Western Union modifies the exchange rate for sending remittances to Cuba

The measure implies an increase of two cents in CUC for every dollar sent in remittances in Cuba.

Sucursal de Western Union en La Habana. © CiberCuba
Western Union branch in Havana. Photo © CiberCuba

This article is from 3 years ago

The company Western Union announced a 2% modification of the exchange rate of the dollar with respect to the Cuban convertible peso (CUC) in remittances sent to Cuba, with a slight benefit for senders and recipients on the island.

"We have made a correction in the exchange rate for money transfers from the United States to Cuba and from now on, for every dollar sent, 0.99 CUC will be paid, an improvement of 2 percent of the previous rate in favor of our clients," he told CyberCuba Margaret D. Fogarty, spokesperson for the corporation for the Americas area.

The modification implies an increase of two cents in CUC for each dollar sent for remittances to Cuba. The exchange rate varied from 0.97 to 0.99 CUC per dollar.

Fogarty confirmed that the measure came into force on September 24.

To give you an idea of the application of the new exchange rate, if until now a user had to send $115 dollars from the United States ($103 principal amount and $12 in shipping charges) to guarantee that the recipient received 100 CUC , now with those $115 dollars they would become 101.97 CUC, applying a monetary equivalence of $1=0.99 CUC.

The official denied that this adjustment in the exchange rate is related to the possibility of paying remittances in dollars to beneficiaries in Cuba, as the Cuban Government has requested since October 2019. The company has kept under consideration the option of transferring payments in dollars to Cubans for a year, without a decision made.

"Western Union continues to explore all possible options to offer secure and reliable money transfer services to our customers, including payment in US dollars. At this time, payment in dollars is not available in Cuba," Fogarty wrote.

In addition, he reported that Western Union has added a new information section on the exchange rate and other matters related to money transfers to Cuba.

Actually, The devaluation of the CUC has occurred in leaps and bounds in the Cuban reality, while interest in the dollar grows. The trigger was the opening of foreign currency stores since the end of 2019, for accelerated collection purposes in the face of the country's liquidity crisis, which has encouraged the black market to acquire dollars.

Although Western Union does not offer data on its operations in any country, the result has been a relapse in remittance shipments from South Florida to Cuba this year, with the growth of a demand from users to deliver the money in dollars, not in CUC.

In the middle of last month, Western Union clarified that he would maintain remittance payments in Cuba in CUC and denied that there is a business decision to reimburse in Cuban pesos (CUP) shipments to their customers on the island.

The clarification took place after versions circulated about the option to reimburse shipments in national currency when the Cuban Government proceeded to monetary unification and imposed the CUP as the only circulating asset in the country.

Western Union's operations have been subject to successive transformations since Donald Trump's administration tightened the embargo and financial blockade against the Cuban regime, with the consequent impact on the reduction of remittance shipments and the cutting of services to Cuba from third countries.

The reinforcement of The sanctions have knocked on the door of the state financial company FINCIMEX, in charge of processing Western Union transactions in Cuba, and most recently from American International Services (AIS), a card branch for money transfers from abroad. Both firms are under the business mantle of CIMEX, controlled by the military consortium GAESA, and have been included in the blacklist of Cuban entities with which US citizens and companies are prevented from doing business.

Fogarty reiterated to CyberCuba that Western Union operations towards Cuba are maintained regularly, without any impact derived from the sanctions announced against FINCIMEX and AIS.

But the agreement established between FINCIMEX and Western Union in 1999 hangs on a lawsuit filed by the Exxon Mobil corporation against CIMEX and CUPET under Title III of the Helms-Burton Act.

The case has been open in federal court in Washington DC since May 2019. The Cuban Government requested to dismiss the lawsuit, But Exxon Mobil lawyers countered the motion by arguing that CIMEX and CUPET are entities that traffic in properties confiscated by Fidel Castro in 1960.

A ruling in this litigation will be key to knowing if FINCIMEX will be able to continue operating remittances sent by Western Union from the United States.

Western Union is the main issuer of remittances to Cuba, and provides its services through 502 branches located in 168 municipalities in the country. The annual amount of remittances to Cuba is estimated at about 3.7 billion dollars annually, according to studies by the consulting firm The Havana Consulting Group, based in Miami.

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Wilfredo Cancio Isla

CiberCuba journalist. Doctor in Information Sciences from the University of La Laguna (Spain). Editor and editorial director at El Nuevo Herald, Telemundo, AFP, Diario Las Américas, AmericaTeVe, Cafe Fuerte and Radio TV Martí.

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