Smuggling Cash to Cuba Rises in Defiance of Embargo

HOLES are appearing in the United States embargo on Cuba.

Black market couriers with moneybelts or carry-on bags stuffed with dollars are flying to the Bahamas, Cayman Islands, or Mexico. From there, Havana is a short flight away.

Most of the money is being smuggled to relatives of Cuban-Americans. But it's clear that tougher travel and foreign currency sanctions enacted last August are a ''fiasco,'' says a senior US Customs agent in Miami.

Agents are being told to look the other way. No one has been arrested since last August when President Clinton announced the tighter restrictions to ''isolate the Communist country economically and deprive it of US dollars.''

''It's a very frustrating situation,'' says the Custom's agent. ''The Office of Foreign Assets Control [OFAC] in Washington has tied our hands by telling us to ignore blatant violations which we see every day.''

Tighter restrictions

Restrictions on travel and money sent to Cuba tightened up as part of the Clinton strategy to curb the exodus of refugees last summer. All US travelers to Cuba, except journalists, must now apply for a license from the Treasury Department. Visitors may only take up to $100 per day for lodging, transportation, and food. Before this, there were fewer restrictions on who could travel and Cuban-Americans could bring up to $300 to relatives.

Embargo violations could bring prison terms and fines of $1 million for firms and $250,000 for individuals.

When the sanctions were announced last year, Jorge Mas Canosa, chairman of the Cuban American National Foundation, praised the prohibition on cash remittances as a way to ''kick the final leg from [President Fidel] Castro's stool.''

But Cuba experts say that thanks to lax enforcement of the embargo, more US dollars than ever are pouring into Cuba. ''Now, thousands of dollars arrive there through third countries,'' says Lisandro Perez, the director of the Cuban Research Institute at Florida International University.

While many Cuban-Americans voice support for the embargo, they also want to help family members in Cuba. The OFAC, the agency of the US Treasury Department that implements all US embargoes on other countries, argues that the sanctions are a success.

''It's not the prosecutions that is evidence of their success, but rather the reduction in flights to Cuba by half -- this has the effect of reducing the amount of money going to the Cuban government,'' says spokesman Hamilton Dix.

Just an inconvenience

There are fewer direct flights to Cuba now. Cuban-Americans who send money to relatives still living in Cuba have been inconvenienced, say Cuba experts, but not stopped by the new regulations.

Armando Garcia, the owner of Marazul Air Charter Services in Miami says, ''Whereas before, people could send cash remittances to Cuba directly from my office for a small fee, people are now forced to travel through third countries and bring the dollars directly to their relatives.''

Another way to get money to Cuba is by black market courier. ''Individuals are now charging a 20 percent fee to bring cash remittances to the Island,'' says Gus Monge, of the Miami-based Free Cuba Foundation. ''Word of mouth gets around very quickly in the community so that everyone knows who's traveling back to Cuba and when.''

Republicans in Congress are pushing a bill to tighten the embargo. But politics are behind the lax enforcement, according to Wayne Smith, a former head of the US Interests Section in Havana.

''OFAC and Treasury appear reluctant to enforce the sanctions because they know that these controls are unconstitutional,'' says Mr. Smith. ''It's a clear violation of the First Amendment and the freedom to travel.

Smith has openly flouted the new regulations, travelling to Cuba without getting the required license. In Miami, he has challenged Customs officials to arrest him. But after consulting with OFAC, Customs allowed him through.