The Irish Independent has seen correspondence from the lender written to long-standing customers with legitimate business interests in Cuba telling them it can no longer process international transactions to or from the Caribbean island.
The ban comes as French bank BNP Paribas was hit with a $9bn (€6.5bn) fine by the US amid allegations it violated US sanctions involving Cuba, Iran and Sudan.
Bank of Ireland has a tie-up with a leading bank in the US which handles all of Bank of Ireland’s transactions under new European payment rules known as the Single Euro Payments Area (SEPA)
The US lender is bound by US regulations which ban payments being made to Cuba, Iran and Sudan, Bank of Ireland said.
Bank of Ireland confirmed that it had written to affected customers who are doing business with Cuba explaining that it could not process payments on their behalf.
“Our correspondent bank for all SEPA transaction is a leading US bank who must comply with its own regulatory requirements and obligations and to avoid a possible exposure to regulatory sanctions and penalties,” Bank of Ireland said in a statement.
“As a result of the decision by our correspondent bank, we are not in a position to process such transactions.
“This affects all international payments to or from Cuba and also any related SEPA payments.”
The US government has sanctions in place against a select number of countries including Cuba, Iran and Sudan. The EU has also had sanctions in place against Iran and Sudan but not Cuba.
AIB declined to comment when asked by the Irish Independent if it was facing similar problems concerning Cuba.