Brussels warns U.S. against exposing EU firms in Cuba to claims

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HAVANA, April 16th  (Reuters) – The European Union has warned Washington that any move to allow U.S. citizens to sue foreign firms doing business in Cuba could lead to a World Trade Organization challenge and a cycle of counter-claims in European courts.

The EU has serious concerns over the decision by U.S. President Donald Trump to end the practice of suspending on a rotating six-month basis a section of the 1996 Helms-Burton Act that would allow such suits, principally from Cuban-Americans.

The comments came in a letter seen by Reuters from EU foreign policy chief Federica Mogherini and EU Trade Commissioner Cecilia Malmstrom to U.S. Secretary of State Mike Pompeo and dated April 10.

The two EU officials called on Washington to adhere to a 1998 agreement to grant a consistent waiver for EU companies and citizens while the bloc suspends a WTO challenge over the issue.

“Failing this, the EU will be obliged to use all means at its disposal, including in cooperation with other international partners, to protect its interests,” the letter said.

“The EU is considering a possible launch of the WTO case.”

The letter also said that EU courts were empowered to allow EU companies to recover any losses caused by claims over Cuba.

It said that an overwhelming majority of the 50 largest claimants, making up more than 70 percent of the value of claims, had assets in the European Union.

“This could trigger a self-defeating cycle of claims that will impair the business climate, without bringing justice to holders of claims, or impacting the situation in Cuba in any positive way,” the two EU officials wrote.

The Trump administration announced on March 4 it would allow lawsuits by U.S. citizens against dozens of Cuban companies on Washington’s blacklist.

However, it stopped short of allowing legal action against foreign firms who had used property confiscated by the Cuban government since the 1959 revolution – though it left the door open to doing so in the future.

Pompeo earlier this month extended to May 1 the waiver for foreign firms.

Trump’s move marked an intensification of U.S. pressure on Cuba and also appeared aimed at punishing Havana over its support for Venezuela’s socialist president, Nicolas Maduro.

The European Union said it also wanted to further democracy and human rights in Cuba and to find a peaceful and democratic solution to the crisis in Venezuela. (Reporting by Philip Blenkinsop; Editing by Andrew Cawthorne)