Western Union in difficulty due to US sanctions against Cuba

IN BRIEF

  • The Cuban government has announced that Western Union will have to cease its operations on the island due to new US sanctions.
  • The sanctions prohibit US citizens from sending money to companies linked to the Cuban military.
  • Western Union, which works in Cuba through Fincimex, which is owned by the military, insists that it can find a way to continue operating while maintaining regulatory compliance.

The Cuban government has announced that Western Union will have to close its 407 offices on the island and cease operations following a new round of sanctions imposed by the US government.

The sanctions, revealed to the public on October 27 by the U.S. Treasury’s Office of Foreign Assets Control (OFAC), are expected to take effect from November 26. Western Union insists that it can find a way to continue operating legally.

Under the new sanctions regime, all natural and legal persons subject to U.S. jurisdiction, including citizens, residents, and businesses, are prohibited from processing remittances to or from entities identified on Cuba’s restricted list as having ties to the Cuban military.

This effectively removes Western Union’s Cuban partner – the military company Fincimex – from the remittance situation.

Josefina: 407 Western Union payment points will close in #Cuba due to the brutal measures taken by the US government against remittances. Another example of the policy of maximum cruelty towards the Cuban people and families, even more so in times of pandemic #COVID19.

#UnblockCuba

Ministry of Foreign Affairs of Cuba:

„The measures imposed by the US government against Fincimex harm the Cuban people.“

See full text on @CubaMINREX

#ElBloqueoEsReal

Fincimex’s sanctions policy

For almost two decades, Fincimex has been Western Union’s main Cuban partner, giving it a special status as a pipeline used by the American diaspora in Cuba, estimated at 2.7 million people, to send money to friends and families back home.

According to a statement signed by US Secretary of State Mike Pompeo, the new sanctions are aimed at preventing the Cuban military from continuing to oppress the Cuban people. Pompeo argued that the sanctions would also prevent interference in Venezuela by using remittance revenues from the diaspora.

The statement reads in part

„The Cuban government and army have created a system that seizes hard currency through financial mechanisms managed by the army, such as FINCIMEX and AIS, and takes some of the remittances that ordinary Cubans receive from abroad, including from the United States“.

Reuters reports that some analysts believe that this movement is part of a political calculation by the Trump administration to consolidate its vote in Florida, where the majority of the historically anti-communist American diaspora in Cuba lives.

Western Union is not giving up yet

In a statement provided to Reuters, Western Union stressed that it believes it can find a way to continue Cuba’s operations while maintaining compliance with the new rules. The statement said :

„We are exploring ways to comply with the new rules and regulations on Cuba. We will provide further information as we formalise these plans. In the meantime, Western Union services between the United States and Cuba remain operational“.

Sabrina Rodriguez: I have been sending money to my family in Cuba via Western Union for years. My family and tons of families in Miami will find new ways to do it, but it complicates many lives.

Also, 7 days before the US presidential election.

Patrick Oppmann CNN: Western Union will end remittance services to Cuba following new administrative sanctions by Trump, a Cuban government company.

While Western Union does not intend to give up its lucrative Cuban business without a fight, the Cuban government’s position is far less conciliatory. On 29 October, a statement shared by the foreign ministry of the troubled island state said the government had no intention of giving up.

This counter-statement reads in part

„Fincimex, which is part of the Cuban financial system, is the entity designated by a sovereign decision of the Cuban government to guarantee remittances to Cuba from the United States, which will be completely stopped. Among its US counterparts is Western Union, an entity whose 407 outlets in Cuba, scattered throughout the country, will be closed as a result of the implementation of these brutal measures. The US government bears full responsibility for the disruption of the money transfer service between the two countries. »