International banks shun Cuba under U.S. scrutiny

[Mika]

More on the US's extraterritorial sanctions on Cuba.


International banks shun Cuba under U.S. scrutiny
http://www.canada.com/montrealgazette/news/business/story.html?id=642156fe-f5c3-4308-9d5d-e84cb3a514f9&k=32697

{snip}

Heightened scrutiny of banking transactions by the United States since the September 11 attacks has led European and Canadian banks to curtail dealings with Cuba, bankers and businesses say.

Cuba ceased exporting armed revolution to Latin America two decades ago, but Washington still lists Communist Cuba as a "rogue" state that sponsors terrorism, along with Iran, Syria, Sudan and North Korea.

The USA Patriot Act allows U.S. authorities to confiscate assets and penalize institutions that fail to report money laundering and terrorist financing.

The result -- perhaps intended -- is that Western businessmen in Havana are having nightmares moving funds in dollars to and from Cuba because banks are increasingly refusing their business.

HSBC , Barclays , Credit Suisse , Royal Bank of Canada and the Bank of Nova Scotia, also known as Scotiabank , have closed accounts of Cuban companies or reduced business tied to Cuba since last year to comply with U.S. regulations.

The moves were confirmed either by the banks themselves, by Cuban officials, or by people doing business in Cuba.

"Canadian banks have told clients to close their accounts and their credit cards because they have a business address in Cuba," said Canadian Mario Simonato, who imports vehicles and heavy equipment into Cuba.

The Havana-based owner of King City Equipment Inc. of King City, Ontario imports vehicles and equipment from Canada, but is turning to China for business due to increased hurdles placed by Canadian authorities who, he says, are bending to pressure from the United States.

ING Groep NV , the first big Western bank to set up business in Communist Cuba, doing so in 1994, said two weeks ago that it will close its Havana office.

ING said it was purely a business decision, but it followed the blacklisting last year by the United States of its banking joint venture with Cuba.

"The banks don't want to risk a fine by the Federal Reserve. Banks like ING and HSBC have much bigger fish to fry than Cuba," said Simonato.

Scotiabank last year ended dollar transactions by the Cuban embassy in Jamaica and was criticized for bowing to U.S. rules.

"It is a risk mitigation measure, a straight issue of our ability to settle transactions on U.S. dollar accounts," said Scotiabank spokesman Frank Switzer. "It applies to anyone on a U.S. sanctions list."

$100 MILLION FINE

The move to comply with U.S. regulations came in the wake of the heaviest penalty in banking history.

In 2004, Switzerland's largest bank, UBS AG , was fined an unprecedented $100 million by the U.S. Federal Reserve for helping Cuba, Iran, Libya and the former Yugoslavia swap old dollar banknotes for new currency.

UBS said it had "substantially completed" its exit from dealings with Cuba, Iran, North Korea, Myanmar, Sudan and Syria by the end of last year.

Much more at: http://www.canada.com/montrealgazette/news/business/story.html?id=642156fe-f5c3-4308-9d5d-e84cb3a514f9&k=32697

[Judi Lynn]

1. Just discovered your article, well after you posted. Going to study this Friday

when I've got more time.

This is going to be useful now, and as something to file away for later. Almost everyone has NO IDEA how much trouble has been forced upon this small island. Talk about political prisoners. The whole island has been imprisoned by the right-wing determination to dominate and control Cuba completely, for a couple of hundred years.

It's about time they get the chance to rise up from under the heel of this country's boot. I'm hoping the solidarity growing throughout Latin America may grow until it will be capable of protecting small countries like Cuba from U.S. right-wing agression.

So many good people need to be free of the meddling bullies from the North.

[Mika]

2. Spot-on observations.

The whole island has been imprisoned by the right-wing determination to dominate and control Cuba completely, for a couple of hundred years.

That pretty much describes the situation to a tee.