[Marxism] U.S. OFAC notice on money transferred to Cuba

Walter Lippmann walterlx at earthlink.net
Wed Aug 16 07:31:34 MDT 2006


This is interesting and it is news. Legally-sent funds to Cuba via
such agencies as Western Union are normally delivered here in Cuba
in U.S. dollars. In fact, Western Union signs here in Cuba - you'd
be surprised to see how many there are, state that U.S. regulations
REQUIRE that the funds be delivered in U.S. dollars ("USD" in local
Cuban parlance. If they can, according to OFAC, be delivered here in
Cuba in these other currencies, it would be a significant positive
step for the recipients. 

Keep in mind, of course, the only funds which can be spent in Cuban
stores are either regular Cuban pesos ("moneda nacional") or Cuban
Convertible Pesos ("CUC" or "chavitos" as they're referred to in
daily parlance here.) Foreign convertible currencies, when changed
over to CUC, are charged 8.5% by the banks here in Cuba. An extra
10% is charged for conversion of U.S. dollars to CUC, so US dollars
are worth substantially less here to the recipient than any other of
the foreign currencies indicated. We'll soon enough see what else,
if anything, might be signified by this new change.


Walter Lippmann
Havana, Cuba
====================================================================

Notice to Remittance Forwarding Service Providers
Concerning Cuban Convertible Pesos

August 2006

http://treas.gov/offices/enforcement/ofac/programs/cuba/cuba_pesos.pdf

The Office of Foreign Assets Control's ("OFAC") Circular 2006 for
Travel, Carrier and Remittance Forwarding Service Providers ("RFs")
issued in March 2006 informs RFs that they must ensure any remittance
transferred to Cuba is delivered to the intended recipient in Cuba in
one of the following five currencies: U.S. dollars, Canadian dollars,
Swiss francs, British pounds, or Euros.1

It has come to OFAC's attention as the result of audits as well as
ongoing monitoring that certain RFs are forwarding remittances to
Cuba that are being paid out to the recipient in Cuban convertible
pesos ("CUC"), also know as chavitos. Payments delivered in CUC are
clearly outside the parameters of payments permitted under Circular
2006.

Furthermore, OFAC has consulted with the Department of State and
recently received guidance confirming that it is contrary to U.S.
foreign policy for persons subject to U.S. jurisdiction to send
remittances to Cuba paid to the recipients in CUC.

Any RF transferring funds to Cuba paid out in CUC is in violation 
of its OFAC authorization and must cease remittance forwarding
immediately until such time as the RF has assurances from the Cuban
payout agent that the funds will be distributed to the recipient only
in U.S. dollars, Canadian dollars, Swiss francs, British pounds, or
Euros. Failure to comply with this action may result in the
imposition of a fine, other penalty, suspension or loss of RF
operating authority.

Criminal penalties for violation of The Cuban Assets Control
Regulations, 31 C.F.R. Part 515 (the "Regulations") range up to 10
years in prison, and $1 million in corporate and $250,000 in
individual fines. OFAC may impose civil penalties at $65,000 per
violation under the Regulations.

1 See "Transferring Funds in which Cuba has an Interest by Proper
Means" beginning on page 8 of Circular 2006 and "International
Transfer of Funds" on page 8 in Appendix I - Service Provider
Operational Guidelines of Circular 2006.





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