The Cuban government has informed several foreign companies that they will not be able to repatriate the foreign currency they have in their bank accounts on the island, funds that in some cases amount to several million dollars, as reported this Thursday by the agency EFE.
The measure has caused significant discomfort among the affected companies, some of which have raised their complaints with their respective governments, revealed the news agency based on the testimony of business and diplomatic sources who wish to remain anonymous.
One of those businesspeople reportedly stated that their account has been "frozen" and that they can currently only use those funds for internal operations in the country.
"We are in total disagreement. It's not the money from the Government (of Cuba), but rather money from the companies," he specified to EFE.
New currency account modality
As an alternative, the authorities are proposing to those affected -with whom they are conducting individual interviews- the opening of a new type of bank accounts in foreign currency within the island.
This initiative, still in a pilot phase and very restricted, would theoretically allow companies to operate without limitations, as the accounting entries of these accounts would have monetary backing.
However, these new accounts only accept new capital.
That is to say, money from the previous accounts cannot be transferred; only transfers from abroad will be accepted.
Some foreign companies, particularly those involved in attracting investment to Cuba, have already started to open and use these accounts.
In fact, companies affiliated with GAESA - the business conglomerate of the Revolutionary Armed Forces (FAR), which dominates key sectors such as tourism, telecommunications, retail, banking, real estate, and gas stations - would already be operating under that model.
Mixed reactions
Among the foreign companies affected, some view this measure as a difficult but inevitable step.
They claim that the restrictions on accessing foreign currency have existed for years, and they believe that these new accounts will allow them to conduct international transactions or repatriate profits.
However, many entrepreneurs remain skeptical.
They weigh past experiences with mechanisms such as the defunct convertible peso (CUC) or the freely convertible currency (MLC).
The doubts revolve around whether the current conditions of these accounts will be maintained in the long term, especially given the crisis context in which the country finds itself.
Serious liquidity problems
The theoretical advantage of the new accounts is their immunity to the severe liquidity issues faced by the Cuban banking system, which has been entirely state-owned since 1959.
This system is going through a critical situation, with multiple parallel exchange rates, de-capitalization, and a liquidity shortage in both Cuban pesos—rationed since August—and foreign currency, with restrictions applied at discretion.
These difficulties are part of a deep economic crisis that has been affecting the island for more than five years, caused by the combination of the pandemic and, above all, the implementation of failed economic and monetary policies.
Since 2024, access to foreign currency has been severely restricted.
The State, in a very precarious financial situation, has been using funds from the banking system to acquire basic goods abroad.
Cuba maintains a monopoly on foreign trade and imports approximately 80% of the products consumed in the country, prioritizing food and fuel in light of the collapse of domestic production.
In this context, the Government has promoted simultaneous processes of bank integration (aimed at reducing the circulation of cash) and dollarization (of administrative procedures and state services), with the goal of attracting more foreign currency and being able to meet international payments.
As of the closing of this note, the Cuban government has not commented on the revelation from the EFE agency. There is also no additional information about the retention of foreign currency from companies based on the island.
Frequently Asked Questions about Currency Retention by the Cuban Regime and Its Implications
Why is the Cuban government withholding foreign currency from foreign companies?
The Cuban government retains foreign currency to address the liquidity crisis facing the country. This situation arises from a combination of factors, such as the pandemic and failed economic policies, which have restricted access to foreign currency since 2024. The State uses the retained funds to purchase essential goods from abroad, prioritizing food and fuel.
What alternative does the Cuban government propose to the affected foreign companies?
The government proposes the opening of a new type of bank accounts in foreign currencies within the island, but these accounts only accept new capital. This means that companies cannot transfer money from frozen accounts; only transfers from abroad are accepted. Some companies are already using these accounts, especially those linked to GAESA.
What impact does this measure have on foreign companies and the Cuban economy?
The measure has caused discomfort among foreign companies, which see their access to the necessary foreign currency to operate and repatriate profits limited. Many companies are skeptical about the new accounts due to past experiences with mechanisms such as the convertible peso (CUC) or the freely convertible currency (MLC). Furthermore, this retention of foreign currency reflects the serious liquidity crisis of the Cuban banking system and the deep economic crisis the country is facing.
How is this situation related to GAESA's control over the Cuban economy?
GAESA, the military conglomerate, plays a central role in the Cuban economy and is linked to the control of foreign currency and overseas bank accounts. While the population faces a humanitarian crisis, the resources diverted by GAESA have increased the national debt. The new foreign currency accounts could primarily benefit the companies associated with this conglomerate, which already dominates key sectors such as tourism and trade.
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