Embargo Forces Cuba to Cease Consular Services in the USA
HAVANA TIMES — The Cuban Interests Section in Washington announced today the suspension of its consular services in the United States over the inability to get a bank to service their accounts in the country, reported dpa news.
The diplomatic mission warned of the “negative consequences” the situation will have for Cubans and Americans and exchanges with the island.
“The Interests Section particularly regrets the effects that this situation will cause Cuban and US citizens due to the inability of the consular section to continue facilitating the paperwork associated with the issuance of passports, visas, legalization of documents and other services,” said the diplomatic mission in a statement sent to reporters in Washington.
This situation, the statement noted, will have “negative consequences for family visits and academic, cultural, educational, scientific, sports and other types of exchanges between Cuba and the US.”
According to the Cuban mission, M & T, the bank operating their accounts in the USA, said back in July that it would no longer serve foreign diplomatic legations.
Since then, the statement adds, it was not possible to find a new financial institution willing to manage the Cuban accounts, “because of the restrictions resulting from the US government policy of economic, commercial and financial blockade against Cuba.”
This situation “will cause serious problems for the normal functioning of the Cuban Interests Section and the Permanent Mission of Cuba to the United Nations,” the statement further noted.
The first consequence: “The Cuban Interests Section is obliged to suspend, effective November 26, 2013, the consular services until further notice,” noting that it will only attend a “limited” number of issues such as “humanitarian proceedings.”
The Cuban diplomatic representation in the U.S. reminded the State Department of its “legal obligation to ensure compliance” with the Vienna Convention on Diplomatic and Consular Relations establishing that diplomatic missions should receive “every facility” to exercise their functions.
In the absence of direct diplomatic relations, Cuba and the United States maintains “interest sections” that allow them to provide consular services and maintain scant bilateral relations, for example on migration matters, although staff has serious action and movement restrictions.
Can somebody tell me if the US Interest Section still closed for public ? I need to legalize documents, I called them they don’t answer, I email them they don’t answer. How can we legalize document to be used in Cuba if the Interest Section is not functioning? I really appreciate some advise!
The U.S. banking regulations have become stricter. If huge fines are being levied by the U.S. against banks in other countries for financial transactions with Cuba, why do you think banks in the U.S. will assume it doesn’t apply to them, too. You clearly haven’t tried to open a bank account in the U.S. lately. It isn’t 1977.
Which again is irrelevant in this case, since the bank is just backing a service, not granting credit. Yes, doing business with Cuba is risky BECAUSE of the US embargo AND the side effects of the denomination of Cuba as state sponsor of terrorism for political reasons.
The bottom line is that even if the worst allegations were true, as long as a country have a diplomatic representation of some sort in the US or the UN, the US government has the obligation to provide the basic services needed to keep it functional, even if that means providing an exception to their own laws.
Failing on that obligation, they face a range of countermeasures from both the affected country and the international community in general, with reciprocal measures as the norm in these cases.
These cases are all related in that they all demonstrate that Cuba is a risky country to do business with. The banking business is sensitive to risks and will seek to reduce it wherever possible.
The North Korean sugar missile incident involved a North Korean ship, which has been impounded in Panama, but it also involves Cuba which was engaged in weapons trading with North Korea, in violation of UN sanctions. Cuba will at the very least face diplomatic penalties for that.
Cuba also has a history of stiffing their creditors and has recently taken to arresting foreign business partners on trumped up corruption charges when they get so uppity as to demand payment on overdue accounts.
All of which underscores the fact that doing business with Cuba is a bad risk.
Which is irrelevant to this case, since the fines applied to banks doing business with Cuba in the last few years were imposed by the US government and are completely unrelated to any real or imaginary UN sanction.
For starters, the NK shipping affair just happened this year and Cuba has not received any sanction whatsoever from the UN (that as far as I know is still investigating and is unclear of what kind of sanction if any they will impose).
Also notice that the ship sails under the North Korea flag, so technically any violation of Panama laws was made by NK, not Cuba and is also irrelevant to the banking sanctions discussed here.
North Korea is under UN sanctions banning all weapons sales to or from that country. Furthermore, the cargo was not declared as it transited the Panama Canal, violating Panamanian laws. So Cuba is in hot water on that issue.
Simply put, Cuban is becoming too much of headache for banks to bother working with them. Behaving like a rogue state and trading with countries like North Korea, Iran, Syria and Sudan comes at a price.
The only reason of those sanctions is because the US government tightened the screws with countries sponsoring terrorism last year and Cuba is in the list for political reasons. What Cuba does or doesn’t do is irrelevant, they are on the list and as such subjected to a **load of additional sanctions.
The North Korea episode has nothing to do with this, North Korea is no longer in the list of countries sponsoring terrorism so whatever the Cuba government trades with them is not punished by these specific laws.
The bottom line is that the reasons they posted to stop the consular services are valid and in this case the blame falls fair and square in the US embargo. There is no need for political posturing from the Cuban side on this particular issue, they can do that without compromising their revenue stream using other means, so when both sides said they are working to solve the situation in the shortest time possible, they probably mean it this time.
These consequences could prove as devastating as the embargo itself for Cuban’s economy, long term. But no problem, it will not affect one bit those in power.
In fact the US is trying to help the Cuban regime to solve a commercial problem.
“Washington: El cierre de cuentas bancarias no afecta solo a La
Habana | Diario de Cuba”
http://www.diariodecuba.com/cuba/1385637468_6117.html
No, the corrupt Cuban government would not be so stupid to use M&T Bank for their illegal activities. However, M&T did provide these services for 36 years, all during the embargo. No other bank wants to do it. There has to be a some new reason.
Last year, ING bank was fined $619 million for violating US sanctions on Cuba and UN sanctions on Iran. Earlier this week, Weatherford International Ltd was fined $91 million for violating sanctions on Iran, Sudan & Cuba.
And let’s not forget about the North Korean freighter loaded with Cuban weapons and money hidden under sacks of Cuban sugar. That deal violated UN sanctions. Curiously enough, the North Korea general who was thought to be responsible for that deal was executed by firing squad a few weeks ago and the Cuban general who was identified by the UN as being involved in the deal died in a tragic, yet convenient, car accident just a couple days after UN inspectors asked to interview him.
So given Cuba’s rather dodgy track record, it’s no wonder no bank is willing to do business with them. With friends like North Korea, Iran, Belarus, Venezuela, FARC, Syria & Sudan, Cuba is known by the company they keep.The Castro regime is not a brave band of steadfast revolutionaries struggling to defend their plucky little nation. They are a cynical criminal organization holding an entire country hostage, actively engaged in a wide range of illegal activities in concert with the most odious regimes on earth. Any bank doing business with them knows they run the risk of being involved in some sort of criminal financial activity.
Don’t get all your news from a single source, this article is simply too scarce in details to arrive to any meaningful conclusion.
Quoting the Miami Herald (hardly a supporter of the Cuban government):
“The Obama administration said Wednesday it was “actively” assisting the Cuban diplomatic mission in Washington find a new bank willing to handle its accounts so it can resume issuing passports and visas to people who want to travel to the island.
In a surprise announcement on Tuesday, the Cuban Interests Section in the U.S. capital said it was immediately suspending consular services because its bank, M&T Bank, no longer wished to provide financial services to foreign missions.
While some Cuba experts sought to portray the Cuban government’s announcement as a pressure tactic against the United States, the State Department appeared to adopt a conciliatory and cooperative tone in its first public statement on the matter.
“The Department of State has been actively working with [the Cuban Interests Section] to identify a new bank to provide services to the Cuban missions,” a department statement said. “We would like to see the Cuban missions return to full operations.”
Administration officials indicated that the U.S. trade embargo against Cuba was not related to the bank’s decision. These officials said the bank decided more than a year ago to disengage from providing bank services to any diplomatic mission, and that it had authorization from the Treasury Department to provide services”
Source:
http://www.miamiherald.com/2013/11/27/3783537/us-seeks-to-end-cuba-consular.html
Apparently, both Cuba and the state department have been working on a solution for this issue since July, but so far unsuccessfully and this is the part Havana blames the embargo (after all, there are explicit sanctions against banks doing business with Cuba)
Obviously, the toxic nature of the US-Cuba relationship polarizes opinions in even the more trivial piece of news regarding the bilateral conflict and there will be a lot of posturing on the issue from well known actors, but the basic fact are unlikely to change:
-The bank that serviced them is no longer providing diplomatic accounts
-The embargo makes harder for them to find a new bank willing to take that role
-Both the US State Department and the Cuban Section have been working to find a solution since July
-Both the Cuban and the US government seems to want the situation resolved ASAP. For the US is an embarrassment and a breach of diplomatic agreements and Cuba will lose the direct revenue for the consular services AND more importantly, all indirect money that potential travelers won’t be spending in Cuba any tome soon.
It would appear to be a larger amount of money than I imagined. Nonetheless, the latest news cycle is reporting that Cuba has known this day was coming since July and is simply milking it for propaganda purposes. No surprise there I ‘spose.. I am always amazed at how willing the Castros are to sacrifice their own people in order to sling mud at the US. My wife is headed to Cuba for the week between Christmas and yearend to visit her folks. I hope they resolve this issue before then.
They where handling exclusively the diplomatic account processing the transactions for the consular services and nothing else. Everything completely legal; there is no need to chase shadows and guesstimate other motivations, after all the press release explicitly states that the bank closed ALL diplomatic accounts and Cuba’s was the last. So whatever the motivation it has nothing to do with Cuba.
Besides, do you honestly think that the Cuban government would use an US based bank to carry ANY dirty transaction? When the US government only has to ask and they will get ALL the details? And specially after the indiscriminate spying documented by whistle-blowers in the last few years?
If they were THAT incompetent there is no way in hell they lasted this long with a superpower as enemy.
Lets get some numbers straight so you can understand the “minor banking services”. Based on this article
http://www.reuters.com/article/2013/10/18/us-cuba-usa-tourism-idUSBRE99H0J320131018
98000 US citizens and 350000 cuban americans traveled to Cuba in 2012. Lets assume for the sake of the argument that the numbers are correct and lets also assume that the visits follow an uniform distribution for simplicity.
That means that 9166 US citizens and 29167 Cuban-Americans traveled in average every month to Cuba. The following article sets the cost of a Cuban visa for an US citizen in $75 USD, lets assume that is correct for the sake of the argument.
http://plazacuba.com/travel.html
That means that the Cuban section in US collects an average of 687,450 USD from US travelers every month.
Cuban-Americans must travel with the Cuban passport exclusively, and they have to renew it every 24 months two consecutive times, then they have to pay for a new passport every 6 years. I don’t have the specific numbers for USA, but judging from the fees in other countries the extension is ~140 UD and the renewal is ~320 USD, so every two years a Cuban-American must pay an average of 200 USD (140 + 140 + 320 / 3).
Lets assume uniform distribution and apply this average to the Cuban-American travelers, in other words every month 1/24 of the total travelers must pay the average passport related fees.
Pluging the average Cuban-American travelers per month and multiplying, you get an average of 5,833,400 USD per month.
Adding the fees from US travelers and you get monthly transactions for 6,520,850 USD just for the basic services (they collect more for document validation, certifications etc, but I don’t have any statistics to work with, so lets assume thats comparatively a small amount)
I don’t know if you ever have carried money, but 6 million USD is a LOT of money to carry (even in large bills we are talking of 4 to 6 large sacks and since no bank is servicing them they can’t just get the money in the less amount of bills possible).
So yes, even if you divide the money in weekly transactions, that is still more than 1.6 million USD to transport per week so you need a large transport vehicle. And since the amount of money is not trivial, they ALSO need protection against possible assailants because a relatively unguarded target handling that amount of cash makes a nice target to potential criminals.
Just days before M&T Bank announced they would no longer handle Cuba’s account, a Korean ship loaded with Cuban weapons hidden under Cuban sugar was stopped and searched in the Panama Canal.
So perhaps M&T Bank doesn’t was to expose themselves to the risk of doing the money laundering for a criminal enterprise. Nobody but Cuba is responsible for their very bad reputation in the financial world.
Perhaps the flood of unreasonably high CMPs issued by OFAC in the last year and a half?
Read the article. The bank that handled all their transactions until now closed all diplomatic accounts, Cuba being the last one and every other bank refuse to carry Cuban transactions, mostly because of the embargo.
Without the ability to collect the fees for the services, they have to either offer them for free or close the services.
So yes, is a load of BS, but in this case it comes from the US laws in place.
now cuba has the oportunity to close the usa interest section in havana,that will put at risk the help from usa to the decedents in the island.
That particular commentor, TravelCEO, works in the travel industry. So he/she has an monetary interest on the issue.
M&T Bank was happy to process Cuba’s financial dealing up until July, 2013. Something must have happened to change their mind, and it wasn’t the embargo which has been in place for decades.
M&T are cooperating with OFAC on other money laundry operations. Your theory doesn’t sound too far fetched.
This consular office enjoys the use of diplomatic pouch exclusion. They do not need armored car transport. They could send the hard currency they have collected home to the Castros on a weekly basis along with the other information they have collected through their vaunted espionage activities. They could resolve this problem entirely by meeting the requirements under Helms-Burton.
As someone who has actually used this office for services, I can tell you that the majority of the transactions that take place there are Cubans renewing passports and non-passport holders buying visas. The office receives the money, makes change, etc. The banking services likely included savings deposit, money orders to pay office costs and other transactional activities. Certainly, having a bank to accept deposits and cut checks for employee salaries, etc. is a convenience but not necessary to function.
….I have to agree with you in this case
How does the embargo force Cuba to close their consular services? The Cuban interest section has been functioning in Washington since 1977. For 36 years the embargo didn’t stop them from carrying out their consular duties. Now suddenly the embargo pops up and forces them to close?
Another load of BS from Havana.
What ?!
Those “minor services” move a *LOT* of money over time. What do you want them to do? Build a vault in the consulate? Bring their own security? I bet you will be thrilled to known that Cuba deployed a sizable armed security force to protect the assets in the consulate, armored cars to transport the money to the airport, armed airport security and probably military planes to transport the money to Cuba (if the same laws that caused the problem even allow it)
There is a good reason for the banks to do all the above themselves: they already do that for their own stuff, plus they can handle international transfers without moving physical money, lowering significantly the cost of the transactions.
A majority of the trips to Cuba are wholly unnecessary and inconsistent with current U.S. policy.
Sanctions must be working. Good news. Let’s have more of it.
Irrespective of your view of Cuba, this situation will cause unnecessary financial harm to tens of thousand of Americans (3/4 of whom are Cuban Americans) who have purchased domestic and international airfare for trips to Cuban the coming weeks and will be unable to travel due to the lack of visa availability. Moreover, as the US is one of the largest exporters of food and other materials to Cuba (and this despite the embargo which means that US companies are paid in cash, not with credit) – this will negatively effect farm states as it will hinder exports from the US. In short, perhaps a phone call from OFAC to M&T Bank or another US Bank assuring them that OFAC will not harass them would be helpful in allowing the Cuban government to maintain a normal; bank account and operate their consulates in a normal fashion and avoid these unpleasant side-effects.
Wait a minute! M&T is a US based bank!
The Castro “government” has been using it! Something does not compute!
Who
Is M&T Bank? A reliable bank that’s strong and stable. Times like these call
for a financial services partner that has stood the test of time. Established in
1856 as Manufacturers and Traders Bank, today we’re the M&T Bank
Corporation, one of the 20 largest US headquartered commercial bank holding
companies, with current assets of $83.2 billion (as of June 30, 2013) and over
725 branches, free account access at more than 2,000 M&T Bank ATMs and more
than 15,000 employees throughout New York, Maryland, Pennsylvania, Washington,
D.C., Virginia, West Virginia, New Jersey, Florida, Delaware and Toronto, Canada
(Deposits with M&T are not insured by the Canada Deposit Insurance
Corporation (CDIC)).
https://www.mtb.com/aboutus/Pages/WhoIsMT.aspx
Could the announcement in July by M & T Bank to stop offering banking services to the Cuban interest section have anything to do with the discover in early July of the North Korean freighter loaded with Cuban weapons hidden under sacks of sugar?
Perhaps M & T does not wish to be party to potentially shady dealings or to risk the exposure to Cuba’s notoriously unreliable financial practices.
us citizens can travel freely to north korea and iran but not cuba? makes no sense. i had to fight OFAC for travel to cuba as they wanted to fine me $10,000. ir took A year but i won.
Much ado about nothing. The Cuban office should simply provide these minor banking services internally. These guys will complain about anything.