Cuba’s Customs Office Tightens the Screws

Fernando Ravsberg*

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.

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.

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.

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.