As part of the Biden administration’s efforts to improve relations with Cuba, businesses from Cuba will now be able to use U.S. online payment systems to facilitate money transfers between the two nations. The new rules also allow Cuban nationals to open U.S. bank accounts and reauthorize so-called “U-turn” transactions.
The policy change is intended to help private sector entrepreneurs in Cuba import food, equipment, and other goods from the U.S., as well as to make it easier for Americans to send money to Cuba. The rule is “limited to private cooperatives, small private businesses, and sole proprietorships located in Cuba of up to 100 employees.” The Office of Foreign Assets Control now refers to these groups as “independent private sector entrepreneurs” rather than the previous term “self-employed individual,” reflecting the growth of small business in Cuba.
According to the OFAC, U.S. banks can now open accounts for Cuban nationals located in Cuba to receive payments in the U.S. or send payments back to Cuba, including through online payment platforms. For example, a Cuban author could open an account with a U.S. bank to receive payments for book sales.
The OFAC emphasized that this authorization can’t be used for the benefit of Cuban government officials or members of the Cuban Communist Party.
A U-turn on U-turns
The agency also reauthorized U-turn transactions, which are funds transfers that originate and terminate outside the U.S. and involve parties not subject to U.S. jurisdiction. These transactions had been banned in September 2019.
Under the new rule, U.S banks can process U-turn transfers involving Cuba or Cuban nationals, even if neither the originator nor the beneficiary is subject to U.S. jurisdiction. Any U-turn funds transfers that had been blocked prior to this rule are now authorized to be reinstated.
Payments to Cuban nationals have been severely restricted for some time. Before the new rule, remittances were limited to categories such as close relatives, religious organizations, and humanitarian projects dedicated to helping the Cuban people. Americans were also allowed to financially assist individuals emigrating from Cuba.