Cuba willing to drop 10 percent penalty on U.S. dollar exchanges

Cuban Foreign Minister Bruno Rodriguez talks to the press Thursday during the opening of the press room that will be used for the visit of President Barack Obama.
Cuban Foreign Minister Bruno Rodriguez talks to the press Thursday during the opening of the press room that will be used for the visit of President Barack Obama. AP

Cuban Foreign Minister Bruno Rodríguez said Thursday that Cuba had decided to do away with a 10 percent penalty Cuba charges on exchanges of U.S. dollars but only if new U.S. banking measures allow improved Cuban access to the international banking system.

The new rules make it clear U.S. financial institutions will be able to process cash, travelers checks and other U.S. dollar-denominated monetary instruments indirectly presented by Cuban financial institutions and that correspondent accounts at third-country financial institutions used for such Cuban transactions may be denominated in U.S. dollars

Rodríguez said in the next few days Cuba would try to make dollar transfers through third-party banking institutions and if they prove successful and don’t result in sanctions against the banks, Cuba would eliminate the 10 percent surcharge.

Cuba imposed the penalty, the foreign minister said, to compensate Cuban financial institutions for the risks and costs associated with the use of greenbacks. Before the new rules, it was illegal to use U.S. dollars in third-party transactions with Cuba and billions of dollars in fines have been levied against banks over the years.

Only days before President Barack Obama is scheduled to visit Cuba, Rodríguez still found plenty to criticize about the set of regulations that the United States announced Tuesday — although in general he said they were “positive measures and a step in the correct direction.”

Previous regulations announced by the United States since the Dec. 17, 2014, rapprochement between the two countries, he said, had little impact on lessening the effects of the embargo.

But he said it appeared some of the banking changes were “significant,” as well as a measure allowing Americans to make individual people-to-people trips to the island rather than just traveling in organized groups.

He pointed out, however, that Americans still can’t travel freely to Cuba — and they still have to keep records of their expenses and activities on their people-to-people trips. “Why keep this absurd prohibition? What about the civil rights of American citizens?” he asked.

A new rule that allows American ships to call on Cuba, drop off cargo and then continue or their routes with cargo for other destinations, he said, is a “measure that doesn’t benefit Cuba but U.S. vessels.”

Rodríguez also wasn’t impressed by a rule change that says Cuban athletes, artists, performers and others, who are in the United States in non-immigrant status, can be hired and paid by U.S. companies as long as no additional payments are made to the Cuban government and the workers aren’t subject to any special tax assessments in Cuba. Rodríguez said that means they wouldn’t be able to satisfy their Cuban tax obligations and such workers would be forced into an “illegal situation.”

He also scoffed at a new rule that allows Americans to legally consume Cuban products such as rum or smoke Cuban cigars when they are in the Bahamas or Mexico, for example. Technically, Americans should have declined rum and cigars in third countries under an old regulation, but few were aware of the prohibition.

Americans still can’t purchase such Cuban products abroad and bring them back to the United States, although they are allowed to bring back $100 worth of tobacco and alcoholic products if they purchase them directly in Cuba.

The Obama administration has emphasized that the changes it is making to loosen the embargo, which only Congress can lift, are designed to benefit and empower the Cuban people. Many of the new measures are aimed at helping Cuban cuentapropistas, or the self-employed, with their fledgling businesses.

“If the United States government wants to benefit the Cuban people, lift the the blockade,” Rodríguez said. “The Cuban people have empowered themselves for decades.”

Even though Obama will make a historic visit to Cuba starting Sunday, Rodríguez said that there are still “great differences [between the two countries] related to national sovereignty, profound differences in relation to the preservation of peace, of international security,” and policy toward Venezuela.

But he said the president would be welcomed by the government and the Cuban people with “the hospitality that distinguishes Cuba and the hospitality a head of state merits.”

He noted that Obama will have an opportunity to speak directly to the Cuban people during a speech Tuesday morning at the Gran Teatro Alicia Alonso in Havana and said that it would be broadcast live on Cuban television.