viernes, enero 17, 2014

Quiet diplomacy surrounds M&T's Cuban accounts

There’s some intrigue involving M&T Bank Corp. and its banking relationship with diplomatic missions in the United States, including Cuba’s. And the issue could resurface a month from now.

To review, the Cuban Interests Section in Washington, D.C. on Nov. 26 said it was suspending consular services in the United States – such as visa and passport applications – because it said M&T was closing its bank accounts. The Cuban officials said M&T would “no longer provide banking services” to foreign missions and had given notice to that effect back on July 12.

The Cuban officials said they were having trouble finding a replacement bank, even with the U.S. State Department’s help. The story attracted national media attention because of the potential impact on travelers between the United States and Cuba, and the history of political tensions between the two countries.

On Dec. 9 – about two weeks after the announcement – Cuban officials said M&T had provided notice on Dec. 6 of a deadline extension. The Cuban officials said the bank specified it “will continue receiving deposits from consular services” until Feb. 17, and would not close the accounts until March 1. A reason for the extension was not given.

The Cuban officials said the extension allowed them to resume – at least temporarily – providing consular services. But its long-term problem of finding another bank remains, and a Miami Herald story in early December suggested the U.S. diplomatic mission in Havana, Cuba, could be impacted if the problem was not resolved.

The deadline extension raised some interesting questions that The Buffalo News has been trying to answer, without success:
•How did Buffalo-based M&T come to have business with diplomatic missions in the United States in the first place, and how many other countries’ missions was it providing services to? M&T has declined to talk about that line of business in general, or the Cuba matter in particular.

•What prompted M&T to extend its deadline for closing the Cuban accounts, after the announcement by the Cuban officials in late November? The State Department acknowledged it has been trying to help the Cuban officials line up a new bank. But a State Department spokeswoman did not answer a specific question about whether the department played a role in M&T’s decision to grant the extension.

Cuban officials in Washington have not responded to requests to comment on this issue. The last time they posted a message on their website about their efforts to line up a new bank was Dec. 9.
Experts say banks in general probably are wary of doing business with foreign missions, since they are under greater pressure to combat money laundering. Under those circumstances, it has been hard to find another bank willing to take M&T’s place for the Cuban Interests Section.

And Cuba is a sensitive subject for U.S. businesses, given U.S. policy toward the island nation and Cuba’s inclusion on the State Department’s list of state sponsors of terror (along with Syria, Sudan and Iran).
-- Matt Glynn

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