MEXICO CITY – Amid mounting US financial restraints on Cuba, more than 400 Western Union offices on the island will be closed, according to Cuban authorities. This could severely restrict the flow of remittances from abroad and exacerbate a deep economic crisis that led to widespread food shortages on the island.

Fincimex, a Cuban military-controlled unit acting as Western Union’s agent on the island, announced planned closings Tuesday after the Trump administration took steps to ban money transfers by companies affiliated with the country’s military .

Fincimex processes a large portion of the transfer money, billions of dollars per year that make up a significant part of the Cuban economy.

Western Union said it was “looking into ways to comply with the new rules,” which will take effect in late November, adding that services between the United States and Cuba would continue to function for the time being.

The communist government of Cuba could continue to designate other institutions with nationwide coverage such as banks to channel remittances under the new rules, analysts said.

US Secretary of State Mike Pompeo said the new restrictions were imposed because the Cuban military cut remittances and “used these funds to suppress the Cuban people and fund Cuba’s interference in Venezuela.”

Fincimex said the new regulations are politically motivated and would harm the Cuban people. “Doing this amid a pandemic underscores cynicism, contempt for the Cuban people and the opportunism of the American government,” the company said in a statement.

The restrictions were the recent efforts of the Trump administration in its aggressive campaign to reverse the American detente towards Cuba and the engagement policy begun by President Barack Obama.

But the timing of the days before the US presidential election is no accident, analysts said.

The battlefield state of Florida, home to a powerful Cuban-American electoral bloc that has historically tipped conservatively, is part of the Trump administration’s equation, they said.

“This is just election year policy,” said Ted A. Henken, associate professor of sociology at Baruch College in New York. “It is very likely that the Cuban vote can help keep Florida in the Republican column this year.”

Mr Henken said this week’s moves could have a disastrous impact on the Cuban people.

“If the Cuban government refuses to allow any other company like a bank to do so, it could be a devastating blow to anyone living wholly or partially on remittances, which is probably 60 percent of the population,” he said. “This is a noose for the Cuban economy and accepts that it is also around the neck of everyday Cubans.”

Emilio Morales, president of Miami-based Havana Consulting Group, said Trump administration’s restrictions weighed on the Cuban government at a time when it was already struggling to sustain an economy crippled by sanctions and the coronavirus pandemic. The virus has brought tourism to a standstill and slowed down remittances.

Billions of dollars in remittances were sent to Cuba last year, Morales said, with much of the river flowing through units controlled by the Cuban military and the rest going to Cuba through other means, such as relatives arriving by plane , and by people hired to take away currency.

The deal has been lucrative for the Cuban military, Morales said, and it is extremely reluctant to give up control. But recent Trump administration restrictions, coinciding with such a severe economic downturn on the island, may leave the government with no choice but to pull the remittance trade out of the hands of the generals.

“If the military doesn’t give the remittance business to other government institutions, they’ll run out of oxygen, it’s that simple,” Morales said.

“Obama tried to empower the Cuban people by opening remittances and large-scale travel,” Morales continued. “Unfortunately, however, his government has not taken due care in how the remittance business was run on the island, and inadvertently placed billions of dollars a year in the hands of the Cuban military leadership who, in reality, never ended up in the hands of their real owners, the people of Cuba. “

Frances Robles contributed to the coverage.

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