The regime against private remittance activities: a new economic battle

The Cuban economy needs a new model to lift it from the communist disaster of 67 years of Marxist-Leninist doctrines. One of these, if we can call them "doctrines," pertains to the creation of wealth and its accumulation, an activity forbidden by the communist constitution of 2019. This has led the regime to monitor, pursue, and eliminate any private activity that generates value.

A good example can be found in a recently published article in Granma titled “Disruption of criminal structures managing millions of dollars in the illegal currency market,” which reports that there are more than 300 investigations including criminal processes already initiated with individuals charged under the prosecution's control. The reason: to do things better than the communist state and make money. Well, now that there are "conversations" with the United States, which has become a matter of utmost relevance, it would be worthwhile to pay attention to the malice of the communists towards any signs of profitable and prosperous private economic activity.

What are we talking about? Everyone will remember that last December, after years of inaction, the State launched a system for the peso in relation to major currencies in an attempt to normalize a service that exists in every country around the world, except for Cuba. Precisely, the lack of action by the State led to a surge in operations in the informal currency markets, and an unofficial exchange system effectively governed daily transactions in major currencies with the peso. Thus, as expected, the state floating system quickly ran out of foreign currency shortly after its launch, and private economic actors had to continue relying on agents providing currency exchange services. The authorities have directed their anger particularly forcefully against them, resulting in more than 300 investigations related to what the regime calls "the illegal currency market."

Described as "a phenomenon that is a priority in the fight against crime and that impacts the macroeconomic stability of the country," according to testimony from Lieutenant Colonel Yisnel Rivera Crespo, head of the Department of Economic Crime Combat of the General Directorate of Criminal Investigation of the Ministry of the Interior (Minint), in the television program "Hacemos Cuba." He stated that "these criminal structures move significant amounts of money and operate with increasingly complex schemes involving Cubans residing abroad as financiers." It is logical; as the demand for foreign currency among Cubans increases due to minimal production in the national economy, it is reasonable that these activities will rise.

Chasing and harassing them can only lead to the disappearance of private currency exchangers and leave many necessary operations without foreign currency, which would further undermine the national currency. However, this does not seem to concern the authorities, who are more interested in creating an absurd scenario that justifies the public funds allocated for investigation and persecution.

What are these currency exchangers being accused of?

It essentially involves conducting an "illegal foreign exchange market, where financiers extort private actors to finance their imports in dollars, but they impose their own conversion rate, with an additional component of manipulation and speculation, along with establishing a profit margin that consistently remains between six and twelve percent."

No one should think of any kind of extortion. What happens is that the economic actor who needs foreign currencies does not have a reliable and supportive state system, and must resort to that "illegal market" for currencies that has been operating in Cuba since the implementation of the so-called "Tarea Ordenamiento" in 2021. The prices and rates established in this market are determined by supply and demand, with complete freedom. Any other narrative is just a petty conflict from the authorities, who, nonetheless, have expressed their concern that "foreign currencies are not coming into the country; the money stays abroad and is used to finance imports," which is efficient and also prevents the regime’s controls and their ability to acquire foreign currencies.

Finally, the authorities are also displeased with the fact that “there are people here in Cuba who follow the orders of these organizers, responsible for collecting funds from these economic actors, who instead of depositing them in the bank, must keep them to hand over to these individuals, which ultimately becomes the money used for the distribution of remittances, usually in their equivalent in national currency.” In other words, the authorities wish to intervene, direct, and control the currency exchange process and ensure that all agents involved comply with their directives. They are prepared.

What the authorities also disapprove of is the recognition that "our borders are utilized for the illicit extraction of these currencies, employing individuals known as mules, whose sole purpose is to extract from the national territory those currencies accumulated as a result of these activities." I insist, the type of activities that the private sector must engage in to meet the needs of economic actors. The authorities even lament that "this involves cash that leaves through the airports, taking advantage of the threshold established by the Central Bank of Cuba of up to $5,000 per person per trip, which, when done repeatedly and with various individuals, allows for the movement of considerable amounts."

And of course, as always happens in the communist regime. In the absence of market solutions and efficient economic activity to address the problem, what they have set out to do is investigate and repress. How? Through the "development of a system that includes multiple ways to obtain operational information, the infiltration of criminal networks, and their subsequent dismantling. Once operational information is obtained, it is necessary to understand how they operate, what roles the participants play, and of course, the dismantling."

The research has yielded results regarding the definition of the different roles involved in these criminal structures:

-Financiers: individuals abroad who cover the cost of imports for private actors.

-Remeseros: they are responsible for collecting funds according to the instructions from those abroad, and later distributing them as remittances throughout the national territory.

- Currency traffickers in physical and virtual spaces: involved in cross-border cash movements.

-Operators of simulated international top-ups: individuals engaged in the trafficking of phone top-ups.

Honestly, to reach this point, it wouldn't be necessary to mobilize resources from the political police and the prosecutor's office. I insist, since the approval of the "Ordering Task," this system has been operating efficiently and continuously on the Island.

The authorities have announced some of the seized and confiscated assets

The first case involved $183,278, €15,560, 1,500,900 Cuban pesos, two cars, five safes, three money counting machines, 12 bank cards, three mobile phones, a laptop, and documentation related to five additional properties. This occurred in the capital municipality of Diez de Octubre: joint forces of Minint dismantled a structure dedicated to the illegal trafficking of foreign currency and the delivery of remittances that operated in two homes. Based on information obtained, searches were conducted and the main defendant was arrested.

On the other hand, in the second operation, $17,210, €13,475, 2,199,650 Cuban pesos, two electric motorcycles, two laptops, a video surveillance system, three cell phones, a money counting machine, and seven magnetic cards with different balances were seized. Two main suspects were also arrested, and searches were conducted at their residences: two homes in the Plaza de la Revolución municipality and one in the Cerro municipality.

Of all the "occupation" and "confiscation" in these two cases, nothing seems to be criminal material but rather basic aspects of the operations being carried out by these currency exchangers who, pressured by State Security, ended up acknowledging a supposed involvement in the illegal currency trafficking. Furthermore, a person who used the services and had come to this location for a deposit during the operation was charged. One can only imagine how that person must feel and what their needs for currency must be to be caught in the operation. It later emerged that this was a private economic actor who came to deposit their daily earnings to convert them into currency through the informal exchange rate for their operations. Nothing unusual; it's been the norm if one wants to have money with real value in the economy.

Finally, there was a third case involving a citizen who had transactions in their bank accounts with credits exceeding 30 million Cuban pesos and debits over 35 million. It was concluded that they were part of a criminal network dedicated to the illegal trafficking of foreign currency, operating from their home in Vedado and collaborating with another individual in a town in the municipality of Mariel. Both acknowledged that their primary activities involved exchanging cash dollars, trafficking in bankable currencies (MLC) and CUP, as well as operations with cryptocurrencies, which was a distinctive element in this case.

The simultaneous raids at the residences in Vedado and Mariel have confiscated: 134,550 Cuban pesos, 815 dollars, two money counting machines, a laptop, a hard drive, a central unit for surveillance, two cell phones, an electric motorcycle, eight bank cards (Metropolitano, Bandec, and BPA), one classic card, and other foreign cards. All highly criminal and illicit, without a doubt.

And of course, since no situation comes alone, the chief prosecutor of the Criminal Proceedings Department of the Prosecutor's Office of Havana, Yudenia San Miguel Ramírez, topped it all off by indicating that, in addition to the parallel asset investigation, “they have looked into the financial operations conducted by these individuals and the accumulation of various assets.” The eternal obsession with wealth and its accumulation, a true burden on the Cuban economy, leads the authorities to view unfavorably the fact that currency exchangers “in the course of their activities are acquiring private businesses and engaging in negotiations and imports.”

For the communist authorities, Cubans—from farmers to self-employed workers, from entrepreneurs to these currency exchangers—should not experience progress or improvement, and any accumulation of value or wealth must be eradicated at its root, regardless of the consequences this has on society. It’s akin to when authorities confiscate a hawker's cart in Havana along with all its goods; the police resolve the issue that day, but the elderly who were waiting for their food find themselves without lunch or a meal that day.

As a result of the assessments, our friends in currency exchange, according to the prosecutor, may have committed crimes related to illegal currency trafficking, tax evasion, and money laundering. Not much. Let's see if they have someone to defend them. For now, they have stopped offering their services, and their clients will have to turn to other currency exchangers. This is how the private economy works; when the doors are opened, the only way to proceed is by trampling on property rights and inventing crimes that are not real, but rather a reflection of outdated legislation that is desperately in need of reform.