Cuba has found a Florida bank willing to handle its future business in Washington, removing a major impediment to the communist country opening an embassy in the U.S.
Stonegate Bank of Fort Lauderdale agreed to handle Cubas diplomatic transactions, including paying bills and issuing visas, according to two people familiar with the negotiations who asked not to be identified before an announcement. The bank and its chief executive officer, David Seleski, did not immediately respond to requests for comment.
[An outside spokeswoman for Stonegate, Suzanne Schmidt, declined to comment on this story and a similar CNBC report when contacted by American Banker.]
The U.S. government has worked to assure financial institutions that it is legal to open a U.S. account for Cubas embassy. Until now, U.S. and foreign banks had refused to do so because of concerns about potential sanctions violations carrying hefty fines. In 2013, M&T Bank told the Cuban government it no longer would provide services to the Cuban Interests Section, a stripped-down diplomatic office in Washington.
E-mails seeking comment from the Cuban interests section in Washington and the Cuban mission at the United Nations were not immediately returned.
Stonegates shares climbed 1.7% to $29.82 at 1:03 p.m. Eastern time. The lender, which has a market capitalization of about $300 million, has 21 branches in south Florida. The bank reported that net income surged 36% in the fourth quarter to about $16 million.
President Obama and Cuban leader Raul Castro announced plans to normalize relations in December. Talks between the two countries on reopening embassies in Washington and Havana after 54 years resume in Washington on Thursday.
Obama notified Congress on April 14 that Cuba is being taken off the State Departments list of state sponsors of terrorism, a move that will take effect by the end of this month. Members of Congress have not indicated an effort will be made to block the decision within the 45 days lawmakers have to do so.
Still, a U.S. official said the two countries have issues to resolve before complete diplomatic ties can be restored.
While progress has been made in our efforts to reestablish diplomatic relations, we are not there yet, Assistant Secretary of State Roberta Jacobson testified before the Senate Foreign Relations Committee on Wednesday. There are still outstanding issues that need to be addressed.
Cuba is pressing the U.S. to cease its pro-democracy programs in the island nation, which Havana says undermine its government. The Obama administration has refused to do so.
The U.S. is seeking approval to have more diplomats in Havana and removal of restrictions on their travel outside the capital, as well as an end to inspections of cargo delivered to the diplomatic post in Havana.
Jacobson told senators that while Cubas government still does not respect the basic rights and freedoms of its citizens, allowing greater travel and commerce will have a positive influence on Cuba.
Sen. Robert Menendez of New Jersey, a Democrat on the Foreign Relations Committee, said that any U.S. telecommunications equipment sold to Cuba must have antisurveillance and other protective technology to prevent the government from spying on its people.
The Obama administration has loosened some restrictions on travel and business, mostly with Cubas small private sector. It has also urged Congress to begin easing the trade embargo imposed by President John F. Kennedy in 1962, after Cuba became a communist nation and nationalized private property.
Lifting the embargo would require legislation that would meet resistance from congressional opponents of relations with the Castro regime.
The Obama administration must notify Congress at least 15 days before it intends to restore its interests section in Havana to full embassy status.
Embassies could reopen and ambassadors may be named as soon as June, although opponents of normalization in the U.S. Senate may attempt to block confirmation of Obamas choice for the post.
Secretary of State John Kerry has expressed interest in visiting Havana after relations are reestablished. Renovation work on Cubas small and aging interests section in Washington is already under way, with jackhammers in full force.
The U.S.-Cuba talks on Thursday will be the fourth round of negotiations since January over the terms for normalizing relations.