U.S., Cuba Set to Talk Property Claims

by Chip Bell


Americans want their Cuban property. Since the 1960s, when Castro first seized power, that wanting has been a symptom most convinced themselves to ignore, despite filing claims against the country. However, when representatives of Cuba and the United States meet on Tuesday in Havana, the issue is to be front and center in their discussion.

“This meeting is an enormously big deal,” said Marricio J. Tarmargo, former chairman of the Foreign Claims Settlement Commission, in an interview with The New York Times.

Established shortly after Castro’s takeover by the U.S. Justice Department, the Foreign Claims Settlement Commission was created to officially catalog the property confiscated from American citizens and companies by the communist regime. Today the commission has approved 5,913 claims’ worth, with appreciation, an estimated $8 billion. (It should be said these claims do not include Cuban Americans who had their property seized prior to fleeing to the U.S.)

“The Cubans have up till now never recognized these claims as legitimate or something they are even prepared to discuss,” Tamargo added.

In the 56 years following the revolution that empowered the Castros and led to the expropriation of American-owned property, never has the Cuban government entertained notions of acknowledging foreign claims to domestic property, which is what makes the forthcoming meeting so important. Attempting to capitalize on growing relations between the two countries, the U.S. State Department has appeared intent on handling the claims – one way or another.

“Reaching agreement on resolving outstanding claims is often a lengthy process, but the department is committed to pursuing a resolution,” said Deputy Assistant Secretary for Public Diplomacy Gonzalo Gallegos.

But the road to a solution goes through Havana, and historically, Americans have not been particularly welcome there.

Maneuvering in Havana

The first thing to consider is that Cuba, regardless of whether it recognizes the nearly $8 billion in American property claims, still maintains that the U.S.’s embargo is responsible for much more significant financial damages. In fact, during the late ’90s, a Cuban court put a number to those damages: $181 billion.

It’s unlikely the U.S. would ever bend to such a claim, but in a now historic news conference that brought U.S. Secretary of State John Kerry and Cuban Minister Bruno Rodriguez together on the same stage, the Cuban representative took the opportunity to reiterate Cuba’s position on the matter.

Rodriguez said, in no uncertain terms: “The U.S. government has recognized that the blockade against Cuba is a wrong policy, causing isolation and bringing about humanitarian damages and privations and deprivations to our people.”

Property claimants, like retired real estate agent Margery Leeder, who holds an approved claim worth $16 million and described the Cuban seizing of property to the Times as “the biggest heist in history,” may be barking up the wrong tree if they expect to get a full return of value. And it might not be the result of Cuba’s unwillingness to pay, but rather its inability to do so.

The Cuban Compromise

Speaking with USA Today, New York-based consultant with the Akerman law firm Matthew Aho pointed out that in similar resolutions with other countries, like France, Spain and Canada, the outcomes have rarely been big payouts.

“Those claims have been settled for pennies on the dollar,” he said.

What’s more likely, he explained, is that, as has been the case elsewhere, Cuba will make arrangements to have monetary losses forgiven in exchange for access to the Caribbean island’s budding market, which is widely believed to have serious commercial potential – especially in the real estate sector.

Aho added: “Many of these countries decided a long time ago that full diplomatic and commercial relations was in their national interest more than holding out for some future resolution on property claims.”

How individual claimants would respond to this possible compromise is hard to predict, but at least for some of the bigger companies that have filed claims – Exxon, Texaco, Coca-Cola and Starwood Resorts account for half the value of all claims – the prospect will likely be welcomed.

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