If Biden-Harris Administration Removes Quarterly Limits On Remittances To Cuba Will It Also Reverse Trump-Pence Administration Policy And Permit Cuba’s Military To Control And Earn Money From Each Remittance?

Trump Administration Did Not Cancel Remittances; It Cancelled A Revenue Stream For Cuba’s Military

Cuba Has Options To Retain Western Union Electronic Remittance Services
GASEA Transfers Or Sells Assets Of Fincimex to BICSA Or Another Bank
Cuba Banks Have A History With Transferring Operations

Biden-Harris Administration Has Restricted Connectivity To Military-Controlled Companies In China And Myanmar (Burma), But OK For Cuba?

Calculating Desire To Help Family & Friends More Important To Members Of Congress And [Florida] Voters Than Providing Revenue To Cuba’s Military

Restrictions Upon Connectivity With Cuba Military Received Bipartisan Support In The United States Congress Including By Senators Robert Menendez (D), Marco Rubio (D), Rick Scott (D)

How Will 45th President Of The United States React?
How Will Governor Of Florida React?

To paraphrase statements by government officials in past administrations, the United States government must decide how and whether to respond to the “crisis you have rather than the crisis you want” based upon “realities on the ground.” There are thus both limitations and opportunities.

The Biden-Harris Administration (2021- ) is evaluating how to confront what some individuals serving in the administration have hoped for- a moment to implement what in 2020 then-candidate Biden said he would implement if he became President Biden. The do-what-you-said-you-would-do similarities to the “Trump Promise” about moving the United States Embassy from Tel Aviv to Jerusalem- he said it and he did it. For others in the Biden-Harris Administration, a moment of dread as they believe there are no good domestic political outcomes for the administration- they want to be wrong, but feel they are right.

The Biden-Harris Administration seems prepared to conclude without conditionality the only immediately viable means of re-establishing a direct electronic remittance transfer process from the United States to the Republic of Cuba requires at this time the participation of and limited revenue to two entities controlled by the Revolutionary Armed Forces (FAR) of the Republic of Cuba.

In announcing a decision, the Biden-Harris Administration would confirm humanitarian value trumps political indigestion. The decision may be a weekend statement from The White House or United States Department of State or United States Department of the Treasury.

The [Miguel] Diaz-Canel Administration (2019- ) in Havana was not inclined in 2020 and is not inclined in 2021 to permit the use of non-FAR-controlled entities, so the Biden-Harris Administration has a decision: Implement what it has said it wants to do on terms that it does not want while preparing for and then absorbing the bipartisan incoming political projectiles from the United States Congress, state capitals, county seats, city officers, and town representatives… and the 45th President of the United States. Or do nothing now, continue with the Cuba Policy Review, and await a moment, which may not arrive, defined by less political drama. The Republic of Cuba is prepared to suffer. Their question to the United States: Is the government of the United States prepared to allow the suffering?

The Trump-Pence Administration (2017-2021) prohibited (with exceptions) individuals subject to United States jurisdiction and United States-based companies from engagement with entities controlled by the Revolutionary Armed Forces (FAR) of the Republic of Cuba. Thus far, the Biden-Harris Administration has not made changes to the prohibitions.

In June 2017, the United States Department of State created the Cuba Restricted List in accordance with National Security Presidential Memorandum-5 (Strengthening the Policy of the United States Toward Cuba). “The U.S. government generally prohibits direct financial transactions with listed entities and sub-entities because they would disproportionately benefit the Cuban military, intelligence, and security services or personnel at the expense of the Cuban people or private enterprise in Cuba.”
In September 2019, the Trump-Pence Administration limited to US$1,000.00 per quarter remittances and further restricted the recipients of remittances from the United States to the Republic of Cuba. The Obama-Biden Administration (2009-2017) had removed limitations.
In June 2020, the Cuba Restricted List was updated to include Republic of Cuba government-operated Financiera Cimex (Fincimex), a Panama-registered subsidiary of Republic of Cuba government-operated Corporacion Cimex which is a subsidiary of Grupo de Administracion Empresarial S.A. (GAESA) and controlled by the FAR. Fincimex was permitted to continue as a component of electronic remittance transfers.
In September 2020, the Cuba Restricted List was updated to include Republic of Cuba government-operated American International Services (AIS) which was a component of the electronic remittance delivery process for Denver, Colorado-based Western Union Company (2020 revenues approximately US$5 billion).
In November 2020, the Cuba Restricted List was updated to prohibit Fincimex from continuing as a component of electronic remittance transfers with Western Union Company.
In January 2021, Republic of Cuba government-operated Banco Financiero Internacional S.A. (BFI) was added to the Cuba Restricted List. BFI was a component of electronic remittance transfers with Western Union Company.

The Republic of Cuba had evaluated, but decided against, options relating to Fincimex, including the sale or transfer of the subsidiary to a non-FAR-controlled Republic of Cuba government-operated entity, such as a financial institution (Banco de Crédito y Comercio S.A. (BANDEC), Banco Popular de Ahorro S.A. (BPA), Banco Internacional de Comercio S.A. (BICSA), and Banco Metropolitano S.A. (BM)) each of which could seamlessly absorb and maintain Fincimex operations.

There is history for one Republic of Cuba government-operated financial institution transferring operations to another Republic of Cuba government-operated financial institution.

From Banco Metropolitano S.A.: “(“BM”) is a Cuban commercial bank that has presence only in Havana. Its corporate object is the pursuit of banking businesses, including but not limited to financial intermediation activities. BM started its operations in 1996 with a Havana branch office specialized in the provision of banking services solely to the diplomatic community, as well as the foreign natural and legal persons who were residents in Cuba. By resolution of Banco Central de Cuba (the Cuban Central Bank of “BCC,” for its Spanish acronym), BM’s corporate object, customer base, product portfolio and services were expanded effectively 2004 when BM acquired 30 offices hitherto held by Banco de Crédito y Comercio (“BANDEC,” for its Spanish acronym) and more than 50 offices hitherto held by Banco Popular de Ahorro (“BPA,” for its Spanish acronym), all located in Havana. As a result, BM established a representative presence in every municipality of the province of Havana.”

In 2015, BICSA, a member of Republic of Cuba government-operated Grupo Nuevo Banca SA, created by Corporate Charter No. 49 on 29 October 1993 and commenced operation on 3 January 1994, was vetted by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury and approved for a correspondent banking relationship with Conway, Arkansas-based Home BancShares (2019 assets approximately US$14 billion) through its subsidiary Centennial Bank which in 2017 purchased Pompano Beach, Florida-based Stonegate Bank.

Stonegate Bank

In 2015, the OFAC authorized Pompano Beach, Florida-based Stonegate Bank (2017 assets approximately US$2.9 billion) to have an account with BICSA. However, because the Obama Administration would not authorize BICSA under a license from the OFAC to have an account with Stonegate Bank which would make fully-operational Direct Correspondent Banking, United States export-related funds were sent and received through Panama City, Panama-based Multibank, which had, but no longer has extensive dealings with the Republic of Cuba. From Bogota, Colombia-based Grupo Aval on 16 June 2020: “On May 25th, Banco de Bogotá, through its subsidiary Leasing Bogotá S.A. Panamá, acquired 96.6% of the ordinary shares of Multi Financial Group. As part of the acquisition process, MFG’s operation in Cuba was closed and as part of the transaction. Grupo Aval complies with OFAC regulations and doesn't have transactional relationships with Cuba.”

Supporting Small Businesses

If the Biden-Harris Administration creates as expected a policy and regulatory framework whereby individuals subject to United States jurisdiction may deliver equity investments and provide loans to cuentapropistas (self-employed) and SME’s, then the existing financial transaction infrastructure throughout the Republic of Cuba will be woefully inadequate to manage what would likely be thousands of commercial checking and savings accounts with foreign exchange arriving (investments and loans), foreign exchange departing (investor dividends, loan repayments, input purchases) on a daily basis.

The Biden-Harris Administration would need to authorize direct correspondent banking so that electronic funds transfers could arrive efficiently, transparently, and cost-effectively. When using an electronic payment platform such as Western Union, using checking accounts to send and receive funds is far less expensive than when using currency, credit card or debit card.

On 14 July 2021, H.E. Alejandro Gil, Minister of Economy and Planning of the Republic of Cuba, reported that during the coming weeks regulations published for the operation of small and medium-size enterprises (SME’s).

LINK TO COMPLETE 3-PAGE ANALYSIS IN PDF FORMAT

LINKS To Previous Analyses

Western Union Data For Transfers To Cuba: 2.88 Million Annually- 24% To Havana; Florida 1st, Texas 2nd, New Jersey 3rd; US$200,000+ Could Be Aboard Each Flight From Miami November 19, 2020

Cuba Has Options To Retain Western Union Electronic Remittance Services- Transfer To A Bank? November 17, 2020

If Western Union Ends Remittance Services To Cuba, That Means A Return Of “Mules On Steroids”- The Impact Could Cripple MIA November 16, 2020