The Trump administration continues its campaign to restrict remittances to Cuba by sanctioning American International Services, a company controlled by the Cuban military involved in dollar remittances, the State Department announced on Monday.
The State Department added AIS to a list of “restricted entities” affiliated with the Cuban military and other security agencies. U.S. citizens and companies are prohibited from conducting financial transactions with these entities.
“AIS is a financial institution controlled by the Cuban military that processes remittances sent to the Cuban people,” Secretary of State Mike Pompeo said in a statement. “The Cuban army also uses AIS, its parent company FINCIMEX and other entities to collect fees and manipulate the remittance and foreign exchange market as part of the regime’s schemes to make money and support its repressive apparatus.”
Fincimex, the company in the military conglomerate GAESA that controls the remittance business, uses AIS, a company registered in Panama, to send remittances in dollars to the island from the United States. Clients can request a card for their relatives in Cuba and make dollar deposits through Miami-based agencies such as Cubamax and VaCuba. Relatives on the island collect the cards, which can be used at government dollar stores recently opened.
Fincimex was included in the list of restricted entities in June. As a consequence, the French bank Credit Mutuel paralyzed the services to Fincimex. Dollar remittances through U.S. agencies were also temporarily suspended. But Fincimex seems to have found a banking solution because on Monday the option to request AIS cards on the Cubamax website was still available and working.
A source at one of the agencies that send money to Cuba said the company was studying the measure. The source asked not to be identified because it was not authorized to speak on the matter.
“For the moment, we are going to suspend the application for AIS cards. We are consulting with the State Department and OFAC on the impacts of this measure,” the source said.
The State Department and the Treasury Department did not immediately clarify if the sanction announced Monday would bar U.S. agencies authorized to send remittances from issuing AIS cards from the United States. According to President Trump’s 2017 memorandum on Cuba, the inclusion of an entity on the list does not prohibit transactions related to “sending, processing, or receiving authorized remittances.”
Currently, the Treasury Department allows $1,000 in remittances to Cuba per person, per quarter.
A State Department spokesperson said the Cuban government should remove the military from the remittance business.
“The Cuban military receives processing fees through AIS and FINCIMEX and keeps the hard currency while dispensing local currency that has no value outside Cuba, or issues debit cards loaded with international currency for accounts its alone controls,” the spokesperson said. “Then, Cubans who receive these remittances have very limited spending options. The Cuban government funnels that spending to state-owned — most often military-owned — stores where the prices are egregiously marked up.”
According to Emilio Morales, the president of The Havana Consulting Group, the Cuban military, which controls remittances, the tourism industry, and several chain stores, has benefited from remittances to the island, appropriating nearly 74 percent of every dollar sent by the Cuban exiles. Morales, who has been tracking the money sent to Cuba over the years, estimates that since 1993, Cuba has received around $46.8 billion in remittances. Almost $20 billion passed through the hands of the Cuban military, he said.
But the new measure could still affect Cuban families, increasingly dependent on the dollars that their relatives in the United States send them.
“By cutting off yet another popular remittance channel (AIS cards) without first securing a viable alternative, Trump and Pompeo are relentlessly punishing Cuban families for the sins of the Cuban government,” Ric Herrero, executive director of the Cuba Study Group, wrote on Twitter.
In his statement, Pompeo urged those who send remittances to the island not to use the entities controlled by the Cuban government. But sending money by informal means, for example, through people known as “mules,” is currently not possible because the Havana airport is closed due to an outbreak of coronavirus on the island. Previously, the Trump administration also suspended all flights to Cuba except to Havana, making it more challenging to get money to those who live in other provinces.
Cuban foreign minister, Bruno Rodríguez, said the new sanction is a “maneuver” to “manipulate Florida voters” and “damage the Cuban people and family ties.”
The sanctions campaign against the Cuban government for its human rights violations and its support for Nicolás Maduro in Venezuela has been welcomed by many Cuban-Americans who support Trump’s policies.
Orlando Gutiérrez Boronat, the coordinator of the Democratic Directorate, a Miami-based coalition of Cuban exiles and Cuban opposition organizations, praised the sanction against AIS as “another financial blow to the repressive military apparatus controlled by the Castro family.”
To get rid of the sanctions, he said, the Cuban government needs to “give back the Cuban people their rights and undergo a genuine democratic transition.”
Cuba is going through a severe liquidity crisis due to its growing foreign debt, the malfunctioning of its Soviet-style economy, dwindling Venezuelan support, and U.S. sanctions. Tourism has also collapsed due to the coronavirus pandemic. (The Miami Herald)
