US working with Cuba to solve banking issue

Washington said Wednesday it is actively working with Cuba to find a new financial institution to handle its diplomatic accounts in the United States (US), after the Caribbean nation announced that a banking cut-off had forced it to halt nearly all United States consular services just ahead of the holiday high season for travel.

The US State Department said in an emailed communique that the US bank that had handled Cuba's accounts severed the relationship due to a "business decision", and that the government does not have the power to interfere or order any bank to handle a foreign mission's account.

It added that Cuba's situation is not unique, saying the closure of embassy accounts can hurt operations at other diplomatic outposts.

"The US government seeks to help foreign missions in the United States that have trouble obtaining banking services," the State Department said, "while ensuring the continued security of the US financial system including through appropriate regulatory oversight."

"We would like to see the Cuban missions return to full operations."

On Tuesday, Cuba stopped providing almost all consular services including passport and visa processing at both the Cuban Interests Section in Washington and its Permanent Mission to the United Nations in New York.

It blamed the 51-year-old US embargo, which outlaws most financial transactions with the Communist-run country, for its banking difficulties. Havana said it had tried unsuccessfully to move its accounts to multiple other banks, and expressed regret for the "negative impact" that slashing consular services will have for people planning trips to the island.

Cuba receives as many as 500,000 visitors from the United States each year. Most are Cuban-Americans with relatives back home, plus smaller numbers of travellers on academic, religious and cultural exchanges. All are legal under embargo rules.

The halting of consular services threatens to disrupt such trips ahead of the holidays, a popular time of the year for Cuban-Americans to visit family on the island.

- AP