Cuban Gov. Moves to Freeze Foreign Company Accounts
By Francisco Acevedo
HAVANA TIMES – The bomb has just exploded, after Cuban authorities informed several foreign companies this week that they will no longer be able to freely use the foreign currency they have in bank accounts in the country — totaling several million dollars.
With a single stroke, the Cuban government prohibits them from withdrawing those funds and forces them to use them solely for operations within Cuba.
As soon as the news broke, the announcement sparked widespread discontent, not only because it came as a surprise but also because it is being carried out semi-secretly, through individual meetings with company representatives, according to those involved.
We are still waiting for an official statement, but the uproar is important—perhaps enough to shame them into reversing the decision—because this would be a fatal blow to foreign investment, precisely when it is needed like the May rains.
According to journalistic sources, some of these investors have already complained to their respective governments.
The audacity doesn’t stop there. In addition to trying to seize foreign currency that doesn’t belong to them, Diaz-Canel and company are “offering” the affected parties the chance to open a new type of foreign currency account on the island. In other words, not only are they being told that their money is not entirely theirs, but they are also being asked to bring in even more hard currency. It’s the height of insolence.
Just as they did the same to their submissive population by “converting” MLC magnetic dollar accounts into a new card called Clasica, into which old funds couldn’t be transferred, only new money could be deposited, now they are telling businesses to open new accounts with fresh money.
According to official data, by the end of 2023, Cuba recognized the operation of 334 foreign investment ventures from more than 40 countries, most through international economic association contracts. A little over a hundred are joint ventures, and the rest are wholly foreign-owned enterprises.
This form of expropriation—because there’s no other word for it—especially affects Spanish entrepreneurs, who represent the largest foreign presence in Cuba’s tourism industry, with over 100 approved management contracts operated by around 20 foreign hotel chains, including well-known ones such as Melia, Iberostar, Roc, Barcelo, and Valentin.
Some representatives of the affected foreign companies recalled that restrictions had already been in place for years, since in practice, it has been nearly impossible to get a dollar out of Cuba. This is a coercive measure that, far from encouraging investment, discourages any interest in investing here.
They nobly hope that with the new accounts, they will be able to carry out international operations or repatriate profits. But if the government has already pulled this “trick” once, there’s no reason to think they won’t do it again. After all, we’re dealing with a government specialized in pushing limits. Take a finger, end up cutting off the whole hand, just as it has done with its people over the past 65 years.
They’ve been sold the idea that they will be immune to the severe liquidity problems plaguing Cuban banks, which are hemorrhaging due to parallel exchange rates, decapitalization, and lack of liquidity, both in Cuban pesos—rationed since last August—and in foreign currency. All operations are subject to restrictions for both civilians and businesses, foreign and domestic.
The island’s failed economic and monetary policies have not solved the severe liquidity problem. Even to collect an inheritance, for example, an average citizen may have to spend months going to the bank just to receive the money in cash.
The Cuban State urgently needs millions of dollars because it currently imports about 80% of what is consumed on the island—especially fuel and food—the latter driven by the extremely weak national production.
The much-hyped banking reform and recent partial dollarization of the economy seem insufficient to attract more foreign currency and cover debt payments abroad, so now they are turning to foreign companies with assets on Cuban soil.
Domestically, sectors that generate foreign currency—such as healthcare (through services and personnel abroad), biotechnology, tobacco, and tourism—cannot access the resources they generate. Everything must be handed over to the Central State Treasury, and it is the Ministry of Economy and Planning that decides how much foreign currency they are given to continue operating.
This kind of financial enclosure—known in other countries as a corralito—will hardly resolve the severe economic crisis Cuba has been mired in for five years, due to the scarcity of basic goods and other problems. But for now, it’s a slap in the face to foreign investment.
Even before this, the 2024 Economic Freedom Index published by the conservative US think tank The Heritage Foundation ranked Cuba as the worst in the Americas to invest. They cite an inefficient and uninviting regulatory environment for business and a highly restrictive investment climate. Now, nothing will lift us from the bottom of the global rankings.
To many opposition voices, this serves as a lesson to those who insist on doing business with the dictatorship, companies that end up tarnishing their image by rubbing shoulders with the regime at official events, shamelessly indulging in gourmet meals while the people go hungry, never speaking out about the human rights situation or political prisoners, nor offering a ride to a Cuban who has no transportation to a hospital.
Now that their toes are being stepped on, as the saying goes, the foreign business executives must remain silent because their money is at the mercy of the generals, and they could lose everything. They realize that these deals are always a lion vs. a monkey, and they regret bringing their savings to this destination. I don’t think a single new investor will come. Hopefully, Diaz-Canel and his entourage can squeeze out as much as they can now—because these may be the last dollars they’ll ever see.
A non profit that has partners in Mexico and India and China had over 300 000 Mexican pesos ( frozen ) by the Cuban gov that was going to replace the medicines fertilizer and rice and other basic items that the equivalent of $17 000 U S plus $3000 worth items were taken by the gov officers 3 months ago this will result in the permanent closing of 2 Co op non profit stores. If this happens all across Cuba no foreign investors will invest in Cuba and cause shortages to get much worse
I have read my fair share of misinformation and slander from treasonous gusanos, but your remarks truly take the cake. Allow me to respond to your inaccurate assertions point-by-point:
Cuba is far from alone in restricting hard currency transfers. Countries such as Argentina (an ally of yours), Turkey (a NATO member), and Ukraine, among others, also impose strict controls on the outflow of hard currencies. These are well-documented financial protection mechanisms used globally—not exclusive to Cuba.
Companies like Meliá, Iberostar, Roc, Barceló, and Valentín operate as remitters. This means all customer payments are processed outside of Cuba. These entities not only remit net profits to their respective headquarters but also pay a portion of those earnings to the Cuban government for licensing, labor, and other services. Therefore, they remain net contributors to the Cuban economy.
The Cuban government has never claimed that international entities are prohibited from withdrawing funds. What is being emphasized is fiscal responsibility. Beyond the payments these companies receive externally, they are required to maintain a hard currency reserve to cover operational costs within the country. This is a standard business safeguard—not a restriction. Similarly, foreign exporters to Cuba must maintain liquidity within Cuban accounts to pay for logistics, tariffs, and service-related expenses.
“Cuban Gov. Moves to Freeze Foreign Company Accounts” – Nooo, Cuba isn’t a corrupt dictatorship.
What do the companies owned by their comrades, the Chinese and Russians, think of this move? Do you think they trust the Castro-fascist dictatorship regime?
I read Havana Times very often and even a single comment is fairly rare. I have never seen 15!
The only embargo…is the dictatorship to it’s own people.
Can’t do business with dictators, those calling US sanctions (blockade) and playing cuban PCC games, should answer these questions.
Does the US prevent the Cuban government from spending money repairing schools and hospitals? No, they don’t, but Cuban government does spend it in hotels (with no tourists), lavish life style for the communist elite, their families, campaigns around the world for support of the continuing oppression of the Cuban people…
Those tearing up their dresses in defense of something they either have no clue or (worse, they know) is fundamentally wrong at every level, should spend sometime at a Cuban neighborhood (not in Varadero)
Just in case…I’m borne and raised Cuban, into the revolution years.
Listen, who ever is talking about the Embargo. First understand why it was put in the first place. They Cuban Government failed to pay the U.S. for the companies that were despropriated. Plus if they do not have money it is their problem. It does not mean you just take money that is not yours, scum bags. For two, if they were not such scum bags they would let people invest without harassing people all the time. Third, in the US we are not obligated to do anything. Everything is done by choice. Off course with the exception of taxes. But opening a business is fair game. The government does confiscate property just because they can. In Cuba, everything is obligated amongst the defenseless people. If not they will batter you and put you in jail. In the US when you make the deal with the government, they pay you. They do not cheat you or blackmail you onto losing money or your business. Therefore do not compare Cuba and the US. The US does not need Cuba but Cuba does need the US. The only way to maintain a communist regime is by force, 99% of your citizens are in forced to do everything.
“Take a finger, end up cutting off the whole hand, just as it has done with its people over the past 65 years.” Ah yes, 100% literacy, 0% homelessness, right to work, vast majority of workers are unionized, diplomats no longer kowtow to the yankees and officials no longer answer to the mafia, and universal free healthcare. How dreadful! It’s very curious how you hand-wave away the role of the yankee blockade in the indigence of the island. Foreign investors typically aren’t too thrilled to invest in somewhere being subjected to a unilateral blockade the likes of which have not been seen in centuries, either. Foreign investors also dislike investing in countries whose ability to purchase on credit has been purposefully sabotaged by the wealthiest empire in history. You are crying out for the most murderous military since the nazis to resubjugate our nation, manufacturing consent for the Cubans to whom you waggle a flimsy pretense of compassion, who will then be killed by the yankee bombs. And if that military should succeed they’re not going to restore your families’ estates, theyre going to hand the country to the IMF for “austerity restructuring” that will turn Cuba, once again, into gringolandia’s personal holiday isle of the tropics, and auction off its assets to wealthy international conglomerates, like the rest of the Caribbean.
Finally the end is near they have stolen from everyone since Jan 1 1959 they started with their own people. My family lost everything but the biggest loss was their homeland.
Good riddance I am now 66 time is short I need to rebuild my homeland. Get the hell out.
There is great risk to operating in a communist dictatorship. Countries that respect freedom and the rule of law, like the USA, boycott Cuba to protect their citizens and businesses from being cheated by Cuba. If other countries honored this boycott, Cubans would remove their dictator, embrace democracy and enjoy the benefits of free trade. Instead, greedy countries continue to do business with Cuba, supporting their dictator and his oppression is the Cuban people.
Yes, Cuban govmt takes money which is not theirs from those companies. It’s called “legaI theft.” I hope you ALSO write an article about how the UK and the US froze and used Russian assets during the Biden admin. Fair is fair. Legal theft is practiced daily by the powerful corporations in the US as well. PLUS, I don’t believe Cuban children should PAY with hunger and malnutrition what the Cuban communists do. No country has the right to STARVE a smaller one (US never blockaded China or the USSR) b/c of their political regime, specially when that regime has been imposed on people, as it is the case in Cuba. Sorry my friend, but as We say here in the US: you can’t have your cake and eat it too!
A few of us are able to stand in the middle and SEE BOTH SIDES, NOT JUST THE ONE WE LIKE BEST. All coins have two sides.
Well deserved. These investors knew of the intrinsic corruption in the Cuban government. They deserved it and more. These measures were taken before, through the Castro communist regime. It is not the first time and, it is well documented.
Think about where we in the US could be going with leaders who are behaving like kings.
Think about how we are treating students at US universities invited to study here.
I will never support a Cuban descendant or Cuba blocking freedom of speech or people’s money.
The Cuban Government has to pay cash for all the things that Cuba imports and like the article says that is about 80% of what Cubans consumes but it has to use tradable currencies to buy things as no country accepts Cuban pesos. The Cuban Government can not print foreign currency, so what do you want the government to do? How about Cubans in the US tell their government representatives that they will not vote for them anymore if they are not going to lobby to lift the blockade.
How did Marco Rubio even get elected in the first place? Seeing as he hates Cuba, a country that he has no knowledge of, because he has never been there.
corruption at its finest
Stop Complaining about what the Cuban Government Does and FOCUS on removing the illegal embargo imposed by the United States Government, which has been voted down for the last 20 consecutive years in the TOOTHLESS United Nations. If I were an official in the Cuban Government, I would lobby countries around the world to SANCTION the United States until they learn to uphold their own Democracy.
ALARMING !!!!
As I mentioned in an earlier post, I once attended big Cuban cigar shindig held at the Capitolio in Havana. I nearly vomited every time I saw European empresarios skinnin’ and grinnin’ with Cuban bigwigs. As much as I enjoy smoking my cigars, I had second thoughts about ever again spending my money to help prop up the Castros. I stopped attending this annual event. So needless to say, I don’t feel the least bit sorry for those foreign corporations that kiss the dictatorship’s butt to do business in Cuba. So now they can’t take their money out of Cuba? That’s what happens when you do business with the devil. By the way, remember what happened to the Canadian representative in Cuba from the Sherritt corporation? That story out to be required reading for any foreign company even thinking about doing business in Cuba. The poor guy was pressured (insert set up) by the regime to pay bribes to several Cuban leaders. Then, surprise, surprise, he was accused and convicted by the same regime and sent to jail in Cuba. These guys don’t play nice.
I am very glad. Of the foreign companies, Spain did not learn the lesson , when all their clergy were shipped out back to Spain . All the ” Gallegos” as all Spaniards, not necessarily from Galicia in Cuba were called had all their businesses confiscated along with everyone else. But oh no , they went back opening Melias hotels. And shamefully operating the stolen Havana Hilton. So good , all the Benetons, and all the Italians, and Canadians hope they leave them without a wire hanger. He who forgets the past is condemned by it. Santana.