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