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United States allows travel and remittances back home by Cuban immigrants

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The Miami Herald reported today that the Obama administration has lifted restrictions on family visits and sending of remittances by Cuban immigrants living in the United States (more details from a White House fact sheet).  Although there are no official figures on the amount of remittances sent by the 1 million Cuban immigrants in the U.S., according to a State Department background note on Cuba, these flows are estimated to be between $600 million and $1 billion annually.  The earlier U.S. policy, in effect since 2004, allowed very small amounts of remittances to immediate family members and trips back home every three years.   

Interestingly, the Cuban government still levies a tax of some 20 percent on inward remittances, and a White House spokesman and some senators have called on Cuba to reduce these onerous charges. These charges represent a significant loss of value for the recipients and a barrier to sending remittances through official channels.

Some questions to consider: Will more remittances flow through formal channels now rather than being sent through friends and relatives visiting Cuba (or through other illegal channels)? Will the new policy of unrestricted family visits lead to an increase in investment, trade and other types of involvement in their home country by the relatively wealthy Cuban community in the U.S.?      


Sanket Mohapatra

Associate Professor, IIM Ahmedabad

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