In 1959, as the Castro regime took control of Cuba, they nationalized all property owned by Americans on the island. This remains one of the largest uncompensated confiscations of American owned properties in U.S. history. Resolution of the claims which arose out of those expropriations remains a major obstacle towards normalizing relations with Cuba.
Though the Obama administration announced the renewal of diplomatic relations, and held approximately 4 meetings with the Cuban government to discuss a claims resolution, little to no progress was made towards reaching a settlement. As a new administration takes shape in the White House, many claimants have renewed hope that a deal may be coming in the near future.
CubaTrade Magazine wrote an article on the resolution of Cuba property claims in this months publication.
The article discusses the differences between how claims could be settled for corporations and individuals. Out of the 5,913 claims that were certified by the Foreign Claims Settlement Commission, 900 belonged to corporations. The remaining 5,013, or approximately 85% were filed by individuals.
The Cuban government now owes over $8 billion to U.S. citizens and corporations. Many of the corporations, including several Fortune 500 firms such as Coca-Cola, Exxon, Colgate Palmolive, General Electric, and Starwood Hotels, became claim holders after merging with or acquiring other companies that had held claims.
Many of these corporations have voiced interest in “swapping out” their claims for the opportunity to invest in Cuba. As explained in the article, proposed settlement of individual claims could come from a pro-rata distribution of money that the Cuban government could raise from imposing new export duties. Other proposed methods include giving shares to claimants for any investment projects that use their property or land.
Mauricio Tamargo, former Chairman of the Foreign Claims Settlement Commission, and law partner with Jason Poblete, represent over 20 individuals with certified claims. Following the announcement of renewed diplomatic relations between the United States and Cuba in 2014, the interest in settlement has accelerated. With a new administration in the White House, a similar sort of anticipation is in the air.
“President Trump has already indicated that he’s a very good dealmaker, so my clients are hoping he puts those skills into settling their certified claims,” Tamargo said. “We need to get the claims negotiated and settled.”
The complete editorial in Cuba Trade Magazine can be read here.