Anti-Cuba law bad news for Canada

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This article was published 22/02/2023 (1266 days ago), so information in it may no longer be current.

I certainly hope the Canadian government is paying close attention because the ghosts of Helms-Burton, the anti-Cuba law passed by the U.S. Congress in early 1996, are about to reappear with bad intentions.

The Helms-Burton law was designed to tighten the economic screws on the Fidel Castro government via the U.S. blockade of Cuba. It was hoped that Castro’s Cuba would eventually be destabilized by an internal uprising as additional pain and suffering were inflicted on the Cuban people. It hasn’t worked thus far.

It was also intended to “internationalize” the U.S. embargo by sending a message to Canada and other European governments to cease engaging with the Cubans economically and financially. Stated differently, Helms-Burton targeted Canadian and European businesses that had commercial operations in the Caribbean country — mostly in the form of joint ventures with the Cuban government, creating economic uncertainty and discouraging foreign direct investment in Cuba.

The heart of the Hems-Burton law was its Title III provisions, which talked loosely about the “wrongful confiscation or taking of property belonging to United States nationals by the Cuban government, and the subsequent exploitation of this property at the expense of the rightful owner…” Those so-called “rightful owners,” so the law stipulates, are the thousands of Cubans “who claimed asylum in the United States as refugees because of persecution and later became naturalized citizens of the United States.”

It goes on to discuss how joint ventures and other property assets in Cuba held by foreign investors are tantamount to stealing it from its “rightful owners.” The law asserts the following: “To deter trafficking in wrongfully confiscated property, United States nationals who were the victims of these confiscations should be endowed with a judicial remedy in the courts of the United States that would deny traffickers any profits from economically exploiting Castro’s wrongful seizures.”

The saving grace for Canada was that Helms-Burton permitted the U.S. president to sign a waiver (every six months) to suspend its application of Title III provisions. Every president after Bill Clinton dutifully did so. But Donald Trump, largely for domestic political purposes, changed all that in April 2019, when he announced he (and now Joe Biden) would no longer sign the presidential waiver.

Not surprisingly, one of the first targets of the lawsuits was in the tourism sector — specifically, Florida-based companies such as Carnival Cruise Line, Royal Caribbean and Norwegian Cruise Line. The legal argument revolves around the rightful owners of the port or docking facilities in Old Havana, which these cruise lines have used since 2015.

One lawsuit in particular claims Fidel Castro unlawfully expropriated the port piers in 1960, and thus wrongfully confiscated property belonging to U.S. nationals. In late December, a U.S. federal judge ruled these cruise lines must pay more than US$440 million in damages (covering the original lost-property claim and decades of interests costs) to an American company that claims it has the original concession (dating back to 1934) to some of the port facilities in Havana.

Evidently, the Foreign Claims Settlement Commission, which comes under the U.S. Justice Department, certified the claim of the Havana Docks Corp. in 1971. Therefore, the U.S. firm argues today that the Castro government never properly compensated the company after the docking piers were summarily nationalized.

The final dollar figure could even be much higher than that under the Helms-Burton Act. It outlines in the anti-Cuba law that the courts could actually triple the amount awarded in damage claims (including from non-U.S. persons). Court documents reportedly showed the cruise lines generated more than US$1 billion in revenues from offshore excursions and paid Cuban authorities US$138 million in fees and charges since 2015.

The cruise lines are going to appeal, but there is no guarantee they will win that higher court case. That means Canadian companies operating in Cuba today could be vulnerable to similar types of lawsuits. (Former Canadian-owned mining company Teck Resources Ltd. was subject to a Helms-Burton lawsuit case over its ownership of 21 mines in the town of El Cobre that was eventually dismissed in 2021.

My advice to the Prime Minister’s Office is to ask Biden to reinstate the waiver. Otherwise, these lawsuits could easily inflame Canada-U.S. relations and create a political hot potato for the Trudeau Liberals.

Peter McKenna is professor of political science at the University of Prince Edward Island in Charlottetown.