The Cuban government recently expressed its discontent over the halt of remittances through Western Union, describing it as a "blow to countless families." This decision is attributed to the sanctions implemented by the Trump administration. Yet, Cuban officials refrained from denying claims that link Orbit S.A., the entity responsible for processing these transfers, to the influential military conglomerate, GAESA.
In a statement issued by the Ministry of Foreign Affairs (MINREX), the Cuban authorities held Washington accountable for the disruption of remittances, calling it an "irrational" move in its stringent policies against the island. According to the statement, the suspension stems from a "change in U.S. sanctions regulations," which has led Western Union to indefinitely halt its money transfer services to Cuba "with immediate effect."
Orbit S.A. and Its Connections to GAESA
The U.S. company's decision was triggered by the recent addition of Orbit S.A. to the Cuba Restricted List, which forbids direct financial dealings with the company, effectively barring its operations in the global financial system.
The regime's foreign ministry statement offered no clarification regarding accusations that Orbit S.A. is a front company controlled by the Business Administration Group S.A. (GAESA), the financial arm of the Revolutionary Armed Forces (FAR). This silence mirrors a similar pattern seen with Fincimex, another GAESA-linked entity that previously managed remittances and faced sanctions from Washington.
Research has shown that Orbit S.A. is not an independent entity but part of a strategy by the regime to maintain control over the money flow sent from abroad. In the past, when Fincimex was sanctioned, the Cuban government established new companies with similar structures to sidestep U.S. restrictions. Orbit S.A. seems to be the latest of such entities created for this purpose.
It has been documented that Orbit S.A. operates under the supervision of CIMEX, a GAESA subsidiary, and its transactions are reported in the same financial statements as this military entity. Although presented as a civilian remittance handler, the company is, in reality, a part of the financial network controlled by the Cuban army, enabling the regime to directly benefit from the income generated by money transfers from the Cuban diaspora.
Sanctions Impact and Historical Context
The inclusion of Orbit S.A. in the restricted entities list was announced on January 31 by U.S. Secretary of State Marco Rubio, who stated that the company "acts for or on behalf of the Cuban military forces." This measure was part of a series of sanctions imposed after Trump returned to the White House on January 20, the day the Republican president reinstated restrictions removed by the Biden administration.
This decision has directly impacted remittances sent from the United States, a primary source of income for many Cuban families. Western Union had resumed its operations in Cuba in May 2023, after suspending them in 2020 due to sanctions against Fincimex. However, following Trump's return to power, the American company has once again had to cease its services on the island.
The effects of this measure add to other restrictions applied during the Trump administration, including the reactivation of Title III of the Helms-Burton Act and Cuba's readdition to the list of State Sponsors of Terrorism, a designation that remains in place today.
The Regime's Control Over Remittances
The Cuban government's control over remittances has been a contentious issue for years. Independent studies revealed in 2023 that over the past three decades, Cuba has received more than $50 billion in cash remittances and another $50 billion in consumer goods.
Through entities like Fincimex and now Orbit S.A., the regime has ensured that money sent by emigrants passes through official channels under its control, allowing access to dollars and foreign currencies essential for sustaining its economic apparatus. With Western Union's suspension and Orbit S.A.'s inclusion in the restricted list, the Cuban government lacks an immediate alternative to channel remittances from the U.S., potentially leading to increased economic pressures on the island.
Nonetheless, the regime has demonstrated its ability to reorganize its financial structure and seek new methods to capture these funds, whether through partnerships with intermediaries or by creating new front companies. For now, Cuban families remain the primary victims, with no clear options to receive money from relatives abroad, as the regime continues to prioritize absolute control over foreign currency revenue without offering real solutions to its citizens.
Key Questions on the Impact of Sanctions on Cuban Remittances
How have U.S. sanctions affected remittances to Cuba?
U.S. sanctions have led to the suspension of remittance services, significantly impacting the flow of money from the United States to Cuba, which is a vital source of income for many Cuban families.
What is the role of Orbit S.A. in the Cuban financial system?
Orbit S.A. is alleged to be a front company linked to GAESA, facilitating the Cuban military's control over remittances and enabling the regime to access foreign currency revenues.
Why did Western Union halt its services in Cuba?
Western Union suspended its services in response to the U.S. sanctions that restrict transactions with Orbit S.A., which is tied to the Cuban military, thus preventing its operation in the global financial system.