A statement of Cuban law in matters affecting business in its various aspects and activities

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Title:
A statement of Cuban law in matters affecting business in its various aspects and activities
Physical Description:
1 online resource (iv, 94 leaves)
Language:
English
Spanish
Creator:
Gay-Calbó, Enrique, 1889-
Rodríguez von Sobotker, Herminio

Subjects

Subjects / Keywords:
Commercial law -- Cuba   ( lcsh )
Industrial laws and legislation -- Cuba   ( lcsh )
Taxation -- Law and legislation -- Cuba   ( lcsh )
Aliens -- Cuba   ( lcsh )
Derecho mercantil -- Cuba   ( bidex )
Derecho industrial -- Cuba   ( bidex )
Derecho fiscal -- Cuba   ( bidex )
Extranjeros -- Cuba   ( bidex )
Genre:
non-fiction   ( marcgt )

Notes

System Details:
Master and use copy. Digital master created according to Benchmark for Faithful Digital Reproductions of Monographs and Serials, Version 1. Digital Library Federation, December 2002.
Language:
"This is a translation of the Spanish original." Third preliminary leaf.
Statement of Responsibility:
by Doctor Enrique Gay Calbo and Doctor Herminio Rodriguez von Sobotker.

Record Information

Source Institution:
University of Michigan Law Library
Rights Management:
Permission granted to University of Florida to digitize and display this item for non-profit research and educational purposes. Any reuse of this item in excess of fair use or other copyright exemptions requires permission of the copyright holder.
Resource Identifier:
oclc - 827189494
ocn827189494
Classification:
lcc - JX1980.58 .S971 v.3
System ID:
AA00021824:00001

Table of Contents
    Front Matter
        Front Matter
    Title Page
        Title Page 1
        Title Page 2
    Note
        Note
    Table of Contents
        Page i
        Page ii
        Page iii
        Page iv
    Introduction
        Page v
    Nationality and immigration
        Page 1
        Page 2
        Page 3
        Page 4
        Page 5
        Page 6
        Page 7
        Page 8
        Page 9
        Page 10
        Page 11
    Rights of foreigners to engage in commerce and industry
        Page 12
        Page 13
        Page 14
        Page 15
        Page 16
        Page 17
        Page 18
        Page 19
        Page 20
        Page 21
        Page 22
        Page 23
        Page 24
        Page 25
        Page 26
        Page 27
        Page 28
        Page 29
        Page 30
        Page 31
        Page 32
        Page 33
        Page 34
        Page 35
    Taxes
        Page 36
        Page 37
        Page 38
        Page 39
        Page 40
        Page 41
        Page 42
        Page 43
        Page 44
        Page 45
        Page 46
        Page 47
        Page 48
        Page 49
    Mining activities
        Page 50
        Page 51
        Page 52
        Page 53
        Page 54
        Page 55
        Page 56
        Page 57
        Page 58
        Page 59
        Page 60
    Social legislation
        Page 61
        Page 62
        Page 63
        Page 64
        Page 65
        Page 66
        Page 67
        Page 68
        Page 69
        Page 70
        Page 71
        Page 72
        Page 73
        Page 74
        Page 75
        Page 76
        Page 77
        Page 78
        Page 79
        Page 80
        Page 81
        Page 82
        Page 83
        Page 84
        Page 85
        Page 86
    Industrial property
        Page 87
        Page 88
        Page 89
        Page 90
        Page 91
        Page 92
        Page 93
        Page 94
Full Text








This volume was donated to LLMVC to enrich its on-line offerings and
ffor purposes of long-term preservation by University of Michigan Law Library













A STATEMENT OF

CUBAN LAW

IN MATTERS AFFECTING BUSINESS IN ITS VARIOUS ASPECTS AND ACTIVITIES






By






DOCTOR ENRIQUE GAY CALB0

and

DOCTOR HERMINIO RODRIGUEZ V0N SOBOTKER
















A Publication

of the

INTER-AMERICAN DEVELOPMENT COMISSION
Washington, D. C.
1946























This Statement of Cuban Law in matters affecting business in its general aspects and activities has been prepared under the auspices of the Inter-American Development Commission of Washington, assisted by the Cuban Commission of Inter-American Development, by two distinguished members of*the Cuban Bar,

In making it available-to such persons and institutions as may wish to study or consult it, the Inter-American Developmemt Commission is animated by the desire to render a service as part of its work in the field of practical inter-American collaboration. The Commissions, of course, do not in any way or to any extent assume responsibility for the contents of the Statement.

The information herein contained is not meant to relieve anyone of the reasonable requirement of consulting counsel in respect to legal
matters in Cuba.



T. Rafael Oreamuno
Inter-American Development
Commission




Washington, D. C.
1946




IM417703














NO TE


This is a translation of the Spanish original, which is deposited in the offices of the Inter-American Development Commission in Washington.

Although all due care has been exercised in the preparation of the translation, no assurance is given as to its absolute accuracy.



INTER-AIERICAN DEVELOPIET COMMISSION



























Copyright, 1946, by the Inter-American Development Commission Washington, D. C.












TABLE OF CONTENTS

page

INTRODUCTION

NATIONALITY AND IMMIGRATION


Nationality

a) Constitutional provisions
b) Legal provisions
c) Adm-inistrative provisions 2

Citizenship by birth 2

Naturalization 3

Loss of Nationality 5

Civil and political rights of foreigners 5

Rights and duties of Cubans 6

Immigration legislation 7

Requirements 7

Tourists 8

Transit passengers 8

Transients 8

Requirements of foreigners after admission 10

Legal status of foreign natural and juridical persons 11 RIGHTS OF FOREIGNERS TO ENGAGE IN COMMCE AIM INDUSTRY


Domestic and foreign companies or firms 12

The Commercial Code 12

Requirements and formalities 12

Registration in the Mercantile Register 12











Page

Types of mercantile companies 13

Collective mercantile companies (partnerships) 14 Silent partnerships 15

Corporations 16

The General Companies' Register 18

The General Register of Corporations 18

Shares of corporations 19

Limited Liability companies 20

Regulation of foreign companies 22

Classification of firms by nature of activities 23

Credit companies 24

Banks -4

Railroads 25

Public Works companies 27

General Deposit Warehouses 28

Insurance general 28

Fire insurance 31
Life insurance 31
Motor vehicle accidents 32
Marine insurance 33
Mutual obligations of insurer and insured 34

TAXES


General Tax on profits 36

Tax on interest 36

Tax on profits of merchants and industries 36

Tax on profits of banks and certain companies 36











Page

Tax Extension Law 3

Tax on installment sales- 42

Tax on exportation of' currency 42

Income Tax 45

Patente tinica 4

Municipal taxes 49

MINING ACTIVITIES


Civil Legislation 50

Legal system governing mining activities 50

The Mining Law 50

Regulations for Cuban Mining 52

Mineral Fuels Law of May 9, 1938 54

Expropriation of land for mines 59

SOCIAL LEGISLATION


Constitutional provisions 61

Eight hour day 62

Sunday rest 63

Paid vacations 63

Wage regulation and minimum wage 64

Industrial accidents 66

Compulsory insurance 69

Labor contracts 69

Labor nationalization law 72








iv


Page

Labor unions 72

Strikes and conciliatory procedure 73

Retirement pensions and social insurance 74

General provisions 74

Railroad and tramway employees 77

Maritime retirement pay 79

Retirement for newspaper workers 81

Retirement in the telephone service 82

Maternity benefits 83

Protection of warren and minors 84

Labor exchanges (employments agemies) 85

INDUSTRIAL PROPERTY


Patent for Industrial Introduction 87

Lan- on Industrial Property 88

General provisions 88

Patents of invention 89

Patents of deposit go

Patents of introduction go

Trademarks 91

Collective trademarks 92

Termination and voidance of trademarks 93

Trade names 94

Commercial slogans, etc. 94

Protection of films 94











T19TrTTrTT











A very limited edition of this STATEMENT OF CUBAN LAW IN MATTERS
AFFECTING BUSINESS IN ITS VARIOUS ASPECTS AND ACTIVITIES is being offered now in mimeographed form in order not to delay its availability until such time as circumstances may permit its publication in printed form.

Copies are obtainable from the Inter-American Development Commission, 2400 Sixteenth Street, N. W., Washington, D. C. The price is $5.00 per copy.

Similar Studies of the Law of Business in several of the Latin American Republics are under preparation and will be made available from time to time by the Inter-American Development Commission.















Habana, Cuba. March 19, 1946


Dr. Enrique Gay Calb6 Dr. Herminio Rodrguez Von Sobotker








NATIONALITY AND IMMIGRATION

An Explanation of the Provisions Contained
In Laws And Regulation Concerning
Nationality.

There are three types of legal provisions in Cuba in regard to nationality: a) constitutional; b) legislative; c) administrativea) The constitutional provisions are contained in section II of the Constitution, published in-the Gaceta Oficial of July 8, 1940, taking effect on October 10 of that year, and in two transitory provisions.

The section of the Constitution referred to above is entitled Nationality and comprises articles 8 to 18.

Article 8 contains a general statement that citizenship brings with it rights and duties.

Article 9 lists the obligations or duties and article 10, the rights.

Article 11 determines the tAjo ways in which Cuban citizenship may be acquired.

Articles 12 and 13 determine who are Cuban citizens by birth and who by naturalization. Article 15 states the manner in which Cuban citizenship may be lost, and No. 17 the way in which such citizenship may be restored, as provided by law.

Articles 14, 15 and 18 contain provisions of a specific nature. The first states that both citizenship papers and certificates of nationality shall be exempt from the payr ent of any tax; the second deals with special conditions in reference to marriage as it relates to nationality, and the last contains a provision that naturalized Cubans may not occupy an official position of Cuba in their country of origin.

The transitory provisions of Section II of the Constitution deal with foreigners who belonged to the Army of Liberation, those who resided in Cuba before January 1, 1899, Spanish residents in Cuba in 1899 who did not register in the Register of Spaniards, and Africans who were slaves in Cuba and those who were emancipated under the terms of the treaty of 1835 between Spain and Great Britain. All the above foreigners have the right to Cuban citizenship.

b) The provisions of a legal nature which are in force in Cuba in
regard to citizenship are of two kinds: those contained in laws of a general nature and those appearing in specific laws.

Among those in the first group there are: the Civil Code and the Civil Registry Law.

The Civil Code, in section 1 of Book 1, states how citizenship is
acquired, article 17 containing the principle embodied in articles 12 and 13 of the Constitution as to who are Cubans by birth and who by naturalization.






2


Article 18 of the Code contains one principle that does not-appear
in the Constitution in regard to acquisition of Cuban citizenship, and this is that children, while they remain under the parental authority, have the nationality of their parents. In accordance with this principle in the Civil Code, which may be regarded as supplementary to the Constitutional provision, minor children, at the time of naturalization of their parents, assume the same citizenship, by virtue of article 18 of the Code.

Article 19 of the Code contains a specific statement that-the formal acts by which Cuban citizenship is acquired, lost, or recovered, must be attested by registration in the Citizenship Section of the Civil Register, which is provided for by a special law on the subject.

Article 20 of the Code reproduces the article of the Constitution which states how Cuban citizenship may be lost.

Article 21 refers to the restoration of citizenship,

Article 22 of the Code contains one very interesting provision in regard to the effects of marriage upon nationality, according to which neither marriage nor its dissolution affects the nationality of the spouse or the children, but that as a means of acquiring citizenship it provides that a foreignman who marries a Cuban woman or a Cuban man who marries a foreign woman may retain their original nationality or acquire Cuban nationality according to choice as governed by the Constitution, or International Law and treaties.

Provisions of an administrative character follow, as contained in curreni regulations and decisions.

We shall mention 'as briefly as possible the legal provisions in force concerning this subject.

First, who are regarded as Cubans bybirth?

This subject is governed by article 12 of the-Constitution and the
principles contained in the Citizenship Regulations, which as may be inferred, are in accord with the Constitutional mandates.

Accordingly, the following are Cubans by birth:

a) All persons born within the territory of the Republic, with the
e-xcoption Of the children of foreigners in the service of their
Government;

b) Persons born in foreign territory of a Cuban father or mother, but
only after becoming domictled in Cuba.

c) Persons born outside the territory of the Republic of a father or
mother who was a native of Cuba but who has lost Cuban citizenship,
,by-claiming it in the manner and conditions provided by law.






~3


d) Foreigners who for a year or more served with the Army of
Liberation and remained with it until the end of' the War of
Independence, providing this is'attested to by bona fide documents
issued by the National Archives.

All persons who desire to opt for Cuban citizenship must present their applications in the official form adopted by the lainistry of State.

Persons comprised in item (a) must prove their birth in Cuba by
presentation of a birth certificate issued by the Municipal Judge of the place where it was registered, if born after January 1, 1885, when the Law of Civil R~egistry took effect in Cuba, and if born prior to that date a baptismal certificate issued by a Parish with the signature legalized by the Bishop of the Diocese.

Those comprised in item (b) must accompany their applicationby a birth certificate or baptismal certificate of the father or mother, the certificate of birth in a foreign country duly issued according to law, and a report attesting to domicile in Cuba.

Those included in item (c) shall present a certificate issued by the Chief of the Civil Register showing the right to enjoy Cuban citizenship and also a certificate of birth issued abroad in accordance with prevailing
law.

Lastly, those included under item (d) must present a certificate issued by the Director of the National Archives showing service for one year or more in the Army of Liberation and the fqct of having remained therein until the end of the War of Independence.

Having taken up the ways and requirements for attaining Cuban citizenship by birth,'we shall now discuss how such citizenship is acquired by naturalization.

First there is naturalization through residence, acquired after five years? continuous residence in the territory of the Republic and not less than one year after having declared the intention of becoming a Cuban citizen. To obtain a Citizenship Certificate (Carta de Ciudadani'a) persons who meet the above conditions must show that they are familiar with the Spanish language. Those who meet the requirements must declare their intention before the Municipal Judge at their place of domicile and after one year has elapsed they must reaffirm their intention by presenting the corresponding certificates of their application, as well as their penal record, proof of their knowledge of the Spanish language, and two letters -fron reputable persons, the signatures to be authenticated by a Notary, attesting to the fact that the applicant does not profess or enGage in propaganda for doctrines or principles contrary to the present organization of the Cuban State or its democratic form and system of government, nor is a member or affiliate of any sect, association or party organized for the teaching or dissemination of such doctrines or principles' and beliefs, and that the applicant is a person of good moral character.










Secondly, there is matrimony asan origin of nationality. According to this principle a foreign man who marries a Cuban woman and a foreign woman who marries a Cuban, may be Cubans by naturalization, providing the marriage results in offspring or there shall have been two years of continuous residence in Cuba after the marriage and prior renunciation of the citizenship of origin. In this case there must be presented a certificate attesting to the right to Cuban citizenship issued-by the Civil Registrar at the place of domicile, the certificate of marriage, proof of the Cuban citizenship of the spouse concerned, a certificate-of birth of at least one child, if two years of marriage have not elapsed, and certificate of domicile.

There is also the case of foreigners who having served in the Army of Liberation claimed Cuban citizenship within the six months following the promulgation of the Constitution of 1901, if they do not fall within the category previously mentioned, to whom a Certificate of Citizenship is issued upon presentation of the registration of their right to Cuban citizenship made within the six months following the promulgation of the Constitution of 1901.

Also Cubans by naturalization are foreigners who were established in Cuba-before Zanuary 1, 1899 and who have preserved their domicile since that date, providing they claimed Cuban citizenship within six months following the promulgation of the Constitution of 1901, or if-necessary, within a similar period following the attainment of majority, by presentation of the required certificate from the Head of the Civil Registry in which this right is duly registered.

Spaniards who resided in Cuba at the end of the war have a special legal status which was accorded them by the Treaty of Paris of December 10, 1898. The Citizenship Regulations state that, in accordance with a constitutional provision, Spanish residents of the territory of Cuba on April 11, 1899 who did not register as such in the appropriate Register before ADril 111, 1900, are Cubans by naturalization and for the Certificate to be issued the application must be accompanied by a certificate from the Head of the Civil Registry showing the right to Cuban citizenship and proof of residence in Cuba on the above-mentioned date. Residence in Cuba on that date must be proved by public or private docurlentary evidence as well as by an affidavit before a notary signed by the applicant and two witnesses stating under oath that the applicant, resided in Cuba from, April 11, '1897 to April llf 1900. The witnesses must declare hmT they know this fact.

It should be mentioned that to be registered in the Register of
Spaniards provided by the Treaty of Paris of 1898, it was necessary for the registrant to be of age at the time of inscription.

Lastly, there are those included under item (g) in the CitizenshipRegulations which refer to persons born abroad of a father or mother who, during the minority of the individual, may have obtained Cuban citizenship by naturalization. They shall be reGarded as Cuban by naturalization by application of article 18 of the Civil Code. Such persons must prove the







5


c itizenship of their father or mother, as well as the registration of their right to Cuban citizenship. In the certification of this it must be stated that the interested party has not opted for his citizenship of origin and has not acquired any other. He must also present evidence of his birth, duly authenticated, and swear that he possesses the political status of a Cuban citizen and customarily resides in Cuba.

Having shown how Cuban citizenship is acquired, there remains the question of how it is lost.

This subject is stated clearly in article 15 of the Constitution, listing the following ways in which citizenship is lost:

1) By acquisition of a foreign citizenship.

2) By entering the military -service of another country, without
permission of the Senate, or by occupying, without such permission,
any position subject to similar authority or jurisdiction.

3) By residence, in the case of naturalized Cubans, three years
consecutively in the country of birth, without declaring every
three years before the appropriate consular authorities, the
desire to retain Cuban citizenship.

It is left to Law to determine what offenses or unworthy acts may produce the loss of citizenship by naturalization through final decision of the courts.

4) By the acceptance of dual citizenship through naturalization.

The loss of citizenship under cases (2) and (3) shall not be effective except by a fin~l decision of a Court of Justice, at a contested trial, as provided by Law.

One very important principle should be mentioned and this is to be found in article '16 of the Constitution, by which neither marriage nor its dissolution affects the nationality of the spouse or children; hence a Cuban woman who marries a foreigner retains her Cuban nationality,

There is one other principle on this subject which states that a
naturalized Cuban may not occupy an official position of Cuba in his country of origin,

In regard to the equality of civil and political rights as between native and naturalized Oubans, or in other words, whether foreigners who acquire Cuban citizenship enjoy the same civil and political rights as natives, it must be admitted that the Constitution establishes certain inequalities in regard to political rights and some civil rights, which will be listed.







-6


That is, rather than assimilating a-naturalized citizen with the
native, the former is subject to discrimination in the exercise of certain rights, as follows:

1. The President and Vice President (articles 139 and 147), a
Senator (article 123 ), a i'linister and a Magistrate of the Supreme
Court (articles 152 and 173) must be Cubans by birth.

2. A naturalized citizen-nust have-resided 10 years in Cuba, counting
from the date of naturalization, before h'e may become a Representative or a Governor (articles 124 and 235).

3. The three lawyer members of the Grand Tury (article 208) and
all officials of the Tribunal de Cuentas (article 268) must be
citizens by birth.

4. In regard to teaching in public or private schools, persons
teaching the subjects of Cuban literature, history and geography
must be native born. (article 56)

5. The Fiscal (Prosecutor) of the Supreme Court, the Teniente Fiscal
(Assistant Prosecutor'and the other Prosecutors must be Cubans
by birth (article 190).

6. In regard to labor, article 73 establishes a peculiar provision
to the effect that a naturalized foreigner having one or more
children born in Cuba shall have preference over 'other naturalized
persons under the provisions of labor regulations.

Article 82 provides that only Cubans by birth or persons who were naturalized five years'previous to applying for a permit, may engage in any profession requiring an official title.

Article 69 states that directors of trade unions must be Cubans by birth.

In the matter of property, this in loft to the law in regard to restrictions on the acquisition and possession of land by foreign individuals or companies.

From this it is evident there are certain matters in-which the civil and political rights of a naturalized Cuban are restricted, and hence inequality exists.

Having a certain bearing on the above is the question of the rights and duties of Cubans, whether native or naturalized.

In this respect, Section II of the Constitution, entitled "Nationality" devotes two articles, articles 8 and 9, to listing the rights and duties. of Cubans, which because of their importance we shall quote Tbolow:








7


The duties of Cubans are: (1) To bear arms in the manner and form
established by law; (2) To contribute to the public expenses in the
amount and form pV vided by law; (3) To comply with the Constitution
and the laws of the Republic and observe a proper civic conduct, which
is also to be inculcated in their children and others under their
it
care, so as to promote in them a higher national consciousness.

The rights which the Constitution accords to Cubans are as follows:

1) To reside in their country without being subject to discrimination
or extortion of any kind, no matter what may be their race, class,
political opinions or religious beliefs;

2) To vote as provided by law at elections and referendums held in
the Republic;

3) To receive the benefits of social aid and public cooperation
attesting in the first case to their condition of poverty;

4) To occupy public positions and charGes;

5) To choose theirwork in so far as the Constitution and laws provide.

Following the above consideration of the acquisition and loss of Cuban citizenship, and the rights and duties of Cubans, reference should be made to foreiG status, that is, the requirements of foreigners for entrance into the national territory and their rights and duties as foreigners.

The immigration legislation in force in Cuba is contained in Order No. 155 issued y the Provisional Governor of Cuba on May 15, 1902, which con-'tained the General Im-igration Law.

Section I states-in general terms who may not be immigrants, such as idiots, insane persons, beggars or persons vho may become a public charge, those suffering from repulsive diseases persons convicted of an infamous crime or of misbehavior indicating morai turpitude, polygamists, or persons under sentence in their own country for infamous crimes not of a political nature nor based on nor resulting from political acts, or those who have left their country on condition of exemption from punishment if they would emigrate, and also persons whose ticket or passage is paid by another or who has been induced to come by another, unless a special investigation shows that such person is not included in any of the other categories nor as a contract laborer.

Immigration of Chinese into Cuba was formerly prohibited, with certain exceptions. Therc is now a treaty which alters this situation and permits immigrants to Cuba from that country.











By decree No. 55 of January 13, 1927, all provisions regarding immigration were grouped together in organized form. Article 1 contains a general provision-reiterating that contained in the Military Order No. 155 already mentioned, by which persons likely to become a public charge are excluded, a decision which is to be made by the M1inister of Finance, In accordance with the report which the Minister of Labor shall request in each case, the obligations imposed by the observance and compliance with the social laws now in effect or hereafter enacted are to be taken into account.

It provides further that foreigners not included in the prohibition
mentioned or in any other may be authorized to remain in Cuba upon providing bond of $500.

Excepted from this requirement are: a) tourists; b) passenger in transit; and c) transients.

Tourists as defined by this Decree are persons who are travelling or pleasure and do not engage in any type of work during their stay in Cuba.

Transit passengers are those who disembark in the national territory while the ship that is carrying them is in port.

And 'transients are persons who arrive in Cuba to continue a voyage to a foreign port or to return to one, providing they do not remain in the national territory more than 30 days and are provided with the passage necessary to continue the voyage to the port of destination.

In addition to the above exceptions the Decree lists the following: lecturers or persons who because of their noteworthy artistic, cultural or scientific training come to Cuba through -h suitable channels, and providing they are to engage in no other lucrative activity during their stay in Cuba; ministers of any religious sect and members of any religious order, providing they present an authorization from the Bishop, Prelate, Superior, etc. of the-congregation, sect or religious group to whose jurisdiction they belongand this authorization must show that they come for the sole purpose of practicing their ninis~try.

Foreigners who regard themselves as included in any of the above
exceptions must fill out under oath a questionnaire adopted by the Director General of Immigration.

-After the issuance of the above-mentioned DIbcree, No. 8146 was issued on April 3, 194+0, which provides that among those not required to show return passage, shall be technicians and specialists in any art or science coming to Cuba under contract with a concern or individual of well known reputation domiciled in the country, for the purpose of training Cuban workmen, technicians or professional men in such art or science, providing they comply fully with the social laws in force, as determined by the Ministry of Labor in each case.







9


By way of reciprocity, citizens of the United States and citizens or subjects of countries which have signed or may sign treaties with Cuba, shall by virtue of the terms of such treaties have the right to disembark in Cuban territory without requirement of bond.

It also provides that foreigners shall lose their character as
residents if having been absent from the national territory for more than six months they do not indicate that their return is for the purpose of resuming the position they held in some industrial, commercial or agricultural enterprise prior to their departure abroad., or if they do not possess sufficient property or income to meet their own needs and those of any family they may have.

Proof of this muslu- be shown by a legalized-certificate issued by the employer or a legal representative of the concern, which after being duly inspected by the Director General at Habana or the Chief of a Provincial Iabor Office, must be deposited with the Department of Immigration, together with the certificate referred to in Article XIII of Decree Ldw No- 788 of 1935 concerning the Register of Foreigners.

Foreigners having the character of residents who are returning to Cuba for the sole purpose of rejoining their parents, children or spouse are exDmpt from the above provisions. In-the latter case, the marriage must have occurred prior to departure for Cuba, and if the marriage was performed by proxy, the foreigner having the 'character of resident remains subject to the previously mentioned provisions.

The deposit of $500, already mentioned, shall'be returned at the end of two years, upon request-of the depositor, who must address his request to the Minister of Finance, showing that he possesses the means for a decent living and that he is not likely to become a public charge.

In case a depositor leaves the country before the end of two years, his deposit will be returned to him.

The fact that a foreigner coming to Cuba is exempted from the deposit Of $500 and fulfills other requirements, does not exempt the traveller from the requirement of a passport visa or some other similar identification document duly issued by a competent authority and visaed by an appropriate Cuban diplomatic or consular representative.

The provision concerning passports is not applicable to tourists, who shall be governed by provisions on the subject a's to the requirements of the case in regard to holding a passport or visa. A foreigner admitted as a tourist or transient may not remain in Cuba for more than six months unless his stay is prolonged for not more than the same period by a competent
authority, and he may not change his status as tourist or tranqiont without leaving the country.








-10


A supplement to Decree No'. 55 of 1935 is No. 767 of 1938,_ which
authorizes a visa on passports of foreigners who have resided in Cuba for several years and who have interests there requiring their personal care or attention, and in exceptional cases the relatives of Cubans who reside abroad. Permits thus granted for a stay in Cuba znay in no case be valid for more than a year, and the immiGrant is required to comply with all regulations in force in Cuba.

Families of an applicant shall present, for the purpose of obtaining a visa, a declaration accompanied by a guarantee that the immigrant-will not become a public charge, that he will not violate the labor laws, and' that the applicant will leave at. his owh'expense waen.-tho -permit expires.

Due to the world war, the Government of Cuba adopted a number of measures in line with national emergency needs of the State, such as a prohibition against passport visas for subjects or citizens of countries at war, etc., but since these measures by their nature are strictly provisional and temporary, they are not given here.

Closely related to the question of immigration are the requirements
that foreigners must meet and the documents they must possess once thoy have been admitted into Cuba.

First there is the so-called Ley de Exctranjeria or Law on Foreign
Status, and secondly the provisions of Decree Law No. 788 of 1934 regarding the Register of Foreigners, which' will be thoroughly analyzed before taking up the civil rights of foreigners.

By article 7 of the Ley de Extranjeria, of July 4, 1870, it is compulsory for all foreign residents in Cuba to be registered in the Register-of Foreigners, with an amendment by Decree Law 788 of December 28, 1934, which states that all foreign residents in Cuba and thosu who enter the national territory at a later date must be registered.

The following persons are excepted:

a) The representatives of foreign nations and of foreign embassies,
legations, and consulates, providing their appointment is not
merely honorary in character.

b) Tourists or transients.

c) Persons less than 16 years of age, supported by parents or guardian.

d) Members of religious orders who customarily engage in charitable
or welfare work, as the primary aims of the association to which
they belong.

e) Foreigners who served in the Army of Liberation.











f) Veterans of the Spnnish-Amaerican War.

Registration in the Register shall include the following information:

Name, age, nationality, civil status-and profession, whether a
domiciled resident, transient or immigrant, place of residence&, typo of establishment in which to be occupied, and accompanying family. Information must-also appear as to size, stature, color, color and type of hair and eyes, -visible identification marks, physical defects, fingerprints of both hands, front and side-view photographs, information as to whether able to read and write, or a statement bf inability to do so, in which case the signature is to be made by mark.

Registration must be under oath in triplicate on official printed
forms containing all the above data and must be accompanied by four frontview photographs and bona fide documents which identify the applicant, these latter being returnable.

Foreigners residing in Cuba have the same rights as Cubans to the
protection of their-person and property as to the enjoyment of rights granted by the Constitution, unless exclusively reserved-to citizens; to the safety of the person, property, home and correspondence, -in the manner established by law; they may meet and associate with citizens, and under the same circumstances as Cubans, but providing their purpose is not hostile to States with which Cuba maintains relations; they may put forth and publish their ideas, subject to laws in force; address petitions to the authorities. The law permits the organization of associations of foreigners on an equal basis, but without discrimination against the rights of Cubans taking part in them.

No foreigner may be a voter nor eligible to public office through popular election; and they may occupy no public employment.

Foreigners are required to respect the social. and economic system of the Republic; to observe the Constitution and the law; to contribute to public expenses in the amount and manner the law may prescribe; to submit to the jurisdiction and decisions of the courts of-law and authorities of the Republic, and in the enjoyment of civil rights, under conditions and
limitations determined by law.

The Government has the power to compel-a foreigner to leave the
territory of the Republic as provided by law, but in the case of foreigners having a Cuban family, residing in Cuba, there must be a judicial sentence of expulsion as prescribed by laws on the subject.

In regard to the legal status of foreign natural and Juridical persons, the Civil Code states that corporations, foundations, and associations recognized by law and domiciled in Cuba shall enjoy Cuban nationality, provided they have the character of juridical persons under-the provisions of the Code, and in regard to associations domiciled abroad, they shall receive the consideration and rights determined by treaties or by special laws.






-12


RIGHTS OF FOREIGNERS TO ENGAGE IN COZMRCE AND INDUSTRY IN CLUA
DCLIESTIC AND FOREIGN COMPANIES OR MERCA-ATILE FIRMS


There is no provision whatever in the Constitution or in the Commercial Code to prevent a foreigner from freely engaging in commerce or developing any industry within the country. On the contrary, the Constitution guarantees to foreigners all rights recognized therein and in the laws, including the civil laws.

The only point made by certain laws is to require that a givenposition in a certain concern or industry must be occupied by a Cuban, but this in no-way restricts or hinders the exercise of commerce in Cuba.

In regard to mercantile companies organized abroad, the Commercial
Code provides for what might be termed a 11system.t for foreign mercantile 6-omanies, and to this effect states that foreigners and companies organized in a foreign country, my engage in commerce in Cuba while subject to the laws of their country. This includes their capacity to make contracts; the creation of establishments within the territory of the Republic; their
mercantile operations and the jurisdiction of the courts of the Republic; in regard to judicial acts, the provisions of the Commercial Code shall apply to such companies.

Positive Cuban law- has no effect upon the terms of treaties and international agreements which Cuba may sign with other nations.

In regard to the requirements or formalities that must be fulfilled or observed to engage in commerce or industry in the country,, by both nationals and foreigners, these are divided into two classes: those of a formal nature and legal character, and those which are administrative or fiscal in character. Some refer to the capacity for making contracts, others to compliance with certain formalities, which in both cases must be observed by nationals and foreigners alike.

The first requisite to be met by every merchant is r-egistration in the MrcAntile Register established by mandate of Section Two of the Commercial Code.

Registration in the Mercantile Register is compulsory for every type of merchant, whether individual or organized into companies, by the terms of the Code or by special laws. The Mercantile Register includes books for indivi -dual merchants, for companies and in the provinces and at coastal points the registration of vessels.

In the registration page of each merchant or company is noted all
information relating to the name, firm name or title, the type of trade and the operations to which it is devoted; the date of commencing operations; the domicile, instruments of organization, general powers of attorney and their revocation, if any, granted to managers, agents or subordinates; the






13

issuance of shares,, bonds and securities of railroads and any- type of company,, etc.; the issuance of banknotes,, deeds to industrial property,, patent titles, etc, In regard to foreign companies in Cuba, these must include besides the by-laws and the documents which are required of Cubans, a certificate issued by a Cuban Consul attesting that these companies are duly established and authorized according to the lavis of their country.

In the Register of Vessels are inscribed the name of the ship, its
type, the system or power of the machinery., the place the hull was constructed) and its distinctive signal under the' Signal Code, as well as the name and domicile of owners and partners in its property, together with all changes that have occurred in its name or in any of the aforementioned data. At the time of registration, the applicant must accompany his petition with motorized copies of the documents. In regard to the registration of banknotes, securities or registered and bearer shares, not carrying real estate or chattel mortgages., registration will be' made upon showing the minutes attesting to th6ir issuance, and the conditions, requisites and guarantees concerning them. If guarantees are concerned consisting of mortgages on real estate., the corresponding document is to be presented to the Mercantile Register after its registration in the Property Register.

One very important provision of the Commercial Code is without doubt, that contained in articles 24 and 26, which provides among other things that the instruments of non-registered companies shall have effect only among
the partners who issue them,,, but shall not affect third parties, who, however, may make use of them when the effect is favorable. Registered documents shall have legal effect against the third party only after the date of their issuance.

There are different types of mercantile companies or firms, and observations shall be made in regard to each.

The Commercial Code,, in Book two, regarding the special contracts of commerce, in referring to mercantile companies after defining this type of contract as-well as indicating the difference between a civil and a mercantile company, establishes a classification of mercantile companies based on two point : one of the forn to be adopted, the other on the nature of operation. These may assume any of the forms provided in the Code.

In form, mercantile companies are of three kinds in accordance with article 122 of the Code:

a) regular (ordinary partnership) b) comandita (silent partnership)
c) an6nima (corporation)

A now type should be added thereto, the limited liability company, created by the Law- of April 17,, 1929, which because of its special natuj e is of much importance in Cuban positive law, since it has filled a void.





14


After making this classification of mercantile companies as to their form, the Code lists them according to the nature of their, activities., as follows: credit companies and banks of issue and discount, land credit companies, mining companies, agricultural banks, railroad., tramway and public-works concessions, general deposit warehouses, and in order not to limit them to those listed., the final paragraph of article 123 states that there may be other types, providing the parties act lawfully and their purpose is industry and commerce,

The Code, in order not to be too drastic in regard to mercantile companies, declares their creation to be free., providing the purpose is some industrial or commercial undertaking that is not expressly prohibited.

In regard to mutual fire-insurance companies,-tontine combinations for life insurance, old age assistance or any other type, and producer, credit or consumer cooperatives, the Code states that these shall only be regarded as mercantile,, and hence subject to its provisions, when they engage in commercial acts other than their mutual operations or are converted into fixed-premium companies.

Collective mercantile companies are those in which all the partners, collectively and under a firm name, agree to share, in some agreed proportion, the same rights and obligations.

In the instrument of organization of such companies there must be definitely stated not only the name, surname and domicile of the partners but also the firm name under which it is to operate, as well as the name and surname of the partners to which the managejwnt and the use of the firm name is entrusted; the capital that each partner contributes in cash, credits or goods., with an indication of the means by which these may be evaluated; the instrument itself must also state the period of time for which the firm is to operate, the amounts assigned annually to each active partner for private expenses and any reasonable expenditures and special conditions
that the partners my wish to establish.

These companies may operate in the name of all partners, some of them., or only one, in the latter two cases by adding after the name or names the
word "Company" (CompaAla).

The collective name (nombre collective) is what constitutes the firm name (razo*n social)., the inclusion of the names of persons not belonging to it being expressly prohibited. If the casd arises that a person not belonging to a firm includes his name in the-firm narhe he becomes jointly liable., without prejudice to penal liability, if any.

In regard to the juridical personality of the partners in relation to the company., all partners in a collective company,,whether working-partners or not,, are jointly and personally liable, with all their property, for the results of operations undertaken in the nam6 of and. for account of the firm under signature of a person duly authorized.






-15


In this respect it should be added that the Code provides that partners not formally authorized to use the firm name do not obligate the firm by theirs acts and contracts, although executing them in its name and -with its signature, it being duly established that persons who have so acted are liable both civilly and criminally.

There are other provisions which need not be discussed here, as they
are general in character, such as: the right held by all partners, whether managers or not, to see that negotiations made by other partrmrs in their own name and with their own funds are not charged to the company -whose liability is not concerned; the prohibition against using the company funds or firm name for personal account; a prohibition against an industrial
partner from entering into other negotiations, unless specifically so authorized; the prohibition against partners removing or withdrawing from the common fund an amount greater than-that assigned to each; the manner of determining each share in the earnings, if not stated in the contract; and the manner of crediting the orders to each partner; and lastly the obligation to pay for-damages caused the company by malice, abuse of power and negligence.

Silent partnerships (companlfas en comandita) are those in which one or several individuals contribute a given amount of capital to the common fund in order to share-in the return from the firm's operations managed exclusively by another, with a collective name.

These companies are established by public instrument, under the
same requirements as for collective companies, and they must operate-either under the name of all collective partners, some of them, or one only, in the two latter cases the words fly compa-Mall being added, USociedad en Comandita" being added in all cases, The collective name constitutes the,
firm name, in which the names of the silent partners must not be included, and in case one or more of si.toh are included in the firm name, they become liable (as regards third parties) to the same extent as the active partners, but without acquiring any further rights than they have as silent partners.

In such companies all collective partners,, whether managing or not., are jointly and personally liable for the results of the firm's operations, in the same way as partners in collective companies.

In regard to the liability of silent partners, the Code provides that 'in the obligations and losses of a company, they shall be limited to the funds they contributed or -were obligated to contribute.

Silent partners may perform no administrative act of any kind in
regard to the interests of the company, this prohibitiLon extending to that of
acting under power of attorney for the managing partners.

They are also prohibited from examining the status or position of the firms management, which may be done only at stated periods. However, the Code itself provides that if a contract does not contain this provision,






16


silent partners shall be informed of the annual balance, which is to be made available for a period of not less than 15 days, together with any information and documents needed to verify and judge the conduct of the business.

Following the two types of mercantile companies discussed above, the
Code refers to the corporation (companla anonim) which is a distinct type in positive law.
-I
Corporations (companlas ano'nimas) are those companies in which the common fund of the members is divided into given portions or parts, which are represented by shares (acciones) or soe other unmistakable form of
participation, and the management of which is entrusted to removable agents or administrators who represent the company under a name suitable to the purpose or undertaking to which the funds are devoted.

In regard to corporations the Code contains two sections four and five, in Title I of Book 2. Section 4 lists the formal and material requirements for corporations, and Section 5 deals with what is the characteristic of this type of company the shares, all of which will be explained as fully as possible.

In regard to the instrument which establishes such companies, the Code sets forth the information that must be contained therein: the name, surname and domicile of the organizers, the name of the company, the name of the person or persons-who are to assume management, as well as the manner of filling vacancies, the firm's capital, with indication of the value placed
upon property that is contributed if not money (or-the method of evaluating it), the number of shares to comprise the capital, the time limit or limits for payment of that part of the capital not paid in at the time of organization, as well as mention of who is authorized to determine the time and manner of paying dividends; the duration of the corporation; and the object for which the capital is to be used.

There must also be stated in the charter for this type of company,
the time and manner of calling and holding ordinary meetings. It must also include submission to a majority vote the agreements by meetings of members that were duly called and convened, in regard to matters under proper discussion. And it must also indicate what constitutes a majority, at both ordinary and extraordinary meetings, to make their agreements binding.

The name of such companies must be suitable to the purpose or
objective of the class of business in which it is engaged, and it may not adopt a name identical with some other.

One important principle contained in the Code is that in regard to liability. According to article 153, the liability of the members for the obligations and losses of a company is limited to the funds they have put






-17


into or promised to put into the common fund,and this article is supplemented by No. 154 which provides that the "common fund, composed of the capital and the accumulated profits, shall be liable for the obligations contracted in the course of its management and administration by legally authorized-persons as provided in the charter, by-laws, or regulations"., As may be seen, liability in such companies is different from that provided by the Code for collective or silent partnerships.

Cuban legislation provides that the managers of companies shall be designated by the members in the mnner determined by their by-laws. The managers of such companies are only their agents, and while they observe the rules of the agency conferred upon them they are not jointly or personally liable for the operations that are carried on, but in case of
violation of the rules or byo-laws or of the decisions of the shareholders, if' injury is caused and they are responsible, any such persons shall be personally liable.

Corporations are required to publish monthly in the Caceta Oficial
a detailed statement of the status of operations, indicating the rate at which their stock, securities and all appraisable property are estimated.

Before outlining the provisions of the Code regarding corpora tions,
certain other legal provisions affecting them should be explained in general terms, in order that persons interested in this type of company the most usual form of organization --may have as complete an idea as possible of the provisions in force in Cuba.

There are three Regulations containing special provisions applicable to corporations: the Regulations for the Mercantile Register; those for the law concerning the Registry of Companies; and the regulations for the supervision and inspection of corporations.

An analysis, as brief as can be, of these regulations will indicate the requirements in effect in Cuba in regard to such companies, which are perhaps the most important not only in Cuba but also abroad, since corporations are the most usual type throughout the world.

As has been mentioned, registration in the Mercantile Register is compulsory both for individual merchants and for companies,, as well as for the mercantile and industrial establishments belonging to such merchants and companies, and it is also compulsory for vessels,

Article 34 of the Regulations for the Mercantile Register lists the infonnation that must be given for registration of the charter and in relation to the capital of such corporations states that the registration must indicate the authorized capital fund, including the value of property contributed in some other form than money and the nominal value of the shares into -which the capital is to be divided, as well as whether they are common, preferred, or have some other name, with a statement as to how many have been subscribed for and how many remain on the company's books. There must






18 lIr


also be a statement of the authorized issues of usufructuary, beneficiary, preferred, common, and any other type or denomination of shares, with an indication of their nominal value and terms and series or serial numbers; there must also be an indication of the amount of capital expended in
organizing the company, and the form and time within which the remaninder must be paid in, as well as the name of the person authorized to determine the time and winner in which dividends are to be Paid or the shares held on the firms books are to be put into circulation.

Decree Law 842, of April 20, 1936, created the General Companies' Register (Registro General de Compan-{as), and provided that-without affecting the usual registration in the Mercantile Registers, registration in the Central or appropriate Provincial Register is compulsory for all
companies or firms organized or established or having branches in the Republic, which adopt the corporate form, no matter what may be the nature of their business or operations, and this compulsory registration was extended to banks, insurance companies., drugstores having a pharmacy end laboratory or factory making chemical, biological or pharmaceutical products, and enterprises or business exploiting mines or utilizing water, or any State, Provincial or Municipal concession, transportation or any public service adopting the corporate form..

The Regulations issued in connection -with this law state in Chapter III which acts and documents are to be registered, and provide that among such documents are any authentic instruments issued in accordance with requirements of the law,, including the instruments of organization of such fii'ms. Also to be registered are all minutes, agreemnts or documents which may alter or modify any of the terms contained in the company registration
and any alteration made for such purpose.

.In regard to documents issued abroad, in conformity with the laws of' the country concerned, the Regulations provide that to have effect they must be legalized and authenticated in Cuba and be accompanied by a Consular certificate attesting to the fact that the original document (or a certified
copy) issued according to the laws of the country where granted and that it fulfills the requirements and extrinsic formalities for it to be regarded as a public instrument. The instruments of companies organized abroad according to law, must also be accompanied by certificAtes issued by Cuban Consul attesting-that the firm is legally organized end authorized in the country
concerned, all of which must be duly authenticated.

Decree No. 2554, of September 12, 1940, created in the Division (Negociado) of Banks, Merchants,, Companies and Firms in the Commerce Department (Direccio~n de Comercio) of the Ministry of Commerce, a special register known as the "GeIB ral Register of Corporationalt(Registro General de Sociedades And~nims), in which registration is compulsory for all corporations, civil or mercantile, in existence or to be organized, whether domiciled in Cuba or located abroad, but engaged in business or activities within the Republic.






1 39


The primary purpose of this Register is without doubt to exercise
supervision over such corporations, in order that they shall comply with the legal regulations in effect. No doubt it was desired that any defects left by the Code should be corrected and supplemented, since there is still no complete law in regard to corporations.

This decree, in.addition to the supervision and the functioning of
corporations, also covers the subject of the preparation anid publication of
financial statements.

The supervision covered by this legal text is broad, since it includes the inspection of operations, of account books and seeing that the charter and by-laws are strictly complied with, as well as agreements made by such organizations; proof of the correctness of the investments of capital and funds and supervision of the formation of reserves; proof of the accuracy of reports and the appraisal of property not in the form of money; verification of the exactness of balance sheets, and several other matters.

The above gives a fairly clear and precise idea of Cuban regulations in regard to corporations. There is now the question of the shares issued
by such firms.

By article 4 of the Mortgage Law, companies in general cannot be mortgaged.

Shares are of two kinds: nominative (registered by name of holder), or to bearer. Nominative shares must be registered in a book kept for that purpose by the firm., in which succeeding transfers are also to be noted.

Bearer shares, by a provision of Law No. 7 of April: 5, 1943, aie
subject to an annual tax of 0.15 percent, payable in the month of May. This
tax is on the actual value of the shares. W~hen- foreign companies are concerned, which besides their business in Cuba, operate outside the national territory, the tax is to be paid on that portion of the capital invested in
Cuba or allotted for operations in that country. In cases- where the taxpayer has no capital invested or allotted for operations in Cuba, the taxable-. capital is determined by comparing the general volume of business with that part done in Cuba. The law provides that shareholders who pay this tax have the right to have it so stated in their respective shares or titles.

In all certificates of shares, whether nominative or bearer, there
shall always be noted the amount of capital that has been Paid down on account of their nominal value or whether the total value has been paid up.

The law,9 with an aim to protect this type of company as far as possible, provides that if the total value of a nominative share has been fully paid, and such share is transferred, the first subscriber or holder of such share, his assignee and each person succeeding him if the share is so transferred,






20


shall be liable jointly and at the discretion of the management of the company) for the portion not paid in., and no agreement contrary to this
liability ray be made.

An important provision is one to the effect that shares must be
nominative until 50 percent of the nominal value is paid in, and after this 50 percent has been paid they may be converted into bearer shares, if so authorized by the charter or later special agreements,

The issuance of new series of shares is prohibited by law until the previous issue or issues have been wholly paid up., any agreement to the contrary being null and void.

In regard to the right of corporations to purchase their own shares from earnings, the law authorizes this only for the purpose of amortization.

A reduction in capital may be authorized by a general shareholders
meeting, if according to regulations, and shares may be amortized by a part of the capital itself.

'The charter of every company must determine the number of members and the proportion of capital that must be represented at general meetings to reduce or increase the capital,, or for changing or dissolving the
corporation,, and in no case may this be less than two-thirds 6f the number of members and two-thirds of the nominal value of the capital.

The directors are authorized to comply with a legally adopted reduction. but only if the remaining working capital after reduction exceeds the amount of debts and obligations of the company by 75 percent.

Otherwise the reduction may not be made until all debts and obligations pending on the date of the agreement are liquidated., unless prior agreement by the creditors is obtained.

When the Commercial Code was promulgated there existed only regular
collective companies., silent partnerships and corporations., but mercantile law has progressed since then and a new type of concern has appeared which more thin any other gives attention to degree of responsibility of the members. These are the limited-liability co.Mpanies which were authorized by a positive Cuban law on April 17., 1929., article 1 of which adds to Title I of Book Two of the Commercial Code a new section., No. 14. This 1=ovides that in addition to the other types of firms already governed by the Code.9* it is possible to organize companies in'which none of the partners are liable for more than their contribution.

The law Limits the number of members to a maximum of ten and a
rdnimum, of two.






21


Another characteristic of these companies is that for their establishment there must be a minimum capital., amounting to five thousand dollars contributed by each member., to be paid in money or in kind., and if the latter.,
the value is to be estimated in currency.

In this type of company, the members are only liable, in relation to third parties, for the value assigned them in the instrument of organiz6Ltion, A personal action under this provision must be brought within two years.

Another characteristic is that all acts., invoices, advertisements,
publications, or other documents issued by such concerns milst state before or immediately after the firm name, the amount of its capital*

The law- prohibits the capital contributed by the members from being represented by negotiable registered or bearer securities.

Thepartners are also prohibited from transferring their interest
in the firm to another-without previously obtaining the consent of at least two-thirds of the capital invested.

Companies of this type are managed and governed by one or more agents,, who may or may not be associates., and-whose services nay or may not be paid for; they shall be named when the firm is organized or later., for a limited or unlimited period, and with full powers in regard to third parties, proceeding on their own except for limitAtions indicated in the charter; they may be removed for any legitimate reason.

The liability of the managers is individual or joint., as the case may be, both to the company and in regard to others, for all legal infractions and violations of the charter or for neglect of duty,

When there are more than five members resolutions will be adopted by a majority of votes representing more than half the capital. If the first meeting., duly called., does not take place., at a second meeting., unless there are provisions to the contrary, a majority vote will suffice regardless of the amount of capital represented. It is left to the charter to fix the date for ordinary and extraordinary meetings of the members.

Any change in the contract of organization must be agreed to by a twothirds rhajority of the members, representing an equal proportion of the capital. One very important legal provision is that no member may be required to increase his share of the capital.

In companies in which there are more than five members ther& must be a supervisory committee to inspect the actions of the management.
The law requires that such companies must set up a reserve fund in cash, consisting of 20 percent of the eai-ningo made each year until the reserve equals 20 percent of the capital.






22-v


Members are obligated to repay to the company any amounts they have received as earnings which were not actually made.

In regard to the K2S2Ltion 2f foreign companies as well as the engaging in commerce in Cuba by foreigners, the provisions governing this are found in the Commercial Coda.

Article 3-5 provides that foreigners and companies established abroad my engage in connerce in Cuba subject to the laws of their country in regard
to their capacity to malke contracts., and since it is such coryuracts as a
-whole that make up the customary practice of tx-ade.9 they are included in the general rules concerning capacity.

According to the last paragraph of article 21 of the Commercial Code, foreign companies which establish or create branches in Cuba must present or inscribe in the Register., in addition to their charter and the documents required for Cuban firms., a certificate issued by a Cuban Consul stating that the firm is authorized and established under the laws of the country concerned.

This requirement, repeated and in part explained by the Supreme Court of Cuba in a decision rendered on June 28, 1915., gave rise in that decision to two significant statements. One of these is that the signing of commercial contracts-with Cuban nationals or companies does not constitute the creation of a branch in Cuba. The other is that a company-which is not required to register in the Mercantile Register of Cuba is also'not required to register the powers it grants, nor is it possible to do so.

There is no provision in Cuban legislation which prohibits foreigners from engaging in commerce in Cuba, and hence they are on an equal basis with Cubans in this regard.

'However, there are certain principles and provisions of a legal
nature, as already explained., in regard to specific requirements that certain foreign companies must meet in order to do business in Cuba.

In regard to questions as to whether foreign mercantile companies and firms must fulfill certain requirements and formalities in order to do business in Cuba., it should first be noted that by article 16 of the Regulations for the Mercantile Registerp foreign companies desiring to establish or create branches in Cuba must register in that Register. It is
provided that in order that the public instruments granted abroad under the laws of the country concerned shall have effect they must be legalized and authenticated in Cuba accompanied by a certificate from a Cuban Consul
stating that the original document or a certified copy thereof was issued in accordance with the laws of the country where issued and that it meets the requirements and formalities provided in the laws concerned to be regarded as a public instrument. The instrument of establishment must also be accompanied by a certificate issued by the Cuban Consul attesting to the fact that the company is authorized and established according to the laws of the country concerned, this being duly authenticated.






23


It is further provided that copies of original foreign documents or certified copies issued directly from the originals by foreign officials, authenticated before April 1.-1929, in which the certificate of the consular official is not authenticated must be accompanied by a notarial affidavit in which it is stated under-oath by the person who is to make use of it., or his legal representative, that the documents or contracts are true and authentic if they contain: change of domicile, extensions changes in the charter, dissolution or total or partial rescission., change in function, and every act or agreement which might affect the free disposition of the capital or credit of the foreign organization.

In addition to the provisions found in the Regulations for the
M Iercantile Register, there are those established by Decree 2262, of July 173 1937, which created the Regulations for the Register of Companies) including those concerning foreign companies.

Article 33 of this decree pxvvides thatwhen foreign companies are concerned which have assigned a part of their capital to their business in Cuba, the amount to be regarded as authorized capital for registration purposes shall be the amount declared in the instrument of organization of the company or in its amendments, if any, for use in operations in Cuba,
providing that it is stipulated in such documents that the said capital is separated from the whole capital of the company which is neither liable for operations undertaken in Cuba nor assigned for that purpose from that used in operations abroad. There must also be an affidavit from the legal representative or agent of the company in Cuba in-which he declares under oath that such assignment, under the conditions described, is in full force at the time and will not be altered or modified by any later agreement or act, and also that the volume of business and operations of the company in Cuba will be maintained within the limitations of the capital assigned for that purpose,

A careful study of the above will show that it contains no principle which establishes a distinction between domestic and foreign companies in regard to participation in the capital or their functioning., hence it ray be rightly asserted that both are on an equal basis.

On the preceding pages there have been given al:l substantial facts contained in Cuban legislation in regard to the general regulation of mercantile companies and firms in Cuba., whether domestic or foreign.,
indicating for the latter th6 formalities or requirements be met in order to do business in Cuba.

The Code, after classifying all firms into the types indicated,, deals with a number of mercantile companies or firms according to the nature of
their activities, such as banks of different kinds land., agricultural,, banks of issue and discount; credit., loan and mortgage societies; public works concessions; manufacturing firms; general deposit warehouses; mining companies; trust and investment business (formacien de capitals y rentals vitalicias); insurance companies; and other associations fornBd for the purpose of any industrial or commercial undertaking,









First are the credit companies, the chief purpose of which is to
make loans to the Government or to provincial or municipal corporations; to acquire public funds and shares in obligations of all types of industrial enterprises or in credit companies; to create railroad-enterprises, canals, factories, mines, general deposit-warehouses, lighting, land clearance, ground-breaking,, irrig-ations drainage and any other industries or public utilities; to undertake the riorge'r or conversion of all types of mercantile firms, or assume charge of the issuance of their bonds or shares, manage and lease'.all types of public service; sell or offer as collateral all shares, bonds, and-securities acquired by the company and convert them whew deemed opportune; to make loans on public property, bonds or shares, goods, produce, etc.; to make all manner of collections or payments for the account of the company or for others; receive on deposit any type of securities; draw up and discount bills and other exchange documents.

The Code authorizes such companies to issue bonds up to an amount equal to that represented by securities held in portfolio. These bonds may he nominative or to'bearer, and for a fixed term which in no case may he less than thirty days, with amortization, if any, and interest as stated.

There are banks of issue and discount, the chief operations of which are as follows: discounts, deposits, current accounts, collections, drafts, loans, and contracts with the Government or public corporations, the operations of which nay not be made at more than 90 days.

In regard to bank reserves, the Code'-states that they must hold in legal currency in their vaults, as reserves, at least one-fourth of the value of their deposits in money of all kinds. The Chief Executive is empowered, at any time, to reduce the amount of this reserve in domestic currency required by this provision, although in no case may it be less than 122L percent of the amount of deposits. The President of the Republic is authorized to fix periodically1in view of the needs of the market, the proportions in which the different types of legal currency should make up the reserves.

The Code imposes on. banks the requiremant of changing their notes for cash by the mere act of presentation by the bearer.

One important provision is that requiring that the value of the notes in circulation, together with the amount represented by deposits and current accounts may in no case exceed the total reserves'in cash and securities negotiable within a maximum period of ninety days.

Banks of issue and discouLnt aria required to publish in the Gaceta Oficial at least monthly., under the responsibility of their management, a
statement of their financial position.

Decree Law 589 of October 16, 1934, provides that the Ministry of Finance is empowered to authorize the'-use of the name adopted by banking houses organized or operating in Cuba, as requested by the firm. This decree









prohibits the use of the words del Estado, del Gobierno, de la Repu~blica, do la Naci'n, or any Others which might lead to the assumption that the firm acts for the account of or in relationship with the Government.

Another type of mercantile company or firm for -which the law provides special regulation is that of railroads and other public works. Railroads are governed by special legislation contained in Order No. 34 of February 7.. 19023 including special provisions to be observed in their establishment as well as
in other matters relating to them.

In order to organize a railroad a number of requirements must be met.

The law provides that any number of persons, but not less than five, may forrm a railroad company for public service and transportation of persons and goods. The organization must be effected through written documents before a Notary and witnesses. The document is to be registered in the Mercantile Register at liabana, after a deposit is made in the Ministry of Finance of an amount equal to $200 for each kilometer of railroad that is to be constructed. The deposit is to be made in gold or in securities, at the discretion of the Railway Commission, now known as the National Transportation Commission, and will be credited on the books, in the custody of the Ministry of Finance, as a bond of the railroad company.

One copy of the instrument, duly certified by the president of the
company or by his duly authorized agent, shall be d6posited with the Railway Commission which will make note of the date of such deposit.

The organization instruments of railroad companies must contain the
following:

a) names and domiiles of the organizers;

b) name or title of the company;

c) designation of the person or persons who are to manage the business
of the company, and the manner of filling vacancies;
d) the capital, including

1) value given to property contributed that is not in the
form of cash, or the manner of appraisal; the capital
may under no condition be less than $6000 per kilometer
of tha line constructed or to be constructed, maintained
or utilized;

2) the number of shares into -which the capital is to be divided,
and whether they are to be common, or part common and part
preferred, and what rights and privileges the preferred shares
will enjoy over the common stock;









e) duration of the company, or whether perpetual;

f) the operations for which the capital is to be used;

g) the places or ten-Inalli between which the railroad is to be
constructed maintained and operated; the length, -when it is
possible to state this9; and the name of each municipality through which it is planned to construct the railroad; and
the place where the main office is to be located.

The law also requires that there be added a sworn declaration by three or more of the organizers affirming that at least twenty percent of the capital has been subscribed and that at least twenty percent of the amount subscribed has been paid in good faith in cash to the organizers named in the instrument, and that'it is proposed in good faith to construct, maintain and operate the railroad.

The liability of the shareholders in such companies is limited to the par value of the stock subscribed, and upon payment of this v-clue at par a certificate must be'issued showing that this has been paid and that they are free from liability.

The conmon or preferred shares of a railroad company may be represented by certificates or other proof of the shareholding.

Nominative shares must be noted in a ledger and on the reverse must appear any transfers of ownership. Shares made to bearer must be numbered.

On all stock certificates there must be noted the amount paid in on account for their nominal par value, or that they are fully paid up.

On nominative shares; if the total value has not been paid, the first subscriber or holder of the certificate, his assignee or each succeeding holder in case of transfer, shall be jointly liable for paynwnt of the amount pending.

When 'wholly unpaid shares are issued to the bearer, the Ferson who may appear as holder shall be liable, but only for the amount not paid.

New series of shares may not be issued until previously issued series have.,been paid in full.

Railroad companies are prohibited from purchasing their own shares, or to take out loans using such shares as collateral,

Some observations should be made regarding the legal provisions on surety bonds, and the commencement of operations.

If within two years after the copy of the instrument of organization has been presented to the National Transportation Commission (formerly the






27

Rail-way Commission) construction of the railroad has not been started by the company-which applied., and if 'within this period at least 10 percent of the capital has not been invested, the right of construction shall cease and the bond required by law to be deposited in the Ministry of Finance for the company's account shall be forfeited to the State., and if within five years from presentation a railroad is not completed and is not in operation., a portion of the bond will be forfeited to the State in proportion to the section of the line not completed., and the right to continue construction shall cease for this portion.

A provision of great importance is in reference to foreigners and their capital used in the construction,, maintenance and operation of railroads or in loans destined for that purpose, which shall be under the protection of the Government of Cuba and exempt from reprisals, confiscation
and embargo in time of war.

It is also provided that foreign shareholders in railroad companies who reside in Cuba or abroad have equal rights to possess shares in such companies., and are eligible for any position in such companies.

The law provides that no railroad company nay enjoy an exclusive
privilege or monopoly that would prevent the construction of other railroads in the same district on a line parallel to it or in another direction., and likewise the State, Provinces, or Municipalities may have no expectant rights in the property of railroad companies.

The law also regulates the mortgage loans of railroad companies
reference being made here only as this may concern foreigners. It provides that mortgages taken out by railroad companies on their property, possessions., property rights and other rights as collateral for the issuance of any type of bonds., may be granted in favor of individuals or foreign or domestic companies as agents or representatives of the future possessors of such
bonds., and in this character such agents or representatives. acting as trustees., have a number of powers which need not be listed here.

One important provision asserts that when the properties and other rights of companies that have constructed and are operating a railroad must be sold,, the purchaser who by such sale acquires a right to the property moy assign wholly or in -part the adjudication nr&de in his favor, or he may associate with any number of persons not less than the number required to form a railroad company, -who may, by compliance with the legal provisions on the subject (excepting those concerning deposits and the presentation of plans establish a company and take over and possess the properties and other rights that have been sold, as they aro at the time of the sale.

A brief mention should be made of the provisions governing the
regulation of public-works companies as contained in the Code. As to their purposes, such companies noy have any that concerns this distinctive type of operations, not only in regard to the construction of public works of any kind but also their exploitation, either in perpetuity or for a fixed period.






28


In regard to capital., it is provided that this together with any subsidy there may be, must represent at least half the total estimated value of the work, and such companies shall not be legally established until all the capital is subscribed and at least 25 percent paid in.

These companies rkay issue nominative or bearer bonds -with no other
limitations than the law or their charter provides. They must be registered in the Mercantile Register andl if there are mortgages concerned., in the appropriate Property Register. In regard to preference in payment, the earliest issues shall have preference over later ones both as to interest coupons and amortization ig this is to be effected.

Bonds issued by such companies my or may not be amortizable as determined by the charter. When there is a subsidy, if the concession is temporary, the bonds that a company may issue must be amortized or liquidated within the time limit of the concession.

These companies are authorized to sell., assign and transfer rights., as well as to merge with others by unanimous consent of the members and the consent of creditors. This consent shall not be necessary if the purchase or merger is accomplished without confounding the collateral and mortgages, and if the separate rights of the creditors are preserved.

Authorization of the Government shall not be necessary for either a transfer or merger., even though the-work my have been declared a public utility in regard to expropriation, unless the enterprise receives some State subsidy or has been granted one by law or some governmental provision.

The law authorizes these companies to make any use they see fit of
funds remaining after construction and payment of credits when due.

If a concession is declared terminated, creditors shall have as a
guarantee the net amounts due to the enterprise; if these do not suffice the net amount obtained by sale of the works at public auction for the remaining period of the concession, and any other property possessed by the company.," not forming a part of the works or necessary for its movement or operation.

General-deposit warehouses:

These companies are organized for purposes of storage, preservation and custody of produce and merchandise delivered to them., and the issuance of corresponding warrants in currency or to bearer. These warrants are
negotiable, transferable by endorsement, assignment or any other m.ans of transferring ownership, the holder having full ownership of the goods deposited in such warehouses.

In regard to insurance it should be noted that in positive Cuban law there are two types of insurance: mercantile and civil. However, neither the Civil Code nor the Commercial Code states specifically when an insurance contract is civil and when mercantile. The Com-ercial Code in






29


article 380 merely states that it is mercantile if the insurer is a merchant
and the contract is for a fixed premium; and as though this sentence were not sufficiently clear, it further defines the legal conception of a fixed premium in regard to which these significant words are included. or when the insured pays a single or constant installment as the price or redistribution of the insurance," Logically., insurance not included in this article 380, in defining the mercantile type, is civil.

Neither the Comm racial nor Civil Codes 'Indicate any requirements as to the form in which insurance companies shall be organized,, hence they may take any*of the general forms recognized by the Commercial Code in articles 117 and 124*

However, there are a number of special provisions governing insurance and bonding companies. First., there are those concerning the guarantees and deposits which must be made by insurance companies in any form as a guarantee of risks and the fulfilment of obligations.

Decree Law 457, of September 7. 1934, concerning insurance and bonding companies, provides that the deposits which must be set up and maintained by natural or juridical persons to guarantee the fulfilment of obligations must be made in legal currency or bonds of the Cuban Government., taken at their value quoted on the Habana Exchange on the day the guarantee is set up. Mortgages are expressly excluded.

The Government may at any time revise the guaranty set up in securities in order that the deposit may always represent at least 70 percent of the funds required for operation, figured at the market value of the Habana Exchange., and such increase in guaranty must be effected within thirty days.

Both the deposit and any increases may consist of up to 35 percent in
certified bonds or other securities issued by foreign governments and states, guaranteed by them in regard to capital and interest., providing that such securities are permitted in their country of origin as legal investments 'by insurance companies authorized therein, and providing the remaining 65 percent of the deposit is represented by legal currency or by domestic bonds as mentioned above.

The Minister of Finance, when he deems it advisable, may revise the guarantees made in foreign securities., in order that the deposit shall always represefit at least 70 percent of the amount set for the operations of the company. This 70 percent indicated as a minimum limit as provided in Decree Law'No. 476 of 1935 must he in the proportion of 65 percent domestic securities and 35 percent foreign., both as to the initial deposit and any supplements., in cases where companies decide to utilize both types of securities in a way that th&ir deposits shall always consist of 65% domestic securities and 35%
foreign.






-30,


The amounts required as deposit in order to establish various types of insurance companies are as follows:

Industrial accidents $100,9000.00
Fire Insurance 75,000.00
Life Insurance 25,000,00
Surety bonding )
Accident and Risk )25, 000.00 Marine Insurance )

Decree 120 of January 20, 1939 provides that foreign insurers and
insurance companies not domiciled in Cuba are required to set up the deposit imposed by law the same as domestic companies,, as a guarantee of the fulfilIment of obligations. Insurers and companies to which this law refers must name a special agent with sufficient power, who'necessarily must be a person with legal capacity and fixed residence in Cuba, or any legal body duly organized
under Cuban law and domiciled in Cuba with sufficient powers to receive notifications, summons, etc,

These special agents must present to the Ministry of Commerce, in applying for autho-.-Lzati.on to set up a deposit or deposits, evidence of the pover of attorney issued in accordance-with the formalities required bythe Notarial Code in regard to foreign documents and their validity in Cuba, and this will be filed with the Insurance Office.

A recent change in regard to insurance companies is that in reference to a provision of the Notarial law of December 17, 1937 (article 9) stating that the signature or signatures of responsible parties on insurance policies or contracts must be authenticated by a notary.

The Code contains certain general provisions applicable to all types of insurance.

It asserts that an insurance contract must be put in writing in a policy or other public or private instrument signed by the contracting parties. An insurance contract will be regarded as null and void by the proved bad faith of one of the partiesat the time of signing; by an incorrect declaration from the insured, even if ma~de in good faith, providing it influences the estimation of risk; and by the omission or concealment by
the insured of facts or circumstances that might have an influence on the signing of the contract.

The law lists the data that a policy must contain: the names of the insurer and the insured; the purpose for which the insurance is taken out; the description and location of the articles insured and any facts needed to determine the nature of the risks, and the amount at-which the insured
articles are valued; the quota payment or premium; the duration of the contract; the day and hour at which it takes effect. Any change rnde in the contract









must be set forth in the policy. It is important t* note that- inisuxrance policies are governed primarily by any legal agreements sta-ted.ina_%Policyr and only when such are lacking, by the ordinary provisions of'law.

As listed in the Commercial Code, th is yeo nurance is fire
insurance. All movable or immovable objects which can be destroyed or damagod by fire may be insured under such contracts, the only exceptions being commercial, government, or private documents or securities, banknotes, bonds
and shares of companies, precious stones and metals coined or in bullion, and objects of art, unless expressly agreed to in the policy, and their value and other circumstances determined.

Fire-insurance includes the repair and compensation for all damage and material injury caused by the direct action of fire and its unavoidable consequences, particularly expenses incurred by the insurer to transport goods in order to save them andthe damage suffered by goods saved.

For an insurer to be obligated under such insurance contracts, a
single agreed premium must have been. paid or partial payments made at fixed intervals. A premium is to be paid in advance, and if the insured delays payment, an insurer may cancel the contract within 48 hours and notify the insured immediately. The contract is regarded as subsisting if this right is not ma~de use of.

In insurance against weather accidents, explosions of gas or steam apparatus, the insurer is liable only for the consequences of fire that my result from such accidents, unless otherwise agreed.

The guaranty extends only to articles that are insured, and the insured person must notify the insurer of any changes or alterations in quality affecting insured articles. If one and the same article is insured by different contracts for a portion of its value, the insurers shall each contribute toward its compensation.

These ar'e the most :important provisions concerning fire-insurance
contracts. It should be noted that an insurer is not liable for fires caused by an offense of the insured or by military action in time of war or for those caused during public disturbances, or by volcanic eruptions or earthquakes.

Life insurance is dealt with in a special manner by positive Cuban law.

This type of insurance comprises all combinations that may be made by agreement to pay a premium or funds in exchange for receiving a life income or one up to a certain age,, or the receipt of funds upon the death of a certain person, in favor of the insured, his'assignee or some third party and in some similar or analagous combination.

A life-insurance policy must contain, besides the general requirements listed previously, the two following points: a) mention of the amount of
insurance, capital or income; and b) a statement of decreases or increases






-32



in the insured capital or income and the dates from which increases or decreases are to be counted.

This type of insurance includes only such risks as are specifically mentioned in the policy, hence on those not mentioned no compensation may be paid, and it should be noted that payment in case of death under the follmiing circumstances is not included:

1L a duel or its consequences
2. suicide
3. capital punishment for a common offense

Such cases, even if included in a policy are not valid, since they concern legal prohibitions.- The case is different for a death occuring on travel outside the Americas, death occuring in military service on land or sea in time of war, or a death occuring through some extraordinary undertaking or action which is notoriously dangerous or indiscreet, for these are valid if included in the policy since no legal prohibition is concerned.

An insured person who delays payment of funds or the installment agreed upon has no right to claim the insurance if he survives a disaster
or complies with conditions of the contract but is overdue in payment.

If the insured has made several partial payments but cannot continue the contract he must notify the insurance company and the amount of insurance will be reduced until'it is in fair proportion to the paid installments according to schedule.

The insured must notify an insurer of previu or simultaneous life insurance that he has taken out -with other companies. Failure to do so may deprive him of the benefits of the insurance.

The Code next takes up insurance on land transportation, which may include any goods that my be carried by the usual means of land transportation.

The increase in recent times in trucking has had a considerable influence on insurance, to such an extent that it has created a new type of insurance that might be termed insurance against motor-vehicle accidents, compulsory in character, by virtue of Decree Law 800 of Apil 4,199 in
reference to public transportation services for passengers and freight by bus and truck, chapter III of which is entitled "Subsidiary Civil Liability" and contains three articles (20, 21 and 22) regarding insurance.

Article 20 requires every carrier to maintain in force an insurance policy to cover its liability .for bodily injuries or death to persons and damages to the property of others up to an amount of $21,000 for each vehicle maintained in active service as a subsidiary guarantee against decisions
rendered by the courts under the terms of the Social Welfare Code (Codigo de Defensa Social) in the following form:






-33


a) for bodily injuries or death of bus passengers as ~the result of an accident, up to $10,000;

b) for similar injuries to pedestrians as the result of a bus or truck accident, up to $10,000;

c) for damages to the property of others in a bus or truck acidn, up to 01000,

Article 21 excludes from the-obligation contained in item (a) of article 20 freight carriers who use trucks of the kind listed in items (a) and (b) of article 3 or who must otherwise maintain a floating policy covering the freight carried by an equal amount..

The buses and trucks included in item (a) of article 2 are those
known as public vehicles, or those usually engaged in making regular trips, taking on or putting off passengers or freight along a fixed route. Those included in item (b) are vehicles for hire, or those engaged expressly for hire or rental by trip, day, hour, or in some other conventional manner, with
no fixed itinerary or schedule for the rendering of services.

Article 22 provides that carriers engaged in the transport of freight using trucks comprised in item (c) of article 3 are also exempt from the requirement in item (a) of article 20, stating further that such carriers are not required to insure their vehicles if in the judgment of the Ministry of
Communications they are sufficiently solvent to guarantee their liability.

In addition to insurance on transportation by land, there is marine
insurance.

The Commercial Code, in Book III.. embracing maritime commerce,'deals with marine insurance as one of the special contracts of such commerce. It does not define the type of contract, but mentions the requirements it must contain as well as the things that may be insured.

To be valid,.such contracts must be set forth in writing in policies signed by the contracting parties, drawn up and signed in duplicate and containing the following points: the date and hour when signed,, the names and surnames' of the insurer and the insured; the purpose for which insurance is taken out, and a statement as to whether the insured person has taken it out for himself or for the account of another, in which case the name of that person must be given; the name) port, flag, and registry of the vessel insured or which is carrying the insured goods; the name, surname and domicile of the captain of the vessel; the port or harbor in which the insured goods were or are to be loaded; the port or harbor -which the vessel has left or is to leave, and any port 'where the vessel must load, unload or stop for any reason; the nature and destination of the insured goods, and the number of packages and their marks, if-any; the time the risk is to begin and terminate, the amount of insurance, the portion of the premium corresponding to the outgoing and to the return voyage if it is a round trip, the cost of the insurance agreed upon, and the time, place and manner of payment.






34


Such insurance may include: the hull of the ship, loaded or in
ballast; in port or on a voyage; the rigging, machinery and all stores and goods comprising its eouipment, supplies, and fuel; goods carried in bulk, the value of freight and the probable earnings as well as other articles of comerce subject to the ris1- of navigation, the value of which can be fixed at a given amount.

The above-mentioned items may be insured jointly or separately, wholly oin part, in time of peace or war, for'a voyage or for a given length of
time, for a one-way voyage or round ti~ip, based on good or bad advices, but with the 'value of each item specified.

-If it is generically stated in a policy that the insurance covers the vessel, this is understood to include the machinery, rigging, stores and anything pertaining to the vessel.

Generic insurance on'goods does not include metal in coin or bullion, precious stones ox' munitions.

If at the time a-contract is signed the specific value of the insured
items has not~ been fixed, this nay be determined from the consignment invoices and the statements of appraisers and experts based on the price of the goods at the Port of shipment plus the costs of loading, freight, and customs charges.

Insurance on freight may be taken out by the shipper, the carrier or the captain and the amount covered must be stated, freight being regarded as the amount collected by the owner of a vessel f or the transportation of
cargo from one port to another.

An insurance policy on earnings, which is governed by agreements reached between the contracting parties,, must state the amount set by the insurer as the earnings thpt will be received at the end-of a successful voyage when the cargo is sold at the port of destination, and there is an obligation to reduce the insurance, if the value resulting from the sale, after deducting expenses for freight, is less than the value of the insurance.

Mutual obligations of insurer and insured.

Insurers pay for damages and injuries incurred by insured articles for any of the following reasons: stranding or grounding of a vessel, with or without breakage in it; storm, shipwreck, accidental boarding; change of route or vessel during the voyage; jettison, fire or explosion, either on board or when cargo has been deposited on land, providing it has been so placed by a competent authority in order to repair the ship or protect the shipment, or fire or spontaneous combustion on coal ships; capture, plunder,
declaration of war; seizure by Government order or by order of foreign powers; reprisals, and any other sea accidents or risks.







35

Insurers are not liable for damages or injuries incurred through any of the following causes,, even if not excluded from a policy: voluntary change in the route of a voyage or course of a ship without the express consent of the insurers; separation from a convoy., when it had been stipulated the ship-would travel in a group; prolongation of a voyage to a more remote port than that designated in the insurance policy; arbitrary provisions contrary to the freight agreement or bill of lading.9 taken by order of the receiver, shipper or carrier; barratry by the master I unless a Purpose of the insurance;
leakage, mishaps, and losses arising f rom. the nature of the items insured; lack of documents required by the Code., or Orders or Regulations of nations or of navigation, and omissions by the captain in violation of administrative requirements, unless the insurer has included liability for barratry by the master.

If different vessels are used in shipping the insured articles., but
there is no indication of the quantity shipped on each one, the insured party
may distribute the shipment to best-advantage or load it all on a single ship without affecting the liability of the insurer. But if express TBntion is made of the quantity to be insured on each vessel and the shipment is made in other quantities than specified,, the insurer is not liable for more than was contracted for each vessel.

For insurance for a fixed period., the liability of the insurer ceases at the hour stiDulated.

If the policy does not fix the time during which a risk is accepted by the insurer, the same as vdth a loan in wartime it -will be in effect in regard to the vessel, nachinery, rigging, and stores from the time the ship puts to sea until it anchors in the port of destination; and in regard
to goods, from the time they are placed on the beach or dock. in the port of shipment until they are unloaded at the port of destination.

An insurer has the right., granted to him by the Code., of abandoning insured articles to the charge of the insured and collecting from him the amount stipulated in the policy in case of shipwreck; disabling of the vessel by stranding., breaking up or @ riy other sea accident., capture, seizure or detention by the home or foreign government; total loss of the insured items., this including three-fourths of the insured value.







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TAXES




Git nera-x on rof its. This tax is provided byCate Io theLa


natual rJuidiare heos schedul or clossigncat ofy thxes conroits
butio- stablnris bynternnsotindwti the natonw:er




1. Ta interest, This tax amounts to 6 percent, -with a surcharge of 20 percent on interest from securities received in Cuba, issued by other nations or by their States, provinces or municipalities or by mercantile or industrial enterprises not doing business in Quba; 5 percent on the dividends from stock shares or interest from banks or corporations, stock-issuing partnerships and limited-liability companies; 10 percent on amounts that must be paid as royalty or fee by any other name if paid for the use of
trademarks, patents, etc.

2. Tax on the profits-of merchants and industries. All individual merchants and industrialists, and industrial companies and firms, excepting those included in the following number, are subject to this tax.

This tax is levied at a scale ranging from 9 percent to 30 percent, and includes profits, gifts, etc.

3. Tax on profits of banks and certain companies. This is paid by
corporations, stock-issuing partnerships (boiwaiditdrids por acciones ) and limited-liability companies on earnings of their shares if there are any, and by banks and bankers and common-law associations, industrial or mercantile firms organized or to be organized in Cuba to develop the sugar-manufacturing industry, and private individuals engaged in this industry, according to a scale ranging from 15 percent to 30 percent.

The law provides that stock companies which provide public services to municipalities under concessions granted in accordance with the terms of the Organic Law on Iunicipalities, or by a concession from the State, and which make an-. annual payment in proportion to the net income of the industry or some other tax on profits i~n accordance with the terms of the concession, shall pay the tax established by the Emergency Law, but the rate shall be reduced by the percentage paid to a Unicipality under the terms of the conecessi)onl.








-37


This tax is fixed at 9.60 percent on the profits obtained by railroads and domestic navigation companies in both coastal and overseas trade located in the country.

Foreign shipping companies engaged in cargo traffic and the transportation of passengers between Cuban and floreiGn ports, are exempt from the profits tax but in its stead pay a tax of' 3.60 percent on the-gross income
obtained from cargo and passengers taken on in domestic ports, without prejudice to the continuance of payment of taxes of other kinds according to legislation in effect.

This tax is imposed on the amount obtained from cargo and passengers$ but in any particular case there may be added to this amount any other contribution which affects or may in the future affect the figure to which the tax is applied. (Article 4, Ragulations for the Taxes on Freights and Passages, Decree 307 of February 27, 1929.)

These regulatory provisions state that in those cases where navigation companies-,take on cargo and passengers in domestic ports to be carried to foreign ports, in combination with other foreign railway or navigation companies, the tax shall be collected only on that portion of the income derived from transportation. that the subject concerns obtain on their own lines, and it is.-6further provided that when such concerns issue round-trip passages at domestic ports for transportation on their lines or in combination with foreign railway or steamship lines, they shall pay a tax only in relation to that portion of the income derived from round-trip passage to Cuban ports from foreign 'countries which covers the return passage, from domestic to foreign ports,

The profits tax on banks and companies, amounts to 4.80 percent;
cooperative producer, consumer and credit companies are exempt if in the nature of a workingmen's organization, providing their character as such is duly indicated in the registers of the ILlinistry of Agriculture.

tax-of 3.60 percent is to be paid on the gross income obtained from
all sources, in lieu of the tax on net profits, by foreign companies operating in Cuba through branches subsidiary companies, agents or legal representatives, and they must indicate in their -contracts or elsewhere, the cost and selling price of the Goods they handle, the veracity of such figures being sufficiently proved to the satisfaction of the administration, which must be convinced that because of the manner of operation there will be no profits from the business; also included-are firms having contracts with foreign companies to do business in Cuba, and those which agree to receive a certain percentage of the income derived in Cuban territory from the sale, lease, exhibition or some other handling of goods brought to that country.

Also subject to this tax are all radiotelegraph, cable and radio telephone companies.







38


This tax, rather than the profits tax, is also paid by-all foreign
companies engaged in the sale, lease, or exhibition of films, or exploitation of the notion-picture business in any form, and those having a contract with companies f ormed to engaGe in this business in Cuba and from whom the f oreign companies agree to-receive a certain percentage of the income obtained in Cuba from the sale, lease, exhibition or other handling- of films sent there, even though the company thus formed may be Cuban.

-The law, after listing those who are subject to payment of the profits tax, provides for the following exemptions in article 5:

a) the income from insurance policies or contracts in any form,
paid on the death of the insured to individual beneficiaries
or to the estate, and the amount received by an insuredl person in any form as a repayment of the premium or. premiums paid for
reduction in life insurance, the entire policy, or as annuities.

b) firms-or individuals on profits derived in publishing newspapers,
books, magazines and pamphlets.

c) profits obtained by stock raisers from the sale of livestock;
the earnings obtained by farmers from agriculture, and by sugarcane planters from the sale of produce, providing that the planters,
if corporations are concerned, are not tenants or sub-tenants,
directly or indirectly, of natural or juridical persons engaged
in the manufacture of sugar who purchase cane from such planters.

d) private hospitals and clinics, if the profits are derived from
members or associates and not from outsiders who pay so much per.
day, week, month or year for their bed or attention.

e) persons or companies engaged in the sale of real estate or goods
on time payments, who shall continue to pay taxes under the terms
of the law of July 6, 1928; and civil societies whose funds are
obtained mainly from businesses that have already paid the generalprofits tax.

f) insurance and bonding companies by reason of their insurance and
bonding business as such, but they are'liable to taxation on other
operations which may be subject to tax.

In regard to the tax on premiums of-insurance companies, according to article 4 of Order No- 463 of November 13, 1900, as amended by the law of January 22, 1932, insurance companies must pay 4 1/2 percent on the premiums they receive annually from those insured, including mutual societies and the commissions of agents.

Law No. 7 of April 5, 1943, known as the Ley de Ampliacio'n TIributaria or Tax Extension Law, besides creating certain new taxes, changed several







-394.


existing ones, such as the prof its tax already mentioned, but since these changed have been taken into consideration there is no need'to repeat them. Only those points not already covered will be taken up here.

There is first the tax on Cuban capital invested abroad amounting to
0.15 percent of all funds, balances, capital, goods, securities and any other investment in money possessed abroad by natural or juridical Persons of Cuban nationality. Funds hold outside Cuban territory by natural or juridical persons of foreign nationality are. also so taxed if these funds belong to an industry or trade established in Cuba. This tax is to be collected on the actual value of any type of share, bond or other security representing capital in foreign companies or foreign public debt which circulates in Cuba.

Exempted from this are the funds, capital, goods, securities or other investment in money possessed abroad by foundations wholly for schools, asylums or hospitals maintained in Cuba. Also exempt are the funds kept abroad by banks, provided these do not exceed 10 percent of their total deposits of all kinds.

Transactions in foreign securities made by persons in Cuba, or' abroad by persons resident in Cuba in their name, are subject to a tax of 0.05 percent of the total value of the operation.

Paragraph 14+ of Presidential Decree 3779 of October 16, 1944, provides for the suspension of collection of this tax under the following limitations:

1) when it affects the funds or securities maintained abroad in current
account by banks established in Cuba to meet ordinary needs of
their banking business;

2) when itconcerna war bonds or securities of the United Nations and
only to the extent 'of 50 percent held abroad by an owner of such
bonds or securities. This suspension will be in force for the
duration of the war and until one year after peace is established.

Chapter IV of the Tax Extension Law establishes a yearly tax of $3.00 for each thousand dollars or fraction thereof on capital-estimated at its actual value with which-companies and firms of' all kinds, civil or mercantile and domestic or foreign, are operatin? in Cuba.

Independent of the normal tax on profits, this law imposes a tax of an additional 15 percent on profits that exceed ten percent of the capital taxed in the above-mentioned manneor.

Exempted from the payment of such taxes are cooperatives of all types, and professional civil societies devoted exclusively to teaching ar to providing medical or surgical services, newspaper plants,. firms acting exclusively as broadcasting stations, and those whose sole purpose is the resale of newspapers and magazines.











It is also provided that the taxes on working capital and nominative sharos imposed by this law shall not be required of companies which being organized under the laws of Cuba for the sole purpose of working minerals of any kind, including:_fuels, are exploring or developing deposits, providing their production cannot be classified as commercial.

Chapter V of this law imposes a yearly tax on bearer shares issued or to be issued by any type of company operating in Cuba. This is a tax of 0.15 percent on the actual value of the shares and may in no case be less than 5 cents a share.

In regard to companies which in addition to their business in Cuba are engaged in operations outside the national territory, the tax is to be paid on that portion of the capital invested in Cuba or assigned to operations carried on in that country.

In those cases where the taxpayer has no capital invested in Cuba or assigned to operations there, the taxable capital shall be determined by comparing the general value of his business with the amount carried on in Cuba.

This tax is collected directly from the companies that have issued or will issue taxable shares, although such companies have the right to pass this on to the shareholders by retainin ; such part of the dividends or profits as it covers, or by other means.

The Taxhxtension Law establishes-a tax on bills of exchange, accom~i plished by affixing a tax stamp thereon, according to a scale provided in the law. The use of a bill of exchange according to the formalities established in the Commercial Code i's made compulsory for all mercantile credit transactions exceeding fifty pesos.

It further provides that bills of exchange issued abroad shall be
subject to the requirements of the country concerned but upon entrance into Cuban territory for negotiation, acceptance or-payment, and whether or not they bear a tax stamp of the country of origin, they must have a Cuban tax stamp affixed in accordance with the amount involved.

A very important tax is the one imposed on gross sales and receipts,
amounting to 2.75 percent, with several increases and surcharges.

Under article /4 of Decree law 393 of November 8, 1935, all merchants, manufacturers or industrialists not exempted by the law itself shall pay this tax on the price or value of all articles, whether for consumption or otherwise, commodities, products or merchandise which they may sell, exchange or transfer, without deduction or discount of any kind. lHowever, the taxpayer may deduct from the price of the goods handled the amount of taxes paid in conformity with laws taxing imported wheat flour by the pound, and the consumption of refined, celntrifugal, bleached or washed sugar with a polarization higher than 96.50.








-41


This tax is also required of all natural or juridical persons who for commercial or industrial purposes occasionally or customarily engage in business for themselves or for others on a commission or representation
basis in the territory of the Republic, whethlor or 'not doMiciled: in Cuba*

The law provides a number of exemptions from this tax which it is important to mention,

The exemptions provided under this law are the following:

a) Cuban agricultural products if sold directly by the growers or in
open markets;

b) Persons engaged in fishing in Cuban territory, or in gathering wild
plants or in the extraction of substances in their natural state,
for original sale, exchange or transfer, providing the products obtained and transferred are the result of their personal labor
or with the assistance of members of the family who are unremunerated
for such services;

c) Peddlers;

d) Persons who, without a concession or regularly established industry,
alone or with members of the family, engage in the manufacture or
confection of articles for retail trade,

e) centrifugal sugar, if sold by the producer or by-wholesalers, and
this-and other types of-sugar if sold for export, as well as sugar
cane, sacks for packing, machinery, eta-, with the exception of
goods sold in the commercial department of a sugar mill or central.

f) Molasses in any form in which sold;

g) Fowls; eggs; raw, pasteiirized, condensed, evaporated and other
milk; butter and cheese; when the article sold or the raw materials and animals, if such are concerned, come from farms located in Cuba
and the sale is made directly by the grower, maker or producer;

h) Charcoal;

i) Domestic livestock and non-imported meat;

j) All articles manufactured in Cuba and subject to the special tax
for the payment of interest and amortization of the 35 millions
loan, /In 1904 the United States made a 40-years loan of 435,000,000
to Cuba-at 5 percent. This was liquidated in I.17$ such as wines,
liquors, beer, etc.;

k) Fuel produced in Cuba from Cuban alcohol, if sold by the producer;








42,


1) Sales of raw materials cultivated, manufactured or produced in
Cuban territory to Cuban industrialists and the goods processed
and sold by the latter to wholesale merchants.

The list contained in the law-of those who are regarded as merchants for the purpose of imposing this tax, is very long, since it includes all possible commercial activities.

However, a number of exceptions are included as to those who need not pay this tax. Among then are the publishers, agents and sellers of periodicals, newspapers, magazines and pamphlets, persons who customarily contract their professional services only, and in general persons engaged in businesses such as cleaning and dyeing, laundering, printing, lithography, land and sea
transportation, etc.

Also exempt are importers and wholesalers, in regard to articles imported and sold at wholesale; industrialists who are registered with the customs for raw materials they import providing they are actually engaged in industry and import goods for that purpose.

Mention should be made, if only briefly, of the'tax on installment sales This tax, established by a law of July 6, 1928, is to be paid by individuals or firms engaged only in the sale of goods or real estate on installments, which are exempt from the profits tax.

A tax has also been established on the exportation of currency or its equivalent. Its only purpose is to discourage withdrawals of money from the' national territory, whether in direct or indirect form, visible or invisible, without hindering normal export trade.

Article 17 of the Public Works Laws of Tuly 15, 1925, fixes this tax at 2 percent, and by Law No; 7 of April 5, 1943, it was extended to cover payments, deposits of funds, transfers of credit arising from securities or produce or similar operations, vhich directly or indirectly result in the withdrawal of currency or its equivalent from the national territory to a
foreign country.

The Regulations issued for the extension of the above article establish or define the direct withdrawals of money on which this tax is imposed, as follows: money in coin, banknotes or paper currency, domestic or foreign
coins which travellers take with them on leaving the country, and money of any kind .tbat is sent abroad by letter, parcel or in any other manner.

The following withdrawals are also subject to this tax: "direct, -as the equivalent of money; postal money orders, bills of exchange, -drafts, checks, travellerst checks, letters of credit, mandatory letters, letters of payment or any other type of exchange document used to remit funds abroad;
any kind of commercial or mercantile document however designated by which is paid, assigned or conveyed to a third party resident abroad any balance, deposits or savings which a natural or juridical person domiciled in Cuba may have to his credit outside the country, providing the said balance,







43


deposits or savings have not already been taxed at the source and are derived from business or-services originating in Cuba; and the exportation or-remittance of produce, merchandise, securities, bonds, shares, obligations, coupons or any other possession.

The following indirect withdrawals are also taxed: credit or bookkeeping operations effected by banks-or local bankers registered in accordance with the terms of the Regulations, on accounts which they may have with banks, bankers, their main offices, agencies or other groups abroad, every credit or installment operation made by natural or juridical persons resident in Cuba, on accounts with offices, headquarters, banks or other agencies located abroad providing this reduces or exhausts some type of holding previously mentioned; debits against foreign creditors which reduce or cancel an overdraft; set-offs with foreign countries.

To be regarded as holdings abroad, through business or services originating in Cuba and not previously taxed at the source are: payments made in Cuba by individuals or local groups for the account of natural or juridical persons-located abroad collections abroad for business or services rendered in Cuba, whatever may be the source or origin of the funds received; debits for the remittance abroad of checks drawn against-funds located abroad and which were purchased or received in Cuba; collections or receipts in-c.bsh outside the country for the account of other persons residing in Cuba, or that are delivered or credited to the income of such persons; excess payments received above the declarations in custom houses or fiscal districts in payment of export duties or for the sale of goods or securities, after deducting authorized expenses and charges on the value of exports of Goods and articles on which duty is not paid.

Also taxed-are payments made abroad for the account of other persons residing in Cuba, whatever may be the source or origin of the accounts or funds used for such payments and any other unrelated operation implying a direct or indirect withdrawal of funds.

Every traveller leaving the country is required to make 'a sworn declaration as to the amount of money he is taking out in cash.

For remittances abroad in coin or paper money that have been previously authorized by the iGovernment, the tax may be paid in the appropriate fiscal office of the domicile of the remitter.

The branches of banks in the Federal Reserve System of the United
States that are established in the Republic of Cuba and duly authorized are exempt from payment of this type on operations solely with banks and bankers and they may also export or make remittances of used or deteriorated paper currency of the United States.

In-conformity with the terms of the Regulations on the application of this tax, banks and registered bankers are to collect the tax from the








-44


purchasers of exchange documents and they must present to the Fiscal Zone or District the documentation concerning such operations.

Natural or juridical persons not registered as a bank or banker, but who maintain an account abroad must present a sworn statement in regard to such tax payments.

The Custom Houses of Cuba collect-the tax on the value of all exports abroad of goods or articles of any kind, made from Cuban ports. However, this is not required if the exporter personally or the goods concerned are exempt from payment of the tax by virtue of some-legal provision or express authorization granted by the ilinistry of Finance, if the exporter is accredited with the Special Public Works Funid Administration, or when the goods are samples without commercial value or articles or goods valued at not over $~2.00.

Declarations of the value of exports or remittances abroad delivered for clearance at the Fiscal Zones are to be regarded as provisional and subject to correction by the Special Public Works Fund Aministration,

It is further provided that every exporter who claims to have a right to exemption may pay a bond to the Special Public Works Fund Administration for an amount sufficient to cover payment of the tax if it is found that he must pay, in cash or in Government bonds, according to their quotation on the Habana Ex~change on the day previous,or by a duly authorized bonding company or the joint guarantee of a member bank of the Habana Clearing House.

Any exporter who shows proof of the re-entry of his exported goods within a certain time and manner shall have the right to claim exemption or the repayment of the tax if paid..

The following time limits are established to make this claim: for
exports to the United States, 120 week days; for other countries, 180 days.

Entry in the country of the value covering exports, takes effect in the following cases: when an exporter receives in Cuba the payment for his exports in cash from abroad, from the consignee or for his account; by partial or full payment to the exporter by local registered banks as a result of atmdnsfer of funds or a check drawn by a foreign bank or a conm mercial credit opened abroad by a consignee or purchaser, or by his order; when an exporter; as a result of exporting, receives from the foreign purchaser or for his account, checks issued by persons or firms not engaged in the banking business drawn on funds in foreign banks or firms; when an exporter issues a bill of exchange (letra) or any other form of exchange document against a foreign consigznee or purchaser; when an exporter draws a check against his own funds accumulated abroad in connection with his exporter.

In regard to exemptions from payment of this tax, it is provided that among those exempt are travellers going abroad who take with them not more








-45


than $50-00; if they take more than that sum, the tax is imposed on the excess$

Also exempt are tourists and travellers in transit who are provided with the appropriate identification cards issued by the General Immigration Office.

Exports made by the Government, Provinces and Mdunicipalities are exempt from payment of the tax, and also sums drawn or remitted by local banks or bankers for their own account or order.

Exporters may ship their products, merchandise or securities without payment of the tax in the following cases: when they are exempt from payment by virtue of some legal provision, by express authorization of the Minister of Finance, when they are bonded, and mhen only samples are concerned,

Furthermore, registered banks and bankers are not required to pay this tax for the following operations: drafts for transfers and cable transfers abroad when made between themselves and other banks or bankers, providing that the credit that is declared exempt corresponds to the debit made by the purchasing bank; transfers of funds between correspondents of the same bank abroad, on condition that the amount credited and declared exempt corresponds exactly to the amount owed to the receiving correspondent; drafts drawn to the accounts of the Diplomatic or Consular Corps -accredited to Cuba; credits representing drafts drawn by the Government, Provinces or Municipalities; credit adjustments which are in the nature of renewals of loan documents, if for the same sum and it is shown that they are for the same obligation; credits which result in the entry of currency into the country; credits for adjustments in the value of foreign currency held by registered banks and bankers in their main offices, branches or with correspondents in a foreign country; credits for the repayment of collections or for the sale of any exchange document which has been paid by check against funds abroad; credits for the income from any exchange document which has been paid by letter of credit or travellers chock issued by a foreign bank.

Ambassadors and other di, lomatic officials accredited to Cuba,'as well consftlar officials', and aR7. remittances made by them are also exempt.

The income tax was established-by Law No. 1 of December 31, 1941 andamen~ded by Chapter XVII of Law No. 7, the Tax Extensionr Law, dated April 6, 1943. On this latter the following discussion is based.

This tax is imposed on the net income of natural or juridical persons engaged in certain types of commerce or industry, on the annual incomederived from all wages, salaries, compensation and pensions; honorariums, fees or emoluments, or chattels and real-estate, securities- shares, funds, bonds and titles of all kinds, dividends, interest payments, produce and any other kind of personal income derived from similar or analagous sources,








46


The income of natural or juridical. persons engaged in certain indus-,1 tries, including the manufacture of alcohol, rums and strong liquors,alcoholic ethers or any unclassified product containing ethyl alcohol, wines, vermouth, cider, beer, artificial soft drinks and mineral waters, cigars, cigarettes, cut tobacco (picadura), matches, and playing cards, is subject to a tax ranging from 9 percent to 30 percent, according to the following scale:

Up to 025,000 ... .... .. .. .9 percent
Over $25;000 UP to $50,000 .'....,' 12
Over $50,000 up to $l00 000'...;.'.., 15
Over $100-000 UP to $500,000. ; ....'.-. .l
Over 0500: 000 up t'o 0l, 000, 00o...'.... 22.5
Over $1,000,000 ... .. .

-For the tax on income-derived from all other sources, the scale starts at-$1,000 and ends with $20,000, at percentages ranging from 1 percent to 17-5 percent.

In regard to income of over $20,000, it is provided that for each
$5,000 or fraction thereof in excess of that amount, the rate is increased by three quarters of one percent (0.75 percent), up to $100,000 on which the tax rate is fixed at 30.5 percent on any amount of excess.

Besides the wages, pensions, etc. already mentioned, this tax also affects the profits derived by commerce or industry that are not subject to the profits tax or that are subject to taxes established to replace that tax, and amounts received by the taxpayer as interest or income from-securities or loans, and for dividends and profits received for any reason, and income produced by any other personal property of the taxpayer, or by his real property.

Interest on the bonds of the public debt issued or to be issued by the Cuban Government is not taxable income. -In accordance with the terms of article 3 of the Regulations for this tax, contained in Dec.z'ee No. 3603 of December 13, 1943, the following types of income are likewise free from tax: inheritances, legacies~and gifts, prizes of the National-Lottery, per diem fees exclusively for repayment of travellingr expenses, lodging and maintenance originating necessarily from employment away from the customary locality, and income obtained from personal or life insurance policies.

7 The law provides that in the determination of taxable income there
shall be deducted from gross income an amount representing payments made by the taxpayer to the Government, Province, or Municipality as taxes or contributions for a particular purpose from such income, or for the same purpose, to any foreign Government for income obtained outside the country' interest paid on money borrowed by a taxpayer; proceeds from capital paid for compulsory reasons; bankruptcy or losses suffered in some business or activity the income from which is taxed by Acuerdo, Ley No. 7 when recovered by the taxpayer; expenditures necessary to the productivity, protection and








-47

safeguarding of property from which the previously mentioned income and expenses are derived.

It is further provided that a taxpayer may deduct from his total taxable income the-following: 30 percent if married, but if the spouse receives an income, this shall be in turn deducted from the 30opercent deduction; 10 percent for each person supported, if ascendants, descendants, minors, adult children or relatives to the third degree of consanguinity or affinity, if such persons receive income that is in turn deducted from the .10 percent reduction if amounting to over 018o a yetar; and amounts for family support paid in compliance with a court decision. If the taxpayer has an income of over C)4,800 annually he is not entitled to these deductions.

The income tax is entirely personal and hence the obligation of payment falls entirely on the person who receives the income. The tax is levied on income which is classified as follows by the Regulations:

Class A. Wages, overtime, salaries, grattitties, representation
expenses, compensation, pensions, equivalent or any other form of remuneration of a permanent or occasional nature,
for personal labor performed under a relationship of
regular dependency.

Class B3. Honorariums, fees, emoluments and any other remuneration
of q similar or analagous nature derived from the practice
of any profession, art, trade or lucrative occupation.

Class C. Income-or produce from real or personal property, securities-;
shares, bonds, title obligations, of any kind, and dividends,
interest or any other type of personal income derived from
similar or..analagous sources.

Cubans residing in the national territory are subject to payment of the tax on incomes under Classes A and B, without regard to the country in which the income was obtained.

Likewise, Cubans who are not residing in the national territory are subject to the tax on income under Classes A and B if obtained from a person or entity established or residing in Cuba or if the income is derived from a business established in Cuba, or received in the capacity of an official or employee in the Cuban Public Administratin; and for income under Class C regardless of in what country it was obtained,

Foreigners who reside in the national territory are liable for income under Classes A and B, regardless of the country of origin, and for Class C income if obtained in Cuba or obtained outside the country to be added to the income received or earned in Cuba.

Foreigners who are non-residents of Cuba must pay a tax on Class A and B income if obtained from persons or entities residing or established in








48


Cuba : r derived from:,a.business established in Cuba or received in the capacity of an official or employee of the Cuban Public Administration; they are liable on Class C income if it is derived from a business or property located in Cuba,

In the application of this tax any person shall be regarded as a resident who has remained in the national territory for 180 days during the tax period concerned.

All matters relating to determination of the amount of taxable income are set forth in Chapter II of the Regulations which regulate in detail the procedure for determining this; what's to be regarded as gross income; the ways and means of receiving income, deductions and authorized deductible expenses; the basis and rate for depreciation; the formal requirements for depreciation; bankruptcies or losses deductible; non-deductible expenses; deductions because of family status and family maintenance allowances, all of which need not be described in detail.

There remains the National Stamp Tax, on which only certain data needbe given as by its general nature it affects all alike, national or foreign, natural or juridical persons.

The Stamp Tax consists in the payment of a given amount, and instead of being paid in currency is 'accomplished by the affixing of tax stamps purchased from fiscal offices.

Numerous operations are subject to this tax, among the principal ones being: stock exchange and other transactions in public and private bonds and securities of all kinds, at the rate of 24 centavos for every operation exceeding WO nominal value and not over $1000; 36 centavos-for each additional thousand or fraction of a thousand over that amount, all on nominal value; wqpehouse receipts, bills of exchange, drafts, notes, securities, travellers checks sold in Cuba, negotiable instruments in general; payrolls in conformity with an established scale, commercial invoices of domestic or import trade; policies and documents in general used in bonding transactions; insurance-policies, except life insurance; travel tickets issued by steamship companies, their agent or consignees, for passages from Cuba to a foreign country, by sea or air. Passages sold abroad for a voyage to begin in Cuba must bear stamps to the value of 5 percent of the cost of passage from Cuba to the foreign country, if first class, and 2 percent of the cost of secondclass passage; the third class is exempted,

There also exists the so-called patented 6nica which was established for the purpose-of identifying taxpayers according to the taxes they are required to pay, and with appropriate notations in cases'where there are several categories under which the same tax must be paid.

The above covers the subject of general or national taxation, all of which comes under the authority of the Ministry of Finance.









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There are in addition the so-called 'Municipal Taxxes" which are outlined in.the Organic Law on Municipalities and the Municipal Tax Law, providing sources of revenue for the expenditures of the municipalities.

These taxes are the following:

a) Tax on the exercise of industry, commerce, professions, arts and
crafts;

b) Tax on the shipping and navigation industry- including interior
traffic or service at ports or on waterways: and the transport
of cargo and passengers in the coastwise trade.

c) Tax on the opening of non-charitable establishments, regulated
freely by each Ayuntamiento (city council).

d) Tax on traffic by truck, also regulated by each Ayuntamiento.

e) Tax on land transportation, except railroads.






50

MINING~ ACTIVITIES



Mining legislation in Cuba has two aspects: adininistrati~rh and civil. Both are intimately related, although they possesscertain characteristic differences.

The Civil Legislation is very brief. There are only two articles in the Civil Code devoted to the subj ect.

Article 426 states in precise terms that every Cuban or Foreigner may freely make trial diggingsor excavations in public lands, if not more than ten meters in length or depth, for the purpose of discovering minerals, but advance notice must be given to local authorities. In regard to privately owned lands, the Code states that excavations may not be made without permission of the owner or his representative.

Article 427 provides that the limitations on this right, the formalities and conditions necessary to excercise it, the designation of those materials that are to be regarded as minerals and the determination of the rights belonging to the surface owner and to the discoverers of minerals in case a concession is granted, shall all be governed by special mining law.

Reference should be made to the principle contained in article 88k of
the Constitution, which states that the subsoil belongs to the State, which may grant concessionsfor its exploitation in conformity with the law, with the added provisions that mining property which has been granted under concession but not developed within a period specified by law shall revert to the State. This same article of the Constitution provides that concessions granted for exploitation of the subsoil must be operated in such a manner as to safeguard the social well-being.

There are also several legal provisions governing mining:

Legislation on M4ineral Fuels contained in a Law of May 9, 1938, with regulations in Decree No. 2625 of October 16, 1939; the Mining Law of July 6, 1859, amended by a Law of March.4, 1868, is still in force in Cuba, while the general regulations on Cuban mining are to be found in Decree 1076 of September 24, 1914; together these form the legal system governing mining
activities in Cuba.

The YiigLaw-states that the object of mining may include all
inorganic, metallic, combustible or saline substances, phosphates, calcareous phosphates, barium sulphate (heavy spar), fl-aorspar, and precious stones, whether in veins, strata or any other form of deposit (article 10).








51)P


By express provisions of law,. the materials listed above are regarded as belonging to the State, and no one may dispose of them without a concession from the Government) granted by the Governor of a Province.

Silicate and calcareous mineral substances, sands, clay-bearing,
magnesian and ferruginous earths, marls another substances of this type, used in agriculture, construction work, etc., are regarded as of common use
when found on either private property or on State or municipal lands.

Any Cuban or foreigner may freely engage in mining work to discover the minerals mentioned in article I of the law, on any land not under *cultivation, whether belonging to the State or cities or private property. Such work, termed calicatas (trial diggii~g6)may not exceed an excavation two meters square and one meter in depth.

If the owner of the land so requires, a prospector may be required to post a bond for indemnity for any damages his digging may cause, and he must also pay for any damages or injury caused to the property later.

It is further provided that excavations may not be made within 4+0 meters of building$,railroads, highways, canals, bridges, etc.

The law provides that individuals or firms may obtain any convenient number of claims, providing that more than two are not requested in a single application by any individual cr more than four by a company.

The area contained in a single claim is indivisible.

ownership of a mining claim is obtained by one of the two following methods: by investigation or by registry. In either case, priority of application confers a preferential right to concession and ownership.

A governor decrees the acceptance of applications and with three days will order the publication of the investigation or registry, with their pertinent facts, in the announcement section of the Boletin Oficial. Contestants of an application must present their claims within sixty days after publication of the notice.

No demarcation will be made unless some mineral has apparently been discovered.

The governor, within thirty days after a mine has been marked out, will issue a decision approving or denying the application, and if he approves, will order the issuance of the appropriate title.

Concessions for mining claims are for an unlimited period, as long as












miners comply with provisions Of law and. any others pertaining to title to property.

Concessions for mines, dumps, and lands shall be cancelled whenever any of the terms set forth in the concession and included in the title are lacking; for lack of drainage, or poor management and execution of work which might cause destruction; for failure to pay the required fees; by abandonent or by voluntary renunciation.

Presidential Decree 1076 of September 28, 1941, promulgated the Regulations for Cuban Minina, a very useful piece of work.

Chapter I contains a classification and division of mineral substances. Chapters II and III, dealing with all matters relating to raining work, set forth the procedure to be followed in making application for a license to carry on mining work and excavations.

Chapter TV deals with mining claims.

The succeeding chapters deal with the steps to be taken in obtaining a
mining concession.

A concessionary must register his mines in the Property Register of the municipalities in which the mines are located.

The Regulations state that mine owners are required to comply with the provisions and rules established by law applicable to the mining and mettJ.-. lurgical industries; this is obligatory from the starting point of the concession.

In regard to the cancell 'ation Of claims, the termination of Iconcessions and the procedure for new adjudication, as previously mentioned-, 'it should be stated that these regulations clarify the law on the subject.

The granting of a concession is without effect and terminated in the following cases: when the applicants lack any essential requirement established by law, such as -- failure to make pAyment within the specified time limit of official expenses involved in the procedure and the fees for surveying of claims and issuance of a title to property; failure to give the name of a claim in the application for registration; wlhen there is not sufficient free land for a concession of at least four hectares, or when the land specified by an applicant differs from the area that is surveyed.

Mining concessions terminate if the concessionary fails to pay the fee charged for one year within fifteen days after legal action is instituted;









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if the concessionary is insolvent; or by his renunciation in writing signed by himself or his legal representative.

The termination of a concession shall be made subject of a decree by the President of the Republic by due process. There is a right of appeal (contencioso administrativo) against such a decree.

Chapter XVII of the Regulations on mines, as now in effect with amendments and additions, provides for the taxes imposed in the field of mining.

The yearly canon or fee which concessions must pay to the Treasury for the exploitation of mineral substances is set at 20 centavos per hectare as provided in item 30 of article 4 of the Law of July 1, 1920.

In addition to the canon, mining property is required to pay 6 percent on its profits.

By a law of May 15, 1925, the tax imposed on the denouncement of mining claims which were not worked was abolished*

A law of July 1, 1937, in addition to a tax on exports of copper and iron, imposes a tax of 6 percent on profits.

Independent of the tax established by the Special Public Works Fund Law of July 15, 1925, on gasoline, refined petroleum, etc., the following taxes affect mineral resources:

Profits tax; tax on mining property and urban estates; import duties on explosives, customs duties, fees for consular invoices; the tax of 1-1/2 percent on imports; the tax of 2.65 percent on gross sales; stamp taxes on operations requiring such stamps; the maternity fund.

In regard to municipal taxes, the mining industry is exempt from land and subsidy taxes (contribuciones territoriales y de subsidio).

All minerals and metals of any kind may be exported abroad free from any duty.

The customs tariff determines the duties to be imposed on imports of
foreign mineral and metal products, Imported petroleum or petroleum residue is charged the duties provided in the Law of July 14, .1917.

A law of December 20,-1939, provided free entry for organized mining companies of all manchinery, equipment, plant,-etc., to be used exclusively for the mining, preparation, etc. of minerals.







54


All questions relating to the subject, of: mining arxe in charge of' the
Ministry of Agriculture.

There are, in addition to the legal provisions already discussed,
certain others of a special nature which affect mineral fuels, contained in the Law of May 9, 1938, in much detail, although only the essential points need be given here.

This law declares as a public utility and of social concern, all matters relating to the exploration and exploitation of' petroleum deposits and other hydrocarbons found either on the surface or underground, whether solid, liquid or gaseous; all matters pertaining to the manufacture and refining of such minerals and their transportation by any means requiring special routes; and all matters pertaining to the exploration and exploitation of deposits of fossil carbon, its mechanical processing and transportation from the mines.

The mineral substances the exploitation of which is regulated by this law are as follows:

a) Petroleum and its natural affiliates, liquid or gaseous, including
naphtha, natural kerosene, hydrocarbon gases and helium;

b) Asphalt in any state, bitumen, tar, elaterite, mercury and other
similar minerals;

c) Fossil carbons, including anthracite, soft coal, lignite and others.

Ownership of all natural mineral fuels rests with the Nation, inalien, ably and imprescriptibly, but the State may grant concessions to private individuals to explore or develop deposits of such minerals, under conditions and terms imposed by law.

Such a concession does not include ownership of the deposit but only the right to explore or develop then conditionally and for a given time, granted at the hazard and risk of the interested party, since the State does not guarantee the existence of minerals nor is it in any way obligated to pay indemnity.

The Chief Executive grants such concessions, except in the following cases: when a concession for operation is involved, a preOvious concession for exploration is granted, in which case this must be done within six months. Granting of a concession is compulsory if rights were acquired prior to promulgation of the Law.







."55


Natural or juridical persons of Cuban nationality or foreigners legally domiciled-in Cuba may acquire concessions if they have capacity to make contracts, but in no case may a concession be granted to a foreign Government or State,

Application for a concession and the procedure to be followed is
through the Provincial Governments. If there are several applications for the same ground, they shall have preference in order of presentation.

The area of a concession is figured in surface units of 40,000 square meters each, to be called "claims't (pertenencias) and no concession may be for less then four claims, The bound-aries of a concession underground are the vertical planes drawn along the sides of the area granted.

The Chief Executive may establish reserves of mineral fuel for the State, in the manner prescribed by law.

There are various provisions of law concerning concessions for exploration and operation with rights inherent in each.

A concession for exploration gives the right to prospecting and development and rights in the discovery of mineral fuel, which shall be granted by
the Mlinistry.' of Agriculture upon compliance with certain conditions, among which is a deposit on, the part of an applicant, when his application is provisionally approved, of the amount necessary to defray the expenses required to prove free title of the land and payment of 15 centavos per hectare, and within thirty days following such payment, the granting of a concession will be approved by the Ministry of Agriculture.

A concession for exploration lasts for three years, counting from the date it is granted, and within this period application may be made for a concession of exploitation.

The concessionary must obtain from the surface owner, called the
%Iperficirario, permission to Occupy the lands needed and agree to pay compensation for damages. In case of opposition, the Minister of Agriculture may act as arbiter, if the parties agree, and if .Agreement is not thus reached, the concessionary has the right to occupy the lands by compulsory expropriation.

Concessions granted aftor the enactment of the Jaw of May 9, 1938, are subject to the following, conditions: a concession shall be granted for a period of 30 years, counting from the date when title is acquired, after which the rights of the concessionary and the property revert to the Nation, including all permanent construction such as buildings, wells, etc., without compensation. If the Government decides not to operate the concession









56



directly, it shall be put up at public auction, giving the right of option (tanteo) for sixty days to the former concessionary. All official expenses involved will be charged to the concessionary.

A concessionary having the right of operation, regardless of the date of title, must pay the yearly canon on the surface area comprising the concession.

For the first ten years, commencing July 1, 1938, or after granting the concession, the canon shall be 4 '5.00 per hectare per year; for the second ten years after the above period, the concession must pay.$10.00 per hectare each year; and during the third ten years, the tax shall be $15-00 per hectare per year, and for any remaining time a concession is in effect after thirty years, and counting from that day, if granted in perpGtuity before enactment of the law, shall pay $20.00 per hectare each year. The canon shall be reduced during ten years to ten centavos, for the second ten years to twenty centavos and for the third ten years to forty centavos, all per hectare and per year, in lieu of the stated rates of $5, $10 or $15 respectively, for the concessionaries referred to in article 17 of the Law which establishes an exception f.= constituting reserves in favor of the State for concessions already granted which do not exceed 100 hectares and for those already granted which do not exceed 200 hectares rzd have obtained some commercial production, and for those who in order to obtain the benefit of the reduction must accept the limitation of their concession to a period of thirty years counting from the date the title is proved, and also for such others who in accepting an equal limitation as to time also cede to the State for its reserves one-eighth of the total surveyed surface in accordance with the terms of article 16 of the law in reference to State reserves,

Concessions for the exploitation of petroleum must pay the State as royalty, 10 percent in currency or in kind at the option of the State, for all petroleum obtained or extracted on the concession with the exception of that utilized in operations. This tax shall be based on the commercial value of the product at the well and shall be paid monthly at the appropriate Fiscal Office (Zona Fiscal). As an exception to the above, every concessionary exploiting petroleum wells shall pay the State a royalty of 9 percent instead of the above 10 percent, in currency or in kind at the option of the State, for all crude petroleum submitted to normal refining processes in a refinery located in Cuba.

As a temporary provision, every concession for the exploitation of naphtha shall pay a royalty to the State of 5 percent in currency or kind at the option of the State for all naphtha obtained or extracted. This tax ,shall be based on the commercial value at the well, to be paid at the appropriate Fiscal office. However, whenever a commercially producing petroleum well may be discovered within the national territory -- commercially productive meaning a yield of at least 20 1 cubic meters daily (122.4








57



barrels) for the first thirty days of operation -- or when the production of naphtha in th6'country shall be more than 2,000,000 gallons annually, this royalty shall-be raised permanently from 5 to 10 percent..

Every concessionary of mineral fuel-s shall pay the State as royalty, 10 percent in currency, or in kind at the option of the State, for all natural gas or natural gasoline obtained from such gas, except for gas used in operations, this tax to be based on the commercial value at the well and paid in the same manner as the others.

To determine the commercial value of petroleum, naphtha, natural gas and natural gasoline at the well, the average price of a product of the same quality during the previous month in a prevailing market or markets:is to be taken, with deduction from this average price of the cost of transportation to such markets and all expenses involved therein.

If the Chief Executive shall choose to receive petroleum or
naphtha in kind the concessionary shall deliver it at the place of operation or at the terminus of the pipelines used in transportation, as the Chief Executive may decide,
Without prejudice to the indemnity to be paid in case of expropriation, every concession for petroleum and naphtha shall pay the surface owner one percent in currency of the gross production from wells existing on his property, this payment to be regarded as complete compensation for injury or damages and right to payment for use of the property.
Concessions for other mineral fuels are exempt from the above payments. Mineral fuels other than naphtha, petroleum and their refined d6riv&tii(2m., if exported in their natural state shall pay to the customs 1 1/2 percent of their value on board ship without deduction for any type of expenses.

From the revenue obtained from royalties on the gross production of petroleum, naphtha or natural gansp the State must devote 15 percent to the development of agricultural industries and construction of local roads and other public works in municipalities where wells are located, by investing in each municipality a sum corresponding to the 15 percent revenue obtained. These industries and publie-works projects shall by at Government expense,

The remaining 85 percent is to be used for the creation of a
special fund for national development, to be used exclusively for servicesand undertakings of the Ministries of Health and Social Welfare, Education,
Public Works and Agriculture.

Concessions for exploiting mineral fuels terminate by failure to pay the surface tax or canon within the first ninety days of the year; by failure to pay the production tax or royalty within 60 days after the date













set by law. If the State chooses -to receive this royalty in kind and a controversy arises as to quantity, in order to avoid termination of a concession, the concessionary must deliver to the appropriate Fiscal Office the amount claimed, as a deposit and reserve against the settlement to be made in due course; for violation of the provisions of Articles VIII and XIII of the Law; for not undertaking the mining work demanded in this law; by voluntary renunciation on the part of the concessionary if.he has paid all amounts due the Treasury and complied with all obligations to leave the mine and its appurtenances in a condition that will not constitute a public danger.

The Chief Executive-may administratively declare the termination of a concession for operation.

Chapter IX of the law concerns pipelines, which may be of three kinds: first and second class public-service pipelines, and pil5eliries for
private use, The President of the Republic, at the request of the Minister of Agriculture, may grant concessions for the purposes of erecting any.of the above three types, after advice from the Ministries of Public Works and Communications with respect to the crossing of public thoroughfares.

The granting of a concession for a public pipeline does not in any way restrict the right of the State to grant others.

A concession for a first-class public pipeline is granted for-30 years to anyone meeting the requirements stated in article 8 of the law, in reference to the capacity to acquire concessions by natural or juridical persons of Cuban nationality or foreigners domiciled in Cuba, with the exception of foreign Governments or States, reversion to the State at the end of that period, without compensation of any kind, of all permanent consttuctions, machinery, aqueducts, etc. concessions for pipelines of this class give the concessionary the right to expropriation of any area needed for any installations, but he is su eyect to Dayment for injury or damage caused by breaks or any other reasons*

pipelines of this class are required to transport the petroleum of anyone requesting their use in addition to the Government petroleum, up to 20 percent of its capacity.

Concessions for second-class public pipelines are granted for
thirty years exclusively to the beneficiaries of an exploitation concession, and upon termination all permanent construction reverts to the State.
public pipelines may Oros$ each other in any direction, above or below, and transport petroleum directly to ships in the open sea, subject to fiscal provisions governing measurement and other technical details.






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Such concessions for transportation of petroleum shall terminate if construction work on them is not begun within six months following the date specified in the Ygrant or if not completed within the time set.

Concessions for private pipelines are granted only to the beneficiaries of concessions for operation and they are required to transport Government petroleum up to 11 percent of capacity it the same cost as for carrying their own petroleum.

The law contains one very important provision in regard to taxes, this being a prohibition against direct or indirect taxation of the production,
transportation or exportation of petroleum or other mineral -fuels by the Government, a Province or Municipality by any special taxes, except those of general an~plication.

It provides farther that every concessionary shall pay -the general
taxes in effect and any that may be established in the future, but any taxes established shall be regarded as fixed, and hence a concession while in effect shall at no time be required to pay larger amounts than previously.

As a supplement to the above, brief mention should be made of the legal -provisions governing the compulsory expropriation of land for the operation of mines as well as those concerning right of way for entrance into mines. The latter is found in Military Order 78) of March 15, 1902, which declares applicable to mining questions the -terms of Section 3a of articles 564 and 565 of Chapter II of the Civil Code, fixing 20 motors as the width for passage to a mine to be used in any way deemed suitable subject to the' terms of Order 34 of 1902 regarding compulsory expropriation for public use.

Such thoroughfare must be used only for the transport of employees
or materials to the mines and for transporting the output. For such right of way to be granted, it must be shown that the mine has no other possible means of egress.

.In regard to the compulsory expropriation. of land for the operation of mines, the natter is governed by Presidential Decree 593 of May 16, 1913, indicating the procedure to be followed, which in general lines is this: any person who has not been able to reach an agreement with an owner of land in which t mine is located and whno must occupy that particular surface for operational purposes may apply to the Governor of a Province requesting issuance of a declaration of public utility and compulsory expropriation of the property possession, share, easement or right to the land needed; the application must include the deed of title to the mine, the certificate of registry of ownership, a map of the surface area deemed necessary for operations, an explanatory memorandum, an estimate of the reasonable value of the-area to be used, deposit of a sum equal to l0 percent of the estimate and, if the applicant is not the original concessionary of the mine, the
document or documents attesting to his right to it.

The memorandum Must show the necessity for comnipulsory expropriation and the reasons why it is to be applied, the condition of the land, etc.








60



Expropriation snall be resorted to in' tle.foliowing cases:

1. If the owner of the surface does not agree to amicable alienation for
a fair price;

2. If he has no legal capacity to sell;

3. If he is unknown;

4. If his title is void or defective;

5. If his property is under attachment or receivership;

6. If his property is under census'lien, mortgaged, leased or subject
to other encumbrance;

7. If there is any other circumstance to prevent its acquisition by
private agreement.

Compulsory expropriation may include not only the surface area of a mine but also any other property that may be required.

The Governor shall publish the application in the Boletin and Gaceta Official, in a notice clearly stating all pertinent particulars and indicating a period of 30 days in which those who may regard themselves as injured
may take action to protect their interest.' Their claims will be transmitted to the applicant for answer within 10 days.

Upon expiration of the thirty-day period and the ten days for answer by the applicant, the Governor will transfer the case to the District Mining Engineer indicating an appropriate period within which to report on it. When this has been done, the matter is referred to the Provincial Agricultural Board which is to issue its report within 30 days. When these reports are made and claims heard, the Governor shall issue a resolution setting forth the reasons for recommending the application and the expropriation of the lands sought, or for rejecting it. The case then goes to
the President of the Republics through the Ministry of Agriculture, for final decision.

The resolution by the President shall include declarations of public utility and expropriation of the area needed.








-61.


SOCIAL LEGISLATION



Cuban social legislation has a double characteristic: it is found
both in the constitution and in the statutes.

-The Constitution of the Republic of Cuba, in force since October 10, l940O*contains in Section One of Title Six a number of provisions concerning lab or.

Article 60 is a declaration of a general nature, It states that labor is an inalienable right of an individual, and the State must employ every resource -,,ithin its power to provide employment for anyone witl-hou it$ and to assure to evei-y -nor-r3 whether mant'.al or intellectual an economic status necessary for a decent eo:istence,, The Section contains a number of general principles referring to the minimum wage or salary; to the prohibition that no wage or salary shall be subject to any deduction not authorized by law; aprohibition against payment in vales (IOUs or promissory statements), tokens, in goods, or in any other representative item; the establishment of social insurance as an unrenounceable and irrevocable right of workers; the requirement of insurance for industrial accidents and occupational diseases;-a maximum work-day; the right to one month rest for each eleven of work, in each calendar year; equality of the sexes and of civil status in regard to labor; protection of maternity; recognition of the right to form unions by employers, private employees and workers, exclusively in connection with their economic activities; compulsory official association for the practice of university professions; recognition of the right of workers to strike and of employers to the lockouts duly regulated by law; legal regulation of collective-bargaining contracts; the right of Cuban natives to a preponderant share in the -various kinds of work and in the wages and salaries paid, and for naturalized Cubans with families born in the national territory a preference over foreigners and naturalized persons not in such status; equality of race or color in regard to labor; the right of workers not to be dismissed without due formality; responsibilities of employers for compliance with the social laws; the duty of the State to promote low-cost housing for workers; a pro-vision of law proclaiming the obligation of enterprises employing workers at a distance from populated centers to provide suitable housing, schools, infirmaries and other services and assistance adequate to the physical well.; being of a worker; the obligation of the State to establish social security, and of State and Municipal welfare institutions to provide free assistance to the poor; legal regulations by which factories and shops may be moved to prevent degrading working conditions; provision for the submission of disputes between capital and labor to conciliation commissions, ccmiposed of representatives Of employers and workers.

These highly advanced constitutional principles merely incorporate in the country's Magna Carta things that the Republic of Cuba has-put into practice for a number of years, and this country is regarded as one of the most advanced in the matter of social legislation.











Regulation of the work-day is both constitutional and .lega3l.

By article 66 of the Constitution the.-maximum work-day may not exceed eight hours. This maximjum must be reduced to six hours a day for persons over 14 and less than 18 years of ago. The maximum weeks's labor shall be 48 hours, equal to 48 hours wages, with the exception of those industries which by their nature must produce without interruption at a certain season of the year. The Constitution prohibits the labor or apprenticeship of persons under 14 years of age.

There is also positive legislation governing the subject. In chronological order, the first is Decree 2513 of October 19, 1933, published in the Gaceta Oficial of November 4s which regulated Decree 1693 of September 19 of that year, providing that wi't-hin thirty days after publication throughout the Republic compliance with the eight-hour (lay, would be compulsory for all occupations.

Article 1 of Decree 2513 states that the maximum work-day shall be
eight hours each day, or forty-eight hours weekly. The workers and employees to whom the provisions of this law apply are the following: employees and workers in factories, workshops, quarries; construction concerns of any kind;
land or sea workers in ports, coasts and waterways; clerks and shop attendants in industrial and commercial firms; operators, drivers, conductors and other employees of railroads, tramways and enterprises directly or indirectly connected 'with these; and in general all persons performing work analagous to that mentioned above. The law defines trabaJo efectivo (actual labor) in relation to the maximum day as including the whole time in which an employee or worker may not act on his own will by reason of being at the disposition or immediate orders of a superior or employer.

A later decree,-No. 798, of April 13, 1938, determines the manner of computing the day in actual labor, and the time that a worker is inactive" during the work-day for reasons other than his will or from 'force majourep as
well as-the time needed by a worker for eating when the nature of the work requires that he remain on the premises. An amaendmient was made to article 38 of this Decree 798, in regard to the computation of the work-day in actual labor, providing that the inactivity of a worker because of a holiday or day of national mourning should be counted as actual labor.

The legal provisions in regard to the eight-hour day when special circumstances require uninterrupted continuity of the work, beyond eight hours, authorize a work-day of more than eight hours providing the total working hours do not exceed 48 in each seven-day period.

Domestic service was excluded from the original law, but it was later provided that every householder who employs one or more maids, cooks, chauffeurs, or housekeepers, is required to grant four days of uninterrupted rest in each month, two of which shall be Sundays or holidays and two onv any other day of the week, and they must be given two hours of rest each day.








63,


In regard to distribution of the eight hours of work a day, the law
leaves to agreement between employer and workers the manner in which the hours shall be distributed, so that a worker may be idle on Saturday afternoons, but in no case, save by force majoure, may there be more than 48 working hours in one week.

The law exempts from the maximum work-day provisions, partners and
persons sharing in the profits of an enterprise, providing the amount received as salary or share is not less than $2,)400 annually or $200 monthly.

The'legislation provides that persons under 18 may not be employed in night work, and likewise persons under 14 may not be employed as apprentices in factories or workshops; apprentices under 18 are also prohibited from operating or directing dangerous machines or apparatus. There is a provision that the eight-hour day is-not applicable to farm work such'as sowing, gathering and harvesting tobacco; the cultivation of small fruits, vegetables and other easily-handled crops, when the work is performed by individual laborers or by groups, providing the work is equal for all or the pay adjusted to a higher level.

The law contains one significant provisioh. It authorizes commercial and banking firms or industries, on days for taking balances or inventories or other extraordinary operations, to exceed the eight-hour limit, providing compensatory rest is given later.

Sunday rest is included in the work schedule, that is, within the
eight-hour-day law. There is, however, a specific law concerning Sunday rest, Decree Law 450 of-August 28, 1934, making Sunday rest compulsory for all newspaper workers, by an express prohibition against work in newspaper offices or shops from six in the morning on Sunday until six in the morning on Monday, during which period no newspapers may be distributed or sold other than the Sunday morning editions and magazines published prior to the established hour.

This law has been extended to include radio stations which devote more
than a third of their time to broadcasting news, radio newspapers, commentaries on the news or articles with a news background. The same decree extends Sunday rest to radio broadcasting stations from eleven in the morning on Sunday until eleven on Monday, authorizing only broadcasts known as sustaining programs .*hich may not contain advertisements or inducements of any kind; broadcasts are permitted of discussions and intcrviews having a scientific, artistic or cultural nature, and commercial programs, providing they last not more than fifteeen minutes and are sponsored by a single person
or commercial firm.

Decree 141 of Tanuary 21, in article 50, provides that radio newspapers are required to comply with the Sunday-rest laws in regard to their personnel.

In the matter of vacations for ouployces and workers,mention should be made of article 67 of the Constitution which establishes for all manual-or intellectual workers one month of paid vacation for oah eleven of work,per calendar year. It provides further that those persons who by the nature of








.64


their employment or for other circumstances have not worked eleven months shall have the right to a paid vacation for a period in proportion to the time worked.

Law No. 40, of March 18, 1935, in its initial article, amended by the above constitutional precept, provides that any employee or worker giving uninterrupted services to the same employers for one year shall have a right to one month's paid vacation.

For the purposes of the law, an employer is defined as any natural or juridical person, engaged in commercial or industrial activities, who has in his employ more than five employees or workmen, and a worker is any person who renders services to an employer, for pay, providing he performs his labor by unit of time or unit of work, in a continuous, intermittent or seasonal manner. Employers are authorized to divide the paid vacations into two periods of fifteen Cloys each. A vacation may not be taken more than six months after the expiration of the 5 1/2 months or 11 months giving the right to such vacation.

The paid vacation is also made applicable to farm workers, and among these the woikors in the sugar industry, who consequently, for labor by unit of work, shall be paid a bonus amounting to 9.09 percent of the wages earned, to be settled at the final pay.

Renunciation of the right to a paid vacation is to be regarded as null and void.

In regard to paid rest and vacations, there is a decree law which
provides that when a holiday falls on a Sunday, the holiday shall be carried over to the following day, or Monday.

Another law concerning the protection of labor is that regulating wages and the minimum wage.

Article 61 of the Constitution provides that every manual or intellectual worker in public or private enterprises, or for the State, a Province, or Municipality, shall be Gaeanteed a minimum wage or salary to be determined in accordance with condi tions in each region and the normal material, moral and cultural needs of a wrc ker, and considering him as the head of a family. The Constitution states that the law must provide a way to periodically regulate minimum salaries or wages, through commissions for that purpose set up in each branch of industry, in accordance with the standard of living and peculiarities of each region and each commercial, industrial or agricultural activity.

For work by the job or piece, assurance of a minimum wage for each work-day is compulsory.

One important principle in the Constitution is to the effect that the minimum wage or salary is unattachable, with the sole exception of liability for support as provided by law.







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The first provision of a legal nature relating to the minimum wage is
sot forth in Decree law 727, of November 30, 1934, which created the Technical Commission on MinLmum Wages. This Commission is composed of the Minister of Labor, the Directors of Agriculture and Coaerce, or Exports designated by them, the Chairman of the National Commission on Statistics and Economic Reform, the Chief of the Statistics Section of the Ministry of Labor, and two representatives each of employers' and workers' organizations. This was amended by Decree 436, by which this Commission was suspended from operation, although by legal provisions cited and decree of the Chief Executive wage scales have been established.

Presidential decree 1104, of April 21, 1942, provides for regulation of minimum wages and salaries in the following manner:

a) for work carried on within the boundaries of a city or in urbanized
districts of any Municipality, the wage or salary shall be $l.50
for each eight hours of labor.

b) For work in the country,' outside the boundaries of a city or urbannized district, it is $1.30 for each eight hours.

c) when the wagos are paid monthly, if the work is done within, a city
or urban district, the minimum shall be $5.00, and if outside
these areas, $39.00 for each calendar month.d) if the work is carried on partly in urban districts or cities and
partly outside such areas, the rate applicable shall be that for
work in urban districts.

For apprentices in commercial enterprises, messengers, office boys, bellhops, etc., the minimum wage is as follows:

24.00 a month for those under 16 years of age;

$30.00 a month for those between 16 and 18;

$36.00 a month for persons over 18.

This scale may be reduced by 20 percent in the provincial capitals, by
30 percent in towns, and by 40 percent on rural property, but only when food and lodging amounting to 20 percent of the sum involved are furnished. There is a prohibition against employing apprentices less than 14 years of age, or of contracting for them by the day or by the job. -Workers employed by the day shall receive their wages at least once a week, and those employed by the week, fortnight or month must be paid at least at the end of each month, although when a monthly wage is concerned this may be divided into several parts within the month, by agreement between the parties concerned.

For work by the job or piece, minimum wage must be determined by
contract by a definitely established scale.











The sugar industry-is governed by the terms of the Sugar Coordination Law, of September 2, 1937, article 35 of which provides that after the zafra (sugar harvest) of 1935, the cutting, loading, and hauling of each one hundred arrobas of cane shall be paid for by planters in accordance with the average yield obtained.

This saime law provides that the minimum daily wage for industrial labor in the protection and handling of sugar shall be fixed, for each eight hours of work, according to a scale based on the price of sugar.

The minimum wage of a cane worker, for each eight hours of labor, shall be determined at harvest time by the value of fifty pounds of sugar polarized to 960, but may not be-less than 80 centavos regardless of the price
of sugar. During the off-seas.Qn, the minimum daily wage shall be paid ac,cording to the price of sugar and according to a scale established by law.

For newspapers the law of April 2, 1935 fixes-the minimum wages for press foremen, typesetters, linotypists, monotypists, machine personnel-and apprentices.

The legislation concerning industrial accidents is contained in Decree law 2687 of November 15, 1933, and amendcents-introduced later.

The law-and regulations define an accident as any bodily injury suffered by a worker, because of or in consequence of work done for another, as well a s an illness or poisoning produced by various substances listed in the
law.

For the application of this law an employer shall be regarded as the proprietary or contracting individual or company undertaking the work, exploitation or industry in which the labor is performed; and a worker is any person who permanently or temporarily, at fixed or variable pay or jobwork, engages in work outside his home. Also regarded as within the definition of workers or laborers is anyone who under the above conditions, although not actually engaging in work, inspects the work of others daily; and apprentices are those who without any assignment work at the accomplishment of a task. Also included are those persons paid by piece work, and anyone who contracts for work by a team or group for a fixed sum or by the job, whether acting. for his co-workers or helpers, or only in his own name, providing he obtains no special paynrent other than the salary, wage or share belonging to him. Also included are clerks, attendants, and travelling salesmen of mercantile establishments.

Excluded from the benefits of this law are: domestic servants in
private residences; work done by members of the family of an employer, when working for his account or if they reside with him; work undertaken by such persons-on their own account, although, h occasionally assisted by one or more helpers, providing the latter receive no remuneration for such occasional work, distinct from the employer's undertaking.











An employer is liable for accidents affecting his workers which
happened because-cf and during the course of performance of the work in which they are engaged, the liability of an employer being assumed in regard to all accidents mentioned in the law. However, he is not liable for accidents due to force najeure net connected with the work in which an accident occurs.

The liability of an employer includes facilitating and paying the expenses of retraining for persons maimed or crippled due to accidents, embracing possible orthopedic means of replacement.

Under the ter.ms1 of legislation in effect for all types of industrial accidents, the injured party has the right to receive medical and pharmaceutical assistance at the expense of the employer or insurance company, but he is not entitled to receive the per diem allowed by law unless it is proved
that, the injuries received in an accident incapacitate himr from engaging in work. This is to be done by the physician undertaking the original treatment of the injured person, if in his opinion the injuries suffered by the victim will prevent him from engaging in his customary work. An employer, or insurance company, is required to provide the doctors or pharmacists needed by the victim of an accident. Both the law and regulations establish the kinds of disabilities for which compensation is to be Daid. There are three
classs: tm~~ay; %,hich prevent a worker from engaginrg in work foray
limited period of timeo wherein the disability does net exceed one year and at the end of whbich the worker is again fit for work; partial nortianent, which applies when the worker recuperates but with a permanent disability that materially diminishes his capacity to work; and absolute permanent, which completely disables a worker.

When the disability is absolute and permanent, the compensation
consists of the p ,.ymont of an income equal to two-thirds of the annual wages;
when partial but permanent, an income equal to half of the decrease the worker is obliged to incur because of his accident; and for temporary disability, a per diem allowance including Sundays and holidays during the time
it is impossible to return to work, equal to one half the wages earned by the worker at the tixie -of the accident, unless the wage is variable, intermittent, discontinuous, or by piece, in which case the per diem shall equal
half of the average wage computed from the amount earned during the two months preceding the accident, by dividing by 60 the total wages earned in the said two months.

If an accident results in the death of a worker, his family has a right to a pension, in the following form:

a) A life income of 20 percent of the annual wage, for the surviving
spouse who resided under the sane roof as the deceased, or who was
legally separated for causes imputable to him;

b) Children of all kinds and equally, providing they are minors, or
if adults, unfit for work because of mental or physical incapacity,
providing they were supported by and und'br the protection of the








-68 .


victim, an income based on the annual wages -of the deceased, at
the rate of' 30 percent if there is only one child; 45 percent if there arc two or three; and 60 percent if there are four or more*

c) Ascendents of any class or degree, providing the deceased loft no
descendents and that they were supported and protected by him, alife income equal to 20 percent of the annual wage of the victim, to be divided into equal allotments for each but not to exceed 30
percent of the victim's annual wage.

d) Brothers and sisters and half-brothers and-sisters if they were
supported by the victim and there were no ascendents or descendents' as described above, and providing they are not over 18 years of age,
shall receive an income to be graduated .and paid in the proportion
previously indicated. If such beneficiaries are physically or
mentally incapacitated the income shall be for life.

e) If the surviving spouse resides with the descendents or collateral
relatives mentioned in the previous categories, the total comp'onsation granted may not exceed 70 percent of the victim's wages.

The compensation established by law shall be increased by one-half if the accident occurred in an establishment in which the machines lacked necessary safety and protective devices.,

Foreign workers who are victims of accidents and wish to leave the country may have their compensation converted into a lump sum, as follows:

In case of absolute and permanent disability, an amount equal to three
years wages; for partial permanent disability, an amount equal to the sum total of the daily reduction in wages incurred in three years ly the victim; in case of death$ the relatives of the victim having rights to it shall receive the same compensation the victim would have received for absolute and .permanent disability, divided in the same-mainer as indicated above. If a worker chooses compensation in a lump sum, after having received certain allotments, they are to be deducted from the sum to be given him.

Cuban workers who are accident victims, and their beneficiaries, have the right to payment of compensation in a lump sum on the same terms as for foreigners, with the exception of minors and those absolutely and permanently incapacitated.

The right to choose this form of compensation oxpi~'es in one year counting from the date of recovery or death of the victim.

The income or per diem which this law provides may not be renounced
or taxed, nor is it attachable.

This law applies to the Government in its arsenals, arms plants,powder plants and any industrial establishments it may operate. It is also applicable to Municipalities and Provincial Governments.







4 9


If' it is proved that a worker has caused an accident intentionally, he has no right to compensation; and also if the recovery of' the victim or complete cure of' -in injury is intentionally retarded, or if' illegal procedure is resorted to in order to increase the amount of compensation..

For the purpose of' guaranteeing compliance by an employer in his
liability, the law has established compulsoryr insurance'to be paid by employers as directly liable f'or accidents that may occur in work.

Insurance, or the guarantee provided in the law, shall be taken out by an Employer, head or representative of an enterprise, industry or construction job, and shall cover all accidents including violent death that may occur at
work.

In no case, f'or-no reason, nor in any form whatever, may employers
withold, directly or indirectly any part of' a worker's wages for the payment of insurance taken out in compliance with this law.,

In regard to labor contracts$ agreements or understandings, the basic law, Decree law 446 of' August 24, 1934, establishes the rights and duties of' the contracting parties and the conditions and rules for conducting work that is carried on by one or more workers or employees.

Collective contracts or agreements between employers and workers'
organizations must be registered with the Ministry of' Labor, and one authentic copy kept by each of' the contracting parties.

An agreement is regarded as approved when it is ratified by the competent labor organization inwhose name it is signed and by the legal representative of the employer, unless the representatives of' one or both parties show that they have sufficient legal personality f'or definite approval.

The Regulations for the above Decree Law are contained in Decree 798 of' April 13, 1938, anid include the following points:

Purpose and type of' the contract;

Forms requirements and effect of' same;

The Work-day;

Wages;

Termination and rescission of the contract.

The first section defines a labor contract and who is to be regarded as a laborer, as wall as those excluded from its legal effects.

The following classification of labor contracts is established;

Individual and collective;










Verbal and written; Express and implied;

For a definite period or for an indefinite time;

Manner of payment, by unit of time or unit of work;

Contracts for continuous work and contracts for intermittent work;

Fixed work and variable work.

The following are listed as obligations of a worker:

To report to work punctually;

To work with due diligence and in the manner stipulated in the
contract;

To advise an employer of defects noted in materials or equipment,
that might cause harm to the enterprise;

To treat an employer and fellow-workers with due respect and consideration;

To maintain loyalty to the enterprise or work, and not divu].ge
business or manufacturing secrets;
To compensate an employer for damage for whidh the worker is to blame, to the buildings, materials. rachinesl or tools employed.

The obligations of an employer are:

To pay wages agreed upon mnctua1l;

To respect -the personal digaity of a worker, provide a suitable
work place, and m1c1ines and tools in safe condition;

To grant one day off per month in case of the death of ascendents,
descendents, brothers and sisters or the spouse, or for child-birth
by the latter, and not more than three days in case of illness of
the worker i-hich prevents him from working, this to be justified by
a doctors certificate;

To grant a worker paid vacation.

In regard to the form, requirements and effects of a contract, this must be in writing, regardless of the number of workers.

If the workers in an enterprise have not formed a union, the employer









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is not required to furnish a collective contract in writing, unless requested by a majority of the workers in the enterprise. If the workers in an enterprise form a union later) they have the right to demand a contract in writing. In every contract, whether individual or collective, the names of the contracting parties must appear; the kind of work for which the contract is made; the
duration of the work-day; and the allotment of -rest periods; the amount of wages and whether to be paid wholly or in part, the periods for which wages are paid and whether by unit of time-or unit of work; the period when the paid vacation is to be granted*

Any work contract not mentioning wages shall be null and void.

A work contract, whether individual or collective, shall -terminate
either upon completion of the work or expiration of the stipulated time limit.a A contract is understood to be prolonged for a period equal to the original stipulation if neither of the parties gives notice at least thirty days in advance.

Other just causes by which a worker may leave his employer are:
failure to pay cages agreed upon, bad treatment and offenses committed by the employer or his representative upon a worker.

Just causes-by which an employer may dismiss his workers are: failure
to report for work, without justifiable cause, for more than two consecutive days or any twelve days in a year; fraud or abuse of trust in work assigned the worker; any offense or serious lack of respect and consideration for the employer; habitual drunkenness; commission of some harmful offense against the property of the enterprise; contagious or repulsive disease of more than 120 days duration; disclosure of secrets of an industry; continued decline in the normal production of a worker by his own will; the necessity of introducing justifiable economies, in which case the dismissed workers are placed in the category of surplus employees with the r-ight to preference in reemployment when aupressed operations may be resumed.

Justification of reasons for dismissal must be by formal hearing as indicated below, in accordance with the Constitutional provision which says that no concern may dismiss a worker without a formal hearing, and if an employer believes that a justifiable reason exists for replacing or dismissing a worker he must initiate such action.In regard to the nationalization of labor, or the proportion between the number of national workers and foreigners in industrial or collective enterprises$ the Constitutional provision has already been mentioned'; 'there remain merely the basic principles of the legislation on the subject.

The first is Decree 258~3) of November 81 1933, article 1 of which imposed the compulsory obligation on all natural or juridical persons or those acting as employers and engaged in agricultural, industrial or mercantile enterprises, to utilize in such enterprises at least 50 percent native Cuban








-72


workers or employees and to devote at least 50 percent of their payroll to the wages of such workers.

The law exempts from the count only the representatives and agents of an employer, and technicians if no native or naturalized Cubans with suitable training are available.

This law provides that the places of workers or employees that become vacant or are created in agricultural, industrial or mercantile enterprises must be filled by native or naturalized Cuban personnel. It also provides that when a suspension or reduction in workers or employees is necessary for economy or other reasons; this should be effected from the foreign personnel while there is any.

The Regulations covering the Labor Nationalization Law, (Ley de
Nacionalizaci6n del Trabajo) contained in Decree 2977, of December 6, 1933,with later amendments, supplements the law and clarifies certain provisions, not sufficiently covered by the law, and includes as exceptions enterprises employing a single worker. In ease of vacancy, this position -must be filled by native or naturalized Cuban. Family work is also exempt, this being defined as work carried on by a worker or employee in his own home or establishment solely with the assistance of his wife and children. Also excepted are: domestic servants in private homes, veterans of the Army of
Liberation who have resided in Cuba for more than ten years, members of the Veterans' Association of the First World War and the British Legion who fought in that war.

An employer is required to classify his workers, grouping them into departments or sections according to the kind of work performed. In each department or section the personnel is to be classified by categories and within each category there must be the proportion of wages established by
law.

In regard to workers organizations, unions, or associations, the
legislation in effect is Decree 2605, of November 7, 1933, which recognizes the right-of all workers or employers in the same profession, trade or specialty, or similar or connected professions, trades or specialties, within the same or several enterprises, freely. to associate for the protection of
their common interests.

Exempt from those provisions are employees of the Government, Provinces and Municipalities, unless these bodies are acting not officially but as private individuals.

The law prohibits the directors, managers, administrators and representatives of an employer in general from forming a part of a workers union in an enterprise. Such persons may, however, belong to associations whose activities are identical or similar.








73


A union may not be organized with less than 25 members i-f workers or less than three if employers. The constitution of a union must contain the following points:

1. Name

2. Domicile

3* Purpose

4. Terms of admission for members

5. Method of selecting the directorate and delegates to represent the
union before official or employer organizations

6. Reasons for e: pulsioa and corrective discipline of members

7. Dues of members

8, Procedure for calling a General Meeting, and the rules for keeping
accounts and manner of liquidation of the union.

A director of a union must be a Cuban citizen, adult, able to read and write, have no criminal record, and possess technical skill in the work with which the union is concerned.

To apply for registration of a union with the Ministry of Labor, an application must be accompanied by two copies of the record of the proceedings-at which the Union was constitutedtwo copies of its constitution or bylaws, and two copies of the certificate of election of directors and the delegate to the Ministry of Labor. The Government reserves the right to, dissolve unions when they are not organized in accordance with legal provisions in effect.

No union may call a strike or temporary suspension of work by its' members, unless in support of legitimate strikes called by another union, without first submitting its demands to consideration by the Ministry of Labor.

The law authorizes unions to promote federations and associations which shall be governed by the same provisions as the unions.

In regard to legislation concerning strikes and conciliation procedure in disputes between workers and employers$ there are first of all the constitutional provisions already mentioned, as well as Decree Law No. 3 of February 6, 1934) containing all provisions referring to strikes or the solution of workers and employers? disputes.

This decree law recognizes the right of workers and employers to form unions and call strikes, which may not be used jointly and indiscriminately








-74


in any case without prior notice to the IMinistry of Labor at least one week in advance, and accompanying such notice by an account of the demands and requests and evidence supporting them,

As soon as such notice is receive edq the Minister of Labor shall order the formation of a Local Committee for Social Cooperation (Comisio'n Local de Cooperacio'n Social) to be headed by an official of the Ministry of. Labor and composed of three members of the union announcing the strike and three members of the employing firm. The Committee must meet and act without loss of time* and render its decision within seven days, which period may not be prolonged*,

A party not in accord with the decision of the Local Committee for
Social Cooperation may appeal to the National Committee for Social Cooperation, which is headed by the Minister of Labor and composed of officials and technical'advisers named respectively by the Ministers of Government, Commerce, and Labor, and by three representatives of the Union and three of the employer or firm involved. The decision reached by this Committee is not compulsory$ and the interested parties may resort to a strike or other joint action except when the demands or claims have been satisfied or declared illegal by the Committee.

When there is a joint agreement between unions or between employers they must meet together in a general meeting called for the purpose, and by a secret vote of one more than half the members a strike or lockout may be called.

If such a meeting cannot be held a referendum shall be taken.

A general strike shall not be regarded as legal if the above-conditions do net exist and if the lockout or strike would place the inhabitants of the country in danger due to a complete lack of light, water, telephones, telegraph, medical or pharmaceutical assistance, firefighting service or transportation.

The Social Cooperation Committees, in rendering decisions, shall take into account the particular circumstances in the economic and working conditions in the enterprise concerned, as well as in similar industries or business, the work-day, the established wages, the location of the enterprise, the cost of transportation, the cost of production or raw materials and other incidental expenses; the number of workers affected and the total number of employees that will be affected by the demands.


Retirement, Pensions and Social Insurance

As the basic provision in regard to retirement assistance, article 65 of the Constitution states that social insurance is established as an unrenounceable and irrevocable right of workers, equitably shared by the State,











the employers and the workers themselves, for the effective protection of~ the latter against disability, old age, unemployment and other contingencies of labor, in the manner determined by law.

A Constitutional provision also establishes retirement pay in old age and a pension in case of death.

Both the direction and management of the institutions devoted to social insurance will be in charge of impartial organizations chosen by employers and workers, participated in by representatives of the Government, except in those cases in which the State has created a social-insurance bank. Insurance is declared compulsory in regard to labor and occupational diseases exclusively at the expense of employers and under Government supervision.

The funds and reserves for social insurance may not be transferred, nor may they be used for any other purpose than that for whiich they were created.

A brief analysis will be made of the legislation concerning retirement and pensions of employees of banks, railroads and tramways; retirement of maritime workers and newspaper workers; retirement pay and pensions for workers and employees in-the telegraph service, and although not properly a pension or insurance law, the law concerning maternity benefits of female workers.

The Law of September 7, 1938 established a public institution known as the Caja General do Tubilaciones y Pensiones de Empleados de Bancos de Cuba (Retirement and Pension Fund for Bank Employees of Cuba).

Coming within this law are all natural or juridical personsproprietors of establishments in Cuba engaged exclusively in banking operations; the employees of such institutions in any category; persons who benefit from or who have a-right to benefit from the retirement pay or pensions as authorized by the law, and also t'Uhe employees of the Caja do Tubilaciones y Pensiones do Empleados de Bancos do Cuba,

The designation bank employees includes all persons who on the date of promulgation of the law were employed in or later employed by a bank within the national territory, periodically receiving wages, who performed any kind of work under the orders of the heads or managers of such firms.

The Caja de rubilaciones is managed and governed by a board of directors, the head of which must be a Cuban citizen.

The revenue and funds of this organization are obtained from a five percent deduction from the monthly wages of every person working in a bank; an equal percentage from the retirement pay and pensions that are paid out, and any other wages that the organization may specify; five percent of the total monthly payrolls paid by banks; the interest and income obtained from capital and property belonging to the institution; the complete first wages











of an employee who enters the services of a bank, to be paid in 24+ consecutive monthly installments separate from the monthly deduction; and any fines imposed for infractions of the law.

Three types of retirement pay (jubilacio'n) have been established: ordinary, disability and vblufitary.

Ordinary retirement pay is received in the following cases:

a) for 30 years' employment and 50 years of age;

b) at 60 years of age and at least 10 years' employment.

Ordinary-retirement pay, for having been employed 30 Years and reached 50 years of age$ is granted for the maximum appearing on the scale, according to the corresponding wage; and for having reached 60 years of age with at
least 10 years' employment.

Retirement pay is not granted to employees who have reached 60 years of age but have not completed 10 years employment, but they shall be repaid the amount of their paid-in contributions.

Retirement pay for disability is granted i~n the following cases: 'a) when an employee becomes physically or mentally completely incapacitated for work of any kind; b) when an em~ployee is physically or mentally .partially
incapacitated for paid work or employment at a wage of more than 50 percent of the amount he would have received,

An employee who is totally incapacitated shall be paid retirement at the rate for ten years' employment, if he has not worked for a longer period.

An employee who is partially incapacitated has the right to repayment of the amount he has contrib-uted to the fund by a number of annuities determined by the Board of Directors, but never more than three annuities.

If-he continues his employment in a bank he shall continue paying his deduction, and upon retirement the fund is available for him as for any other employee.

Retirement pay for disability may. not be considered if such disability began before employment.

Voluntary retirement pay may be availed of by persons who have been
employed more than 20 years and wrho have reached the age of 55. Such retirement will be paid at 75 percent of the amount it would be for ordinary retirement at the age of 60.

Anyone who has received ordinary or voluntary retirement pay may
return to active employment, in which case the retirement pay ceases for the








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time he is engaged in any type of work.

If death occurs to an employee while actively employed or to a person who has a right to retirement pay or is receiving it, the surviving spouse and descendent, ascendent and collateral relatives to the second degree of consanguinity, have a right to pensions in the following cases:

The surviving spouse and children in the ratio of 50 percent to
the spouse and 50 percent to the children in equal parts. The
lack of children does not increase the pension due the surviving
spouse. If there is no spouse or he or she is-divorced or deceased,
or remarried, the pension goes to the children.

A widower not incapacitated for work has no right to a pension, and his share goes to the children.

Differences of more than 15 years in age between one spouse and
another, a marriage occurring after retirement or after the party concerned has reached 55, take away all right to a pension by the surviving spouse unless the marriage has -resulted in offspring. -Sons shall receive a pension until 18 years of age, and daughters until 21, unless incapacitated for work,

Legally recognized children shall have the same rights as legitimate children.

If there is no surviving spouse or children, 50 percent of the pension goes in equal parts to descendents who are orphans and minors supported by the deceased.

If there are none of the above relatives, the pension goes to ascendents in the proportion of 50 percent to the paternal and 50 percent to
the maternal line, without right of increase, To receive this pension such relatives must have been supported by the deceased.

Retirement for railroad and tranlway employees is based on the law of
October 4, 1929, with several amendments. The last was Law No. 19 of February 13, 194Il.

The Caja Central de Tubilaciones y Pensiones de Empleados y Obreros de Ferrocarriles y Tranvi'as, is made up of all railroad and tramway companies operating in Cuba and.any duly organized public land transportation companies.

Also included in the benefits of this law are the employees and workers of railroads, tramways and trucks used in transportation by land, and workers
and employees of public and private concerns engaged in expressing and transporting baggage and freight.

The direction and management of this Caja de Jubilaciones y Pensiones is in the hands of a Board of Directors elected for four years and consisting








78


of a chairmen, two representatives of the concerns and two for the employees and workers,

The funds for the organization are obtained from the following sources: a) a compulsory deduction of 3.. percent from the salaries, wages, or other remuneration of employees and workers if not ovcr 0500 monthly, in which case the deduction is based on that amount considered as the maximum for the
effects of the law; b) payment of. the first salary or wage, made in 36 consecutive monthly installments; c) the difference in wages for the first month, deducted once, When an exanloyee or worker is promoted to a higher paid post or receives an increase in wages, Providing this is to last for at least three months;, d) the monthly contribution by the companies or firms, equal to 2 percent of the total salaries or wages whiich servo as a basis for computing the contribution made by workers or employees of an establishment; e) the net proceeds from abandoned or unclaimed articles left on tramways and buses, after a period of one year; f) the receipts from fines imposed by law; g) the interest and profits from investments made with accumulated funds; h) gifts and legacies made to the organization; i) the compulsory deduction of 10 percent from all retirement and pensions paid out; J) salaries and wages unclaimed by employees and workers within one year; k) a deduction of
85 percent on the excess over "'?200 for those receiving more than that amount as retirement or pension wjhen this law was promulgated; 1) deduction of 20 percent on all retirement pay if the payee resides abroad; m) deduction of 15 percent from all retirement granted before promulgation of this law; n) 10 percent of the amounts received in the fund for feeding and protection of the needy and the fund for the needy as provided by Decree 728 of June 1931, made law on October 5, 1932; o) the proceeds from an extraordinary drawing of the National Lottery held every year in the month of January; p) a surcharge of 1 percent on the price of passenger tickets and for every shipment of freight, animals or express valued at $'1.00 or more.

The employees and workers to whom this law-refers receive retire ment pay based on a classification provided in the law, up to a mximum of -20O monthly There are three kinds: voluntary, ordinary and for disability.

Voluntary retirement pay is given to an employee or worker 60 years of age with more than 10 years employm-,ent, but less than is required -for ordinary retirement pay$ figured at 2 percent, for each year 'of employment, of the average salary, wages or other remuneration received.

Ordinary retirement pay is figured on the average wage or salary received for one year's em-ployment counted retroactively from the date a worker ceased to receive a larger wage or salary earned in regular service after promulgation of the Law of November 24., 1921. These wages or salaries
are to be taken exclusively from payrolls in existence, and retirement pay is to be applied according to the following scale:

a) average monthly salary or wage up to $100, 65 Percent;








7 79


b) over $100. -- 65 percent on the first $100 and 60 percent on the
remainder 'of the monthly average, with 0. maximum limit of $200 for
retirement.

Ordinary retirement pay is given to an employee or worker who satisfactorily shows that he has been employed 25 years and has reached the age of' 55, or that he has 30 years' employment and 50 years of age, or 35 years employment at any age.

Retirement pay for disability is figured on the average monthly wage or salary received during two years' employment. Retirement for permanent total disability is paid at 60 percent of the average wage, and partial permanent disability at 40 percent.

Retirement for disability is granted in the following cases:

1) To an employee after any length of employment who becomes totally
or permanently disabled because of such employment, as a result of an occupational disease, providing the requirements are met showing that such disease was the result of the employment in which the
victim was engaged and that he did not suffer from such disease
prior to engaging in the employment he was forced to abandon.

2) To an employee or worker who after 10 years employment is declared
totally or partially disabled, physically or mentally.

Permanent total disability is taken as meaning the permanent loss of sight in both eyes, loss of both hands or feet, or to be suffering from some incurable disease which prevents any kind of work.

Partial disability-includes the permanent loss of sight in one eye, or one disabled hand or foot, suffering from an incurable disease which prevents work with transportation companies but without causing disability for some
other type of work.

A person receiving retirement pay for permanent disability will lose this right if it is shown that he is engaging in any other work

Every e-mployee or worker who dies while being paid retirement or while eligible for retirement transfers this right to his family through-a pension
and compensation as provided by law. It is transferred to a widow, or widower, if incapacitated for work; sons up to 18 years of age and daughters up to 21; disabled parents supported by the deceased; sons and daughters of any age if unfit for work; and if there are none of the above relatives, unmarried brothers and sisters under'21, or older if they are unfit for work and have no other means of support.

Maritime retirement pay ms created by a law of Jul1y 4+, 1927, amended by the law of September 3, 1938, applicable to workers, employees and laborers,











whether technical or otherwise, of both sexes, who since the inauguration of the Republic have temporarily or customarily been employed by natural or' juridical persons engaged in an activity of a maritime or fluvial nature, or in the exportation of goods or materials of maritime, river or lake origin# established or to be established in Cuba.

Article 3 of the lawi contains a very detailed account of the various activities that are included.

The administration of such retirement, like the others, is in the hands of a Board of Directors.

The funds for pensions are obtained from the following sources:

a) Compulsory deduction of 3 percent from wages and salaries received by
persons covered by the law;

b) the first .'moi1thts wages, paid in 25 consecutive monthly installments;

c) the difference in iages for the first nonth after a worker is promoted
to a higher-naying position or receives an increase in wages;

d) unclaimed wages, salaries or remuneration;

e) a compulsory monthly contribution of 3 percent of the payrolls of
natural or juridical persons embraced by the law;
f) a compulsory deduction of 5 to 10 percent, as agreed upon, from all
pensions and retirement being paid;

g) one percent of the amount received by vessels for recoveries at sea,
salvage or towage;

h) a comnDulsory deduction of 10 percent from retirement and pensions of
all workers and families writh a right to a pension;

i) a tax of 1 percent to be paid by all maritime or air transportation
companies on the not price of passage for all travellers arriving in
or leaving Cuba. In the case of excursion tourists having a round'
trip passage this will be collected only once, on the return passage.

The law classifies such retirement pay into ordinary and disability.

Ordinary retirement pay is granted to any worker 50 years of ago or over who has contributed for at least 20 years, or if for at least 25 years at any age. Such retirement pay may not exceed 0960 annually.

Retirement for disability is given to any worker who has contributed to the fund for at least five years and becomes incapacitated for work in a











manner provided in the Regulations oi. the subject.

Disability includes any incapacitation for work arising from physical or anatomical injury, or functional or organic disorder resulting in a
manifest incapacity to perform work in ahich the victim was previously engaged. Such retirement pay shall not be less than $360 nor more than $960,

The law itself determines who has a right to a pension or compensation in case of death, very similar in all respects to the types previously mentioned.

Retirement -for newspaper workers was established by Decree Law No. 172, of August*23, 1935, amended by Decree Laws No 218 and 224? of September 13 of
that year.

This retirement is granted to all journalists residing in-the national territory who work for -newspapers or maGazines published in Cuba for a fixed
salary or remuneration, are included on the payrolls, and meet other require-' ments provided in the law.

Yournalists, for the purposes of this law, include all persons who
show they are engaged in or have been engaged in their profession permanently for a fixed salary -or as their customary means of -support in any -capacity, whether as manager, editor, reporter, contributor, correspondent, proof reader# copy reader, cartoonist, or graphic reporter.

It does not include the wrriters of contributed articles or work who, although they receive payment, have no fixed or permanent assignment.

-U~nder this law, newspaper enterprises include any natural or juridical person; duly registered in the Mercantile Register, and any-others prescribed by law, who publish daily or weekly newspapers or magazines, employing at, least three professional journalists, at a fixed salary of-not less than $50 a month in Habana or $30 monthly elsewhere in the Re-public, and also radio newspapers if their editions are issued at regular intervals and for profit.

The funds for this purpose are obtained from a compulsory deduction of not less than 3 percent nor more than 5 percent from salaries; one-half the difference or increase in wages for the first month (after advancement); not less than 1 nor more than 5 percent deduction from weekly or monthly payrolls or other sumis paid by such enterprises to personnel; one peso for the issuance of each "Press card, (carnet); gifts and legacies donated to the fund; a compulsory deduction of 15 percent from the first 50 pesos and 25 percent on anything above that amount, on retirement or pensions for those persons who upon retirement have not contributed to the fund for 20 years,
and which they maay contribute to complete the 20 years; a compulsory deduction, which may be collected at any time from pensions or retirement paid out, if. it is shown that there is not a sufficient balance between existing funds and receipts and expenditures subsidies and contributions made by the Government,











Provinces and Municipalities; and the proceeds from festivities held on the Dia del Periodista (Journalistts Day).

There are three types of retirement: ordinary, for incapacity or disability, and voluntary.

To be eligible for ordinary retirement pay a person must have been
employed 20 years and have reached 55 years of age, or have 25 years' employment at 50 years of age, or 30 years' employment at any age.

The retirement pay of this type is figured onthe monthly average of
the highest wages received for two consecutive years, and for a monthly average of $80 amounts to 75 percent; for a higher average, 50 percent.

Retirement for incapacity or disability is granted to those employed
for any length of time provided they are totally or partially but permanently disabled as a result of their employment or in consequence of a disease acquired under certain specified conditions. The monthly value of such retirement is based on the monthly average of the highest wages received for two consecutive years and amounts to 50 percent of that average wage. Voluntary retirement is paid to persons 60 years of age who have been employed during the past 10 years but not the number of years required for ordinary retirement. They will be paid 2 percent per year of employment based on the average
monthly wage for the highest received during two consecutive years.

The law also provides that persons having a right to retirement who have been dismissed for economy reasons or"who leave their employment for reasons other than those stated in the law, or are dismissed because of inefficiency, comprise a surplus group maintaining their status as professional journalists and if rehired in that profession have a right to recognition of their employment prior to being placed in the surplus 6ntegory without the obligation to contribute to the retirement fund during that period.

Another social insurance law, dated November 24, 1921, provides for the employees and workers of the telephone service; its chief provisions are as follows: free voluntary retirement after employment for 20 years and 50 years of age. Compulsory retirement is obtained by application of the interested party or the company, firm or enterprise for reasons of illness, chronic incurable disease or proved physical or mental disability, the legal age requirement being 60 years. If physical disability is concerned, this includes any employee or worker at any age and for any length of employment, either for chronic incurable disease or incapacity for work as proved by
medical examination.

No employee or worker may obtain retirement pay if employed less than 10 years consecutively, with the sole exception of chronic incurable disease or physical or mental disability due to a work accident.

The amount of retirement is figured from the payment of 3 percent of the salary or wage received at the time of retirement. In no case may











retirement pay be more than 75 percent or less than 50 percent of such wages
or salary.

Compulsory retirement for old age, chronic incurable disease or physical disability isgiven when such disability is due to an accident occuring in employment, with a right to 25 percent of the wages or salary.

In case of death, the retirement pay goes to the widow if without
children, and if there are children, 50 percent to the widow and 50 percent to the children in equal parts; to the legitimate or recognized natural children if there is no surviving spouse, likewise in equal parts; to a
widowed mother if lacking means of support; to a father over 60 or incapacitated for work if lacking means of support or employment.

Although not a type of permanent insurance, there is the so-called
Law of Workingwomen's Maternity, of December 15, 1937, containing the following general principles:

Private merchants, civil or mercantile societies or firms; publicservice companies, associations, etc., as well as the Government, Provinces or IMunicipalities and other official organizations are prohibited from employing a woman for a period of six weeks following childbirth. It is also provided that any wonan duly proved to be in pregnant condition, shall have the right to absence from work for six weeks prior to the date when childbirth is expected.

While such a woman is absent from work she shall receive from the
Delegaci6n Provincial de Salud y Maternidad (Provincial Health and Maternity Agency) where the employer is domiciled, an allowance for maintenance in the prenatal and postnatal periods of not less than $1.20 or more than $4.00 a day, the figure to be governed by the wages received by the worker and should be their equivalent.

The funds for such allowances paid for maternity, are obtained in the following manner: a) a contribution of one-fourth percent of wages, salaries and commissions earned monthly byworkers and employees; b) from one-half percent of the payrolls for wages, salaries, comrkissions and any other payments-made monthly to permanent or other personnel by employers; and c) from fines, surcharges and other penalties imposed by the laws of the country destined to this purpose.

Employers are required to register with the Delogacien Provincial where their main office is located.

In case of the death of a contributor with a right to insurance, any pending weekly allowances and those due by law, shall be paid to the persons in whose care any offspring is placed.







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To receive the benefits of Health and Maternity insurance, an indispensable requirement is that the woman Vorker has made regular contribution to the DelegaciknoProvincial.

There is also a provision that pregnancy may not be a cause for dismissal of a worker, ard an employer must hold the position for her during prenatal and postnatal absence.

There are a number of other provisions in the realm of social logislation.

Article 5 of the Law of August 3, 1917, replaced by that of May l8, 1922, concerns the protection of women and minors in their employment.

This article prohibits the placing of any-male immigrant in commercial woments-ware ostablishments such as corset shops, fan shops, clothing stores, and the like, and other positions that may boereadily and properly hold by women, such-as clerks in pharmacies, furriers, womonts ware, bookstores, secretaries, stenographers, typists, telephone operators, and others.

Decree Law 598 of October 16, 1934, prohibits-the employment of women at night by individuals or firms engaged in industry, either public or private, or in any branch thereof, with the exception of those in which only members of one family are engaged.

The law defines industrial enterprises-as including mines, quarries, industries which manufacture, process, polish, repair, finish and prepare goods and articles for nale, in which materials are converted in any way, including ship building, demolitions, etc.

The employment of women in dangerous or unhealthful work is likewise prohibited, including alcohol distillation, mixing of liquors, manufacture of white or red lead, manufacture of explosives or inflammable materials, glass cutting and polishing, polishing of metals with emery, underground work, etc.

Industrial enterprises employing workers of both sexes are required to install separate sanitary facilities for men and women.

The regulations of the Labor Law provide that no woman may be dismissed from employment because she marries.

In reSard to the prohibition against employment of wumen at night, these regulations provide certain exceptions: domestic service in private homes, hospitals, clinics, sanitariums, and in general institutions devoted solely to the care of the sick, public communication and transportation services, establishments selling confectionery, candy or similar goods.






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Decree Law 592, of October 16, 1934, prohibits the signing on as employees on board ships registered under the laws of the Republic, of children and minors less than 18 years of ago unless they present a medical certificate attesting to their fitness for the work. The employment of minors loss than 18 as wipers or firemen on board ship is prohibited.

Decree Law 647, of October 31, 1934, prohibits the employment of
minors under 18 at night in public or Drivate industrial enterprises or in
any branch of the same, except-in an enterprise in which only members of a single family are engageod.

Youths over 16 years of age may be employed at night in industrial
enterprises which from the nature of the industrial process must -operate day and night, such as: manufacture of raw sugar, paper manufacture, iron and steel plants using reverberatory or regenerative furnaces, galvanizing of sheet metal or wire, excepting deoxidation processes, glass factories and ore reduction at iron mines.

For the purposes of this law, night is regarded as a period of 11 consecutive hours ,:Starting between 10 PM and 5 AM.

Work is permitted in coal and lignite mines between 10 P.M. and 5 A.M if a space of five hours and never less than three is provided for between working periods.

The prohibition against night work may be suspended by the President of the Republic for youth between 16 and 18, if the public interest so requires.

The emloyment of persons under 18 is also prohibited in dangerous
or unhealthful work. A law of March 29, 1936, prohibits any cor=ercial or agricultural establishment or enterprise from employing persons less than 18 for more than seven hours daily.

Mention should be made here of Law No. 148 of May 7, 1935, which provides that in each of the provincial capitals where not already in existence, a Labor Exchange is to operate. Its chief function is the registration of workers who are Cubans by naturalization, and the issuance of a registration card to this effect. *

This law provides that employers are required to inform the appropriate Labor Exchange -of all hirings and dismissals which occur in their personnel, whether steadytemporary or for piece work, and whether techniciansltaff employees, skilled or unskilled workers.



* (Note Cubans by birth are required to register with a Labor Exchange.)











It also requires every employer, in case of a vacancy in his personnel, or when he must employ more workers, permanently or temporarily, to apply to the Labor Exchange for lists of unemployed persons in the employment, trade or work for which they are needed.

Labor unions are also required to inform the Labor Exchange of all
unemployment, aaploymont or re-employment movements afTfcting their members.

In those cases where by work agreements an employer must apply to a union for the required personnel, such lists shall be sent him through the Labor Exchange of his Province.

Employers are prohibited from engaging any personnel without presentation of an appropriate registration cvrd from the Labor Exchange, from
which he shall take the data to be kept in his payroll ledger.

Another provision that should be mentioned is one contained in a Law
of May 28, 1935, in regard to employment agencies. Under this provision every natural or juridical person operating an employment agency for any kind' of
labor, must obtain appropriate authorization from the Ministry of Labor. To operate as an employment agency there must be, among other requirements a reliable director as well as capital of not less than lO,000, guaranteed or in cashwhich mustbegoverned in its relations with the public by the regulations on the subject issued by the Ministry of Labor, and charge for services according to rates approved by that Ministry. It must also post a bond in currency or government bonds for 5,000.








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INDUSTRIAL PROPERTY


The treatment of Industrial Property is first of all set forth in the Constitution and secondly in Decree Law 805, of April 4, 1936, the law on Industrial Property.

The Constitution, in article 92, recognizes for every author or inventor the right to exclusive ownership of his work or invention, and states further that the concession of trademarks, industrial marks and other recognition of commercial right bearing indication of Cuban origin. shall be voided if used in any way to protect or cover goods manufactured outside the country.

In its second Transitory Provision of Section IV in Title XVIIP the Constitution created the-Patent for Industrial Introduction (Patente de Introduccio'n Industrial), innovation established with great minuteness, more proper to regulations than to a constitutional principle. It provides that the State shall grant an industrial patent of introduction to any natural or juridical person whowit the first two years after promulgation of the Constitution may so-request from the Ministry of Commerce, for establishing a new industry, principal or accessory, or for manufacturing, processing or preparing goods suitable for local consumption or export'which at the time are not produced or prepared within the national territory. It also requires the construction, within 18 months after the patent is granted, of one or more factories or the expansion of ohe in existence to a capacity suitable for producing the article in question. Titles to such patents may not be granted more than once for each type of article as classified or listed in each section of the current customs tariff. Once a patent of this kind has been granted-and the capacity to produce the articles protected by such patent-is proved, during the period it is in effect no other.person may manufacture; process or prepare such articles or similar articles for domestic consumption, and any violations shall be subject to such civil and criminal liability as the law provides, and without exception any such articles as are imported from abroad for any time or purpose during such period, shall be subject to a surcharge, in addition Vo the prevailing duty, equal to 50 percent ad valorem, as tariff protection. The Government may also adopt any' measures deemed necessary to prevent dumping and any other illegal practices. In applying 'such surcharges the texts of current international treaties will be respected.

The proprietor of a patent for industrial introduction has the right, during the period it is in effect, to import without limit or restriction any machinery and materials needed for installation of the industry, as well as the raw materials to be employed or utilized in production at a rebate or reduction (unless they are already duty free) of 80 percent of the customs duties and charges that are applicable according to the Customs Tariff in-effect at the time the patent is granted. During the time it is in effect, no change shall be made in such exemptions or taxes, duties, or other charges of an internal nature applicable on that date to such imports









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Upon their entry into the country, or to the industries protected by the patent in question. -Articles so produced shall be exempt from any other type of governmental, provincial or municipal tax different from or greater than those paid on similar goods of domestic or foreign origin.

In no case shall any legal provision be enacted-which will harm the
rights protected by the patent, nor may it be altered, suspended or declared terminated unless by expiration of its period or for non-compliance determined by a court decision.

It is further provided that industries protected by such a patent must by preference use raw materials produced in the country if of equal quality and price in relation to those produced abroad, and wholesale sales for domestic consumption of goods manufactured under protection of such patents may not be made at a price of more than 10 percent 0ove the average price for domestic consumption for the previous fortnight as quoted on the New York market for goods of the same type.

The Law on Industrial Property is contained in Decree La'# 805 of-1936P which took effect on August 11 of that year and which repealed the Royal Decree of August 21, 1884 and Orders 512 of 1900 and 160 of 1901.

It provides that any trademark concession is indivisible in regard to its possessor. Hence a product may not be exploited by more than one individual or entity. If the trademark protects several products, it may be used by different persons providing they respect the above principle and that in the division of the'products there shall be no error or confusion because-of their similarity. In case the trademark is transferred or sold in part', the new proprietor will be granted a certificate for that particular product.

A concession in several parts according to law is granted without prejudice to third parties,

Applications must be presented to the Ministry of Commerce, and if the applicgnt does not reside in Habana to the Provincial Delegation of that Ministry.

In the not of presentation which must be signed by the applicant and in the receipt which is issued, there must appear the day, hour and minute at which the application was presented, the name of the applicant and the nature of the registration,

The different types of registration that the law governs are transferrable by any legally recognized means. In order that the transfer of such rights shall havo'bffect on-others, it must be supported by documents legally accrediting the transfer, with a statement showing that the propertytransfer tax has been paid or that it is exempt from same.











Acts of transfer or conveyance issued abroad shall be valid if they conform to the laws in the country where issued.

In addition to these general provisions, the law-takes up separately the various classes of-Registration, or in other words, the various types of industrial property, given here in outline form.

Patents: k patent is a certificate granted by the State by which it
recognizes the right to exclusive use'.of an invention in industry and to give to the trade or place on sale the articles manufactured as a result of such invention, for a given length of time.

They may be for invention, for introduction or for the deposit of foreign patents.

Patentable inventions~include: apparatus, machines, instruments,
appliances, tools, utensils, -processes for mechanical or chemical operations that are wholly new, that is, the nature of which is unknown or is not applied either in Cuba or abroad, and providing they are to be devoted to industrial purposes or production (Ifhis list is merely illustrative and not limiting); a new industrial product or a. new variety of plant reproduced asexually, with the exception of plants propagated by tubers.

Such patents may not include: more or less ingenious ideas if not for some practical or industrial use; mechanical or chemical methods; changes in form, dimensions, proportions or material of some patented article; the application of the methods or apparatus of one industry to some other; inventions which are actually not a novelty; theoretical and purely scientific
principles; commercial or f inancial systems or plans; 13md products obtained directly from the soil or the animal or plant kingdoms.

For an invention to be patentable it must be a novelty, that is, unknown in Cuba or elsewhere.

A very important provision states that when the common interest demands popularization of the invention or its exclusive use on the part of the State, expropriation of the patent Play be decreed through due compensation and a declaration of public utility.

Patents may only be issued for industrial articles.

Applications for patents, when presented, are subject to two exami .. nations: one as to form, to determine patentability; the other comparative, to be made if the first is favorable. If the examination shows defects, the application shall be held in suspense for a period of four months for correction of such defects.

If the comparative examination shows infringement on patents previously granted or applied for, the application is rejected; if such infringement








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does not embrace the entiTe invention, any changes or rectificationmust be made within four months. .

If there is no infringement the-patent will be granted and the applicant must then show within six months after date of notification, that 'he has paid the required fee Of $35-00 at the appropriate Fiscal Office.

A patent of invention runs for 17 years without prolongation.

Patentsof deposit: Any foreign patent may be deposited in Cuba at any time while it is in force in-4he country of origin, unless the article has been exploited in Cuba prior to the date of application.

They are subject to the same examinations as patents of invention,
and shall expire when they expire in their country of origin, but this may never be longer than 17 years.

Paten ts of Introduction: This potent is issued for inventions that have been patented abroad but such patent not deposited in Cuba within three years, or that have not been exploited in Cuba prior to the dateof application, or that have not been registered as h patent of invention. There are also the patents for Industrial Introduction, already discussed, as provided for by the Temporary Constitutional Provision.

All applications for such patents are subject to the same requirements, examinations, etc. as are patents of invention.

The grantee of a patent of introduction must show that he is exploiting the product within a period of three years after the patent is issued, and in case he alleges impossibility of exploiting it within that period, he may obtain from the Ministry of Commerce three successive prolongations of one year each, which must be applied for in advance.

In regard to patents of deposit, such exploitation must be within one year counting from the date of issuance, and there can be no prolongation.

The law lists the requirements to be net in applying for a patent,
omitted here, and provides for their voidance and expiration. It declares that a patent is void if it is shown that in regard to the purpose of the patent, the circumstances of the invention and its novelty are not true; that-..it has been exploited prior to the date of application in Cuba, for patents of introduction and deposit, if it may appear that the article affects public order or safety; if the purpose to which an article is put differs from that for which it was patented; if it is shown that the elenwnts contained in the description and designs will not produce the article patented; and if the fiscal fees are not paid..

Action to void a patent must be taken before a courtof justice.










A patent terminates when the period of its legal existence expires; when the possessor ceases to exploit' it for more than a year and a day; and by express desire of the grantee.

A declaration of termination may be decreed by the minister of Commerce.

Trademarks: Section 2 of the law deals with trademarks and defines them as any sign or material means in any type or form used to point out or distinguish from similar articles any product of industry, commerce, agriculture, and labor.

A-trademark may include names, surnames, denominations, words, -signs, phrases,-letters, firm-names, commercial or-private names, vignettes, headings, arms, labels,-newspaper headlines, magazine titles, embossment, rai'sed".work, watermarks, monograms, engravings, shields,' seals, emblems, etc. (This list is merely illustrative and not limiting.)

The registration of trademarks to distinguish articles made of
precious metals, pharmaceutical, opotherapical, biological and veterinary preparations is compulsory and such goods may not be placed on sale unless protected by a trademark registered or applied for. The registration of a trademark for all types of prepared tobacco products is also compulsory.

The law provides that a trademark-may be applied for and obtained
by any of the following: Manufacturers, merchants, farmers, and in general any producer or seller, whether individuals or firms, who will use them to distinguish the products of their business, of whatever nature; collective organizations legally constituted for the purpose of exporting under a collective trademark, providing they comply with the law; and' persons or entities residing abroad, in accordance with terms of the law.

Manufacturers, merchants, etc., who are legally disqualified may not obtain a trademark.

The legitimate possessor of a trademai&k has the right to oppose the granting of any trademark prohibited by law; to legal process in court against any infringement of his right, and to sue ini civil court for compensation for any damage or injury he may be caused.

Civil damages may also be sought against any merchant who suppresses a producer's mark or sign without his express consent.

The law mentions a number of prohibitions in regard to trademarks,
among which are any device which is the same or similar to another trademark already registered for a like product or one that may offer unfair competition that would give rise to error or confusion on the part-of the consumer; national or foreign shields, flags, insignia, bearings, arms, -emblems or decorations and municipal or provincial sheilds; family names, unless those of deceased historical personages and if there is no objection from persons