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The Associated Press December 27, 2010, 4:58PM ET

Cubans hail new US rules on money transfers

Cubans who rely on remittances from abroad are hailing a U.S. policy change that means they now can receive transfers in the island's convertible currency instead of dollars, sidestepping a 10 percent exchange surcharge.

Western Union said an arm of the U.S. Treasury Department authorized it to pay remittances in Cuba's convertible peso, or CUC, starting Dec. 20.

Previously, the Treasury Department's Office of Foreign Assets Control required dollar transfers to Cuba to be paid out there in dollars, forcing recipients to pay the 10 percent fee that the Cuban government imposes on cash dollar-to-CUC exchanges.

In a statement on its website, Western Union called the changes "great news for our clients!"

They were also met with enthusiasm in Cuba, where many rely on remittances to supplement salaries averaging just $20 a month.

"It's good news," said Zoila Rodriguez as she waited in line at a Western Union branch in Havana on Monday. "It used to be that when my brother sent me money, I had to change it at a (state-run) currency exchange office."

Other clients said it was the first time in years their families had sent money through an official channel like Western Union -- which has 150 branches in Cuba. In a bid to avoid the surcharge, many have resorted to intermediaries, known here as "mules," to deliver remittances directly in CUCs.

For much of the 1990s, the dollar was the primary form of hard currency in Cuba, but in 2004, the government ordered stores and businesses here to stop accepting it. Authorities also applied the 10 percent surcharge on cash dollar-CUC exchanges the same year.

Cuban authorities said those rules were in response to a U.S. crackdown on foreign banks that sent dollars to the island in violation of Washington's long-standing trade sanctions against Cold War enemy Cuba.

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