EU threatens to sue U.S. at WTO if Title III implemented; would also lodge counterclaims
The news was expected. The Miami Herald reported on Tuesday (April 16) that the Trump administration “will end the suspension of a law that allows American citizens, including naturalized Cubans, to sue companies and subsidiaries in Cuba that benefited from private properties that were confiscated by the Cuban government.”
The law in question, Title III of the 1996 Helms Burton Act, has been suspended every six months since it was first introduced in 1996. Every secretary of state from the Clinton era onward — including Rex Tillerson, Donald Trump’s initial secretary of state — has abided by an agreement made with the European Union (EU).
The suspension of Title III makes sense because as Progreso Weekly columnist Jesús Arboleya explains: putting “Chapter III into full force would entail reviving … contradictions and adding them to the growing conflicts between the United States and Europe.” When the law was introduced the EU established a rule to act against it and many of its member countries approved “antidote laws” to deal with it. The following year they filed a lawsuit against Helms Burton before the World Trade Organization (WTO). The lawsuit was withdrawn in 1997 when the U.S. committed to not applying Chapter III.
Simply stated, Title III would let Americans — including Cubans who have since become U.S. citizens — sue companies that “traffic” in property confiscated by Cuba after the country’s 1959 revolution.
National Security Advisor John Bolton is reportedly planning to outline the new policy in remarks before the Bay of Pigs Association in Miami on Wednesday (April 17), in celebration of the 58th anniversary of the failed Bay of Pigs invasion to Cuba.
But as predicted by Arboleya, “[the] European Union is threatening to sue the U.S. at the World Trade Organization and warning of economic penalties against U.S. firms if Washington extends sanctions against Cuba in ways that could hit European companies,” reported the Morningstar, a global financial services firm headquartered in Chicago that provides investment research and management services.
“In a letter to [Secretary of State Mike] Pompeo dated April 10,” reports Morningstar, “the EU’s foreign-policy chief Federica Mogherini and European Trade Commissioner Cecilia Malmström said the recent U.S. decisions are ‘raising serious concerns across the EU.’”
In their reporting, Morningstar adds:
They warned that if the U.S. fully applies the law, removing the Title III waiver, “the EU will be obliged to use all means at its disposal,” including a possible launch of a case at the WTO and the lodging of counterclaims in European courts against any U.S. firm who took action under Helms-Burton in a U.S. court.
Noting that most of the 50 largest U.S. claimants under Helms-Burton have assets in the EU, the officials said these companies could be targeted.
“If a U.S. hotel chain with a certified claim sued an EU hotel chain in a U.S. court under Title III for alleged trafficking in U.S. property, the EU hotel chain would be able to counterclaim for damages from the EU-based assets of the same U.S. hotel chain in an EU court,” the officials wrote.
European diplomats say they won’t be pressed to abandon the bloc’s engagement policy with Cuba.