Dear Fellow Cubans:

On 10 May this year a cable from the BBC took note of a fine imposed by the U.S. Federal Reserve on a Swiss bank for an alleged violation of U.S. sanctions against Libya, Iran, Yugoslavia and Cuba. They accused the Swiss bank of accepting U.S. dollar bills from or of sending them to countries that were subject to United States government sanctions.

A few days later, the NOTIMEX agency reported on statements made by that crook Otto Reich in which, in reference to the measures recently adopted by the United States government, he said that some were already being implemented and that others were about to be implemented. Concretely, he said in a threatening tone:

“Many of them need regulations and some other bureaucratic things to be put in place and government lawyers and other officials are working on that and many more are on the way to being implemented.”

On that same day, an article full of slanders and blatant lies appeared in the Miami El Nuevo Herald under the headline “Cuba Laundered $39 billion in Swiss Bank.” The article, not only twisted everything to do with the normal trading operation that Cuba sustains with foreign countries but also urged U.S. authorities to take new action against our country, saying that:

“We know that the Federal Reserve is autonomous and evidently has no interest in applying the Helms Burton Act but the OFAC (Office for Foreign Assets Control) is part of the executive branch and it can demand a better explanation of the Cuban part of the USB’s (Union of Swiss Banks) business which was elegantly swept under the carpet by the Senate Banking Committee. Perhaps Cuban-American members of Congress can convene hearings in the relevant House of Representatives’ committees so that light may be shed on this colossal scandal.”

On June 8, the Cuban government, true to its habit of keeping our people duly informed, published an explanatory note in the newspaper Granma, which gave a detailed account of the origin of our operations with foreign banks, through which the dollars in cash received in Cuba are deposited in bank accounts so that we can settle the debts derived from our foreign trade.

Among other things, the Note read:

“We have seen how in the last few days the ultra-right wing of the Bush administration is taking steps clearly aimed at blocking the income our country obtains from tourism and other services, at reducing to zero the possibility that Cubans living in the United States can send remittances to their relatives in Cuba by using the most evil, devious, hypocritical method imaginable: simply by preventing Cuba from making deposits in foreign banks of the dollars it obtains from sales in hard currency shops, from activities related to tourism and from other trade services. Thus, Cuba would not be able to use these dollars to buy medicines or food or to import the stock needed for the very shops where those who receive remittances from family members living in the United States buy those products.”

The United States government is using this sleazy method to put pressure on foreign banks to not accept money from Cuba, the origin of which is completely legal and honest. Moreover, it is encouraging the Miami terrorist mob’s papers to publish the repulsive slander that this money could even come from activities against which our country wages a fierce battle, activities such as money laundering and drug trafficking.”

The note published in Granma reads on:

“These actions are even more outrageous if one takes in account the fact that the only reason tourists who visit Cuba must use cash is that the Yankee blockade does not allow them to use credit cards or travelers’ checks issued by U.S. banks and other financial institutions that control this market. Moreover, they have granted only one U.S. Company a license for processing remittances sent through banks to Cuba so that Cubans living abroad need to go through an ordeal to send economic assistance to their relatives and, in the end, most of them are forced to send remittances in cash. These same persecutions and threats, which hang permanently over those who send money from the United States to their relatives in Cuba, means that they often prefer to send cash, so there is no paper trail that could make them liable to persecution from U.S. authorities and to the violent behavior of the terrorists who live in Miami.

The Granma note continues: “One cannot conceive of a more cynical, evil formula: the United States forces remittances and payment made by visitors to Cuba to be made in cash and now, with this crude pressure, is trying to prevent Cuba from using this cash to pay for its imports.”

The note ends as follows:

“All of these tricks are doomed to failure. With its usual steadfastness and serenity, our heroic people will struggle against and will be victorious over a powerful, but despicable, cowardly enemy which is truly contemptible for its genocidal policies and its Nazi-fascist methods.”

We can add to this the fact that, in the seven-year period referred to, Cuba has imported more than $30.9 billion worth of goods, so that the $3.9 billion which they say were sent to the Swiss bank in question and transferred to other beneficiaries, make up approximately 13 per cent of the total amount of payments Cuba made in this period to meet the cost of its imports, a substantial part of which are food, fuel or medical necessities or raw material for its production, other intermediate products for its new industries, articles sold in the chain of hard currency outlets, etc.

The next day, another article in El Nuevo Herald returned to the subject and, with the utmost disregard for the truth, suggested that the money deposited in the aforementioned Swiss Bank was in the name of “unknown entities or persons in banks that were not named,” when, in every single case, that money was used for normal trade transactions with internationally recognized trading and industrial companies. The Herald hysterically demanded:

“We must learn what those names are. Florida congresspersons Ileana Ros-Lehtinen and Lincoln Díaz-Balart must put pressure so that people learn where this money went and where it came from.”

On June 10, in a campaign obviously aimed at drawing international attention to this matter, El Nuevo Herald once again said that the Miami mob, through its best-known spokespersons, congresspersons Ileana Ros-Lehtinen and Lincoln Díaz-Balart, was requesting the federal government to investigate the origin and destination of the aforementioned money. In this article El Nuevo Herald reported that:

“The United States must investigate the origin and destination of some $3.9 billion that the Cuban government “laundered” through an international program of the Federal Reserve, Florida congresspersons Ileana Ros-Lehtinen and Lincoln Díaz-Balart said yesterday in letters sent to the Federal Reserve and to the House’s Finance Committee. “‘We are extremely puzzled as to how such a serious violation of federal law by the USB (Union of Swiss Banks) could have taken place’, the two wrote to the Federal Reserve chairman Alan Greenspan. `We hope that the investigations can answer the many questions we have about this matter.”

In a press conference on June 22, Ileana Ros-Lehtinen, the big, bad she-wolf, hysterically as usual, said:

“I am shocked that a bank which was given the extremely important responsibility of distributing the new American money should violate our country’s regulations concerning a state identified as a terrorist state.”

And she made this demand in a most impertinent manner, saying that:

“I am waiting for the result of the investigation. if the USB (Union of Swiss Banks) is found guilty of violating U.S. restrictions on transactions involving terrorist states such as Cuba, it is most important that those responsible be fined appropriately.”

On June 30, Ileana Ros-Lehtinen, continuing with her campaign, addressed a letter to the chairman of the House of Representatives’ International Relations Committee demanding an investigation into the matter.

Obviously, the aim of intimidating any bank which might have financial relations with Cuba could clearly be seen behind this campaign and blatant pressuring, the purpose being to prevent them from accepting dollar bills which our country must send abroad at regular intervals for the reasons explained above.

At this point, it began to become clearly apparent that many banks were being subject to pressure by U.S. authorities to try to block those remittances and create an extremely critical situation for our country.

In these circumstances, we began to analyze all possible variants in order to prevent any further criminal action by the United States government from causing serious economic damage to our country by impeding the use of the dollars in cash collected in Cuba for trade purposes.

While Cuba calmly and thoughtfully analyzed all its alternatives, the lies and slanders about this subject continued to rain down.

On June 3, El Nuevo Herald launched an attack on the Inter-American Development bank and ECLAC (Economic Commission for Latin America and the Caribbean) accusing them of inflating its estimates of family remittances from the United States to Cuba, which, according to them, would justify the legal origin of the $3.9 billion.

With reference to this point they said: “This whole business is what the IDB (Inter-American Development Bank) and ECLAC are covering up with their inflated figures on remittances, which they say come from the Cuban-American community. This must be clarified. What is more, this money laundering scandal shows that Cuba is a “safe haven for money from terrorists and embezzlers.” This must be exposed.

On July 23, with the crass sensationalism characteristic of the Miami riffraff, El Nuevo Herald published an article entitled “Links to Cuban Money Sought in United States” which, among other things reported that:

“The United States has started a judicial investigation to see if there are possible links between ‘U.S. bodies and persons’ and the $3.9 billion that Cuba infiltrated into the international banking system using a Federal Reserve program. “The operation was carried out through the Union of Swiss Banks (USB). “‘At this time there is an investigation opened by the South East New York district attorney’s office,’ Juan Zárate, the U.S. Treasury undersecretary responsible for the fight against financing terrorism said during a visit to El Nuevo Herald made yesterday.”

Apparently the lies which were published every day in Miami on this affair were so many and so outrageous that, in spite of the proverbial discretion of Swiss banks, the banking institution involved in this case felt itself obliged to publicly deny any accusation of money laundering and a cable from Agence France Press published in Zurich on July 25 said the following:

Statements like these did not prevent the Miami mobsters and the newspapers from continuing with their lying campaign and on September 16 Ileana Ros-Lehtinen came out with more statements:

“‘This is starting and it’s growing’, the congresswoman remarked to El Nuevo Herald. She added: ‘There are at least three persons who were involved in this money manipulation and other banks are being looked into.’”

Note the overt threat when she says “others banks are being looked into.”

On that day, I asked the Central Bank of Cuba to speed up work on this matter and I said that they should concentrate on analyzing the possibility of using the convertible peso instead of the dollar, so that the country would not be vulnerable to the new pressure from the mob and the United States government.

Perhaps you remember that on September 28, during the second Round Table on the subject of electricity, in my comments, I alerted the public to these problems without giving many details. On this point my actual words were:

“We have an enemy that has been trying to destroy us with any and every possible method for more than 45 years so that even the money paid by a tourist cannot circulate through the world because, since they are the owners of the most important currency and owners of the world, they forbid the dollar to be used in any Cuban transaction.”

And with regard to the measures we were working on, I hinted in the Round Table on September 29 which was about energy that:

As recently as October 9, exactly 11 days before my accidental fall, a speech given by Daniel W. Fisk, undersecretary for Western Hemispheric Affairs at the U.S. State Department to the Cuban American veterans’ Association came to our attention. There, he bragged with boundless cynicism about the alleged success of the criminal measures taken by the Bush government against our country. The things he said included:

Among all that imperial arrogance and bragging, there was one specific paragraph which needs careful consideration. Mr. Fisk said:

“We have established a Cuban Assets Targeting Group staffed by law enforcement officials from several agencies to investigate and identify new ways hard currency moves in and out of Cuba; and to stop it.”

The relationship between the Miami mob’s dirty campaign on the subject of alleged money laundering and this new, criminal action by the United States government when it created a group to track down hard currency flows into and out of Cuba couldn’t be clearer. Thus the actions to protect our country’s interests against this new attack had to be taken without any more delay. I immediately instructed the Cuban Central Bank to prepare a timetable for having the convertible peso circulate instead of the U.S. dollar as soon as possible.

That timetable has been drawn up and now we are in a position to officially announce, that, as from November 8 the convertible peso will begin to circulate instead of the U.S. dollar throughout Cuban national territory.

The first thing we need to make clear is that this does not mean that the possession of U.S. dollars or any other freely convertible currency will be penalized. The population can hold any amount of dollars it wishes and this will not be a breach of the law. What this means is that, as from the date mentioned earlier, November 8, the U.S. dollar will not be accepted in our hard currency dealings; these will only accept convertible pesos.

As from November 8, any person in possession of freely convertible currency, be that person Cuban or a visiting foreigner, will first have to obtain convertible pesos in the Exchange Bureaus (CADECAS), in bank chapters -and even in a large number of the very shops that make sales in hard currency, who will also be offering this service—in order to make purchases in the chain of outlets which use hard currency.

As an additional element, it has been decided that as from that date, November 8, anyone who wishes to obtain convertible pesos for U.S. dollars in cash will have to pay a 10 percent tax. This tax will serve as compensation for the risks and costs which derive from using U.S. dollars in the Cuban economy as a result of the aforementioned United States government measures which are trying to prevent our country from using U.S. dollars in cash for normal trade purposes.

So that not the slightest confusion exist, it is very important to repeat that this tax will begin on November 8, so that those with U.S. dollars have two weeks to exercise their right to exchange them for convertible pesos at par and with no tax whatsoever; or if they wish, they can also by goods in dollars before that date, as is done now. If anyone has a U.S.-dollar-account in the bank, they can deposit more dollars and withdraw them later in convertible pesos at par or in U.S. dollars whenever they want them—also tax exempt. If a person has no bank account, he or she can open one and deposit his or her U.S. dollars in the bank and withdraw them whenever they wish in the future as convertible pesos at par or in the same dollars, also tax exempt.

Those who usually receive money from abroad have two weeks from today to coordinate, if they so wish, with their relatives so that in the future the latter do not send their cash remittances in U.S. dollars but in other currencies, such as the Euro, the Canadian dollar, the pound sterling or the Swiss franc, which will not be subject to the 10 percent tax.

This means that we have looked for formulas, which ensure that no one is harmed by this measure, since enough time has been allowed for people to make the arrangements they wish with their U.S. dollars in cash in order not to have to pay the required tax.

I repeat, this is not a measure aimed at obtaining dollars by imposing a tax, it is a response to a real threat posed by a criminal United States government measure and a flagrant campaign to intimidate foreign banks.

I also want to stress that all U.S. dollars, convertible pesos or any other currency bank accounts are totally guaranteed, and, as I already said, no tax will be imposed on money deposited in banks, no matter when clients wish to withdraw it, there being no time limits of any kind.

Perhaps, in order to make this easier to understand, Randy could read the Central Bank resolution which will make this measure effective and after that we can offer some clarification.

As I already explained, the first thing the resolution establishes is that the population can posses, as they can now and with no kind of restriction, any amount of U.S. dollars or any other convertible currency. Between tomorrow and November 7, everything will be as it is now and U.S. dollars will continue to be accepted in the shops; those who wish to change their U.S. dollars for convertible pesos will not be charged the ten-percent tax and the exchange will be at par. People may open new dollar bank accounts with no restrictions of whatsoever or can make new deposits in existing accounts, and they can withdraw these funds whenever they wish in the future in convertible pesos at par or in U.S. dollars, the client may choose, without being subject to any tax.

The obligation to pay in convertible pesos in all establishments that use dollars will come into effect on November 8, and the 10 percent tax will be applied to any transaction that involves exchanging physical U.S. dollars for convertible pesos. Remember, that this is not a change in the exchange rate between the U.S. dollar and the convertible peso, which continues to stand at par, but it is simply a tax on purchasing convertible pesos with U.S. dollars in cash. If you have a convertible peso, you can buy a U.S. dollar; but if you have a U.S. dollar and want to buy a convertible peso, you will have to pay the 10 percent tax, so that you will only receive 90 cents of a convertible peso for your U.S. dollar.

I remind you again that there is no kind of tax for the other currencies that are accepted in the country—euros, Swiss francs, pounds sterling and Canadian dollars. The ten percent tax will be applied to U.S. dollars in cash because of the situation created by the United States government’s new measures to asphyxiate our country.

In order to make it easier to exchange money, this can be done as from October 28 in the Exchange Bureaus (CADECAS), bank chapters, hotels and shops, in the ways already read from the resolution.

The resolution also sets forth that transactions made with credit or debit cards will have no tax applied to them, no matter in which currency they are made, including the U.S. dollar. The explanation is that, when a transaction is made with a credit or debit card, no movement of actual cash is involved, so that the costs and risks associated with handling U.S. dollar bills do not exist.

Some measures have been taken affecting the banking system to make currency exchange easier. For example, banks will open on Saturday and Sunday November 6 and 7, respectively, and from October 28 to November 5 and from 12 noon onwards at that time, they will be totally dedicated to currency exchange operations and during those hours will not process any other transactions, in order to give more time to the public, so that no one who wishes to exchange U.S. dollars for convertible pesos before the 8th, [will not have to] pay the tax….

Of course, we also want to make it clear, following the same rationale, that those who wish to buy Cuban pesos at the CADECAS with U.S. dollars will also be subject to the 10 percent tax, since we would be accepting U.S. dollars in cash.

I also want to make it clear that this measure will not prevent nor hinder in any way whatsoever the guarantees issued by Cuban financial institutions to foreign institutions, nor the availability of funds in freely convertible currency to honor their obligations. This measure is only domestic in scope and we are only regulating matters, which pertain to the circulation of money within Cuban territory and protecting ourselves from an external economic attack.