The United States government will prohibit remittances to Cuba through companies controlled by the Cuban military, which would effectively cut money transfers to Cuba until companies like Western Union and the Cuban government work out a way around the new measures.
According to a draft of the new Treasury Department’s rules to be published in the Federal Register on Tuesday, the existing general authorization for remittances in the embargo regulations will exclude “any transactions involving entities or subentities identified on the Cuba Restricted List.” U.S. citizens and companies are prohibited from conducting financial transactions with these entities.
The list, which is kept and updated by the State Department, includes companies linked to the Cuban military like AIS and its parent company, Fincimex, which processes almost half of remittances to Cuba and is the exclusive representative of Western Union on the island.
Western Union said it was trying to get more “clarity” about the proposed regulations, which will take effect 30 days after publication in the Federal Register.
Fincimex is a subsidiary of GAESA, a larger conglomerate of companies controlled by Raul Castro´s former son-in-law, general Luis Alberto Rodriguez Lopez-Calleja, who was recently sanctioned by the U.S. government.
U.S. officials have said that the string of sanctions against the Cuban military aims to force the Cuban government to push them out of the remittance business and cut the funds flowing to Cuban security agencies accused of human rights violations both in Cuba and in Venezuela.
Currently, the Treasury Department allows $1,000 in remittances to Cuba per person per quarter.
But critics of the administration fear that without another system in place, further restrictions to remittances will affect Cuban families, already overwhelmed by a pandemic and widespread shortages.
There are signs the Cuban government might finally be considering migrating the remittance business to public entities. After the State Department included AIS in its restricted list in late September, Miami-based agencies sending remittances in dollars to Cuba resumed the service through Cuban government banks Banco Metropolitano and Banco Popular de Ahorro.
“The United States wants the money to reach the hands of the Cuban people, not to stay in the coffers of the military, which is what has happened so far. We are talking about $3.7 billion a year that the military manages at will,” said Emilio Morales of the Havana Consulting Group consulting firm, which tracks remittances to the island.
Morales said that in no other Latin American country is the remittance business run by the military.
“Remittances will continue to flow through agencies and informal channels, but they will no longer finance the army’s repression,” he added.
Cuban Foreign Minister Bruno Rodriguez quickly condemned the new measures, which he said aim to “harm” the Cuban people.
“The new measure against remittances reaffirms that there are no limits for a criminal government in imposing policies that limit contacts, communication, and mutual aid between families in both countries,” he wrote on Twitter.
In the last days before the presidential election, the Trump administration has rushed to finalize pending regulations. The president has heavily courted the Cuban American vote in Florida, a critical swing state that he must secure for his reelection.
“The timing of this rule is extremely suspect. The administration announces yet another limit on formal remittances channels today, but delays implementation for 30 days,” said Ric Herrero, executive director of the Cuba Study Group. “It’s as if it were designed to grab headlines now but delay the pain it will inevitably cause Cuban families until after the election.”
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