Property compensation claims are key to US-Cuba relations

Property compensation claims are key to US-Cuba relations
Cardiff Garcia

"I've been surprised by how quiet the claims people have been since last
December," says Gary Hufbauer of the Peterson Institute for
International Economics, a think-tank.
He is referring to the Cuban-American exiles and their descendants who
continue to seek compensation for property that was expropriated by the
Castro government after the revolution of 1959.
But the revolution actually left behind two groups of property claimants
whose cases for restitution have implications for the ongoing diplomatic
thaw.
The first set of claims are those of US nationals — businesses such as
Coca-Cola and Colgate-Palmolive (and their successor companies) that had
buildings and factories taken, and also individuals whose homes were
confiscated. These cases were certified as valid in the 1960s and 1970s
by the Foreign Claims Settlement Commission, run by the US Department of
Justice.
The expropriated property was valued at about $1.8bn when the claims
were certified but some estimates now put the value at $7bn once
interest is factored in.
Only the US government can negotiate with Cuba the settlement of these
cases on behalf of the claimants. And in fact US law currently
stipulates that "the satisfactory resolution of property claims by a
Cuban government ... remains an essential condition for the full
resumption of economic and diplomated relationships between the United
States and Cuba".
In other words, any negotiations about ending the embargo will require
resolution of this issue.
The second set of claims belongs to the Cuban exile community whose
members fled to the US in the early years of the revolution.
Because they were Cuban citizens when their property was taken by the
state, international law does not extend to their right to recover the
property, according to a report by Creighton University in Omaha,
published in 2007 and undertaken with funding from a US government
agency. These Cuban-Americans have not had their claims certified by the
settlement commission.
"Consequently, a bilateral system to resolve property claims between
this group and the government of Cuba would not be supported by
international law," says the Creighton report. "Jurisdiction over their
claims would reside within the Cuban judiciary."
Pedro Freyre, a lawyer in Miami who specialises in Cuban issues, adds:
"I doubt that the US will hear these cases … And I have no illusions
that a Cuban government will give them any kind of remedy."
The thorny problem has no obvious solution — Cuba can hardly afford a
$7bn settlement — though many ideas have been suggested. One is for the
Cuban government to offer tax breaks or other benefits for companies to
stay invested in the island in lieu of cash compensation. Another is to
set up a claims tribunal for Cuban exiles.
Regardless, once the lifting of the embargo becomes the subject of
serious debate, the "claims people" maybe expected to end their silence.

Source: Property compensation claims are key to US-Cuba relations -
FT.com -
http://www.ft.com/cms/s/0/6badc5d6-1125-11e5-9bf8-00144feabdc0.html#axzz3dJiN3IZm