Stepping up pressure on Cuba, the Trump administration will allow lawsuits against foreign companies doing business in properties seized from Americans after the island’s 1959 revolution, a senior administration official said Tuesday.
The move marks a change in more than two decades of U.S. policy on Cuba.
President Donald Trump has been taking steps to isolate embattled Venezuela President Nicolas Maduro, who is clinging to power with help from other countries, including Cuba, China and Russia. The new policy against Havana could deal a severe blow to Cuba’s efforts to draw foreign investment, and spawn international trade disputes between the U.S. and Europe.
The 1996 Helms-Burton Act gave Americans the right to sue the mostly European companies that operate out of hotels, tobacco factories, distilleries and other properties that Cuba nationalized after Fidel Castro took power. The act even allows lawsuits by Cubans who became U.S. citizens years after their properties were taken.
Canada, France, Spain, Great Britain and other countries with large investments in Cuba have ferociously protested the law and threatened to sue in the World Trade Organization if Washington tries to interfere with the business ties between Cuba and another sovereign nation. U.S. airlines and cruise lines that bring hundreds of thousands of travelers to Cuba each year appear to be exempted.
Every U.S. president since Bill Clinton has suspended the key clause to avoid those trade clashes and a potential mass of lawsuits that would prevent any future settlement with Cuba over nationalized properties. Cuba has said it is willing to reimburse the owners of confiscated properties, but only if the communist government is also reimbursed for billions of dollars in damages generated by the six-decade U.S. trade embargo.
The announcement comes at a moment of severe economic weakness for Cuba, which is struggling to find enough cash to import basic food and other supplies following a drop in aid from Venezuela, and a string of bad years in other key economic sectors.
Foreign investment in Cuba increased slightly in recent years, but it remains far below the levels needed to recapitalize the island’s dilapidated, often collapsing infrastructure. The Trump administration’s decision is not expected to drive out major foreign players like Pernod-Ricard of France, which makes Havana Club rum, or Spanish hotel chains Melia or Iberostar, but it could prove a major obstacle to new investment from foreign companies.
National security adviser John Bolton is expected to discuss the new policy during a speech Wednesday in Miami, which is home to thousands of exiles and immigrants from Cuba, Venezuela and Nicaragua.
The speech at the Bay of Pigs Veterans Association is to be delivered on the 58th anniversary of the United States’ failed 1961 invasion of the island, an attempt to overthrow the Cuban government.
Speaking on condition of anonymity ahead of the official announcement, the Trump administration official said there will be no more waivers to the key piece of Helms-Burton, known as Title III.
The official said the administration also plans to start enforcing the section of the act that allows the U.S. to deny entry visas to Cubans and citizens of other countries involved in trafficking in the confiscated property.