International banks shun Cuba under U.S. scrutiny
HAVANA (Reuters) - Heightened scrutiny of banking transactions by the United States since the September 11 attacks has led European and Canadian banks to curtail dealings with Cuba, bankers and businesses say.
Cuba ceased exporting armed revolution to Latin America two decades ago, but Washington still lists Communist Cuba as a "rogue" state that sponsors terrorism, along with Iran, Syria, Sudan and North Korea.
The USA Patriot Act allows U.S. authorities to confiscate assets and penalize institutions that fail to report money laundering and terrorist financing.
The result -- perhaps intended -- is that Western businessmen in Havana are having nightmares moving funds in dollars to and from Cuba because banks are increasingly refusing their business.
HSBC, Barclays, Credit Suisse, Royal Bank of Canada and the Bank of Nova Scotia, also known as Scotiabank, have closed accounts of Cuban companies or reduced business tied to Cuba since last year to comply with U.S. regulations.
The moves were confirmed either by the banks themselves, by Cuban officials, or by people doing business in Cuba.
"Canadian banks have told clients to close their accounts and their credit cards because they have a business address in Cuba," said Canadian Mario Simonato, who imports vehicles and heavy equipment into Cuba.
The Havana-based owner of King City Equipment Inc. of King City, Ontario imports vehicles and equipment from Canada, but is turning to China for business due to increased hurdles placed by Canadian authorities who, he says, are bending to pressure from the United States.
ING Groep NV, the first big Western bank to set up business in Communist Cuba, doing so in 1994, said two weeks ago that it will close its Havana office.
ING said it was purely a business decision, but it followed the blacklisting last year by the United States of its banking joint venture with Cuba.
"The banks don't want to risk a fine by the Federal Reserve. Banks like ING and HSBC have much bigger fish to fry than Cuba," said Simonato.
Scotiabank last year ended dollar transactions by the Cuban embassy in Jamaica and was criticized for bowing to U.S. rules.
"It is a risk mitigation measure, a straight issue of our ability to settle transactions on U.S. dollar accounts," said Scotiabank spokesman Frank Switzer. "It applies to anyone on a U.S. sanctions list."
$100 MILLION FINE
The move to comply with U.S. regulations came in the wake of the heaviest penalty in banking history. Continued...
