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The Trump administration is defying explicit legal threats the European Union privately issued last week to top U.S. officials by moving forward with its plans to ratchet up pressure on Cuba by allowing U.S. nationals to file legal claims against foreign companies that do business there.
The bold move by Secretary of State Mike Pompeo in conjunction with the White House is a stark example of the escalating economic tensions between the U.S. and Europe that are already playing out on Iran sanctions policy and President Trump’s decision to tear up the Obama-era Iran nuclear deal.
In a sternly worded April 10 letter from top European Commission trade officials to Pompeo, obtained by RealClearPolitics, the EC threatened to launch a World Trade Organization lawsuit against the United States if it moved forward with plans to end a waiver, known as Title III of the Helms-Burton Act.
The Helms-Burton Act, also known as the Libertad Act, groups together all of the U.S. economic sanctions against Cuba and has been in effect since 1996.
Ending the Helms-Burton waiver would allow U.S. citizens to sue individuals and companies – including European citizens and businesses — in U.S. courts for commercial use of property they once owned but that was seized by the Cuban government after 1959.
“Recent decisions taken by the U.S. in relation to Title III – namely to depart from the regular six-month extension and to have it partially activated – are raising serious concerns across the EU,” wrote Federica Mogherini, the European Commission’s vice president, and Cecilia Malmstrom, a member of its trade commission, in the letter obtained by RCP.
“The EU considers that the extraterritorial application of unilateral restrictive measures … is contrary to international law. Any decision to further activate it would have an important impact on legitimate EU (and US) economic operators.”
If the U.S. moves forward with its plans, the EU officials threatened to “use all means at its disposal, including in cooperation with other international partners, to protect its interests,” they wrote, pointedly noting that “the EU is considering a possible launch of the WTO case.”
The officials also noted that any claimant U.S. company or citizens would be subjected to counterclaims and liability for damages in EU courts.
Mogherini and Malmstrom sent copies of the letter to National Security Adviser John Bolton and U.S. Trade Representative Robert Lighthizer.
On Wednesday, the Trump administration announced that it was rejecting those concerns and moving forward with its plans to allow U.S. citizens and companies who had their property seized by the Castros to sue those entities that have been using the confiscated property. Many of those entities are foreign companies such as hotels and shipping businesses.
The decision is a victory for hardliners who have been pressing the administration to take a tougher stance on Cuba policy. It comes amid a new administration effort to curb oil shipments between Cuba and Venezuela.
“For 22+ years, Title III of the Libertad Act was suspended in the hope the Cuban regime would transition to democracy,” Pompeo tweeted Wednesday morning, “but the @realDonaldTrump Administration recognizes reality – dictators see appeasement as weakness. President Obama’s attempt to moderate the regime didn’t work.”
Florida senators, both Republicans, issued strong statements supporting the move.
“By allowing US citizens to sue #CastroRegime for property stolen from them in #Cuba @realDonaldTrump is ending almost 6 decades of injustice,” Rubio tweeted. “It also punished regime for its criminal support of #MaduroRegime & honors veterans of Brigade2506 on this 58th anniversary of #BayofPigs.”
Europe has been on edge over U.S. Cuba policy in recent months after Pompeo shorted the length of the Title III waiver in March and allowed court cases to move forward in the U.S. against a number of Cuban companies with military ownership.
After Pompeo’s latest announcement, the European Union and Canada on Wednesday said they planned to take the matter up at the WTO. The EU is Cuba’s No. 2 trade partner and its largest foreign investor.
In a joint statement, Mogherini, Malmstrom and Canadian Foreign Minister Chrystia Freeland said the U.S. decision would have “an important impact on legitimate EU and Canadian economic operators in Cuba.”
“We are determined to work together to protect the interests of our companies in the context of the WTO,” they said, adding that the U.S. action “can only lead to an unnecessary spiral of legal actions.”
While Wednesday’s response from the EU and Canada fell short of a formal launch of a WTO case, it signaled the widening diplomatic rift between Europe and the U.S.
But the threats aren’t just a dramatic legal bluff. The EU launched a case against the U.S. in the WTO in 1996 after Helms-Burton passed, but they withdrew it after President Bill Clinton decide to resolve the matter by issuing a waiver, which presidents have extended every six months until the beginning of this year.
The current administration’s action is the most far-reaching of any U.S. president against Cuba over the last three decades. It’s part of the administration’s decision to elevate Latin America as a national security priority. Bolton delivered a speech last year at Miami’s Freedom Tower to a group of Cuban and Venezuelan exiles, calling the leftist governments of their homelands along with Nicaragua the “troika of tyranny in this hemisphere.”
Cuban Foreign Minister Bruno Rodriguez Parrilla called the activation of Title III “an attack against international law and the sovereignty of #Cuba & third States.”
“Aggressive escalation of #US against #Cuba will fail. As in Giron (Bay of Pigs), we shall overcome,” he added.
Cuba has been struggling to boost its ailing economy by attracting foreign investments, and the action by the Trump administration could further hamper those efforts if the commercial enterprises involve confiscated property.
Jason Poblete, a Washington-area attorney who represents several claimants to confiscated Cuban property, said Europe has become too cozy with Havana because of its financial ties to the communist island nation.
“I wonder if the EU’s foreign minister and top trade official wrote a similar letter to [Rodriguez Parrilla] urging Cuba to consider negotiations to settle this matter once and for all?” Poblete told RCP. “My sense is they did not.”
“As with the Iran deal, Europe has demonstrated they are not interested in solutions,” he said. “America needs to look out for American interests first for a change.”
Susan Crabtree is RealClearPolitics’ White House/national political correspondent.
