Havana embassies scramble as U.S. tightens embargo

Havana embassies scramble as U.S. tightens embargo

By Marc Frank
Reuters
Monday, November 6, 2006; 5:21 PM

HAVANA (Reuters) - Stepped up enforcement of U.S. sanctions on doing
business in dollars with communist Cuba is forcing governments to change
how they finance embassies in Havana, diplomats said on Monday.

The practice of wiring money to U.S. banks and sending U.S. bank checks
to Havana embassies to cash has become more difficult due to U.S.
tightening under the Bush administration, they said.


Rep. Benjamin L. Cardin, elected Tuesday to the Senate, speaks with
reporters yesterday morning with Sen. Barbara A. Mikulski. (Michael
Robinson Chavez -- The Washington Post)

The changes are forcing many to abandon the dollar and convert to euro
accounts to conduct their daily business.

Foreign governments were sent scrambling in September when state-run
Banco Metropolitano, the only Cuban bank that accepts checks from U.S.
banks, informed clients its traditional intermediary, the National Bank
of Canada, would no longer process checks without an attached U.S.
license that was no more than two years old.

"We recommend you look for other ways and a currency other than U.S.
dollars to transfer money to our country, as in the future we could face
new difficulties in dealing with these checks," the memo concluded.

When embassies tried to confirm or renew their licenses they found it
could not be done.

"We asked our embassy in Washington to confirm the validity of our
license ... However we were told that issuing checks from a U.S. bank
itself was a violation," an Asian diplomat said.

"Once our routine way of transferring funds from a U.S. bank to Cuba was
denied, we had no choice but to look for an alternative and after a
month worked out to send euros from a bank in Spain to our dollar
accounts in Cuba," he said.

Tourists and foreign businesses must exchange currency for a Cuban
script called the convertible peso which is indexed to the dollar, while
currencies other than the dollar can be wired in from non-U.S. banks.

Businessmen said wiring dollars into Cuba was impossible as all
transfers were eventually cleared through the United States, where funds
were blocked so that the bank checks at issue were the last means of
working in dollars in Cuba.

At least one Caribbean country has resorted to sending cash to run its
embassy, a Latin American diplomat said.

The tightening follows an announcement earlier this year by the Office
of Foreign Assets Control of the U.S. Treasury Department (OFAC), which
enforces economic sanctions against Cuba imposed in 1962, that it would
increase enforcement of regulations prohibiting the use of dollars when
doing business with Cuba.

"I am sure the intention was not to make life more difficult for
embassies in Havana, we are more the collateral damage of stepped-up
U.S. enforcement," Turkish Ambassador Vefahan Ocak said.

"In our case we have to change how we have operated for 12 years, and we
will have to wait, wait, wait, be patient to get money still at our U.S.
bank," he said.

(Additional reporting by Esteban Israel)

http://www.washingtonpost.com/wp-dyn/content/article/2006/11/06/AR2006110600787.html