Stonegate Bank should be ready to handle transactions with Cuba in three
to four weeks
BY MIMI WHITEFIELD
Stonegate Bank Chief Executive David Seleski flew to Washington on
Monday for a ceremony marking the reopening of the Cuban Embassy and
resumption of diplomatic relations with the United States. Early the
next day, he was on a plane to Havana to ink a historic deal of his own.
Pompano Beach-based Stonegate became the first U.S. bank to sign a
correspondent banking deal with a Cuban bank since the Obama
administration’s opening toward Cuba was announced in December. Seleski
told the Miami Herald on Thursday, in an interview from Havana, that
Stonegate expects to fund its account with Cuba’s Banco Internacional de
Comercio (BICSA) soon and should have it ready for transactions in three
to four weeks.
Initially Stonegate, which became the banker for the Cuban Embassy in
Washington in May, wants to concentrate on transactions involving those
diplomatic accounts and U.S. companies trading with Cuba under
exceptions to the embargo. Then it would like to handle transactions of
travel companies and cruise lines authorized to do business in Cuba.
The goal, Seleski said, is to allow any transactions licensed by the
U.S. government to flow through the account, including those of private
companies in Cuba.
The new correspondent relationship could eventually lead to some
progress on the credit card issue. Although both MasterCard and American
Express have said they’d be willing to let authorized American travelers
use their cards to pay for expenses on the island, no U.S. bank has
stepped up to support the cards, meaning they don’t work in Cuba.
“The big hurdle for the credit cards is no one had a correspondent
relationship,” said Seleski.
Asked if Stonegate, a commercial bank, might issue its own credit cards
or work with another bank that issues cards, Seleski responded: “We are
working on other areas with Cuba.” He said he couldn’t be more specific
at this point.
Before March 12, Cuba wasn’t really on the radar of Seleski or the
But that day Seleski received a call from Ariel Pereda, a Stonegate
customer and food distributor who exports to Cuba under one of the
exceptions to the embargo. Pereda was lunching with Mark Wells, the
State Department’s Cuba desk officer, and James Williams, president of
Engage Cuba, an advocacy group working to end trade and travel
restrictions for Cuba, and they were discussing the difficulties trying
to find a bank to handle the accounts of the Cuban Interests Section.
At that point, the interests section had been without a banker for
around a year, putting it on a cash basis and complicating receipt of
fees for visas, passports and other documents. The lack of a banker was
complicating ongoing talks to reopen embassies and restore diplomatic
relations. Getting a new bank was one of the Cuban government’s priorities.
Seleski said he had been to the island several times with his customer,
Pereda, so “there was some comfort level” with the idea of doing
business with Cuba.
“We looked at the idea, we liked what we saw and we moved forward,”
Seleski said. But he admits it’s a play for the future when there may no
longer be an embargo and business opportunities really start to open up.
“A lot depends on the continued thawing of relations,” he said. “As long
as things move forward on the political front over the next two years,
then there will be more business opportunities.”
But other banks — wary of potential compliance headaches, fearing
political backlash for doing business with the Cuban government or
exercising caution because they don’t want to run afoul of U.S.
sanctions that have resulted in huge fines for some foreign banks that
have used U.S. dollars for business dealings with Cuba — have been
reluctant to venture into Cuba even though new U.S. regulations would
allow them to do so.
Seleski, who has met with BICSA officers and visited the bank’s
branches, said he’s satisfied that Stonegate has all those areas covered.
Stonegate, he said, has segmented its Cuba business and has two
employees who work full-time on Cuban regulatory compliance and other
“The Cuba relationship is not that hard, not that complex,” he said. “It
sounds bigger than it really is.”
Plus, he said, “The Cuban government is very, very conscious of
following the rules. They don’t want problems.”
Seleski said he has been pleasantly surprised at “how sophisticated the
Cuban banking system is. From an anti-money-laundering point of view,
they’re actually more stringent than we are.”
In South Florida, there have been small protests and a weekly vigil
outside Stonegate’s Coral Gables branch. Seleski is aware of them but
they don’t give him pause, either. “We respect people’s opinions and
their right to express their point of view. That’s what make this
country great,” he said.
After Stonegate announced it would be handling the accounts of the
former Cuban Interests Section, he said, it did lose “a few” customers.
“But we also gained some customers who had nothing to do with Cuba but
thought we were doing the right thing so it was actually a net
positive,” Seleski said.
More recently, he said, some companies authorized to do business with
Cuba have moved their business from other banks to Stonegate.
Although it might seem like Stonegate waited to make its announcement
about its new correspondent banking deal until after diplomatic
relations between the United States and Cuba were restored, Seleski said
that’s not the case. He originally had been planning to sign the deal
July 13 but had a scheduling conflict that pushed the signing until Tuesday.
But he’s well aware that Stonegate is playing a role in the historic
rapprochement between Cuba and the United States. “We feel pretty
strongly that this is the right thing,” he said. “It’s very gratifying
to do something that could open up business opportunities in Cuba.”
Source: Stonegate Bank should be ready to handle transactions with Cuba
in three to four weeks | Miami Herald –