Property claims would get short shrift from Cuba

Miami: “I’ve been surprised by how quiet the claims people have been since last December,” says Gary Hufbauer of the Peterson Institute for International Economics, a think tank.

He is referring to the Cuban-American exiles and their descendants who continue to seek compensation for property that was expropriated by the Castro government after the revolution of 1959.

But the revolution actually left behind two groups of property claimants whose cases for restitution have implications for the ongoing diplomatic thaw.

The first set of claims are those of US nationals — businesses such as Coca-Cola and Colgate-Palmolive (and their successor companies) that had buildings and factories taken, and also individuals whose homes were confiscated. These cases were certified as valid in the 1960s and 1970s by the Foreign Claims Settlement Commission, run by the US Department of Justice.

The expropriated property was valued at about $1.8 billion (Dh6.6 billion) when the claims were certified but some estimates now put the value at $7 billion once interest is factored in.

Only the US government can negotiate with Cuba the settlement of these cases on behalf of the claimants. And in fact US law currently stipulates that “the satisfactory resolution of property claims by a Cuban government remains an essential condition for the full resumption of economic and diplomated relationships between the US and Cuba”.

In other words, any negotiations about ending the embargo will require resolution of this issue.

The second set of claims belongs to the Cuban exile community whose members fled to the US in the early years of the revolution.

Bilateral system

Because they were Cuban citizens when their property was taken by the state, international law does not extend to their right to recover the property, according to a report by Creighton University in Omaha, published in 2007 and undertaken with funding from a US government agency. These Cuban-Americans have not had their claims certified by the settlement commission.

“Consequently, a bilateral system to resolve property claims between this group and the government of Cuba would not be supported by international law,” says the Creighton report. “Jurisdiction over their claims would reside within the Cuban judiciary.”

Pedro Freyre, a lawyer in Miami who specialises in Cuban issues, adds: “I doubt that the US will hear these cases; And I have no illusions that a Cuban government will give them any kind of remedy.”

The thorny problem has no obvious solution — Cuba can hardly afford a $7 billion settlement — though many ideas have been suggested. One is for the Cuban government to offer tax breaks or other benefits for companies to stay invested in the island in lieu of cash compensation. Another is to set up a claims tribunal for Cuban exiles.

Regardless, once the lifting of the embargo becomes the subject of serious debate, the “claims people” maybe expected to end their silence.

Financial Times