Cuban Government Raises Financial System Fines: Legal Entities Could Face Penalties Up to 5 Million CUP

The Cuban State Council has announced a new decree, published in the Official Gazette, significantly increasing fines for violations in the banking, financial, and exchange sectors. The new cap is set at 5,000,000 Cuban pesos (CUP) for legal entities and 50,000 CUP for individuals.

This regulation, signed on May 7 by Juan Esteban Lazo Hernández, the President of the National Assembly of People's Power and the State Council, became effective immediately upon its publication. It amends Article 15 of Decree-Law 363, which addresses administrative violations in banking, financial, and exchange matters and has been in force since September 2018.

The government justifies this reform with its usual rhetoric, citing "the accumulated experience in applying the aforementioned regulatory provision, the implementation of a new exchange policy, and the current economic conditions in the country as reasons to update the sanctioning framework."

In addition to the fixed cap, the decree introduces a secondary system of fines indexed to the current monthly minimum wage, applicable to specific violations outlined in Articles 9.7, 10, and 11.1 of Decree-Law 363.

Under this scheme, individuals might incur fines ranging from ten to 200 quotas, while legal entities face a range from 10,000 to 200,000 quotas. Given that the minimum wage has been set at 2,100 CUP since January 2021—with no reported changes—the maximum indexed cap for legal entities could reach 420,000,000 CUP in the most extreme scenario.

The decree indicates that "when determining the value of the fine at the time of its application, graduation criteria related to the continuity or persistence of the infringing behavior and the nature of the damages caused are considered, ensuring that the fine amount is proportional to the impact of the conduct."

Decree-Law 118 aligns with a recent trend of the regime tightening financial regulations, which has accelerated in recent months. In February, the regime enacted a law to seize foreign currency from e-commerce; in March, the Ministry of the Interior launched operations against currency trading, with more than 300 investigations underway; and in April, the government announced cross-referencing financial data to detect tax evasion.

The economic backdrop in which these fines are imposed is devastating for Cubans. The Cuban peso has plummeted by nearly 95% against the dollar in the informal market since 2020, going from 42 CUP per dollar to over 530 CUP by April 2026, which severely diminishes the real value of hard currency penalties.

In this context, Cuban banks have begun to gradually settle outstanding accounts while the state financial system faces an unprecedented liquidity crisis.

The Minister of Justice has 30 business days to publish an updated, revised, and consolidated version of Decree-Law 363 in the Official Gazette, as stipulated by the Second Final Provision of the new decree.