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Cuba Hiding Money to Avoid Court Actions

Economic sanctions against Cuba are not very popular in this town. The Cuban regime and their supporters spend a lot of time trying to weaken them. By and large, it is a futile effort to do so.  One of the preferred arguments against current U.S. policy is that the sanctions do not work. But Cuba is not taking any chances and it appears that they have started to move their money out of western banks. Just in case.

According to a recent Miami Herald story, Cuban bank deposits abroad have plummeted from $5.65 to $2.8 billion. While some folks think the move is designed to hedge against the economic crisis, one fellow is right on point as to why the regime has been doing this:  avoiding asset forfeiture. The former Chief Economist of the Organization of American States (OAS) tells the Herald that the Cubans understand that there is a “legal vulnerability of having financial assets in Western banks which may be subject to forfeiture by the courts”.

The Cuban regime owes billions to U.S. taxpayers and to Cubans for its many bad deeds throughout the years. It also has also lost many cases in U.S. state and federal courts for which they owe compensation. And the number of claims is only going to increase as the government changes on the island. If Cuba moves its cash reserves to banks in countries without reporting requirements, it makes it harder for claimants to get to that money. And that is exactly what they are doing.

Cuban regime officials may also be preparing for something not mentioned in the Herald story, hedging for the end. Senior regime officials understand, or least the rational ones should, that the Castro system has crumbled, it cannot be saved. Times are changing, fast, and they need to prepare for an unknown future with unknown leaders. Hiding the money is a survival tactic.

While countries such as Venezuela will not cooperate with the United States, others may, or should be compelled to do so. If any suspect banks holding Cuba money have access to the U.S. financial market, we should require disclosure of it. This is not easy to do, but in the long run it will be well worth the effort.

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