Update: US sanctions on Cuba
Multiple lawsuits filed under Libertad Act
In our recent article in May 2019 on the recent major shifts in the US sanctions policy towards Cuba. Specifically, we treated the activation of the long dormant Title III of the Cuban Liberty and Democratic Solidarity Act of 1996 ("Libertad Act" or "Helms-Burton Act").
As we described in our article, the newly activated Title III of the Libertad Act authorizes US nationals who formerly owned commercial property expropriated by the Cuban government after the Cuban Revolution in 1959 to file suit against any – including foreign – person who is, or have been, "trafficking" in that property. In April, US Department of State estimated that activation of Title III could produce up to 200 000 claims in the tens of billions of dollars range. Since our last update in May, multiple major lawsuits have been filed in various US courts.
For example, already in May, Exxon Mobil Corp filed suit against the Cuban entities Cuba-Petroleo and Cimex Corporation to recover USD 280 000 000 in monetary damages. They proffer that Cuba-Petroleo and Cimex Corporation have profited from property that was confiscated from Exxon Mobil by the Cuban government after the Cuban Revolution, including an oil refinery and gasoline stations. Further, in July, several Cuban Americans sued French bank Societe Generale for USD 792 000 000, proffering that Societe Generale has "trafficked" in the plaintiffs' expropriated property by doing business with the central bank of Cuba, which expropriated smaller Cuban banks – including that of the plaintiffs' family – after the Cuban Revolution.
Other examples are the lawsuit against British-American cruise line Carnival Corporation, who allegedly has been using certain port terminals and warehouse facilities that were nationalized after the Revolution, and the lawsuit against travel booking platform Trivago who, allegedly, has been profiting from hotel property expropriated by the Cuban government.
As we touched upon in May, the EU views Title III as secondary sanctions on foreign companies operating in Cuba and has warned that they will make use of the EU Blocking Regulation to hamper the pursuit of Title III claims against EU persons. The EU may ban enforcement or recognition of foreign judgements based on Title III. However, as there is sparse precedent on the EU Blocking Regulation, it remains to be seen how the EU will handle Title III claims in practice.
60 year anniversary of Cuban Revolution sparks new sanctions designations
The Trump Administration's focus on Cuba has not been lightened since the activation of the Libertad Act mentioned above.
For example, on 26 July 2019, US Department of State added four sub-entities owned by the Cuban military to the Cuba Restricted List, meaning that no person subject to US jurisdiction may financially interact with them. Notably, the Department of State underlined that this was done on the day "sixty years after Castro promised to improve the lives of the Cuban people" and that "the revolution continues to fail its people by squandering Cuba’s economic potential through mismanagement and oppressing brave Cubans that continue the fight for freedom" (US Department of State press release). On the same day, the US Secretary of State announced visa restrictions on certain Cuban officials and other individuals engaging in "exploitative and coercive labor practises" under the Immigration and Nationality Act.
The Trump Administration does thus not seem to be easing up on its sanctions pressure against Cuba.