Thursday 9 February 2023

Western Union closes in Cuba due to U.S. sanctions

The company closed its 407 offices due to the decision of the US government to include Fincimex, its counterpart on the island, in the list of companies managed by the Cuban military. Remittances to Cuba from the United States are believed to be around US$2 billion to US$3 billion each year.

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(Q24N) The financial services company Western Union closed its operation in Cuba, this Monday, November 23, forced by pressure from the Donald Trump administration, depriving thousands of Cubans from receiving remittances from their relatives in the United States.

A Western Union office worker puts up the closed sign on its last day of business in Havana, Cuba, Nov 23, 2020.  (ISMAEL FRANCISCO / AP)

“US Government: solely responsible for the end of Western Union remittances today (Monday),” Cuban President Miguel Díaz-Canel tweeted.

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The interruption of Western Union operations closes the “official and safest channels for sending remittances from the United States and encourages illegality,” said the daily Granma, a newspaper of the ruling Communist Party.

The closure in Cuba is due to the measure taken in June by the State Department to include Fincimex, a local counterpart of Western Union, in a list of more than 200 Cuban companies that it claims are managed by the island’s military, and with which no US entity can do business.

A client leaves a Western Union office in Havana, Cuba, November 23, 2020. REUTERS/Alexandre Meneghini

During his tenure, the Trump administration has issued more than 130 additional measures to reinforce the blockade that Washington has applied against Cuba since 1962, some of which, such as the suspension of family remittances, directly affect the population.

These money transfers, estimated at about $3.5 billion annually, are an important support for many families on the island, and the second entry of foreign currency into the country, after the sale of medical services and ahead of tourism.

“We are the losers, the (Cuban) government is not hurt, well maybe something, but we are the losers, the ones who receive money from the family,” artistic producer Celilia Castiñeira, 69, told AP.

However, other Cubans see the closure as something temporary, as they know that President-elect Joe Biden has said that the first measures he will take with respect to Cuba will be the restitution of family remittances and American trips to the island.

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“In January he (Donald Trump) has to go and then this will change,” said Franciso Limonta, 81, who receives remittances from his children.

Economist Ricardo Torres, from the Center for the Study of the Cuban Economy, argues that “without being a perfect substitute, (…) the opening of the (Havana) airport, and the arrival of flights will be a relief in that sense, because the money will come physically”.

The economist is referring to the current options for remittances that include agencies that hire “mules” to fly to Cuba with cash and which predate Western Union’s start in Cuba 20 years ago, as well as companies that transfer dollars to Cuban accounts – though that money can only be used at state stores.

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Cryptocurrency exchanges are also promoting themselves as an alternative. Cuban Americans can transfer digital currencies to middle men on the island who then give money to the Cuban Americans’ relatives.

But such platforms lack oversight, cryptocurrencies can fluctuate rapidly and unexpectedly in value and internet access is still not a given in Cuba, Kavulich said.

“We’ve looked but there are no safe services,” said local resident Arturo Labaut.

“It’s a bad time to be doing this because of the suffering it will cause,” said Florida International University professor Guillermo Grenier.

“It’s not governments that suffer, it’s people.”

With reports from AP, Reuters

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Q24N is an aggregator of news for Latin America. Reports from Mexico to the tip of Chile and Caribbean are sourced for our readers to find all their Latin America news in one place.

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