I recently returned from a one week vacation in Cuba (May 2007)-As a US citizen, I only had US dollars to exchange. I had a Cuban friend do my exchanges for Convertible pesos (CUC) at Cadeca, as she's a lot more street-wise than I am.
One of the $20 US dollar bills was NOT accepted because it had a tiny piece missing from one corner, less than a centimeter. I have seen other threads on this, and have heard from other travellers about this also.
I mentioned this to bank teller in my hometown (saying "Central America" instead of Cuba, of course!) She said that this is a common problem with many banks in foreign countries-she mentioned the Phillippines for one-who often accept only crisp, fresh bills for exchange.
THEREFORE: When you get your money from your bank in the US, double check the bills for any rips, tears, or even ink marks on them. Exchange them for newer, crisper bills. Trust me, I learned this the hard way!

Yes this practice is extremely common in SEAsia. A few years ago I had the absurd experience of obtaining some USD from the ANZ bank in Melbourne and attempting to change those SAME notes in the ANZ bank in Hanoi(Vietnam) with one being rejected because it had part of a red stamp on it.
Cheers
john

Please understand international clearing banks do not accept torn or multilated bills, do not accept ink markings (other than anti-counterfeiting pen marks) .... untorn and unmarked billS ARE THE common RULE..
I mighty suggest you ease up a bit on your attitude in Cuba...most of the bumps you are encountering are COMMON to 3rd world travel and NOT Cuba specific problems..

puritan, as stated above, this is standard procedure everywhere in the world, and not specific to Cuba.
Cheers,
Terry

puri;
think that you have troubles with a couple of marked bills, my worst fear is inadvertently passing a counterfit hunskie. they will track you down and throw away the key. every bill i take down passes a thorough exam prior. try explaining that one to the authotrities. thank your lucky stars we have superior diplomatic representation there.

Done that already Tex. I had a counterfit $20.00 US bill 6 years ago in Havana given to me by my bank here in Canada. I had no real problem. They stamped it on all 4 corners "counterfit", front and back, and kept it. The manager, who's English was suprisingly good, told me that this happens a lot. Mostly with American bills. I tried to talk him into giving it back to me to return to my bank BUT no luck there.