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. CADECA 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.
CITIBANK PURCHASE OF MEXICO BANK PERMITS CONTINUED CUBA TRANSACTIONS- The recent purchase of the 250-branch Monterrey, Mexico-based Banco Confia by New York, New York-based Citibank N.A., will not preclude Mexican nationals who hold Visa credit cards and Mastercard credit cards issued by Banco Confia from using those products within the Republic of Cuba. The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., permits individuals not subject to United States law to use Visa credit cards and Mastercard credit cards for transactions within the Republic of Cuba provided that the Visa credit cards and Mastercard credit cards are not issued by United States-based financial institutions. While Banco Confia is not a United States-based financial institution, Banco Confia is now 100% owned by a United States-based financial institution. According to published reports, San Francisco, California-based BankAmerica Corporation is discussing the purchase of Monterrey, Mexico-based Grupo Financiero Banorte S.A., which also issues Visa credit cards and Mastercard credit cards.
AMERICAN AIRLINES' GLOBALIZATION INCREASING ITS INDIRECT CUBA RELATIONS- First, Dallas/Fort Worth, Texas-based American Airlines and Hounslow, Middlesex, United Kingdom-based British Airways, which have been seeking approval from the United States Department of Justice to establish an global alliance to coordinate flight schedules and connections, frequent flyer programs, and to sell seats on each other's aircraft, are jointly purchasing a 10% share in Madrid, Spain-based Iberia Lineas Aereas de Espana. Iberia Airlines has continued to increase its flights between Spain and the Republic of Cuba, and has technical and operational agreements with both Republic of Cuba government-operated Cubana Airlines and with the Institute of Civil Aviation (IACC) of the Republic of Cuba. In 1997, Iberia Airlines replaced DC-10 aircraft with Boeing 747 aircraft on its Madrid-Havana-Madrid route due to increased demand, in some cases 27%. Iberia also reported that it would also soon use Airbus 340 aircraft on the Madrid-Havana-Madrid route, and was studying new routes to other destinations in the Republic of Cuba. Second, American Airlines has a Carrier Service Provider (CSP) license from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., which authorizes the company to operate charter flights between the United States and the Republic of Cuba. Third, In July 1997, American Airlines agreed to purchase a 10% share in Aerolineas Argentinas S.A., the national air carrier of Argentina. C. & T. Charters, Inc., of Miami, Florida, and Airline Brokers Company, Inc., of Miami, Florida, have chartered Aerolineas Argentinas aircraft (Boeing 747's during the Christmas holidays) for direct flights (before February 1996 and resuming in June 1998) and indirect flights (from February 1996 to June 1998) between the United States and the Republic of Cuba. C. & T. Charters and Airline Brokers Company are two of the many companies licensed by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., to provide transportation services to individuals authorized to travel to the Republic of Cuba. The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C. authorizes companies subject to United States law to have non-controlling investments in third country companies that have commercial activities within the Republic of Cuba provided that the investments do not result in control in fact of the third country company and provided that a majority of the revenues of the third country company are not produced from commercial activities within the Republic of Cuba. [Opinion by OFAC dated 4 March 1994].
ANOTHER COMPANY SEEKS OFAC LICENSE TO MARKET CUBAN MEDICINE- A non-United States-based company (the U.S.-Cuba Trade and Economic Council has agreed to maintain its confidentiality) is applying to the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury for permission to market a Republic of Cuba-developed medicine that is patented in the United States. Recently, Philadelphia, Pennsylvania-based SmithKline Beecham, a subsidiary of Brentford, United Kingdom-based SmithKline Beecham plc, asked the OFAC 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.
CANADIAN COMPANY TO A OPERATE HEMODIALYSIS CENTER IN CUBA- Sunnymed International, a division of 931580 Ontario, Inc., of Etobicoke, Ontario, Canada, has an agreement with Servimed, a division of Republic of Cuba government-operated Cubanacan S.A., to operate a hemodialysis center in the resort area of Varadero, 140 kilometers east of the city of Havana. Additional hemodialysis centers may be established at other locations within of the Republic of Cuba. An affiliated company of Sunnymed International, Destination Sunshine, is negotiating with Servimed to provide exclusive referral services for the newly-established Drug Rehabilitation Centre (DRC) at the Don Lino Resort at Guardalavaca, Holguin Province, 800 kilometers east of Havana. The DRC is catering to English-speaking patients.
PEUGEOT AND DEAWOO IN, LADA OUT, FOR POLICE- H.E. Raul Castro Ruz, First Vice President of the Council of State of the Republic of Cuba and Minister of Defense of the Republic of Cuba, officially took delivery of the first of 500 Peugeot model 106 vehicles for use by city of Havana-based officers of the National Revolutionary Police (NRP) of the Ministry of Interior of the Republic of Cuba. In addition, the NRP has purchased Daewoo Tico model vehicles. Both the Peugeot and Deawoo vehicles are replacing U.S.S.R.-built Lada's purchased in the 1980's.
INTERNET ACCESS SUSPENDED- The Ministry of Science, Technology, and Environment of the Republic of Cuba, has suspended the acceptance of new subscriptions for access to the Internet due to a reported "backlog." Internet service packages, including E-mail, available include a US$240.00 per month rate for unlimited use, US$90.00 per month for 20 hours of use; and US$100.00 per month for 30 hours of use. ETECSA, the Republic of Cuba government-operated joint venture telephone company, which also has an Internet provider service, INFOCOM, has also suspended the acceptance of new subscriptions. INFOCOM offered 3 hours per month of E-mail service, with no Internet access, for US$35.00 plus US$.20 per each additional minute. A source at INFOCOM said that there would be no additional subscribers until ETECSA installed additional Internet capabilities. Existing subscribers in the city of Havana reported delays of 30 minutes or more to access the Internet during the day. The government of the Republic of Cuba announced that it was extending Internet priority to universities and hospitals located in the provinces. Republic of Cuba nationals are not permitted to have access to the Internet.
CUBA/CANADA SHIPPING UPDATE- Approximately 400 20-foot containers and 1,000 tons of break bulk are transported by ship from Canada (Montreal and Halifax) each month to the Republic of Cuba. Travel time is seven to ten days. Ships to Canada transport sugar, nickel, rum, tobacco, and steel. Ships from Canada transport agricultural products, building materials, vehicles (new and used), and food products. Approximately 80% of the shipments are through the Port of Havana which has 15 docks and can unload forty containers per hour. Clearing customs can take 72 hours. The draft of the Port of Havana is 11.5 meters and the total circumference is 18 kilometers.
BELGIUM SIGNS INVESTMENT AGREEMENT- H.E. Ibrahim Ferradaz, Minister for Foreign Investment and Economic Cooperation of the Republic of Cuba, signed an Investment Protection and Promotion Agreement with the government of Belgium on 19 May 1998. Belgium is the 7th European Union-member country and 33rd country to sign an Investment Protection and Promotion Agreement with the Republic of Cuba. 55% of the joint ventures operating within the Republic of Cuba are with companies located in European Union-member countries.
GRAIN IMPORT UPDATE- Republic of Cuba grain imports from the French port of Rouen between 1 May 1998 and 13 May 1998 were 52,500 tons.
ARGENTINA REPORTS 1998 WHEAT SALES TO CUBA- The government of Argentina reported that it had sold 10,000 tons of wheat to the Republic of Cuba in 1998 as of 22 May 1998. The government of Argentina reported that it sold 200,000 tons of wheat to the Republic of Cuba in 1996/1997.
CHILE NEARING PARTIAL PREFERENTIAL TRADE AGREEMENT WITH CUBA- The government of the Republic of Cuba and the government of Chile reported that a partial preferential trade agreement covering more than 2,000 products is expected to be signed in July 1998.
BRAZIL PROVIDES US$15 MILLION FOOD EXPORT CREDIT, TO BEGIN OIL EXPLORATION- H.E. Luiz Felipe Lampreia, Minister of Foreign Affairs of Brazil, visiting the Republic of Cuba from 25 May 1998 to 27 May 1998, reported that his country will provide the Republic of Cuba with a US$15 million credit for the purpose of purchasing Brazil-produced food products. Minister Lampreia, who is the highest-ranking official from the government of Brazil to visit the Republic of Cuba in ten years, is also expected to sign an air transportation agreement and discuss implementing an Investment Protection and Promotion Agreement. Petrobas, a Brazil government-operated oil company, is expected to sign an agreement to explore for oil in the Republic of Cuba. Bilateral trade was US$71 million in 1997- US$50 million in exports from Brazil, mainly food products and transportation equipment; US$21 million in exports from the Republic of Cuba, mainly pharmaceuticals.
COCOA PRODUCTION UPDATE- From 1 January 1998 through 1 April 1998 the David Suarez Abella Factory located in Baracoa, 993 kilometers east of the city of Havana, reported production of 700 tons of cocoa, a 33% increase from the same period in 1997. The factory produces cocoa, chocolate bars, cocoa butter, frostings, and other products, both for consumption and as components for cosmetics and pharmaceuticals. Gross revenues in 1998 are expected to be US$1.7 million.
OIL SECTOR UPDATE- Twenty non-Republic of Cuba-based companies have permits from the Ministry of Basic Industry of the Republic of Cuba to explore for oil in thirty-two different tracts located throughout the country. Ten of the tracts are offshore and twenty-two of the tracts are onshore. 90% of the oil wells drilled to date are located in Havana Province and in Matanzas Province. There are twenty oil wells currently producing within the country. During the last six months, the Republic of Cuba has produced approximately 32,000 barrels of oil per day to 33,000 barrels of oil per day, which is approximately 25% of current daily consumption. Republic of Cuba government-operated Cuba Petroleum (Cupet) reported that total consumption in 1997 was 8.23 million tons, of which 17% was produced domestically. 1996 domestic oil production was approximately 15% of less than 8 million tons of oil consumed. Most Republic of Cuba-produced oil contains a high sulfur content, mainly used as fuel for plants that produce electricity, and as fuel at nickel plants and cement plants. Oil found in Ciego de Avila Province contains less sulfur.
TOURISM SUPPLY FAIR SMALLER THAN 1997 AS IMPORT SUBSTITUTION PROGRAM INTENSIFIES- Organizers of the 26 May 1998 to 30 May 1998 TECNOTUR '98 reported that 300 companies (200 Republic of Cuba-based) had rented 4,000 square meters of exhibition space, compared with 365 companies renting 5,000 square meters of exhibition space at TECNOTUR '97, and 585 companies renting 6,000 square meters of exhibition space at TECNOTUR '96. Senior-level officials of the government of the Republic of Cuba report that Republic of Cuba government-operated companies and, to a lesser extent, Republic of Cuba-based joint ventures with non-Republic of Cuba-based companies, are supplying products and services to the tourism industry on long term contracts. In addition, there remains a policy of removing brokers and agents as a part of any transaction, preferring to work directly with manufacturers and exclusive distributors.
HOTEL AND MOTEL ROOM UPDATE- The Minister of Tourism of the Republic of Cuba reported that there are currently 179 hotels and motels with a total of 27,370 rooms of varying quality [most being two to three stars based upon United States quality]. 30% of the 27,370 rooms are being managed under contract with non-Republic of Cuba-based companies such as Club Med, Accor, LTI, Sol Melia, Hoteles Tryp, Super Clubs, and Delta Hotels & Resorts. In 1996 and in 1997, the Ministry of Tourism of the Republic of Cuba reported that by the year 2000, the country would have 50,000 rooms. Today, however, Mr. Gomez Trueba, Director of Investment for the Ministry of Tourism of the Republic of Cuba, reported that there are continuing construction delays due to cost overruns, inconsistency of quality, poor management, and poor labor-management relations (workers seeking U.S. Dollar and U.S. Dollar-based bonuses). Senior-level Republic of Cuba government sources now report that, because of the problems, the Republic of Cuba expects to have 40,000 rooms by the year 2000.
SOL MELIA AND SHERRITT INTERNATIONAL MAY DEVELOP 14 HOTELS- Despite previously-published comments from Mr. Ian Delaney, Chairman of Toronto, Canada-based Sherritt International Corporation, the largest foreign investor in the Republic of Cuba, that his company was not interested in the tourism industry within the Republic of Cuba other than two hotels (one managed by Grupo Sol Melia in the resort area of Varadero, 140 kilometers east of the city of Havana and one under construction in Havana), Mr. Gabriel Escarre, Chairman of Madrid, Spain-based Grupo Sol Melia S.A., announced that both companies may jointly develop 14 hotels during the next three years. By the end of 1998, Grupo Sol Melia will operate 11 hotels within the Republic of Cuba, with an additional hotel under construction (within which Sherritt International Corporation is an investor) in Havana due to open in early 1999.
SUGAR PRODUCTION TO BE RECORD LOW- Sources report that Republic of Cuba raw sugar production is approximately 3.0 million tons, compared with 3.8 million tons planned and 4.2 million tons produced at the same time in 1997. An additional 100,000 tons may be produced when the final milling is completed. The 1994-1995 sugar harvest was 3.3 million tons, the lowest since 1945 when production was 3.56 million tons. The reasons for the disaster according to senior-level officials of the government of the Republic of Cuba include: poor planning, poor weather conditions, lack of financing, poor management, the lack of worker incentives, and lack of technology.
INTERNATIONAL SUGAR ORGANIZATION MEETING IN HAVANA- H.E. Ricardo Carbrisas, Minister of Foreign Trade of the Republic of Cuba, will host the bi-annual meeting of the 52-country International Sugar Organization (ISO) from 26 May 1998 to 29 May 1998 in the city of Havana. Minister Cabrisas is the current President of the ISO. Members of the ISO account for 75% of global sugar production, 91% of global sugar exports, and 22% of global sugar imports, according to Mr. Peter Baron, Executive Director of the organization. The People's Republic of China, Czech Republic, Vietnam, Skovak Republic, Angola, and Poland are expected to attend the ISO meeting as observers.
TOBACCO AND CIGAR PRODUCTION UPDATE- According to senior-level officials of the government of the Republic of Cuba, the Republic of Cuba tobacco harvest will be 40,000 tons, approximately 5,000 tons short of the plan, but 25% greater than the 32,000 tons harvested in 1996-1997. The 1997-1998 tobacco production was financed by more than US$100 million in credits from entities in Spain, France, Lebanon, and other countries. The 1997-1998 tobacco harvest is the largest in 15 years due to acreage sown, not yields per acre, which remained less than 50% of those in other Caribbean Sea-area countries and Central American countries. The Ministry of Agriculture of the Republic of Cuba reported 145,000 acres were planted during the 1997-1998 harvest (November to May), compared with 123,000 acres planted in 1996-1997. The 1997-1998 tobacco harvest is considered to be of high quality and have sufficient wrapper leaf and raw materials to produce the planned 160 million cigars. However, actually producing the planned 160 million cigars is proving problematic due to production difficulties. Cigar exports from January 1998 through April 1998 were 30 million units, 60% less than planned. Of the planned 160 million cigars to be produced in 1998, 40 million cigars are to be produced by machine, 10 million of which are to be produced by the end of May 1998. Newly-purchased machines imported from The Netherlands were not yet operational. An additional 10 million cigars are being held in the factories awaiting bands due to printing delays. Approximately 6 million cigars have been rejected for export due to poor quality because, in part, due to the lack of time to adequately train workers and the increased pace at which experienced workers must produce to meet daily quotas. While worldwide demand for Republic of Cuba-produced cigars continues to increase, there has also been an increase in complaints about consistency of quality. Mr. Francisco Linares, President of Republic of Cuba government-operated Habanos S.A., the exclusive distributor of Republic of Cuba-produced cigars, reported that exports would be 160 million units in 1998, compared with 103 million units in 1997 and 71 million units in 1996. Gross revenues in 1998 are expected to be US$240 million. Producing 160 million cigars for export would place the Republic of Cuba behind the Dominican Republic (250 million cigars for export) and ahead of Honduras (120 million cigars for export).
FOREIGN INVESTMENT MINISTER TO VISIT CANADA- H.E. Ibrahim Ferradaz, Minister for Foreign Investment and Economic Cooperation (MINVEC) of the Republic of Cuba will visit Toronto, Ontario, Canada, from 27 May 1998 to 28 May 1998 at attend the annual shareholders meeting of Sherritt International Corporation, the largest foreign investor within the Republic of Cuba. In 1997, H.E. Marcos Portal, Minister of Basic Industry of the Republic of Cuba, attended the annual shareholders meeting. Minister Ferradaz will also be meeting with executives from the business community and financial community.
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HS Code 9802200000 9802300000 9802400000 TOTAL US$ |
Description Medicinal & Pharmaceutical Products, Donated All Wearing Apparel, Donated For Relief/Charity Articles Donated For Relief Or Charity, Nesio (Not Elsewhere Specified Or Indicated) |
District Miami, FL Miami, FL Detroit, MI |
March 1998 US$25,624.00 US$30,699.00 US$51,070.00 US$107,393.00 |
Year-To-Date US$70,924.00 US$103,168.00 US$524,319.00 US$698,411.00 |
5TH ECONOMIST ROUNDTABLE PLANNED FOR OCTOBER 1998- The Economist Conferences, the United Kingdom-based division of The Economist magazine, has tentatively-scheduled its 5th Economist Roundtable from 13 October 1998 to 15 October 1998 in the city of Havana. The suggested title is "Reassessing Cuba." For information contact telephone 011 34 1 576 2507 or facsimile 011 34 1 431 1424.
UPDATED SPEAKING SCHEDULE
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 to discuss "The Cuba Economic Embargo- What U.S. Companies Can and Cannot Do" sponsored by The Cuban Studies Institute at Tulane University in New Orleans, Louisiana, and in cooperation with the World Trade Center of New Orleans; City of New Orleans Office of International Relations; Consular Corps of New Orleans; F.C. Schaffer & Associates; Gulf Coast International Hispanic Chamber of Commerce; Hibernia National Bank; International Freight Forwarders & Customs Brokers Association of New Orleans; Louisiana International Trade Center; MetroVision Economic Development Partnership; Milling, Benson, Woodward, Hillyer, Pierson & Miller; Port of Greater Baton Rouge; Port of New Orleans; Traffic & Transportation Club of Greater New Orleans; Transportation Research Institute; and Whitney National Bank. For information telephone 504-862-8000 extension 2601 or telephone 504-529-1601.
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