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Special Note Regarding Cuba:

This page contains articles published by the governments of the United States and Cuba which are reproduced without alteration. Inclusion of these articles does not imply endorsement of the views being expressed. Rather, the articles are reproduced to demonstrate the unfortunate rift that exists between the United States and Cuba. I leave the interpretation of these articles and the views being expressed, to you, the reader.


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Background Notes For Cuba

U.S. Department of State Background Notes: Cuba, April 1998

Released by the Bureau of Inter-American Affairs.

OFFICIAL NAME: Republic of Cuba

PROFILE

Geography

Area: 110,860 sq. km. (44,200 sq. mi.); about the size of Pennsylvania.
Cities: Capital--Havana (pop. 2 million). Other major cities--Santiago de Cuba, Camaguey, Santa Clara, Holguin, Guantanamo, Matanzas, Cienfuegos, Pinar del Rio.
Terrain: Flat or gently rolling plains, hills, mountains up to 2,000 meters (6,000 ft.) in the southeast.
Climate: Tropical, moderated by trade winds; dry season (November-April); rainy season (May-October).

People

Nationality: Noun and adjective--Cuban(s).
Population: 11 million; 70% urban, 30% rural.
Avg. annual growth rate: 0.41%.
Ethnic groups: Spanish-African mixture.
Language: Spanish.
Education: Years compulsory-6. Attendance--92% (ages 6-16). Literacy--95%.
Health: Infant mortality rate--7.2/1,000. Life expectancy--78 yrs. for women, 73 yrs. for men.
Work force (4.5 million): Government and services--30%. Industry--22%. Agriculture--20%. Commerce--11%. Construction--11%. Transportation and communications--6%.

Government

Type: Communist state; current government assumed power January 1, 1959.
Independence: May 20, 1902.
Constitution: February 24, 1976.
Branches: Executive--president, council of ministers. Legislative--National Assembly of People's Government. Judicial--People's Supreme Court.
Political party: Cuban Communist Party (PCC).
Suffrage: All citizens age 16 and older, except those who have applied for permanent emigration. National Assembly elections were held in 1998.
Administrative subdivisions: 14 provinces, including the city of Havana, and one special municipality (Isle of Youth).

Economy

GDP (1997 est.): Purchasing power parity $16.9 billion.
Real annual growth rate (1997): 2.5%.
Per capita income: $1,540.
Natural resources: Nickel, cobalt, iron ore, copper, manganese, salt, timber.
Agriculture: Products--sugar, citrus and tropical fruits, tobacco, coffee, rice, beans, meat, and vegetables.
Industry: Types--sugar and food processing, oil refining, cement, electric power, light consumer and industrial products.
Trade: Exports--$1.9 billion (FOB, 1997 est.): Sugar and its by-products, nickel, seafood, citrus, tobacco products, rum. Major markets--Russia 25%, Canada 15%, Netherlands 11%. Imports--$3.3 billion (CIF, 1997 est.): petroleum, food, machinery, chemicals. Major suppliers--Spain 14%, Russia 12%, Mexico 9%.
Official exchange rate: 1 Cuban peso=U.S.$1 (official rate). 23 Cuban pesos=U.S.$1 (internal exchange rate).

PEOPLE

Cuba is a multiracial society with a population of mainly Spanish and African origins. The largest organized religion is the Roman Catholic Church. Santeria, a blend of native African religions and Roman Catholicism, is the most widely practiced religion in Cuba. Officially, Cuba has been an atheist state for most of the Castro era. However, a constitutional amendment adopted on July 12, 1992 changed the nature of the Cuban state from atheist to secular, enabling religious believers to belong to the Cuban Communist Party (PCC).

HISTORY

Spanish settlers established sugar cane and tobacco as Cuba's primary products. As the native Indian population died out, African slaves were imported to work the plantations. Slavery was abolished in 1886.

Cuba was the last major Spanish colony to gain independence, following a 50-year struggle begun in 1850. The final push for independence began in 1895, when Jose Marti, Cuba's national hero, announced the "Grito de Baire" ("Call to arms from Baire"). In 1898, after the USS Maine sunk in Havana Harbor on February 15 due to an explosion of undetermined origin, the United States entered the conflict. In December of that year Spain relinquished control of Cuba to the United States with the Treaty of Paris. On May 20, 1902, the United States granted Cuba its independence, but retained the right to intervene to preserve Cuban independence and stability under the Platt Amendment. In 1934, the amendment was repealed and the United States and Cuba reaffirmed the 1903 agreement which leased the Guantanamo Bay naval base to the United States. The treaty remains in force and can only be terminated by mutual agreement or abandonment by the United States.

Until 1959, Cuba was often ruled by military figures, who either obtained or remained in power by force. Fulgencio Batista, an army sergeant who established himself as Cuba's dominant leader for more than 25 years, fled on January 1, 1959, as Castro's "26th of July Movement" gained control. Castro had established the movement in Mexico, where he was exiled after the failed July 26, 1953, attack on the Moncada army barracks at Santiago de Cuba. Within months of taking power, Castro moved to consolidate his power by imprisoning or executing opponents. Hundreds of thousands of Cubans fled the island.

Castro declared Cuba a socialist state on April 16, 1961. For the next 30 years, Castro pursued close relations with the Soviet Union until the advent of perestroika and the subsequent demise of the U.S.S.R. During that time Cuba received substantial economic and military assistance from the U.S.S.R.--generally estimated at $5.6 billion annually--which kept its economy afloat and enabled it to maintain an enormous military establishment. In 1962, Cuban-Soviet ties led to a direct confrontation between the United States and the Soviet Union over the installation of nuclear-equipped missiles in Cuba, resolved only when the U.S.S.R. agreed to withdraw the missiles and other offensive weapons. Soviet subsidies ended in 1991 with the end of the Soviet Union. Former Soviet military personnel in Cuba--numbering around 15,000 in 1990--were withdrawn by 1993.

Russia still maintains a signal intelligence-gathering facility at Lourdes and has provided funding to preserve the still uncompleted thermonuclear plant at Juragua.

GOVERNMENT

Cuba is a totalitarian state controlled by President Fidel Castro, who is Chief of State, Head of Government, First Secretary of the Communist Party (PCC), and commander in chief of the armed forces. Castro exercises control over all aspects of Cuban life through the Communist Party and its affiliated mass organizations, the government bureaucracy, and the state security apparatus. The Ministry of Interior is the principal organ of state security and control. In addition to the routine law enforcement functions of regulating migration, controlling the Border Guard and the regular police forces, the Ministry's Department of State Security investigates and actively suppresses organized opposition and dissent.

From January 1959 until December 1976, Castro ruled by decree. The 1976 constitution, extensively revised in 1992, enshrines the PCC as "the highest leading force of the society and state." In addition to Fidel Castro and his brother Raul Castro, the center of party power is the 24-member Politburo. There are 149 members in the Central Committee.

Executive and administrative power is vested in the Council of State and the subordinate Council of Ministers, over which Fidel Castro presides, supported by six vice presidents. Legislative authority rests with the National Assembly of People's Power, which meets annually for about five days, and is state-controlled. When not in session, the Assembly is represented by the Council of State. Fidel Castro is president of the Council of State, and his brother, Raul Castro, is first vice president, which places him first in the line of succession. Raul Castro is also the Minister of the Revolutionary Armed Forces.

The Communist Party is constitutionally recognized as Cuba's only legal political party. The party's Politburo and Central Committee together include most of the country's military and civilian leaders. The party monopolizes all government positions, including judicial offices. Though not a formal requirement, party membership is a de facto prerequisite for high-level official positions and professional advancement in most areas, although non-party members are sometimes allowed to serve in the National Assembly.

In 1992, the National Assembly amended the 1976 constitution, abolishing references to the former Soviet bloc, outlawing discrimination for religious beliefs, permitting foreign investment, giving Fidel Castro new emergency powers, and allowing direct elections to the National Assembly of candidates approved by "mass organizations" controlled by the Communist Party.

Although the constitution grants limited rights of assembly and association, these rights are subject to the requirement that they may not be "exercised against … the existence and objectives of the socialist State." The government denies citizens the freedom of association. The Penal Code specifically outlaws "illegal or unrecognized groups." Cubans do not have the right to change their government, to freedom of expression, or freedom to travel to and from Cuba without restriction. The government and party control all electronic and print media. Since 1992, the Cuban Government has eased the harsher aspects of its repression of religious freedom. In preparation for the visit of Pope John Paul II in January 1998, the government further relaxed its restrictions on religion, especially toward the Roman Catholic Church.

Although the constitution theoretically provides for independent courts, it explicitly subordinates them to the National Assembly and to the Council of State. The People's Supreme Court is the highest judicial body. Due process is routinely denied to Cuban citizens, especially in cases involving political offenses. The constitution states that all legally recognized civil liberties can be denied to anyone who opposes the "decision of the Cuban people to build socialism."

The Cuban Government's human rights record is abysmal. It systematically violates fundamental civil and political rights of its citizens. The government uses incessant harassment in the form of detention, threat of long-term imprisonment, exile, physical injury, and search and seizure of private property to intimidate pro-democracy and human rights activists. There are hundreds of political prisoners. Since 1994, when it invited the UN High Commissioner for Human Rights to visit, the Cuban Government has refused permission for international human rights monitors, including the UN Special Rapporteur for Human Rights, to visit Cuba.

National Security

Under Castro, Cuba became a highly militarized society. From 1975 until the late 1980s, massive Soviet military assistance enabled Cuba to upgrade its military capabilities and project power abroad. The tonnage of Soviet military deliveries to Cuba throughout most of the 1980s exceeded deliveries in any year since the military build-up during the 1962 missile crisis. In 1990, Cuba's air force, with about 150 Soviet-supplied fighters, including advanced MiG-23 Floggers and MiG-29 Fulcrums, was probably the best equipped in Latin America. In 1994, Cuba's armed forces were estimated to have 235,000 active duty personnel.

Cuban military power has been sharply reduced by the loss of Soviet subsidies. Lack of fuel has resulted in reduced training and military exercises. Lack of spare parts and new material has resulted in the mothballing of planes, tanks, and other military equipment. Today, the Revolutionary Armed Forces number about 60,000 regular troops. The country's two paramilitary organizations, the Territorial Militia Troops and the Youth Labor Army, have a reduced training capability. Cuba also adopted a "war of the people" strategy that highlights the defensive nature of its capabilities. The government has, however, maintained a large state security apparatus, under the Ministry of Interior, to repress dissent within Cuba.

Principal Government Officials

President, Council of State and Council of Ministers, First Secretary of the Communist Party, and Commander in Chief--Fidel Castro
First Vice President, Council of State and Council of Ministers, Second Secretary of the Communist Party, General of the Army and Minister of the Revolutionary Armed Forces (FAR)--Raul Castro
Minister of Foreign Relations--Roberto Robaina
Ambassador to the United Nations--Bruno Rodriguez

ECONOMY

Under the slogan "Socialism or Death," the Cuban Government continues to proclaim Cuba a socialist or communist nation with an economy organized under Marxist-Leninist precepts. Most means of production are owned and run by the government. About 75% of the labor force is employed directly by the state.

Responsibility for running the economy and for economic policy rests with the Council of State, although the government has devolved some authority to ministries and enterprises in recent years.

Minimal public services are provided by the state, either free of charge or for nominal fees. Access to education generally is adequate, but urban housing and medical facilities have deteriorated, as has transportation.

In 1997, the Cuban Government created the Cuban Central Bank to play a role in monetary policy similar to that of a central bank in a market economy. The National Bank of Cuba continued as a commercial bank, and the Cuban Government is creating additional commercial banks. Some foreign banks have begun limited operations in Cuba.

The major sectors of the Cuban economy are tourism, nickel mining, and agriculture, especially sugar and tobacco. Sugar, long the mainstay of the Cuban economy, was surpassed by tourism in the late 1990s as the main source of foreign exchange. Remittances from abroad, estimated at $500 - 800 million annually, are a major source of income in Cuba, and help sustain many families. An estimated 40% of the population have access to dollars. The Cuban Government stopped producing its annual statistical survey on the Cuban economy in 1990.

The Cuban Government defaulted on most of its international debt in 1986, and remains outside of international financial institutions such as the World Bank. To finance imports, the government relies heavily on short-term loans. Because of its poor credit rating, an $11 billion hard currency debt, and the risks associated with Cuban investment, interest rates have reportedly been as high as 22%.

The Cuban economy suffered a 35% decline in gross domestic product between 1989 and 1993 because of the loss of Soviet subsidies. In October 1990, Castro announced that Cuba had entered a "special period in time of peace" and that the economy would function as if in time of war until the crisis had passed. Most goods are now rationed, and many previously imported from the Soviet Union simply have disappeared.

Economic growth resumed in the mid-1990s after the Cuban Government launched a concerted program to attract foreign tourism and investment. The Cuban Government estimated growth in 1997 at 2.5%. Estimated per capita income in 1997 was $1,540. Living conditions in 1998 are well below the 1990 level.

To deal with the severe shortages brought on by the end of Soviet subsidies and the failure of socialist economic policies, the Cuban Government in the mid-1990s permitted Cubans to offer certain services privately under strict government regulation and scrutiny. It appears that employment in this sector peaked in 1996 at around 206,000 and fell in 1997 to about 170,000. In 1997, the Cuban Government introduced heavy taxes on this sector which forced many out of business. In 1994, the government introduced agricultural markets at which state and private farmers could sell at market prices what they have produced above the quota required by the state. This has helped to alleviate grave food shortages and nutritional problems.

A popular example of this kind of venture has been small restaurants in private homes, known as "paladares." These seek to serve international visitors, but are subject to rules limiting employment of anyone outside of the owner's immediate family and forbidding sales of lobster or shrimp. Such rules are frequently violated, but restaurants and other entities are often closed for minor infractions.

While continuing to limit private investment by Cuban citizens, the Cuban Government is actively courting international investment. It has attracted investment from Canada, Italy, the United Kingdom, Mexico, Spain, France, and other countries. Foreign entities cannot own 100% of the equity of an investment, and must include a Cuban Government entity as a majority partner in the venture. Estimates of the amount of international investment paid in vary widely, but it is thought to be between $1.1 billion to $1.4 billion since 1990.

Cuban officials said early in 1998, there were a total of 332 joint ventures. Many of these are loans or contracts for management, supplies or services, normally not considered equity investment in Western economies. Nevertheless, Cuban officials said in early 1998, that they intend to be more selective in the investment they permit in Cuba. Investors are constrained by the U.S. Cuban Liberty and Democratic Solidarity Act (also known as the Libertad or Helms-Burton Act) which provides for sanctions for those who "traffic" in property expropriated from U.S. citizens. As of March 1998, 15 executives of three foreign companies have been excluded from entry into the U.S. Over a dozen companies had pulled out of Cuba or altered their plans to invest there due to the threat of action under the Libertad Act.

Tourism, a top Cuban official said, is the "heart of the economy." The Cuban Government is stressing its beaches and has actively encouraged sex tourism to attract Europeans, Canadians, and Latin Americans. Cuban officials expect 1.4 million tourists in 1998, an increase of 20% over 1997. The Cuban Government forecasts 1998 gross revenue from tourism as $1.8 billion.

In 1993, the Cuban Government made it legal for its people to possess and use the U.S. dollar. Since then, the dollar has become the major currency in use. Many businesses, including many run by the Cuban Government, and individuals do not accept Cuban pesos.

Those with access to dollars can purchase imported goods at government-run dollar stores that are not accessible to average Cubans with pesos who must shop in understocked peso stores. Thus, those jobs that can earn dollar tips from foreign tourists and business travelers have become highly desirable. It is not uncommon to meet skilled doctors, teachers, engineers, and scientists working in restaurants or as taxi drivers.

Sugar remains an important part of the Cuban economy, with large amounts of land, labor, and other resources dedicated to its production. Sugar production in 1989 was over 8 million tons, but fell to about 3.5 million tons in the 1994-1995 sugar harvest, one of the worst on record. With increased fertilizers and management attention, the 1995-1996 harvest improved, according to official Cuban estimates, to about 4.4 million tons. Cuba was unable to sustain this level of output, however, and the 1996-1997 harvest declined. The threat of U.S. actions against those who finance the sugar harvest--where there are extensive numbers of confiscated properties--had a major impact on the 1996-97 harvest. Prospects for future harvests are considered poor unless the Cuban Government undertakes substantial reform of the sugar industry, something it has not been willing to do.

Cuba is not a party to the Nuclear Non-Proliferation Treaty (NPT). It signed the Treaty of Tlatelolco, a Latin American regional non-proliferation regime, but has not ratified the treaty and brought it into force. Cuba has entered into an agreement with the IAEA to apply safeguards to individual nuclear facilities, including the partially completed Juragua nuclear power plant. The reactors that would be installed are of the VVER-400 type, an advanced model of the Soviet pressurized water reactor. There are serious concerns about the safety of the plant. However, since the plant does not appear to be economically viable, no international investors have been willing to provide funds for completion of the facility.

Cuban failure to launch serious economic reforms has led to the development of a large black market and growing corruption.

FOREIGN RELATIONS

Cuba's once-ambitious foreign policy has been scaled back and redirected as a result of economic hardship and the end of the Cold War.

Cuba aims to find new sources of trade, aid, and foreign investment, and to promote opposition to U.S. policy, especially the trade embargo and the 1996 Libertad Act. Cuba has relations with over 160 countries and has civilian assistance workers--principally medical--in more than 20 nations.

Cuba has largely abandoned the support for guerrilla movements that typified its involvement in regional politics in Latin America and Africa. In 1959, Cuba aided armed expeditions against Panama, the Dominican Republic, and Haiti. During the 1960s and 1970s , Guatemala, Colombia, Venezuela, Peru, and Bolivia faced Cuban-backed guerrilla insurgencies. Although these movements failed to take control of governments, they inflicted heavy loss of life and economic damage in each of the countries. Cuba's support for Latin guerrilla movements, its Marxist-Leninist government, and its alignment with the U.S.S.R., contributed to its isolation in the hemisphere. In January 1962, the Organization of American States (OAS) suspended Cuba. Cuba now has diplomatic or commercial relations with most countries in Latin American and the Caribbean.

Throughout the 1970s and 1980s, Cuba expanded its military presence abroad--deployments reached 50,000 troops in Angola, 24,000 in Ethiopia, 1,500 in Nicaragua, and hundreds more elsewhere. In Angola, Cuban troops, supported logistically by the U.S.S.R., backed the Popular Movement for the Liberation of Angola (MPLA) in its effort to take power after Portugal granted Angola its independence. Cuban forces played a key role in Ethiopia's war against Somalia, and remained there in substantial numbers as a garrison force for a decade. Cubans served in a non-combat advisory role in Mozambique and the Congo. Cuba also used the Congo as a logistical support center for Cuba's Angola mission.

In the late 1980s, Cuba began to pull back militarily. Cuba unilaterally removed its forces from Ethiopia; met the timetable of the 1988 Angola-Namibia accords by completing the withdrawal of its forces from Angola before July 1991; and ended military assistance to Nicaragua following the Sandinistas' 1990 electoral defeat. In January 1992, following the peace agreement in El Salvador, Castro stated that Cuban support for insurgents was a thing of the past.

U.S.-CUBAN RELATIONS

The United States recognized the new Cuban Government on January 7, 1959. However, bilateral relations deteriorated rapidly as the regime expropriated U.S. properties and moved toward adoption of a one-party Communist system. In response, the United States began imposing economic sanctions in 1960, culminating with a comprehensive economic embargo in 1962. The United States broke diplomatic relations on January 3, 1961. Tensions between the two governments peaked during the abortive "Bay of Pigs" invasion by anti-Castro Cubans supported by the United States on April 7, 1961, and the October 1962 missile crisis.

In 1975, U.S.-Cuban normalization talks ended when Cuba launched a large-scale intervention in Angola. However, the U.S. and Cuba established interests sections in their respective capitals on September 1, 1977. Currently, the U.S. interests section in Havana and the Cuban interests section in Washington, DC, are under the protection of the Swiss embassy.

The deployment of Cuban troops to Ethiopia and the discovery of Soviet troops in Cuba in 1979 led President Carter to establish the Caribbean Joint Task Force Headquarters in Florida and warned that Cuban troops would not be allowed to move against neighboring countries.

In April 1980, 10,000 Cubans stormed the Peruvian embassy in Havana seeking political asylum. Eventually, the Cuban Government allowed 125,000 Cubans to illegally take to boats to go to the United States from the port of Mariel, or the "Mariel boatlift." Quiet efforts to explore the prospects for improving relations were initiated by the United States in 1981-82, but ceased as Cuba continued to intervene in the Latin region. In 1983, the United States and regional allies liberated Grenada, forcing the withdrawal of Cuban forces stationed there.

In 1984, the United States and Cuba negotiated an agreement to resume normal immigration, interrupted in the wake of the 1980 Mariel boatlift, and to return to Cuba persons who had arrived during the boatlift who were "excludable" under U.S. law. Cuba suspended this agreement in May 1985 following the U.S. initiation of Radio Marti broadcasts to Cuba, but it was reinstated in November 1987. In March 1990, TV Marti transmissions began to Cuba. Since its inception, Cuba has jammed TV Marti and blocked Radio Marti on the AM band. Radio Marti on short wave has a large audience.

The principal U.S. concerns regarding Cuba are its undemocratic system and lack of respect for human rights, and the potential danger of future mass exoduses. The principal objective of U.S. policy toward Cuba is to promote a peaceful transition to democracy and respect for human rights. U.S. policy seeks to do this by maintaining pressure on the Cuban Government; supporting the Cuban people; forging a multilateral effort to press for democratic change; and keeping migration in safe, legal, and orderly channels. President Bush set free and fair elections under international supervision, respect for human rights, and an end to efforts to subvert its neighbors as the conditions for improving relations with Cuba. In October 1992, the Cuban Democracy Act (CDA) was enacted, codifying portions of the embargo and providing for measures in support of the Cuban people and for improved telecommunications with Cuba and sale of medicines. Other provisions ban most U.S. subsidiary trade with Cuba and exclude any vessel which stops in Cuba from entering U.S. ports for 180 days. It provides for humanitarian donations by U.S. non-governmental organizations to Cuba. Since its enactment, more than $2 billion worth of humanitarian assistance for Cuba has been licensed, including $275 million in medical items. Since 1992, 50 licenses have been issued for sale of medicines or travel to Cuba by representatives of pharmaceutical companies. The U.S. Federal Communications Commission (FCC) approved five U.S. carriers to provide direct telecommunications service between the U.S. and Cuba.

In 1994, regular immigration talks were initiated between the United States and Cuba, prompted by another mass exodus of Cubans that summer. The two governments agreed in September 1994 to direct Cuban migration into safe, legal, and orderly channels. The U.S. committed itself to admit a minimum of 20,000 Cuban immigrants each year, and Cuba pledged to discourage irregular and unsafe departures. Under a May 1995 agreement, the United States began returning Cubans interdicted at sea or entering the U.S. Naval Base at Guantanamo Bay, and Cuba agreed to reintegrate the returnees into Cuban society, with no action to be taken against the returned migrants as a consequence of their attempt to immigrate illegally. The U.S. Interests Section verifies Cuban compliance with that provision through regular visits to the homes of returnees throughout Cuba. Interdicted Cubans who can demonstrate a well-founded fear of persecution in Cuba are resettled in third countries, rather than returned to Cuba.

While the United States engaged in efforts to promote democratic change, the development of an independent civil society, and support for the Cuban people, in February 1996 the Cuban Government moved aggressively against 140 groups of pro-democracy and human rights activists who were seeking to hold a meeting under the auspices of their umbrella organization "Concilio Cubano." The Cuban Government never responded to Concilio's request to legally hold a meeting, and in mid-February began an island-wide crackdown against dissidents--arresting, interrogating, and harassing them. On February 24, 1996, the day the meeting was to be held, the Cuban Government ordered the shootdown of two unarmed civilian aircraft in international airspace. Three U.S. citizens and one legal permanent resident, all members of the Miami-based exile organization Brothers to the Rescue, were killed when their planes were shot down by Cuban MiGs.

On February 26, 1996, President Clinton ordered five punitive measures in response to the shootdown. He suspended direct charter flights to Cuba; sought to obtain international condemnation of Cuba's actions; committed to reach agreement with Congress on the pending Helms-Burton legislation; announced that some form of justice was due to the families of the victims and ordered that funds be transferred from the Cuban Government's blocked accounts in the United States to the families; and set restrictions on the movement of Cuban diplomats in the U.S.

On March 12, 1996, President Clinton signed into law the Cuban Liberty and Democratic Solidarity Act (also known as the Libertad or Helms-Burton Act). The Libertad Act has four main parts:

In accordance with the provisions of the Act, the President suspended the Title III lawsuit provisions because he determined suspension to be necessary and in the national interest and that it will expedite a transition to democracy in Cuba.

On March 20, 1998, President Clinton announced measures intended to respond to the historic visit of Pope John Paul II to Cuba in January and to support the Cuban people. The measures include: resuming direct humanitarian charter cargo and passenger flights to Cuba; reinstituting legal remittances by Cuban Americans and Cuban families living in the United States to their close relatives in Cuba at the level of $300 per quarter (such remittances were suspended in August 1994 in response to the migration crisis); simplifying and expediting the issuance of licenses for the sale of medicines and medical supplies to Cuba. The President also said he would work with Congress to develop bipartisan legislation on the transfer of food and expansion of humanitarian assistance to the Cuban people.

Support for the Cuban people has been a key element of U.S. policy beginning with the CDA and strengthened by President Clinton's initiatives in October 1995 to encourage groups in the U.S. to develop contacts on the island. The 1995 initiatives included licensing U.S. non-governmental organizations (NGOs) to assist Cuban NGOs; allowing sales and donations of communications equipment to Cuban NGOs; establishing news bureaus; increasing academic, cultural, and educational exchanges; and allowing under a general Treasury license once-a-year visits to relatives in Cuba in cases of humanitarian emergencies.

The measures announced March 20 enhance this policy of support for the Cuban people. They support the religious opening, expand humanitarian assistance, and assist development of independent civil society. The measures are in response to the Cuban people, not to anything the Cuban Government has done. Hundreds of political prisoners remain in Cuban jails, including the four leaders of the Dissident Working Group. The U.S. Government has repeatedly made clear, however, that it will consider responding reciprocally if the Cuban Government initiates fundamental democratic change.

Interests Sections

Havana: U.S. Interests Section
Calzada between L and M, Vedado
(tel. (53) (7) 33-3551 through 33-3559).

Principal Officer--Michael Kozak
Deputy Principal Officer--John Boardman
Consul--Ronald Kramer
Public Affairs Adviser--Douglas Barnes

Washington, DC: Cuban Interests Section
2630 16th Street, NW, Washington, DC 20009 (tel. 202-797-8518).

Principal Officer--Fernando de Remirez
Deputy Principal Officer--Felix Wilson

TRAVEL AND BUSINESS INFORMATION

The U.S. Department of State's Consular Information Program provides Travel Warnings and Consular Information Sheets. Travel Warnings are issued when the State Department recommends that Americans avoid travel to a certain country. Consular Information Sheets exist for all countries and include information on immigration practices, currency regulations, health conditions, areas of instability, crime and security, political disturbances, and the addresses of the U.S. posts in the country.

Public Announcements are issued as a means to disseminate information quickly about terrorist threats and other relatively short-term conditions overseas which pose significant risks to the security of American travelers. Free copies of this information are available by calling the Bureau of Consular Affairs at 202-647-5225 or via the fax-on-demand system: 202-647-3000. Travel Warnings and Consular Information Sheets also are available on the Consular Affairs Internet home page: http://travel.state.gov and the Consular Affairs Bulletin Board (CABB). To access CABB, dial the modem number: (301-946-4400 (it will accommodate up to 33,600 bps), set terminal communications program to N-8-1 (no parity, 8 bits, 1 stop bit); and terminal emulation to VT100. The login is travel and the password is info (Note: Lower case is required). The CABB also carries international security information from the Overseas Security Advisory Council and Department's Bureau of Diplomatic Security. Consular Affairs Trips for Travelers publication series, which contain information on obtaining passports and planning a safe trip abroad, can be purchased from the Superintendent of Documents, U.S. Government Printing Office, P.O. Box 371954, Pittsburgh, PA 15250-7954; telephone: 202-512-1800; fax 202-512-2250.

Emergency information concerning Americans traveling abroad may be obtained from the Office of Overseas Citizens Services at (202) 647-5225. For after-hours emergencies, Sundays and holidays, call 202-647-4000.

Passport Services information can be obtained by calling the 24-hour, 7-day a week automated system ($.35 per minute) or live operators 8 a.m. to 8 p.m. (EST) Monday-Friday ($1.05 per minute). The number is 1-900-225-5674 (TDD: 1-900-225-7778). Major credit card users (for a flat rate of $4.95) may call 1-888-362-8668 (TDD: 1-888-498-3648).

Travelers can check the latest health information with the U.S. Centers for Disease Control and Prevention in Atlanta, Georgia. A hotline at (404) 332-4559 gives the most recent health advisories, immunization recommendations or requirements, and advice on food and drinking water safety for regions and countries. A booklet entitled Health Information for International Travel (HHS publication number CDC-95-8280) is available from the U.S. Government Printing Office, Washington, DC 20402, tel. (202) 512-1800.

Information on travel conditions, visa requirements, currency and customs regulations, legal holidays, and other items of interest to travelers also may be obtained before your departure from a country's embassy and/or consulates in the U.S. (for this country, see "Principal Government Officials" listing in this publication).

U.S. citizens who are long-term visitors or traveling in dangerous areas are encouraged to register at the U.S. embassy upon arrival in a country (see "Principal U.S. Embassy Officials" listing in this publication). Registering with the embassy may help you to replace lost identity documents or help family members contact you in case of an emergency.

Further Electronic Information:

Department of State Foreign Affairs Network. Available on the Internet, DOSFAN provides timely, global access to official U.S. foreign policy information. Updated daily, DOSFAN includes Background Notes; Dispatch, the official magazine of U.S. foreign policy; daily press briefings; Country Commercial Guides; directories of key officers of foreign service posts; etc. DOSFAN's World Wide Web site is at http://www.state.gov.

U.S. Foreign Affairs on CD-ROM (USFAC). Published on an annual basis by the U.S. Department of State, USFAC archives information on the Department of State Foreign Affairs Network, and includes an array of official foreign policy information from 1990 to the present. Contact the Superintendent of Documents, U.S. Government Printing Office, P.O. Box 371954, Pittsburgh, PA 15250-7954. To order, call (202) 512-1800 or fax (202) 512-2250.

National Trade Data Bank (NTDB). Operated by the U.S. Department of Commerce, the NTDB contains a wealth of trade-related information, including Country Commercial Guides. It is available on the Internet (www.stat-usa.gov) and on CD-ROM. Call the NTDB Help-Line at (202) 482-1986 for more information.

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Cuba History

Before Columbus' voyage to Cuba, the island was inhabited by Indians.  They survived mainly on agriculture and fishing.

The three tribes on the island were the Tainos, the Ciboneys, and the Guanajatabeyes.

It was the Taino Indians, a part of the race of Arawaks, who were most common on Cuba.  They had come there during the 1400s from South America.

In Cuba, they lived in a peaceful society.  They farmed such crops as corn, beans, squash, and yams.  The Indians slept in hammocks, which the Spanish would share with the rest of the world after discovering them.

They had some religious beliefs.  The Tainos would hold small gatherings and burn tobacco.  They believed in life after death and a supernatural being.

The Indians wore no clothes, but they did know how to weave.  They hunted for small game, including many birds and ducks.  They fished with harpoons and nets, and kept the fish in small ponds until they were ready to eat them.

In 1492, Christopher Columbus and his ships arrived at the island.  Their mission was to conquer the island, convert the natives, and make money for Spain.

Upon first seeing the Europeans, the Cuban Indians fled.  Eventually Columbus' guides coaxed the Cubans into meeting the Spanish.

Columbus had to return, but left some men on the island.  He would return with others to colonize Cuba and claim it for Spain.

During the first half of the 16th century, the Cuban natives were basically wiped out.  They would be replaced by Spanish settlers in the coming years.

Many were murdered by Spanish troops, while others were enslaved in mines to search for gold.  The conditions there were bad enough to kill most of them; indeed, by the mid 1500s, most of the native population had died.

Some Indians, led by Hatuey, fought against the Spanish.  Their rebellions were ruthlessly put down, and Hatuey was captured and burned alive.

As a result, the Spanish began importing slaves.  This started as early as 1512, and continued until 1865.  Tens of thousands of slaves were brought from Africa and other places to replace the dead natives.

Though little gold was found in Cuba, much was found in the rest of Latin America.  Cuba served as a stop-over point to these areas.

In 1607, Havana became Cuba's capital.  A government was formed, and municipalities were established.  The island became quite prosperous from its position as a Spanish hub and its sugar production.

However, the island was plagued by piracy.  Pirates would capture ships headed to Cuba or raid cities.  No city was safe, and this caused many problems.

The Spanish Government wanted to profit from Cuba as much as possible.  In the end of the 17th century, piracy became less common and things developed more easily.

The Spanish Crown completely owned the tobacco industry, which prompted a rebellion from tobacco growers.  Spain put this down, and set up a company to control all Cuban trade. 

In 1762, the English took Havana.  They allowed trade with the rest of the world.  Slave imports and prosperity for Cuba both increased greatly.

The English traded Cuba for Florida to the Spanish.  The Spanish were then pressured to allow free trade, and the country remained wealthy.

Sugar became more important.  It beat tobacco as the most important crop, and the Revolution in Haiti brought an end to competition with that nation.

Havana grew with Cuba's prosperity.  It became a huge city for the times, and in 1728, gained a university.  A postal service was created in 1764 and a newspaper in 1763.  In 1790, the city gained lamps in the streets. 

The major difference between Cuba and other Spanish colonies during this time was that Cuba's economic production largely remained on the island and was put towards developing it, rather than being returned to Spain.

During the 19th century, Cuban prosperity rose.  Fierce opposition to the colonialist Spanish, who always wanted a piece of the  peoples' profits, ultimately resulted in Cuba's freedom.

In 1818, the Spanish officially allowed free trade with Cuba.  A year earlier, the Spanish and British had agreed to end slavery.

However, during the 1820s, half a million slaves were brought to Cuba.  The slave traders easily bribed the local officials.  It wasn't until 1888 that the Cubans abolished slavery.

Cuba was one of the last countries in the New World to still be a Spanish colony.  Many Cubans were beginning to feel separate from Spain, and some pressed for Cuban independence.

Spain also mistreated the populace.  The Cubans were denied the rights that Spanish people had, and the Spanish Government insisted on maintaining full power.

On October 10, 1868, Carlos Manuel de Céspedes began the 10 Years' War.  It went poorly for the Spanish, but they tricked the Cubans into accepting peace.

Spain returned to its old ways in Cuba.  An economic crisis brought on by the war allowed American companies to purchase huge amounts of land there.

The next War of Independence came in 1895.  Important leaders like José Martí and Antonio Maceo were killed, but the Cuban rebels fought on.  The war went terribly for Spain, and no end was in sight.

In 1898, the United States launched a war on Spain.  It quickly won, and took Cuba as one of the spoils of its victory.  Throughout the century the United States had from time to time often tried to buy Cuba, and now it finally had it.

The 20th century brought great change to Cuba.  During the first part of the century, American influence was extremely high.  It ended with the Revolution of 1959.

During the first few years of the 1900s, an American military government ruled Cuba.  It was headed by Leonard Wood, and would remain in power until 1902, when a Cuban Government replaced it.

For many years, the Cuban parties often fought and cheated their way into office.  Once there, they would commonly enrich themselves, robbing millions of dollars from the treasury.

American companies also prospered during this period.  US companies owned 75% of the sugar industry and 60% of Cuba's land.  The wealthy Cuban elite became even richer, but the poor continued to live in poverty.

In 1928, President Machado gave himself another term without reelection.  Opposition to him was successful by 1933, when a revolution forced him to flee.

Shortly after, the Sergeants' Revolt caused Fulgencio Batista to rise to power.  For many years, he would run the country, usually through puppet presidents.

Batista lost the 1944 election and stepped down.  He lived in Miami until American business and Mafia interests convinced him to return.

A coup in 1952 brought back Batista.  He ruled as dictator until the triumph of the Revolution in 1959.  From then on, US power over Cuba was no more.

The new government of Fidel Castro didn't get along well with the US.  Eventually, they turned to the Soviet Union for aid and Mr. Castro announced Cuba was a socialist country.  It has remained such ever since, making tremendous social gains but being hurt greatly by the destruction of its trading partners.

Copyright (c) 1998 by Team 18355. 
All rights reserved.  The Cuban Experience
(Reproduced With Permission)




Chronology of Cuban Affairs, 1958-1998

Released by the Bureau of Inter-American Affairs, January 12, 1998

Mar 14, 1958

The U.S. government suspends arms shipments to the Batista government.

 

 

Jan 1, 1959

Revolutionary forces seize control of Havana.

 

 

Jan 7, 1959

The United States recognizes the new Cuban government.

 

 

Jan 1959

Trials and executions of former Batista regime officials begin.

 

 

May 17, 1959

Agrarian Reform Law expropriates farmlands over 1000 acres and forbids foreign land ownership.

 

 

May 8, 1960

Diplomatic relations between Cuba and the Soviet Union resume.

 

 

Jun 28, 1960

Castro confiscates American-owned oil refineries without compensation.

 

 

Aug 6, 1960

Nationalization of U.S. and foreign-owned property in Cuba begins.

 

 

Aug 7, 1960

The Cuban Catholic Church condemns rise of communism in Cuba. Castro bans religious TV and radio broadcasts.

 

 

Oct 19, 1960

U.S. imposes economic embargo on Cuba, except food and medicine.

 

 

Oct 24, 1960

Remaining American-owned property in Cuba nationalized.

 

 

Jan 3, 1961

President Eisenhower breaks diplomatic relations with Cuba.

 

 

Apr 17, 1961

U.S.-supported Cuban exiles invade Cuba at the Bay of Pigs.

 

 

Dec 2, 1961

Castro declares, "I am a Marxist-Leninist, and will be one until the last day of my life."

 

 

Jan 22, 1962

Cuban membership in the Organization of American States (OAS) is suspended.

 

 

Feb 7, 1962

The U.S. government bans all Cuban imports and re-export of U.S. products to Cuba from other countries. The U.S. will also cut off aid to countries that furnish assistance to Cuba.

 

 

Oct 2, 1962

U.S. ports are closed to nations allowing their ships to carry arms to Cuba, ships that have docked in a socialist country are prohibited from docking in the United States during that voyage, and the transport of U.S. goods is banned on ships owned by companies that trade with Cuba.

 

 

Oct 14, 1962

The Cuban Missile Crisis begins when U.S. reconnaissance aircraft photograph Soviet construction of intermediate-range missile sites in Cuba.

 

 

Oct 26, 1962

In a secret communication, Soviet Premier Nikita Khrushchev agrees not to break the U.S. blockade and offers to withdraw Soviet missiles from Cuba if the United States pledges not to invade Cuba and if President Kennedy would order Jupiter missiles removed from Turkey.

 

 

Oct 27, 1962

Cuba downs a U-2 plane. In a letter to Khrushchev, President Kennedy proposes immediate Soviet withdrawal of the missiles in exchange for an end to the blockade. Privately, the USG informs the Soviet Union it will withdraw U.S. missiles from Turkey once the crisis ends.

 

 

Oct 28, 1962

Radio Moscow announces that the Soviet Union has accepted the proposed solution.

 

 

Nov 21, 1962

President Kennedy terminates the quarantine measures against Cuba.

 

 

Feb 8, 1963

The Kennedy administration prohibits travel to Cuba and makes financial and commercial transactions with Cuba illegal for U.S. citizens.

 

 

Jul 8, 1963

All Cuban-owned assets in the United States are frozen.

 

 

Jul 1964

Members of the OAS vote to enact economic sanctions and to break diplomatic links with Cuba.

 

 

Oct 1965

Over 3000 Cubans leave in a boatlift from Camarioca to the United States.

 

 

Nov 6, 1965

Beginning of the Freedom Flights program, which allows 250,000 Cubans to come to the United States by 1971.

 

 

1966

Father Miguel Laredo is tried for allegedly assisting in the attempted escape of a Cubana Airlines engineer. In addition, priests and other clergymen are required to enter into military service.

 

 

Nov 2, 1966

The Cuban Adjustment Act allows 123,000 Cubans to apply for permanent residence in the U.S.

 

 

Jan 2, 1968

Castro announces petroleum rationing.

 

 

Mar 13, 1968

The Great Revolutionary Offensive is launched, culminating in the nationalization of the remaining private sector and mobilization of manpower for agricultural production.

 

 

Jan 2, 1969

Castro announces sugar rationing.

 

 

Jul 1972

Cuba joins the Council for Mutual Economic Assistance, the communist bloc trade association.

 

 

Oct 1973

Cuba sends 500 tank drivers to aid Syria during the Yom Kippur War.

 

 

Nov 1974

Assistant Secretary of State William Rogers and Assistant to the Secretary of State Lawrence Eagleburger conduct secret normalization talks with Cuban officials in Washington and New York. The talks end over Cuban involvement in Angola.

 

 

Jul 29, 1975

OAS members vote to lift collective sanctions against Cuba. The U.S. government welcomes the action and announces its intention to open serious discussions with Cuba on normalization.

 

 

Oct 1975

Cuba begins deployment of 35,000 combat troops to support the Marxist regime in Angola.

 

 

Dec 20, 1975

President Ford declares that Cuban involvement in Angola and support of the Puerto Rican independence movement ends efforts to improve relations.

 

 

Dec 22, 1975

Castro declares continued support for revolutionary movements in Angola and Puerto Rico.

 

 

Feb 24, 1976

Under a new constitution, Castro becomes head of the government as of President of the Council of Ministers, commander of the armed forces, and First Secretary of the communist party. The PCC is institutionalized within the formal governmental structure. Article 54 prohibits the practice of faith or the establishment of religious organizations in opposition to revolutionary principles.

 

 

Mar 18, 1977

U.S. government lifts prohibition on travel to Cuba and allows U.S. citizens to spend $100 on Cuban goods during their visits.

 

 

Apr 1977

200 Cuban trainers arrive in Ethiopia. Cuba supports the Katangan rebellion, causing the government of Zaire to break-off diplomatic relations. Cuba maintains troops in the Congo, Mozambique, Guinea, Guinea-Bissau, and Equatorial Guinea.

 

 

Apr 27, 1977

The United States and Cuba sign agreements on fishing rights and maritime boundaries.

 

 

Sep 1977

The United States and Cuba open interests sections in each others capitals.

 

 

Jan 1978

Cuba begins deployment of 20,000 troops to Ethiopia.

 

 

Jul 31, 1978

Castro calls for the removal of U.S. bases from Guantanamo Bay. Bombings of the Cuban United Nations Mission, the Cuban Interests Section, and the Soviet Mission by anti-Castro exile groups follow throughout the fall. In December, the U.S. government announces that the full force of the law will be used against those responsible for these terrorist actions.

 

 

Jul 1979

Cuban-supported Sandinistas overthrow the government of Anastasio Somoza in Nicaragua.

 

 

Aug 30, 1979

Senator Frank Church, the chairman of the Foreign Relations Committee, announces discovery of a Soviet combat brigade of 3000 troops in Cuba.

 

 

Oct 1, 1979

President Carter reaffirms that troops from Cuba would not be permitted to move against neighboring countries and establishes a Caribbean Joint Task Force Headquarters in Florida.

 

 

Apr 1980

10,000 Cubans storm the Peruvian embassy in Havana seeking political asylum. After the easing of immigration restrictions, a flotilla of refugees (eventually 125,000) begins an exodus from the port of Mariel in Cuba for the United States.

 

 

May 14, 1980

President Carter demands that the Cuban government impose an orderly departure and orders a blockade to prevent private boats from traveling to Cuba to pick up refugees. The Cuban government closes Mariel harbor in September.

 

 

Sep 11, 1980

An attache of the Cuban Mission to the United Nations is assassinated by anti-Castro terrorists. Secretary of State Muskie issues a statement terming the murder "reprehensible."

 

 

Dec 22, 1980

The first of several meetings between U.S. and Cuban officials to discuss the repatriation of the Marielitos occurs.

 

 

Sep 23, 1981

The U.S. government announces plans to establish Radio Marti to broadcast to Cuba.

 

 

Mar 1982

U.S. envoy Vernon Walters meets with Castro in Havana to discuss outstanding issues.

 

 

Apr 9, 1982

Charter air links between Miami and Havana are halted by the U.S. government.

 

 

Apr 19, 1982

USG effectively bans travel to Cuba by prohibiting monetary expenditures in Cuba by U.S. citizens.

 

 

Oct 25, 1983

The U.S. intervention of Grenada begins following a leftist coup and the discovery that Cubans are being used to build an airstrip that could have been used for military aircraft.

 

 

Jan 11, 1984

A presidential commission on Central America headed by Henry Kissinger reports that the Soviet and Cuban intervention in the region has created a major security problem for the United States.

 

 

July 31, 1984

U.S. and Cuban officials hold talks on migration issues.

 

 

Dec 14, 1984

The United States and Cuba conclude a migration pact under which Cuba agrees to accept the return of Marielitos.

 

 

Jan 21, 1985

U.S. bishops visits Cuba. They meet with Castro and request the release of 250 political prisoners.

 

 

May 20, 1985

Radio Marti begins broadcasts to Cuba. The Cuban government immediately jams the signal. Castro later suspends the 1984 U.S.-Cuban immigration agreement.

 

 

1986

The Cuban government begins to grant long-term visas to foreign priests and nuns.

 

 

Nov 19, 1987

The United States and Cuba conclude a new immigration pact which reinstates the 1984 agreement.

 

 

Mar 1988

The UN Human Rights Commission sends a team to report on the human rights situation in Cuba.

 

 

Aug 23, 1988

President Reagan signs a trade act that ends licensing requirements for importing recordings, printed material, and other media from Cuba.

 

 

Nov 1988

At the intercession of the U.S. Catholic Conference, Cuba agrees to release 44 political prisoners.

 

 

Nov 20, 1989

The Treasury Department limits travel related expenses for U.S. citizens to Cuba at $100 per day.

 

 

Mar 23, 1990

The first test of TV Marti is launched. It is jammed by the Cuban government.

 

 

May 20, 1991

In a meeting with Cuban dissidents, President Bush calls for Castro to release political prisoners and hold elections.

 

 

Sep 11, 1991

Soviet President Mikhail Gorbachev states that he will withdraw all Soviet troops from Cuba.

 

 

1991

The Fourth Communist Party Congress resolves to allow members of religious groups to join the party.

 

 

Dec 1991

Termination of Soviet economic subsidies worth approximately $6 billion annually.

 

 

Jul 1992

Changes to the Cuban constitution include measures to attract foreign investment without compromising Castro's hold on power. The official designation of the Cuban government is changed from "atheist" to "secular." Religious discrimination is also forbidden.

 

 

Oct 15, 1992

Congress passes the Cuban Democracy Act, which prohibits foreign-based subsidiaries of U.S. companies from trading with Cuba, travel to Cuba by U.S. citizens, and family remittances to Cuba. The law allows private groups to deliver food and medicine to Cuba.

 

 

Oct 1, 1993

The United States and Cuba reach an agreement at the working level on the repatriation of 1500 criminal Cuban migrants. High level GOC approval was never forthcoming.

 

 

Aug 1994

Following Castro's declaration of an open migration policy, a new boat lift begins when 30,000 refugees set sail from Cuba as economic conditions continue to deteriorate. A "picket line" established by the U.S. Coast Guard prevents additional seaborne migrations.

 

 

Sep 1, 1994

Talks on migration open in New York City between Cuban and U.S. officials.

 

 

Sep 9, 1994

The U.S. and Cuba issue a joint communique agreeing to take measures to ensure that migration between the two countries is safe, legal, and orderly. The U.S. agrees that total legal migration to the U.S. will be a minimum of 20,000 per year.

 

 

May 2, 1995

The U.S. and Cuba issue a joint statement reaffirming their commitment to promote safe, legal, and orderly migration. Under this accord, Cubans interdicted at sea or who enter the Guantanamo Naval Base illegally are returned to Cuba provided that they do not have any protection concerns. Returned Cubans are monitored by personnel from the United States Interests Section.

 

 

Oct 5, 1995

President Clinton announces measures to expand people-to-people contacts between the U.S. and Cuba, to allow U.S. NGO's to fund projects in Cuba, and to provide AID funding to U.S. NGO's for Cuba-related projects.

 

 

Nov 1995

The Concilio Cubano is formed to organize the first human rights conference in which all human rights groups on the island were expected to participate.

 

 

Jan 1996

The GOC denies Concilio legal recognition. Concilio requests permission for the conference to take place February 24, 1996.

 

 

Feb 1996

The GOC begins an island-wide crackdown on Concilio Cubano. During the next 3 months over 200 Concilio leaders and supporters would be arrested, interrogated, and harassed.

 

 

Feb 24, 1996

Cuban MIG's shoot down in international airspace two civilian aircraft belonging to the Miami-based group Brothers to the Rescue. Three Americans and one Cuban Legal Resident are killed.

 

 

Mar 12, 1996

President Clinton signs the Cuban Liberty and Democratic Solidarity (Libertad Act) which enacts penalties on foreign companies doing business in Cuba, permits U.S. citizens to sue foreign investors who make use of American-owned property seized by the Cuban government, and denies entry into the U.S. to such foreign investors.

 

 

Jul 16, 1996

President Clinton suspends enforcement of Title III provisions of the Libertad Act permitting suits to be filed in U.S. courts against foreign investors who are profiting from U.S.-claimed confiscated property. Title III itself is allowed to go into effect on August 1.

 

 

Nov 19, 1996

Pope John Paul II receives Castro at the Vatican. The Pope accepts an invitation to visit Cuba.

 

 

Aug 16, 1996

President Clinton appoints Ambassador Stuart Eizenstat as the Special Representative for the Promotion of Democracy in Cuba.

 

 

Dec 2, 1996

The European Union adopts the Common Position on Cuba, conditioning developmental assistance to Cuba on fundamental, democratic change.

 

 

Jan 3, 1997

President Clinton suspends the right to sue provisions of Title III, pointing to the progress made under the U.S.-led multilateral initiative to promote democratic change in Cuba.

 

 

Jan 28, 1997

The President releases a report on assistance the U.S. and rest of the international community would provide to a transition government in Cuba.

 

 

Feb 12, 1997

The Administration approves licenses for U.S. news organizations to open bureaus in Cuba. Only CNN is allowed in by the Cuban Government.

 

 

Apr 11, 1997

U.S.-EU Understanding. The EU agrees to suspend WTO case against the Libertad Act and other components of U.S. legislation. The U.S. and EU agree to work together to develop binding international disciplines to deter investment in confiscated property. U.S. agrees to seek presidential waiver authority for Title IV of the Libertad Act if such disciplines are developed and adhered to.

 

 

Jul 16, 1997

Cuban state security arrests the Dissident Working Group on charges of enemy propaganda.

 

 

Jul 16, 1997

President Clinton for the third time suspends the right to sue provisions of Title III.

 

 

Aug-Dec 1997

USG approves a license request by Archdiocese of Miami to charter a cruise ship to take pilgrims to Cuba during the Pope's visit, and licenses for other religious groups and media to use charter aircraft to go to Cuba for the Pope's visit.

[End of Document]


Cuba Government

LOGO PCC

INFORMATION OF THE DEPARTMENT OF INTERNATIONAL
RELATIONS CENTRAL COMMITTEE OF COMMUNIST PARTY OF CUBA.

The 5th congress of the Communist Party of Cuba reaffirmed the socialist direction of the revolution and the basic principles of its Martí and Marxist-Leninist ideology. It outlined the policies needed for us to continue developing in conditions of full independence and sovereignty, despite the systematic and brutal economic war introduced by the United States imperialists against the Cuban nation.

 The forum, held in the City of Havana from 8 to 10 October, approved the central committee report given by the first secretary, Commander-in-Chief Fidel Castro Ruz, on the work carried out since the previous congress and one resolution each on the political document "The Party of unity, democracy and human rights that we defend", on economic policy and on the revision of the organization's statutes.

 The congress, after a substantial renewal, elected a new central committee made up of 150 members, which ratified Comrade Fidel at the head of the organization and Army General Raúl Castro Ruz as second secretary and selected a new political bureau, formed of 24 comrades, 18 re-elected and six who newly joined the organ.

 The assembly also paid posthumous tribute to the heroic guerrilla Commander Ernesto Che Guevara and his comrades who fell in Bolivia 30 years ago and whose remains were honored by the people at the end of the congress in the José Martí Memorial in Revolution Square and accompanied to the city of Santa Clara, the setting of one of the greatest military victories of our liberation war, which was led by the unforgettable internationalist hero.

 The forum critically, exhaustively and analytically debated the main problems and situations that have marked the life of the nation and the Party's activity since the last congress and the challenges, dangers and difficulties that we have had to face and overcome after the disappearance of the socialist camp, to which was added the intensified imperialist blockade. All of this put the Cuban revolution at the most dangerous crossroads in its history.

 The gathering also noted the factors that have allowed us to resist. Among these, what stood out in first place was the heroic conduct of the people, their identification and confidence in the Party and the unity between revolutionaries as the architects of this victory.

 The congress adopted as its own the strategic orientation contained in the central committee report, whereby the bases of the revolution's historic continuity are and will be only in the preservation of socialism, its ideology, the improvement of our democracy, the strengthening of our Party and state, the inseparable link with the people and, in particular, in the growing participation and revolutionary formation of our youth.

 The assembly identified with the appraisal whereby our ability to resist and to find a stable and definitive way out of the special period will be determined by the ever more efficient contribution of everyone to the country's economy.

 The congress denounced the way that the economic war that imperialism is currently waging against Cuba is being accompanied by an ideological and political offensive aimed at trying to destroy the nation's revolutionary tradition, at confusing us, at discouraging us and dividing us with the goal of us renouncing our Martí and Marxist-Leninist ideology, which brings with it the need to offer a firm and creative reply to such proposals.

 Likewise, the congress fully identified with the evidence presented of biological warfare, which demonstrates the genocidal action that is being attempted against our people and that affects plants, animals and people. The congress adopted as its own the high appraisal and recognition expressed during the debates of the role played by our Revolutionary Armed Forces and the Ministry of the Interior in the preservation of the nation's defensive capability and our people's safety and tranquility.

 The congress ratified what was expressed in the central committee report on the foreign policy of our Party and state. This policy establishes that Cuba's legitimate aspiration is to guarantee peace and tranquility for our people and the right to defend the Cuban nation's socialist future, by understanding that this is the only possible option in order to guarantee the independence, sovereignty and social justice conquered.

 The criminal dangers that are now being attempted against this noble and unrenounceable aim were denounced and the congress reaffirmed that the Cuban revolution will live while there remains one communist, one revolutionary, one patriot to defend it.

 The congress approved the document "The Party of unity, democracy and human rights that we defend". This had previously been analyzed and supported by six-and-a-half million Cubans of over 14 years old, which became a virtual democratic plebiscite of our people.

A central idea of the approved text is that our history brought forth and brings forth the liberating principles for whose victory successive generations of Cubans have struggled, since the Cuban revolution is one sole revolution.

 Another basic lesson that our historical development offers and that the document upholds is that Yankee imperialism constitutes our people's main enemy, including since before the nation was fully formed. It has unleashed an insane economic war against Cuba.

The congress reaffirmed the political and historical substantiation of the existence in Cuba of one sole Martí and Marxist-Leninist party as a guarantee of the unity and cohesion of our people. This was ratified in the resolution on the revision of the statutes. This resolution pointed out the validity of the principles of democratic centralism as a cornerstone of the structure and working of the organization and the collective leadership.

 The changes introduced into the statutes are aimed at preserving those normative concepts of an essential character on which is based the organic life and the work of the Party. The changes are also aimed at suppressing those aspects that, due to their being complementary or of a methodological character, should form part of the rules and regulations.

 Other changes are related to modifications in the structure of the leadership organs, as well as to extending the procedure of co-opting onto the central committee, currently limited to intermediate bodies, among other decisions.

 In its resolution on the economy, the fifth congress recalled the serious upheavals caused to the nation in the years since the previous congress by the disintegration of the USSR and the disappearance of the socialist camp, our main partners until then. This resulted in the special period in which we are living.

Important transformations also happened in the working of the world economy, like the process of globalization, the large-scale action of the ever more powerful transnational companies and the boom of neoliberalism as a theory and practice that they are trying to impose on the Third World. All this represents a world economic scenario of the predominance of the capitalist system and of the growing polarization between development and underdevelopment.

In its desire to destroy the revolution, the United States government took advantage of such an occasion in order to intensify the economic blockade imposed against Cuba since more than 37 years ago and whose cost to our economy is calculated at some 60,000 million dollars.

 In that direction, the congress recalled how they first of all introduced the so-called Torricelli Act in 1992 and later the Helms-Burton Act in their determination to internationalize the blockade and virtual economic war against our country, to which is also added proven evidence of biological warfare.

 Faced with this complex, adverse and hostile scenario, the revolution's efforts were first concentrated on slowing down the tumbling economy in order to then relaunch growth, carrying out the transformations needed to adapt ourselves to the new international situations and, at the same time, guarantee the country's prospective development and the preservation of its socialist essence.

 A group of transformations was introduced to this effect, such as the reorientation of foreign trade and external economic relations, the opening-up to the investment of foreign capital, the boost to tourism, the decriminalization of the possession and use of hard currency, the co-operativization of state farms, the opening of agricultural and industrial markets and the expansion of self-employed work, among others, on the basis of popular consensus and state control and regulation. The congress underlined that the adoption of this body of measures, combined with the heroic force of the people, has allowed us to stop economic decline and to begin the recovery, the phase in which we now find ourselves and on which this congress determined new guidelines to follow. These guidelines were based on the following concepts:

- It is realistic to anticipate that in the close future, the current restrictions for the country will continue or grow in terms of sources of foreign financing and a suitable solution to the problem of foreign debt.

- This is why our own efforts are the cornerstone in the whole design and execution of our economic policy. The central objective of this policy is efficiency, since this constitutes one of the greatest potentials that the country has. The country has at its disposal an economic and social infrastructure as well as human and natural resources and resources of scientific and technological development, an infrastructure created throughout more than three decades.

As part of the concrete guidelines approved by the congress, it raised the need to increase the production and export of non-sugar-cane agriculture; the recovery of the strategic role of the sugar agroindustry, which was in decline over the last years; the diversification of exports, modifying their structure in favor of products with greater value added and with services of a high level; strengthening technological and work discipline and energy efficiency; the substitution of imports and the potentiation of domestic savings; the use of modern business management techniques and the downsizing of our branches of industry, among other measures.

The congress also proposed the best use of fiscal, monetary-financial, commercial and tariff policies with the basic aim of helping the development and stabilization of the economy, the consolidation of the revaluing of the national currency and the control of inflationary processes and the deepening of the reform of the banking and financial system.

In the area of trade, the congress determined the geographical diversification of foreign trade, the multiplication of links with the economic integration plans in the region and the promotion of foreign investment, with priority given to projects that contribute to the success of the national economic plans.

A central concept was the agreement of the congress regarding the fundamental role that planning must continue to play in the running of the economy, even when, it affirmed, "space has been opened for the operation of market mechanisms under state regulation".

It is up to the socialist state, the congress emphasized, "to correct the distortions inherent in market mechanisms in order to reduce their negative effects and, above all, to take into account that their inevitable presence presupposes challenges and dangers that it is crucial to confront economically, politically, ideologically and socially".

The congress likewise confirmed that the changes taking place in the Cuban business system will be directed at maintaining the "predominence of socialist state ownership", while admitting other new forms of ownership. The congress confirmed that the state, as the representative of the whole people, exercises social ownership over state companies and plays a regulatory role by means of different directives, laws, enactments and other dispositions. On broaching the prospects of the national economy, the forum proposed considering that the growth in gross domestic product in the coming years could be in the range of between 4 and 6 per cent a year on average, depending on the efficiency levels that we reach, the increase in exports and the performance of the flow of foreign financing.

This growth will be strongly determined by tourism and the performance of traditional exportable products (sugar, nickel, tobacco, fish and others).

 In the case of tourism, it was proposed receiving more than two million tourists and a gross income greater than 2,600 million dollars, increasing sugar production to seven million tons and that of nickel to 100,000 tons a year and increasing the national production of vegetables to 2.5 million tons, as some concrete aims.

 In the social sphere, the congress established that the guarantee and defense of the revolution's achievements -- including the high level of equity expressed in the equality of opportunity of access to services like education, health and sport and culture -- will continue being the "inescapable responsibility" of the socialist state.

These achievements, combined with the absence of any kind of discrimination due to social class, territory, race or gender constitute pillars on which rests the equality of opportunity that the socialist revolution guarantees all our people.


  
City of Havana, November 1997
Department of International Affairs
Communist Party of Cuba Central Committee

Castro Speech Data Base


Cuba Business Law

No information in file.


Commercial Guide of Cuba

No information in file.


Treaties to which Cuba is a Member

GATT General Agreement on Tarrifs and Trade, 1947

The Organization of American States Cuba is a memeber of the OAS, however by resolution of the Eigth Meeting of Consultation of Ministers of Foreign Affairs (1962) the current Government of Cuba has been excluded from participation in the OAS.

Summary of the WTO

WTOThe official site

SELA - The Latin American Economic System

Economic Commission for Latin America and the Caribbean (a commission of the United Nations)

The United Nations


Cuba Labor Law

CHAPTER XI
LABOR SYSTEM
Article 30.
Foreign investment activities must observe the labor and social security legislation in effect in Cuba, with the adjustments included in this Act.

Article 31.
1. The workers in activities corresponding to foreign investments shall be, as a rule, Cubans or foreigners permanently residing in Cuba.

2. However, the management and administrative bodies of joint ventures or totally foreign capital companies, or the parties to international economic-association contracts, may determine that certain top administrative positions or some posts of a technical nature shall be filled by persons who are not permanent residents in the country and, in those cases, determine the labor conditions to be applied and the rights and obligations of those workers. Nonpermanent residents in the country who are contracted are subject to the country's current legislation covering immigration and foreigners.

Article 32.
1. Joint ventures, the parties to international economic-association contracts and totally foreign capital companies may be authorized to create an economic stimulus fund for Cubans or permanent residents in Cuba who are working in activities corresponding to foreign investments.

2. The contributions to the economic stimulus fund shall be made out of earned profits. The amount of these contributions shall be agreed upon between the joint ventures, foreign investors and national investors who are party to international economic-association contracts, and totally foreign capital companies, on the one hand, and the Ministry of Foreign Investment and Economic Cooperation, on the other hand.

Article 33.
1. The workers in joint ventures who are Cuban or permanent residents in Cuba, with the exception of the members of the management or administration, are contracted by an employing entity proposed by the Ministry of Foreign Investment and Economic Cooperation, and authorized by the Ministry of Labor and Social Security.

The members of the management or administration of a joint venture are designated by the general shareholders' meeting and hired directly by the joint venture.

Only in exceptional cases, with the proper authorization, may a joint venture directly employ all the persons who work in that company, and always in accordance with current legal provisions in the field of hiring.

2. The persons working for the parties to international economic-association contracts are contracted by the Cuban party, in accordance with current legal provisions in the field of employment.

3. In totally foreign capital companies, the services of Cuban workers and foreign workers residing permanently in Cuba, with the exception of the members of the management and administrative body, shall be hired through a contract between the company and an employing entity proposed by the Ministry of Foreign Investment and Economic Cooperation, and authorized by the Ministry of Labor and Social Security.

The members of the management and administration of the company with totally foreign capital are designated by the company and directly hired by it.

4. Payments to Cuban workers and foreign workers residing permanently in Cuba are made in national currency which must be obtained beforehand from convertible foreign currency, except in the case described in Article 27 of this Act.

ARTICLE 34.
1. The employing entity discussed in the previous Article individually contracts and directly hires Cuban workers and permanent residents. This employing entity pays those workers their wages.

2. When a joint venture or company with totally foreign capital considers that a specific worker does not meet the requirements of the job, it can request that the employing entity replace that worker with another. Any labor dispute is settled with the employing entity, which pays the worker, at its own expense, the indemnification to which he or she is entitled, determined by the competent authorities. In pertinent cases, the joint venture or company with totally foreign capital compensates the employing entity for such payments, in accordance with the procedure established, and always in compliance with existing legislation.

Article 35.
Notwithstanding what is stipulated in the preceding articles of this Chapter, the authorization approving the foreign investment can in exceptional cases establish special labor regulations.

Article 36.
The technological advances consisting of innovations and other tangible goods which are covered by intellectual property law and which are developed within the framework of an international economic association or by Cuban workers in a foreign capital company are covered under current legislation in the field.

Article 37.
The Ministry of Labor and Social Security is empowered to issue as many complementary legal provisions as it considers necessary for the best application of what is described in this Chapter, especially in the fields of hiring and labor discipline.


Cuba Environmental Law

CHAPTER XVI
ENVIRONMENTAL PROTECTION
Article 54.
Foreign investment is conceived and stimulated in the context of the country's sustainable development, which implies that during the course of the investment, environmental conservation and the rational use of natural resources shall be carefully undertaken.

Article 55.
The Ministry of Foreign Investment and Economic Cooperation, in pertinent cases, submits the investment proposals it receives for the consideration of the Ministry of Science, Technology and the Environment, so that the latter may evaluate the investment's suitability from the environmental point of view and determine whether an environmental impact evaluation is required, as well as the suitability of granting the pertinent environmental licenses and establishing a control and inspection program in accordance with current legislation.

Article 56.
1. The Ministry of Science, Technology and the Environment institutes the measures which may be required to properly control situations that could lead to damage, dangers or risks for the environment and the rational use of natural resources.

2. The person or company responsible for the damage or harm is obliged to reestablish the previous environmental situation, repair the material damage and indemnify the injured parties.


Cuba's Banking and Finance System

CHAPTER IX
THE BANKING SYSTEM
Article 26.
1. Joint ventures, foreign investors and national investors which are party to international economic-association contracts, jointly or individually, and totally foreign capital companies shall open accounts in freely convertible currency in any bank in the National Banking System, through which they shall receive and make payments related to their operations.

2. Joint ventures and national investors who are parties to international economic-association contracts may open and operate accounts in freely convertible currency in banks located abroad, with the authorization of the National Bank of Cuba.

Article 27.
Joint ventures, parties to international economic-association contracts and totally foreign capital companies can be authorized on an exceptional basis by the Executive Committee of the Council of Ministers to effect certain charges and payments in nonconvertible national currency.

Article 28.
Joint ventures, foreign investors and national investors who are parties to international economic-association contracts, and totally foreign capital companies can arrange loans in foreign currency:

a) With a bank in the National Banking System or a financial entity approved by the National Bank of Cuba;

b) With banks or financial entities abroad, in accordance with existing legal regulations covering this matter.


Cuba Visas and Immigration

U.S. Embargo Against Cuba An overview of the Cuban Assets Contol Regulations


Cuba's Foreign Investment Law

Presentation of the
Draft of a Law
on Foreign
Investment

Ernesto Meléndez Bachs
5th Ordinary Period of Sessions
National Assembly of the People´s Power
September 4, 1995
Commander-in-Chief Fidel Castro.
Compañero Ricardo Alarcón, President of the
National Assembly of the People's Power.

Esteemed deputies and guests.

Distinguished members of the Diplomatic Corps:

By decision of the Government, it corresponds to the Ministry for Foreign Investment and Economic Cooperation to present the draft of a Law on Foreign Investment to this session of the National Assembly of the People's Power for its examination and approval. The renewal, every certain number of years, of the legal instrument regulating foreign investment is an international practice designed to adapt such instruments to changing internal and external conditions — which, in the specific case of our country, have had great transcendence in the economic field.

Decree-Law 50 of 1982 was our first revolutionary legal base for normalizing and organizing the process of foreign investments. The first foreign investment was made in tourism in 1988. This process was subsequently opened to include other branches of the economy. In 1991, economic associations in citrus fruits, mining, oil exploration, and several in the manufacturing sector were functioning with foreign capital supplied by enterprises from eight countries.

We had confirmed that certain branches of the economy could be most conveniently developed by the economic association of Cuban entities with international enterprises possessing capital, technologies, access to markets, and broad experience in the new conditions of the world economy in which Cuba has had to develop in the past few years. When the Special Period was established, the promotion of foreign investment was considered necessary, and in the Resolution on Economic Development of the 4th Congress of the Communist Party of Cuba, the stimulation of foreign investment was also included as a complement to the country's efforts to promote the growth of its economy. The Constitutional reform of 1992 made it possible to advance in this direction.

During 1993 and 1994 and the early months of this year, we have seen an increase in the influx of foreign capital and in the establishment of new joint ventures and other forms of association. By the end of last July, 212 associations had been authorized and were functioning.

The number of mixed-capital enterprises and associations that have started up operations in the last 20 months surpasses the total of all those operating in the preceding years. Not only has growth been quantitative. At present, these associations have expanded to 34 economic sectors, including agricultural activities, mining, manufacturing, construction, tourism, tranportation, communications, and other services. The sources of capital invested have become more diversified. In 1991, it came from eight countries; at present, it comes from more than 50 nations.

The experience gained and the studies we have made have enabled us to introduce new forms of association such as those providing financing for our sugar-cane, tobacco, and rice crops; initial investments in real estate such as the Lonja del Comercio, and even Cuban investments abroad in activities such as construction, shipbuilding, nickel and cobalt refining, and banking. This has made it possible, although still on a modest scale, to increase exports, boost our foreign-exchange earnings, modernize and put into operation factories and installations that had been semiparalyzed, recover plantations that had been in danger of total loss, acquire technologies to which we had not had access, and assimilate managerial abilities.

This process has been carried forward in an orderly way, with negotiations examined one by one, based on the criterion of what is beneficial for the country, without permitting the interests of sectors, territories or institutions to take precedence over those of the nation. In every phase of the process, the economic and social development of the country is present and holds first place.

We speak with complete clarity to the entrepreneurs of other countries with whom we associate. We are a socialist country that has been and is respectful of the agreements to which we have committed and will commit ourselves. They operate in a stable country, without terrorism, without drugs, without the kidnapping of executives — a sovereign nation with an honest government.

In synthesis, this is our policy and our experience with regard to foreign investments in Cuba. Thirteen years after the promulgation of Decree-Law 50, we consider that a new legal instrument covering this question is needed to provide guarantees and to clarify the procedures necessary to facilitate the development and effectiveness of this process. Following instructions received from the executive branch of the Government, a team of jurists was organized in 1994 to formulate the ideas and proposals that should characterize the new Law. For this purpose, similar legislation was studied, mainly that of China, Vietnam, and some Latin-American countries. Also studied in depth were the experiences derived from Decree-Law 50.

Several draft versions of the proposed Law circulated for months among the different state organizations, and opinions were received and discussed that made it possible to enrich the bill.

In the month of August, in close coordination with the Presidency of the National Assembly, we carried out a process of explanation, clarification, and analysis of the bill with the Commission for Juridical and Constitutional Matters and the Commission for Economic Matters and, subsequently, with the deputies for all the provinces and the Special Municipality of the Isle of Youth. The result of these exchanges enabled us to improve the draft of the Law.

The proposal that you are about to analyze contains a preamble of 5 points, 17 chapters, 58 articles, a special disposition, 3 transitory and 2 final dispositions. Permit me to point out some noteworthy aspects:

  • the case-by-case approval of foreign investments, specifically by the Council of Ministers or by the Commission designated for this, is maintained. It is a principle of the Government that the proposals for foreign investment that are approved must be for the economic and social benefit of the country;
  • the same guarantees are offered as those usually found in other countries, such as no expropriation — except for reasons of national interest and with due indemnification, full protection of the investment, the investor's option to sell his part of the business at any moment, compensation at the end of the period of association, protection against claims based on law, and the free transfer abroad of profits and capital;
  • diaphanously, the Law stipulates the possibility of foreign investment in any sector, excluding the institutions of the armed forces — except for their entrepreneurial system — and the public services of health and education.
  • the participation of foreign capital in joint ventures is not limited, and the partners come to an agreement as to the percentage of participation of each in the capital of the firm, which is included in the authorization granted;
  • The possibility of creating enterprises totally based on foreign capital, which may be convenient in certain cases, is added to the legal forms of investment. Nevertheless, in the text of the Law, incentives for mixed-capital associations are given priority;
  • a glossary is included which allows us to express clearly the meaning of the main terms used in the Law, thus avoiding misunderstandings or erroneous interpretations;
  • investments in real estate, absent as an option from the previous legislation, are contemplated;
  • as in Law-Decree 50, mixed-capital enterprises and associations with foreign capital will be favored by payment of a profit tax of 30%. Enterprises using only foreign capital will contribute according to the prevailing tax legislation.
  • the Law includes a declaration authorizing the operation of Free Zones and Industrial Parks. At present, a proposal for legislation on this is in preparation;
  • both foreign and Cuban partners have stressed the need for more rapid responses and precise procedures during the process of negotiation, consultations, and reaching final decisions. This is solved in the Law, which clearly defines the participants and the stages involved and sets two maximum time-limits — seventy days for responding to the presentation of proposals for investments and thirty days for their inscription in the corresponding register following their approval;
  • a part of the Law is devoted to listing ways to conciliate the process of foreign investments with our duty to protect the environment.

Compañeros deputies and guests, we can assure you that the draft of the Law on Foreign Investment that we are about to examine has been submitted to a process of elaboration that we can qualify as rigorous and serious. During its different stages of preparation, we have sought out the maximum number of opinions and made an exhaustive study of its legal and technical aspects.

Our enemies, who thus far have done everything possible to interfere with and obstruct our policy of locating new markets and attracting foreign investment, have launched recent campaigns in an effort to avert and impede, with this step, the confirmation of Cuba's will to make available to the international community a Law on Foreign Investment consistent with the ascendent process of recovery of our national economy.

The aim of this Law is to promote and provide incentives for foreign investment within our territory. It will help to strengthen our links with the international community and, in particular, with entrepreneurial, banking, and financial circles. This Law confirms the seriousness with which Cuba is pursuing its policy of opening up to foreign investment within the context of its socialist principles and setting forth clearly its policies and norms. On the basis of all the above, we submit this draft of the Law on Foreign Investment for the approval of our Assembly.

The Aim of the Law
is to Promote and Provide Incentives for Foreign Investment within our National Territory

This Law Confirms
the Seriousness with which Cuba is Pursuing its Policy of Opening Up
to Foreign Investment

I, RICARDO ALARCON DE QUESADA, President of the Republic of Cuba's National Assembly of the People's Power,

LET IT BE KNOWN: That the Republic of Cuba's National Assembly of the People's Power, in session on September 5th, 1995, during the Fifth Regular Session of the Fourth Legislature, has approved the following:

WHEREAS: In today's world, without the existence of the socialist bloc, with a globalizing world economy and strong hegemonistic tendencies in the economic, political and military fields, Cuba, in order to preserve its accomplishments despite the fierce blockade to which it is subjected; lacking capital, certain kinds of technology and often markets and in need of restructuring its industry, can benefit from foreign investment on the basis of the strictest respect for national independence and sovereignty, given that such investment can usher in the introduction of innovative and advanced technology, the modernization of its industries, greater efficiency in production, the creation of new jobs, improvement in the quality of the products and services it offers, cost reduction, greater competitiveness abroad, and access to certain markets, which as a whole would reinforce the efforts the country must undertake for its economic and social development.

WHEREAS: The Constitution of the Republic, as it was modified in 1992, recognizes among other forms of property, joint ventures, companies and economic associations which are established in conformity with the law and, in regard to state property and in exceptional cases, when such action is deemed useful and necessary for the country, provides for the partial or total transference of ownership of economic objectives with the goal of developing them.

WHEREAS: The changes taking place in the national economy, aimed at actively promoting and boosting the investment of foreign capital in Cuba and broadening the possibilities in terms of the forms and areas of investment, among other essential factors, surpass the legal possibilities offered until now by Decree-Law No. 50, «On Economic Association among Cuban and Foreign Entities,» approved on February 15, 1982.

WHEREAS: In order to broaden and facilitate foreign participation in the nation's economy, it is convenient to adopt new legislation that may provide greater security and guarantees to the foreign investor and allow the country to obtain financial resources, technology and new markets in any productive sector and in the service sector in which mutual interests have been identified, for the fundamental purpose of achieving sustainable development in the country and recovery of the national economy.

THEREFORE: The National Assembly of the People's Power, making use of the authority conferred upon it by Article 75, paragraph b) of the Constitution of the Republic, resolves to issue the following

LAW NUMBER 77
FOREIGN INVESTMENT ACT
CHAPTER I
PURPOSE AND CONTENT
Article 1.
1. This Act has the purpose of promoting and encouraging foreign investment in the territory of the Republic of Cuba in order to carry out profitable activities that contribute to the country's economic capacity and sustainable development, on the basis of respect for the country's sovereignty and independence and the protection and rational use of natural resources, and of establishing, for that purpose, the basic legal regulations under which this should be realized.

2. The norms contained in this Act comprise, among other elements, the guarantees granted to investors, the sectors of the economy which can receive foreign investments, the forms that these may adopt, the various types of investments, the procedure for their authorization, the regulations for these investments relating to banking, taxation, and labor, and the norms related to protection of the environment and the rational use of natural resources.

CHAPTER II
GLOSSARY
Article 2.
In this Act, the following terms are used with the definitions indicated in each case:

a) International economic association:

Joint action by one or more national investors and one or more foreign investors within the national territory for the production of goods, the offering of services, or both, for profit, in its two forms, which consist of joint ventures and international economic-association contracts.

b) Authorization:

Document issued by the Executive Committee of the Council of Ministers or a Government Commission, for the realization of one of the forms of foreign investment authorized by this Act, for a specified period.

c) Foreign capital:

Capital originating outside the country, as well as the part of profits or dividends belonging to the foreign investor that may be reinvested in accordance with this Act.

d) Top management posts:

Positions corresponding to person responsible for the direction and administration of the joint ventures and of the company with totally foreign capital as well as the representatives of the parties to international economic-association contracts and the management personnel of companies with totally foreign capital.

e) Government Commission:

Commission designated by the Executive Committee of the Council of Ministers with the authority to approve foreign capital investments in its area of competence in correspondence with what is stipulated in this Act.

f) Administrative concession:

Unilateral action on the part of the Government of the Republic, whereby an entity is granted the right to exploit a public service or a natural resource, or to execute a public work under terms and conditions to be determined.

g) International economic-association contract:

Pact or agreement among one or more national investors and one or more foreign investors, for the joint realization of actions appropriate to an international economic association, without the establishment of a legal entity distinct from each of the parties.

h) Company with totally foreign capital:

Commercial entity with foreign capital, without the involvement of any national investor. i) Joint venture:

Cuban commercial company which adopts the form of a registered-share corporation, in which one or more national investors and one or more foreign investors participate as stockholders.

j) Employing entity:

Cuban organization with legal status, authorized to establish a contract with a joint venture or a company with totally foreign capital, through which it supplies, at the company's request, the workers of various skills needed by the company, who will be employed by that organization.

k) Assets:

Salaries, income and other remuneration, as well as increases, compensations and other additional payments received by Cuban and foreign workers, with the exception of those stemming from the economic stimulation fund, should this exist.

l) Foreign investment:

Capital input by foreign investors, in any of the forms stipulated by this Act.

m) Foreign investor:

The natural or juridical person, with a foreign domicile and foreign capital, that becomes a shareholder in a joint venture or participates in a company with totally foreign capital, or that is party to an international economic-association contract.

n) National investor:

State company or entity with legal status, a corporation or other Cuban national entity domiciled in the national territory and which becomes a shareholder of a joint venture or is party to an international economic-association contract.

CHAPTER III
GUARANTEES
FOR INVESTORS

Article 3.
The foreign investors within Cuban national territory enjoy full protection and security and their assets cannot be expropriated, except for reasons of the public good or in the interest of society, as declared by the Government, in accordance with the Constitution of the Republic, current legislation, and international agreements covering the mutual promotion and protection of investments undertaken in Cuba. In the case of expropriation, indemnification is made in freely convertible currency and is equal to the commercial value established by mutual agreement.

If an agreement is not reached, the price is set by an organization with internationally recognized prestige in the assessment of business assets, authorized by the Ministry of Finance and Prices and contracted for that purpose with the assent of all parties, or of the foreign investor and the Ministry of Foreign Investment and Economic Cooperation, if the affected party is a company with totally foreign capital.

Article 4.
1. The period of time granted for the development of operations by a joint venture, the parties to an international economic-association contract or a company with totally foreign capital, can be extended by the same authority that authorized the entities, as long as it is requested by the interested parties before the end of the period.

2. If the period is not extended, at the time of its expiration the joint venture, international economic-association contract or company with totally foreign capital shall be liquidated, as stipulated in the constituent documents and existing legislation, and the portion due to the foreign investor shall be paid in freely convertible currency, except in the case of an express agreement to the contrary.

Article 5.
Foreign investments are equally protected against third party reclamations which comply with the law and are in accordance with Cuban laws and rulings of national courts of justice.

Article 6.
1. At any moment, subject to the consent of all parties, the foreign investor in an international economic association can sell or transfer its total or partial share of the company to the State or a third party, subject to government authorization, receiving the corresponding price in freely convertible currency, except in the case of an express agreement to the contrary.

2. The foreign investor in a company with totally foreign capital can at any moment sell or transfer, in any form, to the State or a third party and subject to authorization by the Government, its total or partial share of the company, receiving the corresponding price in freely convertible currency, except in the case of an express agreement to the contrary.

Article 7.
The corresponding price to be paid to the foreign investor, in the cases discussed in Articles 4 and 6 of this Act, is set with the consent of both parties or, when that is not feasible, by an organization with internationally recognized prestige in the assessment of businesses and authorized by the Ministry of Finances and Prices to operate in national territory, and contracted for that purpose jointly by all parties, or by agreement of the foreign investor in a company with totally foreign capital and the Ministry of Foreign Investment and Economic Cooperation.

Article 8.
The State guarantees the foreign investor the free transference abroad, in freely convertible currency, free from taxes or any fee related to such transference, of:

a) Net profits or dividends obtained as a result of the investment; and

b) The moneys due him or her in the cases discussed in Articles 3, 4 and 6 of this Act.

2. Foreign citizens working in a joint venture, for the parties in any other form of international economic associations or in a company with totally foreign capital, as long as they are not permanent residents in Cuba, have the right to transfer abroad the income they receive, within stipulated amounts and according to the other regulations issued by the National Bank of Cuba.

Article 9.
Joint ventures and the parties to international economic-association contracts are obliged to pay taxes in line with the special regulations stipulated by this Act, until the expiration of the period for which they were authorized.

The stipulations made in the previous paragraph are not applicable to the rates, contributions (with the exception of social security contributions) and formal duties established in current legislation, nor to the payment obligations included in the Mining Act of December 21, 1994, or other legal provisions which may be issued in regard to natural resources, which shall be observed in the manner and extent stipulated in those laws.

CHAPTER IV
SECTORS OPEN
TO FOREIGN INVESTMENT

Article 10.
Foreign investments may be authorized in all sectors, excluding health and education services for the population and the armed forces institutions, with the exception of the latter's commercial system.

CHAPTER V
FOREIGN INVESTMENTS
FIRST SECTION
Manifestations
and Forms of Foreign
Investment

Article 11.
For the purposes of this Act, foreign investments are defined as:

a) Direct investments, through which the foreign investor participates in an effective manner in the management of the joint venture or company with totally foreign capital, and through which the foreign investor makes his or her own contributions in international economic-association contracts; and

b) Investments in stocks or other securities or bonds, either public or private, which do not fit the definition of direct investments.

Article 12.
Foreign investments shall adopt one of the following forms:

a) Joint venture;

b) International economic-association contract; or

c) Company with totally foreign capital.

SECOND SECTION
Joint Ventures
Article 13.
1. Joint ventures imply the establishment of a legal status distinct from that of any one of the parties. They adopt the form of registered-share corporations and current legislation in this field applies to them.

2. The proportions of capital stock which should be contributed by the foreign investor and the national investor are agreed upon by both partners and defined as part of the authorization.

3. The establishment of a joint venture must take the form of a public document, and annexes to this notarized document include the agreement of economic association, the bylaws governing the company and the authorization.

The agreement of economic association contains the fundamental pacts between the partners for the realization and development of the joint venture's operations, and for the achievement of its objectives, among them the guarantees of Cuban participation in the administration or joint administration of the company and the assurances of a market for the company's products or services; the bases of its accounting system and the estimate and distribution of profits.

The joint venture's bylaws shall include provisions related to the corporation's organization and operation, which must cover the general shareholder's meeting, its characteristics and organization; the necessary quorum and the requirements for exercising the right to vote at the general shareholders' meeting; the structure and characteristics of the management and administrative body; the method by which these bodies make their decisions, both in the general shareholders' meeting and within the management and administrative body, which could range from a simple majority to unanimity; provisions for dissolution and the procedure for liquidating the company; as well as other stipulations resulting from the current legislation in the field, this Act and the agreements between the parties.

4. If the public document does not designate the person or persons who shall administer the joint venture, the first general shareholders' meeting can be held and the members of the management and administrative body can be designated, in line with the bylaws.

5. Once the joint venture is created, the partners cannot be changed except with the consent of the parties and the approval of the authority that granted the authorization.

A change of partners is defined as the substitution of the foreign partner by another person or company, or of the Cuban partner by another person or company.

6. Joint ventures can establish offices, representations, branch offices and affiliates, in national territory and abroad, as well as participating in entities abroad.

7. A joint enterprise acquires legal status when it is included in the Registry maintained by the Republic of Cuba's Chamber of Commerce regarding these activities.

THIRD SECTION
International Economic- Association Contracts
Article 14.
1. International economic-association contracts have the following characteristics, among others: a) They do not imply a legal entity separate from those of the contracting parties.

b) They may have the objective of carrying out any activity authorized by the contracting parties.

c) The contracting parties are free to stipulate all the pacts and clauses that they deem to be in accordance with their interests, as long as they do not infringe on the authorized objective, the conditions of the authorization or current legislation.

d) Each contracting party makes separate contributions, which constitute a cumulative amount which they own at all times, and even though they do not constitute capital stock, it is in their interest to establish a common fund, as long as the portion of ownership belonging to each of the parties is well defined.

2. The text of the contract states the proportion of taxes to be paid by each party and the times of the year in which profits are distributed among them, after meeting their fiscal obligations, as well as the responsibility for losses, if there are any.

3. In an international economic-association contract, the party which carries out an act of management which benefits all parties is fully responsible to third parties, but among the parties each one is responsible to the extent or proportion stipulated in the contract.

4. Once an international economic-association contract is granted, the participants cannot be changed, except with the agreement of the parties and the approval of the authority that granted the authorization.

5. An international economic-association contract must be presented in the form of a public document in order to be approved and goes into effect the moment it is included in the Registry maintained by the Republic of Cuba's Chamber of Commerce regarding these activities.

FOURTH SECTION
Totally Foreign
Capital Company

Article 15.
1. In the company with totally foreign capital, the foreign investor manages the company, enjoys all the rights pertinent to it and is responsible for all the obligations described in the authorization.

2. The foreign investor involved in a company with totally foreign capital may act as an individual or a corporation within Cuban national territory:

a) Through the creation of a foreign entity of which the investor is the owner, within the form of a stock corporation and by being included in the Registry of the Republic of Cuba's Chamber of Commerce; or

b) By being included in the Republic of Cuba's Chamber of Commerce and acting independently.

CHAPTER VI
REAL ESTATE INVESTMENTS
ARTICLE 16.
1. Under the authorization of this Act, investments can be made in real estate and acquire ownership and other property rights over that real estate.

2. The investments in real estate discussed in the previous paragraph can be utilized for:

a) Housing and other structures destined for private residence or tourism activities of persons who are not permanent residents in Cuba;

b) Housing or offices of foreign companies;

c) Real estate development for use in tourism.

ARTICLE 17.
Investments consisting of the purchase of real estate which constitute corporate activity are considered direct investments.

ARTICLE 18.
The conditions and terms under which the purchase and transfer of real estate discussed in Article 16 of this Act are determined in the authorization and must be in accord with current legislation.

CHAPTER VII
CONTRIBUTIONS
AND THEIR VALUATION

Article 19.
1. For the purposes of this Act, contributions are defined as the following:

a) Freely convertible currency;

b) Machinery, equipment or other physical or tangible goods;

c) Intellectual property rights and other rights over intangible goods;

d) Property rights over personal items and real estate, and other rights over these, including usufruct and surface rights; and

e) Other goods and rights.

The contributions which do not consist of freely convertible currency shall be assessed in that currency.

2. Transfer in favor of national investors of property and other rights over state property, for the purposes of contributions by them, shall be carried out under the principles established in the Constitution of the Republic, and under the prior certification of the Ministry of Finance and Prices, in consultation with the corresponding agency and with the approval of the Executive Committee of the Council of Ministers.

The payments of intellectual property rights and other rights over intangible goods shall be covered by current legislation on the matter.

3. Payments in freely convertible currency are set according to their value on the international market and conversion into the national currency, for accounting purposes, shall be realized according to the National Bank of Cuba's exchange rates. The freely convertible currency which constitutes payment of foreign capital should enter the country through the authorized banking entity for use in operations in the national territory.

4. The payments which are not made in freely convertible currency, except those consisting of intellectual property rights and other rights over intangible goods, and which are destined for the capital stock of joint enterprises, or which constitute payments in international economic-association contracts, are valued according to the methods freely agreed upon by the investors. Their value can be determined with the aid of the corresponding expert certifications drawn up by entities under the authority of the Ministry of Finance and Prices.

5. The evaluation of the contributions that are not made in freely convertible currency, except for those in payment for intellectual property rights and other rights over intangible goods, is always made with the aid of expert certifications drawn up by entities under the authority of the Ministry of Finance and Prices.

6. Payments consisting of intellectual property and other rights over intangible goods shall be assessed by methods freely agreed upon by all the national and international investors and between the foreign investor and the Ministry of Foreign Investment and Economic Cooperation, in the case of payments to a totally foreign capital enterprise

CHAPTER VIII
NEGOTIATIONS
AND AUTHORIZATION
OF FOREIGN
INVESTMENT

Article 20.
1. For the creation of an international economic association, the national investor must negotiate with the foreign investor every aspect of the investment, including its economic feasibility, the respective payments, the association's form of management and administration, as well as the legal document needed for its formalization.

2. In the case of a company with totally foreign capital, the Ministry of Foreign Investment and Economic Cooperation indicates to the investor the responsible Cuban entity in the sector, subsector or economic activity for which the investment is planned, and the investor must analyze its proposition with that entity and obtain the corresponding written approval.

ARTICLE 21.
1. Authorization for foreign investments in national territory is granted by the Executive Committee of the Council of Ministers, or by a commission designated for that purpose.

2. The Executive Committee of the Council of Ministers has the exclusive power to authorize foreign investments in any of the sectors listed below or those with the following characteristics:

a) When the total sum of payments made by foreign and national investors is greater than the equivalent of ten (10) million U.S. dollars in freely convertible currency;

b) In the case of totally foreign capital companies;

c) Investments made in public services such as transportation, communications, aqueducts, electricity, or for the construction or exploitation of a public work;

d) When a foreign company with capital shares owned by a foreign state is involved;

e) When the investment involves the exploitation of a natural resource, in accordance with legislation for the protection of the environment and rational use of natural resources;

f) Investments which include the transference of state property or of a real right which is the property of the State; and

g) In the case of the armed forces' commercial system.

3. The Government Commission has the power to authorize foreign investments not mentioned in the previous paragraph.

Article 22.
The foreign investor who expects to obtain authorization for a company with totally foreign capital shall present its request, jointly with the corresponding Cuban entity, to the Ministry of Foreign Investment and Economic Cooperation.

Article 23.
1. To set up a joint venture or establish an international economic-association contract, the written request should be presented jointly to the Ministry of Foreign Investment and Economic Cooperation by the foreign investor and the national investor.

2. The investment request is presented along with the following documents.

a) For the establishment of joint ventures and the granting of international economic-association contracts: draft versions of the economic association agreement and the bylaws of the proposed joint venture or the contract to be granted, as well as an economic feasibility study, in both cases.

b) In regard to the foreign investor: documentation attesting to his or her identity and solvency, as well as proof that he or she is a legitimate representative of the corporation, when applicable.

c) In regard to the national investor, in the case of a state enterprise or entity: express written acceptance granted by the maximum authority in the sector, subsector or economic activity in which the foreign investment is being made; in the case of a commercial association or civilian service organization based on totally Cuban capital, express authorization of the general shareholders' meeting, which grants the specific authority to sign the corresponding documents with the foreign investor.

d) When the foreign investor proposes the constitution of a company with totally foreign capital: acceptance by the maximum authority of the sector, subsector or economic activity for which the investment is planned, the text of the bylaws, an economic feasibility study, documentation attesting to the foreign investor's identity and solvency, and in the case of a juridical person, proof that the foreign investor is a legitimate representative authorized to make the specific investment.

e) The documents accompanying the investment request must be duly authenticated, when pertinent.

3. In order for the Ministry of Foreign Investment and Economic Cooperation to accept the request, it must be presented with the formalities described in the present Article.

4. Once the request is accepted by the Ministry of Foreign Investment and Economic Cooperation, it shall be submitted for consultation to all the corresponding agencies and institutions, in order to obtain their report on matters pertinent to them.

5. Once the above procedures are completed, the Ministry of Foreign Investment and Economic Cooperation shall refer the accumulated documentation and its evaluation to the Executive Committee of the Council of Ministers or the Government Commission, as the case may be, so that it may make the pertinent decision.

6. The decision denying or approving the foreign investment is handed down within a period of sixty (60) days from the date on which the request was presented, and it must be notified to the applicants.

Article 24.
1. The authorization contains the conditions under which it is granted and the objective and time period of the form of investment in question.

2. If the objective of the approved investment is the exploitation of a public service or a natural resource, or the construction and exploitation of a public work, the Executive Committee of the Council of Ministers may grant the corresponding administrative concession, under the terms and conditions established by said Committee.

Article 25.
The conditions established in the authorization can be clarified through the Ministry of Foreign Investment and Economic Cooperation, at the request of the parties.

SPECIAL
PROVISION

Joint ventures, national and foreign investors party to international economic-association contracts, and totally foreign capital companies are subject to any regulations that may be established concerning protection against catastrophes and natural disasters.

TEMPORARY PROVISIONS
FIRST: On the date this Act goes into effect, it applies to the existing and operating joint ventures and other forms of international economic association. Nonetheless, the benefits granted by Decree-Law No. 50, issued February 15, 1982, shall remain in effect during the whole period for which an existing international economic association has been authorized.

SECOND: This Act applies to the requests for foreign investment authorization which are being processed on the date the Act goes into effect. The Ministry of Foreign Investment and Economic Cooperation will come to an agreement with current applicants as to how to proceed.

THIRD: The complementary provisions issued by the various central State administrative agencies for the proper application and execution of the norms contained in Decree-Law No. 50 of February 15, 1982, shall continue to be observed on an individual basis insofar as they do not conflict with this Act. The aforementioned agencies, in a period of no more than three months from the date this Act goes into effect, shall review the aforementioned norms and bring them into harmony with the provisions of this Act.

FINAL
PROVISIONS

FIRST: Decree-Law No. 50, «On Economic Association among Cuban and Foreign Entities,» issued on February 15, 1982, as well as any other legal provisions contrary to the contents of this Act, are hereby repealed, and this Act shall be in force as of its publication in the Gaceta Oficial de la Rep&uacuteblica.

SECOND: The Executive Committee of the Council of Ministers and the central State administrative agencies are authorized, in accordance with their jurisdictions, to issue whatever provisions may be necessary for the proper fulfillment of this Act.

APPROVED in the Sessions Chamber of the National Assembly of the People's Power, International Conference Center, City of Havana, on the fifth day of the month of September of the year nineteen ninety-five.


Intellectual Property Rights In Cuba


Cuba Taxes

CHAPTER XII
SPECIAL TAXATION AND DUTIES SYSTEM
Article 38.
Joint ventures, foreign investors and national investors who are parties to an international economic-association contract are subject to the following fiscal obligations:

a) Income tax;

b) Tax covering the utilization of the labor force and contributions to social security;

c) Customs duties and other payments;

d) Land transportation tax, covering the ownership or possession of land motor vehicles; and

e) Documents tax, which covers rates and payments when applying for, obtaining or renewing certain documents.

Article 39.
For the purpose of this Act, the payment of taxes by the persons and companies mentioned in the previous Article carries the following characteristics:

a) Income taxes are levied at a rate of thirty percent (30%) of net taxable income. In cases considered in the nation's interest, the Executive Committee of the Council of Ministers can exempt all or part of the tax on net income that is reinvested in the country.

b) When the exploitation of renewable or nonrenewable natural resources is involved, the income tax rate can be raised by decision of the Executive Committee of the Council of Ministers. In that case, the taxation rate can be raised as high as fifty percent (50%).

c) In regard to the tax on utilization of the labor force and social security contributions, the following is established:

1. For utilization of the labor force, a discount is granted in the current taxation rate, to a rate of eleven percent (11%).

2. Social security contributions are covered by a taxation rate of fourteen percent (14%).

3. The taxation rates expressed in the two previous clauses are applied on the total wages and other income from any source received by the workers, except what is turned over to them as economic stimulus.

d) Foreign investors who are partners in joint ventures or parties to international economic association contacts are exempted from paying taxes on personal income obtained from the businesses' profits.

Article 40.
The company with totally foreign capital is obliged throughout the duration of its operations to pay taxes in accordance with the current tax legislation.

Article 41.
For the purposes of this Act, persons and companies discussed in the present Chapter may be granted special customs dispensations, in accordance with existing legislation.

Article 42.
The payment of customs tariffs, duties and other fees shall be realized in freely convertible currency, even in those cases in which the amount is expressed in national currency, discounting the exceptional cases which may be established by the Executive Committee of the Council of Ministers.

Article 43.
The Ministry of Finance and Prices, after consulting with the Ministry of Foreign Investment and Economic Cooperation and taking into account the benefits and size of the investment, the recovery of capital and the indications made by the Executive Committee of the Council of Ministers for priority sectors of the economy and the benefits that could be accrued by the national economy, may grant total or partial exemptions, on a temporary basis, or grant the benefits within its jurisdiction, in relation to the special taxation system.

Article 44.
Joint ventures, the parties to international economic-association contracts and totally foreign capital companies are subject to the «Norms for Assessing the Most Significant Assets and Liabilities» issued by the Ministry of Finance and Prices. Such persons can freely determine the accounting system which most suits them, as long as the adopted system conforms to universally accepted accounting principles and meets fiscal demands.

CHAPTER XIII
RESERVES
AND INSURANCE

Article 45.
1. Joint ventures, foreign and national investors party to international economic-association contracts and totally foreign capital companies are obliged to establish reserves, charged to profits, to cover contingencies that may arise in their operations.

2. The procedure for establishing, utilizing and liquidating the reserves foreseen in the previous clause is regulated by the Ministry of Finance and Prices.

Article 46.
Without detriment to the reserves discussed in the previous Article, joint ventures, foreign and national investors party to international economic-association contracts, and totally foreign capital companies may establish other reserves on a voluntary basis, in accordance with the regulations of the Ministry of Finance and Prices.

Article 47.
1. Joint ventures, foreign and national investors who are parties to international economic-association contracts, and totally foreign capital companies should contract for insurance policies, with companies authorized by the Ministry of Finance and Prices to operate in the country, for the protection of goods, properties, operations and any other activities or against any risks as necessary, on the basis of premiums and other contractual conditions which are competitive internationally.

2. Industrial, tourism or other installations or lands leased by state enterprises or other national organizations are insured by the leasee in favor of the leasor, in accordance with the conditions foreseen in the previous clause.

CHAPTER XIV
REGISTRY
AND FINANCIAL INFORMATION

Article 48.
Joint ventures, national and foreign investors party to international economic-association contracts, and totally foreign capital companies before commencing their operations, shall be inscribed in the Registry maintained on these activities by the Republic of Cuba's Chamber of Commerce, within a period of thirty (30) days following the date of authorization.

Article 49.
1. Persons and companies mentioned in the present Chapter shall present to the Ministry of Foreign Investment and Economic Cooperation, within a period of ninety (90) days following the end of their fiscal year, an annual report of their operations in that period.

2. The presentation of an annual report by the persons and companies covered by the present Chapter is independent from their obligations to provide information to the Ministry of Finance and Prices, the corresponding tax administration and any others that may be established for statistical purposes.


General Economic Information of Cuba

Cuba Socio-Economic Data from the Inter-American Development Bank. This is the source for all the hard economic data you need. The particular country page is slow loading, but well worth the wait for you economic gurus.


Cuba Tourism

CubaWeb Tourism


Cuba's Legal System

CHAPTER XVII
SOLUTION OF CONFLICTS
Article 57.
1. The conflicts which may arise in relations between partners of a joint venture, or between foreign investors and national investors party to an international economic-association contract, or between partners in a company with totally foreign capital in the form of a nominal share corporation shall be resolved in accordance with the founding documents.

2. The same rule applies when the conflict arises between one or more of the foreign partners and the joint venture or company with totally foreign capital to which the partner or partners belong.

Article 58.
Litigation over the execution of economic contracts between joint ventures, foreign investors and national investors party to international economic-association contracts or totally foreign capital companies, on the one hand, and state enterprises or other national entities are the jurisdiction of the economic division of the People's Courts established by the Governing Council of the People's Supreme Court.

The U.S. House of Representatives Internet Law Library Laws of other nations Cuba


General Information

WHAT YOU NEED TO KNOW ABOUT THE U.S. EMBARGO
(Treasury Document)

Office of Foreign Assets Control
U.S. Department of the Treasury

Cuban Assets Control Regulations
(Title 31 Part 515 of the U.S. Code of Federal Regulations)

INTRODUCTION - The Cuban Assets Control Regulations were issued by the U.S. Government on 8 July 1963 under the Trading With the Enemy Act in response to certain hostile actions by the Cuban government. They are still in force today and affect all U.S. citizens and permanent residents wherever they are located, all people and organizations physically in the United States, and all branches and subsidiaries of U.S. organizations throughout the world. The Regulations are administered by the U.S. Treasury Department's Office of Foreign Assets Control. The basic goal of the sanctions is to isolate Cuba economically and deprive it of U.S. dollars. Criminal penalties for violating the sanctions range up to 10 years in prison, $1,000,000 in corporate and $250,000 in individual fines. Civil penalties up to $55,000 per violation may also be imposed. Please note that the Regulations require those dealing with Cuba to maintain records, and, upon request from the U.S. Treasury Department, to furnish information regarding such dealings.

SELLING TO CUBA - Except for publications and other informational materials, and certain humanitarian goods licensed for export by the U.S. Department of Commerce, such as medicine and medical supplies, no products, technology or services may be exported from the United States to Cuba, either directly or through third countries, such as Canada or Mexico. This prohibition includes dealing in or assisting the sale of goods or commodities to or from Cuba, even if done entirely offshore. Such "brokering" is considered to be the export of a service. Provision of consulting services is also prohibited. Furthermore, no U.S. citizen or permanent resident alien, wherever located, and no foreign subsidiary or branch of a U.S. organization may export products, technology, or services to Cuba or "broker" the sale of goods or commodities to or from Cuba.

Section 1705(b) of the Cuban Democracy Act provides for donations of food to nongovernmental organizations or individuals in Cuba. Shipments of food can be donated to non-governmental organizations from the U.S. or from third countries, without the need for a license from the U.S. government. Under Section 1705(c) of the same act, exports of medicines and medical supplies are allowed, but require a license issued by the U.S. Commerce Department. U.S. banks may handle the financial aspects of licensed transactions, but may not use blocked funds to pay for such shipments. The Act specifically provides that payments to Cuba involving telecommunications may be made pursuant to specific license. In the mid-1970's, Section 515.559 had been added to the Cuban Assets Control Regulations to allow OFAC to license foreign subsidiaries of U.S. firms to conduct trade with Cuba so long as several specific criteria were met. Section 1706( a) of the CDA prohibits the issuance of a license that would have been issued pursuant to Section 515.559, except where a contract was entered into prior to enactment of the CDA. Exports of medicines and medical supplies by foreign subsidiaries may be considered for licensing.

No vessel carrying goods or passengers to or from Cuba or carrying goods in which Cuba or a Cuban national has any interest may enter a U.S. port. The prohibition also applies to vessels which enter only to take on fuel and supplies (bunker), whether from U.S. fuel providers within the port limits or at offshore points, as well as vessels discharging or loading merchandise offshore, by lighter or otherwise. In addition, vessels which enter a port or place in Cuba to engage in the trade of goods or services are prohibited from loading or unloading any freight at any place in the U.S. for 180 days.

BUYING FROM CUBA - Goods or services of Cuban origin may not be imported into the United States either directly or through third countries, such as Canada or Mexico. The only exceptions are $100 worth of Cuban merchandise which may be brought into the United States as accompanied baggage by authorized travelers arriving from Cuba and publications, artwork, or other informational materials.

SPECIALLY DESIGNATED NATIONALS - The Regulations prohibit buying from or selling to Cuban nationals whether they are physically located on the island of Cuba or doing business elsewhere on behalf of Cuba. Individuals or organizations who act on behalf of Cuba anywhere in the world are considered by the U.S. Treasury Department to be "Specially Designated Nationals" of Cuba. Their names are published in the Federal Register, an official publication of the U.S. Government. A listing of such Specially Designated Nationals may be obtained by calling the Office of Foreign Assets Control at 202/622-2420. The listing, however, is a partial one and any U.S. individual or organization engaging in transactions with foreign nationals must take reasonable care to make certain that such foreign nationals are not specially designated. Specially Designated Nationals of Cuba operating in the United States are subject to criminal prosecution. U.S. individuals or organizations who violate the Regulations by transacting business with them are also subject to criminal prosecution or civil monetary penalties.

ACCOUNTS AND ASSETS - There is a total freeze on Cuban assets, both governmental and private, and on financial dealings with Cuba; all property of Cuba, of Cuban nationals, and of Specially Designated Nationals of Cuba in the possession of U.S. persons is "blocked." Any property in which Cuba has an interest which comes into the United States is automatically blocked by operation of law. Banks receiving unlicensed wire transfer instructions in which there is a Cuban interest, or any instrument in which there is a Cuban interest, must freeze the funds on their own books or block the instrument, regardless of origin or destination. "Suspense accounts" are not permitted. Blocking imposes a complete prohibition against transfers or transactions of any kind. No payments, transfers, withdrawals, or other dealings may take place with regard to blocked property unless authorized by the Treasury Department. Banks are permitted to take normal service charges. Blocked deposits of funds must be interest-bearing. "Set-offs" are not allowed.

U.S. persons are required to exercise extreme caution in order not to knowingly involve themselves in unlicensed transactions in which Cuba has an interest. No bank in the U.S. nor overseas branch or subsidiary of a U.S. bank may even advise a letter of credit involving Cuba nor may it process documents referencing Cuba. All such "property" must be blocked as soon as it comes within the bank's possession or control. U.S. persons who engage in any commercial dealings that involve unauthorized trade with Cuba, either directly or indirectly, are at risk for substantial monetary penalties and criminal prosecution.

SENDING GIFTS - Gift parcels may be sent or carried by an authorized traveler to an individual, or to a religious, charitable, or educational organization in Cuba for the use of the recipient or of the recipient's immediate family, subject to the following limitations: the combined total domestic retail value of all the items in the parcel must not exceed $200 per month; not more than one parcel may be sent or given by the same person in the U.S. to the same recipient in Cuba in any one calendar month; and content must be limited to food, vitamins, seeds, medicines, medical supplies and devices, hospital supplies and equipment, equipment for the handicapped, clothing, personal hygiene items, veterinary medicines and supplies, fishing equipment and supplies, soap-making equipment, or certain radio equipment and batteries for such equipment. Organizations that consolidate and send multiple gift parcels in single shipments must obtain a validated license from the U.S. Department of Commerce. Each gift parcel in the single shipment must meet commodity, dollar-value, and frequency limitations. If a parcel being shipped or carried to Cuba fails to meet these standards, it is subject to seizure by the U.S. Government.

TRAVEL TO CUBA - Only persons whose travel falls into the categories discussed below are authorized to spend money related to travel to Cuba without obtaining special permission from the U.S. Treasury Department. Even that money may be spent only for purchases of items directly related to travel such as hotel accommodations, meals, local transportation, and goods personally used by the traveler in Cuba at a rate not to exceed $100 per day and for the purchase of $100 worth of Cuban merchandise to be brought into the United States as accompanied baggage. Purchases of services unrelated to travel, such as non-emergency medical services, are prohibited. The purchase of publications and other informational material is not restricted.

The following categories of travelers are permitted to spend money for Cuban travel without the need to obtain special permission from the U.S. Treasury Department:

  • Official Government Travelers - U.S. and foreign government officials, including representatives of international organizations of which the United States is a member, who are traveling on official business.
  • Journalists regularly employed in such capacity by a news reporting organization.
  • Persons who are traveling to visit close relatives in Cuba in circumstances of extreme humanitarian need. This authorization is valid without a specific license from the Office of Foreign Assets Control only once every twelve months.

Specific licenses may be issued by the Office of Foreign Assets Control on a case by case basis authorizing travel transactions by persons in connection with the following travel categories:

  • Humanitarian Travel - (1) persons traveling to Cuba more than once in a twelve month period to visit close relatives in cases involving extreme hardship, such as terminal illness or severe medical emergency; (2) persons traveling to Cuba to accompany licensed humanitarian donations (other than gift parcels); or, (3) persons traveling in connection with activities of recognized human rights organizations investigating specific human rights violations.
  • Travel in connection with professional research or similar activities, for clearly defined educational or religious activities, or for purposes related to the exportation, importation, or transmission of information and informational materials, including provision of telecommunications services.

U.S. travel service providers, such as travel agents and tour operators, who handle travel arrangements to, from, or within Cuba must hold special authorizations from the U.S. Treasury Department to engage in such activities. These authorizations are issued based on written applications from the service providers, subject to appropriate checks by the Treasury Department. A traveler should not use any travel service provider that does not hold valid Treasury authorization. If in doubt about the status of a service provider's authorization, travelers should call the Office of Foreign Assets Control at 202/622-2430.

SENDING MONEY TO CUBA - Remittances, including family remittances, may no longer be sent to Cuba without a specific license from the Office of Foreign Assets Control, except for payments of up to $1,000 for fees and travel to enable a close relative to emigrate from Cuba to the United States. A close relative means a spouse, child, grandchild, parent, grandparent, great-grandparent, uncle, aunt, brother, sister, nephew, niece, first cousin, or spouse, widow, or widower of any of those people. A close relative also means mother-in-law, father-in-law, daughter-in-law, son-in-law, sister-in-law, or brother-in-law. Service providers, including banks originating transfers on behalf of non-aggregating customers, must obtain an affidavit from the remitter certifying that the Cuban immigrant has a valid U.S. Visa. The affidavit must contain the full name, date of birth, and Visa date and number of the Cuban traveler. A travel remittance may not be sent without an affidavit and affidavits must be kept on file.

FAIR BUSINESS PRACTICES - Anyone authorized by the U.S. Department of the Treasury to provide Cuban travel services or services in connection with sending money to Cuba is prohibited from participating in discriminatory practices of the Cuban government against individuals or particular classes of travelers. The assessment of consular fees by the Cuban government, which are applicable worldwide, is not considered to be a discriminatory practice. However, requiring the purchase of services not desired by the traveler is not permitted. Persons wishing to provide information on such activities should call 202/622-2430. All information regarding arbitrary fees, payments for unauthorized purposes, or other possible violations furnished to the U.S. Treasury Department will be handled confidentially.

ESTATES AND SAFE DEPOSIT BOXES - An estate becomes blocked whenever a Cuban national is an heir or is the deceased; money from a life insurance policy is blocked whenever the deceased is a Cuban resident. It is now possible for the heir of a person who died in Cuba, or the beneficiary of a life insurance policy of a person who died in Cuba, to apply for a license from the U.S. Treasury Department to unblock the estate or insurance proceeds. Persons administering or interested in a blocked estate should contact the Department's Office of Foreign Assets Control at 202/622-2480 for more information. A safe-deposit box is blocked whenever a Cuban has an interest in the property contained in the box. Access to a blocked safe deposit box for inventory purposes may be granted under certain conditions, but the contents of the box remain blocked and may not be removed without the permission of the U.S. Treasury Department.

PAYMENTS FOR OVERFLIGHTS - Private and commercial aviators must obtain a specific license authorizing payments for overflight charges to Cuba. Banks will ask to see the originals of such licenses before executing transfers and keep a copy for their files. Such transfers must be in a currency other than U.S. dollars.


INFORMATION REGARDING THE HELMS BURTON ACT



For Immediate Release
July 16, 1996

STATEMENT BY THE PRESIDENT

From the outset of my Administration, I have been committed to a bipartisan policy that promotes a peaceful transition to democracy in Cuba. Consistent with the Cuban Democracy Act and with the efforts of my predecessors, I have maintained a tough economic embargo on the Cuban regime while supporting the Cuban people in their struggle for freedom and prosperity. Often, the United States has stood alone in that struggle, because our allies and friends believed that pressuring Cuba to change was the wrong way to go.

Five months ago, the world was given a harsh lesson about why we need more pressure on Cuba. In broad daylight, and without justification, Cuban military jets shot down two unarmed American civilian aircraft over international waters, taking the lives of four American citizens and residents. I took immediate steps to demonstrate my determination to foster change in Cuba -- including the signing into law of the Cuban Liberty and Democratic Solidarity (LIBERTAD) Act, which strengthens the embargo, advances the cause of freedom in Cuba, and protects the interests of American citizens whose property was expropriated by the Cuban regime. And I called on the international community to condemn Cuba's actions.

Now the time has come for our allies and friends to do more -- to join us in taking concrete steps to promote democracy in Cuba. That is why today, I am announcing a course of action on Title III of the LIBERTAD Act to encourage our allies to work with us and accelerate change in Cuba.

Title III allows U.S. nationals to sue foreign companies that profit from American-owned property confiscated by the Cuban regime. The law also provides me with the authority to suspend the date on which Title III enters into force, or the date on which U.S. nationals can bring suit, if I determine that suspension is necessary to the national interests and will expedite a transition to democracy in Cuba. I have decided to use the authority provided by Congress to maximize Title III's effectiveness in encouraging our allies to work with us to promote democracy in Cuba.

I will allow Title III to come into force. As a result, all companies doing business in Cuba are hereby on notice that by trafficking in expropriated American property, they face the prospect of lawsuits and significant liability in the United States. This will serve as a deterrent to such trafficking -- one of the central goals of the LIBERTAD Act.

At the same time, I am suspending the right to file suit for six months. During that period, my Administration will work to build support from the international community on a series of steps to promote democracy in Cuba. These steps include: increasing pressure on the regime to open up politically and economically; supporting forces for change on the island; withholding foreign assistance to Cuba; and promoting business practices that will help bring democracy to the Cuban workplace.

At the end of that period, I will determine whether to end the suspension, in whole or in part, based upon whether others have joined us in promoting democracy in Cuba. Our allies and friends will have a strong incentive to make real progress because, with Title III in effect, liability will be established irreversibly during the suspension period and suits could be brought immediately when the suspension is lifted. And for that very same reason, foreign companies will have a strong incentive to immediately cease trafficking in expropriated property -- the only sure way to avoid future lawsuits.

Our allies and foreign business partners know from our actions over the past four months that my Administration is determined to vigorously implement the LIBERTAD Act. For example, Title IV of the Act bars from the United States individuals who profit from property confiscated from American citizens. My Administration has already begun to notify several foreign nationals that they could no longer enter the United States. Rather than face this prospect, a significant number of foreign companies already has chosen to leave Cuba, thereby reducing the flow of resources the regime uses to maintain its grip on power.

Today's action is the best way to achieve the bipartisan objectives we all share: to isolate the Cuban government and to bring strong international pressure to bear on Cuba's leaders, while holding out the very real prospect of fully implementing Title III in the event it becomes necessary. By working with our allies -- not against them -- we will avoid a split that the Cuban regime will be sure to exploit. Forging an international consensus will avert commercial disputes that would harm American workers and business and cost us jobs here at home. And it will help maintain our leadership authority in international organizations.

We will work with our allies when we can. But they must understand that for countries and foreign companies that take advantage of expropriated property the choice is clear: They can cease profiting from such property. They can join our efforts to promote a transition to democracy in Cuba. Or they can face the risk of full implementation of Title III. As our allies know from our implementation of other provisions of the bill over the last four months, my Administration takes this responsibility seriously.

For the past four decades Republican and Democratic administrations alike have worked for the transition to democracy of the last non-democratic regime in our hemisphere. This is a cause the international community should be prepared to embrace. As implemented under today's decision, Title III of the LIBERTAD Act provides us with powerful leverage to build a stronger international coalition for democracy in Cuba if possible -- and with a powerful tool to lead that struggle alone if necessary. This is in the best interests of our country, and in the best interests of the Cuban people.


Summary of Mexico's Position Regarding The Helms-Burton Act and Cuba

The Government of Mexico, in its statement of August 28, 1996, expressed its opinion that the Helms-Burton Act violates the principles of International Law, specifically those that guarantee equal sovereignty of states and non-intervention. Therefore, Mexico concludes that the Cuban people have the exclusive right to decide the nature of their economic, social, and political regime. The Charters of the OAS and Resolution 2625 (XXV) of the UN's General Assembly forbid the imposition of economic or political measures intended to force another state's will, and the Mexican position employs these to denounce the economic embargo the U.S. has placed on Cuba.

Mexico objects to the extra-territorial enforcement measures of the Helms-Burton Act that challenge the right of Mexican individuals to carry out financial and commercial operations anywhere in the world. The statement from Mexico calls attention to the broad international sentiment in opposition to the U.S. Act, including the objections of:

. The Inter-American Juridical Committee's conclusion of August 23, 1996 that the Helms-Burton Act "is not in conformity with International Law"

  • Canada
  • The Grupo de Río members
  • The CARICOM
  • Russia
  • The European Union
  • The U.S. Secretary of State Warren Christopher, who wrote in a letter to Newt Gingrich that the extra-territorial element of the Act "would be hard to defend under International Law"
  • The U.N.'s Special Rapporteur on Cuba's human rights situation stated on April 16, 1996 that: "The passing in the U.S. of the Helms-Burton Act deepens the spirit of confrontation between both countries, and does not contribute in any way to the creation of a favorable atmosphere for the respect of human rights."

Mexico encourages a political reconciliation between the U.S. and Cuba in order to guarantee stability, peace, and safety in the common geographical area.



Summary of the OAS' Response to the Helms-Burton Act

The Inter-American Juridical Committee of the Organization of American States on August 23, 1996, examined two aspects of the Helms-Burton Act: the protection of the property rights of nationals and the extra-territorial effects of jurisdiction. The Committee outlined the possible international effects of the Act and considered those norms if International Law that regulate the standard procedure for nationalization or expropriation of property and determined areas in which the Helms-Burton Act does not conform to International Law, including:

  • U.S. courts are not the appropriate forum for the resolution of State-to-State claims.
  • The U.S. does not have the right to take on claims of persons who were not nationals at the time of injury.
  • The U.S. does not have the right to attribute liability to nationals of Third States for a claim against Cuba.
  • The U.S. does not have the right to impose liability to nationals of third States for the use of expropriated property in Cuba when such use conforms to Cuban law.
  • The U.S. does not have the right to impose compensation in any amount greater than the effective damage, including interest.
  • The U.S. may not deprive a foreign national of the right to contest the basis and the amount of claims that may affect his property.

The Committee also examined the legality of the extra-territorial aspects of the Act and concluded that:

  • All States are subject to International Law and may not take measures outside of these bounds without incurring responsibility.
  • All States have the freedom to exercise jurisdiction, but within the limits imposed by International Law.
  • No State may exercise its power in any form in the territory of another State.
  • A State may justify the application of the laws of its territory only if an act occurring outside its territory has a direct, substantial, and foreseeable effect within its territory.

The Committee decided that the U.S does not have the right to control acts of "trafficking in confiscated property" when there is no apparent connection between such acts and the protection of its essential sovereign interests. After consideration of all above points, the Committee determined that Helms-Burton is not in conformity with international law.


Six-Month Suspension of Title III of Cuban Liberty and Democratic Solidarity Act (LIBERTAD Act)

Source: White House WWW "Briefing Room"--July 16, 1997

THE WHITE HOUSE

Office of the Press Secretary
For Immediate Release July 16, 1997

STATEMENT BY THE PRESIDENT

Today I am notifying the Congress of my decision to suspend for 6 more months
the right of U.S. citizens to file suit against foreign firms trafficking in
confiscated properties in Cuba. This decision is consistent with my strong
commitment to implement the Cuban Liberty and Democratic Solidarity Act
(LIBERTAD Act) in a way that best serves our national interest and hastens a
peaceful transition to democracy in Cuba.

I have invoked this waiver for the past year in order to continue strengthening
cooperation with our friends and allies toward our shared goal of ending Cuba's
38 years of oppression. Thanks to the efforts of Stuart Eizenstat -- my
Special Representative for the Promotion of Democracy in Cuba and now Under
Secretary of State -- we have made significant progress. We are forging an
international consensus on concrete steps to clear the way for a new era of
democracy and prosperity for the people of Cuba.

I said in January that I expected to continue suspending this provision of
title III of the LIBERTAD Act so long as our partners continued their
stepped-up efforts to promote a democratic transition in Cuba. My decision
today to renew the suspension reflects the sustained progress that has been
made over the past 6 months and my expectation of further advances in the
future. Just 2 weeks ago, the European Union (EU) formally renewed its
commitment to the historic Common Position it adopted last December. This
agreement binds all 15 EU member nations to make any improvement in relations
with Cuba dependent on concrete advances in human rights and political freedoms
on the island. EU member states have broadened their contacts with human
rights activists and independent groups in Cuba. Furthermore, after careful
consultation with the Congress, the United States and the EU reached an
understanding on April 11 to develop international disciplines to inhibit and
deter the acquisition of confiscated properties or any dealings involving them.

Key countries in Europe and, increasingly, Central and South America have made
clear that they are no longer conducting "business as usual" with the Castro
government. Instead, their leaders are pressing for the release of political
prisoners, free elections, economic reform, and other measures that will help
the Cuban people achieve the fundamental political and economic freedoms they
deserve. Major European political parties met in The Netherlands for the first
time to promote freedom and human rights in Cuba and issued a strong
declaration urging Castro to democratize Cuba.

Nongovernmental organizations (NGOs) have also risen to the challenge.
European NGOs have made pathbreaking strides to increase international support
for change in Cuba and provided unprecedented support to prodemocracy activists
on the island. Business and labor groups are formulating "best business"
practices for firms investing in Cuba. While the United States discourages
investment in Cuba, we hope that those who do invest there will foster respect
for basic workers rights and improvements in working conditions.

We have continued to enforce vigorously title IV of the LIBERTAD Act, denying
entrance into the U.S to directors of several foreign firms that traffic in
confiscated properties in Cuba. As a result, several firms have withdrawn from
investments and contracts in Cuba and are reassessing future investments. The
United States will continue enforcing title IV during the negotiations of
binding international disciplines as called for in the U.S.-EU understanding.
The Administration will consult further with the Congress concerning authority
to waive title IV if the investment guidelines have been agreed upon and
implemented.

We are making real progress in strengthening the international effort to bring
democracy to Cuba. The Cuban people and the Castro regime hear the message
more clearly than ever. The international community is committed to seeing
freedom reach Cuba's shores and the Cuban people assume their rightful place in
the family of democratic nations.


July 16, 1997


U.S. STATE DEPARTMENT
FACT SHEET

The President's Title III Decision July 16, 1998
Presidential Decision

President Clinton has suspended for an additional six months, effective August 1, 1998, the provision allowing U.S. nationals with claims to confiscated property in Cuba to file suit under Title III of the Cuban Liberty and Democratic Solidarity Act (Libertad Act), as provided for in the Act. In accordance with the Act, the President certified that a suspension Is necessary to the national interest and will expedite a transition to democracy in Cuba. He has reported his determination to the appropriate Congressional committees. In reaching this decision, the President cited important continuing actions by our friends and allies to promote democracy in Cuba.

The President allowed Title III to enter into force on August 1, 1996, but suspended for six months the right it grants to American nationals to bring suit against persons trafficking in confiscated properties in Cuba, a claim to which is held by a U.S. national. He did so in order to work with our friends and allies to develop a multilateral approach to advance democracy, human rights and fundamental freedoms in Cuba.

In January 1997, the President cited significant progress toward that goal and renewed the suspension for another six months in order to consolidate and develop the multilateral approach. At that time, he said he would expect to continue to suspend the right to file suit as long as our friends and allies continue their stepped-up efforts to promote a transition to democracy in Cuba. In July 1997 and in January 1998, the President noted additional concrete steps to promote democracy and human rights when he announced additional six-month suspensions.

In his statement today, the President described additional important steps which have been taken by governments, non-governmental organizations [NGOs], and the private sector as part of the multilateral initiative to promote democracy in Cuba. The President is continuing to expand the multilateral effort to promote democracy in Cuba. His initiative to gain ~~~~international support and action for democracy in Cuba -- the most ambitious since Castro seized power -- is yielding tangible positive results. Under Secretary of State Stuart Eizenstat is continuing to provide leadership to the President's pro-democracy initiative.

Progress in the International Effort to Promote Democracy in Cuba.

Government Actions

-- On February 17, El Salvador's President Armando Calderon Sol called on Cuba to begin an "opening to Democracy" before El Salvador could normalize relations with Cuba. El Salvador's Foreign Minister said his government would wait for profound changes in the areas of democracy and human rights before establishing diplomatic ties.

-- On February 23, the EU urged the Cuban government to release political prisoners, including the four members of the Dissidents Working Group, and permit their reintegration into society in response to the Pope's visit.

-- In March, a top Italian diplomat visited dissidents in Cuba and told Cuban officials that only private enterprise would bring about needed economic growth.

-- In April, Argentina's President Menem said, "President Clinton and I agreed to maintain our two countries' polices toward Cuba. We basically want a rapid return of Cuba to democracy, freedom, and respect for human rights." Argentina's Foreign Minister DiTella demanded the political democratization and (economic liberalization of Cuba: "Cuba must democratize, it must respect human rights, it must opt for a normal market economy."

-- The EU allowed~ its WTO case against aspects of Helms-Burton and the embargo to lapse in~ April as we continued to develop the multilateral approach.

-- Brazil's President Cardoso gave an address to the Summit of the America's in Santiago on April 28, saying "one country is missing" from the hemisphere's commitment to democracy. "We hope that it will move towards democracy.

-- In his visit to Cuba in late April, Canadian Prime Minister Chretien handed Castro a list of political prisoners and appealed to him to release four leading dissidents jailed without trial. On concluding his visit, he said Castro "has to change." Chretien's staff met with dissidents.~~~

-- At its annual conference in Brazil in May, the InterAmerican Center for Tax Administrators (CIAT) did not support Cuba's application to join because of Cuba's undemocratic character.

-- French Cooperation Minister Josselin said on May 5, "Europe and France want the initiation of a process of democratization and human rights in Cuba." In order for Cuba to become a member of the EU's tome Convention, Cuba would need to agree to more "political dialogue." He added, "We are also interested in seeing all political prisoners freed."

-- On May 18, the US and EU agreed to an Understanding which will inhibit and deter investment in property expropriated contrary to international law around the world, including in Cuba. The EU acknowledged for the first time that one of the primary tools used by the Castro regime to expropriate property belonging to US citizens appears to be contrary to international law and that they will take steps to inhibit and deter investment in such expropriated property. No commercial assistance will be provided by EU Member States to investors in expropriated property in Cuba. This will chill investment in Cuba, when implemented.

-- In their meeting in Geneva May 19, Swiss President Cotti pressed Castro on human rights, democracy, and political prisoners.

-- Brazilian Foreign Minister Lampreia met with dissidents in Cuba in May and said the issue of human rights in Cuba was a "heartfelt and priority policy" for Brazilian President Cardoso because he had been exiled and jailed by a previous dictatorial government in Brazil.

-- At its General Assembly in Caracas June 2, the OAS declined to take up a formula for readmission of Cuba, with many delegations citing Cuba's failure to comply with the democratic standards of the OAS. Argentina's Foreign Minister DiTella said the OAS is for democracies, adding that Cuba could not enter the OAS under current criteria, "because it would be expelled the following day."

-- On June 6, Nicaragua's President Aleman called on Cuba to "rejoin the Americas and democracy."

-- On June 8, the European Union reconfirmed its Common Position on Cuba. It called for "a peaceful transition to pluralist democracy in Cuba and greater respect for human rights and fundamental freedoms." The EU also reported that the EU Human Rights Working Group in Havana ~~~~had been in touch with dissidents and noted that "there has been no substantive change in the political and economic situation in Cuba."

-- In his visit to Cuba June 9, Italy's Foreign Minister Dini called for "progress on freedom of expression and association," and recognition and protection of individual rights. Dini's chief of staff met with dissidents.

-- In a speech in Miami June 12, Spain's Prime Minister Aznar expressed his wish that Cuba recover "as soon as possible" its "lost liberty."

-- A leading member of the delegation of Pierre Mauroy, former Prime Minister of France and current Socialist International leader, met with Cuban dissidents on June 19.

-- While the EU agreed on June 26 that Cuba could observe negotiations to revise the Lome Convention, it said full cooperation, including membership in Lome "will depend upon substantial progress on human rights, good governance, and political freedoms... The Council expects, in particular, that the obstruction of the Havana Ambassadors Human Rights Working Group shall cease, and the four members of the Dissidents' Working Group now in prison shall be released."

NGOs and Human Rights Organizations

-- Amnesty International released a report in January documenting cases of political prisoners in Cuba.

-- The Inter American Commission on Human Rights, affiliated with the OAS, released a report April 23 that said the Cuban state "continues to seriously violate the civil and political liberties of the Cuban people. Political discrimination and the systematic violations of freedom of speech and freedom of organization continue to be a state policy..."

-- Amnesty International and Reporters Sans Frontieres issued a joint statement on March 26 saying that Cuba continued to hold "scores of prisoners of conscience, including two journalists." Both organizations called on the Cuban government to release all political prisoners and permit the Cuban people to establish independent organizations and express their views freely.

-- In May, Pax Christi, the leading Dutch Human Rights NGO, reported on conditions in Cuba during the Pope's visit in January, describing serious human rights abuses. The ~~~~r~eport called on the UN and the Catholic Church to establish permanent human rights offices in Cuba, and for the EU to establish a Human Rights Commissioner for Cuba.

Private Sector

-- The North American Committee (NAC), consisting of over 100 business, labor, and academic leaders from the United States, Canada, and Mexico, established an internal task force to develop plans to organize a broad coalition to promote its "Principles for Private Sector Involvement in Cuba." The NAC discussed this issue with other international NGOs and labor organizations~.

(end text)


Secretary of State Madeleine K. Albright
Statement on U.S.-EU Understanding on Expropriated Property
London, United Kingdom, May 18, 1998
As released by the Office of the Spokesman
U.S. Department of State

U.S.-EU Understanding on Expropriated Property

I am pleased that the United States and the European Union have reached a path-breaking Understanding that will inhibit and deter the acquisition of expropriated property around the world, including in Cuba.

This arrangement sends a strong signal of support for the protection of property rights. It advances emphatically a high-priority goal of the Administration, one we share with many in the Congress, including the Chairman of the Senate Foreign Relations Committee, Senator Helms, and Senator Coverdell.

The disciplines which we each will apply are multifaceted: no government loans, no government grants, no subsidies, no fiscal advantages, no government guarantees, no government political risk insurance, no government equity participation and no government commercial advocacy in support of investments in illegally expropriated property; joint or coordinated approaches to the expropriating state; and more. A Registry of Claims will be established for those who contend that their property was illegally expropriated, commercial assistance will need to take appropriate account of information on the Registry in considering applications for commercial assistance. And as for any property that may be illegally expropriated in the future, each of us will add to these disciplines an outright ban on investments.

The Europeans now acknowledge that one of the primary tools that the Castro regime used to expropriate property from U.S. citizens appears to have been contrary to international law. In this regard, we have established a special provision dealing with what the Understanding calls countries with "an established record of repeated expropriation in contravention of international law." Under this provision, EU commercial assistance agencies -- institutions like our OPIC and Eximbank -- will review applications for commercial assistance (e.g., political risk insurance) in Cuba, so as not to assist projects involving the acquisition of illegally expropriated property. The Europeans and we have agreed to maintain close contacts on the implementation of this provision.

This Understanding advances in a most significant way the goals of the supporters of the Helms Burton Act, such as the co-sponsors Senator Helms and Congressman Burton, along with Senator Torrecelli, Members of Congress Gilman, Menendez, Ros-Lehtinen and Diaz-Balart, as well as many others. The disciplines that the EU and we have adopted can do more than the U.S., acting alone, can do to advance the interests of U.S. claimants and to protect investors around the world.

The Understanding will also ensure that Castro is not able to put illegally expropriated U.S. property on a fire sale in a desperate effort to undo the results of 38 years of political repression and economic mismanagement. For these reasons, the Administration intends, as indicated in the April 11, 1997, Understanding between the U.S. and the EU, to seek legislation authorizing the President to waive Title IV of the Helms Burton Act with respect to countries implementing the disciplines set out in this Understanding.

[End of Document]


Fact Sheet: The U.S. Embargo and Healthcare in Cuba: Myth Versus Reality

Released by the Bureau of Inter-American Affairs, August 5, 1997.

"Our country has gone from preventive medicine...to
sophisticated medicine, and today we have things that
no one else has." Fidel Castro, March 1997.

Summary

There is substantial misunderstanding and misinformation about the present state of healthcare in Cuba, including the accusation, which is not true, that it is U.S. policy to deny medicine or medical supplies and equipment to the Cuban people.

The healthcare available to the average Cuban has deteriorated because the Cuban Government has directed its increasingly scarce resources elsewhere. While not providing basic medical needs to its people, the Cuban Government has developed a closed, parallel healthcare system for the Communist Party elite, foreign "health tourists," and others who can pay for services in hard currency.

The Cuban Democracy Act of 1992 permits the exports of medicine, medical supplies, and equipment to Cuba by American companies and their subsidiaries, provided appropriate end-use monitoring arrangements are in place. Since 1992, the U.S. has approved 36 of 39 license requests for medical sales. Thirty-one (31) licenses were for the commercial sales of medicines, medical equipment, and related supplies to Cuba. Five (5) licenses were for travel to Cuba by representatives of American pharmaceutical companies to explore possible sales. During the same period, the U.S. has licensed over $227 million in humanitarian donations of medicines and medical equipment. This total does not include the millions of dollars in medicines sent to Cuban nationals in the form of gift packages from groups and individuals in the U.S.

The Impact of Cuba's Economic Choices

Cuba's economy is in disarray because of the government's continued adherence to a dysfunctional economic model. This decline has directly affected the health of ordinary Cubans. Lack of chlorinated water, poor nutrition, deteriorating housing, and generally unsanitary conditions have increased the number of cases of infectious diseases, especially in concentrated urban areas like Havana.

The grave economic problems in Cuba were exacerbated by the demise of the Soviet Union and the ending of the $5 billion in subsidies that the U.S.S.R. gave annually to the Cuban Government. Cuba had made significant advances in the quality of healthcare available to average citizens as a result of these subsidies. However, it devoted the bulk of its financial windfall to maintaining an out-sized military machine and a massive internal security apparatus.

The end of Soviet subsidies forced Cuba to face the real costs of its healthcare system. Unwilling to adopt the economic changes necessary to reform its economy, the Cuban Government soon faced a large budget deficit. In response, the Cuban Government made a deliberate decision to continue to spend money to maintain its military and internal security apparatus at the expense of other priorities--including healthcare.

According to the Pan American Health Organization, the Cuban Government currently devotes a smaller percentage of its budget to healthcare than such countries as Jamaica, Costa Rica and the Dominican Republic.

Healthcare in Cuba: "Medical Apartheid" and Health Tourism

Not everyone in Cuba receives substandard healthcare. Senior Cuban Communist Party officials and those who can pay in hard currency have access to first-rate medical services.

This situation exists because the Cuban Government has chosen to develop a two-tiered medical system--the deliberate establishment of a kind of "medical apartheid"--that funnels money into services for a privileged few, while depriving the healthcare system used by the vast majority of Cubans of adequate funding.

Following the loss of Soviet subsidies, Cuba developed special hospitals and set aside floors in others for exclusive use by foreigners who pay in hard currency. These facilities are well-equipped to provide their patients with quality modern care. Press reports indicate that during 1996 more than 7,000 "health tourists" paid Cuba $25 million for medical services.

Cuba's "Medical Technology Fair" held April 21-25, 1997 presented a graphic display of this two-tier medical system. The fair displayed an array of both foreign and Cuban-manufactured medicines and high-tech medical equipment and services items not available to most Cubans. The fair showcased Cuban elite hospitals promoted by "health tourism" enterprises such as SERVIMED and MEDICUBA.

Members of the Cuban Communist Party elite and the military high-command are allowed to use these hospitals free of charge. Certain diplomatic missions in Havana have been informed that their local employees can be granted access privileges to these elite medical facilities--if they pay in dollars.

The founder of Havana's International Center for Neurological Restoration, Dr. Hilda Molina, quit her position in 1994, after refusing to increase the number of neural transplant operations without the required testing and follow-up. She expressed outrage that only foreigners are treated. Dr. Molina resigned from her seat in the national legislature and returned the medals Fidel Castro had bestowed on her.

In 1994, Cuba exported $110 million worth of medical supplies. In 1995, this figure rose to $125 million. These earnings have not been used to support the healthcare system for the Cuban public. In fact, tens of millions of dollars have been diverted to support and subsidize Cuba's biomedical research programs--money that could have been used for primary care facilities.

Another means of earning foreign exchange at the expense of providing healthcare to ordinary Cubans is the government's policy of exporting its doctors to other countries. Three hundred Cuban doctors are in South Africa alone. In the early 1990's, Cuba reportedly planned to have 10,000 physicians abroad by the turn of the century.

A group of Cuban doctors who recently arrived in the United States said they were "mystified" by claims in a recent report of the American Association for World Health (AAWH) that the United States embargo is to be blamed for the public health situation in the country.

According to these doctors, "we...can categorically and authoritatively state that our people's poor health care situation results from a dysfunctional and inhumane economic and political system, exacerbated by the regime to divert scarce resources to meet the needs of the regime's elite and foreign patients who bring hard currency."

Referring to the growing disparity between healthcare provided to ordinary Cubans and that offered to tourists and high ranking Communist party members, the Cuban doctors noted that they "wish that any one of us could provide tours to foreign visitors of the hospitals Cira Garcia, Frank Pais, CIMEQ, and Hermanos Ameijeiras, in order to point out the medicines and equipment, even the bedsheets and blankets, reserved for regime elites or dollar-bearing foreigners, to the detriment of our people, who must bring their own bedsheets, to say nothing of the availability of medicines."

This statement is supported by the latest available trade figures for Cuba (1995). Cuba's imports totaled $2.8 billion, yet only $46 million--only 1.5% of overall foreign purchases--was spent on medical imports for its 11 million people. In comparison, the Dominican Republic, Cuba's neighbor, spent $208 million on medical imports for its 7.5 million citizens in 1995.

U.S. Sales of Medicines and Medical Supplies to Cuba

The U.S. embargo does NOT deny medicines and medical supplies to the Cuban people. As stipulated in Section 1705 of the Cuban Democracy Act of 1992, the U.S. Government is authorized to issue licenses for the sale of medicine and medical supplies to Cuba. The major requirement for obtaining a license is to arrange for end-use monitoring to ensure that there is no reasonable likelihood that these items could be diverted to the Cuban military, used in acts of torture or other human rights abuses, or re-exported or used in the production of biotechnological products. Monitoring of sales can be performed by independent non-governmental organizations, international organizations, or foreign diplomats.

Since 1992, 36 of 39 license requests have been approved for U.S. companies and their subsidiaries for sales of medical items to Cuba. Thirty-one (31) licenses were for the commercial sale of medicines, medical equipment, and related supplies to Cuba. Five (5) licenses were for travel to Cuba by representatives of American pharmaceutical companies to explore possible sales. Licenses have included such items as a liquid chromatography gradient programmer with pump and cable kit; Pentaspan (pentastarch); lab columns; filtration gels and expendables; T 380A IUDs; IMAP (fluspirilene); Thalamonal (fentanyl citrate); Depo-Provera contraception injection; Prostin VR pediatric sterile solution (alprostadil); syringes; an Ortho cytron absolute flow cytometer; catheters; medical diagnostic kits; and fine chemicals for medical and scientific research. The total dollar figure for these licensed transactions was at least $1,665,909. The Department of Commerce declined three requests for licenses. These exceptions to the general policy of approving commercial medical sales with appropriate end-use monitoring occurred in 1993 and 1994.

Moreover, the U.S. embargo on Cuba affects only U.S. companies and their subsidiaries and other companies whose products contain more than 10% U.S. content. Other nations and companies are free to trade with Cuba. Should Cuba choose not to purchase from the U.S., it can purchase medicine or medical equipment from other countries. Such third country transactions only cost an estimated 2-3% more than purchases from the U.S. as a result of higher shipping costs.

Humanitarian Assistance

The Cuban Democracy Act encourages the donation of humanitarian supplies to the people of Cuba, including medicine, food, and clothing.

Since the passage of the Cuban Democracy Act, the U.S. has become the largest donor of humanitarian assistance to Cuba. Much of the humanitarian assistance by U.S. non-governmental organizations consists of medicines and medical equipment. The U.S. Government has licensed more than $227 million in humanitarian donations of medicines and medical supplies to Cuba over the last four years.

U.S. humanitarian assistance has been distributed throughout the island, including to medical clinics. Monitoring is not required for donations of medicines for humanitarian purposes to non-governmental organizations in Cuba. During 1996 and through July of 1997, the Treasury Department's Office of Foreign Assets Control (OFAC) had issued 68 licenses for delivery of humanitarian goods to Cuba and 44 for humanitarian needs assessments. During the same period the Department of Commerce approved 123 licenses for humanitarian donations; none were denied.

In addition, it is believed that the single largest source of medicines used in Cuba today is the large volume of gift packages sent to Cuban nationals by organizations and individuals living in the U.S. These gift packages are estimated to be worth millions of dollars annually.

Medical Contacts

In addition to providing licenses for both humanitarian assistance and commercial sales of medical items, the U.S. has issued 21 visas to Cuban medical doctors in 1997 to attend medical congresses and/or visit U.S. medical institutions. Cuban doctors have visited the Center for Disease Control, the University of Puerto Rico (BioEthics Congress), the American Academy of Orthopedic Surgeons Annual Meeting, the Johns Hopkins University/Johns Hopkins Schools of Medicine, University of North Carolina at Chapel Hill/Duke University (HIV infections), the Marmer Medical Eye Center, and the American Academy of Neurology (Parkinsons Disease). In 1996, visas were issued to some 125 researchers in the natural sciences, most of whom were doctors and biotechnologists. The doctors who traveled worked for the Ministry of Public Health in hospitals and clinics throughout Cuba.

OFAC has issued a number of licenses for U.S. medical personnel to travel to Cuba. In January of this year, ORBIS International, a non-profit, humanitarian organization dedicated to fighting blindness, received a license to conduct a three-week training program of Cuban ophthalmic professionals. The training program included hands-on training in the diagnosis and treatment of childhood eye disorders, cataracts, glaucoma, and diseases of the retina. The training emphasized corneal transplants, technical skills, and hands-on use of ophthalmic technical equipment.

The Disarm Education Fund, in conjunction with medical personnel from the University of Southern California's University Hospital Center for Arthritis and Joint Implant Surgery, was licensed to lecture Cuban medical staff on procedures for performing knee and hip replacement operations on Cuban civilian patients. These U.S. medical personnel also trained Cuban orthopedic physicians to perform surgical implants and in techniques for the treatment of arthritic hip and knee joints.

Personnel of the Centers for Disease Control and Prevention (CDC) have been licensed since 1994 to attend specialized medical congresses, such as the 5th Latin American Tropical Medicine Congress. CDC personnel also verified that Cuban Health Authorities performed medical examinations that complied with U.S. laws and regulations on immigrant applicants. CDC scientists discussed with their Cuban counterparts data on the circulation of vaccine related to polio virus following mass administration of oral polio vaccines; lectured on communicable diseases and surveillance in emergencies; conducted a one-week training course on influenza and laboratory procedures for typing/subtyping influenza strains; and collaborated in an extensive investigation of an epidemic of optic neuropathy in Cuba that was accepted for publication.

Technical Information for License Requests

License applications are required for financial transactions related to travel and the shipping of commodities, whether humanitarian donations or commercial sales. Applications for travel licenses are submitted to the Office of Foreign Assets Control (OFAC) in the Department of the Treasury. License applications for commercial sale and humanitarian shipping of medical supplies are submitted to the Bureau of Export Administration, Department of Commerce. However, overseas subsidiaries of U.S. companies that require a license to sell medicine to Cuba must apply to OFAC. Please note that OFAC has a Fax-On-Demand Service with complete information, which can be reached at (202) 622-0077.

Please send Department of Commerce applications to:

Office of Exporter Services
PO Box 273
Bureau of Export Administration
Department of Commerce
Washington, DC 20230
Phone: (202) 482-4811; fax: (202) 482-3617

Please send OFAC applications to:

Director of the Office of Foreign Assets Control
Department of the Treasury
1500 Pennsylvania Avenue, NW-Annex
Washington, DC 20220
Phone: (202) 622-2480; fax: (202) 622-1657

[end of document]

Zenith and Eclipse:
A Comparative Look at Socio-Economic Conditions
in Pre-Castro and Present Day Cuba
Released by the Bureau of Inter-American Affairs, February 9, 1998.

Methodology | Health | Education | Consumption Production | Mass Media

SUMMARY AND INTRODUCTION

An enduring myth is that 1950's Cuba was a socially and economically backward country whose development was jump-started by the Castro government. In fact, according to readily-available historical data, Cuba was a relatively advanced country in 1958, certainly by Latin American standards and, in some areas, by world standards. The data appear to show that Cuba has at best maintained what were already high levels of development in health and education, but at an extraordinary cost to the overall welfare of the Cuban people. These include access to "basics" such as adequate levels of food and electricity, but also access to consumer goods, the availability of which have increased significantly in other Latin American countries in recent decades.

It is true that Cuba's infant mortality rate is the best in Latin America today, but it also was the best in Latin America -- and the 13th lowest in the world -- in pre-Castro Cuba. Cuba also has improved the literacy of its people, but Cuba had an excellent educational system and impressive literacy rates in the 1950's.

On the other hand, many economic and social indicators have declined since the 1959 revolution. Pre-Castro Cuba ranked third in Latin America in per capita food consumption; today, it ranks last. Per capita consumption of cereals, tubers, and meat are today all below 1950's levels. The number of automobiles in Cuba has fallen since the 1950's -- the only country in Latin America for which this is the case. The number of telephone lines in Cuba also has been virtually frozen at 1950's levels. Cuba once ranked first in Latin America and fifth in the world in television sets per capita. Today, it barely ranks fourth in Latin America and is well back in the ranks globally.

Cuba's rate of development of electrical power since the 1950's ranks behind every other country in Latin America except Haiti. Cuba is the only country in the hemisphere for which rice production today is lower than it was four decades ago. By virtually any measure of macroeconomic stability, Cuba was in far better shape in 1958 than it is today. Finally, the Castro government shut down what was a remarkably vibrant media sector in the 1950's, when the relatively small country had 58 daily newspapers of differing political hues and ranked eighth in the world in number of radio stations.

METHODOLOGY

This paper assesses Cuba's level of development in a variety of economic and social indicators during the revolutionary period (1959-present), especially relative to that of other countries during the same period. It relies most extensively on UN data, particularly from the statistical yearbook and demographic yearbook, which are considered among the most prestigious data compendiums in the development field. Trade data is derived from the IMF's Direction of Trade Statistics, which provides a consistent data series dating back to the 1950's. For the various international comparisons and rankings listed below, only those countries acquiring independence prior to 1958 and having relatively consistent data available for the period 1955-present have been included. (The former stipulation excludes many highly-developed Caribbean countries from consideration.)

HEALTH

The health care system is often touted by many analysts as one of the Castro government's greatest achievements. What this analysis ignores is that the revolutionary government inherited an already-advanced health sector when it took power in 1959.

Cuba's infant mortality rate of 32 per 1,000 live births in 1957 was the lowest in Latin America and the 13th lowest in the world, according to UN data. Cuba ranked ahead of France, Belgium, west Germany, Israel, Japan, Austria, Italy, Spain, and Portugal, all of which would eventually pass Cuba in this indicator during the following decades.

Today, Cuba remains the most advanced country in the region in this measure, but its world ranking has fallen from 13th to 24th during the Castro era, according to UN Data. Also missing from the conventional analysis of Cuba's infant mortality rates is its staggering abortion rate -- 0.71 abortions per live birth in 1991, according to the latest UN data -- which, because of selective termination of "high-risk" pregnancies, yields lower numbers for infant mortality. Cuba's abortion rate is at least twice the rate for the other countries in the table below for which data are available.

In terms of physicians and dentists per capita, Cuba in 1957 ranked third in Latin America, behind only Uruguay and Argentina -- both of which were more advanced than the United States in this measure. Cuba's 128 physicians and dentists per 100,000 people in 1957 was the same as the Netherlands, and ahead of the United Kingdom (122 per 100,000 people) and Finland (96).

Unfortunately, the UN statistical yearbook no longer publishes these statistics, so more recent comparisons are not possible, but it is completely erroneous to characterize pre-Revolutionary Cuba as backward in terms of healthcare.

WORLD: INFANT MORTALITY

(DEATHS PER 1,000 LIVE BIRTHS)

1957

1990-95

JAPAN

40

4

ICELAND

16

5

SWEDEN

18

5

FINLAND

28

5

SWITZERLAND

23

6

BELGIUM

36

6

GERMANY (A)

36

6

NETHERLANDS

18

7

AUSTRALIA

21

7

DENMARK

23

7

UNITED KINGDOM

24

7

CANADA

31

7

IRELAND

33

7

FRANCE

34

7

LUXEMBOURG

39

7

AUSTRIA

44

7

SPAIN

53

7

NORWAY

21

8

ITALY

50

8

UNITED STATES

26

9

ISRAEL

39

9

GREECE

44

10

PORTUGAL

88

10

CUBA

32

12

MALAYSIA

76

13

(A) - FOR 1957, INCLUDES ONLY FRG.

SOURCE: UNITED NATIONS.

 

EDUCATION

Cuba has been among the most literate countries in Latin America since well before the Castro revolution, when it ranked fourth. Since then, Cuba has increased its literacy rate from 76 to 96 percent, which today places it second only to Argentina in Latin America. This improvement is impressive, but not unique, among Latin American countries. Panama -- which ranked just behind Cuba in this indicator during the 1950's -- has matched Cuba's improvement when measured in percentage terms.

 

 

LATIN AMERICA: LITERACY RATES (A)

(PERCENT)

LATEST

AVAILABLE

1950-53

1995

ARGENTINA

87

(B)

96

CUBA

76

96

CHILE

81

95

COSTA RICA

79

95

PARAGUAY

68

92

COLOMBIA

62

91

PANAMA

72

91

ECUADOR

56

90

BRAZIL

49

83

DOMINICAN REPUBLIC

43

82

EL SALVADOR

42

72

GUATEMALA

30

56

HAITI

11

45

(A) - DATA FOR 1950-53 ARE AGE 10 AND OVER.

DATA FOR 1995 ARE AGE 15 AND OVER, REFLECTING

A CHANGE IN COMMON USAGE OVER THIS PERIOD.

(B) - 1947 DATA, THE LATEST AVAILABLE, ARE

FOR AGE 14 AND OVER.

SOURCE: UNITED NATIONS.

 

CONSUMPTION

Rationing has been a staple of Cuban life since the early 1960's. During the early 1990's, Cuba's food consumption deteriorated sharply, when massive amounts of Soviet aid were withdrawn. On its own without Soviet largesse and abundant food imports, Cuban agriculture was paralyzed by a scarcity of inputs and poor production incentives resulting from collectivism and the lack of appropriate price signals. In pre-Castro Cuba, by contrast, food supplies were abundant. The 1960 UN Statistical yearbook ranked pre-Revolutionary Cuba third out of 11 Latin American countries in per capita daily caloric consumption. This was in spite of the fact that the latest available food consumption data for Cuba at the time was from 1948-49, almost a decade before the other Latin American countries' data being used in the comparison. Looking at the same group of 11 countries today, Cuba ranks last in per capita daily caloric consumption, according to the most recent data available from the UN FAO Indeed, the data show Cuba with a poorer food supply situation than even Honduras.

 

LATIN AMERICA:

PER CAPITA FOOD CONSUMPTION

(CALORIES PER DAY)

LATEST

DATA

1954-57

1995

MEXICO

2420

3135

ARGENTINA

3100

3110

BRAZIL

2540

2834

URUGUAY

2960

2826

CHILE

2330

2769

COLOMBIA

2050

2758

PARAGUAY

2690

2560

VENEZUELA

1960

2442

ECUADOR

2130

2436

HONDURAS

2260

2359

CUBA

2730

(A)

2291

(A) - FOR 1948-49.

SOURCE: UN FAO FOOD BALANCE SHEETS

 

A closer look at some basic food groups reveals that Cubans now have less access to cereals, tubers, and meats than they had in the late 1940's. According to 1995 UN FAO data, Cuba's per capita supply of cereals has fallen from 106 kg per year in the late 1940's to 100 kg today, half a century later. Per capita supply of tubers and roots shows an even steeper decline, from 91 kg per year to 56 kg. Meat supplies have fallen from 33 kg per year to 23 kg per year, measured on a per capita basis.

Although some would blame Cuba's food problems on the U.S. embargo, the facts suggest that the food shortages are a function of an inefficient collectivized agricultural system -- and a scarcity of foreign exchange resulting from Castro's unwillingness to liberalize Cuba's economy, diversify its export base, and pay off debts owed to its Japanese, European, and Latin American trading partners during the years of abundant soviet aid. This foreign exchange shortage has severely limited Cuba's ability to purchase readily-available food supplies from Canada, Latin America, and Europe. The U.S. Embargo has added, at most, relatively small increases in transportation costs by forcing Cuba to import food from non - U.S. sources elsewhere in the hemisphere.

The statistics on the consumption of nonfood items tell a similar story. The number of automobiles in Cuba per capita has actually fallen since the 1950's, the only country in the hemisphere for which this is the case. (Unfortunately, the latest available data for Cuba are from 1988.) UN data show that the number of automobiles per capita in Cuba declined slightly between 1958 and 1988, whereas virtually every other country in the region -- with the possible exception of Nicaragua -- experienced very significant increases in this indicator. Within Latin America, Cuba ranked second only to Venezuela in 1958, but by 1988, had dropped to ninth.

The 1988 data on automobiles also reveal that countries in Asia and Europe that once ranked far behind Cuba in this measure have since surpassed Cuba by a wide margin. Japan, with four cars per 1,000 inhabitants in 1958, was far behind Cuba (24) that year, but by 1988, Japan's number had grown to 251, whereas the figure for Cuba remained frozen at its 1958 level. Similar comments could be made for Portugal (increased from 15 in 1958 to 216 in 1988), Spain (increased from six to 278), and Greece (increased from four to 150). Indeed, Italy's 29 cars per capita was not far ahead of Cuba's 24 in 1958, but by 1988, Italy boasted 440 cars per capita, whereas the figure for Cuba was unchanged from the 1950's.

 

LATIN AMERICA: PASSENGER CARS PER CAPITA (A)

(CARS PER 1,000 INHABITANTS)

Average

Annual

Growth

1958

1988

(PERCENT)

ARGENTINA

19

129

6.6

URUGUAY

22

(F)

114

5.3

VENEZUELA

27

94

4.3

BRAZIL

7

73

8.1

MEXICO

11

(C)

70

6.4

PANAMA

16

(B)

56

4.3

CHILE

7

52

6.9

COSTA RICA

13

47

(C)

4.4

CUBA

24

23

-0.1

DOMINICAN REPUBLIC

3

(B)

23

(G)

7.3

COLOMBIA

6

21

(D)

4.3

PARAGUAY

3

(C)

20

6.5

PERU

7

(E)

18

3.1

ECUADOR

2

15

7.0

BOLIVIA

3

(C)

12

4.7

GUATEMALA

6

11

2.0

EL SALVADOR

7

10

1.2

NICARAGUA

7

(B)

8

0.5

HONDURAS

3

6

2.3

(A) - FOR MOST COUNTRIES, EXCLUDES POLICE AND

MILITARY CARS.

(B) - EXCLUDES ALL GOVERNMENT CARS.

(C) - INCLUDES POLICE CARS.

(D) - INCLUDES CARS NO LONGER IN USE.

(E) - 1957.

(F) - 1956.

(G) - 1987.

SOURCE: UNITED NATIONS.

 

 

Telephones are another case in point. While every other country in the region has seen its teledensity increase at least two fold -- and most have seen even greater improvements -- Cuba's has remained frozen at 1958 levels. Today, Cuba has only 3 telephone lines per 100 people, placing it 14th out of 20 Latin American countries surveyed in 1994 and far behind countries that were less advanced than Cuba in this measure in 1958, such as Argentina (today 14 lines per 100 inhabitants), Costa Rica (13), Panama (11), Chile (11), Venezuela (11), and several others.

Cuba also has not kept pace with the rest of Latin America in terms of radios per capita. During the late 1950's, Cuba ranked second only to Uruguay in Latin America, with 169 radios per 1,000 people. (Worldwide, this put Cuba just ahead of Japan.) At that time, Argentina and Cuba were very similar in terms of this measure. Since then, the number of radios per capita in Argentina has grown three times as fast as in Cuba. Cuba also has been surpassed by Bolivia, Venezuela, El Salvador, Honduras, and Brazil in this indicator. Today, Cuba ranks just above average for Latin American countries.

In terms of television sets per capita, 1950's Cuba was far ahead of the rest of Latin America and was among the world's leaders. Cuba had 45 television sets per 1,000 inhabitants in 1957, by far the most in Latin America and fifth in the world, behind only Monaco, the United States, Canada, and the United Kingdom. In fact, its closest competitor in Latin America was Venezuela, which had only 16 television sets per 1,000 people. Today, Cuba has 170 televisions per thousand, behind Uruguay (232 per capita), Argentina (220), and brazil (209). Of these three countries, Uruguay in 1957 had fewer than one television per 1,000 people, and Argentina and Brazil each had five per 1,000 people -- far behind Cuba's 45 per capita.

PRODUCTION

Post 1959 Cuba falls short in areas of industrial production once prioritized by Soviet client states, such as electricity production. Although Cuba has never been a regional leader in public electricity production per capita, its relative ranking among 20 Latin American countries has fallen from eighth to 11th during the Castro era. In fact, in terms of the rate of growth for this measure, Cuba ranks 19th of 20 countries in the region, with only Haiti showing less accelerated development.

Cuba is the only country in Latin America whose production of rice has fallen since 1958, when it ranked fourth in the region in production of this staple. Two of the countries ranking ahead of Cuba in rice production in 1958 -- Colombia and Peru -- have since seen their rice production grow by more than three fold. Cuba's Caribbean neighbor, the Dominican republic, has increased its rice production by four fold since 1958. Perhaps even more telling are Cuba's yields per hectare in rice production. Whereas the Dominican Republic has increased rice yields from 2100 kg per hectare in 1958 to 5400 kg per hectare in 1996, Cuba's yields today are only 2500 kg per hectare, a negligible increase from the 2400 kg per hectare registered in 1958, according to UN FAO data.

LATIN AMERICA: RICE PRODUCTION

(1,000 MT)

Average

Annual

Growth

1958

1996

(PERCENT)

BRAZIL

3829

10035

2.6

COLOMBIA

378

1787

4.2

ECUADOR

176

1346

5.5

PERU

285

1203

3.9

ARGENTINA

217

974

4.0

URUGUAY

58

868

7.4

VENEZUELA

22

733

9.7

DOMINICAN REPUBLIC

99

555

4.6

MEXICO

240

455

1.7

BOLIVIA

11

296

9.1

PANAMA

86

230

2.6

CUBA

261

223

-0.4

NICARAGUA

33

219

5.1

COSTA RICA

34

186

4.6

CHILE

102

154

1.1

PARAGUAY

20

119

4.8

HAITI

42

(A)

96

2.3

EL SALVADOR

27

51

1.7

HONDURAS

21

41

1.8

GUATEMALA

11

33

2.9

(A) - 1959.

SOURCE: FAO YEARBOOK (UN)

 

Foreign Trade AND BALANCE OF PAYMENTS

 

Cuba's exports have not kept pace with other countries of the region. Of the 20 countries in the region for which comparable IMF data are available, Cuba ranks last in terms of export growth -- below even Haiti. Mexico and Cuba had virtually identical export levels in 1958 -- while Mexico's population was five times Cuba's. Since then, Cuba's exports have merely doubled while Mexico's have increased by almost 130-fold, according to IMF statistics. Cuba's exports in 1958 far exceeded those of Chile and Colombia, countries which have since left Cuba behind. The lack of diversification of Cuba's exports over the past 35 years also is remarkable, when compared with other countries in the region.

Cuba's enviable productive base during the 1950's was strengthened by sizable inflows of foreign direct investment. As of 1958, the value of U.S. foreign direct investment in Cuba was $861 million, according to United States government figures published in 1959. Adjusting for inflation that foreign investment number amounts to more than USD 4.3 billion in today's dollars.

Contrary to popular perception, U.S. investors were not focusing on the sugar industry in the 1950's. U.S. firms began to gradually sell their Cuban sugar holdings to Cuban firms beginning in 1935. By 1958, U.S. firms owned fewer than 40 of Cuba's 161 mills. While U.S. firms were moving away from sugar, they were rapidly investing in a range of other ventures, especially in infrastructure development. According to U.S. government statistics, 41 percent of U.S. direct investments in Cuba were in utilities as of 1958.

 

 

LATIN AMERICA: TOTAL EXPORTS

(MILLION USD)

Average

Annual

Growth

1958

1996

(PERCENT)

MEXICO

736

95991

14

PANAMA

23

2722

13

ECUADOR

95

5243

11

COSTA RICA

92

3826

10

CHILE

389

15396

10

BRAZIL

1243

47747

10

PARAGUAY

34

1282

10

HONDURAS

70

2469

10

ARGENTINA

994

23794

9

COLOMBIA

461

10437

9

GUATEMALA

103

2330

9

PERU

291

5854

8

BOLIVIA

65

1216

8

URUGUAY

139

2397

8

VENEZUELA

2319

23149

6

EL SALVADOR

116

1020

6

NICARAGUA

71

621

6

DOMINICAN REPUBLIC

136

886

5

HAITI

48

181

4

CUBA

732

1831

2

SOURCE: IMF DIRECTION OF TRADE STATISTICS.

 

As the numbers above imply, Cuba had a very favorable overall balance of payments situation during the 1950's, contrasted with the tenuous situation today. In 1958, Cuba had gold and foreign exchange reserves -- a key measure of a healthy balance of payments--totaling $387 million in 1958 dollars, according to IMF statistics. (That level of reserves would be worth more than 1.9 billion USD in today's dollars.) Cuba's reserves were third in Latin America, behind only Venezuela and Brazil, which was impressive for a small economy with a population of fewer than 7 million people. Unfortunately, Cuba no longer publishes information on its foreign exchange and gold reserves.

MASS MEDIA

It is no exaggeration to state that during the 1950's, the Cuban people were among the most informed in the world, living in an uncharacteristically large media market for such a small country. Cubans had a choice of 58 daily newspapers during the late 1950's, according to the UN statistical yearbook. Despite its small size, this placed Cuba behind only Brazil, Argentina, and Mexico in the region. By 1992, government controls had reduced the number of dailies to only 17.

There has also been a reduction in the number of radio and television broadcasting stations, although the UN no longer reports these statistics. However, it should be noted that in 1957, Cuba had more television stations (23) than any other country in Latin America, easily outdistancing larger countries such as Mexico (12 television stations) and Venezuela (10). It also led Latin America and ranked eighth in the world in number of radio stations (160), ahead of such countries as Austria (83 radio stations), United Kingdom (62), and France (50), according to the UN statistical yearbook.

[End of Document]

Michael E. Ranneberger
Coordinator for Cuban Affairs
Remarks at Friedrich Hayek University
Coral Gables, Florida, November 17, 1997

U.S. Policy Toward Cuba

Introduction

It is a pleasure to speak to you today. In recent months, both Under Secretary Eizenstat and Assistant Secretary Davidow have had the privilege of addressing the Cuba Vision Series in Washington, and I am honored to be able to make this address as part of the "Hayek Lecture Series." Special thanks to Roberto Weill for his kind invitation today, and to the other co-sponsors, Aetna and the Gables Financial Group. I look forward to taking your questions afterward.

Cuba's Potential

Dr. Weill has suggested that I address the topic "United States Policy Toward Cuba and Its Impact on Emerging Markets." As I understand it, the term "emerging markets" refers to less developed countries which have undertaken market-oriented reforms and are reaping the benefits of economic growth and greater social mobility. Former Under Secretary of Commerce Jeffrey Garten in a recent book noted that the 10 "big emerging markets…are all trying to open their economies, balance their budgets, and sell off state enterprises. All but two have instituted substantial political liberalization."* So, the emerging markets are engaged in both political and economic reforms with a view to opening up their economies and improving the lives of their people.

We see this trend throughout Latin America, except, of course, in Cuba. While Cuba was once one of the leading nations of Latin America in terms of economic growth and development, this came to an end under the disastrous communist policies of the current government. Sadly, Fidel Castro has made clear that he has no intention of allowing Cuba to undertake the kind of fundamental, systematic change needed to put Cuba on the road to true economic and political development.

I note, however, that when change comes to the island--and it will come--the talent, creativity, and entrepreneurial zeal of the Cuban people will be unleashed. When change comes, we expect Cuba to rapidly emerge as one of the fastest-growing, most economically exciting markets in the region. I expect that the policies of a future Cuban Government will be consistent with the prescription offered by Friedrich Hayek himself in concluding his famous work, The Road to Serfdom, that " a policy of freedom for the individual is the only true progressive policy...." **

The United States stands ready to assist the Cuban people make the transition to democracy and a market system. In January of this year, the President released a report entitled "Support for a Democratic Transition in Cuba." The report notes that over two dozen former communist countries have joined the global trend to democracy and free markets, and that the lessons learned by the U.S. and the international community "can serve the Cuban people well when the opportunity for transition presents itself in Cuba." ***

In this report, we describe the kinds of assistance that a democratizing Cuba is likely to need and the ways in which the U.S. and the international community can help. This is consistent with our efforts to help other nations build democratic, free market institutions that protect human rights and function within the rule of law.

The report is not a blueprint for Cuba's future, since only the Cuban people and its democratically elected leaders can chart the country's future course. It is an assurance that the U.S. and other members of the international community will be there to help Cuba through the initial difficulties of regaining freedom and prosperity.

Now, let me turn to the current situation in Cuba and U.S. policy toward Cuba.

Retrenchment

The just-concluded Fifth Party Congress confirmed the process of retrenchment--politically, economically, and socially--which began in the fall of 1995, well before the shootdown of U.S. aircraft. The Party Congress focused on the serious economic situation the country faces, with officials admitting to a lower than expected 2% growth rate for this year and noting the unmet expectations for the sugar harvest.

It seems possible that the modest growth the Cuban economy experienced during 1992-95, largely as a result of foreign investment and tourism, has reached a plateau. The Party Congress offered, however, no prescription for solving these difficulties. It called for greater efficiency, but underlined the government's determination to stay the socialist course. Yet, even foreign businessmen in Cuba describe the situation as "desperate," and foreign investors seem increasingly skittish about becoming enmeshed in such a morass.

Our information indicates that the Cuban Government is facing a financial crunch, with short-term interest rates topping 20% and foreign investors demanding cash payments in hard currencies for goods and services. The average Cuban can testify to the deteriorating conditions faced daily, including insufficient food supplies, especially for those who must make do with government allocated rations. Public services like water and electricity are erratic and transportation is difficult. The end of Soviet subsidies exposed the inherent disfunctionality of Cuba's economic system. It is that failed system--and not the U.S. embargo--that is the fundamental cause of the Cuban people's hardships.

While I have painted a fairly dark picture of Cuba's economic situation, it would be misleading for me to suggest that the implosion of the existing order in Havana is imminent.

Why is change so slow in coming to Cuba, when it has come more quickly in the former Soviet Bloc and in our hemisphere? There are a number of possible explanations, but I find two most persuasive. One is that the Cuban Government has successfully limited and distorted the information Cubans have about the United States and about alternatives to the Cuban system. This has helped the Cuban Government trumpet a sense of false nationalism--largely defined with respect to us--which, despite the Party Congress rhetoric, has essentially replaced the now-discredited Communist ideology. The other is that the Cuban Government maintains a very repressive and effective internal security system.

Human Rights Denied

During the last year we have seen glaring examples of the Cuban government's callous disregard for international standards of human rights and its dogged determination to deny fundamental freedoms to the Cuban people. The Cuban Government's hard line is reflected in the overall deterioration of the human rights situation on the island.

Since June, 1997, over 100 persons have been detained, interrogated, or arrested. Rene Gomez Manzano, Vladimiro Roca, Marta Beatriz Roque, and Felix Bonne, the four core members of the "Dissident Working Group," were arrested July 16 and charged with "enemy propaganda." In May and June, the group had increased its activities and efforts to reach out to the international community for support. It held two press conferences attended by foreign journalists in Cuba. During the second conference, it released a paper, "The Homeland Belongs To Us All," noting the shortfalls and errors of the document released in May by the Communist Party in preparation for the Fifth Party Congress.

We note that Rene Gomez Manzano, founder of the independent lawyers group "Corriente Agromontista," was selected by the American Bar Association to receive its 1997 International Human Rights award for his advocacy of the rule of law and due process. Ironically, he was unable to attend the August 5 award ceremony because of his imprisonment. "Concilio Cubano" founder Leonel Morejon, the other recipient of the award, was also unable to attend because he was under house arrest.

The U.S. Government is committed to maintaining close contacts with human rights and dissident communities to lend our moral and political support to their legitimate aspirations. We are also encouraging other governments and non-governmental groups to do so, and they are acting.

U.S. Policy

While our policy toward Cuba is not based on the geopolitical realities of the Cold War, it is grounded in legitimate U.S. interests. Just 90 miles from our shores is a regime that systematically denies human rights and freedoms to its citizens. As we have witnessed in history, this has had significant consequences for the United States. Moreover, this is happening to, among others, the parents, brothers, and sisters of American citizens. We react to repression and hardship in Cuba as we would to a crisis that befalls a close family member. We want to do everything in our power to bring about a solution.

Our policy is also based on the vision we have of what Cuba can and will be in the future--a democracy with full protection for human rights, rule of law, and a free market system that encourages the Cuban people to achieve economic well-being for themselves and for their families. The overarching goal of U.S. policy is to promote a peaceful transition to democracy that will allow Cuba to develop its potential by permitting the Cuban people to choose the future they want.

The Cuban Government's adamant refusal to change and join the modern world inevitably raises the risk of instability since the current system is simply not sustainable over the medium and longer terms. We strongly believe that furthering a democratic transition as expeditiously as possible is the only way to ensure stability on the island.

I want to stress that the United States does not support violence as a means of achieving political change, and does not support organizations that advocate violence. You are well aware of the bombings in Havana earlier this year. The United States has strongly condemned these violent acts and will continue to condemn the use of terrorism. Violence will not contribute to the effort to bring peaceful democratic change to Cuba, nor will it create the foundations and institutions for a society and a government respectful of the rule of law and human rights.

Our policy of promoting peaceful change in Cuba has four essential elements: pressure on the Cuban Government for change through the comprehensive economic embargo and Libertad Act sanctions; outreach to the Cuban people; multilateral efforts to press for democracy and respect for human rights; and migration accords to promote safe, orderly and legal migration.

Support for the Cuban People

While we believe that tough economic sanctions are necessary to maintain pressure on the government to undertake peaceful democratic change, the Administration also believes change in Cuba must come from within, led by Cubans on the island who recognize the problems and injustices of the current system and challenge them. Increasing the flow of information to, from and within Cuba is essential to fostering this dynamic, as is outside support and advice to independent groups trying to carve out space for their activities.

In October 1995, the President initiated measures to encourage groups in the U.S. to develop contacts on the island. President Clinton has made this a priority, initiating measures in October 1995 to permit groups in the U.S. to begin developing new kinds of contacts on the island. These steps complemented earlier efforts to improve telecommunications service between the U.S. and Cuba, and to encourage private humanitarian donations to NGOs in Cuba.

Since the 1995 measures were announced, the Administration has licensed dozens of trips, programs and other activities by NGOs and institutions in the U.S. aimed at strengthening independent civil society. Several U.S. NGOs have begun sharing expertise and modest resources with Cuban partners, American students and teachers are meeting with their peers, and U.S. professionals and researchers are establishing contacts and cooperation with colleagues on the island. Over the past five years, we have licensed over $2 billion in private humanitarian aid from U.S. NGOs and individuals to the people of Cuba. Strengthening civil society helps pave the way for a "smooth landing" in Cuba once a transition is under way.

Building International Pressure for Change

The U.S. does not want to pursue a unilateral policy on Cuba. Rather, the President has made forging a multilateral effort to promote democracy in Cuba the central thrust of U.S. policy. By suspending for the first time in July 1996 and two times since then the right to file suit under Title III, if U.S. friends and allies would take a more active approach to advancing reform in Cuba, the President was able to spark more vigorous action toward the goals the European Union and other U.S. allies were already pursuing in Cuba. Right now, the Cuban Government is hearing a more resounding and diverse chorus of voices than ever before calling for fundamental changes in the Cuban system. Over time, that is bound to have an impact.

In response to the values and beliefs of its Member States, the EU adopted the "Common Position on Cuba," a binding commitment of all 15 Member States to press harder for human rights and democratic change in Cuba. Among other actions, the EU Member States have broadened their contacts with human rights activists and independent groups in Cuba.

The Common Position served as an important stepping stone to an unprecedented and significant agreement with the U.S.--the April 11 "Understanding" between the United States and the European Union. This recommits both sides to continue their stepped up efforts to promote democracy in Cuba and to encourage other nations to do so. The Understanding also established a framework for resolving our differences over the Libertad Act through negotiations to develop disciplines on treatment of investment in property confiscated contrary to international law. An agreement on this issue would strongly reinforce the multilateral approach.

The private sector is also playing an important role. The North America Committee of the National Policy Association, composed of business and labor leaders of the U.S., Mexico, and Canada, issued a statement in July delineating a set of principles which it advocates should be applied to businesses in Cuba, including areas that we in democratic nations take for granted, such as respect for due process, the right to organize and join a union, and the absence of political coercion in the workplace. The Committee encouraged businesses in Cuba to "work to gain the right to recruit, contract, pay, and promote workers directly, not through government intermediaries."

The Trans-Atlantic Business Dialogue, comprised of CEO's of top corporations in the U.S. and in Europe, has encouraged the private sector to implement "best business practices" that recognize the importance of human rights and labor rights in all dealings overseas. Cuba has been a special focus of concern.

We have also maintained pressure on Cuba in international human rights fora. In the United Nations we co-sponsor annually a resolution condemning the human rights situation in Cuba and calling on the Castro government to abide by its obligations as a UN member and an adherent to the Universal Charter on Human Rights as well as other international human rights instruments.

We welcome the January visit to Cuba by Pope John Paul II and believe it will have a constructive impact. His pastoral visit will bring a message of hope for the future to the people of Cuba.

Migration Accords

Our Cuban migration policy seeks to deter irregular migration from the island, to save lives that might otherwise be lost at sea and to prevent the chaotic, uncontrolled arrival of undocumented migrants. Our main tools in this effort are the September 9, 1994 U.S.-Cuba Migration Agreement and the May 2, 1995 Joint Statement on Migration Issues. Respectively, these accords: 1) expand legal migration opportunities for Cubans in Cuba, including those without relatives in the United States, and 2) establish a mechanism for the vigorous enforcement of U.S. law against undocumented entry. Together, they form a coherent strategy to promote, in the language of the September agreement: "safe, legal, and orderly" migration, as an alternative to the dangerous raft voyages that have brought such suffering to families on both sides of the Florida Straits.

What Next?

Popular pressures for a better way of life are inexorably growing. Some of the Cuban elite must know that the regime's recalcitrance now increases the risks of instability, and have, I think, a strong self-interest in avoiding that scenario. We have a strong interest in ensuring stability through a process of peaceful democratic change.

We must, however, do an even better job of sending a concerted message to the Cuban people, and the governing elites, that change is in their interest. Our report on "Support for a Democratic Transition in Cuba" incorporates ideas for training and including leaders in all segments of society in transition efforts. With Castro having turned 71, members of the leadership around him must grapple with their own futures and that of their institutions. We must send a message to that leadership that they too may have a role to play in a future democratic Cuba if they help to bring that about and if they submit to democratic processes.

The United States' policy toward Cuba has broad bipartisan support. The Congress and a broad sector of the American public continue to believe that pressure must be brought on the Cuban Government to undertake fundamental change. Our message is clear, and we will continue efforts with our allies in Europe, Canada, and Latin America in the government, private and NGO sectors to build international pressure for change in Cuba. As senior Administration officials have stated, if there is fundamental change is Cuba, the U.S. will respond.

Footnotes:

*Garten, Jeffrey, The Big Ten; Basic Books, 1997; page 14
** Hayek, Friedrich A., The Road to Serfdom; University of Chicago Press, 1944; page 241
*** Support for a Democratic Transition in Cuba, January 28, 1997; available from Department of State

[end of document]

For additional information on U.S.-Cuban Relations, click here.

Michael Ranneberger
Coordinator for Cuban Affairs
Bureau for Inter-American Affairs
Statement before the Subcommittee on Trade
The House Ways and Means Committee
Washington, DC, May 7, 1998

Mr. Chairman, Members of Congress:

Good afternoon and thank you for the opportunity to speak to you today on the subject of U.S. economic and trade policy toward Cuba. I would like to make brief remarks and submit this more comprehensive statement for the record. I look forward to your questions.

U.S.-Cuba Policy

To begin, I want to establish the context for our Cuba policy. In his statement of March 20, President Clinton said:

The people of Cuba continue to live under a regime which deprives them of their freedom and denies them economic opportunity. The overarching goal of American policy must be to promote a peaceful transition to democracy on the island.

The Cuban Government continues to be one of the most repressive regimes in the world. It does not listen to or respond to the voices of its people. There is no free press or political opposition, no private sector or independent civil society that can publicly discuss or criticize government policies.

Today in Cuba there are 400-500 political prisoners. These are individuals imprisoned because of their beliefs and their efforts to express them peacefully--actions that are legal and normal in our free societies. In this hearing on economic policy, I would like to draw your attention to one of these individuals, an economist, Marta Beatriz Roque, a founding member of the "Dissident Working Group."

Once a respected economics professor at the University of Havana, Marta Beatriz Roque is imprisoned because she wrote an independent critique of government economic plans. She sought only to express her views of the Cuban economy, pointing out serious problems with its central planning policies. Cuban authorities have denied her adequate medical care and she is seriously ill. We call on the Cuban Government to release Marta Beatriz Roque, to ensure that she receives adequate medical care, and to allow her to carry out her peaceful activities.

As the President said, our goal in Cuba is to promote a peaceful transition to democracy and respect for human rights. We do this through four essential elements: pressure on the Cuban Government through the embargo and the Libertad Act; development of a multilateral effort to promote democracy; support for the Cuban people consistent with the 1992 Cuban Democracy Act (CDA) and the Libertad Act; and measures to keep migration in safe, legal, and orderly channels. We also seek, through the Libertad Act, to protect the legitimate interests of U.S. citizens whose property has been expropriated in Cuba.

The President has also clearly stated that the United States would respond reciprocally if the Cuban Government implemented fundamental, systemic change. Cuba has not done so.

Papal Visit and March 20 Measures

We recognize the importance of the historic visit of Pope John Paul II to Cuba. The Pope brought a message of truth, hope, and support for the Cuban people--his presence in Cuba was electrifying. I attended the Mass in Revolution Square and was deeply moved by the sight of at least a half million Cubans listening to, welcoming, and cheering the Pope's forceful, direct call for freedom and human rights. During those moments, the people of Cuba held the attention of all of us who care about their struggle for freedom and justice. We must continue to support them in their aspirations.

The measures the President announced March 20 are designed to support the Cuban people and to assist in the development of independent civil society. I want to emphasize, as the Secretary said, that the measures "do not reflect a change in policy toward the Cuban Government. That policy has been, and remains, to seek a peaceful transition to democracy." I will discuss the March 20 measures in greater detail later.

U.S. Sanctions Policy

Before turning specifically to Cuban issues, let me touch briefly on U.S. sanctions policy. Under Secretary Stuart Eizenstat testified on this subject before your subcommittee in October. I will not attempt to review all of Under Secretary Eizenstat's excellent statement, but I want to highlight a few of the points he made that apply especially to Cuba.

As Under Secretary Eizenstat explained, economic sanctions can be and are a valuable tool for enforcing international norms and protecting our national interests. We should, however, resort to sanctions only after other appropriate diplomatic options have been aggressively pursued and have failed, or would be inadequate. Although, in many instances, engagement can be preferable to isolation, in the case of some rogue regimes, engagement would simply feed the regime's appetite for inappropriate or dangerous behavior.

As Under Secretary Eizenstat said, while there are advantages to multilateral sanctions, there are times when important national interests or core values are at issue that we must be prepared to act unilaterally. There can be no "one-size fits all" approach. The President must have the flexibility to tailor our response to specific situations.

Sanctions are used for a variety of purposes, including:

  • to punish a country for unacceptable behavior;
  • to influence the behavior of a target country;
  • to signal disapproval of a government's behavior;
  • as a necessary early reaction and as a warning that harsher measures could follow;
  • to limit a target state's freedom of action;
  • to deny resources or technology;
  • to increase the cost of engaging in unacceptable behavior;
  • to draw international attention to unacceptable behavior;
  • to challenge our allies to take more forceful action themselves in support of common objectives;
  • or at times, simply to signal that a business-as-usual approach to a government that violates core values is not acceptable.

As Under Secretary Eizenstat noted, our Cuba policy is illustrative of one of the principal goals of economic sanctions--to encourage our friends and allies to adopt policies that can advance our common interests. Our allies and major trading partners disagree with our embargo of Cuba and have urged us to change or alter the provisions of the Libertad Act.

At the same time, our allies have said they agree with us on the key goal of encouraging democracy and human rights in Cuba. Even when supporting Cuba's resolution at the UN General Assembly against the U.S. embargo of Cuba, the EU made clear its opposition to Cuba's human rights policies. In explaining the vote of EU members in favor of Cuba's resolution, Luxembourg-- in its role of President of the European Union--issued a strong condemnation of Cuba's human rights record, noting concern about the "persistent absence of progress toward democracy," "non-respect for political rights," "increasing violations of civil and political rights," and "harassment of those who seek to bring democracy to Cuba by peaceful means."

The Embargo and The Cuban Economy

For three decades, a fundamental premise of our policy toward Cuba has been that the current Cuban Government will not institute political and economic change unless it has to, and it will go only as far as it has to in order to maintain absolute control. Therefore, if we want to see fundamental change in Cuba occur, pressure is necessary.

The U. S. policy of applying economic pressure originated soon after Fidel Castro came to power in 1959. The embargo formally began under President Kennedy, and has been supported by all successive Presidents.

One of the major reasons for the imposition of the embargo was the Cuban Government's failure to compensate thousands of U.S. companies and individuals whose properties, large and small, were confiscated after the revolution. The Cuban Government specifically targeted and took properties owned by U.S. nationals. Under the Cuba claims program in the 1960s, the U.S. Foreign Claims Settlement Commission (FCSC) certified 5,911 valid claims by U.S. nationals against the Government of Cuba. The Castro Government also took property from thousands of Cubans, some of whom have since become U.S. citizens.

The impact of the embargo was somewhat offset during the Cold War years by $5-6 billion annually in Soviet subsidies, but these ended with the collapse of the Soviet Union and other European Communist regimes in the early 1990s. Cuba suffered a 35% decline in gross domestic product between 1989 and 1993, revealing an inherently dysfunctional economy. Food shortages and failure of basic public services led to disturbances which threatened to challenge the regime.

These problems, coupled with the continuing embargo, forced the Cuban Government to undertake very limited economic reforms to enable it to survive. The Cuban Government in the mid-1990s permitted Cubans to offer certain services privately under strict government scrutiny, but in 1997 introduced heavy taxes which forced many out of business. It appears that employment in this sector peaked in 1996 at around 206,000 and fell in 1997 to about 170,000. In 1994, the government introduced agricultural markets at which state and private farmers could sell surplus products at market prices after delivering the required quota to the state, which helped to alleviate grave food shortages and nutritional problems.

Cuba has actively sought foreign tourism and investment, while continuing to forbid private investment by Cuban citizens. It succeeded in attracting a limited amount of investment, but its overall "investment climate" remains hostile to private enterprise.

In 1993, the Cuban Government made it legal for its citizens to possess and use the U.S. dollar, which has become the major currency. Cuban failure to launch serious economic reforms has led to the development of a large black market and growing corruption. Those with access to dollars can purchase imported goods at government-run dollar stores. To earn dollar tips, many skilled doctors, teachers, engineers, and scientists are working in restaurants or as taxi drivers.

Nevertheless, under the slogan "socialism or death," the Cuban Government has resisted any credible effort to adopt market-based policies and continues tight state control of its highly centralized economy. Over 80% of the labor force is employed by the state.

The Embargo and The Libertad Act

Seeking to hasten a democratic transition in Cuba, Congress passed in 1992 the Cuban Democracy Act (CDA), which tightened the embargo by prohibiting U.S.-owned or -controlled subsidiaries located abroad from doing business with Cuba. The Act also provided for avenues to support the Cuban people, which, as I noted above, constitute a principal focus of our policy.

As change continued in Eastern Europe in the 1990s, but not in Cuba, concerned Members of Congress sought to develop ways to both deal with the continuing expropriation problem and apply additional pressure for peaceful change on the Cuban Government. This led to the development of the "Cuban Liberty and Democratic Solidarity Act," called the "Libertad Act," and known as the Helms-Burton Act after its principal sponsors. When in February 1996 Cuban MiGs shot down two civilian aircraft in international air space, killing three U.S. citizens and one resident, Congress passed this act by overwhelming margins. The President signed it into law on March 12, 1996.

Title I of the Libertad Act, for the first time, codified the embargo. The Act specifies conditions under which the embargo can be lifted or suspended once a new Cuban Government begins implementing a genuine transition to democracy. The Administration believes that until Cuba is engaged in a process of democratization, which includes free and fair elections, respect for human rights, and due process of law--just to mention a few elements--the embargo should be maintained.

Title I of the Act also strengthens enforcement of the embargo by expanding the civil enforcement authority available to the Office of Foreign Assets Control (OFAC) of the Department of the Treasury, which is charged with enforcing the restrictions on financial transactions with Cuba. The State Department strongly supports the embargo enforcement efforts of OFAC, the Department of Commerce, and the U.S. Customs Service.

The Administration continues to believe that maintaining pressure on the Cuban Government for fundamental change through economic sanctions is essential. The increased penalties and clarifications in Title I of the Libertad Act help send the message that violations of the embargo will not be tolerated.

Equally important, we work closely with OFAC and the Department of Commerce on license requests for humanitarian assistance, as encouraged by the Cuban Democracy Act and the Libertad Act.

Helms-Burton and the Multilateral Initiative

Perhaps the best known and most controversial aspects of the Libertad Act are Titles III, which created a private cause of action in U.S. courts, and Title IV, which prohibits visas and entry into the United States to those who "traffic" in confiscated property claimed by a U.S. national. These provisions prompted the European Union to initiate a complaint against the U.S. in the World Trade Organization (WTO). Canada and Mexico called for consultations under the provisions of NAFTA.

The President allowed the Title III lawsuit provisions to enter into force on August 1, 1996. At the same time, because of the intense interest in the Act among our allies and trading partners, he saw an opportunity to increase international pressure for change through a U.S.-led multilateral initiative to promote democracy in Cuba. In order to achieve this, the President in July 1996 suspended the right to file suit under Title III for 6 months, effective August 1, while calling on our friends and allies to step up efforts to promote a transition to democracy in Cuba. This initiative has changed the terms of the international debate about Cuba.

We have been able to manage this serious disagreement with close friends and trading partners and advance the President's multilateral initiative to promote democracy in Cuba. Under Secretary Eizenstat reached an "Understanding" with the EU in April 1997 under which the EU agreed to suspend its WTO case and step up its efforts to promote democracy in Cuba. The parties also agreed to negotiate disciplines on property confiscated in contravention of international law, including property in Cuba, and principles on conflicting jurisdictions. These discussions are in a crucial phase and, if an agreement is reached, the Administration will discuss with Congress the possibility of obtaining authority to waive Title IV of the Act.

The multilateral initiative to promote democracy has resulted in several important steps to promote democracy in Cuba. Perhaps the most important of these is the European Union's Common Position, which links improved relations with Cuba to fundamental democratic changes. The EU nations also created a Human Rights Working Group among their embassies in Havana to increase contact with dissidents, human rights groups, and independent elements of civil society. They have forcefully called for the Cuban Government to release political prisoners. In addition, Under Secretary Eizenstat's visit to four Central American countries last year energized their efforts to promote change in Cuba; leaders of these nations have spoken out. At the United Nations General Assembly in December 1997, more countries than ever before co-sponsored the U.S. resolution on the human rights situation in Cuba. The Cuba resolution at the UN Human Rights Commission in Geneva this year had 27 co-sponsors, including many key EU allies, although--tragically--it did not pass. The Department issued a statement expressing its concern that some members of the commission chose to turn their backs on the suffering of the Cuban people. We believe it is unconscionable that the vote will end the mandate of the UN Special Rapporteur in Cuba.

Non-governmental organizations (NGOs) are increasing their support for peaceful, democratic change on the island. Pax Christi, the Dutch human rights organization, is leading a coalition of European NGOs to focus on the deplorable human rights situation in Cuba, and has held two major conferences. In August 1997, Amnesty International issued a special 38-page report entitled Cuba: Renewed Crackdown on Peaceful Government Critics, which documented the Cuban Government's campaign against those who work for human rights and democracy. In August 1997, the American Bar Association awarded its annual "International Human Rights Award" to Dr. Rene Gomez Manzano and Dr. Leonel Morejon Almagro, two members of the Dissident Working Group in Cuba who were unable to receive the award because they had been arrested by the Cuban Government.

As a result of these efforts--the rhetoric of the Cuban regime notwithstanding--Cuba is hearing a concerted message on the need for fundamental, democratic, systemic change.

Title IV Enforcement

Through a special unit established in the Office of Cuban Affairs, the Department continues to implement Title IV of the Libertad Act based on facts and the terms of the law.

  • Determinations have been made involving three companies: Sherritt International of Canada, Grupo Domos of Mexico, and BM Group, an Israeli-owned firm registered in Panama, and over 15 executives and their family members have been excluded from entry into the U.S. Because Grupo Domos has presented evidence that it is no longer involved with U.S.-claimed property in Cuba, the company's executives are once again eligible to enter the U.S.
  • Implementation efforts have had a significant negative impact on the Cuban economy. Since enactment of the Act, 19 firms from over 10 countries have changed their plans for investment in Cuba or have pulled out of investments there. There are many indications that the investment environment in Cuba is unstable and risky. Interest rates for projects in Cuba have been driven to as high as 22%. The Cuban Government is finding it more difficult to obtain financing, and potential investors face the same problem.
  • As part of our investigative effort, we have contacted an additional 12 companies from 7 countries about their activities in Cuba. Companies may provide additional information to demonstrate that their activities are not covered under the Act, or they can explain their plans to discontinue activity in Cuba in order to avoid Title IV action. Among companies contacted for additional information, as the press has reported, have been 3 firms involved with petroleum exploration. As a result, one has already ceased its operations in Cuba.

In addition to seeking information from claimants about their claims, we are making maximum use of the limited amount of information available from all sources on foreign investment in Cuba. The Cuban Government claims there are over 300 joint ventures with foreign firms, without regard to whether they are involved with U.S.-claimed property. We believe this number is inflated, but we are developing a database to track activities of joint ventures and gather information on the location of property subject to certified claims. Gathering reliable information is a difficult and time-consuming process.

Other Aspects of Economic Policy Toward Cuba

Before I describe in more detail our efforts to provide humanitarian assistance to the Cuban people, I want also to touch on other aspects of economic policy, some of which are also contained in the Libertad Act. The United States opposes reintegration of the current Cuban Government into international financial institutions and regional economic groupings. We are urging the European Union, for example, to apply to Cuba the human rights and democracy standards of the Lome Convention, under which the EU provides economic benefits to developing nations, as it considers Cuba's application to join the Lome Convention.

The U.S. discourages companies from other countries from investing in Cuba. Under the current regime in Cuba, such investment tends to increase the power and control of the Cuban Government rather than benefit the people.

We recognize, however, that some companies from other countries are investing in Cuba. As part of the multilateral initiative to promote democracy in Cuba, Under Secretary Eizenstat is leading an effort to press businesses in Cuba not involved with contacted property to recognize and promote "best business practices." These are fundamental rights taken for granted in the Western world that the Cuban Government does not acknowledge, such as free speech and association; the right to join an independent labor union; and even the right to hire and pay an employee directly without intervention from the State. The Trans Atlantic Business Dialogue, the North American Committee of the National Policy Association, and the Dutch human rights organization, Pax Christi, have all endorsed this concept and are encouraging companies operating in Cuba to implement best business practices.

Support for the Cuban People

A fundamental aspect of U.S. policy toward Cuba is to provide support for the Cuban people, without supporting the Cuban Government. This focus has been a key element of our policy for most of this decade beginning with the Cuban Democracy Act of 1992. These efforts were strengthened by President Clinton's initiatives in October 1995 to encourage human rights organizations and other non-governmental groups and individuals in the U.S. to develop contacts on the island. Those steps complemented earlier efforts to improve telecommunications service between the U.S. and Cuba, and to encourage private humanitarian donations to NGOs in Cuba. The 1995 initiatives included licensing U.S. NGOs to assist independent Cuban NGOs; allowing sales and donations of communications equipment to Cuban NGOs; authorizing establishment of news bureaus; increasing academic, cultural, and educational exchanges; and allowing under a general Treasury license once-a-year family visits to Cuba in cases of humanitarian emergencies.

Since the October 1995 measures were announced, the Administration has licensed dozens of trips, programs, and other activities by NGOs and institutions in the U.S. aimed at strengthening independent civil society. Several U.S. NGOs have begun sharing expertise and modest resources with Cuban partners, American students and teachers are meeting with their peers, and U.S. professionals and researchers are establishing contacts and cooperation with colleagues on the island.

To foster the development of independent civil society in Cuba through support for the Cuban people, the Department works through a program administered by the U.S. Agency for International Development (USAID), pursuant to Section 109 of the Libertad Act. With valuable input from many agencies and the Congress, since it began in the fall of 1995, $2.45 million has been approved for U.S. NGOs under this program. Of that, $2 million has been approved in the last 12 months. An additional $1.8 million in new project proposals is under review.

These projects are wide-ranging, promoting the free flow of information to, from, and within Cuba. Among other activities, they will enable independent community grassroots organizers, professional organizations, and the private agricultural sector to meet their counterparts in Latin America, the Caribbean, and the U.S.; facilitate contact between Cuban environmentalists and environmental NGOs in other countries; and promote best business practices for foreign investors not involved in confiscated property to follow inside Cuba in order to promote workers' rights.

The Department takes very seriously its responsibility to assist in the provision of humanitarian assistance to the Cuban people. We work closely with the Department of the Treasury's Office of Foreign Assets Control and with the Department of Commerce to ensure appropriate licenses are issued. Since the passage of the Cuban Democracy Act in 1992, OFAC and the Department of Commerce have issued 50 licenses for exports of medicines and medical equipment from U.S. companies or U.S.-owned subsidiaries, subject to appropriate end-use monitoring. These licenses include 12 authorizations for travel to Cuba by representatives of American pharmaceutical companies to explore possible sales. Since the passage of the CDA in 1992, over $2 billion in humanitarian donations has been licensed, including nearly $275 million for medicines and medical equipment, and $13 million in food. The United States is the largest donor of humanitarian assistance to Cuba.

March 20 Measures

Pope John Paul spoke eloquently on the need to respect human rights and fundamental freedoms, to release prisoners of conscience, and to allow the development of independent civil society. When Secretary of State Albright met with the Pontiff in Rome, she discussed prospects for change in Cuba. The Pope was optimistic, speaking of the crowds who attended masses throughout the island, culminating in the huge mass in Revolution Square in Havana. John Paul II has publicly made clear his hope that his visit will propel Cuba toward a process of fundamental change, just as his first visit to Poland did.

This historic visit left us with a challenge--how to sustain the religious opening created by the Pope's visit, how to increase support for the Cuban people, and how to encourage a process of fundamental change without providing resources which will prop up Castro's regime. We believe the measures announced March 20 will do that.

The new measures are a strong response to the Pope's visit and enhance support for the Cuban people in their aspiration for a peaceful democratic transition.

As the Secretary of State said on March 20, we are taking these steps "to empower Cuban citizens . . . (and) not because of anything the Castro regime has done . . . ." In announcing his decision on March 20, President Clinton said: "To build further on the impact of the Pope's visit, to support the role of the Church and other elements of civil society in Cuba, and to thereby help prepare the Cuban people for a democratic transition, I have decided to take the following steps."

First, the resumption of licensing direct humanitarian charter flights to Cuba. Direct humanitarian flights under applicable agency regulations will make it easier for Cuban-Americans to visit family on the island, and for humanitarian organizations to provide needed assistance more expeditiously and at lower cost.

Second, establishing new licensing arrangements to permit Cuban-Americans and Cuban families living here in the United States to send humanitarian remittances to their families in Cuba at the level of $300 per quarter, as was permitted until August 1994. This will enable Cuban-Americans to provide direct support to close relatives in Cuba, while moving the current large flow of remittances back into legal, orderly channels.

Third, streamlining and expediting the issuance of licenses for the sale of medicines and medical supplies and equipment to Cuba. Based on experience of the past several years, including during the Papal visit, we believe that the end-use verification called for in the Cuban Democracy Act can be met through simplified arrangements.

The Departments of the Treasury, Commerce, and State are developing and will announce the new arrangements in these areas in the coming weeks.

As you can see from my review of these measures, we have not altered the fundamentals of U.S. policy toward Cuba. The measures are being taken using Treasury and Commerce licensing authorities and are fully consistent with the Cuban Democracy Act of 1992 and the Libertad Act of 1996.

What's Next?

What does the future hold for U.S. economic policy toward Cuba? The Castro regime is under more international pressure than ever before to respect human rights and implement democratic change, in part because of our multilateral initiative. We plan to keep up that pressure on the Cuban Government.

In January 1997, the President submitted to Congress and released publicly a major report entitled Support for a Democratic Transition in Cuba, as mandated by Title II of the Libertad Act. To develop the plan, an inter-agency team drew on lessons learned from assistance programs to Latin American countries and the former Communist countries of Eastern Europe.

The transition plan describes the many issues that will confront a democratic transition government in Cuba, and how the United States and other nations will be able to assist. The report indicates that a democratic transition government can expect to receive $4-6 billion in private assistance, loans, and grants from international financial institutions and other donors over a 6-year period following the establishment of a transition government. The report is an incentive to all those in Cuba who favor a democratic transition.

We have translated the report into Spanish, and over 10,000 copies have been distributed in Cuba. Radio Marti has described the plan to the Cuban people. The extent to which the Cuban Government fears the impact of this message was evident from the vitriolic propaganda offensive the Cuban Government launched against it. Castro required military officers to sign loyalty oaths specifically denouncing the transition report.

As we implement our Cuba policy, we must find creative ways to increase support for the Cuban people while maintaining pressure on the Cuban Government for fundamental, systemic change. We should strive to do that on the bipartisan basis that has characterized our Cuba policy for decades. In that way, we will maintain international leadership on this issue. And we will send a strong, effective message to the Cuban Government, the Cuban people, and the world. Thank you.

[end of document]

Secretary of State Madeleine K. Albright
Opening Remarks on Cuba at Press Briefing followed by Question and Answer Session by other Administration Officials
Washington, D.C., March 20, 1998
As released by the Office of the Spokesman
U.S. Department of State

Opening Statement on Cuba

SECRETARY ALBRIGHT: Good afternoon. Today, I want to discuss with you four actions the President has decided to take to reach out to the people of Cuba to make their lives more tolerable.

First, we will work with Congressional leaders such as Chairman Helms, with whom I discussed this subject at length yesterday, and with Senator Dodd, Senator Graham and Senator Torricelli and others in both the Senate and House who have demonstrated concern about the plight of the Cuban people. Together, we will develop bipartisan legislation to meet humanitarian food needs on the island.

Second, we will streamline and expedite the issuance of licenses for the sale of medical supplies to Cuba. Third, we will resume licensing direct humanitarian charter flights. Finally, we will restore arrangements to permit Cuban-American families to send remittances to their relatives in Cuba.

Let me explain what these actions do and do not mean, and why we have taken them at this time. Let me be very clear. They do not reflect a change in policy towards the Cuban Government. That policy has been, and remains, to seek a peaceful transition to democracy.

Over the past two decades, the Americas have been transformed from a hemisphere dense with dictators to one in which every single country, except for Cuba, has an elected government, if you will look at your maps. We believe the Cuban people deserve the same rights and liberties as their counterparts from Patagonia to Prudhoe Bay.

With that goal in mind, we will maintain economic pressure through the embargo and the Helms-Burton Act. We will seek to increase multilateral support, which has been building, to press for political openness in Cuba and respect for human rights. We will continue to shine a spotlight on Havana’s prisoners of conscience and call for their release. We will strive to ensure that migration from Cuba is safe, orderly and legal.

And we will not forget that, twenty-five months ago, three US citizens and one legal resident were shot down in international airspace, nor will we cease our efforts with the world community to make Castro’s regime take responsibility for those acts of murder.

Of course, we would like to see Castro embrace democracy. But after 38 years, he appears as autocratic as ever -- continuing to arrest political dissidents and exile others. Nevertheless, the Cuban people are beginning to think beyond Castro. We need to do the same.

The basis of any dictatorship’s power is control. The more dependent people are on the state, the more they are controlled. We can help to lessen the Cuban people’s dependence on the Cuban state by addressing humanitarian needs, aiding the development of a civil society and strengthening the role of the Church and other non-governmental organizations. By so doing, we can begin to empower Cuban citizens and help them prepare to make a peaceful transition to democracy.

We are taking these steps now not because of anything the Castro regime has done; nor are we doing it to improve official relations with the Government of Cuba. On the contrary, we are acting because of new possibilities that exist outside the government’s control. Those possibilities were brought into the open this past January by Pope John Paul II’s historic visit to Cuba. The Pope went to Cuba, in his own words, as a pilgrim of love, of truth and of hope. And he delivered a clear and unambiguous message that prisoners of conscience should be released; human rights should be respected; and a climate of freedom should prevail.

Earlier this month, I met with His Holiness in Rome. He spoke warmly about the reception his message had received. He expressed support for steps that would reduce the suffering and isolation of the Cuban people. And he has publicly stated the hope that his pilgrimage to Cuba would have an impact similar to that of the trips he had made earlier to a Poland then still behind the Iron Curtain and still ruled by martial law.

Of course, Cuba is not Poland, where pride in the Pope’s background gave his visit extra meaning. But there are similarities. As in Cuba, the Pope’s visits to Poland were arranged by the Church, not the government; and the outpouring of enthusiasm astonished the regime, which had assumed wrongly that years of dictatorship had caused religious faith to erode. In Poland, and I suspect in Cuba, thousands upon thousands of citizens realized for the first time that they shared a deep bond not created or controlled by the state. This is the kind of realization that can produce historic change.

Over the past month, in Florida and elsewhere, I’ve consulted with the Cuban-American community. Not surprisingly, there is a divergence of views. But there is agreement that the Pope’s visit generated huge currents of energy and excitement within Cuba. And that we should explore ways to help the Cuban people without helping the government.

As we implement the steps I’m announcing today, we will do all we can to meet that standard. For example, we will continue to verify that medicines reach the Cuban people and are not diverted to other uses. We will allow humanitarian, but not tourist or business, flights. And we know that we will have a better chance of seeing that remittances go to the intended recipients if they are regularized in transparent and legal channels.

For far too long, the Cuban people have been held back by the old thinking and brutal policies of Fidel Castro -- a leader they never chose. The time has come to move on, and to look ahead to a new era of fresh thinking based on timeless principles.

We know that in expectation of the Pope’s visit, Christmas Day had special meaning in Cuba this year. We will not rest until another day -- Election Day -- has real meaning there, as well. That day will come. We hope soon.

Bearing in mind Jose Marti’s words that fraternity and solidarity is never a concession, it is always a duty, we will do all we can to help meet the needs of the Cuban people -- our neighbors, brothers and sisters -- as they prepare for that new day.

Thank you very much.

Question and Answer Session by
Ambassador Jeffrey Davidow, Assistant Secretary of State for Inter-American Affairs, Ambassador James Dobbins, Special Assistant to the President and NSC Senior Director for Inter-American Affairs, and Michael Ranneberger, Coordinator of the Office of Cuban Affairs

AMB. JEFFREY AMB. DAVIDOW: My name is Jeffrey Davidow; this is Jim Dobbins of the White House, and Michael Ranneberger, who is the director of the Office of Cuban Affairs and quite expert on the technicalities of these issues.

QUESTION: Do you expect that over time these measures will have the effect of eroding support for the Cuban Government?

AMB. DAVIDOW: I think what will happen over time -- and indeed we have already seen this -- is that these measures will help create in Cuba other centers of activity. Cuba is notable in the world today in its apparent absence of what we have all come to call "civil society." There are no independent institutions or organizations in Cuba. There is no free press. There are no free political parties. There is no independent Girl Scout movement. Everything is controlled by the Communist party, as it was in the Soviet Union decades ago.

So, part of the desired result here is to open up breathing space, in the first instance by helping humanitarian organizations do their work. And hopefully that will extend to the creation of other organizations, allowing them to do more work in developing civil society in Cuba.

AMB. JAMES AMB. DOBBINS: I think both the President's statement and what Secretary Albright just said put an emphasis on promoting a peaceful transition to democracy. We don't know when the transition will come; we are confident it will come. We want it to come peacefully; and we believe that the development of civil society along the lines that Jeff has suggested will contribute both to its coming, but also to its being peaceful and expeditious when that transition occurs.

And just to add one other point, clearly, at the moment, the largest non-governmental organization in Cuba is the Catholic Church, and to the degree that we can provide assistance which is channeled through the Catholic Church -- and not exclusively through the Catholic Church, through other denominations and through other non-governmental, non-sectarian organizations -- we can begin to build this civil society. It is notable that the Pope's visit was organized by the Catholic Church -- by a non-governmental organization in Cuba. And it is that kind of non-governmental activity of a peaceful and benign sort that we are seeking through these measures to support.

QUESTION: Can you explain why you decided to do it in this manner? The Helms people are complaining that Helms had legislation moving forward, he was trying to build a bipartisan political consensus on Cuba, and the Administration just sort of pulled the rug out from under them by acting in what they say is in a unilateral manner. And they have even raised the suggestion that perhaps the President doesn't have the legal standing to do this because some of these actions were codified in Helms-Burton. So, could you talk to all that?

AMB. DAVIDOW: Well, we are absolutely convinced -- and more importantly, the lawyers are convinced -- that the President does have the legal standing to do this. Rather than to get into the details of that, we would be glad to provide you more information on this.

The Secretary of State, as she said, did meet with Senator Helms yesterday. I believe it was a good, useful conversation. The President stated this morning that he is prepared to work with bipartisan groups on the Hill, and the Secretary of State repeated this, to see if there is a possibility for legislation to deal with the issue of proportion of foodstuffs -- sending foodstuffs to Cuba.

The measures that are taken today in relation to remittances, flights, medical, are not ones that we feel were covered or encumbered by the Helms-Burton legislation. The embargo remains in force. It is the intent of the US Government to enforce that embargo as an important element of our overall Cuba policy.

QUESTION: About the embargo, just one broad question. If the Secretary calls for fresh thinking based on timeless principles, well, the embargo is certainly a case of old thinking from another era, and the principles are in question now; and I wonder why so little, in a sense. And I have one more specific question which has to do with the shipping method. A group called the Americans for Humanitarian Trade with Cuba complained a couple months ago, just as the Pope was about to travel, that there was no way they could send in medicines and other supplies because of the restrictions on shipping and it raised costs to quadruple what the value of the goods was. I haven't heard whether this is being remedied in the latest proposal.

AMB. DAVIDOW: Well, I'll let Mike Ranneberger answer specific questions on shipping, and I'm not familiar with this particular organization, but our figures indicate that hundreds of millions of dollars in medical donations and in humanitarian donations have gone into Cuba from the United States in recent years. So if one group complains that it hasn't been able to do that, perhaps it's not operating with the same efficiency as other groups.

Mike, do you have anything specific on it?

MR. RANNEBERGER: No, just the specific figure is that we've licensed almost $275 million now in medical assistance. We have reason to believe that the vast bulk of that has gotten to Cuba.

On the shipping issue, there is a provision under the embargo where ships that call at Cuban ports can't call at US ports for 180 days following that. However, that said, there is a regular shipping line that runs to Cuba through third countries. These medicines can be sent to third countries and shipped to Cuba; admittedly, at increased costs.

The restoration of the direct flights -- and this is a very important point -- will allow medicines and other humanitarian donations to be sent directly to Cuba, and will substantially reduce those costs.

QUESTION: But you're not changing, then, the actual restriction on shipping American -- in other words, the six-month ban still applies?

MR. RANNEBERGER: That's correct.

QUESTION: And can you take up the broader question of why so little, in a sense, after 39 years of this embargo?

AMB. DOBBINS: I mean, I think there are some who are going to say we did too little, there are some who are going to say we've done too much. We think this strikes the right balance.

The intent was not to change our policy toward Cuba; the intent was not to abandon the embargo. The intent was to begin to focus on Cuba beyond Castro, and to think of steps we can take now that insure that there is a peaceful and smooth transition to democracy at that time. We believe the steps we have taken can make a direct contribution. There may well be further steps; we're open to suggestions, and we'll be talking to people on the Hill and elsewhere.

This concept of building civil society is one that was really derived from the experience largely in Eastern Europe, but also in the move from dictatorship to democracy which occurred in the 1980s in South America, Central America. It is one that was originally put forward in the Cuban Democracy Act in 1994, and it's one that we've been seeking to advance through official US aid programs, as well as regulatory steps which facilitate non-governmental organizations and others who want to engage in this kind of activity and we will continue to be open to ways of facilitating and promoting that in the future.

QUESTION: I have a follow up. So, with your decision to still apply the embargo, do you think this policy is in the right direction? I mean, it has been more than 30 years since you applied the embargo and Castro is still in power; so how long are we going to wait until the embargo is going to have an effect? And I have -- when you say further steps in the right direction, you are talking about probably taking another measure, trying to find out the permission from the Congress to suspend Chapter IV of Helms-Burton?

AMB. DAVIDOW: Well, you've asked a lot of questions and let me just say that, to follow up what Jim said on the embargo, yes, the embargo has been in place for a long time; and yes, Castro has not changed the nature of that regime. But during all those years that the United States was not, and has not been trading with Cuba, much of the entire world has been. And the question should equally be asked, if our policy, in your view, is not successful, has the policy of the rest of the world, in trading with Cuba, been successful?

Cuba's economy is a disaster because of the economic policies of the Cuban Government. The results of those policies were in some measure masked during the years that Cuba was receiving billions -- thousands of millions of dollars of assistance every year from Eastern Europe. When that ended, the true nature of the Cuban economy became ever more apparent. So I do think that it's overly facile to suggest that because Castro is still in power, the embargo has not worked. What's more, it has provided an opportunity for the United States to state a very strong political opinion about the need for democracy and freedom in that country. Now, I'm not sure I understood the question about Title IV of Helms-Burton.

QUESTION: Because Mr. Dobbins says that they are looking for further steps and my question was --

AMB. DOBBINS: You don't have to --

QUESTION: -- that you have a compromise with the European Union to suspend Chapter IV -- at least to try to get the authorization from Congress.

AMB. DOBBINS: That's really a different question related to the handling of expropriated property on a global basis, and not specifically with respect to Cuba. So we can get into that but it really doesn't have anything to do with what we're talking about today, nor does it have anything to do with the embargo.

I think on the embargo, I'm not sure a prolonged argument about whether or not it's good is particularly useful; we can rehearse it if you'd like. I think if you look at the maps we've circulated, you will see that we believe, in part as a result of our successful efforts to isolate Cuba, the hemisphere has become overwhelmingly democratic.

Now, in terms of what are the conditions under which the United States would lift he embargo, and how do we envisage doing that? We provided the Congress a long report last year on US support for a democratic transition in Cuba. We estimated that $4 billion to $8 billion worth of external assistance would be available to a Cuba that wanted to move toward democratic elections and other normal democratic forums, and we discussed how it would be provided. And that report, as well as Helms-Burton itself, indicates the criteria that would need to be met, and they're fairly straight-forward criteria that have been met by almost every other country in the world.

QUESTION: When do you expect these measures to take effect under executive order? And secondly, aren't we really just reverting US policy back to pre-1994 and the painful interludes of the exile exodus and the Brothers to the Rescue shoot-down?

AMB. DOBBINS: First of all, I don't believe that an executive order is necessary to implement this. What we're talking about is changes in licensing procedures, and I think the President's announcement today makes clearer what he's done, which is ask the relevant agencies of government -- State, Treasury, Commerce -- to develop new licensing procedures to permit each of these activities. So it's a very simple, very straightforward process. It'll take several weeks. We'll want to consult with the affected groups and make sure that the process is an inclusive one that takes account of views so that when new procedures are published, they're effective and address the problem and do what's intended.

So this will happen over the next several weeks, and affected people who are interested in this will be given an opportunity to get their views, and we'll try to keep people informed.

QUESTION: Will those flights occur by the end of the year, do you think?

MR. RANNEBERGER: Oh, I think in a few weeks. I mean, this is just a question of promulgating new licensing procedures. So it's fairly simple, but it's not something that's going to be done by next week.

QUESTION: Okay, could you answer the second question, Ambassador, which was, essentially, aren't we reverting back to a pre-1994 policy?

MR. RANNEBERGER: I don't think we look at it that way. I think that some of the restrictions on remittances were placed in 1994. The restrictions on direct flights were placed in 1996. The medicines is actually taking a 1994 step that was in -- that legislation was the first to permit the sale of medicine. It set up certain criteria for verifying end use. We now have four years' experience, and think we can do what that legislation requires in a manner that is simpler and more expeditious.

But the focus of these is very much on the future -- on building a different Cuba and on preparing the Cuban people to build a different Cuba.

QUESTION: The Secretary spoke of legislation -- that the Administration has spoken with Senators Helms and Dodd and Torricelli about some legislation that has to do with humanitarian aid. Can you please expand on that? Does that mean only donations and expansion of the stuff that's permitted now, or what does that mean? And also, the expedited licensing you're talking about for the sale of drugs -- are we still talking about a ban on all medicines that were developed in the last 25 years and stuff like that? What are we talking about, and can you explain that a bit more?

AMB. DAVIDOW: Well, why don't I have Mike answer the question on the drug issue.

MR. RANNEBERGER: Sure. On the medicine issue, there are no medical sales that are banned to Cuba. The only requirement is that there be end-use verification so that these items cannot be used for certain purposes -- whether it's torture, resale, biotechnological industry and the like. By expediting, what we're talking about here is essentially streamlining the process so that it will be quicker and simpler. There are a number of ways to do that, which will also mean, however, that the end-use monitoring requirement will be there. But there are ways to simplify that.

Certain drugs, for example, clearly don't need extensive end-use monitoring; I mean, aspirin and the like.

QUESTION: Are these mostly drugs that are exempt from this end-use monitoring requirement?

MR. RANNEBERGER: Well, I'm not going to get into the details of how this will be worked out. What I'm saying is, there is an end-use monitoring requirement. The statute basically says that we have to assure ourselves that drugs will not be misused. But I'm saying that conceivably, there are certain obvious very simple drugs that can't be misused. But we have not worked out the details of the regulations.

Whatever we do will be strictly consistent with the Cuban Democracy Act, which does require end-use monitoring.

MR. FOLEY: We're going to take one more question in English, and then start taking some questions in Spanish.

QUESTION: Can you answer the question on the legislation?

AMB. DAVIDOW: All right. On the legislation, just by way of background, in recent months there have been two approaches discussed on the Hill. One was enshrined or crystallized in legislation which was introduced, I believe, already been introduced by Senator Dodd and Congressman Torres, which would lift the embargo as it relates to the sale of food.

There was another idea which was propounded by the Cuban-American National Foundation and Senator Helms -- and I am not, frankly, sure whether this is still a live idea on the Hill -- that would have made Cuba eligible for humanitarian food donations a la PL-480, the kind of law that we have that gives US Government supplies to the poor in other countries.

Obviously, there's a fair amount of ferment on the Hill. We would like to see a bipartisan effort come together; have discussions up there. We would be willing to participate, but we go in with no offer on the table other than we're willing to talk about this in the hope that something can be done.

QUESTION: So the Administration would consider endorsing, although it hasn't yet, a bill that would lift sanctions on the sale of food?

AMB. DAVIDOW: No, I'm saying all we're willing to do is talk at this time. Do you want to make a point?

AMB. DOBBINS: Well, I just want to mention, there was another proposal that was put forward by the Cuban-American Foundation, which was a proposal to allow US Aid funds to be used to buy food, which would be distributed by CARITAS and other humanitarian relief organizations.

So there's a variety of proposals from across the political spectrum. And our view is that with that range of proposals, surely there's something that the Congress and the Administration should be able to agree on. We're not endorsing any of those proposals at the moment. We're not saying that we would endorse any one of them. What we're saying is that with the Cuban-American Foundation, Senator Helms, Senator Dodd and others each having put forward different proposals which affect the transfer of food, that there should be something in there that can secure the requisite bipartisan support.

QUESTION: Have you all been in touch with the Cuban Government about this change? And might these changes also encompass medical equipment that might be needed, aside from medicines?

AMB. DAVIDOW: No, yes. (Laughter.)

MR. RANNEBERGER: Medical equipment is treated exactly the same as medicine.

AMB. DAVIDOW: Is that it?

QUESTION: One more question about the embargo, because you're leaving one big loophole open. What are the circumstances under which the embargo can be lifted? What must Castro do to fulfill whatever American conditions are?

MR. RANNEBERGER: They're covered in Helms-Burton; they're also covered in the report that I mentioned that we submitted last year. So, I mean, they're quite clear-cut. But straightforwardly, they have to begin allowing political parties to organize; they have to schedule genuine free elections; they need to release political prisoners; and they need to move toward democracy.

It's something virtually every government in the Western Hemisphere has done, something virtually every government in Eastern Europe, the former Soviet Union have done. It's well understood. And if they're prepared to do it, we're prepared to reciprocate.

MR. FOLEY: Thank you very much. We're going to start taking questions in Spanish now.

For additional information on U.S.-Cuban Relations, click here. [End of Document]

Cuba - Consular Info Sheet


Importing and Exporting

CHAPTER X
EXPORT
AND IMPORT SYSTEM

Article 29.
Joint ventures, national and foreign investors who are parties to international economic-association contracts, and totally foreign capital companies have the right, in accordance with established legislation in the field, to export their products directly and to import, also directly, whatever is needed for their purposes.

CHAPTER XV
DUTY-FREE ZONES
AND INDUSTRIAL PARKS

Article 50.
With the goal of stimulating exports and international trade, the Executive Committee of the Council of Ministers may authorize the establishment of duty-free zones and industrial parks, in delimited areas of national territory.

Article 51.
1. Duty-free zones are defined as areas in which, by decision of the Executive Committee of the Council of Ministers, a special system can be established covering customs duties, exchange rates, taxation, labor, migration, public order, capital investment and foreign trade, and in which foreign investors can participate for the purposes of financial operations, importing, exporting, storage, productive activities or reexporting.

2. Industrial parks are defined as areas in which, by decision of the Executive Committee of the Council of Ministers, a special system can be established covering customs duties, taxation, labor, capital investment and foreign trade, for the development of productive activities with the participation of foreign capital.

Article 52.
The authorizations of foreign investments, if pertinent, may consign particular facilities and incentives offered to foreign investors in the duty-free zones and industrial parks.

Article 53.
The establishment and norms related to the operation of duty-free zones and industrial parks shall be regulated by special legislation issued for that purpose.

TradePort's online tutorial on importing and exporting.

Reducing the Risk of Trade Disputes for Exporters

U.S. Harmonized Tarrif Schedule

AGEX - Exporting Agency of Cuba


Marketing

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Cuban Conventions Bureau THE CUBAN CONVENTlON BUREAU IS IN CHARGE OF PROMOTlNG AND DEVELOPING THE ISLANDS POTENTIAL as a destination for congresses, events, and incentive travels. Highly skilled specialist and technicians from about fifty institutions are MEMBERS of the Bureau as a big family who will be pleased to welcome to you. Some of its main functions and objectives are to lay down the strategies and policies for the development of this activity and to provide counseling to national and international organizations on holding events on the island.

Havana International Convention Center


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