Fearing the embargo, French bank suspends services to Fincimex
The Cuban government’s plan to cash in on the reopening of dollar stores seems to have overlooked one detail: the Trump administration’s express goal to prevent money sent by Cuban exiles from going to companies controlled by the military.
Three sources in the remittance business told el Nuevo Herald that due to pressure from the administration and fear of U.S. sanctions, the French bank Crédit Mutuel halted services to Fincimex, a Cuban company that controls remittances and is linked to the military.
As a result, money transfers in dollars from the United States, which had recently started through the agencies Cubamax and VaCuba, are suspended. And the Cuban government has not found another bank that is willing to carry out these operations, the sources said.
Western Union continues to send remittances to Cuba. Still, the recipient does not receive the money in dollars, but in the local convertible currency, the CUC.
The Crédit Mutuel Bank closed the doors to Cuban companies Havanatur, Cubapack and American International Service, used by Fincimex, said one of the sources who asked not to be identified to discuss the issue. “There have been efforts to ask other banks to take over this business, but nobody wants to for fear of sanctions. The sad thing is that people in Cuba need dollars, and family members are deprived of the opportunity to help them,” the source said.
Crédit Mutuel Bank did not immediately reply to a request for comment. After the online publication of this story, a bank spokesperson, Aziz Ridouan, sent the following statement:
“In 2018, when adopting its strategic plan, Crédit Mutuel Alliance Fédérale announced its decision to focus on its banking and insurance activities in the euro zone,” the statement says. “This has led to a gradual withdrawal from certain activities abroad, including those in Cuba. The American
authorities did not intervene in this decision.”
The Treasury Department declined to comment. Citing increasing repression on the island, a senior administration official told the Herald that the goal of current U.S. policy towards Cuba was to make it more difficult for the government to conduct its international financial operations.
“We are working on further regulations that would further close any loopholes
... that the regime has had and used to manipulate the Cuban people and skim off every dollar that people attempt to send to their families,” the official said. “We are closing every door, every loophole.”
The loss of the French bank services also hurts other Cuban government businesses, such as shipping services from the U.S. through Cubapack, and travel. One of the sources said charter flight agencies fear they would not be able to pay Havanatur due to the lack of a proper channel.
Cuba does not have direct banking relations with the United States due to the embargo. Cuban President
Miguel Díaz-Canel recently complained in a speech about the “aggressiveness” of the Trump administration and the “increase in financial persecution and the freezing of Cuban bank accounts and assets in third countries.”
At the center of the most recent crisis is Fincimex, a subsidiary of Cimex, Cuba´s largest commercial corporation which is part of the conglomerate of Gaesa military companies.
“Currently between 45 and 50 percent of remittances to Cuba go through informal channels. The rest of the market is distributed among some 20 agents who have signed contracts with Fincimex,” said Emilio Morales, president of the Havana Consulting Group, a Miamibased consulting firm.
To receive the money, Fincimex uses American International Service, a company registered in Panama. The company issues cards that can be used in the new dollar stores. The State Department sanctioned Fincimex, Cimex, and Gaesa, but AIS has been spared.
Although Fincimex was added last month to the list of restricted Cuban entities, the company continued to operate normally, and remittances to Cuba were not affected due to protective exceptions in the embargo. But the sanction sent a message to the Cuban government that it should transfer the business to civilian entities, several experts told the Herald.
“Changes in control would seem to satisfy the goals of the Trump administration — to unwind the role of the military within the commercial and economic infrastructure of the Republic of Cuba while permitting the maintenance of important commercial relationships,” said John Kavulich, president of the U.S.-Cuba Trade and Economic Council.
However, the government kept Fincimex at the center of its plan to attract foreign currency. In mid-July DíazCanel announced an economic strategy that rested largely on the dollars sent by exiles.
Cubans abroad could deposit dollars in Cuba’s bank accounts, a substantial change after decades of exclusion. With dollars deposited in bank accounts and
AIS cards, they could help their families buy food or even run small businesses.
But the plan’s vulnerability only took a few days to surface.
Delfina Casas applied for an AIS card at the Cubamax’s Homestead branch last week. She said she wanted her family to receive dollars, not CUCs.
“With the new stores, the possibility that my family can go shopping at a place where there is food is the most important thing,” she said.
She received an email confirming that the card was being processed and should be delivered in a period of seven to 21 days. “In Cuba, people queue up to 12 hours to get the cards in foreign currency. I thought it was an excellent opportunity to save my mother the trip and help her from here, “she said.
Casas was surprised when she checked on the Cubamax website and saw that the option to get new cards had been canceled.
“I called, and a girl told me that I could not send remittances in foreign currency at the moment, that the service was suspended and that they did not know when it could be back.”