Corrupción – Cuba – Corruption
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Manual for Trading with Cuban Businesses

Manual for Trading with Cuban Businesses / Juan Juan Almeida
Posted on March 4, 2015

Juan Juan Almeida, 23 February 2015 — Marijuana relaxes, cocaine
excites, and the consumption of amphetamines allows concentration; but
of all the drugs, wanting to trade with Cuba is an event that provokes
alienation.

The effect was evident a few days ago, when a group of US businesses
expressed a willingness to do business with Cuban civil society.

Undoubtedly, the Cuban phenomenon is a magnetic stimulation and shows
that they, the businesses and their attorneys, although they call
themselves specialists in Cuban issues, don’t know that in the greatest
of Antilles a foreign business can only trade with State businesses
which, by the way, are the only ones who have import licenses.

To do business in Cuba, first you have to be very clear that trading
activity on the Island answers only to the political decisions of the
Government, and to the State budget, in that order, the first deciding
what company does business, and the second determines what the company
is paid.

The Cuban commercial structure is hierarchical and, to a certain point,
disciplines; but the system is corrupt. Therefore, there are
entrepreneurs who earn more in Cuba than in any other place in the
world. But they are not doing business, but buying paper.

Let me explain: The confirmed Letter of Credit is a bank tool that is
governed according to international norms, where the payer buys the
merchandise and indicates the bank, upon confirmation of the funds,
which makes payment according to certain clauses; and the banking entity
that guarantees assumes the obligations starting from receiving certain
documentation such as the invoice, customs certificates.

After the freezing of financial assets which happened in 2009, none of
the businesses located in the country accept payments in Cuban
Convertible Pesos (CUC). Since then, and by political resolution,
payment is only in Letters of Credit confirmed by first line banks
(Royal Bank, Republik Bank, etc.) to certain and determined foreign
companies. The rest pay in unconfirmed Letters of Credit, paid in 120 to
260 days and backed by the Central Bank of Cuba, the Cuban International
Financing Bank, or offshore banks located in tax havens.

Negotiating with Cuban banks as work that never ends. The negotiation of
who decides is risky and to earn more than 50% is to buy this kind of
stamped and supported paper debt, I repeat, by offshore banks located in
tax havens.

No bank in the world pays more than a small percentage in interest.
Buying Letters of Credit in Cuba is a lucrative business. The danger is
that, as the document is “unconfirmed,” dealing with the time required
(120 to 360 days) the Cuban bank doesn’t pay because either they haven’t
received the government order or because the state budget lacks
financial fluidity. In any case, the renegotiation of the document and
everything is a question of waiting, or more to the point, of waiting to
have a contact who is politically important and/or a bank official who,
after receiving 5% of the transaction, as a bribe, will authorize final
payment of the full amount owed.

Doing business in Cuba is a real achievement and a true adventure; and,
if you’ll allow me, let me suggest that before you begin, educate yourself.

Source: Manual for Trading with Cuban Businesses / Juan Juan Almeida |
Translating Cuba –
http://translatingcuba.com/manual-for-trading-with-cuban-businesses-juan-juan-almeida/

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