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

By Beatriz Juez (dpa)

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.