FATF AML Deficiency List
Designated State Sponsor of Terrorism
US Dept of State Money Laundering assessment
World Governance Indicators (Average Score)
Corruption Index (Transparency International & W.G.I.)
Weakness in Government Legislation to combat Money Laundering
Cuba is no longer on the FATF List of Countries that have been identified as having strategic AML deficiencies
FATF Statement re AML Strategic Deficiencies: 24 October 2014
The FATF welcomes Cuba’s significant progress in improving its AML/CFT regime and notes that Cuba has established the legal and regulatory framework to meet its commitments in its action plan regarding the strategic deficiencies that the FATF had identified in February 2013. Cuba is therefore no longer subject to the FATF’s monitoring process under its on-going global AML/CFT compliance process. Cuba will work with GAFISUD to further strengthen its AML/CFT regime.
Compliance with FATF Recommendations
The latest follow-up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Cuba was undertaken in 2021. According to that Evaluation, Cuba was deemed Compliant for 18 and Largely Compliant for 20 of the FATF 40 Recommendations. It was deemed Highly Effective for 0 and Substantially Effective for 5 of the Effectiveness & Technical Compliance ratings.
US Department of State Money Laundering assessment (INCSR)
Cuba is categorised by the US State Department as a Country/Jurisdiction of Primary Concern in respect of Money Laundering and Financial Crimes.
Cuba is not a regional financial center. Cuban financial practices and U.S. sanctions continue to prevent Cuba’s banking system from fully integrating into the international financial system. The government-controlled banking sector renders Cuba an unattractive location for large-scale money laundering through financial institutions. The centrally-planned economy allows for little, and extremely regulated, private activity. However, a significant black market operates parallel to the heavily subsidized and rationed formal market dominated by the state and which state authorities actively participate in and benefit from. The Government of Cuba does not identify money laundering as a major problem.
The Cuban government and state-controlled businesses actively engage in money laundering in order to evade U.S. sanctions. Cuba should increase the transparency of its financial sector and continue to increase its engagement with the regional and international AML/CFT communities to expand its capacity to fight illegal activities. Cuba should increase the transparency of criminal investigations and prosecutions.
The Cuban Assets Control Regulations, 31 CFR Part 515 (the “Regulations”), were issued by the U.S. Government on July 8, 1963, under the Trading With the Enemy Act in response to certain hostile actions by the Cuban Government. They apply to all persons (individuals and entities) subject to U.S. jurisdiction. There are general prohibitions on exports, imports, and certain other transactions.
15 March 2016 - The U.S. Department Of The Treasury announced significant amendments to the Cuba sanctions regulations. These include the following: -
Banking and financial services –
- U-turn payments through the U.S. financial system. U.S. banking institutions will be authorized to process U-turn transactions in which Cuba or a Cuban national has an interest. This provision will authorize funds transfers from a bank outside the United States that pass through one or more U.S. financial institutions before being transferred to a bank outside the United States, where neither the originator nor the beneficiary is a person subject to U.S. jurisdiction.
- Processing of U.S. dollar monetary instruments. U.S. banking institutions will be authorized to process U.S. dollar monetary instruments, including cash and travelers’ checks, presented indirectly by Cuban financial institutions. Correspondent accounts at third-country financial institutions used for such transactions may be denominated in U.S. dollars.
- U.S. bank accounts for Cuban nationals. U.S. banking institutions will be authorized to open and maintain bank accounts in the United States for Cuban nationals in Cuba to receive payments in the United States for authorized or exempt transactions and to remit such payments back to Cuba.
Trade and commerce –
- Physical and business presence. OFAC will expand the existing authorization for “physical presence” (such as an office, retail outlet, or warehouse) to include entities that engage in authorized humanitarian projects, entities that engage in authorized non-commercial activities intended to provide support for the Cuban people, and private foundations or research or educational institutes engaging in certain authorized activities pursuant to sections 515.575, 515.574, and 515.576 of the CACR, respectively. OFAC will also expand the existing authorization for “business presence” (such as a joint venture) to include exporters of goods that are authorized for export or re-export to Cuba or that are exempt, entities providing mail or parcel transmission services or cargo transportation services, and providers of carrier and travel services to facilitate authorized transactions. The revised regulations will also clarify that the physical and business presence authorizations permit exporters and re-exporters of authorized or exempt goods to assemble such goods in Cuba. BIS will make conforming changes to the EAR to generally authorize exports and re-exports of eligible items to establish and maintain a physical or business presence that is authorized by OFAC.
- Importation of software. The CACR currently authorizes the importation of Cuban-origin mobile applications. OFAC will expand this authorization to allow the importation of Cuban-origin software.
- Shipping. BIS will generally authorize vessels to transport authorized cargo from the United States to Cuba and then sail to other countries with any remaining cargo that was onloaded in the United States.
- Cuban private sector. BIS will adopt a licensing policy of case-by-case review for exports and re-exports of items that would enable or facilitate exports from Cuba of items produced by the Cuban private sector.
BRIBERY & CORRUPTION
Rating (100-Good / 0-Bad)
Transparency International Corruption Index 47
World Governance Indicator – Control of Corruption 59
The government continues to balance the need for loosening its socialist economic system against a desire for firm political control. In April 2011, the government held the first Cuban Communist Party Congress in almost 13 years, during which leaders approved a plan for wide-ranging economic changes. Since then, the government has slowly and incrementally implemented limited economic reforms, including allowing Cubans to buy electronic appliances and cell phones, stay in hotels, and buy and sell used cars. The government has cut state sector jobs as part of the reform process, and it has opened up some retail services to "self-employment," leading to the rise of so-called "cuentapropistas" or entrepreneurs. Approximately 476,000 Cuban workers are currently registered as self-employed.
The Cuban regime has updated its economic model to include permitting the private ownership and sale of real estate and new vehicles, allowing private farmers to sell agricultural goods directly to hotels, allowing the creation of non-agricultural cooperatives, adopting a new foreign investment law, and launching a “Special Development Zone” around the Mariel port.
Since late 2000, Venezuela has provided petroleum products to Cuba on preferential terms, supplying nearly 100,000 barrels per day. Cuba has been paying for the oil, in part, with the services of Cuban personnel in Venezuela, including some 30,000 medical professionals.
Agriculture - products:
sugar, tobacco, citrus, coffee, rice, potatoes, beans; livestock
petroleum, nickel, cobalt, pharmaceuticals, tobacco, construction, steel, cement, agricultural machinery, sugar.
Exports - commodities:
petroleum, nickel, medical products, sugar, tobacco, fish, citrus, coffee
Exports - partners:
Canada 17.7%, Venezuela 13.8%, China 13%, Netherlands 6.4%, Spain 5.4%, Belize 4.7% (2015)
Imports - commodities:
petroleum, food, machinery and equipment, chemicals
Imports - partners:
Venezuela 31.8%, China 17.6%, Spain 10%, Brazil 4.8% (2015)
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