Optimizing economic outcomes for the development of the nation requires the application of a coherent legal structure with the investment process the Special Zone Development Mariel (ZEDM) will face.
According to Narciso Cobo Roura, vice president of the Cuban Court of International Commercial Arbitration, outlining the legal environment and taking it to higher levels is an imperative in the context of updating the Cuban economic model and it corresponds with the next revision of Law 77, which regulates the process of foreign investment in the country.
To Cobo, special development zones, even with the history of the free zones, are new to the country and the Party Guidelines are projected more strongly in that direction. Consequently, he says the ZEDM is the first experience of this kind.
What differences do you see between the known free zones and ZEDM?
Mariel is the first real development area we created in the country. We have a history of so-called free zones, but ZEDM has greater flexibility, facing a new reality, a new projection, with other possibilities, with lots of potential and greater benefits.
Free zones have a grantee, usually a Cuban corporation, and operators and worked, in my opinion, with limitations. This other special area, the ZEDM, has the possibility of working with a variety of dealers, which may be foreign natural or legal persons or domestic legal persons.
There is an opening in the case of users, which may be natural or legal persons or Cubans. In the latter case if they are residing in the country.
The number and diversity of actors that can operate within a special area is considerably larger, expanding and enriching the system of relations.
There are also other criteria of flexibility. In this case, the Zone Office itself, which is created for administration, may approve foreign investment in it , and only in certain cases it needs the Council of Ministers’ approval. For this purpose they shall have the power to assess, with the support of a committee, investment proposals, although the Government shall submit those related to natural resources, real estate development or involving the transfer of state property, among others. All subject to time limits for responding.
From the legal point of view the ZEDM will operate with greater flexibility…
Of course it suggests another dynamic. To the legal guarantees that it has, adds a number of special schemes such as those established in the field of labor, tax or customs relations, which are enablers of investment. And they should encourage this place to be able to attract more foreign investors in an effective manner.
Do you think the next revision of Law 77 on foreign investment in Cuba is necessary?
Law 77 has always worked, has been good, but requires updating. I do not think that is obsolete, but experience allows a new mechanism, another degree of refinement to bring it into line with the new realities. It is needed a more facilitative stage so that there is a more open and transparent communication with the foreign investor that has traditionally found certain bureaucratic mechanisms that hinder negotiations.
I believe that anything which tends to shorten these negotiations and make them more transparent, and to make them more effective, is positive. I hope the new law moves in that direction.
To what extent the complementarity between the opening of the ZEDM and expansion of the Panama Canal will contribute to trade development in the region?
In economic terms , experts argue that the expansion of the Panama Canal will mean that a significant part of the loads been moved from the West Coast to the East Coast in the United States, for example , will somehow be transferred to the seaway. This implies a considerably larger cargo volume.
To this it must be added the fact that these vessels greatly economize transportation: saving is important. These elements lead us to think that there will be an increasing flow of cargo by sea in the coming years.
Moreover, these ships cannot dock at any port, only those with certain requirements. Within those few it will be the Mariel port, which would have a possibility of joining the chain, from this new era of maritime transportation. It will mark, I think, a before and after. It would definitely give us the opportunity to position in an important place.
How do you rate the work of commercial arbitration in Cuba and the world?
Arbitration is a very effective way to resolve disputes on trade, and Cuba has built up a culture in this regard. Companies are better prepared in the field. Contracts are contemplating more carefully the ways in which conflicts are resolved. This leads to truly assess what are the most appropriate spaces. Within these criteria, the Cuban court of arbitration has been quite privileged, which entails recognition of the independence and impartiality of the arbitrators and what work has been sustained for many years.
Today it is comprised of a group of experts with a lot of recognition in the academic and professional circles. All this reinforces the credibility of the Court and the country itself.
We have seen trade traumatic change at different times, and current circumstances for Cuba have continued to be very complicated.
However, I believe that we are facing new opportunities: our business portfolio is larger, with a wider range of countries as customers and suppliers and we are taking very serious steps about the development of foreign trade. Without having too wishful thinking, we can move forward.
For: Sundred Suzarte Medina
