U.S.-Cuba money transactions could get more complicated

Posted on Monday, 12.02.13

U.S.-Cuba money transactions could get more complicated
BY JUAN O. TAMAYO
JTAMAYO@ELNUEVOHERALD.COM

Cuba travel agency owner Vivian Mannerud says she tried for three years
to find a bank that would hold an account for her money remittance
business, which was fully licensed by the U.S. government.

"Not one would do it. I tried several banks, and not just here, in
Nevada, in Texas. And I showed them all my licenses," said Mannerud,
owner of Miami-based Airline Brokers. All of them said no.

The difficulties in transferring funds between the U.S. and Cuba have
sparked broad concerns in the wake of M&T Bank's decision to stop
processing accounts for the Cuban diplomatic mission in Washington.

Because the bank would no longer handle its business, the Cuban
Interests Section said last week it would stop processing visa, passport
and other such requests — just as the peak holiday season for travel to
Cuba approaches.

Cuba experts say they are now starting to worry that other banks may
stop handling other Cuba transactions, such as remittances or payments
for hotel bookings and airport landing fees that are legal despite the
U.S. embargo against Cuba.

"Obviously this is creating havoc, and a heck of a mess may be on the
horizon if things don't get sorted out," said Washington attorney Robert
Muse, who closely follows the Cuba travel industry.

U.S. government officials said last week that the Buffalo-based M&T
Bank, which had a Treasury Department license to handle Cuba's accounts,
had notified clients more than a year ago that it had decided to stop
servicing all diplomatic missions.

But some supporters of easing U.S. sanctions on Havana blamed Cuba's
inclusion on the U.S. State Department's list of state sponsors of
international terrorism for M&T's decision.

"This banking issue is all about Cuba being on the list of state
sponsors of terrorism," Richard Feinberg, a senior fellow at the
Brookings Institution in Washington, was quoted as saying in a Reuters
wire service report last week.

But Muse said the M&T decision was due more to the profusion of U.S.
laws and regulations that require detailed reporting and cut into the
profits of all banks that handle foreign transactions — not just those
that handle Cuban accounts.

"Cuba has been on that terror list since 1982. So why, 30-plus years
later, does that designation come up just now to bite the banks in the
butt?" Muse asked. Iran, Sudan and Syria are also on the State
Department's list.

Washington attorney Lonnie Pera, who advises Cuba travel companies, said
U.S. banks are finding it too difficult to handle foreign accounts
because of the combination of laws against money laundering, fraud,
terrorist financing and other crimes.

There's the Foreign Corrupt Practices Act, the Patriot Act, the Bank
Secrecy Act, the Antiterrorism Act of 1996 and the Trading with the
Enemy Act, which covers the half-century-old U.S. trade embargo as well
as the U.S. terror list.

"All these things impose onerous screening, record-keeping and reporting
requirements on banks," said Pera, "But many banks do not have the staff
or the technology that can perform those tasks."

Mannerud said her remittance business, now closed, had to deal with
Treasury's Office of Foreign Assets Controls, which enforces U.S.
sanctions on foreign countries; the Financial Crimes Enforcement
Network; the U.S. Office of the Comptroller of the Currency; and the
State of Florida's Office of Financial Regulation.

The three federal agencies have often conflicting requirements that
undermine the Obama Administration policy of promoting increased
contacts between the U.S. and Cuban peoples, she said, "and every year
it's been getting worse and worse."

About 476,000 Cuban residents of the United States traveled to the
island to visit relatives last year. Havana claimed another 98,000
non-Cuban Americans also went to the island on "people-to-people" trips
authorized by the Obama administration.

Tom Popper, whose New York-based Insight Cuba Company arranges
people-to-people trips, said he expects any concerns over how his
clients will pay for their visas will be fixed in a few days — likely by
having them pay in Havana rather than in Washington.

But the issue with the Cuban-Americans is more complicated because they
will need to renew their Cuban passports, and the Cuban government has
been screening them before they board planes for the island for security
reasons.

Source: "U.S.-Cuba money transactions could get more complicated - Cuba
- MiamiHerald.com" -
http://www.miamiherald.com/2013/12/02/3793228/us-cuba-money-transactions-could.html