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  HOME | Cuba

US to Allow Lawsuits against Foreign Companies Operating in Cuba

WASHINGTON – United States Secretary of State Mike Pompeo said on Wednesday that the US government would invoke a measure for the first time that allows lawsuits against foreign companies operating on properties seized from Americans following the 1959 revolution in Cuba.

“For 22+ years, Title III of the LIBERTAD Act was suspended in the hope the Cuban regime would transition to democracy. But the Trump Administration recognizes reality – dictators see appeasement as weakness. President Obama’s attempt to moderate the regime didn’t work,” Pompeo said.

The LIBERTAD Act, or Helms-Burton Act, was enacted in 1996 and Title III of the law allows plaintiffs to sue both foreign and Cuban companies making money off properties confiscated after the 1959 Cuban Revolution in US courts.

Implementation of Title III was suspended every six months by the administrations of Bill Clinton, George W. Bush and Barack Obama.

President Donald Trump did the same thing in his first two years in office, but in January he suspended Title III for only 45 days and then for only 30 days, a term that expired on Wednesday.

The Cuban government, for its part, reacted to the announcement by labeling it an “attack” on the island.

“I energetically reject the announcement by Secretary of State Pompeo on the activation of Title III of the Helms-Burton Law. It’s an attack on international law and the sovereignty of Cuba and of third states. Aggressive escalation by the USA against Cuba will fail,” Foreign Minister Bruno Rodriguez said in a Twitter post.

Spain, whose companies have extensive investments on the island, especially in the tourism industry, said the EU would have to get involved and weigh action against Washington before the World Trade Organization (WTO).

“I would say that the suit before the WTO will almost be obligatory because we have conclusions from the European Council of Ministers from 1997 that call for this not as a possibility, but as an action that the European Union must take if the memorandum that was signed is not complied with,” Spanish Ambassador to Cuba Juan Fernandez Trigo said.

The Association of Spanish Businesses in Cuba (AEEC) urged the EU to pursue a policy of “reciprocity” and punish US corporations filing lawsuits against European companies for profiting from properties expropriated by Cuba’s communist government.

“We’re demanding reciprocity, that we not stay silent. That if some Spanish company with interests in Cuba sees itself threatened, fined, warned, that the US company promoting this action suffer the same punishment,” AEEC president Xulio Fontecha told EFE in Havana.

Fontecha noted that most of the US firms potentially filing lawsuits were large corporations “with interests in Spain or in Europe.”

The Spanish businessman urged Brussels to “take reciprocity measures and also punish them in a timely fashion.”

Regarding the possible effects of a hypothetical wave of lawsuits against Spanish companies, many of which operate on the island under joint-venture contracts with Cuban state-owned enterprises, Fontecha acknowledged that the situation “is very difficult, very premature, knowing what’s going to happen.”

Canada, another country whose businesses have extensive interests in Cuba, said it regretted Washington’s change in policy.

Foreign Affairs Minister Chrystia Freeland said in a statement that Canada would “fully defend the interests of Canadians conducting legitimate trade and investment with Cuba.”

“We will be reviewing all options in response to this US decision,” Freeland said.

Pompeo said no companies would be granted exemptions from the provision.

“Effective May 2, under Title III of the LIBERTAD Act, US citizens will be able to bring lawsuits against persons trafficking in property that was confiscated by the Cuban regime. After more than 22 years of delays, Americans will finally have a chance at justice,” Pompeo said.

National Security Adviser John Bolton, meanwhile, said during a luncheon with members of the Cuban exile community in Miami that the Trump administration would limit remittances sent by people living in the United States to the island to $1,000 per person quarterly.

The Treasury Department will limit non-family travel to the island, Bolton said.

Washington is also adding five businesses owned by the Cuban military, including Aerogaviota, to a list of entities banned from engaging in direct financial transactions, Bolton said.

A Department of Justice committee has “certified” 5,913 cases brought by US citizens and firms – including Texaco, Coca-Cola and Colgate-Palmolive – who will be able to resort to Title III to file lawsuits totaling $1.9 billion, attorney Nicolas Gutierrez, the president of the National Association of Cuban Landowners in Miami, told EFE last month.

Pompeo said the Trump administration was taking action in light of Cuba’s activities in the hemisphere.

“The Cuban regime has for years exported its oppression to Venezuela. Cuban military, intelligence, and security services keep Maduro in power. This behavior undermines the stability of countries in the Western Hemisphere, and poses a direct threat to US national security,” Pompeo said.

 

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