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Companies Seek Payback for Assets Stranded in Cuba

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Monday, 22 February 2016 15:53

In an article by Agenda Week, a publication of The Financial Times, details the corporate compliance side of U.S. certified property claims against Cuba. Several experts outline possible strategies for companies seeking compensation for confiscated assets as well as what companies that engage in the Cuba marketplce should consider when reviewing compliance risk issues that involve properties in Cuba subject to a claim.

JP Quote

... Companies such as Exxon Mobil and Chiquita Brands International are currently waiting to hear if the government of Cuba will repay them for assets confiscated by Fidel Castro during the expropriation of American property beginning in 1959. 

... PobleteTamargo attorney, Jason Poblete, notes that any discussion on settlement of claims requires authorization from the US government. He also stresses that though physical property will not be given back, US companies or citizens cannot sell a claim. Though many companies have expressed interest in seeking an alternative means of reparation, such as preferential treatment in joint ventures, Poblete points out that some US companies may not be interested in future Cuban ventures and want only to be paid back. 

... For companies looking at commerce with Cuba, boards must ensure that they are not dealing with previously confiscated assets or will find themselves trafficking in stolen property. Poblete says that due diligence for any company planning to expand into Cuba includes contacting the State Department to determine whether the Cuban business has claims against it. Poblete also advises that corporate representatives regularly check to see whether foreign entities are trafficking in U.S. companies’ assets. A transaction might be actionable in foreign investors’ home countries or in the United States.

... Nevertheless, trade and commerce will not open up between the US and Cuba until claims are settled. Poblete says that the process of settlement may frustrate companies as negotiations between the two countries are held in secret, and the government is not obligated to release a transcript. However, Poblete says it’s promising that discussions are under way.

... “But for the embargo to be eased, this has to be settled,” he says. “Access to the U.S. market is a privilege, not a right. If you want U.S. investors to do business in Cuba, you need to take care of these old claims. You also need a mechanism that protects property rights. What good is it to go to there if you don’t have a mechanism to resolve your claim?”

The full article can be found here. (Subscription required)

 

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