The Truth About Remittances
"There are a number of things that we would consider doing to help the people of Cuba, but it would require a different circumstance or a guarantee that they would not be taken advantage of by the government — for example, the ability to send remittances to — back to Cuba. I would not do that now because the fact is it’s highly likely that the regime would confiscate those remittances or big chunks of it."
--President Joseph Biden, July 15, 2021
President Biden has been badly misled by his staff in the National Security Council or by Senator Robert Menendez, who may himself be misinformed . For twenty years remittances were transferred 100% to their recipients in a completely professional and uncorrupted fashion by Western Union. The only money that went to the Cuban government came from a reasonable share of operational fees paid by the sender.
Following is my understanding about how remittances worked based on personal experience and consultation with experts.
There is no objective reason to continue the Trump maximum pressure campaign that was intended to punish Cuban Americans for continued engagement with their homeland through their families and to further damage Cuba's economy.
Personal representatives of the two Presidents should immediately meet to confirm a mutually satisfactory system that will effectively address pressing human need and the rupture of family ties.
--John McAuliff, Fund for Reconciliation and Development director@ffrd.org
8/17/21 I have added below a good article from Cuba Debate that offers the view from Havana.
1) When Western Union began transfers from the US to Cuba in 1999, they were paid through Western Union branded outlets in dollars. For Cubans to use the money locally, they faced the same special rate as other dollar exchanges, e.g. 3% on all foreign currency exchanges plus 10% assessment on dollar exchanges. The assessment made up for the costs Cuba faced because the US prevented it from using and trading dollars in normal international markets on the theory that all US dollars were ultimately US property. ($100 US = 87 CUC)
2) Around 2010 Western Union was allowed to pay out in CUC at the official exchange rate of 1 to 1. The only cost to the recipient was the normal 3% exchange fee. ($100 US = 97 CUC)
3) When I sent money via Western Union, I paid a fee. My memory is that was 10% when I did it on my computer with my credit card and wanted virtually instant availability. (There was a cheaper way through a bank transfer that took several days.) Western Union divides its fees so that about 1/3 goes to a US based agency where people pay for the transfer, 1/3 to Western Union, and 1/3 to the host country distributor. The exact share of the fee for the distributor is negotiated and in fact Fincimex was on the low side of international practice.
So when I sent $100 to a Cuban colleague, I paid Western Union $110, my friend received 97 CUC, and Fincimex would receive from my fee payment less than $3.
4) Fincimex operates 420 Western Union retail distribution locations in Cuba using the Western Union logo, for which it pays rent, staff costs, computer infrastructure, etc.
5) Unless Western Union is allowed to create its own distribution system in a country, it must work through a local intermediary. It transfers dollars to the intermediary; the intermediary transfers funds to the retail distribution points in national currency where the recipients collect their money. Nothing is different in Cuba than with most other countries.
6) If Western Union is allowed by the US to resume transfers to Cuba, it would pay out in CUP at the official rate $1 USD to 24 CUP. That is normal international practice. Electronic transfers must be done at the official rate.
7) Once the system of hand carrying dollars via " mules" is reestablished, i.e. when frequent flights are available, some adjustment may be made to maintain the competitive value of electronic transfers. The unofficial dollar : CUP rate is almost three times the official rate.
8) Opposition to remittances is not based on funds being ripped off from recipients despite the rhetoric. The goal of opposition is starving the national economy of hard currency that can be used to import food, medicine and consumer goods for purchase by receivers of remittances and others.
9) It is estimated by the Congressional Resource Service that in 2019, the last unrestricted year following Obama's policy, remittances from the US through all channels totaled $3.6 billion. That was about 3% of the country's GDP and three times the value of exports ($1.21 billion). Some 48% of Cuban Americans sent remittances and fifty-six percent of Cuban families received them.
10) Technically it is still possible for every Cuban American to send or carry $1,000 per quarter but Western Union and other electronic means were shut down on November 26, 2020.
- "In September 2019, OFAC made several amendments to the CACR further
restricting remittances to Cuba. · OFAC capped family remittances to any one
Cuban national to $1,000 per quarter; such family remittances had not been
capped since 2009. · ...· OFAC eliminated the category of donative remittances
that had been established in 2015 but authorized remittances to support the
operation of economic activity in the non-state sector by self-employed
individuals....
- On October 27, 2020, however, OFAC amended the CACR to prohibit, effective
November 26, 2020, the processing of remittances through any entities on the
“Cuba restricted list,” which included AIS and FINCIMEX. The new regulations
resulted in Western Union ceasing its operations in Cuba on November 22,
until a solution can be found to keep its services open."
FINCIMEX:
Restrictions on remittances have negatively impacted the standard of living of
recipients and the pockets of those who send them
By: Cubadebate Newsroom
Posted in: U.S.-Cuba
Dispute, Cuba-U.S. Relations
17 August 2021
In view of the continued restrictions on sending remittances from the
United States to Cuba, ordered in October 2020 by the Trump administration, and
the recent statements by the Biden administration accusing the Cuban government
of keeping part of those remittances, Cubadebate interviewed Yamil Hernández
González, General Manager of FINCIMEX
At the end
of last year, it was learned that regular remittances to Cuba from the United
States would cease. The reason defended was that these were used to illegitimately
benefit the military sector in Cuba, that the government and the armed forces
kept between 20 and 40 percent of the money sent. How did those operations
actually work?
Indeed, in October 2020, the U.S. government banned Western Union's
relations with Cuban institutions responsible for processing remittances to
Cuba, specifically FINCIMEX. In other words, it unilaterally ended the flow of
remittances through regular and institutional channels. The Trump
administration thus continued a policy aimed at penalizing the standard of
living of the Cuban population on the basis of totally unfounded and
unscrupulous pretexts.
How did the
receipt of remittances from the US work?
It worked in a way that was not unique, nor extraordinary at all, if one
takes into account the most common practices in most countries.
The United States company Western Union was responsible for sending the
remittances to Cuba. Under the existing scheme, that entity charged the sender
of the remittance in the United States five dollars for every 100 dollars sent
to Cuba, as a commercial commission. Western Union itself paid FINCIMEX one
dollar for every hundred sent. This payment to FINCIMEX was for services
rendered, which is a common practice in the international remittance industry.
It is false that FINCIMEX, the Cuban government or the armed forces appropriated 20% or 40% of the money sent to Cuba from the United States, a falsehood that politicians in that country repeat without stopping. I repeat, the money sent was not subject to any tax when it entered Cuba. The recipient received the amount fully and in full.
What was
fincimex's role in processing remittances in Cuba?
FINCIMEX is a commercial company
like many that exist in Cuba, recognized and respected in the international
remittance industry. It maintains commercial relations with important
financial institutions of several countries and provides the remittance service
that arrives in Cuba from different parts of the world. Its business results
are public in accordance with the provisions in Cuba for public limited
companies and the Mercantile Registry.
In Cuba, commercial banks accept
remittances from other international banks and FINCIMEX is the company with the
State mandate to execute remittances sent to Cuba through non-bank financial
companies. It is the entity that has the established
infrastructure, the accumulated experience and the regulatory system in accordance
with the international rules for this type of transaction.
The U.S.
government has said its goal is to nullify the military's involvement in the
remittance process. Is this claim supported?
FINCIMEX
is a 100% civil entity. None of its workers are military. It is false that it
is an entity belonging to the armed forces. FINCIMEX's income from
services rendered is part of the country's general income and is intended both
for the support and operation of the company itself - including its
technological infrastructure - and for making contributions to the national
budget and the economy as a whole. It is untrue that their income is used to support the armed forces.
Was the
processing of remittances from the US a routine procedure or did it involve
particular difficulties?
The handling of remittances from the U.S. via
Western Union was for FINCIMEX an
operation of high financial risks, since the amounts were paid to the recipient
of the remittance before receiving the payment from the U.S. company. It was a risk
taken because of the importance of the service to consumers.
But there
are those in the United States who propose that remittances be made without the
participation of the Cuban government and, in particular, without the
participation of FINCIMEX.
Each country arranges and organizes
in its national territory the reception of remittances as it determines best,
complying with its own laws and international regulations. This is a sovereign
prerogative. The United States cannot dictate that to any country. To do so is
a violation of international law.
In reality, our government does not have a direct
role in receiving remittances. It is a commercial activity and is managed by a
commercial entity, in this case FINCIMEX. The role of the government, in use
of its sovereign prerogatives, is to designate FINCIMEX as the entity in charge
of this management. No foreign
government, including that of the United States, has the right to dictate to
Cuba which company can handle remittances and which cannot.
I must
emphasize again, FINCIMEX did not withhold
or applied any lien to the amounts managed. It is false that it is a military entity. It is
false that the institution, the armed forces, or the Cuban Government retained
a percentage of the amount sent. State government should not interfere in
how and to whom its citizens, in exercise of their constitutional rights, send
remittances.
What has
been the impact of the interruption of remittances to Cuba from the United
States?
The main consequence of the interruption of remittances
through formal and institutional channels was the increased difficulty and
costs of receiving them. The measure has
negatively impacted the standard of living of recipients and the pockets of
those who send them. It is said
that currently people are paying in the United States up to 30 dollars or more
for every hundred they send to their relatives in Cuba through irregular
channels. The question is who benefits from that, because at
first glance it is an undeserved punishment for the people of Cuba and their
families in the United States.
Another consequence has been the
increase in uncontrolled transfers of foreign currency from the United States
to Cuba, which is never a good thing and which goes against what the
international community is trying to organize and regulate.
Consequently, the lifting of the restrictions imposed in October 2020 would
benefit all those who are now unfairly affected. It would also help to
re-regulate the main movement of foreign exchange between the two countries.
FINCIMEX: Restricciones a las remesas han impactado
negativamente en el nivel de vida de los receptores y en los bolsillos de
quienes las envían
Por: Redacción de
Cubadebate
Publicado en: Diferendo Estados
Unidos - Cuba, Relaciones Cuba-EE.UU
En
este artículo: Cuba, Estados Unidos, Relaciones Cuba
Estados Unidos, Remesas
17
agosto 2021 | 32 |
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Ante
el sostenimiento de las restricciones al envío de remesas desde Estados Unidos
a Cuba, ordenadas en Octubre de 2020 por la administración Trump, y las
declaraciones recientes de la administración Biden acusando al gobierno cubano
de quedarse con parte de esas remesas, Cubadebate entrevistó a Yamil Hernández
González, Gerente General de FINCIMEX
A finales del año
pasado, se conoció que cesarían las remesas regulares a Cuba procedentes de
EEUU. El motivo defendido fue que estas eran utilizadas para beneficiar
ilegítimamente al sector militar en Cuba, que el gobierno y las fuerzas armadas
se quedaban con entre un 20 y un 40 por ciento del dinero remesado. ¿Cómo
funcionaban realmente esas operaciones?
Efectivamente,
en octubre de 2020, el gobierno estadounidense prohibió las relaciones de la
compañía Western Union con las instituciones cubanas encargadas de tramitar las
remesas a Cuba, específicamente FINCIMEX. O sea, puso fin de manera unilateral
al flujo a de remesas por canales regulares e institucionales. El gobierno de
Trump dio continuidad así a una política dirigida a penalizar el nivel de vida
de la población cubana sobre la base de pretextos totalmente infundados y
reiterados sin escrúpulo alguno.
¿Cómo funcionaba la
recepción de las remesas procedentes de EEUU?
Funcionaba
de un modo que no era singular, ni extraordinario en lo absoluto, si se toma en
cuenta las prácticas más comunes en la mayoría de los países.
La
empresa estadounidense Western Union era la entidad encargada de enviar las
remesas a Cuba. En el esquema existente, esa entidad cobraba en Estados Unidos
al emisor de la remesa cinco dólares por cada 100 que se enviaban a Cuba, como
comisión comercial. La propia Western Union pagaba a FINCIMEX un dólar por cada
cien remesado. Este pago a FINCIMEX ocurría por concepto de servicios
prestados, lo cual es una práctica común en la industria de remesas
internacionales.
Es falso que FINCIMEX, el gobierno cubano o las fuerzas armadas se apropiaran de un 20% o un 40% del dinero remesado a Cuba desde Estados Unidos, falsedad que políticos de ese país repiten sin parar. Insisto, el dinero remesado no era objeto de gravamen alguno al ingresar a Cuba. El destinatario recibía el monto remesado total e íntegramente.
¿Cuál era el papel de
FINCIMEX en la tramitación de las remesas en Cuba?
FINCIMEX
es una empresa comercial como muchas que existen en Cuba, reconocida y
respetada en la industria de remesas internacionales. Mantiene relaciones
comerciales con importantes entidades financieras de varios países y brinda el
servicio de remesas que llega a Cuba desde disímiles partes del mundo. Sus
resultados empresariales son públicos de acuerdo con lo dispuesto en Cuba para
las sociedades anónimas y el Registro Mercantil.
En
Cuba, los bancos comerciales aceptan remesas desde otros bancos internacionales
y FINCIMEX es la empresa con el encargo estatal de ejecutar las remesas
enviadas a Cuba mediante empresas financieras no bancarias. Es la entidad que
cuenta con la infraestructura establecida, la experiencia acumulada y el
sistema normativo acorde con las reglas internacionales para ese tipo de
transacción.
El gobierno de Estados
Unidos ha dicho que su objetivo es anular la participación de militares en el
proceso de envío de remesas. ¿Tiene sustento esta aseveración?
FINCIMEX es una
entidad 100% civil. Ninguno de sus trabajadores es militar. Es falso que se
trate de una entidad perteneciente a las fuerzas armadas. Los ingresos de
FINCIMEX por servicios prestados forman parte de los ingresos generales del
país y se destinan tanto al sostenimiento y funcionamiento de la propia empresa
-incluyendo su infraestructura tecnológica- como a realizar aportes al
presupuesto nacional y la economía en su conjunto. Es falso que sus
ingresos se destinen al sostenimiento de las fuerzas armadas.
¿La tramitación de las
remesas procedentes de EEUU constituía un procedimiento rutinario o entrañaba
dificultades particulares?
El manejo de las
remesas procedentes de EEUU vía Western Union era para FINCIMEX una
operación de altos riesgos financieros, toda vez que los montos eran pagados al
receptor de la remesa antes de recibirse el pago desde la compañía
estadounidense. Era un riesgo asumido debido a la importancia del servicio
para los consumidores.
Pero hay quienes en
Estados Unidos proponen que las remesas se realicen sin participación del
gobierno cubano y, en particular, sin la participación de FINCIMEX.
Cada
país dispone y organiza en su territorio nacional la recepción de remesas
conforme mejor determine, cumpliendo con sus propias leyes y con normativas
internacionales. Se trata de una prerrogativa soberana. Estados Unidos no puede
dictarle eso a ningún país. Pretenderlo es una violación del Derecho
Internacional.
En realidad, nuestro
gobierno no tiene un papel directo en la recepción de remesas. Se trata de una
actividad comercial y la gestiona una entidad comercial, en este caso FINCIMEX.
El papel del gobierno, en uso de sus prerrogativas soberanas, es designar a
FINCIMEX como la entidad encargada de esta gestión. Ningún gobierno
extranjero, incluyendo el de EEUU, tiene derecho a dictarle a Cuba qué empresa
puede gestionar remesas y cuál no.
Debo enfatizar
nuevamente, FINCIMEX no retenía ni aplicaba gravamen alguno a los montos
gestionados. Es falso que sea una entidad militar. Es falso que la
institución, las fuerzas armadas o el gobierno cubano retuvieran un porcentaje
del monto remesado. El gobierno de Estados no debería interferir en cómo y a
quién sus ciudadanos, en ejercicio de sus derechos constitucionales, envían las
remesas.
¿Cuál ha sido el
impacto de la interrupción de las remesas a Cuba provenientes de EEUU?
La principal
consecuencia de la interrupción de las remesas a través de los canales formales
e institucionales fue el aumento de la dificultad y los costos para recibirlas. La
medida ha impactado negativamente en el nivel de vida de los receptores y en
los bolsillos de quienes las envían. Se dice que actualmente las personas están
pagando en Estados Unidos hasta 30 dólares o más por cada cien que envían a sus
familiares en Cuba e a través de canales irregulares, es decir. La pregunta
es quién se beneficia de eso, porque a simple vista es un castigo inmerecido al
pueblo de Cuba y a sus familiares en Estados Unidos.
Otra
consecuencia ha sido el aumento de las transferencias incontroladas de divisas
desde Estados Unidos a Cuba, algo que nunca es positivo y que va en contra de
lo que la comunidad internacional intenta organizar y regular.
En
consecuencia, el levantamiento de las restricciones impuestas en octubre de
2020 beneficiaría a todos los que ahora se ven injustamente afectados. También
ayudaría a regular nuevamente el principal movimiento de divisas entre los dos
países.
http://www.cubadebate.cu/noticias/2021/08/17/fincimex-restricciones-a-las-remesas-han-impactado-negativamente-en-el-nivel-de-vida-de-los-receptores-y-en-los-bolsillos-de-quienes-las-envian/
+++++++++++++++++
Summary Comment
review wu's policy and business model.
First: WU always delivers in local currency or in legal
tender (anywhere in the world). The legal tender may be the dollar. In Cuba,
the dollar is not a local currency or legal tender. The Americans don't want
to. In Panama, Nicargua, Ecuador, El Salvador..., it is legal tender because
the U.S. Treasury wants it to be so and these countries pay a tax for the use
of that currency in their territory. The purchasing value of the local currency
is another matter.
Second: WU and its business model is peer-to-peer. It
does not deliver, by policy (since it was founded), remittance to government.
Third: But of course there must be a shipping platform.
That shipping platform is a service that is provided and in our case it is
fincimex sa and there is one of the two sources of gain of WU.
Fourth: there are international rules that a company SA,
is a company in partnership, therefore it is not, technically, owned by any
government, but by its partners. And then WU, according to its policy, uses it
for its business.
Fifth: the business model and this is the resounding
success of WU, is that it delivers money person to person through a type of
company of the type SA, or some form of private property, receives a commission
and the issuer pays for the wu service (the two sources of gain). It is a pure
and transparent business, for more than 150 years.
Sixth: If you do not use fincimex SA channels for money
transfer, and you use private channels or agencies that do not have DIRECT
relations with fincimex, you run the risk of not having a legitimate right of
claim.
Seventh: by placing FINCIMEX SA as a supposed government
company in the United States and putting Cuba on the expuria list of countries
sponsoring terrorism; the WU has to get Cuba out of business. Pure replay of
the Yankee Blockade.
Eighth: the Society for Worldwide Interbank Financial
Telecommunication (SWITF) is a platform dominated by the USA. That there is
known origin and destination of international banking transactions. And that's
where they hold it, seize it, and block it. Especially to banks that can not
make accounting in real time, due to technological problems.
Ninth: They have politicized everything and as much as
they can. They have misrepresented everything and as much as they could.
holos dijo:
revisen cual es la
politica y el modelo de negocio de WU.
Primero: WU siempre entrega en la moneda
local o en moneda de curso legal (en cualquier parte del mundo) . La moneda de
curso legal puede ser el dolar. En Cuba el dolar no es moneda local ni de curso
legal. Los americanos no quieren. En Panamá, Nicargua, Ecuador, El Salvador...,
es moneda de curso legal porque el Tesoro de EEUU quiere que sea así y estos
paises pagan un impuesto por el uso de esa moneda en su territorio. El valor
adquisitivo de la moneda local, es otro asunto.
Segundo: WU y su modelo de negocio es
peer-to-peer (persona a persona). No entrega, por politica (desde que se
fundó), remesa a gobierno.
Tercero: Pero por supuesto debe haber
una plataforma de envio. Esa plataforma de envio es un servicio que se presta y
en nuestro caso es fincimex sa y ahi está una de las dos fuentes de ganacia de
WU.
Cuarto: hay reglas internacionales que
una empresa SA, es una empresa en sociedad, por lo tanto no es, tecnicamente,
propiedad de gobierno alguno, sino de sus socios. Y entonces WU, atendiendo a
su politica, la usa para su negocio
Quinto: el modelo de negocio y he ahí el
exito rotundo de WU, es que entrega dinero persona a persona a través de un
tipo de empresa del tipo SA, o alguna forma de propiedad privada, recibe una comision
y el emisor paga por el servicio de WU (las dos fuentes de ganacia). Es un
negocio puro y transparente, desde hace mas de 150 años.
Sexto: Si no usas para transferencia de
dinero, los canales de Fincimex SA, y usas canales privados o agencias que no
tengan relaciones DIRECTAS con fincimex, corres el riesgo de no tener derecho
ligitimado de reclamacion.
Septimo: al poner EEUU a FINCIMEX SA
como una supuesta empresa de gobierno y poner a cuba en la lista expuria de
paises patrocinadores del terrorismo; la WU tiene que sacar a Cuba de su
negocio. Puro rejuego del Bloqueo yanqui.
Octavo: la Society for Worldwide
Interbank Financial Telecommunication (SWITF) es una plataforma dominada por
USA. Que por ahi se sabe origen y destino de las transacciones bancarias
internacionales. Y por ahí la retienen, la embarga y la bloquean. Sobre todo a
la banca que no puede hacer contabilizacion en tiempo real, por problemas
tecnologicos.
Noveno: Lo han politizado todo y cuanto
han podido. Lo han tergiveresado todo y cuanto han podido.
17 AGOSTO 2021
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