Wednesday, July 22, 2015

An American and Cuban bank have made a
historic agreement. A Florida bank established the first
connection with a Cuban counterpart since President Obama's December
decision to open up relations between the two nations. Stonegate Bank and
Banco Internacional de Comercio S. A. (BICSA) signed a deal on Tuesday in
Havana that would establish a correspondent account for the Florida-based bank
on the island, making it easier for U. S. companies doing business in Cuba to
process transactions directly, reported the Wall Street Journal.
Correspondent accounts allow banks to send money back and forth across
international borders. Some U. S. business transactions in Cuba use U. S.
treasury licenses, but all commercial deals end up going through banks in
third countries, adding another step to the process. These kinds of
accounts have come under close scrutiny by federal regulators due to their
historical ties to money laundering and other criminal activities, and banks
have been hesitant to work with counterparts in other nations that don't
have strong oversight of their banking systems. Cuba has been labeled
"high-risk" by the Financial Action Task Force, an organization that
supports policies to prevent money laundering. "We did an extensive
risk-management approach to this," Stonegate Bank CEO Dave Seleski, told the
Wall Street Journal. "We feel very comfortable that we did something that
is very low risk. " The move could be the first step toward closer
financial ties between the two nations, including the eventual approval of the
use of credit cards in Cuba. U. S. credit cards don't currently work on
the island, though the companies have said they would start processing
transactions this year. This article originally appeared on Fortune. com.
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established the first connection with a Cuban counterpart since President
Obama's December decision to open up relations between the two nations.

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