In a recent move to tighten its grip on the private sector, the Cuban regime has announced new financial monitoring obligations. Published in the Official Gazette, the Ministry of Finance and Prices issued Resolution 86, which mandates self-employed individuals, small and medium-sized enterprises (SMEs), Non-Agricultural Cooperatives, and Local Development Projects to act as financial watchdogs. These entities are now required to alert authorities about any suspicious transactions they encounter.
Signed on April 8 and appearing in Official Gazette No. 37, the resolution outlines the "Procedure for the Attention, Supervision, and Control of Bookkeeping Activities" for all non-state actors performing this function. It designates them as "obligated subjects" in the prevention of money laundering, terrorism financing, and the proliferation of weapons of mass destruction.
Effectively, this regulation shifts certain state surveillance duties onto the private sector, further extending government control over an already heavily regulated non-state economy.
Key Responsibilities Under the New Regulation
Central to these obligations is the issuance of a Suspicious Transaction Report (STR). If a bookkeeper suspects that a client’s transaction might involve illegal activities, they must confidentially report it without informing the client under scrutiny.
Additionally, obligated entities are required to check international and national lists of individuals associated with terrorism before providing services. They must retain pertinent data and information for five years after ending a contractual relationship and cooperate with authorities upon request.
Government Oversight and Enforcement
The Ministry of Finance and Prices, along with the National Office of Tax Administration (ONAT) and local agencies, are empowered to supervise, inspect, and enforce corrective measures, with the possibility of escalating cases to the Prosecutor's Office, the Ministry of the Interior, and the Comptroller's Office.
This regulation comes amid increasing regulatory pressure on Cuba's private sector. Resolution 56/2024 revoked wholesale trade licenses for independent workers, SMEs, and cooperatives, while Decree-Law 91/2024 imposed penalties up to 72,000 pesos. Additionally, mandatory electronic invoicing for private businesses is slated for 2026, alongside currency restrictions in commerce.
Official Justifications and International Commitments
The regime defends these measures as part of its Economic and Social Program's Objective No. 8, aimed at "advancing the implementation of general guidelines for the prevention and reduction of crime, corruption, illegalities, and social indiscipline."
The government also claims the regulation fulfills commitments to the Financial Action Task Force of Latin America (GAFILAT), of which Cuba is a member, as it prepares for a new round of evaluations. A report from the organization had noted the non-integration of the non-state sector into the suspicious transaction reporting system.
However, this measure adds significant bureaucratic and legal burdens on entrepreneurs operating amidst a severe economic crisis. It poses real risks of penalties, business suspension, and criminal investigation for those failing to comply with the new surveillance obligations.
With over 11,000 registered SMEs contributing 31.2% of employment and 23% of tax revenue, Cuba's private sector is increasingly being co-opted into the state’s control framework.
Cuba's New Financial Surveillance Measures: What You Need to Know
What is the purpose of Cuba's Resolution 86?
Resolution 86 aims to shift financial monitoring responsibilities to the private sector, requiring them to report suspicious transactions to authorities, thereby extending state control over non-state economic activities.
How are private sector entities expected to comply with the new regulation?
Private sector entities must issue Suspicious Transaction Reports, verify international and national terrorism-related lists, retain relevant data for five years, and cooperate with authorities upon request.
What are the potential consequences for non-compliance with Resolution 86?
Non-compliance with Resolution 86 can lead to severe penalties, including financial sanctions, suspension of business activities, and possible criminal investigations.