Havana suspends licenses for new private restaurants, warns owners to follow regulations

Havana's city government announced Wednesday it has temporarily suspended issuing licenses for new private restaurants in the Cuban capital and warned existing ones to follow regulations to avoid closure or tough fines.

"This is a temporary measure and it will be in place while we inspect and audit these restaurants in Havana. We recognize the importance they have for the city and our local government wants them to be successful by observing the law," said Isabel Hamze, vice president of the capital's government, confirming the decision.

Hamze said over the last six weeks 135 owners of some of the better-known restaurants in the capital have been called to meetings where Havana city officials first listed all the regulatory violations that some of them have committed, warning them to cease and desist.P The official said some restaurant owners are evading tax payments, buying supplies on the black market, allowing the sale of drugs, staying open after 3 a.m. and letting prostitutes and pimps use their places.

"Other violations include...employing workers without licenses and having more than 50 seats at their restaurants. We will look closely and take new measures for those who continue to infringe on regulations," she added.

Currently there are over 150,000 private workers in Havana and the most flourishing businesses are restaurants, which exceed 500 throughout the city, said the official.

Since President Raul Castro relaxed restrictions on small businesses six years ago, private restaurants have thrived, especially in the capital where income is higher and an increasing flow of tourists demand better fare and services than what is available in most state-run restaurants.

Private restaurant owners contacted by Xinhua confirmed the local government's decision to temporarily stop granting new licenses and tough inspections at their businesses will take place in the upcoming weeks.

According to state regulations, the restaurants, also known as "paladares", must buy all their supplies at state-run retail stores and markets, often at very high prices, but many buy cheaper products on the black market.

Earlier this year, the Cuban government imposed price controls on private transportation services after thousands of citizens complained taxi and bus drivers raised fares without reason.

Inspections of private workers are not new in Cuba as the government encourages private businesses but always tries to keep them within the law and regulations.

Critics of the measure said this is a new sign that Havana is hesitant to further open up to private business and to continue market reforms in the country, where the state still controls most economic activities. Endi