US Remittances to Cuba Continue, Bypassing Restrictions

Apr 11, 2022
5:46 PM

A street vendor sells produce in Havana, Cuba (szeke/CC BY-SA 2.0)

Last December, Daniel Muñiz-Rivera received a message from his friend asking him for financial help. Christmas wasn’t far away and Pedro Quiala Carmenate, who lives in Cuba, wanted to buy his family a nice piece of pork for the holiday celebration.

Both men had thought out a bulletproof system to circumvent the restrictions on remittances to Cuba due to U.S. sanctions. Muñiz-Rivera, who lives in Brooklyn’s Buswhick neighborhood, would send the money to a friend of Carmenate’s in Miami using a banking application, Zelle, and Carmenate’s friend would then make a cash deposit on his Moneda Libremente Convertible (MLC) card, an electronic banking card used by Cubans for everyday transactions like buying soap or a can of beans. In doing so, Carmenate would receive the full amount converted into the official Cuban convertible peso (CUC) and, more important, the transaction would be informal and thus remain under the government’s radar.

“In Cuba, you can’t live off your salary,” said Carmenate, 30. “You have to survive on the black market or depend on exiled Cubans.”

Their complicated dynamic is far from rare. Every month, Cubans in the U.S. send more than 240,000 unique money transfers into Cuba using formal channels, according to the U.S.-Cuba Trade and Economic Council. Cuba’s stagnant economy and frequent financial crises have resulted in more than two-thirds of all Cubans on the island relying on assistance from family members abroad to buy basic goods like food, clothing, and medication, as well as pay monthly rent and electricity bills, according to the Center for Strategic and International Studies.

Cuba’s Central Bank has never released a remittance report since the military government unblocked remittance flows in 1993, but independent researchers have subsequently estimated that approximately 50 percent of the transactions reach Cubans on the island through informal channels.

On the day that Carmenate received the money from Muñiz-Rivera, he was able to buy pork for his Christmas dinner, but Muñiz-Rivera wasn’t happy with the images that came along with Carmenate’s heart-felt thank you message. He mostly saw grease and bones, as meat of any kind was hard to find.

“When I saw the (quality of) meat that he received and was ecstatic to receive it, it broke my heart,” said Muñiz-Rivera, 25.

Carmenate had bought it on the black market. In Cuba, you can only use your MLC card in shops controlled by the military-run umbrella enterprise Grupo de Administración de Empresas, commonly known as GAESA. Products in these markets are sold at much higher prices compared to normal shops, making it hard for regular Cubans to afford the staples they sell

“These products cost a minimum of 240 percent more than the price at which they are purchased abroad,” explained Emilio Morales, a Cuban economist and president of the Havana Consulting Group in Miami. “This means that what costs one dollar to you, they sell for ($2.40), but in the CUC currency—a currency that, if you are Cuban and you travel to any part of the world, that currency is of no use to you because you can’t change it in any bank.”

In October 2020, the Treasury Department under the Trump administration added GAESA to its Cuba Restricted List. The list includes entities under the control of the Cuban military whose financial transactions disproportionately benefit those who run the enterprise, rather than the Cuban people. Until then, Western Union had partnered with Fincimex, a sub-entity of GAESA, to process any remittances sent by Cubans in the diaspora to loved ones on the island. After the measures came into effect, Western Union closed its 407 offices across Cuba.

“GAESA has had six months to find a civil corporation and transfer them Fincimex’s infrastructure to channel remittances and avoid this crisis,” said Morales. “It still hasn’t done this.”

Instead, GAESA transferred Fincimex’s infrastructure to RED S.A., a non-military finance company, to receive remittances from the United States. But the government still hasn’t reached out to an American company like Western Union to facilitate formal remittances. As a result, informal channels have become even more popular.

Many Cubans living in New York City, like Muñiz-Rivera, send dollar remittances to family and friends so that they can afford or avoid GAESA’s inflated costs and Cuba’s long-devalued currency.

Ana Alpizar moved to the U.S. from Cuba almost five years ago, leaving her entire family behind in search of economic opportunity. Today, she sends her mom monthly remittances in the form of money, clothing, and food from her home in Bushwick. When Alpizar knows a friend of hers is visiting Cuba, she gives them the remittance to physically deliver to her family.

“Today, a can of condensed milk costs six dollars in Cuba,” said Alpizar, 31. “If I don’t send my mom steady remittances, she doesn’t make it to the end of the month.”

Since she moved, Alpizar only visited her hometown in La Habana three times on trips that lasted less than three days. She acts as a “mula,” or a mule, someone who travels to Cuba with cash dollars to ensure that the remittances reach their family in dollars and aren’t converted by the government into Cuban pesos, which are continuously at the mercy of inflation.

“For me, going to Cuba is super painful,” Alpizar recalled. “There was a time when I was homesick after moving to the U.S., where I decided to go back to Cuba for a couple of months, but I ended up buying my return ticket only a week after being there.”

Efren Pulgarón, 55, received political refuge in the United States in 1999 after demonstrating persecution by the Cuban government for working as an independent journalist in the capital city, La Habana (as Havana is known in Spanish). Today, he lives in the Bronx, though his brother and nephew still live on the island.

Pulgarón refuses to send formal remittances, believing that the full amount won’t reach his family if it goes through military-controlled Fincimex. Instead, he puts cash in an envelope and, along with some clothes and other necessities, gives it to his cousin who sporadically travels to Cuba from Miami.

This way, Pulgarón’s brother avoids spending money in GAESA shops and gives business directly to local shop owners.

“My brother uses that money to buy directly from local shops in Cuba,” Pulgarón explained.

Carmenate, who lives with cystic fibrosis, a genetic disorder that affects his respiratory and digestive systems, has never left Cuba. He often relies on remittances from Muñiz-Rivera and other friends in New York to afford the medication he needs.

“Since I was a child, I haven’t had the appropriate medication I need for treatment. I haven’t had adequate food or the proper comfort of a home that a family requires,” he said. 

Carmenate lives with his family who support him financially, given that his medical condition prevents him from working. They sold their house in rural Mayarí, a city in the southeastern Holguín Province, about two hours north of Santiago de Cuba by car. They used the money to move to La Habana, so that Carmenate could have better access to healthcare.

Today, Carmenate lives in a dilapidated one-bedroom apartment in Old Havana with three other family members. His family accesses drinking water by attaching a hose to two water tanks in their house and throwing it over an unstable balcony to connect it to a ruptured water pipe on the street below. 

But those aren’t the only tanks the family owns. Carmenate sleeps next to three tanks that feed him oxygen through a tube connected to his nose, without which he couldn’t breathe properly.

Following the July 11th protests that occurred throughout Cuba and major cities across the world last year, Carmenate joined a massive WhatsApp group created by Patria y Vida, an organization of Cubans on the island and in the diaspora fighting to topple the totalitarian regime that has reigned since 1960. Through the group he met Muñiz-Rivera and many other Cuban Americans who sporadically send him medication.

“Sometimes they send me a care package that contains antibiotics, aerosols, and other medication,” Carmenate said. “Because of that, my health has improved a little.”

Last month, Carmenate noticed that the sewage system near his house wasn’t functioning properly, so he went to the nearest government office to submit a complaint. When they did nothing about it, he made a poster that read “Patria y Vida” (Homeland and Life) and hung it on his balcony. Almost immediately, police showed up at his house, smashed his phone, and arrested him.

He was detained for three days. It wasn’t his first time in jail, and he doubts it’ll be his last.

“Here you can’t do what you want. You have to do what the government wants, because if not, we’ll be jailed,” he said.

But like most Cubans on and off the island, Carmenate hasn’t accepted defeat.

“My family and I don’t have luxuries or many material items, but we feel good,” said Carmenate. “We remain happy because we continuously fight for a free and democratic Cuba.”


Camila Grigera Naón is an Argentine-American journalist and currently a student at Toni Stabile Center for Investigative Journalism at Columbia University. Twitter: @c_grigera