Transcript Of First Court Arguments In A Carnival Corporation Libertad Act Lawsuit

This is the complete 100-page transcript of the first motion to dismiss for a Libertad Act lawsuit.  

The words of the judge, plaintiff and defendant are instructive as to how lawsuits using Title III of the Libertad Act may be shaped- and may be decided. 

The U.S.-Cuba Trade and Economic Council requested and made payment for the transcript and is providing it for reference use: LINK   

“He says he owns it. He may be totally wrong. He may be totally wrong, maybe -- well, it may be proven, totally, totally wrong for a lot of reasons.  But it's a claim. We're talking about a claim against the defendant because of the confiscation by the Cuban Government.”  Judge King

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

MIAMI DIVISION

CASE NO.: 1:19-CV-21725-JLK 

31 July 2019

10:02 am to 12:20 pm

JAVIER GARCIA-BENGOCHEA, Miami, Florida, PLAINTIFF  

vs. 

CARNIVAL CORPORATION, A FOREIGN CORPORATION DOING BUSINESS AS CARNIVAL CRUISE LINES

DEFENDANT'S MOTION TO DISMISS ORAL ARGUMENT 

BEFORE THE HONORABLE JAMES LAWRENCE KING

UNITED STATES SENIOR DISTRICT JUDGE 

APPEARANCES: 

FOR THE PLAINTIFF:  

ROBERTO MARTINEZ, ESQ.

STEPHANIE ANNE CASEY, ESQ.

Colson Hicks Eidson

RODNEY MARGOL, ESQ.

Margol & Margol, P.A.

FOR THE DEFENDANT:  

STUART HAROLD SINGER, ESQ.

EVAN EZRAY, ESQ.

Boies Schiller & Flexner

GEORGE J. FOWLER, III, ESQ.

LUIS EMILIO LLAMAS, ESQ.

Jones Walker, LLP

ALSO PRESENT:  

JAVIER GARCIA-BENGOCHEA, Plaintiff

ARZIZA MARTINEZ, colleague of Martinez

MICHAEL CALVIN, Technician of Singer 

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 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 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.

U.S. Ag/Food Exports To Cuba Decline 11.3% In June; Remain Up 6.9% Year-To-Year

ECONOMIC EYE ON CUBA©

August 2019 

June 2019 Food/Ag Exports To Cuba Decrease 11.3%- 1

Cuba Ranked In June 53rd of 229 U.S. Food/Ag Export Markets- 2

Cuba Year-To-Year Exports Increase 6.9%- 2

US$6 Billion Exported To Cuba Since 2001- 2

June 2019 Healthcare Product Exports US$23,375.00- 2

June 2019 Humanitarian Donations US$465,907.00- 3

Obama Administration Initiatives Exports Continue To Increase- 3

U.S. Port Export Data- 16 

JUNE 2019 FOOD/AG EXPORTS TO CUBA DECREASE 11.3%- Exports of food products and agricultural commodities from the United States to the Republic of Cuba in June 2019 were US$18,815,665.00 compared to US$21,225,971.00 in June 2018 and US$24,630,738.00 in June 2017.   

Exports from January 2019 through June 2019 were US$154,937,855.00 compared to US$144,811,965.00 from January 2018 through June 2018, representing an increase of 6.9%.   

Exports since December 2001 exceed US$6,030,151,076.00. 

The data is for 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. 

LINK To Complete Report

Waiting Until The Last Minute, Cuba Decides To Defend Against Exxon Mobil In Title III Lawsuit

Nearing the last moment available for motions prior to the judge potentially issuing a default judgement, the defendants have elected to retain counsel. 

On 2 May 2019, Irving, Texas-based Exxon Mobil Corporation (2018 revenues of US$290 billion) filed a lawsuit [LINK] in the United States District Court for the District of Colombia against Republic of Cuba government-operated Corporacion Cimex S.A. and Republic of Cuba government-operated Union Cuba-Petroleo. 

Exxon Mobil Corporation has brought the lawsuit using Title III of the Cuban Liberty and Democratic Solidarity (Libertad) Act of 1996. [LINK]

Exxon Mobil Corporation is the second-largest company in the United States and second-largest oil and gas company in the world. 

On 2 August 2019, New York, New York-based Rabinowitz, Boudin, Standard, Krinsky & Lieberman, P.C., the longtime law firm representing the government of the Republic of Cuba, informed the court that it will be representing [LINK and LINK] the defendants and requested an extension to prepare its motions [LINK].  The defendants had three months during which they did not respond to the summons presented by the plaintiff. 

The defendants will seek to show that they have no interests in the United States so the case should be dismissed.  The plaintiff will seek to show that at least one of the defendants has connectivity to the United States, specifically Corporacion Cimex S.A. through its travel-related services which include individuals subject to United States jurisdiction as clients (defendants will argue that these services are exempt from the lawsuit); and its currency delivery services, which have an agreement [LINK] with Denver, Colorado-based Western Union Company (2018 revenues approximately US$6 billion).

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 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 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

Irony? EU-Based Company (Germany's DHL) Facilitating Title III Lawsuits Against Cuba Opposed By EU

Irony?  EU-Based Company Facilitating Title III Lawsuits Opposed By EU Against Cuba 

How Does U.S. Plaintiff Inform Defendant In Cuba That It’s Being Sued? DHL (with a little benefit to the German government) Or USPS (with a little benefit to the United States government) 

Might Cuba Prohibit DHL and USPS from delivering Libertad Act-Related Documents?  

Bonn, Germany-based DHL Express Worldwide, is a wholly-owned subsidiary of Bonn, Germany-based Deutsche Post (2018 revenues exceeded US$68 billion).  The government of Germany has a 21% shareholding in Deutsche Post.  

DHL Worldwide Express Cuba Profile: https://www.dhl.com/en/cu/country_profile.html 

Video From DHL Express Worldwide On Shipping To Cuba: https://www.youtube.com/watch?v=xbhe49g0qFs

Both DHL Worldwide Express and Washington DC-based United States Postal Service (USPS) contract with Republic of Cuba government-operated Grupo Empresarial Correos de Cuba [https://www.correos.cu] for the delivery of items throughout the Republic of Cuba. 

Why the government of Germany, with its leadership position within the 28-member Brussels, Belgium-based European Union (EU) which opposes the implementation of the Title III of the Cuban Liberty and Democratic Solidarity Act of 1996 (known as “Libertad Act”), not discourage or impede or prohibit DHL Worldwide Express from delivering Title III-related documents to the Republic of Cuba using as a basis EU (and EU-member) statutes/regulations/policies discouraging cooperation with Title III-related activities?  

Irving, Texas-based Exxon Mobil Corporation (2018 revenues exceeded US$290 billion) paid DHL Express Worldwide to deliver its summons and complaint to Republic of Cuba government-operated Corporacion Cimex S.A. [Label LINK] and Republic of Cuba government-operated Union Cuba-Petroleo [Label LINK].  

The law firm representing another of Libertad Act Title III plaintiff relied upon the USPS to deliver its summons and complaint to Amsterdam, Netherlands-based Booking.com B.V. [Label LINK; Summons LINK], Republic of Cuba government-operated Grupo Hotelero Gran Caribe [Label LINK], Corporacion de Comercio y Turismo International Cubanacan S.A. [Label LINK] and Republic of Cuba government-operated Grupo de Turismo Gaviota S.A. [Label LINK].  

On 16 March 2016, the USPS re-established direct services to the Republic of Cuba: https://www.cubatrade.org/blog/2017/3/6/usps-commences-deliveries-to-cuba?rq=USPS 

On 10 April 2019, two officials of the EU wrote [Letter LINK] to The Honorable Michael R. Pompeo, United States Secretary of State, reiterating the opposition by the EU to any implementation of Title III of the Libertad Act.

European Union

Council Regulation (EC) No. 2271/96 Of 22 November 1996 [LINK] 

Article 4 

No judgment of a court or tribunal and no decision of an administrative authority located outside the community giving effect, directly or indirectly, to the laws specified in the Annex or to actions based thereon or resulting there from, shall be recognized or be enforceable in any manner. 

Article 5 

No person referred to in Article 11 (2. “any legal person incorporated within the Community,”)   shall comply, whether directly or through a subsidiary or other intermediary person, actively or by deliberate omission, with any requirement or prohibition, including requests of foreign courts, based on or resulting, directly or indirectly, from the laws specified in the Annex or from actions based thereon or resulting therefrom.  

From The Archives- Economic Eye On Cuba In 2000 

“Global Express Guaranteed service from the United States to the Republic of Cuba is offered through an agreement with Brussels, Belgium-based DHL International Limited, which commenced operations within the Republic of Cuba in 1990.   

DHL International Limited headquarters for Republic of Cuba operations is in the city of Havana and there are branch offices in the city of Santiago de Cuba (860 kilometers east of Havana) and in the resort area of Varadero (140 kilometers east of Havana).  DHL International Limited also has offices in all provincial capitals of the Republic of Cuba and in resort areas within the Republic of Cuba.   

Panama City, Panama-based Republic of Cuba government-operated Utisa (under the auspice of the Ministry of Information and Communications of the Republic of Cuba), a subsidiary of Republic of Cuba government-operated Cutisa (under the auspice of the Ministry of Information and Communications of the Republic of Cuba) is the representative of DHL International Limited within the Republic of Cuba.  DHL International Limited owns 23% of Redwood City, California-based DHL Worldwide Express, Inc., and the founders (and their families) of DHL International Limited own a minority share of DHL Worldwide Express, Inc.   

Bonn, Germany-based government of Germany-operated Deutsche Post AG (2000 revenues approximately US$25 billion) controls 51% of DHL International Limited and Cologne, Germany-based Deutsche Lufthansa Aktiengesellschaft (Lufthansa Airlines) owns 25% of DHL International Limited.  The founders and their families reportedly own the remaining 24% of DHL International Limited.  DHL Worldwide Express has authorization from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., to provide delivery services between the United States and the Republic of Cuba. DHL Worldwide Express, Inc., which is controlled by individuals subject to United States law, receives revenues from DHL International Limited for package delivery services to the Republic of Cuba.   

The delivery services are limited to 2-pound packages containing documents, brochures, videotapes, compact discs, etc. DHL Worldwide Express sends packages from the United States to the Republic of Cuba through Mexico City, Mexico, where the packages are transferred from the operational control of DHL Worldwide Express, Inc., to the operational control of DHL International Limited.  The packages are then sent by commercial aircraft (Mexico City, Mexico-based Aeromexico and Mexico City, Mexico Mexico-based Mexicana de Aviacion SA de CV) to the Republic of Cuba.   

The cost of sending a one-pound package from the United States to the Republic of Cuba is approximately US$81.00.  The cost of sending a one-pound package from the Republic of Cuba to the United States is approximately US$39.00.  The delivery time for packages sent from the United States to Havana, Republic of Cuba, is four days.  The delivery time for packages sent from Havana, Republic of Cuba, to the United States is three days.   

In 1998, DHL International Limited delivered from various countries approximately 80,000 packages to the Republic of Cuba.  In 1998, DHL International Limited sent approximately 32,000 packages from the Republic of Cuba to various countries.  Republic of Cuba government-operated Seguros Internacionales de Cuba S.A. (ESICUBA) has an agreement with DHL International Limited to insure packages sent by DHL International Limited from the Republic of Cuba to other countries.   

Neither Atlanta, Georgia-based United Parcel Service of America, Inc. (2000 revenues exceeded US$24 billion) nor Memphis, Tennessee-based FedEx Corporation (2000 revenues exceeded US$17 billion) currently operates direct delivery services or indirect delivery services between the United States and the Republic of Cuba.”

LINK To Complete Analysis In PDF Format

Cuba Publishes Commercial/Economic Data, But The Data Remains Incomplete- Especially For Creditors

NOTE: Important to reference that the data provided by the government of the Republic of Cuba is not independently audited and there remain inconsistencies with previously-published data.  Also, the values are reported as Gross Revenues, not reported as Gross Revenues and Net Revenues. There is also no means to verify that funds identified were received as opposed to expected or promised.

Thomson Reuters

London, United Kingdom

2 August 2019 

HAVANA (Reuters) - Cash-strapped Cuba on Friday for the first time published details of its foreign exchange earnings from services such as telecommunications, hotels, health and education assistance, in an apparent concession to creditors.  

Service exports make up most of the Communist-run country’s foreign exchange earnings. But for decades the Caribbean island nation has refused to publish details despite requests by foreign governments and businesses.  

A number of western diplomats involved in debt and trade talks with Cuba in recent months have expressed frustration that officials have not provided details on the country’s financial situation.  

A common complaint of potential foreign business partners is that their Cuban counterparts refuse to provide information needed for proper due diligence, for example, when discussing potential collateral through telecommunications or transportation earnings.  

According to the report on the National Statistics Office web page (here.pdf) the biggest export earner in 2018 was health services at $6.4 billion, followed by "support services" at $1.3 billion.  

The report on page 47 said hotel and related services garnered $970 million, followed by telecommunications at $722 million and transportation and support services, which includes everything from airlines to docking fees, at around $600 million.  The report did not provide data for previous years.  

The country’s foreign exchange earnings have declined in recent years in tandem with the implosion of its ally and main economic partner, Venezuela, forcing the government to adopt austerity measures aimed at limiting imports.  

Total exports were $18.6 billion in 2013 and $14.5 billion last year. Imports fell from $15.6 billion to $12.6 billion.  

The economy has stagnated and tough new U.S. sanctions on some 175 Cuban companies, tourism and investment are expected to worsen the situation in 2019.  

Cuba last reported its foreign debt at $18.2 billion for 2016 and considers its current account and reserves state secrets.

First Arguments In Carnival Corporation Libertad Lawsuit Don't Bode Well For Dismissal; Judge Has Long History With Cuba Cases

Helms-Burton Suit Against Carnival May Float Despite Holes

By Nathan Hale  

Law360, Miami (July 31, 2019, 6:40 PM EDT) -- A Florida federal judge indicated Wednesday that he will deny Carnival's bid to dismiss a lawsuit seeking damages under the Helms-Burton Act over its use of Cuban port facilities that were confiscated by the Castro regime, but counsel for the cruise line said they still see several deficiencies in the claims.  

At a hearing in Miami, senior U.S. District Judge James Lawrence King said he was prepared to make a tentative ruling that, viewing the pleaded facts as true, plaintiff Javier Garcia-Bengochea has made a sufficient claim to an ownership interest in the La Maritima and Terminal Naviera docks in Santiago de Cuba.

The judge reserved the right to change his mind in his final order; however, he also suggested several times that Carnival's arguments for dismissal ask him to make findings that he is not prepared to make at this stage of the case.

"It seems to me that it's taking the court beyond perhaps where it should be at this point," the judge said, adding that he has always viewed the "guiding star" when deciding a motion to dismiss is "facts well pled."

After the hearing, George J. Fowler III of Jones Walker LLP, who is representing Carnival Corp. and was involved in the drafting of Helms-Burton, said he thinks Judge King is inclined to rule against the company at this stage but said that gaps in Garcia-Bengochea's pleadings about the basis for his ownership claim could portend problems for his case down the road.

"It may not be reflected in this first decision," said Fowler, who characterized the judge's comments as, "He said, 'I'm not going to dot all the I's and cross all the T's at this point.'"

Counsel for both sides noted the first impression issues presented by the case, which was filed May 2, the first day a policy shift by the Trump administration allowed Title III of the 1996 Helms-Burton Act to take effect, allowing U.S. nationals to bring litigation over property seized by Fidel Castro's communist government. Carnival also faces a similar suit over its use of docks in Havana.

In his eight-page complaint, Garcia-Bengochea, who is currently a resident of Jacksonville, Florida, claims that Doral, Florida-based Carnival is liable for money damages under Helms-Burton for trafficking in confiscated Cuban property through its use of the La Maritima docks to disembark passengers after it started offering cruises to the Caribbean island in May 2016.

Garcia-Bengochea asserts that he is the rightful owner of an 82.5% interest in the La Maritima property, and attached a form from the Foreign Claims Settlement Commission certifying a portion of his claim representing a 32.5% interest in the property.

But Carnival says Garcia-Bengochea's ownership claims are conclusory. The cruise line pointed out that the commission's certification lists an Albert Parreno as the owner of the claim and the complaint offers no explanation for Garcia-Bengochea's assertion that he possesses a right to the claim now.

The company also has argued that dismissal is warranted because Garcia-Bengochea's claim relates to ownership of stock in the La Maritima corporation that owned the docks, not the docks themselves, so he cannot allege that Carnival trafficked in the property he allegedly owned. Furthermore, he cannot bring a derivative claim on behalf of La Maritima because it was incorporated in Cuba and does not qualify as a U.S. national eligible to bring a claim under Helms-Burton.

During the hearing, Garcia-Bengochea's counsel, Roberto Martinez of Colson Hicks Eidson PA, told the court that Garcia-Bengochea inherited the claims through two cousins, which he said is certainly allowed under Helms-Burton.

"It was not the intent of Helms-Burton to allow the Cuban government to run out the clock on old Cubans," Martinez said.  Martinez also argued that the law features a "very expansive definition of property" that extends to patents, copyrights and any interest in property.

He also argued that the complaint is sufficient, having alleged that Garcia-Bengochea has an ownership interest in the waterfront property and that Carnival has used it.  

"A claim is really nothing more than an assertion to a right to a payment," Martinez said.  Judge King said he was swayed that Garcia-Bengochea's claims were sufficient for this stage of the litigation.

"He says he owns it. It may be totally wrong. It may be proven totally wrong. But it's a claim," the judge said.

Carnival also contends that its use of the property does not meet the definition of "trafficking" under Helms-Burton because the law carved out an exception for "uses of property incident to lawful travel to Cuba" and "necessary to the conduct of travel." It said it is undisputed that it was acting lawfully under a license to provide cruises to Cuba granted by the U.S. Treasury Department's Office of Foreign Assets Control, and it says Garcia-Bengochea's pleadings were insufficient because they did not mention lawful travel.

"You cannot plead trafficking without addressing whether the use of the property was lawful," Carnival counsel Stuart H. Singer of Boies Schiller & Flexner LLP argued, suggesting the court can dismiss the case based on judicial notice of Carnival's OFAC license.  

In response, Martinez argued that Carnival's lawful travel argument is an affirmative defense, calling the suggestion it had to be included in the complaint nonsense. Carnival's assertions that its use of the docks was incidental and necessary to travel and that it complied with its license are issues of fact that Garcia-Bengochea disputes. Martinez declined further comment after the hearing.  

Garcia-Bengochea alleges that he is entitled to money damages equal to three times the greater of the amount certified by the Foreign Claims Settlement Commission, plus interest; an amount determined by a special master; or fair market value of the property.  

Garcia-Bengochea is represented by Roberto Martinez, Francisco Raul Maderal Jr. and Stephanie A. Casey of Colson Hicks Eidson PA and Rodney S. Margol of Margol & Margol PA.  

Carnival is represented by Stuart H. Singer and Evan Ezray of Boies Schiller & Flexner LLP and George J. Fowler III and Luis E. Llamas of Jones Walker LLP.  

The case is Garcia-Bengochea v. Carnival Corp., case number 1:19-cv-21725, in the U.S. District Court for the Southern District of Florida.  

The Honorable James King, Senior Judge of the United States District Court for the Southern District of Florida  

Garcia-Bengochea v. Carnival Corporation (1:19-cv-21725-JLK)

https://www.fjc.gov/history/judges/king-james-lawrence  

https://www.flsd.uscourts.gov/content/senior-judge-james-lawrence-king 

https://en.wikipedia.org/wiki/James_Lawrence_King

U.S. Department Of State Imposes Visa Restrictions Upon Cuban Officials & Their Families

https://www.state.gov/visa-actions-against-cuban-officials/

Visa Actions Against Cuban Officials

Press Statement

Michael R. Pompeo, Secretary of State

July 26, 2019

The Cuban government engages in exploitative and coercive labor practices while it earns money on the backs of its citizens through its overseas medical missions program.  To address this labor abuse, the Department has imposed visa restrictions on certain Cuban officials and other individuals responsible for these coercive labor practices under the Immigration and Nationality Act Section 212(a)(3)(C).  These practices include working long hours, housing in unsafe areas, and compelling Cuban medical professionals to advance the regime’s political agenda.  Such visa restrictions could include immediate family members of these individuals.

No USDA Taxpayer Support Required: U.S. Soybean Exports To Cuba For First Five Months Of 2019 Exceed Entire Exports For Calendar Year 2018

Soybean product (soybeans, soybean oil cake) exports from the United States to the Republic of Cuba have thus far in 2019 exceeded the entire calendar year 2018, representing an increase of 14.59%. 

Soybean product exports to the Republic of Cuba for the period January 2019 through May 2019 were US$46,627,034.00 compared to calendar year 2018 of US$40,687,867.00. 

The Trade Sanctions Reform and Export Enhancement Act (TSREEA) of 2000 re-authorized the direct export of agricultural commodities and food products from the United States to the Republic of Cuba albeit on a payment-of-cash-in-advance basis.  

Since the first exports using provisions of the TSREEA in December 2001, the Republic of Cuba has purchased more than US$6,011,335,411.00 in agricultural commodities and food products exclusive of transportation charges, bank charges, or other costs associated with exports. 

On 25 July 2019, the United States Department of Agriculture (USDA) announced a “Support Package for Farmers” valued at US$16 billion “aimed at supporting American agricultural producers while the Administration continues to work on free, fair, and reciprocal trade deals.”  Soybean products are a significant component of the Support Package as soybean product exports from the United States to the People’s Republic of China have decreased substantially: 

https://www.usda.gov/media/press-releases/2019/07/25/usda-announces-details-support-package-farmers 

LINK To Economic Eye On Cuba Report

U.S. Department Of State Fourth Update To Cuba Restricted List Includes Second Kempinski Property & Aerogaviota

Munich, Germany-based Kempinski Hotels S.A. (seventy-five properties in thirty countries) has their second property (the first was Gran Hotel Manzana Kempinski La Habana) in the Republic of Cuba included on the Cuba Restricted List: https://www.kempinski.com/en/cayo-guillermo/cayo-guillermo-resort/ 

From The United States Department Of State: 

The Department of State is publishing an update to its List of Restricted Entities and Subentities Associated with Cuba (Cuba Restricted List) with which direct financial transactions are generally prohibited under the Cuban Assets Control Regulations (CACR). This Cuba Restricted List is also considered during review of license applications submitted to the Department of Commerce's Bureau of Industry and Security (BIS) pursuant to the Export Administration Regulations (EAR). 

DATES: The Cuba Restricted List is updated as of July 26, 2019. 

LINK To PDF Of List 

Background 

On June 16, 2017, the President signed National Security Presidential Memorandum-5 on Strengthening the Policy of the United States Toward Cuba (NSPM-5). As directed by NSPM-5, on November 9, 2017, the Department of the Treasury's Office of Foreign Assets Control (OFAC) published a final rule in the Federal Register amending the CACR, 31 CFR part 515, and the Department of Commerce's Bureau of Industry and Security (BIS) published a final rule in the Federal Register amending, among other sections, the section of the Export Administration Regulations (EAR) regarding Cuba, 15 CFR 746.2. The regulatory amendment to the CACR added § 515.209, which generally prohibits direct financial transactions with certain entities and subentities identified on the State Department's Cuba Restricted List. The regulatory amendment to 15 CFR 746.2, notes BIS will generally deny applications to export or re-export items for use by entities or subentities identified on the Cuba Restricted List. The State Department is now updating the Cuba Restricted list, as published below and available on the State Department's website (https://www.state.gov/​cuba-sanctions/​cuba-restricted-list/​). 

This update includes four additional subentities. This is the fourth update to the Cuba Restricted List since it was published November 9, 2017 (82 FR 52089). Previous updates were published November 15, 2018 (see 83 FR 57523), March 9, 2019 (see 84 FR 8939), and April 24, 2019 (see 84 FR 17228). The State Department will continue to update the Cuba Restricted List periodically. 

The publication of the updated Cuba Restricted List further implements the directive in paragraph 3(a)(i) of NSPM-5 for the Secretary of State to identify the entities or subentities, as appropriate, that are under the control of, or act for or on behalf of, the Cuban military, intelligence, or security services or personnel, and publish a list of those identified entities and subentities with which direct financial transactions would disproportionately benefit such services or personnel at the expense of the Cuban people or private enterprise in Cuba. 

This document and additional information concerning the Cuba Restricted List are available from the Department of State's website (https://www.state.gov/​cuba-sanctions/​cuba-restricted-list/​). 

List of Restricted Entities and Subentities Associated With Cuba as of July 26, 2019 

Below is the U.S. Department of State's list of entities and subentities under the control of, or acting for or on behalf of, the Cuban military, intelligence, or security services or personnel with which direct financial transactions would disproportionately benefit such services or personnel at the expense of the Cuban people or private enterprise in Cuba. For information regarding the prohibition on direct financial transactions with these entities, please see 31 CFR 515.209. All entities and subentities were listed effective November 9, 2017, unless otherwise indicated. 

* * * Entities or subentities owned or controlled by another entity or subentity on this list are not treated as restricted unless also specified by name on the list. * * *

State Department Updates the Cuba Restricted List

07/26/2019 10:32 AM EDT  

The State Department has updated the Cuba Restricted List to add four sub-entities owned by the Cuban military.  The changes take effect today, July 26, as Cuba celebrates more than 60 years since the start of the Cuban Revolution.  Sixty years after Castro promised to improve the lives of the Cuban people, the revolution continues to fail its people by squandering Cuba’s economic potential through mismanagement and oppressing brave Cubans that continue the fight for freedom.  The Department remains committed to ensuring U.S. funds do not directly support Cuba’s state security apparatus, which not only violates the human rights of the Cuban people, but also exports this repression to Venezuela to support the corrupt Maduro regime. 

In accordance with the June 2017 National Security Presidential Memorandum-5, “Strengthening the Policy of the United States Toward Cuba,” the U.S. government generally prohibits direct financial transactions with listed entities and sub-entities because they would disproportionately benefit the Cuban military, intelligence, and security services or personnel at the expense of the Cuban people or private enterprise in Cuba. 

For more information on the regulations prohibiting direct financial transactions with entities and sub-entities on the Cuba Restricted List, please refer to the November 2017 regulatory amendments by the Departments of the Treasury (31 CFR part 515) and Commerce (15 CFR parts 730-774). 

For further information, please contact WHA Press at WHAPress@state.gov and EB Press at EEB-A-PD-DL@state.gov. 

The post State Department Updates the Cuba Restricted List appeared first on United States Department of State.

U.S. Cash-In-Advance Food/Ag Exports To Cuba Exceed US$6 Billion

In December 2001, the first agricultural commodity exports were delivered directly from the United States to the Republic of Cuba using provisions of the Trade Sanctions Reform and Export Enhancement Act (TSREEA) of 2000. 

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 Cuban Democracy Act (CDA) of 1992. 

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.

LINK To Economic Eye On Cuba Report

U.S. Exports To Cuba Decrease 5.1% In May 2019; Remain Up 8.5% Year-To-Year; Cuba Hits US$6 Billion In Purchases

ECONOMIC EYE ON CUBA©

July 2019

US$6 Billion Exported To Cuba Since 2001- 1

May 2019 Food/Ag Exports To Cuba Decrease 5.1%- 1

Cuba Ranked of 50th of 229 U.S. Food/Ag Export Markets- 2

Cuba Year-To-Year Exports Increase 10.1%- 2

May 2019 Healthcare Product Exports US$144,860.00- 2

May 2019 Humanitarian Donations US$1,412,237.00- 3

Obama Administration Initiatives Exports Continue To Increase- 3

U.S. Port Export Data- 16 

MAY 2019 FOOD/AG EXPORTS TO CUBA DECREASED 5.1%- Exports of food products and agricultural commodities from the United States to the Republic of Cuba in May 2019 were US$27,657,057.00 compared to US$29,169,203.00 in May 2018 and US$31,720,403.00 in May 2017.   

United States exports from January 2019 through May 2019 were US$136,122,190.00 compared to US$123,585,994.00 from January 2018 through May 2018, representing an increase of 10.1%. 

Total exports of agricultural commodities and food products from the United States to the Republic of Cuba since December 2001 is US$6,011,335,411.00 through May 2019.   

The information on exports from the United States to the Republic of Cuba includes- 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 

LINK To Complete Report

Recent Court Filings In Spain (Not United States) Lawsuit Against Melia Hotels International

The two most recent filings for the lawsuit filed on 29 May 2019 in Spain against Palma de Mallorca, Spain-based Melia Hotels International S.A. relating to the use by the company of expropriated property in the Republic of Cuba.   

The lawsuit is not using provisions of the 1996 Cuba Liberty and Democratic Solidarity Act (known as “Libertad Act”) although Melia Hotels International S.A. does reference the Libertad Act in its response. 

8 July 2019 on behalf of Melia Hotels International S.A. [LINK]

17 July 2019 on behalf of Central Santa Lucia L.C. [LINK]

29 May 2019 on behalf of Central Santa Lucia L.C. (original lawsuit filing) [LINK]

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.  One Canada-based company is currently subject to this provision based upon a certified claim. 

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.

Societe Generale Of France Is Target Of 9th Lawsuit Using Libertad Act

1:19-cv-22842-DPG Sucesores de Don Carlos Nunez y Dona Pura Galvez, Inc. v. Societe Generale, S.A.
Darrin P. Gayles, presiding

Date filed: 07/10/2019 

LINK To Filing 

Societe Generale sued for $792 million by heirs of Cuban bank seized by Castro 

Reuters

By Jonathan Stempel

10 July 2019 

(Reuters) - The family of the former owners of a Cuban bank seized by Fidel Castro’s government nearly six decades ago sued Societe Generale (SOGN.PA) for approximately $792 million, saying the French bank owes damages for circumventing U.S. sanctions against Cuba. 

In a complaint filed on Wednesday with the U.S. District Court in Miami, 14 grandchildren of Carlos and Pura Nuñez, who once owned Banco Nuñez, want to hold Societe Generale liable under U.S. law for doing business with Cuba’s central bank, which nationalized Banco Nuñez and other lenders in 1960. 

A lawyer for the plaintiffs said he believed the case was the first against a bank that allegedly “trafficked” in property expropriated by the Castro regime, since the Trump administration said in April it would begin letting U.S. nationals sue companies for such conduct. 

“Victims of the Cuban regime who had their property confiscated now have a vehicle to get justice,” Javier Lopez, the lawyer, said in an interview. “We have multiple financial institutions that we’re looking to target.”  Societe Generale did not immediately respond to requests for comment after market hours. 

The lawsuit was filed eight months after Societe Generale agreed to pay $1.34 billion and enter a deferred prosecution agreement to settle U.S. and New York regulatory charges that it handled billions of dollars of transactions related to Cuba and other countries under U.S. sanctions. 

According to the plaintiffs, Societe Generale generated hundreds of millions of dollars of fees by lending money to and processing transactions for Banco Nacional de Cuba from 2000 to 2010. 

The plaintiffs said they own a claim to 10.5% of the equity in Banco Nacional de Cuba, roughly the percentage that Banco Nuñez represented when it was seized.  Lawyers for the plaintiffs at Kozyak Tropin & Throckmorton based the $792 million damages estimate on Banco Nuñez’s $7.8 million worth at the time, plus 6% annual interest and triple damages under the Helms-Burton Act, a 1996 federal law. 

The right to sue under that law had been suspended for 23 years because of opposition from the international community and concern that U.S. courts could be overrun by lawsuits. 

Secretary of State Mike Pompeo announced the lifting of that suspension in April, to boost pressure on Havana to end Cuban support for Venezuela’s socialist president, Nicolas Maduro. 

The case is Sucesors de Don Carlos Nuñez y Doña Pura Galvez Inc v Societe Generale SA, U.S. District Court, Southern District of Florida, No. 19-22842.

President Trump To Visit Turkey: (Bonus) A Trump Tower In Istanbul & (Challenge) A Well-Known Company May Be Sued

The Honorable Donald J. Trump, President of the United States, continues to plan for a visit to the Republic of Turkey.  Will he visit Trump Towers in Istanbul?  Cuba will be a topic.   

A goal for a two-night visit to Turkey remains for July 2019 or August 2019 (prior or subsequent to the 45th G7 Summit in Biarritz, Nouvelle-Aquitaine, France) or September 2019 prior to the United Nations General Assembly in New York City. 

During the United Nations General Assembly, President Trump anticipates high-profile bilateral meetings (formal and sideline) with leadership of Cuba, Iran, North Korea, Syria, and Venezuela (unified or bifurcated) among others. 

H.E. Recep Tayyip Erdogan, President of the Republic of Turkey since 2014, was Prime Minister from 2003 to 2014, and Mayor of Istanbul from 1994 to 1998.  President Erdogan leads the Justice and Development Party (AKP).  Primary opposition party is Republican People’s Party (CHP). 

Despite current commercial, economic and political challenges for President Erdogan, he and the 82.9 million population of Turkey remain indispensable to the multilateral interests of the United States.  

The Trump Administration remains concerned by a re-alignment of Turkey with China, Russia, India, Iran, Iraq and Syria (where Ankara will have a substantive role in the management and rebuilding of the country).   

The delay by the Brussels, Belgium-based European Union (EU) in its efforts to include Turkey as its 29th member is no longer considered by Turkey to be of immediate importance; membership has ceased to be an enticement to influence behavior.   

Turkey withdrawing from the 29-member Brussels, Belgium-based North Atlantic Treaty Organization (NATO) should not be discounted as a genuine option; Turkey could affiliate with the 125-member and 25 observer countries of the New York, New York-based Non-Aligned Movement (NAM)- Turkey would immediately have a leadership role and revitalize its global influence.    

A goal of the visit to Turkey is to project President Trump as not anti-Muslim in a country where an existing narrative is that he is anti-Muslim; with a perception by some that he separates Muslims into two groups- those who are “civilized” defined as wealthy, purchase products (particularly defense-related) from the United States, and support United States policies and those who are “uncivilized” defined as poor, do not purchase products (particularly defense-related) from the United States, and do not support United States policies. 

Venues in Turkey of interest to staff at The White House- National Security Council (NSC) and Office of Scheduling and Advance, United States Department of State, and United States Secret Service (USSS) include the capital Ankara (population approximately 5 million), the largest city Istanbul (population approximately 15 million), and Izmir (population approximately 4 million), located on the Aegean Sea coast and location of substantive photogenic archaeological sites. 

In Istanbul, the preferred primary location, President and Mrs. Trump with President and Mrs. Erdogan would visit the Blue Mosque, Hagia Sophia Museum and Basilica Cistern.  President Trump and President Erdogan might visit the Suleymaniye Hamam.  Mrs. Trump and Mrs. Erdogan may visit Topkapi Palace Museum, Suleymaniye Mosque and Grand Bazaar.  There may also be a cruise on the Bosphorus and photo opportunity at the Maiden’s Tower; and potentially a visit to one of the Prince’s Islands located in the Sea of Marmara to the southeast of Istanbul.  

The government of Turkey advocates for Air Force One to arrive at US$8 billion Istanbul Airport (IST) which commenced full operation in 2019 and is located approximately expressway 22 miles from Istanbul.  Once completed, expected to be one of the largest airports in the world with eight runways and annual capacity approaching 200 million travelers.  Turkish Airlines is reported as the largest airline in the world by number of destinations, currently 304.  Turkish Airlines is an “Airborne Embassy” and Turkish Cargo is an “Airborne Chamber of Commerce.”   

If bilateral and multilateral defense-related issues are resolved or near resolution, President Trump would have an interest in visiting a military base to reinforce the relationship of Turkey with the United States and NATO (F-35 aircraft manufactured by Fort Worth, Texas-based Lockheed Martin with components manufactured in Turkey).  If there are Patriot surface-to-air (SAM) systems manufactured by Waltham, Massachusetts-based Raytheon Company available for viewing, they would be included in any tour. 

If Turkey accepts delivery of the S-400 SAM from Moscow, Russia-based VKO Almaz-Antey, a visit by President Trump to an installation site should not be discounted as it would provide an opportunity for the President to present reasons the Patriot is superior to the S-400.   

Venue concerns are primarily focused upon (though unlikely) demonstrations- in support of the AKP and against the AKP and in support of the CHP and against the CHP.  The recently-elected mayors of Ankara (the capital) and Istanbul (the largest city in the country) are members of the CHP and each will welcome President Trump when he arrives to their respective cities.  Expect Turkey to consider temporarily closing its overland borders with Syria, Iraq, Iran, Armenia and Georgia as security precautions.  President Erdogan will desire to be perceived as a muscular democrat- tolerant to opposition yet unquestioned as to his leadership of the country.    

A most significant optical challenge for the Trump Administration is how to manage the desire of President Trump to visit the two-building Trump Towers located in the Sisli District of Istanbul.  

According to the required 2018 filing to the U.S. Office of Government Ethics, President Trump certified: “TRUMP MARKS ISTANBUL II LLC NIA 342.  Value: None (or less than $1,001).  Income Type: royalties.  Income Amount: $100,001-$1,000,000.  Value reported reflects bank account holding only.  Additional Underlying Asset: license deal with ORTADOGU OTOMOTIV TICARET AS - value not readily ascertainable. License holder, New York, NY.  Trump Marks Istanbul II LLC shareholders: 1% Trump Marks Istanbul II Corp (role- managing shareholder) and 99%- DTTM Operations LLC (role- member).”   

The property is near previously-outlined secure motorcade routes from Ataturk International Airport to the listed hotels (United States government preferred brands include Hilton, Hyatt, Marriott).  The Trump Towers are viewable from most rooms in the United States-branded properties in Istanbul.  

President Trump has been criticized for visiting properties in the United States and other countries owned/managed/licensed by The Trump Organization as the visits are perceived as a United States-taxpayer funded opportunity to provide marketing value for the personal interests of the President and his family.  Thus far, the President has not indicated that he considers such criticism to be justified; and has continued to visit properties even when there is substantial cost to United States taxpayers- golf course in Scotland, for example and no identifiable official purpose.   

Opened in 2010, Trump Towers Istanbul (http://www.trumpistanbul.com.tr/en/default.aspx) was reported as the first to be constructed on the European Continent. 

Trump Towers (Wikipedia): 

“Trump Towers, Istanbul, Sisli is a landmark in the historic city of Istanbul.  With two towers rising in Mecidiyekoy, one of the city's most vibrant areas, the property captures the utmost in luxury.  The residential tower, just under 40 stories, consists of over 200 residences, and will feature the expansive layouts, meticulous eye for design and lavish finishes synonymous with the Trump name.  Forest, city and Bosporus views will be extraordinary through the vista of floor-to-ceiling windows.   

In addition, residents will enjoy a full-service spa and fitness center, an indoor pool, a 24-hour doorman, a business center, and a vast range of additional amenities. The office tower, also 40 stories, will offer commercial luxury at its finest, with a private entrance, a beauty center, fitness area and pool for those working in the building. A luxury retail component of over 400,000-square-feet rests at the base of both towers, offering residents and visitors the best in retail and dining with personalized service incomparable to anything in Istanbul. 

A prominent tenant in the building has been: Reza Zarrab (Persian: رضا ضراب‎, Turkish: Rıza Sarraf; born 12 September 1983 in Tabriz, Iran) is a Turkey-based businessman. He has quadruple Iranian, Azerbaijani, Turkish and Macedonian citizenship.  

On 19 March 2016 he was arrested in the United States, and is accused of being a member of international criminal organization. He was charged with evading the US economic sanctions on Iran and money laundering in an alleged racket scheme to help Iran bypass the sanctions, involving ministers of the Turkish government of then prime minister and now president of Turkey, Recep Tayyip Erdoğan.   

His father, Hossein Zarrab, had a close relationship with Mahmoud Ahmadinejad, who served as the President of Iran between 2005 and 2013. The U.S. Department of Treasury accused Hossein Zarrab of violating U.S. sanctions on Iran and slapped a $9.1 million fine against him. His fine reduced to $2.3 million following his collaboration with the U.S. officials. 

Zarrab was arrested by the FBI in Miami in the US on March 19, 2016 and was accused of bank fraud, money laundering and helping the Iranian government in evading the US economic sanctions on Iran to hinder its nuclear-weapons program. His charges; conspiracy to defraud, violating the International Emergency Economic Powers Act, money laundering, and bank fraud; could bring up to 70 years in prison if found guilty in the U.S. Federal Court.” 

Issues for discussion by President Trump and President Erdogan include:  

Accepting from Iraq the children of Turkish-nationals

Accepting from Syria the children of Turkish-nationals

China (commercial relationship, Uighurs)

Continuing NATO membership

Cuba (potential lawsuit against company using Libertad Act; relationship with Venezuela)

EU Membership

F-35 Aircraft

Fethullah Gulen

Iran

Iraq

Israel

Libya

NATO membership

Natural Gas Purchases

North Korea

Oil Purchases

Prisoner Exchanges

Production Cooperation Agreement for S-500 defense system with Russia

Purchase of S-400 defense system from Russia

Removal of Turkey as a Beneficiary Developing Country (BDC) for GSP

Removed higher level United States tariffs on steel exports to the United States

Russia

Syria

Venezuela

Complete Analysis In PDF Format

OFAC Sanctions Another Company Owned By Government Of Cuba That Engages With Venezuela

United States Department of State

Washington DC

3 July 2019

The United States Curtails Cuban Support for Illegitimate Former Maduro Regime

Today, the United States removed sanctions on oil shipping company PB Tankers in response to actions it has taken to ensure that its vessels no longer were complicit in supporting the former Maduro regime. Additionally, the United States designated Cubametales, the Cuban state-run company and primary facilitator of oil imports from Venezuela, for circumventing U.S. sanctions.

The services and goods Cuba provides Venezuela continue to fuel the corruption of Maduro and his cronies and help maintain their influence over the Venezuelan people. These actions serve to squeeze the lifeline provided by Cuba that preserves Nicolas Maduro’s influence. Every drop of Venezuelan oil shipped to Cuba is traded for additional security and intelligence officers and other personnel, which further robs and impoverishes a once rich nation, denies Venezuelan sovereignty, and prolongs the suffering of the Venezuelan people.

We commend PB Tankers, which was sanctioned on April 12, 2019, for taking actions since then to ensure that its vessels are not used to prop up Maduro and his Cuban sponsors. This is a reminder that those who take concrete and meaningful actions to restore democracy in Venezuela can expect the removal of sanctions.

At the same time, the United States will continue to take action against those that seek to thwart Venezuela’s peaceful transition back to freedom and prosperity.

We call on the international community to step up pressure on Nicolas Maduro and his criminal associates. We must stand together in support of the Venezuelan people’s struggle for democracy and desire to live in dignity.

United States Department of the Treasury

Washington DC

3 July 2019 

Treasury further removes sanctions on company that has ended its involvement in Venezuelan oil shipments to Cuba 

Washington (3 July 2019) – Today, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Cubametales, the Cuban state-run oil import and export company, for its continued importation of oil from Venezuela.  Cuba, in exchange for this oil, continues to provide support, including defense, intelligence, and security assistance, to the illegitimate regime of former President Nicolas Maduro.  Today’s action, taken pursuant to Executive Order (E.O.) 13850, as amended, targets the company for operating in the oil sector of the Venezuelan economy.   

“Maduro is clinging to Cuba to stay in power, buying military and intelligence operatives in exchange for oil.  Treasury’s sanctions on Cubametales will disrupt Maduro’s attempts to use Venezuela’s oil as a bargaining tool to help his supporters purchase protection from Cuba and other malign foreign actors,” said Treasury Secretary Steven T. Mnuchin.  “Treasury’s decision to remove restrictions on PB Tankers and unblock previously sanctioned vessels is a reminder that positive changes in behavior can result in the lifting of sanctions.” 

On October 31, 2000, the Government of Cuba solidified its investment in the oil sector of Venezuela through the Cuba-Venezuela Integral Cooperation Agreement (CIC).  Through this agreement, Venezuela exports oil to Cuba, and in return, Cuba provides assistance to several sectors of the Venezuelan economy, to include the provision of medical services, technology, and military assistance.  The goods and services Cuba provides Venezuela continue to fuel the corruption of Maduro and his associates and help maintain their control over the increasingly impoverished Venezuelan people whose oil has been shipped to Cuba in support of dictatorship.   

Since the January 28, 2019 designation of Petroleos de Venezuela, S.A. (PDVSA), the Venezuelan state-owned oil company, Cubametales and other Cuba-based entities have continued to support Maduro through oil shipments from Venezuela.   

Cubametales is based in Havana, Cuba and is responsible for guaranteeing 100 percent of imports and exports of fuels and imports of additives and basic oils for lubricants to and from Cuba.  Additionally, Cubametales has been the recipient, and charterer, of shipments of oil from Venezuela to Cuba and has expanded its operations to include non-traditionally traded oil products such as sulfur fuel and diluted crude oil.  As a part of the original CIC agreement, the agreement states that Cubametales (and its administrative manager) and PDVSA are responsible for setting the terms and conditions for PDVSA oil exports up to 53,000 barrels per day on a quarterly basis.   

As a result of today’s action, all property and interests in property of this entity, and of any entities that are owned, directly or indirectly, 50 percent or more by the designated entity, that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC.  OFAC’s regulations generally prohibit all dealings by U.S. persons or within (or transiting) the United States that involve any property or interests in property of blocked or designated persons.

Delisting of PB Tanker S.p.A 

In addition to today’s designation of Cubametales, OFAC is delisting PB Tankers S.p.A. (PB Tankers).  OFAC designated PB Tankers on April 12, 2019, for operating in the oil sector of the Venezuelan economy.  As a part of this designation, six vessels were identified as blocked property in the interest of PB Tankers; one vessel, named the Silver Point, was used to deliver oil products from Venezuela to Cuba.  Following the company’s designation, PB Tankers terminated its charter agreement with Cubametales, which had chartered the Silver Point to transport oil between Venezuela and Cuba.  Likewise, PB Tankers took additional steps to increase scrutiny of its business operations to prevent future sanctionable activity.   

Treasury recognizes the actions that PB Tankers has taken to ensure that its vessels are not complicit in propping up the illegitimate former Maduro regime in Venezuela.  As a result of today’s action, all property and interests in property, which had been blocked as a result of PB Tankers’ designation, are unblocked, and all otherwise lawful transactions involving U.S. persons and PB Tankers are no longer prohibited. 

Delistings Promote Positive Changes in Behavior 

U.S. sanctions need not be permanent; sanctions are intended to bring about a positive change of behavior.  The United States has made clear that the removal of sanctions is available for persons designated under E.O. 13692 or E.O. 13850, both as amended, who take concrete and meaningful actions to restore the democratic order, including through refusing to operate in Venezuela’s oil sector, which continues to provide a lifeline to the illegitimate regime of former President Nicolas Maduro.  

Additional Resources 

For information about the methods that Venezuelan senior political figures, their associates, and front persons use to move and hide corrupt proceeds, including how they try to exploit the U.S. financial system and real estate market, please refer to Treasury’s Financial Crimes Enforcement Network (FinCEN) advisories FIN-2019-A002, “Updated Advisory on Widespread Public Corruption in Venezuela,” FIN-2017-A006, “Advisory to Financial Institutions and Real Estate Firms and Professionals” and FIN-2018-A003, “Advisory on Human Rights Abuses Enabled by Corrupt Senior Foreign Political Figures and their Financial Facilitators.”

Is "Economic Waterboarding" Necessary For 32 Million People? G20 Needs To Focus Upon A Resolution

Venezuela Impacts G20 And More; Resolution Should Be A Priority

Lack Of Triangular Trust Is Profound

“Hard Choices”

Closing Borders? The Syria Model

Is “Economic Waterboarding” Necessary For 32 Million People?

Five Members Of The G20 Are Primary For A Resolution

Seven Global Impacts Because Of Venezuela’s Instability

Cuba Has A Role

The Five-Step Roadmap 

Why are thirty-two million residents of Venezuela victimized by “economic waterboarding”- not once, not twice, but every day- and every hour of every day?

First, because of decisions by the government of Venezuela; that’s an inescapable conclusion.  Second, because none of the consequential actors agree as to the definition of the problem.  Third, because none of those actors will make hard choices- which may require (perhaps temporarily) separating self-interest from the interests of the dispossessed. 

The issue is not uniquely about crossing lines, red or any other color, it’s about removing boundaries which are effectually barriers to communication to solve the problem.  

Is Venezuela solvable?  Yes.  The equation required is neither linear nor one dimensional.  The solution requires decisions that optically are unpleasant.  Absent correction, what represents approximately 10% of the population of the United States will remain unwelcomed, unresponsive, unproductive and increasingly simultaneously angry and dispirited- 1,377 miles south east of Key West, Florida.  All the while atop the world’s largest proven oil reserves (Iran ranks third/fourth).    

For a resident of Venezuela, the debate among governments as to who to hold responsible, how to hold them responsible and where to hold them responsible is of far less importance than finding water, food, medication and employment.  They want a solution rather than awaiting results from a caloric-depleting gaming theory played-out by elected and appointed officials in capitals around the world- none of whom are lacking in food, clothing or paycheck.  

For the outlying governments- near and abroad, they await a population that erupts to topple the Maduro Administration; an energy-depleted population without cohesive leadership.  The hoped-for result takes time- with the outlying governments patient while the population suffers-along-to-victory.  

The lack of a sustainable trilateral trust among the United States, Venezuela and the Republic of Cuba remains profound and unless addressed will serve as the primary impediment to resolving the respective bilateral issues and ultimately the trilateral issues.  

The commercial, economic and political issues enveloping Venezuela are a global contagion impacting each member (and beyond) of the G20, G7, OAS and UN. 

Lack of a resolution for Venezuela continues to impact globally the a) price of crude oil b) price of natural gas c) prices of distillates (fuels and fuel oils) d) range of interest rates governments must pay, companies must pay and consumers must pay e) cost of bonds f) value of stock markets and g) decisions by country central banks.   

Why does Venezuela matter? Venezuela has the largest proven oil reserves in the world, the eighth-largest natural gas reserves in the world and has been the twenty-seventh (27th) largest gold producer in the world.  Venezuela’s population of 32 million ranks 44th among 233 countries.  As the crow flies, the capital Caracas is 2,060 miles south from Washington DC.  And, the connectively of Venezuela and Iran, with respect to how issues relating to each impact global energy markets and global political discourse, is another reason that a resolution for Venezuela is important. 

G20 members- Brazil (which shares a 1,367 mile border with Venezuela), China, Russia, Turkey and United States have defining roles in determining how costly is a resolution for each of the 32 million citizens of Venezuela- approximately four million of whom have departed the country during the last four (4) years with approximately one (1) million having departed in the last five (5) months.   

To date, the imperfect defacto consensus for Venezuela by Brazil, Venezuela, China, Russia, Turkey and the United States is 1) something needs to happen 2) absence of a resolution remains a preferred landscape; and the cost of repair and replace and hardship inflicted upon the 32 million citizens of Venezuela remains within acceptable political parameters 3) the solution must birth itself from within Venezuela, although the definition of “birth itself” is not shared by the five parties 4) there is no trust among the five 5) none of the five will publicly say that they’ve done anything wrong 6) no agreement as to the definition of the problem and what, if anything, needs to be done and 7) some members of the five take pride in advancing and/or sustaining the status quo precisely because of the indigestion and distraction and internal recrimination brought to the overseas doorstep of the United States.  Until some or all of the calculus changes, Venezuela remains a global contagion. 

Predictive modeling analysis to determine at least two outcomes is easily calculable and subject to calibration: None of the five primary actors will permit Venezuela to implode or explode.  The five primary actors are (agnostically) permissive of permitting extreme pain- a multiple-times-per-day economic waterboarding for 32 million citizens- without consistent messaging as to what the population need collectively to do for the pain to end. 

It’s about surrendering.  The question is who surrenders to whom?  The government to the governed or the governed to the government? 

Some context: The United Nations reported that of Syria’s 21 million pre-2011 population, today 13.5 million require humanitarian assistance, more than 6 million are “internally displaced” (a delicate way to convey their homes are uninhabitable; not visiting relatives or on vacation), and more than 6 million have left the country.  Turkey (population 82 million) is hosting a reported 3.6 million; Lebanon (population 6 million) is hosting 1.5 million, and Jordan (population 10 million) is hosting 1.4 million.  The cost to reconstitute what was in 2011?  Perhaps, US$50 billion to US$100 billion- another commercial opportunity.   

There were border-closing propositions debated from 2011 through 2013 where the Obama Administration would have led a coalition including Jordan, Iraq, Israel, Lebanon and Turkey to close their respective borders soon after the initial violence in Syria.  Had those propositions been adopted, the multi-year, multi-billion-dollar tragedy that has infiltrated and disrupted the European Continent may have been mitigated. 

If Jordan, Iraq, Lebanon and Turkey had closed their borders in 2011 and governments (particularly the United States) had not closed their embassies and those of Syria in other countries, the Assad Administration would have been forced to embrace a far less catastrophic strategy due to a lack of commercial, economic and political oxygen- and a robust diplomatic presence throughout the country.  What’s happened in Syria is much easier to accomplish when nearing one-in-three citizens have departed the country.   

The United Nations reported that since 2014 approximately 4 million have departed Venezuela.  If Aruba, Brazil, Colombia Curacao, Guyana, and Trinidad and Tobago had closed their borders in 2018 or 2019, the Maduro Administration, lacking commercial, economic and political value from purging the unwanted, would have chosen a less catastrophic strategy due to a lack of commercial, economic and political oxygen.      

For those countries whose borders are continuous and connected to Venezuela- Brazil, Colombia and Guyana, stability is far more paramount than is the immediate composition, the character of leadership in Caracas.  Each remain impacted by an unstable Venezuela due to impact upon energy deliveries, immigration, and political relationships.   

Colombia (population 49.85 million), sharing a 1,378 mile border with Venezuela, has been most impacted by a reported more than 1.5 million citizens of Venezuela arriving to during the last several years resulting in an increase in unemployment, depression of wages, stresses upon educational systems, impact upon social services, and an increase in crime particularly in the capital, Bogota (population 8 million).  Colombia’s borders also include Panama, Ecuador, Peru and Brazil, so the country is a point of transit for refugees seeking to travel to Peru, Bolivia, Chile and Argentina and these countries have implemented immigration policies to curb arrivals due to the same issues impacting Colombia.  According to the United States Department of State, Peru (population approximately 32.17 million) is hosting approximately 800,000 migrants/refugees from Venezuela and Ecuador (population approximately 16.65 million) is hosting approximately 260,000 migrants/refugees from Venezuela.   

Though painful for all parties, Brazil, Colombia and Guyana can still close their borders with Venezuela.  The result would expectantly lessen the duration of the Maduro Administration- but, at what societal and reputational cost?  With border closures, the problems within Venezuela would then remain within the borders of Venezuela- requiring the Maduro Administration to adopt commercial, economic and political changes or preside over a chain reaction of implosions and explosions certain to lead to unpleasant final chapter.    

The closure of borders is painful for those who are trapped, but shorter-term pain is probably preferred to longer-term generational mismanagement in providing opportunities to a population.     

Economic waterboarding has become an ever-more frequent instrument for those in government to remain in government and for those out of government to return to government and for those seeking to be the government: Afghanistan, Democratic Republic of Congo, Iraq, Israel/Palestine, Libya, Nigeria, Somalia, South Africa, South Sudan, Sudan, Syria, Yemen and Zimbabwe come to mind as reported examples. 

Another instrument of population pain is the concept of Apartheid, having its roots in segregation and subjugation by race (white on black), but has from end of the 20th century and thus far through the 21st century carried-forth defined not only by race (which has transformed in some instances to black on black particularly on the continent of Africa), but to ethnicity, political perspective, party affiliation, and religious testament.  Components of the 21st century apartheid appear in Venezuela.  Traditionally, the role of global balancer would be the purview of the United States; that opportunity does not seem to be currently viable. 

The problems inflicting Venezuela are self-inflicted due to the creation and implementation during more than twenty (20) years of policies, regulations and statutes that continue to impede export revenues, import revenues, debt servicing, and manufacturing/assembly productivity and efficiency.  The decisions of third-parties have exacerbated the self-inflicted issues, but are not their cause.       

For political leadership in Venezuela to prevail, primary focus need be upon transparency in the decision-making process, consistency in the decision-making process, and continuity in the decision-making process.  With those three imperatives, Venezuela and other countries may model outcomes so that impact is both predictable and manageable.  

The known is whatever the solution for Venezuela, the fulcrum component requires global stable pricing for crude oil so that the government of Venezuela and those who finance it (through direct/indirect lending and bond purchases) and those who manage it may project revenues and expenses.   

Before Venezuela has the means to again redevelop its manufacturing and assembly infrastructure to support the aspirations of its 32 million citizens, its companies (domestic and subsidiaries of foreign companies) require pricing for its current primary export to be stable.   

This means the United States and the Organization of the Petroleum Exporting Countries (OPEC) need to cooperate.   

One OPEC member is a member of the G20- Saudi Arabia; two OPEC Observers are members of the G20- Mexico and Russia.  

Can, however, the United States, OPEC, OPEC Observers, and the countries who import oil through the complexities of the global marketplace, denominated in United States Dollars, create global stability where sources of energy and uses of energy continue to change whether a construct of pricing, environmental focus or both?  The cooperative baseline will likely remain imperfect. 

And For Cuba?  

A resolution for Venezuela also dramatically impacts the Republic of Cuba- requiring the [Miguel] Diaz-Canel Administration to continue to accept, adapt, endure and maintain ongoing structural changes to the economic fabric and social fabric of the 800-mile archipelago for its 11.4 million citizens.   

The most consequential challenge for the government of the Republic of Cuba is how to pivot from a commercial, economic and political landscape which has existed due to non-market-based benefits provided by third-parties to a landscape which the public sector and private sector function on the basis of market-based relationships with those it exports to, imports from, and provides services.  Once achieved, the Republic of Cuba will have created an environment whereby it will have better control over the domestic direct and indirect impact of decisions by third-parties. 

Prosperity in the Republic of Cuba has not been prevented, but has been impacted because of laws, regulations and policies of the United States.  Prosperity has not revisited the Republic of Cuba primarily because the government of the Republic of Cuba remains fearful of the impact of prosperity upon the population.  There is a fear of the “lottery curse” where those who have not had money suddenly have money and they mismanage it and, in some instances, it corrupts their soul. 

First Published 30 March 2019

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 

Until there is a resolution, or the perception of a resolution to Venezuela amongst impacted constituencies, challenging will be resolve by the Trump Administration to engage the Republic of Cuba in direct bilateral negotiations about the certified claims or any other issue of substance. 

There are decisions which could be implemented in Venezuela and in the Republic of Cuba that might prompt a shift in the political compass (and calculus) of the Trump Administration from directionally limited to normal activity.  For that to happen, the Trump Administration needs to be succinct in the logic and practicality of its strategy and its messaging. 

The Trump Administration must provide assurances to Russia and China that monies owed to them by Venezuela will be repaid and that the Trump Administration will not seek to prohibit or deter companies from Russia and China from bidding on, implementing, and receiving payment from contracts in the future.

First, H.E. Juan Guaido, President of the National Assembly of Venezuela and self-declared Interim President of Venezuela, should be unequivocal in stating he will not become a presidential candidate when the next election is scheduled.  By confirming that his role is solely guiding Venezuela to its next presidential election, he would assist, but not eliminate, perceptions that he is too influenced by and beholden to interests of the United States.  His not seeking higher office removes an impediment to resolving the problems of Venezuela. 

Interim-President Guaido has limited time within which to demonstrate a landscape of control of the government of Venezuela- especially relating to the provision of services and particularly with respect to the distribution of substantial quantities of United States Dollars and other currencies located outside of Venezuela which the Trump Administration and other governments have sequestered for his control and then use on behalf of the citizens of Venezuela.  There may be a moment where citizens of Venezuela, despite support for Interim-President Guaido, decide that too many of their county’s financial resources are inaccessible unless they support President Nicolas Maduro; and the international community generally has limited patience in maintaining potentially billions of United States dollars and other currencies in perpetuity for a Maduro-less or Maduro-light government of Venezuela.  

Second, the Trump Administration has increased its usage of the phrasing “recognizing the realities on the ground” to discuss territorial issues.  The reality on the ground in Venezuela is those serving in the armed forces of Venezuela will determine whether President Maduro departs, when he departs and how he departs.  Unless there is an amnesty which includes departure from the country, if desired, and a guarantee that the United States and other countries will not pursue individuals for additional criminal or civil actions, challenging will be creating an atmosphere where members of the armed forces will support meaningful- and permanent change in Venezuela. 

Third, President Maduro, should he decide to resign and remain in Venezuela or depart for another country, would require assurances that he and his family would not be pursued for criminal and civil charges.  Perhaps, an unsettling and unappetizing possibility, but lacking such “not-go-to-jail cards and get-of-of-jail cards” the process of crisis- and the pain inflicted upon the citizens of Venezuela will continue- as will a question for those opposing President Maduro:  What is most important- President Maduro becoming Mr. Maduro or holding President Maduro accountable when he becomes Mr. Maduro?  There may not be a reasonable option to pursue both- there might be a forced choice.  Is the goal solving the problem or maintaining the problem?     

Fourth, if President Maduro departs Venezuela and the Republic of Cuba agrees to provide him with temporary or permanent housing, what should be the conditions?  Other countries who might host President Maduro include Russia, Turkey or one of the other thirteen members of the Vienna, Austria-based Organization of Petroleum Exporting Countries (OPEC).  

The Republic of Cuba would want guarantees from the United States, Organization of American States (OAS), European Union (EU), United Nations (UN) and International Criminal Court (ICC) among others that Mr. Maduro would not be sought for extradition and the Republic of Cuba would not be penalized for providing housing to Mr. Maduro.   

The United States would need to choose- the Trump Administration has defined President Maduro and what has happened within Venezuela as a [mostly] creation of the Republic of Cuba and has stated that if the Republic of Cuba withdrew its support (military and intelligence) for President Maduro, the problems of Venezuela would become those for Mr. Guaido (until a new president is elected) and supporters to repair.  

Political realities are often not binary and are multi-dimensional and lacking zero-sum definitions.  The Trump Administration will likely not inhabit the Venezuela it projects to seek in the short-term to medium-term unless there is an agreement with the Republic of Cuba- who will not agree to be blamed by the Trump Administration for what is happening in Venezuela while simultaneously being blamed if it takes a meaningful decision to change the equation to what is sought by the Trump Administration by providing safe harbor to Mr. Maduro.  Such self-imposed constraints on the Trump Administration would be challenging and equally so for members of the United States Congress.  

Fifth, if the Republic of Cuba were to agree to provide housing for Mr. Maduro, it would expectantly seek from the Trump Administration an agreement to reverse some decisions it has already taken or not implement what it has yet to do; perhaps including reinstatement to the OAS and lessening some international transaction restrictions.   

There is also logic for the Republic of Cuba to seek nothing from the Trump Administration and extract global goodwill for solving a problem which, by doing so, will result in economic pain for the Republic of Cuba.  The Republic of Cuba’s reliance on Venezuela has continued to decrease during the last four years; so, while painful, the Republic of Cuba could manage an elimination of its preferential commercial agreements.  If the Trump Administration were to then implement additional measures, they would be perceived by other countries as punitive- and the Republic of Cuba would gain leverage in the global marketplace- and in some constituencies throughout the United States.   

The primary question for the Trump Administration: President Maduro is willing to let his people suffer; is the Trump Administration willing to let his people suffer?  President Maduro has now survived past the presented expectations of the Trump Administration, so the distance between the Trump Administration obtaining everything that it wants and what is likely available continues to increase- that’s a problem for the Trump Administration.   

The likely predicted outcome for Venezuela will neither have a winner or a looser.  With President Maduro’s absence, all stakeholders will continue to endure pain while gaining or regaining what they want.  

G7, G20, OAS, EU, OPEC Membership 

G7: Canada, France, Germany, Italy, Japan, United Kingdom, and United States.   

G20: Argentina, Brazil, China, Germany, Indonesia, Japan, Republic of Korea, Russia, Turkey, United States, Australia, Canada, France, India, Italy, Mexico, Republic of South Africa, Saudi Arabia, United Kingdom, and Brussels, Belgium-based European Union (EU). 

OAS: Antigua and Barbuda, Argentina, Barbados, Belize, Bolivia, Brazil, Canada, Chile, Colombia, Costa Rica, Dominica, Dominican Republic, Ecuador, El Salvador, Grenada, Guatemala, Guyana, Haiti, Honduras, Jamaica, Mexico, Nicaragua, Panama, Paraguay, Peru, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Suriname, The Bahamas, Trinidad and Tobago, United States, Uruguay and Venezuela. 

EU: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland,  France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom. 

OPEC: Algeria, Angola, Congo, Ecuador, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia, United Arab Emirates and Venezuela.  OPEC Observers: Egypt, Mexico, Norway, Oman and Russia among other countries. 

LINK To Complete Analysis In PDF Format

Four New Lawsuits Using Libertad Act Filed In Florida Against Trivago

On 24 June 2019, Coral Gables, Florida-based Rivero Mestre LLP filed additional documents in the United States District Court, Southern District of Florida (Miami) against Dusseldorf, Germany-based Trivago GMbH (2018 revenues approximately US$1.2 billion), a subsidiary of  Bellevue, Washington-based Expedia Group (2018 revenues approximately US$11.2 billion). Expedia is expected to be sued soon.  

1. Filing

2. Filing

3. Filing

4. Filing

5. Filing

6. Filing

7. Filing

8. Filing

On 18 June 2019, Rivero Mestre LLP filed a class-action lawsuit in the United States District Court, Southern District of Florida (Miami) against Trivago GmbH.   

LINK: https://www.cubatrade.org/blog/2019/6/19/trivago-subsidiary-of-expedia-becomes-fifth-title-iii-libertad-act-lawsuit 

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.  One Canada-based company is currently subject to this provision based upon a certified claim. 

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.

FBI Commends Cuba For Seizing Assets Of Convicted Individual

No Safe Haven

Cuba is an Unreliable Shelter for Illicit Funds 

“Individuals who believe Cuba offers a safe haven for ill-gotten financial gains should understand the nation’s current government offers no such guarantee,” said acting FBI Legal Attaché to Cuba Christopher Starrett. 

Cuba’s recent seizure of assets housed there by Orelvis Olivera is an example of what can happen to property and bank accounts that criminals attempt to illegally shelter on the island. 

Olivera, who came to the United States from Cuba in 2005, was convicted in federal court in 2014 of defrauding Medicare of nearly $8 million. On paper, Olivera’s Acclaim Home Health Inc. provided home health care and physical therapy services to Medicare beneficiaries. In actuality, according to court documents and the FBI, the firm paid bribes to patient recruiters who referred Medicare beneficiaries to the company, allowing Acclaim to bill Medicare for unnecessary services. 

“They were providing limited services,” said Special Agent Noel Gil, who worked the case with the FBI Miami Field Office, “but most of their business was fraudulent. They were also enabling more fraud by accepting kickbacks for referring Medicare recipients to other medical agencies.” 

Olivera’s sentence of six years in prison included an order to pay more than $5.7 million in restitution to the U.S. government. Much of Olivera’s illegally acquired money, however, had been invested in properties and deposited in bank accounts in Cuba before he faced criminal charges. 

Media reports noted that Olivera was able to move the money during frequent trips to Cuba and frequent visits from family members to the United States. 

Gil said it is unlikely that Olivera started to hide his money in Cuba because of any loyalty to the country; rather, he likely viewed it as a safeguard against U.S. authorities. “He was hiding his money in Cuba because he believed he could go back to his businesses and his riches,” Gil said. 

In April 2019, however, the Cuban government convicted Olivera in absentia and sentenced him to 10 years in prison for money laundering, tax evasion, forgery of public documents, and illicit enrichment, among other crimes, based on his conviction in the United States and his investments in Cuba. They also punished several individuals who supported Olivera’s businesses or enterprises with fines or prison sentences. 

Most notably, Cuban authorities seized four properties, a vehicle, and two bank accounts that Olivera had put in the names of relatives and associates in Cuba. The United States will pursue recovering assets held in Cuba as part of the ordered restitution payments. 

The FBI believes Olivera is not the only individual who has had assets seized after a conviction in the United States. “The primary takeaway,” said Starrett, “is that the Cuban government may seize assets linked to crimes and no criminal should count on reclaiming them once they are seized.” 

https://www.fbi.gov/news/stories/cuba-is-an-unreliable-shelter-for-illicit-funds-062419

18 New Libertad Lawsuits Expected; 6 Filed In U.S.; 1 Related Lawsuit Filed In Spain

6 Lawsuits Filed; 18 Expected Within 60 Days 

Provided by legal counsels: Previous court filings and expected court filings in United States District Courts within the next thirty (30) and sixty (60) days using Title III of The Cuban Liberty and Democratic Solidarity Act of 1996 (Libertad Act). 

Libertad Act 

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

Title IV of the Libertad Act authorizes the United States Department of State to restrict entry into the United States by individuals who have connectivity to unresolved claims.  One company, Toronto, Canada-based Sherritt International (2018 revenue approximately US$500 million), is currently known to be subject to this provision; other companies have been impacted, but current status remains undetermined.  Since 1996, the United States Department of State has declined to provide the names of companies or individuals who have been subject to Title IV and information relating to behavioral change by companies or individuals due to pressure, but not implementation, of the use of Title IV. 

Title III Lawsuits Filed In United States  

(2 May 2019) Miami, Florida-based Carnival; Plaintiff- Havana Docks Corporation

(2 May 2019) Miami, Florida-based Carnival; Plaintiff- Javier Garcia-Bengochea

(2 May 2019) Havana, Cuba-based Corporacion Cimex; Plaintiff- Exxon Mobil Corporation

(2 May 2019) Havana, Cuba-based Union Cuba-Petroleo; Plaintiff- Exxon Mobil Corporation

(20 May 2019) Havana, Cuba-based Grupo Hotelero Gran Caribe, Corporacion de Comercio Y Turismo Internacional, Cubanacan S.A., Grupo De Turismo Gaviota S.A., Corporacion Cimex S.A., Raul Doe 1-5, and Mariela Doe 1-5; Plaintiff: Mata and Hernandez families

(18 June 2019) Dusseldorf, Germany-based Trivago GMbH (subsidiary of Bellevue, Washington-based Expedia); Plaintiff- Hernandez family 

Non-Title III Lawsuit (unjust enrichment statue) Filed In Spain

(29 May 2019) Palma de Mallorca, Spain-based Melia Hotels International; Plaintiff- Sanchez Hill family; filed in Superior Court of Palma de Mallorca, Spain  

Expected Libertad Act Filings In United States

Canada

Blue Diamond Resorts (Subsidiary of Toronto, Canada-based Sunwing Travel Group) 

France

Paris, France-based Group ADP (formerly Aeroports de Paris); Plaintiff: Lopez Regueiro family

Paris, France-based Societe Generale; Plaintiff: Nunez family  

México

Mexico City, Mexico-based Grupo Posadas 

Portugal

Lisbon, Portugal-based Pestana Management 

Spain

Tenerife, Spain-based Be Live Hotels

Palma de Mallorca, Spain-based Blau Hotels

Palma de Mallorca, Spain-based El Salado Resorts

Madrid, Spain-based Iberia Airlines

Palma, Majorca, Spain-based Iberostar Group

Palma de Mallorca, Spain-based Melia Hotels International (for properties in Holguín, Havana, Varadero, Cienfuegos and Cayo Coco among others) 

Turkey

Istanbul, Turkey-based Global Ports Holding 

United States

Fort Worth, Texas-based American Airlines

Norwalk, Connecticut-based Booking Holdings (booking.com); filing likely 18 July 2019

Atlanta, Georgia-based Delta Air Lines

Bellevue, Washington-based Expedia (hotels.com, orbitz.com, travelocity.com); filing likely 18 July 2019

Long Island City, New York-based Jet Blue Airways

Dallas, Texas-based Southwest Airlines

Chicago, Illinois-based United Airlines 

LINK: 

Libertad Act Lawsuit Filings- Part 1

Libertad Act Lawsuit Filings- Part 2 

Complete Analysis In PDF Format

Title III Lawsuits Could Impact 20 Countries 

https://www.cubatrade.org/blog/2019/2/18/title-iii-lawuits-for-cuba-expropriations-could-impact-20-countries-and-6-us-states?rq=Global%20Ports%20Holding