Customs Policy Change September 1, 2014

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Cuba’s airports and ports quickly showed the effects of Monday’s changes to the country’s revised customs import policy. In the past, the baggage carousels at Cuban airports looked more like a Walmart’s checkout counter than what one would find at other International airports. The effect of the new policy was sobering for travelers returning to their homeland and who are accustomed to reasonable and fairly loose import policy regarding domestic goods to be distributed to children, family and extended family members.

Yordi at El Morro

Cuba says the customs policy tightening is in response to the abusive behavior of many Cubans living in the states and other international locations. These guests not only bring goods for family members but also bring heaps of goods for Cuban retail businesses to sell. These goods are supposed to be purchased through the government but, as we know, Cuba is challenged to supply goods the general population would like to have. The lack or necessary and typical retail products in Cuba is regarded as a form of censorship by many. However, the lack of goods is more likely a reflection of a government that simply does not have sufficient resources and lacks for credit to acquire goods for distribution.

What frequent flyers to Cuba first noticed on September 1st were the lack bicycles, televisions, monitors and computer equipment coming withy travelers. To the government’s credit, they issued fair warning that new customs restrictions would take place on the day of change. Travelers may not have liked the shift in policy but visitors had notice. The empty carousels gave notice that the message was received.

Holguin

Holguin

Since President Obama extended People-to-People privileges and also extended the number of visits Cuban nationals could make to and from Cuba, customs has been more lenient. Government said one individual brought 41 computer monitors and 66 flat-screen televisions into the country last year. It is estimated that of the approximately $2 billion of goods brought by travelers and returning Cubans to the country, 60 percent were distributed to Cuban family members while the remaining 40 percent were distributed to businesses.

Cuba’s struggle to pay off sovereign debt in hopes of making the island more attractive to international investors has put a financial strain on the island. Rather than loads of goods coming in, government needs to pad its coiffures. One way to do that is to encourage Cubans living abroad to send cash, which in turn is paid to government to acquire necessary domestic products. The hard fact that there simply is not enough supply to help supply natives does not enter into government’s policy.

Havana Departure Lounge

Havana Departure Lounge

Basics like soap, toilet paper and feminine hygiene products are in short supply. New technology equipment cannot be found. Recognizing this, Cuban nationals have been coming to the island and bringing much needed goods for their families. There were angry travelers at Cuba’s airports on Monday. Not only did government issue a new 41-page customs protocol, they also raised values on imported goods. No traveler can bring more than $1,000 worth of goods into the country on a given trip.

Duty on these goods was fairly expensive. But, under the new rules, the value of $1,000 is significantly less than $1,000 on Sunday as Cuba’s appraised value of goods has increased. Additionally, the amount of duty was raised. So, the double edged sword struck native Cubans where it hurts the most, in the home. It will be interesting to see what the value of soap and personal hygiene products will be in the future. The supply is down to the point where it falls far short of demand, a surefire way to drive prices up.

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A study performed by the Havana Consulting Group, a Florida-based consulting agency that specializes in Cuban policy and activity indicates that the average traveler returning to Cuba brought an average of about $3,551 in goods along with them in 2013. Some travelers expressed their frustration, suggesting that the new policy would have a direct effect on the quality of life in Cuba.  Unfortunately, this is rarely seen as a problem for a government this in survival mode.