US opens up banking to private Cuban businesses as it aims to boost private sector

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The measures will allow independent entrepreneurs to open and access U.S. bank accounts online to support their businesses. They also include steps to open up more internet-based services and expand private companies’ ability to make certain financial transactions.

“These regulatory amendments update and clarify authorizations in support of internet-based services to promote internet freedom in Cuba, support independent Cuban private sector entrepreneurs, and expand access to certain financial services for the Cuban people,” the Treasury Department said in a news release.

One of the key changes will allow Cuban private business owners to open bank accounts in the United States and then access them online once back in Cuba — something they couldn’t do previously. The U.S. also is again allowing something called U-turn transactions, where money is transferred from one country to another but is routed through the United States.

“This reinstated authorization is intended to help the Cuban people, including independent private sector entrepreneurs, by facilitating remittances and payments for transactions in the Cuban private sector,” the release said.

The Trump administration had removed permission for the U-turn transactions in 2019.

The Cuban authorities downplayed the announcement. Johana Tablada, deputy director of the U.S. department in the Cuban Foreign Ministry, said the steps were “limited” and will do little to ease the embargo or sanctions that have most hurt the Cuban people.

“If these measures are serious and truly intended to bring benefits to the population, even if they are going to bring benefits to a part of the population, they will not be hindered by the Cuban government,” Tablada told The Associated Press.

The Treasury Department’s updated guidance Tuesday also changed terminology that the agency uses to make clear that Cuban officials or prohibited Cuban Communist Party members were not benefiting from the changes that are aimed at the country’s emerging private sector.

About 11,000 private businesses in Cuba are responsible for roughly one-third of the island’s employment, Cuban officials have said.

In Cuba, caution prevailed about what the changes would mean.

“It is a generally positive measure, but there are many hows and whys that will have to be answered in the coming days,” Oniel Díaz, manager of AUGE, a Cuban corporate services company, told the AP.

Díaz said it could open up avenues for Cuban businessmen who import everything from food to automobiles and help them make payments to suppliers, for example. But he questioned whether banks would want to do operations with businessmen on the island due to the perception of risks.

Díaz recalled that during the Obama administration there was a provision that allowed — albeit in a more limited way — Cubans to open U.S.-based accounts, but the banks did not show “great enthusiasm” for it.

Tuesday’s announcement comes a few weeks after the U.S. removed Cuba from the State Department’s short list of countries that it deems less than fully cooperative against violent groups. However, the U.S. still lists Cuba as a state sponsor of terrorism — a description that often scares away banks because they don’t want to become the target of lawsuits in U.S. courts.

Ties between the U.S. and Cuba were essentially frozen after the 1959 revolution that saw Fidel Castro rise to power and install a Communist government. There was a wave of nationalizations of large companies, although some small private businesses were allowed to stay open until 1968.

The U.S. implemented a full-scale economic embargo on Cuba in 1962 under President John F. Kennedy.

Cuba has also slowly opened up its economy to more privately owned enterprises.

In 2010, President Raúl Castro began reforms that expanded independent work for individuals but not for companies. In 2021, Cuban authorities allowed the creation of the first small- and medium-sized companies — called Pymes in Spanish.

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Rodriguez contributed from Havana, Cuba.

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