14ymedio, Madrid, 28 July 2022 – John Kavulich, the first entrepreneur to obtain a US Treasury license for a private business in Cuba, believes that the Biden government will allow banking relations between the two countries, something that he considers a “logical” step, taking into account that his case wouldn’t be the only one.
“It wouldn’t make sense for the Biden Administration to continue to require funds moving from the United States to Cuba to pass through banks in third countries, where they then charge a commission for each transaction,” Kavulich, who is also president of the United States-Cuba Economic and Trade Council, told El Nuevo Herald in a report about the transactions of the island’s embassy in Washington.
Kavulich, who, pending the approval of the Cuban Government, has not given any details about the company in which he plans to invest “up to $25,000,” explained that whoever intends to put his money in Cuban private businesses needs to “have a direct, efficient and transparent means” to send the funds and receive their investment income, dividends and loan payments.
At present, this mechanism doesn’t exist, since embargo laws prevent direct transactions between the two countries. During the time of the thaw, the government headed by Barack Obama authorized U.S. entities and companies to open accounts in Cuba, but not so that the Cuban side could do the same.
Relations between Cuba and the United States are now much more tense than then, and Joe Biden is at a time in his mandate – burdened by the consequences of the pandemic, the supply crisis and the invasion of Ukraine – in which it is doubtful that he will expose himself to a confrontation with Florida, where a banking correspondent (collaboration of entities from different countries) with the island would not be welcomed.
However, the license granted to Kavulich and the announcements of new policies that will include the expansion of electronic payments and support for the private sector give hope to those who aspire to invest in the island. Added to this is the statement made by Havana last week, when it opened the door to allow foreigners to put money in private companies in Cuba, an idea rejected outright by some Florida politicians.
The information from El Nuevo Herald explains how a bank founded by a Cuban exile has ended up being the manager of the regime’s accounts in the United States, specifically that of the Cuban embassy and the Cuban mission at the New York headquarters of the United Nations.
In 1974, Carlos Dascal founded Continental Bank, the first bank created by a Cuban-American in the United States. This entity was absorbed in 2019 by First American Bank, an Illinois-based bank that acquired Cuban accounts in June after Centennial Bank “cut off all business relations” with Havana for its support for Russia in connection with the invasion of Ukraine, according to sources in El Nuevo Herald.
Centennial Bank had managed the accounts of the Cuban Government since it acquired Stonegate Bank, an entity authorized for this purpose by the Treasury in 2015. According to the same source, which asked to remain anonymous, First American Bank is currently negotiating with the state-owned International Trade Bank to open a correspondent account in Cuba.
Translated by Regina Anavy
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