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

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

Cuba wants to ensure it has better access to international banking
system first
Cuban foreign minister says some new U.S. rules for Cuba are 'positive'
But minister says embargo still needs to go

BY MIMI WHITEFIELD
mwhitefield@miamiherald.com

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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.

Source: Cuba willing to drop 10 percent penalty on U.S. dollar exchanges
| Miami Herald -
http://www.miamiherald.com/news/nation-world/world/americas/cuba/article66775447.html