Cuba Surcharge on US Dollar Continues

Isbel Diaz Torres

CADECA change house. Photo:

The news of the elimination of the surcharge on the US dollar was joyously sent from email account to email account.  Nonetheless, exchange rates at Cuban bureaux de change (CADECAs) remained unchanged.

After stopping to think a second, I understood.  The headlines from the BBC and El Pais that appeared in our email accounts on December 26 had confused us.  They should have specified that the change will be applicable only to those dollars coming from the United States through Western Union.

This would mean, for example, that if a friend arrived from abroad and gave me $10 USD, when I went to the CADECA I would still receive only $8 CUC, as always.  Though such an experience is not as frequent as I would like, it is indeed part of the reality of many Cuban families.

When residents in the United States or Mexico come to the island, they often give a few dollars to their relatives and friends.  However those dollars won’t have the same privileges as the ones benefitting from the recent agreement between Western Union and the Cuban government.  They have cut an excellent deal… for them.

Let’s take a closer look.

An excellent deal cut…for them. Photo: Isbel Diaz

Western Union will achieve a monopoly on the transfer of remittances to the island.  Previously, it was not the favorite vehicle for most Cubans due to the high rates of that transnational corporation.  In addition, many of the gifts received here are small amounts.

On the other hand, the Cuban government will be able to better control and manage its finances (which seems a good thing) and it will receive almost all of the American dollars that are transferred to the island.  Under the new formula, the island’s government will earn 20 percent on all transactions carried out in CADECAs and 10 percent on those realized through Western Union.  In no instance does it lose.

Those who will not benefit will be the poor who from time to time receive a few “dolaritos” as gifts.  Also shortchanged will be families that, though they live abroad, won’t be able to afford Western Union and therefore will be forced to send assistance through someone coming to the island.

I should add that those who the media refer to as “mules” are often family members bringing help to their relatives and not always people simply seeking profit.

I also wonder what the rate will be for foreigners who exchange currency in the airport when entering the country.  Will they be obliged to send their money to themselves through Western Union to avoid the government surcharge?

Lastly, I am struck by the question of who will manage the data for all of these transactions: the names of the originators and recipients, their home addresses, the amounts sent…  I’ve never received a package from Western Union, but I assume they provide a form explaining the confidentiality of the personal data – but will that be enough?

In short…a little less enthusiasm my friends.  Let´s wait and see how things unfold.  Hopefully in the future (while the absurdity of capitalist logic prevails on this planet) a single USD/CUC exchange rate reflecting the true position of both currencies will be established for all of Cuba.

Isbel Diaz

Isbel Diaz Torres: Pinar del Rio and Havana are my cities. I was born in one on March 1, 1976, and I’ve always lived in the other. I am a biologist and poet, though at times I’ve also been a musician, translator, teacher, computer geek, designer, photographer and editor. I’m very non-conformist and a defender of differences – perhaps due to always having been an ever-repressed “model child.” Nothing enthralls me more than the unknown, nature and art; these serve as my sources of mystery and development. A surprising activism has been born in me over the recent period. Though I’m not very sure how to channel it, I feel that it’s a worthy and legitimate energy. Let’s hope I have the discernment to manage it.

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7 thoughts on “Cuba Surcharge on US Dollar Continues

  • What changed was the rate which went from 1.08 USD to 1.00 CUC. Now it is 1.00 USD to 1.00 CUC.
    When exchanging U.S. dollar banknotes a 10% tax is STILL applied plus an exchange commission. The 10% tax is not applied to other currencies, bank transfers, or credit card payments.
    For transactions using credit cards, the cards are charged in U.S. dollars plus an extra 3% service charge. (Credit cards issued by U.S. banks cannot be used in Cuba.
    Let us know if you have further questions on this.

  • i was advised that the 10% surcharge was eliminated recently. I had intended to travel legitimately to cuba with euros rather than dollars for my travel expenses. it does not make sense if the euro is now of the same value as the equivalent amount in dollars.anyone know?

  • Hi Brenda! The reason people don’t bother to “exchange their US dollars to Canadian currency or to Euros before sending it / giving it to Cuban family and friends” is because every time a person exchanges currencies, he/she has to pay a percentage to do it. So, if a person changes their USD for Canadian Dollars or Pounds Sterling (or whatever), he/she must pay a percentage. THEN when they exchange those Canadian Dollars or Pounds for Pesos CUC in Cuba, they pay the normal 10% conversion rate on top of that! It all added up to 20% no matter how you did it — unless you could get foreign currencies from your bank for no fee (which I’ve heard about, but never seen … not to say that it isn’t a fact for some people). Anyway, that’s why people don’t do as you suggest.

  • The main cause of this change is the US government who now permit Western Union to send deliver CUC. I don’t think it has been said whether the Cuban government are pleased about the change or not – it could be seen as a way of reducing the amount the Cuban goivernment gets.

    Brenda – why not change to another currency ? Firstly, I am not sure if that is allowed by OFAC. But also, US banks often give such poor exchange rates that it is hardly worthg doing. There are ways around it, but not legally from the US standpoint/

  • The additional 10% fee for exchanging US dollars for Cuban currency is due to the US embargo’s extra territorial provisions that have imposed giagantic fines against international banks that allowed Cuba trade US currency.
    Therefore, it has simply not been in Cuba’s interest to have dollars reach the island at all. Cuba cannot buy most things abroad in US dollars because of the US pressures on banks. They need other currencies to do that. So adding the 10% fee is not primarily an attempt to somehow compensate for the additional cost to Cuba created by the US pressure on the banks, it is to dissuade people from bringing or sending US dollars here at all.
    Most people coming to Cuba have, ever since that 10% additional fee was added, tried to convert their cash into Canadian dollars, Euros or British pounds BEFORE they come here. Most US bank account holders can get foreign currency at no charge from their bank before travelling. So people in the know change their money before getting here. It’s a win-win for everyone that way.

  • US citizens without family in Cuba are still banned from sending money to the island. So you will not see tourists sending money via western union because these new regulations still only benefit Cuban Americans. For US citizens without direct family members in Cuba (indeed many people have people they consider family but who are not related by blood or who are not closely related relatives) they are still forced to use “mules” or other options such Canadian debit cards where the money is transferred to Canada and eventually placed on a card in Cuba.

    I am sure Cuba would love to remove all of these restrictions so they could benefit directly from money sent through these debit cards as well (duales, caribbean transfers). American Express Travelers Checks also do not incur the fee. So some people will send US dollar remittances with mules in the form of US travelers checks to avoid the fee.

    I assume the reason why the gov’t keeps the 10% tax on US currency is to control the possibility of a black market being established in US currency. But this is what the convertible peso was supposed to do. So, hopefully at some point they will drop the fees all together and allow families some breathing room in terms of sending remittances.

    The ban on non-direct family sending remittances through western union is US policy and is whole different monster. For us we will have to continue using mules or debit cards until our government lifts the embargo.

  • Why wouldn’t people from the US exchange their US dollars to Canadian currency or to Euros before sending it / giving it to Cuban family and friends?

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