Trade

This essay reflects Counter Trading and its effects on marketing tactics and techniques: this includes bartering, switch trading, counter purchase, buyback and offset, and how Counter Trading affects the market today. In 1972, counter-trading was estimated to be used in businesses and governments in 57 countries, then in 1979 that number increasingly became 27 countries; finally in the 1990’s, 100 countries were using counter-trading in businesses and governments across the world.

Today, business and economist experts estimate more than 80 countries make up 5% of the required counter-trading techniques used in businesses across the world according to an organization called GATT. Source 2: http://en. wikipedia. org/wiki/GATT The British Department of Trade and Industry has suggested 15% and other numerous scholars believe the rate is closer to 30% with some east-west trade as high as 50% in trading sectors in Eastern European and Third World Countries. In the United States of America, an official statement was made; saying:

“The U. S. Government generally views countertrade, including barter as contrary to an open, free trading system and, in the long run, not in the interest of the U. S. business community. However, as a matter of policy the U. S. Government will not oppose U. S. companies’ participation in countertrade arrangements unless such action could have a negative impact on national security. ” (Office of Management and Budget; “Impact of Offsets in Defense-related Exports,” December, 1985). A large part of countertrade has involved military sales.

Source quote 2a: http://en. wikipedia. org/wiki/Counter_trade Counter-trade also occurs when hard currency, the literal meaning is currency in each country, is not used to receive (a) good(s) from another country or service in exchange with someone’s own good(s). In the year of 2000, India and Iraq agreed on an “oil for wheat and rice” barter deal, with approval under article 50 of the UN Gulf War Sanctions, which would facilitate 300,000 barrels of oil delivered to India at a price of $6. 85 a barrel while Iraq oil sales into Asia were valued around $22.

00 a barrel. In 2001, India agreed to swap 1. 5 million tons of Iraqi crude under the oil-for-food program. In counter-trading, there is a fine line between trading goods for another countries or a local companies goods. Counter-trading means you need a specific amount or a variety of these goods to complete a counter-trade, which is used in most of today’s sales and exchanges throughout the world. If you have 2,000 products which are not used or needed and need to trade them for 1,560 of a highly demanded product, a counter-trade is issued.

Sometimes stealing, burglary or untrusting employee’s make it hard to complete a counter-trade if the good(s) are not available; this makes transactions or services drop and decline, which also destroy many businesses. Source 3: http://en. wikipedia. org/wiki/fair_trade_debate Not all companies use counter-trading, but other ways of making money by using switch trading, also known as “fair-trade” in today’s society. Due to the high nature of debate reasoning and history behind fair-trade, I will not go into detail about its history too much and keep it brief.

Fair-trade is setting the price of a product that is already above the market price; this encourages products to make more of the product. To sum this essay, counter-trade is in the realm of economics, meaning it is just another way of gathering money to keep a business alive or keeping goods in-flow with your company. Today, there are many companies and small firms that try to replicate counter-trade and other forms of techniques to raise money; it all falls into economics, but the range of the world in economy extends to so many techniques and attempts to make money.

“If the Trade-Off Theory were true, then firms ought to have much higher debt levels than we observe in reality.” — Miller (in “Debt and Taxes” published in Journal of Finance, 1977) The simulation model does a good job of capturing some dynamic aspects of Diageo’s capital structure problem. By using random variables to model for uncertainties, and generating 10,000 trials of 15 years each, a far range of outcomes can be quantified. The simulation includes many reactive variables, such as recalculation of the interest coverage ratio in each year and changes in the debt level to maintain a constant zero-cash balance. However, the model also uses many constant parameters for simplicity, and fails to capture some features of reality.

The greatest weakness of the model might be a lack of measures for preventing or responding to financial distress. The model is meant to evaluate the effectiveness of different interest coverage benchmarks, but it does not seem to allow for Diageo to take action to stick to each target benchmark. Only when the coverage is deemed too high, the company can issue a special dividend. But as the case describes, “there was no provision to pay down debt when coverage fell” to avoid potential distress. In fact, the coverage ratio and debt levels seemed to depend more on financing measures modeled to maintain constant year-end cash balances than on the target coverage ratio.

The model also lacks provisions for company reorganization in the face of financial distress. A 20% reduction in firm value occurs whenever the coverage falls below 1, but if the firm anticipated a fall in interest coverage due to low expected profitability, even if it cannot pay down debt at that point it can cut back on some major expense accounts such as its advertising budget, to leave some space for financing interest payments. Measures for preventing distress will decrease the likelihood of bankruptcy and may also decrease its cost.

The cash assumptions and the definition of financial distress made by the model are also questionable. Interest payments are paid out of the cash account, not EBIT, so an interest coverage ratio below 1 does not mean that the company is insolvent and in distress. If it happens to be a bad season, then it is short term and if Diageo has a sufficient cash buffer then there is no real distress problem. Only when the coverage ratio continues to be below 1 does distress arise. This then leads to another modeling assumption that the year end cash balance is always zero and therefore no cash buffer exists to pay for interest in bad years.

This is a poor assumption since companies always maintain some minimum cash and liquid assets, and this minimum should grow as the size of the company grows. Assuming a zero year-end cash balance also forces Diageo to take out or repay additional debt when it may be better off not doing so. In some cases, Diageo may be too highly leveraged and will not even be able to take out additional debt but the model does not account for this possibility and does not allow the company to issue new equity in place of debt in any circumstance.

Further static assumptions of the model include a constant maturity mix of debt and presumably infinite refinancing at the range of rates given by a set of interest coverage ratios. Constant currency mix of debt is also assumed regardless of exchange rate dynamics and regional strategies. So management in effect has no control over the type of debt taken out and cannot choose less costly debt or debt that holds less exchange rate risk. If the model can capture this, the cost of holding debt should go down.

Finally, as the Treasurer Ian Cray describes, in the interest of Diageo, financial distress is not simply an inability to pay debt, it also should include an inability to meet the expectations of equity holders. Therefore even when interest coverage is above 1, the company could already be in a “distressed” situation and already have lost some of its firm value. At that point, the company can of course take action to reorganize, at some cost. Otherwise, there may be some chance of it suffering the full cost of financial distress. Since this is an important consideration to Diageo, the model can be enhanced to accommodate it. It will skew results to indicate a higher optimal coverage and less financial leverage.

More thoughts on Diageo’s capital structure decision. There are other factors that we should take into account in choosing the optimal capital structure. Agency costs can be one factor. Agency costs involve conflict between the interest of the firm’s management, its shareholders, and its debt holders. With respect to leverage policy, debt may have a disciplining effect on companies and causes underinvestment. If the leveraged firm undertakes a low-risk project with safe and consistent cash flows, most of the returns will be claimed by the debt-holders.

In response the equity holders will want the company to avoid those low-risk projects and only invest in those projects which are risky and can produce very high returns at the expense of the debt holders. Management acting in the interest of shareholders with therefore limit investment to high return projects and disregard other positive NPV projects which can increase firm value. The greater the firm’s leverage, the more severe is the underinvestment problems. This is a cost of debt which the model has not accounted for.

From shareholders’ perspective, they may or may not be satisfied with the debt to equity ratio suggested by the static trade-off theory. Shareholders have their own decisions on how much risk they can afford and how much return they are expecting. If the debt to equity ratio is way too high, the shareholders will be left in a highly risky position because in case the company encounters a financial distress the debt holders have priority in receiving protection. Since the management team is responsible to act in shareholders’ interests, the CEO, CFO and other decision makers should pay attention to shareholders’ tolerance of risk level while they adjust the company’s capital structure.

In Diageo’s case, the debt to equity ratio is about 1 to 3, while interest coverage ratio is 5 to 8 times. If the management decides to follow the trade-off model and target an interest coverage ratio of 3.9 to 4.5 times, the debt to equity ratio would increase (lower interest coverage ratio implies a higher debt level, assuming EBITDA remains the same). Then the management team should question themselves whether the shareholders would be satisfied with the higher debt level, or not.

Another way to think about the capital structure is to analyze the industry comparables. The major competitors, including Allied Domecq and Coca Cola, have higher interest coverage ratios than Diageo. Some competitors’ interest coverage ratios have doubled or even tripled Diageo’s. This implies that Diageo’s debt level is a bit too high. If the management follows the competitors’ choice on debt and equity ratio, they should rearrange the capital structure by reducing the debt level and increase equity level.

However, the industry comparable analysis may not suggest the right capital structure for Diageo because the competitors’ financial condition and ability to generate earnings may differ from Diageo’s. In fact, the decision on capital structure largely depends on Diageo’s own positions in operation and financing as well as Diageo’s management and shareholders’ risk tolerance.

Last but not least, Diageo is currently allowed to take on a higher level of debt than other companies due to its relatively stable cash flows. It is questionable whether Diageo can maintain the cash flow stability. The cash flow stability can be affected by internal factors such as changes in investing activities and by external factors such as industry competition. In this sense, it is not guaranteed that Diageo can still enjoy a higher level of debt than other companies while maintaining A+ credit rating. Thus, the constraints on Diageo’s debt level may vary over time.

Conclusion

The management’s decision on Diageo’s capital structure can be influenced by a variety of factors, which include the optimization of static trade off model, the maintenance of credit ratings, risk tolerance of shareholders and capital structures of comparable competitors, etc. It is important to acknowledge that these factors have set up constraints on the capital structure decision in very different directions. For instance, the optimal solution from the trade off model does not satisfy the requirements of credit ratings.

Surprisingly, the “real” trade off in Diageo’s case is between all these factors. Thus, the amount of weights the management allocates to these factors becomes the key in making the capital structure decision. If the management put more weights on the maintenance of credit rating, the interest coverage ratio should be in the range of 5 to 8 and the debt level should be below 6.78 billion. If more weights are given to the trade off model, the interest coverage ratio should be around 4.2. The management may increase the debt level to 8.1 billion and risk a credit rating downgrade to BBB.

However, even though Columbus did not discover the Americas first, European Exploration still had a ore immense impact within their world and our modern world today. One of the major reasons the European Exploration turned out to have a much bigger impact in history’ than any other exploration is due to the formation Of the European Exchange. Thanks to the exchange many goods had been traded and thus the creation of many foodstuff as well as other materials such as tobacco and crops. The European Exchange is one of the major reasons that the European Exploration is recognized above all other explorations.

The trade between these countries lead to many others to come o Europe for valuable resources and Europe began to expand and grow, not only due to the newly conquered land, but to the new people that were coming for the resources. I believe that this is because of how large this was on the scale and the explorers prior to the Europeans never made a big deal rather they just kept moving on and missed an opportune chance. European Exploration also overshadows the other explorations as the fact that they were more ruthless and willing to do anything in their power to expand their religion, obtain more gold, and be glorified for their actions.

Their actions lead to them to enslave and slay the natives of the New World whether by accident (disease). Their sheer numbers had overwhelmed many places that they conquered and changed the society of the people around them. Native Americans turned into Catholics and lived the same way as the Europeans. Other countries, such as China, used Ghent Hajj was took on more of a peaceful approach yet not to an extent. China used the tribute system which enforced their power on the land nearby, whereas Vocal De Gamma, a

European explorer, enslaved and killed hundreds to capture ports for Portugal to trade. Their ways were very much similar, however Europeans were more ruthless and quicker and thus their influence was more massive and swifter which is why their influence is still active today. Rupee’s strength was not solely the reason why its influence was so solid- some states like.

In states that are emerging markets, there are confronts and chances for business prospective. Thailand is a nation that offers many innate resources, of which; Nivea can advantage all the way through the procedure of ascertaining and developing a flourishing business and bring supplementary employment chances to the people of Thailand.

Thailand is a rising that is situated in the middle of Southeast Asia and therefore presents an excellent corporeal location for businesses that exploit both external and internal means of transport in the procedure of providing a service. Current developments introduce chances for transportation trades related to the development of cultivation and auto manufacturing export necessities as well as those requirements of the individual customer in regions that have since been made almost impenetrable by the Tsunami destruction in 2001.

At present there are other trades in Thailand, which do offer vend services, but there residue potential and chance for a cosmetic products commerce that will take into deliberation the accurate requirements of the customer and will work industriously to achieve those needs. Nivea intends on gathering that confront and becoming the foremost cosmetic products corporation for Thailand. Conclusion In short the Thailand is country of possibility, the way it recovered from the crisis and the way the Economy of Thailand has developed going through good and tough.

The Thailand is the country of Possibilities and the way it recovered form Asian crisis and the way its economy developed for the Last fifteen years, it can be assessed that in near future, the Thailand will become the Flag Bearer of the best Economy of the Asia. So on the basis of this analysis of the economy of Thailand as well as customer demands in Thailand; Nivea should launch its products in Thailand.

Bibliography

Cited in Barry Wilson, “Farm profitability key to WTO deal,” The Western Producer, December 9, 2004.David W. Raisbeck, “The Role of Agriculture in the Global Economy,” World Agricultural Forum, St. Louis, Mo. , May 18, 2003. E. G. , Wendy Holm, “Cargill’s domination a concern,” The Western Producer, September 8, 2005 FAOSTAT 2004 data cited in “Productivity growth for poverty reduction: an approach to agriculture,” (draft paper for comment) Department of International Development, United Kingdom (July 2005), paragraph 31.

International trade is a key component in the global economy today. It is further burgeoning through the rise of organizations like the WTO and agreements such as NAFTA which open up free trade, allowing goods to move freely and thereby aiding consumers in various countries in terms of prices and quality. It also spawns healthy competition in the local industries. However, when things in the economy begin to go awry, the first thing that many policy makers pursue is to enact trade restrictions. This can lead to a breakdown in competition and can lead to adverse effects in the local and international market.

In theory every country has a comparative advantage in the production of some products. This means that the labor and capital resources available in the reason are more productive when focused towards a particular industry and thus are able to be produce that product better as a result (Robert 1999). In the case of the textile industry, Pakistan enjoys a comparative advantage as it has many cotton fields, providing it direct access to the raw material for the industry. It further has been operating in that industry for a long time which has spawned a lot of trained workforce relating to that industry in the country.

Therefore, law of comparative advantage dictates that it should produce textile materials. Similarly, the US industry has been producing software products in the Silicon Valley for a long time. So, with respect to these two countries, it is most efficient in the economic system if Pakistan devotes its resources towards textile production and the US to software production and they both trade with each other for the goods. When trade restrictions are brought into play, the best allocation of resources that the law of comparative advantage specifies ceases to function as it should as it requires free trade (Younkins 2002).

These restrictions result in the consumers having to buy the same materials that were gotten at lower prices and with better quality from other countries at higher prices from the local industry. It further may result in a drop in quality. Local employees benefit however as local industry may be able to survive in such artificial conditions and result in more jobs and possibly higher wages for workers. Thus it results in an ethical dilemma about whether these restrictions should be put in place, helping the workers, or removed to help the consumers?

Considering the issue from an ethical stand point, there are different perspectives to consider. Ethics of care dictates that both the worker and the consumer should be looked after and protected, with one’s rights not being compromised for the other. However, ethics of justice dictates that the market is opened up and the best performer survives. This is also supported from a utilitarian perspective as by opening up the market, local industry may be able to reorient itself to meets its position of comparative advantage in a few years, helping the workers and the economy in the long run.

Thus trade restrictions are not ethical and should not be adopted as a possible measure for protecting local industry.

Bibliography

Howse, Robert (1999). The regulation of international trade. Routledge. Younkins, Edward (2002). Trade Barriers Are Immoral and Destructive of Economic Well-Being. Retrieved June 18, 2009, from Rebirth of Reason Web site: http://rebirthofreason. com/Articles/Younkins/Trade_Barriers_Are_Immoral_and_Destructive_of_Economic_Well-Being. shtml

Cuba, the largest island nation in the Caribbean just ninety miles off the coast of Florida, experienced many difficult struggles through its extensive history. It was the last major Spanish colony to gain independence, following a lengthy struggle that was begun in 1868. It was in 1898 when the U. S. intervened during the Spanish-American War that it finally overthrew Spanish rule. The Treaty of Paris established Cuban independence, which was granted in 1902 after a three-year transition period.

The United States and Cuba concluded a Treaty of Relations in 1934, which, among other things, continued the 1903 agreements that leased the Guantanamo Bay naval base to the United States. In the time before 1959, the United States had maintained strong ties with Cuba. Many Americans had many various business investments there, and the country was a special place for tourists from around the world. Since the fall of the U. S.-supported dictatorship of Fulgencio Batista in 1959, it was Fidel Castro who has mainly led Cuba throughout the years.

It was in Febuary 19, 2008 when Fidel Castro finally ceded power to his brother Raul Castro. Since the majority of Cubans were born after the 1959 revolution, most of the Cuban people have known no other leader. President Fidel Castro outlasted no fewer than nine American presidents since he took power in 1959. Relations between the United States and Cuba deteriorated rapidly as Fidel Castro and the Cuban regime moved toward the acceptance of the one-party communist system. Cuba seized the assets of American citizens and U. S. irms including farms, factories, hotels, bank accounts, and real estate without compensation. It was finally on April 16, 1961 when Fidel Castro declared Cuba a socialist state.

Cuba’s Communist revolution, with Soviet support, was brought to other countries throughout Latin America and Africa during the 1960s, 1970s, and 1980s. Castro maintained close relations with the Soviet Union and worked jointly with the goals of Soviet communism by funding and provoking violent rebellious activities, as well as using military intervention in other countries, until the fall of the U.S. S. R. in 1991 (Castro: Profile). In response, the United States imposed an embargo on Cuba in October 1960, and, broke diplomatic relations on January 3, 1961. This began the over forty-year period of tension between the U. S. and Cuba, beginning with President Kennedy’s failed Bay of Pigs invasion in 1963 and the Cuban Missile Crises (CIA World Factbook). Since 1961, Cuba portrayed many difficulties as the result of the U. S. embargo and the embargo had a great effect on both nations.

It was in 1963 that the United States passed the Cuban Assets Control Regulations, under the authority of the Trading with the Enemy Act. The Act was enacted in 1917 to restrict trade with countries that are hostile to the United States. The law gives the President the power to oversee or restrict any or all trade between the U. S. and its enemies in times of war. The purpose of the law was to isolate Cuba economically and politically. It banned all trade and financial transactions between Cuba and the U. S. , and froze all U. S. held assets of the Cuban government and of private Cuban citizens. It also prohibited almost all travel to Cuba by researchers, student groups, journalists, athletes, and those traveling to see immediate family members.

After the fall of the Soviet Union in the early 1990’s, the U. S. Congress wanted to pressure Cuba for democratic change. First in 1992, the U. S. Congress approved the Cuban Democracy Act, restricting Americans from visiting the island, banning family remittances, and prohibiting foreign subsidiaries of U. S. ompanies from doing business with Cuba. Following a few years later, on March 12, 1996, President Bill Clinton signed the Cuban Liberty and Democratic Solidarity Act, also called the Helms-Burton Act. After this law was signed, it further toughened the Cuban sanctions. It imposed penalties on foreign companies doing business in Cuba, it permitted U. S. citizens to file lawsuits against foreign investors who made use of the American-owned property that was seized after 1959 by the Cuban government, and it denied an entry visa into the U. S. to such foreign investors.

It was a very controversial because this included many Mexican, Canadian, and European businessmen who did business in Cuba (268). The passage of the Helm-Burton Act caused a worldwide protest, primarily in Mexico, Canada, and the European Union, who argued that the Helm-Burton Act violated international law. A protest was filed with the World Trade Organization by the European Union, but was suspended when the Clinton Administration reassured that the law for visa restrictions under Title III of the Helm-Burton Act would not be enforced against citizens in third world countries.

The Act calls for the trade sanctions between the U. S. and Cuba to end as soon as Cuba agrees to have a democratically elected government, abide by human rights conventions, opens its prisons to international inspection, returns Cuban citizenship to Cuban exiles living in the U. S. , and makes progress in returning expropriated property to its rightful owners (268). Today, there are many laws, rules, and regulations that derived from the U. S. sanctions against Cuba. Presently, most commercial imports from Cuba are illegal by law but remain listed under the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA).

Under the Act, the sale of certain items, including medicine and medical supplies, and agricultural commodities have been approved for export by specific regulations. According to the Act, “The Department of the Treasury is responsible in issuing licenses that are used to export these goods on a case-by-case scenario and authorizing Cuban travel-related transactions that are only relating to marketing, sales negotiation, accompanied delivery, and servicing of exports and re-exports that also must appear in line with the licensing policy of the Department of Commerce”.

The only sectors in which U. S. citizens may sell and service products to Cuba include agricultural commodities, medicine, and medical devices. The Treasury Department will is also be able to consider requests for specific licenses for humanitarian travel, educational exchanges (that are at least 10 weeks in length), and religious activities by individuals or groups that are associated with a religious organization. However, any U. S. citizen or corporation that is subject to U. S. law and engages in any travel-related transaction in Cuba violates the regulations.

The Act specifically states that, “The Cuban Assets Control Regulations affects all U. S. citizens and permanent residents wherever they are located, all people and organizations physically in the United States, and all branches and subsidiaries of U. S. organizations throughout the world” (U. S. Treasury Department). If the regulations are not followed, then it may result in both civil penalties and criminal prosecution upon return to the United States (U. S. Treasury Department). Today, traveling to Cuba also has many rules and laws that make traveling to the Cuba very complex.

In 2004, President Bush’s Commission for Assistance to a Free Cuba placed a further reduction on the restrictions on family visits to Cuba. Visits by Cuban Americans to family in Cuba are permitted only once every 3 years instead of once every year. No humanitarian exceptions are given if there is any of a family illness or crisis going on in Cuba. Visits are restricted to two weeks and strictly limited to immediate family as defined by the U. S. Department of Treasury’s Office of Foreign Assets Control (OFAC), which eliminates the right to visit cousins, aunts, uncles, nephews, nieces, or more distant relatives (LAWG).

Only if a traveler receives a license, then a valid passport will be required for entry into Cuba. The Cuban government requires that travelers obtain their visas before they arrive to the country. If there are attempts to enter or exit Cuba illegally, or there is in any kind of aid in helping Cuban nationals or others escape Cuba then punishment is served by stiff jail terms. Entering Cuban territory, territorial waters or airspace, which include being within 12 miles of the Cuban coast, without any prior permission from the Cuban government may result in arrest or other enforcement actions by Cuban authorities.

According to the U. S. Department of State, most immigration violators are subject to prison terms that range from four years for illegal entry or exit to as many as 30 years for certain cases of assisting Cuban migrants to attempt to leave Cuba illegally (U. S. Department of State). Family remittances or money sent to Cuba also have specific rules and regulations that must be followed by the people residing under U. S. law. According to the U. S. Department of State, “U. S. ersons aged 18 or older may send money to members of the remitter’s immediate family in Cuba of up to $300 per household in any consecutive three-month period, regardless of the number of members of the remitter’s immediate family residing in that household. ”

The law also states that no member of the household can be a prohibited official of the Government of Cuba or a prohibited member of the Cuban Communist Party (U. S. Department of State). Other laws that are also a part of the on going U. S. embargo with the Cuban government involves the use of money in Cuba that U. S. travelers are limited to spend during their stay in Cuba. U. S. people traveling to Cuba to visit their family or traveling for other purposes can spend no more than $50 per day on non-transportation-related expense in Cuba, and up to an additional $50 per trip to pay for transportation-related expenses in Cuba. However, professionals such as journalists, photographers, or any other kind of licensed travelers may spend additional money for their professions that are directly related to what they need in order to fulfill their work (U. S. Department of State).

It is also interesting to know that U. S. citizens and permanent resident aliens are not allowed from using their credit cards, personal checks, or travelers’ checks that are drawn from U. S. banks in Cuba. U. S. credit card companies do not accept any kind of vouchers from Cuba, and, at the same time, Cuban shops, hotels and other places of business do not accept any types of U. S. credit cards (U. S. Department of State). Today, the U. S. Cuban embargo has become one of the most controversial issues upon many countries throughout the world.

There have been many advocating for a change of the current policies towards Cuba for some time now. The sanction has continuously been condemned and voted against by almost all nations throughout the world. For the 16th consecutive year, the U. N. General Assembly recommended that the U. S. ended the embargo. In 2006, a total of 183 member nations of the U. N called on the U. S. to end the sanctions with Cuba (Sierra). In 2007, the 192-member General Assembly passed the measure by 184 votes to four, with one abstention (U. S. Urged).

According to Remy Herrera, “The normative content of this embargo and its rules, which the U. S. intends to inflict on the international community with its unilateral sanctions is a violation of the spirit and letter of the United Nations Charter and of the Organization of American States, and of the very fundamentals of international law” (Herrera). This excessive extension of the territorial jurisdiction of the U. S. , Herrera adds, “Is contrary to the principle of national sovereignty and to that of non-intervention in the internal choices of a foreign state, s recognized in the jurisprudence of the International Court of Justice” (Herrera). According to Richard Schaffer, even the Vatican protested Helms-Burton, claiming that it increased economic suffering of the Cuban People. Many trade groups have also argued against the law because they believed that economic engagement actually would promote freedom in totalitarian countries. The U. S. firms that are hoping to engage in the business activities in Cuba also seek an ending to the U. S. trade sanctions (Schaffer 269). According to U. S.

Congresswoman Nancy Pelosi, many feel that the lifting of the travel restrictions to Cuba, family remittances, and trade exchange are necessary and are some of the most important issues in the policy changing process that the U. S. needs to undergo in order to have better relations with Cuba (Pelosi). Ironically, surveys of the American public opinion show that the vast majority of Americans favor ending sanctions as well, and recognizing the government of Cuba (Schaffer 269). According to a recent poll from USA Today that took place between February 21- 24, 2008, 61% of 2,021 adults nationwide favored re-establishing U. S. diplomatic relations with Cuba, 29% opposed, and 10% of the people were unsure (PollingReport).

Over Forty-five years of communism have left the island nation an economic ruin and the U. S. embargo had many diverse effects on Cuba. According to a BusinessWeek article by Geri Smith, “The Cuban government has always referred to the embargo as a ‘blockade,’ a word that has a more sinister tone than ‘embargo’” (Smith). Cuba went through many difficulties as the result of the U. S. embargo since 1961 and suffered much more since the collapse of the Soviet Union in 1991.

The country faced a severe economic downturn, which really caused the Cubans’ living standards to significantly fall. The disappearance of Soviet aid following the collapse of the USSR forced the government to introduce tight rationing of energy, food, and consumer goods, as well as the withdrawal of the former Soviet annual subsidies that were worth $4 billion to $6 billion. Since then, it has taken action with limited reforms in order to increase enterprise efficiency and improve some of their economic problems which included their serious shortages of food and goods.

Due to the economic problems and domestic inefficiencies that Cuba faced during the 1990’s, President Castro allowed a few steps towards a more market-oriented system. In 1993, the U. S. dollar was accepted by Cuba and allowed to circulate throughout the nation. Because of their lack of basic necessities and few consumer goods, Cuba’s economy persisted with the help of Canadian, European and Latin American investments. Essentially for Cuba, the nation also developed closer relations with China and Venezuela.

China invested in Cuba’s nickel industry and provided Cuba support in the form of trade credit, technology, and investment capital while Venezuela provided supply to cheap fuel (Smith). Since late 2000, Venezuela has been supplying about 100,000 barrels per day of petroleum products. Cuba has been paying for this oil with the services of Cuban personnel in Venezuela, including 20,000 medical professionals (CIA WorldFactbook). After market factors improved, in 2004 the U. S. dollar transactions in Cuba were banned and a 10% tax was imposed on the dollar-peso conversions. According to the CIA World Factbook, Cuban exports total $3. 31 billion and their major exports include Sugar, nickel, tobacco, fish, medical products, citrus, and coffee partners. The countries that Cuba mainly exports to include the Netherlands (21. 8%), Canada (21. 6%), China (18. 7%), Spain (5. 9%). On the other hand, Cuban imports have totaled $10. 86 billion and consist mainly of petroleum, food, machinery and equipment, and chemicals. The countries that Cuba mainly imports from include Venezuela (26. 6%), China (15. 6%), Spain (9. 8%), Germany (6. 4%), Canada (5. 6%), Italy (4. 4%,) the U. S. (4. 3%), and Brazil (4. %) (CIA WorldFactobook) Today, Cuba has two currencies in circulation, which include the Cuban peso (CUP) and the convertible peso (CUC). The Cuban peso (CUP) is specifically for the Cubans, while the convertible peso (CUC) is strictly for tourists and foreign businessmen.

According to a BBC News article by Michael Voss, “The average Cuban salary of 400 pesos a month is worth about $16, yet almost everything available in the shops has to be paid for in the convertible pesos (CUC’s)” (Voss). “Why has the economy moved to convertible pesos when workers are paid in the national currency? ” declared one of the students in the article. You need to work for two days just to buy a toothbrush” (Voss). The problem with the dual currency is one of the biggest challenges that negatively influences the Cuban economy. Cuba faces many hardships because of the economic problems throughout the country. Many of the effects have caused an increase in prostitution, corruption, black marketeering and desperate efforts to escape in search of a better life (Country Profile: Cuba). Many Cubans had enough with the hardships and risk their lives to escape from the country. Thousands have tried to escape through the sea in a waterborne exodus to Florida, but many have drowned. Castro: Profile) According to the BBC News article, Castro: Profile of the Great Survivor, “Even his own daughter Alina Fernandez prefers a life of exile as a dissident in Miami to rule under her ‘despotic’ father” (Castro: Profile). According to the CIA World Fact Book, illicit migration to the U. S. , using homemade rafts, alien smugglers, or air flights, is still a continuing problem. The U. S. Coast Guard seized 2,864 people trying to cross the Straits of Florida in the year 2006 (CIA WorldFactbook). Cuba has also been fraudulent with the UN’s top human rights forum, over specific rights abuses.

The UN has insisted that Cuba allows for freedom of expression and to release imprisoned protesters who have protested against the government. The U. S. has caused Cuba many economic damages because of the U. S. embargo. According to U. S. congresswoman Nancy Pelosi, “The over-45-year US economic, commercial and financial blockade of Cuba has translated into over 89 billion dollar losses for the U. S. ” (Pelosi). According to the article, The Effects of the U. S. Embargo Against Cuba, the direct economic losses for Cuba by the U. S. embargo would exceed 70 billion dollars.

The damages were estimated by calculating amounts of Cuba’s potential earnings and unnecessary losses since the institution of the U. S. embargo in 1961. The embargo negatively affected all of the sectors in Cuba, which also directly imposed on the major driving forces of the Cuban economy, which included tourism, foreign direct investments (FDI) and currency transfers (Herrera). Cuba became very limited in having access to technologies and various resources because of the obstacles that were forced by the Unites States. According to a Business Week article, “Trade and investment open up economies to new ideas.

Cell phones, the Internet, and other high-tech communication technologies are detrimental to closed-minded bureaucracies” (Farrel). Since December, 2001, when food and agricultural products were allowed to be exported to Cuba, over $2 billion dollars worth of goods were earned by U. S. firms and shippers (LAWG). According to the article, The Travel Industry’s Push to Unlock Cuba, loosening the restrictions could boost the U. S. economy in the long term by as much as $1. 6 billion annually and create as many as 23,000 new jobs (Unlock Cuba). In this way, Cuba has the potential for economic growth if the U. S. nds or even loosens their trade sanctions. This can also further ease the hardships and economic issues of poverty in Cuba. Relations between the United States and Cuba are hoping to improve in the future, especially because Fidel Castro retired his control over Cuba. Many hope that Cuba will be open for business and that there may be signs of new beginnings of change on the economic front under Raul Castro (Smith). Some, however, are more skeptical of the idea. According to a recent poll from USA Today that took place between February 21- 24 of 2008, only 37% of 2,021 people felt that the situation for people in Cuba would get better.

A majority of 51% felt that the situation for people in Cuba would stay the same, 6% felt that it would get worse, and 6% felt they were unsure (PollingReport). Fortunately, Raul Castro has introduced a series of reforms since taking over as president from his brother Fidel in February and has already taken steps on improving certain services for the Cuban public. The new leader started focusing on some of the most-mentioned problems, such as spotty public transportation and the low wages paid by the government to private farmers (Smith).

According to the article, Cuban Leaders Plan More Reforms, these reforms have also included the removal of some restrictions on the purchase of electrical goods such as mobile phones, microwave ovens and DVD players. According to the article, Cubans have been reported to take out 7,400 new mobile phone contracts in the 10 days since the restrictions were eased. The country has also lifted a ban on its people staying in hotels previously reserved for foreigners (Cuban Leaders). It will be interesting to see if more market-oriented steps will take place with the Raul Castro’s new regime. Another major issue that will be crucial for many U. S. businesses as soon as the embargo ends in the future is the growing interest in the tourism sector of Cuba.

According to an article by Sucharita Mulpuru, Americans represent only a small part of the nearly 1. 2 million visitors who come to Cuba every year, mainly from Canada, Spain, France, Germany, and Britain (Mulpuru). Tourism continues to inspire high hopes among many investors. In the article, Enzo Alberto, the Canadian-Italian CEO of ICC, a major investor in the island’s Internet infrastructure states, “I believe that Cuba could be to America like Hong Kong is to Asia,” (Mulpuru).

Many countries pour nearly $2 billion into the economy, outstripping revenues from sugar and other core crops such as tobacco (Mulpuru). According to the article, A Warmer Climate for Trade with Cuba, the industry argues that the island nation is a potential source of needed revenues that would be able to boost both the travel business and the U. S. economy while opening to tourism and foreign investment in Cuba. As a result, this will also boost the economy as well as the currency reserves of Cuba. Unfortunately, all of this potential to help both economies and many people in both nations will not end until the U. S. rade embargo ends and the Cuban government loosens its stranglehold on the economy.

It will be interesting to see how the U. S. embargo will be affected by the policies of the future elected president of the U. S. Of the three leading Presidential candidates, only Democratic contender Senator Barack Obama has stated that he would be willing to sit down and talk with Raul Castro’s government, as long as human rights are on the agenda. On the other hand, Senator Hillary Clinton stated said she would not do so until Cuba started to implement economic and political reforms, while Senator John McCain has kept President George W.

Bush’s policy and states that “talks are off” until Cuba begins a “transition to a free and open society” and releases all political prisoners (Smith). According to the Associated Press, the presidential candidates are expected to lightly discuss the question of lifting the embargo during their campaign. According to their article, Five-decade U. S. Trade Embargo with Cuba Expected to Outlast Fidel Castro, there is a great deal of sensitivity on the issue, especially in states with high populations of Cuban immigrants such as Florida (Associated Press). The entrepreneurs of the U. S. ave seen their foreign competitors take advantage of opportunities in Cuba. U. S. businesspersons can only hope that the trade and travel restrictions will be lifted eventually, so that they can tap the potential markets in Cuba especially in the tourism and agricultural sectors. This is very unlikely to happen soon because of the ongoing disputes between many in regards to the Cuban embargo. The impact of the Cuban embargo caused many diverse effects for both nations, but with new policies and politicians that are developing for the future, this story can be the end of an old era.

References

1. ACN Cuban News Agency. 2007, May 2). “Nancy Pelosi Says U. S. Blockade of Cuba Should be Lifted. ” Retrieved April 24, 2008, from http://www. cubanews. ain. cu/2008/0425nancypelosi. htm
2. Alomso, Cynthia C. “The Travel Industry’s Push to Unlock Cuba. ” BusinessWeek. 27 August 2003 Associated Press. Five-decade U. S. Trade Embargo with Cuba Expected to Outlast Fidel Castro. 20 February 2008. Retrieved on April 24, 2008 from http://www1. whdh. com/news/articles/national/BO73631
3. BBC News. (2008, February 19). “Castro: Profile of the Great Survivor”. Retrieved April 24, 2008 from http://news. bbc. co. k/2/hi/americas/244974. stm
4. BBC News. (2008, April 12). “Cuban Leaders Plan More Reforms”. Retrieved April 24, 2008, from http://news. bbc. co. uk/2/hi/americas/7343883. stm
5. BBC News. (2008, February 26). “Country Profile: Cuba”. Retrieved April 24, 2008 from http://news. bbc. co. uk/2/hi/americas/country_profiles/1203299. stm
6. BBC News. (2008, April 24). “Cubans Snapping Up Mobile Phones”. Retrieved April 24, 2008, from http://news. bbc. co. uk/2/hi/business/7364791. stm
7. BBC News. (2007, October 30). “U. S. Urged to End Cuba Embargo”. Retrieved April 24, 2008, from http://www. bbc. co. k/caribbean/news/story/2007/10/071030_cubaun. shtml
8. CIA World Factbook. Cuba. (nd). Retrieved on April 22, 2008 from https://www. cia. gov/library/publications/the-world-factbook/geos/cu. html
9. Farrell, Christopher. “The Case Against Embargoes” BusinessWeek. 25 April 2005
10. Herrera, Remy. The Effects of the U. S. ‘Embargo’ Against Cuba. 7 October 2003. Retrieved on April 22, 2008 from http://www. alternatives. ca/article876. html
11. Latin America Working Group (LAWG). Top Ten Reasons For Changing U. S. Policy Toward Cuba. (nd) Retrieved on April 22, 2008 from http://www. lawg. org/docs/new_member_packet. df
12. Magnusson, Paul. “A Warmer Climate For Trade in Cuba. ” BusinessWeek. 16 June 2000 Mulpuru, Sucharita. “In Cuba, History’s Joy—and Curse. ” BusinessWeek. 3 Feb 2003.
13. Pew Hipic Center. Cubans in the Unite States: A Profile. 25 August 2006. Retrieved from http://pewhipic. org/files/factsheets/23. pdf
14. Polling Report. Cuba. Retrieved on April 22, 2008 from http://www. pollingreport. com/cuba. htm
15. Plummer, Robert. “How Cubans Heal Their Economic Ills” BBC News. 3 January 2007.
16. Schaffer R. , Earle B. , & Agusti F. (2005). International Business Law and Its Environment. Ohio: Thomson-Southwestern West. (6e).
17. Sierra, J. A. Economic Embargo Timeline. (nd). Retrieved on April 22, 2008 from http://www. historyofcuba. com/history/funfacts/embargo. htm
18. Smith, Geri. “Cuba Under the Other Castro? ” BusinessWeek. 24 February 2008
19. Smith, Geri. “When Will Cuba Be Open for Business? ” BusinessWeek. 29 February 2008 U. S. Department of the State. (http://www. state. gov). Retrieved on April 22, 2008.
20. U. S. Department of the Treasury. “Cuba: What You Need To Know About The U. S. Embargo”. Retrieved April 22, 2008 from http://www. treas. gov/ofac Voss, Michael. “Stepping Into Big Brother’s Shoes? ” BBC News. 24 February 2008

DHL ECONOMY SELECT

is a Day Definite International door-to-door service, offering reliable, cost effective and convenient business-to-business delivery. DHL ECONOMY SELECT is for single parcels, multiparcel shipments and pallets, with weights up to 1,000 kg per parcel and up to 2,500 kg per shipment. DHL IMPORT ECONOMY SELECT is a value-added feature of the Day Definite International service. It provides the ability to not only import goods to the UK but also to ship goods outside the UK – e. g. between France and Poland – whilst still being billed directly in the UK.  10 Export by Air Door-to-door deliveries by air express across the world, with next day delivery to most European destinations and key business locations in the USA, as well as 2nd day delivery to many non-European destinations. Choose from delivery by 9:00, 12:00 or close of business. Our next day services to EU destinations and all deliveries by 09:00 and 12:00 come with a money-back guarantee. 14 Import by Air DHL IMPORT EXPRESS WORLDWIDE is a fast, easy-to-use service for importing dutiable or non-dutiable goods from over 210 countries and territories. Furthermore, DHL IMPORT EXPRESS WORLDWIDE provides the ability to not only import goods to the UK but also to ship goods outside the UK – e. g. between France and Poland – whilst still being billed directly in the UK. 22 International Business Mail A simple and cost-effective solution for your international business mail requirements called GLOBALMAIL BUSINESS. Includes a choice of Priority and Standard services. 24 Shipper’s Interest Insurance DHL offers insurance in the event of loss or damage to your shipment. A full policy summary is included in this brochure. With a money-back guarantee from most European origins.  Please contact your local DHL account manager for further details. 4 Shipping Steps Tariff and Transit Guide 2009 SHIPPING STEPS IMPORTANT How to calculate volumetric weight If you are sending a large lightweight package, the the cost of the package is calculated based on the following formula:1. The volumetric weight of your package shipped on air express services is calculated by multiplying the length, depth and width of the package in centimetres and dividing the result by 5,000. 2. The volumetric weight of your package shipped on road xpress services is calculated by multiplying the length, depth and width of the package in centimetres and dividing the result by 4,000. depth width length To calculate the total chargeable weight of your shipment, take the actual or volumetric weight (whichever is the greater) for each package and add all the weights together. Shipping Steps Shipping Steps Tariff and Transit Guide 2009 5 STEP 1 Deciding which service you require With DHL you can choose a service that best suits your needs. Whether you’re sending a shipment internationally or within the UK we have the service to suit you.

Certain items will not be accepted for carriage. A list of prohibited and/or restricted items is available on request. Please refer to www. dhl. co. uk/prohibited. STEP 4 Preparing your shipment Every shipment requires a consignment note (known as an Air Waybill). This is an address and information label used to identify your shipment, and it contains a unique tracking number that you can use to monitor the progress of your shipment. STEP 2 Calculating the cost of your shipment Please use the enclosed rate tables to calculate the cost of sending your hipment, remembering to add VAT for shipments within the UK and other EU countries. DHL can provide Shipper’s Interest Insurance on International Air Express services and is accordingly regulated by the Financial Services Authority. See page 24 for details. There may be a charge for collection and delivery service for remote areas (Remote Area Service). You may also be sending a large, lightweight package as all or part of your shipment. If so, the cost of the package is calculated based on the space it takes up on the vehicle or aircraft; this is called the volumetric weight.

See page 4 for guidance on how to calculate the cost of your shipment. STEP 5 Tracking your shipment Delivery information can be obtained by using any of the following methods: • Web site – Check your shipment status on www. dhl. co. uk by selecting one of our tracking options. • Call Customer Services on 0844 248 0844. For Air Express shipments only, you can also track your shipment using the following methods: • Speed Tracking – Call 0844 248 0844 and select Option 2 for Speed Tracking. • e-Track – Enter your Air Waybill number ONLY in the subject field and send to track@dhl. com. Alternatively, you could use EasyView – our advanced tracking and reporting system. For more information, please see www. dhl. co. uk/easyview. • ExpressSMS – Simply send a text message with your Air Waybill number to 07720 334 455 and DHL will text you back with the latest information on your shipment. For Europe by Road shipments you can also use: • Tracknet – Our unique tracknet system lets you keep track of your DHL ECONOMY SELECT shipments with: – full end-to-end shipment visibility. – free 24/7 internet access. – a minimum of 5 separate tracking events. STEP 3 Select a shipping method

The following shipping tools are available from DHL: DHL INTRASHIP is a web-based shipping tool ideal for regular shippers. DHL INTRASHIP can support a multi-user environment and enables a seamless order process, from despatch through to email notification to your customers with latest shipment status. DHL INTRASHIP has been developed to provide maximum efficiency, total visibility and control over your entire shipping needs. DHL EASYSHIP is a desktop solution that gives you access to the complete range of DHL services and is ideal for customers with high volume shipping needs.

All services provided by DHL are subject to DHL’s standard terms and conditions, which can be found on www. dhl. co. uk or are available on request. 6 Country Zones & Transit Times Tariff and Transit Guide 2009 COUNTRY ZONES & TRANSIT TIMES COUNTRY ZONES Find the country in our list and note the corresponding country zone. Then refer to the relevant rate card to find your price. TRANSIT TIMES Transit times are in working days and are based on deliveries to major cities. They are subject to change depending on location of collection and delivery, weight and customs value.

Please note deliveries may take a little longer to and from remote locations. DOMESTIC AND EUROPEAN UNION Export (Transit time in working days) REST OF THE WORLD Import (Transit time in working days) Export (Transit time in working days) Import (Transit time in working days) Country Zone 9:00, 12:00 Close of 9:00, 12:00 Close of 12:00 Noon & Business 12:00 Noon & Business Noon & Close of Noon & Close of Close of Business Close of Business Business Business Country Zone 9:00, 12:00 Close of 9:00, 12:00 Close of 12:00 Noon & Business 12:00 Noon & Business Noon & Close of Noon & Close of Close of Business Close of Business

Examples The transit time of 1 for Austria is shown in the 9:00, 12:00 Noon & Close of Business column, which indicates that deliveries to and from Austria can be made in 1 working day using either DHL EXPRESS 9:00, DHL EXPRESS 12:00 or DHL EXPRESS WORLDWIDE. Alternatively, the transit time of 2-4 for Canada is shown in the Close of Business column, which indicates that deliveries to and from Canada can be made in 2-4 working days using DHL EXPRESS WORLDWIDE.

choose to have your shipments delivered by 9:00 am, 12:00 noon or close of business the next working day. • Proactive delivery notification comes as standard with the by 9:00 am service. Choose from e-mail, fax or SMS. • Timed options (by 9:00 am and by 12:00 noon) come with a money-back guarantee*. How to use the tables 1 Weigh your shipment (which could be one or several packages) in kilograms.

You may need to calculate its volumetric weight (please refer to page 4 for a full explanation of how to do this). 2 Next look across the table to find the service you require on the opposite page. 3 Then look down the weight column in the table until you reach the correct total shipment weight (using whichever is the greater of the actual or volumetric weight) to find the basic cost. OWP – OVERWEIGHT PIECES Shipment pieces with a chargeable weight of 70kg or more fall outside our standard handling processes, and will incur a surcharge of ? 20. 00 per piece*

IMPORT BY AIR DUTY AND TAX INFORMATION

Ex-Works IMPORT CLEARANCE SERVICES DHL provides routine customs clearance where required for all delivery services. We also offer a range of special clearance services for non-standard clearance requirements, as detailed: Use of DHL deferment account How to use the tables 1 Check the zone you want. See the tables on pages 6-7 for the destination country zone band (1-9). 2 Weigh your Non-Document and Document items in kilograms. You may need to calculate its volumetric weight (see page 4). 3 Next, select the table for the service you require and find the shipment cost in ? for your weight and country zone. This is the normal DHL clearance method for Import Express shipments. For Ex-Works shipments, the consignor prepares the shipment for export including packing and necessary shipping documentation. The account holder will be responsible for all transport charges and any duty and taxes payable on arrival. IMPORT EXPRESS ONLINE For greater control over your imports, please use our DHL IMPORT EXPRESS ONLINE service. This webbased tool automates the importing process as well as tracking incoming shipments. For more information, please see www. dhl. co. uk/importexpressonline

If you use the DHL deferment account to pay taxes or duty, an administration fee of ? 10 or 2% (whichever is the greater) will apply. Clearance authorisation DHL contacts a mandated person in the importing company prior to customs clearance being initiated. Charge: ? 20 Multi-line entry clearance (more than five lines) Charge: ? 20 Hand over to broker Example If you import a shipment from Belgium using the DHL EXPRESS 9:00 service (given as zone 1 on page 6) which weighs 10 kg, go to ‘10’ in the kgs column in the table and read across to zone ‘1’ to find the basic cost for the shipment, which is ? 143. 90. (charged to broker) Charge: ? 2. 50 Storage (more than five working days) Charge: ? 20 Document handling Example for air Assume the actual weight of your shipment is 7 kg, but the volumetric weight is: 50cm x 40cm x 30cm = 12 kg 5,000 In this example the volumetric weight of 12 kg is greater than the actual weight of your shipment, so use this figure to calculate the cost. (extra charge per shipment) Charge: ? 20 Transit shipment Delivery Service options Charge: ? 25 OWP – OVERWEIGHT PIECES Shipment pieces with a chargeable weight of 70kg or more fall outside our standard handling processes, and will incur a surcharge of ? 20. 00 per piece*

Please contact Customer Services or your local Account Manager to discuss your requirements. Available at www. dhl. co. uk or Customer Services on 08702 400 072. Available on the website or via Customer Services. Written proof of delivery including name and signature of receiver. Delivery to certain remote areas within Europe. A documentation and processing charge for deliveries outside the European Union and to exception territories of EU countries. Parcels/consignments are returned to the sender after an unsuccessful delivery attempt. An additional surcharge for items with a length of between 120 and 240 cm.

A surcharge for packages with a chargeable weight of 70kg or more. ?15. 00 per shipment+ ? 20. 00 Return of Non-Deliverable items Out of Gauge Overweight Pieces Original tariff is charged again plus a surcharge of ? 8. 00 together with any customs charges, taxes and duties ? 15. 00 per shipment ? 20. 00 per package** * Please contact your DHL account manager for details on shipping goods between countries outside of the UK. + Effective 1st March 2009. ** Effective August 1st 2009. Please note: items over 70kg must be palletised. Items weighing between 31. 5kg and 70kg must be suitable for mechanical handling.

Items under 31. 5kg have no special handling requirements. 1. For the details on Remote Area Service post codes please visit http://raslist. dhl. com/jsp/first_main. jsp. We do not deliver to overseas French territories, Greenland or the Faroe Islands. 2. Only available on DHL ECONOMY SELECT service. The feature is not available for Russia, Turkey, Greece and on DHL IMPORT ECONOMY SELECT. 3. These features are available only to customers who use DHL automated despatch systems or who pass data to DHL electronically. Is not available for Russia, Turkey, Greece and on DHL IMPORT ECONOMY SELECT.

Country Name How to use the table For exporting from the UK using DHL ECONOMY SELECT, find the zone for the destination country from the table to the left, then refer to the DHL ECONOMY SELECT tariff table on page 20 to find your price. For importing to the UK using DHL IMPORT ECONOMY SELECT, find the zone for the country of origin from the table to the left, then refer to the DHL IMPORT ECONOMY SELECT tariff table on page 21 to find your price. Europe by Road

Austria Belgium Bulgaria Channel Islands3&4 Croatia Czech Republic Denmark Estonia Finland France Germany Greece5 Hungary Ireland Italy Latvia Lithuania Luxembourg Netherlands Norway4 Poland Portugal Romania Russian Federation 4,5 & 6 Slovakia Slovenia Spain (incl Andorra4, Gibraltar4, & Canary Islands4 served as Remote Areas) Sweden Switzerland4 (incl Liechtenstein4 served as Remote Area) Turkey4&5 * Please contact your DHL account manager for details on shipping goods between countries outside of the UK. 1. UK Export Transit Days is for origins in England and Wales and does not cover remote areas.

DHL GLOBALMAIL BUSINESS saves YOU MONEY:

• We offer even lower prices than you are used to from your Post Office.

• There is no need for you to maintain a franking machine or purchase stamps in advance.

• We offer free supplies such as packaging and pre-printed Air Waybills. How it works. It’s as EASY as 1, 2, 3. 1. Place all your international mail into the DHL GLOBALMAIL BUSINESS packaging provided. 2. When all your international mail has been placed into your DHL GLOBALMAIL BUSINESS packaging, you need to weigh it and complete the pre-printed Air Waybill, selecting the service level (Priority or Standard). 3.

Your DHL courier will collect your completed DHL GLOBALMAIL BUSINESS packaging during their regular pick up and from that moment on you can leave it to us! Features of mail items We will pick up all types of international mail* in compliance with our general terms and conditions (see also our list of restricted items). Mail items are defined as those with the following features: Rectangular Shape Minimum size (L x W) / (L x 2R) Maximum size (L + W + D) / (L + 4R) Maximum single side (L or W or D or 2R) Maximum weight 14 x 9 cm (5. 5 x 3. 5 inches) 90 cm (35. 4 inches) 60 cm (23. 6 inches) 2 kg (4. 4 lb) Cylindrical Shape 5 x 5 cm (5. 9 x 2 inches) 104 cm (40. 9 inches) 90 cm (35. 4 inches) 2 kg (4. 4 lb) Transit Time Transit time to Europe Transit time to North America Transit time to Rest of World 4 – 7 working days 5 – 8 working days 6 – 10 working days * Examples of international mail items: Documents such as contracts, reports, pay slips, invoices, and commercial offers; Odd-shaped items such as commercial documentation, gadgets, sample material, posters, low-value spare parts. For questions regarding mail delivery restrictions for odd-shaped items outside the European Union, please contact our Customer Services on 08701 100 300.

DHL GLOBALMAIL BUSINESS International Business Mail 23 Price Structure The price you pay is based on four factors: 1. The destination Check out which zone your destination country falls into. This will have an impact on the price you pay. Zone 1 Europe, incl. surrounding countries Cyprus Czech Republic Denmark (Inc Greenland and Faroe Islands) Estonia Finland France Georgia Germany Greece Hungary Iceland Ireland Italy Latvia Liechtenstein Lithuania Luxembourg Macedonia Malta Moldova Monaco Montenegro The Netherlands Norway Poland Portugal Romania Russia San Marino Serbia Slovakia Slovenia Spain Sweden Switzerland Turkey Ukraine Vatican City

Zone 2 Rest of the World Albania Andorra Armenia Austria Azerbaijan Belarus Belgium Bosnia & Herzegovina Bulgaria Croatia Africa Asia Latin-America Middle East North America Oceania 2. Service you choose (Priority or Standard) Zones 3. The number of items 4. The total weight Per item (in ? ) Per kilo (in ? ) Priority tariff 1 0. 35 8. 80 Standard tariff 1 0. 34 7. 70 Example You have a mail bag full of mixed business mail, in total 80 items including contracts, commercial documentations, posters and invoices. You want to send everything with our GLOBALMAIL BUSINESS priority service to various countries in Zone 2: Rest of the World.

You then fill out the pre-printed Air Waybill with this amount, add the tick for priority service and we do the rest of the work for you. What amount will you be charged for? In total you will be charged for sending the 80 items to Zone 2: Rest of the World – 80 items x ? 0. 35 + 5 kg x ? 12. 50 = ? 90. 50 These prices are valid from 1st January 2008 and cover non-dutiable mail items that are picked up in combination with your regular DHL EXPRESS pick-up arrangement. Prices within EU are subject to VAT. 24 Shipper’s Interest Insurance Tariff and Transit Guide 2009 SHIPPER’S INTEREST INSURANCE

INITIAL DISCLOSURE STATEMENT

In the event of damage to or loss of your shipment, DHL’s liability to you is limited in accordance with its terms and conditions of business. DHL encourages you to protect yourself against potential loss or damage (limited to your actual financial loss) by purchasing Shipper’s Interest Insurance. Shipper’s Interest Insurance can be arranged for both express documents and parcels, although some restrictions and limitations may apply. These will depend on the destination and content of the shipment. DHL only offers one product from a single insurer, currently AIG (UK) Limited.

Although DHL can arrange the insurance for you, DHL is unable to provide you with advice other than asking some questions which will help you determine the suitability of the cover offered. Charge. The cost of Shipper’s Interest Insurance for express documents and parcels is 1. 5% of the replacement value you have declared (subject to a minimum charge of 12. 00 GBP*). This cost includes VAT and/or Insurance Premium Tax (IPT), where applicable. * Effective 1st June 2009 Regulators. DHL International (UK) Limited is regulated and authorised by the Financial Services Authority. DHL’s FSA registration number is 312634.

DHL is permitted to act as an insurance intermediary to facilitate the arrangement and administration of Shipper’s Interest Insurance. You can check this and find more information on the FSA’s website (www. fsa. gov. uk) or by contacting them on 0845 606 1234. Ownership. Deutsche Post AG, a company domiciled in Germany, is the ultimate owner of 100% of DHL’s share capital. Complaints and the Financial Compensation Scheme. If you have a complaint about Shipper’s Interest Insurance please note DHL act as agents for the insurer. Contact details and further information is contained on page 26 within the Policy Summary.

Shipper’s Interest Insurance Tariff and Transit Guide 2009 25 DEMANDS AND NEEDS STATEMENT The following should be read in conjunction with the Policy Summary, located on page 26 of this document. DHL’s Shipper’s Interest Insurance as provided by AIG (UK) Limited meets the general requirements for loss and damage to goods in transit cover. The cover applies to goods carried under a single Air Waybill. Cover is effective from the time DHL has control or possession of the shipment until the time of delivery. Cover is for physical loss or damage of goods, subject to specific limitations and exclusions.

Further details of exclusions and limitations are set out in the policy summary below. Please note that Shipper’s Interest Insurance does not cover delays; damage or loss arising from political circumstances; the effects of radioactive activity; deterioration arising from the nature of the goods or the consequences of damage or loss. Your goods will be insured for the replacement value that you have advised us prior to collection. In the event of a claim, you will be required to provide evidence of the value of the shipment. Shipper’s Interest Insurance

In assessing the suitability of Shipper’s Interest Insurance, DHL will request you to provide: • Information relating to the content and value of the goods to enable DHL to identify your requirements; and • Disclosure of