Jane Franklin, who sent in the original article, has provided additional important info.
magbana
My friends Michael Rivas and Bob Guild sent me some additional information about those charges on remittances. Please see their additions below.
Jane Franklin
http://ourworld.compuserve.com/homepages/jbfranklinsHere are Michael Rivas's comments:
The issue of the foreign banks as described in this article
is very important. There are a number of banks overseas who in cooperation with the Fed receive worn out bills in US currency and give the banks tendering those bills new currency. The Fed does this to retire from circulation the old bills. Cuba was using that system just as in any other country. Bush ordered those banks not to conduct transactions with Cuba, which created a problem for Cuba with the bills they had in hand. Thus part of the fee is to account for the extra risk of having those US bills around. The other fee is simply a new exchange rate as described in this article. The other elements are as described here regarding not wanting to have foreign currencies other than Cuba's circulating as legal tender, not just the dollar. All other currencies are exchanged for CUCs and not just the dollar, but they are not charged the extra fee since they are exchanged using the floating rates used in the world financial markets. So, the total fee on the dollar is 18% not the 30% cited by Axelrod.
Since dollars don't circulate as payment for anything, smuggling dollars into Cuba doesn't by-pass the fees. Whoever gets a dollar
either via the electronic process or smuggled in, has to change them for CUCs at the bank, hotel, or exchange stores.
Best, Michael
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And here are Bob Guild's comments:
The 10% fee when exchanging into Convertible Cuban Pesos (CUC's) only applies to the exchange of US Dollars. It does not apply when exchanging Euros, Mexican Pesos, or Canadian dollars into CUC. The reason for this is that Cuba wanted to reduce the amount of USD cash it was receiving because the US government - under Bush - was running around the world demanding that foreign banks not accept money from Cuba if it was in USD cash.
- Bob