|
|
|
|
Search: 
Latin American Herald Tribune
Venezuela Overview
Venezuelan Embassies & Consulates Around The World
Sites/Blogs about Venezuela
Venezuelan Newspapers
Facts about Venezuela
Venezuela Tourism
Embassies in Caracas

Colombia Overview
Colombian Embassies & Consulates Around the World
Government Links
Embassies in Bogota
Media
Sites/Blogs about Colombia
Educational Institutions

Stocks

Commodities
Crude Oil
US Gasoline Prices
Natural Gas
Gold
Silver
Copper

Euro
UK Pound
Australia Dollar
Canada Dollar
Brazil Real
Mexico Peso
India Rupee

Antigua & Barbuda
Aruba
Barbados
Cayman Islands
Cuba
Curacao
Dominica

Grenada
Haiti
Jamaica
Saint Kitts and Nevis
Saint Lucia
Saint Vincent and the Grenadines

Belize
Costa Rica
El Salvador
Honduras
Nicaragua
Panama

Bahamas
Bermuda
Mexico

Argentina
Brazil
Chile
Guyana
Paraguay
Peru
Uruguay

What's New at LAHT?
Follow Us On Facebook
Follow Us On Twitter
Most Viewed on the Web
Popular on Twitter
Receive Our Daily Headlines


  HOME | Cuba

US Sanctions on Remittances Threaten Key Income Source for Many Cubans

HAVANA – Thousands of Cubans receiving remittances from relatives in the United States could lose this vital source of income if Washington decides to make the latest sanctions on companies on the island retroactive given that one of the firms is the one that channels cash transfers in Cuba via Western Union.

Fincimex is a financial services firm that is in the sights of the US for its links with Cuba’s GAESA military conglomerate. On Wednesday, it was one of seven new names added to the “black list” of companies with whom US citizens are prohibited from doing any business whatsoever.

Foreign firms that want to operate in Cuba must deal via a state-run counterpart and, in the case of Western Union, that partner since 2016 has been Fincimex, a powerful company that also processes Visa and Mastercard credit card transactions on the communist island as well as a portion of the Airbnb payments to Cuban hosts.

The key element in the matter lies in whether these new sanctions will be retroactive or not, something that will not be known until June 12, when the US Office of Foreign Assets Control (OFAC) publishes the new regulations in detail.

If the ban on doing business with Fincimex is not retroactive, Western Union will continue to rely on the agreement it has with the firm and will be able to continue operations in Cuba. If it is retroactive, the multinational remittance-sending company will have to close its more than 150 offices on the island.

A precedent exists. The Starwood hotel group – which now belongs to Marriot – was able to maintain its 2016 management agreement with a Havana hotel in the Sheraton chain despite the fact that its Cuban counterpart, the state-run tourism corporation Gaviota, also linked to the Cuban armed forces, was included on the black list in 2017.

The closure of Western Union would leave thousands of Cubans with no way to receive money from their relatives in the US because the other popular cash-sending system, that of using “mules” who carry actual US currency to the island, is also paralyzed now given that Cuba has closed its borders for the indefinite future to limit further importation of the coronavirus.

“Amid the natural reduction that remittances to Cuba were going to suffer (due to the health crisis), now they’re dealing them a mortal blow,” Cuban economist Omar Everleny said in remarks to EFE.

He added that the Donald Trump administration’s policy is “absurd” because although Fincimex belongs to the military conglomerate “it is linked very directly with the Cuban people” in channeling remittances “originating not only with Western Union but also with other sources.”

“In the short term, there’s no other way to channel them to the country. Getting currency into Cuba continues to get worse,” Everleny said.

Although no official figures exist, consulting firms and economists specializing in Cuba put remittances as the primary unofficial source of (foreign) currency for the country, above tourism, exports and medical and professional services to third countries.

Tourism has been paralyzed since March by the coronavirus pandemic and, with few hopes of recovery this year, the sustained drop in exports over the past two years has become more acute with the global crisis, and in recent months Cuba also lost important export contracts for medical services with Brazil, Ecuador and Bolivia.

The US has already targeted those currency sources with earlier sets of sanctions like prohibiting cruise ships and flights to all Cuban airports except Havana, and Washington is continuing with its aggressive public campaign against Cuban medical services by calling them a form of “forced labor.”

Amid this situation, cutting off the flow of remittances to the island would be a coup de grace for the Cuban economy, which is already mired in its worst crisis in two decades because of the economic deterioration of its main ally, Venezuela, the US embargo that has been in place for some six decades and the delay in hoped-for reforms to its inefficient centralized economy.

The Havana Consulting group, based in the US, reported that Cuba received $6.6 billion in cash remittances in 2018, with each of the approximately three million Cuban households who receive such remittances obtaining about $180-$220 per month. That seemingly rather small monthly amount nevertheless allows many families to survive since the average monthly salary in the state-run sector is less than $45.

Another group receiving a considerable amount in remittances is the elderly population with children or grandchildren abroad. Retirement pensions in Cuba barely average $15 per month and so the help from abroad can mean the difference between being able to eat and going hungry.

Moreover, thousands of Cubans who since 2015 have been able to offer lodging in their homes to tourists via Airbnb would also be negatively impacted.

The sanctions announced on Wednesday are not the first to target remittances to Cuba.

Last February, Western Union had to stop offering the option of sending money to the island from third countries, allegedly due to difficulties in completing this kind of transaction because of the tightening of the US embargo.

Five months earlier, the OFAC had prohibited “U-Turn” transactions, thus impeding banks under US jurisdiction from processing certain money transfers to Cuba although they may have originated and terminated outside the US.

Also designated as illegal were remittances to close relatives of Cuban officials on the black list and members of the Cuban Communist Party, and remittances to others were limited to $1,000 per person per quarter.

 

Enter your email address to subscribe to free headlines (and great cartoons so every email has a happy ending!) from the Latin American Herald Tribune:

 

Copyright Latin American Herald Tribune - 2005-2020 © All rights reserved