José María Viñals / Tania Esparza
Lupicinio International Law Firm
For the second time in less than a year (the first time was with Iran), the Trump Administration’s foreign policy puts European companies with foreign interests between a rock and a hard place. And this time, through the partial lifting of Title III of the Helms Burton-Act, it manages to make red flags go off of a risk that not even the US government itself understands and that is not insurable by our companies.
In a press conference held the same day of the announcement of the partial lifting of the suspension of Title III of the Helms-Burton Act, the State Department admitted not being able to predict how many lawsuits could really be expected, nor the prospect of executing a sentence for Cuban public entities to compensate Americans. The partial lifting only allows Americans with registered claims to request listed “restricted Cuban persons” to indemnify them for the expropriations that took place with the Cuban revolution.
We believe this measure intends to increase the pressure on the Cuban government in the context of the Venezuelan crisis. Despite the assertion of the State Department that this new step does not affect foreign investors in Cuba and that the concerns expressed by the EU and Canada in the face of a lifting of the suspension are “part of their decision-making process”, this partial lifting of the suspension could affect our companies.
This lifting means an important legal uncertainty for companies that run assets jointly with Cuban companies listed. Notably big hotels investment, like those of Meliá or Iberostar, can be diminished and could even in the future be involved in the execution of eventual convictions for damages. But the lifting can also damage to any company that makes business in Cuba, because this is a temporary situation (it will last just 30 days) with the threat of further increasing the lifting of the suspension.
On the other hand, and for the second time in less than a year, the European Blocking Statute will again have a leading role as the only (and weak) protection for our companies. The Spanish Chamber of Commerce has already requested the protection of the EU against this wave of demands, because the Blocking Statute can only protect them within our territory, and diplomatic pressure is therefore paramount.
The arm of US law is longer than EU’s, which is very scrupulous in complying with international law. In addition, the economic importance that the North American country maintains amplifies the effectiveness of the extraterritorial regulations that it dictates. In particular, the prevalence of the USD as an international transaction currency and its centrality in the international banking and insurance systems threatens those who initiate or already have commercial relations with countries that the US puts in the spotlight of its foreign policy.
We look forward to next April 17 for the next step of the White House regarding Title III of the Helms Burton. In only 30 days we will see if the current lifting was a storm warning or the first step of a much more serious policy that really can damage the interests of European companies in Cuba.
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