PostFinance closes payment channel to Cuba under US sanctions pressure

Several other banks have also closed payment channels to the country in the last couple of years. Keystone / Alejandro Ernesto

Switzerland's PostFinance company has suspended payment transactions to Cuba due to United States sanctions, drawing criticism from Swiss living on the island and complicating Swiss projects in the country.

On Thursday, PostFinance confirmed reports in the French-language paper Le CourrierExternal link that the payment channel to Cuba has been closed since September 1, 2019 due to the tightening of US sanctionsExternal link against the Cuban government. There are some exceptions but PostFinance did not provide swissinfo.ch with any details.

However, Johannes Möri, a spokesman for the banking arm of the state-owned Swiss Post, said that continuing commercial relations with Cuba raised the risk of being excluded from international payments.

The Swiss news agency, Keystone-SDA, reported that PostFinance is currently studying the question of whether suspending trade relations with entities domiciled in Cuba would be appropriate following the tightening of sanctions by Washington.

As a Swiss bank, PostFinance is not subject to US laws but it participates in the global payment system and is therefore dependent on a network of associated banks and access to US dollar payment transactions. US legislation could therefore have an “extraterritorial effect” notes Keystone-SDA.

Strong critique

The Swiss-Cuban chamber of commerce and industry says there are grave consequences to the decision, as some contracts that have already been agreed upon can no longer be executed. The chamber has issued a strong critique saying the bank has not fulfilled the “legal mandate of the Confederation to provide basic payment services”.

According to Postfinance, however, this basic service is limited to domestic services in Swiss francs. Customers domiciled abroad are subject to certain conditions.

Swiss NGO MediCuba was notified by a PostFinance employee of the interruption. Roland Wüest, a coordinator of MediCuba told swissinfo.ch in a statement that he was concerned about being able to honour contracts with private and public bodies in Switzerland.

“I still do not know how we’re going to do it. The big Swiss banks closed their channels on the island a few years ago and PostFinance was probably the last chance for money transfers between Switzerland and Cuba. “

swissinfo.ch has launched a call on FacebookExternal link (in Italian), inviting readers to report any difficulties Swiss citizens on the island are facing after the PostFinance decision. One Swiss pensioner in Havana already reported that he can no longer access money from his pension, paid into a PostFinance account.

Another thorn in the side

This is not the first time PostFinance has angered Swiss living abroad. In March, some delegates of the Organisation of the Swiss Abroad (OSA)External link criticised the company for limiting access to bank accounts and charging fees that are five times as high as those for domestic clients.

Over the past decade, Swiss banks became increasingly reluctant to do business with expatriate Swiss clients amid international pressure to crack down on tax evasion.

PostFinance is not the first financial institution to stop its payment transactions with Cuba. UBS and Credit Suisse stopped serving clients in the country in 2013. Zurich Cantonal Bank and Raiffeisen have also placed restricted on payments to the country.

This has been adapted from an article by Andrea Tognina written in Italian