Monday, January 21, 2019

More on Title III

It appears likely from the State Department’s announcement that Title III of the Helms-Burton law will be allowed to go into effect around March 1. No U.S. President has permitted this: Since enactment in 1996, Clinton, Bush, Obama, and Trump have blocked it every six months.

As a result, those whose properties in Cuba were expropriated and who can identify a foreign business connected to that property, can sue the foreign business in U.S. courts – even if the plaintiff was not a U.S. citizen or resident at the time of the taking.

My opinion on all this is here. Some more info on Title III:

The law is presented as protection for claimants who were never compensated. But the right to sue is limited. Cuban Americans can’t sue for their homes. No one can sue for a property worth $50,000 or less when it was taken. And the right to sue expires if Cuba’s socialist government goes away, or if the President decides to suspend it again.

The law also shields two classes of business from Title III lawsuits.

First are those engaged in “the delivery of international telecommunication signals to Cuba.” In other words, companies delivering voice or data traffic to the Cuban network are protected, while those whose businesses extend into the Cuban domestic network are not.

Then there are those engaged in transactions and uses of property incident to lawful travel to Cuba, to the extent that such transactions and uses of property are necessary to the conduct of such travel.” The House-Senate report accompanying the bill put it more simply: “any activities related to lawful travel to Cuba” are protected. Those who want to sue, for example, based on ownership of a port facility, are surely searching for ways to argue that this language should not apply.

In theory, the damages could be substantial; the law fixes them at three times the property’s current value, plus court costs and attorneys’ fees.

Finally, some U.S. businesses who lost property in Cuba were partially compensated through a tax deduction. In November 1962, the IRS allowed them to deduct Cuba confiscation losses from their business income.

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