On May 15, the first First Joint European Union (EU)-Cuba Council meeting will take place in Brussels, Belgium to start the process for the EU providing 40 million Euros for projects in Cuba.
The parties will sign their first Financial Agreement to establish the framework for the implementation of a bilateral program in the area of renewable energies for which the EU will contribute up to €18 million (U.S. $ 21.5 million). This will pave the way for a second Financial Agreement later in the year for a program in support of renewable energy and sustainable food security in Cuba, with an EU contribution of €19.65 million (U.S.$ 23.5 million).
These financial accords are the result of the two parties’ Political Dialogue and Cooperation Agreement (PDCA), most parts of which have been provisionally applied since last November 1. The PDCA defines general principles and objectives for the relationship between the EU and Cuba and provides the following framework for accompanying the reform process in Cuba:
“Political dialogue: addressing issues, such as human rights, small arms and disarmament, non-proliferation of weapons of mass destruction, migration, drugs, fight against terrorism, sustainable development, etc.;
Cooperation and sector policy dialogue: including areas, such as governance, civil society, human rights, social and economic development, environment as well as regional cooperation;
Trade and trade cooperation: dealing with principles of international trade and covering cooperation on customs, trade facilitation, technical norms and standards, sustainable trade and investment.”
According to the EU, three high-level dialogues already have been held to exchange views on basic principles of human rights, to identify areas to cooperate or share best practices. The two parties also will launch dialogues focused on sustainable development, non-proliferation, arms control, and unilateral measures. The last will include the U.S. embargo on the Island.
The PDCA also provides for the possibility of suspension in the event of a serious violation of human rights commitments.
Ramón Jáuregui, president of the Euro-Latin American Assembly (a transnational non-governmental body of 150 legislators from Europe and Latin America to improve their governments’ relations), said, “Cuba needs an economic opening, it needs cooperation, it needs energy, it needs investments, it needs to improve its GDP to improve the quality of life of Cubans. [The EU] “can be a loyal partner” of Havana with the agreement and “through this opening and this collaboration, [Cuba] will have no choice but to take successive democratic steps.”
Last month Sweden’s Minister of International Cooperation Isabella Lövin, told her Parliament that Cuba’s civil society and democratic movement have a legitimate role in the discussions on the implementation of the Association Agreement and Political Dialogue. 
The 28 EU countries are the main foreign investor in Cuba (mainly in the sectors of tourism or construction), according to the European Commission, which in 2017 had 471 million euros of imports of Cuban goods in 2017 (mostly agricultural products, beverages, tobacco and mineral fuels) 2,094 million euros of EU exports to the island.
The previously mentioned EU-Cuba conference in Belgium will take place the day before Cuba’s Universal Periodic Review in Geneva, Switzerland, and at the latter session Cuba undoubtedly will raise its agreement with the EU for dialogues about human rights.
This EU-Cuba agreement on dialogue about human rights is similar to the human rights dialogues that were conducted by Cuba and the U.S. during the Obama Administration and that apparently are now suspended in the Trump Administration.
It also is interesting that no report about the conference in Belgium was found in the major U.S. newspapers that cover foreign affairs (New York Times, Washington Post and the Wall Street Journal) or in the major news organizations (Reuters and the Associated Press) for U.S. news organizations.
 The contrasting U.S. approaches to Cuba on human rights are covered in many posts in the following sections of List of Posts to dwkcommentaries–Topical: CUBA: “U.S. (Obama) & Cuba (Normalization)– 2014 and 2015 and 2016 and 2017” and “U.S. (Trump) & Cuba, 2016-2017 and 2018.”
“Eighty-six-year-old Raúl Castro grabbed headlines last week when he ceded the title of president to 58-year-old civilian Miguel Diáz-Canel. Too bad this change at the top is nominal when it comes to freedom for the Cuban people.”
“Mr. Diáz-Canel is . . .[not] an independent thinker. Cubans have every reason to believe him when he says, as he did in his acceptance speech, that he is committed to preserving a police state. If Mr. Diáz-Canel wants to keep his job and privileges, human rights won’t be on his agenda.”
“Raúl still leads the Communist Party and has kept the two most powerful regime positions under his control. Col. Alejandro Castro Espín, his son, runs counterintelligence for the Interior Ministry that controls the secret police. Gen. Luis Alberto Rodríguez López-Callejas, Raúl’s former son-in-law, is top dog at GAESA, the military’s holding company that owns the tourism industry, the shipping company, the airline, construction companies, auto imports and sales, the real-estate business, the banks and control of container traffic at the Port of Mariel. Ramiro Valdés, a regime enforcer, still sits on the Council of State, Cuba’s highest government body.”
. . . .
“Now Havana’s crime family has again run out of other peoples’ money. Its largest sources of hard currency are the doctors and nurses who live in poverty while Cuba “rents” them to countries around the world. Yet even this multibillion-dollar human trafficking isn’t enough to support the broken Cuban economy.”
“President Trump has reined in some of Barack Obama’s executive orders that made it easier for Americans to travel to Cuba. But the regime’s bigger problem is that investors who kick the tires on the Castro jalopy increasingly walk away. There are plenty of opportunities in emerging markets these days, and the smart money doesn’t want gangsters for partners.”
“Promises of greater economic freedom for Cubans have never materialized. Small businesses can operate as long as they are subsistence operations. But they can’t hire and the regime has again cracked down on permitting lest it lose control. Cuba’s poverty suggests something has to change. But liberalization is not in the interests of the Castro family or the military. And they’re still in charge.”
On May 6 Cuban Ambassador José Ramón Cabañas Rodríguez responded to this editorial with the following letter to the Journal.
“The U.S. corporate press has always been predictable in its articles on Cuba and even more so when it comes to its editorials. Newspapers such as yours were against Cubans being free from Spanish power in the 19th century. Later on, they commended local corrupt politicians who supported the invasion—first militarily and then economically by American companies during the first half of the 20th century. Finally, those newspapers relentlessly demonized the Cuban Revolution since 1959.”
“However, I was caught off guard by the sordidness of the language used by your editorial board when referring to my country. It is the typical exercise of those who are left without arguments. There is still a financial, economic and commercial embargo imposed on Cuba intended to starve our population into submission. However, the information blockade has decreased. Americans massively travel to Cuba and 75% of them support a better relationship with our country.”
“Your renewed efforts to promote the business of the ‘dissidence’ in Cuba will not have the slightest success. History is wise and has forgotten (and will forget) the names of the annexationists of Cuban origins, but any educated human being who inhabits the earth today will be able to tell you about Carlos Manuel de Céspedes, José Martí, Antonio Maceo, Julio Antonio Mella, Ernesto Guevara and Fidel Castro; those are the names of the pro-independence figures.”
“To maintain a part of the audience you still have, before criticizing Cuba again, or any other Latin American or Caribbean country for that matter, please start by looking at yourselves in the mirror.”
Although I believe that U.S. policies regarding Cuba are heading the wrong direction in the Trump Administration and deplore its abandonment of many (but not all) aspects of the Obama Administration’s opening of relations with Cuba and although I have met and respect the Cuban Ambassador, this exchange or argument is unsatisfying.
The Journal, given its general support of free markets and capitalism, should have (a) encouraged the Cuban government to engage in further efforts to promote the expansion of its private sector of bed-and-breakfasts, restaurants and other ventures and (b) criticized some of the Trump Administration’s policies that discourage such Cuban expansion of free enterprise and markets.
Such efforts enable Cubans to increase their financial circumstances and offer better-paying jobs to other Cubans and thereby provide the Cuban economy with desperately needed boosts. Cuba’s efforts last year to restrict such expansion were misguided out of fears of changes.
This would have forced the Cuban Ambassador into the difficult position of trying to justify the regime’s clamp-down last year of expansion of the private sector. The Ambassador in this hypothetical, however, could have argued that the Cuban Government needed to be cautious on these issues because of illegitimate U.S. efforts, overtly and covertly over many years, to promote regime change in Cuba.
According to the Department, the two countries “discussed the significant reduction in irregular migration from Cuba to the [U.S.] since the implementation of the January 2017 Joint Statement [during the last days of the Obama Administration ]. Apprehensions of Cuban migrants at U.S. ports of entry decreased by 64 percent from fiscal year 2016 to 2017, and maritime interdictions of Cuban migrants decreased by 71 percent. The [U.S.] confirmed it met its annual commitment in fiscal year 2017 to facilitate legal migration by issuing a minimum of 20,000 documents under the Migration Accords to Cubans to immigrate to the [U.S.] The U.S. delegation also raised the need for increased Cuban cooperation in the return of Cubans with final orders of removal from the [U.S.]”
The Department added, “A strong migration policy is vital to the [U.S.] national security. The Migration Talks, which began in 1995, provide a forum for the [U.S.] and Cuba to review and coordinate efforts to ensure safe, legal, and orderly migration between Cuba and the [U.S.]. The talks were last held in April 2017 [in the Trump Administration].”
The Cuban statement provided greater details on the substance of these discussions. It said “Cuba urged the [U.S.] to fulfill its obligation to issue no less than 20,000 travel documents annually to Cuban citizens to emigrate to that country. “Cuba also questioned the “validity of the U.S. Cuban Adjustment Act, which continues to be a stimulus to irregular migration and whose repeal will be essential to achieve normal migratory relations between the two countries.” Another impediment to cooperation on migration, said Cuba, was the U.S. cancellation of “trips of official delegations from the [U.S.] to Cuba, which has led to the postponement of previously scheduled exchanges of mutual interest, which , if maintained, could deepen the effects on exchanges in this and other areas.”
The Cuban statement also said that Cuba had “expressed its deepest concern about the negative consequences that [U.S.] unilateral, unfounded and politically motivated decisions [in September and October 2017] have on immigration relations between both countries.”
Furthermore, Cuba “warned . . .about the negative impact of the suspension of the granting of visas in the [U.S.] Consulate in Havana [due to the U.S. reduced staffing], which, by paralyzing the procedures of Cuban citizens to visit or emigrate to that country, seriously hampers family relations and exchanges of all kinds between both peoples.” Cuba reiterated its objection to the U.S.”arbitrary expulsion of a significant group of officials from [Cuba’s] Embassy in Washington, which has significantly affected the functioning of the diplomatic mission, . . . [especially] the services it provides to Cubans residing in the[U.S.]. . . . and] to American citizens who are interested in traveling to our country.”
On a more positive note, Cuba observed that both side recognized “the positive impact of the Joint Declaration signed on January 12, 2017 [during the last days of the Obama Administration] and, specifically, the elimination of the “dry feet-wet feet” policy and the “Parole Program for Cuban Medical Professionals” in the decrease of irregular emigration from Cuba to the [U.S.]”
In addition, both countries” agreed on the usefulness of the exchange between Coast Guard Troops and the Coast Guard Service held in July and the technical meeting on human trafficking and immigration fraud carried out in September  which will continue on December 12. Cuba reaffirmed its willingness to give continuity to the rounds of conversations on migration issues.”
As an advocate for normalization of U.S.-Cuba relations, it is good to know that the two countries still manage to hold respectful meetings to discuss issues of mutual concern even though they do not agree on all such issues and even though this blog disapproves of the Trump Administration’s recent changes to U.S. regulations on travel to Cuba and trade with Cuba.
This blog was also pleased to read the U.S. implicit positive endorsement of the Obama Administration’s January 12, 2017, Joint Declaration with Cuba about the latter’s migration to the U.S.
On the other hand, this blog disagrees with the U.S. reduction of the staffing of its Embassy in Havana and the expulsion of Cuban diplomats from its Embassy in Washington and supports Cuba’s complaint about the negative consequences of those decisions.
On June 16, the Council of Churches of Cuba  issued the following statement regarding President Trump’s just announced changes in U.S. policies with respect to Cuba.
“With the re-establishment of diplomatic relations between Cuba and the United States [in 2015], a new era was established with the new policies of the Obama administration. This had been the dream and struggle of many people as well as churches and religions on both sides.”
“A [new] path of respect and dialogue [between the two countries] showed hope to the world that from civilized relationships bridges could be built and walls torn down. [This process was started with agreements that resulted] from work over many years and several generations [that] had and have the wide support of the community of believers at national and global levels.”
“Today, June 16, President Donald Trump has announced another policy that involves a setback in a path that, although fragile, established safe steps in a strategy of coexistence where everyone could benefit and promised a future of peace and understanding: not only between the two countries but for the whole region.”
“This [new] policy, like others of this administration, does not reflect the wishes of the American people, whose visits to the Caribbean nation soared in 2016, expressing and confirming their desire to interact with the island.”
“Cubans and Americans can do much for our region and for our humanity. Laws or resolutions that prevent the interactions that are the will of the people are not logical. We must not, nor can we, renounce the Divine will that these two nations mutually benefit from their religious, cultural, educational, sporting, scientific and enrichment exchanges.”
“This [new] policy denotes a lack of information and knowledge about the Cuban reality, our history, the sovereignty and the rights of this people and the people of the United States. It is decontextualized in the time that we live today. We are, rather, presented with a monologue that should have no part in the 21st century, when humanity calls for dialogue and search for civilized solutions. We live in the era of dialogue, in the search and construction of peace without which humanity will not be able to survive.”
“We know and we are sure that this is not the will of the American people or their churches and religions, who have always advocated peace, dialogue and normalization of relationships. We also know that it is their will the embargo be removed, as has been expressed by nations year after year in multiple ballots of the United Nations.”
“We are members of the World Council of Churches, the Joint Alliance of Churches, the Latin American Council of Churches, brothers of the United States National Council of Churches and the World Service of Churches. [We also are] brothers and fellow missionaries of many denominations, foundations, agencies, councils in the United States and throughout the world, which is of God. We are sure that together with our prayers and actions we will continue to break down walls and lift the bridges in our pilgrimage for justice, peace and love.”
“May the Incarnate, Risen and Glorified Christ pour out and shower His grace upon Cuba, the United States and all the people of our lands, filling us with His blessing and His manifestation to all, guiding us along the paths of dialogue, justice, of love and peace.”
 “Since its foundation in 1941, the Council has proclaimed unity for the service of our people and nation, through the search for love, justice and peace among all peoples and nations, which are the most evident evangelical signs of the reign of God among us.” Today “the Council is the lead institution of the Cuban ecumenical movement, composed of 51 churches and Christian institutions—Protestants, Reformed, Evangelical, Pentecostal, Episcopal and Orthodox—as well as Jews, Yogas and centers of study, information, community service and theological seminaries.” The Council’s current president and the signatory for this statement is Rev. Joel Ortega Dopico of the Presbyterian-Reformed Church of Cuba. The English translation of the original Spanish of the statement is provided by Jack Kern, an Elder at Covenant Presbyterian Church of Austin, Texas, which has a partnership with the Presbyterian Reformed Church of Cuba in the Luyanó neighborhood of Havana; he has made 24 trips to Cuba starting in 1998 and plans to return later this year.
As reported in prior posts, the Trump Administration presumably has been conducting an overall review of U.S. policies regarding Cuba. Although the completion of that review has not been publicly announced, there are rumors that in mid-June the Administration will be announcing a rollback of at least some of the various normalization measures announced by the Obama Administration starting on December 17, 2014.
Even though U.S.’ Cuba policies have not had much public attention in these days of focus on revelations of Trump campaign connections with Russia, the pro-U.S.-embargo lobby apparently has used support for the Administration’s non-Cuba legislation (e.g., health care) to extract promises from Trump on rolling back the present policies. High on the list of rumored roll backs are limiting people-to-people U.S. travel to technical categories and stopping any U.S. trade or licenses that would be associated with “military” entities of the Cuban government.
This rumored reversal is happening even though all federal administration agencies support further negotiations with Cuba for better relations, especially in the areas of illegal immigration, national security, human trafficking, environment, trade, commerce, healthcare. These agencies influence have been hampered because there is no one in charge of Western Hemisphere Affairs at the State Department.
These unfortunate changes were hinted in President Trump’s statement on the May 20th so-called Cuban Independence Day when he said:
“Americans and Cubans share allegiance to the principles of self-governance, dignity, and freedom. Today, we remember patriots like José Martí, who devoted himself to making Cuba an economically competitive and politically autonomous nation. He reminds us that cruel despotism cannot extinguish the flame of freedom in the hearts of Cubans, and that unjust persecution cannot tamper Cubans’ dreams for their children to live free from oppression. The Cuban people deserve a government that peacefully upholds democratic values, economic liberties, religious freedoms, and human rights, and my Administration is committed to achieving that vision.” (Emphasis added.)
Trump’s statement, not unexpectedly, was not well received in Cuba. Later the same day an “Official Note” was read on Cuban state television describing Trump’s message as “controversial” and “ridiculous,” especially on May 20, which Cuba sees as the date in 1902 when Cuba became a “Yankee neo-colony” or de facto U.S. protectorate after its status as a Spanish colony ended. More specifically May 20, 1902, was the date the Platt Amendment was added to the Cuban Constitution and 11 days after the signing of the Treaty of Paris by the U.S. and Spain ending the so-called Spanish-American War. Cuba’s true Independence Day is January 1, 1959, the date the Cuban Revolution took over the government of the island.
Resistance to Reversals
There, however, is resistance to any such rumored reversals.
First, the Trump Administration itself recently submitted its proposed Fiscal 2018 budget for the State Department that does not include any funds for the so-called Cuba “democracy promotion” programs by the U.S. Agency for International Development (USAID). In a letter accompanying this budget request, U.S. Secretary of State Rex Tillerson said the request “acknowledges that U.S. diplomacy engagement and aid programs must be more efficient and more effective, and that advancing our national security, our economic interests, and our values will remain our primary mission.” These undercover or covert USAID programs, in this blogger’s opinion, are unjustified and counterproductive and should have been cancelled a long time ago.
Second, another voice for resistance within the Trump Administration is U.S. Secretary of Agriculture Sonny Perdue, who is a Trump appointee. On May 17 he appeared before the House Agriculture Committee. In response to a question by Representative Rick Crawford (Rep., AR) about his bill, Cuba Agricultural Exports Act (H.R.525), that would eliminate the U.S. requirement for Cuban cash payments upfront to purchase U.S. agricultural exports, Perdue said, “I think that’s something I would be supportive of if folks around the world need private credit to buy our products, and I’m all for that. 
Third, a May 24 letter to President Trump advocated the maintenance of the current U.S. policies regarding U.S. travel to Cuba. It came from a group of over 40 U.S. travel service providers that offer legal, authorized travel to Cuba. It asserted that the recent increase of such travel “has had a significant impact on our businesses by increasing our revenue and allowing us to hire more American employees. Additionally, it has helped the Cuban private sector, and fostered strong relationships between Americans and Cuban religious organizations and humanitarian programs.” The impact on Cuba’s private sector was emphasized: “Many U.S. travelers visiting Cuba stay in privately run B&Bs, dine at private restaurants, hire independent taxis and purchase goods and services from entrepreneurs. They are greatly supporting the growth of the Cuban private sector.”
Fourth, another force for resistance to any such roll back is Cuban Ambassador to the U.S., José Ramón Cabañas, who along with other Cuban diplomats has been traveling to many parts of the U.S. and conveying Cuba’s best wishes for better relations with the U.S. and how such relations will benefit many Americans. I well remember the visit he and his wife made to Minneapolis in 2014 before he had the title of Ambassador and his low-key, pleasant and intelligent discussion of the many issues facing our two countries. More recently he has been to Harvard University and Montana State University and visiting mayors, governors, legislators and ordinary Americans in Pennsylvania, Maryland, Montana, Massachusetts, Kentucky, Louisiana, the Washington suburbs and Florida. At the University of Louisville, the Ambassador said, “We are ready and open to work with the Trump administration, and we believe that we can build a future of cooperation with the United States in many subjects, although we recognize that there are many areas in which we will not agree.”
Now is the time for all U.S. supporters of normalization to engage in public advocacy of these policies and to urge their U.S. Senators and Representatives to oppose any rollback of normalization.
We also need to express our support of those who have introduced bills in this Session of Congress to end the embargo and to expand Americans’ freedom to travel to Cuba:
Senator Heidi Heitkamp (Dem., ND), Agricultural Export Expansion Act of 2017 (S.275);
Senator Jerry Moran (Rep., KS), Cuba Trade Act of 2017 (S.472)(end the embargo);
Representative Mark Sanford (Rep., SC), Freedom to Travel to Cuba Act of 2017 (H.R.351);
Representative Tom Emmer (Rep., MN), Cuba Trade Act of 2017 (H.R.442)(end the embargo);
Representative Kevin Cramer (Rep., ND), Cuba DATA Act (H.R.498);
Representative Rick Crawford (Rep., AR), Cuba Agricultural Exports Act (H.R.525); and
Representative Jose Serrano, (Dem., NY), Promoting American Agricultural and Medical Exports to Cuba Act of 2017 (H.R.572), Baseball Diplomacy Act (H.R.573), Cuba Reconciliation Act (H.R.574).
Granma, the official newspaper of the Communist Party of Cuba, reviews the measures already adopted by the Obama Administration to reduce the scope of the U.S. embargo of Cuba. The newspaper then asserts that the Administration has existing legal authority to adopt additional limitations of the embargo and isolates what only Congress can do to eliminate the embargo.
Administration’s Limitations of the Embargo (to Date)
According to Granma, the following are “some” of the measures already adopted by the Administration:
The 12 categories of U.S. citizens permitted to travel to Cuba can do so now under a general license. Travelers are no longer subject to spending limits on the island and can use their credit and debit cards. Approved travelers may be accompanied by their families.
In the area of telecommunications, exports of goods and services to Cuba are authorized. The main limitation is the requirement to pay cash in advance.
The list of U.S. products that can be exported to Cuba without having to request authorization from the U.S. Department of Commerce is reduced to telecommunications products and services, construction materials and equipment and tools for the use of the non-state sector, including agriculture.
The authorization to import Cuban goods and services produced by the non-state sector – which excludes key items for the Cuban economy such as tobacco.
The modifications to the regulations on maritime transport, which allow for cargo ships carrying humanitarian goods to Cuba to enter U.S. ports before the 180 day limit applied to others – irrelevant since in practice the majority are not limited to transporting food, medicines, medical equipment or other authorized exports.
Changes in the financial sphere merely facilitate processing of authorized transactions relating to travel, exports and remittances.
The sale to Cuba of products by other countries containing up to 25% U.S. made components is permitted – the previous limit was 10%.
The establishment of offices in Cuba by companies approved to have relations with the island was authorized.
Other Legally Permissible Administrative Limitations of the Embargo
In addition, Granma contends that the Obama Administration has the legal authority, without any action by the U.S. Congress, to adopt the following additional measures to further reduce the impact of the embargo:
Authorize the use of the U.S. dollar in Cuba’s international transactions.
Permit Cuban entities (banks, companies, etc.) to open corresponding accounts with U.S. banks.
End the policy of financial persecution against Cuba, which has included the imposition of fines and sanctions.
Allow the granting of credits, loans and finance to Cuba, in order to purchase products from the U.S. market (excluding agricultural products, prohibited by law).
Authorize U.S. products to be directly exported to Cuba.
Allow Cuba to import products from third countries which contain over 25% U.S. made components.
Allow the U.S. to import Cuban products and services which constitute exportable goods key to the Cuban economy, such as tobacco, rum and biotechnology products, including products manufactured in third countries which contain Cuban raw materials such as nickel or sugar.
Allow U.S. companies to invest in Cuba.
Eliminate the value limit on Cuban goods that U.S. travelers can import from Cuba, for personal use or as gifts.
Allow U.S. citizens to receive medical treatment in Cuba.
Instruct U.S. representatives in international financial institutions not to impede the granting of credits or other financial services to Cuba.
Other Limitations of the Embargo Requiring Congressional Action
According to Granma, only the following five limitations of the embargo require congressional action:
Permitting travel for the purposes of tourism (Trade Sanctions Reform and Export Enhancement Act of 2000);
Repealing the ban on U.S. subsidiaries in other countries trading with Cuba (Torricelli Act);
Repealing the prohibition on doing business with formerly U.S.-owned companies in Cuba that were nationalized (Helms-Burton Act);
Repealing the obligation to pay cash in advance for purchases of agricultural products from the U.S. (Trade Sanctions Reform and Export Enhancement Act of 2000); and
Eliminating the blockade (Helms-Burton Act) in its entirety.
Cuba, of course, is urging the Obama Administration to adopt the 11 previously mentioned measures that Cuba asserts are legally permissible under U.S. law and the Congress to adopt the above five measures.
Although I am a retired lawyer, I have not attempted to determine whether Cuba is correct in its contention that the Administration has the legal authority to adopt the above 11 limitations. I invite an attorney knowledgeable about such matters to share an analysis of these issues. If there is such legal authority, I would join in a request that these measures be adopted as this blog consistently has called for ending the embargo.
On December 8, the U.S. and Cuba held discussions in Havana about the two countries’ damage claims: (1) U.S. claims to recover damages for U.S. property interests that were expropriated by the Cuban government at the start of the Cuban Revolution in 1959.; (2) U.S. courts’ money judgments against Cuba; (3) Cuba’s claims for alleged damages resulting from the U.S. embargo of Cuba; and (4) Cuba’s alleged damage claims for Cubans personal injuries and deaths from U.S. hostile actions.
This post will briefly examine those claims, the recent U.S.-Cuba discussions on the subject and an analysis of the issues by Washington, D.C.’s Brookings Institution.
Some 5,913 U.S. corporations and individuals have $1.9 billion worth of claims (without interest) for factories, farms, homes and other assets that were nationalized in Cuba after Fidel Castro’s rebels came to power in 1959. These claims have been registered and validated by the U.S. Justice Department’s Foreign Claims Settlement Commission. They are now worth roughly $8 billion when including 6.0 percent annual interest. These claims (without interest) have been categorized by the Brookings Institution’s report discussed below:
Nevertheless, the Brookings’ report identifies these potential issues with respect to the claims validated by the U.S. Commission: (1) Whether to recognize the Commission rulings as a legitimate procedure in which cuba did not participate; (2) Whether to accept or challenge its valuations of lost properties; (3) Whether Cuba should recognize accumulated interest as awarded by the Commission on its certified claims or whether to negotiate an alternative benchmark interest rate or other formula for partial payments.
In a 2015 report to the United Nations General Assembly, Cuba asserted that the accumulated economic damages from the U.S. economic sanctions had reached $121 billion. The annual report offers some estimates on sectoral damages but does not discuss methodology. An earlier 1992 Cuban statement detailed these estimated cumulative losses among others:: (a) $3.8 billion for losses in the tourist industry; (b) $400 million for losses in the nickel industry; (c) $375 million for the higher costs of freighters; (d) $200 million for the purchase of sugarcane crop equipment to substitute for U.S.-manufactured equipment; and (e) $120 million for the substitution of electric industry equipment
4. Cubans Killed or Injured by Alleged U.S. Hostilities
The Cuban government claims that U.S. “acts of terrorism against Cuba have caused 3,478 deaths and 2,099 disabling injuries.” Examples of such alleged acts include (a) U.S.-supported hostilities in Cuba resulting in 549 deaths between 1959-1965; (b) the Bay of Pigs invasion resulting in 176 deaths and over 300 wounded of whom 50 were left incapacitated; (c) the explosion of the French vessel La Coubre on March 4, 1960 in Havana Harbor, resulting in 101 deaths including some French sailors; (d) the terrorist bombing of Cuban Airlines Flight 455 in 1976 killing all 73 persons on board including 57 Cubans; (e) the September 11, 1980 assassination of Cuban diplomat Félix García Rodriguez in New York City; (f) Numerous aggressions from the U.S. naval base in Guantanamo resulting in the deaths of Cuban citizens; and (g) suspicions that the U.S. employed biological warfare to spread fatal dengue fever in Cuba.
Immediately before the December 8 discussions, a U.S. State Department spokesperson said the U.S. expected this to be “a first step in what we expect to be a long and complex process, but the United States views the resolution of outstanding claims as a top priority for normalization.”
Afterwards a U.S official said that reaching a settlement of these claims was “a top priority” for the U.S. and that these talks were “fruitful” and would continue in 2016. This official also said that the U.S. had provided information on the additional $2 billion in judgments awarded to plaintiffs who had sued the Cuban government in U.S. courts, proceedings that Havana does not recognize.
Other than the above sketchy summary, very little has publicly emerged about the specifics of the talks. It sounds as if the discussions were akin to the pretrial discovery process in U.S. civil lawsuits when parties learn about each other’s evidence and arguments.
A Cuba legal expert, Pedro Freyre, said, “It’s the first time the two countries are going back to look at this history and try to sort out a system for fixing it.” The Cubans, he added, were “very tough, very clever” in such negotiations.
On the same day as the U.S.-Cuba discussions (December 8), the Brookings Institution released a cogent report on the subject by Richard Feinberg, a nonresident senior fellow in Brookings’ Latin American Initiative. 
Introducing the report at a press conference, Feinberg said, “The convening of these talks in Havana [is] a major milestone in the process of gradual full normalization of relations between the United States and Cuba, especially important with regard to commercial relations. Property ownership and claims are at the strategic heart of the Cuban revolution, dating from the early 1960s and also a major cause, perhaps the major cause, of the conflict between the United States and the Cuban revolution. The seizure of U.S. properties was the proximate cause of the imposition of U.S. economic sanctions back in the early 1960s.” These talks are of “strategic importance in the bilateral relationship.”
Feinberg also emphasized that both the U.S. and Cuba “agree on the principle of compensation” for expropriation of property.” Indeed, he said, to do so is in Cuba’s national interest. It “wants to demonstrate [that] it is not a rogue nation . . . [that] it is a nation of laws” and it “wants to remove major irritants to its international diplomacy and commercial relations” and “to attract international investment.”
Another point made by Feinberg was Cuba was not so poor that it could not pay any compensation, especially if the payments were spread out over time, as seems likely.
In addition to setting forth information about the above claims, the report examined the following ways of resolving these claims.
The Grand Bargain
The Report asserts that “a much more promising alternative approach” is “to take advantage of the very size and complexity of the conflicting claims and to make their resolution the centerpiece of a grand bargain that would resolve some of the other remaining points of tension between the two nations, and embrace an ambitious, forward-looking development strategy for Cuba.”
In such a grand bargain, “the settlement of U.S. claims could be wrapped in a package of economic opportunities for Cuba. Importantly, the United States could further relax its economic sanctions (amending or repealing Helms-Burton), providing more trade and investment opportunities – and the capacity for Cuba to earn the foreign exchange needed to service debt obligations. In turn, Cuba will have to accelerate and deepen its economic reforms, to offer a more attractive business environment for investors and exporters. Politically, the Cuban government could present a significant softening of the U.S. embargo as a victory, offsetting any concessions made in the claims negotiations. A comprehensive package might also be more attractive to the U.S. Congress; formal Congressional consent would enhance the measures’ legitimacy and durability and help to close off any court challenges, should some claimants be unsatisfied with the final settlement.”
“The [U.S.] strategic goals in a massive claims resolution process must be political: to heal the deep wounds of past conflicts, to lay foundations for peaceful coexistence and the non-violent resolution of disputes, to avoid jeopardizing fiscal balances and crippling debt burdens, to build investor confidence and international reputation, and to help render the Cuban economy more open and competitive. . . . In the interests of both Cuba and the United States, the twentieth-century trauma of massive property seizures should be transformed into a twenty-first century economic development opportunity.”
“Wrapping a claims settlement within a more sweeping diplomatic package could have large advantages. A robust accord could help overcome long-simmering bilateral animosities and reconcile the fractured Cuban family. Potentially embarrassing ‘concessions’ by either party could be masked by larger victories on more weighty or emotive issues. What to some might appear the unseemly materialism or inequity of property claims would be subsumed within a higher-toned humanitarian achievement. Having turned the page on a half-century long era of conflict, Cuban society could begin in earnest on a new path toward social peace and shared prosperity. The claims settlement, which would bolster investor confidence, could also be linked to a reformed economic development model for Cuba actively supported by the international community.”
2. Lump-Sum Settlement
Separate resolution of the damage claims could be done in a lump-sum settlement, whereby “the two governments negotiate a total amount of financial compensation that is transferred in a lump-sum or global indemnity to the plaintiff government which in turn assumes the responsibility to distribute the transferred monies among its national claimants.” Such a settlement would provide “greater efficiency in coping with large numbers of claims; enhanced consistency in the administration and adjudication of claims; promoting fairness among claimants in setting criteria for evaluating claims and distributing awards; and upholding professionalism and integrity in the national claims commission.” In addition, sometimes lump-sum arrangements “allow the two governments to address other matters, such as broader investment and trade relations.”
3. Two-Tier Resolution
Another way for separate resolution of the U.S. expropriation damage claims is what Brookings calls a two-tier solution, “whereby corporate claimants can choose either to seek creative bargains, or join individual claimants in a lump-sum settlement.”
The 5,014 individual claims validated by the U.S. Commission total about $229 million (without interest). Of these, only 39 amount to over $1 million each while only four were valued at over $5 million. A lump-sum cash settlement of these claims could be shared share equitably by all or with caps on those over a certain figure, such as $ 1 million.
The 899 corporate claims are heavily concentrated: the top 10 corporate claims are valued at nearly $1 billion while the top 50 at $1.5 billion. “The corporate claimants could be given the opportunity to be included in a lump-sum settlement—albeit possibly facing an equity hair-cut to limit the burden on Cuba and to ensure a minimum payment to the smaller claimants—or to ‘opt out’ of the general settlement and instead seek alternative remedies” in Cuba, such as a voucher for new investment; a right to operate a new business; a final project authorization for a new venture; a preferred acquisition right for a venture; Cuba sovereign bonds; and restoration of properties.
Although I hope that the Brookings’s “grand bargain” or more limited negotiated solution is reached, a Miami Herald article emphasizes the difficulties in reaching any settlement. First, some of the claims that were validated by the U.S. Foreign Claims Settlement Commission could be stricken from the list that the U.S. may negotiate if the claims have not always been owned by a U.S. citizen or business. Second, the U.S. government is not authorized to negotiate the previously mentioned U.S. courts’ default judgments against Cuba. As a result, U.S. attorneys for the plaintiffs in those cases could seek to seize any assets in the U.S. of the Cuban government such as a Cuban plane or ship to satisfy the outstanding judgments. Third, Cuba also has to fear that any payment of U.S. claimants for expropriated property will invite demands for similar payments by Cuban exiles around the world and by Spanish claimants after some Spanish courts have ruled that Spain’s 1986 settlement of such claims with Cuba is not binding on at least some Spanish claimants. Fourth, the time to complete such a settlement at the end of the Obama Administration is rapidly shrinking, and a new administration in January 2017 may not be as willing to do such a deal.
I, therefore, reiterate the solution proposed in a prior post: an agreement by the two countries to submit all of their damage claims against each other for resolution to the Permanent Court of Arbitration at the Hague in the Netherlands under its Arbitration Rules 2012 before a panel of three or five arbitrators.
My experience as a lawyer who handled business disputes in U.S. courts and in international arbitrations leads me to believe that arbitration is the appropriate way to resolve these claims by the two governments. The International Court of Arbitration was established in the late 19thcentury to resolve disputes between governments. It would be a third-party, neutral administrator of the proceedings and the arbitrators who would be selected would also be neutral. Finally it has an existing set of arbitration rules and procedures. Moreover, in the arbitration process, both sides would gain a better understanding of the opponent’s evidence and argument that could lead to a settlement before the arbitrators would be asked to render an award.
Brookings is a non-governmental organization that “brings together more than 300 leading experts in government and academia from all over the world who provide the highest quality research, policy recommendations and analysis on a full range of public policy issues.” Feinberg is a professor of international political economy in the School of Global Policy and Strategy (formerly the School of International Relations and Pacific Studies) at the University of California, San Diego. Previously, Feinberg served as special assistant to President Clinton for National Security Affairs and senior director of the National Security Council’s Office of Inter-American Affairs; his other government positions include positions on the policy planning staff of the U.S. Department of State and in the Office of International Affairs in the U.S. Treasury Department.