January 16, 2019 / 10:21 PM / 3 months ago

U.S. considering allowing lawsuits over Cuba-confiscated properties

WASHINGTON/HAVANA (Reuters) - The Trump administration is considering allowing a law that has been suspended since its creation in 1996 to go into effect, allowing U.S. citizens to sue foreign companies and individuals over property confiscated from them by the Cuban government.

FILE PHOTO: U.S. and Cuban flags are seen on a balcony in Havana, Cuba March 19, 2016. REUTERS/Ivan Alvarado/File Photo

The so-called Title III rule forms part of the Helms-Burton Act, which codified all U.S. sanctions against Cuba into law 23 years ago. It has been waived by every president ever since, Democrats and Republicans alike, due to opposition from the international community and fears it could create chaos in the U.S. court system, analysts say.

However, the administration of President Donald Trump on Wednesday suspended it for just 45 days rather than the customary six months and said it would take a fresh look at allowing it to go into effect.

“This extension will permit us to conduct a careful review of the right to bring action under Title III in light of the national interests of the United States and efforts to expedite a transition to democracy in Cuba,” the State Department said in a statement.

“We encourage any person doing business in Cuba to reconsider whether they are trafficking in confiscated property and abetting this dictatorship.”

If Title III went into effect, it would likely dash foreign investment that Cuba has been seeking to drum up to support its beleaguered state-dominated economy.

In the first official Cuban response to the news, Foreign Minister Bruno Rodriguez wrote on Twitter that the decision to suspend Title III for just 45 days was “political blackmail” and a “brutal attack against international law.”

U.S.-Cuban relations have nosedived since Trump became president, partially rolling back the detente initiated by his predecessor Barack Obama and reverting to Cold War rhetoric, albeit maintaining re-established diplomatic relations.

Analysts say changes to the administration over the last year, including the appointment of Cuba hardliners to top posts, suggest the Trump government could further toughen its stance on Cuba.

John Bolton, who became Trump’s national security adviser last April, called Cuba and its top allies Venezuela and Nicaragua a “troika of tyranny” in November.

The right to sue over property confiscated by the Cuban government after the 1959 revolution is one of the long-standing claims of older generations of Cuban-Americans.

“I look forward to continuing to work with the administration to ensure that ... the victims receive the justice which is long overdue,” said Florida Representative Mario Diaz-Balart on Twitter.

However, analysts said such a move could backfire.

“It would cause an enormous legal mess, anger U.S. allies in Europe and Latin America, and probably result in a World Trade Organization case against the U.S.,” said William Leogrande, a professor of government at American University.

The State Department estimated in the past that allowing Title III to go into effect could result in 200,000 or more lawsuits being filed, he said.

Even U.S. businesses could get caught in the crossfire, said Michael Bustamante, an assistant professor of Latin American history at Florida International University.

U.S. airlines and cruise companies started operating in Cuba following Obama’s detente, paying fees to Havana’s airport and port, properties that may have been confiscated.

“Legitimate property claims need to be resolved, but in the context of a bilateral negotiation,” said Bustamante. “Those backing the enforcement of Title III seem most intent on sowing havoc rather than achieving a positive good.”

Reporting by Lesley Wroughton and Matt Spetalnick in Washington and Sarah Marsh and Marc Frank in Havana; Editing by Rosalba O'Brien

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