Cuba, You Owe Us $7 Billion 7

Raul Castro

Raul Castro

Behind the trade embargo lies a huge and nearly forgotten obstacle: the still-active property claims by American companies. Inside the effort to settle a 50-year-old debt

By Leon Neyfakh, Boston Globe

If symbols could gather rust, the American trade embargo against Cuba would be covered with it. Enacted in 1960, shortly after Fidel Castro came to power, and expanded in 1962, at the height of the Cold War, the embargo has frozen the United States and its tiny neighbor off the Florida coast in a standoff that seems as dated as the classic American cars on Havana streets.

Leaders from around the world have been calling on the United States to dismantle the embargo for more than 20 years, and recent polls show that a majority of Americans are in favor of lifting it. With the repressive Castro regime seemingly nearing its end, a “normalization” of relations between the countries seems increasingly within reach. That would appear to spell an end sometime soon for the embargo, which in the popular imagination stands as a sort of political weapon that was designed to cripple Castro and stem the tide of communism.

What’s often forgotten, though, is that the embargo was actually triggered by something concrete: an enormous pile of American assets that Castro seized in the process of nationalizing the Cuban economy. Some of these assets were the vacation homes and bank accounts of wealthy individuals. But the lion’s share of the confiscated property—originally valued at $1.8 billion, which at 6 percent simple interest translates to nearly $7 billion today—was sugar factories, mines, oil refineries, and other business operations belonging to American corporations, among them the Coca-Cola Co., Exxon, and the First National Bank of Boston. A 2009 article in the Inter-American Law Review described Castro’s nationalization of US assets as the “largest uncompensated taking of American property by a foreign government in history.”

Today, the nearly 6,000 property claims filed in the wake of the Cuban revolution almost never come up as a significant sticking point in discussions of a prospective Cuban-American thaw. But they remain active—and more to the point, the federal law that lays out the conditions of a possible reconciliation with Cuba, the 1996 Helms-Burton Act, says they have to be resolved. According to that statute, said Michael Kelly, a professor of international law at Creighton University in Nebraska, settling the certified property claims “is one of the first dominos that has to fall in a whole series of dominos for the embargo to be lifted.”

While the other dominos are clearly much more daunting—the overall point of the Helms-Burton Act is that Cuba has to have a democratic, America-friendly government in place before there can be any talk of lifting the embargo—experts say the property claims will be an intensely difficult problem to settle when it comes time to do so. For one thing, Cuba is unlikely to ever have enough cash on hand to fully compensate the claimants, especially while the embargo is still in place; to make matters even more complicated, many of the individual claimants have died, and some of the companies no longer exist.

With Cuba inching toward reform on a number of fronts over the past several years, giving hope to those who believe our two countries might reconcile in the near future, a number of Cuba experts have begun to study the question of how to resolve the property claims in a way that is both realistic and fair. The proposals that have come out of their efforts provide a unique window onto the potential future of the American relationship with Cuba—and point to the level of imagination that can be required in the present to turn the page on what happened in the past.

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Feature continues here:  Property Claims

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7 comments

  1. This is why U.S. policy toward Cuba has not varied between Republicans and Democrats. George Bush failed to enforce Titles III and IV of the Helms-Burton Act just like Clinton and Obama. In contrast, Obama applied similar measures against Russians for the seizure of Crimea.

  2. The problem is that Castro also brought multimillionaire claims against the U.S. and they were validated by Cuban courts. Is it a matter of negotiation?

  3. The Embargo has not been enforced the way it has supposed to be enforced.European countries are openly trading with Cuba,millions of their tourists travel to Cuba every year and thousand of Cubans,including active members of the communist elite visit the US every year.The only one that will benefit from the lifting of the embargo would be the Cuban regime,Castro will become richer and the Cubans will remain in the same poor conditions.If there was a change of government in Cuba with a true transition to democracy,then it would be feasible to negotiate.We must also remember that Castro does not has any interest in the lifting of the embargo because he blames all of his error and economic failures to the embargo,in another words he is hiding his failures behind the embargo,Castro loves the embargo to persist.

  4. Who will benefit from the Lifting of the embargo?Simply,Castro and his corrupt Generals.Let’s say the embargo is lifted and then what?Is Castro leaving power?Who will become richer?The Cubans?

    • That’s not the point. The point is the contradictory nature of the embargo: a move against Castro that provides him with a political excuse supported by almost all the rest of the world. The result: a long-lasting standby without exit by the grace and deed of the Helms-Burton Law. The collateral damage is the Cuban Adjustment, which brings to the U.S. a Mariel every three of four years with immigrants, not exiles, who afterwards fell into the network of the Castro industries (travels, remittances, shipments, telephone calls…) and make a hole in the embargo.

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