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American owners of confiscated property in Cuba prepare for potential lawsuits
By Nora Gámez Torres El Nuevo Herald (TNS) Apr 28, 2019

MIAMI — A group of cruise lines might become the first companies to face lawsuits under the Helms-Burton Act over the use of properties owned by Americans that were confiscated by the Fidel Castro government 60 years ago.

Beginning on May 2, the Trump administration will allow Title III of the Helms-Burton Act to go into effect, Secretary of State Mike Pompeo announced recently. The controversial provision allows U.S. citizens to seek compensation for the confiscated properties in federal courts.

Michael Behn and Javier Bengochea, the holders of certified claims for properties confiscated in the ports of Havana and Santiago de Cuba, told el Nuevo Herald they have notified a number of cruise companies that they intend to file lawsuits against them, probably in Florida. The two men were guests at a recent luncheon in Miami where national security adviser John Bolton unveiled a series of measures to tighten the economic embargo against the Cuban government.

“I am going to sue all of them,” said Bengochea, referring to cruise companies that use the docks in the eastern city of Santiago de Cuba. The main terminal and several warehouses in the port of Santiago were confiscated from his family in October 1960.

El Nuevo Herald reviewed a list of cruise companies that Behn said are using the installations of Havana Docks, a company managed by his grandfather that owned three docks and a number of buildings in the port of Havana. The facilities were confiscated in November 1961 and are currently part of the city’s cruise ship terminal. The terminal has been administered by a Turkish company, Global Ports Holding, since 2018.

The list includes 10 U.S. companies, among them some based in Miami such as Carnival, Royal Caribbean and Norwegian. Carnival and Norwegian did not reply to requests for comment for this story. Royal Caribbean issued a statement saying it was “reviewing the recent statements to evaluate their impact on our guests and our company. For now, we are sailing our Cuba itineraries as scheduled and will keep our guests updated if anything changes.”

The Foreign Claims Settlement Commission of the U.S. Department of Justice has certified 5,913 claims by U.S. citizens and companies for seized properties and losses valued at a total of $1.9 billion — now valued at $8.5 billion because of accumulated interests. The commission’s final report showed that only 817 of the claims had an original value of more than $50,000 — the minimum figure required for lawsuits filed under Title III of the Helms-Burton Act.

Title III also allows lawsuits by Cubans who became U.S. citizens after their properties were seized. One State Department estimate in 1996 reported that those lawsuits could climb to as many as 200,000, although the technical complexities and costs of pursuing those cases could limit their number significantly. Unlike holders of certified claims, Cuban Americans will have to provide judges with evidence that they owned the seized properties, said Pedro Freyre, an attorney with Akerman LLP, which represents clients that do business in Cuba.

Kimberly Breier, assistant secretary of state for Western Hemisphere affairs, did not rule out the possibility of starting a new process to certify the claims by the Cuban Americans.

“They could still be (certified) if the window were open,” she said in a telephone briefing for journalists.

Some experts said that allowing the implementation of Title III is not a genuine effort by the U.S. government to resolve the dispute over confiscations, in particular for those with certified claims on their hands.

“There has been outreach to the Trump administration by representatives of certified claimants; there has been no interest by senior-level officials to meet with them in an ongoing manner, meaning to construct a settlement process,” said John Kavulich, president of the U.S.-Cuba Trade and Economic Council.

Meanwhile, companies doing business in Cuba have been preparing for some time to deal with the risks they run.

“Yes there’s a lot of concern,” among the companies involved in Cuba-related business, said Aymee Valdivia, a lawyer with Holland & Knight, which represents European and U.S. companies like Starwood — now part of Marriott — that administers the Four Points by Sheraton hotel in Havana.

The nearly 60 U.S. companies with presence in Cuba are doing so under authorizations issued by the Treasury’s Office of Foreign Assets Control, which handles a number of U.S. sanctions programs. But having an OFAC license may not be enough to protect the businesses from lawsuits, experts said.

Asked by el Nuevo Herald if the OFAC licenses for doing business in Cuba provide protection, Breier would only say, “There will not be any exemptions.”

“That’s right,” said Behn, the Havana Docks certified claimant. “The cruise companies have an authorization to go to Cuba, but they don’t necessarily have to use the port of Havana installations that were confiscated from my family.”

Several experts and attorneys agreed that a significant part of the lawsuits filed under Title III will pivot on interpretations of the language in the law itself. U.S. cruise, airline and hotel companies are concerned about how federal courts will interpret “lawful travel.” That is because the prohibition on “trafficking” with confiscated properties excludes “transactions and uses of property incident to lawful travel to Cuba, to the extent that such transactions and uses of property are necessary to the conduct of such travel.”

Companies in the travel industry could argue their businesses in Cuba are covered under that exception in the law, Freyre said. But since most of the U.S. companies’ businesses in Cuba did not exist when the Helms-Burton Act was signed by President Bill Clinton in 1996, federal judges will have to assess the intention of the lawmakers at the time, Kavulich said.

Companies facing lawsuits could also reach out-of-court settlements to avoid trials, as some European companies with dealings in Cuba have done.

Behn’s certified claim for Havana Docks, for example, has an original value of nearly $9.2 million, now $45 million because of the 6% annual interest approved by the U.S. claims commission. Title III allows compensation for up to three times the claim value, which Behn said would allow him to seek about $125 million in damages.

Canada and many European countries already have said that they will oppose the application of U.S. laws to their companies for doing business in Cuba, calling it an extraterritorial reach. Some of those countries also adopted national laws protecting companies from Helms-Burton, which promises lengthy legal battles.

Valdivia said another possibility is that the companies facing Title III lawsuits will collectively pressure the Cuban government to agree to negotiate and settle the claims.

(EDITORS: STORY CAN END HERE)

During the Obama administration, U.S. and Cuban representatives met several times to discuss the issue, but the talks went nowhere because Havana insisted in demanding compensation for the damages caused by the U.S. trade embargo on the island.

The Cuban government already said that it will not respond to any lawsuit filed under Helms-Burton and that it does not recognize the jurisdiction of U.S. Courts.

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©2019 Miami Herald

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