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<SEC-DOCUMENT>0001398344-09-000877.txt : 20090828
<SEC-HEADER>0001398344-09-000877.hdr.sgml : 20090828
<ACCEPTANCE-DATETIME>20090828160335
ACCESSION NUMBER:		0001398344-09-000877
CONFORMED SUBMISSION TYPE:	N-CSR
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20090630
FILED AS OF DATE:		20090828
DATE AS OF CHANGE:		20090828
EFFECTIVENESS DATE:		20090828

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			HERZFELD CARIBBEAN BASIN FUND INC
		CENTRAL INDEX KEY:			0000880406
		IRS NUMBER:				650396889
		STATE OF INCORPORATION:			MD
		FISCAL YEAR END:			0630

	FILING VALUES:
		FORM TYPE:		N-CSR
		SEC ACT:		1940 Act
		SEC FILE NUMBER:	811-06445
		FILM NUMBER:		091043367

	BUSINESS ADDRESS:	
		STREET 1:		P O BOX 161465
		CITY:			MIAMI
		STATE:			FL
		ZIP:			33116
		BUSINESS PHONE:		3052711900

	MAIL ADDRESS:	
		STREET 2:		PO BOX 161465
		CITY:			MIAMI
		STATE:			FL
		ZIP:			33116

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	FIRST CUBA FUND INC
		DATE OF NAME CHANGE:	19920929
</SEC-HEADER>
<DOCUMENT>
<TYPE>N-CSR
<SEQUENCE>1
<FILENAME>fp0000962_ncsr-0609.txt
<TEXT>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM N-CSR

              CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
                              INVESTMENT COMPANIES

                  Investment Company Act file number 811-06445

                     The Herzfeld Caribbean Basin Fund, Inc.
                     ---------------------------------------
               (Exact name of registrant as specified in charter)

                      P.O. BOX 161465, MIAMI, FLORIDA 33116
                      -------------------------------------
               (Address of principal executive offices) (Zip code)

                               THOMAS J. HERZFELD
                        P.O. BOX 161465, MIAMI, FL 33116
                        --------------------------------
                     (Name and address of agent for service)

        Registrant's telephone number, including area code: 305-271-1900

                        Date of fiscal year end: 06/30/09

                   Date of reporting period: 7/01/08 - 6/30/09

Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.


<PAGE>

ITEM 1. SHAREHOLDER REPORT


      THE HERZFELD
      CARIBBEAN BASIN
      FUND, INC.


                                 ANNUAL REPORT
                                 JUNE 30, 2009


<PAGE>

================================================================================
THE HERZFELD CARIBBEAN BASIN FUND, INC.
The Herzfeld Building
PO Box 161465
Miami, FL  33116
(305) 271-1900

INVESTMENT ADVISOR
HERZFELD/CUBA
a division of Thomas J. Herzfeld Advisors, Inc.
PO Box 161465
Miami, FL  33116
(305) 271-1900

TRANSFER AGENT & REGISTRAR
State Street Bank and Trust
200 Clarendon Street, 16th Floor
Boston, MA  02116
(617) 443-6870

CUSTODIAN
State Street Bank and Trust
200 Clarendon Street, 5th Floor
Boston, MA  02116

COUNSEL
Pepper Hamilton LLP
3000 Two Logan Square
18th and Arch Streets
Philadelphia, PA  19103

INDEPENDENT AUDITORS
Rothstein Kass & Company, LLP
101 Montgomery Street, 22nd Floor
San Francisco, CA  94104


                          Listed NASDAQ Capital Market
                                  Symbol: CUBA

- --------------------------------------------------------------------------------
THE HERZFELD CARIBBEAN BASIN FUND INC.'S INVESTMENT OBJECTIVE IS LONG-TERM
CAPITAL APPRECIATION. TO ACHIEVE ITS OBJECTIVE, THE FUND INVESTS IN ISSUERS THAT
ARE LIKELY, IN THE ADVISOR'S VIEW, TO BENEFIT FROM ECONOMIC, POLITICAL,
STRUCTURAL AND TECHNOLOGICAL DEVELOPMENTS IN THE COUNTRIES IN THE CARIBBEAN
BASIN, WHICH INCLUDE, AMONG OTHERS, CUBA, JAMAICA, TRINIDAD AND TOBAGO, THE
BAHAMAS, THE DOMINICAN REPUBLIC, BARBADOS, ARUBA, HAITI, THE NETHERLANDS
ANTILLES, THE COMMONWEALTH OF PUERTO RICO, MEXICO, HONDURAS, GUATEMALA, BELIZE,
COSTA RICA, PANAMA, COLOMBIA, THE UNITED STATES AND VENEZUELA ("CARIBBEAN BASIN
COUNTRIES"). THE FUND INVESTS AT LEAST 80% OF ITS TOTAL ASSETS IN EQUITY AND
EQUITY-LINKED SECURITIES OF ISSUERS, INCLUDING U.S.-BASED COMPANIES WHICH ENGAGE
IN SUBSTANTIAL TRADE WITH, AND DERIVE SUBSTANTIAL REVENUE FROM, OPERATIONS IN
THE CARIBBEAN BASIN COUNTRIES.
- --------------------------------------------------------------------------------


                                      - 2 -
<PAGE>

LETTER TO STOCKHOLDERS
================================================================================

                                                                 [PICTURE]
                                                            THOMAS J. HERZFELD
                                                          CHAIRMAN AND PRESIDENT

August 5, 2009

Dear Fellow Shareholders:

We are pleased to present our annual report for the period ending June 30, 2009.
On that date the Fund's net asset value was $5.35 per share, which represents a
loss of 23.72% for the one year period then ended (adjusted for distributions).
The Fund's share price closed the fiscal year at $6.07 per share, down from
$7.69 per share on June 30, 2008, and representing a 17.73% loss for the year
(adjusted for distributions). A year-end distribution of $0.211 per share was
paid on January 5, 2009, to shareholders of record December 12, 2008.

For the first six months of calendar year 2009 the Fund benefited from a
recovery in global financial markets. During that same time, the Fund's share
price was up 44.52%, and net asset value per share advanced 11.69%.

Our two-fold investment focus stresses first, companies which we believe will
benefit from a resumption of trade with Cuba and second, companies in the
Caribbean Basin which we believe have good prospects even if there is no change
in U.S. policy towards Cuba.

Over the past fiscal year, demand for goods and services of the Caribbean
remained under pressure, on the other hand, continued and steady progress has
been made in U.S. policy towards Cuba. For example, the U.S. government has
moved on a number of initiatives which could eventually pave the road towards
normalization of relations with Cuba. We are pleased that the new administration
has relaxed restrictions on cash remittances and family travel by
Cuban-Americans to Cuba. As


                                      - 3 -
<PAGE>

LETTER TO STOCKHOLDERS (CONTINUED)
================================================================================

   [PICTURE]
ERIK M. HERZFELD
PORTFOLIO MANAGER

we noted in our last report to shareholders, we anticipated that this would be
one of the key first steps for the new incoming administration.

The level of interest in Cuba by the U.S. Congress has also increased. For
instance, Senator Max Baucus (D-MT), who heads the Senate Finance Committee, has
introduced legislation designed to ease restrictions on the sale of U.S. food to
Cuba and facilitate travel to Cuba by farmers seeking sales. Senator John Kerry
(D-MA), head of the Senate Foreign Relations Committee, has also argued for
major changes to embargo policy.

Legislation we are watching closely includes several bills aimed at eliminating
restrictions for Americans traveling to Cuba. We believe our holdings in
CARNIVAL CORPORATION (NYSE: CCL), ROYAL CARIBBEAN CRUISES LTD (NYSE: RCL), and
COPA HOLDINGS, S.A. (NYSE: CPA), are prime candidates to see an increase in
revenue from such changes in policy. Since Cuba lacks adequate hotel and airport
facilities, cruise ships are uniquely positioned to handle the early volume of
American tourists traveling to that country. Copa Holdings, S.A. through Copa
Airlines already operates daily direct service to Cuba from Panama and Mexico;
we believe the airline is in a strong position to continue to dominate in the
region.

A list of our major holdings appears on the following page. FREEPORT-MCMORAN
COPPER & GOLD INC. (NYSE: FCX) is currently our largest holding and has
benefited from the surge in commodity prices. FCX, the world's largest publicly
traded copper company, has registered a claim related to confiscated mines in
Cuba. That claim is the second biggest claim against the government of Cuba
under Title V of the International Claims Settlement Act of 1949. In addition,
we believe the holding can provide a hedge against a weaker dollar.


                                      - 4 -
<PAGE>

LETTER TO STOCKHOLDERS (CONTINUED)
================================================================================
Largest Allocations

The following tables present our largest  investment and geographic  allocations
as of June 30, 2009.

- ------------------------------       -------------------------------------------
GEOGRAPHIC     % OF NET ASSETS       LARGEST PORTFOLIO           % OF NET ASSETS
ALLOCATION                           POSITIONS

USA                     46.62%       Freeport McMoran Copper & Gold        7.31%
Mexico                  17.48%       Watsco Incorporated                   6.89%
Panama                   8.50%       Seaboard Corporation                  6.78%
Cayman Islands           7.28%       Copa Holdings S.A.                    6.06%
Colombia                 4.03%       Consolidated Water, Inc.              5.33%
Bahamas                  3.86%       Carnival Corp.                        4.47%
Puerto Rico              0.98%       Bancolombia, S.A.                     4.03%
Belize                   0.74%       Mastec, Inc.                          3.90%
Venezuela                0.05%       America Movil, S.A.B. de C.V. ADR     3.90%
Latin American Regional  0.01%       Coca Cola Femsa, S.A.B.
Cuba                     0.00%          de C.V.  ADR                       3.33%
Cash and Other          10.45%
- ------------------------------       ------------------------------------------

Daily net asset values and press releases on the Fund are available on the
Internet at www.herzfeld.com.

We would like to thank the members of the Board of Directors for their hard work
and guidance and also to thank our fellow stockholders for their continued
support and suggestions.

                                          Sincerely,

                                          /s/ Thomas J. Herzfeld

                                          Thomas J. Herzfeld
                                          Chairman of the Board, President and
                                          Portfolio Manager

                                          /s/ Erik M. Herzfeld

                                          Erik M. Herzfeld
                                          Portfolio Manager


                                      - 5 -
<PAGE>

SCHEDULE OF INVESTMENTS AS OF JUNE 30, 2009
================================================================================
Shares or Principal Amount          Description                       Fair Value
- --------------------------------------------------------------------------------
Common stocks - 90.40% of net assets

Airlines - 6.55%
    29,500   Copa Holdings, S.A                                    $  1,204,190
    16,000   AirTran Holdings Inc                                        99,040

Banking and finance - 8.54%
    26,280   Bancolombia, S.A                                           801,540
    39,000   Banco Latinoamericano de Exportaciones, S.A                484,770
     6,500   Doral Financial Corp.*                                      16,250
    16,400   Grupo Financiero Banorte, S.A. de C.V. Series O             39,910
     9,900   Grupo Financiero Inbursa, S.A.B. de C.V. Series O           26,264
    50,000   Popular Inc.                                               110,000
     3,844   W Holding Co. Inc.                                          54,585
    10,000   Western Union Company                                      164,000

Communications - 12.83%
    20,000   America Movil, S.A.B. de C.V. ADR                          774,400
    35,600   America Movil, S.A.B. de C.V. Series A                      67,603
    50,891   America Movil, S.A.B. de C.V. Series L                      98,727
     4,894   Atlantic Tele-Network, Inc.                                192,285
    11,900   Carso Global Telecom, S.A.B. de C.V. Series A1*             44,003
   176,000   Fuego Entertainment Inc.*                                   26,400
       871   Grupo Iusacell, S.A. de C.V. Series V*                       3,009
    21,120   Grupo Radio Centro, S.A.B. ADR                             147,629
    32,400   Grupo Televisa, S.A.B. ADR                                 550,800
    13,400   Grupo Televisa, S.A.B. Series CPO                           45,531
    80,304   Spanish Broadcasting System, Inc.*                          14,455
    15,000   Telefonos de Mexico, S.A.B. de C.V. ADR Series L           243,150
    23,800   Telefonos de Mexico, S.A.B. de C.V. Series A                19,336
    78,600   Telefonos de Mexico, S.A.B. de C.V. Series L                64,156
    15,000   Telmex International, S.A.B. de C.V. ADR                   189,750
    23,800   Telmex International Series A                               14,457
    78,600   Telmex International Series L                               49,892
    13,900   TV Azteca, S.A.B. de C.V. Series CPO                         5,594

Conglomerates and holding companies - 1.15%
   250,000   Admiralty Holding Company*                                     175
     5,400   Alfa, S.A.B. de C.V. Series A                               15,212
    70,348   BCB Holdings Ltd.*                                         144,816
- ------------------------------
* Non-income producing

                             SEE ACCOMPANYING NOTES.


                                      - 6 -
<PAGE>

SCHEDULE OF INVESTMENTS AS OF JUNE 30, 2009 (CONTINUED)
================================================================================
Shares or Principal Amount          Description                       Fair Value
- --------------------------------------------------------------------------------
Conglomerates and holding companies (continued)
     3,200   Corporacion Interamericana de Entretenimiento, S.A.B.
                de C.V. Series B*                                  $      1,611
    11,000   Grupo Carso, S.A.B. de C.V. Series A1                       29,567
     1,580   Grupo Kuo S.A.B. de C.V.*                                      720
        20   Grupo Pochteca, S.A.B. de C.V. *                                 3
     3,250   Shellshock Ltd. Ord.*                                        1,873
     2,900   Vitro, S.A.B. de C.V. Series A*                              1,268
    27,918   Vitro, S.A.B. de C.V. ADR                                   33,222

Construction and related - 5.27%
    21,737   Cemex S.A.B. de C.V. ADR                                   203,024
    51,582   Cemex S.A.B. de C.V. Series CPO                             48,213
        20   Ceramica Carabobo Class A ADR*                               4,657
    17,200   Consorcio ARA, S.A.B. de C.V.                                7,483
     1,580   Dine S.A.B. de C.V. Series B*                                  720
     3,583   Empresas ICA, S.A.B. de C.V.*                                6,140
       800   Grupo Cementos de Chichuahua, S.A.B. de C.V.                 2,074
    66,132   Mastec, Inc.*                                              775,067

Consumer products and related manufacturing - 8.13%
    13,273   Grupo Casa Saba, S.A.B. de C.V. ADR                        245,551
    28,000   Watsco Incorporated                                      1,370,040

Food, beverages and tobacco - 6.06%
     1,219   Alsea, S.A.B. de C.V.                                          692
    12,000   Chiquita Brands International Inc.*                        123,120
    16,500   Coca Cola Femsa, S.A.B. de C.V. ADR                        661,980
       200   Coca Cola Femsa, S.A.B. de C.V. Series L                       804
    18,900   Fomento Economico Mexicano, S.A.B. de C.V. Series UBD       60,947
    17,690   Fresh Del Monte Produce Inc.*                              287,639
       800   Gruma, S.A.B. de C.V. Series B*                                820
     7,600   Grupo Bimbo, S.A.B. de C.V. Series A                        40,394
     7,700   Grupo Modelo, S.A.B. de C.V. Series C                       27,502

Housing - 1.66%
     1,700   Corporacion Geo S.A.B. de C.V. Series B*                     3,284
       100   Desarrolladora Homex, S.A.B. de C.V.*                          465
    33,500   Lennar Corporation                                         324,615
       400   Sare Holding, S.A.B. de C.V. Series B*                         122
     1,500   Urbi Desarrollos Urbanos, S.A.B. de C.V.*                    2,278
- ------------------------------
* Non-income producing

                             SEE ACCOMPANYING NOTES.


                                      - 7 -
<PAGE>

SCHEDULE OF INVESTMENTS AS OF JUNE 30, 2009 (CONTINUED)
================================================================================
Shares or Principal Amount          Description                       Fair Value
- --------------------------------------------------------------------------------
Investment companies - 0.02%
     4,420   Shellproof Limited                                    $      2,184
       147   Western Asset Emerging Markets Debt Fund                     2,151

Leisure - 7.61%
    34,500   Carnival Corp.                                             889,065
    32,500   Royal Caribbean Cruises Ltd.                               440,050
     6,000   Steiner Leisure Ltd.*                                      183,180

Medical - 0.21%
     8,386   Micromet Inc.*                                              41,762

Mining - 7.33%
    29,000   Freeport McMoran Copper & Gold, Inc.                     1,453,190
     3,813   Grupo Mexico, S.A.B. de C.V. Series B                        4,169

Pulp and paper - 0.12%
     6,100   Kimberly-Clark de Mexico, S.A.B. de C.V. Series A           23,274

Railroad - 3.03%
    16,000   Norfolk Southern Corporation                               602,720

Retail - 0.97%
     3,700   Controladora Comercial Mexicana, S.A.B. de C.V.
                Series UBC*                                               2,132
     1,270   Grupo Elektra, S.A.B. de C.V. Series CPO                    57,857
    45,111   Wal-Mart de Mexico, S.A.B. de C.V. Series V                133,447

Service - 0.01%
       700   Grupo Aeroportuario del Sureste, S.A.B. de C.V. Series B     2,741
       100   Promotora Ambiental, S.A.B. de C.V.*                            89

Trucking and marine freight - 12.50%
    61,404   Grupo TMM, S.A.B. ADR*                                      54,036
     1,201   Seaboard Corporation                                     1,347,522
     1,000   Seacor Holdings, Inc.                                       75,240
    20,000   Teekay Corporation                                         420,600
     8,361   Teekay LNG Partners LP                                     163,040
    66,797   Trailer Bridge, Inc.*                                      323,297
    23,000   Ultrapetrol Bahamas Ltd.*                                  101,890
- ------------------------------
* Non-income producing

                             SEE ACCOMPANYING NOTES.


                                      - 8 -
<PAGE>

SCHEDULE OF INVESTMENTS AS OF JUNE 30, 2009 (CONTINUED)
================================================================================
Shares or Principal Amount          Description                       Fair Value
- --------------------------------------------------------------------------------
Utilities - 8.28%
    12,000   Caribbean Utilities Ltd. Class A                     $     100,200
    66,841   Consolidated Water, Inc.                                 1,059,430
       700   Cuban Electric Company*                                      3,500
    40,500   Teco Energy Inc.                                           483,165

Other - 0.13%
    13,000   Impellam Grp.*                                               5,887
    55,921   Margo Caribe, Inc.*                                         14,539
       300   Mexichem S.A.B. de C.V.                                        383
       895   Siderurgica Venezolana Sivensa, S.A. ADR                     3,960
        79   Siderurgica Venezolana Sivensa, S.A. Series B                  350
    45,000   Xcelera, Inc. (Note 2)*                                         --

TOTAL COMMON STOCKS (COST $21,915,066)                            $  17,972,873

Bonds - 0% of net assets
$  165,000   Republic of Cuba - 4.5%, 1977 - in default
                (cost $63,038) (Note 2)*                                     --
                                                                  -------------

OTHER ASSETS LESS LIABILITIES - 9.60% OF NET ASSETS               $   1,908,627
                                                                  -------------

NET ASSETS - 100%                                                 $  19,881,500
                                                                  =============

The investments are concentrated in the following geographic regions (as
percentages of net assets):

United States of America                                                 46.62%
Mexico                                                                   17.48%
Panama                                                                    8.50%
Cayman Islands                                                            7.28%
Other, individually under 5%**                                           20.12%
                                                                  -------------
                                                                        100.00%

- ------------------------------
* Non-income producing
** Amount includes other assets less liabilities of 9.60%

                             SEE ACCOMPANYING NOTES.


                                      - 9 -
<PAGE>

STATEMENT OF ASSETS AND LIABILITIES AS OF JUNE 30, 2009
================================================================================
ASSETS

   Investments in securities, at fair value
      (cost $21,978,104) (Notes 1 and 2)                            $17,972,873
   Cash                                                               1,966,347
   Dividends receivable                                                  16,872
   Other assets                                                          33,249
                                                                    -----------

      TOTAL ASSETS                                                   19,989,341

LIABILITIES

   Accrued investment advisor fee (Note 3)                 66,760
   Other payables                                          41,081
                                                      -----------

      TOTAL LIABILITIES                                                 107,841
                                                                    -----------

NET ASSETS (Equivalent to $5.35 per share
   based on 3,713,071 shares outstanding)                           $19,881,500
                                                                    ===========

NET ASSETS CONSIST OF THE FOLLOWING:
   Common stock, $.001 par value; 100,000,000
      shares authorized; 3,713,071* shares issued
      and outstanding                                               $     3,713
   Additional paid-in capital                                        26,856,478
   Accumulated net realized loss on investments                      (2,973,460)
   Net unrealized loss on investments (Notes 4 and 5)                (4,005,231)
                                                                    -----------

      NET ASSETS                                                    $19,881,500
                                                                    ===========

* 213,222 shares issued through dividend reinvestment plan and 1,812,293 shares
issued through rights offering (Note 6)

                             SEE ACCOMPANYING NOTES.


                                     - 10 -
<PAGE>


STATEMENT OF OPERATIONS YEAR ENDED JUNE 30, 2009
================================================================================
INVESTMENT INCOME AND EXPENSES
   Dividends and interest                                          $    437,395
                                                                   ------------

   Investment advisor fees (Note 3)                $    282,795
   Professional fees                                     92,812
   Custodian fees                                        54,000
   Insurance                                             45,707
   CCO salary                                            26,913
   Printing and postage                                  23,518
   Transfer agent fees                                   17,500
   Director fees                                         15,600
   Listing fees                                          15,000
   Proxy services                                         4,623
   Other                                                 28,939
                                                   ------------
      Total investment expenses                                         607,407
                                                                   ------------

      NET INVESTMENT INCOME (LOSS)                                     (170,012)

REALIZED AND UNREALIZED GAIN (LOSS)
   ON INVESTMENTS AND FOREIGN CURRENCY
   Net realized gain (loss) on investments and
      foreign currency                                (2,917,743)
   Net increase (decrease) in unrealized
      appreciation (depreciation) on
      investments and foreign currency                (3,377,841)
                                                    ------------

      NET LOSS ON INVESTMENTS                                        (6,295,584)
                                                                   ------------

NET DECREASE IN NET ASSETS RESULTING
   FROM OPERATIONS                                                 ($ 6,465,596)
                                                                   ============

                             SEE ACCOMPANYING NOTES.


                                     - 11 -
<PAGE>

STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED JUNE 30, 2009 AND 2008
================================================================================

                                                       2009            2008

INCREASE (DECREASE) IN NET ASSETS RESULTING
   FROM OPERATIONS:
   Net investment income (loss)                    ($   170,012)   $    417,567
   Net realized gain (loss) on investments and
      foreign currency                             (  2,917,743)      3,127,940
   Net increase (decrease) in unrealized
      appreciation (depreciation) on
      investments and foreign currency             (  3,377,841)   (  8,184,478)
                                                   ------------    ------------

NET DECREASE IN NET ASSETS
   resulting from operations                       (  6,465,596)   (  4,638,971)

DISTRIBUTIONS TO STOCKHOLDERS:
   Net investment income                           (    600,032)   (    200,000)
   Long-term realized gains                        (    183,426)   (  4,279,807)
                                                   ------------    ------------

NET DISTRIBUTIONS TO STOCKHOLDERS                  (    783,458)   (  4,479,807)
                                                   ------------    ------------

CAPITAL STOCK TRANSACTIONS:
   Shares issued in reinvestment
      of distribution
      (213,222 shares in 2008) (Note 6)                      --       1,692,977
   Shares issued in rights offering,
      net of rights offering costs
      (1,812,293 shares in 2008) (Note 6)                    --      18,075,138
                                                   ------------    ------------

TOTAL INCREASE (DECREASE) IN NET ASSETS            (  7,249,054)     10,649,337

NET ASSETS:

   Beginning                                         27,130,554      16,481,217

   Ending                                          $ 19,881,500    $ 27,130,554
                                                   ============    ============

                             SEE ACCOMPANYING NOTES.


                                     - 12 -
<PAGE>

<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
YEARS ENDED JUNE 30, 2005 THROUGH 2009
======================================================================================================================
                                                            2009         2008         2007         2006         2005
                                                          --------     --------     --------     --------     --------
<S>                                                       <C>          <C>          <C>          <C>          <C>
PER SHARE OPERATING PERFORMANCE
(FOR A SHARE OF CAPITAL STOCK OUTSTANDING FOR THE YEAR)
Net asset value, beginning of year                        $   7.31     $  9.77      $   8.08     $  7.33      $  5.43
                                                          --------     --------     --------     --------     --------

Operations:
   Net investment income (loss)(1)                           (0.05)        0.22        (0.14)       (0.16)       (0.09)
   Net realized and unrealized gain (loss) on
      investment transactions(1)                             (1.70)       (1.40)        2.83         1.08         1.99
                                                          --------     --------     --------     --------     --------
      Total from operations                                  (1.75)       (1.18)        2.69         0.92         1.90
                                                                                    --------     --------     --------

Distributions:
   From net investment income                                (0.16)       (0.06)          --           --           --
   From net realized gains                                   (0.05)       (1.22)       (1.00)       (0.17)          --
                                                          --------     --------     ---------    --------
      Total distributions                                    (0.21)       (1.28)       (1.00)       (0.17)          --
                                                                                    ---------    --------

Net asset value, end of year                              $   5.35     $   7.31     $   9.77     $   8.08     $   7.33
                                                          --------     --------     --------     --------     --------

Per share market value, end of year                       $   6.07     $   7.69        13.59     $   7.57     $   6.30
                                                          --------     --------     --------     --------     --------

Total investment return (loss) based on
   market value per share                                  (17.73%)     (34.29%)      94.61%       22.86%       29.36%
                                                          --------     --------     --------     --------     --------

RATIOS AND SUPPLEMENTAL DATA
Net assets, end of year (in 000's)                        $ 19,882     $ 27,131     $ 16,481     $ 13,553     $ 12,292
                                                          --------     --------     --------     --------     --------
Ratio of expenses to average net assets                      3.02%        2.74%        3.28%        3.37%        3.55%
                                                          --------     --------     --------     --------     --------
Ratio of net investment income (loss)
  to average net assets                                     (0.84%)       1.70%       (1.83%)      (1.95%)      (1.47%)
                                                          --------     --------     --------     --------     --------
Portfolio turnover rate                                        17%          25%          28%          40%          30%
                                                          --------     --------     --------     --------     --------
</TABLE>

(1) Computed by dividing the respective year's amounts from the Statement of
Operations by the average outstanding shares for each year presented. For
2008, amounts were computed using the weighted average outstanding shares
due to the significant one-time increase in shares from the rights
offering.

                             SEE ACCOMPANYING NOTES.


                                     - 13 -
<PAGE>

NOTES TO FINANCIAL STATEMENTS
================================================================================
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND RELATED MATTERS
- --------------------------------

The Herzfeld Caribbean Basin Fund, Inc. (the "Fund") is a non-diversified,
closed-end management investment company incorporated under the laws of the
State of Maryland on March 10, 1992, and registered under the Investment Company
Act of 1940. The Fund commenced investing activities in January 1994. The Fund
is listed on the NASDAQ Capital Market and trades under the symbol "CUBA".

The Fund's investment objective is to obtain long-term capital appreciation. The
Fund pursues its objective by investing primarily in equity and equity-linked
securities of public and private companies, including U.S.-based companies, (i)
whose securities are traded principally on a stock exchange in a Caribbean Basin
Country or (ii) that have at least 50% of the value of their assets in a
Caribbean Basin Country or (iii) that derive at least 50% of their total revenue
from operations in a Caribbean Basin Country (collectively, "Caribbean Basin
Companies"). Under normal conditions, the Fund invests at least 80% of its total
assets in equity and equity-linked securities of Caribbean Basin Countries. This
80% policy may be changed without stockholder approval upon sixty days written
notice to stockholders. The Fund's investment objective is fundamental and may
not be changed without the approval of a majority of the Fund's outstanding
voting securities.

At June 30, 2009, the Fund had foreign investments in companies operating
principally in Mexico and Panama representing approximately 17% and 9% of the
Fund's net assets, respectively.

The Fund's custodian and transfer agent is State Street Bank & Trust Company
("SSBT"), 200 Clarendon Street, PO Box 9130, Boston, Massachusetts 02117.

SECURITY VALUATION
- ------------------

The Fund adopted the provisions of SFAS No. 157, "Fair Value Measurements"
("SFAS No. 157"), effective January 1, 2008. Under SFAS No. 157, fair value is
defined as the price that would be received to sell an asset or paid to transfer
a liability (i.e., the "exit price") in an orderly transaction between market
participants at the measurement date.

In determining fair value, the Fund uses various valuation approaches. SFAS No.
157 establishes a fair value hierarchy for inputs used in measuring fair value
that maximizes the use of observable inputs and minimizes the use of
unobservable inputs by requiring that the most observable inputs be used when
available.


                                     - 14 -
<PAGE>

NOTES TO FINANCIAL STATEMENTS
================================================================================
Observable inputs are those that market participants would use in pricing the
asset or liability based on market data obtained from sources independent of the
Fund. Unobservable inputs reflect the Fund's assumptions about the inputs market
participants would use in pricing the asset or liability developed based on the
best information available in the circumstances. The fair value hierarchy is
categorized into three levels based on the inputs as follows:

Level 1:    quoted prices in active markets for identical investments
Level 2:    other significant observable inputs (including quoted prices for
            similar investments, interest rates, prepayment speeds, credit risk,
            etc.)
Level 3:    significant unobservable inputs (including the Fund's own
            assumptions in determining the fair value of investments)

The availability of valuation techniques and observable inputs can vary from
security to security and is affected by a wide variety of factors including, the
type of security, whether the security is new and not yet established in the
marketplace, and other characteristics particular to the transaction. To the
extent that valuation is based on models or inputs that are less observable or
unobservable in the market, the determination of fair value requires more
judgment. Those estimated values do not necessarily represent the amounts that
may be ultimately realized due to the occurrence of future circumstances that
cannot be reasonably determined. Because of the inherent uncertainty of
valuation, those estimated values may be materially higher or lower than the
values that would have been used had a ready market for the securities existed.
Accordingly, the degree of judgment exercised by the Fund in determining fair
value is greatest for securities categorized in Level 3. In certain cases, the
inputs used to measure fair value may fall into different levels of the fair
value hierarchy. In such cases, for disclosure purposes, the level in the fair
value hierarchy within which the fair value measurement in its entirety falls,
is determined based on the lowest level input that is significant to the fair
value measurement.

Fair value is a market-based measure considered from the perspective of a market
participant rather than an entity-specific measure. Therefore, even when market
assumptions are not readily available, the Fund's own assumptions are set to
reflect those that market participants would use in pricing the asset or
liability at the measurement date. The Fund uses prices and inputs that are
current as of the measurement date, including periods of market dislocation. In
periods of market dislocation, the observability of prices and inputs may be
reduced for many securities. This condition could cause a security to be
reclassified to a lower level within the fair value hierarchy.

Investments in securities traded on a national securities exchange (or reported
on the NASDAQ National Market or Capital Market) are stated at the last reported
sales price on the day of valuation (or at the NASDAQ official closing price);
other securities traded in the over-the-counter market and listed securities for
which no sale was reported on that date


                                     - 15 -
<PAGE>

NOTES TO FINANCIAL STATEMENTS
================================================================================
are stated at the last quoted bid price. Restricted securities and other
securities for which quotations are not readily available are valued at fair
value as determined by the Board of Directors.

The following table summarizes the classification of the Fund's investments by
the above fair value hierarchy levels as of June 30, 2009:

      LEVEL          Investments in Securities
      ----------------------------------------
      Level 1                     $ 17,972,873
      Level 2                     $          0
      Level 3                     $          0*

*See Note 2, non-marketable securities owned

The Fund's Level 3 assets measured at fair value as of July 1, 2008 were $0.
There were no purchases, sales, or transfers of Level 3 assets during the year
ended June 30, 2009. Changes in unrealized gains (losses) for Level 3 assets
still held as of June 30, 2009 were $0.

INCOME RECOGNITION
- ------------------

Security transactions are recorded on the trade date. Gains and losses on
securities sold are determined on the basis of identified cost. Dividend income
is recognized on the ex-dividend date or in the case of certain foreign
securities, as soon as the Fund is notified, and interest income is recognized
on an accrual basis. Pursuant to a custodian agreement, SSBT receives a fee
reduced by credits which are determined based on the average daily cash balance
the Fund maintains with SSBT. Credit balances used to reduce the Fund's
custodian fees for the year ended June 30, 2009 were approximately $27.
Discounts and premiums on debt securities purchased are amortized over the life
of the respective securities. It is the Fund's practice to include the portion
of realized and unrealized gains and losses on investments denominated in
foreign currencies as components of realized and unrealized gains and losses on
investments and foreign currency.

DEPOSITS WITH FINANCIAL INSTITUTIONS
- ------------------------------------

The Fund may, during the course of its operations, maintain account balances
with financial institutions in excess of federally insured limits.


                                     - 16 -
<PAGE>

NOTES TO FINANCIAL STATEMENTS
================================================================================
USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS
- -----------------------------------------------------------

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

INCOME TAXES
- ------------

The Fund's policy is to continue to comply with the provisions of the Internal
Revenue Code that are applicable to regulated investment companies and to
distribute all its taxable income to its stockholders. Under these provisions,
the Fund is not subject to federal income tax on its taxable income and no
federal income tax provision is required.

The Fund has adopted a June 30 year-end for federal income tax purposes.

DISTRIBUTIONS TO STOCKHOLDERS
- -----------------------------

Distributions to stockholders are recorded on the ex-dividend date. Income and
capital gain distributions are determined in accordance with income tax
regulations which may differ from accounting principles generally accepted in
the United States of America. For the year ended June 30, 2009, a distribution
from long-term capital gains of $0.0494 per share and a net investment income
distribtuion of $0.1616 per share was declared on November 12, 2008, payable on
January 5, 2009 to stockholders of record December 12, 2008. The distribution
was paid in stock, unless an election to receive cash was made by the
stockholder. Shares were issued at a reinvestment price of $4.9896 per share,
which was the price paid by the Fund to purchase the required number of shares
in the open market in order to pay the distribution.

NOTE 2. NON-MARKETABLE AND RESTRICTED SECURITIES OWNED

Investments in securities, include $165,000 principal, 4.5%, 1977 Republic of
Cuba bonds purchased for $63,038. The bonds were listed on the New York Stock
Exchange and had been trading in default since 1960. A "regulatory halt" on
trading was imposed by the New York Stock Exchange in July 1995 and trading in
the bonds was suspended as of December 28, 2006. The New York Stock Exchange has
stated that following the suspension of trading, application will be made to the
Securities and Exchange Commission to delist the issue. As of June 30, 2009, the
position was valued at $0 by the Board of Directors, which approximates the
bonds' fair value.


                                     - 17 -
<PAGE>

NOTES TO FINANCIAL STATEMENTS
================================================================================
Investments in securities also include 45,000 shares of Xcelera, Inc. The
security traded on the Pink Sheets until the first quarter of 2007 when trading
was discontinued. As of June 30, 2009, the position was valued at $0 by the
Board of Directors, which approximates the position's fair value.

Two of the Fund's holdings are currently segregated and restricted from transfer
because they appear on the OFAC list. These securities are: $165,000 principal
value Republic of Cuba, 4.5%, 1977 in default with a fair value of $0, and 700
shares of Cuban Electric Company with a fair value of $3,500.

NOTE 3. TRANSACTIONS WITH AFFILIATES

HERZFELD / CUBA (the "Advisor"), a division of Thomas J. Herzfeld Advisors,
Inc., is the Fund's investment advisor and charges a monthly fee at the annual
rate of 1.45% of the Fund's average daily net assets. Total fees for the year
ended June 30, 2009 amounted to $282,795, of which $66,760 is payable as of June
30, 2009.

During the year ended June 30, 2009, the Fund paid $14,550 of brokerage
commissions to Thomas J. Herzfeld & Co., Inc., an affiliate of the Advisor, at
an average cost per share of $0.04.

A director of the Fund serves on the Board of Directors of Margo Caribe, Inc., a
company in which the Fund has an investment.

A director of the Fund is the owner of the Advisor and Thomas J. Herzfeld & Co.,
Inc.

The Fund reimbursed the Advisor in the amount of $26,913 for the portion of the
chief compliance officer's (the "CCO") salary determined to be attributable to
the services provided as CCO of the Fund.

NOTE 4. INVESTMENT TRANSACTIONS

During the year ended June 30, 2009, purchases and sales of investment
securities were $3,424,049 and $5,880,414, respectively.

At June 30, 2009, the Fund's investment portfolio had gross unrealized gains of
$2,011,269 and gross unrealized losses of $6,016,500, resulting in a net
unrealized loss of $4,005,231 for financial statement purposes.

NOTE 5. INCOME TAX INFORMATION

For financial statement purposes, the Fund's net investment loss for the year
ended June 30, 2009 does not differ from the net investment loss for tax
purposes. Realized gains differ for financial statement and tax purposes
primarily due to differing treatments of wash sales.


                                     - 18 -
<PAGE>

NOTES TO FINANCIAL STATEMENTS
================================================================================
As of June 30, 2009, for tax purposes the Fund's undistributed net investment
loss was $0 and its undistributed realized loss ("capital loss carryforward") on
investments was $1,256,393. This capital loss carryforward will expire, if
unutilized, as of December 31, 2017. Additionally, the Fund has post October
capital losses as of June 30, 2009, which is deferred until 2010 for tax
purposes, of $1,220,594.

The cost basis of securities owned for financial statement purposes is lower
than the cost basis for income tax purposes by $496,451 due to wash sale
adjustments. As of June 30, 2009, gross unrealized gains were $1,514,818 and
gross unrealized losses were $6,016,500 for income tax purposes.

Permanent differences accounted for during the year ended June 30, 2009 result
from differences between book and tax accounting for the characterization of
distributions and the write-off of the Fund's net investment loss for tax
purposes. Such amounts have been reclassified as follows:

                                              Accumulated Net
                            Accumulated Net   Realized Loss On   Additional Paid
                            Investment Loss     Investments        in Capital
- --------------------------------------------------------------------------------
Year ended June 30, 2009       $546,263          $(373,042)        $(173,221)
- --------------------------------------------------------------------------------

In June, 2006, FASB issued FASB Interpretation No. 48, "Accounting for
Uncertainty in Income Taxes -- an interpretation of FASB Statement No. 109"
("FIN 48"). FIN 48 clarifies the accounting for uncertainty in income taxes
recognized in accordance with FASB Statement No. 109, "Accounting for Income
Taxes." This interpretation prescribes a recognition threshold and measurement
attribute for the financial statement recognition and measurement of a tax
position taken or expected to be taken in a tax return. It also provides
guidance on de-recognition, classification, interest and penalties, accounting
in interim periods, disclosure and transition. FIN 48 is effective for fiscal
years beginning after December 15, 2006, and was adopted by the Fund on July 1,
2007. The adoption had no effect on the Fund's financial statements.

The Fund's policy would be to recognize accrued interest expense to unrecognized
tax benefits in interest expense and penalties in operating expenses. There were
none for the period ended June 30, 2009.

The Fund files income tax returns in the U.S. federal jurisdiction and various
states jurisdictions. The tax years ended 2006 to 2008 are open and may be
subject to examination by U.S. federal, state and local income tax authorities.


                                     - 19 -
<PAGE>

NOTES TO FINANCIAL STATEMENTS
================================================================================
NOTE 6. CAPITAL SHARE TRANSACTIONS

RIGHTS OFFERING

On October 26, 2007, the Fund issued 1,812,293 common shares in connection with
a rights offering. Stockholders of record September 26, 2007 were issued one
non-transferable right for every share owned on that date. The rights entitled
the stockholders to purchase one new common share for every right held. In
addition, the Fund had the discretion to increase the number of shares of common
stock subject to subscription by up to 100% of the shares offered, or up to an
additional 1,678,556 additional shares of common stock.

The subscription price was equal to 85% of the average volume-weighted sales
price per share of the Fund's common stock on the NASDAQ Capital Market on
October 26, 2007 and the four preceding trading days. The final subscription
price was $10.04 per share. Net proceeds to the Fund were $18,075,138 after
deducting rights offering costs of $120,284. The net asset value of the Fund's
common shares was increased by approximately $0.09 per share as a result of the
share issuance.

YEAR-END DISTRIBUTIONS

On January 5, 2009, the Fund paid a year-end distribution of $0.211 per share
paid in stock. Stockholders were also given the option of receiving the payment
in cash. Shares were purchased in the open market to pay the distribution at a
reinvestment price of $4.9896 per share including brokerage commissions.

On January 9, 2008, the Fund issued 213,222 common shares in connection with a
year-end distribution of $1.28 per share paid in stock. Stockholders were also
given the option of receiving the payment in cash. Shares were issued at $7.94
per share, equal to the net asset value of the Fund on the payable date of
January 9, 2008. New shares were issued at net asset value per share, therefore
the reinvestment of distributions had no effect on net asset value.


                                     - 20 -
<PAGE>

      Certified         Rothstein, Kass & Company, LLP         Beverly Hills
      Public            101 Montgomery Street, 22nd Floor      Dallas
      Accountants       San Francisco, CA  94596               Denver
                        Tel  415.788.6666                      Grand Cayman
                        Fax  415.788.1890                      New York
                        www.rkco.com                           Richmond
                                                               San Francisco
                                                               Walnut Creek

[LOGO]  Rothstein Kass

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------

To the Board of Directors and Stockholders of The Herzfeld Caribbean Basin Fund,
Inc.

We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of The Herzfeld Caribbean Basin Fund, Inc. (the
"Fund") as of June 30, 2009, and the related statement of operations for the
year then ended, the statement of changes in net assets for each of the two
years then ended, and financials highlights for each of the four years in the
period then ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits. The financial highlights for the year ended June 30, 2005 were audited
by an independent registered public accounting firm whose report dated July 14,
2005 expressed an unqualified opinion on those financial highlights.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. The Fund
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Fund's internal control over
financial reporting. Accordingly, we express no such opinion. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of June 30, 2009, by correspondence with the custodian and brokers. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of The
Herzfeld Caribbean Basin Fund, Inc. as of June 30, 2009, the results of its
operations for the year then ended, the changes in net assets for each of the
two years in the period then ended, and the financial highlights for each of the
four years in the period then ended, in conformity with accounting principles
generally accepted in the United States of America.


/s/ Rothstein, Kass & Company, LLP

San Francisco, California
August 12, 2009


                                     - 21 -
<PAGE>

<TABLE>
<CAPTION>
DIRECTORS AND OFFICERS OF THE FUND
====================================================================================================================================
                                                                                                  NUMBER
                                                 TERM OF              PRINCIPAL                OF PORTFOLIOS           OTHER
NAME                            POSITION(S)     OFFICE AND           OCCUPATION(S)              IN COMPLEX          DIRECTORSHIPS
ADDRESS                           HELD           LENTH OF            DURING PAST                 OVERSEEN             HELD BY
AND AGE                         WITH FUND      TIME SERVED             5 YEARS                  BY DIRECTOR           DIRECTOR
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                             <C>          <C>                 <C>                                <C>         <C>
INTERESTED DIRECTOR
- -------------------

THOMAS J. HERZFELD*             President,   three years;        Chairman and President of          2           The Cuba Fund, Inc.
PO Box 161465                   Portfolio    1993 to present     Thomas J. Herzfeld & Co.,                      (in registration)
Miami, FL  33116                Manager,                         Inc., a broker dealer,
Age: 64                         Chairman,                        and Thomas J. Herzfeld
                                Director                         Advisors, Inc.

INDEPENDENT DIRECTORS
- ---------------------

ANN S. LIEFF                    Director     three years;        President of the Lieff             1           Hastings
c/o The Herzfeld Caribbean                   1998 to present     Company, a management                          Entertainment, Inc.;
Basin Fund, Inc.                                                 consulting firm that                           Birks & Mayors, Inc.
PO Box 161465                                                    offers ongoing advisory
Miami, FL 33116                                                  services as a corporate
Age: 57                                                          director to several retail
                                                                 operations, 1998-present;
                                                                 former CEO Spec's Music,
                                                                 1980-1998, a retailer of
                                                                 recorded music.

MICHAEL A. RUBIN                Director     three years;        Partner of Michael A. Rubin        1           Margo Caribe, Inc.
c/o The Herzfeld Caribbean                   2002 to present     P.A., attorney at law;
Basin Fund, Inc.                                                 Broker, Oaks Management &
PO Box 161465                                                    Real Estate Corp., a real
Miami, FL 33116                                                  estate corporation
Age: 67

KAY W. TATUM, PH.D., CPA        Director     three years;        Associate Professor of             1           None
c/o The Herzfeld Caribbean                   2007 to present     Accounting, University of
Basin Fund, Inc.                                                 Miami School of Business
PO Box 161465                                                    Administration, 1992-present;
Miami, FL 33116                                                  Chair, Department of
Age: 57                                                          Accounting, 2004-2008;
                                                                 Assistant Professor of
                                                                 Accounting, University of
                                                                 Miami, 1986-1992.

OFFICERS
- --------

ERIK M. HERZFELD                Portfolio    2008 to present     Portfolio Manager and                          N/A
PO Box 161465                   Manager                          Head of Alternative
Miami, FL  33116                                                 Strategies, Thomas J.
Age: 36                                                          Herzfeld Advisors, Inc.
                                                                 2007-present; Vice
                                                                 President JPMorgan Chase
                                                                 2000-2007, foreign
                                                                 exchange option trading

CECILIA L. GONDOR               Secretary,   1993 to present     Executive Vice President                       N/A
PO Box 161465                   Treasurer                        of Thomas J. Herzfeld &
Miami, FL  33116                                                 Co., Inc., a broker dealer,
Age: 47                                                          and Thomas J. Herzfeld
                                                                 Advisors, Inc.
</TABLE>

* Mr. Herzfeld is considered an "interested person" of the Fund, as defined in
Section 2(a)(19) of the 1940 Act and the rules thereunder because of his
position with the Advisor.


                                   - 22 & 23 -
<PAGE>

ADDITIONAL PORTFOLIO MANAGER
================================================================================
In November 2008, Mr. Erik M. Herzfeld was appointed as a portfolio manager of
the Fund. Prior to his appointment as a portfolio manager, Mr. Thomas J.
Herzfeld was sole portfolio manager of the Fund. Erik joined Thomas J. Herzfeld
Advisors, Inc. in February, 2007. Before Thomas J. Herzfeld Advisors, Inc., Erik
served in quantitative research and trading roles with both Lehman Brothers and
JPMorgan, where he served as a Vice President in New York and Asia. Erik is a
graduate of Johns Hopkins University with a degree in Economics and holds a
Masters Degree from the MIT Sloan School of Management.


                                     - 24 -
<PAGE>

PRIVACY POLICY
================================================================================
INFORMATION WE COLLECT

We collect nonpublic information about you from applications or other account
forms you complete, from your transactions with us, our affiliates or others
through transactions and conversations over the telephone.

INFORMATION WE DISCLOSE

We do not disclose information about you, or our former customers, to our
affiliates or to service providers or other third parties except on the limited
basis permitted by law. For example, we may disclose nonpublic information about
you to third parties to assist us in servicing your account with us and to send
transaction confirmations, annual reports, prospectuses and tax forms to you. We
may also disclose nonpublic information about you to government entities in
response to subpoenas.

OUR SECURITY PROCEDURES

To ensure the highest level of confidentiality and security, we maintain
physical, electronic and procedural safeguards that comply with federal
standards to guard your personal information. We also restrict access to your
personal and account information to those employees who need to know that
information to provide services to you.


                                     - 25 -
<PAGE>

PROXY VOTING POLICIES AND PROCEDURES
================================================================================
A description of the policies and procedures used to determine how to vote
proxies relating to portfolio securities is available without charge, upon
request, by calling the Fund at 800-TJH-FUND, or by accessing the SEC's website
at www.sec.gov.

Information on how the investment adviser voted proxies on the Fund's behalf for
the twelve month period ended June 30 is provided in the Fund's Form N-PX which
is is available on the SEC's EDGAR database at www.sec.gov. In addition, the
Form N-PX can be reviewed and copied at the SEC's public reference room in
Washington, D.C. More information about the SEC's website or the operation of
the public reference room can be obtained by calling the SEC at 800-732-0330.


                                     - 26 -
<PAGE>

QUARTERLY PORTFOLIO REPORTS
================================================================================
The Fund files quarterly schedules of portfolio holdings with the SEC for the
first and third quarters of each fiscal year on Form N-Q. The Form N-Q is
available by link on the Fund's website at www.herzfeld.com/cuba.htm, by calling
the Fund at 800-TJH-FUND, or on the SEC's EDGAR database at www.sec.gov. In
addition, the Form N-Q can be reviewed and copied at the SEC's public reference
room in Washington, D.C. More information about the SEC's website or the
operation of the public reference room can be obtained by calling the SEC at
800-732-0330.


                                     - 27 -
<PAGE>

THE HERZFELD CARIBBEAN BASIN FUND, INC.
The Herzfeld Building
P.O. Box 161465
Miami, FL  33116


<PAGE>

ITEM 2. CODE OF ETHICS

(a) The registrant, as of the end of the period covered by this report, has
adopted a code of ethics that applies to the registrant's principal executive
officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions, regardless of whether these
individuals are employed by the registrant or a third party.

(c) There have been no amendments, during the period covered by this report, to
a provision of the code of ethics that applies to the registrant's principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions, regardless of whether these
individuals are employed by the registrant or a third party, and that relates to
any element of the code of ethics description.

(d) The registrant has not granted any waivers, including an implicit waiver,
from a provision of the code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions, regardless of
whether these individuals are employed by the registrant or a third party, that
relates to one or more of the items set forth in Item 2(b) of Form N-CSR.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT

As of the end of the period covered by the report, the registrant's board of
directors has determined that Dr. Kay Tatum is an "audit committee financial
expert" serving on its audit committee and that she is "independent" as such
terms are defined by Item 3 of Form N-CSR.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES

(a) - (d)

Set forth in the table below are audit fees and non-audit related fees billed to
the registrant by its principal accountant (the "Auditor") for the audit of the
registrant's annual financial statements and services provided by the Auditor in
connection with statutory and regulatory filings during and for the Registrant's
fiscal years ended June 30, 2008 and 2009.


Fiscal Year                        Audit-Related        Tax          All Other
Ended June 30,      Audit Fees        Fees(1)         Fees(2)         Fees(3)

2008                 $39,500          $12,500         $12,000           $0
2009                 $42,500           $6,000          $5,750           $0

(1) These fees related to out-of-pocket expenses incurred by the fund's auditor
in connection with the audit.


<PAGE>

(2) These fees related to services consisting of the review or preparation of
U.S. federal, state, local and excise tax returns

(3) These fees related to services consisting of accounting consultations,
agreed upon procedure reports, attestation reports, comfort letters and review
of statutory and regulatory filings.

(e) The registrant's Audit Committee charter requires that the Audit Committee
pre-approve all auditing services and non-audit services (including the fees for
such services and terms thereof) to be performed for the registrant by its
Auditor, and the committee has not adopted pre-approval policies and procedures,
although it may determine to do so in the future. The engagement to render
auditing and non-auditing services would be presented to and pre-approved by the
Audit Committee. All of the audit, audit-related and tax services described
above for which the Auditor billed the registrant fees for the fiscal years
ended June 30, 2008 and 2009 were pre-approved by the Audit Committee.

(f) Not applicable.

(g) The aggregate non-audit fees bills by the registrant's Auditor for services
rendered to the registrant, and rendered to the registrant's investment adviser,
and any entity controlling, controlled by, or under common control with the
adviser that provides ongoing services to the registrant for each of the last
two fiscal years of the registrant were $0 for 2008 and $0 for 2009.

(h) Not applicable.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS

(a) The registrant has a separately-designated standing audit committee
established in accordance with Section 3(a)(58)(A) of the Exchange Act. As of
June 30, 2009, the registrant's audit committee was comprised of Kay W. Tatum,
Ann S. Lieff, and Michael A. Rubin.

(b) Not applicable.

ITEM 6. INVESTMENTS

(a) Schedule of Investments in securities of unaffiliated issuers as of the
close of the reporting period is included as part of the report to shareholders
filed under Item 1 of this Form.

(b) Not applicable.


<PAGE>

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES

A copy of the registrant's proxy voting policies and procedures as well as its
adviser's policies and procedures are attached hereto as Appendix A.

ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES

(a)(1) Thomas J. Herzfeld, Chairman and President of The Herzfeld Caribbean
Basin Fund, Inc. serves as a portfolio manager of the Fund and has held this
position since its inception in 1993. This information is as of August 29, 2009.

Erik M. Herzfeld, Portfolio Manager of The Herzfeld Caribbean Basin Fund, Inc.
serves as a portfolio manager of the Fund and has held this position since 2008.
Before joining the Fund's investment adviser in 2007, Erik served in
quantitative research and trading with both Lehman Brothers and JPMorgan, where
he served as Vice President in New York and Asia. This information is as of
August 29, 2009.

(a)(2)(i) and (ii) Mr. Thomas J. Herzfeld and Mr. Erik M. Herzfeld are also
portfolio managers for approximately 46 other accounts comprising $46 million
under management, and 0 pooled investment vehicles comprising $0 under
management, however, none of the these accounts are managed with an investment
strategy similar to the Fund's. The Fund is the only investment company managed
by Mr. Thomas J. Herzfeld and Mr. Erik M. Herzfeld; the Fund has total assets of
approximately $21 million.

(a)(2)(iii) No accounts are charged fees based on performance. For accounts
other than the Fund, fees are calculated as a percentage of the value of assets
under management at the end of each quarter.

(a)(2)(iv) The Fund does not believe that any material conflicts are likely to
arise through Mr. Thomas J. Herzfeld's or Mr. Erik M. Herzfeld's management of
other accounts in addition to the Fund in that there is very little overlap in
the type of investments made for the Fund and other accounts, which generally
trade shares of closed-end funds. The Fund is permitted, to a limited extent, to
buy shares of other closed-end funds and occasionally other clients or Mr.
Herzfeld may buy shares of securities also held in the portfolio of the Fund.
The advisor and the Fund have adopted procedures overseen by the Chief
Compliance Officer ("CCO") intended to monitor compliance with such policies
which include conflicts which may occur regarding allocation of investment
opportunities between the Fund and other account. The CCO of the Fund reports
directly to the Board of Directors at least annually.

(3) Mr. Thomas J. Herzfeld and Mr. Erik M. Herzfeld receive no direct
compensation from the Fund for their services as Portfolio Managers. Mr. Thomas
J. Herzfeld is 100% owner of the Advisor, a Subchapter S Corporation, therefore
he profits from the success of the Advisor and is taxed on its profits.
Portfolio managers, other than Thomas J. Herzfeld, are paid a fixed salary by
the Advisor. In addition, the Advisor retains the ability to pay bonuses based
on the overall profitability of the Advisor, however, compensation is not
directly based upon the performance of a particular client or account, including
the Fund's performance, nor the value of a particular client or account,
including the value of the Fund's assets.


<PAGE>

(4)(a) Range of value of shares of the Fund owned by Mr.  Thomas J.  Herzfeld as
of June 30, 2009: $100,001-$500,000. Range of value of shares of the Fund owned
by Mr. Erik M. Herzfeld as of June 30, 2009: $100,001-$500,000.

(4)(b) Range of value of shares of the Fund owned by Mr. Thomas J. Herzfeld as
of the date of this filing: $100,001-$500,000. Range of value of shares of the
Fund owned by Mr. Erik M. Herzfeld as of the date of this filing:
$100,001-$500,000.

ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END FUND MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
                                                                      (c)Total Number of        (d)Maximum Number
                                                                       Shares Purchased as      of Shares that May
                                                                        Part of Publicly         Yet Be Purchased
                           (a) Total Number of   (b) Average Price     Announced Plans or       Under the Plans or
Period                       Shares Purchased      Paid Per Share          Programs                 Programs
- ----------------------------------------------------------------------------------------------------------------------
<S>                                 <C>                   <C>                 <C>                      <C>
Month #1 (beginning                  0                    n/a                 n/a                      n/a
January 1, 2009 and
ending January 31, 2009)
- ----------------------------------------------------------------------------------------------------------------------
Month #2 (beginning                  0                    n/a                 n/a                      n/a
February 1, 2009 and
ending February 28, 2009)
- ----------------------------------------------------------------------------------------------------------------------
Month #3 (beginning                  0                    n/a                 n/a                      n/a
March 1, 2009 and
ending March 31, 2009)
- ----------------------------------------------------------------------------------------------------------------------
Month #4 (beginning                  0                    n/a                 n/a                      n/a
April 1, 2009 and
ending April 30, 2009)
- ----------------------------------------------------------------------------------------------------------------------
Month #5 (beginning May              0                    n/a                 n/a                      n/a
1, 2009 and ending May
31, 2009)
- ----------------------------------------------------------------------------------------------------------------------
Month #6 (beginning                  0                    n/a                 n/a                      n/a
June 1, 2009 and ending
June 30, 2009)
- ----------------------------------------------------------------------------------------------------------------------
Total                                0                    n/a                 n/a                      n/a
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>


<PAGE>

ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

There have been no material changes to the procedures by which the stockholders
may recommend nominees to the registrant's board of directors, where those
changes were implemented after the registrant last provided disclosure in
response to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A (17 CFR
240.14a-101), or this Item.

ITEM 11. CONTROLS AND PROCEDURES.

(a) The registrant's principal executive and principal financial officers, or
persons performing similar functions, have concluded that the registrant's
disclosure controls and procedures (as defined in Rule 30a-3(c) under the
Investment Company Act of 1940, as amended (the "1940 Act") (17 CFR
270.30a-3(c))) are effective, as of a date within 90 days of the filing date of
the report that includes the disclosure required by this paragraph, based on
their evaluation of these controls and procedures required by Rule 30a-3(b)
under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under
the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or
240.15d-15(b)).

(b) There were no changes in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d))
that occurred during the registrant's last fiscal half-year (the registrant's
second fiscal half-year in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the registrant's
internal control over financial reporting.

ITEM 12. EXHIBITS.

(a) (1) Code of ethics is filed as Exhibit 99.CodeEth to the N-CSR filing dated
8/31/05.

(a)(2) Certifications pursuant to Rule 30a-2(b) under the 1940 Act and Section
302 of the Sarbanes-Oxley Act of 2002 are filed herewith as Exhibits 99.302
Cert.

(a)(3) Not applicable.

(b) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 906
of the Sarbanes-Oxley Act of 2002 are filed herewith as Exhibits 99.906 Cert.


<PAGE>

                                   Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

The Herzfeld Caribbean Basin Fund, Inc.

                                           By: /s/ Thomas J. Herzfeld
                                           ----------------------------
                                           Thomas J. Herzfeld
                                           President and Chairman

                                           Date: August 28, 2009


Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

                                           By: /s/ Thomas J. Herzfeld
                                           ----------------------------
                                           Thomas J. Herzfeld
                                           President and Chairman

                                           Date: August 28, 2009


                                           By: /s/ Cecilia L. Gondor
                                           ----------------------------
                                           Cecilia L. Gondor
                                           Secretary and Treasurer
                                           (Principal Financial Officer)

                                           Date: August 28, 2009


<PAGE>

                                   APPENDIX A
                     THE HERZFELD CARIBBEAN BASIN FUND, INC.
                       Proxy Voting Policy and Procedures

The Board of Directors of The Herzfeld Caribbean Basin Fund, Inc. (the "Fund")
hereby adopts the following policy and procedures with respect to voting proxies
relating to portfolio securities held by the Fund:

Policy

It is the policy of the Board of Directors of the Fund (the "Board") to delegate
the responsibility for voting proxies relating to portfolio securities held by
the Fund to the Fund's investment adviser (the "Adviser") as a part of the
Adviser's general management of the Fund, subject to the Board's continuing
oversight.' The voting of proxies is an integral part of the investment
management services that the Adviser provides pursuant to the advisory contract.

The Adviser may, but is not required to, delegate the responsibility for voting
proxies relating to portfolio securities held by the Fund to a sub-adviser
("Sub-Adviser") retained to provide investment advisory services, if applicable.
If such responsibility is delegated to a Sub-Adviser, then the Sub-Adviser shall
assume the fiduciary duty and reporting responsibilities of the Adviser under
these policy guidelines.

Fiduciary Duty

The right to vote a proxy with respect to portfolio securities held by the Fund
is an asset of the Fund. The Adviser, to which authority to vote on behalf of
the Fund is delegated, acts as a fiduciary of the Fund and must vote proxies in
a manner consistent with the best interest of the Fund and its shareholders.

Procedures

The following are the procedures adopted by the Board for the administration of
this policy:

A. Review of Adviser Proxy Voting Procedures. The Adviser with authority to vote
proxies on behalf of the Fund shall present to the Board its policies,
procedures and other guidelines for voting proxies at least annually, and must
notify the Board promptly of material changes to any of these documents.

B. Voting Record Reporting.  No less than annually,  the Adviser shall report to
the Board a record of each proxy voted with respect to portfolio  securities  of
the Fund during the year.  With  respect to those  proxies  that the Adviser has
identified as involving a conflict of interest(2), the Adviser shall submit a
separate  report  indicating the nature of the conflict of interest and how that
conflict was resolved with respect to the voting of the proxy.

Revocation

The delegation by the Board of the authority to vote proxies relating to
portfolio securities of the Fund is entirely voluntary and may be revoked by the
Board, in whole or in part, at any time.


<PAGE>

Annual Filing

The Fund shall file an annual report of each proxy voted with respect to its
portfolio securities during the twelve-month period ended June 30 on Form N-PX
not later than August 31 of each year.

Disclosures

The Fund shall include in its annual report to stockholders:

A description of this policy and of the policies and procedures used by the
Adviser to determine how to vote proxies relating to portfolio securities (3);
and

A statement disclosing that information regarding how the Fund voted proxies
relating to portfolio securities during the most recent 12-month period ended
June 30 is available without charge, upon request, by calling the Fund's
toll-free telephone number and on the SEC website(4).

The Fund shall also include in its annual and semi-annual reports to
stockholders:

A statement disclosing that a description of the policies and procedures used by
or on behalf of the Fund to determine how to vote proxies relating to portfolio
securities of the Funds is available without charge, upon request, by calling
the Fund's toll-free telephone number and on the SEC website.(5)

A statement disclosing that information regarding how the Fund voted proxies
relating to portfolio securities during the most recent 12-month period ended
June 30 is available without charge, upon request, by calling the Fund's
toll-free telephone number and on the SEC website.(6)

Review of Policy.

At least annually, the Board shall review this Policy to determine its
sufficiency and shall make and approve any changes that it deems necessary from
time to time


- ----------

(1)   This policy is adopted for the purpose of the disclosure requirements
      adopted by the Securities and Exchange Commission, Release Nos. 33-8188,
      34-47304, IC-25922.

(2)   As it is used in this document, the term "conflict of interest" refers to
      a situation in which the Adviser or Sub-Adviser or affiliated persons of
      the Adviser or Sub-Adviser have a financial interest in a matter presented
      by a proxy other than the obligation it incurs as investment adviser to
      the Fund which compromises the Adviser's or Sub-Adviser's independence of
      judgment and action with respect to the voting of the proxy.

(3)   This disclosure shall be included in the annual report next filed by the
      Fund, on Form N-CSR on or after July 1, 2003.

(4)   Id.

(5)   This disclosure shall be included in the report next filed by the Fund on
      or after July 1, 2003.

(6)   Id.


<PAGE>

                        THOMAS J. HERZFELD ADVISORS, INC.

                                  PROXY VOTING

                             POLICIES AND PROCEDURES

I.    POLICY

Thomas J. Herzfeld Advisors, Inc. (the "Adviser") acts as discretionary
investment adviser for various clients, including The Herzfeld Caribbean Basin
Fund, Inc. an investment company registered under the Investment Company Act of
1940, as amended, and clients governed by the Employee Retirement Income
Security Act of 1974 ("ERISA").

Selected clients, including The Herzfeld Caribbean Basin Fund, Inc. have elected
to have the Adviser vote proxies or act on the other shareholder actions on
their behalf, while other clients vote proxies themselves.

When voting proxies or acting on corporate actions for clients, the Adviser's
utmost concern is that all decisions be made in the best interest of its clients
(for ERISA accounts, plan beneficiaries and participants, in accordance with the
letter and spirit of ERISA). The Adviser will act in a manner deemed prudent and
diligent and which is intended to enhance the economic value of the assets of
its clients' accounts.

II.   PURPOSE

The purpose of these Policies and Procedures is to memorialize the procedures
and policies adopted by the Adviser to enable it to comply with its
responsibilities and the requirements of Rule 206(4)-6 under the Investment
Advisers Act of 1940, as amended ("Advisers Act"). These Policies and Procedures
also reflect the fiduciary standards and responsibilities set forth by the
Department of Labor for ERISA accounts.

III.  PROCEDURES

Cecilia Gondor, Executive Vice President of the Adviser, is ultimately
responsible for ensuring that all proxies received by the Adviser are voted in a
timely manner and voted consistently across all portfolios. Although many proxy
proposals can be voted in accordance with the Adviser's established guidelines
(see Section V. below) (the "Guidelines"), the Adviser recognizes that some
proposals require special consideration, which may dictate that the Adviser
makes an exception to the Guidelines.

Cecilia Gondor is also responsible for ensuring that all corporate actions
received by the Adviser are addressed in a timely manner and consistent action
is taken across all portfolios.


<PAGE>

A. Conflicts of Interest. Where a proxy proposal raises a material conflict of
interest between the Adviser's interests and that of one or more its clients,
the Adviser shall resolve such conflict in the manner described below.

1. Vote in Accordance with the Guidelines. To the extent that the Adviser has
little or no discretion to deviate from the Guidelines with respect to the
proposal in question, the Adviser shall vote in accordance with such
pre-determined voting policy.

2. Obtain Consent of Clients. To the extent that the Adviser has discretion to
deviate from the Guidelines with respect to the proposal in question, the
Adviser shall disclose the conflict to the relevant clients and obtain their
consent to the proposed vote prior to voting the securities. The disclosure to
the clients will include sufficient detail regarding the matter to be voted on
and the nature of our conflict that the clients would be able to make an
informed decision regarding the vote. When a client does not respond to such a
conflict disclosure request or denies the request, the Adviser will abstain from
voting the securities held by that client's account.

B. Limitations. In certain circumstances, in accordance with a client's
investment advisory contract (or other written directive) or where the Adviser
has determined that it is in the client's best interest, the Adviser will not
vote proxies received. The following are some circumstances where the Adviser
will limit its role in voting proxies received on client securities:

1. Client Maintains Proxy Voting Authority: Where a client has not specifically
delegated the authority to vote proxies to the Adviser or that it has delegated
the right to vote proxies to a third party, the Adviser will not vote the
securities and will direct the relevant custodian to send the proxy material
directly to the client. If any proxy material is received by the Adviser, it
will promptly be forwarded to the client.

2. Terminated Account: Once a client account has been terminated with the
Adviser in accordance with its investment advisory agreement, the Adviser will
not vote any proxies received after the termination. However, the client may
specify in writing that proxies should be directed to the client for action.

3. Limited Value: If the Adviser concludes that the client's economic interest
or the value of the portfolio holding is indeterminable or insignificant, the
Adviser will abstain from voting a client's proxies. The Adviser does not vote
proxies received for securities which are no longer held by the client's
account. In addition, the Adviser generally does not vote securities where the
economic value of the securities in the client's account is less than $500.

4. Securities Lending Programs: When securities are out on loan, they are
transferred into the borrower's name and are voted by the borrower, in its
discretion. However, where the Adviser determines that a proxy vote (or
shareholder action) is materially important to the client's account, the Adviser
may recall the security.

5. Unjustifiable Costs: In certain circumstances, after doing a cost-benefit
analysis, the Adviser may abstain from voting where the cost of voting a
client's proxy would exceed any anticipated benefits of the proxy proposal.

IV.   RECORD KEEPING

In accordance with Rule 204-2 under the Advisers Act, the Adviser will maintain
for the time periods set forth in the Rule (i) these proxy voting procedures and
policies, and amendments thereto; (ii) all proxy statements received regarding
client securities (provided however, that the Adviser may rely on the proxy
statement filed on EDGAR as its records)(1); (iii) a record of votes cast on
behalf of clients; (iv) records of client requests for proxy voting information;
(v) any documents prepared by the adviser that were material to making a
decision how to vote or that memorialized the basis for the decision; and (vi)
records relating to requests made to clients regarding conflicts of interest in
voting the proxy.


<PAGE>

The Adviser will describe in its Part II of Form ADV (or other brochure
fulfilling the requirement of Rule 204-3) its proxy voting policies and
procedures and advising clients how they may obtain information on how the
Adviser voted their securities. Clients may obtain information on how their
securities were voted or a copy of our Policies and Procedures by written
request addressed to the Adviser.

V. GUIDELINES

Each proxy issue will be considered individually. The following guidelines are a
partial list to be used in voting proposals contained in the proxy statements,
but will not be used as rigid rules.

- --------------------------------------------------------------------------------
1.    Issues regarding the issuer's Board entrenchment and              Oppose
      anti-takeover measures such as the following:

      b.    Proposals to limit the ability of shareholders to
            call special meetings;

      c.    Proposals to require super majority votes;

      d.    Proposals requesting excessive increases in
            authorized common or preferred shares where
            management provides no explanation for the use or
            need for these additional shares;

      e.    Proposals regarding "poison pill" provisions; and

      f.    Permitting "green mail".
- --------------------------------------------------------------------------------
2.    Providing cumulative voting rights.                             Oppose
- --------------------------------------------------------------------------------
3.    "Social issues," unless specific client guidelines              Oppose
      supersede, e.g., restrictions regarding South Africa.
- --------------------------------------------------------------------------------
4.    Election of directors recommended by management, except if      Approve
      there is a proxy fight.
- --------------------------------------------------------------------------------
5.    Election of auditors recommended by management, unless          Approve
      seeking to replace if there exists a dispute over policies.
- --------------------------------------------------------------------------------
6.    Date and place of annual meeting.                               Approve
- --------------------------------------------------------------------------------
7.    Limitation on charitable contributions or fees paid to          Approve
      lawyers.
- --------------------------------------------------------------------------------
8.    Ratification of directors' actions on routine matters since     Approve
      previous annual meeting.
- --------------------------------------------------------------------------------


<PAGE>

- --------------------------------------------------------------------------------
9.    Confidential voting                                             Approve

Confidential voting is most often proposed by shareholders as a
means of eliminating undue management pressure on shareholders
regarding their vote on proxy issues.

The Adviser will generally approve these proposals as
shareholders can later divulge their votes to management on a
selective basis if a legitimate reason arises.
- --------------------------------------------------------------------------------
10.   Limiting directors' liability                                   Approve
- --------------------------------------------------------------------------------
11.   Eliminate preemptive right                                      Approve

Preemptive rights give current shareholders the opportunity to
maintain their current percentage ownership through any
subsequent equity offerings. These provisions are no longer
common in the U.S., and can restrict management's ability to
raise new capital.

The Adviser approves the elimination of preemptive rights, but
will oppose the elimination of limited preemptive rights, E.G.,
on proposed issues representing more than an acceptable level of
total dilution.
- --------------------------------------------------------------------------------
12.   Employee Stock Purchase Plan                                    Approve
- --------------------------------------------------------------------------------
13.   Establish 401(k) Plan                                           Approve
- --------------------------------------------------------------------------------
14.   Rotate annual meeting location/date                             Approve
- --------------------------------------------------------------------------------
15.   Establish a staggered Board                                     Approve
- --------------------------------------------------------------------------------
16.   Eliminate director mandatory retirement policy                Case-by-Case
- --------------------------------------------------------------------------------
17.   Option and stock grants to management and directors           Case-by-Case
- --------------------------------------------------------------------------------
18.   Allowing indemnification of directors and/or officers after   Case-by-Case
      reviewing the applicablelaws and extent of protection
      requested.
- --------------------------------------------------------------------------------


<PAGE>

                                    EXHIBIT A

Chief Executive Officer - Thomas J. Herzfeld

Chief Financial Officer - Cecilia L. Gondor
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.CODE ETH
<SEQUENCE>2
<FILENAME>fp0000962_ex99code.txt
<TEXT>
                              EXHIBIT 99. CODE ETH.

                       HERZFELD CARIBBEAN BASIN FUND, INC.
          CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND FINANCIAL OFFICERS

PREAMBLE
- --------

      This Code of Ethics is being adopted in compliance  with the  requirements
of Rule 17j-1  under the  Investment  Company  Act of 1940 (the  "Act") and Rule
204A-1 under the Investment Advisers Act of 1940 (the "Advisers Act") adopted by
the United States Securities and Exchange  Commission to effectuate the purposes
and objectives of the rules.

      Rule 17j-1  makes it unlawful  for certain  persons,  in  connection  with
purchase  or sale by such  person of a security  held or to be  acquired  by The
Herzfeld Caribbean Basin Fund, Inc. (the "Fund"):

      (1)   To employ a device, scheme or artifice to defraud the Fund;

      (2)   To make to the Fund any untrue  statement of a material fact or omit
            to state to the Fund a material fact  necessary in order to make the
            statements  made,  in light of the  circumstances  in which they are
            made, not misleading;

      (3)   To engage in any act,  practice or course of business which operates
            or would operate as a fraud or deceit upon the Fund; or

      (4)   To engage in a manipulative practice with respect to the Fund.

      Section  206 of the  Advisers  Act makes it unlawful  for certain  persons
including Thomas J. Herzfeld Advisors, Inc. (the "Adviser"):

      (1) To employ any  device,  scheme or  artifice  to defraud  any client or
prospective client;

      (2) To engage in any  transaction,  practice or course of  business  which
operates as a fraud or deceit upon any client or prospective client;

      (3)  Acting  as  principal  for his own  account,  knowingly  to sell  any
security to or purchase  any security  from a client;  or acting as broker for a
person other than such  client,  knowingly to effect any sale or purchase of any
security for the account of such client,  without  disclosing  to such client in
writing before the completion of such  transaction,  the capacity in which he is
acting  and  obtaining  the  consent  of the  client  to such  transaction.  The
prohibitions  of this  paragraph (3) shall not apply to any  transaction  with a
customer  of a broker  or dealer  if such  broker or dealer is not  acting as an
investment adviser in relation to such transaction; or


<PAGE>

      (4) To  engage  in any act,  practice,  or  course  of  business  which is
fraudulent, deceptive or manipulative.

      Rule 17j-1 and/or Rule 204A-1 require the Fund and its investment  adviser
to adopt a written Code of Ethics containing  provisions reasonably necessary to
prevent  persons from engaging in acts in violation of the above standard and to
use  reasonable  diligence,  and institute  procedures  reasonably  necessary to
prevent violations of the Code.

      Set forth below is the Code of Ethics adopted by the Board of Directors of
the Fund (the "Fund Board") and by the Adviser in compliance with the Rule. This
Code is based upon the  principle  that the  directors and officers of the Fund,
and certain affiliated persons of the Fund and Adviser, owe a fiduciary duty to,
among others,  the shareholders of the Fund to conduct their affairs,  including
their  personal  securities  transactions,  in such  manner to avoid (i) serving
their own personal  interests ahead of shareholders;  (ii) taking  inappropriate
advantage  of their  position  with the Fund;  and (iii) any actual or potential
conflicts of interest or any abuse of their position of Fund and responsibility.

1.    DEFINITIONS
      -----------

      (a)   "ACCESS  PERSON" means any Advisory Person of the Fund or the Fund's
            Adviser.

      (b)   "ADVISORY PERSON" means

            (i)   any director, trustee, officer, general partner or employee of
                  the  Fund  or  its  Adviser  (or  any  company  in  a  control
                  relationship  to the  Fund  or  investment  adviser)  who,  in
                  connection with his or her regular functions or duties, makes,
                  participates  in,  or  obtains  information   regarding,   the
                  purchase or sale of Covered  Securities  by the Fund, or whose
                  functions  relate to the  making of any  recommendations  with
                  respect to such purchase or sales; and

            (ii)  any natural  person in a control  relationship  to the Fund or
                  the Adviser who obtains information concerning recommendations
                  made to the Fund  with  regard  to the  purchase  or sale of a
                  Covered Security by the Fund.

      (c)   A security is "BEING  CONSIDERED  FOR PURCHASE OR SALE" or is "BEING
            PURCHASED  OR SOLD" when a  recommendation  to  purchase or sell the
            security has been made and  communicated to the trading desk,  which
            includes  when the Fund has a  pending  "buy" or "sell"  order  with
            respect to a security,  and,  with respect to the person  making the
            recommendation,  when such person seriously  considers making such a
            recommendation.

      (d)   "BENEFICIAL  OWNERSHIP"  shall be as defined in, and  interpreted in
            the same  manner as it would be in  determining  whether a person is
            subject to the provisions of, Section 16 of the Securities  Exchange
            Act  of  1934  and  the  rules  and  regulations  thereunder  which,
            generally   speaking,   encompasses   those   situations  where  the
            beneficial  owner has the right to enjoy some economic  benefit from
            the ownership of the security  regardless  of who is the  registered
            owner. This would include:


<PAGE>

            (i)   securities which a person holds for his or her own benefit
                  either in bearer form, registered in his or her own name or
                  otherwise regardless of whether the securities are owned
                  individually or jointly;

            (ii)  securities held in the name of a member of his or her
                  immediate family (spouse or child) sharing the same household;

            (iii) securities held by a trustee, executor, administrator,
                  custodian or broker;

            (iv)  securities owned by a general partnership of which the person
                  is a member or a limited partnership of which such person is a
                  general partner;

            (v)   securities held by a corporation which can be regarded as a
                  personal holding company of a person; and

            (vi)  securities recently purchased by a person and awaiting
                  transfer into his or her name.

      (e)   "CONTROL" shall have the same meaning as that set forth in Section
            2(a)(9) of the Act.

      (f)   "CHIEF COMPLIANCE OFFICER" means Cecilia Gondor or her successor(s)
            appointed by the Fund Board, and the board of directors of the
            Adviser, respectively.

      (g)   "COVERED SECURITY" means a security, except that it shall not
            include

            (i)   direct obligations of the Government of the United States;

            (ii)  bankers' acceptances, bank certificates of deposit, commercial
                  paper and high quality short-term debt instruments, including
                  repurchase agreements; and

            (iii) shares issued by registered, open-end investment companies,
                  except shares issued by exchange traded funds or ETFs.

      (h)   "INDEPENDENT DIRECTOR" means a Director of the Fund who is not an
            "interested person" of the Fund within the meaning of Section
            2(a)(19) of the Act.


<PAGE>

      (i)   "INITIAL PUBLIC OFFERING" ("IPO") means an offering of securities
            registered under the Securities Act of 1933 ("Securities Act"), the
            issuer of which, immediately before the registration, was not
            subject to the reporting requirements of Sections 13 or 15(d) of the
            Securities Exchange Act of 1934.

      (j)   "INVESTMENT PERSONNEL" means:

            (i)   Any Advisory Person who, in connection with his regular
                  functions or duties, makes or participates in making
                  recommendations regarding the purchase or sale of securities
                  by the Fund.

            (ii)  Any natural person who controls the Fund or Adviser and who
                  obtains current information concerning recommendations made to
                  the Fund regarding the purchase or sale of securities by the
                  Fund.
      (k)   "LIMITED OFFERING" means an offering that is exempt from
            registration under the Securities Act pursuant to Section 4(2) or
            Section 4(6) or pursuant to rule 504, rule 505 or rule 506 under the
            Securities Act.

      (l)   "PURCHASE OR SALE OF A COVERED SECURITY" includes the writing of an
            option to purchase or sell a Covered Security.

      (m)   "SECURITY HELD OR TO BE ACQUIRED" by the Fund means:

            (i)   any Covered Security which, within the most recent seven (7)
                  days:

                  (A)   is or has been held by the Fund; or

                  (B)   is being or has been considered by the Fund or the
                        Adviser for purchase by the Fund; and

            (ii)  any option to purchase or sell, and any security convertible
                  into or exchangeable for, a Covered Security described in
                  paragraph (m)(i) of this section.

      (n)   "SECURITY" as defined in Section 2(a)(36) of the Act means any note,
            stock, treasury stock, bond, debenture, evidence of indebtedness,
            certificate of interest or participation in any profit-sharing
            agreement, collateral-trust certificate, preorganization certificate
            or subscription, transferable share, investment contract,
            voting-trust certificate, certificate of deposit for a security,
            fractional undivided interest in oil, gas, or other mineral rights,
            any put, call, straddle, option, or privilege on any security
            (including a certificate of deposit) or on any group or index of
            securities (including any interest therein or based on the value
            thereof), or any put, call, straddle, option, or privilege entered
            into in a national securities exchange relating to foreign currency,
            or, in general, any interest or instrument commonly known as a
            "security," or any certificate of interest or participation in,
            temporary or interim certificate for, receipt for, guarantee of, or
            warrant or right to subscribe to or purchase, any of the foregoing.


<PAGE>

2.    PROHIBITED TRANSACTIONS
      -----------------------

      (a)   No ACCESS PERSON shall engage in any act, practice or course of
            conduct, which would violate the provisions of Rule 17j-1 under the
            Act, Section 206 of the Adviser Act or Rule 204A-1 under the
            Advisers Act.

      (b)   No ACCESS PERSON shall:

            (i)   purchase or sell, directly or indirectly, any Covered Security
                  in which he has or by reason of such transaction acquires, any
                  direct or indirect beneficial ownership and which to his or
                  her ACTUAL KNOWLEDGE at the time of such purchase or sale is a
                  SECURITY HELD OR TO BE ACQUIRED BY THE FUND or the Adviser as
                  defined under paragraph 1(m) above;

            (ii)  disclose to other persons the securities activities engaged in
                  or contemplated for the various series of the Fund;

            (iii) seek or accept anything of value, either directly or
                  indirectly, from broker-dealers or other persons providing
                  services to the Fund because of such person's association with
                  the Fund. For the purposes of this provision, the following
                  gifts from broker-dealers or other persons providing services
                  to the Fund will not be considered to be in violation of this
                  section:

                  (A)   an occasional meal;

                  (B)   an occasional ticket to a sporting event, the theater or
                        comparable entertainment;

                  (C)   a holiday gift of fruit or other foods, or other
                        comparable gift.

      (c)   NO INVESTMENT PERSONNEL shall:

            (i)   Acquire directly or indirectly any beneficial ownership in any
                  securities in an IPO if such security is being considered for
                  purchase or sale by the Fund or is being purchased or sold by
                  the Fund.

            (ii)  Acquire directly or indirectly any beneficial ownership in any
                  securities in a Limited Offering without prior approval of the
                  CHIEF COMPLIANCE OFFICER or other person designated by the
                  Fund Board.


<PAGE>

                  Any person  authorized  to  purchase  securities  in a Limited
                  Offering shall disclose such  investment when they play a part
                  in any subsequent  consideration  of an investment by the Fund
                  in the issuer. In such  circumstances,  the Fund's decision to
                  purchase   securities  of  the  issuer  shall  be  subject  to
                  independent  review by the Fund's  officers  with no  personal
                  interest in the issuer.

            (iii) Applicable only to Fund managers identified on Schedule A from
                  time to time, buy or sell a Covered Security within seven (7)
                  calendar days before and after any series of the Fund that he
                  or she manages trades in that security. Any profits realized
                  on trades within the proscribed period are required to be
                  disgorged. Schedule A will be amended as necessary by the Fund
                  Board to reflect changes in Adviser personnel.

            (iv)  Serve on the board of directors of any publicly traded company
                  without prior authorization of the Chairman and/or President
                  of the Fund. Any such authorization shall be based upon a
                  determination that the board service would be consistent with
                  the interests of the Fund and its shareholders.

3.    EXEMPTED TRANSACTIONS
      ---------------------

      The prohibitions of Sections 2(b) and 2(c) shall not apply to:

      (a)   purchases or sales effected in any account over which the Access
            Person has no direct or indirect influence or control;

      (b)   purchases or sales which are non-volitional on the part of
                  either the Access Person or the Fund;

      (c)   purchases which are part of an automatic dividend reinvestment plan;

      (d)   purchases effected upon the exercise of rights issued by an issuer
            pro rata to all holders of a class of its securities, to the extent
            such rights were acquired from such issuer, and sales of such rights
            so acquired;

      (e)   purchases or sales other than those exempted in (a) through (d) of
            this Section 3 that have been authorized in advance and in writing
            by the CHIEF COMPLIANCE OFFICER following a specific determination
            that the transaction is consistent with the provisions of the
            Preamble;

      (f)   purchases or sales of publicly traded shares of companies that have
            a market capitalization at the time of purchase in excess of $5
            billion; and

      (g)   purchase or sale transactions by Investment Personnel in accordance
            with the investment program of Managed Portfolios, as defined and
            published monthly in The Investor's Guide to Closed-End Funds,
            provided that such transactions are executed simultaneously, and at
            the same price as, a purchase or sale by the Fund or, if not
            executed simultaneously with the Managed Portfolios then after such
            transactions have been executed. All such transactions by Investment
            Personnel are required to be pre-cleared by the CCO.


<PAGE>

4.    COMPLIANCE PROCEDURES
      ---------------------

      (a)   Pre-clearance
            -------------

            With the exception of the Independent Directors, all Access Persons
            shall receive prior approval from the CHIEF COMPLIANCE OFFICER or
            other officer designated by the Fund Board or Adviser's board, as
            the case may be, before purchasing or selling securities. Any
            approval is valid only for one day after authorization is received.
            If an Access Person is unable to effect the securities transaction
            during such period, he or she must re-obtain approval prior to
            effecting the securities transaction.

      (b)   Reporting Requirements
            ----------------------

            INITIAL & ANNUAL REPORTS. All Access Persons, except Independent
            Directors, shall disclose to the CHIEF COMPLIANCE OFFICER within 10
            days of becoming an Access Person, and thereafter on an annual basis
            as of December 31(i) the name, number of shares and principal amount
            of each Covered Security in which the Access Person has any direct
            or indirect beneficial ownership and (ii) the name of any broker,
            dealer or bank with whom the Access Person maintains a securities
            account. The initial holdings report shall be made on the form
            attached as Exhibit A, and the annual holdings report shall be made
            on the form attached as Exhibit B. The information on the initial
            holdings and annual reports must be current as of a date no more
            than 45 days before the date the person becomes an Access Person.

            QUARTERLY REPORTS. Every Access Person shall report to the CHIEF
            COMPLIANCE OFFICER the information described below with respect to
            transactions in any Covered Security in which such person has, or by
            reason of such transaction acquires, any direct or indirect
            beneficial ownership in the security; provided, however, that an
            Access Person shall not be required to make a report with respect to
            transactions effected for any account over which such person has no
            direct or indirect influence or control.

            (i)   Each Independent Director need only report a transaction in a
                  Covered Security if such Director, at the time of that
                  transaction, knew, or, in the ordinary course of fulfilling
                  his official duties as a trustee, should have known that on
                  the date, or during the 7 calendar days immediately before or
                  after such date, of the Director's transaction, such Covered
                  Security was purchased or sold by the Fund or was being
                  considered for purchase or sale by the Fund or Adviser.


<PAGE>

            (ii)  Reports required to be made under this Paragraph (b) shall be
                  made not later than 30 days after the end of the calendar
                  quarter. Every Access Person shall be required to submit a
                  report for all periods, including those periods in which no
                  securities transactions were effected. A report shall be made
                  on the form attached hereto as EXHIBIT C or on any other form
                  containing the following information:

                  With respect to any transaction during the quarter in a
                  Covered Security in which the Access Person had any direct or
                  indirect beneficial ownership:

                  (A)   the date of the transaction, the name, the interest rate
                        and maturity date (if applicable), the number of shares,
                        and the principal amount of each Covered Security
                        involved;

                  (B)   the nature of the transaction (I.E., purchase, sale or
                        any other type of acquisition or disposition);

                  (C)   the price of the Covered Security at which the
                        transaction was effected;

                  (D)   the name of the broker, dealer or bank with or through
                        which the transaction was effected; and

                  (E)   the date that the report is submitted by the Access
                        Person.

                  With respect to any securities account established at a
                  broker, dealer, or bank during the quarter for the direct or
                  indirect benefit of the Access Person:

                  (A)   the name of the broker, dealer or bank with whom the
                        Access Person established the account;

                  (B)   the date the account was established; and

                  (C)   the date that the report is submitted by the Access
                        Person.

            Any report may contain a statement that the report shall not be
            construed as an admission by the person making such report that he
            or she has any direct or indirect beneficial ownership in the
            security to which the report relates.


<PAGE>

            EXCEPTIONS. Access Persons need not make reports under the following
            circumstances:

            (i)   an Access Person to the Adviser need not make a separate
                  report to the Adviser as provided in this Paragraph (b) to the
                  extent that the information in the report would duplicate
                  information required to be recorded by Section 204-2(a)(13) of
                  the Advisers Act; and

            (ii)  an Access Person need not make a quarterly transaction report
                  if the report would duplicate information contained in broker
                  trade confirmations or account statements received by the Fund
                  or Adviser with respect to the Access Person within the 30 day
                  reporting period described under "Quarterly Reports" above, as
                  long as all the information required to be presented in a
                  quarterly report is contained in the broker trade
                  confirmations or account statements, or in the records of the
                  Fund or Adviser.

      (c)   Provision of Brokers' Statements
            --------------------------------

            With the exception of the Independent Directors, every Access Person
            shall direct their brokers to supply to the CHIEF COMPLIANCE
            OFFICER, on a timely basis, duplicate copies of the confirmation of
            all personal securities transactions and copies of all periodic
            statements for all securities accounts.

      (d)   Notification of Reporting Obligations
            -------------------------------------

            The CHIEF COMPLIANCE OFFICER shall notify each Access Person that he
            or she is subject to these reporting requirements, and shall deliver
            a copy of this Code of Ethics to each such person upon request.

      (e)   Certification of Compliance with Code of Ethics
            -----------------------------------------------

            With the exception of the Independent Directors, every Access Person
            shall certify in an annual report that:

            (i)   they have read and understand the Code of Ethics and recognize
                  that they are subject thereto;

            (ii)  they have complied with the requirements of the Code of
                  Ethics; and

            (iii) they have reported all personal securities transactions
                  required to be reported pursuant to the requirements of the
                  Code of Ethics.


<PAGE>

      (f)   Conflict of Interest
            --------------------

            Every Access Person shall notify the CHIEF COMPLIANCE OFFICER of any
            personal conflict of interest relationship which may involve the
            Fund, such as the existence of any economic relationship between
            their transactions and securities held or to be acquired by any
            series of the Fund. Such notification shall occur in the
            pre-clearance process.

      (g)   Review of Reports
            -----------------

            The CHIEF COMPLIANCE OFFICER or her designate immediately shall
            review all personal holdings reports, submitted by each Access
            Person, including confirmations of personal securities transactions,
            to ensure no trading has taken place in violation of Rule 17j-1,
            Rule 204A-1 or the Code of Ethics. Any violations of the Code of
            Ethics shall be reported to the Fund Board in accordance with
            Section 5 of the Code. The CHIEF COMPLIANCE OFFICER shall maintain a
            list of the personnel responsible for reviewing the transactions and
            personal holdings reports.

5.    REPORTING OF VIOLATIONS
      -----------------------

      (a)   All apparent violations of this Code of Ethics shall be promptly
            reported to the CHIEF COMPLIANCE OFFICER.

      (b)   The CHIEF COMPLIANCE OFFICER shall promptly report to the Fund
            Board:

            (i)   all apparent violations of this Code of Ethics and the
                  reporting requirements thereunder; and

            (ii)  any reported transaction in a Covered Security which was
                  purchased or sold by the Fund within seven (7) days before or
                  after the date of the reported transaction.

      (c)   When the CHIEF COMPLIANCE OFFICER finds that a transaction otherwise
            reportable to the Fund Board under Paragraph (b) of this Section
            could not reasonably be found to have resulted in a fraud, deceit or
            manipulative practice in violation of Rule 17j-1(a), it may, in its
            discretion, lodge a written memorandum of such finding and the
            reasons therefor with the reports made pursuant to this Code of
            Ethics, in lieu of reporting the transaction to the Fund Board.

      (d)   The Fund Board, or a committee of directors thereof created by the
            Fund Board for that purpose, shall consider reports made to the Fund
            Board hereunder and shall determine whether or not this Code of
            Ethics has been violated and what sanctions, if any, should be
            imposed in respect of transactions related to the Fund, and the
            board of the Adviser shall take such similar action in respect of
            transactions unrelated to the Fund.


<PAGE>

6.    ANNUAL REPORTING TO THE FUND BOARD
      ----------------------------------

      (a)   The CHIEF COMPLIANCE OFFICER and Adviser shall furnish to the Fund
            Board, and the Fund Board must consider, an annual report relating
            to this Code of Ethics. Such annual report shall:

            (i)   describe any issues arising under the Code of Ethics or
                  procedures during the past year;

            (ii)  identify any material violations of this Code or procedures,
                  including sanctions imposed in response to such violations
                  during the past year;

            (iii) identify any recommended changes in the existing restrictions
                  or procedures based upon the Fund's experience under its Code
                  of Ethics, evolving industry practices or developments in
                  applicable laws or regulations; and

            (iv)  certify that the Fund, Adviser and principal underwriter have
                  adopted procedures reasonably necessary to prevent Access
                  Persons from violating the Code of Ethics.

7.    SANCTIONS
      ---------

      Upon  discovering a violation of this Code, the Fund Board or the board of
the  Adviser,  as the  case may be,  may  impose  such  sanctions  as they  deem
appropriate, including, among other things, a letter of censure or suspension or
termination of the employment of the violator.

8.    RETENTION OF RECORDS
      --------------------

      This  Code of  Ethics,  a list of all  persons  required  to make  reports
hereunder  from time to time,  a copy of each  report  made by an ACCESS  PERSON
hereunder,  a list of all persons responsible for reviewing the reports required
hereunder,  a record of any decision and the reasons  supporting the decision to
approve the  acquisition  by  INVESTMENT  PERSONNEL of  securities  in a Limited
Offering,  each memorandum made by the CHIEF COMPLIANCE  OFFICER hereunder and a
record  of any  violation  hereof  and any  action  taken  as a  result  of such
violation,  shall be maintained by the Fund as required  under Rule 17j-1 and by
the Adviser as required under Rule 204-2.

9.    ADOPTION AND APPROVAL
      ---------------------

      The Fund  Board,  including  a majority of  Independent  Directors,  shall
approve this Code of Ethics and any material changes to the Code.

      Before  approving  this Code or any amendment to this Code, the Fund Board
shall have  received a  certification  from the Fund and the Adviser that it has
adopted procedures reasonably necessary to prevent Access Persons from violating
the Code.

Dated:  November 11, 2008
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.CERT
<SEQUENCE>3
<FILENAME>fp0000962_ex99cert.txt
<TEXT>
EX-99.302CERT

                                 CERTIFICATIONS

I, Thomas J. Herzfeld, certify that:

1. I have reviewed this report on Form N-CSR of The Herzfeld Caribbean Basin
Fund, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations, changes in net assets, and cash
flows (if the financial statements are required to include a statement of cash
flows) of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Rule 30a-3(c) under the Investment Company Act of 1940) and internal control
over financial reporting (as defined in Rule 30a-3(d) under the Investment
Company Act of 1940) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our supervision
to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of a date within 90 days prior to
the filing date of this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control
over financial reporting that occurred during the second fiscal quarter covered
by this report that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting;
and

5. The registrant's other certifying officer(s) and I have disclosed to the
registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize, and report financial information; and

(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control over
financial reporting.

                              Date: August 28, 2009

                              /s/ Thomas J. Herzfeld
                              -----------------------------
                              Thomas J. Herzfeld
                              President and Chairman


<PAGE>

I, Cecilia L. Gondor, certify that:

1. I have reviewed this report on Form N-CSR of The Herzfeld Caribbean Basin
Fund, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations, changes in net assets, and cash
flows (if the financial statements are required to include a statement of cash
flows) of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Rule 30a-3(c) under the Investment Company Act of 1940) and internal control
over financial reporting (as defined in Rule 30a-3(d) under the Investment
Company Act of 1940) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our supervision
to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of a date within 90 days prior to
the filing date of this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control
over financial reporting that occurred during the second fiscal quarter covered
by this report that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting;
and

5. The registrant's other certifying officer(s) and I have disclosed to the
registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize, and report financial information; and

(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control over
financial reporting.

                              Date: August 28, 2009

                              /s/ Cecilia Gondor
                              -----------------------------
                              Cecilia Gondor
                              Secretary and Treasurer
                              (Principal Financial Officer)
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.906CERT
<SEQUENCE>4
<FILENAME>fp0000962_ex99906cert.txt
<TEXT>

EX 99.906CERT

    Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
                (subsection (a) and (b) of 18 U.S.C. 1350 Code)


In connection with the attached Report of The Herzfeld Caribbean Basin Fund,
Inc. (the "Fund") on Form N-CSR to be filed with the Securities and Exchange
Commission for the fiscal half-year ended December 31, 2003 (the "Report"), each
of the undersigned officers of the Fund does hereby certify that, to the best of
such officer's knowledge:

      1.    The Report fully complies with the requirements of Section 13(a) or
            15(d) of the Securities Exchange Act of 1934; and

      2.    The information contained in the Report fairly presents, in all
            material respects, the financial condition and results of operations
            of the Fund as of, and for, the periods presented in the Report.

                              Dated: August 28, 2009

                              /s/ Thomas J. Herzfeld
                              -----------------------------
                              Thomas J. Herzfeld
                              President and Chairman
                              (Principal Executive Officer)

                              Dated: August 28, 2009

                              /s/ Cecilia L. Gondor
                              -----------------------------
                              Cecilia L. Gondor
                              Secretary and Treasurer
                              (Principal Financial Officer)
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
