Friday, September 4, 2009

Remittances by bank transfer -- a good first step (corrected)

[Correction: My reading of that Treasury language was wrong. U.S. banks will be permitted to send remittances through third-country banks, and at the same time they will be allowed to communicate directly with the Cuban banks to establish who is sending the remittances and who should receive them. We’ll see how this works in practice, but it should be cheaper than some of the methods of sending remittances that have been available to date. It still escapes me why the U.S. government would not allow direct wire transfers of money between U.S. and Cuban banks in both cases discussed here; the legal sending of remittances to Cuba, and Cuba’s payments for shipments of U.S. agricultural exports.]

In addition to ending limits on remittances, President Obama has made it easier to send them. His new regulations will allow direct transfers of funds between U.S. and Cuban banks, so that a guy in Hialeah can go to his bank and transfer money directly to the Cuban bank account of his sister in Camaguey. No middleman, no Western Union, no storefront remittance forwarder, no mule charging 20 percent.

The language is as follows:

“Depository institutions are permitted to set up testing arrangements and exchange authenticator keys with Cuban financial institutions to forward remittances…but may not open or use direct correspondent accounts of their own with Cuban financial institutions.”

That’s a normal, 21st-century arrangement.

So why can’t it apply to the payments for our agricultural exports to Cuba?

When Cuba pays for our exports, our regulations don’t allow the Cuban buyer to wire money to U.S. banks – payments have to be sent through third countries. This makes European bankers happy as they collect fees for handling the transactions and changing money from one currency to another. Sometimes, this scheme delays transactions, and it always adds a few percentage points of cost, needlessly making our exports more expensive and less competitive.

If American banks can send money to Cuban banks, why not let Cuban banks send money to ours, especially since this would benefit U.S. exporters?

12 comments:

Anonymous said...

Panama is an obvious third country with a developed international banking system, and the US dollar as its de facto currency.

Vecino de NF

Anonymous said...

Testing Phil Peters' patience and hospitality, the extract from Juan Juan Almeida's book that was posted in Penultimos Días offers a highly personal look at Raul Castro's personality. There is no way to verify its accuracy but it appears plausible in view of RC's behavior when he interrupted the ALBA summit in Venezuela. RC appears to be a rather mercurial fellow reminding one of Jimmy Bond, the character played by Woody Allen in the original Casino Royale.

Vecino de NF

Anonymous said...

Peters, I'd be very interested in your thoughts on how increased Cuban American travel and remittances can be used to undermine the regime. Clearly, you know the regime is despicable and your viewpoint is we should use more contact, etc., to undo its control of the populace. Please elaborate.

chingon

Anonymous said...

The Hate, Bravo!
Tú SI eres guapo, macho!!!
La parte que no entendí es que haces en esta orilla?

Anonymous said...

sorry, but did i understand the hate to say for every cuban official killed he'd pay?
if so that crosses the line and the moderator should step in
if not, i apologize

El Odio said...

Si, creo que esta orilla es un poco peligroso. Soy muy joven y Americano, pero sabes que, caballeros?--me muero para esta causa.

El Odio

Elpidio Valdez said...

Alguien debe decirle al estupido que firma Odio que ni es guapo ni esta dispuesto a morirse por nada.Cuantas veces a intentado infiltrarse en Cuba para enfrentar al gobierno cubano? No es otra cosa que un berraco bocon.

Anonymous said...

Elpidio,
Te vamos a cojer muy muy pronto. Vamos a ver que tipo de hombre eres. Si eres guapo?

Anonymous said...

We made a documentary about Cuban Underground musicians, called Cuba RebelioN.

Check out the trailer at www.coldsun.eu

Karamchand said...

Mi opinión personal:
- Aun cuando la transferencia se haga por un tercer país, costará más barato comprar a EEUU, el ahorro en flete compensa cualquier gasto por transferencia bancaria. De manera que siempre serán más competitivas las mercancías de EEUU.
- La participación del gobierno de Cuba en estos negocios limitados y autorizados por EEUU, es leonina, se quedan con la mayor parte de las ganancias; bien sea en el negocio de las llamadas, o de las transferencias de dinero desde EEUU a Cuba. Las empresas norteamericanas socias en estos negocios, reciben a cambio un por ciento mucho menor, permaneciendo en el negocio pues como quiera ganan y de abandonar, hay dispuestos a sustituirlas.
Son claras las inclinaciones de usted señor Peters, lo cual le impide ser más realista o ver las dos partes del asunto y le resta objetividad. Parece ser, con todo respeto, que usted ha contraído el sindrome del cubano, que padece de una nebulosa para ver un solo lado de la moneda y se parcializa según sus deseos e inclinaciones; eso, como cubano, lo padezco, pero al menos, el ser cubano me justifica en parte; me cuesta trabajo ver la cara de la moneda que le agrada a usted, y aclaro que no digo que el señor Peters sea partidario o apoye la dictadura cubana, no me cosnta, a mi modesto entender, está en el ala demócrata que quiere creer, aun contrario a la realidad de 50 años, que el acercamiento redundará en beneficio de la democratización o la libertad del pueblo cubano.
Lo anterior lo digo por lo obvio del ahorro en flete frente a los gastos bancarios, que bien pudo tener presente el señor Peters.

Anonymous said...

May someone please explain to me who exactly is this "Cuban buyer" Mr. Peters speaks of?

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