Cuba, you owe us $7 billion
Behind the trade embargo lies a huge and nearly forgotten obstacle: the still-active property claims by American companies. Inside the effort to settle a 50-year-old debt
If symbols could gather rust, the American trade embargo against Cuba would be covered with it. Enacted in 1960, shortly after Fidel Castro came to power, and expanded in 1962, at the height of the Cold War, the embargo has frozen the United States and its tiny neighbor off the Florida coast in a standoff that seems as dated as the classic American cars on Havana streets.
Leaders from around the world have been calling on the United States to dismantle the embargo for more than 20 years, and recent polls show that a majority of Americans are in favor of lifting it. With the repressive Castro regime seemingly nearing its end, a “normalization” of relations between the countries seems increasingly within reach. That would appear to spell an end sometime soon for the embargo, which in the popular imagination stands as a sort of political weapon that was designed to cripple Castro and stem the tide of communism.
What’s often forgotten, though, is that the embargo was actually triggered by something concrete: an enormous pile of American assets that Castro seized in the process of nationalizing the Cuban economy. Some of these assets were the vacation homes and bank accounts of wealthy individuals. But the lion’s share of the confiscated property—originally valued at $1.8 billion, which at 6 percent simple interest translates to nearly $7 billion today—was sugar factories, mines, oil refineries, and other business operations belonging to American corporations, among them the Coca-Cola Co., Exxon, and the First National Bank of Boston. A 2009 article in the Inter-American Law Review described Castro’s nationalization of US assets as the “largest uncompensated taking of American property by a foreign government in history.”
Today, the nearly 6,000 property claims filed in the wake of the Cuban revolution almost never come up as a significant sticking point in discussions of a prospective Cuban-American thaw. But they remain active—and more to the point, the federal law that lays out the conditions of a possible reconciliation with Cuba, the 1996 Helms-Burton Act, says they have to be resolved. According to that statute, said Michael Kelly, a professor of international law at Creighton University in Nebraska, settling the certified property claims “is one of the first dominos that has to fall in a whole series of dominos for the embargo to be lifted.”
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