Seized US Properties in Cuba: Another Pending Issue for the Thaw

By Beatriz Juez (dpa)

Pedro Freyre. Photo:

HAVANA TIMES — The nationalization of US companies following the Cuban revolution, one of the measures that detonated the diplomatic break between Washington and Havana in 1961, is one of the issues that has been put on the table once again, after the historic rapprochement between the two countries announced in December of last year.

The issue, a priority for thousands of US companies and citizens, will be addressed on Thursday by the US House Subcommittee on the Western Hemisphere, which is to review demands made by US citizens whose properties were expropriated without any compensation.

These demands could well be one of the thorniest issues to address in the long-term “normalization” process the two countries aspire to, a process that also includes matters such as the return of the Guantanamo Naval Base territory to Cuba and the compensation the island’s government demands for the damage caused by the embargo.

It is a matter that could be resolved “with a bit of intelligence and pragmatism from both ends,” Cuban-American lawyer Pedro Freyre believes. Freyre is an expert on private investment in Latin America and issues related to the Cuban embargo.

Representatives and senators such as Republican Marco Rubio and Democrat Bob Menendez have asked President Barack Obama to tackle the issue before the planned reopening of embassies.

“When Fidel Castro brutally seized power in 1959, he confiscated property from both US and Cuban titleholders – some at gunpoint – without providing any compensation in return,” Jeff Duncan, chair of the Subcommittee on the Western Hemisphere, charged before the Lower House of the US Congress.

Duncan, who is opposed to Obama’s decision to normalize relations with Havana, pointed out that “these property claims represent the loss of billions of dollars and a blatant disregard for the importance of property rights and the rule of law.”

Washington considers resolving this issue a priority, but it has not yet been put on the agenda, as both governments would need to agree on this first.

According to the Foreign Claims Settlement Commission (FCSC), an independent agency of the US Department of Justice, “it is not yet clear what effect such changes will have on the status of the claims previously adjudicated by the Commission.”

The Commission has certified a total of 5,913 claims made by US citizens or companies in connection with properties nationalized on the island following Fidel Castro’s arrival in power in 1959.

The list includes companies such as the Cuban Electric Company, North American Sugar Industries, Exxon, Texaco and Starwood Hotels & Resorts. According to the list made available by the Commission on the web, Coca Cola and General Motors are among the other companies that have also put forth claims.

International law requires States to pay compensation for the nationalization of properties owned by foreign citizens, which was not the case in Cuba. As a result of this, Washington broke diplomatic ties with Havana in 1961 and, a year later, imposed a near-total embargo on the island.

According to the FCSC, tasked with arbitrating claims by US citizens against foreign governments, at the time of their nationalization, these US properties were valued at some 1.9 billion dollars. Today, this is equivalent to 7 billion dollars, or so The New York Times estimates.

“It may be resolved eventually, but I don’t believe this is the number one priority right now. I don’t believe it is impeding the re-establishment of relations right now,” Cuban-born Miami lawyer Freyre claims.

He explains that, in the case of the nationalization of US companies and assets, the State Department is “obliged to negotiate with Cuba to resolve this issue.” Freyre believes that, in practice, these companies will settle these claims individually, through bilateral negotiations with Cuban authorities, as happened in Eastern Europe.

The claims made by Cuban-American families “is more delicate and has less institutional support,” Freyre tells us. His family lost several properties on the island, including his family’s home.

The embargo, decreed in 1960 as a response to the nationalization of US properties, is still in place. Obama cannot individually order its lifting; only Congress is empowered to put an end to it.

13 thoughts on “Seized US Properties in Cuba: Another Pending Issue for the Thaw

  • Tough shit! American just take the lost and move on, or invade the miserable country, there ain’t much there for the American to take except what the Castros family has in their possession other than that the whole country is ruined by lack of funds and maintenance. So I don’t really know what you all talking about. The whole country is a disaster. So go right ahead and try to collect anything from Cuba and you all would know how feels like to ask a Panhandle for some change. However whatever is left there to repossess is in possession of Los Esviros, El Comite Central, El Partido Comunista, los Comandantes y Generales de las FAR la Seguridad de Estado, El ministerio de Interior El D.T.I. Those are the one eating the meat while the whole country chew the bones.

  • It’s true that Castro went to the tax records and paid according to what the companies claimed on their taxes. Castro interview with Oliver Stone.

  • In Hugh Thomas’ History of Cuba, he described the republican era during which US businesses expanded into Cuba. The US owned companies tended to pay better than the Cuban owned companies did, and most Cubans preferred to work for them. However, the US companies would tend to hire Americans as senior managers (who were paid more than Cubans in similar situations). This led to some resentment. Some US corporations were given special tax breaks, but then, so did many Cuban owned firms. Political corruption was extensive during this period, and was getting worse. Batista was just one aspect of the corruption, as the opposition parties were equally corrupt.

    One particular Cuban businessman, Julio Lobo, who owned the largest sugar plantation & mills in Cuba was invited to Che’s office a few months after the rebels had seized power. Che told Lobo that the revolution had seized his plantations and mills and that he had looked closely at his company records and had discovered than unlike nearly all other businessmen in Cuba, his records were accurate and honest. He then asked Lobo to join the revolution and manage the sugar ministry. Lobo asked for a couple days to think it over. They next morning, Lobo & his family fled to the US.

    I have read several histories of Cuba and nowhere have I ever read that Castro offered to pay fair compensation for seized US property. I did read that they once offered, in general terms & not to specific businesses, to pay compensation in the form of 10 year bonds payable in Cuban currency. In other words, they offered to pay eventually in what would be worthless paper money. That is not a serious offer of compensation.

    I have read several comments from pro-Castro supporters who claim that the revolution offered compensation, but they have never provided any supporting links, quotations or documentation to back up that claim. Therefore, the claim must be dismissed as yet another legend or lie about the Cuban revolution.

    Nor did the Castro’s pay the many Cuban business owners for there value of their seized property. For example, the Bacardi family was never offered any compensation when the revolution seized their distillery, brewery and office buildings. That’s the thanks Fidel showed for the considerable financial support the Bacardis sent to the rebels during the fight against Batista.

  • The problem under Batista was political represion, and of course there was some crony capitalism. That was the 1950’s. Unfortunately John, we never learned what Cuba could have become (it was going in the right direction). Now we have prostitutes and taxi cab drivers, and apparently, based on a recent piece, bottle cap collectors, earning more than doctors, lawyers, and professors. It seems worse that 1959.

  • To Griffin, ( below),
    I heard this story some time ago so I can’t put my finger on the source at the moment . The details I remember are too ..well… detailed to now think I got it wrong.
    It makes sense given the predatory nature of imperial capitalism and the huge amount of financial corruption under Batista .
    Note that I never said that the U.S. companies did not pay taxes, just that they paid based on totally fantastic self- undervaluation of the taxable assets and thereby cheated Cuban society for decades.

  • The Cuban economy and standard of living rose considerably due to US investment and the preferential contracts to purchase Cuban sugar. The wealth was not evenly shared, but even the poorest in Cuba were better off in the 1950’s than they were in 1890’s, during the Spanish era.

    Many Cubans resented the US domination of their economy, but they also benefited from it.

  • US companies paid taxes in Cuba. Cuban owned companies tended to avoid paying taxes.

    I have not found any evidence that the Cuban government ever offered US businesses compensation for their seized property. IF somebody has a link to back up that claim, please post it.

  • Nonsense.
    If Cuba stopped providing food, medicine, education, shelter for all its people like most poor Third World countries in which the U.S. has succeeded in installing or maintaining neo-liberal capitalism , Cuba could easily reimburse the very needy millionaire U.S. companies .
    Your attitude will not win you any friends in the U.S. ruling class.
    You wouldn’t have them as friends anyway.

  • As I recall, American companies were said to claim that their Cuban properties were worth about 10% of their actual worth when it came time to pay Cuban taxes and of course any dictator worth the name will agree to the U.S. companies’ terms if he would like to continue to be a U.S. puppet and make lots of money .
    I heard that the Cuban government offered the (lying, tax-cheating ) U.S. companies
    compensation amounting to exactly what those companies said they were worth when it was tax time .
    Now all you read in the corporate media is that the Cubans refused to pay these companies compensation .PERIOD .
    Once you know the true history: meaning the facts, the picture is entirely different.
    It’s one more case (remember Mariel?) where the U.S.G. tried to screw the Cubans and got screwed instead.
    The CIA calls this “blowback”: a reaction to the deprivations of the Empire

  • All the European countries were remembursed for properties that were nationalized. Americans were not because our government refused to negotiate on the business owners behalf. Serves the companies right for outsourcing American jobs to Cuba.

  • While you may not agree with the business terms and agreements that US companies had with pre-Castro Cuba, they were entered into legally. According to international law, the Castros are obliged to pay these lawful claims.

  • As a practical matter, Cuba lacks the means pay these claims. Given the neglect of the properties in Cuba, perhaps they may give them back if the owners agree to bring them up to date.

  • US companies raped Cuba blind over many years.They already have their profits.

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