September 6, 2019 / 3:40 PM / 14 days ago

U.S. Treasury says Cuba remittances cap will not apply to private sector

WASHINGTON/HAVANA (Reuters) - The Trump administration on Friday published new limits on money transfers to Cuba as part of tighter U.S. sanctions on the island, but the previously announced rules allow funding for private businesses, and pro-democracy and citizen groups.

U.S. remittances to Cuba have surged to an estimated several billion dollars per year since former U.S. President Barack Obama started easing restrictions on them a decade ago, playing an increasingly important role in the beleaguered Cuban economy.

But the administration of U.S. President Donald Trump has reversed Obama’s policy of detente, reinstating such limits and sanctions in what it says is an attempt to coerce the communist government into reform and abandoning support for leftist Venezuelan President Nicolas Maduro.

Analysts say it is likely also eyeing the anti-Castro Cuban American vote in the key swing state of Florida in next year’s presidential election.

“Through these regulatory amendments, Treasury is denying Cuba access to hard currency, and we are curbing the Cuban government’s bad behavior while continuing to support the long-suffering people of Cuba,” Treasury Secretary Steven Mnuchin said in a statement.

Cuban Foreign Minister Bruno Rodriguez said on Twitter he strongly rejected the measures aimed at strengthening the “economic siege against Cuba.”

“The opportunistic attempts to divide Cubans will fail,” he said.

The U.S. Treasury Department said in a statement on Friday its Office of Foreign Assets Control (OFAC) had amended its regulations to reflect the new limits on remittances announced in April by U.S. National Security Adviser John Bolton.

The changes, which go into effect on Oct. 9, cap the amount Cuban Americans can send family members to $1,000 per quarter, and no longer allow transfers of money to nonfamily members.

However, the department said it was adding a provision authorizing remittances to certain individuals and independent nongovernmental organizations in Cuba that would “support the operation of economic activity in the non-state sector.”

The exemption will likely be received with relief by Cuban entrepreneurs who have used money sent by U.S. relatives to set up and run restaurants, bed-and-breakfasts and a variety of other businesses in recent years as Havana has opened up the state-run economy.

Another provision allows remittances to pro-democracy groups and civil society groups.

“While exemptions for private sector entrepreneurs and certain NGOs are appreciated, the aggregate impact of these new restrictions .. will be to further punish #Cuban families and the most disadvantaged sectors of Cuban society,” tweeted Ricardo Herrero, executive director of the Cuba Study Group, which advocates engagement with Cuba.

Reporting by Makini Brice in Washington and Sarah Marsh in Havana; editing by Jonathan Oatis and Richard Chang

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