US forges ahead to allow Cuba lawsuits, defying EU warnings

17 Apr 2019 / 23:39 H.

WASHINGTON: The administration of President Donald Trump on Wednesday forged ahead with a long-delayed law that allows lawsuits in US courts over property seized by Cuba, defying warnings from the European Union and vowing to issue no exemptions.

Fuelling fears on the island over its economic future, Secretary of State Mike Pompeo announced that the measure — passed by the US Congress in 1996 but until now delayed systematically by each president every six months — will go into effect on May 2.

“Any person or company doing business in Cuba should heed this announcement,“ Pompeo told reporters.

Under the provision of the Helms-Burton Act, any companies that operate in property seized by Cuba during Fidel Castro’s 1959 communist revolution could face lawsuits in US courts from the vast and politically powerful Cuban American diaspora.

Pompeo called on all businesses that own buildings in Cuba to “fully investigate whether they are stolen in service of a failed communist experiment.”

“I encourage our friends and allies alike to follow our lead and stand with the Cuban people,“ he said.

But the European Union and Canada, which have long warned against the Helms-Burton Act, swiftly condemned the move.

“The EU and Canada consider the extraterritorial application of unilateral Cuba-related measures contrary to international law,“ the EU’s foreign affairs supremo Federica Mogherini and Trade Commissioner Cecilia Malmstrom said in a statement that was also signed by Canadian Foreign Minister Chrystia Freeland.

In a letter ahead of the announcement, Mogherini and Malmstrom warned Pompeo that enforcement of the law would lead to reprisals in Europe.

The European Union “will be obliged to use all means at its disposal, including in cooperation with other international partners, to protect its interests,“ said the letter seen by AFP by EU foreign policy chief Federica Mogherini and trade commissioner Cecilia Malmstrom.

They also warned of launch of action at the World Trade Organization, a key reason why presidents Bill Clinton, George W. Bush and Barack Obama all blocked the lawsuit provision from coming into force.

No exemptions

Kimberly Breier, the top US diplomat for Latin America, said the United States would not issue any exemptions to the new law, as it has in previous controversial decisions such as its sanctions on Iran.

But Breier said businesses would only be affected if they operate in properties seized from Cubans who have emigrated to the United States.

“I think the vast number of European companies will not have any concerns operating in Cuba,“ she said.

But the costs could still be overwhelming. The Justice Department has taken note of 6,000 potential claims that reach US$1.9 billion, said a study by Richard Feinberg of the Brookings Institution.

Adding interest, the figure goes up to US$6 billion, it said.

In Havana, diplomats said that the decision had already sent a chill through foreign investors, who have been assiduously wooed by Cuba since the fall of the Soviet Union cut off a key lifeline.

In 2017, Cuba drew US$2 billion in foreign investment, falling short of its US$5 billion goal seen as necessary to revitalize the economy, according to official figures.

U-turn in policy

The decision marks a sharp reversal from the policies of Obama, who normalized relations with Cuba through secret diplomacy aided by the Vatican.

Declaring the half-century US effort to topple the communist regime a failure, Obama visited Cuba and opened the door to greater travel and other interactions by Americans.

Pompeo, in his latest heated criticism of the previous administration, accused the Obama team of playing “a game of footsy with Castro’s junta” and said Cuba had stepped up repression of dissidents.

He also pointed to Cuba’s support of Venezuelan President Nicolas Maduro, a leftist firebrand presiding over a crumbling economy whom the United States is seeking to topple.

“We see clearly that the regime’s oppression of its own people and its unrepentant exportation of tyranny in the region have only gotten worse, because dictators perceive appeasement as weakness, not strength,“ Pompeo said.

The decision is the latest by the Trump administration to put into effect policies long considered too disruptive on the international scene.

In late 2017, Trump similarly stopped issuing waivers on a law and moved the US embassy in Israel to bitterly contested Jerusalem. — AFP

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