13 December 1999 to 19 December 1999
U.S. Dollar Unchanged Against The Peso- 1
U.S. Healthcare Exhibitors Permitted To Distribute Samples- 2
Chase Manhattan Bank Subsidiary Is Nominee For Western Mining Corporation
Shares- 2
Grand Hyatt Hong Kong Is Location Of Pacific Cigar Company Event-
2
Pam Shriver, Zena Garrison, Dr. “Patch” Adams, Milwaukee Symphony
Visit Cuba- 3
Cuba Concrete Producers Accused Of Dumping Products In Canada- 4
Leisure Canada Trading On Canadian Venture Exchange- 4
Tokmakjian Group To Use Hyundai Motors In Heavy Equipment Moderniziation-
6
Update On China Joint Ventures And Trade Credits- 6
September 1999 United States Exports To Cuba- 7
Updated Speaking Schedule- 8
Attachment- Photocopy Of Letter From The United States Department
Of Commerce
U.S. DOLLAR UNCHANGED AGAINST THE PESO- Republic of Cuba government-operated
Cajas de Cambio S.A. (CADECA) sold the Convertible Peso, equal to US$1.00,
for 22 Pesos and purchased the U.S. Dollar for 21 Pesos since 1 October
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.
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U.S. HEALTHCARE EXHIBITORS PERMITTED TO DISTRIBUTE SAMPLES- The
Bureau of Export Administration (BXA) of the United States Department of
Commerce in Washington, D.C., has authorized participants in the U.S. Healthcare
Exhibition (25 January 2000 to 29 January 2000) in the city of Havana to
distribute samples of their products to attendees. The definition
of “attendees” as provided by the BXA includes: officials of the government
of the Republic of Cuba, members of non-governmental organizations (e.g.,
charitable or religious organizations) and other individuals not affiliated
with the government of the Republic of Cuba, and Republic of Cuba nationals.
[See attached photocopy of 13 December 1999 letter from the BXA].
Exhibitors will require a license (complete form BXA-748P) from the BXA
for such distribution. The BXA will authorize the distribution of
the following “free of charge” and “in usual and customary quantities”:
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newspaper and magazine articles, sales brochures, sales information on diskettes, video tapes, etc., not proprietary information may be distributed such as schematics |
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over-the-counter nutritional and food supplements |
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no description provided |
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no description provided |
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includes such items as bandages, gauze, surgical gloves, etc. |
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including accessories, related software, or component parts |
For additional information, please contact Mrs. Joan Roberts, Director- Foreign Policy Controls Division, Office of Strategic Trade and Foreign Policy Controls, Bureau of Export Administration of the United States Department of Commerce in Washington, D.C., at telephone (202) 482-4252 or by facsimile at (202) 482-6088.
CHASE MANHATTAN BANK SUBSIDIARY IS NOMINEE FOR WESTERN MINING CORPORATION SHARES- A subsidiary of Sydney, Australia-based Chase Manhattan Bank Australia (CMBAL), Sydney, Australia-based Chase Manhattan Nominees Ltd. (CMN), an indirect wholly-owned subsidiary of New York City, New York-based Chase Manhattan Corporation (1998 assets exceeding US$350 billion), has served since 1988 as the nominee (custodian) for outstanding shares of Melbourne, Australia-based Western Mining Corporation (WMC). The current holdings by CMN in WMC is 7.66%, valued approximately US$200 million. In 1997, Republic of Cuba government-operated Caribbean Nickel S.A. (under the auspice of the Ministry of Basic Industry of the Republic of Cuba) signed a joint venture agreement valued at US$650 million with Melbourne, Australia-based Westminer Holdings Ltd., a subsidiary of WMC, to construct a nickel plus cobalt plant and refinery in the Pinares de Mayari area of Holguin Province. The venture, in which WMC holds 65% of the shares, has yet to begin construction due to previously low nickel prices and a lack of financing. The total value of the assets of CMN is reported as approximately US$70 billion. Individual entities (corporations) using the services of CMN normally have a minimum asset value of US$100 million placed with CMN. WMC has American Depository Receipts (ADR’s) listed on the New York City, New York-based New York Stock Exchange (NYSE). According, to CMBAL, individuals subject to United States law may use the services of CMN. 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 a 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. [OFAC 4 March 1994].
GRAND HYATT HONG KONG IS LOCATION OF PACIFIC CIGAR COMPANY EVENT- On 25 November 1999, Hong Kong, People’s Republic of China-based Grand Hyatt Hong Kong was the location of a gathering (cigar fashion show) hosted by Hong Kong, People’s Republic of China-based Pacific Cigar Company, the exclusive distributor of Republic of Cuba-produced cigars within countries on the Asian continent. The Grand Hyatt Hong Kong is managed by Chicago, Illinois-based Hyatt Hotels & Resorts (1998 revenues exceeded US$3 billion). The Grand Hyatt Hong Kong is owned by Hong Kong, People’s Republic of China-based New World Development Limited. Hyatt Hotels & Resorts has been permitted by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., to own and to manage the Park Hyatt Toronto, a US$75 million property located in Toronto, Canada, that had a Casa del Habano retail cigar store on the premises (with a multi-year lease) when Hyatt Hotels & Resorts first evaluated the property for purchase. Republic of Cuba government-operated Habanos S.A., the exclusive distributor of Republic of Cuba-produced cigars, owns the Casa del Habano retail cigar store franchise, of which there are approximately 69 located throughout the world. Habanos S.A. owns 100% of some of the Casa del Habano retail cigar stores (mainly those located within the Republic of Cuba), has an equity interest in others, and in others has no equity interest, only receiving a franchise fee. In April 1998, the 798-room Sheraton Hong Kong Hotel & Towers opened a Casa del Habano retail cigar store in the property. White Plains, New York-based Starwood Hotels & Resorts Worldwide, Inc. (1998 revenues exceeded US$4 billion), owns Sheraton, Westin, Four Points, St. Regis/The Luxury Collection, W Hotels, and Ciga. The Sheraton Hong Kong Hotel & Towers is “partially-owned” Sheraton. Bala Cynwyd, Pennsylvania-based Tinder Box International, Ltd., which owns the Tinder Box brand name, has a franchisee located in Winnipeg, Canada, which sells Republic of Cuba-produced tobacco products. According to Tinder Box International, Ltd., approximately 75% of the tobacco products sold in the Winnipeg, Canada, retail store are of Republic of Cuba origin. Tinder Box, Inc., has two company-owned retail stores within the United States and 128 franchisee-owned retail stores within the United States; and a franchisee-owned retail store will be operational by December 1999 in Santiago, Chile. Franchisees pay Tinder Box International, Ltd., a one-time franchise fee of US$30,000.00 and between 4% and 5% of gross revenues per Tinder Box retail store under a ten-year franchise agreement. Tinder Box International, Ltd., provides advertising support to franchisees. The Nassau Marriott Resort and Crystal Palace Casino located in Nassau, the Bahamas, has featured a nightly one hour and forty-five minute joint performance offering a musical review of Cuban culture and Bahamian culture by 38 Republic of Cuba nationals and 22 Bahamian nationals. The Nassau Marriott Resort and Crystal Palace Casino is managed by Washington, D.C.-based Marriott International, Inc. (1998 revenues exceeded US$8 billion), which operates 1,300 properties in 56 countries. The Nassau Marriott Resort and Crystal Palace Casino is owned by Wichita, Kansas-based Mr. Philip Ruffin. The Wyndham Aruba Beach Resort & Casino, which is managed by Dallas, Texas-based Wyndam International, Inc., has hosted a nightly show, “An Evening In Havana- No Passport Required.” The owner of the Wyndham Aruba Hotel & Casino is a Venezuela-based company. The Wyndham Aruba Hotel & Casino has compensated Republic of Cuba government-operated Artex S.A., which, in turn, has compensated the performers who are Republic of Cuba nationals.
PAM SHRIVER, ZENA GARRISON, DR. “PATCH” ADAMS, MILWAUKEE SYMPHONY VISIT CUBA- Professional tennis players, Ms. Pam Shriver and Ms. Zena Garrison, visited the Republic of Cuba on 15 December 1999 and 16 December 1999 under a license from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C. The purpose of the visit was to hold an exhibition match with Republic of Cuba nationals as partners and to host a series of tennis clinics. Other visitors last week included Dr. Hunter “Patch” Adams, known within the United States as the “Doctor of Laughs” for his use of clowns and humor with pediatric patients, along with a 103-member healthcare delegation. The actor Mr. Robin Williams played the role of Dr. Adams in a recent motion picture. And, the Milwaukee Symphony Orchestra visited the Republic of Cuba, becoming the first major United States-based symphony orchestra to perform in the Republic of Cuba since 1959. Milwaukee, Wisconsin-based Briggs & Stratton Corporation (1998 revenues exceeding US$1 billion) contributed US$25,000.00 to be a sponsor of the Milwaukee Symphony Orchestra’s visit to the Republic of Cuba. Briggs & Stratton Corporation manufactures and sells components for original equipment manufacturers, namely gasoline engines for outdoor powered equipment.
CUBA CONCRETE PRODUCERS ACCUSED OF DUMPING PRODUCTS IN CANADA-
For the second time in less than twelve months, Republic of Cuba government-operated
exporters have been accused by the government of Canada of dumping products.
The Canada Customs and Revenue Agency (CCRA) of the government of Canada
reported that a formal investigation had been launched into the dumping
(14% below prevailing market prices) of concrete reinforcing bar products
into Canada by companies located in Cuba, South Korea and Turkey.
Concrete reinforcing bars are used in the construction industry.
Until the conclusion of an investigation by the Canadian International
Trade Tribunal (CITT), import duties ranging from 3% to 27% are being imposed
on reinforcing bars imported from companies in Cuba, South Korea, and Turkey.
The CCRA reported that the investigation is expected to be completed by
12 January 2000. In September 1999, the government of Canada, after
a nine-month investigation, 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 imposed
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 1999 would be US$76 million, steel exports in 1998 were US$56
million (compared to US$110 million planned), steel exports were US$80
million in 1997, and steel exports were US$50 million in 1996. The
two Republic of Cuba government-operated steel works planned to produce
more than 400,000 tons of steel in 1999. Import figures from the
government of Canada:
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LEISURE CANADA TRADING ON CANADIAN VENTURE EXCHANGE- North Vancouver,
Canada-based leisure Canada, Inc. (CDNX:LCN) reported that on 29 November
1999 the common shares of Leisure Canada Inc. commenced trading on the
Canadian Venture Exchange (CDNX) and was de-listed from the Canadian Dealer
Network. Leisure Canada, Inc., through its North Vancouver, Canada-based
Wilton Properties subsidiary, plans to invest approximately US$400 million
to develop within the Republic of Cuba hotels, marinas, golf courses, equestrian
riding centers, cruise ship facilities, tennis courts, convention centers,
health spas, retail facilities, and eco-tourism facilities in through a
joint venture with Republic of Cuba government-operated Gran Caribe S.A.,
one of the three largest Republic of Cuba government-operated tourism companies.
Construction is expected to begin in January 2000 at Jibacoa, a 5.5 square
kilometer waterfront property located 65 kilometers east of the city of
Havana on the coast highway, midway between Havana and the resort area
of Varadero, 140 kilometers east of Havana. In 1997, then San Francisco,
California-based BancAmerica ROBERTSON STEPHENS Investment Management,
an investment banking company with assets of US$2 billion specializing
in emerging growth companies, purchased a 26.2% (fully diluted) investment
in Leisure Canada. The investment was made through a registered offshore
fund, ROBERTSON STEPHENS Orphan Fund, located on Grand Cayman, Cayman Islands.
BancAmerica ROBERTSON STEPHENS Investment Management announced in November
1998 that it was being purchased by a group of investors, which included
the company’s original founders. BancAmerica ROBERTSON STEPHENS has
since changed its name to BancBoston Robertson Stephens, Inc., and is a
wholly owned subsidiary of Boston, Massachusetts-based FleetBoston Financial.
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 a 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.
[OFAC 4 March 1994]. Other investors in Leisure Canada include Paris,
France-based Societe General and Paris, France-based LCF Rothschild.
Leisure Canada reports no current revenues from operations within the Republic
of Cuba, but expects that within the next two years more than 51% of its
revenues will be from operations within the Republic of Cuba. In
February 1999, Leisure Canada, Inc., announced the appointment of Mr. Simon
F. Cooper as a member of the Board of Directors. Mr. Cooper is President
of Toronto, Canada-based Marriott Lodging Canada and is Senior Vice President-Lodging,
Canada Region for Washington, D.C.-based Marriott International, Inc. (1998
global revenues exceeding US$9 billion). Undisclosed is whether Mr.
Cooper and/or Marriott International, Inc., has now or plans to have a
financial interest in Leisure Canada. Mr. Cooper previously served
as President and Chief Operating Officer of Toronto, Canada-based Delta
Hotels and Resorts (a subsidiary of Calgary, Alberta, Canada-based Canadian
Pacific Limited), which had managed properties within the Republic of Cuba,
but in 1998 ceased all activity within the Republic of Cuba. Leisure
Canada and Paris, France-based Meridien Gestion SA (a subsidiary of London,
United Kingdom-based Forte Hotels which itself is a subsidiary of London,
United Kingdom-based Granada Group Plc) which manages Le Meridien Hotels
& Resorts have an agreement to develop the Le Meridien Village in Jibacoa.
The new development will be similar to the Forte Village located in Sardinia,
Italy, reportedly the company’s most profitable property. Forte Hotels
manages more than 400 properties with a combined 54,000 rooms worldwide.
Le Meridien Hotels and Resorts manages more than 90 properties with a combined
24,000 rooms worldwide. Le Meridien Hotels and Resorts will assist
in the “design, development, and mangement” of three properties in Jibacoa.
In November 1998, Meridien Gestion S.A. signed a Letter of Intent with
Leisure Canada whereby Meridien Hotels and Resorts would manage and, perhaps,
have an equity interest in, five hotels with a combined 1,000 rooms.
The Letter of Intent stated that the initially agreed three hotels would
be in operation within 30 months of a final signed agreement between Meridien
Gestion S.A. and Leisure Canada. Leisure Canada, Inc. and PGAGM have
a joint venture agreement to establish professional golf within the Republic
of Cuba by assisting in the organization of amateur golf within the Republic
of Cuba through the development of PGA of the United Kingdom and Ireland
golf academies to provide for the coaching of amateur golfers and professional
golfers and for the training of both
amateur golfers and professional golfers. The joint venture will
merchandise the PGA of the United Kingdom and Ireland brand and market
media rights. Established in 1992, PGAGM (which shares a similar
name but is not controlled by Palm Beach Gardens, Florida-based PGA of
America) is a subsidiary company of the PGA of the United Kingdom and Ireland,
the oldest professional golf association in the world. Ponte Vedra
Beach, Florida-based PGA tour is also not affiliated with the PGA of the
United Kingdom and Ireland. The PGA of the United Kingdom and Ireland,
and/or the PGA of any other country, the PGA tour in Europe can add a PGA
Tour-sanctioned golf tournament within the Republic of Cuba to its tour
schedule. PGAGM provides development, operational and management
consultancy to the golf industry. PGAGM reports that the company
has previous experience working within the Republic of Cuba through Europe-based
companies. The finale round of the European Challenger Tour was held
28 October 1999 to 31 October 1999 at the Varadero Golf Course. The
Republic of Cuba’s first professional golf championship since 1959 was
sponsored by Madrid, Spain-based Grupo Sol Melia, which recently signed
an agreement with PGAGM to sponsor at least one tournament annually in
Varadero. Varadero has the Republic of Cuba’s only 18-hole professional
golf course. There are announced plans to construct at least four
additional 18-hole professional golf courses within the Republic of Cuba.
TOKMAKJIAN GROUP TO USE HYUNDAI MOTORS IN HEAVY EQUIPMENT MODERNIZATION- Thornhill, Ontario, Canada-based Tokmakjian Limited, which operates two companies within the Republic of Cuba, Caribbean Auto S.A. and Caribbean Diesel S.A., reported that the company had established several economic associations with the Ministry of Sugar of the Republic of Cuba to replace existing motors in heavy equipment used in agriculture with motors manufactured by Seoul, South Korea-based Hyundai Group. Tokmakjian is the exclusive representative of Hyundai Group within the Republic of Cuba. The economic association will: 1) replace motors in agricultural equipment located in Camaguey Province (530 kilometers east of the city of Havana) 2) assemble tractors in Holguin Province (740 kilometers east of Havana), GIMAC, a subsidiary of the Ministry of Steel, Mechanical, and Electronics Industry of the Republic of Cuba. 3) assemble tractors in Holguin Province (740 kilometers east of Havana) with UEREA, a subsidiary of the Ministry of Construction of the Republic of Cuba to replace motors in heavy equipment. Tokmakjian Limited has been selling vehicles to Republic of Cuba government-operated companies for more than five years, and also has contracts for the sale of food products to the Republic of Cuba government-operated companies under the auspice of the Ministry of Tourism of the Republic of Cuba and to Republic of Cuba government-operated U.S. Dollar retail stores.
UPDATE ON CHINA JOINT VENTURES AND TRADE CREDITS- H.E. Dr. Carlos
Lage, a Vice President of the Council of State of the Republic of Cuba,
visited the People’s Republic of China from 9 December 1999 to 13 December
1999 where he presided at the formal signings of previously announced joint
ventures, letters of intent, and provision of trade credits, as well as,
the establishment of an office: 1) Gran Kaimen S.A., a joint venture
between Republic of Cuba government-operated Grupo Electronica of the Republic
of Cuba and People’s Republic of China
government-operated Gran Dragon Telecommunications Corporation to produce
telecommunications equipment in the Republic of Cuba for the Republic of
Cuba domestic market and for export to countries in the Americas
2) a joint venture between Republic of Cuba government-operated Cimab
S.A. and People’s Republic of China government-operated International Science
Center to produce pharmaceuticals in the People’s Republic of China 3)
Hungda-C- Kure, a joint venture between Republic of Cuba government-operated
Centro Nacional de Sanidad Animal of the Republic of Cuba and People’s
Republic of China government-operated Hungda de Changchun High Technology
Group to produce veterinarian medicines in the People’s Republic of China
4) letter of intent between the Ministry of Transportation of the
Republic of Cuba and People’s Republic of China government-operated Tianjin
International Economic and Technical Cooperation Corporation to develop
port facilities and to operate port facilities within the Republic of Cuba
5) letter of intent between the Ministry of Transportation of the
Republic of Cuba, People’s Republic of China government-operated Dalian
Locomotive Factory, and People’s Republic of China government-operated
Dalian Import-Export Corporation to modernize railways within the Republic
of Cuba with revenues generated from future unspecified joint port operations
6) trade credits to Republic of Cuba government-operated Consumimport
to purchase computers and computer-related equipment for the Ministry of
Education of the Republic of Cuba 7) trade credits to the government
of the Republic of Cuba from the People’s Republic of China government-operated
China National Corporation for the purchase of bicycle making machinery
8) establishment of a branch office in Beijing, People’s Republic
of China, by Republic of Cuba government-operated National Bank of the
Republic of Cuba. The government of the People’s Republic of China
reported that bilateral trade in 1998 was US$221 million. The People’s
Republic of China is the Republic of Cuba’s primary supplier of rice (200,000
tons in 1999), and a supplier of fuel oil, and machinery. People’s
Republic of China government-operated Construction and Engineering Corporation
(CSCEG) and Republic of Cuba government-operated Habaguanex S.A., (which
manages the restoration of the colonial district, known as “Old Havana,”
in the city of Havana) recently established a joint venture to design,
construct, and operate a hotel near Havana’s China Town district.
The government of the People’s Republic of China also has a joint venture
restaurant in the resort area of Varadero (140 kilometers east of Havana)
and a recently established rice growing joint venture.
SEPTEMBER UNITED STATES EXPORTS TO CUBA- The Foreign Trade Division
of the United States Bureau of the Census of the United States Department
of Commerce in Washington, D.C., reported that the value of United States
exports (defined as products exiting the borders of the United States whether
sold or donated) to the Republic of Cuba in August 1999 was US$42,963.00.
The reported values are on an F.A.S. (Free Along Side Ship) basis- the
cost of freight is excluded:
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In US$ |
Value in US$ |
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NESOI (Not Elsewhere Specified Or Indicated) |
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NESOI (Not Elsewhere Specified Or Indicated) |
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Updated Speaking Schedule
Mr. John S. Kavulich II, President of the U.S.-Cuba Trade and Economic
Council, has accepted an invitation from Ronan, Montana-based Travel Learning
Conferences, Inc., to speak at the annual Nonprofits in Travel Conference
(NPTC) at the Omni Shoreham Hotel in Washington, D.C., on 10
February 2000. The NPTC is “the premiere national forum for
nonprofit organizations offering life-long learning through educational
travel programs. The mission of these organizations is educational,
and they use travel revenue to subsidize their non-travel programs, provide
educational outreach, and maintain strong and loyal connections with members/alumni.”
For additional information, please access www.nptc2000.com on the Internet
or contact Ms. Sara Swan, Program Coordinator, at telephone: (406) 676-2255
or facsimile: (406) 676-8524 or e-mail:
tlc@ronan.net
ECONOMIC EYE ON CUBA© is published each Monday for members of the U.S.-Cuba Trade and Economic Council, the largest nonpartisan business organization within the United States focusing upon the Republic of Cuba. The organization is a private, not-for-profit corporation which does not take positions with respect to United States-Republic of Cuba political relations. All rights reserved. Material may not be reproduced without written permission.