Cuban Authorities Crack Down on Informal remittance Networks
Cuban authorities, through the Ministry โขof the Interior (MININT), haveโข announced a series โฃof investigations and actionsโ targeting individuals and networks facilitating the transferโ of remittancesโ outsideโข of official โฃstate channels. These operations, spanning multiple provinces including Villa Clara, Sancti Spรญritus,โข Las Tunas, Pinar del โRรญo, andโค Havana’s 10 โขde โOctubre municipality, reveal a complex system leveraging non-state forms of management – specifically Micro, Smallโค and Medium Enterprises โค(MSMEs) – to circumvent official financial institutions.
The investigationsโ detail a schemeโ where operatorsโ negotiated with MSMEs to pay foreign suppliers directly from abroad.the equivalent value in Cuban โฃpesos โwas then distributed to remittance recipientsโ within Cuba,โค bypassing state-controlled banks and exchange houses. This involved organized structures with managers overseeing the collectionโ of pesos from MSMEs and distributing fundsโ through informal networks extendingโข across provinces.Individuals in Sancti Spรญritus and Las Tunas were identified as keyโ players โขin transferring and delivering cash within these subnetworks.
Authorities allege these operations generatedโค “million-dollar enrichments”โค through commissionsโ ranging โfrom 8 toโค 12% on bothโ shipmentโข values and the final price of goods sold by individuals.โค MININT asserts theseโข practices violateโ laws โฃin both Cubaโฃ and the sending countries, โขnegatively impacting economic growth โขand the daily โlives of citizens.
While MININT stated this is โnotโ a direct attack on non-state forms of management, theyโข acknowledged the growth of theโฃ private sectorโ has created opportunities for operations outside theโฃ state banking โขsystem. The government framed these schemesโฃ asโข a form of “economic war” imposed โคby the United States, and confirmed criminal proceedings โคhave been initiated against ten individuals, with some currently held under provisional arrest.
A separate investigation in pinar del Rรญo uncovered an individual operating an informal currency exchange โคfrom their home, assisted by collaborators handling money transport and โsocialโ media promotion. Another network was โdetected in Havana, directly linkedโฃ to MSMEs requiringโ significantโฃ amounts of both Cuban pesosโ andโค foreign currency to maintain operations.
MININT โฃreports over one hundred similar investigations are currently โคunderway across the country, coinciding with a period of economic, energy, and epidemiological crisis exacerbated by Hurricane Melissa. The government maintains that dismantling theseโ networks is crucialโ for “preserving order and โคtranquility” and ensuringโฃ financial flows benefit “the social and common interest.”
According to official figures, less than 10% of remittances currently reach Cuba through state channels. Though,โ critics argue the proliferation of these informal networks is a direct consequence of the failings of โthe โcuban banking system – including delays and a lack of publicโค trust โฃ- โforcing families โคto seekโ option methods for receiving funds. The government continues โฃto portray those facilitatingโ theseโ transfers abroad โขas exploiting remittances sent by emigrants, โฃwhile manyโ Cubans view the crackdown as an attempt to regain control of โa market lost due to state inefficiencies.
