The Trump Administration has told Congress that it is undertaking a ‘careful review’ of the six-monthly Title III waiver of the 2016 Helms Burton legislation. The 1996 legislation enables US and naturalised citizens born in Cuba holding registered claims to take legal action in the US against individuals or companies ‘trafficking’ in property confiscated by the Cuban Government after 1959.
In a 16 January message, the US Secretary of State, Mike Pompeo, said that a short extension of the waiver for a period of 45 days from 1 February would allow the US Administration “to conduct a careful review of the right to act under Title III in light of the national interests of the United States and efforts to accelerate the transition to democracy in Cuba”.
In his statement Pompeo said that his actions were a response to “the brutal oppression on the part of the Cuban Government of human rights and fundamental freedoms” and its “indefensible support to the increasingly authoritarian and corrupt regimes in Venezuela and Nicaragua”
Cuba’s President Miguel Díaz-Canel subsequently described the decision as a provocation aimed at subverting and overthrowing the Cuban Government and imposing a regime to the liking of the US Government (see below).
Up to now every US President has exercised his right to waive the provision on a six-monthly basis. However, if the Trump Administration decides to discontinue doing so, it could potentially allow hundreds of lawsuits against corporations and individuals operating in Cuba, from around the world.
One reason that no US administration, up to now, has been willing to allow registered claimants to sue beneficiaries of expropriated assets, has been the threat of retaliation by US allies who have made clear that the legislation’s extra-territorial nature would result in WTO complaints and other responses.
In an apparent reference to the confrontational position that the Trump Administration may now be prepared to take over the issue, Pompeo wrote: “We ask the international community to intensify efforts to hold the Cuban Government accountable for the 60 years of repression of its people. We encourage anyone doing business in Cuba to reconsider whether they are trafficking in confiscated property and inciting that dictatorship”.
Under the legislation the definition “Trafficking” is broad, ranging from use of a property or land through benefitting commercially from such activities, to owning shares in or benefitting from companies managing such assets.
There are, in total, 5,913 certified claims by US companies and individuals and an uncertain number by Cuban-Americans. Although there is no clear figure, some reports have suggested that the likely sums at stake including interest, could amount to US$10bn. However, the legal process is likely to be lengthy, complex and expensive.
Commenting, Senator Marco Rubio (R-Florida), who together with the US President’s National Security Adviser, John Bolton, is driving US policy towards Cuba and more generally Latin America, warned Cuba in a Tweet “You have won millions of dollars of stolen property in the last 60 years. But check again in 45 days #TickTock”. Rubio also warned investors that the decision was “a clear indication of what comes next. If you are dealing with stolen property in Cuba, now would be a good time to get out”.
In other responses to Pompeo’s statement, Phil Peters, a leading consultant for US businesses in Cuba said: “If they take this decision, they will be moving from a policy of limiting US engagement with Cuba to a policy of very actively trying to disrupt the Cuban economy.”
The US-Cuba Trade and Economic Council, which supports American business in the Caribbean island, said Pompeo’s move was calculated to “create uncertainty and, thus, anxiety.”
Cuba condemns US approach – says aimed at overthrowing Government
Responding on Twitter to the US Secretary of State’s remarks, Cuba’s President, Miguel Díaz-Canel, said “we vigorously reject this new provocation, meddling, threatening and bullying, in violation of international law” while noting that the Helms-Burton Act “pursues the objective of subverting and overthrowing the Government and imposing a regime to the liking of the US Government”. “We strongly condemn such interventionist policy”, Cuba’s President wrote.
Cuba’s Foreign Minister Bruno Rodríguez separately described Pompeo’s announcement as “political blackmail and irresponsible hostility aimed at hardening the blockade on Cuba.”
In a detailed and lengthy background statement, Cuba’s Ministry of Foreign Affairs noted that the measures the Trump Administration were threatening were ‘a new step that would dangerously reinforce the blockade against Cuba, flagrantly violate International Law, and directly attack the sovereignty and interests of third countries’.
The Government of Cuba, it said, ‘reserves the right to duly respond to this new aggression’. It however noted that Cuba remained willing to find a solution to the mutual claims and compensations, a process begun under the Obama Administration when three high level bilateral meetings took place on the issue.
Third country concerns mount
As Cuba Briefing reported in its 17 December 2018 issue, the ending of the Title III waiver is of serious concern to European and other governments as it has the capacity to drive a new wedge between the US Administration and its traditional allies there as well as in Canada and Japan.
At that time sources close to the issue indicated that although the general principles had been agreed within the Trump Administration, the implications and possible associated conditionalities were still under active discussion, with differences emerging between President Trump’s hard-line National Security Adviser, John Bolton and the US Secretary of State, Mike Pompeo.
It is not clear however whether the strong language used by Pompeo signals the internal battle is now over and that any debate on the negative impact a changed approach may have on Washington’s allies now lies with Congress.
Some sources suggest that the US Administration may be looking at several associated options beyond a simple suspension of the waiver, although, in the face of strenuous lobbying and Congressional concern, there may be ameliorating provisions in relation to some US corporations.
What is unclear is how the US’s trade partners may respond. Some EU governments, including the UK, have introduced regulations protecting their trade interests by making it illegal to comply with US exterritorial trade law.
To complicate matters further, much has changed since Helms Burton was first legislated, with many of Washington’s allies taking advantage of the Obama Administration’s policy of détente to normalise and deepen relations.
This is particularly the case with the European Union.
All EU states, including the UK, despite its close engagement with the Trump White House, remain convinced of the value of engagement with Havana. The EU common position, which introduced political conditionalities into Europe’s Cuba policy thereby placating US concerns has gone; EU Cuba engagement is now governed by a bilateral Political Dialogue and Cooperation Agreement which allows for dialogue with Havana on all issues; most nations have reached formal agreements with Cuba on how Paris Club debt can be translated into new investments; and almost all EU governments including Spain, Germany and post-Communist nations such as the Czech Republic, previously opposed to a deeper European relationship with Cuba, are actively seeking to strengthen relations (Cuba Briefing 26 November 2018).
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