State Department Records Reveal Cuba Still Owes Billions to U.S. Taxpayers; Property Claims No Closer to Resolution

Washington, D.C. – The road to the historic re-establishment of diplomatic relations between the United States and Cuba on July 25, 2015, was supposed to usher in a new era of U.S.-Cuba relations. For the first time in close to a century, a sitting American president visited Cuba and so did many representatives from various American companies. Supporters of the new policy lauded the outreach as a new way forward. Opponents argued it was a mistake and the move to normalize relations without settling the claims was premature.

For American citizens holding thousands of certified claims against Cuba’s government for stolen properties confiscated after the 1959 Communist revolution, there was a hope that they would finally see justice and accountability. The claims were supposedly discussed between both countries for the first time in decades. Yet, as of this writing, American taxpayers owed more than $10,000,000,000 by Cuba have yet to be paid what they are owed under U.S. law and international claims law.

On October 10, 2018, Poblete Tamargo LLP (“PT Law”) filed a Freedom of Information Act (“FOIA”) lawsuit against the Department of State in U.S. District Court for the District of Columbia for records requested more than five years ago related to U.S.-Cuba property claims. The Complaint is embedded at the end of this post. The suit stems from two FOIA records requests for records, one filed in 2014, and the other in 2015, submitted to the Department of State before the U.S. and Cuba normalized diplomatic relations.

The firm was particularly interested in records on the enforcement, or lack thereof, of several provisions of the Cuban Liberty and Democratic Solidarity Act of 1996 (“the Helms-Burton”) and other laws related to the settlement of the outstanding American property claims pending against the government of Cuba. As of this writing, American taxpayers owed billions by Cuba no closer to settling the claims. The relationship with Cuba has also deteriorated for various reasons, especially over the attacks on U.S. diplomats that started in late 2016 and that have yet to be satisfactorily resolved, among other issues. At the end of this post is a copy of the complaint and a sampling of some of the documents released to date.

2019-12-10 18-cv-02335 December 2019 PT REDACTED

PT Law Attorneys and Public Policy professionals have worked on U.S.-Cuba policy for decades including during the drafting of the Helms-Burton law in Congress. The firm currently represents nearly two dozen families who hold certified claims against Cuba. In advocacy efforts during the past few years, the Firm has stressed the importance of resolving these claims correctly, consistent with the law.

The resolution of U.S.-Cuba property claims will set important precedents that will impact future property claims programs well beyond Cuba. During the past ten years, PT Law attorneys have testified before Congress, briefed policymakers in both political branches of government, foreign governments, businesses, and other interested parties on the importance of successfully resolving this long-standing dispute not only for our clients but to better inform the general public and fellow attorneys about these programs.

The records produced by the Department of State will not only help advance justice and accountability for American citizens wronged by Communist Cuba and those today who traffic in confiscated property, but it will also help U.S. taxpayers understand how this program has worked, or not worked, and how it can be improved so that future claims programs can be properly structured to advance U.S. national and taxpayer interests.

If you are a claims practitioner, we hope these records bring much-needed sunshine on the U.S.-Cuba claims program, an intersection of law and public policy that continues to unfold in courts of law and in the court of public opinion. You can search for records produced by the Department of State by following this link.

2018-10-10 PT v State Complaint FOIA

2018-10-10 PT v State Compl… by Jason I. Poblete on Scribd

** Note PobleteTamargo has redacted additional information from any posted productions to protect the email addresses and direct phone numbers of government officials.

PRODUCTION DATE	DOWNLOAD LINK
June 2019	DOWNLOAD
November 2019	DOWNLOAD
December 2019	DOWNLOAD
January 2020	DOWNLOAD
February 2020	DOWNLOAD
March 2020	DOWNLOAD

Excerpts from Documents Produced by the State Department in 18-cv-02335

May 6, 2019July 28, 2020

THE ILS GAZETTE: New Phase in US-Cuba Relations Adds New Layers of Complexity for Foreign Companies Doing Business in Cuba

To read The ILS Gazette go here.

New Phase in US-Cuba Relations Adds New Layers of Complexity for Foreign Companies Doing Business in Cuba

By Arthur M. Freyre*

President Trump’s decision to end the waiver of Helms-Burton’s[1] Title III lawsuits has dramatically changed how foreign companies do business in Cuba. Individuals who have a claim or may have a potential claim against the Cuban government for stolen property can now file suit against foreign companies who are trafficking or trespassing on property they used to own but confiscated by Cuba without compensation. The waiver that has been in the law since the signing of the bill in 1996, ended on May 2nd and Title III will finally be implemented. This post provides a general overview on the Title III lawsuit process. Let’s answer three basic questions: “Who are the plaintiffs?” “What is property?” and “What is the trafficking?”

Prior to discussing the three questions, counsels should note that pursuant to 22 U.S.C. §6082 (a)(8), the Attorney General was supposed to have prepared and published in the Federal Register a concise summary of the Act sixty days after the date of enactment. Now that the waiver has been lifted, we anticipate that the Attorney General will prepare and publish the Title III summary. Besides being familiar with the statute, attorneys filing or defending Title III lawsuits need to be aware of certain required actions (i.e. notice to parties and the wind down period) prior to the filing of the lawsuit.

The first question is “Who are the Plaintiffs?” Helms-Burton recognizes two groups of plaintiffs. The first group of plaintiffs is known as certified claimants. The second group of plaintiffs consists of individuals, or heirs of Cuban nationals, who are now U.S. citizens. These are known as uncertified claimants.

Certified claimants are individuals or corporations who were U.S. citizens when their property in Cuba was confiscated by the Castro revolution after 1959. These individuals provided evidence to the U.S. Foreign Claims Settlement Commission showing that the Cuban government confiscated their land without compensation. The Commission issued a certified claim to the claimant based on the property’s value. Prior to this implementation of Title III, certified claimants effectively had no access to federal court to file a lawsuit, except for a limited number of victims of terror with personal injury or wrongful death claims.

Uncertified claimants are persons whose families left Cuba after the 1959 communist takeover and whose property were also confiscated by the Cuban government. At the time of the taking, these property owners were not U.S. citizens, and were not eligible to present their matter before the U.S. Foreign Claims Settlement Commission when they arrived to the United States. Subsequently, they or their sons or daughters became U.S. citizens. Regarding this class of potential plaintiffs, Title III states that the federal courts may use the Commission as a special master to review the uncertified claim and make a finding on it’s validity and it’s value for the court to decide.

An additional question the courts may have to consider is the question of what is property? Pursuant to Title III, property is broadly defined to include intellectual property (i.e. trademarks, copyrights, patents, and so forth), real property (commercial and personal), and any item that may have a present, future, or contingent right, security, or other interest therein.

The third and final question is what is defines as trafficking? Trafficking in a confiscated property involves a person who knowingly and intentionally, and without authorization of any U.S. national who holds a claim to the property, engages in or benefits from a wide range of transactions in Cuba that include or relate to a confiscated property. There are several exceptions to the trafficking definition. It is important to discuss this matter with counsel.

One final point regarding trafficking, 22 USC § 6082(b) states the required minimum threshold for damages in federal court is $50,000 value of the property at the time of the confiscation. This amount is exclusive of interest, costs, and attorney fees.

Just because one believes that they might meet the minimal threshold of standing, there are other factors that one needs to consider. For instance, the Judicial Conference announced that there is an additional filing fee of $6,548.00 that one needs to pay the courts for the filing of a Title III action, Besides the filing fees, other costs may include service of process, and other fees and expenses we have not mentioned here regarding litigation.

In closing, companies doing business in Cuba should reassess their increased risk exposure during this time, as it may be significant. They need to make sure that they are not trafficking in stolen property. This was the case before May 2nd since there remains an economic embargo of Cuba. Counsel should read and understand Title III carefully and also review the economic sanctions regulations in conjunction with your Title III analysis. Failure to do this assessment may expose companies and individuals to potential lawsuits and liability. Reading and understanding Title III carefully is just as important for those who believe that they may have a Title III claim. Failure to comply with the notice provisions could lead to unnecessary expense and the dismissal of a Title III claim.

*Arthur M. Freyre, Esq., is an attorney at the Law Offices of Poblete Tamargo LLP. His practice area includes federal regulatory law and public policy. Mr. Freyre would like to thank Mr. Mauricio Tamargo, Esq., former Chairman of the Foreign Claim Settlement Commission and Mr. Jason Poblete, Esq., an expert in U.S. economic sanctions and export control laws, for their assistance and input in this blog post.

[1] The Cuban Liberty and Democratic Solidarity Act, 22 U.S.C. §§6021-6091.

November 30, 2016November 30, 2016

Moving Forward

The prospective changes on US-Cuba policy were reinforced by Reince Priebus, the incoming Chief of Staff for President-elect Trump who noted that Mr. Trump would “absolutely” reverse President Obama’s opening to Cuba. Priebus further stated, “Repression, open markets, freedom of religion, political prisoners—these things need to change in order to have open and free relationships, and that’s what President-elect Trump believes, and that’s where he’s going to head.”

During his campaign, Mr. Trump pledged that he would reverse the concessions made by the Obama Administration to the Cuban government unless they meet his demands. We anticipate that the incoming Trump administration will follow through in reversing some of President Obama’s Executive Orders. And based on the President-elect’s discourse over the past month, it seems that the orders that are most likely to be reversed will focus on commerce, especially in the areas of banking and credit financing. These and other restrictions, such as tourism, may be used as leverage against the Cuban government to influence the changes that are necessary for diplomatic relations.

Though the current bilateral talks initiated by the Obama Administration had a promising start, the progress has been virtually non-existent. Whether or not the Trump Administration continues the ongoing bilateral negotiations depends on the actions taken by the Cuban government.

In closing, there will be a transition in Cuba after Fidel Castro’s death. The proper question is what will this transition look like? And will it last? One major challenge facing the United States is to win the propaganda battle regarding its policy and put pressure on the Cuban government, who is ultimately responsible for taking the necessary steps for not only lifting the embargo, but also becoming a part of the global economy.

More information on US-Cuba policy can be found here. For the latest news and events check out the following news feeds;

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October 27, 2015October 5, 2020

Can Cuba Afford to Pay?

Forbes Magazine used to list both Castro brothers on its list of the top 100 richest people in the world. Forbes later removed the Castro brothers from the “Top 100” after the Cuban government objected, indicating those Swiss bank accounts in both Fidel and Raul’s names are held by the Castro brothers on “behalf of the Cuban people.”

The Paris Club recently announced that they are entering into negotiations with the Cuban government to restructure the $15 billion debt arising for a 1986 default by Cuba. Financial experts have opined that the Paris Club creditors believe Cuba and the US may normalize trade relations and would give Cuba more revenue to start paying the Paris Club.

The World bank estimates that Cuba’s GDP, based on its population of 11.38 million people and the last reported Cuban government figures of 2013, is estimated to be $77.15 billion. According to these statistics, the per capita income of $5,880; however, we know that this money is kept by the state and the government officials who run the Cuban economy.

To these facts we need to add the biggest fact of all, the lifting of the US embargo on Cuba. We need to remember that the US embargo was first created because Cuba refused to pay for taking American property. To this day Cuba still represents the largest taking of American property in the world. The bi-lateral negotiations will most likely include the US agreeing to lift the embargo if Cuba agrees to pay these certified claims, among other conditions that the Congress will likely require of such an arrangement.

Once that embargo is lifted, economic activity and trade in Cuba will increase and Cuba will be in a much better position to pay its debts. That being the case, if Cuba were unable to come up with all of the money to pay, Cuba could finance the $8 billion it needs to settle the American certified claims before lifting the embargo.

Even with the devastated state of the Cuban economy resulting from decades of central planning, according to Forbes, Cuba is still able to generate $8 billion a year from its medical industries. Once Cuba is free, the economy will generate a great deal of income from tourism, medicine research development, and much more.

There is no good reason for the US to settle for anything less than the full payment of the certified claims, with interest, just as the United States did with American claims against Vietnam and Germany. There is no reason to give Cuba a free ride. The world needs to see that Cuba is ready to rejoin the global arena of trading nations and that it is prepared to pay its bills and will keep doing so.

We should remember also that for the majority of those American families in Cuba 1959, they lost everything, and were completely devastated. They have been waiting for 55 years for justice and to be paid for what was taken from them. It is crucial for the world to see that the US will look out for its own people otherwise we will have a repeat of Cuba.

September 23, 2015August 18, 2016

Congressman Jeff Duncan Urges US Delegation to UN to Uphold US Sovereign Law

Chairman Duncan makes clear in his letter that it is the responsibility of the Obama Administration to uphold the laws of the United States and defend the Nation’s interests at the UN.

As a member of the Western Hemisphere Subcommittee, Duncan has participated in several hearings regarding the policy shift towards Cuba, and concludes that “the new Cuba policy has failed to extract any noteworthy, sustained concessions on democracy, human rights, or justice for the nearly 6,000 American claimants whose property was stolen by the Castro regime.”

Congressman Duncan’s letter can be found below or at his congressional website.