WORLD TRADE
ORGANIZATIONWT/L/320
15 October 1999
(99-4412)
General Council
3, 4 and 8 November 1999Original:  Spanish
CUBA
Report of the Government of Cuba under
the Decision of 14 October 19961
The following communication, dated 8 October, has been received from the Permanent
Mission of Cuba.
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Pursuant to the provisions of Article IX:4 of the Agreement Establishing the World Trade
Organization, the Republic of Cuba submits this third annual report in relation to the waiver granted
to it with respect to Article XV:6 of the General Agreement on Tariffs and Trade 1994 (documentWT/L/182) on 14 October 1996.
In this connection, the Government of Cuba wishes to state that the measures employed to
reorganize and reactivate the Cuban economy, which have been implemented in a rational manner
since 1993, have led to the gradual recovery of the economy over the last few years.
During 1998 the Cuban economy achieved an overall growth of 1.2 per cent in spite of the
complex economic situation in which the country found itself, the effects of the international financial
crisis and the intensification of the economic war waged against Cuba by the United States.
It is a well known fact that the economic changes and the new monetary, financial and credit
conditions in which the economy has evolved have necessitated the restructuring of the nationalbanking system, not only from an institutional point of view but also in terms of financial services and
the modernization of that sector.
The major task of the restructuring process was the creation of the Central Bank of Cuba with
the following basic functions:  to ensure the stability  of the purchasing power of the national currency;
to contribute to economic balance and the coherent development of the economy;  to guard and
manage the country's international reserves;  to ensure the proper functioning of domestic and foreign
payments;  to exercise functions relating to financial discipline and supervision of financial
institutions and representative offices of foreign banks authorized to set up in the country, and any
other functions entrusted to it by law.
                                                     
1 WT/L/182.WT/L/320
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The monetary and foreign exchange legislation in force in Cuba regulates the following:
- Dual currency circulation;- exchange rates;- payments and receipts in freely convertible currencies by authorized legal persons -
foreign investment;
- the holding of foreign currency by natural persons;- imports and exports of gold, securities and national and foreign currency by natural
persons.
I. DUAL CURRENCY CIRCULATION
(a) National currency
The monetary unit of the Republic of Cuba is the Cuban Peso.  The only legal tenders in Cuba
are the notes and coins issued by the Central Bank of Cuba.
The Central Bank can issue other means of payment as the country's situation requires.  It has
recently issued bills known as convertible Pesos which:
- Serve as a means of payment in commercial transactions effected by establishments
authorized to sell goods and provide services in freely convertible currencies;
- are used by the Central Bank and other authorized entities in foreign exchange
transactions using freely convertible currencies at the discretion of the holders.
This means of payment is put in circulation concurrently with acceptable convertible
currencies in accordance with the provisions in force.
(b) Foreign currency
In Cuba, every activity involving the measurement of the value and prices of goods and
services produced and sold, as well as payments under agreements or contracts between Cubanresidents or contracts which must be executed within the country, must be denominated and transacted
in the national currency, except where otherwise expressly stipulated by the Central Bank of Cuba.
Authorized natural and legal persons residing in Cuba and operating in entities authorized to
trade in goods and/or services in foreign currency  may use the following freely convertible currencies
as means of payment:  Deutsche Marks, Pounds Sterling, US Dollars, Canadian Dollars, Spanish
Pesetas, French Francs and Swiss Francs.
II. EXCHANGE RATES
The Central Bank of Cuba exercises foreign exchange control by:
- Establishing the foreign exchange regime dictated by the balance of payments and the
economic situation of the country;WT/L/320
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- regulating the foreign exchange transactions carried out by duly authorized financial
institutions;
- proposing and implementing the exchange-rate system for the Cuban Peso.
(a) The official exchange rate
The current official exchange rate in Cuba is CUP 1 = USD 1.
The exchange rates for the other major convertible currencies are calculated on the basis of
cross rates obtained by applying the Peso exchange rate.
The official exchange rate of the Cuban Peso against foreign currencies is used in all official
transactions requiring conversions from the national currency into foreign currencies and vice versa,
as well as in planning, accounting and statistics.  It changes on a daily basis and is published daily in
the national press.
(b) The unofficial exchange rate
The trading company Casas de Cambio S.A. (CADECA) buys foreign exchange from and
sells it to the population.  The unofficial exchange ra te used in these transactions is determined by
supply and demand in the market.
III. PAYMENTS AND RECEIPTS IN FREELY CONVERTIBLE CURRENCIES BY
AUTHORIZED LEGAL PERSONS
Economic associations and private foreign companies are entitled to keep accounts in freely
convertible currencies or in the national currency.
Cuban private and state companies may keep accounts in freely convertible currencies
provided they have been previously authorized to carry out transactions in the particular currency by
the competent authorities and subject to a licence from the Central Bank of Cuba.
IV. FOREIGN INVESTMENT
Foreign investment is authorized in all sectors in Cuba except for health, education and
defence.
Under Law No. 77 on Foreign Investment in Cuba of 5 September 1995, the State guarantees
the foreign investor free transfer abroad of profits or dividends obtained from his investment.  The
same applies if, by mutual consent of the parties, the foreign investor decides to withdraw his invested
capital from Cuba.
V. THE HOLDING OF FOREIGN CURRENCY BY NATURAL PERSONS
The holding and use of foreign currency by natural persons is authorized under
Decree Law No. 140 of 13 August 1993.  Under that Law, natural persons residing in Cuba are free
to:
- open a bank account in a freely convertible currency;
- use the freely convertible currency for the payment of goods or services;WT/L/320
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- acquire instruments of payment denominated in freely convertible currencies;
- effect purchases and sales using freely convertible currencies at the market exchange
rate at the time the transaction is carried out.
VI. IMPORTS AND EXPORTS OF GOLD, SECURITIES, FREELY CONVERTIBLE
CURRENCY AND NATIONAL CURRENCY BY NATURAL PERSONS
Under Decree Law No. 172 of 28 May 1997, one of the main powers and functions conferred
upon the Central Bank of Cuba in international activity is to authorize the export and import of gold
and other metals and precious stones.
The import and export of freely convertible currency and national currency by natural persons
is regulated by Resolution No. 236 of 3 October 1994 and Resolution No. 75 of 2 September 1999.
Natural persons residing either permanently or temporarily in Cuba may import freely
convertible currency whether in cash or through bank transfers, giros, cheques or other means of
payment used in standard international banking practice.
Natural persons permanently residing in Cuba are not allowed to export freely convertible
currency except as stipulated by the Law on Foreign Investment with respect to foreign permanent
residents who receive salaries in freely convertible currency and to cases in which express
authorization has been obtained from the Central Bank of Cuba.
Natural persons with temporary residence in Cuba may export freely convertible currency in
cash up to the equivalent of 5,000 Cuban Pesos.  Amounts in excess of that limit can only be exported
if they had been declared upon entry into the country or if the bearer has been expressly authorized by
the Central Bank of Cuba to do so.
The measures which have been introduced in the country and the qualitative and quantitative
changes that subsequently took place provide irrefutable proof of the progress made by Cuba towards
creating the necessary conditions for the country's integration into the WTO General Agreement on
Tariffs and Trade.
However, in spite of the changes in the Cuban economy and the new monetary, financial and
credit conditions in which the economy has been evolving, we repeat that we continue to have limits
placed on our access to sources of external credit as a result of the reinforced blockade imposed by the
United States against our country.  Limits to medium- and long-term credit facilities to boost
economic development also persist as well as the financial dependence on short-term credit under
burdensome conditions.
We must also draw attention to our country's external debt situation.  During 1998, the Cuban
authorities continued to search for reasonable and realistic solutions to the debt problem in order to
reactivate and normalize the country's international financial relations.  Thus, it refrained from
entering into unviable refinancing commitments which might only increase and perpetuate external
debt.
At the end of 1998, discussions were held with the Secretariat of the Paris Club ad hoc group
of creditor countries of Cuba to initiate a dialogue that would bring the country closer to a multilateral
restructuring of its official debt with those countries.
Bilateral agreements have been reached with Japanese suppliers and with official export
credit insurance companies in Italy, Belgium and the United Kingdom.  Those agreements haveWT/L/320
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helped to regularize debt and reactivate trade and financial relations between Cuba and the countries
in question.  Similarly, progress has been made in bilateral negotiations being conducted with official
institutions of other creditor countries such as Germany, Spain, Austria and Canada.
All of these considerations have forced the Cuban authorities to maintain restrictions on
exchange controls in order to sustain the economic growth that began during the last few years and to
keep the economy functioning properly in current conditions so as to preserve the considerable
progress made in the economic and social spheres.
In the light of the above, we are of the view that the current economic situation in Cuba as
well as the forecasts for the coming years fully justify granting Cuba the waiver in respect of
Article XV:6 of the General Agreement on Tariffs and Trade.
We confirm that the foreign exchange measures that have been implemented continue to be
fully consistent with the principles and objectives of the said Agreement.
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