Cu currency
Oct 25, 2004

Havana - (Prensa Latina) - Cuba announced Monday that the US dollar will not circulate in the domestic market and will be substituted for the convertible peso as of next November 8. Cuban president Fidel Castro stated over a TV broadcast that the measure was taken due to actions from the US government aimed at blocking the use of the US currency in Cuba´s international operations. He made it clear that possession of the dollar or any other hard currency will not be penalized, but retail stores selling in US dollars will only accept Convertible Pesos (equivalent to US dollars).  Cuban Central Bank (BCC) resolution 80/2004, read in the popular program Round Table of Cuban TV, establishes that from November 8 onward, the exchange of US dollars for Convertible Pesos will bear a 10 per cent tax. The measure is applied to nationals and foreign visitors in stores, hotels, bars, cafeterias, taxis, rent-a-car companies and any other business that presently accepts cash payments in US dollars. The Bank´s resolution explains that this decision is based on the tightening of the US economic war against the people of Cuba over the last months, with measures aimed at systematically obstructing foreign financial flows from entering the country.

As part of that policy, it adds, the US government has strengthened pressures and threats on foreign banks to prevent Cuba from depositing money abroad to fulfill its trade obligations, the dollars spent by the population and by foreign visitors in the island´s outlets. The document recalls that recently an Assistant Secretary of State of the US announced the creation of a task force to persecute Cuban assets in order to interfere and stop the hard currency flow from and to the island. This, it adds, is a new, unprecedented aggression in the history of international financial relations. The resolution specifies the decision was taken due to the situation created which urgently demands the protection of the country´s interests facing the severe damage caused by US actions. The text affirms the population will be able to possess, without any restrictions whatsoever, as until today, the US dollars or whatever freely convertible currency, in any amount. It makes clear that the 10 per cent tax established as a cover for the risks assumed by Cuba in handling US dollars, will not be applied to other currencies presently accepted in Cuba: the Euro, Canadian Dollar, Pound Sterling and Swiss Franc.

The holders of US dollar bank accounts in Cuba are totally guaranteed and withdrawals can be made without limit from these accounts at any moment, be it in US dollars or Convertible Pesos, without the 10 per cent tax. As of next November 8, no new deposits in US dollars will be accepted, although they will be able to receive funds through bank transfers in any freely convertible currency and in cash of Convertible Pesos and the other currencies accepted in the country. The same action will be applied to US dollar bank accounts held by natural foreign persons in Cuban banks. Among other specifics, the resolution indicates that deposit certificates in US dollars and Convertible Pesos are not subject to the tax and maintain the conditions originally agreed with the bank. Also, transactions with credit or debit cards accepted in Cuba for any payment or withdrawal of cash will continue to work as to this date without having to pay the 10 per cent tax. In the US dollar accounts of business enterprises with mixed or foreign capital, and foreign representations in Cuba, including diplomatic missions, will not admit cash deposits in US dollars as of the 8th of November. From those accounts, the recognized holder will be able to withdraw in US dollars or in Convertible Pesos without being burdened with the 10 per cent tax.