From Spanish hotel group Melia to German shipping company Hapap-Lloyd, foreign businesses are pulling out of Cuba for fear of falling foul of US sanctions.
The pace of withdrawals accelerated this week ahead of a Friday deadline from US President Donald Trump for them to cut ties with the sanctioned military conglomerate GAESA, which controls much of Cuba’s economy.
Here is an overview of the situation:
Visa and Mastercard payments will be suspended in Cuba from June 6 after a foreign bank severed ties with Fincimex, a financial institution linked to GAESA responsible for processing credit card transactions on the island.
The cards are primarily used by foreign companies, tourists and Cubans living abroad to pay in stores, real estate agencies, hotels, restaurants and state-run gas stations.
Several international hotel chains have severed ties with nearly one hundred properties on the island, most of them associated with GAESA
They include Spain’s largest hotel chain Melia.
The disinvestments marks another blow to an already crumbling tourism industry, struggling with a severe shortage of fuel and other basics, which has prompted many international airlines to suspend flights to Cuba.
Foreign hotel chains, which arrived in Cuba in the 1990s, operate under one of two models: they either manage hotels in partnership with the tourism ministry or through agreements with Gaviota, GAESA’s tourism entity.
Melia and Iberostar have ceased managing 15 and 12 hotels linked to GAESA, respectively, although they will maintain operations at the properties they manage jointly with the tourism ministry.
Canada’s Blue Diamond has completely ceased operations at its 62 hotels on the island.
Similarly, the Asian group Archipelago International, which operated six hotels under the Aston brand, has ended its operations, two sources close to the sector told AFP.
Two European shipping companies, France’s CMA CGM and Germany’s Hapag-Lloyd, announced the ‘temporary’ suspension of container shipments to Cuba in mid-May.
Although maritime transport is not explicitly mentioned in Trump’s May 1 announcement of sweeping sanctions on Cuba’s economy, both companies could face sanctions for operating in the port of Mariel, which is managed by GAESA.
Canadian mining company Sherritt, which had been extracting nickel and cobalt since the 1990s through a joint venture with the state-owned General Nickel Company, announced last month it was leaving Cuba due to the US sanctions.
It initially planned to liquidate its assets on the island but later said it was negotiating the sale of a majority stake to a US firm owned by a former Trump advisor.
