Professor LeoGrande’s Argument Against U.S. Litigation Over Cuban Expropriated Property

Senator Patrick Leahy in his lengthy February 15 speech on the Senate floor, which was repeated in a prior post, had appended to his remarks an article about Cuba by a noted U.S. expert on the country, Professor William L. LeoGrande of American University. Here is the text of that article, “President Trump Risks Alienating Allies Over Cuban American Property Claims” from OnCubaNews (2/13/19).

“The Trump administration is seriously considering whether to allow Title III of the Cuban Liberty and Democratic Solidarity Act (Helms-Burton) to go into effect in March, according to National Security Adviser John Bolton. On January 16, Secretary of State Mike Pompeo announced that he was suspending Title III for just 45 days instead of the usual six months while the administration reviews whether its implementation would promote democracy in Cuba. He warned foreign companies doing business on the island that they had better ‘reconsider whether they are trafficking in confiscated property and abetting this dictatorship.’”

“Title III allows U.S. nationals to file suit in U.S. courts against anyone ‘trafficking’ in their confiscated property in Cuba—that is, anyone profiting from it. If President Trump allows Title III to go fully into effect, he will open the door to as many as 200,000 law suits by U.S. nationals, most of them Cuban Americans, whose property was taken by the Cuban government after 1959. U.S. courts would be swamped, the ability of U.S. companies to do business on the island would be crippled, and allies abroad might retaliate for U.S. suits brought against their companies in Cuba. Once the suits have been filed, there will be no way to undo the resulting legal chaos and the tangle of resulting litigation could take years to unwind.”

“The U.S. Foreign Claims Settlement Commission has certified 5,913 claims of U.S. nationals whose property was seized. These are the claims that Cuba recognizes and that the United States and Cuba had begun to discuss during the Obama administration. But Title III takes the unusual position of allowing naturalized Cuban Americans who lost property to also file suit against alleged traffickers. Normally, international law recognizes the sovereign right of governments to dispose of the property of their own citizens. According to the Department of State, by including Cuban Americans who were not U.S. citizens when their property was taken, Title III creates the potential for an estimated 75,000-200,000 claims worth ‘tens of billions of dollars.’”

“Back in 1996, when the law was being debated in Congress, angry opposition from U.S. allies Canada, Mexico, and the European Union, whose companies doing business in Cuba would be the targets of Title III law suits, led President Bill Clinton to insist on a presidential waiver provision in Title III. As a result, the president has the authority to suspend for six months the right to file Title III law suits, and he can renew that suspension indefinitely. Every six months since the Cuban Liberty and Democratic Solidarity Act was passed, successive presidents, Democrat and Republican alike, have continued the suspension of Title III.”

“U.S. allies have denounced Title III’s extraterritorial reach. Mexico, Canada, the United Kingdom, and the European Union all passed laws prohibiting compliance with it. The European Union also filed a complaint with the World Trade Organization, which it did not pursue after President Clinton suspended Title III. In fact, the principal justification both President Clinton and President George W. Bush offered for continuing the suspension was the need to maintain cooperation with European allies.”

“If President Trump does not renew the suspension, all these old wounds with allies will be reopened as U.S. claimants try to haul foreign companies into U.S. courts for doing business in Cuba. We already have enough tough issues on our agenda with Mexico, Canada, and Europe without adding another one. At this very moment, Washington is trying to muster their support in dealing with the Venezuelan crisis, support that could be endangered if the administration picks a fight with them over Title III.”

“U.S. businesses would not be exempt from potential liability. A Cuban American family in Miami claims to have owned the land on which José Martí International Airport was built, so any U.S. carrier using the air field could conceivably be sued under Title III. Another family that owned the Port of Santiago could file suit against U.S. cruise ships docking there.”

“Moreover, it would be almost impossible for a U.S. or foreign company to know in advance whether a proposed business opportunity in Cuba might become the subject of Title III litigation. “This will effectively end for decades any attempt to restore trade between the U.S. and Cuba,” attorney Robert Muse told the Tampa Bay Times.”

“When President Trump announced new sanctions on Cuba back in June 2017, senior administration officials said they were designed “to not disrupt existing business” that U.S. companies were doing in Cuba. If the president fails to continue the suspension of Title III, business relations will be disrupted far more severely and irreparably than they would be by any regulatory change.”

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Leahy, Statement of Senator Leahy On the Freedom To Export To Cuba Act (Feb. 15, 2019); LeoGrande, Trump and Cuban-American property claims, OnCubaNews (Feb. 11, 2019). See also President Trump Considering Another Hostile Action Against Cuba, dwkcommentaries.com (Jan. 18, 2019); Update on Trump Administration’s Threat To Allow U.S. Litigation Over Cuba’s Expropriated Property, dwkcommentaries.com (Jan. 30, 2019).

U.S. Considering Re-Designating Cuba as “State Sponsor of Terrorism” 

According to the Miami Herald, the U.S. is considering re-designating Cuba as a “State Sponsor of Terrorism” if Cuba’s government and military continue to support Nicolás Maduro in Venezuela. A senior U.S. official said,  ”What Cubans are doing in Venezuela is unacceptable,. And the United States is evaluating options to address that behavior.” [1]

This unnamed official added, ““The Cubans are executing a strategy to keep the military from second-guessing their support to Maduro. The only thing that is preventing the generals from supporting President Juan Guaidó is the surveillance Cubans are doing. What is keeping [Nicolas] Maduro going is Cuba’s logistical support.”

Another potential reason for such a re-designation is Cuba’s refusal so far to extradite Colombian leaders of the guerilla group ELN — in Havana for currently suspended peace negotiations —for suspected involvement in. last week’s fatal car bombing in Bogota. The Cuban government, however, condemned the attack, but said it would follow the protocols agreed at the start of peace negotiations in 2017. These provide security guarantees for guerrilla commanders to return to Colombia or Venezuela within 15 days of an end to talks and bar military offensives for 72 hours. [2]

Reactions

This possible re-designation predictably was endorsed by Senator Marco Rubio. He said, “Maduro had ‘bought’ the loyalty of the largely corrupt generals. They are also loyal, by the way, because the Cubans are spying on them. The Cuban intelligence agencies quickly pick up on any of these military officers that are being disloyal or expressing doubts and those guys are arrested. There has been a massive purge of Venezuelan military officers over the last two years … And it wasn’t because of corruption … It was because the Cubans caught them and reported them.”

According to William LeoGrande, a Cuba expert and American University professor, “Putting Cuba back on the list of state sponsors of international terrorism would not have a major practical impact on Cuba because almost all the financial sanctions that such a designation entails are already in place under the broader Cuban embargo. However, Cuba would take it as a great insult, and it would certainly have an extremely negative effect on state-to-state cooperation on issues of mutual interest.”

LeoGrande added, ““The Cuban government certainly recognizes that Maduro’s situation is dire and the worst outcome for Cuba would be complete regime collapse through civil violence or external military intervention. Regime collapse would probably mean an immediate end to Venezuelan oil shipments to Cuba — a blow to [Cuba’s] already fragile economy. Cuba would be willing to help find a negotiated political solution to the Venezuelan crisis . . . but only if both Maduro and the opposition are willing to seek such a solution. At the moment, neither side seems willing to accept any compromise. As a result, the Cubans are essentially stuck with Maduro, even as the chances for his survival diminish.”

Another U.S. expert on Cuba, Ted Henken, a professor at Baruch College, said, “Returning Cuba to the list could be disastrous for the Cuban economy because it would scare away desperately needed foreign investments, already very small.”

Background

The State Department summarizes the statutory requirements for “state sponsor of terrorism” as a state that has been “determined [by the Secretary of State] to have repeatedly provided support for acts of international terrorism.” [3]

The Cuban government was on the list of countries that sponsor terrorism from 1982 until 2015, when the Obama administration ruled the island was no longer supporting terrorist organizations. More specifically, the State Department in April 2015 stated its recommendation to President Obama for rescission “reflects the Department’s assessment that Cuba meets the criteria established by Congress for rescission . . . . whether Cuba provided any support for international terrorism during the previous six months, and whether Cuba has provided assurances that it will not support acts of international terrorism in the future.” This conclusion was based, in part, upon “corroborative assurances received from the Government of Cuba. [4]

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[1] Gamez Torres, U.S. considers putting Cuba on terror list over island’s support of Maduro, Miami Herald (Jan. 25, 2019).

[2[ Reuters, Cuba Urges Colombia, ELN Rebels to Follow Peace Talks Protocol, N.Y. times (Jan. 26, 2019).

[3] State Dep’t, State Sponsor of Terrorism. The three statues are section 6(j) of the Export Administration Act, section 40 of the Arms Export Control Act, and section 620A of the Foreign Assistance Act.

[4] President Obama Rescinds U.S. Designation of Cuba as a “State Sponsor of Terrorism,” dwkcommentaries.com (April 15, 2015). See also other posts listed in the “Cuba: State Sponsor of Terrorism?” section of List of Posts to dwkcommentaries—Topical (CUBA).

President Trump Considering Another Hostile Action Against Cuba 

On January 16, U.S. Secretary of State Mike Pompeo extended for 45 days the right to bring certain lawsuits in U.S. federal courts  by Americans who owned property in Cuba that was confiscated by its government. [1]

The Announcement

The State Department stated that this 45-day extension, instead of the usual six-month extension, “will permit us to conduct a careful review of the right to bring action under Title III [of the Helms-Burton or LIBERTAD Act] in light of the national interests of the United States and efforts to expedite a transition to democracy in Cuba and include factors such as the Cuban regime’s brutal oppression of human rights and fundamental freedoms and its indefensible support for increasingly authoritarian and corrupt regimes in Venezuela and Nicaragua.”

This announcement added, “We call upon the international community to strengthen efforts to hold the Cuban government accountable for 60 years of repression of its people. We encourage any person doing business in Cuba to reconsider whether they are trafficking in confiscated property and abetting this dictatorship.”

This right to sue was created by Title III of the Helms-Burton Act of 1996. It would permit lawsuits against persons who profit from property in Cuba that was expropriated from Americans. For example, there could be hundreds of lawsuits against corporations around the world, such as  Spanish companies that run Cuban hotels as well as Chinese and Turkish firms renovating Cuban ports. Exempt from this provision of  the Act  are U.S. companies involved in U.S. legal travel to Cuba such as AirBnB, airlines and cruise companies. But the exact meaning of this exemption could be tested in litigation, for example, over U.S. and foreign airlines landing at Havana’s Jose Marti Airport, which is built on land expropriated from a family now living in Miami.

Every  U.S. president since the enactment of the Helms-Burton Act, starting with Bill Clinton and including Trump in 2017 and 2018, has suspended Title III, for six months each time, because of its potential to alienate U.S. allies and complicate any future American detente with Cuba. Moreover, not suspending title III would create a huge obstacle to new foreign investment in Cuba.[2]

The most recent extension of only 45 days and the stated reason for this extension raise the real possibility that the Trump Administration will grant no additional suspensions or waivers of Title III and thereby permit such lawsuits.

Reactions to This Announcement[3]

This announcement predictably was applauded by Senator Marco Rubio (Rep., FL). He said in a tweet that it “is a strong indication of what comes next. If you are trafficking in stolen property in #Cuba, now would be a good time to get out.” A similar opinion was expressed by Representative Mario Diaz-Balart (Rep., FL).

Three U.S. experts on Cuba, however, criticized this possible change. Professor William LeoGrande of American University said, “It would cause an enormous legal mess, anger U.S. allies in Europe and Latin America, and probably result in a World Trade Organization case against the U.S.” He added that the State Department previously had estimated that allowing Title III to go into effect could result in 200,000 or more lawsuits being filed. Another expert, Phil Peters, said, “If they take this decision they will be moving from a policy of limiting U.S. engagement with Cuba to a policy of very actively trying to disrupt the Cuban economy.” The third, Michael Bustamante, assistant professor of history at Florida International University, stated, “Legitimate property claims need to be resolved, but in the context of a bilateral negotiation. Those backing the enforcement of Title III seem most intent on sowing havoc rather than achieving a positive good.”

Cuban authorities naturally had negative reactions to this proposed change. President Miguel Diaz-Canel said on Twitter that “we vigorously reject this new provocation, meddling, threatening and bullying, in violation of international law.”

Cuban Foreign Minister Bruno Rodriguez described the announcement as “political blackmail and irresponsible hostility aimed at hardening the blockade on Cuba. The government of President Donald Trump threatens to take a new step that would reinforce, in a dangerous way, the blockade against Cuba, would flagrantly violate International Law and directly attack the sovereignty and interests of third countries. It . . . [is] a hostile act of extreme arrogance and irresponsibility [issued in] the disrespectful and slanderous language of the State Department’s public message.”

Conclusion

This U.S. announcement follows shortly after U.S. Senators Robert Menendez and Rubio called for another hostile U.S. action against Cuba—the re-establishment of the U.S. parole policy for Cuban medical professionals, which was criticized in a recent post.[4]

Both of these proposed U.S. actions may well have been promoted or provoked by National Security Advisor John Bolton, who has long-held hostile opinions about Cuba and more recently has called Cuba, Venezuela and Nicaragua “the Troika of Tyranny.” Moreover, on November 1 in Miami, Bolton said the Administration was “seriously” considering new measures against the Cuban government, including allowing Cuban exiles whose properties were confiscated by the Castro government to file lawsuits in U.S. courts against foreign companies currently using those properties.[5]

Both of these proposed hostile actions by the U.S., in this blogger’s opinion, are ill-advised as unnecessarily creating additional conflicts with a close neighbor, with whom the U.S. should be fostering better relations as was done by President Obama after December 17, 2014.

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[1] U.S. State Dep’t, Secretary’s Determination of 45-Day Suspension Under Title III of LIBERTAD Act (Jan. 16, 2019); Reuters, U.S. Considering  Allowing Lawsuits Over Cuba-Confiscated Properties, N.Y. Times (Jan. 16, 2019); Assoc. Press, Trump Weighs Dramatic Tightening of US Embargo on Cuba, N.Y. Times (Jan. 17, 2019).

[2] U.S..State Dep’t, United States Determination of Six Months Suspension under Title III of LIBERTAD Act (July 14, 2017); Lederman, Trump administration again suspends a part of Cuba embargo, Fox News (July 14, 2017); Whitefield, Trump to suspend lawsuit provision of Helms-Burton Act in August, Miami Herald (July 17, 2017); U.S. Continues To Suspend Part of Its Embargo of Cuba, dwkcommentaries.com (July 20, 2017); U.S. State Dep’t, United States Determination of Six Months Suspension under Title III of LIBERTAD Act (Jan. 24, 2018); State Department Creates Cuba Internet Task Force and Suspends Enforcement of Statutory Liability for Trafficking in Certain Cuban Expropriated Property, dwkcommentaries.com (Jan. 25, 2018); U.S. State Dep’t, Secretary’s Determination of Six Months Suspension under Title III of LIBERTAD Act (June 28, 2018); Whitefield, Trump administration extends ban on lawsuits over confiscated property in Cuba, Miami Herald (June 28, 2018).

[3] Fn. 1; Guzzo, U.S. might allow lawsuits over U.S. properties nationalized in Cuba, Tampa Bay Times (Jan. 17, 2019); Cuba Foreign Minister Rodriguez, Cuba strongly rejects the threat of activation of Article III of the Helms Burton Act, Granma (Jan. 17, 2019).

[4] Senators Menendez and Rubio Call for Restoring U.S. Parole Program for Cuban Doctors, dwkcommentaries.com (Jan. 11, 2019).

[5] U.S. National Security Advisor Announces New U.S. Hostility Towards Cuba, dwkcommentaries.com (Nov. 3, 2018).

Russia Is Identified as Suspect of Harming U.S. Diplomats in Cuba 

On September 11, 2018, NBC News exclusively reported that U.S.intelligence agencies have concluded that Russia is “the main suspect” for causing the medical problems of the 26 U.S. diplomats stationed in Cuba. In addition, NBC reports that “the victims [also] include multiple CIA officers, at least one member of the U.S. military, and representatives of other agencies.”[1]

This conclusion is reported to be “is backed up by evidence from communications intercepts, known in the spy world as signals intelligence.” This prompted the U.S. investigation to turn to “the Air Force and its directed energy research program at Kirtland Air Force Base in New Mexico, where the military has giant lasers and advanced laboratories to test high-power electromagnetic weapons, including microwaves. . .  Although the U.S. believes sophisticated microwaves or another type of electromagnetic weapon were likely used on the U.S. government workers, they are also exploring the possibility that one or more additional technologies were also used, possibly in conjunction with microwaves.”

NBC News further reports that although “the U.S. believes sophisticated microwaves or another type of electromagnetic weapon were likely used on the U.S. government workers, they are also exploring the possibility that one or more additional technologies were also used, possibly in conjunction with microwaves, officials and others involved in the government’s investigation say.”

On August 14, “the U.S. convened officials from the Energy Department, the National Institute of Health, the State Department and the Canadian government at the Sandia National Laboratories in Livermore, California, according to State Department medical officials. U.S. experts attending a neurotrauma conference in Toronto were linked in by videoconference as [University of Pennsylvania] physicians presented their most recent technical findings. But the summit ended with no new medical revelations”

“The strong U.S. suspicion that Russia is behind the incidents means that Cuba’s government is no longer considered the likely culprit. Still, officials did not rule out the possibility that the Cuban intelligence services may have offered the Russians some level of cooperation or tacit consent.”

Nevertheless, NBC News said the evidence “is not yet conclusive enough, however, for the U.S. to formally assign blame to Moscow.”

Indeed, on September 11, Heather Nauert, the State Department’s spokesperson, in response to a journalist’s question, said the following: [2]

  • “We have seen . . . a firestorm of reports out there today assigning blame to the Russian Government according to some unnamed U.S. Government officials. I would caution you all to be very skeptical of those officials’ statements right now. As you should be aware, the investigation continues into what has caused. . . – what we have called health attacks on our State Department employees who have been working in Cuba. There is no known cause, no known individual or group believed to be responsible at this time. We are looking into it. Our position has not changed. The investigation is ongoing. We have not assigned any blame and we continue to look into this, so I want to be very clear about this.”

Relevant to the NBC News report is the increase of Cuba-Russia cooperation on various matters in recent years. A noted U.S. expert on Cuba, Professor William LeoGrande, provided the following summary of the recent Cuba-Russia rapprochement:[3]

  • In 2000 “when Putin “succeeded Boris Yeltsin as Russian president,” Putin  “began rebuilding Russia’s global influence by repairing relations with traditional allies.” The first step was “Putin’s 2000 trip to Havana, which resulted in expanded trade deals. . . .”
  • “Raul Castro in 2009 visited Moscow during which the two governments signed 33 cooperative agreements, including $354 million in credits and aid for Havana.“
  • In July 2014, Putin visited the island again and agreed to forgive 90 percent of Cuba’s $32 billion in Soviet-era debt, with the remainder to be retired through debt-equity swaps linked to Russian investments.
  • When Raul Castro returned to Moscow in 2015, Russia had signed agreements to invest in airport construction, the development of the Mariel port and metallurgy and oil exploration, and had also agreed to lend Cuba 1.2 billion euros—about $1.36 billion at the time—to develop thermal energy plants.”
  • In September 2016, Russia announced a new package of commercial agreements in which it will finance $4 billion in development projects focusing on energy and infrastructure, and Cuba will begin exporting pharmaceuticals to Russia.

According to LeoGrande, “Both Havana and Moscow refer to their relationship as a ‘strategic partnership’ that has diplomatic and military components. Diplomatically, Cuba supports Moscow’s positions on Ukraine, Syria and NATO expansion. Militarily, Russia is refurbishing and replacing Cuba’s aging Soviet-era armaments. Russian naval vessels visit Cuban ports, and Russia reportedly wants to establish a new military base on the island.”

Conclusion

Interestingly as of the early morning of September 12, this blogger has not found any published reactions to the NBC News report from Russian or Cuban governments. Nor has there been other reporting or comments from U.S. officials or U.S. or international news organizations.

Be on the outlook for reactions to the NBC News report.

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[1] NBC News, U.S. Officials suspect Russia in mystery ‘attacks’ on diplomats in Cuba, China (Sept. 11, 2018); Reuters, Russia the Main Suspect in U.S. Diplomats’ Illness in Cuba: NBC, N.Y. Times (sept, 11, 2018).

[2] U.S. State Dep’t, Department Press Briefing—September 11, 2018.

[3] Professor LeoGrande ‘s Comments on the Strengthening Cuba-Russian Relationship, dwkcommentaries (Jan. 3, 2018). See also Trump’s Hostility Towards Cuba Provides Opportunities for Russia, dwkcommentaries.com (Dec. 19, 2017).

Professor LeoGrande’s Comments on the Strengthening Cuba-Russian Relationship    

A prior post discussed President Trump’s hostility towards Cuba as providing greater opportunities for Russia’s enhancing its relationship with Cuba. Now American University Professor William LeoGrande, a noted scholar about Cuba, placed the recent expansion of Cuba-Russia economic deals in a broader perspective.[1]

He says their rapprochement began in 2000 “when Putin “succeeded Boris Yeltsin as Russian president and began rebuilding Russia’s global influence by repairing relations with traditional allies.” The first step was “Putin’s 2000 trip to Havana, which resulted in expanded trade deals. . . . That was followed by Raul Castro’s 2009 visit to Moscow during which the two governments signed 33 cooperative agreements, including $354 million in credits and aid for Havana.“

Five years later, observes LeoGrande, “in July 2014, Putin visited the island again and agreed to forgive 90 percent of Cuba’s $32 billion in Soviet-era debt, with the remainder to be retired through debt-equity swaps linked to Russian investments. By the time Raul Castro returned to Moscow in 2015, Russia had signed agreements to invest in airport construction, the development of the Mariel port and metallurgy and oil exploration, and had also agreed to lend Cuba 1.2 billion euros—about $1.36 billion at the time—to develop thermal energy plants.”

In another pre-Trump deal, “in September 2016, Russia announced a new package of commercial agreements in which it will finance $4 billion in development projects focusing on energy and infrastructure, and Cuba will begin exporting pharmaceuticals to Russia.”

Beyond these expanded economic ties, LeoGrande emphasizes, “As Putin tries to restore Russia’s status as a global power, Cuba is an attractive partner right at the doorstep of the [U.S.]. A Russian presence in Cuba is a reminder to Washington that Moscow will respond in kind to the expansion of U.S. influence into Russia’s ‘near abroad’ in places like Ukraine. For Cuba, a closer relationship with Moscow serves as a counterweight to Washington’s renewed hostility under President Donald Trump.”

“Both Havana and Moscow refer to their relationship as a ‘strategic partnership’ that has diplomatic and military components. Diplomatically, Cuba supports Moscow’s positions on Ukraine, Syria and NATO expansion. Militarily, Russia is refurbishing and replacing Cuba’s aging Soviet-era armaments. Russian naval vessels visit Cuban ports, and Russia reportedly wants to establish a new military base on the island.”

The major obstacle to a more robust Cuba-Russia relationship is Cuba’s persistent lack of funds due to few goods for export and its dependence on tourism, remittances  and export of medical services to try to make up the difference.

Conclusion

LeoGrande’s comments re-emphasize for this blogger the utter stupidity from the standpoint of U.S. national security and economic interests of the Trump Administration’s hostile rhetoric and actions regarding Cuba. The same lesson should also be evident from the European Union’s strengthening ties with Cuba symbolized by the visit to the island starting today by the EU’s High Representative for Foreign Affairs and Security Policy, Federica Mogherini, that will be discussed in a future post.

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[1] LeoGrande, Cuba Looks More to Russia as the Prospects for Better U.S. Ties Fade Under Trump, World Politics Review (Jan. 2, 2018).