U.S. DOLLAR GAINS AGAINST THE PESO- Republic of Cuba government-operated Cajas de Cambio S.A. (CADECA) began selling the Convertible Peso, equal to US$1.00, for 22 Pesos and purchased the U.S. Dollar for 20 Pesos on 13 September 1999.  CADECA had sold the Convertible Peso, equal to US$1.00, for 20 Pesos and purchased the U.S. Dollar for 20 Pesos since 1 September 1999.  The official international exchange rate of one Peso to one U.S. Dollar, in effect for more than thirty years, remained unchanged.  The government of the Republic of Cuba maintains a fixed exchange rate for its international dealings and a more flexible exchange rate for domestic use.  The government of the Republic of Cuba 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.
 

CADECA Buy

CADECA Sell

From / To

20	22	13 September 1999 to 19 September 1999
20	20	1 September 1999 through 12 September 1999
20	21	13 August 1999 through 31 August 1999
22	22	16 June 1999 to 12 August 1999
22	21	13 April 1999 through 15 June 1999
21	21	15 March 1999 to 12 April 1999
20	21	4 March 1999 to 14 March 1999
21	21	19 February 1999 to 3 March 1999
21	20	13 January 1999 to 18 February 1999
21	22	26 November 1998 to 12 January 1999
21	21	15 July 1998 to 25 November 1998
19	21	1 April 1998 to 14 July 1998
20	22	12 March 1998 to 31 March 1998
21	23	11 February 1998 to 11 March 1998
23	23	August 1997 to 10 February 1998

65% TO 67% INCREASE IN OFAC LICENSES FOR TRAVEL, CARRIER, AND REMITTANCE SERVICES- The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., has, as of 12 August 1999, issued 214 travel-related and service-related licenses to 115 United States-based companies.  Approximately twelve months ago, the OFAC had issued 144 travel-related and service-related licenses to 75 United States-based companies.  Some of the companies include: Dallas Fort Worth Airport, Texas-based American Airlines, Inc. (CSP), New York City, New York-based American Express Travel Related Services (TSP), Paramus, New Jersey-based Western Union Financial Services International (RF), Englewood, Colorado-based MoneyGram Payment Systems (RF), and Fort Lauderdale, Florida-based Tico Travel (TSP).  The licenses, which are renewed every twelve months, authorize United States-based companies to provide services for individuals subject to United States law with respect to traveling to the Republic of Cuba and for sending funds to the Republic of Cuba.  The license categories are: 1) Travel Services Provider (TSP) 2) Carrier Service Provider (CSP) and 3) Remittance Forwarder (RF).  Executives of United States-based companies report that becoming an authorized OFAC travel-related and service-related licensee for the Republic of Cuba assists with developing a) operational experience within the Republic of Cuba and b) relationships with individuals within the Republic of Cuba.  Some United States-based companies have OFAC licenses to provide more than one type of service.  The following chart represents information provided by the OFAC.  Figures for 1998 are in parentheses.
 

State	Travel Service Provider (TSP)	Carrier Service Provider (CSP)	Remittance Forwarder (RF)	Total
Florida	75	17	69	161 (94)
California	8	1	6	15 (12)
New York	3		2	5 (3)
Texas	1	1	1	3 (5)
New Jersey	7		7	14 (11)
Louisiana	2		2	4 (2)
Illinois	1		1	2 (2)
Puerto Rico	3		3	6 (7)
Virginia	1			1 (1)
Nevada	1			1 (1)
Colorado	1			1 (1)
Minnesota			1	1 (0)
Total	103 (64)	19 (12)	92 (63)

UNITED STATES DEPARTMENT OF THE INTERIOR OFFICIAL COMMENTS ON CUBA- Mr. Edgar Johnson, Desk Officer for the U.S. Virgin Islands within the Office of Insular Affairs of the Office of Policy, Management, and Budget of the United States Department of the Interior in Washington, D.C., has commented upon the impact expansion of tourism within the Republic of Cuba on the U.S. Virgin Islands.  Visitors to the U.S. Virgin Islands (St. Thomas and St. Croix, St. John, and Water Island) were 2.1 million in 1998 with 1.6 million of the 2.1 million
arriving by cruise ship.  Visitor spending was US$921.4 million in 1998 according to the Government Development Bank.  Mr. Johnson, in an interview with Reuters, said, “When Cuba opens up, it's going to create real havoc for the islands.”

UNITED STATES GOVERNMENT ISSUES Y2K REPORT FOR CUBA- The United States Department of State in Washington, D.C., has issued a report on the Y2K preparedness of the Republic of Cuba.  “Cuba is not heavily reliant on automated systems.  The Cuban Government started a Y2K awareness program in November 1996.  Cuba appears to be somewhat prepared to deal with the Y2K problem.  Although Cuba continues remediation efforts and contingency planning, at the present time it appears that there is a moderate risk of potential disruption in such key sectors as banking and finance, telecommunications, and electric power.  Public services are not reliable, and the Cuban population is accustomed to doing without key services.  U.S. citizens traveling to or residing in Cuba in late 1999 or early 2000 should be aware of potential difficulties.  It is difficult to predict the severity or duration of Y2K-related disruptions.  U.S. citizens in Cuba should take practical precautions, anticipate the potential for disruption to their daily activities, and be prepared to cope with the impact of such disruptions.  Information about personal preparedness and Y2K is available in the Department of State worldwide Public Announcement of July 26, 1999 which is accessible on the Department of State, Bureau of Consular Affairs home page at http://travel.state.gov/y2kca.html.”

KCET-TV IN LOS ANGELES WILL BE FIRST TO BROADCAST BUENA VISTA SOCIAL CLUB FILM- Los Angeles, California-based KCET-TV will broadcast the “World Television Premiere of ‘Buena Vista Social Club’” on 3 November 1999 at 9:00 p.m. (EST) on PBS.  According to a media release by KCET-TV, “Buena Vista Social Club,” a documentary directed by Mr. Wim Wenders that mixes traditional Cuban music with impressionistic glimpses of urban life in contemporary Cuba.  The one-hour and 40-minute film will be followed by excerpts of a Charlie Rose interview with Wenders and one of the film's producers, guitarist Ry Cooder.  Filmmaker Wenders (“Paris, Texas,” “Wings of Desire”) provides a feature-length portrait of the Buena Vista Social Club, a group of talented Cuban musicians, many in their 80’s and 90’s, nearly forgotten in their own country.  The group, which includes some of the island’s most legendary performers, was assembled by the Grammy-winning Cooder during a 1996 trip to Havana.  Cooder’s quest was to record an album featuring the country's traditional music, including Cuban boleros and sones, dating as far back as the 1920’s.  He named the album “Buena Vista Social Club” after a private club that was a musical mecca in pre-Castro Cuba.  It sold more than 1 million copies worldwide and won the 1998 Grammy for Best Tropical Latin Album.  Cooder then convinced his longtime friend Wenders to return with him to Cuba to film the musicians in their homeland and in performance at various locations.  The documentary reveals the joy and spontaneous creativity of these amazing musicians, including footage from studio performances, the group’s concert in Amsterdam and their historic 1998 Carnegie Hall performance. Wenders’ camera also follows the artists into the hot, dusty streets of their youth, where their recollections lead to touching and often humorous stories.  In the film’s finale, viewers witness the musicians' awestruck response to being in New York City for the first time.  Among the musicians Cooder rediscovered was the film’s star, 70-year-old Ibrahim Ferrer, whom Cooder nicknamed “the Nat King Cole of Cuba” for his velvety voice.  Ferrer was literally born at a social club dance, won his first singing contest at age 12 and began singing professionally in 1941.  In the 1950’s, he performed with legendary names in Cuban music, including the Orquesta de Chapin and Benny More.  Another featured musician is 90-year-old Compay Segundo, the lead guitarist who invented the armonico, a cross between a guitar and a Cuban tres, and who reveals his zest for life when the father of five declares that he hopes to sire a sixth child.  Also highlighted is Ruben Gonzalez, 77, whom Cooder describes as “the greatest piano soloist I have ever heard in my life” and who is the only survivor of a trio of pianists from the period that helped shape the future sound of Cuban music.  The only woman in the group is Omara Portuondo, 68, known as “the Edith Piaf of Cuba,” a veteran of world tours who worked with Nat King Cole.  These musicians join 11 others ranging in age from the 14-year-old percussionist sensation Julienne Oviedo Sanchez to 81-year-old singer/songwriter Pio Leyva.  Songs featured in the film include “Chan Chan” (Francisco Repilado), “Silencio” (Rafael Hernandez), “Dos Gardenias” (Isolina Carillo), “Buena Vista Social Club” (Orestes Lopez), “Candela” (Faustino Oramas), “Viente Anos” (Maria Teresa Vera) and “El Cuarto de Tula” (Sergio Siaba).  New York City-based AT&T (1997 revenues US$52 billion) was a sponsor of the 1 July 1998 performance of the “Buena Vista Social Club” at Carnegie Hall in New York City.  This was the first time that a Fortune 100-listed United States-based company was a public sponsor of a performance of a Republic of Cuba music group visiting the United States.  AT&T, Sprint, MCI, WilTel, LDDS, and AT&T de Puerto Rico provide long distance services between the United States and the Republic of Cuba.

KOREA COMPANY OBTAINS US$3.5 MILLION ORDER FOR ELEVATORS- Seoul, South Korea-based LG Industrial Systems Co. Ltd. (1998 revenues of approximately US$6 billion), a subsidiary of Seoul, South Korea-based LG Group (1998 revenues of approximately US$73 billion) reported that the company had received an order for components (control panels, traction motion, etc.) for 150 elevators valued at US$3.5 million from the Ministry of Public Health of the Republic of Cuba.  LG Industrial Systems Co. Ltd. reports that the company expects to export approximately US$5 million in elevator components to the Republic of Cuba in 1999.  In 1998, LG Industrial Systems Co. Ltd. was awarded the Premio a la Calidad at Metanica ’98, an exhibition of machinery, metal products, and electronics products held annually in the city of Havana, Republic of Cuba. Metanica ’98 is sponsored by the Ministry of Steel, Mechanical, and Electronics Industry of the Republic of Cuba (SEME).  According to LG Industrial Systems Co. Ltd., winning the award “will increase Cuban recognition of LG Industrial Systems as a manufacturer of high quality products. It will also increase recognition of the LG brand…. LGIS is thus aiming to capture the Cuban elevator market ahead of the competition and this win at the Metanica ’98 certainly puts LGIS in a position to do so.”   LG Industrial Systems Co. Ltd. reports that the company is amongst the largest elevator manufacturing companies in the world after Farmington, Connecticut-based Otis Elevator Company, Tokyo, Japan-based Mitsubishi Corporation, and Hergiswill, Switzerland-based Schindler-Holding AG, and Dusseldorf, Germany-based Thyssen Krupp AG.  Republic of Cuba government-operated Copextel S.A., affiliated with SIME, is marketing air conditioners assembled within the Republic of Cuba and designed by LG Group.  LG Group also assembles (and supports with a service center network) within the Republic of Cuba televisions, washing machines, audio equipment, and telephones.  LG Group owns Glenview, Illinois-based Zenith Electronics Corporation.

CHINA REPORTS DECREASE IN VALUE OF IMPORTS FROM CUBA- The General Administration of Customs of the government of the People’s Republic of China, as reported a 26.7% decrease in the value of imports from the Republic of Cuba for the period January 1999 through July 1999 compared to January 1998 through July 1998.
U.S.-Cuba Trade and Economic Council, Inc.
 

Value Of Imports To The People’s Republic Of China From The Republic Of Cuba

July 1999 Imports	January 1999 through July 1999 Imports	January 1998 through July 1998 Imports
US$5,074,000.00	US$43,596,000.00	US$55,236.13

FEED BARLEY IMPORT UPDATE- The Republic of Cuba imported 400 tons of feed barley between 1 July 1999 and 31 August 1999 from various ports within France, including the port at Rouen and the port at La Pallice.
 

Total Imports of Barley (in tons)	Reporting Period
400	1 July 1999 to 31 August 1999
26,250	1 February 1999 to 24 February 1999

CANADA IMPOSING DUTIES ON STEEL DUMPING BY CUBA- The government of Canada, after a nine-month investigation, has concluded that 4,140 metric tons of steel products (reinforced bar) had been dumped within Canada by a producer within the Republic of Cuba.  The complaint, filed by five Canada-based steel producers, charged that Acinox S.A., a Republic of Cuba government-operated steel maker, was illegally selling steel used to reinforce buildings at below-cost prices, approximately 21%.  As a result of the dumping, Acinox S.A. reportedly increased is market share in Canada by approximately 40% during the first half of 1999.  The dumping took place from 1 October 1998 through 31 March 1999.  The government of Canada will impose duties 27% on steel imported from the Republic of Cuba.  Republic of Cuba steel production and exports declined in 1998 due to increased competition, mainly from Asia.  The Ministry of Steel, Mechanical, and Electronic Industry (SIME) of the Republic of Cuba reported that steel exports in 1998 were US$56 million, compared to US$110 million planned, US$80 million in 1997, and US$50 million in 1996.The two primary Republic of Cuba government-operated steel works produced 350,000 tons of steel in 1997, compared to 230,000 tons in 1996.  The two Republic of Cuba government-operated steel works planned to produce more than 400,000 tons of steel products in 1998, and more than 400,000 tons of steel in 1999.  Import figures from the government of Canada:
 

Canada Imports Of Steel From Cuba	Quantity (In Metric Tons)	Value In U.S. Dollars (.70 exchange)
January to 31 July 1999	9,116	US$2,013,200.00 (January 1999 to June 1999)
1998	2,974	US$2,035,600.00
1997		US$141,339.00

REAL ESTATE DEVELOPMENT MAY SHIFT FROM CENTER OF THE CITY OF HAVANA- H.E. Marta Lomas, Minister for Foreign Investment and Economic Cooperation of the Republic of Cuba, reported that future real estate development would be focused on the outskirts of the city of Havana and in other provinces.  Since 1996, twenty real estate joint ventures (18 involving housing for sale to non-Republic of Cuba nationals and rental to non-Republic of Cuba nationals, and 2 involving commercial space) have been established, with most in the Miramar district of Havana, where adequate utilities and services are maintained.  Republic of Cuba government-operated Cimex S.A. is a partner in ten of the joint ventures; Republic of Cuba government operated Cubalse S.A. is a partner in eight of the joint ventures; and Republic of Cuba government-operated Habaguanex S.A. (which manages the restoration of the colonial district, Old Havana) is a partner in two of the joint ventures.

CIMEX REAL ESTATE DEVELOPMENT UPDATE- Panama City, Panama-based Grupo Residencial Dos Mil, and Republic of Cuba government-operated Bienes y Raices Inmobiliario (a subsidiary of Republic of Cuba government-operated Cimex S.A) have established Cumbre S.A. The 50%-50% joint venture will commence construction of a reported US$5 million twenty-three-unit condominium in the Miramar district of the city of Havana.  The joint venture is planning a second condominium, also to be located in the Miramar district of Havana.  Mr. Jose Ibarra, Director of Real Estate Development for Cimex S.A., reported that another joint venture, Serenisima S.A. (between
Italy-based Garda and Republic of Cuba government-operated Bienes y Raices Inmobiliario, a subsidiary of Republic of Cuba government-operated Cimex S.A) would be established in September 1999.  De La Isla S.A., a real estate joint venture (ten years and on a 50%-50% basis) between Italy-based VI. RI. SE Caribbean Group S.A. and Republic of Cuba government-operated Desarrollo Inmobiliario (a subsidiary of Republic of Cuba government-operated Cimex S.A.) was established in July 1999 and will construct a 34-unit condominium in the Miramar district of the city of Havana. The property is expected to be completed by January 2001.  VI. RI. SE Caribbean Group S.A. will reportedly invest US$2.7 million in the joint venture.  Desarrollo Inmobiliario will provide the land, valued at US$300.00 per square meter.  VI. RI. SE Caribbean Group S.A. is also a partner in Havana Inmobiliaria, which plans to construct two multi-unit condominium properties in Miramar.  Cimasqu Inmobiliaria, a real estate joint venture between Madrid, Spain-based Imasa Construction and Republic of Cuba government-operated Cimex Inmobiliaria (a subsidiary of Cimex S.A.), recently announced that construction would begin on a 106-unit condominium in the Miramar district of Havana.  Mr. Jose Ibarra reported that nine joint ventures had been signed to date and more than twenty were being negotiated.  Of the nine joint ventures signed, three are with capital from Italy, two are with capital from Spain, and the others have capital from Switzerland, United Kingdom, Canada, and other countries.  The total non-Republic of Cuba-based capital invested in the nine joint ventures (a combined 520 units) is reportedly US$69 million.  Cimex S.A. expects gross revenues of US$300 million in the year 2000 from real estate sales and real estate rentals.

CUBALSE REAL ESTATE UPDATE- Italy-based La Vivienda S.A., with capital from Italy-based investors who have existing commercial interests within the Republic of Cuba, and Republic of Cuba government-operated Lares Inmobiliaria S.A., the real estate subsidiary of Republic of Cuba government-operated Cubalse S.A., have established La Eden del Caribe S.A., which will invest US$20 million to construct an 188-unit condominium complex in the Miramar district of the city of Havana.  Lares Inmobiliaria S.A. recently established another joint venture, Residential America, with capital from Spain, and expects, within the next weeks, to establish the joint venture, Villa Europa, and the joint venture, Terranova.  Both joint ventures have capital from Canada-based investors.  Lares Inmobiliaria established its first joint venture, Real Inmobiliaria S.A., in 1996, with the Morocco-based Pastor Group and Italy-based investors, to construct a total of 600 condominium units primarily to be located in the city of Havana.  Real Inmobiliaria S.A. recently established the 31-unit Monte Carlo Palace.  Monte Barreto S.A., a joint venture with the Tel Aviv, Israel-based Grupo BM, was established in late 1996 to construct the 18-building, 180,000 square meter Miramar Trade Center, of which two buildings have been completed.  Costa Habana S.A., a joint venture with Residencial Miramar, a subsidiary of Madrid, Spain-based Esfera 2000 group, was established in 1997 to construct 175 duplex condominium units in the Miramar district of Havana.  Costa Habana S.A., expects to complete in 2000 the US$14 million, 175-unit Jardines de 5th Avenida.  Reportedly, 65% of the units are sold, 50% to mainly to individuals from Spain and from Italy, with the remainder non-Republic of Cuba nationals residing in the Republic of Cuba.  The average unit purchase price ranged from US$100,000.00 to US$150,000.00.  Since the government of the Republic of Cuba has yet to authorize mortgages, the purchase price of a unit is paid in installments of 15%, 25%, 25%, 25%, and 10% upon receipt of the property.  Reportedly, 65% of the installment payments due for each unit sold have been paid.  A 4% tax on the total value of the condominium unit is paid to the Ministry of Justice of the Republic of Cuba upon receipt of title to the condominium unit.  Monthly maintenance charges are expected to range from US$50.00 to US$75.00, depending upon the value of the condominium unit.  Pilar Inmobiliaria S.A, a joint venture with Italy-based F. Lli Pierantozzi SpA, was established in 1998 to construct condominium units in the Miramar district of Havana.  Parque Oeste S.A., a joint venture with Spain-based Nuevo Futuro Construcciones y Contractas S.A., was established in 1998 to construct beachfront condominiums east of Havana.  Lares Inmobiliaria S.A. has eight joint ventures, five to construct condominium units in Havana and surrounding areas.

OLD HAVANA RESTORATION UPDATE- Mr. Rafael Rojas, head of development projects of Republic of Cuba government-operated Habaguanex S.A., which manages the restoration of the colonial district (Old Havana) of the city of Havana, reported that in 1999 approximately US$40 million would be invested (financed) for restoration, including properties such as the Santander Hotel (100 rooms), Packard Hotel (200 rooms), Nueva Isla Hotel (210 rooms), and Telegrafo Hotel (60 rooms). Other hotels slated for restoration, or in the process of being restored, include the Florida Hotel (25 rooms with Italy-based Tognozzi), Saratoga Hotel (88 rooms with United Kingdom-based capital and Lebanon-based capital), the Gran Hotel (144 rooms with France-based Feal S.A.), the Park View Hotel (62 rooms), the Lafayette Hotel (40 rooms), and the conversion of what is currently the building housing the Ministry of Education of the Republic of Cuba into a 400-room hotel.  Mr. Rojas reported that plans included a combined total of 1,130 hotel rooms to be operational by 2001, compared to the approximately 200 hotel rooms currently operational.  Reportedly, approximately 54% of the 1.4 million tourists visiting the Republic of Cuba in 1998 toured the 4.25 square kilometer Old Havana.  As of the end of 1998, Habaguanex S.A. managed seventy-two establishments, including 12 cafeterias, 16 U.S. Dollar retail stores, 13 markets, two hotels, and one inn.  In 1982, Old Havana was designated a World Heritage Site by the United Nations Educational, Scientific, and Cultural Organization (UNESCO).  The designation includes 4,000 buildings, of which 520 are considered historic and have already been or will be restored and protected.  The Office of the Historian of the City of Havana, which manages the commercial development of Old Havana, has created several companies to manage its commercial activities: Habaguanex S.A (food service, retail stores, hotels), Fenix S.A. (real estate) and San Cristobal (tourism).

SPAIN GOVERNMENT COULD TAKE LEGAL ACTION AGAINST TREASURE HUNTERS IN CUBA- The government of Spain reported that it could claim hundreds of sunken Galleons within the territorial waters of the Republic of Cuba, as well as, off the coasts of other countries.  Republic of Cuba government-operated Geomar, in association with a Canada-based company, a South African-based company, and a France-based company, is seeking to salvage ships that were sunk off the shores of the Republic of Cuba between 1500 and 1900.  The government of the Republic of Cuba has granted exploration rights on a risk basis, with companies recouping costs if valuables are discovered, then equally sharing any remaining valuables with Geomar.  Toronto, Canada-based Visa Gold Exploration Inc, after six years of preparations, was listed on the Toronto Stock Exchange (TSE) last week as the company began underwater exploration off the Province of Havana’s northern coast, and the Isla de la Juventud, 150 kilometers to the south of the city of Havana.  In July 1999, a United States court awarded the government of Spain custody of two frigates lost off the coast of Virginia in 1802, rather than custody to the United States-based company that discovered the frigates.  While the government of Spain may not challenge the government of the Republic of Cuba over custody of any discovered valuables, the government of Spain may seek restitution from non-Republic of Cuba-based partners of Geomar.

RUSSIA FOREIGN MINISTER TO VISIT CUBA- H.E. Ivanov, Minister of Foreign Affairs of the Russian Federation, will visit the Republic of Cuba on 28 September 1999.