WORLD TRADE  
ORGANIZATION  WT/L/630 
21 November 2005 
 (05-5520) 
General Council 
1-2 December 2005 Original:   Spanish 
 
 
 
CUBA – ARTICLE XV:6 OF THE GENERAL AGREEMENT 
ON TARIFFS AND TRADE 1994 
 
Report of the Government of Cuba under the Decision of 20 December 20011 
 
  The following communication, dated 15 November 2005, is being circulated at the request of 
the delegation of Cuba.  
_______________ 
 
  Pursuant to the provisions of Article IX.4 of the Agreement Establishing the World Trade 
Organization (WTO), the Republic of Cuba transm its herewith the fourth annual report on the 
extension granted on 20 December 2001
2 of the waiver approved on 14 October 19963, in relation to 
Article XV.6 of the General Agreemen t on Tariffs and Trade 1994 (GATT 1994). 
  Bearing in mind the heavy impact on the Cuban economy of the economic, commercial, and financial blockade imposed on the country by the Un ited States, we would like to recall that 2004 saw 
the entry into force of a new package of measures adopted by the US Government with a view to 
tightening the already existing restrictions to tour ism and investment in Cuba, introducing yet another 
impediment to financial flows and travel to the island, to family remittances, to trade, and to 
scientific, sports, and cultural exchanges, the objectiv e being to create conditi ons that would foment a 
change in Cuba's political and economic system in Cuba.   These new measures involve, inter alia : 
 
 - New criminal sanctions ai med at limiting the free trans it of persons and goods to and 
from Cuba; 
  - intimidation and fines aimed at invest ors or financial institutions operating or 
intending to operate with Cuba.  Fin es of up to US$100,000,000 were imposed on a 
third-country bank to prevent the deposit, ex change, or transfer through that bank of 
Cuban dollars legitimately earne d through tourism, remittanc es, or exchange in banks 
or exchange offices, the objective being to  block Cuban imports, essentially of food, 
medicines and fuel, in order to provoke an economic and social breakdown; 
 
 - the new regulations of the United States  Treasury Department prohibiting US citizens 
or permanent US residents from legally purc hasing, in a third country, products of 
Cuban origin, including tobacco and alcohol, even for their personal use.  Criminal sanctions for the violation of these regulations can amount to as much as 
                                                     
 
1 WT/L/440. 
2 Idem . 
3 WT/L/182. WT/L/630 
Page 2  
 
US$1,000,000 in fines for corporations, or US$250,000 and imprisonment for up to ten years for natural persons; 
  - creation of a "Cuban Asset Targeting Group" to investigate and block any new 
channels for the flow of foreign exchange to and from Cuba; 
 
 - the limited Cuban purchases of agricultura l and medical products in the United States 
have been subjected to a new interpre tation of the concept of "advance cash 
settlement", where payment must take place be fore the goods are loaded in a US port 
for shipment to Cuba. 
 
 The extraterritoriality of the US blockade polic y against Cuba continues to affect persons and 
enterprises from third countries.  Both the investme nts of third country firms in the United States and 
US investments abroad, essentially in the form of  mergers and total or partial acquisitions of 
companies aggravate the impact of the economic, co mmercial and financial blockade against Cuba by 
reducing its external economic space and making it more  difficult, if not impossible, to find partners 
and suppliers.  This, in its turn , is undermining the biotechnologi cal industry and biotechnological 
research as well as the purchase of medicines and food.   This ongoing policy of aggression has caused dire ct damage to the Cuban economy.  Indeed, 
according to preliminary conservative calculations , losses have already exceeded US$82 billion, with 
an annual average of US$1,782,000,000.  And th is total figure does not include the more than 
US$54 billion in direct damage to the country's social and economic objectives, or the acts of sabotage and terrorism organized and financed from the United States;  nor does it include the value 
of the products that could not be produced and the damage caused by the burdensome credit terms 
imposed on Cuba. 
 
 With the limitations on access to the US mark et, the country risk, and the application of 
extraterritorial regulations, the estimated cost fo r Cuba of the US blockade policy in 2004 exceeded 
US$2,764,000,000.  The cost to foreign trade last  year is estimated at US$822.6 million, exceeding 
the figure for 2003 of US$57.2 million.  The cost of th e extraterritorial regula tions is calculated at 
US$380 million, and the denial of access to what would normally be a natural market for Cuba, 
forcing it to resort to third countries for its imports and exports with the associated increase in 
insurance and freight costs, is estimated to have cost some US$305.2 million.   From the financial point of view, the economi c damage associated with the country risk 
governing access to external financing is estimated at US$72.2 million. 
 
 Over the past year, the Government of Cuba  has adopted new measures in response to the 
pressures and threats of foreign banks aimed at preventing Cuba from depositing abroad the cash dollars that the population and fo reign visitors spend in Cuba n establishments selling goods or 
offering services in dollars.  
 Thus, it introduced Resolution No. 80 of the Ce ntral Bank of Cuba (BCC) stipulating that all 
entities currently accepting dollars in cash could ch arge only convertible pesos (CUC) for their 
transactions in Cuban territory.  There is a 10 per cent surcharge for the purchase of convertible pesos 
and Cuban pesos in cash dollars.  The holding of dollars is not prohibited, and the convertibility of 
convertible pesos has been maintained. 
 
 This measure supplements Resolution No. 65 issued in 2003 making the use of the convertible peso mandatory in commercial transact ions in the business sector, lending continuity to 
the de-dollarization of the economy.   WT/L/630 
 Page 3 
 
 
 At the end of 2004, the Central Bank of Cuba ( BCC) issued Resolution 92 stipulating that as 
from 1 January 2005, all convertible currency revenue paid in such currency shall be deposited in an 
account at the BCC, where they will be centrally r eallocated to the domestic economy to cover foreign 
obligations.  
 This resolution has established  a rational centralization of decisions on the use of foreign 
exchange, thereby helping, inter alia , to ensure enhanced contro l of these resources and making it 
possible to take important decisions aimed at  ridding international trade of non-representative 
commerical intermediaries whose activities were ca using a disproportionate increase in the price of 
goods and services purchased abroad.  At the same time, it meant that Cuba's foreign exchange 
revenue was centralized at the BCC and remained at the Bank's disposal, thereby significantly 
boosting the country's negotiating capacity and facilita ting trade and financial management.  Finally, 
the resolution enabled Cuba to comply strictly w ith the obligations arising from its new external 
financial commitments and the renegociated debt s, giving it access to new sources of financing on 
more favourable terms. 
 
 In view of the results of the monetary reform s which led to the replacement of the US dollar 
by the convertible peso in the monetary circuit, and the opening up of new prospects for the development of the Cuban economy, at the beginni ng of 2005 it was decided to strengthen the two 
national currencies in circulation.  
 To that end, the BCC's Monetary Policy Comm ittee decided to revalue the exchange rate of 
the Cuban peso by 7 per cent and of the convertible  peso by 8 per cent, bringing the total appreciation 
of the Cuban peso against the dollar to 15 per cent for the segment of the population concerned.  Once 
again, it was the policy of the Cuban Government  to offer an absolute guarantee for the funds 
deposited in the banks as well as a reasonable period of time for the population to adjust their 
monetary balances to the new conditions. 
  This measure supplemented the efforts to stre ngthen the country's monitary sovereignty that 
began with Resolution 65/03 and 80/04.   The understanding shown by our main trading and financial partners testifies to the fact that 
none of these changes to the exchange rate and financial systems had any adverse impact on any 
WTO Member.  Nor have there been any complaints  from foreign investors with interests in our 
country, which shows that there is no inconsis tency with the principles and objectives of the 
GATT 1994.  
 In spite of all the pressure exerted by th e US Government on third countries, and the 
aggravation of the strict economic, commercial a nd financial blockade, the Cuban economy registered 
a GDP growth of 5 per cent in 2004 as compared to 2003, and achieved cons iderable progress in the 
social area.   Cuba confirms the particular circumstances th at gave rise to the extension of the waiver 
granted to it in December 2001, as well as its de termination to comply with the commitments 
established therein.   
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