Changes in Cuba: Facts or Fiction?

cuba flag-2526259_1280

On 13 July 2019, the Cuban Parliament approved the new Electoral Law, restricting, for the first time in nearly 60 years, the presidency to a five-year term in office and a maximum of two consecutive terms. This new law also creates the figure of the President, to be elected by the National Assembly and not by direct vote of the people.

This new act constitutes the first legal provision issued after the amendments made on 22 July 2018, when Cuba’s National Assembly unanimously approved the issuing of a new constitution. These amendments are the result of open discussions held during the second half of 2018, where Cuban citizens were given the opportunity to express their opinions and suggest “changes” to the initial proposal. This exercise culminated in a constitutional referendum that took place on 24 February 2019, where 7.8 million (90.15%) exercised their right to vote with 86.85% voting in favor of the amendments.

Although most of the proposed amendments are still in the process of being drafted for later implementation, the new modifications, if implemented, would allow a “free market economy” yet keep the Communist Party in control of the economy and of the state. A division of power at the top of government is also proposed, aimed at guaranteeing the preservation of the socialist system in a post-Castro era.

Although Raul Castro handed power over to Miguel Díaz-Canel, who was instituted Prime Minister in April 2018, Castro will remain head of the Communist Party until 2021, although actually he has indicated his willingness to go after that. As Raul also heads the constitutional reform commission, it is clear that he will have control of the ship at least until then.

The new Constitution also creates the position of Prime Minister and designates the President of the Assembly as head of state, Cuba’s highest executive body. Nevertheless, the President will not be in charge of the Council of Ministers, which would be supervised by the Prime Minister as it has been up to now. As of today, Díaz-Canel is acting as both, President and Prime Minister, until the election of the President be held next October and that of the Primer Minister before the end of this year. The position of the President will be chosen by the National Assembly — it is expected to be Díaz-Canel —, while the Prime Minister will be appointed by the President and ratified later by the National Assembly.

Under the new Constitution free health care and education to all Cuban citizens continue to be guaranteed. However, some services, such as aesthetic procedures, as are excluded in almost all insurance policies worldwide, will not be covered. It would be the first time that Cuban hospitals will charge Cubans for medical services. As it is now the case, tourists will continue to need a mandatory medical insurance policy — which needs to be issued by a foreign insurance company authorized by Cuban entities  — to be allowed entrance to Cuba.

A year since the Trump administration banned all commercial and financial transactions with 180 Cuban companies (mainly linked to the Cuban Armed Forces), the list has grown to 220 companies as of today . Whilst entering a phase of gradual political transition, Cuba will continue to lack access to US reinsurers to protect risks. For more info about reinsurance issues in Cuba, please refer to the following links:

https://www.kennedyslaw.com/thought-leadership/article/cuba-a-newly-emerging-market/;

https://www.kennedyslaw.com/thought-leadership/article/cuba-sanctions/.

 

[1] http://www.cuba-hostels.com/health-insurance-policy-for-traveling-to-cuba/list-of-recognized-insurance-companies-in-cuba/

[2] https://www.state.gov/cuba-sanctions/cuba-restricted-list/list-of-restricted-entities-and-subentities-associated-with-cuba-as-of-april-24-2019/

Authors: Alex Guillamont, Head of Latin America and Caribbean at Kennedys and Daniel Padrón, Associate at Kennedys’ regional hub in Miami.

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