English translation of the new law regarding foreign currencies in Cuba.
[See also Isaac Saney's very important comments about this issue. In addition to putting this in context (relative to the unwanted inequality in Cuban society as a result of the use of US dollars, among other things), he made the very important point that Cuba is probably the only country in the world that could make the sovereign decision to go from "dollarization" (permitting US dollars to be used as currency in their country) to "de-dollarization", without interference (i.e."permission") from the IMF and World Bank.
The Resolution below makes it very clear that the 10% surcharge on future exchange of US dollars in Cuba is a direct response to US measures aimed at penalizing companies and financial institutions in other parts of the world for accepting US dollars coming from Cuba.
This is one more instance demonstrating that what the US government likes to call an "embargo" is in fact a blockade designed not only to prevent US individuals and companies from trading with Cuba, but to impose that restriction on citizens, companies and governments in the rest of the world.
It is precisely this "extra-territoriality" (placing US laws above the laws of every other country) that has led
every other independent country in the world (including all of the US' closest allies) to vote against the US blockade at every session of the United Nations General Assembly since 1992, when the Torricelli Act first explicitly told the world that they must obey US laws in regard to Cuba.
--kw
*****************
--------------------------------------
*Resolution No. 80/2004*
*WHEREAS*: In the last few months the U.S. government has
intensified its economic war on the people of Cuba by
dictating new measures aimed at systematically hindering
the external financial flows of our country, thus causing
serious damage and creating grave risks for the exercise of
our normal international financial activity.
*WHEREAS*: As part of this policy, the U.S. government has
increased its pressure on and threats to foreign banks to
prevent Cuba from depositing the U.S. dollars spent by the
population and foreign visitors in Cuban establishments
that sell merchandise or lend services in that currency
abroad in order to meet its commercial obligations.
*WHEREAS*: Recently, the assistant deputy secretary for
Western Hemisphere Affairs attached to the Department of
State announced the creation of a "Pursuance of Cuban
Assets Group" composed of officials from various government
agencies to interfere with and halt the flow of hard
currency to and from Cuba, which constitutes a new
aggression unprecedented in the history of international
financial relations.
*WHEREAS*: The situation thus created demands the urgent
adoption of measures to protect the country's interests
faced with the serious damage that such actions will cause
it.
*WHEREAS*: In its Article 36 (Clause a]) Decree Law No. 172
"From the Central Bank of Cuba, " dated May 28, 1997
establishes that the faculties of the president of the
Central Bank of Cuba include that of drawing up
resolutions, instructions and other dispositions necessary
for the execution of the functions of the Central Bank of
Cuba, with an obligatory nature for all agencies, bodies,
enterprises and state economic or other associations,
cooperatives, the private sector and the population.
*WHEREAS*: The person with that faculty was designated
government minister and president of the Central Bank of
Cuba by the Council of State Agreement dated June 13, 1997.
*THEREFORE*: In the execution of the faculties conferred
upon me, and in prior consultation with the president of
the Councils of State and Ministers;
*I RESOLVE:*
*I* *"On the holding by the population of U.S. dollars and
other freely convertible currencies that circulate in the
country"*
*Article 1*: The population may maintain in its power any
quantity of U.S. dollars or any other freely convertible
currencies without restrictions of any kind, as is the case
to date.
*II* *"On cash payments in freely convertible currency,
starting November 8, 2004"*
*Article 2*: From November 8, 2004 all entities that
currently accept U.S. dollars in cash on charging for their
transactions in national territory, will only accept
convertible pesos.
This measure is to be universal, both for the population
and for visitors from abroad. Its application covers:
stores, hotels, restaurants, bars, cafeterias, taxis, car
hire agencies, and any other entity currently charging in
U.S. dollars in cash.
As has been previously stated, the application of this
measure does not imply any kind of limitation on holding
U.S. dollars or any other freely convertible currency.
*Article 3*: The convertible peso will maintain its
conversion on the basis of one convertible peso to one U.S.
dollar.
*Article 4*: From November 8, 2004 persons wishing to
acquire convertible pesos with U.S. dollars in cash will
have to pay a 10% surcharge as compensation for the costs
and risks to the national economy originating with the
handling of U.S. dollars as a consequence of the
above-mentioned U.S. government measures.
The remainder of hard currencies exchangeable in Cuba: the
euro, Canadian dollar, GBP sterling and Swiss francs can be
exchanged for Cuban convertible pesos without any tax
whatsoever, taking international market exchange rates as a
reference point and always considering one convertible peso
as equal to one U.S. dollar.
In time, bank branches and Exchange Bureaus will be able to
change other hard currency as part of their services.
>From November 8, 2004, there will also be a 10% surcharge
on U.S. dollars in cash used to buy Cuban pesos in the
Exchange Bureaus. Cuban pesos can be purchased with euros,
Canadian dollars, GBP sterling and Swiss francs as is the
case to date, without any 10% surcharge.
*Article 5*: Euros will still be accepted in the tourism
complexes that currently do so.
III- "On the use and operation of bank accounts and credit
cards in freely convertible currency by Cuban or foreign
persons"
*Article 6*: Current U.S. dollar accounts held by the
population in Cuban banks are totally guaranteed.
Withdrawals in U.S. dollars or convertible pesos from such
accounts can be made at any point, with no time limit and
without any kind of restriction, according to the client's
choice, at the present rate of 1 to 1, and the 10%
surcharge will not be applied. From November 8, 2004, cash
deposits in U.S. dollars in such accounts will not be
accepted. Those accounts can receive funds via bank
transfers in any freely convertible currency, as well as
receiving cash deposits in convertible pesos, Canadian
dollars, GBP sterling, and Swiss francs, taking the
international market exchange rates as a reference.
The same dispositions laid out in the last paragraph will
be applied to current U.S. dollar accounts held by
foreigners in Cuban banks.
*Article 7*: From November 8, 2004, persons wishing to open
new accounts in U.S. dollars or constitute deposit accounts
in that currency will be able to do so, but deposits and
withdrawals can only be made in U.S. dollars cash in these
new accounts.
*Article 8*: Accounts in convertible pesos will continue to
enjoy all the bank guarantees and services presently
available. From November 8, 2004 these accounts will not
accept U.S. dollar cash deposits.
*Article 9*: Current deposit accounts and savings
certificates in U.S. dollars and convertible pesos are
totally guaranteed, they are not subject to the 10%
surcharge and will maintain the conditions agreed by the
holder at the moment of their constitution. The principal
and interest accrued in deposit accounts or savings
certificates in U.S. dollars in force on November 7 can be
collected in U.S. dollars or convertible pesos when they
are due, according to the client's choice, at the rate of 1
to 1 without the application of the 10% surcharge, or
converted into convertible pesos deposit accounts at the
rate of 1 to 1 without the 10% surcharge being applied.
These deposits can be renewed as many times as the client
wishes without losing these prerogatives.
*Article 10*: Operations made with credit or debit cards
accepted in Cuba, whether for the realization of payments
or cash withdrawals can continue as is the case to date
without any 10% surcharge.
IV- "On the use of cash and the operation of bank accounts
in convertible pesos by private individuals"
*Article 11*: From November 8, 2004, U.S. dollars in cash
will not be accepted into the current accounts maintained
by trading associations based on joint or foreign capital,
and foreign representations in Cuba, including diplomatic
ones. At the request of the account holder, withdrawals can
be made in U.S. dollars cash or in convertible pesos
without applying the 10% surcharge. Exceptionally, the
Central Bank of Cuba will be able to authorize cash
deposits in U.S. dollars without applying the 10% surcharge
into the accounts of certain of the aforementioned holders,
but in that case the 10% surcharge will be applied.
*Article 12*: In terms of accounts in convertible pesos
held by state enterprises, trading societies with 100%
Cuban capital, budgetary units and other authorized
agencies, cash may continue to be withdrawn in line with
the existing regulations. From November 8, 2004, these
accounts will not accept cash deposits in U.S. dollars.
Exceptionally, the Central Bank of Cuba can authorize cash
deposits in U.S. dollars for certain of the above-mentioned
account holders, but in such cases the 10% surcharge will
be imposed.
*V- "Locations authorized for the exchange of currency"*
*Article 13*: From October 28, 2004, the acquisition of
convertible pesos with U.S. dollars can be undertaken in
any of the following locations:
*** *Exchange Bureaus*, They can likewise change euros,
Canadian dollars, Swiss francs and GBP sterling, taking as
their reference point international market exchange rates.
** Bank branches.* They will change only amounts of 10 U.S.
dollars or over, except in municipalities where there are
no Exchange Bureaus. They can also change euros, Canadian
dollars, Swiss francs and GBP sterling, taking as reference
the rates of exchange on the international market.
** Selected hard-currency stores and other authorized
establishments*. Only convertible pesos can be acquired in
these places in exchange for U.S. dollars, in amounts of 10
U.S. dollars or more.
** Hotels.* They will also exchange euros, Canadian
dollars, Swiss francs and pounds sterling, taking the rate
on the international market as their reference. They will
offer exchange services only to their clients.
>From October 28 to November 7, 2004, convertible pesos can
be acquired with U.S. dollars without the application of
the 10% surcharge. From November 8, 2004 the aforementioned
surcharge will be applied.
*Article 14*: Transactions for acquiring U.S. dollars with
convertible pesos can be made in the Exchange Bureaus, bank
branches and hotels. The last is only for their clients.
Additionally, visitors from abroad will have the option of
changing convertible pesos for U.S. dollars or other
accepted currencies at the international airports.
*Article 15*: Hotels, selected hard-currency stores and
other authorized establishments will have a license from
the Central Bank of Cuba for their money changing
operations.
VI-"Entry into effect"
*Article 16*: The present resolution will come into effect
on October 28, 2004, except in the aspect related to
transactions effected solely in convertible pesos and the
application of the 10% surcharge on the use of the U.S.
dollar, which will come into effect from November 8, 2004.
*Article 17*: the measures established by this resolution
only cover transactions made within national territory and
in no case will prevent or hinder the execution of
guarantees granted by Cuban financial institutions to
foreign entities, or the availability of funds in freely
convertible currency needed to honor obligations contracted
by Cuban financial institutions with foreign entities.
*TRANSITORY DISPOSITIONS*
*FIRST*: The dispositions of Article 6 of this resolution
will also apply to U.S. dollar accounts opened between
October 26 to November 7, 2004.
*SECOND*: Bank branches throughout the country, excepting
those of the BFI and the BICSA in City of Havana, will
attend to the business sector from October 28 to November
5, 2004 only until 12:00 midday. From that time, the full
capacity of these branches will be devoted to lending
banking services to the population and to effecting money
exchange transactions. Additionally, bank branches
throughout the country, except for those of the BFI and the
BICSA in City of Havana, will open on Saturday November 6
and Sunday, November 7, 2004, from 9:00 a.m. to 3:00 p.m.
to lend the population the services mentioned above.
*HERBEY NOTIFIED* are the Ministry of Finance and Prices
and the Ministry of Economy and Planning, the Ministry of
Tourism and the presidents of the Credit and Commerce Bank,
the International Financial Bank Ltd, the International
Commercial Bank Ltd, the Metropolitan Bank Ltd, the Popular
Savings Bank, the New Banking Group Ltd, Cadeca Ltd and the
directors of Issuing and Assets and of the Treasury, both
attached to the Central Bank of Cuba.
*HEREBY COMMUNICATED* to the executive secretary of the
Council of Ministers; the heads of the State Central
Administration Agencies; the president of the National
Assembly of People's Power; the presidents of the
Provincial Administration Councils of People's Power; the
attorney general of the Republic; the president of the
Supreme People's Court; the first vice president, the vice
presidents, the superintendent, the auditor and the
directors of the Central Bank of Cuba; and those companies
and individuals who should be aware of the same.
*TO BE PUBLISHED* in the Gaceta Oficial of the Republic of
Cuba.
*TO BE ARCHIVED* as an original in the Central Bank of Cuba
Secretariat.
*ANNOUNCED* in the City of Havana, on the 23rd day of the
Articles & Analysis
Economy