U.S.-Cuba Trade and Economic Council, Inc.
30 Rockefeller Plaza New York, New York 10112-0002
Telephone (212) 246-1444 Facsimile (212) 246-2345
Internet: http://www.cubatrade.org


Realities of MarketCuba©

What United States Companies Can Do

United States businesses are permitted, either under a general license (no written authorization required) or specific license (written authorization required) from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., and/or Bureau of Export Administration (BXA) of the United States Department of Commerce in Washington, D.C., to:

(A) Execute and implement contracts within the fields of agricultural products, air charter services, artwork, communications, cultural events, entertainment, exhibitions, farm supplies, food sales, informational materials, medical equipment, medical instruments, medical supplies, medicated products, medicines, money transfer services, package delivery services, pharmaceuticals, telecommunications, and travel services

(B) Visit the Republic of Cuba to identify commercial opportunities within the fields of agricultural products, air charter services, artwork, communications, cultural events, entertainment, exhibitions, farm supplies, food sales, informational materials, medical equipment, medical instruments, medical supplies, medicated products, medicines, money transfer services, package delivery services, pharmaceuticals, telecommunications, travel services; and for intellectual property matters and for legal matters.

(C) Register trademarks and patents.

(D) Provide camera-ready artwork for advertising on television, in newspapers and magazines.

(E) Execute non-binding letters of intent.

(F) Provide funding to entrepreneurs.

(G) Make donations of products for humanitarian purposes.

(H) Organize and participate in trade shows.

(I) Have executives lecture at educational institutions.

(J) Authorize consumer credit cards to be valid for use.

(K) Have indirect non-controlling investments in the Republic of Cuba.  On 4 March 1994 the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., issued an opinion to Mr. John S. Kavulich II, which stated that a U.S. business or individual subject to U.S. law may make a secondary market investment in a third-country business which has commercial dealings within the Republic of Cuba provided that the investment does not result in control-in-fact of the third-country business by the U.S. investor and the third-country company does not derive a majority of its revenues from business activity within the Republic of Cuba.  Secondary market investment that falls short of a controlling interest in such a business is not prohibited.

 

United States-Republic of Cuba Commercial Relations -- 1980 to Present

 Between 1980 and the end of 1992, for example, the value of United States-owned foreign subsidiaries' trade, licensed by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury and by the Bureau of Export Administration (BXA) of the United States Department of Commerce, with enterprises within the Republic of Cuba was US$4.563 billion. 

 Of this total trade, US$2.637 billion was the value of subsidiaries' exports to the Republic of Cuba permitted by the licenses and US$1.926 billion was the value of subsidiaries' imports from the Republic of Cuba permitted by the licenses.  There were 2,938 licenses issued by the OFAC and by the BXA to more than one hundred United States-based companies businesses (see attached listing) between 1980 and the end of 1992.  There were few license applications rejected by the OFAC.

 The implementation of the Cuban Democracy Act in October of 1992 eliminated (bulk food commodities) the continuation of most United States-owned foreign subsidiaries' trade with enterprises within the Republic of Cuba, but at the same time provided additional licensed and non-licensed opportunities for the artwork, communications, entertainment, informational materials, medical equipment, medical instruments, medical supplies, medicated products, medical, pharmaceutical, publishing, and telecommunications industries. 

Year

Estimated Number Of United States Business Representatives Visiting The Republic Of Cuba

2001

3,700

2000

3,400

1999

2,800

1998

2,500

1997

2,000

1996

1,500

1995

1,300

1994

500

  The total value of permitted United States business activity within the Republic of Cuba from October 1994 through December 2001 is estimated to have exceeded US$900 million.

Executives of AOL Time Warner and other companies have traveled to the Republic of Cuba to discuss opportunities for the export and import of music, films, and publications.  Johnson & Johnson and other companies have received licenses from the BXA to export healthcare products to Republic of Cuba government-operated companies.  AT&T, LDDS/Metromedia, MCI, Sprint, AT&T de Puerto Rico, Wil-Tel, and WorldCom each currently provide long distance telephone and data services between the United States and the Republic of Cuba. 

The number of United States-based companies receiving Carrier Service Provider (CSP) licenses and Travel Service Provider (TSP) licenses from the OFAC increased during the period 7 September 2000 through 13 April 2001.  The number of United States-based companies receiving and Remittance Forwarder (RF) licenses from the OFAC has decreased during the period 7 September 2001 through 13 April 2001.  A total of 164 United States-based companies currently have a combined 273 licenses (TSP, CSP, and/or RF) issued by the OFAC.

Period

TSP Licenses

CSP Licenses

        RF Licenses

Total Licenses

13 April 2001

149

28

96

273

7 September 2000

137

27

99

264

12 August 1999

103

19

92

214

 

Location Of OFAC Licensees As Of 13 April 2001

State

TSP Licenses

CSP Licenses

RF Licenses

California

21

1

12

Colorado

 

 

1

Florida

99

21

66

Georgia

 

1

 

Illinois

2

1

1

Louisiana

3

1

2

Massachusetts

1

 

 

Minnesota

 

 

1

Nevada

1

 

 

New Jersey

9

1

7

New York

3

 

2

Puerto Rico

3

 

3

Tennessee

1

 

 

Texas

1

1

 

Virginia

1

 

 

Washington

1

 

 

Washington, D.C.

3

1

1

 

Elk Grove Township, Illinois-based United Airlines, Inc. (2001 revenues exceeded US$17 billion), Dallas/Fort Worth Airport, Texas-based American Airlines, Inc. (2001 revenues exceeded US$19 billion); Atlanta, Georgia-based Delta Air Lines, Inc. (2001 revenues exceeded US$14 billion); and Dania Beach, Florida-based Gulfstream International Airlines (2001 revenues exceeded US$80 million), within which Houston, Texas-based-Continental Airlines, Inc. (2001 revenues exceeded US$7 billion) has a 28% interest, each have CSP licenses from the OFAC which authorize the transportation of passengers and cargo between the United States and the Republic of Cuba.  United Airlines also has a TSP license from the OFAC.  RF licenses are held by Englewood, Colorado-based Western Union Financial Services, Inc. (a subsidiary of Atlanta, Georgia-based First Data Corporation, 2001 revenues exceeded US$5 billion), and Minneapolis, Minnesota-based MoneyGram Payment Services, Inc. (a subsidiary of Phoenix, Arizona-based Viad Corp, 2001 revenues exceeded US$2 billion).   

Only Gulfstream International Airlines (which has a CSP license and a TSP license) has chosen to operate regularly scheduled charter flights between the United States and the Republic of Cuba using its own aircraft.  United Airlines and American Airlines have chartered their aircraft to CSP licensees for use on regularly scheduled charter flights between the United States and the Republic of Cuba; and Delta Air Lines has used its aircraft to transport a group from the United States to the Republic of Cuba.  Gulfstream International Airlines has a code-share agreement with St. Paul, Minnesota-based Northwest Airlines Corporation (2000 revenues exceeded US$10 billion).  Gulfstream International Airlines has a connection agreement and operates the TWA Connection from San Juan, Puerto Rico, with St. Louis, Missouri-based Trans World Airlines, Inc. (2000 revenues exceed US$3 billion), a subsidiary of American Airlines.  Gulfstream International Airlines has a code-share agreement with Panama City, Panama-based COPA airlines. 

Since 1962, Delta Air Lines, Continental Airlines, and United Airlines have had route authorities from the following cities: Delta- Havana to Houston, Los Angeles, New Orleans, San Francisco, and San Juan; Continental- Havana to Fort Lauderdale, West Palm Beach, United- Havana to Miami, Key West, Baltimore, Boston, Dallas, Houston, Los Angeles, New Orleans, New York, Newark, Philadelphia, San Francisco, San Juan, St. Croix, St. Thomas, and Washington, D.C.; and Camaguay to Miami, Baltimore, Boston, Dallas, Houston, Los Angeles, New Orleans, New York, Newark, Philadelphia, San Francisco, San Juan, St. Croix, St. Thomas, and Washington, D.C.

  US Airways permits the 17 million members of its US Airways Dividend Miles program to accrue mileage for travel to/from/through the Republic of Cuba.  While US Airways does not currently provide service to/from/through the Republic of Cuba, and no awards are available for travel to the Republic of Cuba, members of the US Airways Dividend Miles program can accrue mileage to/from/through the Republic of Cuba when traveling on airlines affiliated with LatinPass.  LatinPass is a worldwide partner of the US Airways Dividend Miles program (other airline partners include ANA, Qantas, Alitalia, Sabena, Swissair, and Northwest).  LatinPass, which has 125,000 members, includes ACES, Avianca, Aviateca, COPA, LACSA, Mexicana, Nica, Saeta, Taca, US Airways, KLM, Avis, American Express Membership Rewards, AT&T True Awards, InterAmerican Rent-a -Car, Diners Club Rewards, Holiday Inn Worldwide, and Radisson Hotels Worldwide.

 

Year

Travelers (not including individuals of Cuban descent visiting relatives) Visiting (charter flights and through third countries) Reported By The National Statistics Office (NTO) of the Republic of Cuba

Authorized Travelers Using Charter Flights Reported By The OFAC (including individuals of Cuban descent and individuals not of Cuban descent)

2001

 

89,164 (preliminary reported by TSP’s)

2000

76,898

“more than 150,000”*

1999

62,345

82,000**

1998

46,778

55,975

1997

34,956

50,812

1996

27,113

Not Reported

1995

20,672

Not Reported

1994

17,937

Not Reported

1993

14,715

Not Reported

1992

10,050

Not Reported

1991

11,233

Not Reported

1990

7,375

Not Reported

1989

12,908

Not Reported

1988

10,195

Not Reported

1987

10,201

Not Reported

1986

15,445

Not Reported

1985

5,936

Not Reported

*Travelers Using General OFAC Licences And Specific OFAC Licenses As Reported By TSP’s And CSP’s.

**The OFAC reported that 82,000 individuals subject to United States law traveled from the United States to the Republic of Cuba in 1999 using the regularly-scheduled direct charter flights operating from Miami International Airport and, during the month of December 1999, from John F. Kennedy International Airport in New York City, and general aviation charter flights from other cities.

 

In March 2000, Mr. Eduardo Bencomo, President of Republic of Cuba government-operated Corporacion Cimex S.A., the largest Republic of Cuba government-operated company earning revenues in U.S. Dollars, reported that 124,000 individuals of Cuban descent who are subject to United States law visited the Republic of Cuba in 1999, primarily using the travel services of Republic of Cuba government-operated Havanatur, a subsidiary of Corporacion Cimex S.A.  Since 1994, the number of individuals subject to United States law authorized by a general license (no specific documentation from the OFAC is required) or specific license from the OFAC to travel to the Republic of Cuba has increased on average 9% to 11%.  Since 1994, the number of individuals subject to United States law traveling to the Republic of Cuba, but not authorized by the OFAC to do so, has increased on average 19% to 21%.  Approximately 22,000 individuals subject to United States law traveled to the Republic of Cuba in 2000 without authorization from the OFAC.  Approximately 92% of individuals subject to United States law visiting the Republic of Cuba from 1994 through 2000 were of Cuban descent whose specific purpose was to visit immediate family members for a self-defined “humanitarian purpose” or under the auspice of a specific license issued by the OFAC.  Individuals subject to United States law of Cuban descent who have immediate family members residing within the Republic of Cuba are permitted one visit under a general license from the OFAC every twelve months for a self-defined “humanitarian purpose.”  Approximately 8% of individuals subject to United States law traveling to the Republic of Cuba since 1994 under a general license from the OFAC or specific license from the OFAC were business representatives, journalists, academicians, cultural groups, students, athletes, and humanitarian groups amongst an expanding number of categories. 

Since January 1999, with the expansion of the “people-to-people” program regulated by the OFAC, a) the annual rate of increase for authorized travelers has increased b) the annual rate of increase for unauthorized travelers has decreased as more unauthorized travelers determine that they are eligible for a license from the OFAC and c) the ratio of all travelers visiting the Republic of Cuba has shifted, with the percentage of authorized travelers visiting the Republic of Cuba who are not of Cuban descent increasing from approximately 8% to approximately 17%.

U.S. Congress Hearings

Representatives of the U.S. business community appearing and/or providing statements to the 17 March 1994 joint hearing before the Subcommittee on Select Revenue Measures and the Subcommittee on Trade of the Committee on Ways and Means of the U.S. House of Representatives: AT&T; Carlson Companies; LDDS/Metromedia; RKO Pictures; SH&E; and United Technologies Corporation.

 

Representatives of the U.S. business community appearing at and/or providing statements to the 19 May 1994 hearing before the Subcommittee on Foreign Agriculture and Hunger of the Committee on Agriculture of the U.S. House of Representatives: Archer Daniels Midland Company; National Oil Seed Processors Association; National Pork Producers Council; The Rice Miller's Association; and U.S. Rice Producer's Group.

Representatives of the U.S. business community appearing at and/or providing statements to the 30 June 1995 hearing before the Subcommittee on Trade of the Committee on Ways and Means of the U.S. House of Representatives: National Association of Sugar Mill Owners of Cuba; U.S.-Cuba Trade and Economic Council; and USA Rice.            

Representatives of the U.S. business community appearing at the 23 October 1997 hearing and/or providing statements regarding the “Use and Effect of Unilateral Trade Sanctions” before the Subcommittee on Trade of the Committee on Ways and Means of the U.S. House of Representatives: USA Engage; The Boeing Company; National Association of Manufacturers; National Foreign Trade Council; American Farm Bureau Federation; European-American Business Council; U.S.A. Rice Federation; and U.S.-Cuba Trade and Economic Council.

Representatives of the U.S. business community appearing at the 7 May 1998 hearing and/or providing statements for the hearing before the Subcommittee on Trade of the Committee on Ways and Means of the U.S. House of Representatives, the focus of which “is to examine: (1) U.S. economic and trade policy toward Cuba and the impact of the U.S. embargo on the Cuban people, (2) the prospects for future economic relations in light of the Pope’s recent visit, (3) the status of humanitarian assistance extended to the Cuban people, and (4) how U.S.-Cuba policy, particularly the Helms-Burton legislation, has affected relations with U.S. trading partners.”  included: Chamber of Commerce of the United States; USA Engage; Medical Device Manufacturers Association; European-American Business Committee; and U.S.-Cuba Trade and Economic Council.

United States Companies and the Republic of Cuba

Some of the United States-based companies and United States-based companies with non-United States-based subsidiaries engaging in commerce with entities within the Republic of Cuba under licenses issued by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., and/or Bureau of Export Administration (BXA) of the United States Department of Commerce in Washington, D.C., from 1985 through 2001.
 
Alcoa 
Am International 
Aeroquip 
Armco 
AT&T 
Beckton Dickinson 
Baker Hughes 
Central Soya 
Continental Grain 
Corning 
Crane Cooper Industries 
Cummins Engine 
Combustion Engineering 
Coleman 
Champion Spark Plug 
Del Monte 
Dow Chemical 
Door-Oliver 
Drew Chemical 
Drexel Burnham Lambert 
Dresser Industries 
E.D. & F Man 
E.I. Dupont 
Environtech 
Emhart Industries 
Eli Lilly and Company 
Exxon 
Fisher & Porter 
Ford Motor 
General Electric 
Genlyte Group 
Gerber Products 
Gilbarco 
Goodyear Tire and Rubber 
GTE International 
H.B. Fuller 
H.H. Robertson 
Buckman Laboratories 
Borg-Warner 
Bridgestone/Firestone 
Beatrice Companies 
Barry Wehmiller 
BF Goodrich 
Butler Manufacturing 
Hercules 
Hoechst Celanese 
Honeywell 
Hussman 
IBM World Trade 
ITT 
Ingersoll-Rand 
International Multifoods 
International Securities Investments 
Johnson & Johnson 
Johnson Controls 
John Fluke Manufacturing 
Joyce International 
LDDS/Metromedia 
Lubrizol 
Litton Industries 
Manville 
Mastercard International 
MCI Communications 
3M 
Mennen 
Monsanto 
Morton International 
McGraw Edison 
N.L. Industries 
NYNEX 
Otis Elevator 
Owens Corning Fiber 
Pfizer 
Philipp Brothers 
Burndy
Bonne Bell 
Caterpillar 
Carter Day Industries
Campbell Investment 
Cargill
Carrier
Picker Industries 
Potters Industries 
RCA Global 
R.J. Reynolds
Raychem
Reichold Chemicals 
Reliance Electric
Richardson Electronics 
Rohm & Haas
Joseph E. Seagram & Sons
S.C. Johnson & Son 
Sigma Aldrich 
Sybron Acquisition 
Tenneco
TFX Holdings
Time Warner
TRW Telefax
Toledo Scale 
Uarco
Union Camp 
Union Carbide 
Upjohn
USM 
Vulcan Hart 
VISA International
Westinghouse Electric
Worthington International
Worthington Pump
WilTel 

Republic of Cuba Commercial Highlights

Background

Cuba is the largest Caribbean Sea-area country, larger than nearly all of the islands within the Caribbean Sea-area combined, and with nearly one-third of the combined populations.  Nearly as large as the State of Pennsylvania and approximately as long as the State of Florida.  With 11.217 million citizens, the population is approximately the same as the State of Illinois.  If Cuba were a sate within the United States, it would rank 7th in population. 

Cuba, like the United States, was a founding signatory of the General Agreement on Tariffs and Trade (GATT).  Cuba, like the United States, is a member of the World Trade Organization, unlike the People’s Republic of China and Russia.  The United States and Cuba share membership in many international organizations and are signatories to many of the same international treaties.

There are more than 600 representation offices of foreign businesses located within the Republic of Cuba.  The Republic of Cuba maintains commercial dealings with approximately 4,500 foreign businesses in more than 100 countries.

The Republic of Cuba maintains diplomatic relations with 164 countries.  Seventy-eight countries have embassies in the Republic of Cuba.

As of 1 December 2001, there were a reported 398 joint ventures and economic associations established with Republic of Cuba government-operated companies by companies located in 46 countries, compared with 392 in 2000.  The 398 joint ventures and economic associations are in thirty-two sectors, including tourism, oil, mining, product assembly, and agriculture.  There are approximately fifty joint ventures and economic associations located in other countries, including Vietnam, People’s Republic of China, and Brazil.  In 1992 there were 80, in 1993 there were 112, in 1994 there were 180, in 1995 there were 212, in 1996 there were 260, and in 1997 there were 317.  Total announced/committed/delivered direct foreign investment within the Republic of Cuba is approximately US$5 billion by more than 100 companies from 30 countries as of December 2000.

The government of the Republic of Cuba has Investment Protection and Promotion Agreements with the following countries:

Italy (May 1993), Russia (July 1993), Spain (May 1994), Colombia (July 1994), United Kingdom (January 1995), China (April 1995), Ukraine (May 1995), Bolivia (May 1995), Vietnam (October 1995), Lebanon (October 1995) Argentina (November 1995), South Africa (December 1995), Chile (January 1996), Romania (January 1996), Barbados (February 1996), Germany (May 1996), Switzerland (June 1996), Greece (June 1996), Venezuela (December 1996), Hungary (January 1997), Belgium (initialed), France (April 1997), Laos (April 1997), Ecuador (May 1997), Cape Verde (May 1997), Jamaica (June 1997) Brazil (June 1997), Indonesia (September 1997), Namibia (June 1997), Malaysia (September 1997), Turkey (December 1997), Belize (April 1998), Belgium (May 1998), Portugal (July 1998), Suriname (January 1999), Panama (January 1999), Trinidad and Tobago (May 1999), Guatemala (August 1999), Hungary (October 1999), The Netherlands (November 1999), Ghana (November 1999), Dominican Republic (November 1999), Zambia (March 2000) and Austria (May 2000), Yugoslavia (August 2000); Colombia (September 2000), Tunisia (October 2000), Peru (October 2000), Paraguay (November 2000), Croatia (February 2001), and Denmark (February 2001). Mexico (May 2001), Cambodia (May 2001), (August 2001), Mozambique (October 2001), (November 2001) and Finland (December 2001).

The government of the Republic of Cuba has a tax treaty with Lebanon (February 2001), Russian Federation, Portugal, Spain, Italy, Barbados, and People’s Republic of China.   

Tourism

Before 1959, 85% of tourists visiting the Republic of Cuba were United States citizens.  There are differences between tourist arrivals reported by the Madrid, Spain-based World Tourism Organization (WTO), of which the government of the Republic of Cuba is a member, and by the Ministry of Tourism of the Republic of Cuba:  

Year

Tourist Arrivals (Reported By Cuba)

Tourist Arrivals (WTO)

2001

1.85 million to 1.9 million to 2.0 million

 

2000

1,774,000

1,772,488

1999

1,602,781

1,561,000

1998

1,415,832

1,390,000

1997

1,170,083

1,153,000

1996

1,004,336

999,000

1995

745,495

742,000

1994

619,218

617,000

1993

546,023

544,000

1992

460,610

455,000

1991

424,041

418,000

1990

340,329

327,000

1985

250,000

240,500

 

Year

Cuba Reported Gross Direct And Indirect Tourism Revenues (not including air transportation unless specified)

WTO Reported Gross Direct And Indirect Tourism Revenues ****

2001

US$2.230.9 billion*****

 

2000

US$1.757 billion*, US$1.952 billion****, US$2.05 billion**

Not Yet Reported

1999

US$1.741 billion* or US$1.901 billion***

US$1.714 billion

1998

US$1.759 billion

US$1.571 billion

1997

US$1.54 billion

US$1.354 billion

1996

US$1.375 billion

 

1995

US$1 billion

US$977 million

1994

US$850 million

 

1993

US$720 million

 

1992

US$567 million

 

1991

US$387 million

 

1990

US$243 million

US$243 million

1985

US$84 million

 

* Does not include air transportation.

** Reported by Ministry of Foreign Affairs of the Republic of Cuba which includes air transportation revenues.

*** Reported by Ministry of Tourism of the Republic of Cuba which includes air transportation revenues.

**** Not reported whether including air transportation revenues.

***** Reported by Central Bank of the Republic of Cuba and includes air transportation.

  Airlines

61 international air carriers have regular and/or charter services to and from the Republic of Cuba.  31 international air carriers have offices within the Republic of Cuba.

Cubana Airlines has regular and/or charter services to and from:  Spain, United Kingdom, Russia, Germany, France, Italy, Belgium, Chile, Argentina, Mexico, Jamaica, Canada, Panama, Brazil, Peru, Costa Rica, Dominican Republic, Venezuela, Austria, Angola, Netherlands-Antilles, and Ecuador among other countries.

SH&E, the largest civil aviation consultants in the world, estimates that United States-Republic of Cuba air travel might reach 5.2 million passengers per year; and that the economic impact upon U.S. airlines might approach US$1 billion.  SH&E also has projected that there may be a potential for up to US$2 billion in aircraft sales to Cubana Airlines. 

The U.S. Government authorizes charter airline passenger services between the Republic of Cuba and Miami, Florida; New York City, New York; and Los Angeles, California. 

Car Rentals

There are presently three vehicle rental agencies within the Republic of Cuba.  Available vehicle types include: Nissan, Suzuki, Daihatsu, Toyota, Mercedes Benz, and Renault.

Republic of Cuba government-operated companies have imported 1999 model Chrysler and Ford passenger vans, and Toyota passenger cars and vans.

Cubanacan S.A., the largest of the three Republic of Cuba public/private tourism businesses, has more than 400 imported passenger vehicles which are rented to foreign tourists. Transautos has 1,500 vehicles and reported US$13 million in profits in 1997. 

Hotels

In 1990, there were 13,664 hotel rooms of acceptable international quality within the Republic of Cuba.  By December 1993, there were 20,800, a 52% increase.  There are 181 hotels used exclusively for tourists, of which 13 of these are five-star and 45 are four-star.   As of June 1998, there were approximately 28,000 hotel rooms of varying quality.  As of January 2001, there were approximately 35,400 hotel rooms of varying quality.

Palma de Mallorca, Spain-based Sol Melia S.A. (2000 revenues US$800 million) manages twenty-three hotels within the Republic of Cuba.  [In August 2000, Sol Melia S.A. purchased Madrid, Spain-based Hoteles Tryp, which then managed four hotels within the Republic of Cuba].  By the end of 2001, Sol Melia is expected to manage approximately 12,568 hotel rooms, or approximately 33% of the approximately 38,000 hotel rooms within the Republic of Cuba as reported by the Ministry of Tourism of the Republic of Cuba.  Since many of the hotel rooms managed and marketed by Republic of Cuba government-operated companies (Gran Caribe S.A., Corporacion Cubanacan, Gaviota S.A., Horizontes S.A., Habaguanex S.A.) are of one-star quality and two-star quality based upon United States criteria, Sol Melia S.A. may manage more than 50% of all three-star quality to five-star quality hotel rooms, based upon United States criteria, within the Republic of Cuba by 2004. 

LTI, the German tourist agency, has several resorts under management and development.

Days Inn of the United States has requested United States Government approval to include the Republic of Cuba in its representation agreement with a Canadian company.

Cruise Ships

Cruise ship dockings are increasing, mainly those of the Club Med II, the Aida, the Princess

Danae, the Triton, and the Costa Prima.  At least US$12 million has been committed to renovate and construct new passenger cruise ship terminals in Havana (completed in December 1995), Mariel, and Santiago de Cuba.

Banking and Financial Services

MasterCard and Visa are permitted to be used in the Republic of Cuba by individuals not subject to U.S. law.  The cards must not be processed by United States-based financial institutions.  American Express cards are being used as well.  Visa charges exceeded US$180 million and Mastercard charges exceeded US$85 million in 1996.

Banamex, Mexico's largest financial conglomerate, has a joint venture with an enterprise within the Republic of Cuba to process receivables and issue consumer credit and charge cards.

The Banco Financiero Internacional, S.A., Banco Nacional de Cuba, Banco Internacional de Comercio and savings bank Banco Popular de Ahorro,  provide Republic of Cuba enterprises, non-

Republic of Cuba enterprises, joint ventures, Cuban citizens and resident foreigners with checking accounts, travelers checks, letters of credit, transfers, and letters of guarantee among other services.

ING Bank NV has become the first foreign bank to operate within the Republic of Cuba since the 1959 Revolution.  ING Bank NV operates through a 50/50 joint venture with Acemex, S.A., a private shipping company registered in Liechtenstein and held by entities within the Republic of Cuba.  The venture, called Netherlands Caribbean Bank, initially is focusing upon non-traditional commodity financing.  The venture, registered in Curacao, has been established with US$40 million in credits applicable to mining, tourism, and commodities industries.

Remittances from abroad to Republic of Cuba nationals within the Republic of Cuba were approximately US$250 million in 1993 and approximately US$400 million in 2001.

Established in 1996, CFC, in which Guernsey, Channel Islands-based Beta Gran Caribe Limited (the first investment fund licensed to operate within the Republic of Cuba) is the largest shareholder (75%), and within which Republic of Cuba government-operated Interholdings, a subsidiary of Republic of Cuba government-operated Seguros Internacionales de Cuba S.A. (ESICUBA), holds 20% of the shares, has operated without restriction from offices within the city of Havana since 1996.  Funding for the CFC has also come from Republic of Cuba government-operated Casa Financiera del Turismo Fintur S.A. (under the auspice of the Ministry of Tourism of the Republic of Cuba), which provides funding for tourism sector activities within the Republic of Cuba.  In 1994, Beta Funds International Limited, an affiliate of Guernsey, Cannel Islands-based Beta Funds Limited (which established Beta Gran Caribe Limited), established Guernsey, Cannel Islands-based Havana Asset Management Limited (HAM), the first investment management company to focus on direct investment within the Republic of Cuba.  Since 1995, HAM has had a licensed representative office within Havana.  London, United Kingdom-based Beta Funds Limited both created and provides advisory services to CFC, HAM, Beta Gran Caribe, and Beta Funds International. Since 1996, CFC has issued more than 160 short-term loans with a total combined value of approximately US$60 million, of which approximately US$10 million remained outstanding.  The auditor of CFC is the Cayman Islands, British West Indies office of Ernst & Young.  The banker of CFC is Curacao, Netherlands Antilles-based Netherlands Caribbean Bank N.V.  The administrator of CFC is George Town, Cayman Islands-based Midland Bank Trust Corporation (Cayman) Limited, a subsidiary of London, United Kingdom-based HSBC Holdings plc., whose United States representative is Buffalo, New York-based HSBC USA Inc.  Banco Exterior de Espana, part of the Spanish banking group Argentaria, has offices in Havana.Montreal-based Banque Nationale de Canada, Fransabank of Lebanon, and Spain’s Banco Bilbao Vizcaya have offices within the Republic of Cuba.

Communications

Sprint Communications has U.S. Government approval to provide data services transmission between the United States and the Republic of Cuba.  IDB Worldcom Services has U.S. Government approval to provide direct telex service between the United States and the Republic of Cuba.

There are more than 1,000 users of the Internet in the Republic of Cuba.  Enterprises, organizations, and ministries can send and receive E-mail and access other Internet services.

DHL Courier has a full service office in the Republic of Cuba.  Documents can be sent from the United States and received in the United States.  Documents sent from the United States to Havana arrive in three to four days, via Mexico.

Rome, Italy-based Telecom Italia S.p.A. (2000 revenues approximately US$15 billion), a subsidiary of Ivrea, Italy-based Olivetti S.p.A. (2000 revenues approximately US$27 billion) and ETEC S.A. are shareholders in a joint venture which is controlled by the Ministry of Information and Communications of the Republic of Cuba.  ETEC S.A. has a total capital value of US$1.44 billion.  Amsterdam, The Netherlands-based Stet International Netherlands N.V. (a subsidiary of Telecom Italia S.p.A.) has a 29.29% interest in ETEC S.A. valued at US$422.33 million. 

TIMSA, a US$8 million Mexican joint venture, operates cellular telephone systems within the Republic of Cuba.  The telephones may be purchased or rented on a daily basis.

Caribbean Radio Services, a Panama-registered company with an office in Havana, provides voice and tone paging services in Havana and resort area of Varadero.  The company also rents and sells Satellite telephone equipment, telex equipment, facsimile machines, and cellular telephones.

Consumer Goods and Retail Operations

The French fashion designer, Pierre Cardin, has announced that he is exploring commercial import and export opportunities within the Republic of Cuba.

Benneton, the Italian clothing company, has representation, retail stores, and outdoor billboards within the Republic of Cuba through Republic of Cuba government-operated Corporacion Cubanacan.

The Republic of Cuba imported 1,000,000 bicycles manufactured in the People’s Republic of China.

At food stores within the Republic of Cuba that sell products for U.S. Dollars, brands available include:  Campbell Soup, Heinz, Del Monte, Libby's, Kraft, La Choy, Bumble Bee, Progresso, Uncle Ben's, Planter's, Gerber, Hellman's, Motts, Ragu, Tabasco, A-1, Vlasic, Mars, and Purina.

The four largest Republic of Cuba enterprises that, among other businesses, import consumer products (sundries, food, durables, etc.) and sell the products for United States Dollars, had reported combined 2000 gross revenues in excess of US$1 billion.

BAT, the British tobacco company, has an agreement to produce various types of tobacco products  for multiple export markets.

Unilever PLC has established a partnership with Cuban soap maker Suchel to make deodorant, soap, shampoo and other products.

Sharp Electronics products are exclusively distributed in Cuba by a Canadian company.  There are two retail and service locations.

Canon photocopiers and facsimile machines has the overwhelming market share in Cuba supported by a retail and service center.

Food and Beverage

Republic of Cuba government-operated Cubanacan, S.A.(the largest tourism company within the Republic of Cuba) and Republic of Cuba government-operated Gran Caribe S.A., have established or plan to establish Cuban cuisine restaurants in France, People’s Republic of China, Brazil, Mexico, Spain, and Italy.  A replica of the Tropicana nightclub opened in Spain in 1994.

Cubanacan, S.A., currently operates franchised Canada-based restaurant brand Pizza Nova, and has discussed opportunities to operate Swiss Chalet and Harvey’s brands.

Puerto Rico, with one-third the population of the Republic of Cuba, has 100 Burger King restaurants.

Mining

Canadian companies MacDonald Mines, Sherritt International, Minera Mantura, and several others have operations within the Republic of Cuba.  Most investment has been in the nickel industry.

Caribgold Resources of Canada has a joint venture to mine gold.  Joutel Resources of Canada has a joint venture to prospect for gold, lead, silver, and zinc.

The Republic of Cuba has 246 quarries for construction aggregates and 32 quarries specializing in marble production.  The country has 34 yards for prefabricated concrete.

Miramar Mining of Canada has a joint venture to exploit an open-pit copper mine.

Agriculture

The State of Arkansas was the largest supplier of rice to the Republic of Cuba before 1959.  The Republic of Cuba imports from the People’s Republic of China, Vietnam, and Thailand what amounts to approximately 12% of current United States rice exports.  Rice imports are decreasing as the People’s Republic of China and Vietnam provide Cuba with new growing and cultivation methods.

The Republic of Cuba has reported the importation of fertilizer from former U.S.S.R. countries and from Nigeria at a cost of US$73 per ton only in seaboard transportation.

Tel Aviv, Israel-based Grupo BM manages a 115,000 acre citrus plantation; and markets fruit in Europe and the Middle East.  The company also has real estate projects. 

Sports

Adidas and Mizuno (the Japan-based athletic equipment manufacturer) have sponsorship contracts with Republic of Cuba government-operated athletic teams and with individual Republic of Cuba national athletes.  Reportedly, the Adidas contract included a payment of approximately US$100,000.00 and Adidas product and the Mizuno contract included the provision of equipment. 

Construction

The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury provided a license to a New Jersey-based construction company for the purpose of remodeling the Embassy of Germany in Havana.  The value of the contract was several hundred thousand dollars.

Most new heavy construction equipment in the Republic of Cuba has been imported from Asia.

Oil

Britain's Burmah Castrol Group, through its Dutch subsidiary, has a joint venture to use excess Republic of Cuba refining capacity to process lubricants for sale in the Caribbean.

Cupet-Cimex, a venture between two Republic of Cuba government-controlled companies, operate almost forty 24-hour fuel service stations throughout the country.  These stations sell automobile products, sundries, and food items.  Another Republic of Cuba venture, operated by Cubalse, also operates fuel service stations.

Domestic oil production continues to increase.  Almost 90% of the crude oil is high in sulfur content and can only be used for converted power and cement plants.  Nineteen of 32 exploration blocks are currently under license with companies from Canada, France, and the United Kingdom.

Cuba’s last major discovery was Cupet 1X, an offshore well completed in late 1995.  The well flowed on test at a rate of 3,700 b/d of 16° gravity crude.  Cupet 1X was drilled by Canadian Northwest, a subsidiary of Toronto, Canada-based Sherritt International Corporation.  The oil well’s depth was 2,800 meters and the water depth was 6 meters.  Cuba currently produces crude with gravities of 10° to 27° in four fields: Boca de Jaruco (discovered in 1968), Varadero (discovered in 1969), Perifericos (discovered in 1972), and Pina (discovered in 1989). 

 

 

 

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