The Cuban government has effectively frozen foreign currency accounts belonging to all foreign companies and diplomatic missions on the island.
According to EFE, the administration of Díaz-Canel has informed foreign companies that they will no longer be able to withdraw or transfer abroad the funds currently deposited in Cuban banks. This move has quietly imposed a financial lockdown on foreign investors.
In an attempt to mitigate the impact, the regime is offering these companies the option to open “real” accounts funded with foreign currency from abroad. These accounts are purportedly meant for external transfers and cash withdrawals.
However, several companies have reported difficulties in withdrawing cash or repatriating funds from these so-called “real” accounts.
In a meeting held last Wednesday, Cuban foreign ministry officials briefed the diplomatic corps on the implementation of a similar mechanism for diplomatic missions.
During the meeting, it was disclosed that a future date would be announced when newly deposited funds could be withdrawn, but there are no guarantees regarding the availability of previous deposits.
Back in April, EFE had already reported that this measure, now widespread, was being selectively applied to several companies.
In July, the United States government issued a public warning to international investors about the risks of doing business in Cuba, describing the island’s economic system as “rigged to benefit the regime and its cronies.”
“Cuba is not open for business—it’s rigged for the regime’s cronies,” the Bureau of Western Hemisphere Affairs at the State Department stated.
The statement detailed that the Cuban government compels foreign companies to form joint ventures where the state seizes at least 60% of the profits. The remaining portion is “withheld” and rarely disbursed to foreign partners.
Moreover, the regime has a track record of defaulting on payments and manipulating contractual conditions to its advantage.
Understanding Cuba’s Financial Restrictions on Foreign Companies
What is the current situation for foreign companies in Cuba regarding their funds?
Foreign companies in Cuba are currently unable to withdraw or transfer their foreign currency funds from Cuban banks due to a financial lockdown imposed by the government.
How has the Cuban government responded to the issue faced by foreign investors?
The Cuban regime has offered foreign companies the option to open “real” accounts funded with external currency, aimed at facilitating international transfers and cash withdrawals, although challenges persist.
What warning has the United States issued regarding doing business in Cuba?
The U.S. government has cautioned international investors about the risks of doing business in Cuba, highlighting that the economic system is manipulated to favor the regime and its associates.
