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MEMBERS VISIT THE REPUBLIC OF CUBA- Two member companies of the U.S.-Cuba Trade and Economic Council had their executives recently visit the Republic of Cuba for the purpose of identifying sales opportunities in the medical equipment, medical instrument, medical supply, and pharmaceutical sectors. Such licensed visits have been authorized since October 1996 by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., and the Bureau of Export Administration (BXA) of the United States Department of Commerce in Washington, D.C. The BXA issues licenses for the temporary export of product samples. The two member companies were the recipients of the second and third licenses to be issued by the OFAC. The first license, also issued to a member of the U.S.-Cuba Trade and Economic Council, resulted in an order being placed for pharmaceutical products. An increasing number of license applications either are pending or will soon be submitted.
PROBLEMS WITH BAHAMAS CUSTOMS DEPARTMENT- Individuals subject to United States law who are returning to the United States from the Republic of Cuba and transiting through Nassau International Airport are reporting increased delays by and difficulties with officials of the Bahamas Customs Department. Because of a rapidly increasing number of individuals not subject to United States law who traveling to the Republic of Cuba and then returning to the Bahamas with Republic of Cuba-produced cigars and rum, or, in some cases, paying tourists to act as "mules" to transport the cigars and rum, the Bahamas Customs Department has been separating passengers arriving on Cubana Airlines aircraft and subjecting all baggage to thorough searches. In some cases, cigars and rum are being confiscated or duty being imposed when such confiscations and duties may not necessarily be in keeping with the regulations. International passengers "in transit" from one country to another are often exempt from regulations to which "non transit" visitors, i.e., individuals remaining in a country must adhere since "in transit" passengers are not technically entering the country. In Nassau, however, there exists neither an "in transit" lounge nor a secured pathway between the two terminals. Therefore, since "in transit" passengers can leave the terminal building, the Bahamas Customs Department has been diligent with respect to the importation of cigars and rum, both of which have high duties and taxes if sold at retail in the Bahamas. Individuals subject to United States law who have traveled to the Republic of Cuba under either a general license or specific license administered by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., are permitted to import into the United States, for their personal use, up to US$100.00 worth of Republic of Cuba-produced products, including cigars and rum. The Bahamas Customs Department specifically authorizes visitors (adults only) to import to the Bahamas, for their personal use, up to 50 cigars; more than fifty cigars can result in duty being collected in the amount of 200% of the amount paid for the cigars. When returning from the Republic of Cuba to the United States through Nassau International Airport, individuals subject to United States law should 1) present the connecting airline ticket showing the same-day departure for the United States 2) present the original license, and have available a photocopy of the document, to the Bahamas Customs official 3) present a copy of the travel regulations issued by the OFAC 4) present receipts for any cigars purchased in the Republic of Cuba. If a problem develops, ask if a customs official will provide an escort (this service is provided) to the connecting airline check-in counter. Individuals subject to United States law should remember that if they are traveling directly to the Republic of Cuba through the Bahamas and returning directly from the Republic of Cuba through the Bahamas, make certain to inform the Bahamian immigration official of "in transit" status, this will save the US$15.00 departure tax in both directions. Individuals subject to United States law returning to the United States through Nassau should remember that the United States Immigration and Naturalization Service and the United States Customs Service have preclearance centers at the airport, once you are cleared, you are subject to United States law. Individuals with OFAC licenses should be prepared to show the document and any products purchased in the Republic of Cuba. All informational materials are exempt from regulation, including artwork.
CIGAR CLUB OPENS IN NOVEMBER- The Republic of Cuba's first post-1959 revolution cigar club is scheduled to open on 13 November 1997 to coincide with the Havana Invitational Cigar Lover's Golf Tournament. Club de Tobacco Cuba, which will be located within the exclusive Le Select Restaurant, will provide members with business, social, and hospitality services. Le Select Restaurant (Calle 28 e/ 5ta y 7ma. Ave, in the exclusive Miramar District of the city of Havana), the only restaurant in the Republic of Cuba within which gentlemen are requested to wear a jacket, offers indoor formal dining, a chef's table, outdoor, pool side dining, Bar-B-Q, sauna, and a special cigar concierge (with individual humidors for members).
PRESIDENT CASTRO OPENS SCHOOL YEAR- H.E. Dr. Fidel Castro Ruz, President of the Republic of Cuba, opened the 1997-1998 school year (September through June) with praise for the nation's educators. President Castro, who appeared in good health and spoke for close to an hour, said that despite economic hardships the government guaranteed schools, teachers, and basic materials for all primary and secondary students. The Ministry of Education of the Republic of Cuba that reported 2.3 million students were registered for the 1997-1998 school year, of which 125,000 were attending university-level institutions, of which 18,000 were freshman. Approximately 220,000 professionals were reportedly enrolled in post graduate level courses, and more than 25,000 students in medical schools. More than 3,000 foreign students were reported attending various university-level institutions. Foreign investors and others who do business with the Republic of Cuba reported that the educational level of the population is one of the island's greatest attractions. The island has 12,500 educational facilities, including 46 university-level institutions. The Republic of Cuba reportedly has the highest teacher per capita and teacher per student ratio in the world.
RUSSIAN TRADE CREDITS APPROVED- Various unnamed Russian Federation financial institutions approved continued trade credits for the Republic of Cuba to purchase inputs for the sugar industry, rail transport system, and other sectors with large amounts of Russian technology. The credits, first agreed upon in 1993, are continued on an annual basis contingent on the Republic of Cuba's prompt repayment. The Russian Federation was the Republic of Cuba's most important trading partner in 1996. The Russian Federation reported trade exceeded US$1 billion, while the Republic of Cuba reported trade was more than US$500 million. Republic of Cuba economists said the discrepancy was due to Russia's inclusion of triangular oil and sugar trade as direct trade.
DOMINICAN MINISTERIAL DELEGATION VISITS- A Ministerial delegation from the Dominican Republic visited the Republic of Cuba 4 September 1997 to 7 September 1997. The delegation included: the Technical and Administrative Secretaries to the President; the Ministers of Education, Industry and Trade, and Public Works; and the President and two Vice Presidents of the Olympic Committee. The delegation was in the Republic of Cuba to seek support for and technical assistance for their country's desire to host the Pan-American Games in the year 2003. Delegation members met with H.E. Dr. Carlos Lage Davila, Vice President of the Council of State of the Republic of Cuba, as well as, with the Ministers of Foreign Affairs, Foreign Trade, Foreign Investment and Economic Cooperation, and Economy and Planning. The Dominican Republic established councilor relations with the Republic of Cuba in June 1997.
TOURISM UPDATE- The Ministry of Tourism of the Republic of Cuba reported 686,983 tourists visited the island from January 1997 through July 1997, an increase of 18.1% from the same period in 1996. The Ministry of Tourism reported that among traditional tourism providers the number of French tourists increased 62.5%, Italian 9.2%, and Spanish 4.3%. The Ministry of Tourism said that the greatest percentage increases came from nontraditional providers, such as Belgium - up 80%, United Kingdom - up 70.4%, Brazil - up 63.6%, and Mexico - up 47.4%.
GRAN CARIBE READIES NEW LUXURY HOTELS- Republic of Cuba government-operated Gran Caribe announced that two new hotels would be ready for the start of the high season (December through March). The hotels are located at the resort areas of Varadero and Cayo Coco, 140 and 450 kilometers, respectively, from the city of Havana. Mr. Alexis Escobar Burgos, President of Gran Caribe, said that construction of an additional five hotels would begin in 1998 as part of a plan to have 12,000 hotel rooms available by the year 2000, twice those currently operated by the corporation. Mr. Escobar said that 12 of Gran Caribe's 33 hotels were managed and marketed by six foreign companies and Grand Caribe was establishing joint ventures, mainly with Canadian companies, to reach its year 2000 goal. The corporation recently established a joint venture with Germany-based Oger Tours to construct two, 250-room hotels, on Cayo Coco. Gran Caribe also operates the Tropicana night club, and the famous Floridita and Bodeguita del Medio restaurants.
FOREIGN TRADE MINISTRY LAUNCHES SHIPPING COMPANY- Republic of Cuba government-operated EXPEDIMAR S.A., a transportation company affiliated with the Ministry of Foreign Trade of the Republic of Cuba, announced that it would launch a shipping line between the Republic of Cuba ports of Santiago de Cuba and Mariel, and Guadalupe, Trinidad-Tobago, Puerta Cabello, and Columbia. The company said the 800-ton dead weight Gerona would begin plying the forty-day route by the end of the year. Company sources said the line aimed at overcoming the major obstacle to area trade, which is transportation. Republic of Cuba trade with the Caribbean Islands was US$446 million in 1996, in large part due to oil imports.
AUDITS FIND MILLIONS- The National Tax Office (NTO) of the Republic of Cuba reported it conducted seventy-five audits, from January 1997 through June 1997, of companies authorized to operate in U.S. Dollars in the Republic of Cuba. The audits of joint ventures and 100% Republic of Cuba government-owned companies uncovered US$4.4 million in taxes due the government.
THE ROLE OF AUDITORS- Each of the National Tax Office (NTO) of the Republic of Cuba's 200 auditors uncovered an average of 337,000 Pesos and US$2,200.00 in taxes due from January 1997 through June 1997. The auditor's average salary is 400 Pesos per month, twice the average monthly wage, but less than that of tourism workers' who receive tips, the self-employed, and 1.3 million workers receiving various forms of various forms of U.S. Dollar-based and U.S. Dollar-related bonuses. Sources close to the NTO said that the low salaries made retaining qualified accountants difficult, and created conditions ripe for corruption. The sources said a number of measures had been taken to control auditors, including the use of 2 to 3 auditors per audit, checks on audits, and the occasional auditing of the same companies by other government agencies. The sources said some 20 accountants had been fired over the last few years.
BRAZILIAN INDUSTRIALISTS EXPLORE INVESTMENT AND TRADE- The Honorable Fernando Bezerra, a member of the Brazilian Senate, and President of the Brazilian Industries Confederation, led a nine-member business delegation on a seven-day visit to the Republic of Cuba. Senator Bezerra said that, "while everyone knows something about the Cuban Revolution, few know anything about the economy." The delegation met with various Ministers and other officials, including the Ministers of Tourism, Foreign Investment and Economic Cooperation, Economy and Planning, and Foreign Trade. The delegation toured Free Trade Zones, tourism, and other facilities. The Brazilian delegation reported 1996 trade between the two countries was US$71 million (exports US$42 million and imports US$29 million) compared to US$78 million (exports US$42 million and imports US$36 million) in 1995, The Brazilian cigarette manufacturer Souza Cruz, a subsidiary of British-American Tobacco Company (BAT), and the Republic of Cuba government-operated National Union of Tobacco Companies, established Brascuba in 1995 to grow tobacco and produce cigarettes for the domestic market and export.
TOBACCO SHORTAGE THREATENS CIGAR EXPORTS- The Ministry of Agriculture of the Republic of Cuba reported that the 1997 tobacco harvest was approximately 33,000 tons, similar to the previous harvest, and less than the 45,000 tons planned. Industry sources said it placed in doubt plans to export 150 million famous "Habano" cigars in 1998. Tobacco and cigars were Cuba's sixth largest export in 1996, earning an estimated US$110 million. The Union of Tobacco Companies of the Republic of Cuba reported more than 100,000 acres were sown for the 1997 harvest, compared to approximately 80,000 acres in 1996. The Ministry of Agriculture reported production stagnated due to blue mold and poor weather. Tobacco industry sources said other factors played important roles, such as: the lack of adequate incentives; an average yield of 12 tons per 33.37 acres, 50% of the Caribbean area's average; and the massive diversion of resources and tobacco to the black market (officially estimated at 30%). Tobacco Industry sources said the poor harvest would not impact 1997 plans to export 100 million cigars, compared to 71 million cigars in 1996, and earn US$150 million. The sources explained a large percentage of the tobacco used for cigars in 1997 came from the 1996 harvest. The sources said, however, that this year's harvest put in doubt plans to export 150 million cigars in 1998. The 1994 tobacco harvest weighed in at 16,000 tons, compared to an average 40,000 tons in the 1980's. Cigar exports decreased from as high as 130 million units to less than 50 million units. The Republic of Cuba announced in 1995 that it had obtained US$30 million in annual financing from non-Republic of Cuba cigar distributors to increase tobacco production to 50,000 tons, and cigar exports to 200 million units, by the year 2000. The 1995 tobacco harvest was 26,000 tons, cigar exports were 60 million units, and the industry earned approximately US$101 million. The 1996 harvest produced 33,000 tons, cigar exports were 71 million units, and the industry earned approximately US$110 million.
GERMANY APPROVES INVESTMENT AGREEMENT- The German Government approved an Investment Protection and Promotion agreement signed with the Republic of Cuba on 30 April 1996. A number of German companies, for example Mercedes Benz, Bayer, and LTU, have strong business relationships within the Republic of Cuba. Other German firms have expressed interest in major development projects such as nuclear power, rail modernization, tourism, and road building. The Republic of Cuba has signed investment protection and promotion agreements with twenty-three countries.
TAXI SERVICE UPDATE- Mr. Armando Rodriguez Hurtado said that more city of Havana residents were dialing 81-3311 for his Panataxi yellow cabs, ninety of which were operating at any given time. Panataxi, operated by the government of the city of Havana, reported revenues of US$1 million in 1995, US$1.3 million in 1996, and US$1.8 million through August 1997. Mr. Rodriguez attributed his company's success to officiant door to door service, reasonable rates, and the replacement of all U.S.S.R.-built Ladas with yellow French-built Citroens. Mr. Rodriguez said calls averaged between 900-1,000 per day, compared to 300 calls per day a few years ago. He said 60% of his customers were Republic of Cuba nationals. Panataxi charges US$.45 per kilometer, compared to tourism taxi rates which range up to US$.75 per kilometer.
PERU APPROVES ENERGY ASSISTANCE- The government of Peru announced it would provide the Republic of Cuba with technical assistance to improve the efficiency of power consumption. A similar program begun in 1995 in Peru resulted in the saving of 316 gigawatts per hour. The announcement was made in Lima after a meeting between H.E. Alberto Pandolfi, President of the Cabinet and Peruvian Minister of Energy and Mines, and Mr. Ricardo Gonzalez Sanchez, Director of Distribution of the National Electric Union of the Republic of Cuba. The government of the Republic of Cuba has emphasized energy conservation to meet increasing energy demand due to a gradual economic recovery. The Republic of Cuba imports 85% of its oil requirements, an average of US$1 million per day of petroleum, to generate electricity.
A NUCLEAR SOLUTION TO SUGAR PLAGUE- Scientists at the National Plant Sanitary Institute of The Republic of Cuba said they would unleash massive numbers of sterilized Diatraea Saccharalis insects, or sugar borers, to thwart the reproduction of the insect that attacks sugar cane, the Island's most important export. The scientists said they had perfected the mass production of the insect and the use of nuclear gamma rays to sterilize them. The project is funded by the International Atomic Energy Organization.
ALCOHOL PRODUCTION TO REACH 900,000 LITERS- Mr. Alberto Francis, Director of By-products Production for the Ministry of Sugar of the Republic of Cuba, said that the country's 12 distilleries would produce 900,000 liters of alcohol this year. Mr. Francis said approximately 75% of the alcohol, or 700,000 liters, was targeted for domestic cooking fuel, and that the remainder for rum and industrial uses. Mr. Francis said that the Ministry of Sugar was diversifying its rum brands from such traditional brands as Havana Club, to new brands such as Conde Cuba, Caribbean Club, Mulata, Slboney, Relicario, Santero, and Varadero. He said that he expected the volume of domestic U.S. Dollar rum sales to double compared to 1996. The price of Republic of Cuba-produced rum varies depending on age and quality. A liter bottle of rum ranges anywhere from US$4.50 to US$12.00 at domestic U.S. Dollar retail stores.
COMPUTER CLUBS CELEBRATE ANNIVERSARY- The Republic of Cuba's Youth Computer Clubs marked their tenth anniversary with a national conference and exhibition. The clubs, operated by the Union of Young Communists, are designed to familiarize young people with computer technology. There are clubs in 142 of the Republic of Cuba's 169 municipalities. The clubs have approximately 1,100 computers. According to the Union of Young Communists, 135,000 young people have taken computer classes at the clubs. The government of the Republic of Cuba reported a density of .57 computers per capita, compared to the Third World norm of .7 per capita.
ANGOLAN AND UGANDAN FOREIGN MINISTERS VISIT- H.E. Venancio Da Silva Moura, Minister of Foreign Relations of Angola, arrived in the Republic of Cuba 4 September 1997 on a six-day official visit. Angolan and Republic of Cuba sources said Minister Da Silva Moura would meet with various officials to discuss bilateral and multilateral affairs, as well as upcoming economic talks scheduled for later this month in Luanda. H.E. Erlya Kategaya, Minister of Foreign Relations of Uganda, arrived 6 September 1997 and departs 15 September 1997.
SPORTING EVENT SCHEDULE- 10 September 1997 to 20 September 1997, Copa Cubadeportes Softball Tournament; 16 November 1997, Havana International Marathon.
Tuesday, 30 September 1997, 12:00 p.m., Location To Be Announced
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