Cuba’s Customs Office Tightens the Screws

Fernando Ravsberg*

Most of the clothing sold in the streets of Cuba arrives on the island as personal baggage carried by “mules” in duffle bags like these.” Photo: Raquel Perez

HAVANA TIMES — The Customs law that goes into effect in September is one that will have the most social impact, since in one way or another it will affect the majority of Cubans, making everyday life a little more difficult and a lot more expensive.

“Luisa” assured me that if the government raises customs tariffs, her business will collapse since all of her merchandise is brought over here from Ecuador. (I don’t want to give her real name because the license only authorizes her to sell clothes that she makes herself.)

At present, official Cuban commerce is practically stagnant since many people opt for the parallel import market, which has better products at lower prices, with everything from washing machines to deodorant, including catalog sales from Miami.

The new Customs Law will significantly raise taxes on these imported goods and will also limit the quantity. Therefore the expectation is that shipments through “mules” will be dramatically reduced, as will parcels disguised as family assistance.

Restrictions

Cubans residing in the country pay their customs duties in pesos. The new law will maintain the payment in pesos for residents but only on their first trip in any one year; after that, the duty will be paid in CUCs – a convertible currency that is 24 times more expensive.

Like in this cafe, many private workers have set up their businesses by buying equipment from abroad, even including the decorations. Photo: Raquel Perez

When it comes to clothes and shoes from their second trip, only 30 kg per passenger will be exempt, the rest will require payments of $10 USD per kg. This rate will apply regardless of what the traveler has already paid the airline for luggage transport costs.

Parcel shipments will also be limited. This is a means through which TVs, refrigerators, washing machines and even tools, toasters, juicers, irons and deep fryers have been brought in — from Panama and Miami — for sale to the new self-employed workers.
This year the state again started collecting customs duties on people bringing in food, which had been exempt from taxes since 2008, the year when Cuba was hit by three hurricanes that swept across the island causing heavy damage.

Clothes “Made in Cuba”

The island has few clothing options. One can buy expensive clothes in state-run stores or buy Chinese clothes that are a little cheaper and are sold in the doorways of private homes. In these stoops, tens of thousands of “timbiriches” (vending stands) have flourished since private work was authorized.

Since self-employment was authorized in Cuba, tens of thousands of porches and porticos have been converted into stands for selling clothing that comes mainly from Ecuador. Photo: Raquel Perez

The license is actually for selling clothing made by the vendor themself, but most of the clothes and shoes that are offered in the streets come in bags or bales from Ecuador and Cancun. These are brought into the country by “mules” who are very well “connected” with the customs office at the airport.

Clothing and better quality electronic equipment arrive in the suitcases of Cuban pilots and flight attendants. In this way they get bonuses, which is much more necessary now that the fight against corruption has derailed the major illicit businesses that operated in that industry.

“Abel” is an engineer who lives in Miami and travels twice a month to spend his weekends in Cuba. He is a “mule” whose ticket is bought for him in exchange for him bringing in 90 kg of goods. “I don’t make a penny, but I can travel for free whenever I want,” he said.

Online sales

Despite the disappearance of the underwater cable and other limitations, internet sales in Cuba are growing. The website “Revolico” offers Cubans appliances, homes, cars, furniture, computers, animals, jewelry and much more.

“Revolico” is the Cuba’s most popular online classified ads site. Through it, one can buy all sorts of appliances and even order them by catalog from stores in Miami. Photo: Raquel Perez

The site has the ability to sell what many want to buy, even deodorant. “Luis,” for example, acquired his espresso machine through that site. He selected it from the online catalog of a shop in Miami, and a month later it showed up at his door.

In the meantime, products in government-owned stores go old for a lack of buyers. The main reason is that their prices are inflated by a 240 percent sales tax, to which some managers will add a “commission” that goes straight into their pockets.

It’s logical for the government to want to protect domestic trade, but the truth is that their stores typically lack products, and when they do have these their prices are completely out of whack with people’s wages. But what’s most serious is that this end of the importing of contraband will leave tens of thousands of families without incomes.
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(*) An authorized translation by Havana Times (from the Spanish original) published by Cartas Desde Cuba.

 


14 thoughts on “Cuba’s Customs Office Tightens the Screws

  • May 3, 2013 at 11:02 pm
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    Real world reminder: The most powerful military and corporate entities are hell bent on making the Cuban socialist experiment fail – if they can’t destroy it completely. You want to argue that the “embargo” is not a “blockade” and is just about consumer goods? You forget how the U.S. set up and maintained the most vile dictatorships throughout the Americas, Asia and Europe. And when they fell, it was in spite of the CIA, US military, corporate hit me, etc. So it is easy to fault Cuban government and it’s efforts to survive, but if for one moment, you think the average Cuban, or any average citizen in any of the ex-colonies or US invaded countries would be better off if things returned to the “good old days” you’re living a self-deception. If by success, freedom and democracy you mean the chance to win the lottery, than at least your just selfish and math-challenged.

    The day the US has to stop trying to take over in Cuba once again, then we might see Cuba’s talents flourish unfettered. Meanwhile climate change caused by the mindless and destructive exploitations of world-wide corporate dominance may prevent all human efforts to live in some harmony with each other and nature. Right now the odds seem to be worsening rapidly as we waste what time we have.

  • July 20, 2012 at 6:14 am
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    The October elections in Cuba can be a good way of punishing the government (or the party, which is ultimately the same). Let’s not vote for anyone who’s already in the government and who has shown us that they won’t do anything to affect change. Let’s not vote for the slate.

  • July 20, 2012 at 6:13 am
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    The question of taxes imposed by the customs office is simple.

    The generals, with their little business of selling to Cubans, were losing the entire market to the “mules,” which had better assortments, better quality and better prices. Therefore the officialdom couldn’t sell their expensive but poor quality products to the Cuban people at astronomical prices.

    They can’t compete in a market, so they’re doing what they can. Since they hold the power, it’s easy for them to eliminate competition. Those who end up losing are the people. We’re back to the same old thing.

  • July 19, 2012 at 6:36 pm
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    We will have to wait days or months to really see the effect of this new restriction, to find out clearly how all of its aspects will affect people in one way or another, including those who travel once or twice a year for work reasons.

    The hierarchy isn’t affected by this. The customs office must be in a good mood thinking about how much they will be able to collect in bribes from their fellow citizens, without the slightest contemplation… because the customs officers have to cover their families and have to live as well.

    Exiting the airport arrival hall was already complicated… hopefully they’ll say how much of a delay there will be in processing to finally leave the international airport in Havana.

    Surely the self-employed sector will be affected, as well as the option of occasionally purchasing one or the other product at a cheaper price.

    It’s the same old story, with the people getting screwed.

  • July 19, 2012 at 6:26 pm
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    And the regulations in the diplomatic sector? Aren’t they contemplated in the new law?

    Worldwide, the charge for overweight luggage is paid to the airline for one simple physical reason: the plane has a weight limit for flying and therefore they limit what each passenger can bring aboard. If Cubana Airlines charges $50 per kilo more, or Iberia charges $100, it’s the problem of the airlines, while passengers are free to choose which company they travel with.

    What I don’t understand is why a tax is applied to overweight luggage by the customs office!

    It’s clear that they can place certain limits or control certain items, whether for national security or to protect domestic products. But the problem is that Cuba doesn’t produce anything, so what are they protecting?

    More important than continuing to foster corruption in customs is creating mechanisms whereby Cubans can import what they want, for example, cars, tools, etc. It could be that the importing entity is the government, but that it functions properly and doesn’t need to be monopolized by CIMEX, as others have explained above. Self-employed workers are “businesses” now and they must have the necessary freedom of operation, for example, to import a truck for their work, or an oven for their private restaurant, just as they should create mechanisms for wholesale purchases.

    In the end, all of these changes are purely cosmetic… it shows in every step they make that there’s no genuine effort being made to move things forward; it shows that they’re only giving the crumbs.

  • July 19, 2012 at 6:22 pm
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    A boycott is the solution.

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