02.15.19

Statement of Senator Leahy On The Freedom To Export To Cuba Act

Mr. LEAHY.  Mr. President, I want to commend Senator Klobuchar for introducing the Freedom to Export to Cuba Act, of which I and Senator Enzi are cosponsors.  I urge other Senators to join us. 

This bill is about ending the anachronistic prohibitions in U.S. law that for decades have limited U.S. engagement with Cuba, including preventing American companies from exporting their products to Cuba.  The fact that legislation to do so is even necessary is illustrative of the absurdity of the situation in which we find ourselves.  Companies from Europe, Russia, China, Mexico, and every other country can sell their products to Cuba, which is just 90 miles from our coast, but American manufacturers and retailers are largely shut out of the Cuban market. 

For example, Cuba buys rice from Vietnam and powdered milk from New Zealand, half a world away, not from Alabama, Vermont, or Michigan.  That makes no sense.  This bill would enable American companies to compete, which every believer in a free market should support.

It is also important for Senators to know that punitive actions by the Trump Administration last year to further restrict the right of Americans to travel to Cuba have had devastating consequences for Cuba’s fledgling private sector – the very people the White House and supporters of the restrictions profess to want to help.  The fact that they have said nothing about the harm they are causing Cuba’s struggling entrepreneurs demonstrates that they care more about continuing their failed policy of sanctions, regardless of who they hurt, than about helping the Cuban people or about protecting the right of Americans to travel freely. 

The latest ill-conceived attempt by the White House to punish Cuba would permit Title III of the Helms-Burton Act to go into effect.  This would allow, among others, individuals who were Cuban citizens when their property in Cuba was expropriated half a century ago to sue in U.S. courts any Cuban, foreign, and even American company whose business in Cuba today uses that property.  That could be an airport, port, warehouse, hotel, restaurant, you name it.  Virtually every American and foreign company investing in Cuba would suddenly be liable for treble damages.

The purpose, as the law’s authors made clear when it was enacted 23 years ago, is to harm Cuba’s economy by making it completely inhospitable for foreign investment.

As my friend in the House, Representative Jim McGovern, has pointed out –

“It’s no mystery why Presidents Clinton, Bush, Obama, and Trump blocked Title III from going into effect every six months for the past 23 years.

It is hypocritical – it penalizes companies for doing what American companies do all over the world.

It is contrary to international law, which recognizes the right of expropriation and requires compensation.

It is an extraterritorial sanction that guarantees a response from our trading partners, like Canada, Spain and the EU, including complaints at the World Trade Organization. 

And if you care about agriculture, be warned: It will open a new front in the trade war, with all the repercussions that can bring.

It will allow Cuba to claim victim status and rally international support.

It will clog our courts with lawsuits.

It will make it impossible to negotiate compensation for U.S. claims in Cuba, and, in the end, hurt the very Americans who seek compensation for the property they lost.

It will divide us from friends and allies who are now working for a peaceful solution in Venezuela.

And it will guarantee that new investment in Cuba will come from the Russians, Chinese and others who are hostile to the United States, and whose state-owned companies can’t be sued in U.S. courts.”

I agree with my friend in the other body.  What the White House is considering would trigger an avalanche of unintended consequences that would bring U.S. commerce with Cuba to a halt, harm relations with our allies in this hemisphere and beyond, and make resolving property claims more difficult.  I ask unanimous consent that a piece by William Leogrande on Title III of the Helms-Burton Act published in the February 13, 2019 issue of OnCubaNews be printed in the Record following my remarks

Mr. President, like many issues, Members of Congress have strong feelings pro and con about U.S. relations with Cuba.  It is no secret that, after more than half a century of a policy of isolation that has achieved none of its objectives and primarily hurt the Cuban people, I, like Senators Klobuchar and Enzi and many others in this body, favor closer relations.

Conversely, there are those in Congress and the Trump Administration who believe strongly that we should ratchet up the pressure on the Cuban government in an attempt to achieve those elusive goals.

I have often spoken publicly about the lack of political freedom and civil liberties in Cuba.  But I also think it is important to try to be objective:  to criticize when called for and to acknowledge positive changes when they occur.

I recognize that those who favor maintaining the failed economic embargo have a longstanding, visceral antagonism and resentment toward the Cuban government.  While they rarely, if ever, mention the corrupt and brutal Batista regime that enjoyed unqualified U.S. support until it was overthrown in 1959, they have legitimate reasons to criticize the mistreatment of the Cuban people by the current government and its support for the corrupt and repressive Maduro regime in Venezuela. 

But they too should acknowledge that threatening and bullying Cuba has not worked.  In fact it has made the situation worse, and provided an excuse for the Cuban government to blame its own failures on us.  They should also acknowledge positive changes in Cuba, but they never do.  Not ever.  It is almost as if they are psychologically, ideologically, or emotionally incapable of saying one positive thing about the Cuban government, no matter what positive things it does.   

Perhaps they are afraid that if they did, they would alienate their donors in the Cuban-American community.  Of course, we know that Cuban-Americans are divided about the U.S. embargo.  Some are hardcore believers in the embargo, and they always will be.  But at least as many – and increasing numbers – oppose the embargo, especially those who were born after the Cuban revolution. 

I wonder what the pro-embargo isolationists would say if the Cuban government were to stop harassing and abusing dissidents who favor a more democratic system.  Would those who oppose the embargo say anything positive? 

What if the Cuban government decided to embrace a free market economy and let private businesses flourish?  Would those who oppose the embargo say anything positive?

I doubt it.  I doubt it because no matter what positive reforms occur in Cuba, they will continue to defend the embargo until Cuba is a full-fledged democracy and those who currently hold power either die or are voted out of office. 

We all want Cuba to become a democracy, where civil and political rights are respected, and the sooner the better.  But those same defenders of the embargo support billions of dollars in U.S. aid – and weapons sales – to countries that are led by authoritarian, brutal, and corrupt dictatorships and monarchies, some of which have held power for decades or generations.    

How do the pro-embargo diehards reconcile that?  They don’t and they can’t.

The fact is, Cuba is changing.  Not nearly as fast as we and the Cuban people would like, but it is changing in ways that few would have predicted not very long ago.

Last year, Raul Castro’s hand-picked successor, Miguel Diaz-Canel, became President and he promised a government more accessible and responsive to the people’s needs.  How he delivers on that promise remains to be seen.   

Since 2010, after the Cuban government recognized that the Internet is essential if Cuba wants to be part of the modern world, Internet access has exploded.  The government has opened hundreds of public Wi-Fi hot spots and cyber cafes in the past five years, and home Internet access became legal and available in 2017.  Today, almost half of the Cuban people have personal cell phones that were illegal just a decade ago.

As others have pointed out, these changes have encouraged new forms of communication, networking and organizing via social media.

But change does not come easily in Cuba, as it does not in many countries.  Last July, the government announced onerous new regulations on the private sector, covering a wide range of issues:  food safety, labor contracts, procurement, taxation, limits on the size of private businesses.  The new rules were an attempt by hardliners to crack down on the private sector, which was criticized for black marketeering.

But private entrepreneurs resisted, and they challenged the regulations as contradictory to the government’s own plans that recognizes the private sector as important to economic growth and employment. They appealed to government officials and spoke publicly about the harm the new rules would have on their businesses. 

When the final regulations were issued, several that had caused the most resentment were dropped.  According to the Minister of Labor and Social Security, the decision to revise the rules was due to “the opinion and experiences of those directly involved.”

The government also retreated on a new law – Decree 349 – requiring artists, musicians and performers to register with the state and pay a large commission on their earnings from private engagements, and it banned work with objectionable content and empowered inspectors to shut down any offensive exhibition or performance.  Clearly, an attempt to further limit free expression.

Since the 1980s, Cuban artists have had more freedom to be critical of the government than other social sectors, and so it was not surprising that Decree 349 ignited widespread protests.  After social media was used to mobilize opposition within the Cuban arts community and among artists abroad, the government agreed not to enforce the law until implementing regulations are drafted in consultation with the arts community.

According to one observer, “during [the latter half of last year], nearly 8.9 million Cubans debated the draft of a new constitution in their workplaces, neighborhoods and schools.  Communist Party members were told not to argue with even the most radical proposals for amendments, and the ensuing debates were freewheeling, often lasting past their scheduled time.  Among the main topics: whether the president and state governors should be directly elected by voters; whether the concentration of wealth and property should be allowed; whether term limits

and age limits for leaders were a good idea; and whether the Communist Party should be subordinated to the constitution and hence the law.”  Not long ago it would have been unthinkable to openly debate these issues, especially as part of a constitutional reform process.

One article that attracted intense debate recognized same-sex marriage, and was promoted by Raul Castro’s daughter, a long-time activist for LGBTQ rights. The proposal sparked strong opposition from evangelical churches supported by the Catholic Church.  Gay rights advocates countered with campaigns of their own.  The chance of a significant “no” vote on the entire constitutional reform led the government to drop the provision from the final draft of the constitution with a pledge to consider it later.

This surge in mobilization by well-organized constituencies utilizing social media to resist government policy, from burdensome private sector regulations to gay marriage, is unprecedented in Cuba.  The government’s willingness to not only tolerate these organized challenges but to change policies in response to them, is significant.    

As has been noted, none of these issues dealt with the rigid structure of the Cuban system.  Cuba remains a one party state, in which those who challenge the system are treated as criminals.  But the precedent of organized interest groups mounting successful campaigns to challenge and change government policy is now established, which is positive. 

None of the longstanding critics of the Cuban government in the U.S. Congress or the Cuban-American community have acknowledged any of this, nor are they likely too.  For them, anything less than a wholesale change of government in Cuba is unworthy of mention, even though they apply a very different standard – a double standard – to other authoritarian governments.  In fact, they would ridicule anyone who regards such changes as positive or worthy of recognition.

As we know from our own experience, political reform is difficult.  Our own Electoral College, an anachronism designed to protect a slave-holding minority, remains in effect more than two centuries later.  Five times, in the world’s oldest democracy, it has prevented the winner of the most popular votes from being elected president.   

The Cuban people want to live better and they want a lot less government control over their lives.  Armed with cell phones and the Internet they are going to make increasing demands of their government.  This is happening at a time when Venezuela’s economy is collapsing and the survival of the Maduro regime, Cuba’s closest ally in the hemisphere, is in question.  Not surprisingly, the Cuban government is trying to limit the pace of change and to secure other benefactors.  It is turning increasingly to Russia, Algeria, Iran and other countries that welcome the chance to challenge U.S. influence in this hemisphere. 

This is a time for the United States to be actively and visibly engaged in Cuba, for Americans to be traveling to Cuba, for expanding educational, cultural, and professional exchanges between the U.S. and Cuba, and for American companies to be competing in Cuba.  It is not a time to return to a failed policy of threats and ultimatums, driven by domestic politics rather than by what is in our national interests.

That is why I am cosponsoring the Freedom to Export to Cuba Act.  And it is why I intend to support other bipartisan legislation to replace our failed Cuba policy with one that serves America’s interests, not the interests of a shrinking minority, and not the interests of Russia and other countries that are reaping the economic benefits of our self-defeating policy of isolation.   

# # # # #

OnCubaNews (2/13/2019)

President Trump Risks Alienating Allies over Cuban American Property Claims

William M. LeoGrande

The Trump administration is seriously considering whether to allow Title III of the Cuban Liberty and Democratic Solidarity Act (Helms-Burton) to go into effect in March, according to National Security Adviser John Bolton. On January 16, Secretary of State Mike Pompeo announced that he was suspending Title III for just 45 days instead of the usual six months while the administration reviews whether its implementation would promote democracy in Cuba. He warned foreign companies doing business on the island that they had better “reconsider whether they are trafficking in confiscated property and abetting this dictatorship.”

Title III allows U.S. nationals to file suit in U.S. courts against anyone “trafficking” in their confiscated property in Cuba—that is, anyone profiting from it. If President Trump allows Title III to go fully into effect, he will open the door to as many as 200,000 law suits by U.S. nationals, most of them Cuban Americans, whose property was taken by the Cuban government after 1959. U.S. courts would be swamped, the ability of U.S. companies to do business on the island would be crippled, and allies abroad might retaliate for U.S. suits brought against their companies in Cuba. Once the suits have been filed, there will be no way to undo the resulting legal chaos and the tangle of resulting litigation could take years to unwind.

The U.S. Foreign Claims Settlement Commission has certified 5,913 claims of U.S. nationals whose property was seized. These are the claims that Cuba recognizies and that the United States and Cuba had begun to discuss during the Obama administration. But Title III takes the unusual position of allowing naturalized Cuban Americans who lost property to also file suit against alleged traffickers. Normally, international law recognizes the sovereign right of governments to dispose of the property of their own citizens. According to the Department of State, by including Cuban Americans who were not U.S. citizens when their property was taken, Title III creates the potential for an estimated 75,000-200,000 claims worth “tens of billions of dollars.”

Back in 1996, when the law was being debated in Congress, angry opposition from U.S. allies Canada, Mexico, and the European Union, whose companies doing business in Cuba would be the targets of Title III law suits, led President Bill Clinton to insist on a presidential waiver provision in Title III. As a result, the president has the authority to suspend for six months the right to file Title III law suits, and he can renew that suspension indefinitely. Every six months since the Cuban Liberty and Democratic Solidarity Act was passed, successive presidents, Democrat and Republican alike, have continued the suspension of Title III.

U.S. allies have denounced Title III’s extraterritorial reach. Mexico, Canada, the United Kingdom, and the European Union all passed laws prohibiting compliance with it. The European Union also filed a complaint with the World Trade Organization, which it did not pursue after President Clinton suspended Title III. In fact, the principal justification both President Clinton and President George W. Bush offered for continuing the suspension was the need to maintain cooperation with European allies.

If President Trump does not renew the suspension, all these old wounds with allies will be reopened as U.S. claimants try to haul foreign companies into U.S. courts for doing business in Cuba. We already have enough tough issues on our agenda with Mexico, Canada, and Europe without adding another one. At this very moment, Washington is trying to muster their support in dealing with the Venezuelan crisis, support that could be endangered if the administration picks a fight with them over Title III.

U.S. businesses would not be exempt from potential liability. A Cuban American family in Miami claims to have owned the land on which José Martí International Airport was built, so any U.S. carrier using the air field could conceivably be sued under Title III. Another family that owned the Port of Santiago could file suit against U.S. cruise ships docking there.

Moreover, it would be almost impossible for a U.S. or foreign company to know in advance whether a proposed business opportunity in Cuba might become the subject of Title III litigation. "This will effectively end for decades any attempt to restore trade between the U.S. and Cuba," attorney Robert Muse told the Tampa Bay Times.

When President Trump announced new sanctions on Cuba back in June 2017, senior administration officials said they were designed “to not disrupt existing business” that U.S. companies were doing in Cuba. If the president fails to continue the suspension of Title III, business relations will be disrupted far more severely and irreparably than they would be by any regulatory change.

Press Contact

David Carle: 202-224-3693