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Duty free zones and industrial parks decree law 165 from 1996

Posted September 29, 2005 by publisher in Cuba Business.
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Camara de Comercio de la Republica de Cuba

Decree-Law No. 165
Duty-Free Zones and Industrial Parks

DECREE-LAW NUMBER 165
DUTY-FREE ZONES AND INDUSTRIAL PARKS
Fidel Castro Ruz, President of the Republic of Cuba’s State Council. LET IT BE KNOWN: That the State Council has agreed the following:

WHEREAS: The creation and development of Free Zones and Industrial Parks in the national territory offer new opportunities for foreign investment, as the investors established therein enjoy a special regime as to customs, banking, taxation, labor, migration, public order, capital investment and foreign trade, and this will mean the generation of new jobs, a source of hard currency and technological, economic and social progress for the country.

WHEREAS: Cuba offers great attractions for the development of Free Zones and Industrial Parks through foreign investment, because of its facilities for international maritime and air communications due to its geographic position, its sociopolitical stability and the availability of skilled labor, among other favorable factors.

WHEREAS: Law number 77/95, of 5 September 1995, the Foreign Investment Act, refers to Free Zones and Industrial Parks as one of the accessible sectors for foreign investment, and announces that they shall be regulated by the special legislation that shall be enacted for that purpose.

WHEREAS: It behooves to enact a Decree-Law establishing regulations which will govern the Free Zones and Industrial Parks.
THEREFORE: The State Council, making use of the authority conferred upon it by Article 90, Paragraph b) of the Constitution of the Republic, resolves to enact the following

DECREE- LAW NUMBER 165
FREE ZONES AND INDUSTRIAL PARKS

CHAPTER 1
PRELIMINARY PROVISIONS

ARTICLE 1.1 The object of this Decree-Law is to enact the regulations in relation to the establishment and functioning of Free Zones and Industrial Parks.

2. The provisions of this Decree-Law concerning Free Zones are likewise applicable to Industrial Parks.

3. The establishment of Free Zones and Industrial Parks contributes to economic and social development, stimulates international trade and, besides attracting foreign capital, has the following specific aims:

a) generating new jobs and raising the workers’ skills;
b) incorporating a greater domestic industrial value added, making use of the country’s resources; and
c) developing new national industries through the assimilation of advanced technologies and the export of national products.

4. This Decree-Law also includes the regulations of a special customs, banking, tax, labor, migratory and public order
regime, which imply facilities and incentives for foreign investment.


CHAPTER II
DEFINITIONS

ARTICLE 2.1. For the sake of brevity, the following terms are used in this Decree-Law:

Free Zone, meaning Free Zone and Industrial Park.

Executive Committee, meaning Executive Committee of the Council of Ministers.

Commission, meaning Free Zone Commission.

2. In the same text, the following terms are used, with the meaning indicated in each case:

Free Zone: a space within the national territory, duly delimited, without any residing population, with free import and export of goods, not linked to the customs demarcation, where industrial, commercial, agricultural, technological and service-rendering activities are carried out with the application of a special regime.

Industrial Park: a space within the national territory with similar characteristics to those of the Free Zone, but where industrial activities and those service-rendering activities that serve to support them are predominantly carried out.

Special Regime: rules related to customs, banking, taxation, labor, migratory and public order systems, less onerous and rigid than common or ordinary ones, applicable to grantees and operators of Free Zones as an incentive for investment.

Concession: a unilateral act by the Government of the Republic of Cuba by which a natural or legal person is granted the faculty to develop and exploit a Free Zone, subject to compliance with certain conditions.

Grantee: The natural or legal person, with a foreign domicile and foreign capital, or the national legal person which, in the exercise of the corresponding concession and with its own resources, promotes and develops the necessary, sufficient infrastructure,for the establishment and functioning of the Free Zone and subsequently assumes the government and management of it.

Operator: The natural or legal person, with a foreign domicile and foreign capital, or the national legal person which the Ministry for Foreign Investment and Economic Cooperation, at the grantee’s proposal, authorizes to establish itself in the Free Zone to conduct one or various activities comprised within the legal framework of this occupation.

Official Registry: Books or magnetic supports which the Ministry for Foreign Investment and Economic Cooperation establishes and organizes for the registration of the grantees and operators.


CHAPTER III
THE ESTABLISHMENT AND CONTROL OF FREE ZONES
Section One
The Establishment of Free Zones

ARTICLE 3. The Executive Committee of the Council of Ministers, on its own initiative or at the proposal of the Ministry for Foreign Investment and Economic Cooperation, disposes the establishment of Free Zones.

Section Two

Control of Free Zones

ARTICLE 4.1. The Ministry for Foreign Investment and Economic Cooperation is the State Central Administrative body responsible for regulating and controlling the activities carried out in Free Zones.

2. To these effects, it is responsible for:

a) proposing to the Executive Committee, based on solid reasons, the establishment of Free Zones and the granting of concessions;
b) proposing to the Executive Committee the policy to be followed in relation to Free Zones and their development programs;
c) enacting the regulations of each Free Zone at the grantee’s proposal or, lacking this, on its own initiative;
d) organizing and coordinating the relationship with other entities whose activities are related to those which are carried out in Free Zones;
e) establishing, together with the Ministries of Finances and Prices, Foreign Trade, Economy and Planning, Labor and Social Security, and of the Interior, as well as with Banco National de Cuba, the General Customshouse of the Republic and other state entities, a system by means of which the negotiations or arrangements to be carried out or accomplished by the grantees and operators of Free Zones in regard to them are conducted from a single place or central office within the Free Zone itself;
f) creating, organizing and regulating the Official Registry, for the grantees’ and operators’ registration;
g) receiving the Free Zone operator authorization applications, knowing about them and enacting the corresponding resolutions;
h) fixing the amounts and establishing the way in which the grantees must make the guarantee deposits to ensure the compliance with the concession conditions;
i) complying with the other duties legally imposed on it in relation to Free Zones.

ARTICLE 5.1. The Ministry for Foreign Investment and Economic Cooperation, with the aim of ensuring the continuity and effectiveness of Free Zone activities, also acts as their regulating body, and as such it is up to it to guarantee the compliance with the conditions imposed on the respective grantees and operators and to react effectively against any non-observance of the rules.

2. The grantees and operators must give the information and perform the actions that the Ministry for Foreign Investment and Economic Cooperation, within its faculties, requires from them for better executing its supervision obligations.


CHAPTER IV
THE FREE ZONES COMMISSION

ARTICLE 6.1 The Free Zoiaes Commission is set up as an advisory body of the Ministry for Foreign Investment and Economic Cooperation with the competence and functions indicated further on.

2. The Free Zones Commission is made up of the Minister for Foreign Investment and Economic Cooperation, as chairman, and a representative of each of the following bodies, as voting members:

- Ministry of Economy and Planning
- Ministry of Finance and Prices
- Ministry of Foreign Trade
- Ministry of Labor and Social Security
- Ministry of the Revolutionary Armed Forces
- Ministry of the Interior
- Ministry of Science, Technology and the Environment
- Ministry of Transportation
- Banco National de Cuba
- General Customshouse of the Republic

3. In the event that, due to the nature of the matter being discussed, it is considered necessary to hear the opinion of a body or agency not included on the foregoing list, the chairman shall request its administration to appoint a representative which would act as another voting member of the Commission to these effects.

4. The Commission has the following functions:

a) cooperating with the Ministry for Foreign Investment and Economic Cooperation in the drafting of the Free Zones Development Comprehensive program;
b) passing judgement on proposals for the setting up of Free Zones and the granting of concessions; and
c) recommending, among other matters, the decisions and actions that it deem useful for the development of Free Zones.

5. The Commission itself, prior to the approval of the Ministry for Foreign Investment and Economic Cooperation, shall draw up the Regulations which it will have to follow in which the frequency of its sessions, the amount of votes needed for reaching decisions
and how to put these on record shall be established, as well as all other relevant provisions.


CHAPTER V
THE FREE ZONE GRANTEES
Section One
Authority Empowered to Grant the Concession

ARTICLE 7. The granting of management concessions in relation to specific Free Zones is a responsibility of the Executive Committee.

Section Two
Application for Concession and its Processing

ARTICLE 8.1 The granting of a management concession in relation to a specific Free Zone can be applied for by natural or legal persons domiciled abroad and having foreign capital or national legal persons.

2. The application is submitted to the Ministry for Foreign Investment and Economic Cooperation together with a statement containing the following information:

a) name or firm name and address of the applicant;
b) description of the objectives, activities, structures, organization and services planned, in accordance with the development plan of the territory concerned;
c) area and location of the Free Zone;
d) a technical, financial and economic feasibility study of the project and the prospective market;
e) indication as to the composition of the capital;
f) timetable for executing the project, including the initial investment and a plan of future investments;
g) documents certifying his/her identity and economic solvency, and in the case of a national or foreign legal person, a copy of the incorporating documents of the entity and of the documents which attest the powers of the appearing party as its legitimate representative, duly legalized; and
h) other data and information required by the Ministry for Foreign Investment and Economic Cooperation in specific cases.

ARTICLE 9. The Ministry for Foreign Investment and Economic Cooperation, once it has examined the documents submitted to it and consulted with other bodies or entities if need be, will send what has been done to the Commission so that, taking these elements into consideration, it gives its opinion and finally refers the file prepared to this effect to the Executive Committee for decision.

Section Three
Granting of the Concession

The Concession shall be granted or denied within a term of sixty (60) calendar days, counted from the day the application is submitted, and the government decision reached shall be notified to the person concerned through the Ministry for Foreign Investment and Economic Cooperation.

ARTICLE 11.1 The decision granting the concession shall contain the following data:

a) the grantee’s identity and legal status;
b) geographical location of the Free Zone being authorized;
c) conditions imposed on the grantee;
d) investment program;
e) characteristics of the project;
f) activities to be carried out;
g) special regime applicable;
h) time limit of the concession; and
i) any other data whose inclusion is deemed convenient.

2. The time limit of the concession shall not exceed fifty (50) years and it can be extended for successive time periods until reaching the originally set time limit.

3. Once the time limit of the concession and its extension or extensions, as the case may be, expire, the original grantee shall have preference for a new concession over other interested parties having the same conditions.

Section Four
Faculties and Duties of the Grantee

ARTICLE 12.1 The development, establishment and functioning of the Free Zones are carried out by the grantees, who for this purpose perform the activities described in the decision of the Executive Committee which grants the concession, which comprise the following:

a) developing land lots, constructing on them buildings for offices, factories, warehouses, depots, rendering of services and other complementary activities, as well as any infrastructure necessary and convenient for carrying out the latter, both for their own use and that of third parties who may establish themselves therein;
b) leasing land lots or giving surface rights over them for carrying out authorized activities;
c) offering start-up and partial or full plant operation services to support or carry out operators’ activities;
d) building, promoting and developing centers for technical training, medical assistance, sports and recreation, as well as public services establishments, including transportation, for the use of operators and their workers;
e) making all the necessary facilities to provide public services such as electric power, gas and water, local and international communications, safety, sewerage, treatment of residuals and rubbish, as well as any other required to achieve the objectives of the Free Zones;
f) carrying out, outside the Free Zones and in the areas eventually selected, the construction of houses, hotels and other lodging facilities, hospitals, schools and as many others as may contribute to the good functioning of the Free Zones;
g) operating airports, seaports, piers, loading and unloading places, railway stations or railways, in accordance with the respective legal regulations in force; and
h) any other included in the grant by the Executive Committee.

2. The grantee, when entering into the leasing contract or the contract granting surface rights, will abide by the provisions of the Civil Code of the Republic of Cuba to that effect.

3. The rest of the activities previously mentioned shall also be carried out observing the rules that exist in relation to them.

ARTICLE 13. The grantee, once the concession has been granted, must:

a) invest in the development of the Free Zone an amount no less than the one proposed in the application and ratified in the decision whereby the concession was granted, and within the scheduled time limit;
b) begin the investment referred to in the foregoing paragraph within a period no greater than one hundred and eighty (180) days, counted as of its registration in the Official Grantees and Operators Registry;
c) guarantee the existence and maintenance of the infrastructure, according to what was specified in the concession, allowing for proper working conditions and the rendering of basic and indispensable services, including urban greening and areas for recreation, in conformity with international practices;
d) promote and develop training programs which will contribute to the technical and professional upgrading of the workers, whenever this is required;
e) ensure the efficiency of the Free Zone facilities, in such a way that the operators have the necessary conditions for carrying out their activities;
D comply and make others comply with the regulations in force or those which are enacted in relation to environmental protection, the elimination of pollution, the preservation of soils, urban greening, the sea, the wildlife, as well as with veterinary and phytosanitary control;
g) observe legal provisions on occupational health and safeti.
h) draw up the draft regulations for the Free Zone for its subsequent approval by the Ministry for Foreign Investment and Economic Cooperation;
i) make the guarantee deposit if these obligations are included in the concession conditions; and
j) submit an annual report of its activities to the Ministry for Foreign Investment and Economic Cooperation and any other report that Ministry requests.

ARTICLE 14. The grantee can freely set the price the operator must pay for the transfer of property, the leasing of facilities and the cession of rights in its favor, as well as for the services it agrees to render the latter.

ARTICLE 15. The grantee, with the prior authorization of the Ministry for Foreign Affairs and Economic Cooperation, can carry out its functions through an agent or proxy, who would always act in the name and under the responsibility of the former.

ARTICLE 16. The grantee, in order to begin his operations and activities, must register in the Official Grantees and Operators Registry within a period of thirty (30) days as of the date the concession is granted.

CHAPTER VI
THE FREE ZONE OPERATORS

Section One
The Authority Empowered to Authorize the Operator

ARTICLE 17. The Ministry for Foreign Investment and Economic Cooperation is the one in charge of authorizing, on the grantee’s proposal, the establishment of operators in the Free Zone facilities.


Section Two
The Operator Authorization Application and its Proceeding

ARTICLE 18. Natural or legal persons with foreign domicile and foreign capital or national legal persons interested in this sort of activity can be Free Zone operators.

ARTICLE 19.1. To procure the operator authorization, the persons concerned must submit a formal request to the grantee together with a statement containing the following information:

a) as to natural persons: full name, nationality, passport data and home address.
b) as to legal persons: name of the enterprise, company or corporation, corporate purpose, country under whose laws it has been incorporated, information concerning its registration in the corresponding public registry, as well as the full name of its legal representative. A copy of its incorporation documents and certification which attests the capacity of the legal representative appointed, will beattached duly legalized in conformity with Cuban law.
2. The following information, duly documented, shall be submitted with the application in relation to the following paragraphs:
a) the applicant’s economic solvency;
b) the activities it is planning to carry out;
c) a list of the main machinery, equipment and accessories, and of the raw materials and other means which will be used;
d) the estimated amount of jobs the project will generate according to the financial-economic and market studies made;
e) initial and future investments, including a timetable of the project execution; and
f) other data and information required by the grantee in each concrete case.

3. Once the proceedings specified in the foregoing paragraphs have been fulfilled, the grantee shall submit the completed file to the Ministry for Foreign Investment and Economic Cooperation to its effects.

Section Three
The Operator Authorization

ARTICLE 20. The Ministry for Foreign Investment and Economic Cooperation, once it has examined and evaluated all the documents submitted, and also made all the consultations with the pertinent bodies of the Central Administration of the State, shall act accordingly within a period of no more than fort’ five (45) days, counted from the date the application was submitted.

ARTICLE 21. The operator authorization should contain all the information relating to the operator’s identity, the Free Zone where he shall carry out his tasks, the program of immediate and future investments, the carefully detailed activities within his scope of operations, the special system applicable and any other relevant or convenient matters.

ARTICLE 22. The operator, in order to begin his operations, must register in the Official Grantees and Operators Registry within a period of thirty (30) days from the date the authorization is granted.


Section Four
The Operators’ Powers and Duties

ARTICLE 23. A Free Zone operator can carry out the activities described in the authorization, comprised within the following framework:

a) production and manufacture, i.e, the transformation of raw materials and semifinished goods;
b) assembly, i.e., the manufacturing of finished or semi finished goods by the assembly and fitting of spare parts, parts, components and accessories;
c) processing of finished and semi finished goods, i.e., finished or semi finished goods, spare parts, components, accessories or parts to be submitted to some process necessary for making viable the commercialization of the product concerned;
d) commercial, i.e., handling, packing and repacking, storage, deposit and buying and selling of the products;
e) operational, i.e., the use of seaports, airports, piers, loading and unloading places, railroad stations and railways, for loading and unloading on land and other similar activities;
f) banking, financial and insurance services, i.e., the rendering of these services in the Free Zone in which it is established, in other Free Zones or abroad;
g) general services, i.e., rendering of services to Free Zones and to the operators and their workers, such as restaurants, laundries, pharmacies, beauty parlors, gyms, medical assistance and other similar ones;
h) other services, i.e., rendering of marketing. auditing, management, informatics, consulting and similar services to the operators established in that same Free Zone or others of the national territory or for export;
i) technological or scientific research, i.e., research for the improvement of the technological level of industrial and agroindustrial activities;
j) agricultural, i.e., crop raising and husbandry; and
k) other activities previously determined by the Ministry for Foreign Investment and Economic Cooperation.

ARTICLE 24. Any application that the operators have to submit to state entities and institutions or any proceeding they have to carry out in relation to them must be done through the single place or central office of the Free Zone.

ARTICLE 25. For reasons of labor supply, transportation, raw material management and other important reasons, and with the previous and express authority of the Ministry for Foreign Investment and Economic Cooperation, the operator can carry out the activities specified in the corresponding resolution of the aforementioned Ministry out of the Free Zone where it is established, but with the proper customs, fiscal and labor controls.

ARTICLE 26.1 The Free Zone operator carrying out activities in building, manufacturing, assembly, processing of finished or semi finished goods, trade and agriculture, can assign up to twenty-five percent (25%) of the goods it produces to the national market.

2. In the event that the operator requests to introduce more than twenty-five percent (25%) of its goods in the national market, the matter shall be decided by the Ministry for Foreign Investment and Economic Cooperation and the Ministry of Foreign Trade.

3. Imports from Free Zones to the national customs territory are subject to the same regulations and the payment of the same tariffs as those applied to exports coming from other countries, excluding from this payment the percentage of the incorporated national value added.

4. No tariffs shall be paid when goods that have undergone a transformation or improvement (value added in its costs) that contributes at least fifty percent (50%) of their final value are introduced into the national market.
ARTICLE 27. Operators must comply with the following obligations:

a) keeping records of their production, services and other activities, according to universally accepted principles;
b) investing in their projects an amount no less than that indicated in the application and in the terms and time limits expressed in the corresponding authorization;
c) promoting and carrying out training programs that will allow for the technical and professional training and upgrading of the workers when necessary;
d) sending to the Ministry for Foreign Investment and Economic Cooperation, through the grantee, an annual report with the following information: jobs generated, investment made, volume, amount, type and destination of exports (goods and services), production achieved, inputs used (amount, origin and type) and any other that the aforementioned Ministry indicates;
e) submitting fiscal reports to the Ministry of Finance and Prices with all the data indicated by that Ministry;
f) taking the necessary measures in order for the inspections and verifications stipulated by the competent authorities to be efficiently made for the control of the conditions established in the authorization;
g) making the guarantee deposits in the required cases; and
h) carrying out their activities under the terms and conditions established in the authorization granted.


CHAPTER VII
OTHER PROVISIONS CONCERNING GRANTEES AND OPERATORS

ARTICLE 28. The grantee can carry out the activities of the operator concurrently with its own, being applicable in that event the corresponding regulations for both occupations.

ARTICLE 29. The grantee and the operator enter into a contract which includes, among other stipulations, those in which the former transfers to the latter through a sale, a lease or any other form of property transfer, a definite part of the Free Zone facilities, the rights that the former cedes and the services it agrees to render the latter to make his task, feasible, as well as those which set the amount, the form and the conditions of the price to be paid.

ARTICLE 30. The grantee and the operator can purchase, in the national territory outside the geographic area where they are established, goods or services offered by the enterprises based in the country.


CHAPTER VIII
SPECIAL REGIME


Section One
Scope of the Special Regime

ARTICLE 31.1. The special regime mentioned in previous rules of this Decree-Law and defined in Article 2.2 of same, applicable to grantees and operators of Free Zones as an incentive for investment, consists of customs, banking, taxation, labor and public order regulations which are also special, i.e., more appealing and less rigid and onerous than common, ordinary ones. Regarding migratory regulations, these will be consigned in a resolution that the governing body shall enact within a period of 90 days after this Decree-Law goes into force.

2. The grantees and operators enjoy the special regime that this Decree-Law stipulates, and under no circumstances can it be modified to their detriment.


Section Two
Special Customs Regulations

ARTICLE 32.1. Grantees and operators are exempt from paying tariffs and other customs duties for introducing in the Free Zones products intended for carrying out their authorized activities.

2. Exports made from Free Zones are not encumbered by tariffs or other customs duties.
ARTICLE 33. No weapons, explosives or products whose export or import is banned, suspended or restricted by current law can be introduced in the Free Zone.

ARTICLE 34. The General Customhouse of the Republic shall establish the necessary mechanisms and the proper controls in relation to imports and exports made by Free Zone grantees and operators.


Section Three
Special Taxation Regulations

ARTICLE 35.1. Free Zone grantees and operators, benefited by the special regime shall be exempt from paying the following fiscal obligations:

a) profits tax; and
b) tax covering the utilization of the labor force. 2. These exemptions are granted in the following manner:

In relation to granteees and operators who carry out activities in production, manufacturing, assembly, processing of finished and semi finished products, and agriculture;

a) total exemption from the corresponding payment during the first twelve (12) years; and
b) fifty percent (50%) payment during the five (5) following years. In relation to operators who carry out commercial and service-rendering activities, a) total exemption from the corresponding payment during the first five (5) years; and b) fifty percent (50%) payment during the three (3) following years.

ARTICLE 36. When the concessions are granted and the operator authorizations are approved, more favorable exemptions than those established in the first Article of this Section may be granted or other incentives may be agreed upon, according to the benefits that the specific activity involved can bring to the economic development of the country, the nature of the investment projected and the regulation applicable to the different sectors of the national economy.

ARTICLE 37.1. The time limits of the tax exemptions stipulated in the foregoing paragraphs may be extended for the same time periods as the original ones.

2. Once the time limits of the established exemptions have expired and during the remaining period of their activities, the grantees and operators of Free Zones benefited by the special regime shall pay the aforementioned taxes in conformity with what is stipulated in this respect in Law No. 77/95, Foreign Investment Act.


Section Four
Special Banking Regulations

ARTICLE 38.1. Free Zone grantees and operators can transfer abroad, in freely-convertible currency, the net profits or dividends which they obtain from their activities, without having-to pay taxes or any other fee related to such transference.

2. Foreign citizens working in a Free Zone, as long as they are not permanent residents in Cuba, have the right to transfer abroad the income they receive, within stipulated amounts and in accordance with the other regulations established by Banco Nacional de Cuba.

ARTICLE 39. The operators authorized to render banking and financial services in Free Zones, shall only be able to carry out their activities within the boundaries of the Free Zone in which they are established, in other Free Zones of the country and abroad, in accordance with the regulations set down by Banco Nacional de Cuba.

ARTICLE 40. Transactions within the boundaries of Free Zones and those referred to in Articles 25 and 30 of this Decree-Law, shall be made by the grantees and operators in freely-convertible currency.

ARTICLE 41. Neither the assessment of securities, the setting of prices nor the payments for services rendered can be denominated or executed in national currency, except when expressly authorized. The same applies for contracts entered into by the grantees and operators within the Free Zones.

ARTICLE 42. Without detriment to what has been stipulated in foregoing Articles, Banco Nacional de Cuba shall enact the additional special regulations which may be required for operators authorized to render banking services in the Free Zones to carry out their activities.


Section Five
Special Labor Regulations

ARTICLE 43.1. The workers who work for Free Zone grantees and operators shall be, as a general rule, Cubans or foreigners who are permanent residents in Cuba.

2. For certain technical or top management posts, the Free Zone grantees and operators may directly hire natural persons who are not permanent residents in the country and in those cases also determine the labor conditions to be applied and the rights and obligations of those workers, previously procuring the corresponding working permit.

ARTICLE 44. The Ministry of Labor and Social Security shall set the minimum salaries by occupations that are to be paid to Cuban workers and foreign workers with permanent residence in Cuba who work for Free Zone grantees and operators.

ARTICLE 45.1. The grantee with Cuban or joint capital directly hires Cuban workers and foreign workers with permanent residence in Cuba and also acts as the employing entity in relation to the workers required by the operators.

2. The employing entity referred to in the foregoing paragraph hires the workers concerned individually, pays their emoluments and maintains the work link with them.

3. The Ministry of Labor and Social Security establishes the rules the grantees must observe in its capacity as an employing entity.

4. Cuban workers and foreigners permanently residing in the country work for the Free Zone grantees and operators whose capital is totally foreign through a contract which they enter into with an employing entity proposed by the Ministry for Foreign Investment and Economic Cooperation and approved by the Ministry of Labor and Social Security.

ARTICLE 46. Without any detriment to what is provided for in the foregoing Articles, the Executive Committee, in the agreement which stipulates the creation of a Free Zone, can determine that, in relation to said Free Zone and in exceptional cases, special labor regulations be established.


Section Six
Special Public Order Regulations

ARTICLE 47.1. Public order in Free Zones will be kept in conformity with the regulations that the Ministry of the Interior enacts for this purpose.

2. Cost of surveillance and protection shall be set according to international practice and shall be paid for by the grantees and operators in the proportion that they themselves agree.


CHAPTER IX
VIOLATIONS COMMITTED BY FREE ZONE GRANTEES AND OPERATORS

ARTICLE 48. The unfulfillment by the grantees of their obligations as to amount and time limit of the investment they must make, may be sufficient cause for the concession to be revoked.

ARTICLE 49. The unfulfillment by grantees and operators of the conditions imposed in their respective deeds constitute an administrative violation. It also constitutes a violation of this Decree-Law or of the Free Zone Regulations, in what applies to them.

ARTICLE 50.1. The violations by grantees and operators referred to in the foregoing articles can bring about the revocation of the respective deed by the state institution which granted it, except If it is proven that the unfulfillment was fortuitous or due to force majeure.

2. The revocation of the deed shall consist in the total or defintive annulment of the concession or the operator authorization and the loss, in favor of the State, of the assets and rights of the violator linked to the Free Zone.


CHAPTER X
THE SOLUTION OF CONFLICTS

ARTICLE 51.1. The conflicts that may arise between Free Zone grantees and operators shall be resolved in the manner specified in the contracts they have subscribed.

2. The same applies when the conflict arises between the operators.

ARTICLE 52. The litigations over the execution of economic contracts between grantees and operators on the one hand and state enterprises or other national entities on the other, are the jurisdiction of the economic division of the People’s Courts established by the Governing Council of the People’s Supreme Court.


SPECIAL PROVISIONS

FIRST: The provisions for better executing this Decree-Law shall be enacted by the competent bodies of the Central Administration of the State within a time limit no greater than ninety (90) days after it goes into effect.

SECOND: The different bodies of the Central Administration of the State and other governmental institutions shall take the necessary measures so that the applications for authorizations, consultations and other Free Zone related services can be resolved within a time limit no greater than forty (40) days in all cases, counted as of the date the application was accepted.


FINAL PROVISION

SINGLE: All legal provisions of equal or lower hierarchy, opposing what is established in this Decree-Law, are hereby repealed. This Decree-Law shall be in force as of the date it is published in the Gaceta Oficial de la Republica.

APPROVED on the Palacio de la Revolucion, City of Havana, on the third day of the month of June of the year nineteen ninety-six.

Fidel Castro Ruz

 

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