Cuba says U.S. sanctions to end remittances, Western Union says not so fast

[October 29, 2020]  HAVANA (Reuters) - Cuba said late on Tuesday Western Union would have to shut down its operations on the island due to new U.S. sanctions, thereby cutting off key remittances, but the money transfer firm said it was still exploring ways to comply with the new rules.

Odalys Paez waits to receive a remittance at a Western Union office, in Havana, Cuba, October 28, 2020. REUTERS/Alexandre Meneghini

President Donald Trump's administration said last week it was enacting a rule prohibiting persons subject to U.S. jurisdiction from sending remittances to Communist-run Cuba via firms that work with Cuban military-controlled companies.

Military-owned Fincimex is the main Cuban partner of Western Union, which millions of Cubans in the United States have used for two decades to send money back to their loved ones on the Caribbean island.

In a statement published on Saturday, U.S. Secretary of State Mike Pompeo said the military used its profits from the transfer business "to oppress the Cuban people and to fund Cuba's interference in Venezuela".

Some analysts also believe the Trump administration is ratcheting up sanctions on Cuba ahead of next week's presidential election in a bid to ensure it has secured the anti-Castro vote in the key swing state of Florida.

The administration said the changes would be effective within 30 days, theoretically giving Western Union and the Cuban government time to figure out a new business arrangement such as transferring the remittances business to non-military entities.

"We are exploring ways to comply with the new rules and regulations on Cuba," Western Union said in a statement.

"We will provide additional information as we formalize those plans. In the meantime, Western Union services between the U.S. and Cuba remain operational."

But a Fincimex statement posted on Facebook and shared on social media by the Cuban Foreign Ministry suggests Havana will not negotiate.

"Fincimex is the entity that, by sovereign decision of the Cuban government, has been charged with guaranteeing remittances to Cuba from the United States, which will now be totally interrupted," it said.

"Among the North American counterparts are Western Union, whose 407 paypoints distributed throughout the country will close due to these brutal measures."

(Reporting by Sarah Marsh; editing by John Stonestreet)

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