The Central Bank Of Cuba is Going to Start New Manage Remittances

Autorizan a ORBIT S.A. para realizar operaciones con remesas en Cuba

HAVANA, Feb. 9th The Central Bank of Cuba authorized a new financial institution to manage remittances and carry out other transfer operations after Washington blacklisted Fincimex,

a 20-year counterpart to Western Union, the main money transfer company from the United States. The Official Gazette published the resolution signed by the president of the Central Bank of Cuba (BCC), Martha Sabina Wilson, to accept orbit S.A.’s request to “manage and process international transfers from abroad to Cuba” and “provide payment services from abroad through its infrastructure.”

Until November 2020, remittances were operated by Western Union with Fincimex, but within the framework of the tightening of US sanctions on the island, in October of that year, the government of then-President Donald Trump cancelled the permit for the company from his country and included Fincimex in a list of restricted companies arguing that the Cuban counterpart was part of a conglomerate under military administration.

The origin of the firm Orbit S.A is unknown except for the fact that the resolution of the BCC indicated in its considerations that it was constituted on “February 3, 2020, with headquarters in Havana”. Nor if Western Union will resume its agreement with the island with this new financial institution or when the income of remittances will be effective.

According to the regulations, the BCC may cancel or modify the license at the request of Orbit S.A. in the event of non-compliance by the entity with the applicable legal provisions in force. The Official Gazette indicates that Orbit S.A., was incorporated by Notarial Deed No. 54, of February 3, 2020, with headquarters in Havana, but no other precise information appears, such as members of the company or corporate purpose.

That undertaking has no public records of financial or commercial activity. Orbit S.A does not have an official website. Nor does it have official profiles on social networks, nor do emails, telephones or other means of contact appear.

The resolution is dated Friday, Feb. 4, the same day the administration of Democrat Joe Biden said it is considering implementing digital payments “as part of innovative solutions” to facilitate the transfer of money from the United States to Cuba.

Following anti-government protests on the island, Biden in July asked the Treasury Department and the State Department to study the matter and report on how to allow the flow of remittances — which were once a financial lifeline for many Cubans — ensuring that the money does not fall into the hands of the island’s government.

Remittances were severely restricted under Donald Trump. When it took its action, the Trump administration said FINCIMEX, the Cuban military’s financier, and other companies “disproportionately benefit the Castro dictatorship, a regime that uses the profits of these businesses to oppress the Cuban people and finance their interference in Venezuela, at the expense of the Cuban people or private enterprise in Cuba.”

Havana refused to cede the management of remittances to another company not associated with the military and kept the management in the hands of FINCIMEX, despite the time given by the Trump Administration to reorder the sending of remittances between the two countries. Finally, Western Union, its counterpart in the US, closed all its offices on the island.

For the economist Elías Amor, the control exercised by the communist regime over the economy is so high that it is not easy to find cracks so that capital movements benefit their true recipients, as the United States intends.”The current situation is that those who wish to help their families on the island from the United States are forced to resort to informal means.

The sending of money by the Cuban diaspora to their relatives on the island was in 2019 the second source of foreign exchange in Cuba, after the export of medical services. That year, remittances totaled about $3.72 billion, according to Miami-based Havana Consulting Group.