Having Cuba in the name of your company can be a financial risk and there is no solution

SKIP O'ROURKE   |   Times The Cuban Club located at 2010 Republica de Cuba in Ybor City on 02/27/18. The Cuban Club's $190,000 loan was frozen by its bank in February because the wire transfer contained the word "Cuba" and was not released until the bank was sure that the money was in no way connected to the nation of Cuba. After looking into the matter, Rep. Kathy Castor said their is unfortunately little that can be done to prevent this from happening time and again.

With the third largest Cuban American population, Cuba’s culture is celebrated throughout the Tampa Bay area and in a diversity of ways.

Flags hang in homes, fashion is worn, music performed, food served.

But be wary of honoring that heritage by putting Cuba in the name of a company unless you want to deal with Cuban Embargo issues.

Even if the business has no links to the socialist nation, just the word Cuba can cause wire transfers to be frozen for an unknown length of time.

Cuban native and Tampa resident Vicente Amor learned that hard way after funds for his home flipping company named the Tampa-Cuba Network were in banking limbo for almost three weeks, nearly costing him the deal.

“It is ridiculous,” Amor said. “Someone needs to do something about this.”

But U.S. Rep. Kathy Castor — a Tampa Democrat in favor of better relations with Cuba — has bad news: It would take a historic act of Congress to fix.

“This has been on my radar,” Castor said. “But the only solution is to repeal the Cuban Embargo because that is what forbids transactions with Cuba. In the end, banks want to follow the law. They don’t want trouble.”

Because most financial transactions with Cuba are against the law and those that are legal require a license from the U.S. Treasury Department’s Office of Foreign Assets Control, to be on the safe side, banks use software for a screening process that flags wire transfers with names related to Cuba.

Even if a bank accidentally facilitates a financial transaction with Cuba, it will be fined by the Treasury Department. So, until a bank is certain nothing nefarious is going on, the money may remain frozen, and this takes time.

According to SunBiz.org, there are over 2,000 entities registered in Florida with a name that starts with either Cuba or Cuban. And that list does not include those with either word elsewhere in the title, like Amor’s business.

This is at least the second time in less than three months in Tampa that a large wire transfer has been frozen because of the word Cuba or Cuban.

In February, the Cuban Club — a 120-year-old social organization for those of Cuban descent — had a $190,000 loan frozen for nearly a week.

Tampa-Cuba Network had its March 26 wire transfer of $4,600 frozen. It was meant to be a deposit on a Brandon house to be fixed up and quickly sold.

To keep the home owners from selling to someone else, Amor wrote a personal check “that cleared in seconds,” he said. “But it’s a lot to pay twice. I didn’t get the original money back for a while.”

Then, a payment on April 10 for more than $33,000 was simultaneously held up, preventing him from accessing the home. This pushed back the start of renovations in an industry where profits are dependent on quick turnouts.

Funds for each were released on April 13.

Amor is also vice president of travel company ASC International USA, which specializes in itineraries to Cuba. He understands that, because of the embargo, precautions must be taken ensure business is performed on the right side of the law. So, he’s okay if a wire is frozen for a few hours, “but not days or weeks.”

Amor purchased a home last June under his company name and flipped it in October. He said wire transfers were held up 24 hours for that transaction.

A company can ask a bank to “white list” it or stick with a local financial institution familiar with the party, said Doug Jacobson, a sanctions attorney in Washington D.C. But with numerous banks involved in payments it is like “whack-a-mole” to get ahead of the problem.

In Amor’s case, three banks plus the title company were involved in his two wire transfers with J.P. Morgan freezing each.

Another solution? Change the name.

Amor may take Cuba out his business name by shortening it to TCN, but that is not likely the route the historic Cuban Club will take.

“It’s ridiculous to expect them to change their name,” Rep. Castor said of the Cuban Club, adding that the Treasury “should be focused on real terrorists and not every transaction with the word Cuba in it.”

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