Cuban Authorities Crack Down on Informal remittance Networks
Cuban authorities, through the Ministry of the Interior (MININT), have announced a series of investigations and actions targeting individuals and networks facilitating the transfer of remittances outside of official state channels. These operations, spanning multiple provinces including Villa Clara, Sancti Spíritus, Las Tunas, Pinar del Río, and Havana’s 10 de Octubre municipality, reveal a complex system leveraging non-state forms of management – specifically Micro, Small and Medium Enterprises (MSMEs) – to circumvent official financial institutions.
The investigations detail a scheme where operators negotiated with MSMEs to pay foreign suppliers directly from abroad.the equivalent value in Cuban pesos was then distributed to remittance recipients within Cuba, bypassing state-controlled banks and exchange houses. This involved organized structures with managers overseeing the collection of pesos from MSMEs and distributing funds through informal networks extending across provinces.Individuals in Sancti Spíritus and Las Tunas were identified as key players in transferring and delivering cash within these subnetworks.
Authorities allege these operations generated “million-dollar enrichments” through commissions ranging from 8 to 12% on both shipment values and the final price of goods sold by individuals. MININT asserts these practices violate laws in both Cuba and the sending countries, negatively impacting economic growth and the daily lives of citizens.
While MININT stated this is not a direct attack on non-state forms of management, they acknowledged the growth of the private sector has created opportunities for operations outside the state banking system. The government framed these schemes as a form of “economic war” imposed by the United States, and confirmed criminal proceedings have been initiated against ten individuals, with some currently held under provisional arrest.
A separate investigation in pinar del Río uncovered an individual operating an informal currency exchange from their home, assisted by collaborators handling money transport and social media promotion. Another network was detected in Havana, directly linked to MSMEs requiring significant amounts of both Cuban pesos and foreign currency to maintain operations.
MININT reports over one hundred similar investigations are currently underway across the country, coinciding with a period of economic, energy, and epidemiological crisis exacerbated by Hurricane Melissa. The government maintains that dismantling these networks is crucial for “preserving order and tranquility” and ensuring financial flows benefit “the social and common interest.”
According to official figures, less than 10% of remittances currently reach Cuba through state channels. Though, critics argue the proliferation of these informal networks is a direct consequence of the failings of the cuban banking system – including delays and a lack of public trust - forcing families to seek option methods for receiving funds. The government continues to portray those facilitating these transfers abroad as exploiting remittances sent by emigrants, while many Cubans view the crackdown as an attempt to regain control of a market lost due to state inefficiencies.