JAPAN SUSPENSION OF INSURANCE FOR CUBA-BOUND

UNCLAS TOKYO 002286 SENSITIVE SIPDIS FOR EAP/J AND WHA/CCA E.O. 12958: N/A TAGS: ETRD EINV EWWT PREL CU JA SUBJECT: JAPAN SUSPENSION OF INSURANCE FOR CUBA-BOUND EXPORTS SENSITIVE BUT UNCLASSIFIED NOT FOR INTERNET ¶1. (SBU) Japan's top economic newspaper reported August 19 that Nippon Export and Investment Insurance (NEXI),the GOJ-backed provider of international trade insurance, stopped accepting applications for trade insurance on deals with Cuba, prompting speculation about the future of Japan's Cuba-bound exports. Ministry of Economy, Trade and Industry (METI) officials, however, told Econoff there has been no final decision and the GOJ is working with Cuban Central Bank officials to resolve the matter. ¶2. (SBU) The Central Bank of Cuba informed NEXI in early August it was unable to make timely payment on recent imports from Japan due to a shortage of foreign exchange, according to the Nikkei newspaper. NEXI subsequently announced it has downgraded Cuba's Central Bank to a status where it no longer qualifies for new export insurance. According to the Japan External Trade Organization (JETRO) website, Japan exports to Cuba in 2007 totalled $176.5 million, up from $127.9 million in 2006. Japanese exports to Cuba are mainly medical supplies and precision machinery. ¶3. (SBU) NEXI is supervised by METI. A responsible METI official confirmed to Embassy the basic substance of the Nikkei report but said "we have not decided to suspend underwriting trade insurance for exports to Cuba." GOJ officials, he added, are working diligently to resolve the problem and the official hopes to provide the Embassy with more information early next week. SCHIEFFER