The Cuban government has decided to resume the acceptance of cash foreign currency payments in sectors such as tourism and retail stores, reversing a measure suspended in 2021.
Policy Changes Announced at National Assembly
During the third regular session of the National Assembly's tenth legislature, Prime Minister Manuel Marrero unveiled new regulations affecting micro, small, and medium-sized enterprises (MSMEs) and the private sector in general.
Marrero stated that these measures aim to advance the country's "Macroeconomic Stabilization Program" and address the "partial dollarization of the economy." Among the "specific measures" approved by the government are:
- Imposing tariffs in foreign currency on non-state sector imports.
- Gradually and selectively implementing foreign currency charges for port services.
- Accepting cash foreign currency in designated sectors and activities, such as tourism.
Regarding the first measure, Marrero emphasized that the state would no longer "allow so much merchandise" to enter the country, insisting that private sector importers pay taxes in the national currency.
Revised Cash Acceptance Policy
On the third measure, Marrero clarified that the move to cash acceptance in foreign currency is crucial for the government, as the banking system alone is insufficient. "We're losing a lot of money. We won't eliminate banking transactions, but tourists can't miss out on offers because their cards don't work. This measure will apply not only in tourism but also in retail stores and other sectors," he stated.
The government has approved a new mechanism for the allocation and management of foreign currency, replacing Resolution 115/2020, which was signed by the ousted former "corrupt" minister, Alejandro Gil. This mechanism allows for a "cleanup process" of state accounts and the approval of "closed schemes" for exports.
Legal Gaps in Private Sector Regulations
In an extraordinary Council of Ministers meeting on July 12, Marrero acknowledged that the initial regulations for the private sector had legal gaps that led to "distortions." "We must clarify the role each actor plays in the country's economy, and the Constitution of the Republic clearly states that the main actor is the socialist state enterprise," he emphasized.
In 2021, the Cuban government temporarily suspended the acceptance of U.S. dollar bank deposits. At that time, the General Customs of the Republic also announced that duties and services for imports at the border had to be paid in other currencies accepted by the Central Bank of Cuba or through foreign currency cards operating in the country.
The Cuban government is tightening its control mechanisms and regulations against the private sector, which could lead to an even more severe period of shortages than the country is already experiencing.
Understanding Cuba's New Foreign Currency Policies
The recent policy changes in Cuba regarding the acceptance of cash foreign currency have raised several questions. Below are some frequently asked questions and their answers to help clarify these new regulations.
Why did the Cuban government decide to accept cash foreign currency again?
The Cuban government decided to accept cash foreign currency again because they were losing significant revenue due to the inability to process card payments effectively, especially in the tourism sector.
Which sectors will see the acceptance of cash foreign currency?
The sectors that will see the acceptance of cash foreign currency include tourism, retail stores, and other designated sectors and activities.
What are the new regulations for the private sector in Cuba?
New regulations for the private sector in Cuba include imposing tariffs in foreign currency on imports, selectively implementing foreign currency charges for port services, and addressing legal gaps that previously led to economic distortions.