Cuban government announces closure of Western Union offices and suspension of remittances


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More than 400 Western Union offices in Cuba will close their doors due to new embargo regulations imposed by the Trump administration, Fincimex, the Cuban military company that controls remittances to Cuba, said Tuesday.

But Western Union, which handles the lion’s share of the money sent to the island from the United States, said it continues looking for alternatives to maintain the service.

The Trump administration published new embargo regulations Tuesday that prohibit the participation of companies controlled by the Cuban military in the processing of remittances. In a statement, Secretary of State Mike Pompeo said that the measure seeks to cut the Cuban military out of the business and cut off funds that flow to Cuban security agencies accused of human rights violations in Cuba and Venezuela.

But in a statement posted on Facebook and republished in the Cuban Foreign Ministry’s website, Fincimex suggested that the Cuban government is unwilling to give in by transferring the remittance business to public, non-military entities.

“Fincimex, as part of the Cuban financial system, is the entity that by sovereign decision of the Cuban government has been in charge of guaranteeing remittances to Cuba from the US, which will be totally interrupted” by the new measures, the statement said.

https://www.miamiherald.com/news/nation-world/world/americas/cuba/article246762646.html

 

 

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9 hours ago, El Presidente said:

Cuban government announces closure of

Headline makes it sound like the Cubans are at fault .... but ... 

9 hours ago, nino said:

will close their doors due to new embargo regulations imposed by the Trump administration

reading in detail, it's because of new US govt regulations. 

 

I'm not implying blame to any side - I just think this is pretty sad for the Cuban population. Also, headlines can so easily be twisted and misconstrued. 

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About three months ago, for the first time a Cuban friend asked me to explain cryptocurrency.

I'm certainly not the most qualified but I had a stab at an explanation.

Since then, a few other Cuban friends have asked about it. 

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11 hours ago, Meklown said:

Headline makes it sound like the Cubans are at fault .... but ... 

reading in detail, it's because of new US govt regulations. 

Well, I suppose the Cuban government has said that they are not willing to transfer ownership to a non-military-owned Cuban public company.

I'm not sure if such a thing, a "non-military-owned Cuban public company", actually exists.

And even if it did, would an audit of such a company be believed by whoever it is who is trying to widen the effect of the embargo.

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50 minutes ago, miamipadronsmoker said:

https://www.nytimes.com/2020/10/28/world/americas/cuba-western-union-remittances.html

Cuba’s Communist government could still designate other institutions with countrywide coverage, like banks, to channel remittances in compliance with the new rules, analysts said.

Who owns the Cuban banks and the military?

One and the same.  

What is it meant to achieve? votes regardless of pain/stress inflicted on individuals who have done nothing wrong other to be born on a different side of the strait of florida. 

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43 minutes ago, El Presidente said:

Who owns the Cuban banks and the military?

One and the same.  

What is it meant to achieve? votes regardless of pain/stress inflicted on individuals who have done nothing wrong other to be born on a different side of the strait of florida. 

I do think there may be a slight difference but I have no real knowledge of the Cuban banking system. The votes down here these days are more in favor of normalization. The Cuban vote has become younger and changed significantly. Whatever the motive it’s become clear that this administration does know how to financially punish countries it wants to.  

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This situation isn't a joking matter but it reminds me of the old joke, that I've heard in Cuba too, of how Che Guevara became head of the Cuban National Bank, which he was for about 9 months.

After the revolution, Fidel etc. are appointing new heads to the various ministries. When he gets to who is going to head up the bank, he asks the room, "Is anybody here an economist?".

Che puts up his hand "I am!" and gets the job.

Later Fidel says to Che, "I didn't know you were an economist?". Che replies, "Economist? I thought you said 'Communist!'"

 

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Money can still move to Cuba, likely via a traditional hawala system. This system is illegal in many countries but does result in more money in the hands of the friends and family because it prevents the government from collecting the ridiculous 10% remittance tax. I had no idea this tax was the second largest form of revenue for the Cuban government at $3B.

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4 hours ago, Bram Smoker said:

Money can still move to Cuba, likely via a traditional hawala system. This system is illegal in many countries but does result in more money in the hands of the friends and family because it prevents the government from collecting the ridiculous 10% remittance tax. I had no idea this tax was the second largest form of revenue for the Cuban government at $3B.

I am familiar with hawala in Pakistan but I can't see how it can work in Cuba as at some point it requires repatriation of funds or settlements of like debts via third parties. I have a mate in the Jewelry business who uses it extensively throughout middle east and pakistan/India.  It takes great record keeping, tight family or longstanding commercial  relationships to run smoothly.  

I had no idea it ran in central / south America on any significant scale. You learn something every day :ok:

 

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What’s strange about these US actions isn’t their timing - like most US sanctions related to Cuba in an election years their aim is entirely to curry favor in the swing state of Florida. But I can’t see how Cuban-Americans will rally around such a drastic move, when so many already put the welfare of their countrymen above their opposition to the Communist Gov’t when it comes to remittances to family and friends. 
 

 

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Hawala runs everywhere. Full disclosure i was corp counsel for Western Union and did contract negotiations including some of their Caribbean dealings. I still work in the money remittance sector. There are many ways to move money and settle debts with one of the easiest being gift cards (iTunes, prepaid, and the like). Few limit use of funds to the countries in which they are loaded. The physical cards never move, only the information, where it is placed on a new physical card or used electronically. Settlement no longer requires physically meeting or providing cash. 

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16 minutes ago, Bram Smoker said:

Hawala runs everywhere. Full disclosure i was corp counsel for Western Union and did contract negotiations including some of their Caribbean dealings. I still work in the money remittance sector. There are many ways to move money and settle debts with one of the easiest being gift cards (iTunes, prepaid, and the like). Few limit use of funds to the countries in which they are loaded. The physical cards never move, only the information, where it is placed on a new physical card or used electronically. Settlement no longer requires physically meeting or providing cash. 

Gift cards in Cuba are an unlikely scenario. Hell, no one wants to accept them in Miami. If it were ever to happen it would be only with the Cuban government orchestrating the whole thing. Money can be sent to Cuba, but the payout will be in CUC as there are no USD's circulating. About 15 years+ (before Western Union) some agencies in Miami were charging 24% to send USD's to Cuba. You would have to give $124 US to the agency for your family member to receive $100 US. More informal brokers were charging 10-15%. Right now its 1:1 but the payout is in CUC's. So there is quite a bit of money to be made on the exchange rates. John

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15 minutes ago, JohnnyO said:

Gift cards in Cuba are an unlikely scenario. Hell, no one wants to accept them in Miami. If it were ever to happen it would be only with the Cuban government orchestrating the whole thing. Money can be sent to Cuba, but the payout will be in CUC as there are no USD's circulating. About 15 years+ (before Western Union) some agencies in Miami were charging 24% to send USD's to Cuba. You would have to give $124 US to the agency for your family member to receive $100 US. More informal brokers were charging 10-15%. Right now its 1:1 but the payout is in CUC's. So there is quite a bit of money to be made on the exchange rates. John

Happy to have private discussions on how the movement of funds is orchestrated but hesitant to provide too much detail on public forms.

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  • 3 weeks later...

Western Union closes its Cuban branches November 23rd at 6 PM :

https://www.14ymedio.com/cuba/Western-Union-oficinas-Cuba-noviembre_0_2984701512.html

Western Union cerrará sus oficinas en Cuba el 23 de noviembre a las 6 de la tarde

El pulso entre Washington y La Habana lleva a la compañía de remesas a anunciar el cese de sus actividades en la Isla

14ymedio, La Habana | Noviembre 13, 2020

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