In his last month in office, former President Barack Obama preempted what could have been one of President Donald Trump’s first actions on Cuba: he suspended a section of the Helms-Burton Act that allows former owners of commercial property expropriated by Cuba to sue foreign companies “trafficking” in those confiscated holdings.
President Bill Clinton signed the Helms-Burton Act, which among other things sets strict conditions that must be met by Cuba before the U.S. embargo against the island is lifted, in 1996 soon after Cuba shot down two Brothers to the Rescue planes, resulting in the deaths of four South Florida pilots.
But no one has ever filed suit because every U.S. president since has routinely suspended the lawsuit provision every six months. The fear has been that letting the lawsuits go forward would alienate important trading partners such as Canada and EU countries whose citizens have invested in Cuba. Opponents contend that Section III of Helms-Burton violates international treaties by attempting to punish foreign companies for business they conduct outside U.S. borders.
On Jan. 4, former Secretary of State John Kerry notified Congress that Obama had suspended the lawsuit provision for another six months, effective Feb. 1. That was the date that Obama’s previous six-month suspension expired.
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Robert Muse, a Washington lawyer, said that a president can rescind such a suspension at any time as long as he reports to appropriate Congressional committees “that doing so will expedite a transition to democracy in Cuba.”
“Trump doesn’t have to wait six months; he can do it tomorrow,” Muse said.
The Trump administration also could make other changes in U.S. policy toward Cuba.
White House press secretary Sean Spicer said at a recent briefing that a “full review of all U.S. policies towards Cuba” is under way. “The president is committed to an agenda of ensuring human rights for all citizens throughout the world. And as we review those policies in Cuba, that will be forefront in their policy discussions,” Spicer said.
Under Obama, there was a rapprochement with Cuba that included both countries reopening respective embassies, the signing of 22 agreements on topics of mutual interest, the resumption of regularly scheduled commercial airline and cruise service to Cuba, and a limited commercial and travel opening to the island.
Trump has said variously that he would get a better deal than Obama and that he might consider shutting down the opening unless Cuba makes certain concessions.
Section III of Helms-Burton was designed to have a chilling effect on foreign investment in Cuba. If the president doesn’t exercise a waiver, it would allow the preparation of lawsuits in U.S. federal courts against those using, for example, tourism properties, mining operations or seaports where there are prior claims.
“There are individuals who maintain they have Title III-actionable claims relating to Jose Martí International Airport and the port at Santiago de Cuba,” said John Kavulich, president of the U.S.-Cuba Trade and Economic Council. “United States-based air carriers and those from other countries could find their assets attached if they do not avoid the Republic of Cuba. Passenger cruise ships and cargo ships might avoid docking and unloading [in Santiago] for fear of expensive and enduring legal proceedings.”
Cuba is actively courting foreign investors and says it needs foreign investment of around $2.5 billion a year to reach a goal of 7 percent annual economic growth. Since Cuba’s new foreign investment law went into effect in 2014, it has only attracted about $1.3 billion in investments.
Follow Mimi Whitefield on Twitter: @HeraldMimi