Sending money to Cuba proving troublesome despite political rhetoric

Sending money to Cuba proving troublesome despite political rhetoric
Published: Nov 11, 2015 3:06 p.m. ET
By FRANCINE MCKENNA REPORTER

Amid a new era of diplomatic and commercial relations with Cuba has come
reports of problems with payments between U.S. and Cuban businesses.

The Miami Herald reported on Sunday that tour operators that need to
transfer money to Cuban banks to pay in advance for flights,
accommodations, and local transportation are finding their wire
transfers to Cuba have slowed or stopped. Banks are asking charter
companies to provide details of passengers' itineraries before they will
process payment to the Cuban travel agency, Havanatur Celimar, that
authorizes landing rights.

The Miami Herald reported Sunday that the day after a speech from Cuban
Foreign Minister Bruno Rodríguez at the United Nations critical of U.S.
policy, charter tour operator Daniel French said he received an email
from the Cuban Embassy telling him that, going forward, all payments had
to be made on a timely basis. As a result of delays in the transmission
of wire transfers for his upcoming flights, French's landing rights for
two upcoming flights were canceled.


In an interview French told MarketWatch, "Cuba's goodwill has expired."

The Cuban Embassy in Washington DC did not respond to a request for
comment via email or phone.

Rodríguez also said that SWIFT, the global messaging network that
financial institutions use to transmit wire transfer instructions and
information securely, had recently canceled its contract with Cuba.

It's no wonder big banks are still skittish about sending dollars to
Cuba. Banks are still being sanctioned this year for doing business with
Cuba in the past. French bank Credit Agricole was fined $787 million in
October by the Department of Justice for allegedly processing $32
billion in transactions between 2003 to 2008 that violated US sanctions
related to Cuba as well as Iran, Sudan and Myanmar. Germany's
Commerzbank AG paid $1.45 billion in fines in march to settle
allegations of processing transactions on behalf of Cuba, Iran, Sudan
and Myanmar. In 2011 J.P. Morgan Chase agreed to pay $88 million for
processing 1,711 electronic funds transfers to Cuban government agencies
or Cuban nationals worth $178 million for what the government said was
an "apparent violation of the prohibition against dealing in property in
which Cuba or a Cuban national has an interest."

French says his company has been processing transfers using third-party
banks for more than twenty years and that the process has always been
slow. What's different now is that the big banks are taking a bigger
role in checking the details of the transaction, and Cuba is no longer
putting up with late payments.

A Chase spokeswoman declined comment. However, a source at the bank
knowledgeable about the situation said that increased wire transfer
demand alone may be making it hard for everyone involved to process the
larger volume at even the slow but ultimately reliable pace as in the past.

The U.S. Treasury's Office of Foreign Assets Control is the last word on
whether any sanctions that remain between the U.S. and Cuba stay put and
is the only one that can assuage any fears banks have going forward in
processing transactions on behalf of U.S. businesses that want to take
advantage of the rapprochement with Cuba. A Treasury spokesperson said
that they "continue to work with financial institutions and industry to
clarify our regulations so that they can appropriately comply with our
regulations. As with all of our regulations, it is our priority to make
them as effective as possible."

Source: Sending money to Cuba proving troublesome despite political
rhetoric - MarketWatch -
http://www.marketwatch.com/story/sending-money-to-cuba-proving-troublesome-despite-political-rhetoric-2015-11-11