U.S.- Cuba

US Treasury Allows Cuban Small Businesses to Use US Banks

On May 28th, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced it would be amending the Cuban Assets Control Regulations (CACR) to “increase support for the Cuban people.” The US Treasury Department’s OFAC highlights the regulatory amendments of the CACR in three different factors: Promotion of internet freedom in Cuba, independent Cuban private sector entrepreneurs and the expansion of access to financial services for the Cuban people.

The CACR was updated to clarify the scope of authorized internet-based services to include examples such as social media platforms, collaboration platforms, video conferencing, automated translation, user authentication services, e-learning platforms, cloud-based services, among others.

This allows US companies to provide such services to Cuban small businesses. Two examples would include one posed by the Miami Herald: a Cuban software developer would be able to have their apps on Apple or Google app stores. Another example would be a Cuban Spanish tutor being able to advertise and offer their services to an American audience via the internet.

The CACR would now include “independent private sector entrepreneurs,” such as private cooperatives or small private businesses, all the while excluding ‘prohibited Cuban officials’ and ‘prohibited Cuban Communist Party members’ from these measures that are intended to benefit the non-state sector of the Cuban economy.

These Cuban “independent private sector entrepreneurs” are now authorized to “open, maintain and remotely use US bank accounts,” including through online payment platforms, conducting authorized and exempt transactions regardless of the entrepreneur’s physical location.

The OFAC is also reauthorizing “U-turn transactions,” which are funds transfers originating and terminating outside of the United States where the originator and beneficiary are not subject to US jurisdiction. The reauthorization of U-turn transactions allows for US banks to process these funds transfers in which a Cuban national is involved so long as “neither the originator nor the beneficiary is a person subject to US jurisdiction.”

John Kavulich, president of the US-Cuba Trade and Economic Council, said the measures are a step in the right direction but don’t go far enough in regularizing banking transactions. He goes on to state: “As long as financing, investment and payments need to be routed through third countries, the Biden-Harris administration will be constraining precisely the activity it professes to support.”

Though Cuban entrepreneurs can operate their US accounts, it will be difficult for them to transfer money from and to their accounts using Cuban banks because there are no direct banking relations between the two countries. 

The amendments are relatively recent so it remains to be seen how these changes play out and how they interact with the ongoing US embargo of Cuba. These are nonetheless good for ordinary Cubans as they are able to do business easier with the world so long as they have no direct ties to the Cuban government.

 


Derek Roldan | Latin American Correspondent

Derek Roldan Torres is a Puerto Rican senior student who is currently studying at the University of New Haven, pursuing an International Affairs degree. Through his research and writing, he wishes to bring to attention the political issues the Caribbean and Southern Cone currently faces and the stories it holds. Through the Caribbean, Cuba tends to dominate the American news cycle while some stories in Jamaica, the Dominican Republic, Puerto Rico and etc. go relatively underreported by comparison. Through the Southern Cone, the region proves to be an especially important battleground as its economic importance increases. In reporting and researching these regions, he hopes to increase the understanding of these regions and their importance to the United States and the wider world to an English-speaking audience.