United States and Cuba Launch Talks Over Property Claims

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[author: Kate Benner]

On December 8, the United States and Cuba met for the first talks on a variety of property claims that arose over the last 66 years. The meeting, which occurred a year after the bilateral announcement by Presidents Obama and Raúl Castro that their countries would renew diplomatic relations, addressed expropriation and damages claims, some of which may present a statutory hurdle to full normalization.

By way of background, after the 1959 Cuban Revolution, many forms of property in Cuba, including real estate, physical property, and intellectual property, were nationalized. The seized property owned by U.S. citizens and corporations was certified by the U.S. Department of Justice’s Foreign Claims Settlement Commission. The Commission ruled that Cuba had seized $1.9 billion in U.S. assets. Applying a simple 6 percent per annum interest rate raises the total value of the claims to over $7 billion. Individuals hold the majority of the claims (5,014 in number), but they represent only $230 million of the total claims by asset value (before interest). Corporate claimants, which include Coca-Cola, Exxon, and Office Depot, represent 899 claims, valued at $1.7 billion (before interest). In addition to the roughly 6,000 certified Commission claims, the U.S. Government also raised for discussion unsatisfied U.S. court judgments against Cuba and U.S. governmental claims, which add significantly to the amounts at issue.

The 1996 Cuban Liberty and Democratic Solidarity (Libertad) Act, which also is known as the Helms-Burton Act, tied full diplomatic and economic relations between the United States and Cuba to the positive resolution of the outstanding property claims.

The Cuban Government has reached settlements with other countries in the past for expropriation claims arising out of the Revolution, but those settlements were for far smaller figures than currently under discussion. Moreover, Cuba has levied its own claims against the United States that will need to be resolved. Cuba argued at the United Nations this year that the United States owes Cuba over $120 billion in damages resulting from the U.S. embargo, and Cuban state media has held the embargo damages to be $833.75 billion. In addition, Cuba has claimed personal injury damages arising from American “acts of terrorism” against Cuba.

This meeting was the first round of discussions. Further talks will be necessary to reach the positive outcome needed for full economic relations between the U.S. and Cuba under current U.S. law.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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