Washington makes risky move

(VOVWORLD) - Washington on Wednesday announced the reactivation of Title III of the Helms-Burton Act, which allows Americans to sue foreign companies and individuals over property nationalized by the 1959 Revolution in Cuba. The US decision, which aims to pressurize Cuba on Venezuela, is considered risky because it may trigger new disputes between the US and the EU and enmesh  US, Canadian, and European companies in lawsuits. 

In January, President Donald Trump threatened to activate the 1996 Helms-Burton Act, which allows Americans to file suit in US court over hotels, tobacco factories, wine distilling facilities, and other assets nationalized by the Cuban government in 1959. The Act also enables Cuban-Americans to sue over assets which were confiscated. For the past 23 years, the Act has been suspended to avoid trade disputes with allies.

Pressure on Cuba’s foreign investment attraction  

Cuba’s economic development and its foreign investment attraction have achieved significant results. Cuba seeks to increase productivity and exports to surpass last year’s 1.2% growth rate. It is ready to update its social and economic models to be more progressive and improve its foreign investment climate. Cuba now has more than 500 foreign-invested projects worth a total of 11 billion USD.

At last year’s Havana International Fair (FIHAV), Cuba announced 170 animal husbandry, food industry, light industry, mechanics, metallurgy, chemicals, mining, and tourism projects that need foreign investment.

Cuba has vehemently denounced the reactivation of Title III of the Helms-Burton Act, saying it is determined to defy US hostility.

US allies’ protest

The US decision harms not only Cuba’s investment environment but also American, Canadian and European companies invested in Cuba. Even before the US announcement, the EU threatened to file a petition with the World Trade Organization. EU Ambassador to Cuba Alberto Navarro said the extraterritorial application of the US embargo is illegal and immoral. During her visit to Cuba last year, Federica Mogherini, the EU’s High Representative  for Foreign Affairs and Security Policy pledged to boost EU’s efforts to open the Cuban economy. She said “Regardless of the changes in policy in Washington, the message I am bringing here is that Cuba's friendship and relationship with the EU is here to stay. It’s solid, it’s stable, and it’s reliable.”

In a statement on Wednesday, Mogherini said the EU will ban enforcement or recognition of foreign judgments based on Title III, both in the EU and Canada. 

Canada, France, the UK and many other countries who have invested in Cuba have vehemently condemned Washington’s move, saying the US is intentionally interfering in business relations between Cuba and another sovereign countries and holding them legally responsible before the US courts. Spain, Cuba’s 3rd largest trade partner, said Madrid is ready to support its businesses. Spanish leaders have asked the EU and all political parties in Spain to form a united front and vow not to abandon their strategic ties with Cuba.

Previous US Presidents suspended Title III of the Helms-Burton Act to avoid trade conflicts. The Trump administration giving a green light to law suits against foreign companies in Cuba marks a major change of US policy on Cuba. This move is a double-edged sword. It might hinder Cuba’s foreign investment attraction, but will surely undermine the relationship between the US and its allies. 

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