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U.S. Shift on Cuba Remittances Spurring Scramble Among MSBs
By Brian Monroe
printThe Obama administration said Monday that it would lift restrictions on how much money Cuban Americans can send to Cuba, easing financial constraints first established in the 1960s. The policy shift, which was coupled with announcements on rollbacks of restrictions on Cuban travel and telecommunications deals, will allow Cuban Americans to send an unlimited number of remittances to Cuban relatives in households that don't include communist officials, White House Press Secretary Robert Gibbs said, in a press briefing. The policy change is likely to triple the amount of money annually remitted to the communist country since 2004, when the Bush...
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Terrorist attacks in Europe over the past year have done more than spur talk of new rules from the EU. They've also prompted major financial institutions to adjust their compliance controls in an effort to root out terrorism's financial backers. Such has been the case for Western Union Europe.
Thursday's partial easing of U.S. sanctions against Cuba will do much to bring money to the island nation, but even a full rollback of economic restrictions won't soon resolve the biggest barriers to entry for American banks: low profit margins and high regulatory risk.
The U.S. Treasury Department's sanctions enforcer issued regulations Thursday permitting American banks to transact directly with their Cuban counterparts for the first time in decades.
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A contradiction between U.S. sanctions rules and federal guidance on Cuban money remitters is prompting some compliance staff to scratch their heads, say analysts.
New U.S. Treasury Department regulations easing economic sanctions against Cuba and the compliance burden of financial institutions could make it easier for money remitters to break the rules, say analysts.
The U.S. Treasury Department officially loosened restrictions on money sent to Cuba Thursday, lifting caps on dollar amounts remitted and expanding the number of individuals who can receive the funds.
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The U.S. Treasury Department will likely move quickly in drafting regulations that loosen most restrictions on money remitted from the United States to Cuba, say banking professionals.
The U.S. Senate passed a bill Tuesday that would allow businesses to travel to Cuba for the sale of agricultural and medical products, the first rollback of economic sanctions against the country in over eight years.
The incoming Obama administration is likely to scale back limits on remittances to Cuba imposed by President Bush, a move that would be welcomed by the U.S. financial community, according to bank regulatory specialists.
U.S. and European banks are dropping their direct and correspondent relationships "and any other ties" with Cuba in an effort to protect themselves from any possible fines or actions they anticipate could be levied by U.S. regulators.