At 6:00 PM Today, Final [For Now] Western Union Transactions With Cuba Are [Temporarily Perhaps] Suspended
/From Western Union Company: “November 22, 2020 at 11:00PM U.S. EST: The last opportunity to send money from the U.S. to Cuba. On November 23, 2020, at 6:00 PM Cuba Time: The deadline to pick up money at Western Union retail locations in Cuba.”
Today at 6:00 pm the final transaction using the services of Western Union will be completed for a remittance from the United States to the Republic of Cuba. A one-in-four chance that remittance will be from the state of Florida to the city of Havana.
In 2019, Western Union Company completed globally more than 800 million transactions with a total value of approximately US$300 billion. In 2019, Western Union Company transferred an estimated US$1+ billion (approximately US$3+ million per day, the majority sent from Florida of which 24% was dispersed amongst ninety-four distribution locations in Havana) from the United States to the Republic of Cuba. Western Union Company has 407 distribution locations in the Republic of Cuba.
The Trump Administration is not anticipating re-authorizing Denver, Colorado-based Western Union Company (2019 revenues US$5.3 billion) to continue to use Fincimex as its distribution partner. Fincimex is a subsidiary of Republic of Cuba government-operated Corporacion Cimex S.A., which is a subsidiary of Republic of Cuba government-operated GAESA, which is controlled by the Revolutionary Armed Forces (FAR) of the Republic of Cuba. The Republic of Cuba continues to evaluate separating Fincimex from the FAR.
The Trump Administration has developed and implemented a narrative to advocate for the disconnection in the Republic of Cuba of the military from its role throughout the economy. The Trump Administration has followed with a similar focus upon the military in the People’s Republic of China. For the Republic of Cuba, the Trump Administration created the question- should a United States company, or any country, assist with military control of an economy? United States executives should prefer to conduct a commercial transaction with a civilian rather than with a general. Officials of the Trump Administration have indicated additional policy changes focusing upon the Republic of Cuba and Venezuela are anticipated prior to 20 January 2021.
The Biden Administration is expected in 2021 to remove the Trump Administration restriction of US$1,000.00 per quarter for remittances from the United States to the Republic of Cuba.
However, the Biden Administration is not expected to remove the Trump Administration prohibition for Western Union Company to use Fincimex, nor any other FAR-controlled entity, as its distribution partner in the Republic of Cuba. There will be no political appetite within the West Wing of The White House to incur the certain wrath from a bipartisan membership within the United States Congress.
With the Republic of Cuba planning to merge its two currencies and multiple currency exchange rates, perhaps as early as 1 January 2021, important to have efficient, constant and transparent inflows of foreign exchange to buffer the substantial economic disruptions that will, unfortunately necessary for the process to be effective, be inflicted upon the 11.3 million citizens of the Republic of Cuba. Absent an electronic financial institution connectivity with the United States, those with no access and those with tenuous, inconsistent access to foreign exchange will expectedly become fearful, which may present a destabilizing challenge to the [Miguel] Diaz-Canel Administration throughout 2021.
With the current two Pesos (CUP- national peso and CUC- convertible peso) existing side-by-side in the Republic of Cuba with different public and commercial exchange rates, time will be required to condition the population that one Peso is sufficient, stable, redeemable, and sustainable.
As the global reserve currency, the United States Dollar will not be replaced easily in the Republic of Cuba neither by the Peso nor a digital currency such as bitcoin as a measure of value for the population. The same is valid for the use of the Euro and the Canadian Dollar, the currencies used by most visitors to the Republic of Cuba. Most remittances to the Republic of Cuba are estimated to arrive directly or indirectly from the United States and using currency for an electronic remittance is substantially less expensive than using a credit card or debit card. The use of a digital currency requires the sender and the recipient to have access to the Internet, have access to a digital currency platform and retain often complex access requirements; and digital currencies remain subject to expansive and unexpected changes in valuation, theft, confiscation, and government regulation.
There are 11.3 million citizens in the Republic of Cuba and there are approximately 2.3 million individuals of Cuban-descent residing in the United States, with the majority in Florida. Most remittances to the Republic of Cuba originate in the United States, where the use of the United States Dollar in the form of currency and for transactions with credit cards and debit cards will not soon be changing to digital currency. If the Republic of Cuba attempts aggressively to replace inflows of the United States Dollar solely with digital currency, the level of remittances will decrease.
Most importantly, should a sender or a recipient have an issue with an electronic remittance sent using Western Union Company, the sender and the recipient have 100% confidence that Western Union Company has the organizational means to determine what happened and to resolve the issue. Using a digital currency and digital wallet provide no efficient dispute mechanism- there is no toll-free telephone number to reach bitcoin customer service.
FinCEN Form 105 For Currency To Cuba
