Will There Be A "Venezuela Libertad Act" And Would President Trump Sign It Into Law?

There is reporting by media that the government of Venezuela may be considering the expropriation of real estate from Venezuela nationals who have departed the country.   

If true, there would be unflattering comparisons to the expropriation of assets (individual and company) without compensation beginning in 1959 by the government of the Republic of Cuba. 

If H.E. Nicolas Maduro, President of Venezuela, were to sanction such a decision, and if the decision were implemented, there may be a legislative response by members of the United States Congress. 

Provisions of any Venezuela-focused legislation would be expectantly be less globally robust than its Republic of Cuba-focused predecessor., but perhaps equally problematic in terms of enforcement.   

The 42-page Cuban Liberty and Democratic Solidarity Act of 1996 (known as “Libertad Act”), whose purpose is “To seek international sanctions against the Castro government in Cuba, to plan for support of a transition government leading to a democratically elected government in Cuba, and for other purposes” includes four (4) Titles: Strengthening International Sanctions Against The Castro Government; Assistance To A Free And Independent Cuba; Protection Of Property Rights Of United States Nationals; and Exclusion Of Certain Aliens. 

The Libertad Act would be the foundation for a “Venezuela Liberty and Democratic Solidarity Act.”  

Legislation would find genesis in the United States Senate with likely sponsors/co-sponsors including The Honorable Marco Rubio (R- Florida), The Honorable Rick Scott (R- Florida), and The Honorable Robert Menendez (D- New Jersey).  In the United States House of Representatives, The Honorable Albio Sires (D- New Jersey 8th District) and The Honorable Mario Diaz-Balart (R- New Jersey 25th District) and The Honorable Chris Smith (R- New Jersey 4th District). 

The Honorable Donald Trump, President of the United States, would be expected to sign the legislation into law if the Maduro Administration continues to defy United States public and private operations designed to hasten his departure from Venezuela…. and an election looms on 3 November 2020. 

Background On Cuba Libertad Act 

In March 1996, the United States Congress passed and The Honorable William Clinton, President of the United States, signed into law the Libertad Act

In 1995 and 1996, the legislation had been stymied in the United States Congress, particularly in the United States Senate, and was not expected to become law.  However, after two aircraft operated by the Revolutionary Armed Forces of the Republic of Cuba (FAR) destroyed two general aviation aircraft killing four individuals, and with focus upon an uncertain reelection on 5 November 1996, President Clinton, who had opposed elements of the legislation, signed it.  

In 2019, the Trump Administration made operational Title III and further implemented Title IV of the Libertad Act.

Title III authorizes lawsuits in United States District Courts against companies and individuals who are using a certified claim or non-certified claim where the owner of the certified claim or non-certified claim has not received compensation from the Republic of Cuba or from a third-party who is using (“trafficking”) the asset.   

Title IV authorizes the United States Secretary of State to restrict entry into the United States by individuals who have connectivity to unresolved certified claims or non-certified claims.  Only one company, Toronto, Canada-based Sherritt International Corporation (2018 revenues approximately US$528 million), is known currently subject to this provision based upon a certified claim. 

Cuba Certified Claims Background 

There are 8,821 claims of which 5,913 awards valued at US$1,902,202,284.95 were certified by the USFCSC and have not been resolved for nearing sixty years (some assets were officially confiscated in the 1960’s, some in the 1970’s and some in the 1990’s.  The USFCSC permitted simple interest (not compound interest) of 6% per annum (approximately US$114,132,137.10); with the approximate current value of the 5,913 certified claims US$8,521,866,236.75.  

The first asset to be expropriated by the Republic of Cuba was an oil refinery in 1960 owned by White Plains, New York-based Texaco, Inc., now a subsidiary of San Ramon, California-based Chevron Corporation (USFCSC: CU-1331/CU-1332/CU-1333 valued at US$56,196,422.73).  

The largest certified claim (Cuban Electric Company) valued at US$267,568,413.62 is controlled by Boca Raton, Florida-based Office Depot, Inc.  The second-largest certified claim (International Telephone and Telegraph Co, ITT as Trustee, Starwood Hotels & Resorts Worldwide, Inc.) valued at US$181,808,794.14 is controlled by Bethesda, Maryland-based Marriott International; the certified claim also includes land adjacent to the Jose Marti International Airport in Havana, Republic of Cuba.  The smallest certified claim is by Sara W. Fishman in the amount of US$1.00 with reference to the Cuban-Venezuelan Oil Voting Trust. 

The two (2) largest certified claims total US$449,377,207.76, representing 24% of the total value of the certified claims.  Thirty (30) certified claimants hold 56% of the total value of the certified claims.  This concentration of value creates an efficient pathway towards a settlement.   

Title III of the Cuban Liberty and Democratic Solidarity (Libertad) Act of 1996 requires that an asset had a value of US$50,000.00 when expropriated by the Republic of Cuba without compensation to the original owner.  Of the 5,913 certified claims, 913, or 15%, are valued at US$50,000.00 or more.  Adjusted for inflation, US$50,000.00 (3.70% per annum) in 1960 has a 2019 value of approximately US$427,267.01.  The USFCSC authorized 6% per annum, meaning the 2019 value of US$50,000.00 is approximately US$1,649,384.54.  

The ITT Corporation Agreement 

In July 1997, then-New York City, New York-based ITT Corporation and then-Amsterdam, the Netherlands-based STET International Netherlands N.V. signed an agreement whereby STET International Netherlands N.V. would pay approximately US$25 million to ITT Corporation for a ten-year right (after which the agreement could be renewed and was renewed) to use assets (telephone facilities and telephone equipment) within the Republic of Cuba upon which ITT Corporation has a certified claim valued at approximately US$130.8 million.  ETECSA, which is now wholly-owned by the government of the Republic of Cuba, was a joint venture controlled by the Ministry of Information and Communications of the Republic of Cuba within which Amsterdam, the Netherlands-based Telecom Italia International N.V. (formerly Stet International Netherlands N.V.), a subsidiary of Rome, Italy-based Telecom Italia S.p.A. was a shareholder.  Telecom Italia S.p.A., was at one time a subsidiary of Ivrea, Italy-based Olivetti S.p.A.  The second-largest certified claim (International Telephone and Telegraph Co, ITT as Trustee, Starwood Hotels & Resorts Worldwide, Inc.) valued at US$181,808,794.14 is controlled by Bethesda, Maryland-based Marriott International.  

What Is “Trafficking” According To Libertad Act? 

(13) Traffics.--(A) As used in title III, and except as provided in subparagraph (B), a person "traffics" in confiscated property if that person knowingly and intentionally-- (i) sells, transfers, distributes, dispenses, brokers, manages, or otherwise disposes of confiscated property, or purchases, leases, receives, possesses, obtains control of, manages, uses, or otherwise acquires or holds an interest in confiscated property, (ii) engages in a commercial activity using or otherwise benefiting from confiscated property, or (iii) causes, directs, participates in, or profits from, trafficking (as described in clause (i) or (ii)) by another person, or otherwise engages in trafficking (as described in clause (i) or (ii)) through another person, without the authorization of any United States national who holds a claim to the property. 

(B) The term "traffics" does not include-- (i) the delivery of international telecommunication signals to Cuba; (ii) the trading or holding of securities publicly traded or held, unless the trading is with or by a person determined by the Secretary of the Treasury to be a specially designated national; (iii) transactions and uses of property incident to lawful travel to Cuba, to the extent that such transactions and uses of property are necessary to the conduct of such travel; or (iv) transactions and uses of property by a person who is both a citizen of Cuba and a resident of Cuba, and who is not an official of the Cuban Government or the ruling political party in Cuba. 

“DETERMINATION OF OWNERSHIP OF CLAIMS REFERRED BY DISTRICT COURTS OF THE UNITED STATES 

"Sec. 514. Notwithstanding any other provision of this Act and only for purposes of section 302 of the Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of 1996, a United State district court, for fact-finding purposes, may refer to the Commission, and the Commission may determine, questions of the amount and ownership of a claim by a United States national (as defined in section 4 of the Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of 1996), resulting from the confiscation of property by the Government of Cuba described in section 503(a), whether or not the United States national qualified as a national of the United States (as defined in section 502(1)) at the time of the action by the Government of Cuba.” 

TITLE III--SEC. 302. LIABILITY FOR TRAFFICKING IN CONFISCATED PROPERTY CLAIMED BY UNITED STATES NATIONALS. 

(a) Civil Remedy.-- (1) Liability for trafficking.--(A) Except as otherwise provided in this section, any person that, after the end of the 3-month period beginning on the effective date of this title, traffics in property which was confiscated by the Cuban Government on or after January 1, 1959, shall be liable to any United States national who owns the claim to such property for money damages in an amount equal to the sum of-- (i) the amount which is the greater of-- (I) the amount, if any, certified to the claimant by the Foreign Claims Settlement Commission under the International Claims Settlement Act of 1949, plus interest; (II) the amount determined under section 303(a)(2), plus interest; or (III) the fair market value of that property, calculated as being either the current value of the property, or the value of the property when confiscated plus interest, whichever is greater; and (ii) court costs and reasonable attorneys' fees.  (B) Interest under subparagraph (A)(i) shall be at the rate set forth in section 1961 of title 28, United States Code, computed by the court from the date of confiscation of the property involved to the date on which the action is brought under this subsection.   

(2) Presumption in favor of the certified claims.--There shall be a presumption that the amount for which a person is liable under clause (i) of paragraph (1)(A) is the amount that is certified as described in subclause (I) of that clause. The presumption shall be rebuttable by clear and convincing evidence that the amount described in subclause (II) or (III) of that clause is the appropriate amount of liability under that clause. 

(3) Increased liability.-- (A) Any person that traffics in confiscated property for which liability is incurred under paragraph (1) shall, if a United States national owns a claim with respect to that property which was certified by the Foreign Claims Settlement Commission under title V of the International Claims Settlement Act of 1949, be liable for damages computed in accordance with subparagraph (C).   

(B) If the claimant in an action under this subsection (other than a United States national to whom subparagraph (A) applies) provides, after the end of the 3-month period described in paragraph (1) notice to-- (i) a person against whom the action is to be initiated, or (ii) a person who is to be joined as a defendant in the action, at least 30 days before initiating the action or joining such person as a defendant, as the case may be, and that person, after the end of the 30- day period beginning on the date the notice is provided, traffics in the confiscated property that is the subject of the action, then that person shall be liable to that claimant for damages computed in accordance with subparagraph (C).   

(C) Damages for which a person is liable under subparagraph (A) or subparagraph (B) are money damages in an amount equal to the sum of-- (i) the amount determined under paragraph (1)(A)(ii), and (ii) 3 times the amount determined applicable under paragraph (1)(A)(i).  (D) Notice to a person under subparagraph (B)-- (i) shall be in writing; (ii) shall be posted by certified mail or personally delivered to the person; and (iii) shall contain-- (I) a statement of intention to commence the action under this section or to join the person as a defendant (as the case may be), together with the reasons therefor; (II) a demand that the unlawful trafficking in the claimant's property cease immediately; and (III) a copy of the summary statement published under paragraph (8).  (4) Applicability.--(A) Except as otherwise provided in this paragraph, actions may be brought under paragraph (1) with respect to property confiscated before, on, or after the date of the enactment of this Act. 

(B) In the case of property confiscated before the date of the enactment of this Act, a United States national may not bring an action under this section on a claim to the confiscated property unless such national acquires ownership of the claim before such date of enactment.  (C) In the case of property confiscated on or after the date of the enactment of this Act, a United States national who, after the property is confiscated, acquires ownership of a claim to the property by assignment for value, may not bring an action on the claim under this section.   

(5) Treatment of certain actions.--(A) In the case of a United States national who was eligible to file a claim with the Foreign Claims Settlement Commission under title V of the International Claims Settlement Act of 1949 but did not so file the claim, that United States national may not bring an action on that claim under this section.  (B) In the case of any action brought under this section by a United States national whose underlying claim in the action was timely filed with the Foreign Claims Settlement Commission under title V of the International Claims Settlement Act of 1949 but was denied by the Commission, the court shall accept the findings of the Commission on the claim as conclusive in the action under this section. 

(C) A United States national, other than a United States national bringing an action under this section on a claim certified under title V of the International Claims Settlement Act of 1949, may not bring an action on a claim under this section before the end of the 2-year period beginning on the date of the enactment of this Act. 

(D) An interest in property for which a United States national has a claim certified under title V of the International Claims Settlement Act of 1949 may not be the subject of a claim in an action under this section by any other person. Any person bringing an action under this section whose claim has not been so certified shall have the burden of establishing for the court that the interest property that is the subject of the claim is not the subject of a claim so certified.  (6) Inapplicability of act of state doctrine. No court of the United States shall decline, based upon the act of state doctrine, to make a determination on the merits in an action brought under paragraph (1). 

(7) Licenses not required.  (A) Notwithstanding any other provision of law, an action under this section may be brought and may be settled, and a judgment rendered in such action may be enforced, without obtaining any license or other permission from any agency of the United States, except that this paragraph shall not apply to the execution of a judgment against, or the settlement of actions involving, property blocked under the authorities of section 5(b) of the Trading with the Enemy Act that were being exercised on July 1, 1977, as a result of a national emergency declared by the President before such date, and are being exercised on the date of the enactment of this Act.

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Required Departure of Cuban Diplomats from Cuba’s Permanent Mission to the United Nations

For Immediate Release 

STATEMENT BY MORGAN ORTAGUS, SPOKESPERSON

September 19, 2019 

Required Departure of Cuban Diplomats from Cuba’s Permanent Mission to the United Nations

The Department of State today notified the Cuban Ministry of Foreign Affairs that the United States requires the imminent departure of two members of Cuba’s Permanent Mission to the United Nations for abusing their privileges of residence. This is due to their attempts to conduct influence operations against the United States. 

In addition to the required departures, travel within the United States by all members of Cuba’s Permanent Mission to the United Nations will now essentially be restricted to the island of Manhattan. 

We take any and all attempts against the National Security of the United States seriously, and will continue to investigate any additional personnel who may be manipulating their privileges of residence.

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Cruise Lines (sued); Hotels (sued); Internet Travel Sites (sued); Cuba Companies (sued). Next Up- 51 Airlines?

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United Nations General Assembly May Have A New Subject To Debate

Fifty-One New Libertad Act Defendants? Spain Hit Twice?

One Man’s Lawsuit Could Be More Disruptive Than Any Other

Importance Of One Question: What Is The Meaning Of “Lawful”

Marriott International Could Have A Role

Could 51 Airline Lawsuits Trigger Bilateral Stand-Down & EU-US Negotiations?

This week, the phrase Land, Sea & Air may represent collectively travel-related companies sued in United States District Courts using provisions of Title III of the Cuban Liberty and Democratic Solidarity Act of 1996 (known as “Libertad Act”).   

Thus far, four cruise lines are defendants.  Six travel-related Internet sites are defendants.  One hotel company is a defendant.  Five Republic of Cuba government-operated companies are defendants. 

Soon, five (5) United States-based airlines and forty-six (46) non-United States-based airlines may be join the list.  The majority of the non-United States-based airlines have operational exposure within the United States. 

Once sued, will airlines reduce or cease their operations in the Republic of Cuba?  Change airports? Reduce or cease their operations in the United States?  Do nothing?  Will cost-benefit analysis determine the United States market and other markets are more important than the Republic of Cuba market?  A lawsuit against fifty-one airlines could materially impact the economy of the Republic of Cuba. 

At the apex, center, fulcrum, or ignition is Mr. Jose Ramon Lopez, a citizen of Spain and who became a United States citizen through naturalization after the implementation of the Libertad Act 1996.  Mr. Lopez’s father, Jose Lopez Vilaboy, died in 1989 in Florida; a probate court confirmed he was an heir to his father’s estate. 

Mr. Lopez believes he has standing to file a lawsuit(s) for some of the assets (bank, hotels, factories, newspaper, airlines and an airport) of his father that were expropriated in 1959 without compensation by the government of the Republic of Cuba.  Any claim filed by Mr. Lopez would not be considered a certified claim.  NOTE: There are attorneys who believe language in the Libertad Act requires a plaintiff to have been a United States national prior to implementation of the Libertad Act in order to bring a lawsuit using the Libertad Act; a judge likely will decide. 

A court filing is expected in the United States District Court for the Southern District of Florida.  Unknown if the court filing will be a new lawsuit or an addendum to the defendants in an existing lawsuit.  Unknown if Mr. Lopez will be accompanied by other plaintiffs who have claims to land upon which HAV or other airports are located in the Republic of Cuba. 

On 11 September 2019, Mr. Lopez was included (for an hotel claim) in a list of thirty-nine (39) individuals who are seeking class action status in a lawsuit (Case 1:19-cv-22529-FAM) previously filed against Melia Hotels International, SA.; Melia Hotels USA, LLC; Expedia, Inc.; Trivago GmbH, Hotels.com L.P.; Hotels.com GP, Orbitz LLC, Travelocity.com, LP; Booking.com B.V.; Booking Holdings Inc.; Grupo Hotelero Gran Caribe, Corporacion de Comercio Y Turismo Internacional Cubanacan S.A.; Grupo De Turismo Gaviota S.A.; Rail Doe 1-5; and Mariela Roe 1-5.  This lawsuit was filed by Coral Gables, Florida-based Rivero Mestre LLP. 

The asset of new primary focus is in Rancho Boyeros, created in 1976 as one of the fifteen municipalities in the city of Havana, Republic of Cuba.  Specifically, the target is what was known as Rancho-Boyeros Airport and today is known as Jose Marti International Airport (HAV).  Approximately fifty-one (51) airlines service HAV, including five (5) United States-based airlines.

The following are airlines been reported as providing services to the Jose Marti International Airport (HAV):  Aeroflot; AeroCaribbean; Aerogaviota; Aeropostal; Air Canada Rouge; Air Caraïbes; Air China; Air Europa; Air France; Air Transat; Alitalia; American Airlines; Aruba Airlines; Avianca; Bahamasair; Blue Panorama Airlines; Caribbean Airlines; Cayman Airways; Condor; Conviasa; Copa Airlines; Corsair International; Cubana de Aviación; Delta Air Lines; EasySky; Edelweiss Air; Eurowings; Evelop Airlines; Finnair; Iberia; InterCaribbean Airways; Interjet; Jet Blue Airways; KLM; LATAM; Lufthansa; Neos; Royal Flight; Southwest Airlines; Sunrise Airways; Sunwing Airlines; Swiss Air; TAAG Angola Airlines; TACA; TAME Quito; Turkish Airlines; United Airlines; Virgin Atlantic; Viva Aerobus; Wingo.

Likely given Mr. Lopez’s connectivity to Spain, both Madrid, Spain-based Lineas Aereas de Espana, S.A. (Iberia; a member of the 13-airline oneworld Alliance) and Llucmajor, Spain-based Air Europa Lineas Aereas S.A.U. (a member of the 19-airline Sky Team Alliance) will be included as defendants in any lawsuit. 

The inclusion of Iberia in a lawsuit would impact (management, shareholders) London, United Kingdom-based International Consolidated Airlines Group, S.A. (IAG; 2018 revenues exceeded US$30.5 billion) which controls Iberia and Hounslow, United Kingdom-based British Airways (member of oneworld alliance) and Dublin, Ireland-based Air Lingus (member of oneworld Alliance) among other airlines. 

Air Europa, the third-largest airline in Spain, is a subsidiary of Globalia Corporacion Empresarial, S.A. (2018 revenues approximately US$4 billion) whose hotel subsidiary, Be Live Hotels manages seven (1,502 rooms) properties in the Republic of Cuba which account for 31.6% of the company’s global room inventory.  Among its forty-four aircraft fleet, Air Europa operates twelve (12), with orders for fourteen (14), Boeing 787-8/9 Dreamliners and has orders for twenty-two (22) Boeing 737- MAX 8 aircraft.   

Unknown if legal counsel for Mr. Lopez will seek administrative action using Title IV of the Libertad Act which authorizes the United States Secretary of State to restrict entry into the United States by individuals who have connectivity to unresolved certified claims or non-certified claims.   

Is a Lawsuit Lawful? 

Section 4 of the Libertad Act provides definitions.  Item 13 (iii) notes that the term “traffics” does not include: “transactions and uses of property incident to lawful travel to Cuba, to the extent that such transactions and uses of property are necessary to the conduct of such travel.”   

Courts will decide whether cruise ships docking in Havana, hotels accepting guests, Internet-based platforms providing reservations, and airlines using Jose Marti International Airport were/are engaging in lawful activities.   

United States-based airlines and cruise lines and travel-related Internet companies argue they were/are and operate(d) under general licenses or specific licenses issued by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury and/or authorization from the Bureau of Industry and Security (BIS) of the United States Department of Commerce, and/or authorization from the United States Department of Transportation (DOT) and/or legally-protected inspiration from The White House. 

In their defense against Title III lawsuits, defendants include standing issues (does the plaintiff have the right to sue), jurisdictional issues and perhaps constitutional issues.   

Marriott Controls Land Adjacent To Havana Airport  

On 5 August 2016, Paris, France-based Groupe ADP (formerly Aeroports de Paris), through wholly-owned subsidiary ADP Management, in association with Istanbul, Turkey-based TAV Airports (ADP has a 46% shareholding in TAV Airports), and in consortium with Paris, France-based Bouygues Batiment International (a subsidiary of Paris, France-based Bouygues Construction, reported that it was negotiating a concession contract with the government of the Republic of Cuba.  The concession contract would include renovation, extension and operation of existing international terminals and the development of the San Antonio de los Banos aerodrome, located to the west of Havana.  A goal of the agreement, now more than three years ago, was to “provide Havana with a handling capacity of over 10 million passengers per year from 2020, while current traffic is close to 5 million passengers and the announcements of the opening up of air traffic, notably to the USA, hold out the prospect of rapid growth in needs at the airport.”  Groupe ADP has not reported the concession contract is operational. 

Second-largest certified claimant, Bethesda, Maryland-based Marriott International, Inc. (2018 revenues approximately US$20 billion) through its subsidiary, Stamford, Connecticut-based Starwood Hotels and Resorts Worldwide LLC, has a certified claim which includes land adjacent to the Jose Marti International Airport.  Use of the land is important to the expansion of runways. 

Marriott International/Starwood Hotels and Resorts Worldwide has a series of two-year licenses from the OFAC to manage two (2) properties located in the Republic of Cuba.  Both properties (one currently through Starwood Hotels and Resorts Worldwide LLC) are in Havana, the 186-room Four Points by Sheraton Havana (which employs approximately 125 Republic of Cuba citizens) and 83-room Hotel Inglaterra (delayed opening without public explanation from December 2016 to December 2017 to December 2019 to “sometime” in 2020).  Both properties are owned by entities controlled by the Revolutionary Armed Forces of the Republic of Cuba (FAR).   

Libertad Act 

The Trump Administration has made operational Title III and further implemented Title IV of the Cuban Liberty and Democratic Solidarity Act of 1996 (known as “Libertad Act”).   

Title III authorizes lawsuits in United States District Courts against companies and individuals who are using a certified claim or non-certified claim where the owner of the certified claim or non-certified claim has not received compensation from the Republic of Cuba or from a third-party who is using (“trafficking”) the asset.   

Title IV authorizes the United States Secretary of State to restrict entry into the United States by individuals who have connectivity to unresolved certified claims or non-certified claims.  Only one company, Toronto, Canada-based Sherritt International Corporation (2018 revenues approximately US$528 million), is known currently subject to this provision based upon a certified claim. 

Suspension History 

Title III has been suspended every six months since the Libertad Act was enacted in 1996- by President William J. Clinton, President George W. Bush, President Barack H. Obama and President Donald J. Trump.  

On 16 January 2019, The Honorable Mike Pompeo, United States Secretary of State, reported a suspension for forty-five (45) days. 

On 4 March 2019, Secretary Pompeo reported a suspension for thirty (30) days.

On 3 April 2019, Secretary Pompeo reported a further suspension for fourteen (14) days through 1 May 2019. 

On 17 April 2019, the Trump Administration reported that it would no longer suspend Title III. 

On 2 May 2019 certified claimants and non-certified claimants were permitted to file lawsuits in United States courts. 

Certified Claims Background 

There are 8,821 claims of which 5,913 awards valued at US$1,902,202,284.95 were certified by the USFCSC and have not been resolved for nearing sixty years (some assets were officially confiscated in the 1960’s, some in the 1970’s and some in the 1990’s.  The USFCSC permitted simple interest (not compound interest) of 6% per annum (approximately US$114,132,137.10); with the approximate current value of the 5,913 certified claims US$8,521,866,236.75.  

The first asset to be expropriated by the Republic of Cuba was an oil refinery in 1960 owned by White Plains, New York-based Texaco, Inc., now a subsidiary of San Ramon, California-based Chevron Corporation (USFCSC: CU-1331/CU-1332/CU-1333 valued at US$56,196,422.73).  

The largest certified claim (Cuban Electric Company) valued at US$267,568,413.62 is controlled by Boca Raton, Florida-based Office Depot, Inc.  The second-largest certified claim (International Telephone and Telegraph Co, ITT as Trustee, Starwood Hotels & Resorts Worldwide, Inc.) valued at US$181,808,794.14 is controlled by Bethesda, Maryland-based Marriott International; the certified claim also includes land adjacent to the Jose Marti International Airport in Havana, Republic of Cuba.  The smallest certified claim is by Sara W. Fishman in the amount of US$1.00 with reference to the Cuban-Venezuelan Oil Voting Trust. 

The two (2) largest certified claims total US$449,377,207.76, representing 24% of the total value of the certified claims.  Thirty (30) certified claimants hold 56% of the total value of the certified claims.  This concentration of value creates an efficient pathway towards a settlement.   

Title III of the Cuban Liberty and Democratic Solidarity (Libertad) Act of 1996 requires that an asset had a value of US$50,000.00 when expropriated by the Republic of Cuba without compensation to the original owner.  Of the 5,913 certified claims, 913, or 15%, are valued at US$50,000.00 or more.  Adjusted for inflation, US$50,000.00 (3.70% per annum) in 1960 has a 2019 value of approximately US$427,267.01.  The USFCSC authorized 6% per annum, meaning the 2019 value of US$50,000.00 is approximately US$1,649,384.54.  

The ITT Corporation Agreement 

In July 1997, then-New York City, New York-based ITT Corporation and then-Amsterdam, the Netherlands-based STET International Netherlands N.V. signed an agreement whereby STET International Netherlands N.V. would pay approximately US$25 million to ITT Corporation for a ten-year right (after which the agreement could be renewed and was renewed) to use assets (telephone facilities and telephone equipment) within the Republic of Cuba upon which ITT Corporation has a certified claim valued at approximately US$130.8 million.  ETECSA, which is now wholly-owned by the government of the Republic of Cuba, was a joint venture controlled by the Ministry of Information and Communications of the Republic of Cuba within which Amsterdam, the Netherlands-based Telecom Italia International N.V. (formerly Stet International Netherlands N.V.), a subsidiary of Rome, Italy-based Telecom Italia S.p.A. was a shareholder.  Telecom Italia S.p.A., was at one time a subsidiary of Ivrea, Italy-based Olivetti S.p.A.  The second-largest certified claim (International Telephone and Telegraph Co, ITT as Trustee, Starwood Hotels & Resorts Worldwide, Inc.) valued at US$181,808,794.14 is controlled by Bethesda, Maryland-based Marriott International.  

What Is “Trafficking” According To Libertad Act? 

(13) Traffics.--(A) As used in title III, and except as provided in subparagraph (B), a person "traffics" in confiscated property if that person knowingly and intentionally-- (i) sells, transfers, distributes, dispenses, brokers, manages, or otherwise disposes of confiscated property, or purchases, leases, receives, possesses, obtains control of, manages, uses, or otherwise acquires or holds an interest in confiscated property, (ii) engages in a commercial activity using or otherwise benefiting from confiscated property, or (iii) causes, directs, participates in, or profits from, trafficking (as described in clause (i) or (ii)) by another person, or otherwise engages in trafficking (as described in clause (i) or (ii)) through another person, without the authorization of any United States national who holds a claim to the property. 

(B) The term "traffics" does not include-- (i) the delivery of international telecommunication signals to Cuba; (ii) the trading or holding of securities publicly traded or held, unless the trading is with or by a person determined by the Secretary of the Treasury to be a specially designated national; (iii) transactions and uses of property incident to lawful travel to Cuba, to the extent that such transactions and uses of property are necessary to the conduct of such travel; or (iv) transactions and uses of property by a person who is both a citizen of Cuba and a resident of Cuba, and who is not an official of the Cuban Government or the ruling political party in Cuba. 

“DETERMINATION OF OWNERSHIP OF CLAIMS REFERRED BY DISTRICT COURTS OF THE UNITED STATES 

"Sec. 514. Notwithstanding any other provision of this Act and only for purposes of section 302 of the Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of 1996, a United State district court, for fact-finding purposes, may refer to the Commission, and the Commission may determine, questions of the amount and ownership of a claim by a United States national (as defined in section 4 of the Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of 1996), resulting from the confiscation of property by the Government of Cuba described in section 503(a), whether or not the United States national qualified as a national of the United States (as defined in section 502(1)) at the time of the action by the Government of Cuba.” 

TITLE III--SEC. 302. LIABILITY FOR TRAFFICKING IN CONFISCATED PROPERTY CLAIMED BY UNITED STATES NATIONALS. 

(a) Civil Remedy.-- (1) Liability for trafficking.--(A) Except as otherwise provided in this section, any person that, after the end of the 3-month period beginning on the effective date of this title, traffics in property which was confiscated by the Cuban Government on or after January 1, 1959, shall be liable to any United States national who owns the claim to such property for money damages in an amount equal to the sum of-- (i) the amount which is the greater of-- (I) the amount, if any, certified to the claimant by the Foreign Claims Settlement Commission under the International Claims Settlement Act of 1949, plus interest; (II) the amount determined under section 303(a)(2), plus interest; or (III) the fair market value of that property, calculated as being either the current value of the property, or the value of the property when confiscated plus interest, whichever is greater; and (ii) court costs and reasonable attorneys' fees.  (B) Interest under subparagraph (A)(i) shall be at the rate set forth in section 1961 of title 28, United States Code, computed by the court from the date of confiscation of the property involved to the date on which the action is brought under this subsection.   

(2) Presumption in favor of the certified claims.--There shall be a presumption that the amount for which a person is liable under clause (i) of paragraph (1)(A) is the amount that is certified as described in subclause (I) of that clause. The presumption shall be rebuttable by clear and convincing evidence that the amount described in subclause (II) or (III) of that clause is the appropriate amount of liability under that clause. 

(3) Increased liability.-- (A) Any person that traffics in confiscated property for which liability is incurred under paragraph (1) shall, if a United States national owns a claim with respect to that property which was certified by the Foreign Claims Settlement Commission under title V of the International Claims Settlement Act of 1949, be liable for damages computed in accordance with subparagraph (C).   

(B) If the claimant in an action under this subsection (other than a United States national to whom subparagraph (A) applies) provides, after the end of the 3-month period described in paragraph (1) notice to-- (i) a person against whom the action is to be initiated, or (ii) a person who is to be joined as a defendant in the action, at least 30 days before initiating the action or joining such person as a defendant, as the case may be, and that person, after the end of the 30- day period beginning on the date the notice is provided, traffics in the confiscated property that is the subject of the action, then that person shall be liable to that claimant for damages computed in accordance with subparagraph (C).   

(C) Damages for which a person is liable under subparagraph (A) or subparagraph (B) are money damages in an amount equal to the sum of-- (i) the amount determined under paragraph (1)(A)(ii), and (ii) 3 times the amount determined applicable under paragraph (1)(A)(i).  (D) Notice to a person under subparagraph (B)-- (i) shall be in writing; (ii) shall be posted by certified mail or personally delivered to the person; and (iii) shall contain-- (I) a statement of intention to commence the action under this section or to join the person as a defendant (as the case may be), together with the reasons therefor; (II) a demand that the unlawful trafficking in the claimant's property cease immediately; and (III) a copy of the summary statement published under paragraph (8).  (4) Applicability.--(A) Except as otherwise provided in this paragraph, actions may be brought under paragraph (1) with respect to property confiscated before, on, or after the date of the enactment of this Act. 

(B) In the case of property confiscated before the date of the enactment of this Act, a United States national may not bring an action under this section on a claim to the confiscated property unless such national acquires ownership of the claim before such date of enactment.  (C) In the case of property confiscated on or after the date of the enactment of this Act, a United States national who, after the property is confiscated, acquires ownership of a claim to the property by assignment for value, may not bring an action on the claim under this section.   

(5) Treatment of certain actions.--(A) In the case of a United States national who was eligible to file a claim with the Foreign Claims Settlement Commission under title V of the International Claims Settlement Act of 1949 but did not so file the claim, that United States national may not bring an action on that claim under this section.  (B) In the case of any action brought under this section by a United States national whose underlying claim in the action was timely filed with the Foreign Claims Settlement Commission under title V of the International Claims Settlement Act of 1949 but was denied by the Commission, the court shall accept the findings of the Commission on the claim as conclusive in the action under this section. 

(C) A United States national, other than a United States national bringing an action under this section on a claim certified under title V of the International Claims Settlement Act of 1949, may not bring an action on a claim under this section before the end of the 2-year period beginning on the date of the enactment of this Act. 

(D) An interest in property for which a United States national has a claim certified under title V of the International Claims Settlement Act of 1949 may not be the subject of a claim in an action under this section by any other person. Any person bringing an action under this section whose claim has not been so certified shall have the burden of establishing for the court that the interest property that is the subject of the claim is not the subject of a claim so certified.  (6) Inapplicability of act of state doctrine. No court of the United States shall decline, based upon the act of state doctrine, to make a determination on the merits in an action brought under paragraph (1). 

(7) Licenses not required.  (A) Notwithstanding any other provision of law, an action under this section may be brought and may be settled, and a judgment rendered in such action may be enforced, without obtaining any license or other permission from any agency of the United States, except that this paragraph shall not apply to the execution of a judgment against, or the settlement of actions involving, property blocked under the authorities of section 5(b) of the Trading with the Enemy Act that were being exercised on July 1, 1977, as a result of a national emergency declared by the President before such date, and are being exercised on the date of the enactment of this Act.

LINK To Complete Analysis In PDF Format

LINK To 2016 Article About Mr. Lopez Published By The New York Times: https://nyti.ms/1KU4Edn 

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No Surprise: President Trump Continues Cuba Authorities Under Trading With The Enemy Act

The White House
Washington DC
September 13, 2019

MEMORANDUM FOR
THE SECRETARY OF STATE
THE SECRETARY OF THE TREASURY

SUBJECT: Continuation of the Exercise of Certain Authorities under the Trading With the Enemy Act


Under section 101(b) of Public Law 95-223 (91 Stat. 1625; 50 U.S.C. 4305 note), and a previous determination on September 10, 2018 (83 FR 46347, September 12, 2018), the exercise of certain authorities under the Trading With the Enemy Act is scheduled to expire on September 14, 2019.

I hereby determine that the continuation of the exercise of those authorities with respect to Cuba for 1 year is in the national interest of the United States.

Therefore, consistent with the authority vested in me by section 101(b) of Public Law 95-223, I continue for 1 year, until September 14, 2020, the exercise of those authorities with respect to Cuba, as implemented by the Cuban Assets Control Regulations, 31 C.F.R. Part 515.

The Secretary of the Treasury is authorized and directed to publish this determination in the Federal Register.

DONALD J. TRUMP

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16 Of World's Largest 325 Hotel Companies Have A Presence In Cuba- Including Number 1

According to Chicago, Illinois-based Hotels Magazine, sixteen (16) of the world’s three-hundred-twenty-five (325) largest hotel companies have a presence in the Republic of Cuba, either through one or more of their property brands:

1- Marriott International
6- Accor Hotels
20- Melia Hotels International
23- Minor International
31- Barcelo Hotels Group
38- RIU Hotels & Resorts
44- Iberostar Hotels & Resorts
58- Grupo Turismo Gaviota
70- Kempinski Hotels
93- H10 Hotels
96- Blue Diamond Hotels & Resorts
100- Grupo Cubanacan
112- Hotels Catalonia
119- Pestana Hotels & Resorts
161- Be Live Hotels
214- Hotels Islazul

LINK To Lists Published By Hotels Magazine

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Prior To Departing On Marine One, President Trump Comments About Cuba & Venezuela

The White House
Washington DC
12 September 2019

REMARKS BY PRESIDENT TRUMP BEFORE MARINE ONE DEPARTURE


South Lawn
5:47 P.M. EDT

Q Mr. President, how was John Bolton holding you back on Venezuela, sir?

THE PRESIDENT: Say it.

Q How was John Bolton holding you back on Venezuela? Do you want more in military --

THE PRESIDENT: Well, we're dealing on Venezuela right now. It's going to be a very interesting period of time. We're also trying to help a lot of Venezuelans who are dying. They have no food. They have no water. And we are trying to help. A lot them have escaped, so to speak, into Colombia and different places. We're trying to help those people that have been able to get out.

But we are dealing with a lot of things having to do with Venezuela. My attitude on Venezuela is a very tough one. And, frankly, my attitude on Cuba is a very tough one. And, in a way, they go hand in hand, because Cuba has always made it possible for Venezuela to do what they’re doing. And, frankly, that’s ending now. And, likewise, Venezuela, through the oil, took care of Cuba. A lot of that is ending right now.

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President Trump Tweets To Senator Rubio About Cuba- Bolton Was Holding Trump Back From Stronger Actions

Marco Rubio
‏Verified account @marcorubio
5:39 AM - 12 Sep 2019

Just spoke to @realDonaldTrump on #Venezuela
It’s true he disagreed with some of the views of previous advisor
But as he reminded me it’s actually the DIRECT OPPOSITE of what many claim or assume
If in fact the direction of policy changes it won’t be to make it weaker

Donald J. Trump
‏Verified account @realDonaldTrump
10:22 am- 12 Sep 2019

In fact, my views on Venezuela, and especially Cuba, were far stronger than those of John Bolton. He was holding me back!

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Melia Hotels, Expedia, Trivago, Orbitz, Hotels.com, Travelocity, Booking.com Added To Title III Libertad Class Action Lawsuit

Rivero Mestre adds travel tech giants Expedia and Booking.com to Helms-Burton lawsuit; seeks treble damages  

“MIAMI—Sept. 11, 2019—Rivero Mestre filed an amendment to its Melia Hotel class action complaint alleging violations of the Helms-Burton Act to add defendants Booking.com, Expedia, and Melia International (and affiliates of each) as businesses that have trafficked in and benefitted from trafficking in properties confiscated by the Cuban government. The new defendants did not respond to 30-day notices of plaintiffs’ intent to sue, which gave plaintiffs the right to seek treble damages. The new defendants all are based in the U.S. or Spain, and include:  

Melia Hotels International, S.A., and its subsidiary Melia Hotels USA, LLC.;

Expedia, Inc., and its subsidiaries Trivago, Hotels.com, Orbitz, and Travelocity.com; and

Booking Holdings, Inc., and its subsidiary Booking.com 

The Helms-Burton Act provides Cuban-Americans, whose properties in Cuba were confiscated by the communist Castro dictatorship, with the right to recover damages from persons and entities that traffic in, or benefit from trafficking in, their properties. The Act also provides for treble damages against a defendant that received prior notice of the claim and did not stop its trafficking or compensate the owners of the confiscated property. Previously named defendants include: 

Grupo Hotelero Gran Caribe;

Corporación de Comercio y Turismo Internacional Cubanacán S.A.;

Grupo de Turismo Gaviota S.A.; and

Trivago GmbH. 

The lawsuit originally was filed by Marisela Mata and Bibiana Hernandez, descendants of Antonio Mata y Alvarez, who built the San Carlos Hotel in Cienfuegos in 1925 and left Cuba after the Cuban government confiscated the hotel in 1962. The lawsuit sought individual damages and damages on behalf of a class of similarly-situated individuals. The amendment adds plaintiffs from three other families whose properties in Varadero, Cayo Coco, and Cienfuegos, Cuba also were confiscated by the communist Castro regime and later trafficked by the same Cuban, U.S., and European entities.”

LINK To Court Filings

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United Nations Provides Provisional List Of Speakers For September 2019 General Debate

Office of the Spokesperson for the Secretary-General, United Nations Department of Public Information, has provided the provisional list of speakers at this year’s General Debate. 

The Honorable Donald J. Trump, President of United States, is scheduled to deliver remarks at 9:00 am on Tuesday, 24 September 2019

The unidentified Head of State of Venezuela is scheduled to deliver remarks on Thursday, 26 September 2019, during the period 3:00 pm to 9:00 pm. UPDATE: On 12 September 2019, President Maduro reported that he would not attend the United Nations. In 2018, President Maduro said the same, but attended.  

His Excellency Bruno Rodriguez, Minister of Foreign Affairs of the Republic of Cuba, is scheduled to deliver remarks on Saturday, 28 September 2019, during the period 9:00 am to 2:45 pm.  There remains an expectation that His Excellency Miguel Diaz-Canel, President of the Republic of Cuba, will deliver the remarks. 

LINK To List of Speakers In PDF Format

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Carnival Corporation Seeks Court Permission To Appeal To Eleventh Circuit As To Claim Ownership

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA
MIAMI DIVISION
CASE NO.: 19-cv-21725-KING

JAVIER GARCIA-BENGOCHEA,
Plaintiff,
v.
CARNIVAL CORPORATION d/b/a/ CARNIVAL CRUISE LINE, a foreign corporation,
Defendant.

Introduction

"This is a textbook case for Section 1292(b) certification. Plaintiff brought among the first ever suits under the Helms-Burton Act. 22 U.S.C. § 6021 et seq.

Plaintiff’s Complaint required the Court to disregard normal principles of corporate law and hold that under Helms-Burton a plaintiff can make a claim not only for his or her own assets but also for the assets of a foreign corporation for which he or she was a shareholder.

The Court’s order finding that Bengochea can make a claim for the subject property, despite the undisputed fact that this property was owned by La Maritima, S.A., a Cuban entity, was not only unprecedented as to corporate law, but it was also the first ever direct judicial treatment of Helms-Burton.

Carnival respectfully requests this Court amend its August 26, 2019 Order to certify this discrete issue for interlocutory appeal pursuant to 28 U.S.C. § 1292(b).

Allowing for an interlocutory appeal here would allow the Court of Appeals to answer this threshold legal question at the outset and potentially avoid the expenditure of further resources by the Court and the parties. Accordingly, certification is proper."

LINK To Carnival Corporation's Motion For Certification For Interlocutory Appeal

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Norwegian Cruise Line Title III Libertad Case Receives Discovery Expedited/Standard Track Schedule; Will Settlement Talks Begin?

United States District Court for the Southern District of Florida
Javier Garcia-Bengochea, Plaintiff,
v.
Norwegian Cruise Line Holdings, Ltd., Defendant.

Civil Action No. 19-23593-Civ-Scola

Order Requiring Discovery and Scheduling Conference
and
Order Referring Discovery Matters to the Magistrate Judge

LINK To Court Document In PDF Format

LINK To All Case Documents

President Diaz-Canel Meeting With Thirty-Largest Certified Claimants In NYC In September? He Should.

One Important Meeting In NYC For President Diaz-Canel
Host One; Seek The Other
Offense Rather Than Defense
A Meeting For Thirty Representatives
Postage For Invitations US$16.50
Trump Administration May Object
Government-To-Government Negotiations Still Possible- If Cuba Asks
Obama & Castro Bet On Clinton Victory; Diaz-Canel Paying For That Mistake

It’s time for the [H.E. Miguel] Diaz-Canel Administration embrace an offense rather than continue to attempt to fortify a defense defined by levels of acceptable pain rather than success.  Focus upon solutions rather than maintaining issues. 

That moment will be during the United Nations General Assembly (UNGA) in New York City in September 2019 for a first meeting with representatives of the thirty-largest United States certified claimants.   

For perspective, the two largest certified claimants represent 24% of the total value- with the second largest managing one (soon two) hotels in the city of Havana; the thirty certified claimants represent 56% of the total value.  There are 5,913 certified claimants.  The total value of the certified claims is US$1,902,202,284.95.   

While at the United Nations, President Diaz-Canel should seek a meeting with The Honorable Donald Trump, President of the United States.  As distasteful as the optics of such a meeting might be, absent settlement of the certified claims and changes to United States statutes, regulations and policies, the Republic of Cuba will continue to be globally constrained commercially, economically and politically; and a strategy of “waiting-him-out,” by relying upon a loss by President Trump on 3 November 2020 is government malpractice because whomever is victorious will not necessarily do what they said they wanted to do when they wanted to do it.  There are always unknown disruptors- for example, health issues of diplomats and Venezuela. 

The Meeting 

As soon as possible, invitations (through the government’s longtime legal counsel in New York City; postage US$16.50) should be delivered to each of the thirty-largest certified claimants to meet with President Diaz-Canel at the Permanent Mission of the Republic of Cuba to the United Nations located on Lexington Avenue. 

The purpose of the meeting would be to commence negotiations to settle the certified claims.  Timelines would be agreed to, benchmarks for progress (or lack thereof) would be agreed to, and there would be transparency.   

There exists a certified claims settlement proposal [LINK] presented in 2018 to the Trump Administration and the Diaz-Canel Administration.  There are two certified claims [LINK] whose settlement would be least problematic. 

The moment such a negotiation is announced, the Republic of Cuba will gain from its supporters, allies, rivals and enemies.   

Companies will create their interest, renew their interest or expand their interest towards the country.  Rather than cringe when pondering the issues relating to engagement with the Republic of Cuba, there would be less concern and more relief.  As a collective block, the European Union (EU) would be relieved. 

With a settlement of the certified claims, commercial activity in the Republic of Cuba gains value; potential direct foreign investment projects become more viable.   

Absent the issue of the certified claims, other components of United States statutes, regulations and policies would adjust as United States companies without the impediment of certified claims must have the required tools to make use of whatever value is obtained from a settlement. 

If a resolution involves currency- the certified claimant must be able to obtain it, control it, move it.  If resolution involves a security- the certified claimant must be able to obtain it, control it, sell it, or trade it.  If the resolution involves an asset- the certified claimant must be able to obtain it, control it, operate it, invest in it, accept investors, sell shares. 

There are individuals within the Republic of Cuba who don’t object to compensating certified claimants but are adamant that the presence of United States companies is unwelcome.  There are individuals who believe that no compensation is required; and United States companies are unwelcome.  

The Trump Administration may object- by statement, by Tweet, by speech, by press conference and define the meeting as a sham; an effort by the Republic of Cuba to distract and buy time from additional lawsuits being filed and to create expanded distance between the validity of the certified claimants from the non-certified claimants.   

The Trump Administration will maintain that its policies towards Venezuela are impacting the Republic of Cuba and its policies towards the Republic of Cuba are impacting the Republic of Cuba- so the Diaz-Canel Administration is desperate to make deal.  Wait, certified claimants, the Trump Administration will argue- so an even better deal will be offered once the Maduro Administration in Caracas is replaced with the Guido Administration and Venezuela ends its discounted oil sales to the Republic of Cuba and removes Republic of Cuba nationals who work (primarily healthcare) on a contract basis in Venezuela- only then the Republic of Cuba will be truly desperate to make a deal.  The Trump Administration will argue that certified claims negotiations are government-to-government rather than certified claimant(s)-to-government. 

All the above arguments would be traditionally persuasive.  But, the last argument is the weakest when it should be the strongest.   

In 2018 and then in 2019, leading to the decision by the Trump Administration to implement Title III of the Cuban Liberty and Solidarity Act of 1996, known as the “Libertad Act,” officials of the Trump Administration (The White House, United States Department of State) never invited, individually or in groups, the largest certified claimants to a meeting or meetings- the two largest certified claimants (and their legal counsels) have confirmed this to be true- and they represent 24% of the total value of all 5,913 certified claims.  

Those most impacted by the Title III decision were specifically excluded from any input as to whether they would benefit or suffer from a decision to implement Title III.   

Why didn’t the Trump Administration, through the National Security Council (NSC), convene a one-day conference, a series of briefings, a teleconference, a webinar, with the largest certified claimants?  Because the interests of the largest certified claimants were immaterial to the decision-making process. 

If the goal of the Trump Administration was to negotiate a settlement, would not the process had included the United States Secretary of State sending a letter to the Minister of Foreign Affairs of the Republic of Cuba requesting (or demanding) that negotiations begin at the earliest date?  And, if the Republic of Cuba refused, then there would be consequences?  The Trump Administration implemented the consequences prior to extending an invitation. 

As the Libertad Act permits private settlements, and the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury authorizes certified claimants to visit the Republic of Cuba for certified claims-related purposes, if the United States government hasn’t an interest in solving the problem, then perhaps the private sector needs to intervene.   

In 2018, a comprehensive proposal for a government-to-government certified claims negotiation was presented to the Trump Administration in Washington DC and to the Diaz-Canel Administration in Havana.  Unfortunately, issues relating to Venezuela interceded and the proposal was waylaid. [LINK To Proposal]. 

NOTE: There should be no surprise if the Trump Administration again suspends the right-of-action under Title III.  If there are not many lawsuits filed (estimates referenced by the United States Department of State were upwards of 200,000 for non-certified claimants), and the Trump Administration needs the assistance from the EU, Canada, Japan, and countries in The Americas for an issue (China, Iran, North Korea, Russia, Syria, Turkey, Venezuela), again suspending Title III would be a painless offering as existing lawsuits would be unaffected.  

Thus far, there have been fourteen (14) lawsuits filed using Title III in United States District Courts; and there is one (1) related lawsuit filed in Spain using a law similar to provisions of Title III.  Thus far, none of the lawsuits using Title III have been dismissed by the respective presiding judge. 

The [Barack] Obama Administration and the [Raul] Castro Administration abjectly failed to use their uniquely created moments from 17 December 2014 through 20 January 2017 to negotiate a settlement for the certified claims.  The failure was due in part to each government expecting a [Hillary] Clinton Administration- so they believed no urgency to work through the complicated issues.  A debacle for the Castro Administration, and inherited by the Diaz-Canel Administration. 

The Republic of Cuba wagered a better deal would be had not from the Obama Administration, but from a potential Clinton Administration.  How could they have believed that?  Perhaps, they will not make the same mistake in advance of 3 November 2020.     

Cuba’s Problems & EU Comments 

An unnerving and continuing consensus amongst leadership within the global business community and government leadership: The country chooses to remain anachronistic, and its chronic shortage of foreign exchange reflects that adhesion to an unsustainable model.  Foreign debt (commercial and sovereign) continues to increase.  Revenues from exports have decreased.  Costs for imports have increased.  Not unusual for Republic of Cuba government-operated companies to seek payment terms of 720 days.  Consumer retail prices reflect a mark-up from cost of 240% on average; true wholesale markets are nonexistent.  Production of agricultural commodities remains inefficient.  The manufacture and assembly of products is lackluster.  The self-employed continue to be constrained.  Statutes, regulations and policies remain fluid which impacts strategic planning.  Trends for visitor arrivals and revenues have decreased- not only from the United States; and tourism (and other) infrastructure languishes from neglected maintenance and investment.  Financial support from the [Nicolas] Maduro Administration in Venezuela continues to decrease (and extinguishing is not unlikely) and no other country or countries will individually or collectively replace it.  Suspicions fueled by ideology and history and inefficiencies of process continue to restrain companies from engagement- exporting to, importing from, providing services for, and supporting delivery of direct foreign investment.   

As one company executive wrote years ago, the Republic of Cuba functions as it does primarily because others have paid for the country to remain an anachronism- a sort of Yesterday Land within an amusement park of decay.  When visitors ponder- “How did they do it?” the context is “How did they let it get this way and why don’t they do something about it?” 

The twenty-eight (28) member EU has in limited instances expressed publicly its frustrations with the Republic of Cuba, but during a 31 May 2019 forum sponsored by the Ministry of Foreign Affairs (MINREX) of the Republic of Cuba, Ambassador Alberto Navarro, Head of Delegation, was quoted:  

“Beyond looking at the past and criticizing the Helms-Burton law, there is also an opportunity here to improve the security of investments, to facilitate trade and investment and there the European Union will be with you,” and “[I]n these difficult times, seek the opportunity to improve the investment climate and to facilitate trade and investment,” and “[T]here are sufficient arguments for Cuba to understand that the countries with the greatest trade opening are the most prosperous in the world.”  And, “I have not seen any country emerge from underdevelopment through development aid and international solidarity (...) The countries that prosper are thanks to trade liberalization and foreign investment (...). unique, an opportunity.”  Settling the certified claims are a means to bring forth to reality the potential discussed by Ambassador Navarro.  

Cuba Confirms Claims Obligation 

The government of the Republic has confirmed its obligation to compensate the certified claimants.  From a December 2015 report by the Brookings Institution: “Importantly, Law 851 of July 6, 1960, which authorized the nationalization of the properties of U.S. nationals (in retaliation for the refusal of U.S.-owned refineries to refine crude oil from the Soviet Union) provided for compensation payments.  These payments were to be arranged by means of 30-year bonds with two percent interest, to be financed from sugar sales to the United States, which the United States was already cutting as punishment for previous Cuban actions.  However disingenuous the payment scheme, the law nevertheless acknowledged the compensation obligation.  Similarly, the Agrarian Reform Law of May 17, 1959 provided for compensation via 20-year bonds with interest.” 

Interested in attracting foreign investors, the Cuban government recognizes that unresolved U.S. property claims, and associated U.S. legislation, raise a significant barrier to new capital inflows. For many non-U.S. multinationals, the Cuban market is too small to risk potential confrontations with the U.S. government or with U.S. claimants.  As with U.S. sanctions more generally, the unresolved property claims, even when they do not forestall deals entirely, do raise the costs of doing business in Cuba, and hence prejudice Cuban economic development…. In so far as Cuba wishes to restore normal commercial relations with the very large market immediately to its north, the outstanding property claims remain a significant barrier, legally, politically, and commercially.” 

Important for the Republic of Cuba to directly compensate certified claimants.  Third parties invited by the Republic of Cuba to make use of expropriated properties should not be compensating the certified claimants.  The resolution must be bilateral; a straight line rather than a triangle. 

What the Republic of Cuba must not do is seek further to merge their financial issues with the United States government with compensating the certified claimants.  The government of the Republic of Cuba reported in June 2019 that damages “in 2018 exceeded $134 billion at current prices and ‘the figure of $933 billion dollars, taking into account the depreciation of the dollar against the value of gold in the international market.’”  The certified claims have nothing to do with damages; and efforts at linkage will remain unsuccessful and harmful.   

Libertad Act 

The Trump Administration has made operational Title III and further implemented Title IV of the Cuban Liberty and Democratic Solidarity Act of 1996 (known as “Libertad Act”).   

Title III authorizes lawsuits in United States District Courts against companies and individuals who are using a certified claim or non-certified claim where the owner of the certified claim or non-certified claim has not received compensation from the Republic of Cuba or from a third-party who is using (“trafficking”) the asset.   

Title IV restricts entry into the United States by individuals who have connectivity to unresolved certified claims or non-certified claims.  Since 1996, the United States Department of State has on occasion issued letters requesting information from companies as to their activities in the Republic of Cuba and has informed companies that they could receive letters.  The total number of letters issued since 1996 is reportedly less than twelve (12).  One Canada-based company is currently subject to this provision based upon a certified claim.  There is limited legal recourse for appealing a Title IV determination.  The United States Department of State refuses to divulge how many letters have been sent and/or to whom the letters have been sent. 

Suspension History 

Title III had been suspended every six months since the Libertad Act was enacted in 1996- by President William J. Clinton, President George W. Bush, President Barack H. Obama and President Donald J. Trump.  

On 4 March 2019, The Honorable Mike Pompeo, United States Secretary of State, reported that there would be a suspension for thirty (30) days. 

On 3 April 2019, Secretary Pompeo reported a further suspension for fourteen (14) days through 1 May 2019. 

On 17 April 2019, the Trump Administration reported that it would no longer suspend Title III. 

On 2 May 2019 certified claimants and non-certified claimants were permitted to file lawsuits in United States courts. 

Certified Claims Background 

There are 8,821 claims of which 5,913 awards valued at US$1,902,202,284.95 were certified by the USFCSC and have not been resolved for nearing sixty years (some assets were officially confiscated in the 1960’s, some in the 1970’s and some in the 1990’s.  The USFCSC permitted simple interest (not compound interest) of 6% per annum (approximately US$114,132,137.10); with the approximate current value of the 5,913 certified claims US$8,521,866,236.75.  

The first asset to be expropriated by the Republic of Cuba was an oil refinery in 1960 owned by White Plains, New York-based Texaco, Inc., now a subsidiary of San Ramon, California-based Chevron Corporation (USFCSC: CU-1331/CU-1332/CU-1333 valued at US$56,196,422.73).  

The largest certified claim (Cuban Electric Company) valued at US$267,568,413.62 is controlled by Boca Raton, Florida-based Office Depot, Inc.  The second-largest certified claim (International Telephone and Telegraph Co, ITT as Trustee, Starwood Hotels & Resorts Worldwide, Inc.) valued at US$181,808,794.14 is controlled by Bethesda, Maryland-based Marriott International; the certified claim also includes land adjacent to the Jose Marti International Airport in Havana, Republic of Cuba.  The smallest certified claim is by Sara W. Fishman in the amount of US$1.00 with reference to the Cuban-Venezuelan Oil Voting Trust. 

The two (2) largest certified claims total US$449,377,207.76, representing 24% of the total value of the certified claims.  Thirty (30) certified claimants hold 56% of the total value of the certified claims.  This concentration of value creates an efficient pathway towards a settlement.   

Title III of the Cuban Liberty and Democratic Solidarity (Libertad) Act of 1996 requires that an asset had a value of US$50,000.00 when expropriated by the Republic of Cuba without compensation to the original owner.  Of the 5,913 certified claims, 913, or 15%, are valued at US$50,000.00 or more.  Adjusted for inflation, US$50,000.00 (3.70% per annum) in 1960 has a 2019 value of approximately US$427,267.01.  The USFCSC authorized 6% per annum, meaning the 2019 value of US$50,000.00 is approximately US$1,649,384.54.  

The ITT Corporation Agreement 

In July 1997, then-New York City, New York-based ITT Corporation and then-Amsterdam, the Netherlands-based STET International Netherlands N.V. signed an agreement whereby STET International Netherlands N.V. would pay approximately US$25 million to ITT Corporation for a ten-year right (after which the agreement could be renewed and was renewed) to use assets (telephone facilities and telephone equipment) within the Republic of Cuba upon which ITT Corporation has a certified claim valued at approximately US$130.8 million.  ETECSA, which is now wholly-owned by the government of the Republic of Cuba, was a joint venture controlled by the Ministry of Information and Communications of the Republic of Cuba within which Amsterdam, the Netherlands-based Telecom Italia International N.V. (formerly Stet International Netherlands N.V.), a subsidiary of Rome, Italy-based Telecom Italia S.p.A. was a shareholder.  Telecom Italia S.p.A., was at one time a subsidiary of Ivrea, Italy-based Olivetti S.p.A.  The second-largest certified claim (International Telephone and Telegraph Co, ITT as Trustee, Starwood Hotels & Resorts Worldwide, Inc.) valued at US$181,808,794.14 is controlled by Bethesda, Maryland-based Marriott International.  

TITLE III--SEC. 302. LIABILITY FOR TRAFFICKING IN CONFISCATED PROPERTY CLAIMED BY UNITED STATES NATIONALS. 

(a) Civil Remedy.-- (1) Liability for trafficking.--(A) Except as otherwise provided in this section, any person that, after the end of the 3-month period beginning on the effective date of this title, traffics in property which was confiscated by the Cuban Government on or after January 1, 1959, shall be liable to any United States national who owns the claim to such property for money damages in an amount equal to the sum of-- (i) the amount which is the greater of-- (I) the amount, if any, certified to the claimant by the Foreign Claims Settlement Commission under the International Claims Settlement Act of 1949, plus interest; (II) the amount determined under section 303(a)(2), plus interest; or (III) the fair market value of that property, calculated as being either the current value of the property, or the value of the property when confiscated plus interest, whichever is greater; and (ii) court costs and reasonable attorneys' fees.  (B) Interest under subparagraph (A)(i) shall be at the rate set forth in section 1961 of title 28, United States Code, computed by the court from the date of confiscation of the property involved to the date on which the action is brought under this subsection.   

(2) Presumption in favor of the certified claims.--There shall be a presumption that the amount for which a person is liable under clause (i) of paragraph (1)(A) is the amount that is certified as described in subclause (I) of that clause. The presumption shall be rebuttable by clear and convincing evidence that the amount described in subclause (II) or (III) of that clause is the appropriate amount of liability under that clause. 

(3) Increased liability.-- (A) Any person that traffics in confiscated property for which liability is incurred under paragraph (1) shall, if a United States national owns a claim with respect to that property which was certified by the Foreign Claims Settlement Commission under title V of the International Claims Settlement Act of 1949, be liable for damages computed in accordance with subparagraph (C).   

(B) If the claimant in an action under this subsection (other than a United States national to whom subparagraph (A) applies) provides, after the end of the 3-month period described in paragraph (1) notice to-- (i) a person against whom the action is to be initiated, or (ii) a person who is to be joined as a defendant in the action, at least 30 days before initiating the action or joining such person as a defendant, as the case may be, and that person, after the end of the 30- day period beginning on the date the notice is provided, traffics in the confiscated property that is the subject of the action, then that person shall be liable to that claimant for damages computed in accordance with subparagraph (C).   

(C) Damages for which a person is liable under subparagraph (A) or subparagraph (B) are money damages in an amount equal to the sum of-- (i) the amount determined under paragraph (1)(A)(ii), and (ii) 3 times the amount determined applicable under paragraph (1)(A)(i).  (D) Notice to a person under subparagraph (B)-- (i) shall be in writing; (ii) shall be posted by certified mail or personally delivered to the person; and (iii) shall contain-- (I) a statement of intention to commence the action under this section or to join the person as a defendant (as the case may be), together with the reasons therefor; (II) a demand that the unlawful trafficking in the claimant's property cease immediately; and (III) a copy of the summary statement published under paragraph (8).  (4) Applicability.--(A) Except as otherwise provided in this paragraph, actions may be brought under paragraph (1) with respect to property confiscated before, on, or after the date of the enactment of this Act. 

(B) In the case of property confiscated before the date of the enactment of this Act, a United States national may not bring an action under this section on a claim to the confiscated property unless such national acquires ownership of the claim before such date of enactment.  (C) In the case of property confiscated on or after the date of the enactment of this Act, a United States national who, after the property is confiscated, acquires ownership of a claim to the property by assignment for value, may not bring an action on the claim under this section.   

(5) Treatment of certain actions.--(A) In the case of a United States national who was eligible to file a claim with the Foreign Claims Settlement Commission under title V of the International Claims Settlement Act of 1949 but did not so file the claim, that United States national may not bring an action on that claim under this section.  (B) In the case of any action brought under this section by a United States national whose underlying claim in the action was timely filed with the Foreign Claims Settlement Commission under title V of the International Claims Settlement Act of 1949 but was denied by the Commission, the court shall accept the findings of the Commission on the claim as conclusive in the action under this section. 

(C) A United States national, other than a United States national bringing an action under this section on a claim certified under title V of the International Claims Settlement Act of 1949, may not bring an action on a claim under this section before the end of the 2-year period beginning on the date of the enactment of this Act. 

(D) An interest in property for which a United States national has a claim certified under title V of the International Claims Settlement Act of 1949 may not be the subject of a claim in an action under this section by any other person. Any person bringing an action under this section whose claim has not been so certified shall have the burden of establishing for the court that the interest in property that is the subject of the claim is not the subject of a claim so certified.  (6) Inapplicability of act of state doctrine.--No court of the United States shall decline, based upon the act of state doctrine, to make a determination on the merits in an action brought under paragraph (1). 

(7) Licenses not required.--(A) Notwithstanding any other provision of law, an action under this section may be brought and may be settled, and a judgment rendered in such action may be enforced, without obtaining any license or other permission from any agency of the United States, except that this paragraph shall not apply to the execution of a judgment against, or the settlement of actions involving, property blocked under the authorities of section 5(b) of the Trading with the Enemy Act that were being exercised on July 1, 1977, as a result of a national emergency declared by the President before such date, and are being exercised on the date of the enactment of this Act. 

LINK To Complete Analysis In PDF Format

Additional Analysis 

Troika To Negotiate Settlement Of Certified Claims Against Cuba?  Kushner, Greenblatt & Feinberg 

https://www.cubatrade.org/blog/2018/11/18/lojx6s6oe5epgonh6mub855d5ak143?rq=G20

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Will Cuba Accept Maduro?  Yes.  But, There’s At Least One Problem.  Trust. 

Published 7 September 2019 

Will Cuba Accept Maduro?  Yes.  But, There’s At Least One Problem.  Trust. 

H.E. Nicolas Maduro, President of Venezuela, members of his immediate family, aides and members of the government, board an aircraft at Simon Bolivar International Airport (SMVI) or Generalissimo Francisco de Miranda Air Base (SVFM) near the capital, Caracas. 

The aircraft may be the property of the government of Venezuela, the government of the Republic of Cuba, of a third country, or chartered by an international organization, such as the United Nations (UN). 

Scenario One- The F-16’s  

The aircraft departs Venezuela for the 1,342-mile, three-and-a-half-hour flight to Jose Marti International Airport (HAV) or military airports Managua Airport (MUMG) or San Antonio de los Banos Air Base (MUSA). 

Soon after departing Venezuela airspace, The Honorable Donald Trump, President of the United States; The Honorable Michael Pompeo, United States Secretary of State; The Honorable John Bolton, Assistant to the President for National Security Affairs; and The Honorable Elliott Abrams, Special Representative for Venezuela at the United States Department of State; along with members of the United States Congress, publish statements using the Twitter platform.   

Collectively, the statements congratulate the citizens of Venezuela for obtaining their freedom, confirm that the United States will be supporting the citizens of Venezuela, confirm that commercial, economic and political sanctions will soon be removed, and note that the government of the Republic of Cuba “has now done what it should have done years agoMaduro should still face justice for his crimes.”     

Other statements, although more positive in tone, are issued by individual governments and by the one hundred ninety-three-member UN, twenty-eight member European Union (EU) and thirty-five-member Organization of American States (OAS).    

Nearing the end of the journey, while over international waters, four (4) General Dynamics F-16 Fighting Falcon aircraft from the United States Air Force intercept the aircraft transporting Mr. Maduro and require the pilots to land either in the United States or a third country.  If in a third country, Mr. Maduro is then flown to the United States, likely the state of Florida, where he is arrested, arraigned, charged and then remanded to custody at the Federal Courthouse in Miami, Florida.  His mug shot is included in a Tweet published by President Trump. 

Presumably, President Maduro would not depart Venezuela using an aircraft belonging to the government of Venezuela precisely to seek to prevent the aforementioned scenario- President of the National Assembly of Venezuela and Interim President Juan Guaido would likely not strenuously object to a redirection of the aircraft and would rescind any diplomatic immunity for those aboard the aircraft.  If, however, the aircraft belongs to the government of the Republic of Cuba or another country (China, Russia or Turkey for example) or chartered by an international organization which has diplomatic status, would the United States feel encumbered by potential criticism?  As of today, doubtful. 

Scenario Two- Extradition 

The aircraft departs Venezuela for the 1,342-mile, three-and-a-half-hour flight to commercial airport Jose Marti International Airport (HAV) or military airports Managua Airport (MUMG) or San Antonio de los Banos Air Base (MUSA). 

Soon after departing Venezuela airspace, The Honorable Donald Trump, President of the United States; The Honorable Michael Pompeo, United States Secretary of State; The Honorable John Bolton, Assistant to the President for National Security Affairs; and The Honorable Elliott Abrams, Special Representative for Venezuela at the United States Department of State; along with members of the United States Congress, publish statements using the Twitter platform.   

Collectively, the statements congratulate the citizens of Venezuela for obtaining their freedom, confirm that the United States will be supporting the citizens of Venezuela, confirm that commercial, economic and political sanctions will soon be removed, and note that the government of the Republic of Cuba “has now done what it should have done years agoThe United States appreciates that President Diaz-Canel has helped to end the suffering of the citizens of Venezuela; now he should focus on ending the suffering in Cuba.” 

Other statements, although more positive in tone, are issued by individual governments and by the one hundred ninety-three-member United Nations (UN), twenty-eight member European Union (EU) and thirty-five-member Organization of American States (OAS).    

Upon landing, Mr. Maduro and his party are transferred to several secure protocol residences located in the Miramar District of Havana. 

Hours later, there is a new series of statements from officials of the United States government and by members of the United States Congress: The government of the Republic of Cuba must “immediately extradite Maduro and others to face justice or Cuba will face even more severe consequences for harboring an international criminal and drug trafficker.” 

Verbal whiplash for the [Miguel] Diaz-Canel Administration in Havana: At 10:00 am, President Maduro departed Venezuela.  At 1:30 pm, he arrived in the Republic of Cuba.  At 1:45 pm, the United States government confirmed the Republic of Cuba’s constructive role in resolving the problem for Venezuela.  At 3:00 pm, the United States is again condemning and threatening the Republic of Cuba. 

The Questions 

For the government of the Republic of Cuba, determining its role in resolving the commercial, economic and political issues in Venezuela includes determining whether the United States wants to resolve a problem or maintain an issue.  It’s about trust. 

The United States proposal to the government of the Republic of Cuba: Accept President Maduro, his immediate family, aides and members of the government.  In return, the United States will not seek the extradition of Mr. Maduro or any of the other members of the traveling party and will not criticize the Republic of Cuba for accepting Mr. Maduro or any of the other members of the traveling party.  The United States will continue to search for assets connected to Mr. Maduro, his family, aides, and officials located outside of Venezuela and return those assets to Venezuela. 

Even if the United States were to put the proposal in writing, and it was signed by President Trump, Secretary Pompeo, Ambassador Bolton and Ambassador Abrams, could and should the Diaz-Canel Administration and other governments have confidence that the agreement would binding… and for how long would be until the next statement issued using Twitter that the agreement was no longer valid?     

Additional Analysis 

The Unresolved Commercial, Economic And Political Issues In Venezuela Remain A Bilateral And Multilateral Contagion 

https://www.cubatrade.org/blog/2019/3/30/the-unresolved-commercial-economic-and-political-issues-in-venezuela-remain-a-bilateral-and-multilateral-contagion?rq=maduro

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U.S. Ag Exports To Cuba Increased 100.2% In July; Remain Up 10% Year-To-Year

ECONOMIC EYE ON CUBA©

September 2019

July 2019 Food/Ag Exports To Cuba Increase 100.2%- 1

Cuba Ranked In June 45th of 229 U.S. Food/Ag Export Markets- 2

Cuba Year-To-Year Exports Increase 10.0%- 2

July 2019 Healthcare Product Exports US$18,910.00- 2

July 2019 Humanitarian Donations US$279,488.00- 3

Obama Administration Initiatives Exports Continue To Increase- 3

U.S. Port Export Data- 16

JULY 2019 FOOD/AG EXPORTS TO CUBA INCREASE 100.2%- Exports of food products and agricultural commodities from the United States to the Republic of Cuba in July 2019 were US$31,176,618.00 compared to US$15,569,938.00 in July 2018 and US$24,379,155.00 in July 2017.

United States exports from January 2019 through July 2019 were US$186,114,479.00 compared to US$169,191,120.00 from January 2018 through July 2018, representing an increase of 10.0%.

Thus far in 2019, the Republic of Cuba ranks as the 50th largest (of 229) agricultural commodity/food product export market for the United States.

Since December 2001, agricultural commodity and food product exports from the United States to the Republic of Cuba exceed US$6,061,327,697.00.

The data contains information on exports from the United States to the Republic of Cuba- products within the Trade Sanctions Reform and Export Enhancement Act (TSREEA) of 2000, Cuban Democracy Act (CDA) of 1992, and regulations implemented (1992 to present) for other products by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury and Bureau of Industry and Security (BIS) of the United States Department of Commerce.

The TSREEA re-authorized the direct commercial (on a cash basis) export of food products (including branded food products) and agricultural commodities from the United States to the Republic of Cuba, irrespective of purpose. The TSREEA does not include healthcare products, which remain authorized and regulated by the CDA.

The data represents the U.S. Dollar value of product exported from the United States to the Republic of Cuba under the TSREEA. The data does not include transportation charges, bank charges, or other costs associated with exports; the government of the Republic of Cuba reports unverifiable data that includes transportation charges, bank charges, and other costs.

Complete Report Available Soon

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OFAC Authorizes Banks To Refuse U-Turn Transactions, Defines Self-Employed, Limits Remittances

Publication of Updated Cuban Assets Control Regulations (CACR) and Frequently Asked Questions  

The Department of the Treasury's Office of Foreign Assets Control (OFAC) is amending the Cuban Assets Control Regulations, 31 C.F.R. part 515 (CACR), to further implement portions of the President’s foreign policy toward Cuba.   

In accordance with announced changes related to remittances and certain kinds of financial transactions, OFAC is amending the CACR to: i) revise certain authorizations for remittances to Cuba to impose new requirements and limitations; and ii) revise the authorization commonly known as the “U-turn” general license to eliminate the authorization for banking institutions subject to U.S. jurisdiction to process certain kinds of financial transactions.   

The CACR amendment will be published in the Federal Register on Monday, September 9, 2019 and will take effect on October 9, 2019.  OFAC is also publishing a number of updated Frequently Asked Questions and a Fact Sheet pertaining to this regulatory amendment. 

For more information on this specific action, please visit our Recent Actions page

LINK To Frequently Asked Questions Update 

LINK To Federal Register Changes

“United States Restricts Remittances and “U-Turn” Transactions to Cuba

Today, the Department of the Treasury took action to prevent U.S. remittances to Cuba from enriching Cuban regime insiders and their families and to restrict Cuba’s access to the U.S. financial system.

Going forward, U.S. persons are no longer allowed to send family remittances to close relatives of prohibited officials of the Government of Cuba or close relatives of prohibited members of the Cuban Communist Party. U.S. persons will also no longer be allowed to send donative remittances, or remittances regardless of familial relationships, to Cuba.

In line with the President’s foreign policy on Cuba, these actions are designed to target the Cuban regime while continuing to provide vital relief to the long-suffering people of Cuba. As National Security Advisor Bolton said in April, “we know that families in the United States want to help their loved ones in Cuba, and we want Cubans to get the support they need and deserve…we know that these remittances are critical to families.” For this reason, remittances to support family members are permitted up to $1,000 per quarter per person, and remittances to private businesses, human rights groups, religious organizations, and other self-employed individuals operating in the non-state sector are authorized with no cap at this time.

The Department of the Treasury also restricted the Cuban regime’s access to the U.S. financial system by eliminating authorization for what are commonly known as “U-turn” transactions, funds transfers that originate and terminate outside the U.S. where neither the originator nor beneficiary is a person subject to U.S. jurisdiction.

The United States continues to hold Cuba accountable for its repression of the Cuban people, its interference in Venezuela, and its unconscionable support of the illegitimate former Maduro regime. Despite widespread international condemnation, Maduro continues to undermine his country’s institutions and subvert the Venezuelan people’s right to self-determination. Empowered by Cuba, he has created a humanitarian disaster that destabilizes the region.

For more information on the regulations, please refer to the following Department of the Treasury page: https://www.treasury.gov/resource-center/sanctions/Programs/Pages/cuba.aspx

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Court In Spain Dismisses Lawsuit Against Melia Hotels International Relating To Operations In Cuba; Plaintiffs Now Expected To Sue In U.S. Using Libertad Act

From Melia Hotels International

3 September 2019 

The Spanish Courts decide to close the case regarding the lawsuit filed by the Sanchez-Hill family against Meliá Hotels International 

Corporate News 

This is the first decision taken by any European Court following the activation of the Helms-Burton Act

The plaintiffs based their claim on the alleged illegitimate operation of hotels in Cuba on land which was nationalised under Law 890 in 1960 after the Cuban revolution in 1959. The hotels have been managed by Meliá since the late 1980s and early 1990s

The sentence orders the plaintiffs to pay all costs and is blunt in stating that a Spanish Court is not competent to assess, among other things, whether the nationalisation carried out by the Cuban government in 1960 was lawful or not  

Magistrate's Court number 24 in Palma de Mallorca has just issued a sentence supporting in full the arguments raised by Meliá Hotels International regarding the rejection of jurisdiction in relation to the lawsuit filed by Central Santa Lucía L.C., a company based in the United States of America. 

Before the Cuban Revolution of 1959, Central Santa Lucia claims to have been the owner of land in Playa Esmeralda (Cuba) which was allegedly expropriated by the Cuban state after the approval of Law 890 on October 15, 1960. Central Santa Lucia bases its lawsuit on the alleged unlawful enrichment of Meliá due to the management of the Sol Río y Luna Mares and Paradisus Rio de Oro hotels. 

Behind this procedural ruse, the lawsuit against Meliá was really intended to be based on the illegitimacy of the Cuban law by which land which they claim to have owned was expropriated (always allegedly). The Court concluded that the lawsuit filed by the plaintiff requires the prior determination of the lawfulness of the nationalisation activities carried out at the time by the Cuban government, conclusively stating that a Spanish Court is unable to assess whether nationalisation by a sovereign state may be considered legal or otherwise. 

The sentence also states that the activities subsequently carried out by companies controlled by the Cuban government in selecting Meliá to operate the hotels are irrelevant, since what would really determine the alleged illegality of which the plaintiff accuses Meliá would be the initial act of nationalisation. 

According to the Court, the rights of the plaintiff to any claims on the fruits of the operation of the hotels could only be considered if their rights to the ownership of the land were previously acknowledged, which would mean discussing, and eventually rejecting in this case, the right to ownership of the Cuban State, something which is not within the jurisdiction of the Spanish Courts as the sentence itself acknowledges. 

Meliá Hotels International, advised by the prestigious law firm Garrigues, has expressed its total satisfaction with a sentence that begins to clarify the real limits that extraterritorial claims of this nature may have, always with total respect for applicable law. As Juan Ignacio Pardo, Chief Legal & Compliance Officer for Meliá points out, “the activation of Title III of the Helms-Burton Act after more than 20 years of suspension by successive US governments has obviously generated a degree of uncertainty on both sides of the Atlantic. Significant sentences such as this will help us all to be very clear about what may or may not be done under Spanish and European law. Not just anything goes in the world of law, and it is comforting to see how our courts are able to resist the influence of the media to clearly distinguish between procedural devices and solidly founded arguments". 

For Gabriel Escarrer, Vice President and CEO of Meliá, the importance of this sentence is not only that it is the first to be issued by a Court after the full activation of the Helms-Burton Act, but that according to international and Spanish law, “the Courts of another country are not in a position to review the legality of a law passed in Cuba in 1960 or the acts performed by a sovereign state in implementing that law." 

As the hotel company stated last April, the lifting of the suspension of Title III of the Helms-Burton Act by the US government will not affect Meliá Hotels International's willingness to continue working for the sustainable development of the travel industry in Cuba, a country in which it has operated legitimately and impeccably for more than 30 years. 

The company also indicates that the sentence dictated by Court 24 in Palma may be subject to appeal, although given the forcefulness of the sentence and its acceptance of all of the arguments presented by Meliá, it is difficult to imagine that any such appeal might prosper. 

https://www.meliahotelsinternational.com/en/newsroom/our-news/Courts-close-case-lawsuit-Sanchez-Hill-against-Melia-Hotels-International

LINK To Spain Court Decision (2 September 2019)

LINK To Court Case Lawsuit Filings

From Melia Hotels International

3 September 2019

La justicia española ordena archivar la demanda planteada por la familia Sanchez-Hill contra Meliá Hotels International 

Se trata de la primera resolución dictada por un Tribunal europeo tras la activación e la Ley Helms Burton

Los demandantes pretendían fundamentar su demanda en la supuesta explotación ilegítima de unos hoteles en Cuba, construidos sobre terrenos nacionalizados por la Ley 890 de 1960, tras la revolución cubana de 1959 y gestionados por el grupo Meliá desde finales de los años 80 y principios de los 90

El Auto, que condena también en costas a los demandantes, es contundente al afirmar que un Tribunal español no es competente para entrar a valorar, entre otras cosas, si la nacionalización acordada por el estado cubano en el año 1960  fue o no lícita 

Palma de Mallorca, 3 de septiembre de 2019. El Juzgado de Primera Instancia nº 24 de Palma de Mallorca acaba de dictar Auto por el que estima en su totalidad los argumentos planteados por Meliá Hotels International en la declinatoria de jurisdicción y competencia judicial internacional planteada por dicha Compañía frente a la demanda que interpuso la sociedad Central Santa Lucía L.C. radicada en Norteamérica.

Central Santa Lucia, que manifiesta haber sido, antes de la Revolución Cubana de 1959, propietaria de unos terrenos sitos en Playa Esmeralda (Cuba), supuestamente expropiados por el Estado Cubano tras la aprobación de la Ley 890 de 15 de octubre de 1960, fundamentaba su demanda en un pretendido enriquecimiento ilícito de Meliá derivado de la llevanza en gestión de los hoteles Sol Río y Luna Mares, y Paradisus Rio de Oro.

Tras ese artificio procesal, la demanda contra Meliá pretendía en realidad fundamentarse en la ilegitimidad de la ley cubana por la cual le fueron expropiados (siempre presuntamente) los terrenos de los que dicen ser titulares. En este sentido, el Tribunal ha percibido claramente que en realidad el objeto del procedimiento pasaba obligatoriamente por el previo enjuiciamiento de la licitud del acto de nacionalización acordado en su día por el gobierno cubano, concluyendo con rotundidad que un Tribunal español no puede entrar a valorar si la nacionalización acordada por un estado soberano fue o no lícita.

La resolución también establece que los actos de gestión realizados posteriormente por empresas del gobierno cubano al contratar a Meliá para la gestión de los hoteles, serían irrelevantes, ya que lo que realmente determinaría en su caso la presunta ilicitud de la que el demandante acusa a Meliá sería el acto primigenio de nacionalización.

Según el Tribunal, sólo podría hipotéticamente reconocerse el derecho del reclamante por los frutos de la explotación empresarial de estos hoteles si se reconociera previamente  su derecho de propiedad sobre los terrenos, lo que implicaría entrar a discutir y acabar negando, en su caso, el derecho de propiedad del Estado cubano, algo para lo que los Tribunales españoles carecen de competencia tal y como la propia resolución reconoce.

Meliá Hotels International, que ha estado asesorada en este procedimiento por el prestigioso bufete Garrigues, ha manifestado su total satisfacción por una resolución que, con absoluto respeto al derecho aplicable, inicia el camino de la necesaria clarificación de los límites reales que pretensiones extraterritoriales de este género pueden llegar a tener.  Como señala Juan Ignacio Pardo, Chief Legal & Compliance Officer del Grupo hotelero, “es evidente que la activación del Título III de la Ley Helms Burton, tras más de 20 años de suspensión por los sucesivos gobiernos norteamericanos, ha generado cierto grado de incertidumbre en ambos lados del Atlántico. Resoluciones judiciales de este calado nos ayudarán a todos a delimitar muy claramente lo que, al amparo de la normativa española y europea, puede o no hacerse. No todo vale en el mundo del Derecho, y reconforta ver cómo nuestros juzgados y tribunales, sin dejarse influenciar por el ruido mediático interesado, saben distinguir entre artificios procesales y los argumentos sólidamente fundados”.

Para Gabriel Escarrer, Vicepresidente y CEO de Meliá, la importancia de esta resolución no radica únicamente en que se trata de la primera dictada por un Tribunal tras la plena activación de la Ley Helms Burton, sino sobre todo, en que según el derecho internacional y la propia legislación española, “los Tribunales de otro país no pueden entrar a revisar la legalidad de una ley de Cuba del año 1960 o de los actos realizados por un Estado soberano en su ejecución.”

Como ya declaró la hotelera el pasado mes de abril, el levantamiento de la suspensión del Título III de la Ley Helms Burton por parte de la Administración de Estados Unidos no afectará a la voluntad de Meliá Hotels International de seguir trabajando por el desarrollo sostenible de la industria turística en Cuba, país en el que opera legítima e impecablemente desde hace más de 30 años.

La Compañía indica que la resolución dictada por el Juzgado 24 de Palma puede ser recurrida en apelación, aunque dada su contundencia, que acepta la totalidad de los motivos plateados por Meliá, será difícil que dicha apelación prospere.

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A Different Judge, A Second Defeat For Carnival Corporation; Painful Process Of Discovery Begins; Stream Of Lawsuits May Become A River

Second Judge Refuses To Dismiss Libertad Lawsuit Against Carnival Corporation
Stream Of Lawsuits May Become A River
Three Other Cruise Lines Will Likely Lose Any Motion To Dismiss
The Process Of Discovery Could Become Ugly And Lead To Settlements
Will Settlement Discussions Commence?
Definition Of “Authorized Travel” And “Lawful Travel” Is Key To Liability
If Travel Defense Is Not Valid, Cruise Lines May Be Liable
Did President Obama Create 13th Travel Category? Was It Illegal?
Are Airlines Next Defendants?
What Advice Were Companies Given By Their Legal Counsel- Will Be Issue In Lawsuits

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
MIAMI DIVISION
CASE NO: 1:19-cv-21724-BB
Havana Docks Corporation v. Carnival Corporation

Excerpts From 28 August 2019 9-Page Ruling By Judge Beth Bloom: 

“Based on the language of the Libertad Act, the Court agrees with the Plaintiff that the “lawful travel exception” is an affirmative defense to trafficking. Affirmative defenses generally admit the matters in a complaint but nevertheless assert facts that would defeat recovery. “Plaintiffs are not required to negate an affirmative defense in their complaint.” La Grasta v. First Union Sec., Inc., 358 F.3d 840, 845 (11th Cir. 2004). Therefore, this exception must be established by Carnival and Plaintiff was not required to negate this exception in its Complaint. While it may very well be that Carnival’s conduct falls within the scope of the exception, such argument is not appropriate at this stage of the litigation.” 

“The Court further rejects the notion that Plaintiff was required “to go a step further” beyond the elements articulated in the statute and state that the alleged trafficking was not “incident to” or “necessary for” lawful travel. Plaintiff alleges that the trafficking that occurred was “as defined in 22 U.S.C. § 6023(13)(A).” ECF No. [1], at ¶ 14. To the extent the Defendant disagrees with this allegation, it may deny it, and assert an appropriate affirmative defense.”  

“Carnival also argues that even if Plaintiff has attempted to adequately plead trafficking, such attempt would fail because Carnival’s use of the Subject Property was “incident to” or “necessary for” lawful travel. ECF No. [17], at 5-8. However, this argument is also inappropriate at this stage, as it calls into question a direct issue of fact in dispute. Such question is not suitable for disposition upon a motion to dismiss. See Int’l Village Ass’n, Inc. v. AmTrust N. Am., Inc., 2015 WL 3772443, at *4 (S.D. Fla. June 17, 2015) (“[Defendant’s] contrary assertion... raises an issue of fact inappropriate for resolution on a motion to dismiss.”).” 

“First, the plain language of the Libertad Act states that “any person ... that traffics in property which was confiscated by the Cuban Government ... shall be liable to any United States national who owns the claim to such property.” 22 U.S.C. § 6082(A) (emphasis added). Thus, the Libertad Act does not expressly make any distinction whether such trafficking needs to occur while a party holds a property interest in the property at issue. To this extent, the Court agrees with the Plaintiff that the Defendant incorrectly conflates a claim to a property and a property interest. Accordingly, the Court finds that the Complaint sufficiently alleges that the Plaintiff owns a claim to the Subject Property.” 

LINK TO COMPLETE ORDER  

LINK TO COURT DOCUMENTS 

LINK To Judge King Opinion (26 August 2019)

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Five New Lawsuits: Royal Caribbean, Norwegian Cruise Lines, MSC Cruises Sued Using Libertad Act

Plaintiff attorneys feeling confident after 26 August 2019 ruling [LINK] against Carnival Cruise Lines; filing five (5) new lawsuits:

Havana Docks Corporation v. MSC Cruises SA CO et al

1:19-cv-23588-MGC

 

Havana Docks Corporation v. Royal Caribbean Cruises, LTD.

1:19-cv-23590-DPG

 

Havana Docks Corporation v. Norwegian Cruise Line Holdings, Ltd.

1:19-cv-23591-JEM

 

Garcia-Bengochea v. Royal Caribbean Cruises, LTD.

1:19-cv-23592-BB

 

Garcia-Bengochea v. Norwegian Cruise Line Holdings, Ltd.

1:19-cv-23593-XXXX

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SEC 10Q Filing By Carnival Corporation For Potential Impact By Libertad Act Lawsuits

United States Securities And Exchange Commission (SEC)

Washington DC

 

Form 10Q (For the quarterly period ended May 31, 2019)

Carnival Corporation

Miami, Florida

Page 11 

NOTE 4 – Contingencies

Litigation 

“On May 2, 2019, two lawsuits were filed against Carnival Corporation in the U.S. District Court for the Southern District of Florida under Title III of the Cuban Liberty and Democratic Solidarity Act, also known as the Helms-Burton Act. The complaint filed by Havana Docks Corporation alleges it holds an interest in the Havana Cruise Port Terminal and the complaint filed by Javier Garcia-Bengochea alleges that he holds an interest in the Port of Santiago, Cuba, both of which were expropriated by the Cuban Government. 

The complaints further allege that Carnival Cruise Line “trafficked” in those properties by embarking and disembarking passengers at these facilities. The plaintiffs seek all available statutory remedies, including the value of the expropriated property, plus interest, treble damages, attorneys’ fees and costs. We believe we have meritorious defenses to the claims and we intend to vigorously defend against them. We do not believe that it is likely that the outcome of these matters will be material, but litigation is inherently unpredictable and there can be no assurances that the final outcome of the case might not be material to our operating results or financial condition. 

Additionally, in the normal course of our business, various claims and lawsuits have been filed or are pending against us. Most of these claims and lawsuits, or any settlement of claims and lawsuits, are covered by insurance and the maximum amount of our liability, net of any insurance recoverables, is typically limited to our self-insurance retention levels. We believe the ultimate outcome of these claims, lawsuits and settlements, as applicable, each and in the aggregate, will not have a material impact on our consolidated financial statements.”

LINK To 10 Q Filing

The U.S.-Cuba Trade and Economic Council requested statements (on-the-record or off-the-record) relating to SEC obligations from attorneys. The following is an on-the-record response:

“Carnival should continue to disclose the ongoing Helms-Burton matters in its financial statements (and as you identified, Carnival began doing so no later than May 2019), but there is no requirement for Carnival to provide an estimated financial impact. Whether Carnival is required to record an accrual or disclose a loss contingency is an accounting matter, and must be made jointly by Carnival and PwC.  

ASC 450 (formerly FAS 5) defines a contingency as an “existing condition, situation, or set of circumstances involving uncertainty . . . that will ultimately be resolved when . . . future events occur or fail to occur.” An analysis under ASC 450 requires Carnival to determine the likelihood that the company will incur a “material loss.” There are three ranges of material losses: remote, reasonably possible and probable. 

A material loss is “remote” if the chance of the future event is slight, and there is no requirement for the company to either record an accrual or make disclosures of a remote contingency. A material loss is “probable” if the future event is likely to occur, and if the amount of loss is reasonably estimable, then the company must accrue for the probable contingent loss. A material loss is “reasonable possible” if the likelihood falls in the range between being remote and probable, and only a disclosure of the contingency is required—not an accrual.  

Carnival retains affirmative defenses and there will be a lot of litigation before the likelihood becomes probable that Carnival will experience a material loss.”  

Evan J.  Stroman, Esq., CPA

Kozyak Tropin & Throckmorton

2525 Ponce De Leon Blvd., 9th Floor, Miami, FL 33134

305.372.1800 | Direct 305.728.2988 | estroman@kttlaw.com

From The United States Securities And Exchange Commission (SEC) on 29 August 2019: 

“see Item 103 of Regulation S-K. Also, US GAAP (ASC 450) requires disclosures of loss contingencies, including legal proceedings.” 

PART 229—STANDARD INSTRUCTIONS FOR FILING FORMS UNDER SECURITIES ACT OF 1933, SECURITIES EXCHANGE ACT OF 1934 AND ENERGY POLICY AND CONSERVATION ACT OF 1975—REGULATION S-K 

§229.103 (Item 103) Legal proceedings. 

Describe briefly any material pending legal proceedings, other than ordinary routine litigation incidental to the business, to which the registrant or any of its subsidiaries is a party or of which any of their property is the subject. Include the name of the court or agency in which the proceedings are pending, the date instituted, the principal parties thereto, a description of the factual basis alleged to underlie the proceeding and the relief sought. Include similar information as to any such proceedings known to be contemplated by governmental authorities.

Instructions to Item 103:  

1. If the business ordinarily results in actions for negligence or other claims, no such action or claim need be described unless it departs from the normal kind of such actions. 

2. No information need be given with respect to any proceeding that involves primarily a claim for damages if the amount involved, exclusive of interest and costs, does not exceed 10 percent of the current assets of the registrant and its subsidiaries on a consolidated basis. However, if any proceeding presents in large degree the same legal and factual issues as other proceedings pending or known to be contemplated, the amount involved in such other proceedings shall be included in computing such percentage. 

3. Notwithstanding Instructions 1 and 2, any material bankruptcy, receivership, or similar proceeding with respect to the registrant or any of its significant subsidiaries shall be described. 

4. Any material proceedings to which any director, officer or affiliate of the registrant, any owner of record or beneficially of more than five percent of any class of voting securities of the registrant, or any associate of any such director, officer, affiliate of the registrant, or security holder is a party adverse to the registrant or any of its subsidiaries or has a material interest adverse to the registrant or any of its subsidiaries also shall be described. 

5. Notwithstanding the foregoing, an administrative or judicial proceeding (including, for purposes of A and B of this Instruction, proceedings which present in large degree the same issues) arising under any Federal, State or local provisions that have been enacted or adopted regulating the discharge of materials into the environment or primary for the purpose of protecting the environment shall not be deemed “ordinary routine litigation incidental to the business” and shall be described if: 

A. Such proceeding is material to the business or financial condition of the registrant; 

B. Such proceeding involves primarily a claim for damages, or involves potential monetary sanctions, capital expenditures, deferred charges or charges to income and the amount involved, exclusive of interest and costs, exceeds 10 percent of the current assets of the registrant and its subsidiaries on a consolidated basis; or 

C. A governmental authority is a party to such proceeding and such proceeding involves potential monetary sanctions, unless the registrant reasonably believes that such proceeding will result in no monetary sanctions, or in monetary sanctions, exclusive of interest and costs, of less than $100,000; provided, however, that such proceedings which are similar in nature may be grouped and described generically.

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