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Despite U.S. laws, remittances still find their way to Cuba.

The Bush administration's continued crackdown against Cuba is crippling South Florida money transfer companies like never before.

Just how much is flowing from the United States to Cuba in the form of remittances is hard to say. Miami-based pollsters Bendixen & Associates puts the number at $460 million a year, while the Inter-American Development Bank says it's more like $1 billion annually.

Regardless, this flow of money used to be big business for such companies, until the Bush administration put the squeeze on remittances in 2004.

Claiming that it's trying to prevent the Castro regime from benefitting from this money, the White House limited such transfers to $100 per month, and only to immediate family members; exiles were previously allowed to send $300 a month.

In addition, anyone sending money to Cuba must sign an affadavit swearing that the cash isn't going to Cuban government officials or members of the Cuban Communist Party.


The U.S. Treasury Department, through its Office of Foreign Assets Control, has also narrowed down who can send money to Cuba by revoking money transfer licenses held by various independent travel agencies.

In May 2006, OFAC suspended the licenses held by La Perla del Caribe, Transeair Travel and Uno Remittance Inc. OFAC also revoked the licenses of 26 travel agencies such as Baby Envios Travel, Fortuna Travel Services, Cubatur Express and La Estrella de Cuba.

By September, a much larger company offering wire transfer services, MoneyGram, discontinued its Cuba business altogether. In an e-mail to CubaNews, company spokeswoman Cathy Rebuffoni said "MoneyGram is re-evaluating the service due to low consumer usage and government regulations."

Some suspect that the Bush administration's crackdown scared away MoneyGram from pursuing the Cuban-American remittance market further. The difficult climate has given those remaining independent remitters more reason to charge exorbitant rates for even small transactions.

For example, the Hialeah money transfer outfit National Multiservice charges $23 to wire $100 within 24 hours to Havana, while Western Union only charges $15 for the same amount. Even the $15 rate is still relatively high, considering that WU charges $8 to send $100 to the nearby Dominican Republic.

The one advantage National Multiservice has over Western Union is that it does not require remitters to fill out any affidavits or other government paperwork. Perhaps it's for this reason that National Multiservice doesn't advertise, and gains much of its business by word-of-mouth.

An agent at National Multiservice who refused to identify herself told CubaNews that her company uses the Duales money transfer agency in Canada to deliver its clients' funds to Cuba.


It seems that this Hialeah office has set up a round-about mechanim to bypass OFAC restrictions and affidavit requirements by using a third-party Canadian money transfer service to conduct hassle-free (if pricey) money transfers to Cuba.

Apparently, that company's reputation for timely wire transfers to recipients in Cuba has kept this operation in business.

Trust is an even bigger factor in another option to send money to Cuba--by hand.

Researcher Manuel Orozco of Inter-American Dialogue, in a 2004 report on the Latin remittance market for Georgetown University, noted the use of both Cuban-American and non-Cuban couriers--known in Spanish as mulas or mules--to personally bring money to Cuba for an undetermined fee.

"There is no single type of mula, and their numbers may run into the thousands," according to Orozco's report. "Some mulas are salaried and employed by a particular entrepreneur who hires them to travel back and forth to Cuba. There are also mulas who are sole proprietors of their informal remittance businesses and who work with family networks in the United States and Cuba."


Orozco says Cuba is perhaps the only country in Latin America where much of its incoming remittances rely on couriers--a mechanism which also evades Cuban government scrutiny of such funds.

Most other remittance markets are well-covered by Western Union and various reputable independent operations, such as Grace Kennedy Ltd. in the English-speaking Caribbean, Airpak in Central America, Quisqueyana in the Dominican Republic and Vigo in Brazil, or by various banks in these countries, since they're not subjected to a trade embargo by Washington.

Of course, there's always another alternative: online money transfer operations. These include Duales and Transcard in Canada, and AWS Technologies based in Switzerland.

AWS, in particular, is taking advantage of the growing Cuban immigrant population in Western European countries like Spain and Italy, where euro-earning Cubans are using such services to wire funds back to Cuba. Since AWS doesn't impose a limit on how much can be sent to Cuba, even Cuban exiles living in the United States can use that service and bill it onto their credit cards.


Orozco also noted yet another market for such remittance services in Europe.

"There's definitely a growth in money transfers from Europe to Cuba, because of tourism and the resulting relationships formed between tourists and locals--producing a new form of emigration from the island," he told CubaNews. "So people in Switzerland, Italy, the Netherlands, Germany and Spain, among other countries, are increasingly traveling to Cuba and meeting [romantic] partners who they eventually bring back to their countries. In turn you see an emerging market for money transfers from Europe to Cuba."

RELATED ARTICLE: Nicaragua, Cuba restore diplomatic relations.

Nicaragua and Cuba officially restored full diplomatic ties Mar. 20 for the first time since the mid-1990s, when relations were downgraded to the level of charge d'affaires.

President Daniel Ortega accepted the credentials of Cuba's new envoy, Luis Hernandez Ojeda, in a speech pledging support for the Castro government.

Ortega asked the international community to respect the rights of the Cuban people, and demanded an end to the U.S. embargo.

Hernandez said Cuba will set up three eye clinics in Nicaragua to operate free of charge on cataract patients. The first clinic will be built on the outskirts of Managua, while the other two--each with the capacity to operate on 80 patients a day--are slated for Puerto Cabezas and Bluefields, along Nicaragua's impoverished Atlantic coast.

Cuba will also help Nicaragua eradicate illiteracy through its widely acclaimed "Yo Si Puedo" (Yes I Can) teaching method.

In addition, Cuba will install generating plants supplied by Venezuela. Hernandez said the generators will produce 60 megawatts each by the end of April, and that more generators would be on the way from Cuba to boost Nicaragua's electricity grid.

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Author:Echevarria, Vito
Geographic Code:5CUBA
Date:Mar 1, 2007
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