US and Cuba Talks on Property Claims in Havana
by Circles Robinson
HAVANA TIMES — One of the thorniest issues to achieve a full normalization in US-Cuba relations are the multiple property claims, in the billions of dollars, that both countries have with the other. To begin putting the different positions on the table delegations from both countries are meeting today in Havana.
The US delegation is led by Mary McLeod the acting legal adviser for the US State Department.
For decades Cuba has kept track of what it considers the damages caused by the internationally repudiated US embargo on the island. The government’s demands have also included the return of the territory occupied by the US Guantanamo Naval Base.
For its part the United States government defends the thousands of claims of US citizens that were certified by the Foreign Claims Settlement Commission. These include claims by individuals and corporations.
According to the State Dept. “The meeting is the first step in what we expect to be a long and complex process, but the United States views the resolution of outstanding claims as a top priority for normalization.”
The single greatest impact of the embargo is that it prohibits Cuba from using USD to settle accounts. On Cuban exports, not a big issue as Cuba has little to export. On Cuban imports, again not a huge problem as Cuba has limited hard currency or credit to purchase abroad. Of course lifting the embargo would increase market share. From 0% anything is an increase. If Cubans could develop software they could do that now. Coding and programming require few resources. Of course I believe that the embargo is legal. So does the World Court. It is also acceptable to the US Congress where it matters the most. I agree with you that Cuba has great potential. But lacking incentives is Cuba’s problem. That I blame on the Castros.
I was giving two examples where the embargo adversely affects trade between Cuba and other countries. You think that is acceptable and legal – I don’t and have given reasons why on numerous occasions.
On the second point a lot of what you say is true but I was refuting the suggestion that Cuba doesn’t have anything to export. There is no goose that lays the golden egg, but if the embargo was dropped all these products would inevitably gain some market share which would have a great cumulative affect. In turn this would allow further investment and development of other markets.
I also think that there is great potential for Cuba to develop software and other skill based products. There really is no room for negativity.
Daniel you are very wrong. Your example of the French cake company with Cuban sugar is false. They could simply sell their cakes elsewhere. The US limits the import of all sorts of products for all sorts of reasons. To assume their only market is the US is flattering but simply not true. The export of nickel to the US is a non-starter. Nickel is used in steel production and no longer a growth industry in the US. Tobacco growers in the US are fierce competition to the Castros. Cuban cigars are a specialty export. Cuban rum, likewise, would face price and quality competition from the Bacardi group to name one. Finally, check your stats. Cuba has been forced to import sugar in recent years.
Absolutely true. Any more than 5% of US components is blocked by the embargo. That’s why the US boarded the oil platform on its way from China. I’m not sure whether computers are excluded from the embargo as communications equipment or that Cuba has managed to circumvent by setting up bogus companies in third countries. But either way the point still stands that the embargo has done huge damage to Cuba’s trade with other nations.
Your second point shows the political nature of the embargo. Why should publicly owned enterprises not be able to to export. It shouldn’t be up to the US to dictate the ownership policy in Cuba.
Though Cuba is mainly a tourist destination there are plenty of things that they export now and could develop further if the embargo was dropped. eg sugar, nickel, rum, tobacco.
Dani: far from true. Have you ever seen a computer in Cuba that was not using an Intel or AMD processor?
BTW, are aware that Americans can now import products directly from Cuba if they were made entirely by Cuban private enterprise?
The sad fact is that Cuba has very little to export other than doctors. Look at the facts..
If Cuba wants to buy a Chinese tractor where the rubber for the tyres is made in the us they will be blocked. Same if a French company exports cakes to the us they will be blocked from buying Cuba sugar. My guess is that the us will own up to this at least since the end of the cold war and Cuba will agree to 50% compensation.
U.S companies that open subsidiaries in foreign countries take a certain risk. They are bound by the laws of that country. Companies that outsource U.S. Jobs for cheaper foreign labor deserve what they get because often times they exploit the foreign workers. As far as I ‘m concerned Cuba owes these companies NADA!
You are trying to mix perceived social wrongs with direct economic damages for seized property. That cannot be done.
Yes, it is fact that those US citizens and companies stand no chance of being paid 100% for their claims as Cuba simply is unable to pay. But they do want something even if they have to settle for pennies on the dollar.
Investment in Cuba will always be constrained by the Cuban economic model and government. I am confident the US can survive economically without Cuba. Much less so about the inverse.
Dani: The US is representing only claims held by US citizens and US companies for expropriated properties and not any claims by the US government. Cuba has no counter claims against those US citizens and companies.
The US has never stopped trade between a foreign country and Cuba as they have no legal authority to do so. The US has prevented using US dollars for payment which they do have legal authority as such payments would clear through the US Federal Reserve System. But such trade can happen so long as payment is in some other currency.
You are correct that Cuban claims would be settled by investments or bonds of some sort as Cuban has no money to pay those claims. Nor do the US citizens or companies even want the assets back now as Cuba has diminished them in value. Certainly the US Moa Bay Mining company does not want those mines back since Cuba has extracted and sold most of the nickel ore. Nor does Chiquita Banana (ex- United Fruit) want a 55 year old sugar mill back that was cannibalized for parts many years ago..
All real revolutions result in property loss for the losing side. The American Revolution was no exception:
“Numerous Loyalists [who had supported the British king against their fellow American revolutionaries] who chose exile abandoned substantial amounts of
property in the new nation. The British government provided some
compensation and tried to get the rest from the U.S. It was an issue
during the negotiation of the Jay Treaty
in 1794. Negotiations resulted on the U.S. government ‘advising’ the
states to provide restitution. More than two centuries later, some of
the descendants of Loyalists still assert claims to their ancestors’
property in the United States…” [https://en.wikipedia.org/wiki/Expulsion_of_the_Loyalists].
If they’re not doing it already, the Cubans could also claim for the property that was destroyed by the American-organized counter-revolutionaries during the early years of the Revolution (Havana’s main department was burned to the ground, with one death; although no one has proved it, there is very good reason to believe the CIA was behind the destruction of the ship from Belgium bringing arms, resulting in more than a hundred deaths. And what is a human life worth?
Whatever the legalities, the overwhelming balance of the moral case is with the Cubans, regardless of the kind of government they have now.
But here I expect political realities will prodominate over dry legal technicalities. If they’re smart, both sides will recognize each other’s case in principle, and negotiate some sort of compromise that will leave honor satisfied without incurring serious costs for either party.
It’s too much to hope for some sort of apology from the US side for its violent and murderous actions during the 60s, but it would cost nothing and go a lot further in advancing democracy in Cuba than some grudgingly-paid compensation.
and while we’re at it, how about adding reparations for 250 years of involuntary servitude by American slave masters; ditto reparations for all the Native American lands illegally seized, etc. The list is endless. We’re talking about property seized over 50 years ago. The Miami dinosaurs, the United Fruit Company, the Cuban-American Electric Company, etc.etc, have as little chance of receiving compensation as…the Cubans have of receiving $800,000,000,000+ Meanwhile, the rest of the world goes on, and the multi-nationals based elsewhere will continue to invest in Cuba. By the time the U.S. faces this new reality it will be too late.
You are falling into the trap of thinking it is a simple bilateral issue. The embargo has stopped trade between Cuba. And other countries and so they do have a legitimate claim. It will probably be sorted by investment and bonds of some kind.
The US citizens who have outstanding property claims against Cuba have a legal basis to their case. Cuba’s demand to have the US vacate the territory leased by the US for their naval base at Guantanamo Bay has a legal basis, although the treaty does stipulate that both sides are obligated to negotiate the termination of the treaty.
But Cuba’s claims of damages from the US embargo are ridiculous and without legal basis.
One group not represented in these talks are the Cuban nationals on the island or in exile who’s property was seized from them by the Cuban Revolution. They have a strong legal basis to their claims for restitution. Who will speak for them?
Putting some numbers to the discussion, US residents have $1.9 billion in court certified claims for properties expropriated in the years following the Revolution. With interest, this is now up to $8 billion. Cuba’s claims for damages caused by the embargo are $834 billion or 100X as much. But none of these are certified because there is no international law that one country must trade with another.
So Cuba’s opening demand is that the US write them a check for $826 billion and give them Guantanamo naval base back. I don’t see this being resolved any time soon even before considering the unwillingness of the US Congress to act.