Cuba blocks the repatriation of foreign currency to foreign companies established in the country

Cuban authorities have informed several foreign companies that they will not be able to repatriate foreign currency deposited in bank accounts within the country, a measure affecting sums in the millions in some cases, as reported by the EFE agency.

The decision has sparked deep unease among aggrieved companies, some of which have taken their complaints to their respective governments, according to business and diplomatic sources who preferred to remain anonymous.

One affected businessman expressed his frustration to EFE: "We are in total disagreement. It is not the (Cuban) government's money, but money from the companies." This testimony reflects the feelings of those who denounce that their accounts have been "frozen" and that they can only use those funds for internal operations in Cuba, which severely limits their ability to maneuver financially at the international level.

For his part, the Republican congressman, Carlos Gimenez reacted to this measure on his X account, and noted:

"The murderous dictatorship in #Cuba is once again STEALING and EXPROPRIATING money from foreign companies on the island.

Investing in #Cuba gives total loss and we continue to push our initiatives to STOP all travel, remittances and investments on the island. Enough is enough! #PatriaYVida."

An alternative with conditions

In response, the Cuban regime has proposed to the affected companies, through individual meetings called "interviews," the opening of a new type of bank accounts in foreign currency. This modality, which is in a pilot phase and is restricted for the moment, promises companies the possibility of operating without the current limitations, since it would have real monetary backing. However, these accounts will only accept fresh capital from foreign transfers, excluding funds already existing in previous accounts.

Some foreign companies channeling investment into Cuba have begun to adopt this alternative, as have certain companies linked to GAESA, the powerful business conglomerate of the Revolutionary Armed Forces (FAR).

GAESA dominates key sectors such as tourism, telecommunications, retail, banks, gas stations and the real estate market, and appears to be one of the first beneficiaries of this new modality.

Meanwhile, opinions among those affected are divided. Some businessmen consider that, although painful, the measure could be a necessary step in the face of the restrictions they had already been facing for years, and are confident that the new accounts will allow them to carry out international operations or repatriate profits.

Others, however, view the proposal with skepticism, recalling failed experiences such as the disappeared convertible peso (CUC) or the freely convertible currency (MLC), and fear that the current conditions of these accounts will deteriorate in the future, given the deep economic crisis the island is going through.

Banking and dollarization as a strategy

In order to capture more foreign currency and face its international commitments, the authorities of the Cuban regime have promoted in recent months processes of bankarization, aimed at reducing the circulation of cash, and dollarization, applied to state procedures and services. These measures seek to channel a greater volume of foreign currency into the formal economy, at a time when the country is struggling to keep its finances afloat.