Cuba Works to Combat Money Laundering Despite US Sanctions

Training Officials to Combat Money Laundering and Terrorist Financing

HAVANA - The Financial Action Task Force (FATF) has been training Cuban officials on methods to combat money laundering and terrorist financing operations. Alejandro Montes de Oca, an expert who led the course, explained that they covered 40 different recommendations in areas such as criminal procedures, legal classification, and preventive measures for financial transactions.

Progress Made, but Challenges Remain

Cuba was previously placed on a black list by the FATF due to its lack of membership in international institutions combating these crimes. However, it has since been moved to a gray list, an intermediate state before being removed from the list altogether. Despite this progress, Cuba’s Central Bank claims that the country was put on the black list due to manipulation and says that the training courses have not taught them anything new.

Recent Reports of Money Laundering

However, recent reports have linked the Cuban branch of an international financial bank to a Medicare scam involving $30 million in stolen funds. When asked about this, a Central Bank official asked not to publish her comments and insisted that such secrecy is standard practice worldwide.

Commitment to Improving Financial Systems

Montes de Oca acknowledged that Cuba’s authorities are committed to improving their financial systems and incorporating the country into international networks combating these crimes. He added that new norms will be approved by year’s end, aiming to fulfill an action plan agreed upon with the FATF to remove Cuba from the gray list.

Benefits for Fighting Corruption

Some of these measures could also benefit Cuba’s fight against corruption at home, as they demand transparency in financial transactions and identification of beneficiaries behind companies. “We are focusing particularly on individuals who hold public offices and those close to them,” Montes de Oca said, aiming for greater control over state finances.

Challenges Due to International Sanctions

However, Cuba faces unique challenges due to international persecution by the US. Many financial transactions must be conducted secretly to avoid sanctions and fines imposed by Washington on banks dealing with the island. “It is a political matter,” Montes de Oca said, emphasizing that the FATF’s evaluation process is technical, not political.

History of Sanctions

Since 2009, the Obama administration has enforced strict sanctions against banks operating with Cuban assets, resulting in over $2 billion in fines for embargo violations. The situation has become so dire that Cuba’s diplomatic delegation in Washington has suspended its consular activities due to US banks’ refusal to open accounts for them.

Outlook

Despite these challenges, the new agreements with the FATF may open doors for Cuba at the international level. However, being placed on a white list will not spare Cuba from US sanctions, which also apply to financial institutions with transactions with the island.