News and Facts about Cuba

Have U.S. property claims in Cuba been forgotten in normalization rush?

Have U.S. property claims in Cuba been forgotten in normalization rush?

About 6,000 Americans hold certified claims against Cuban government for
expropriations
Claims, valued today at as much as $8 billion, are U.S. government’s
responsibility to settle
With normalization surging forward, claimants worry that they’ve been
forgotten
BY ELEANOR MUELLER

WASHINGTON
When Javier Garcia-Bengochea opened his morning newspaper in 1996, the
last thing he expected to see was a mention of his family’s former property.

But, near the bottom of a Wall Street Journal article on foreign
business in Cuba, there it was. An Italian shipping line with
which the U.S. did business would be developing the Santiago shipping
port La Maritima Parreño as a new destination for its cruise ships.

The port and its warehouses were once part of a privately held
corporation headed by Garcia-Bengochea’s cousin, Albert J. Parreño,
who’d become an American citizen in 1943. If the family had sold, given
away or even abandoned the property, its development might not have been
shocking news.

However, the Cuban government had confiscated the Santiago land from the
family in 1960, and the family had never been paid for its stake in the
company, as international law requires.

“Every American venture in Cuba involves stolen property,” said
Garcia-Bengochea, a neurosurgeon who lives in Jacksonville, Florida.
“It’s one of the most disgraceful things I’ve ever seen.”

Garcia-Bengochea is one of almost 6,000 U.S. citizens who hold interest
in certified property claims against the Cuban government. His cousin’s
is No. 1231, according the U.S. Foreign Claims Settlement Commission.
Cubans who became American citizens after their property was
expropriated by the Castro regime are not eligible to take part in the
U.S. claims process.

With diplomatic relations restored, some restrictions lifted and
legislation in the pipeline that would lift even more constraints on
trade, Garcia-Bengochea and his fellow claimants are growing
increasingly concerned that their claims – valued today at $6 billion to
$8 billion – may remain unsettled forever.

“They are really running out of time to do this,” said Mauricio Tamargo,
former chairman of the Foreign Claims Settlement Commission. “I
understand some gestures of opening the process to begin discussions,
but we’ve gone well beyond what we should be doing.”

More than half a century has passed since ’s rise to power
and his subsequent confiscation of property in the name of the
revolution. Since then, the Foreign Claims Settlement Commission, an
independent agency within the Department of Justice, has evaluated 8,821
claims by American parties and validated 5,913 of them with certifications.

Most of the claims are held by corporations. Others were filed by
individuals, such as Garcia-Bengochea’s cousin, who were American
nationals at the time of the confiscation. Though the property was
originally valued at $1.9 billion, interest brings that estimate as high
as $8 billion.

Under international law, the U.S. government is supposed to negotiate a
settlement for the claims with the Cuban government. But as the process
of normalization has surged – last week, the Obama administration
proposed authorizing eight airlines to fly nonstop to Havana – there’s
been no public progress on settling the claims, and claimants’ advocates
are feeling frustrated.

“I am quite distressed at the level of commerce that is occurring
between the two countries,” Tamargo said. “Stop giving these trade
concessions; start forcing them to make an offer and settle these claims.”

Tamargo’s parents and uncles also were certified claimants, he said. A
farm in Oriente province, a house in Havana and various other properties
are among the items the Cuban government confiscated.

Experts remain optimistic that the claims can be settled, but they worry
that the easing of travel restrictions and the change in other
limitations on trade with Cuba have depleted U.S. leverage.

“The administration is making it harder and harder for things to be done
with Cuba,” Roy Smith, a professor at New York Stern
of Business, said of administration moves to rebuild relations. “But I
don’t think they’ve missed a window of opportunity.”

Diplomats from both countries met in Cuba on Dec. 8 to discuss the
claims for the first time, but they merely gave presentations and agreed
to meet later in 2016 before heading home.

Since then, no further negotiations have taken place, according to the
State Department.

“We hope to have another dialogue on claims in the coming months, which
would be the next step in what we expect to be a complex process that
may take time,” a department spokesperson said in an email Monday,
speaking only on the condition of anonymity as part of department
protocol. “Resolving claims of U.S. nationals is a top priority for
normalization.”

The longer the U.S. waits, the more difficult it will be, Smith said.

“The claims are among the more difficult problems that exist between
these two countries, and I think they will be among the last to be
solved,” Smith said. “If indeed they are solved at all, which I suspect
they may not be.”

The process is not straightforward; many complications exist, Smith
said. The Cuban government has counterclaimed with over $800 billion in
damages it says were caused by the U.S. trade , while some of the
American claimants have received tax breaks for their losses.

Perhaps more complicating is the Cuban government’s ability to pay only
“about 2 cents on the dollar,” said Patrick Borchers, a professor at
Creighton University who’s an investigator in a U.S. Agency for
International Development study on the claims.

But that doesn’t mean it’s a hopeless case. Settling the claims would be
“in the interests of both countries,” said Richard Feinberg, a
nonresident fellow in the Latin America Initiative at the Brookings
Institutions in Washington who’s a professor at the University of
California San Diego.

Cuba would boost its business climate and escape legal consequences, he
said, and the U.S. would maintain “the principle of compensation” in the
normalization process.

Any action by the administration will likely fall between the November
elections and the January inauguration, experts said.

“If something dramatic is going to happen, I can just about guarantee
it’s after the election,” said Borchers, noting that Florida’s
swing-state status and the political awareness of the state’s large
Cuban-American community make it difficult for Obama to act without
affecting presumptive Democratic presidential nominee Hillary Clinton.

It doesn’t matter when something happens, as long as it does,
Garcia-Bengochea said.

“It’s disgraceful,” Garcia-Bengochea said. “This process has found a way
to not follow the law.”

Since Garcia-Bengochea saw that Wall Street Journal story in 1996,
multiple international corporations have continued doing business on his
family’s former property, including Carnival Cruise Line, the
Harbour Engineering Co. and Fred Olsen Cruise Lines, Garcia-Bengochea
said. The property includes the Santiago port and its accompanying
warehouses.

Garcia-Bengochea inherited the claim from his cousin Parreño, a New York
attorney and American citizen at the time of the property’s
confiscation. Originally valued at $547,365, the claim’s 6 percent
annual interest rate means its value today is almost $8 million.

Rep. Jeff Duncan, R-S.C., held a June 2015 Capitol Hill hearing at which
Garcia-Bengochea testified. Since then, he and his fellow lawmakers
“really haven’t seen any significant progress on this issue,” Duncan said.

“Here we are, looking at normalizing relations with Cuba, and we’ve
still got all these . . . unresolved property claims,” he said. “It’s
not a precondition; it’s not even a condition.”

In a June 24 letter, Duncan and Rep. Albio Sires, D-N.J., requested an
update on the State Department’s progress on the issue. As of July 8,
they’d not received a response, Duncan said.

“This was important at one time,” Duncan said of the claims. “The fact
it has yet to be addressed is one of the most egregious items that’s out
there in regards to normalizing with Cuba.”

“They’re getting everything they want, and we’re not getting anything in
return.”

Eleanor Mueller: 202-383-6033, @eleanor_mueller

Source: Issue of settling U.S. propoerty claims against Cuba sees little
progress | In Cuba Today –
www.incubatoday.com/news/article89374572.html

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