Cuba Loses Two Important International Bank Branches

Wilfredo Cancio Isla (Café Fuerte)

France's BNP Paribas bank closing shop in Cuba.
France’s BNP Paribas bank closing shop in Cuba.

HAVANA TIMES — The Banque Nacionale de Paris (BNP Paribas), France’s largest banking institution, has closed its branch in Havana following an investigation undertaken by US authorities prompted by alleged transactions in violation of the commercial bans on Cuba, Iran and Sudan.

A resolution published in Cuba’s Official Gazette, signed by the President of the Central Bank of Cuba (BCC) Ernesto Medina Villaveiran in November of last year, reported that the BNP had petitioned to cancel its operation license, in effect since 1999.

The BNP Paribas was one of the 11 foreign banks with branches on the island authorized to maintain transactions with Cuban State companies, joint-venture firms and the Central Bank of Cuba. Another important French institution, the Societe Generale, still operates under a license in Cuba.

The decision of the BNP Paribas (considered the fourth largest bank in the world) to close down its branch in Cuba has not been reported by the international press, nor have Cuba’s official media made any mention of it.

Approached by Diario las Americas, Paris spokesman Pascal Henisse refused to comment on the reasons behind the decision.

Ongoing Investigations

This past February 13, however, on announcing its annual profits, the BNP Paribas declared that it had set aside US $ 1.1 billion to pay potential fines arising from transactions with companies and citizens of countries which the United States has identified as States that sponsor terrorism. At the time, the institution revealed that its net profits for 2013 – which had been estimated at US $ 1.3 billion by experts – had fallen by 26 percent.

A communiqué issued by the French banking institution last week acknowledged the ongoing investigation undertaken by the US Department of Justice, the Office for Foreign Assets Control (OFAC) of the Treasury Department and Federal Reserve, as well as by the District Attorney’s Office in Manhattan, where the BNP Paribas US branch is based.

“We have conducted a retrospective internal review of certain payments in dollars that involve countries, people and entities that may have been the object of economic sanctions by virtue of US laws,” the communiqué issued by BNP Paribas pointed out. “We have identified a significant volume of transactions that could be considered inadmissible.”

The French bank representatives refused to identify the countries involved in the investigation, but closing down their branch in Havana is an indication that Cuba is among them.

A Door Closes

The BNP Paribas declared it was cooperating with the investigation being conducted by US authorities.

The shut-down of the Havana branch brings about yet another obstacle in the way of financial operations by the Cuban government at the international level.

“It is a financial channel that will no longer be available to Cuba and through which part of its foreign trade transactions were made,” economist Emilio Morales, president of Miami’s Havana Consulting Group commented.

Morales explained that French banks have been key in Cuba’s financial maneuvers aimed at evading embargo restrictions, particularly in connection with tobacco and rum sales in Europe.

The BNP Paribas is the second international bank based in Havana to request the closure of its branch. In October of 2013, a Central Bank resolution reported that the representative of Spain’s Banco Sabadell S.A. had requested the cancellation of its Mediterranean Savings Account license, which had been operative since 2003. The Banco Sabadell had come into possession of the Mediterranean Savings Account in 2011 as part of a restructuring process that forced the Bank of Spain to intervene.

The reasons for the closure of the Sabadell branch in Cuba were not explained.

A Financial Siege

The Cuban government has complained at different international forums about the financial siege brought about by the embargo and has even alleged that the Obama administration has stepped up the blockade.

The BNP Paribas incident is the most recent investigation into financial consortiums that have had links to Cuba and other countries blacklisted by the US State Department.

At the close of 2013, US Treasury Department officials fined the Royal Bank of Scotland (RBS) US $ 100 million for violating the sanctions imposed on Cuba, Iran, Sudan, Burma and Cuba.

In December 2012, the HSBC conglomerate had to pay some US $1.92 billion to avoid legal proceedings for alleged violations of the regulations set down by the US Banking Secrecy Act (BSA) and US sanctions currently in effect, which involved the New York branch of the banking institution for illegal transactions with clients such as Cuba.

That same year, the ING Bank agreed to pay a fine of US $619 million to skirt accusations of violating the US embargo against Cuba and the sanctions imposed on Iran, Sudan, Burma and Libya.

The JP Morgan Chase and Credit Suisse Banks have also been fined for similar reasons over the last five years.


12 thoughts on “Cuba Loses Two Important International Bank Branches

  • Moses, you wrote an extremely good follow up to my post. You made some very good points. All I can say in reply is that no one is perfect. Certainly I can agree with you that power can go to anyone’s head…there are countless stories about this phenomenon occurring all over the world. Fidel was not immune back in the day. The cow and the sugar harvest are rather comical examples by comparison to some of the more sinister accounts from further abroad.

    I think where you and I differ so much is that I respect what Fidel and his brother Raul have done for their country and their people. Are they perfect? No, of course not, but none of us are really. I do tend to focus on the positives much more than the negatives because I’m convinced that their hearts have always been in the right place when it comes to bettering their country and their population. I’m much less cynical than you are about their motives and their perceived lust for power. I don’t see a lust for power. I see a government that takes great pride in their many positive accomplishments achieved through many struggles. I see a government that has kept control of it’s population because it has been necessary to do so to insure that the revolution succeeded to win Cuba’s independence for the greater good of all. I firmly believe that when the US government ends their war on Cuba, conditions will be ripe for significant positive changes to occur with the full support of the Cuban government. I too say Cuba has a never-seen-before future. But it will continue to be a work-in-progress over time, and not the immediate about-face that some are demanding.

  • Terry, though we largely disagree, I appreciate the tone of your discourse. Both sides of the Florida straits have blood on their hands, this is true. Here is the difference: In a democracy such as exists in the US, there are legal mechanisms to protect the innocent from the evil deeds of zealots. Our freedoms of the press, public information act requirements, public meeting laws and so on at least begin to guarantee that the less than honorable intentions of a few in positions of power will eventually be brought into the light for public scrutiny. In Cuba, these ‘protections’ simply do not exists. It is not enough to say that because of the ‘war-footing’ that the Castros have claimed to be necessary that basic human rights can be abased. In times of war, even the US has overplayed our hand and abused our liberties (internment camps, Patriotic Act for example), but because of our capacity to self-criticism, eventually these egregious wrongs are corrected. Again, in Cuba, the Castros have allowed no such criticism. Finally, the access to health care and education in Cuba do not justify the loss of freedom of speech and assembly. These are incongruous necessities in society and the existence of one does not simply justify the loss of the other. Finally, the odd thing about power and especially the kind of absolute power that the Castros have wielded for 55 years does generate actions that are just for “jollies” as you wrote. Power like that is toxicating and toxicated people do things sober people don’t do. How else do you explain Castro’s ‘super cow’ folly or his ‘ten million ton harvest’ flight of fancy. He imposed these ridiculous programs on the entire Cuban nation simply because he could. He did it for “jollies”. No reasonable, deliberative politician answerable to the people could have done this. Only a dictator intoxicated by power behaves like this. One more thing: who says a post-Castro, post-embargo and democratic Cuba must return to the pre-1959 Cuba? Why assume that? I say Cuba has a never-seen-before future if they choose to exercise their right to choose it.

  • Moses, you wrote…. “I don’t hate socialism”.

    Wow! Now that’s an amazing revelation. Moses, that puts you much, much, closer to the rest of us who support the Castros positive efforts to better the lives of their population, and as I’m sure you’d also agree…there are many positive things that the Castro government has done for the Cuban people over the many years since they began governing their country. This is not meant to ignore instances that, regrettably, have shown a lack of tolerance. But by and large, my glass is much more than half-full when I think of what the Cuban government has achieved for it’s people…especially when considering the limitations the ecomomic embargo has had on hampering their efforts to also achieve much needed economic success as well.

    One must weigh in that any instances or repression against perceived enemies of the state have occurred because of the threat to the success of the revolution…not because the Castros simply get their jollies harassing certain individuals within their population. It’s the revolution that must survive with the Castros at the helm until America’s war on their government and the people of Cuba ends. The revolution is still ongoing and war-time measures are still in place. The Cuban government is committed to survive America’s continued efforts to over-throw them AND to destroy the revolution, returning Cuba to the dark days of exploitation at the hands of corporate America, the US government, and the mob. Have there been casualties of war in Cuba?…yes, of course. But you can’t tell me that there hasn’t been any collateral damage and blood on America’s hands connected to the many political and military interventions that the US have promoted, sponsored, and participated in around the world over the past 100 years. Just keeping it real.

  • Your ‘drive-by’ comments attacking the commenters you disagree with belies the weakness of your ideas. Socialized medicine in not the panacea for all that ails public health care. In those countries where socialized medicine exists, including Cuba, there are long lines for service, lesser quality staff and facilities and a high degree of black market pay-for-services activities. You continue to present a ‘straw-man’ argument that implies that pro-embargo folks do not want normalized relations with Cuba. This could not be farther from the truth. Speaking for myself and others, I want US/Cuba relations to normalize as quickly as anyone on your side. The difference is under what conditions. It is disingenuous to normalize relations with the Castros while they continue to beat the Ladies in White. It is against what America stands for to knowingly support the Castros while they use that support to repress the Cuban people. I don’t hate socialism. I HATE the repression and totalitarianism that socialist regimes have historically used to maintain their regimes.

  • Really? A free press, free speech, no political prisoners, open and independent elections and NO CASTROS running things is better than 12/31/58. Back then Batista was a dictator and there were political prisoners. What is it about freedom for the Cuban people that frightens you so much?

  • Really? A free press, free speech, no political prisoners, open and independent elections and NO CASTROS running things is better than 12/31/58. Back then Batista was a dictator and there were political prisoners. What is it about freedom for the Cuban people that frightens you so much?

  • Under the Helms Burton, and Toricelli Acts the changes necessary to lift the embargo would be nothing less than turning the clock back to December 31st, 1958.

  • One crazy arguement you hear against the socialist government of Cuba is that everything that has gone wrong, or not continued to be profitable enough, is only the fault of the “Castros.” This argument is shown to be either crazy or an outright lie but such evidence as the gigantic fines banks and other non-Cuban enterprises have had to pay to the US! for doing business in dollars or with Cuban related enterprises. Haters of socialism and the Cuban government even argue that the US embargo has been helpful and at the same time is not harmful to Cuba! Yet most of these anti-socialists want the embargo to continue – even as many of them argue it has not detrimental effect. Examples are arguments that since Cuba trades with the US for some food items, the embargo isn’t doing any harm. Anyone who does a little reading much less research, sees that the US efforts to prevent Cuban socialism from working have had a serious impact over the last 50 plus years. Huge fines are only one of the aggressive assaults by the US.

    Fortunately, Cuba has survived the US and the loss of Soviet support. We can only imagine how much more successful the Cuban efforts would have been without these assaults. Now it seems that opinion among US citizens is changing in favor of more normal relations with Cuba.

    As a social worker in the US for over 30 years, I have witnessed how cruel poverty, insane social services and a terribly unequal medical system punish generations and harming the children and the vulnerable over generations. I have examined these systems in both the US and Cuba and while both can clearly be improved, I would hate to see it get worse in either country. Instead, i am certain that people served in both Countries could benifit from honest exchanges. We in the US could only imagine how much better our health would be with a univeersal system free of profit. Cuba’s medical system is doing amzaingly well in spite of the embargo and US attacks designed to impoverish their economy. When it comes to the poor and sick, both countries have the same enemies. Those who hate even the challenged socialism in Cuba, would go ballistic if we in the US implemented a socialist health care system – not because it would save lives, but because it would threaten profits. Note how the haters never suggest how chronically poor people can really get help!

  • Note that any of the foreign financial institutions mentioned in the article are free to do any financial business with Cuba SO LONG AS THE TRANSACTIONS ARE NOT IN US DOLLARS as that involves the transaction linking through the US. Why BNP Paribas did not require the transactions be in Euros, Sterling, or Canadian instead of US dollars escapes me. That could have saved them about a Billion US dollars in fines. But I guess BNP Paribas is no smarter than HSBC or ING.

  • Previously both Banco Sabadell and CAM had offices in Havana. Banco Sabadell acquired CAM and is now called Banco SabadellCAM. The CAM office was only closed because CAM no longer exists. There is still a Banco Sabadell office in Havana. There is nothing out of the ordinary in regards to SabadellCAM.

  • Sometimes the truth is moronic. The ineffectual embargo stands as the carrot AND the stick to prod the Castros to make changes in Cuba. On the one hand, it is a propaganda tool the Castros have milked ad nauseum to justify their failed policies. On the other hand, it does serve as a limited obstacle to the future success of the Mariel Port expansion and continues to add a chilling effect to the Castros access to international credit. I doubt that Raul will ever make the changes necessary to trigger the lifting of the embargo. On the other hand, his successor, in a face-saving move will act quickly to make the very same changes and use the lifting of the embargo as the excuse for political reforms. Yes, it’s moronic.

  • Que the moronic comments that the blockade/embargo is completely ineffectual, and useful only to the Cuban government as an excuse, but nonetheless desirable because it promotes human rights and democracy

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