WORLD TRADE  
ORGANIZATION  WT/L/666 
4 December 2006 
 
 (06-5811) 
General Council 
14-15 December 2006 Original:   Spanish 
 
 
 
CUBA – ARTICLE XV:6 OF THE GENERAL AGREEMENT 
ON TARIFFS AND TRADE 1994 
 
Report by the Government of Cuba under the Decision of 20 December 20011 
 
  The following communication, dated 1 December 2006, is being circulated at the request of 
the delegation of Cuba.  
_______________ 
 
  The Government of the Republic of Cuba hereby  requests an extension of the waiver of the 
provisions of Article XV:6 of the General Ag reement on Tariffs and Trade 1994 approved on 
14 October 1996
2 and renewed on 20 December 20013, as is appropriate given that Cuba is not a 
member of the International Monetary Fund (IMF), and due to expire on 31 December 2006. 
  The reason for this request for a further exte nsion of the waiver is that the conditions 
specified in previous years continue to exist,  albeit worsened by the measures constituting the 
economic, commercial and financial blockade imposed on Cuba by th e United States, which make it 
impossible for Cuba to sign a special exchange agreement with the Members of the World Trade 
Organization (WTO).   Cuba does not have access to important sour ces of credit from international or regional 
funding agencies as other countries do.  
 Under Title I, Section 104, of the Helms- Burton Act, the US statutorily opposes Cuba's 
membership of international financial organizations  through instructions from the Secretary of the 
Treasury to the US Executive Dir ectors of such institutions. 
  This US blockade policy prevents external fi nancing for the Cuban nation, as can be seen by 
the refusal to grant direct funding;  as a result, ac cess to credit is subject to onerous conditions and 
provided on a much less flexible basis than credit from financial institutions and official sources. 
  It also restricts free trade through the offici al ban on the use of the US dollar in external 
commercial and financial transactions by the Cuban Government, forcing the country to carry out 
such transactions in other currencies even though the prices of its main commodities are quoted on 
world markets in US dollars.  As a result, Cuba has incurred huge losses from the appreciation and depreciation of that currency in relation to the curre ncies of its main trading partners, as well as the 
instability suffered by its enterprises on account of the double exchange-rate risk. 
                                                     
 
1 WT/L/440. 
2 Idem . 
3 WT/L/182. WT/L/666 
Page 2  
 
   After more than 46 years, these Regulations remain fully in force, with the effect of 
maintaining an economic, commercial an d financial blockade against Cuba. 
  However, in the period 2001 to 2005, the C uban economy continued to recover and grew at 
an average annual rate of 5.6 per cent.  This period saw the key macroeconomic indicators develop 
favourably;  gross domestic product (GDP) expanded in  terms of volume owing to greater efficiency, 
productivity and rationality in the use of the availa ble material, financial and human resources;  and 
considerable progress was achieved in the monetary, financial and fiscal areas.   The Cuban economy recorded expansion of 11.8 per cent in 2005 (at constant 1997 prices).  
Attention should be drawn to the major role played  in this respect by high value-added services, 
notably health services, the growth of which was gr eater than that of the economy as a whole, and the 
sustained growth of the tourism industry.   During this period, the services sector was the driving force of the Cuban economy.  
GDP behaviour has basically been underpinned by the growth of tourism, telecommunications and 
non-commercial social services, of which health and so cial welfare have shown the greatest increases.  
Cuba has developed more than 200 programmes to impr ove social services and, to that effect, some 
7,000 projects have been completed over the last six years.   Also worthy of special mention given th eir contribution to economic expansion are 
agriculture, the non-sugar industry and mining, notably the increased production of domestic crude 
oil, natural gas and nickel, which constitutes an historical record.  The country's construction sector 
has also significantly expanded.   Cuba has been able to grow and develop in spite of the economic war waged against it by the 
US, the rise in oil prices on the international mark et and the adverse effects of natural phenomena.  
Estimated losses from the passage of three hurri canes which lashed the island in 2005 totalled 
US$2,308 million and those of the drought suffered by  the eastern regions of the country from 2003 to 
2005 amounted to US$1,350.0 million;  taken toge ther, these figures represent 7.9 per cent of GDP. 
  Further proof of strength and strict manageme nt of public finances were visible in 2005.  
Albeit in unfavourable conditions, the State budget con tinues to back the change  in the socio-cultural 
order being undertaken by the Cuban State, with  the implementation of more than 200 social 
programmes.  The budget deficit/GDP ratio was 4. 2 per cent, higher than previous years, but 
remaining within an acceptable range given the c onditions and characteristics of the Cuban economy. 
  
 Price stabilization also continued during 2005, which meant that the variation in the 
Consumer Price Index in relation to 2004 was 3.7 pe r cent, in spite of the salary increases recorded in 
a number of economic sectors.   However, in parallel to this, 2004 saw the en try into force of a new package of anti-Cuban 
measures adopted by the Government of George W.  Bush with a view to tightening the existing 
restrictions on tourism and investment in Cuba, introducing another impedime nt to financial flows 
and travel by US citizens to the island and restric ting yet further the sending of family remittances, 
trade, and scientific and cultural exchanges.  These measures have the stated objective of 
overthrowing Cuba's political and economic system.  
 The US Government's policy of aggression has resulted in an estimated accumulated 
economic cost to the Cuban economy of more than  US$86 billion, a figure which does not include the 
more than US$54 billion in direct damage to the country's social and economic objectives as a result of acts of sabotage and terrorism organized and financed from the Un ited States.  Nor does it include 
the value of goods that could not be produced or the damage caused by the burdensome credit terms  WT/L/666 
 Page 3 
 
 
  imposed on Cuba.  In 2005 alone, direct economic damage inflicted on Cuba by the US blockade 
policy exceeded US$4,108 million.  According to a report by the Office of Foreign Assets Control 
(OFAC) to the US Congress, assets frozen in US banks as a consequence of the blockade totalled 
US$268,300,000 in 2005.  
 Damage to Cuban foreign trade exceeded  US$945,320,000 in 2005, an increase of almost 
15 per cent on 2004.  Likewise, the financial costs related to the high risk rating assigned to Cuba, in 
its capacity as a blockaded country, exceeded US$320, 765,000, which had a negative impact on the 
country's foreign trade as a result of the difficult financing conditions imposed.  
 The economic, commercial and financial aggr ession also affects States, citizens and 
companies of third countries as a result of the extrat erritorial application of the laws on the blockade 
against Cuba.  In 2005, citing the violation of various regulations govern ing the embargo against 
Cuba, OFAC imposed fines on eight companies an d banking institutions, and at least 38 countries 
were affected. 
 
 On 13 February 2006, new OFAC regulations on the system of fines applicable to banking institutions violating US laws on sanctions against various countri es, including Cuba, entered into 
force.  Violators may be subject to civil inves tigation, assessment by OFAC of the offending conduct, 
or criminal investigation and indictment.  These new measures have prevented, inter alia , the payment 
of Cuba's membership fees to two international organizations based in Ge neva, the International 
Telecommunication Union (ITU) and the World Mete orological Organization (WMO), owing to the 
refusal of the Swiss bank UBS, which holds the acc ounts of both of these international organizations, 
to receive transfers from Cuba.   On 10 July 2006, the Bush Administration p ublished the second version of the Plan for the 
Annexation of Cuba, with a view to reinforcing a nd intensifying the negative impact of the action set 
out in the first report of the misnamed "Commission for Assistance to a Free Cuba", which was approved on 20 May 2004.   The recommendation to apply Title III of the Helms-Burton Act to entrepreneurs from third countries considered by their activities to be backi ng the continuity of the Cuban Government reveals 
the irrational escalation in the extraterritorial appli cation of the blockade po licy against Cuba.  This 
Title – which presses for entrepreneurs from thir d countries conducting business with Cuba to be 
brought to trial before US courts – had been postp oned for years in the face of international pressure. 
  This new version of the Plan also reiterates the recommendation to rigorously apply the 
sanctions under Title IV of the Helms-Burton Act, which prohibits the granting of US entry visas to 
foreign investors in Cuba, with particularly ha rsh treatment being meted out to those conducting 
business in strategic sectors, such as oil drilling and extraction, tourism, nickel and rum and tobacco 
production and marketing.   Other measures envisaged in the new report include the recommendation to create an 
Interagency Task Force with a view to suppressi ng production of Cuban nickel and strengthening the 
Cuban Asset Targeting Group.   The Central Bank of Cuba (BCC) res ponded to such measures by implementing 
Resolution No. 80, which established the mandatory u se of the convertible Cuban peso to replace the 
US dollar in domestic transactions as a complement  to the de-dollarization of the economy which WT/L/666 
Page 4  
 
  began in 2003 pursuant to Resolution No. 65, which serves the same purpose and is aimed at use of 
the convertible peso in commercia l transactions in the business sector
4 within national territory. 
  In view of the special characteristics of  the Cuban economy, monitoring the monetary 
aggregate M1A
5 is particularly important.  This indicator  rose 28.5 per cent in 2005 and, in spite of 
other increases in previous years as a result of  the de-dollarization of the economy and salary 
increases, no rise in infla tion has been recorded. 
  Deposit rates in the banking system, in the different currencies, have remained stable. 
 
 It should be noted that the changes to Cuba's  exchange-rate and financial systems have not 
affected its relations with the rest of the WTO Members, as proved by the continuity of operations 
with its main trading and financia l partners.  Neither have these measures adversely affected foreign 
investment interests in Cuba.  
 Furthermore, the Cuban banking and financial system continued to gain in strength and 
expand.  At the end of 2005, it consisted of th e Central Bank of Cuba, nine commercial banks, 
16 non-bank financial in stitutions, 13 representative offices of fo reign banks and four representative 
offices of non-bank financial institutions.   The external sector recorded a surplus in the bala nce-of-payments current account for the 
second consecutive year owing to increased services exports, notably health services, the quality of 
which has received international recognition.   Cuba also continued to move ahead with fi nding solutions to strategic economic development 
problems, while raising the standard of living of its people, as evidenced by  major successes in the 
areas of education and health in spite of a ll the difficulties represented by the ongoing hostility 
towards it of the US Government.   The US policy has placed severe constraints on all sectors of the Cuban economy. In this respect it is worth mentioning, inter alia , the major losses triggered by the impossibility of using the 
US dollar in external commercial and financial tran sactions;  barriers to investment in the form of 
penalties and threats to foreign partners;  the im possibility of gaining access to long-term financing 
with favourable conditions;  a ban on the sending of remittances;  the targeting of all Cuban business 
operations, while associating other countries a nd international bodies with this policy. 
  Even with regard to sales of agricultural produc ts by the United States to Cuba, authorized on 
a case-by-case basis and subject to specific licences, restrictions come into play and make the 
transactions less effective.  A new difficulty lies in the fact that Cuba has to pay the total value of such 
imports in advance.   Consequently, the country's efforts to integrat e itself into the world trading system are being 
made under particularly difficult and exceptiona l conditions – the outcome of a policy which 
contradicts the principle of free trade. 
  The above factors mean that the particular circ umstances that gave rise to the extension of the 
waiver granted to Cuba in October 2001 – a waiver which has no adverse effects on other 
WTO Members – still exist. 
                                                     
 
4 Excludes entities created under the Law on Foreign Investment (Law No. 77 of 5 September 1995) 
and others expressly authorized by the Central Bank of Cuba. 
5 Monetary aggregate which measures the behaviour of  the liquid assets held by the public and includes 
cash in circulation, savings accounts payable on demand and current accounts.  WT/L/666 
 Page 5 
 
 
   
 Cuba has shown that it has complied with its commitment to make use of the waiver without 
affecting the objectives of the General Agreement or  harming the rights of the other WTO Members. 
 
_________