Sanctions on Cuba​: How Business Deal with AML Restrictions

As a communist country, Cuba was always considered high-risk to work with by foreign companies. Here is how the recent reforms have changed this trend.

The relationship between Cuba and the US has been intense for almost 50 years. However, certain developments have changed the situation for the better.

Sanctioned Country
Ever since 1963 Cuba has been repeatedly sanctioned by the US due to the ideological war between the countries. In addition to that, Cuba’s international position in the AML risk rating has got worse—black market activity flourished, the country lacked economic and individual freedom in terms of government and legal transparency, the government controlled the country’s banking sector and private businesses.

Changes to the Sanctions List
In April 2011, during the Cuban Communist Party Congress (for the first time in 13 years), the government accepted a plan to impose wide-ranging economic changes including the permission of the private ownership, sale of real estate, new and used vehicles, purchasing of the electronic appliances and cellphones.

In 2015, The Financial Action Task Force (FATF) excluded Cuba from the List of Countries that have been identified as having strategic AML deficiencies, recognizing significant changes in Cuban AML regulations. According to FATF Report, Cuba is now compliant for 16 and Largely Compliant for 20 out of the FATF 40 Recommendations.

Based on the Cuban government’s efforts, the U.S. Department of the Treasury declared some changes on the Cuban sanctions list:

  • In the area of banking and finance: allowance to make U-turn transactions via the U.S. banking institutions; processing U.S. dollar monetary instruments, including cash and travelers’ checks, presented indirectly by Cuban financial institutions in the US, allowance to open US bank accounts to receive payments in the United States for Cuban citizens.
  • In the area of trade and commerce: participation in international non-commercial activities and humanitarian projects became much easier for Cuban people; simplified import of some goods to Cuba;​ trade of Cuban-origin mobile application and software became accepted.

Cuba has been under sanctions for a long time and many foreign entrepreneurs still do not work in this country, even though now, Cuba represents an attractive region in many areas of investment due to its sustainable development.

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