Will New U.S. Restrictions Make It Significantly Harder To Send Remittances To Cuba?
This week the Trump administration will lay out new restrictions on remittances to Cuba. They could lead to a more drastic reduction in the amount of money sent to the island. Meanwhile, Cuba economy experts are studying how the U.S. can still keep that cash flowing to Cubans.
WLRN is committed to providing South Florida with trusted news and information. In these uncertain times, our mission is more vital than ever. Your support makes it possible. Please donate today. Thank you.
Last week the State Department added Fincimex to its list of state-run Cuban firms U.S. companies are restricted from doing business with, largely because the firm is linked to the Cuban military. But what’s different in Fincimex's case is that it handles more than 40 percent of the billions of dollars in remittances sent to Cuba each year – almost $4 billion last year.
The U.S. money-transfer company Western Union uses Fincimex. So the question is whether Western Union can no longer wire remittance cash to Cuba – which millions of Cubans depend on in the island's forever-threadbare economy. On Friday, the State Department is set to announce more details about the Fincimex restrictions.
Another big reason the Trump administration is taking this step is that the U.S. says the Cuban regime pockets far too much of the money sent through Fincimex – and that Cubans there receive not dollars but a sort of coupon in a lesser Cuban currency known as CUCs, which they have to use to buy overpriced goods in special stores that benefit the regime.
“People don’t have an idea of what happens with the money they send there," says economist Emilio Morales, a former Cuban official who now heads the Havana Consulting Group in Miami. He held a press briefing on Wednesday in Coral Gables along with the Foundation for Human Rights in Cuba.
"I send $100 for my daughter in Cuba, and my daughter receives 87 CUCs. For 27 years the Cuban government has been not transparent with this business.”
Morales points out that people carrying cash themselves to Cubans on visits there account for the largest share of remittances. He says until the regime allows private Cuban companies to formally handle remittances, as Fincimex does, the U.S. will need to look for ways to increase the informal flow.
“The best solution is that — the informal ways of sending remittances," says Morales. "Unfortunately right now we don’t have any other.”
As a result, Trump administration critics say one way to increase informal remittances would be to allow more Cuban-American travel to the island, which the U.S. recently curtailed again as a sanction against Havana. Otherwise, they say measures like the Fincimex sanction will end up hurting Cubans more than the Cuban regime.
Last year the administration cut the amount of remittances Cuban families in the U.S. can send to Cuba to $1,000 every three months. The amount had been unlimited under the Obama administration.