The recent decision by the United States government to add Orbit S.A. to the Restricted Entities List has stirred concerns among Cubans who rely heavily on remittances from abroad. Until recently, Orbit S.A. was relatively unknown. However, it emerged as a possible alternative for managing remittances after Fincimex S.A. exited the business due to sanctions imposed by the U.S. Treasury Department.
The revival of Title III of the Helms-Burton Act and the expansion of the list of restricted Cuban entities, implemented during the Trump administration, have once again cast doubt on the future of remittances to Cuba.
The Origins and Role of Orbit S.A. in Remittances
Founded on February 3, 2020, Orbit S.A. gained prominence in 2022 when it received a license from the Central Bank of Cuba (BCC) to operate as a "non-bank financial institution." This enabled the company to handle international transfers and provide payment services on the island, positioning itself as a potential successor to Fincimex S.A. in the remittance sector.
Orbit S.A. set up its headquarters in Miramar, adjacent to Fincimex offices, as revealed by a detailed investigation by Proyecto Inventario. The report highlighted connections between the two entities, pointing to Orbit S.A.'s ties with the Business Administration Group S.A. (GAESA), which is controlled by the Cuban military and the regime's leadership.
With BCC's backing and no international sanctions at the time, Orbit established an agreement with American company Va-Cuba INC., allowing it to receive remittances from the U.S. under a license granted by the Office of Foreign Assets Control (OFAC).
Orbit S.A.'s Role After Sanctions on Fincimex
Until November 2020, Fincimex S.A., controlled by GAESA, was the primary remittance handler in Cuba. Its inclusion in the "Restricted Entities List" by the U.S. led to the suspension of services with American companies, including Western Union, which had been the most popular method for sending money to Cuba for decades.
Orbit S.A.'s emergence was seen as a temporary fix to the remittance issue. Despite lacking Fincimex's infrastructure, Orbit obtained a BCC license and began operations with various platforms to facilitate money transfers from Europe and Canada.
The Impact of Orbit's Inclusion in the Restricted List
On January 31, 2025, the U.S. Department of State announced that Orbit S.A. would be added to the "Restricted Entities List." This decision was based on reports linking the company to Cuba's financial apparatus and GAESA, a military entity that controls a significant portion of the island's economy.
This action will have substantial effects on the flow of remittances to Cuba:
- Suspension of U.S. Transactions: Orbit S.A. will lose its ability to process remittances from the U.S. through companies like Va-Cuba INC., impacting the regime's exploitative pricing on thousands of Cuban families who depend on these funds.
- Search for Alternatives: The measure might compel the Cuban regime to explore new avenues for remittance processing, potentially through digital platforms, cryptocurrencies, or agreements with allied nations.
- Increased Informality in Money Transfers: With the loss of an official remittance channel from the U.S., informal methods such as couriers, P2P applications, and transfers to third-country accounts are likely to rise.
Orbit S.A.'s addition to the Restricted Entities List represents another blow to the remittance system controlled by the Cuban regime. A study published in September 2023 by Cuba Siglo XXI revealed that exiles sent $52.25 billion in cash to Cuba over the past 30 years.
Remittances are a crucial source of income for many Cuban families and play a significant role in the national economy. Here are some key statistics:
- Percentage of Households Receiving Remittances: According to the VI Study on Social Rights (2023), cited by independent media 14ymedio, 27% of Cuban households received some form of family remittance from abroad during the summer of 2023.
- Annual Remittance Amount: Estimates from the Inter-American Dialogue, cited by CNN, indicate that in 2019, Cuba received remittances worth over $2.055 billion, which accounted for approximately 2% of the country's Gross Domestic Product (GDP) that year.
- GDP Impact: Sources like Havana Times suggest that cash remittances represent about 25% of Cuba's GDP. Including remittance goods, the total could reach up to a third of the GDP. It's important to note that figures may vary by source and year, and the Cuban government does not regularly publish official remittance data.
Understanding the Consequences of Orbit S.A.'s Restriction
Why was Orbit S.A. added to the Restricted Entities List?
Orbit S.A. was added due to reports linking it to the financial operations of the Cuban regime and GAESA, a military entity controlling a large segment of Cuba's economy.
How will this affect remittances to Cuba?
The inclusion will halt Orbit S.A.'s ability to process remittances from the U.S., prompting a search for alternative methods and likely increasing informal money transfers.
What alternatives might the Cuban regime explore?
The regime may consider digital platforms, cryptocurrencies, or partnerships with allied countries to manage remittances.