The native Amerindian population of Cuba began to decline after the European discovery of the

Transcription

1

2 Country Profile Background The native Amerindian population of Cuba began to decline after the European discovery of the island by Christopher Columbus in 1492 and following its development as a Spanish colony during the next several centuries. Large numbers of African slaves were imported to work the coffee and sugar plantations, and Havana became the launching point for the annual treasure fleets bound for Spain from Mexico and Peru. Spanish rule eventually provoked an independence movement and occasional rebellions that were harshly suppressed. US intervention during the Spanish-American War in 1898 assisted the Cubans in overthrowing Spanish rule. The Treaty of Paris established Cuban independence from Spain in 1898 and, following three-and-a-half years of subsequent US military rule, Cuba became an independent republic in 1902 after which the island experienced a string of governments mostly dominated by the military and corrupt politicians. Fidel CASTRO led a rebel army to victory in 1959; his authoritarian rule held the subsequent regime together for nearly five decades. He stepped down as president in February 2008 in favor of his younger brother Raul CASTRO. Cuba s communist revolution, with Soviet support, was exported throughout Latin America and Africa during the 1960s, 1970s, and 1980s. On 8-9 September 2017, Hurricane Irma passed along the north coast of Cuba causing extensive damage to structures, roads, and power supplies. Miguel DIAZ-CANEL Bermudez, hand-picked by Raul CASTRO to succeed him, was approved as president by the National Assembly and took office on 19 April The country faced a severe economic downturn in 1990 following the withdrawal of former Soviet subsidies worth $4-6 billion annually. Cuba at times portrays the US embargo, in place since 1961, as the source of its difficulties. Over the past decade, there has been growing communication with the Cuban Government to address national interests. As a result of efforts begun in December 2014 to reestablish diplomatic relations with the Cuban Government, which were severed in January 1961, the US and Cuba reopened embassies in their respective countries on 20 July However, the embargo remains in place. Illicit migration of Cuban nationals to the US via maritime and overland routes has been a longstanding challenge. On 12 January 2017, the US and Cuba signed a Joint Statement ending the socalled wet-foot, dry-foot policy by which Cuban nationals who reached US soil were permitted to stay facilitating the repatriation of Cuban migrants. Illicit Cuban migration has since dropped significantly. In FY 2017, the US Coast Guard interdicted 1,606 Cuban nationals at sea. Also in FY 2017, 20,995 Cuban migrants presented themselves at various land border ports of entry throughout the US. EXPORTING TO CUBA 2

3 Country Name Conventional Long Form: Republic of Cuba Conventional Short Form: Cuba Capital Havana Location Located in the Caribbean between the Caribbean Sea and the North Atlantic Ocean and is 150 km south of Key West, Florida with geographic coordinates of 21.30⁰ N and 80.00⁰ W. Area Total: sq km Land: sq km Water: sq km Climate Cuba has a tropical climate which is moderated by trade winds. There is the dry season which commences in November and ends in April and the wet season from May to October. The terrain is mostly flat with rolling plains, rugged hills and mountains in the south east. Natural Resources Cobalt, nickel, iron ore, chromium, copper salt, timber, silica, petroleum, arable land Land Use Agricultural land: 60.3% (arable land 33.8%, permanent crops 3.6%, permanent pasture 22.9%) Forest: 27.3% Other 12.4% (2011 est.) Population (July 2017 est.) Language Spanish (Official) Population distribution: Large population clusters are found throughout the country with the more significant ones being in the larger towns and cities, particularly the capital of Havana. EXPORTING TO CUBA 3

4 Ethnic Groups 26.6% White 9.3% 64.1% Mulatto and Mixed Black N.B. Data represent racial self-identification from Cuba s 2012 national census (2012 est.) Religions Nominally Roman Catholic 85%, Protestant, Jehovah s Witnesses, Jewish, Santeria N.B. Prior to Castro assuming power Government Type Communist State Administrative Divisions 15 provinces and 1 special municipality*; Artemisa, Camaguey, Ciego de Avila, Cienfuegos, Granma, Guantanamo, Holguin, Isla de la Juventud*, La Habana, Las Tunas, Matanzas, Mayabeque, Pinar del Rio, Sancti Spiritus, Santiago de Cuba, Villa Clara Legal System Civil law system based on Spanish civil code International Organization Participation ACP, ALBA, AOSIS, CELAC, FAO, G-77, IAEA, ICAO, ICC (national committees), ICRM, IFAD, IFRCS, IHO, ILO, IMO, IMSO, Interpol, IOC, IOM (observer), IPU, ISO, ITSO, ITU, LAES, LAIA, NAM, OAS (excluded from formal participation since 1962), OPANAL, OPCW, PCA, Petrocaribe, PIF (partner), UN, UNCTAD, UNESCO, UNIDO, Union Latina, UNWTO, UPU, WCO, WFTU (NGOs) WHO, WIPO, WMO, WTO EXPORTING TO CUBA 4

5 Economy Overview The government continues to balance the need for loosening its social economic system against a desire for firm political control. In April 2011, the government held the first Cuban Communist Party Congress in almost 13 years, during which leaders approved a plan for wide-ranging economic changes. Since then, the government has slowly and incrementally implemented limited economic reforms, including allowing Cubans to buy electronic appliances and cell phones, stay in hotels, and buy and sell used cars. The government has cut state sector jobs as part of the reform process, and it has opened up some retail services to self employment, leading to the rise of so called cuentapropistas or entrepreneurs. More than Cuban workers are currently registered as self-employed. The Cuban regime has updated its economic model to include permitting the private ownership and sale of real estate and new vehicles, allowing private farmers to sell agricultural goods directly to hotels, allowing the creation of non-agricultural cooperatives, adopting a new foreign investment law, and launching a Special Development Zone around the Mariel port. Since 2016, Cuba has attributed slow economic growth in part to problems with the petroleum product deliveries from Venezuela. Since late 2000, Venezuela provided petroleum products to Cuba on preferential terms, supplying at times nearly barrels per day. Cuba paid for the oil in part, with the services of Cuban personnel in Venezuela, including some medical professionals. GDP Real Growth Rate 1.6% (2017 est.) 0.5% (2016 est.) 4.4% (2015 est.) 4% GDP Composition, by sector of origin Services 22% Industry Tourism 74% Agriculture products Sugar, tobacco, citrus, coffee, rice, potatoes, beans, livestock Industries Petroleum, nickel, cobalt, pharmaceuticals, tobacco, construction, steel, cement, agricultural machinery, sugar EXPORTING TO CUBA 5

6 Economy Overview Exports Imports 2017 (est.) $2.885 Billion $10.84 Billion 2016 (est.) $2.546 Billion $10.3 Billion Export Commodities Petroleum Nickel Medical Products Sugar Import Commodities Petroleum Food Machinery and Equipment Chemicals Tobacco Fish Citrus Coffee Export Partners Import Partners Venezuela 17.8% China 22% Spain 12.2% Spain 14% Russia 7.9% Russia 5% Lebanon 6.1% Brazil 5% Indonesia 4.5% Mexico 4.9% Germany 4.3% Italy 4.8% USA 4.5% EXPORTING TO CUBA 6

7 Economy Overview Exchange Rate Cuban Pesos (CUP) per US dollar 1 (2017 est.) Communications Fixed-line and mobile services run by the state-run ETESCA; mobile-cellular telephone service is expensive and must be paid in convertible pesos; Cuban Government has opened several hundred Wi-Fi hotspots around the island, which are expensive, and launched a new residential internet pilot in Havana and other provinces. Fixed line density remains low at about 12 per 100 inhabitants; mobile-cellular service expanding but remains only about 36 per 100 persons. Government owns and controls all broadcast media with private ownership of electronic media prohibited; however, several online independent news sites exist and those that are not openly critical of the government are often tolerated. Government operates 5 national TV networks and many local TV stations as well as 6 national radio networks, an international station and many local radio stations. Private citizens are prohibited from buying computers or accessing the internet without special authorization. Foreigners may access the internet in large hotels but are subject to firewalls. Some Cubans buy illegal passwords on the black market or take advantage of public outlets to access limited and the government controlled intranet (July 2016 est.) Transportation Cuba has a total of 133 airports with 64 of them having paved runways and 69 without. Roadways Total: km Paved: km (includes 639 km of expressways) Unpaved: km (2001) Waterways 240 km (almost all navigable inland waterways are near the mouths of rivers) (2011) Merchant Marine Total: 43 (General Cargo 11, Oil Tanker 3, Other 29) (2017) Major Seaports Antilla, Cienfuegos, Guantnamo, Havana, Matanzas, Mariel, Nuevitas Bay, Santiago de Cuba EXPORTING TO CUBA 7

8 Saint Lucia s Exports to Cuba Year Export Value Main Commodity 2013 $ Personal Effects 2014 $ Personal Effects 2015 $ Personal Effects 2016 $ Personal Effects 2017 $ Sauces and Condiments Based on statistics from the Asycuda World System of the Customs and Excise Department, there has been very little activity in terms of the export of Saint Lucian products/goods to Cuba from However, in 2017 a significant increase was realized with the exportation of sauces and condiments being the main commodity exported. Most of this was attributed to the exporter going through the process and following the steps required which will ultimately lead to becoming an exporter to Cuba. Factors which improve a Company s Probability of Success in the Cuban Market Having the option to display information in Spanish on your company s website or a Spanish version of your website Having dedicated Spanish speaking personnel within your firm to serve as a contact person Company documentation in Spanish Persistence and constant activity in the Cuban market. Companies should not lose touch with their Cuban companies of interest EXPORTING TO CUBA 8

9 The Process for Becoming an Exporter to Cuba The following are the steps which a company must follow when desirous of exporting their products to Cuba: Establish demand for you product Secure interest of the Government Authorized Importer Submit documentation to be registered in Importer s Portfolio of Potential Suppliers 1 2 Establish Demand for your Product Secure the interest of a Cuban companies which is a sales outlet for your products or which requires your product for their use. Secure the interest of the Government Authorised Importer The Cuban company which is demanding your product may not be authorized to import products into Cuba. It is therefore necessary to present your products to the Government Authorised Importer for that company inclusive of product information and pricing. 3 Submit documentation to be registered in Importer s Portfolio of Potential Suppliers If interest is secured with the Government Authorised Importer it will be necessary to submit documentation to become eligible to be listed on their Portfolio of Potential Suppliers. The costs involved in this process are the costs for translations, apostilles and requesting the required documents from banks and company registries in the company s country of origin. Registration is a time consuming and costly process and its feasibility should be evaluated taking into account the immediate potential in the Cuban market. Importers may take up to two months to review the documentation provided before reverting to the exporter to confirm their registration. This registration does not imply registration in the Cuban Foreign Trade System nor does guarantee that a company will be awarded a contract but rather indicates that it will be considered among the exporters that are eligible to participate in its bidding process. Only after signing a contract with an Importer does an exporter receive a Foreign Trade Code which is used for every other export operation in the Cuban market. EXPORTING TO CUBA 9

10 Product Certification Maintain Interest in Your Product Participate in the Government Authorized Importer s Bidding Process 4 Product Certification Any product which is to be sold in Cuba must first be certified by the appropriate Cuban Certification Authority. This certification is also necessary to be part of an Importer s bidding process. The two main certification authorities in Cuba are the Instituto Nacional de Higiene e Epidemiologia y Microbiologia (INHEM) and the Centro de Certificacion de Productos Tropicalizados within the Laboratorio De Ensayos De Tropicalizacion (LABET). 5 Maintain Interest in Your Product It is important to keep in contact with the Cuban company and its Government Authorized Importer to inform of your product s certification and to secure your participation in the Requests for Proposals and the bidding process which is held to contract new suppliers. It may be necessary to carry out on the ground promotions or seminars to showcase the product to the public. 6 Participate in the Government Authorized Importer s Bidding Process New suppliers in Cuba are contracted through a bidding process which is managed by the Government Authorized Importer. The importer will send out an official Call for Proposals to companies which have secured their interest. These exporters must submit Proposals in accordance with the parameters specified in the Call inclusive of price and quantity. Exporting companies are allowed a fifteen day period to submit proposals to support their availability to supply under the conditions indicated in the Call and to prove why their company should be selected by the Importer. Factors such as international certifications, awards won by the company, price, diversified product lines, terms of payment and favorable trade agreements in existence in Cuba should be highlighted to edge out the competing suppliers. EXPORTING TO CUBA 10

11 7 Selection and Contract Awarding Shipment of Products to Cuba 8 9 Continuous Activity in the Cuban Market 10 Participation in Future Bidding Processes 7 Selection and Contract Awarding The Government Authorized Importer then makes a counter offer which the exporter may choose to move forward with. If both parties reach an agreement a contract is negotiated and subsequently signed regarding the terms of payment and details of shipment etc. After signing a contract with the Cuban Importer, your company will be assigned a Foreign Trade Code that will be used for all export operations in the Cuban market Shipment of Products to Cuba In accordance with the contract signed the exporter makes the shipment of the products to the Government Authorized Importer in Cuba. This shipment is a test shipment to evaluate the products performance in the market and will normally be a small shipment. Continuous Activity in the Cuban Market In order to maximize the possibility of products being sold in Cuba it is important to continue to undertake marketing and promotion events inclusive of seminars to educate your target market segment on how the product can be used and its benefits. It is also important to inform importers of any newly certified products in Cuba at this time. This also increases your chances of participating in subsequent bidding processes and gaining further contracts with the importer. Exporters may also try to gain interest from other importers to increase the reach of their product. Participation in Future Bidding Processes Until an exporter has become a permanent supplier for a Government Authorized Importer, it must participate in the Importer s bidding process in order to be able to make future shipments to them. Depending on the product s performance, the Importer will decide whether the exporter should be part of subsequent bidding processes. If invited to subsequent bidding processes it is important that an excellent case is made for selection of their product as was done in the first. After an exporter has been a supplier for a number of years and the importer is satisfied with the product s performance they may be invited to become a permanent supplier. EXPORTING TO CUBA 11

12 Documentary Requirements All documentation to be used during the process of securing business with Cuba must be translated into Spanish. In some cases a certified translation, apostille and legalization documentation are required as indicated below where necessary. Documents required to establish an interest in your products (certified translation required): Company profile Catalogues Technical data on products Quality certifications Price lists Documents required to become registered in the Government Authorized Importer s Portfolio of Potential Suppliers: The following documents must be translated and legalized. To achieve this, the original English documents must be first notarized and then apostilled by the Ministry of Foreign Affairs. The Apostille and the original English documents must then be translated into Spanish after which they can be legalized by the Cuban Embassy: Legal Act of Incorporation/Founding or Certificate of Incorporation with Statutes, that is, By Laws/Articles of Incorporation/Memorandum of Association Certificate of Good Standing (issue date must be within 1 year) Bank Guarantee Letter from company s bank in Saint Lucia (issue date must be within 1 year) certified translation required In cases where the person who will be negotiating on behalf of the company is not a director or president, a notarized and apostilled power of attorney appointing the person who will sign contracts and engage in negotiations on behalf of the company must be provided. A certified \ translation must also be provided The completed registration/application form provided by the importer The above listing serves as a reference as each importer may have variations regarding documents which are required to be legalized or apostilled and requirements may change from time to time. It is imperative to verify with importer before proceeding. Documents Required for the Certification of Products Before securing/ finalising a contract with a Cuban Importer, all products must be certified by the relevant Cuban certifying authority. The Insituto Nacional de Higiene e Epidemiologia y Microbiologia (INHEM) and the Centro de Certificacion de Productos Tropicalizados within the Laboratorio De Ensayos De Tropicalizacion (LABET) are the two main certification authorities however the Cuban Importer will indicate any other certifications which are necessary for the product in question to be accepted by them. For example, in certain cases approval is required from the Drug Administration Authority or in the case of some construction products a dictamentecnico (technical opinion) is required from the safety division of the Ministry of Construction. As mentioned all required certification will be indicated by the Cuban Importer. EXPORTING TO CUBA 12

13 Sanitary Register for Foods, Cosmetics, and personal Domestic Products- Instituto Nacional de Higiene e Epidemiologia y Microbiologia (INHEM) Foodstuff, beverages, cosmetics and personal hygiene products all require sanitary permits to enter Cuba. The importing company can, on completion of preliminary contractual agreements with the supplier, apply for sanitary permission for the products entry into Cuba or this can be done by an agent on behalf of the supplier, with evidence of the contract which he is about to embark upon. This is covered under Decree-law No. 54 and Law No. 41 Resolution No. 215, Ministry of Public Health. Products certified by the Instituto Nacional de Higiene e Epidemiologia y Microbiologia (INHEM): Food and beverage items Cosmetics Personal hygiene products Home care products Raw materials Food additives Toys Health and environmental technologies used in the treatment of drinking water, waste water and recreational water Products manufactured from tobacco Food contact materials Materials available to the State of Cuba for the preservation of health INHEM Certification Process The exporter signs a contract with INHEM for the services to be provided The exporter submits a letter requesting the registration of the relevant products The exporter receives an invoice for settlement in advance of tests The exporter pays and submits a company profile, catalogues, technical data on products, valid certificates relating to quality certifications and product samples INHEM s Committee reviews the documents submitted. If documentation submitted is satisfactory, samples are sent to the lab for testing Testing takes up to one month from the date full documentation is received If the product meets the standard a certificate is issued which is valid for three years. Renewal costs are half the price of first time certification costs, additional copies if the certificate cost 10 CUC each. Sanitary Register for Veterinary Use All animal products and products of animal origin whether preserved or live destined for consumption, industrial, ornamental or experimental use and for veterinary purposes are subject to sanitary requirements. This permission is issued by the Ministry of Agriculture, and approved products would be registered in the Veterinary Registry. Requests can be made through an agent or by the importing company and must be done at least 15 days prior to shipment of goods, with approval likely to take a period of 10 working days (Decree Law No. 137, Resolution No. 121/93, Ministry of Agriculture). Some provisions are made in cases where a certified laboratory exists within the exporting country to have the product certification done within that country with final approval undertaken by the resident Cuban diplomatic representative. This process however, requires prior approval through the National Office of Standardization (Decree No. 182). EXPORTING TO CUBA 13

14 Phyto-Sanitary Register Products of plant origin require Phyto-Sanitary Certification prior to entry into Cuba. This approval, unlike the sanitary approval which is valid for one year is granted on a case by case basis and only for the actual consignment. They require authorization which would take approximately 30 days for approval or denial and therefore such requests should be submitted 60 days prior to the shipment of the products. It is advised that samples should always exceed by three or four the amounts requested in the documentation in case of spoilage, breakage or any other contingency. Products certified by the Centro de Certificacion de Productos Tropicalizados within the Laboratorio De Ensayos De Tropicalizacion (LABET): LABET carries out tests and evaluations for the certification and approval of all products, inputs and materials which do not fall under the products certified by the INHEM. They perform climatic tests, both accelerated and natural, corrosion tests and physio-chemical tests, electric tests, mechanical safety tests, reliability tests and special measurements. LABET Certification Process The exporter makes a request via for testing to be carried out and provides samples to LABET. The request must detail: Name and position of the contact person for the company for the testing process Company profile and product information/catalogues Technical data on products The specialist from LABET responds providing a program indicating the tests which need to be carried out for the product in question The exporter signs in acceptance and provides the company s legal documents and payment to Tecno Sime which is the entity responsible for the administration of fees destined to LABET as well as all documentary requirements for their process. LABET will provide Tecno Sime s full contact details to the exporter The testing process takes up to 55 working days depending on the tests to be done. Testing begins from the date the importer signs in acceptance however results and certificates are only provided after payment and documentary requirements have been satisfied After tests are completed, a report and the certificate are provided to the exporter. In cases where the products do not meet the standard to be certified, recommendations for improvement are made The certificate is valid for two years from the date on which it is issued EXPORTING TO CUBA 14

15 Samples It should be noted that LABET does not intervene with regards to bringing samples into Cuba. Samples can be brought in at the request of the importer. Also in the case of some products for example paints, the product can be applied on to surfaces to avoid bringing in samples. In such cases application must be done correctly, for example, wood paints on wood and wall paints on wall. Depending on the tests to be done the exporter may choose to request they be done in their home country. In such case a team from LABET will travel to the exporter s country with all expenses covered by the exporter. This is normally the preferred option for exporters of various lines of products, to avoid the need of sending various samples to Cuba. Shipping Documentation The requirements for shipping goods to Cuba are similar to other international locations. Two copies of the Bill of Lading are required or the Airway Bill if being sent by air. At least two copies of the Commercial Invoice and the Packing List are also to accompany the shipment. This list must give full description of the contents of the shipment. For items claiming CARICOM origin, two copies of the Certificate of Origin must accompany the shipment. In cases where a sanitary and phytosanitary license is required, copies of these would be lodged with the importing agency which must present them before the goods are released from Customs. Labelling and Marking Requirements The national Standards Office in Cuba sets out strict guidelines for labeling all products exported into Cuba. These standards are similar to other countries regulations. The following are the guidelines; Specific name of the product(s) Labels must be in Spanish Labels must contain ingredients of products The expiry date must be cited Net content must be listed Price Quantity of units In addition, all documents must be originals and translated in Spanish. EXPORTING TO CUBA 15

16 Shipping, Logistics and Payment Shipping and Logistics Hewanorra Air Cargo Services offers a daily service on British Airways with a transit period of two days. Their ability to ship the cargo is dependent on the availability of space and the price for shipping is determined by the dimensions and the weight of the cargo. The cargo must be brought to their facility by 1pm on the day of shipment. CMA CGM St. Lucia offers a weekly service to Cuba with a transit period of twelve (12) to seventeen (17) days. Twenty (20), forty (40), and refrigerated container options are available for shipping however no provisions are made for break bulk cargo. The cost of shipping will be communicated to the exporter after a formal request is sent and relevant information pertaining to the shipment is received. Terms of Payment Payment from Cuban importers normally requires a credit period of ninety (90) to three hundred and sixty (360) days. The length of the period is generally determined by how quickly the product in question can be sold. Fast selling products attract shorter credit periods while products which tend to sell slowly will require longer periods of credit for the buyer. The importer will therefore require the use of some credit instrument normally a letter of credit to facilitate the payment. Customs Duties As a member of the World Trade Organization (WTO), Cuba is a signatory to all of the international trading regulations which this body sanctions. As such, its customs procedures and norms are those consistent with other WTO members, and Cuba has several trade treaties with various economic groupings from which zero tariff or Most Favoured Nation (MFN) tariffs apply. Cuba therefore has two tariffs: The General Tariff which is applied to non-members of the WTO and to countries which have not signed bilateral trade agreements with Cuba, and: The MFN Tariff, which applies to WTO member countries and to those with bi-lateral trading agreements with Cuba. Presently, the largest portion of Cuba s imports receive MFN status with the average MFN tariff stated at 10.7% and the general tariff not exceeding 17%. Only 8% of items have tariffs exceeding 20%, with over 90% receiving tariff treatment under 15%. The highest MFN tariff is set at 30% for a very selective group of products. Tariffs are based on the ad valorem value of goods. It is important to note that by way of CARICOM, a bilateral trade agreement exists between Saint Lucia and Cuba in the form of the Trade and Economic Co-Operation Agreement between the Caribbean Community (CARICOM) And the Government of the Republic of Cuba. EXPORTING TO CUBA 16