Cuba adds red tape for potential foreign investors.Foreign companies and individuals hoping to make small investments in Cuba have new bureaucratic bu·reau·crat n. 1. An official of a bureaucracy. 2. An official who is rigidly devoted to the details of administrative procedure. bu hoops to jump through, under a government decree decree, in law, decision of a suit in a court of equity. It is the counterpart in equity of the judgment in a court of law, although in those jurisdictions where law and equity have merged, judgment is sometimes used to include both. published Feb. 2 in Cuba's official business weekly, Opciones. Marc Frank of Reuters reports that Administrative Control Direction or exercise of authority over subordinate or other organizations in respect to administration and support, including organization of Service forces, control of resources and equipment, personnel management, unit logistics, individual and unit training, readiness, mobilization, Decision #5290 of the Executive Committee of the Council of Ministers covers what are known as "cooperative production and administrative agreements"--and follows a recent trend of increased centralization cen·tral·ize v. cen·tral·ized, cen·tral·iz·ing, cen·tral·iz·es v.tr. 1. To draw into or toward a center; consolidate. 2. of the economy and regulation of Cuban state-run companies and foreign firms. Under the agreements, investors sell on credit raw material, technology and know-how to a Cuban state-owned company, or run a Cuban entity in exchanged for a fixed sum per product produced, or the purchase of the finished product outright for export. The agreements were previously approved by the Cuban company and the ministry it was supervised su·per·vise tr.v. su·per·vised, su·per·vis·ing, su·per·vis·es To have the charge and direction of; superintend. [Middle English *supervisen, from Medieval Latin by. Now they will also need approval by the Ministry of Foreign Investment and Economic Collaboration (Minvec) and the Executive Committee of the Council of Ministers. "This is more of the same," a European diplomat told Reuters. "The rationalization rationalization, in psychology: see defense mechanism. and reduction of joint ventures and cooperative agreements is part of a general return to a classic command economy." Under the new decree, investors in the copperative accords can no longer import or export. In addition, they can no longer be the exclusive suppliers for cooperative production projects. "Foreign individuals and companies related to the forms of investment ruled by this decision will not be allowed to perform import or export activities independently to or from Cuba," says the resolution, which takes effect this month. There are a host of other new requirements--from how bank accounts are managed to elimination of tax loopholes. In addition, all financing must be approved by Cuba's Central Bank. Diplomatic sources said the government is driving out small investors Small investor An individual person investing in small quantities of stock or bonds. This group of investors makes up a minimal fraction of total stock ownership. small investor and traders it views as doing little for the economy and corrupting Cubans by introducing practices like commissions and kickbacks. The sources said the number of joint ventures fell from over 400 in 2002 to around 300 in 2004, though no large ventures, or those involving well known international companies, closed. Cuba is also in the process of eliminating its free-trade zones free-trade zone Area within which goods may be landed, handled, and re-exported freely. The purpose is to remove obstacles to trade and to permit quick turnaround of ships and planes. which once boasted 400 foreign firms (see CubaNews, January 2005, page 2). |
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