A binary decision: The Biden-Harris Administration (2021- ) and Diaz-Canel-Valdes Mesa Administration (2019- ) each have two choices with respect to the delivery of electronic remittance transfers from the United States to the Republic of Cuba:

For the Biden-Harris Administration the choice is to accept or reject a role for the government of the Republic of Cuba, and “government” includes entities controlled by the Revolutionary Armed Forces (FAR) of the Republic of Cuba.
For the Diaz-Canel-Valdes Mesa Administration the choice is to continue or discontinue a role for the government of the Republic of Cuba, and “government” includes entities controlled by the Revolutionary Armed Forces (FAR) of the Republic of Cuba.

That’s it.

There are no means to remove the government of the Republic of Cuba from the processing, distribution, delivery, and use of funds delivered to the Republic of Cuba whether by electronic remittance transfers or any other means. The government of the Republic of Cuba will benefit. The United States government can do nothing about it. Here’s why:

The government of the Republic of Cuba requires as do most countries that transactions within its territory be conducted in the national currency, the Cuban Peso (CUP).
The government of the Republic of Cuba, through its Central Bank, as in many countries, determines the exchange rate for the currency. The CUP is currently valued at 24 to US$1.00. The CUP in the informal market is valued at 70 to US$1.00. There is anticipation that the CUP may be devalued by the end of 2021. Two illustrative examples: The Hashemite Kingdom of Jordan has for years maintained erroneously that its currency, the Dinar, is worth more than the United States Dollar. The People’s Republic of China has for years maintained an exchange rate for its currency, the Renminbi, that the United States Government believes is undervalued. The Republic of Cuba is not the only country maintain a currency valuation that is not consistent with global economic norms.
The government of the Republic of Cuba owns and manages the majority of retail stores and service providers and establishes the prices for products and services. Not uncommon for retail prices for products to be 200% or more above cost.

Since November 2020, when the Trump-Pence Administration (2017-2021) determined that no longer was it the interest of the United States for electronic remittance transfers to be processed and distributed by entities that it maintained were controlled by the FAR, the Diaz-Canel-Valdes Mesa Administration has not agreed to shift from entities controlled by the FAR the processing and distribution of electronic remittance transfers. As of August 2021, there remains no indication that the decision taken in November 2020 will be reversed.

It’s 2%- US$20 million

The government of the Republic of Cuba is estimated to receive on an annual basis approximately US$20 million as fees for the processing and delivery of electronic remittance transfers from the United States to the Republic of Cuba.

The approximately US$20 million represents approximately 2% of the total value of electronic remittance transfers of approximately US$1.5 billion. The 2% is in line with global norms.

For financial perspective as to what approximately US$20 million means in terms of the commercial relationship between the Republic of Cuba and the United States:

United States exports of agricultural commodities and food products to the Republic of Cuba in January 2021 were US$19,018,549.00 and in February 2021 were US$21,242,700.00.
United States exports of agricultural commodities and food products to the Republic of Cuba thus far in 2021 (January-June) were US$159,942,168.00; for 2020 were US$163,354,728.00; and for 2019 were US$257,659,479.00.
From 2003 through June 2021, United States exports of medical equipment, medical instruments, medical supplies, and pharmaceuticals is US$26,807,700.00

The approximately US$20 million in fees is divided amongst three Republic of Cuba government-operated entities. All electronic remittance transfers arriving to the Republic of Cuba are processed by and create benefit to the government of the Republic of Cuba primarily through FAR-connected Republic of Cuba government-operated Banco Financiero Internacional S.A. (BFI), Republic of Cuba government-operated Financiera Cimex (Fincimex) and Republic of Cuba government-operated American International Services (AIS).

One option under consideration is for the Diaz-Canel-Valdes Mesa Administration to permit electronic remittance transfer fees to remain in a segregated account in the United States where the fees would be used to make payment for authorized exports from the United States. The Republic of Cuba would use funds for purchases that it deems necessary with payment solely moving within the United States, resulting in transfers that are more efficient and transparent.

There are obstacles to such a plan. If Denver, Colorado-based Western Union Company (2019 revenues approximately US$5.3 billion) were to retain the fees for the benefit of the government of the Republic of Cuba, attorneys representing clients with outstanding court judgements would likely attempt to seize the fees to satisfy past or future court-issued judgements against the Republic of Cuba. Even if the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury were to issue a specific license to Western Union Company to retain the fees or create a fee account and provide regulatory considerations to protect the account, attorneys would likely seek a judicial review because Western Union Company could be deemed to “have an interest” in funds belonging to the Republic of Cuba, thus incurring legal costs to Western Union Company.

Another option under consideration is to suspend all fees for electronic remittance transfers from the United States to the Republic of Cuba through 31 December 2021. The suspension would align with the duration for decisions by government of the Republic of Cuba to suspend certain duties and fees on imported products. A shorter in duration suspension of all fees would front-load electronic remittance transfers from the United States to the Republic of Cuba as senders seek to avoid fees. The result would be a politically challenging for the Biden-Harris Administration financial windfall for the government of the Republic of Cuba.

There are decisions the OFAC could take that would enhance or complicate the electronic remittance transfer process. The goal should be for regulations to align with global commercial norms and thus lessen the possibility the Republic of Cuba will reject any decision delivered from the Biden-Harris Administration:

The OFAC could require that companies subject to United States jurisdiction engaged in electronic remittance transfers to the Republic of Cuba make the payout in United States Dollars to the recipient in the Republic of Cuba- fostering a dollarization of the commercial and economic systems in the Republic of Cuba. This would then require the recipient to exchange the United States Dollars for CUP at the exchange rate established by the Central Bank of the Republic of Cuba.
The OFAC could require companies subject to United States jurisdiction engaged in electronic remittance transfers to limit the fee(s) paid to Republic of Cuba government-operated entities. Currently, the fee paid by Western Union Company to Fincimex, AIS, and BFI total approximately 2%, which is in line with global commercial norms.
The OFAC could require companies subject to United States jurisdiction engaged in electronic remittance transfers to the Republic of Cuba to provide quarterly reports to the OFAC and United States Department of State. The reports would need be exempt from requests using the Freedom of Information Act (FOIA) and include the total amount transferred from the United States to the Republic of Cuba and the amount of fees paid to Republic of Cuba government-operated entities.
The OFAC could require companies subject to United States jurisdiction engaged in electronic remittance transfers to the Republic of Cuba to use Direct Correspondent Banking for the transfer of funds from the United States to the Republic of Cuba rather than through third countries which is less transparent, less efficient, less secure.

In 2015, the OFAC authorized Pompano Beach, Florida-based Stonegate Bank (2017 assets approximately US$2.9 billion) to have a correspondent account with Republic of Cuba government-operated Banco Internacional de Comercia SA (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. Stonegate Bank provided commercial operating accounts for the Embassy of the Republic of Cuba in Washington DC, the Permanent Mission of the Republic of Cuba to the United Nations in New York City, and other types of OFAC-authorized transactions for more than eighty customers. In September 2017, Stonegate Bank was purchased by Conway, Arkansas-based Home BancShares (2019 assets approximately US$14 billion) through its Centennial Bank subsidiary. Despite intense advocacy, the Obama-Biden Administration National Security Council (NSC) inexplicably refused to permit BICSA a correspondent account with Stonegate Bank, so Stonegate Bank processed transactions for approximately eighty (80) customers on a regular basis through Panama City, Panama-based Multibank, which had dealings with the Republic of Cuba. However, on 16 June 2020, Bogota, Colombia-based Grupo Aval reported: “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.”

LINK To Complete Analysis In PDF Format

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