Western Union Resumes Services To Cuba After Cyberattack

May 14, 2024
Western Union has resumed its limited money transfer services between the US and Cuba after a three-month hiatus caused by a cyberattack on Cuban banks.

Western Union has resumed its limited money transfer services between the US and Cuba after a three-month hiatus caused by a cyberattack on Cuban banks.

Western Union customers can now send money to family members in Cuba from any US retail location or via the Western Union app or website. Funds can be received into bank accounts or debit card accounts only at Popular, Metropolitano or Bandec — three of Cuba’s major banks.

Due to US sanctions, the service is limited to non-commercial money transfers and send-to-self transfers are prohibited. Recipients must be Cuban nationals and must be blood relatives or in-laws of the sender.

US customers can remit up to $2,000 per transaction and must present a valid government-issued ID to do so.

Transfers must be made in US dollars and must be received in Moneda Libremente Convertible (MLC), a digital currency launched by the Central Bank of Cuba in 2019.

Designed to facilitate remittances and foreign exchange transactions, the value of each MLC unit is fixed at 1:1 with the US dollar.

To move money between the US and Cuba, Western Union partners with local payments processor Orbit, which is a state-owned firm that handles remittances transactions.

Western Union put its Cuba service on hold on January 28 due to a major cyberattack that affected the country’s banking system.

On February 1, the government had planned to increase the price of petrol by 400 percent, in an effort to raise cash and reduce its budget deficit.

The price hike was postponed in the wake of the cyberattack, and Alejandro Gil, minister of economy, was relieved of his post several days later.

Sanctions back and forth

Since 1962, when President John F Kennedy imposed a trade embargo, Cuba has spent more time under US sanctions than any other country.

For more than half a century, US policy towards Cuba remained largely unchanged, with successive administrations attempting to isolate the country both economically and diplomatically.

In 2015, President Barack Obama met with Cuban President Raul Castro and restored diplomatic relations between the two countries. He also eased restrictions on remittances between family members in the US and Cuba.

In September 2019, President Donald Trump reversed many of Obama’s reforms, imposing new sanctions on Cuba and redesignating it as a state sponsor of terrorism.

His administration imposed a limit of $1,000 per quarter on remittances between family members, and it also sanctioned two local partners that were working Western Union.

In November 2020, this led Western Union to close more than 400 branches and suspend its operations in Cuba.

Two years later, the Biden administration rolled back Trump’s reforms, scrapping the limit on family remittances but leaving the Cuba Restricted List unchanged.

The US State Department said it aims to ensure that “remittances flow more freely” to the Cuban people, while not “enriching those who perpetrate human rights abuses”.

In addition to scrapping the Trump-era remittance limits, the Biden administration also opened up “donative” (non-family) remittances to support Cuban entrepreneurs.

“We will engage with electronic payment processors to encourage increased Cuban market accessibility,” the State Department said.

Against this backdrop, Western Union reformed and relaunched its remittance services to Cuba in July 2023.

In the intervening years, Western Union said that many Cubans had turned to “less secure” and “more expensive” ways to remit money, including cash couriers and crypto transfers.

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