Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

In blow to struggling Cubans, Western Union offices close as sanctions bite

Stock MarketsNov 24, 2020 12:00AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. Western Union to end remittances service in Cuba due to U.S. sanctions 2/2

HAVANA (Reuters) - Western Union (NYSE:WU) Co suspended its operations across Cuba on Monday evening as new U.S. sanctions kicked in, cutting a key lifeline for many struggling Cuban families as the coronavirus pandemic deepens the Communist-run island's economic crisis.

U.S. President-elect Joe Biden has promised to roll back some sanctions on remittances. But any lifting of the suspension could take time and until then, Cuban Americans are expected to resort to alternatives that are more costly, less secure and less rapid.

Remittances to Cuba are believed to be around $2 billion to $3 billion annually, representing its third biggest source of dollars after the services industry and tourism.

Money transfers from the United States via Western Union were estimated at more than $1 billion last year, the majority of which was sent from Florida, according to John Kavulich, president of the U.S.-Cuba Trade and Economic Council.

Current options for remittances include agencies that hire "mules" to fly out to Cuba with cash and which predate Western Union's start in Cuba 20 years ago, as well as companies that transfer dollars to Cuban accounts - though that money can only be used at state stores.

Cryptocurrency exchanges are also promoting themselves as an alternative. Cuban Americans can transfer digital currencies to middle men on the island who then give money to the Cuban Americans' relatives.

But such platforms lack oversight, cryptocurrencies can fluctuate rapidly and unexpectedly in value and internet access is still not a given in Cuba, Kavulich said.

"We've looked but there are no safe services," said local resident Arturo Labaut.

The closures of Western Union's 407 offices in Cuba came into effect after U.S. President Donald Trump's administration banned U.S. firms sending remittances via military-controlled companies that include Western Union’s main Cuban partner.

His administration has also previously capped the amount Cuban Americans can send family members at $1,000 per quarter, and transfers of money to non-family members are no longer allowed.

The new ban comes just as Cuba has started enacting structural reforms to revive its state-run economy which have been long called for but which will spell pain for its residents in the meantime.

"It's a bad time to be doing this because of the suffering it will cause," said Florida International University professor Guillermo Grenier.

"It's not governments that suffer, it's people."

In blow to struggling Cubans, Western Union offices close as sanctions bite
 

Related Articles

These 3 Chip Stocks Are Cheap and Screaming Buy
These 3 Chip Stocks Are Cheap and Screaming Buy By StockNews - Jun 24, 2021

A global semiconductor chip supply crunch has resulted in rising capital investments in the semiconductor industry, given its applications in virtually every industry....

3 Overlooked Mortgage REITs With Yields Over 5%
3 Overlooked Mortgage REITs With Yields Over 5% By StockNews - Jun 24, 2021

There are many indicators that the economy could be due for a period of deceleration. This would be bullish for yield-payers like REIT stocks. Three REITs with attractive yields...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email