EXCHANGE RATES UNCHANGED- Republic of Cuba government-operated Cajas de Cambio S.A. (CADECA) sold the Convertible Peso, equal to one U.S. Dollar, for 21 Pesos and purchased the U.S. Dollar for 19 Pesos, as it has since 1 April 1998. The U.S. Dollar on the informal market increased from as low as 18 Pesos three weeks ago to 20 Pesos. CADECA had purchased the U.S. Dollar for 20 Pesos and sold the U.S. Dollar for 22 Pesos from 12 March 1998 to 31 March 1998. CEDECA purchased the U.S. Dollar for 21 Pesos and sold the U.S. Dollar for 23 Pesos from 11 February 1998 to 11 March 1998. CADECA purchased and sold the U.S. Dollar for 23 Pesos from August 1997 through 10 February 1998. CADECA began April 1997 purchasing the U.S. Dollar for 26 Pesos and selling the U.S. Dollar for 26 Pesos. In April 1995, the U.S. Dollar could be purchased on the unofficial market for 40 Pesos, as CADECA did not yet exist. The official international exchange rate of one Peso to one 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 the Republic of Cuba.
DAIMLER-BENZ PURCHASE OF CHRYSLER IMPACTS CUBA- The announcement that Stuttgart, Germany-based Daimler-Benz AG will purchase Auburn Hills, Michigan-based Chrysler Corporation may impact commercial opportunities for both companies within the Republic of Cuba. Mercedes Benz engines operate the majority of the Republic of Cuba's 2,000 sugar cane-cutting combines. Mercedes Benz engines operate an increasing number of Republic of Cuba trucks and tractors under the auspice of the Ministry of Sugar of the Republic of Cuba. Mercedes Benz buses, vans, and minibuses are being sold to Republic of Cuba government-operated tourism companies and Republic of Cuba government-operated non-tourism-related companies through an agency agreement with Cimex S.A., the Panama-based, Republic of Cuba government-operated conglomerate. Mercedes Benz buses are being used for public transportation. Mercedes Benz has a joint venture, MCV Servios S.A., with Republic of Cuba government-operated TransCimex S.A. (a subsidiary of Cimex S.A.). MCV Servios S.A. is a nationwide service center network for Mercedes Benz vehicles. An increasing number of Chrysler vehicles are appearing within the Republic of Cuba, including pick-up trucks and vans. Competition from Goteburg, Sweden-based AB Volvo has increased during the last several years.
SMITHKLINE BEECHAM PLC SEEKS TO TEST CUBAN VACCINE- Philadelphia, Pennsylvania-based SmithKline Beecham, a subsidiary of Brentford, United Kingdom-based SmithKline Beecham plc, has asked the Clinton Administration to authorize a laboratory in Belgium owned by a United States-based subsidiary of SmithKline Beecham plc to test, and, perhaps, eventually develop and distribute within the United States and other countries a Meningitis B vaccine developed by the Republic of Cuba government-operated Finlay Institute . The Clinton Administration is expected soon to permit, with restrictions, SmithKline Beecham's request. Reportedly, the government of the Republic of Cuba could eventually receive US$10 million to US$20 million from SmithKline Beecham for a five-year exclusive right to market the vaccine. Compensation could be made in the form of products. Approximately 1,000 United States citizens contract Meningitis B each year, of which 120 die. Writing to the Clinton Administration in support of the request by SmithKline Beecham were from the United States Senate: The Honorable Christopher Dodd (D-Connecticut), The Honorable Richard Lugar (R-Indiana), and The Honorable Arlen Specter (R-Pennsylvania) among others; and from the United States House of Representatives: The Honorable Tom DeLay (R-Texas), The Honorable Sonny Callahan (R-Alabama), The Honorable Joseph McDade (R-Pennsylvania), The Honorable James Greenwood (R-Pennsylvania), The Honorable Nancy Pelosi (D-California), The Honorable Henry Waxman (D-California), and The Honorable Howard Berman (D-California) among others. Other Republic of Cuba-produced healthcare products are being evaluated by United States-based companies.
UNITED STATES DEPARTMENT OF COMMERCE SAYS ANIMAL FEED CAN BE DONATED- The Bureau of Export Administration (BXA) of the United States Department of Commerce has authorized a New York City-based company to donate animal feed to Caritas Cubana, a non-governmental organization (NGO), within the Republic of Cuba. The value of the donation was approximately US$8,000.00. Caritas Cubana assists Republic of Cuba farmers who have title to their land, approximately 5% of the total number of farmers within the Republic of Cuba. The government of the Republic of Cuba requires that farmers who have title to their land sell approximately 60% of their produce to the government at pre-determined prices. The remaining 40% of the produce can be sold directly by the farmer at market prices. There has been an increase in United States-based companies providing animal feed and seeds to NGO's within the Republic of Cuba.
COMMERCE DEPARTMENT DETAILS LICENSED HEALTHCARE PRODUCT EXPORTS (SALES)- The Bureau of Export Administration (BXA) of the United States Department of Commerce in Washington, D.C., has provided a partial listing of the products licensed for export (sales) to the Republic of Cuba since 1992. The BXA reported that it had issued 36 such licenses with a total value of US$1,655,909.00. The products included: liquid chromatography gradient programmer with pump and cable kit; Pentaspan (pentastarch); lab columns; filtration gels and expendables; T 380A IUD's; IMAP (fluspirilene); Thalamonal (fentanyl citrate); Depo-Provera contraception injection; Prostin VR pediatric sterile solution (alprostadil); syringes; an Ortho cytron absolute flow cytometer catheters; medical diagnostic kits; and fine chemicals for medial and scientific research.
INSURANCE INDUSTRY UPDATE- H.E. Manuel Millares, Minister of Finances and Prices of the Republic of Cuba, reported that the government would significantly reduce its role as risk insurer for Republic of Cuba government-operated companies. Minister Millares said that Republic of Cuba government-operated companies would be required to obtain policies from Republic of Cuba government-operated companies. The insurance sector currently represents less than 1% of the Republic of Cuba's Gross Domestic Product (GDP). The Republic of Cuba insurance industry reported 1997 earnings of 117.5 million Pesos and US$58 million, a 37% increase from 1996. Paid-out claims were 53 million Pesos and US$10 million. Republic of Cuba government-operated insurance companies lent US$135 million to Republic of Cuba government-operated companies. Republic of Cuba government-operated insurance companies include: International Insurance Company; National Insurance Company; Isla Azul S.A. (tourism insurer); a joint venture with United Kingdom-based CE Health PLC; Asistur (travel insurance); and various assessment agencies.
PUERTO RICO HOTELS PREPARING FOR CUBA COMPETITION- In an article appearing in the Spring 1998 issue of Latitudes, the in-flight magazine of American Airlines' American Eagle, an unidentified hotel official in Puerto Rico said that "[N]o one wants to be left out when Cuba opens up . . . So there's been a refocusing on hotel development here in San Juan."
CUBAN COMPANIES ARE MEMBERS AND FEDERAL EXPRESS IS A SPONSOR OF THE CARIBBEAN HOTEL ASSOCIATION- Three of the largest Republic of Cuba government-operated tourism companies (Cubanacan, Gran Caribe, and Horizontes) are paid members of the San Juan, Puerto Rico-based Caribbean Hotel Association (CHA). The thirty-five-year-old CHA represents more than 1,000 properties with a total of almost 120,000 rooms. The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury authorizes Republic of Cuba government-operated companies to become members of United States-based organizations provided that the services provided by the organization to Republic of Cuba government-operated companies are limited to the sharing of information and informational materials unless a specific OFAC license has been obtained. Earlier this year, Memphis, Tennessee-based Federal Express Corporation became an official sponsor of the CHA. Federal Express will offer hospitality, marketing, and tourism development programs, including discounts, to CHA members. Currently, Federal Express Corporation does not provide services between the United States and the Republic of Cuba. Brussels, Belgium-based DHL Worldwide Express is authorized by the OFAC to offer document-only services between the United States and the Republic of Cuba.
TOURISM CONVENTION UPDATE- The 19th annual International Tourism Convention and Fair (Cuba '98) is being held from 12 May 1998 to 14 May 1998 in the city of Havana. An estimated 1,200 travel agents from throughout the world are expected to attend. Approximately 120 companies (55 of which are non-Republic of Cuba-based) have rented 3,000 square meters of exhibition space at the PABEXPO convention center. Individuals subject to United States law are also attending Cuba '98.
IMMIGRATION TALKS TENTATIVELY SCHEDULED FOR MAY 1998 IN NEW YORK CITY- The government of the Republic of Cuba and the government of the United States are tentatively-scheduled to hold their bi-annual meeting to discuss immigration issues at the end of May 1998 in New York City. The Republic of Cuba delegation is expected to be led by H.E. Ricardo Alarcon, President of the National Assembly of People's Power of the Republic of Cuba.
PRESIDENT CASTRO TO VISIT SWITZERLAND- H.E. Dr. Fidel Castro Ruz, President of the Republic of Cuba, is expected to visit Switzerland 13 May 1998 to 21 May 1998 to attend the annual assembly of the World Health Organization, which coincides with the organization's 50th anniversary. Mrs. Hillary Rodham Clinton, wife of The Honorable William J. Clinton, President of the United States, who will represent the government of the United States, is scheduled to address the WHO assembly on 14 May 1998, the same day as President Castro. President Castro and Mrs. Clinton are expected to stay at the Hotel Inter-Continental Geneve, owned by London-United Kingdom-based, Bass PLC. President Castro is expected to use the same suite that was used by Ernesto "Che" Guevara during a visit to Geneva in 1964.
COMMONWEALTH DEVELOPMENT CORPORATION PROVIDES US$30 MILLION CREDIT- United Kingdom-based Commonwealth Development Corporation (CDC), which is controlled by the government of the United Kingdom, is providing US$30 million in medium-term financing for the importation of transportation equipment and industrial equipment, most of which is expected to be purchased from United Kingdom-based companies for use by Republic of Cuba government-operated companies. The CDC reported that the financing "is intended to catalyze other sources of medium-term finance for the fast-growing Cuban economy." The CDC and Republic of Cuba government-operated New Bank Group established Caribbean Finance Investment Limited (CFIL) in February 1997 as the only financial joint venture announced as approved to date by the government of the Republic of Cuba. Guernsey, Channel Islands-based Beta Gran Caribe Limited (BGCL) has reported that it had loaned approximately US$4 million to CFIL. The most recent Interim Report issued by BGCL suggests that the overwhelming majority of its profits to date have been as a result of providing short-term financing (60-day to 120-day) to Republic of Cuba government-operated companies (principally to Finatur, a Republic of Cuba government-operated company providing financing within the tourism sector, and to Interholdings, an unidentified company), as opposed to returns on investments in operational companies. Most of the BGCL investments are in start-up companies so a lack of immediate returns are not surprising. The values of the six individual financings range from US$4 million to US$1 million. [Although there is no mention of the interest rates being charged for the short-term financing, the range seems to be between 16% and 20%]. BGCFL is an investment company focused exclusively on the Republic of Cuba. The assets of BGCL are managed by Havana Asset Management Limited (HAML), the first (1995) and only investment management company to be established in the Republic of Cuba.
CUBA CLOSER TO JOINING LOME CONVENTION NEGOTIATIONS- H.E. Roberto Robaina, Minister of Foreign Affairs of the Republic of Cuba, reported that his government would continue to seek to become a party to negotiations for a Fifth Lome Convention. Minister Robaina held more than twelve bilateral meetings during his visit to Barbados. The seventy-one member Africa, Caribbean, and Pacific Group (ACP) granted the Republic of Cuba Observer Status to attend the ACP's Ministerial meeting 4 May 1998 to 6 May 1998 in Barbados, which prepared for the European Union (EU)-ACP Ministerial meeting 7 May 1998 to 8 May 1998 in Barbados. The EU granted, as expected, the Republic of Cuba Observer Status at the EU-ACP meeting as well. The two separate meetings served as a prelude to formal negotiations for a Fifth Lome Convention. The Lome Convention between the EU and the ACP grants preferential entry into EU markets and annual access to US$17 billion in EU-administered assistance. The World Trade Organization (WTO) opposes preferential trade agreements. The current Lome Agreement expires at the end of 1999 and negotiations for a new agreement begin in May 1998. The Republic of Cuba has requested membership in the ACP and has asked to be included as an observer in the Lome negotiations due to its former colonial status under Spain. Italy and France supports the Republic of Cuba's request.
EQUITY IN VARADERO HOTELS SOLD- Mr. Enrique Martinon, who had controlled 50.5% of CIHSA, a Spain-based corporation, which has interests in the following resort area of Varadero-based hotels: 50% share in the Melia Varadero, a 50% share in the Sol Palmeras, and a 50% share in the Melia Las Americas, has purchased an additional 16% of CIHSA from a Spain-based corporation which had been seeking a buyer. The Spain-based corporation had been seeking US$7 million for the shares in CIHSA subsequently purchased by Mr. Martinon. The remaining 50% share in the Melia Varadero, 50% share in the Sol Club Palmeras, and 50% share in the Melia Las Americas is held by Republic of Cuba government-operated Cubanacan S.A.. The ownership of CIHSA before the purchase was: Sol Melia S.A. (33.5%); Mr. Enrique Martinon, a Spain-based investor (50.5%); and a Barcelona-based corporation controlled by two individuals (16%). The Barcelona-based corporation sought to sell its 16% share of CIHSA (which equates to a 16% interest in the Melia Varadero, 16% interest in the Sol Palmeras, and an 8% interest in the Melia Las Americas) for approximately US$7 million. Toronto, Canada-based Sherritt International Corporation, the largest foreign investor in the Republic of Cuba, has a 25% indirect interest in the Melia Las Americas. The Barcelona-based corporation reported that the purchaser could expect an annual rate of return of 15% on the investment.
SUGAR UPDATE- Republic of Cuba government sources report that raw sugar production was 2.75 million tons as of 1 May 1998, compared with 3.8 million tons planned and approximately 4.0 million tons produced on 1 May 1997. H.E. General Ulises Rosales del Toro, Minister of Sugar of the Republic of Cuba, blamed poor planting, cultivation, and weather among the reasons for the disastrous harvest.
FISHING VENTURE WITH MEXICO ESTABLISHED- The Ministry of Fishing of the Republic of Cuba and the Ministry of Fisheries of Mexico have established Pesca Caribe S.A. to supply shellfish and fish to their respective countries' tourism industries. Initial capital was reported to be US$3 million. Pesca Caribe S.A. has a contract to provide a minimum of 280 tons of live Republic of Cuba-harvested lobster to Mexico.
UNITED STATES SHIP BECOMES SCUBA DIVING AND FISHING LOCATION- The 132-meter San Pascual, a tanker constructed in the 1920's in California, has become the location of an eight-stateroom hotel, restaurant, bar, and retail store. The ship is now located on a northern coast beach in Villa Clara Province, 350 kilometers east of the city of Havana. Prior to 1959, the San Pascual served as a United States military post and as a prison.
SAN JUAN HILL RESTORATION- The government of Santiago de Cuba (860 kilometers east of the city of Havana and the country's second-largest city) announced that it would restore the San Juan Hill Monument and Park. The Honorable Theodore Roosevelt, prior becoming President of the United States, led his "rough riders" in their last battle against Spain on San Juan Hill in July 1898. Also to be restored, the Peace Tree, the location of the surrender by Spain to the United States. The restoration is planned to be completed by July 1998, the one hundredth anniversary of the independence of the Republic of Cuba from Spain.
|
HS Code 9802200000 9802300000 9802400000 9802400000 TOTAL US$ |
Description Medicinal & Pharmaceutical Products, Donated All Wearing Apparel, Donated For Relief/Charity Articles Donated For Relief Or Charity, Nesio (Not Elsewhere Specified Or Indicated) Articles Donated For Relief Or Charity, Nesio (Not Elsewhere Specified Or Indicated) |
District Miami, FL Miami, FL Detroit, MI Miami,FL |
February 1998 Value in US$ 0.00 72,469.00 21,000.00 280,544.00 US$374,013.00 |
Year-To-Date Value in US$ 45,300.00 72,469.00 21,000.00 452,249.00 US$591,108.00 |
CANADA TRADE UPDATE- According to the Government of Canada's Statistics Canada, peas, poultry, sulfur, and wheat accounted for approximately 25% of Canada's approximately US$225 million in exports to the Republic of Cuba in 1997. Nickel, shrimp, sugar, and cigars accounted for approximately 90% of Canada's approximately US$250 million of imports from the Republic of Cuba in 1997.
US$10.186 MILLION IN SAVINGS ACCOUNTS REPORTED BY SAVINGS BANK- Republic of Cuba government-operated Popular Savings Bank reported that its various branches had a total of 12,041 U.S. Dollar savings accounts with a combined US$10.186 million. Popular Savings Bank (which has accepted U.S. Dollar accounts since 1996) reported that these accounts represented 40.4% of all U.S. Dollar savings accounts held by Republic of Cuba nationals within the Republic of Cuba. Popular Savings Bank reported that is had 4.356 million Peso savings accounts with a combined 241.8 million Pesos, 94.6% of all Peso savings accounts held by Republic of Cuba nationals within the Republic of Cuba. Popular Savings Bank pays depositors 3.5% annual interest on U.S. Dollar accounts, 4.5% interest on six-month time deposit accounts, and 5.5% interest on one-year time deposit accounts. Popular Savings Bank reported that it had loaned 270.9 million Pesos and US$10.2 million to various Republic of Cuba government-operated companies during the first four months of 1998.
WHAT'S ON TELEVISION- Recent motion pictures appearing on television within the Republic of Cuba: "Phenomenon," "Aladdin," "North By Northwest," "The Final Cut," "Blink," and "Jumanji." Sunday mornings are frequently the time period during which family-oriented films produced United States-based companies are shown. Most of the United States-produced and United States-distributed television programs and motion pictures shown on television and in theaters within the Republic of Cuba are not directly provided by United States-based companies, rather the signals are captured from various satellite broadcasting services or films and video tapes are obtained through third-countries, without compensation. United States-based companies are permitted by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., to export (sell and donate) television programs, motion pictures, and radio programs to the Republic of Cuba. United States-based companies are permitted to purchase advertising (camera-ready artwork must be provided) in Republic of Cuba-based publications and to air commercials (must be delivered completed and ready for broadcast) on television and radio programs.
GUATEMALA VICE PRESIDENT TO VISIT- H.E. Luis Flores Asturias, Vice President of Guatemala, is scheduled to visit the Republic of Cuba in June 1998.
SPAIN MINISTER OF INDUSTRY TO VISIT- H.E. Jose Pique, Minister of Industry of Spain, is expected to visit the Republic of Cuba in May 1998. In June 1998, H.E. Abel Matutes, Minister of Foreign Affairs of Spain, is scheduled to visit the Republic of Cuba. King Juan Carlos of Spain is expected to visit the Republic of Cuba in 1998.
CLARIFICATIONS- 27 April 1998 ECONOMIC EYE ON CUBA©
After publication of the 27 April 1998 issue of the ECONOMIC EYE ON CUBA, additional information became available with respect to the following two items. The new information is printed in italics.
PACKAGING FACTORY USES SUGAR CANE BYPRODUCT- Cubaenvase, a Republic of Cuba-based joint venture with Spain-based capital, is producing boxes made of bagasse for use in packaging fruit. Located in Las Tunas Province, 662 kilometers east of the city of Havana, the Maximo Gomez Bagasse Board Factory is near the Jesus Mendez Sugar Mill. Cubaenvases expects to produce 900,000 boxes in 1998 and eventually 5 million boxes annually.
GERMANY'S TOURISTIK TO BEGIN FLIGHTS AND CRUISE OPERATIONS- Germany-based FTI Touristik reported that it would commence in May 1998 four flights per week from Germany to the resort area of Varadero, 140 kilometers east of the city of Havana. FTI Touristik will use Britannia Airlines to provide the service. FTI Touristik also reported that it would commence in November 1998 the operation of a passenger cruise ship to various ports within the Republic of Cuba. Republic of Cuba government-operated Rumbos S.A. will be coordinating the activities of the estimated 40,000 FTI Touristik clients. Republic of Cuba government-operated Prensa Latina News Agency reported that FTI Touristik expected to bring 80,000 clients to the Republic of Cuba in 1998.
UPDATED SPEAKING SCHEDULE
13 May 1998- Mr. John S. Kavulich II, President of the U.S.-Cuba Trade and Economic Council, is scheduled to appear at the "1998 Annual Trade with the Americas Conference and Exhibition" sponsored by the World Trade Center Association Los Angeles-Long Beach. For information telephone (562) 495-7070.
29 May 1998- Mr. John S. Kavulich II, President of the U.S.-Cuba Trade and Economic Council, is scheduled to appear at a luncheon sponsored by The Cuban Studies Institute at Tulane University in New Orleans, Louisiana, and in cooperation with the World Trade Center of New Orleans, Whitney National Bank, City of New Orleans Office of International Relations, Gulf Coast International Hispanic Chamber of Commerce, Louisiana Department of Economic Development, Louisiana International Trade Center, Louisiana International Trade Commission, and Traffic and Transportation Club. For information telephone: 504-862-8000 extension 2601.
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