Exchange Rates Unchanged-1
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 21 Pesos, as it
has since 15 July 1998. CADECA purchased the U.S. Dollar for 19 Pesos
and sold the U.S. Dollar for 21 Pesos from 1 April 1998 to 14 July 1998.
CADECA 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 purchased the U.S. Dollar for 24 Pesos and sold the U.S. Dollar
for 24 Pesos in August 1996. 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 government does not fluctuate the value of the Peso for
commercial transactions regardless of any fluctuation with the value of
the U.S. Dollar or other currencies on the international market.
The Peso and the U.S. Dollar circulate freely in the Republic of Cuba.
CUBA AIRCRAFT FEES HIGHER THAN UNITED STATES AND OTHER COUNTRY AIRPORTS-
The combined landing fee and handling fee for a 19-seat turboprop Beechcraft
1900-R at Jose Marti International Airport in the city of Havana ranges
between US$1,000.00 and US$1,500.00. The range in price is determined
arbitrarily according to non-Republic of Cuba-based air carriers.
GULFSTREAM INTERNATIONAL AIRLINES OPERATING DIRECT CHARTER FLIGHTS-
Fort Lauderdale, Florida-based Gulfstream International Airlines began
on 3 October 1998 to operate Miami, Florida, to Havana, Republic of Cuba,
flights four days each week, with continuing service to the cities of Holguin
and Camaguey. The city of Santiago de Cuba is expected to be added
soon. Of significance is that Gulfstream International Airlines is
an operating air carrier with its own aircraft. The company has for
many years provided charter aircraft services between the United States
and the Republic of Cuba for the United States government. Historically,
the direct and indirect air services between the United States and the
Republic of Cuba have been operated by charter companies who contract with
existing airlines to use aircraft. Gulfstream International Airlines
is a ten-year-old company with 30 aircraft and revenues of approximately
US$100 million. The company is the third-largest air carrier, in
terms of departures, servicing Miami, Florida’s Miami International Airport
(MIA), with 235 departures daily. The company is a “connecting feeder
carrier” for Houston, Texas-based Continental Airlines, Inc., for which
it operates aircraft as “Continental Connection” in Florida; and is a code-sharing
partner with Elk Grove Township, Illinois-based United Airlines, Inc.
Gulfstream International Airlines is using 50-seat, Dash-7 turboprop aircraft
manufactured by Toronto, Canada-based De Havilland and 19-seat, Beechcraft
1900-R turboprop aircraft manufactured by Wichita, Kansas-based Raytheon
Aircraft, a division of Lexington, Massachusetts-based Raytheon Company.
The company will charter a 19-seat, Beechcraft 1900-R turboprop aircraft
for service to the Republic of Cuba by an individual, group, or corporate
use, at a cost of US$4,000.00 round-trip, regardless of the number of passengers.
Gulfstream International Airlines joins Miami, Florida-based Airline Broker
Company, Inc. (ABC) as the only two United States-based companies currently
operating the charter flights. ABC operates its six flights per week
using chartered Boeing 767 aircraft and chartered Boeing 777 aircraft from
United Airlines, and chartered Boeing 727 aircraft from Mexico City, Mexico-based
Mexicana Airlines. ABC charges US$.75 per pound for cargo to be transported
to the Republic of Cuba. Gulstream International Airlines has yet
to define its cargo policy, but expects to do so soon. The round-trip
airfare is US$299.00 per person plus US$36.00 in airport fees. United
States-based travel agents receive a US$50.00 commission per ticket sold.
The round-trip airfare is determined principally by Republic of Cuba
government-operated Havanatur S.A., which is the coordinating entity within
the Republic of Cuba for the operation of the charter flights between the
United States and the Republic of Cuba. Approximately 100 United
States-based companies possess licenses or have applied for licenses from
the Office of Foreign Assets Control (OFAC) to provide air carrier services
and/or travel agent services and/or remittance forwarding services between
the United States and the Republic of Cuba. For additional Information
and to obtain flight schedules: Airline Brokers Company, Inc., Telephone:
(305) 871-1260 and Facsimile: (305) 447-0965. Gulfstream International
Airlines, Telephone: (305) 871-0727 and facsimile: (305) 871-4800.
US$250 MILLION CANADIAN TIMESHARE AND CONDOMINIUM VENTURE- Thunder
Bay, Ontario, Canada-based Cuban Canadian Resorts International, established
in 1994, has announced plans to develop during the next ten years 2,614
beachfront residential units within the Republic of Cuba for purchase as
timeshare units or as condominium units. The estimated US$250 million
joint venture, Cuban Club Resorts S.A. (CCR), with Republic of Cuba government-operated
Gran Caribe, was approved by the Executive Committee of the Council of
Ministers of the Republic of Cuba on 25 August 1998. Phase One of
the development, which is expected to be completed in March 1999, will
begin with the construction of 354 units in the Santa Maria del Mar area,
18 kilometers east of the city of Havana, followed by the construction
of 260 units at the resort area of Santa Lucia, Holguin Province, 750 kilometers
east of Havana. The development is being designed by Huelva, Spain-based
Arcadia Design Architects, which has designed properties for Chicago, Illinois-based
Hyatt Hotels. The president of CCR is Mr. David I. McMillan, who
has held senior-level management positions with Hyatt Hotels and Minneapolis,
Minnesota-based Radisson Hotels, among other companies. Mr. McMillan
is a former chairman of the Toronto, Canada-based Hotel Association of
Canada. The prices for vacation ownership units are expected to be
US$5,000.00 per one week interval, and annual maintenance fees. This
is a one-time fixed cost that permits an owner(s) to visit the vacation
ownership unit a minimum of one week per year for the lifespan of the timeshare.
Condominiums are expected to cost a minimum of US$200,000.00. For
additional information: Telephone: (877) 227-4685 and Facsimile: (905)
465-0877.
SOL MELIA AND SHERRITT INTERNATIONAL STUDY HOTEL DEVELOPMENT-
Madrid, Spain-based Grupo Sol Melia S.A. said that the company and Toronto,
Canada-based Sherritt International Corporation were discussing an
agreement worth an estimated US$216 million to construct and to manage
fourteen new hotels within the Republic of Cuba. This was the first
official confirmation of previous rumors about an agreement between the
two most visible non-Republic of Cuba-based companies operating within
the Republic of Cuba. Grupo Sol Melia currently manages 11 hotels
within the Republic of Cuba and Sherritt International Corporation is an
investor in two of the properties- one in the report area of Varadero,
140 kilometers east of the city of Havana, and one within Havana.
CAJA MADRID ESTABLISHES FINANCE VENTURE- Madrid, Spain-based
Caja Madrid and Republic of Cuba government operated Banco Popular de Ahorro
have established the Havana Finance Corporation (HFC), the first financial
joint venture to be located within the Republic of Cuba. Mr. Miguel
Blesa, President of Caja Madrid, said that the new company would begin
operations with US$5 million in capital and a US$10 million credit line
from his bank. Mr. Blesa said that Caja Madrid would provide 60%
of the capital of HFC and Banco Popular de Ahorro would provide 40% of
the capital of HFC. The term of the joint venture is twenty-five
years. He said that HFC would focus upon short term and medium term
lending to small and to medium-sized Republic of Cuba government-operated
companies and to joint venture companies operating within the Republic
of Cuba. Mr. Blesa said that Caja Madrid had identified 130 joint
ventures and Spain-based companies with Republic of Cuba-focused transactions
which had commercial relationships with Caja Madrid. Mr. Blesa said
that loans would be made at market rates, currently between 14% and 20%
within in the Republic of Cuba. He did not rule out increasing HFC’s
capital in the future, nor diversifying the company’s operations.
Over the years, Caja Madrid has provided advice, training, and computers
to modernize the Republic of Cuba’s banking system. In January 1998,
Caja Madrid confirmed that it would purchase a 10% interest in Mapfre America,
an insurance company with operations throughout Latin America. Mr.
Blesa said that HFC would focus upon the tourism sector. “The Cuban
economy has begun a difficult recovery, and Cuban-based
firms need financing for it to continue,” said Mr. Blesa. HFC
joins an increasing number of non-Republic of Cuba-based banks, non-Republic
of Cuba-based finance companies, and non-Republic of Cuba-based investment
funds with a focus upon the Republic of Cuba. Current Republic of
Cuba law prohibits non-Republic of Cuba-based banks from engaging in normal
customer operations (checking accounts, savings accounts, credit and charge
cards, etc.) with Republic of Cuba nationals, permitted operations include:
1) loans to Republic of Cuba government-operated companies 2) loans to
joint ventures AND 3) loans to non-Republic of Cuba-based companies engaging
in transactions within the Republic of Cuba 4) Representing non-Republic
of Cuba-based customers and 5) and establishing joint ventures. Unofficially,
non-Republic of Cuba-based banks have, in some instances, been permitted
to expand their services when non-Republic of Cuba-based companies involved
in transactions make the condition of the transactions an expansion of
the services provided by the non-Republic of Cuba-based banks.
BANKING, FINANCE COMPANY, AND INVESTMENT FUND UPDATE- The
Central Bank of the Republic of Cuba reported that as of September 1998
there were 12 non-Republic of Cuba-based banks with offices within the
Republic of Cuba and 3 non-Republic of Cuba-based finance companies with
offices within the Republic of Cuba.
Jose Marti International Airport
(Republic of Cuba)
Denver International Airport
Miami International Airport
Nassau International Airport (Bahamas)
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US$1 BILLION IN FINANCING OBTAINED IN 1997- Republic of
Cuba government operated Banco Popular de Ahorro reported that Republic
of Cuba government-operated banks, non-Republic of Cuba-based banks, non-Republic
of Cuba-based finance companies, and non-Republic of Cuba-based investment
funds provided approximately US$1 billion in financing in 1997, mainly
in the form of short term loans to medium term loans, to companies operating
within the Republic of Cuba. Banco Popular de Ahorro reported that the
US$1 billion amount did not include credits obtained from institutions
operating outside the country, presumably including the United Nations
Development Program (UNDP), and from government-operated entities in the
United Kingdom, France, Canada, Spain, and other countries.
FOOTWEAR JOINT VENTURE INAUGURATED- H.E. Dr. Carlos Lage, a Vice
President of the Council of State of the Republic of Cuba, inaugurated
a joint venture (the partner is a company owned by the government of the
People’s Republic of China) sandal factory in the city of Santiago de Cuba,
850 kilometers east of the city of Havana. The joint ventures’s 250
Republic of Cuba national employees will produce four million pairs of
“Caribbean Beach Sandals” annually for domestic sale and for export.
SOUTH AFRICAN COMPANY WILL FOCUS ON CUBA- Johannesburg, South
Africa-based Allied Electronics Corporation Limited (Altron), a global
electrical and cable manufacturing company, with divisions Allied Technologies
(Altech), Powertech (a cable manufacturer), and Fintech (an information
technology company), reported that the Republic of Cuba will be a principal
export target market for the company.
IMPORT SUBSTITUTION CONTINUES TO BE A PRIORITY- H.E. Dr.
Carlos Lage, a Vice President of the Council of State of the Republic of
Cuba, said that the country would save US$2 million annually by producing
tires for sugar combines and related vehicle tires, which were previously
imported. Vice President Lage inaugurated a new production line (at
a reported cost of US$4 million and 2 million Pesos) at the Nelson Fernandez
rubber plant located in San Jose de las Lajas, Havana Province. He
said that the new production line, using technology from Italy and Mexico,
would produce 16,000 tires annually. Vice President Lage emphasized
that the government of the Republic of Cuba’s foreign investment policy
continues to focus upon substituting imports and stimulating exports.
The Vice President also visited the Orlando Cuellar bottling plant also
located in San Jose de Las Lajas, Havana Province, where he inaugurated
a new US$2.5 million production line with a capacity of 27 million beer
bottles annually. He said that Republic of Cuba-based industry was
gradually recovering because of the demand of the tourism sector.
LABIOFAM READIES GAMBORO VIRUS VACCINE- Republic of Cuba government
operated los Laboratorios Biologicos Farmaceuticos de Cuba (LABIOFAM),
announced that a vaccine against the Gamboro bird virus would be available
for export in two to three years. The Gamboro virus, named after
the town in the United States where it first appeared in 1962, effects
birds in a similar manner to how AIDS effects humans, and also mutates
rapidly. The genetically-engineered vaccine is now being prepared
for clinical trials.
CHILE SIGNS COOPERATION AGREEMENTS- The government of Chile
and the government of the Republic of Cuba signed six cooperation agreements
covering trade, diplomacy, education, technology, and the environment.
Both governments agreed to increase export information exchanges and to
develop opportunities for Chile-developed mining technology to used with
the Republic of Cuba. The two governments resumed diplomatic relations
in 1995, and recently agreed to lower tariffs on more than 1,000 products.
UNITED KINGDOM MINISTER VISITS- The Honorable Barones Symons
of Vernham Dean, Deputy Foreign Minister of the United Kingdom, one of
the highest-ranking officials of the government of the United Kingdom to
visit the Republic of Cuba since the 1959 revolution, met with H.E. Ricardo
Cabrisas, Minister of Foreign Trade of the Republic of Cuba; H.E. Ibraham
Ferradaz, Minister for Foreign Investment and Economic Cooperation of the
Republic of Cuba; H.E. Francisco Soberon, Minister President of the Central
Bank of the Republic of Cuba, and with H.E. Roberto Robaina, Minister of
Foreign Relations of the Republic of Cuba, during a 7 October 1998 to 9
October 1998 visit to the Republic of Cuba. Baroness Symons said
that she expected dialogue, tourism, trade and investment to increase,
and announced that H.E. Bryan Wilson, Minister of Foreign Trade of the
United Kingdom, would visit the Republic of Cuba in early November 1998
in conjunction with the Republic of Cuba’s annual International Trade Fair.
Baroness Symons reported that discussions were held regarding the Republic
of Cuba’s debt to the United Kingdom, estimated at US$136 million.
The United Kingdom reported that 1997 bilateral trade was US$55 million-
US$31 million in exports to the Republic of Cuba. The United Kingdom
reported that exports increased to US$40 million during the first seven
months of 1998, while imports from the Republic of Cuba declined by 10%
to US$15.5 million. The Ministry of Foreign Trade (MINCEX) of the
Republic of Cuba reported that exports to the United Kingdom increased
45% during the first three months of 1998 in comparison with the same period
in 1997. MINCEX reported that the United Kingdom is the six-largest
trading partner of the Republic of Cuba and that bilateral trade between
the Republic of Cuba and the United Kingdom represents 7% of the total
bilateral trade between the Republic of Cuba and member countries of the
European Union (EU). Approximately twelve United Kingdom-based companies
have investments within the Republic of Cuba.
BRITISH AIRWAYS PLANS FLIGHTS- As reported by the U.S.-Cuba
Trade and Economic Council on 8 June 1998, Hounslow, United Kingdom-based
British Airways, the largest airline in Europe, has now formally
announced that it would begin service to the city of Havana, and, perhaps,
to other cities within the Republic of Cuba, on 28 March 1999. The
government of the United Kingdom and the government of the Republic of
Cuba signed an air service agreement last week. The Ministry of Tourism
of the Republic of Cuba reported that 47,515 United Kingdom nationals visited
in 1997, which is expected to increase by 30% 1998. The prominence
of British Airways will assist the Republic of Cuba with increasing the
existing low to medium demographic base of tourists visiting the country.
Service to the Republic of Cuba by British Airways will result in additional
publicity for the Republic of Cuba as British Airways-associated publications
will feature the island in articles. British Airways and Dallas/Fort
Worth, Texas-based American Airlines, which have been seeking approval
from the United States Department of Justice and the European Commission
to establish a 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 Airlines,
which 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. 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.
“BLACK WATCH” DOCKS IN SANTIAGO DE CUBA- The cruise ship
“Black Watch” docked for ten hours at the city of Santiago de Cuba, 850
kilometers east of the city of Havana, on 8 October 1998. Republic
of Cuba-based tourism officials reported that this was the first ship to
visit Santiago de Cuba in almost two years. The “Black Watch’s” 700
passengers, mainly elderly United Kingdom nationals, toured the city and
nearby tourism attractions. The tour was operated by Sweden-based
Frank Olsen Cruise Lines.
CRUISE SHIP ARRIVALS UPDATE- The Ministry of Transport
of the Republic of Cuba reported that six cruise ships would bring approximately
120,000 passengers to the island between the last months of 1998 and throughout
1999. Two cruise ships, the 650- passenger “Triton” and 520-passenger
“Italia Prima,” will be berthed in the Port of Havana as of December 1998,
and will make weekly cruises. The 1100-passenger “Sundream,” operated
by a United Kingdom-based company, is expected to visit twice each month
to the Port of Havana, and the 1100-passenger “Aida,” operated by a Germany-based
company, will visit Santiago de Cuba beginning on 25 November 1998.
The cruise ships “Edinburg Castle,” “Black Watch,” “Princess
Danae,” and “Club Med II” are expected to include various Republic of Cuba
ports in their Caribbean Sea-area itineraries. From 1995 until 1998,
Genoa, Italy-based Cosa Crociere operated the “Costa Playa” and a subsidiary
developed and managed the newly-reconstructed passenger ship facility at
the Port of Havana. In 1997, Fort Lauderdale, Florida-based Carnival
Cruise Lines purchased Costa Crociere, a transfer of ownership which required
[based upon regulations administered by the Office of Foreign Assets Control
(OFAC) of the United States Department of the Treasury] Carnival Cruise
Lines to cease both the operation of the “Costa Playa” to the Republic
of Cuba and the management of the passenger ship facility.
VENEZUELA’S AEROPOSTAL AIRLINE EXPANDS OPERATIONS- On 8 October
1998, Caracas, Venezuela-based Aeropostal-Alas de Venezuela (ALAS) inaugurated
offices at the city of Havana Jose Marti International Airport and Tryp-Havana
Libre Hotel. ALAS also signed agreements with Republic of Cuba
government operated Rumbos S.A. travel agency and with Republic of Cuba
government-operated Horizontes hotel company to receive, lodge, and entertain
customers. ALAS currently has service five times each week between
Caracas and Havana, carrying a total of 3,500 passengers each month.
Since April 1998, Aeropostal has operated a code-sharing agreement with
Atlanta, Georgia-based Delta Air Lines. In an article appearing in
the 6 April 1998 issue of the Atlanta Business Chronicle, Mr. E.
Todd Clay, a spokesperson for Delta Air Lines, said that when commercial
service to the Republic of Cuba is again authorized, the company will,
“like other Caribbean and Latin American countries, . . . look
at the opportunities there.” Since 1962, Delta Air Lines has had
route authorities from the following cities: Havana to Houston, Los Angeles,
New Orleans, San Francisco, and San Juan.
SCUBA DIVING VENTURE ESTABLISHED- Republic of Cuba government
operated Marlin Marinas and Nautics and Belgium-based EuroCuba will begin
operating the thirty five passenger “Persia” in December 1998.
The “Persia” will offer scuba diving, snorkeling, fishing, and other activities
during its 11-day cruises from Santiago de Cuba, 850 kilometers east of
the city of Havana, along the southern coast of the Republic of Cuba to
Cienfuegos, 250 kilometers east of Havana, as well as, nightly hotel-based
and extra hotel activities.
“INTELLIGENT” BUILDING VENTURE ESTABLISHED- Colombia-based Ciudad
Sistemas said that it would establish a joint venture with Republic of
Cuba government operated Centro de Economia y de Control de la Energia
to design software, supply and maintain equipment for “intelligent” buildings.
The two companies have already been working together on hotels and office
buildings. Equipment will be supplied by Schneider Group and Lakonia
International.
GRAIN IMPORT UPDATE- Republic of Cuba wheat imports from the
French port of Rouen for the month of September 1998 were 27,000 tons.
AIDS CASES INCREASING- The Ministry of Public Health of the Republic
of Cuba (MINSAP) reported that 547 Republic of Cuba nationals have died
of AIDS since 1986. Since that time, 2,040 Republic of Cuba nationals
have tested positive for HIV, of which 768 have developed AIDS. According
to MINSAP, approximately 67% of those infected with HIV and AIDS are homosexual
males. MINSAP believes that the increasing number of tourists visiting
the Republic of Cuba during the last eight years have been a principal
factor in the increase in cases of HIV and AIDS.
PRESIDENT CASTRO EXPECTED IN PORTUGAL- The government of the
Republic of Cuba announced that H.E. Dr. Fidel Castro Ruz, President
of the Republic of Cuba, would attend the eighth Ibero-American Summit
in Oporto, Portugal from 17 October 1998 to 18 October 1998. President
Castro is expected to propose an agenda for the 1999 Ibero-American Summit,
which will be held in the city of Havana, Republic of Cuba.
ANNUAL MEMBER LUNCHEON SPEAKER CONFIRMATION The principal guest speaker will be Mr. David G.P. Allan, Chairman
of Mississauga, Ontario, Canada-based York Medical, Inc.
York Medical was created in 1994 to bring together Canadian experts
in pharmaceutical licensing, regulatory and clinical affairs, and marketing
with the Republic of Cuba-based life-sciences establishment. Five
products from five different Republic of Cuba government-operated life-sciences
institutes were identified.
| Diramic™ | Diagnostic equipment for rapid detection of urinary tract infections and antibiotic susceptibility |
| Udertan™ | Topical veterinary prophylaxis for mastitis in dairy cattle |
| Dermofural™ | Topical antifungal/antibacterial ointment |
| DiaCIM™
TheraCIM™ |
Humanized monoclonal antibody for the treatment and diagnosis of epithelial cell cancers |
| Hbeberkinasa™ | Recombinant streptokinase, a treatment for acute mycardial infarction |
In addition to the above-referenced products, York Medical reports that the company has the right of first refusal to many other product opportunities arising from scientific research within the Republic of Cuba.
The 1997 Annual Report of York Medical has been provided to members of the U.S.-Cuba Trade and Economic Council.
The annual member luncheon of the U.S.-Cuba Trade and Economic Council
is being tentatively-scheduled for October 1998 or November 1998 at
The “21”Club in New York City. Invitations will be sent soon.
The luncheon is complimentary for members of the U.S.-Cuba Trade and Economic
Council.
UPDATED SPEAKING SCHEDULE From 29 October 1998 to 31 October 1998, Mr. John S. Kavulich
II, President of the U.S.-Cuba Trade and Economic Council, will be a guest
of The Stanley Foundation (headquartered in Muscatine, Iowa) at its “Cuba
and the United States: Approaches to Engagement” at the 39th Strategy for
Peace Conference at the Airlie Center near Warrington, Virginia.
The conference will bring together approximately fifty experts from the
public and private sectors from the United States and from the Republic
of Cuba.
On 6 November 1998, Mr. John S. Kavulich II, President of the
U.S.-Cuba Trade and Economic Council, will appear at the annual College
Music Journal (CMJ) Music Marathon-Musicfest & Filmfest at the Millennium
Hotel in New York City as a panelist for a discussion entitled “Whirled
Music: The Cuban Experience.” The CMJ Music Marathon- Musicfest &
Filmfest is the world’s largest and longest running new music convention
and festival featuring panels, workshops, and 1,000 musicians performing
at more than 60 venues in and around New York City. The projected
attendance is 8,000.
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