Wednesday, 24 April 2019 11:09

What Effects would the New US Measures Have against Cuba?

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What Effects would the New US Measures Have against Cuba? Photo: PL

The measures taken by the US government against Cuba could strike new blows to the relationship between both countries, the private sector of the island and US companies today consider a coalition promoting the bilateral approach.

 

Washington.- Engage Cuba, a group that seeks the end of the blockade imposed by Washington against the Caribbean country almost 60 years ago, conducted an analysis on the consequences of the actions announced by the Donald Trump administration on April 17, including allowing the total application of Title III of the Helms-Burton Act.

This section enables citizens of the United States to sue in courts of this nation individuals and entities, including third countries, that invest in Cuban territory on nationalized properties after the triumph of the Revolution on January 1, 1959.

Engage Cuba noted that it is not clear how many trials Title III will generate in practice, since the conditions of the statute that govern what type of property is eligible for a claim, limit the number of possible claims.

Under the Helms-Burton Act, property with a value of less than US $ 50,000 at the time of nationalization cannot be submitted to claims, nor those that are residential or related to legal trips to Cuba, the coalition said.

But if, indeed, there is an avalanche of litigation resulting from the activation of Title III, it will be charged to the United States judicial system and its objectives will not be met, the group estimated.

The Engage Cuba document recalled that the Caribbean country has compensated other foreign citizens for their properties, "but the rupture of the diplomatic ties between the United States and Cuba in 1961 stalled the compensation for Americans."

Negotiating with the Cuban government through high-level diplomatic channels would have been more likely to achieve compensation than the demands of Title III, as happened with Canada, Spain and other European countries, the text said.

In assessing the impact of this measure, the group added they could also have significant detrimental effects on the relationship between the two countries, US business and Washington's ties with its allies.

Since Title III affects companies that currently operate in Cuba on nationalized properties, as well as those that indirectly benefit from what the United States labels as "traffic" with those goods, US companies are not exempt from possible lawsuits.

In that sense, the document stated they can face a large number of claims and considered as unlikely to expand their operations in the largest of the Antilles, despite their past success on the island.

To these and other possible consequences, it is added that the European Union has already declared its intention to revive the challenge against Title III before the World Trade Organization.

The result could be retaliatory measures that allow litigation against US firms, as well as the risk that these tensions will shift to other aspects of Washington's bilateral cooperation with its allies.

As announced by the National Security Advisor, John Bolton, Engage Cuba detailed as another action against the island that US nationals now can only send one thousand dollars per person each quarter to those living in Cuba in the form of general donations or remittances.

Because so many Cuban entrepreneurs in the private sector or self-employed depend on remittances from relatives and friends in the United States, this policy change will force them to find an alternative vehicle to obtain capital, the analysis warned.

This effect, he added, comes at a time when the reduction of travel by the Americans has already dealt a great blow to the income of the Cuban private sector, it said.

Another measure announced by the Trump executive is to end the financial transactions of Cuban companies and banks in third countries that were indirectly carried out through the US banking system.

If the restriction that prevents this process is reinstated, "foreign banks will incur in fines for processing Cuban transfers in US dollars."

This new rule adds to a complicated network of financial sanctions that discourage the global business community from investing in Cuba, the coalition said.

Also, the intention to restrict non-family travel to Cuba could affect even more the Americans, who currently must comply with one of the 12 approved categories to visit the island, because they are not allowed to do so freely as tourists.

According to Engage Cuba, the administration could choose to ban most non-family trips to Cuba by ceasing the approval of the licenses. (PL)

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