The Trump administration is close to deciding whether U.S. citizens can sue over property confiscated during the Cuban revolution, a move allowed by a 1996 law but suspended by every president since.
At risk is the bottom line for a host of U.S. and foreign companies operating in the island nation, including airlines such as KLM and Delta, cruise lines Carnival and MSC Cruises, and manufacturers like Huawei Technologies. The White House's decision could also upend already tense relationships with allies like Canada and the European Union, strained by the administration’s skepticism of multilateral trade agreements.
Title III of the 1996 Helms-Burton Act would allow Cuban Americans to sue foreign companies that now profit from property seized by the Cuban government during the 1959 revolution. Amid uproar from U.S. trading partners, every president has suspended the provision, but in mid-January the Trump administration said it would suspend the statute for only 45 days to conduct a review. Analysts say it’s likely the administration will allow some lawsuits to proceed.
“As of today, I would expect that the announcement would be that the United States is implementing Title III, with some restrictions,” said John Kavulich, president of the U.S.-Cuba Trade and Economic Council.
Though the 45-day suspension would create a mid-March deadline, it’s likely that an announcement will come sooner. Under the 1996 law, the White House must notify Congress of its decision 15 days before the effective date, meaning a decision could come as soon as this week.
When Congress passed the 1996 legislation, U.S. trading partners balked. The EU filed a complaint with the World Trade Organization, which led to the Clinton White House suspending the provision in 1998. The U.K., Mexico, and Canada have passed laws forbidding any company based in their jurisdictions from complying with a U.S. judgment.
“The European Union is already working on countermeasures; they’re already planning on what they are going to do,” said William LeoGrande, a professor at American University and a Cuba expert. “It wouldn’t surprise me if they refiled their complaint in the World Trade Organization.”
Analysts said the White House may issue a partial suspension of the statute, in which only some claimants are allowed to file a lawsuit, or a decision exempting U.S. companies profiting from Cuba assets from liability. But that could invite legal action against the administration from claimants who don’t get to sue, LeoGrande said.
Since the early 1960s, the Justice Department’s Foreign Claims Settlement Commission has accepted more than 5,000 claims filed by property owners, originally totaling about $1.9 billion. With inflation and a 6 percent interest rate allowed by Congress, that value is now closer to $9 billion.
The expropriated Cuban property covers a wide range: ranches, sugar mills, mines, bank deposits, and personal property owned by U.S. citizens or companies before the revolution.
Cruise-ship companies could be sued for using the Port of Santiago in southeastern Cuba. The Miami Herald reported in 2018 that the Parreño family of Florida claims majority ownership of the port despite the Castro government confiscating it in 1960. Cruise companies docking in Havana Harbor may see a lawsuit from Mickael Behn, a U.S. citizen residing in England who says his family owned the property before the revolution, the Tampa Bay Times reported last year.
Out of the 5,000 certified claims, only a few make up the total dollar amount. The largest, valued at $267 million, is controlled by Boca Raton, Florida-based Office Depot, which, through decades of mergers and acquisitions, controls a claim from the expropriation of the Cuban Electric Company.
Another large claim is controlled by Bethesda, Maryland-based hotelier Marriott International. Again, through a series of acquisitions, Marriott controls a $50 million claim for the seized Cuban assets of the International Telephone and Telegraph Corporation.
But not all 5,000-plus claimants may get a chance to sue, because the 1996 law restricts suits to claims over $50,000. That limits the number of potential lawsuits to around 913, the U.S.-Cuba Trade and Economic Council said.
The Trump administration has sought to reverse the Obama administration’s economic and political détente with Cuba. In 2017, Trump spoke in Miami’s Little Havana, announcing that he would reimpose some travel restrictions and clamp down on businesses tied to Cuban military and intelligence services.
The decision to revisit Title III comes as hard-line foreign policy advisers occupy a greater role in the White House and amid a broader effort by the administration to make its mark on Latin America. President Trump’s appointment of John Bolton to national security adviser was key in the administration's move to increase pressure on Cuba, especially as tensions with Nicolás Maduro’s Venezuela—a top ally to Cuba—ramp up, analysts said. Last November, Bolton called Cuba, Venezuela, and Nicaragua the “Troika of Tyranny,” a play on the Bush administration’s “Axis of Evil” label used to describe North Korea, Iran, and Saddam Hussein’s Iraq.
Mauricio Claver-Carone, a D.C. attorney who served as executive director of the anti-Castro U.S.-Cuba Democracy PAC, became senior director of the National Security Council's Western Hemisphere division in late 2018. Claver-Carone was a member of Trump’s transition team for the Treasury Department and has pushed for sanctions against Venezuelan officials.
So far, there has been little activity in Congress over the Trump administration's proposed move. In 2002, lawmakers introduced legislation to sunset Title III of the 1996 bill, but it did not advance. A key bipartisan group of lawmakers has backed previous Trump administration policy changes toward the Cuba, including Sen. Marco Rubio of Florida and Senate Foreign Relations Committee ranking member Bob Menendez, as well as Rep. Mario Diaz-Balart of Florida, who called the decision to review Title III “a firm step in the right direction.” In the House Foreign Affairs Committee, newly installed Western Hemisphere subcommittee chairman Albio Sires opposed Obama’s relaxation of restriction on Cuba.
“So you have much different dynamic that now, politically, they’re able to make these decisions where they weren’t before,” Kavulich said.
Kavulich said that in December his group and others submitted a proposal to the White House and to Cubans to “lay out a script” for reopening negotiations over the certified claims, but geopolitics intervened.
“It was getting some traction in Congress and the White House and the Cubans—people looking at it, claimants—and then January moved along and, of course, Venezuela blew up,” Kavulich said.