Tue | Jul 7, 2020

Trump policy sows chaos around Western Union remittances to Cuba

Published:Wednesday | June 17, 2020 | 12:13 AM
People stand outside a Western Union in the Vedado neighbourhood of Havana, Cuba, on Friday, June 12.
People stand outside a Western Union in the Vedado neighbourhood of Havana, Cuba, on Friday, June 12.

Two weeks ago, US Secretary of State Mike Pompeo issued a strongly worded announcement that the Trump administration was prohibiting business with Fincimex, a Cuban state corporation that works with foreign credit card and money-transfer businesses, among others.

Many ordinary Cubans panicked.

Fincimex handles hundreds of millions of dollars in remittances sent to Cuba through Western Union by families in Cuban-American communities in South Florida and around the nation. Would a ban on business with the military-run company mean an end to the remittances that so many Cuban families need to put food on the table?

The State and Treasury departments wouldn’t say. Meanwhile, thousands of families rushed to send money before the ban went into effect on Friday.

What happened next offers a small window into the chaos behind the administration’s execution of one of its top foreign policy priorities — weakening the Cuban government and its long-standing alliance with President Nicolás Maduro of Venezuela.

As expected, the administration published a regulation Friday in the Federal Register — the official gazette of the United States government. The new rule sanctions anyone doing business with military-run businesses in Cuba, including three hotels, two scuba-diving centres and a swimming-with-dolphins centre at a beach resort in eastern Cuba.

Clerical error

But it doesn’t mention Fincimex. That led Cuba-watchers to speculate Friday morning that the Trump administration had simply backed off its threat to potentially cut remittances to Cuba. A few hours later, the State Department said omitting Fincimex had simply been a clerical error and the Cuban company would indeed be sanctioned.

“The correction will be published in the Federal Register in the coming days,’’ the State Department said.

The new regulation will not, however, actually affect Americans’ ability to send remittances to family in Cuba, according to a person familiar with the process.

Western Union is expected to be able to continue sending money to Cuba through Fincimex even after the new ban goes into effect, the person said on condition of anonymity.

The American company declined to comment on any future regulations, saying on Friday simply that “we can confirm that our business and services from the US to Cuba are operating as usual and in compliance with US law and regulations”.

A US bank that works with MasterCard to operate a small number of cards allowing cash withdrawals at ATMs in Cuba cut off those cards last Thursday evening, but otherwise the Fincimex ban was expected to have a minimal impact on the island, said Collin Laverty, the head of Cuba Educational Travel, one of the largest companies bringing US travellers to Cuba. Laverty also consults for US companies who want to do business in Cuba.

“It is kind of symbolic of the Trump approach to Cuba, which is to make a lot of noise, cause a lot of confusion,’’ he said. “Sometimes they follow though with regulations, sometimes they don’t ... the policy’s been extremely inconsistent and incoherent.”

Despite Western Union’s reassurances, many Cubans and their families in the US have spent the last week assuming that remittances were about to be cut off in the middle of one of Cuba’s deepest economic crises in decades, fuelled in large part by the near-total closure of flights in and out of the island due to the coronavirus pandemic.

Yadamis Roque is a 47-year-old homemaker with a disabled 20-year-old daughter and a 12-year-old son. She lives on remittances sent by her mother in Florida. As she waited in line outside a Western Union in Havana on a recent weekday, she said she was still assuming that her lifeline was about to be cut off.

“I will be affected,’’ she said. “This has been a really heavy blow ... why do we have to suffer as a result of this, and in the middle of a pandemic?’’

AP