Investigation Findings
A recent investigation by the Miami Herald has uncovered that the Cuban government is skirting U.S. sanctions by obscuring the true nature of the company responsible for managing remittances sent from Cuban Americans to their relatives in Cuba.
These sanctions were introduced by the Trump administration in 2020, targeting the Cuban military and barring it from overseeing monetary transfers from the U.S. The Biden administration has upheld this policy.
In a bid to comply, the Cuban government created a new entity, presenting it as free from military ties.
However, documents reviewed by the Herald suggest that the military has retained control of this new company since its inception.
Remittance Management Under Scrutiny
The organization currently overseeing remittances from the U.S. is Orbit S.A., which replaced Fincimex—its predecessor that was sanctioned due to its military connections.
The original sanctions aimed to hold the Cuban armed forces accountable for human rights violations and their support of Nicolás Maduro in Venezuela, while also trying to divert foreign currency to the private sector rather than the military apparatus.
For years, remittances from Cubans residing in the U.S. have formed a financial lifeline for the military, which controls several sectors of the island’s economy through a conglomerate called GAESA (Grupo de Administración Empresarial S.A.).
Although remittances to Cuba were temporarily suspended, they resumed in 2022 after Cuban officials assured the U.S. that Orbit was an independent establishment, not influenced by the military.
While officially part of the Cuban Ministry of Foreign Trade and Investment, the Herald’s investigation indicates that Orbit is effectively managed by Cimex, an enterprise linked to GAESA.
The connections are clear: Diana Rosa Rodríguez Pérez, the president of Orbit, is a former executive at GAESA.
Furthermore, Cimex, which managed Fincimex, provides reports on remittances processed by Orbit directly to GAESA, showcasing a close and ongoing relationship.
Potential Policy Implications
These revelations may prompt increased scrutiny from U.S. authorities regarding Western Union’s operations with Orbit, potentially resulting in tighter regulations surrounding remittance processes.
The forthcoming Trump administration is expected to include individuals with hardline perspectives on Cuba, such as Senator Marco Rubio, who has been instrumental in the formulation of preceding sanctions against the Cuban military.
The facilitation of remittances through Orbit had received approval from the U.S. Treasury Department under the assumption that the company had no military affiliations.
This belief includes other money-transfer services based in Miami, such as VaCuba and Cubamax, which currently partner with Orbit.
Under the existing U.S. trade embargo against Cuba, all financial interactions with the island require authorization from the U.S. Treasury Department.
In March 2023, Western Union resumed transferring money to Cuba and confirmed that Orbit would handle their payouts on the island.
However, when approached for comments about these recent findings, a Western Union representative opted not to provide a statement.
Other companies, like VaCuba and Cubamax, did not respond to inquiries either.
Requests for comments from both the Treasury and State departments went unanswered.
U.S. Representative Mario Díaz-Balart, a Cuban American Republican known for his advocacy for strict sanctions, asserted the crucial role of investigative journalism in exposing the hidden military and economic ties relevant to U.S. sanctions on Cuba.
He emphasized that if these reports are accurate, they underline the urgent need for strict enforcement of sanctions.
Díaz-Balart criticized the Biden administration for allegedly loosening remittance and travel sanctions while engaging in more diplomatic exchanges with Cuban officials.
Prior to the sanctions introduced by Trump, GAESA managed remittances sent by expatriates through services like Western Union.
To operate in Cuba, companies were required to work with Fincimex, a subsidiary of Cimex registered in Panama.
After the sanctions imposed in October 2020, Western Union had to cease its operations in Cuba, halting the flow of funds to the island.
This move followed the designation of Fincimex as a restricted entity due to its military connections.
Amid dwindling cash flow, Cuban military officials refused to turn remittance operations over to a civilian-run entity.
For over a year, military officials claimed that only they possessed the capability to manage the support that Western Union had provided.
After Trump left office, Cuban authorities appealed to the Biden administration for relief from restrictions, arguing that the sanctions were particularly harmful to families during the COVID-19 pandemic.
Meanwhile, they mischaracterized Fincimex as entirely civilian, despite ongoing military control.
In response to a government crackdown on protests in July 2021, President Biden expressed reservations about measures to aid the Cuban populace, fearing they might inadvertently enrich the government.
In summary, the Herald’s investigation—derived from internal documents and insights from a source familiar with the companies’ operations—illuminates the complexities surrounding financial dealings with Cuba.
The enduring connection between remittances and military-owned enterprises is a pressing concern for policymakers and for Cuban citizens who rely on these funds in the midst of a dire economic crisis.
Source: Stripes