British credit cards hit by US sanctions

Autumn 2002

By Stephen Wilkinson

British tourists travelling to Cuba are being prevented from using their credit cards because of the US blockade, it has emerged.

HFC, Beneficial and Marbles - the card brands of the US finance company Household International - wrote to their British holders in August telling them that their cards will not be valid in Cuba.

Two CSC members were among the estimated two million customers who received the warning on their monthly statement.

Thanks to their timely pro-tests, CSC alerted the media and the story made the Financial Times on August 28th.

Zelda Robinson was particularly angered because her card is an affinity card issued in the name of the Consumers’ Association. She wrote a letter of complaint to Which?

Her statement, like all the others read:

‘Due to US government restrictions applicable to us, please do not use your card in Cuba as the transaction will not be processed.’

Zelda told CubaSi: ‘I was appalled that the current US administration can interfere to this extent with my freedom and told them so.’

The matter is serious because it has also emerged that the British subsidiaries of other US banks are also blocking transactions in Cuba by their customers. It could be that more than one in five UK cards cannot be used on the island.

Even cards from major British banks such as Abbey National and Alliance & Leicester cannot be used there because they are outsourced to MBNA, the US card issuer that claims 14 per cent of the UK market.

‘What we are telling card-holders is that their cards will not be able to be used in Cuba and this is because of an American directive,’ said Martin Rutland, communications director of HFC.

MBNA told the Financial Times that it had no option but to refuse transactions with Cuba. ‘We are not doing this by choice. We are bound by US law.’

Vincent Cable, Liberal Democrat spokesman for trade and industry, was quoted by the FT as saying it was ‘clearly unacceptable’ that US sanctions should hit Britons. ‘It means whenever America has a bilateral quarrel, it hits UK and European interests. What is clearly needed is a multilateral agreement to stop unforeseen consequences of extra-territorial legislation.’

It is not clear why this ruling has been suddenly brought into effect. Presumably these cards have been used in Cuba in the past, so why they have suddenly been targeted would be interesting to find out. No one at the banks would say, but it would most likely be an assertion of the ban on subsidiary trade with Cuba in the 1992 Torricelli Law. This law was condemned outright as extra-territorial and illegal by the Major Government at the time it was passed.

International law expert Keith Ewing told CubaSi: ‘This is an outrageous example of extra-territoriality and should be condemned. It is also a nonsense. Why should Cuba be singled out for this treatment? Presumably these cards could be used in Baghdad right now, so why not Havana?.’

CSC wrote to the minister reposnsible for the Caribbean at the DTI, Baroness Symons of Vernham Dean, and got the following reply: ‘The Government’s understanding is that this is situation is a contractual matter between consumers and pro- viders. In this case there does not seem to be an extra territorial application of US law.’

In other words: the government intends to do nothing about this. CSC members should write letters of protest to the companies concerned and copy them to their MPs.

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