Cuba Central Bank Authorizes Cuba's Postal Service To Provide Financial Services. Continuing Expansion For Receiving And Spending Funds Assists Private Sector

From CUBA STANDARD (8/27/21)- In an apparent response to the U.S. blacklisting of Fincimex — the Cuban counterpart of U.S. remittance companies — and of Banco Financiero Internacional (BFI), the Central Bank empowered Cuba’s postal system to provide financial services.

With Resolution 208, published Aug. 26 in the Gaceta Oficial, the central bank authorizes Grupo Empresarial Correos de Cuba to “act as a non-financial support entity for financial institutions on national territory”. The postal service will now be able to receive international bank transfers and money orders and deposit them in consumers’ hard-currency bank accounts in Cuba. Consumers will now be able to use post offices to effect transactions with magnetic cards connected to those accounts and make deposits and cash withdrawals in Cuban pesos.

LINK To Gaceta Oficial Resolucion 208 Banco Central de Cuba (8/26/21)

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Cuba Central Bank Authorizes Cuba's Postal Service To Provide Financial Services. Continuing Expansion For Receiving And Spending Funds Assists Private Sector Aug 27, 2021

Cuba Central Bank Moving Nearer To Regulations For Cryptocurrencies- Another Signal To United States That Cuba Is Changing. Private Sectors Are Expanding- Though Government Remains Reluctant August 27, 2021

Cuba Central Bank Moving Nearer To Regulations For Cryptocurrencies- Another Signal To United States That Cuba Is Changing. Private Sectors Are Expanding- Though Government Remains Reluctant

LINK To Gaceta Oficial Resolution 215 (26 August 2021)

From Bitcoin Magazine (8/27/21) excerpts

On Thursday Cuba’s government said it would “recognize and regulate” Bitcoin and other cryptocurrencies for payments on the island, Bloomberg reported.  The local Cuban Official Gazette has published a resolution which stated that the central bank will create rules for Bitcoin and other crypto assets to determine licensing laws for providers of crypto services on the island. 

The resolution stated the central bank has power to authorize the use of Bitcoin and other crypto for “reasons of socio-economic interest,” according to the report. The resolution also said the state will act as a check over the bank’s operations, preventing the use of Bitcoin for “illegal activities”. 

Because of tough embargo rules in Cuba it has become difficult to use dollars, and as a result the popularity of Bitcoin has grown among Cuba’s technologically savvy.  A local programmer told Bloomberg that some Cubans are already using crypto in tandem with gift cards to make online purchases.  The announcement comes just 10 days before El Salvador is to become the first country to make Bitcoin legal currency as a way to remove the fees and dangers of sending cash remittances, a staple of both economies. 

It remains unknown how the central bank of Cuba will choose to regulate Bitcoin, as the only real controls it can put on the permissionless, immutable, unstoppable currency are through regulating exchanges and making it more difficult, though not impossible, for citizens to get access to its common on ramps and off ramps.  Bitcoin regulation may come as a result of the government’s realization that people are using the currency to evade U.S. restrictions on sending money to Cuba.  

From CUBA STANDARD (8/27/21) excerpts 

Resolution 215, published Aug. 26 in the Gaceta Oficial, sets the norms how the central bank will regulate cyber currencies, and states that the central bank will license commercial providers, but spells out few details.  “It will be important for the government to regulate and maintain sovereignty over the financial system”, said Eduardo Sánchez, a Cuban blockchain expert. “The Cuban context shares the same risk with any other crypto markets in the world — the volatility, security, capital flight, financing for criminal activities.” 

The official recognition of cyber currencies follows a boomlet in Cuba prompted by the U.S. government’s shutdown of most legal channels for U.S.-Cuba remittances in late 2019.  A more aggressive U.S. sanctions regime against Cuba in recent years has led international banks and companies to avoid transactions involving the island, and prompted remittance giant Western Union to pull out of Cuba. And most recently, travel restrictions imposed in response to the COVID-19 pandemic have been affecting informal remittance channels.  In September 2019, the Central Bank – together with the University of Havana – began to study whether the country should introduce its own cryptocurrency, following the lead of Venezuela. There has been no announcement whether the partners have come to any conclusion. 

The central bank resolution is a far cry from an enthusiastic embrace. Showing official Cuba’s skepticism regarding the soundness of cyber currencies, the resolution says the central bank will warn consumers about the risks of virtual money. In a final disclaimer, the text clarifies that “natural persons assume the risks and responsibilities … of operating with virtual assets and virtual asset service providers that function at the margins of the banking and financial system, even if virtual-asset transactions between said persons are not prohibited”. 

State banks and enterprises will only be allowed to use cyber currencies with the express permission of the central bank.  The new rule clarifies that all cyber currency service providers will have to seek a license from the central bank. The resolution defines as cyber currency service providers “any natural or judicial person that as business or business activity dedicates itself to the exchange between virtual assets and legal currencies; the exchange between one or more forms of virtual assets; the transfer of virtual assets; the custody or administration of virtual assets or instruments that allow control over virtual assets; and the participation in the provision of financial services related to the offer of an emission or sale of a virtual asset”. 

In Cuba, a tech-savvy younger generation has increasingly adopted cyber currencies, thanks to the spread of mobile Internet use, and due to a weak local currency that makes it harder to get dollars, and U.S. sanctions complicating money transfers. Crypto currencies offer a parallel financial infrastructure, allowing users to bypass the U.S.-controlled SWIFT messaging service that banks use to communicate payment instructions. 

A fairly high percentage of Cubans seem to have become familiar with — or even use — crypto currency. Cubans have used virtual currencies to get paid for jobs, receive remittances from the United States, and to invest in crypto assets. Along the way, Cuba has joined the world’s most active markets with crypto currency. According to Fintech Times, Cuba in late 2020 was the No. 1 country for crypto inquiries as a percentage of all inquiries on TradingView, a platform that keeps tabs on stocks, bonds, regular currencies and cryptocurrencies. 

Qbita, a bitcoin exchange platform launched in 2019, leads the field of virtual currency service providers in Cuba, with 13,000 users and a volume of US$354,771 in transactions in 2020. Qbita facilitates the exchange between bitcoin and Cuban pesos, US dollars, and other cryptocurrencies. Other startups, such as Fusyona and Bitremesas, and more recently QvaPay, are not only transmitting remittances, but provide business solutions to Cuban entrepreneurs through the use of crypto assets. 

Investment platforms such as Trust Investing and QubitTech manage crypto assets and offer investment plans to Cubans. Tulip Research, a financial forensics firm focusing on blockchain, defined both as Ponzi schemes, and the national exchange commissions of Spain and Panama issued a warning in 2020 against Trust Investing. But that has so far not stopped their rising popularity in Cuba.  Meanwhile, crypto mining — the “production” of virtual money — is difficult to do in Cuba. Unlike in oil-rich countries such as Iran or Venezuela, where government subsidies lower the cost of electricity needed for computers to process cryptocurrencies, Cuban “miners” face material limitations. 

Says Eduardo Sánchez: “There could be an entrepreneurship boom connected to crypto assets in the next couple of years in Cuba. There is potential and talent for that. But it all depends on the relationship with the U.S. and the success of domestic reforms.” 

Recently, the U.S. Treasury has been catching up, in what seems to be a systematic crackdown against U.S. companies engaging in cryptocurrency transactions involving sanctioned countries.  In late December, the Office of Foreign Assets Control (OFAC) fined BitGo, a Palo Alto, Cal.-based crypto wallet and custodian, for allowing users from Ukraine, Cuba, Iran, Sudan and Syria to access its crypto wallet. Six weeks later, OFAC announced it fined BitPay Inc., after it alleged that consumers in sanctioned countries had used the Atlanta-based company’s cybercurrency merchant payment solution. Both companies settled the allegations by paying a fine and agreeing to block customers in sanctioned countries. OFAC has also added individuals and hosts of cryptocurrency addresses, such as Zcash and Dash, to the Specially Designated Nationals (SDN) list, over crimes ranging from wire fraud to election interference.

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Goldwind Turbine Of China Libertad Act Lawsuit Dismissed (In Part) By Court, But Plaintiffs May Refile- And Likely Will- Court Confirmed They Have Standing

NORTH AMERICAN SUGAR INDUSTRIES INC., V. XINJIANG GOLDWIND SCIENCE & TECHNOLOGY CO., LTD., GOLDWIND INTERNATIONAL HOLDINGS (HK) LTD., DSV AIR & SEA INC., BBC CHARTERING USA, LLC, and BBC CHARTERING SINGAPORE PTE LTD., [1:20-cv-22471; Southern Florida District].

Gibson, Dunn & Crutcher (plaintiff)
Mandel & Mandel (plaintiff)
Morgan, Lewis & Bochius (defendant)
Akerman (defendant)
Hogan Lovells LLP (defendant)

LINK To Order (8/24/21)

LINK To Libertad Act Lawsuit Filing Statistics

Excerpts:

The Cuban government is constructing a large-scale wind power project (the “Project”) located in the Cuban province of Las Tunas, about 15 miles from Puerto Carupano. [ECF No. 1 ¶ 82].2 The Project will house 54 wind turbines and is expected to significantly increase Cuba’s renewable energy capacity. Id. at ¶ 85. Equipment for the Project is imported through Puerto Carupano. Id. at ¶ 82.

Goldwind International contracted with Cuba’s Ministry of Energy and Mining to supply the Project with wind turbines and other equipment. Id. at ¶ 88. Goldwind International and Goldwind Science worked with shipping carriers DSV, BBC USA, and BBC Singapore to transport equipment to Cuba for the Project.

In their Motion, Defendants allege that on April 1, 2019, Plaintiff, Plaintiff’s parent companies, and thirteen additional co-debtors (collectively, the “Hexion Debtors”) filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code, 11 U.S.C. §§ 101, et seq. (the “Bankruptcy Proceeding”). [ECF No. 54].4 According to Defendants, Plaintiff did not mention the Certified Claim or any Act related claims in its filings for the Bankruptcy Proceeding. Id. On June 25, 2019, the bankruptcy court confirmed the Hexion Debtors’ Reorganization Plan, which became effective on July 1, 2019.

Defendants argue that Plaintiff’s failure to disclose its Certified Claim or Act-related claims in the Bankruptcy Proceeding bars this action. The Court finds that it is premature to address these issues.

As set forth in detail above, Plaintiff has adequately alleged standing under Article III of the constitution to bring these claims.

Though Plaintiff has adequately alleged Article III standing, the Complaint must be dismissed as a shotgun pleading.

Here, the Complaint improperly incorporates all the factual allegations into each count, without properly tying each of those factual allegations to the claims raised. See Innova Inv. Grp., LLC v. Village of Key Biscayne, No. 19-CIV-22540, 2020 WL 6781821, at *5 (S.D. Fla. Nov. 18, 2020). In addition, each count adopts the allegations of all preceding counts. Weiland, 792 F.3d at 1321. As a result of these pleading deficiencies, the Court is unable to ascertain which facts support which claims and whether Plaintiff has stated any claims upon which relief can be granted. Therefore, the Complaint shall be dismissed without prejudice.

Based on the foregoing, it is ORDERED AND ADJUDGED as follows: 1. Defendants’ Motion to Dismiss Complaint, [ECF No. 54], is GRANTED in PART. The Complaint is dismissed without prejudice. 2. Defendants’ Motions to Dismiss for Lack of Personal Jurisdiction, [ECF Nos. 48, 52, 53, & 107], are DENIED as MOOT as there is no longer an operative complaint. Defendants may refile their respective motions based on lack of personal jurisdiction, supplemented by the facts obtained during jurisdictional discovery, upon the filing of an amended complaint.

Cuba Continues Progress From Analog Television To Digital Television

Advanced Television
East Sussex, United Kingdom
27 July 2021

Cuba delays full digital TV until 2024
By Chris Forrester

Cuba has delayed its digital switchover. Cuba’s deputy minister of communications, Ana Julia Marine Lopez, confirmed in an interview with a local newspaper that the nation has put off a complete switch to DTT until 2024. She blamed the delay on costs and the ongoing financial problems the nation is facing. According to Marine Lopez, Cuba’s government has approved the financing that allowed to boost the production of set-top boxes and is expected to deliver 318,000 units this year. From 2013 to today Cuba has sold 2.7 million DTT STBs. However, some progress is being made; The first switch-over to DTT will start later this year in Cuba’s western provinces, followed in 2022 in the region from Villa Clara to Camagüey. The final phase, she said, would take place in 2023 in the eastern portion of the nation.

Xinhua News Agency
Beijing, China
24 May 2021

China supports development of Cuba's digital TV platform
By Yosley Carrero

HAVANA, May 23 (Xinhua) -- Lazaro Campos, who works as a supervisor at Havana-based Camilo Cienfuegos electronics company, has changed his daily routine over the past few weeks as the island started manufacturing set-top boxes to meet local demand."Cuba is moving from analog (TV) to digital TV. That is why we want to make sure people get access to the necessary equipment," he said. Campos told Xinhua that components used in the production process were imported from China, which is the island's second largest commercial partner and a main technical assistance provider. "We have received training from Chinese experts who have very much contributed to improving the quality of our work," he added.So far, technicians from the Cuban electronics company have already manufactured 90,000 of the 318,000 converter boxes expected to be produced by the end of the year. In parallel, over 32,000 TV sets will be manufactured by the company in 2021 to supply the country's stores as well as to support Cuba's education and tourism industries.Sitting on a black chair, Nayta Perez checked the quality of sound and image of 32-inch and 43-inch hybrid TV sets before they were packaged and sent to a warehouse. "It is a very time-consuming process, but very important," she said. "We have to guarantee the product meets all the requirements for people to have a comfortable digital TV viewing experience at home."The state-run electronic company is also boosting innovation and research on digital TV at a laboratory donated by China. "We have gained some expertise with analog TV, but the digital era has changed almost everything," said 48-year-old Camilo Varona, who has been working in the company since 1994. "China and Cuba have built a win-win relationship."Digital television rollout in the Caribbean country kicked off in 2013, with converter boxes donated by the Chinese government being part of the first test in the capital city of Havana. At present, more than 40 municipal, provincial and national TV channels in Cuba broadcast via analog and digital signals. According to local media, new digital television transmitters would be spotted at various corners of the country this year.Edel Gomez, director of the electronics company, told Xinhua that Cuba uses renewable energy sources and environmentally friendly technologies to produce set-top boxes and hybrid TV sets. "The outcome of joint work between Chinese companies and Cuba has been very positive. The digital TV with Chinese standards has shown its high quality of signal reception, sound, and image resolution," he said. "Things are going well."

Advanced Television
East Sussex, United Kingdom
28 May 2013

Cuba to start DTT in June
By Chris Forrester

Cuba will start testing its Chinese version of digital terrestrial TV in June, Cuba has adopted China’s Digital Terrestrial Multimedia Broadcast standard (DTMB) and will start testing in “real conditions” around Havana, the capital. As part of the tests the Communications Ministry will be distributing set-top box decoders to various neighbourhoods to ensure adequate transmissions are being made. The Chinese government has donated much of the equipment needed. The test receiver boxes can be bought be residents at a price 7.35 Cuban Pesos (about US 33 cents) probably the lowest cost – to consumers – of a box anywhere on the planet.

Advanced Television
East Sussex, United Kingdom
22 March 2013

Cuba adopts Chinese TV standard
By Chris Forrester

It may not be the largest TV market on the planet but China must be pleased that it will be providing equipment for Cuba’s adoption of digital terrestrial TV, just 90 miles from the Florida coast. China’s DTMB standard (Digital Terrestrial Multimedia Broadcast) is used throughout China, Hong Kong, Macau and Laos. Other countries using it, although often in trial modes only, include Iraq, Jordan, Syria and Lebanon. The advantages are that the system permits reception by handheld devices, and embraces HD, standard definition digital and delivery to multimedia devices.

Cuba Issues 175 Pages Of Regulations For Micro, Small And Medium-Sized Enterprises (MSME's)

Radio Cadena Agramonte
Camaguey, Republic of Cuba
20 August 2021

Regulations on small and medium-sized enterprises in Cuba are published

Havana, Aug 20.- Cuba today issued regulations related to the activities that micro, small and medium-sized private companies, non-agricultural cooperatives, and self-employed workers can carry out. 

The Official Gazette publishes Decree-Law 46 signed by the president of the National Assembly of People's Power, Juan Esteban Lazo Hernández, this Thursday , its purpose is to regulate the creation and operation of micro, small and medium-sized enterprises (MIPYMES).  

The legal norm highlights that MSMEs are those economic units with legal personality, which have their own dimensions and characteristics, and whose purpose is to develop the production of goods and the provision of services that meet the needs of society. These can be state, private or mixed property, and are classified depending on the number of employed persons as: Micro enterprise, whose range of employed is from one to 10 persons; Small business, from 11 to 35, and Medium business, from 36 to 100 people. 

Stresses that MSMEs have business autonomy; they contract goods and services with the other subjects recognized in the current legislation with equal conditions, and provide statistical information as provided by law. In addition, they can export and import in accordance with the provisions of current legislation; manage and administer your assets; define the products and services to be marketed, as well as their suppliers, clients, destinations and market insertion; operate bank accounts and access any lawful source of financing; set the prices of its services and goods except those that are centrally approved. 

Define its structure, staff and number of workers; determine the income of its workers respecting the established minimum wages; make the investments required for the development of the MIPYME; create establishments that do not have legal personality, inside or outside the province where their registered office is located; and another faculty or right that derives from its condition of company, as long as it does not oppose what is legally established. Regarding the activities to be carried out by micro, small and medium-sized private companies, non-agricultural cooperatives and self-employed workers, Decree 49 states, which are those considered legal, except those that are regulated in the list of unauthorized activities, annexed to that regulation.   

Unauthorized activities include pest control, except domestic pest control; ordinary hunting and trapping for commercial purposes, and mining and quarrying. Within the manufacturing industry, the production of sugar, natural mineral waters and tobacco is not authorized; the printing of newspapers, magazines, tabloids, books, maps, atlases, postage stamps, tax stamps, title documents, checks and other guarantee documents, except for products associated with the promotion of commercial activity. Manufacture of arms and ammunition; of military insignia; of cells, batteries and accumulators; of motor vehicles; of ships, floating structures, recreational and sports boats, as well as other boats; as well as repair and maintenance of firearms and ammunition, among others. 

The creation of record labels, music publishers and entities for the commercialization of records and other phonographic supports are not authorized, except for the activities of recording and post-production of sound and licenses for record sellers already approved; radio transmissions; television programming and broadcasts, on the cultural programming of music, performing arts, books, plastic arts, cinema, heritage and community cultural work; as well as wireline, wireless and satellite telecommunications activities that include the public internet access service. The annex to the regulations also includes other unauthorized activities in activities of extraterritorial organizations and bodies; of services; artistic, entertainment and recreational; human health care and social assistance; teaching; real estate; professional, scientific and technical; as well as administrative and support services, among others. (Text and infographic: ACN) 

LINK To Gaceta Oficial Document (175 Pages In Spanish)

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DHS Secretary Mayorkas Visits Florida. Refuses To Answer Question Could Signal Biden Administration Considering Cuba Military Participation In Remittance Delivery

The Honorable Alejandro Mayorkas was sworn in as Secretary of the Department of Homeland Security (DHS) by President Joe Biden on February 2, 2021. Secretary Mayorkas is of Cuban descent.

Politico
Arlington, Virginia
19 August 2021

Excerpts: “Mayorkas was tight-lipped with reporters about the future of U.S.-Cuba policy. Asked why Biden’s policies so far looked less like those of President Obama, Biden's former boss when he was vice president, and more like the Trump policies that Biden had once pledged to scale back, Mayorkas wouldn’t say. "The Biden-Harris administration will develop its policy toward Cuba in support of the Cuban people with the Cuban-American community," he replied. Biden's Homeland Security secretary also said he would not comment on whether he supports efforts to prevent money from flowing directly or indirectly to the Cuban military, which controls the island’s economy — the heart of Trump’s Cuba policy.”

Remittance Background

Electronic remittance transfers arriving to the Republic of Cuba are processed by, delivered through, and create benefit for the government of the Republic of Cuba primarily through Revolutionary Armed Forces (FAR) of the Republic of Cuba-connected Grupo de Administración Empresarial S.A. (GAESA) which controls 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).    

Perhaps, the Biden-Harris Administration (2021- ) is considering solely for the processing and delivery of electronic remittance transfers to authorize BFI, Fincimex, and AIS which are on the Cuba Restricted List (CRL) maintained by the United States Department of State. And limiting the percentage the three entities may collectively receive (currently less than 2% combined which is in line with global marketplace norms) and using direct correspondent banking to make the transactions direct rather than through third countries thus ensuring greater transparency. The Cuba Remittance Working Group (CRWG) is to deliver its recommendation(s) to The White House by 29 August 2021.

Twitter Feed From DHS

Secretary Alejandro Mayorkas @SecMayorkas Meeting with the Haitian American community in Miami again today, I expressed the Biden-Harris Administration’s steadfast commitment to ensuring the safety and well-being of Haitians as the country faces one tragedy after another.

Today in Miami, @SecMayorkas is joined by Juan Gonzalez, @WHNSC Sr. Director for the Western Hemisphere, and Mark Feierstein, Principal Advisor to @PowerUSAID, for engagements with the Cuban American and Haitian American communities.

The Biden Administration stands in solidarity with the Cuban people and their call for freedom. I join @POTUS in our commitment to holding the Cuban regime accountable, supporting the Cuban people, and ensuring Cuban Americans remain a vital partner in our efforts.

Secretary Alejandro Mayorkas @SecMayorkas I am on my way to Miami, where I will meet with both the Cuban American and Haitian American communities. I will also have the chance to pay my respects to the #Surfside victims, and thank dedicated Miami-Dade first responders.

The White House
Washington DC
28 January 2021

Press Briefing by Press Secretary Jen Psaki

”Q And if I may ask one more on Cuba: Do you guys plan on starting -- walking back all of those restrictions that were put into place under the Trump administration after the Obama administration had opened things up with Cuba?”

”MS. PSAKI: Well, our Cuba policy is governed by two principles. First, support for democracy and human rights. That will be at the core of our efforts. Second is Americans, especially Cuban Americans, are the best ambassadors for freedom in Cuba. So we'll review the Trump administration policies, as we are in a number of other areas of national security, with an eye to assure -- ensuring that our approach is aligned with that. But, you know, we will take our own path. I don't I don't have anything to predict for you at this point in time.”

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Miami Herald: "Feds seized $2.7 million in cash from Florida travelers. There’s just one reason why" And Much Going To Cuba

Miami Herald
Miami, Florida
19 August 2021

Feds seized $2.7 million in cash from Florida travelers. There’s just one reason why

By Ariana Aspuru and Jay Weaver

Last year, $2.7 million in bulk cash was seized at Florida airports and ports. That’s a big uptick from 2020 federal seizures of $2 million in Florida, according to U.S. Customs and Border Protection.  

Before boarding his flight in May from Fort Lauderdale to Panama, Lisandro Cadenas claimed he was only traveling with $3,000.  U.S. Customs and Border Protection officers asked him both in English and Spanish to confirm how much money he was carrying, according to court documents. Again, Cadenas said $3,000. 

When the customs officers searched his belongings, however, they found bundles of cash stashed in multiple places, including the front pocket of his jeans and in a handkerchief of a man’s purse. When the officers finished searching Cadenas, a lawful U.S. resident of Cuban descent, they counted more than $29,000 on him, according to a criminal complaint and affidavit. Cadenas, who faces federal trial at the end of August on charges of bulk-cash smuggling and making a false statement, lost all his money because he was required to declare it under U.S. law.  

Customs officers seized his cash — a haul that added to more than $2.7 million that was confiscated from U.S. and foreign travelers who didn’t legally declare the money at Florida airports and ports this fiscal year, which ends next month. That’s a big uptick from 2020 federal seizures of $2 million in Florida, according to U.S. Customs and Border Protection. 

Federal law states that travelers can bring as much money as they want when they travel in or out of the country, but they need to declare anything over $10,000 to U.S. Customs and Border Protection. Travelers who fail to declare their funds risk getting the money taken away by customs officers — but the seizure statistics suggest more people still try to slip big wads of cash past federal agents.  

In March, a Cuban couple was stopped at Miami International Airport by customs officers before boarding a Swift Air flight to Cuba.  Miguel Angel Del Rosario and Rachel De La Caridad Garcia declared they were carrying $8,000 in cash on the trip, but then only produced $5,104 when asked to show the funds in their two suitcases and two carry-on bags, according to a criminal complaint and affidavit. The customs officers searched their luggage and found a total of $105,469 hidden in their clothes. The couple’s money was seized, and they pleaded guilty to bulk-cash smuggling in June. They face sentencing in September. 

In Florida, Miami International Airport, recognized as a hub for cash, contraband and drug smuggling, ranks among the top five in the United States for federal seizures of money from travelers who don’t legally declare it — a sum totaling $91.5 million at MIA between 2000 and 2016, according to a report by the Institute for Justice, a Virginia-based law firm that specializes in efforts to recover civil forfeitures by the government.

The airport seizure report, based on statistics from a Treasury Department’s forfeiture database, focuses on travelers whose money was taken by Customs and Border Protection officers. Their typical crime: a failure to file required paperwork, FinCEN Form 105, declaring more than $10,000 in cash upon entering or leaving the country. 

The report — titled “Jetway Robbery? Homeland Security and Cash Seizures at Airports” — says that customs officers seized $2 billion in more than 30,000 seizures at U.S. airports over a 17-year period. A big chunk of that total, $500 million, was confiscated only because American and foreign travelers failed to declare more than $10,000 in cash — not because the seizure was connected to serious criminal activity.

In response to the report’s findings, U.S. Customs and Border Protection said travelers must obey the cash reporting law and the agency must enforce it. The only two expectations that CBP has of travelers is that they truthfully report all currency that they possess to a CBP officer, and that they complete a U.S. Treasury Department form (FINCEN 105) for all currency and other monetary instruments that exceed $10,000, the agency said. 

“The disregard that some travelers have for our nation’s currency reporting laws is a concern and very unwise, especially when you consider travelers can keep their currency simply by just being honest and declaring the full amount to a Customs and Border Protection officer,” said Zach Mann, an agency spokesman in South Florida. 

“CBP’s mission is to protect our nation, its citizens, residents and economy from criminal and terrorist activity,” Mann said. “As an agency, and as individual officers, we want to spend our time effectively and efficiently going after those with bad intentions. Part of the equation for all of our success is informed compliance by the traveler. When travelers know the law and comply then CBP can better focus on the bad guys.”  

Cadenas’ encounter with customs officers at Fort Lauderdale’s airport is a case in point. When pressed about why he was traveling with more than $29,000 in cash, Cadenas said he was planning to board a connecting flight from Panama to Cuba and then buy a car on the island, according to court records. But he also confessed that some of the money was part of a business arrangement where he and his wife transfer money from the U.S. to Cuba, records show. He said he only declared $3,000 to customs officers in Fort Lauderdale because he was worried about Cuban officials taking his cash.  Instead, the U.S. government seized because agents said he didn’t declare the full total.  

One month before the feds seized Cadenas’ cash, Quashad Peterson Taylor lost a massive amount of money to customs officials at Fort Lauderdale Executive Airport as his chartered flight was about to leave for the Bahamas.  Customs and Border Patrol and Homeland Security Investigations inspected the plane from Tropical Air Charters Inc. Taylor was a passenger with two crew members who all shook their heads when investigators asked if they had more than $10,000 in their possession, according to a criminal complaint and affidavit. Taylor said he only had $100 in a gray backpack in the cargo area.  Records indicated that Taylor was also suspected of traveling with bulk cash in 2018.  This time, officers searched the plane and found three large plastic bins filled with wrapped bundles of cash, rubber bands and empty money storage bags, according to the affidavit. More money was also found in Taylor’s fanny pack. 

After the search of the plane in April, Taylor filled out a currency reporting form and wrote how he was transporting more than $1,000,000 on the flight to the Bahamas. He claimed all the money belonged to him, according to the criminal affidavit. Customs officers seized the money, which will be forfeited at his upcoming sentencing and turned over to the U.S. government.  Taylor pleaded guilty to bulk cash smuggling last month and will face sentencing in mid-October, said his lawyer, Nayib Hassan. He declined to comment about the case. 

Relevant Analyses 

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

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

Will United States Airlines Now Post A Link To FinCEN Form 105 On Their Internet Sites For Passengers Traveling To Cuba? November 23, 2020

Binary: Electronic Remittance Transfer Decision For Biden Administration And Diaz-Canel Administration; And Putting US$20 Million Into Perspective Aug 12, 2021

Healthcare Crisis In Cuba Provides Additional Questions And Opportunities For Biden-Harris Administration To Address Electronic Remittance Transfers... And Do So Practically Aug 19, 2021

Biden-Harris Administration Confirms Cuba "Remittance Working Group" Has No Private Sector Members Aug 12, 2021

Cuba Purchases Of U.S. Agricultural Commodity/Food Products Increase 94.4% Year-To-Year; June 2021 Increased 413% Compared To June 2020 Aug 8, 2021

Defining "Transformative"- Cuba Ratifies Decree-Law Authorizing SME's: Micro (1-10 employees), Small (11-35 employees), Medium (35-100 employees). The Private Sector Has Returned. Aug 7, 2021

Cuba Links Resumption Of Remittances From United States To Expanding Investment Opportunities For Cuban Residents Abroad Aug 6, 2021

Cuba Expands Again Role Of Private Sector- Suppliers, Foreign Currency Access Aug 5, 2021

European Union Member France's CMA CGM S.A. Is 41st Company Sued Using Libertad Act- Shipping To Cuba Through Jamaica And Using Port Mariel Aug 3, 2021

American Airlines Survives: Judge Quotes John Adams. Libertad Act Lawsuit Dismissed- Plaintiff Has Standing, But Inheritance Came Too Late. Aug 3, 2021

Judge In Libertad Act Lawsuit Against Seaboard Marine Dismisses 17 Plaintiffs; Remaining Plaintiff Wins Rulings- They Own The Property. Seaboard Trafficked And Knew It Was Trafficking. Settlement? Jul 31, 2021

President Biden Meets With Individuals Of Cuban Descent To Discuss Policy And Regulatory Options; Background Call Provides Details; White House Press Briefing Mentions Cuba Jul 30, 2021

U.S. Secretary Of State Speaks With Foreign Ministers Of Mexico And Spain. Cuba Does Not Come Up For Mexico Given Acts By Mexico's President? And Spain Does Not Confirm Cuba Was Discussed. Jul 30, 2021

Cuba Suspends Tariffs And Fees For Non-Commercial (SME's Next?) Solar Systems. Another Opportunity For Biden-Harris Administration To Support U.S. Exporters And Florida Companies Should Benefit. Jul 30, 2021

Healthcare Crisis In Cuba Provides Additional Questions And Opportunities For Biden-Harris Administration To Address Electronic Remittance Transfers... And Do So Practically

The partial collapse of the Republic of Cuba government-operated healthcare system managed by the Diaz-Canel-Valdes Mesa Administration (2019- ) has provided additional questions and additional opportunities for the Biden-Harris Administration (2021- ).  Can citizen anger be managed? 

• First, how to craft an electronic remittance transfer regulatory and policy construct which is perceived in the United States (specifically from some members of the 117th United States Congress and to populations residing in certain areas of the State of Florida) as “helping to rescue” the 11.3 million citizens of the Republic of Cuba while not perceived as “helping to rescue” the government of the Republic of Cuba. 

• Second, how to craft an electronic remittance transfer regulatory and policy construct whereby Republic of Cuba nationals direct responsibility toward the government of the Republic of Cuba for commercial, economic, and political inadequacies rather than toward the government of the United States. 

• Third, opportunities exist that were absent two months ago for the Biden-Harris Administration to further lessen the dependency of Republic of Cuba nationals upon the government of the Republic of Cuba.  One of these opportunities is through the implementation of a regulatory and policy construct to authorize direct investment to and direct financing for the re-emerging private sectors in the Republic of Cuba, which are fragile and subject to internal and external disruption.  They require nurturing.  They require resources.  They require capital.  They require financing.  And those providing the capital and the financing require a direct means to obtain dividends from their investment and payment for the loans provided. 

The most efficient and cost-effective means for the Biden-Harris Administration to further separate the citizens of the Republic of Cuba from the commercial and economic constraints of the government of the Republic of Cuba is to provide financial sector authorizations that encourage the development of and create an efficient resource delivery marketplace.   

If the Biden-Harris Administration wants to meaningfully provide for United States-based companies and individuals subject to United States jurisdiction to invest in and provide financing for micro, small and medium-size enterprises (SME’s) located in the Republic of Cuba, then essential to remove constraints upon the movement of funds.    

This requires sending and receiving funds directly rather than through third countries.  This requires financial institutions in third countries be authorized to process transactions relating to the Republic of Cuba.  

If the Biden-Harris Administration wants to create stress points throughout the banking system in the Republic of Cuba, then [from its current impractical status] authorize Direct Correspondent Banking and U-turn transactions. 

Critical to Biden-Harris Administration thinking: Not to sacrifice the re-emerging private sectors in the Republic of Cuba to make a political point.  Meaning, escape the trap of authorizing the processing, delivery, and distribution of electronic remittance transfers, authorizing implementation of direct correspondent banking, re-authorizing U-turn financial transactions… but doing each with onerous restrictions that results in United States companies and financial institutions unable to make practical use of the regulatory and policy decisions.  All participants require clarity rather than uncertainty.  When faced with uncertainty, United States companies and financial institutions will not engage. 

• The best example of such regulatory malpractice was during the Obama-Biden Administration (2009-2017).  In 2015, the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury 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.”   

The OFAC should focus upon making the most basic possible.  This means electronic transfer remittances where the recipient receives their choice of currency- in Cuban Pesos (CUP) or United States Dollars and bank account to bank account.  Don’t complicate the process. 

Also vital for the Biden-Harris Administration to authorize United States companies and individuals subject to United States jurisdiction with access to all delivery platforms that currently exist in the Republic of Cuba- whether sending funds to the Republic of Cuba government-operated American International Services (AIS) Moneda Libremente Convertible (MLC) cards, through Empresa de Telecomunicaciones de Cuba S.A. (ETECSA) to wireless devices, or the use of digital currencies.  Caution with respect to supporting the use of digital currencies as the product remains unregulated, volatile in value, speculative, and susceptible to theft.  Not beneficial for the Biden-Harris Administration to introduce further economic and commercial instability to the Republic of Cuba- for which it will certainly be blamed when holders loose value.    

The OFAC could require payout (in currency and bank account to bank account) in the Republic of Cuba to be made in U.S. Dollars or CUP, at the discretion of the recipient.  The result would place pressure upon the Central Bank of the Republic of Cuba to further align the official value of the CUP at 24 to US$1.00 nearer to the unofficial rate of the CUP at 70 to the US$1.00.  Authorizing direct correspondent banking would permit electronic remittance transfers to settle respective accounts within hours rather than days- meaning a process less expensive, more efficient, and more transparent.    

The OFAC could place a “consistent with the global marketplace limit” upon electronic remittance transfer fees arriving to the Republic of Cuba that are processed by and create benefit to the government of the Republic of Cuba primarily through Revolutionary Armed Forces (FAR) of the Republic of Cuba-connected Banco Financiero Internacional S.A. (BFI), Republic of Cuba government-operated Financiera Cimex (Fincimex) and Republic of Cuba government-operated American International Services (AIS).   

The OFAC could also carve-out from the Cuba Restricted List (CRL) maintained by the United States Department of State an authorization for BFI, Fincimex, and AIS to engage solely in electronic remittance transfers, but remain subject to all other provisions of the CRL.      

Seizing Funds Remains Issue For Financial Institutions 

The use of direct correspondent banking could result in an attorney on behalf of a client asking a court to seize funds controlled by a United States-based company or financial institution with the argument that the Republic of Cuba “has an interest” in the funds.  However, there are two relevant points: 

First, important to authorize direct correspondent banking and then allow the marketplace to determine the risk associated with transactions and when direct correspondent banking is implemented.  

Second, an attorney would find that case law, OFAC license wording authorizing the process, the public benefits of direct correspondent banking, and public discourse about the consequences to United States exporters of expropriating funds owed to them as persuasive in deterring a request.   

• Since December 2001, approximately US$6,455,169,592.00 (through June 2021) of agricultural commodities and food products have been exported from the United States to the Republic of Cuba through provisions of the Trade Sanctions Reform and Export Enhancement Act (TREEA) of 2000.  Since 2003, approximately US$26,807,700.00 of healthcare products (medical equipment, medical instruments, medical supplies, pharmaceuticals) have been exported from the United States to the Republic of Cuba through provisions of the Cuban Democracy Act (CDA) of 1992.  All of these funds have been received by United States exporters through third countries rather than directly from the Republic of Cuba.  As a result, transactions take more time to complete, are more costly to the United States exporter, and are less transparent. 

• The government of the Republic of Cuba was 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 represented approximately 2% of the total value of electronic remittance transfers of approximately US$1.5 billion.  The approximately 2% was in line with global norms.  Daily, the fee to the Republic of Cuba was approximately US$54,000.00.  If the OFAC were to authorize direct correspondent banking, then Denver, Colorado-based Western Union Company (2019 revenues approximately US$5.3 billion) and other companies could settle accounts daily, thus limiting the amount of funds which could be subject to court action.   

• The Central Bank of the Republic of Cuba may determine that making operational direct correspondent banking between, for example, BICSA and Home BancShares, BICSA and Western Union Company, or BFI and Western Union Company would not be in their interest due to United States statutes and regulations relating to compliance and transparency which, in their opinion, may result in financial information used to their determent.  Important to permit the Central Bank of the Republic of Cuba to make that decision rather than the Biden-Harris Administration make that decision.  Removal of obstacles places additional pressures upon the government of the Republic of Cuba to choose between engagement under conditions similar to how financial institutions in other countries make use of direct correspondent banking or continue with the third-country transfer process. 

Historical Consideration 

Conditionality, important to note, was neither effective nor sustainable during the Fidel Castro Administration (1976-2008), the Raul Castro Administration (2008-2018), or thus far with the Diaz-Canel-Valdes Mesa Administration.   

Paraphrasing a comment shared in the early 1990’s from a diplomat residing in the Republic of Cuba: Successive governments of the Republic of Cuba have been prepared for its citizens to suffer. For the Biden-Harris Administration, the question is if it is prepared to permit the citizens of the Republic of Cuba to suffer.

LINK To Complete Analysis In PDF Format

Relevant Analyses 

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

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

Will United States Airlines Now Post A Link To FinCEN Form 105 On Their Internet Sites For Passengers Traveling To Cuba? November 23, 2020

Binary: Electronic Remittance Transfer Decision For Biden Administration And Diaz-Canel Administration; And Putting US$20 Million Into Perspective Aug 12, 2021

Healthcare Crisis In Cuba Provides Additional Questions And Opportunities For Biden-Harris Administration To Address Electronic Remittance Transfers... And Do So Practically Aug 19, 2021

Biden-Harris Administration Confirms Cuba "Remittance Working Group" Has No Private Sector Members Aug 12, 2021

Cuba Purchases Of U.S. Agricultural Commodity/Food Products Increase 94.4% Year-To-Year; June 2021 Increased 413% Compared To June 2020 Aug 8, 2021

Defining "Transformative"- Cuba Ratifies Decree-Law Authorizing SME's: Micro (1-10 employees), Small (11-35 employees), Medium (35-100 employees). The Private Sector Has Returned. Aug 7, 2021

Cuba Links Resumption Of Remittances From United States To Expanding Investment Opportunities For Cuban Residents Abroad Aug 6, 2021

Cuba Expands Again Role Of Private Sector- Suppliers, Foreign Currency Access Aug 5, 2021

European Union Member France's CMA CGM S.A. Is 41st Company Sued Using Libertad Act- Shipping To Cuba Through Jamaica And Using Port Mariel Aug 3, 2021

American Airlines Survives: Judge Quotes John Adams. Libertad Act Lawsuit Dismissed- Plaintiff Has Standing, But Inheritance Came Too Late. Aug 3, 2021

Judge In Libertad Act Lawsuit Against Seaboard Marine Dismisses 17 Plaintiffs; Remaining Plaintiff Wins Rulings- They Own The Property. Seaboard Trafficked And Knew It Was Trafficking. Settlement? Jul 31, 2021

President Biden Meets With Individuals Of Cuban Descent To Discuss Policy And Regulatory Options; Background Call Provides Details; White House Press Briefing Mentions Cuba Jul 30, 2021

U.S. Secretary Of State Speaks With Foreign Ministers Of Mexico And Spain. Cuba Does Not Come Up For Mexico Given Acts By Mexico's President? And Spain Does Not Confirm Cuba Was Discussed. Jul 30, 2021

Cuba Suspends Tariffs And Fees For Non-Commercial (SME's Next?) Solar Systems. Another Opportunity For Biden-Harris Administration To Support U.S. Exporters And Florida Companies Should Benefit. Jul 30, 2021

Iberostar Of Spain Continues To Await Decision By European Commission- How Much More Time Will U.S. Court Permit?

MARIA DOLORES CANTO MARTI, AS PERSONAL REPRESENTATIVE OF THE ESTATES OF DOLORES MARTI MERCADE AND FERNANDO CANTO BORY V. IBEROSTAR HOTELES Y APARTAMENTOS SL [1:20-cv-20078; Southern Florida District]

Zumpano Patricios P.A. (plaintiff)
Bird & Bird (defendant)
Holland & Knight (defendant)

LINKS
Defendant's Status Report (18 August 2021)
Plaintiff's Notice Of Appeal (1 June 2021)
Plaintiff's 11th Circuit Court Of Appeals Confirmation (3 June 2021)

Libertad Act Lawsuit Filing Statistics

USDOT Authorizes Cargo Flights From United States To Six Airports In Cuba Through 30 November 2021

On 14 July 2021, the United States Department of Transportation (USDOT) granted an Emergency Exemption to Skyway Enterprises, Inc. and IBC Airways, Inc. to operate cargo flights from the United States to the Republic of Cuba through 30 November 2021. Swift Air LLC is awaiting authorization.  

Excerpts: 

“Skyway requests an emergency exemption from Order 2020-8-4, in order to operate up to two weekly all-cargo charter operations to transport humanitarian aid and diplomatic cargo between Miami, Florida, and Havana, Cuba, using small aircraft, from September 29, 2021, to November 30, 2021. Skyway also requests emergency exemption authority to operate up to one weekly all-cargo charter operation to transport humanitarian aid, using small aircraft, from Miami to any of the following additional points in Cuba: Santiago de Cuba, Matanzas/Varadero, Holguin, Santa Clara, and Camagüey, between July 22, 2021, and November 30, 2021.  

In support of its request, Skyway states that the proposed operation is a continuation of its previously approved operation to carry humanitarian aid, and that U.S. officials in Cuba are requesting that Skyway transport diplomatic cargo to the U.S. Embassy in Cuba. Skyway asserts that its proposed operation would satisfy two exceptions noted in Order 2020-8-4, that permit certain charter operations for “emergency medical purposes…, and other travel deemed to be in the interest of the United States.” 

Skyway Enterprises is operating two flights per week. IBC is expected to commence soon.

Background: By Order 2020-8-4, issued August 13, 2020, the Department suspended the authority of all U.S. air carriers and foreign air carriers to provide charter flights between the United States and all airports in Cuba, except for authorized public charters to and from Havana and other authorized charter flights for emergency medical purposes, search and rescue, and other travel deemed to be in the interest of the United States.  The Department issued Order 2020-8-4 at the request of the U.S. Department of State, following the receipt of a letter from then-Secretary of State Michael R. Pompeo to then-Secretary of Transportation Elaine L. Chao, stating that:  

To advance the Administration’s policy to strengthen the economic pressure on the Cuban regime as a means to restrict the regime’s ability to repress its people and support the illegitimate Maduro regime in Venezuela, and in the foreign-policy interests of the United States, I respectfully request that the Department of Transportation suspend until further notice all charter flights between the United States and all airports in Cuba over which the Department of Transportation exercises jurisdiction, except for authorized public charters to and from Havana, and other authorized charter flights for emergency medical purposes, search and rescue, and other travel deemed to be in the interest of the United States.  

Accordingly, the Department found that it was in the public interest to suspend the charter authority of all U.S. and foreign carriers to the extent necessary to prohibit charter operations between the United States and Cuba as set forth in the Order.  

Decision: We have decided to grant Skyway’s application for an exemption from Order 2020-8-4 to operate the proposed charter flights. Our action in Order 2020-8-4 suspending carriers’ U.S.-Cuba charter authority was taken at the request of the U.S. Department of State, and it incorporated the Department of State’s language as to permitted exceptions.  

We take note of the assertion made by Skyway that the flights should be permitted under the Order’s exceptions. Those exceptions, as discussed above, were expressly derived from the Department of State letter upon which the DOT suspension action was predicated. Accordingly, we consulted with the Department of State to determine whether they regard the proposed Skyway flights as coming within the Order’s specified exceptions.  

The Department of State provided its view that the application does fall within the Order’s specified exceptions. The Department of State also noted its willingness to review future exemption requests to determine whether proposed flights fall within the scope of its specified exceptions as set forth in DOT’s Order 2020-8-4, namely: emergency medical purposes, search and rescue, and other travel deemed to be in the interest of the United States. Against this background, we find that it would be in the public interest to grant the requested exemption from Order 2020-8-4 to operate the proposed all-cargo charter flights.  

As a final matter, we remind the applicant that a number of significant limitations and requirements remain in place concerning air transportation between Cuba and the United States. Nothing in the Department’s award of authority will relieve any party from complying with all applicable regulations and requirements of other U.S. agencies and with all applicable laws of the United States.  

To the extent not granted, we denied all requests in the referenced application. We may amend, modify, or revoke the authority granted in this Notice at any time without hearing at our discretion.” 

LINKS: 

Application of Swift Air, L.L.C. d/b/a iAero Airways for an Emergency Exemption from Orders 2020-5-7 and 2020-8-4 (10 August 2021) 

Application Of Swift Air, L.L.C. D/B/A iAero Airways For An Emergency Exemption And Motion To Shorten Answer Period (6 August 2021) 

USDOT Notice Of Action Taken- Skyway Enterprises, Inc. (23 July 2021) 

USDOT Notice Of Action Taken- Skyway Enterprises, Inc. (14 July 2021) 

Application Of IBC Airways, Inc. For An Emergency Exemption (8 July 2021)

Application Of Swift Air, L.L.C. D/B/A iAero Airways For An Emergency Exemption And Motion To Shorten Answer Period (6 July 2021) 

Binary: Electronic Remittance Transfer Decision For Biden Administration And Diaz-Canel Administration; And Putting US$20 Million Into Perspective

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

Recent Cuba Analyses  

U.S. Department Of State Memorandum: The 17 Company Members Of The CRWG- Moving Remittances And Using Remittances; Cuba Entities Need Be Part Of The Process July 26, 2021    

Biden-Diaz-Canel Remittance Compromise: U.S. And Cuba Companies Suspend Transaction Fees Until 31 December 2021. Impact On 800 Publix Markets July 27, 2021   

Biden-Harris Administration Confirms Cuba "Remittance Working Group" Has No Private Sector Members August 12, 2021 

Defining "Transformative"- Cuba Ratifies Decree-Law Authorizing SME's: Micro (1-10 employees), Small (11-35 employees), Medium (35-100 employees). The Private Sector Has Returned. Aug 7, 2021    

Cuba Links Resumption Of Remittances From United States To Expanding Investment Opportunities For Cuban Residents Abroad Aug 6, 2021    

Cuba Expands Again Role Of Private Sector- Suppliers, Foreign Currency Access Aug 5, 2021    

Cuba Suspends Tariffs And Fees For Non-Commercial (SME's Next?) Solar Systems. Another Opportunity For Biden-Harris Administration To Support U.S. Exporters And Florida Companies Should Benefit. Jul 30, 2021    

If A Product Costs At Least 2,500 Pesos (US$104.16), Customers In Cuba Now May Obtain Financing: Terms Are 2.5% Interest With 20% Down July 24, 2021  

Biden Administration Wants To Deny Cuba's Government (Military) With Earnings- Conditional Resumption Of Product Filled Flights To Airports In Cuba Benefits Self-Employed; By-In From Congress? July 19, 2021 

Is Biden-Harris Administration Nearing Decision To Reverse Trump-Pence Administration Prohibition On Cuba Military Earning Money From Remittances? July 15, 2021    

The Word For Today Is "cuentapropistas" And It Is The Fulcrum Around Which Biden Administration Cuba Policy Revolves May 20, 2021 

Remittances: Will Biden-Harris Administration Repeat Mistakes Of Obama-Biden Administration And Learn From Mistakes Of Trump-Pence Administration? No Triangles. Yes Loans. Yes Investments. May 18, 2021 

Cuba Central Bank May Provide Option For Western Union To Continue Services To Cuba: REDSA November 26, 2020    

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  

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

At 6:00 PM Today, Final [For Now] Western Union Transactions With Cuba Are [Temporarily Perhaps] Suspended November 23, 2020   

Will United States Airlines Now Post A Link To FinCEN Form 105 On Their Internet Sites For Passengers Traveling To Cuba? November 23, 2020   

Trump Administration Executive Order About China Military Will Impact Biden Administration Decisions About Cuba Military November 17, 2020

Cuba Has Options To Retain Western Union Electronic Remittance Services- Transfer To A Bank? November 16, 2020    

Western Union Preparing To End Money Transfers To Cuba On 22 November 2020.... Will Cuba Permit It?November 13, 2020

Biden-Harris Administration Confirms Cuba "Remittance Working Group" Has No Private Sector Members

From a United States Department Of State spokesperson:

"The Administration has formed a U.S. governmental Remittance Working Group to review available options to establish remittance channels so that the Cuban people receive the maximum benefit from remittances their families send. At the President’s direction the State Department and the Treasury Department will provide recommendations to the President for how to maximize remittances to the Cuban people, while minimizing or eliminating the Cuban military’s ability to take a cut."

Biden-Harris Administration (2021- ) officials familiar with the process confirm that the members of the Remittance Working Group are United States Government employees.

Reasonable to conclude members of the Remittance Working Group include United States Government employees from The White House (including National Security Council), United States Department of State, United States Department of the Treasury, United States Department of Defense, United States Department of the Treasury, United States Department of Commerce, United States Department of Justice, and Central Intelligence Agency.

Recent Cuba Analyses

U.S. Department Of State Memorandum: The 17 Company Members Of The CRWG- Moving Remittances And Using Remittances; Cuba Entities Need Be Part Of The Process July 26, 2021  

Biden-Diaz-Canel Remittance Compromise: U.S. And Cuba Companies Suspend Transaction Fees Until 31 December 2021. Impact On 800 Publix Markets July 27, 2021 

Defining "Transformative"- Cuba Ratifies Decree-Law Authorizing SME's: Micro (1-10 employees), Small (11-35 employees), Medium (35-100 employees). The Private Sector Has Returned. Aug 7, 2021  

Cuba Links Resumption Of Remittances From United States To Expanding Investment Opportunities For Cuban Residents Abroad Aug 6, 2021  

Cuba Expands Again Role Of Private Sector- Suppliers, Foreign Currency Access Aug 5, 2021  

Cuba Suspends Tariffs And Fees For Non-Commercial (SME's Next?) Solar Systems. Another Opportunity For Biden-Harris Administration To Support U.S. Exporters And Florida Companies Should Benefit. Jul 30, 2021  

If A Product Costs At Least 2,500 Pesos (US$104.16), Customers In Cuba Now May Obtain Financing: Terms Are 2.5% Interest With 20% Down July 24, 2021

Biden Administration Wants To Deny Cuba's Government (Military) With Earnings- Conditional Resumption Of Product Filled Flights To Airports In Cuba Benefits Self-Employed; By-In From Congress? July 19, 2021

Is Biden-Harris Administration Nearing Decision To Reverse Trump-Pence Administration Prohibition On Cuba Military Earning Money From Remittances? July 15, 2021  

Cuba Central Bank May Provide Option For Western Union To Continue Services To Cuba: REDSA November 26, 2020  

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  

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

At 6:00 PM Today, Final [For Now] Western Union Transactions With Cuba Are [Temporarily Perhaps] Suspended November 23, 2020  

Will United States Airlines Now Post A Link To FinCEN Form 105 On Their Internet Sites For Passengers Traveling To Cuba? November 23, 2020 

Trump Administration Executive Order About China Military Will Impact Biden Administration Decisions About Cuba Military November 17, 2020  

Cuba Has Options To Retain Western Union Electronic Remittance Services- Transfer To A Bank? November 16, 2020  

Western Union Preparing To End Money Transfers To Cuba On 22 November 2020.... Will Cuba Permit It? November 13, 2020 

United States Department Of State Spokesperson References Cuba

The United States Department of State
Washington DC
11 August 2021

Briefing- Ned Price

Today marks one month since the Cuban people took to the streets, making a call for freedom heard around the world. The Cuban Government responded with a brutal wave of repression unseen in decades. As of today, over 800 Cubans have been reported detained for peacefully demonstrating on July 11th. By some accounts, there may be hundreds more. Many are held incommunicado, without access to family or legal representation; secret, summary judicial proceedings lack fair trial guarantees and seek to repress, to silence, and make examples of anyone who added their voice to peaceful protests on July 11th.

The Government of Cuba denies this systematic abuse of human rights and refuses access to international observers. Cuba’s leaders are counting on the world to turn a blind eye to their repression. The world must not look away. The United States will not look away. We join the families who are suffering and scared, Cuba’s human rights defenders, and those who share our concern around the world in calling for the immediate release of all those detained or missing for merely exercising their rights to freedom of expression and peaceful assembly.

Addressing the ongoing crisis in Cuba is a top priority. At President Biden’s direction, the U.S. Government is actively focused on providing support to the Cuban people, whether it is facilitating humanitarian assistance or information access. We’ve brought to bear the strength of international diplomacy, rallying nations around the world to speak out in support of the Cuban people and in condemnation of the regime’s violent response to the protests. And we are holding the repressors accountable for human rights abuses through the Global Magnitsky sanctions program.

OFAC Publishes "Fact Sheet" About The Internet And Cuba

Publication of Fact Sheet on Supporting the Cuban People’s Right to Seek, Receive, and Impart Information through Safe and Secure Access to the Internet

On August 11, 2021, the United States Department of the Treasury's Office of Foreign Assets Control (OFAC) and Department of Commerce's Bureau of Industry and Security (BIS) issued a Fact Sheet to emphasize the U.S. government’s commitment to promoting the ability of the Cuban people to seek, receive, and impart information, by highlighting the most relevant exemptions and authorizations pertinent to supporting the Cuban people through the provision of certain internet and related telecommunications services.

LINK To Five-Page OFAC Document

Senior Director For WHA At NSC In The White House Discusses Cuba. Doing "a series of other things."

The White House
Washington DC
9 August 2021

On-the-Record Press Call by National Security Council Senior Director for the Western Hemisphere Juan Gonzalez on Official Travel to Brazil and Argentina Via Teleconference

Excerpts

On Cuba, since the July 11th protests, we have been working to hold the regime accountable while, at the same time, doing everything we can to support the Cuban people. And in that regard, we've been doing a regular pace of sanctions of individuals involved in the crackdown against the July 11th protestors, and then doing everything to support the families of those who have been detained by increasing funding, working to expand Internet connectivity on the island, and a series of other things. So that continues.

Q Mr. Juan Gonzalez -- I would like to ask him if there was any request from the United States to the Argentinian government, to the government of Alberto Fernández, for Argentina support most the democratization of Cuba, Venezuela, or Nicaragua in terms of, for example, any declaration against the repression of the Cuban people by the government, in the case of Cuba, and if there was any request in that sense for Argentina to participate in the dialogue that the opposition and the Maduro’s regime will start in Mexico this week.

MR. GONZALEZ: Great. So, look, on the question of democracy and human rights in the region, Jake Sullivan mentioned, just as he did in Brazil, in Argentina, in the conversations with President Fernández, with Foreign Minister Solá, with Gustavo Beliz, and others that -- you know, that we have a -- we really have to break through the left-and-right mindset when it comes to promoting democratic values and that we need to really focus on a conversation with regard to democracies and countries that are not democracies if we are to ensure that, as a region, we maintain this international consensus in favor of democracy.

So, you know, I think we underscored the importance of breaking through this ideological problem that exists in the region, both in the left and the right, when it comes to democratic values and that, you know, we did raise the issue of Cuba, Nicaragua, Venezuela as one where we’re urging all countries, not just Argentina, to stand up for those ideals, given in particular the history that Argentina has suffered in the past.

And so, it's somewhere where there was a -- I think a very constructive conversation with the Argentines’ willingness to find areas of common ground and an interest in them being -- in being helpful. I mean, I think they made clear that they're not always going to agree with us on how -- on matters of approach, but that we're going to continue to have a very open and fluid dialogue when it comes to these matters.
And, you know, we believe that Argentina is a country that can speak to governments of both the left and the right, and can play an important role in encouraging the defense of democratic values. Particularly, I think, when you see in Nicaragua, which has been, you know, a move -- a very kind of concerning move toward authoritarianism in the run-up to the November elections.

And I think you'd also asked about the dialogue, sorry, on Venezuela. What I would say is -- is that we’re not -- we don't -- we're not the ones that get to pick who is seated at the table in the dialogue. I think that's a question, really, for the Unity Platform, led by the -- those Venezuelans that are in favor of democracy and the regime that is on the other side of that equation.

And, you know, I think our perspective -- which has been one that is articulated between the United States, Canada, and the European Union -- is that the international community is going to continue to push for free and fair elections, and we're going to use everything we can to press the regime to take concrete steps in that direction.

Cuba Purchases Of U.S. Agricultural Commodity/Food Products Increase 94.4% Year-To-Year; June 2021 Increased 413% Compared To June 2020

ECONOMIC EYE ON CUBA©
August 2021

June 2021 Food/Ag Exports To Cuba Increase 413%- 1
51st Of 222 June 2021 U.S. Food/Ag Export Markets- 2
Year-To-Year Exports Increase 94.4%- 2
Cuba Ranked 54th Of 222 U.S. Ag/Food Export Markets- 2
June 2021 Healthcare Product Exports US$52,110.00- 2
June 2021 Humanitarian Donations US$306,697.00- 3
2021 Obama Administration Initiatives Exports Continue- 3
U.S. Port Export Data- 16

JUNE 2021 FOOD/AG EXPORTS TO CUBA INCREASE 413%- Exports of food products and agricultural commodities from the United States to the Republic of Cuba in June 2021 were US$28,256,268.00 compared to US$5,507,338.00 in June 2020 and US$18,815,665.00 in June 2019. 

June 2021 Exports Included: Chicken Leg Quarters (Frozen); Chicken Meat (Frozen); Chicken Legs (Frozen); Soybeans.

January 2021 through June 2021 exports were US$159,942,168.00 compared to US$82,236,262.00 for the period January 2020 through June 2020.

Since December 2001, agricultural commodity and food product exports reported from the United States to the Republic of Cuba is US$6,455,169,592.00.

This report contains information on exports from the United States to the Republic of Cuba- products within the Trade Sanctions Reform and Export Enhancement Act (TSREEA) of 2000, Cuban Democracy Act (CDA) of 1992, and regulations implemented (1992 to present) for other products by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury and Bureau of Industry and Security (BIS) of the United States Department of Commerce.

The TSREEA re-authorized the direct commercial (on a cash basis) export of food products (including branded food products) and agricultural commodities from the United States to the Republic of Cuba, irrespective of purpose. The TSREEA does not include healthcare products, which remain authorized and regulated by the CDA.

LINK To August 2021 Report

Defining "Transformative"- Cuba Ratifies Decree-Law Authorizing SME's: Micro (1-10 employees), Small (11-35 employees), Medium (35-100 employees). The Private Sector Has Returned.

Regardless of the reasoning, the rationale, by the Diaz-Canel-Valdes Mesa Administration (2019- ) in Havana, the impact of the decisions during the last three months relating to re-empowering and re-emerging private sector is for the Republic of Cuba both transformative and irreversible.

Significantly, the regulatory changes by the government of the Republic of Cuba provide the Biden-Harris Administration (2021- ) with additional basis for re-engagement to support the private sector by authorizing direct investments, direct loans, direct correspondent banking, resurrecting U-turn banking transactions, and re-creating an efficient electronic and transparent remittance transfer platform.

AFP
Paris, France
7 August 2021

On Friday night, the Cuban government ratified a decree-law authorizing the operation of private and state small and medium-sized businesses, a measure geared toward economic reforms in the socialist state, in which public corporation prevails.

“The State Council approved the Decree-Law on Small and Medium Enterprises, which facilitates their inclusion in a coherent manner in the legal system as an actor affecting the productive transformation of the country,” a note on the page stated. Website of the National Assembly of People’s Power of Cuba.

The decision, long awaited by Cuban businessmen, comes nearly a month after unprecedented demonstrations erupted on July 11 and 12, chanting “We are hungry” and “Freedom” in more than 40 cities on the island, leaving dead and dozens injured. Hundreds were arrested.

“For the Cuban economy, not only in the economic sphere, but also in the historical sphere, this represents a giant step that will have consequences in the medium and long term” to reshape the national economy, O’Neill Diaz, consultant, told AFP specializing in business development and communications and public affairs in Cuba.

In a regular session of the State Council, in which President Miguel Diaz-Canel participated via video link, other measures aimed at developing non-agricultural cooperatives and self-employed or self-employed workers were approved.

– ‘A very important moment’ –

The assembly decided that small and medium businesses could be government, private or mixed and that small businesses could have from one to 10 employees, small businesses from 11 to 35 people and averaged up to 100 workers.

Last February, the government expanded more than 2,000 activities in which freelance workers can work in Cuba’s controlled economy. The government indicated in June that some activities authorized for independent workers would not be included in the SME list, such as “computer programmers, bookkeepers, translators and interpreters, pet or pet vets, designers and certain types of consultancy”. pointed out. Although that will be determined in the regulations which should be published soon.

Prime Minister Manuel Marrero Cruz said last June that the expansion of activities by private actors “does not lead to a privatization process, as there are limits that cannot be crossed.”

For O’Neill Diaz, this is “a very important moment in which many entrepreneurs from the private sector have spent years striving, working and trying to contribute to the national debate.” The government has recognized that small businesses are already operating on the island in a “disguised” fashion, but the legal framework can generate greater interest in these businesses.

For the US business community, the Díaz-Canel government has made an “important decision that may re-evaluate business interests” on the island, the Cuban-US Economic and Trade Council said last June when the Cuban government announced it would regulate small and medium-sized businesses.

Cuba is accelerating its reforms, while facing a deep economic crisis due to the coronavirus pandemic that has hit the tourism sector, the engine of its economy, and in the midst of an economic embargo imposed by the United States that has tightened under the governments of Donald Trump and Joe. Biden.

Prensa Latina News Agency
Havana, Republic of Cuba
7 August 2021

La Habana, 7 ago (Prensa Latina) El Consejo de Estado de Cuba, en su más reciente reunión ordinaria, aprobó ocho decretos-leyes vinculados al cumplimiento de la estrategia económico-social del país, informaron hoy medios locales.

De acuerdo con Esteban Lazo, presidente de ese órgano, las normas relativas al desarrollo de distintos actores económicos y el ordenamiento de otras actividades, fortalecen la institucionalidad y permiten avanzar en la actualización del modelo cubano, publicó el diario Granma.

Entre las disposiciones se encuentra el decreto-ley que regula la creación y funcionamiento de las micro, pequeñas y medianas empresas (Mipymes), aprobadas por el Consejo de Ministros en mayo y que pueden ser de propiedad estatal, privada o mixta.

La nación caribeña aspira a que el impulso de estas formas de producción dinamice aspectos como la diversificación de los renglones productivos, los encadenamientos con distintas industrias y el fomento del empleo.

El Consejo de Estado también emitió una disposición para las cooperativas no agropecuarias, donde regula elementos como su constitución, funcionamiento y extinción, con lo cual se elimina el carácter experimental con el que surgieron.

El ejercicio del trabajo por cuenta propia (sector privado) también estuvo entre los beneficiados con el paquete de normas aprobadas, al dar salida a dos relacionadas con dicha actividad.

Un decreto-ley específico actualiza las disposiciones generales para su desarrollo y define otros aspectos como el procedimiento para tramitar las autorizaciones, las relaciones con otras entidades e instituciones, además de ajustar el sistema de organización y control.

La segunda normativa está referida a las contravenciones personales en el ejercicio del trabajo por cuenta propia y establece las infracciones concernientes a ello, las sanciones y medidas aplicables, así como las autoridades facultadas para imponerlas y las vías para resolver inconformidades.

El desarrollo de estos actores económicos motivó también la aprobación de un decreto-ley Del Régimen Especial de Seguridad Social para los Trabajadores por Cuenta Propia, los Socios de las Cooperativas no Agropecuarias y de las Micro, Pequeñas y Medianas Empresas Privadas.

Asimismo, fue necesaria la modificación de varios elementos de la Ley Tributaria de 2012, asunto igualmente previsto en uno de los cuerpos legales adoptados.

Completan el paquete de disposiciones del Consejo de Estado las normas Sobre la Conservación, Mejoramiento y Manejo Sostenible de los Suelos y el Uso de los Fertilizantes; y de los Registros Públicos de Bienes Inmuebles, el cual estipula la organización y funcionamiento de estos.

English Translation (Google)

According to Esteban Lazo, president of that body, the norms related to the development of different economic actors and the ordering of other activities, strengthen the institutional framework and allow progress in updating the Cuban model, published the newspaper Granma. Among the provisions is the decree-law that regulates the creation and operation of micro, small and medium-sized enterprises (MSMEs), approved by the Council of Ministers in May and which can be state, private or mixed property.

The Caribbean nation aspires that the impulse of these forms of production stimulate aspects such as the diversification of the productive lines, the linkages with different industries and the promotion of employment.

The State Council also issued a provision for non-agricultural cooperatives, where it regulates elements such as their constitution, operation and extinction, thereby eliminating the experimental character with which they arose. The exercise of self-employment (private sector) was also among the beneficiaries of the package of approved regulations, when two related to said activity were released.

A specific decree-law updates the general provisions for its development and defines other aspects such as the procedure for processing authorizations, relationships with other entities and institutions, as well as adjusting the organization and control system. The second regulation refers to personal violations in the exercise of self-employment and establishes the infractions concerning this, the applicable sanctions and measures, as well as the authorities empowered to impose them and the ways to resolve non-conformities.

The development of these economic actors also motivated the approval of a decree-law of the Special Social Security Regime for Self-Employed Workers, Members of Non-Agricultural Cooperatives and Micro, Small and Medium Private Companies. Likewise, it was necessary to modify several elements of the Tax Law of 2012, a matter also provided for in one of the adopted legal bodies. The regulations on the Conservation, Improvement and Sustainable Management of Soils and the Use of Fertilizers complete the package of provisions of the State Council; and the Public Registries of Real Estate, which stipulates the organization and operation of these.

Granma
Havana, Republic of Cuba
5 August 2021

Micro, small and medium-sized businesses in Cuba: A smooth start

Minister of Economy and Planning Alejandro Gil Fernández explains new legal norms recently approved by the Council of Ministers, which will guide the functioning of these important economic actors

The first small private companies will emerge from currently operating groups of self-employed workers, like the successful Pinturas Coronas. Photo: Ricardo López Hevia

The creation in Cuba of micro, small and medium-size businesses (MSMEs), as part of the overhauling of the economic actors has risen an intensive debate and a lot of expectations, especially in the non-state sector. As it has was recently reported by Deputy Prime Minister and Minister of Economy and Planning (MEP) Alejandro Gil Fernández on Cuban television’s Mesa Redonda program, they are currently working at an accelerated pace in the norms that will rule the organization and functioning of these companies dedicated to the production of goods and services, conceived with legal personality, both for the state and private sector.

Regarding private MSMEs, he says “the first MSMEs will be created from the current businesses run by self-employed workers, a sector that hires a lot of workers”. In the case of state-run businesses, he explains, “we are conducting a study to see which organizations could join this experience, always with the priorities of the country as their main focus.”

“The first step is to organize what we already have,” the Economy Minister said referring to the undergoing restructuring, in a gradual manner and under the leadership of the Government, in order to “release the productive forces, lift hurdles and boost social responsibility among these economic actors.”

Meanwhile, Economy and Planning Deputy Minister Johana Odriozola Guitart, provided more details on the process of creation of the norms, in which the academy has been actively involved and they have considered the preparation of several legal provisions raging from the highest to the lowest levels of legislation hierarchy. “Right now, we are agreeing on the basic principles of the legislation,” she says and stresses how the creation of these new actors will bring benefits in the financial and hiring order to the businesses currently in operation.

MSMEs, which will have the same management model regardless of the type of property, will take the legal form of Private Limited Company, Odriozola Guitart continues. “It means that, unlike other countries, our norms will have a larger scope because we must regularize the characteristics of economic subjects that does not exist so far,” she underlines. The Deputy Minister explains that the norms are directed to both state and private property, although it does not rule out the existence of joint SMEs in the future.

The purpose of these norms are to provide a smooth start without bumps or legal vacuums. Subsequently, public policies will be evaluated in order to allow a bigger contribution and integration to put talent at the service of the country’s development, the deputy minister adds. Given the novelty of this topic in the Cuban economic landscape, the Minister of Economy and Planning noted that the ministry’s website has provided responses to some of the most frequently asked questions raised recently. The population can submit questions on the new legal framework for these economic actors to the email address: actoreseconomicos@mep.gob.cu.

Presented below are several examples:

How are businesses in Cuba classified as micro, small and medium-sized? MSMEs in Cuba are classified according to the number of workers involved: Micro: from 1 to 10. Small: from 11 to 35. Medium: from 36 to 100.

Is the classification by number of workers used worldwide? No, it is not. The number of workers is the most widespread criterion, but MSMEs can be classified based on other elements. The most commonly used are the volume of annual sales and the assets value. Monetary restructuring makes it more complex to adopt billing indicators for the MSMEs in Cuba for two main reasons: the new monetary order establishes only one type of exchange rate for all economy actors and it makes impossible to compare historical records with the current conditions.

What is understood as ‘occupied’? In the MSMEs, it includes all natural persons who take part in the activity of the business, both as members and as employees.

How many members can there be in an MSME? An MSME can be formed with as many members as the company deems necessary as long as they comply with the number of occupied people established by law.

What are the advantages of being a legal person? It grants access to financing and more favorable financing conditions, it increases credibility and trust among the clients and increases the chances of positioning a brand in the market and makes contract relationships easier. In the case of debts, the company can use the business equity to pay it off without affecting the personal equity of the partners and it allows to expand equity and bring in new members. Likewise, partners and employees can have access to the same social security benefits as state employees.

What is a Private Limited Company? It’s a business with equity divided in social shares and composed of the contributions from the members’ personal equity. The organization of this company means there is a separation between the personal equity of the members and the social equity of the company, since the members do not have to comply with the obligations acquired by the company with their own equity, but with the equity of the Private Limited Company.

Is social equity a must for the organization of a MSME? The MSME should be organized with social equity that should be reflected on the organization documents. A minimum social equity is not required. The contributions of all members makes the social equity of the MSME. Social equity has three main functions: Productivity: this function basically has an economic content, by which equity serves as capital funds to obtain profit, through the execution of the corporate purpose. It determines the position of the member in the company as it numerically provides the percentage of its engagement. Guarantee to creditors: as long as it is not possible to distribute profits because the company's net worth does not exceed that amount and allows creditors to know the company's net worth situation in order to meet their obligations.

What is the MSME liable for its obligations and what is the scope of its liability? The MSME is liable for its obligations to third parties with all the assets that make up its patrimony.

What will be the bodies of the MSME? The MSME will have the following bodies: Board: an assembly body in which agreements related to the operation of the company are adopted. Administrative body: responsible for the management and representation of the MSME. Supervisory and control body: oversees compliance with the provisions of the legislation in force. It will have its attributions determined in the legal norm, without prejudice that the partners may incorporate others. In the case of MSMEs with a single owner, it will obviously not be possible to create an assembly body. This body will include the sole partner. (Translated by ESTI)

Relevant Analyses

Cuba Links Resumption Of Remittances From United States To Expanding Investment Opportunities For Cuban Residents Abroad Aug 6, 2021

Cuba Expands Again Role Of Private Sector- Suppliers, Foreign Currency Access Aug 5, 2021

Cuba Suspends Tariffs And Fees For Non-Commercial (SME's Next?) Solar Systems. Another Opportunity For Biden-Harris Administration To Support U.S. Exporters And Florida Companies Should Benefit. Jul 30, 2021

Biden-Diaz-Canel Remittance Compromise: U.S. And Cuba Companies Suspend Transaction Fees Until 31 December 2021. Impact On 800 Publix Markets Jul 27, 2021

U.S. Department Of State Memorandum: The 17 Company Members Of The CRWG- Moving Remittances And Using Remittances; Cuba Entities Need Be Part Of The Process Jul 26, 2021

If A Product Costs At Least 2,500 Pesos (US$104.16), Customers In Cuba Now May Obtain Financing: Terms Are 2.5% Interest With 20% Down Jul 24, 2021

The first small private companies will emerge from currently operating groups of self-employed workers, like the successful Pinturas Coronas. Photo: Ricardo López Hevia

Cuba Links Resumption Of Remittances From United States To Expanding Investment Opportunities For Cuban Residents Abroad

Prensa Latina News Agency
Havana, Republic of Cuba
6 August 2021

Havana, Aug 6 (Prensa Latina) Cuba is willing to promote opportunities for its nationals residing abroad to contribute to the country, but obstacles such as the US blockade impedes investments, an official from the Foreign Ministry said the eve.

According to Ernesto Soberón, director general of Consular Affairs and Attention to Cuban Residents Abroad, the possible participation in projects of socioeconomic development in the nation opens a door in the links between the island and Cubans living in other latitudes.

He specified that the initiatives can be related to the private sector, local development projects and cooperation exchanges.

Similarly, the official recalled that people look at remittances not only in their traditional use of buying goods and services, but also as the possibility of investing in a business that generates income for the family in Cuba.

However, it is still necessary to create the legal bases and consider another series of issues necessary for an effective implementation of this entire process, Soberón acknowledged to the publication OnCuba. 'In all this they are working, beyond the manipulation on the subject there will always be by certain media and sectors,' he said.

However, the diplomat pointed out, although for someone to invest in a country they must bring money, market or technology, the main difficulty, not only for Cubans, but for everyone, is to transfer the cash to the Caribbean nation due to to the permanence of the blockade imposed by the United States.

The same happens in the case of remittances and their possible use in enterprises, he stressed. 'If the North American government obstructs these shipments, if it prevents the money from arriving, that is another problem for the Cuban community that does not depend on what Cuba can do. That is the responsibility of the United States', he emphasized.

In this sense, Soberón described as absurd the speech that tries to accuse Havana with this issue by saying that the limitation of remittances is due to the fact that the Antillean government keeps all or part of it. In the end, the permanence of Washington's coercive measures only seek to create difficulties, social unrest and people's discontent, he remarked. For almost six decades, the White House has applied an economic, commercial and financial blockade to Cuba that reported losses of more than 147 thousand 853 million dollars.

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Cuba Suspends Tariffs And Fees For Non-Commercial (SME's Next?) Solar Systems. Another Opportunity For Biden-Harris Administration To Support U.S. Exporters And Florida Companies Should Benefit. Jul 30, 2021

Biden-Diaz-Canel Remittance Compromise: U.S. And Cuba Companies Suspend Transaction Fees Until 31 December 2021. Impact On 800 Publix Markets Jul 27, 2021

U.S. Department Of State Memorandum: The 17 Company Members Of The CRWG- Moving Remittances And Using Remittances; Cuba Entities Need Be Part Of The Process Jul 26, 2021

If A Product Costs At Least 2,500 Pesos (US$104.16), Customers In Cuba Now May Obtain Financing: Terms Are 2.5% Interest With 20% Down Jul 24, 2021

Cuba Expands Again Role Of Private Sector- Suppliers, Foreign Currency Access

Resolution 52 - 2021 on the Financial Procedure to be applied in retail sales in foreign currency Through Resolution No. 52/2021 of the MEP it is approved that the forms of non-state management are also contracted as suppliers of the commercial network in freely convertible currency, incorporating them in the financial procedure to be applied, as another step in the similar conditions of performance of the economic actors of our society.

LINK To Resolution 52-2021 (Spanish)
LINK To Resolution 52-2021 (English)

Resolution No. 52/2021

WHEREAS: Agreement 5959 of the Executive Committee of the Council of Ministers of April 2, 2007, in its second section, numeral 7, establishes as one of the specific functions of the Ministry of Economy and Planning participation in the preparation and proposals of actions for the administration and distribution systematic analysis of the country's currencies, including facilities and returns, taking into account take into account the established priorities and exercise control over the decisions adopt.

WHEREAS: As part of the measures aimed at strengthening the industry national, was approved the hiring of non-state forms of management such as suppliers of the commercial network in freely convertible currency in this sense it is necessary to insert them in the financial procedure to be applied to sales retailers in foreign currency and consequently repeal Resolution 221 of 14 October 2019 from the Minister of Economy and Planning.

THEREFORE: In the exercise of the faculty that has been conferred on me in subsection d) of article 145 of the Constitution of the Republic of Cuba,

I RESOLVE FIRST: Approve the following:

“FINANCIAL PROCEDURE TO APPLY TO THE RETAIL SALES IN FOREIGN CURRENCIES

Article 1. Importing entities selected by the Ministry of Commerce Foreign and Foreign Investment, which are defined in the corresponding regulation of that body, request the Central Bank of Cuba to open a bank account in foreign exchange, for income from retail sales made in that country currency.

Article 2. One hundred percent (100%) is paid to the aforementioned bank account. of the currencies that are obtained by the sales that are made in that currency.

Article 3. The liquidity received in these accounts from sales is used by the entities referred to in article 1, to replace the goods that are they trade in currencies or acquire others for sale in the same currency.

Article 4. The replacement or acquisition of the merchandise can be done through importation, purchase on consignment, in the national industry, in another entity of the economy, or to the forms of non-state management.

Article 5.1. When the replacement is carried out by importation, this can be executed with payments on demand or on credit, with or without bank instruments; in both In cases, payment is made using the cash in the foreign currency account. 2. In credit purchases, funds must be reserved for the payment of the obligation. upon expiration.

Article 6. When the replacement is made through the purchase of merchandise in consignment, payment is made with the currencies entered into said bank account, in accordance with the procedures established in the country.

Article 7. In the event that the replacement is made by way of purchase from the industry national, payment is made in foreign currency, from the bank account used for this purpose.

Article 8. When the entities referred to in article 1, order payments from your foreign currency accounts to Cuban peso accounts (CUP), at the exchange rate established, of the entities of the national industry for the sales that these carried out, the Central Bank of Cuba will credit one hundred percent (100%) of the liquidity in the corresponding liquidity capacity (CL) accounts.

Article 9. The entities of the national industry use the Cuban pesos and the corresponding liquidity they receive for this concept, for the production of goods and the provision of services for retail sales in foreign currency.

Article 10. In the event that the replacement is made by means of the purchase to another entity of the economy, whose account is not denominated in CUP, the payment is made in foreign currency and said entity will operate in accordance with what is currently established.

Article 11.1. Once the banking-financial mechanisms are established in the country to access loans with or without liquidity support, the entities of the National industry, or others from the economy, can take these financing to make productions for sale in foreign currency. 2. With the income from sales in foreign currency to the entities to which it is referred to in article 1, they amortize the financing received and can take new credits to guarantee the continuity of the production process.

Article 12.1. When the entities referred to in article 1, order payments from their foreign currency accounts to non-state management for sale, these are received in the accounts in freely convertible currency that are enabled at the respect and in accordance with the provisions of the Central Bank of Cuba, the eighty (80) percent of what is billed to the entity. 2. The entities of article 1 are in charge of applying the percent (%) mentioned in the previous article, transfer that amount to the account in the form of non-state management and release the remaining twenty (20) percent to central liquidity. 3. The equivalent value in Cuban pesos at the official exchange rate of twenty (20) percent released, it is transferred by the entities of article 1 to the account in CUP previously defined by the form of non-state management.

Article 13. Activity levels and other indicators related to these operations, are taken into account by the subjects of the plan in the elaboration and execution of the economy plan.

SECOND: Repeal Resolution 221, of October 14, 2019, issued by the that solves.

THIRD: This resolution enters into force three (3) days after its publication in the Official Gazette of the Republic of Cuba.

BE PUBLISHED in the Official Gazette of the Republic of Cuba. FILE the original signed at the Legal Directorate of this Ministry.

GIVEN in Havana, on July 12, 2021.

Alejandro Gil Fernandez, Minister

Granma
Havana, Republic of Cuba
5 August 2021

Micro, small and medium-sized businesses in Cuba: A smooth start

Minister of Economy and Planning Alejandro Gil Fernández explains new legal norms recently approved by the Council of Ministers, which will guide the functioning of these important economic actors

The first small private companies will emerge from currently operating groups of self-employed workers, like the successful Pinturas Coronas. Photo: Ricardo López Hevia

The creation in Cuba of micro, small and medium-size businesses (MSMEs), as part of the overhauling of the economic actors has risen an intensive debate and a lot of expectations, especially in the non-state sector. As it has was recently reported by Deputy Prime Minister and Minister of Economy and Planning (MEP) Alejandro Gil Fernández on Cuban television’s Mesa Redonda program, they are currently working at an accelerated pace in the norms that will rule the organization and functioning of these companies dedicated to the production of goods and services, conceived with legal personality, both for the state and private sector.

Regarding private MSMEs, he says “the first MSMEs will be created from the current businesses run by self-employed workers, a sector that hires a lot of workers”. In the case of state-run businesses, he explains, “we are conducting a study to see which organizations could join this experience, always with the priorities of the country as their main focus.”

“The first step is to organize what we already have,” the Economy Minister said referring to the undergoing restructuring, in a gradual manner and under the leadership of the Government, in order to “release the productive forces, lift hurdles and boost social responsibility among these economic actors.”

Meanwhile, Economy and Planning Deputy Minister Johana Odriozola Guitart, provided more details on the process of creation of the norms, in which the academy has been actively involved and they have considered the preparation of several legal provisions raging from the highest to the lowest levels of legislation hierarchy. “Right now, we are agreeing on the basic principles of the legislation,” she says and stresses how the creation of these new actors will bring benefits in the financial and hiring order to the businesses currently in operation.

MSMEs, which will have the same management model regardless of the type of property, will take the legal form of Private Limited Company, Odriozola Guitart continues. “It means that, unlike other countries, our norms will have a larger scope because we must regularize the characteristics of economic subjects that does not exist so far,” she underlines. The Deputy Minister explains that the norms are directed to both state and private property, although it does not rule out the existence of joint SMEs in the future.

The purpose of these norms are to provide a smooth start without bumps or legal vacuums. Subsequently, public policies will be evaluated in order to allow a bigger contribution and integration to put talent at the service of the country’s development, the deputy minister adds. Given the novelty of this topic in the Cuban economic landscape, the Minister of Economy and Planning noted that the ministry’s website has provided responses to some of the most frequently asked questions raised recently. The population can submit questions on the new legal framework for these economic actors to the email address: actoreseconomicos@mep.gob.cu.

Presented below are several examples:

How are businesses in Cuba classified as micro, small and medium-sized? MSMEs in Cuba are classified according to the number of workers involved: Micro: from 1 to 10. Small: from 11 to 35. Medium: from 36 to 100.

-Is the classification by number of workers used worldwide? No, it is not. The number of workers is the most widespread criterion, but MSMEs can be classified based on other elements. The most commonly used are the volume of annual sales and the assets value. Monetary restructuring makes it more complex to adopt billing indicators for the MSMEs in Cuba for two main reasons: the new monetary order establishes only one type of exchange rate for all economy actors and it makes impossible to compare historical records with the current conditions.

What is understood as ‘occupied’? In the MSMEs, it includes all natural persons who take part in the activity of the business, both as members and as employees.

How many members can there be in an MSME? An MSME can be formed with as many members as the company deems necessary as long as they comply with the number of occupied people established by law.

What are the advantages of being a legal person? It grants access to financing and more favorable financing conditions, it increases credibility and trust among the clients and increases the chances of positioning a brand in the market and makes contract relationships easier. In the case of debts, the company can use the business equity to pay it off without affecting the personal equity of the partners and it allows to expand equity and bring in new members. Likewise, partners and employees can have access to the same social security benefits as state employees.

What is a Private Limited Company? It’s a business with equity divided in social shares and composed of the contributions from the members’ personal equity. The organization of this company means there is a separation between the personal equity of the members and the social equity of the company, since the members do not have to comply with the obligations acquired by the company with their own equity, but with the equity of the Private Limited Company.

Is social equity a must for the organization of a MSME? The MSME should be organized with social equity that should be reflected on the organization documents. A minimum social equity is not required. The contributions of all members makes the social equity of the MSME. Social equity has three main functions: Productivity: this function basically has an economic content, by which equity serves as capital funds to obtain profit, through the execution of the corporate purpose. It determines the position of the member in the company as it numerically provides the percentage of its engagement. Guarantee to creditors: as long as it is not possible to distribute profits because the company's net worth does not exceed that amount and allows creditors to know the company's net worth situation in order to meet their obligations.

What is the MSME liable for its obligations and what is the scope of its liability? The MSME is liable for its obligations to third parties with all the assets that make up its patrimony.

What will be the bodies of the MSME? The MSME will have the following bodies: Board: an assembly body in which agreements related to the operation of the company are adopted. Administrative body: responsible for the management and representation of the MSME. Supervisory and control body: oversees compliance with the provisions of the legislation in force. It will have its attributions determined in the legal norm, without prejudice that the partners may incorporate others. In the case of MSMEs with a single owner, it will obviously not be possible to create an assembly body. This body will include the sole partner. (Translated by ESTI)

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Cuba Suspends Tariffs And Fees For Non-Commercial (SME's Next?) Solar Systems. Another Opportunity For Biden-Harris Administration To Support U.S. Exporters And Florida Companies Should Benefit. Jul 30, 2021

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If A Product Costs At Least 2,500 Pesos (US$104.16), Customers In Cuba Now May Obtain Financing: Terms Are 2.5% Interest With 20% Down Jul 24, 2021