efforts to establish a series of small accounts. All banks and financial institutions must also assign a manager to oversee efforts to prevent money laundering.
TAX AUDIT UPDATE- The National Tax Office (NTO) of the Republic of Cuba reported that audits through 31 May 1997 uncovered US$1.3 million and 199 million Pesos in back taxes owed. The NTO reported that the audits of 144 Republic of Cuba government-controlled entities uncovered 124,068,000 Pesos in back taxes owed. The NTO reported that thirty-five audits of joint ventures and foreign companies uncovered US$1,324,000 in back taxes owed. The NTO reported that a review of 56,580 individual income tax forms filed uncovered 5,675,000 Pesos in back taxes owed. The NTO reported that the funds owed were due to late payments, poor accounting procedures, or fraud.
GOVERNMENT DECREASES GDP GROWTH ESTIMATE- H.E. Alfonso Casanova, Vice Minister of the Ministry of Economy and Planning of the Republic of Cuba, reported that the Gross Domestic Product (GDP) increased less than expected from January 1997 through May 1997, but was expected to increase during the second half of 1997 and increase a total of 4% for the year, but less than the 5% originally expected. Sources report that the GDP increased 1.5% from January 1997 through May 1997, compared with more than 9% during the same period in 1996. The poor sugar harvest, 24% decrease in terms of trade in 1996, and a continuing increase in the prices of food and oil imports, were the principal reasons for the decline in GDP. The 1996-1997 sugar harvest (November to June) ended with 4.2 million tons to 4.25 million tons produced, 5% less than the 4.445 million tons produced in 1995-1996. During the same period in 1996, sugar production increased 33%, fueling the growth in GDP.
FOURTH REAL ESTATE VENTURE ESTABLISHED- Lares Real Estate S.A., a subsidiary of Republic of Cuba government-controlled Cubalse, and Spain's Miramar Residencial S.A., have established a US$15 million joint venture, Costa Habana, to construct Miramar Gardens, a 175-unit duplex apartment complex in the exclusive Miramar district of the city of Havana. Mr. Felix Perez, Americas Representative of Miramar Residencial, said that each joint venture partner had a 50% share and the life of the joint venture was ten years. He said that construction would begin in 1997 and be completed in 1999, with the apartments, studios, lofts, and penthouses being sold or rented to foreign residents of the Republic of Cuba. Cubalse has three additional joint ventures which have renovated, are in the process of renovating, or constructing residential and office space in the city of Havana. An additional twenty projects are being negotiated.
AIR TRAFFIC UPDATE- The Civil Aeronautics Institute of Cuba (IACC) reported that it expected forty foreign airlines to be flying to the island by the end of 1997, compared to the thirty-two currently serving the country: 15 from Europe, 16 from the Americas, and 1 from Africa. The IACC also reported an increasing frequency of flights and aircraft size. Cubana Airlines, which is Republic of Cuba government-controlled, operates to thirty-six destinations in twenty-six countries in Europe and in the Americas. Aerocaribbean, which is a Republic of Cuba government-controlled charter company, reported a 20% increase in passengers from January 1997 through May 1997. Mr. Assad Kutaite, President of the International Civil Aviation Organization, reported that negotiations between the government of the Republic of Cuba and the government of the United States to permit Cubana Airlines to overfly United States territory are expected to conclude this year, with such overflight permission being granted. United States-based air carriers currently receive overflight permission from the government of the Republic of Cuba.
LACSA AIRLINES ESTABLISHES CANADA SERVICE- In July 1997, San Jose, Costa Rica-based, Lacsa Airlines will begin round-trip San Jose-Havana-Toronto service on Tuesdays, Thursdays, and Saturdays. Currently, Lacsa Airlines operates San Jose-Havana flights on Mondays, Wednesdays, and Fridays.
DAILY TORONTO-HAVANA EXECUTIVE JET SERVICE TO BEGIN THIS FALL- Samaritan Air Service Limited of Toronto, Canada, has announced that beginning this fall the company will operate a 50-seat executive jet aircraft for Monday through Friday nonstop service between Toronto International Airport and Havana's Jose Marti International Airport. The three-and-one-half hour flight, which will have a Business Class section, will depart Toronto at 7:30 a.m. and arrive in Havana at 11:00 a.m., and depart Havana at 3:00 p.m. and arrive in Toronto at 6:30 p.m. The round-trip airfare will be approximately CA$1,430.00 (US$1,029.00). Individuals subject to United States law are permitted to use the flights provided that they are traveling to the Republic of Cuba under the auspices of either a general license (including fully-hosted) or specific license as authorized by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C. For additional information about the flights, contact Mr. William Johnson at Samaritan Air Service Limited at telephone (905) 672-2226, extension 241.
MULTIPLE DESTINATION TOURISM INCREASES- Havanatur, S.A., the Republic of Cuba's largest tour operator and a subsidiary of Republic of Cuba government-controlled Cemex S.A., which is registered in Panama, reported that receptions increased 29% and departures increased 10% from January 1997 through May 1997, compared with the same period in 1996. Havanatur, which expects to service 80,000 travelers in 1997, compared to 60,000 in 1996, reported that the increase was due, in part, to the development of multiple destination tourism packages which the company offers to Mexico, Bahamas, Jamaica, Cayman Islands, Dominican Republic, Costa Rica, Panama, Martinica, Haiti, and St. Maarten.
CITRUS ORCHARD REPORTS INCREASED HARVEST- The Victoria de Jiron citrus orchard produced 400,000 tons of fruit during the 1996-1997 harvest (July to June), 90,000 tons more than in 1995-1996. The orchard, founded thirty years ago, is the country's largest, accounting for more than 40% of fresh fruit, juice, and extract exports. H.E. Alfredo Jordan, Minister of Agriculture of the Republic of Cuba, reported in May 1997 that the 1996-1997 citrus harvest would be approximately 700,000 tons, compared with 600,000 tons produced in 1995-1996, and 536,000 tons produced in 1994-1995. The Republic of Cuba was the world's largest citrus exporter, producing 1,000,000 tons (and exporting 800,000 tons to the former U.S.S.R. and U.S.S.R.-controlled countries) until 1989. The citrus industry has gradually been recovering due to joint ventures established with companies in Israel, Chile, and Greece. Republic of Cuba citrus is exported to countries in Europe, the Middle East, and in the Americas.
BANANA BUNCH SETS WORLD RECORD- The Republic of Cuba government-controlled trade union weekly newspaper, Trabajadores, reported that Mr. William Napolesel, a farmer in the Guantanamo Province, 900 kilometers east of the city of Havana, harvested the world's largest banana bunch- the banana bunch measured 1.60 meters and weighed 105 kilos. Mr. Napolesel reported that he has other banana bunches maturing that should establish new records as well.
STEEL PRODUCTION UPDATE- January 1997 through May 1997 steel production increased 36% to 137,000 tons, compared with the similar period in 1996. The industry is expected to produce 330,000 tons in 1997, compared with 230,000 tons in 1996, and approximately 400,000 tons in 1989. H.E. Ignacio Gonzalez, Minister of the Ministry of Steel, Mechanical, and Electronics Industry (known as SIME), reported that 1996 sales revenues exceeded 600 million Pesos, a 33% increase from 1995. Sales revenues in 1990 were 800 million Pesos. He reported that exports increased 10%, to US$41 million, and productivity increased 37%. 1997 sales revenues are expected to be 750 million Pesos with exports increasing 50% and profits increasing 38%.
MINISTER OF FOREIGN TRADE VISITS VIETNAM- H.E. Ricardo Cabrisas, Minister of Foreign Trade of the Republic of Cuba, and H.E. Nguyen Cong Tan, Minister of Agriculture and Rural Development of Vietnam, held two days of discussions in Hanoi during which both governments renewed a five-year trade agreement signed one year ago in Havana. The agreement required the Republic of Cuba to purchase 100,000 tons of rice in 1996, and one-third of rice imports thereafter, from Vietnam. The agreement included an increase in Republic of Cuba raw material, medical equipment, and pharmaceutical sales to Vietnam. Minister Cabrisas attended the inauguration of an US$8.5 million live stock and meat processing joint venture, reviewed the results of a construction joint venture established in 1995, and reviewed plans for the Republic of Cuba government-controlled Tecnoazucar to design and provide technical assistance to construct a sugar mill in Vietnam. Minister Cabrisas also signed agreements increasing scientific and technical cooperation between the two countries. Bilateral trade was estimated at less than US$50 million in 1996 and US$35 million in 1995.
In the "Free Trade Zone Update" item contained in the 12 May 1997 to 18 May 1997 issue of the ECONOMIC EYE ON CUBA©, H.E. Octavio Castilla, Director of the National Office of Free Zones and Industrial Parks of the Republic of Cuba which operates under the auspices of the Ministry for Foreign Investment and Economic Cooperation of the Republic of Cuba, has written to the U.S.-Cuba Trade and Economic Council to identify an error. The item incorrectly stated that "Companies can sell 25% of the product duty-free within the Republic of Cuba market." Mr. Castilla has provided the text of Article 26.1 of Decree Law 165 on Free Trade Zones and Industrial Parks:
1. The Free Zone operator carrying out activities in building, manufacturing, assembly, processing of finished or semi-finished goods, trade and agriculture, can assign up to twenty-five percent (25%) of the goods it produces to the national market.
2. In the event that the operator requests to introduce more than twenty-five percent (25%) of its goods in the national market, the matter shall be decided by the Ministry for Foreign Investment and Economic Cooperation, and the Ministry of Foreign Trade.
3. Imports from Free Zones to the national customs territory are subject to the same regulations and the payment of the same tariffs as those applied to exports coming from other countries, excluding from this payment the percentage of the incorporated national value added.
4. No tariffs shall be paid when goods that have undergone a transformation or improvement (value added in costs) that contributes at least fifty percent (50%) of their final value, are introduced into the national market.
The time that was taken to prepare the one-page letter and attachments that were sent to the U.S.-Cuba Trade and Economic Council by H.E. Octavio Castilla, Director of the National Office of Free Zones and Industrial Parks is, perhaps, the greatest compliment that a publication such as the ECONOMIC EYE ON CUBA© can receive from a reader. Each Monday, the publication is sent as a courtesy by facsimile to senior-level officials of the government of the Republic of Cuba at the Council of State, Council of Ministers, individual ministries, National Assembly, and Communist Party. Reader response, especially from individuals within the Republic of Cuba, is both appreciated and encouraged.
Home
About the U.S.-Cuba Trade and Economic Council
Letters of Cooperation
Realities of MarketCuba©
1998 Commercial Highlights
1999 Commercial Highlights
Who Can Visit Cuba & Conducting Transactions With Cuba
Cuba Internet and E-mail Contacts
Non-United States Companies and Cuba
Foreign Investment and Cuba
United States-based Attorneys
Trademark and Patent Registration
Certified Claims
Special Bulletins
Economic Eye on Cuba© Weekly Newsletter
Congressional Testimony
Publications
Events and Speaking Schedule
Mailing List Request