Cuba and U.S. to Discuss Settling Claims on Property

IMAGES SECTIONS-17HAVANA, Dec.5th  (New York Times) Representatives of Cuba and the United States will meet on Tuesday in Havana to begin negotiations on settling decades-old outstanding property claims for the thousands of American citizens and companies whose assets were confiscated after Cuba’s revolution, according to several people briefed on the coming talks.

The meeting is considered a major step because the United States’ trade embargo against Cuba was initially enacted after Fidel Castro, the Cuban leader at the time, expropriated land from American companies. Nearly 6,000 people and corporations lost homes, farms, factories, sugar mills and other properties totaling $1.9 billion.
Now, for the first time, Cuba has agreed to meet to consider settling those losses. The State Department is expected to announce the meeting on Monday. A Cuban Embassy spokeswoman declined to comment.

“This meeting is an enormously big deal,” said Mauricio J. Tamargo, the former chairman of the Foreign Claims Settlement Commission, an agency within the Justice Department that adjudicates claims against foreign governments.
“The Cubans have up till now never recognized these claims as legitimate or something they are even prepared to discuss. It has never happened in 56 years since the revolution began and they started confiscating American property.”

When Mr. Castro declared victory in 1959, many Americans were forced to flee their homes and give up their land. His government later started expropriating large companies, and eventually nearly 900 corporations filed claims.

The list of claimants includes Exxon, Texaco, Coca-Cola and Starwood Resorts. About half the value of the claims, now estimated at up to $8 billion, belong to just 10 companies.

The issue had long been a stumbling block to the re-establishment of relations between the United States and Cuba. But the Obama administration restored diplomatic relations last year, with the vague assurance that property claims would be on the long list of issues to be taken up in bilateral talks.

Cuba would be unlikely to accept any deal that did not include lifting the trade embargo, which has for years been the nation’s top priority, said Mr. Tamargo, a lawyer with the firm Poblete Tamargo, which represents people with claims. If the embargo is lifted, he added, the Cubans could pay off the settlements with the increased trade revenues.

The Cuban government has estimated that the American embargo cost Cuba about $121 billion in losses.

“If American properties are compensated, then the embargo should be lifted,” Mr. Tamargo said. “There is a window of opportunity for Cubans that will be gone in about a year.”

“Obama is a very good negotiating partner for them to have as opposed to President Trump or President Bush or even President Hillary,” he added, referring to Donald J. Trump, Jeb Bush or Hillary Clinton.

The talks would not include the thousands of claims of Cuban-Americans who lost property before they became American citizens, like Mr. Tamargo’s family, who lost a 3,500-acre farm.

Although many people assume that Cuba does not have the money to pay off settlements, it could pay claims by offering American corporations with outstanding claims a first shot at the Cuban market, said Richard E. Feinberg, whose Brookings Institution study on the issue will be released Tuesday.

If the payments were spread out over 10 years, Cuba probably has the money to pay the original claims, but perhaps not the 6 percent interest levied by the claims commission, Mr. Feinberg said.

“It’s a historic moment, if you consider that U.S.-Cuban relations collapsed in the early ’60s in large measure when Fidel Castro moved to expropriate the large U.S. holdings there,” he said. “Now 55 years later, the two sides are sitting down to say, how do we settle this?”

One person with a pending claim, Margery Leeder, 85, a retired real estate agent in Pompano Beach, Fla., said she never thought her family would be compensated after the Cuban government seized 72,000 acres of rice and sugar her father owned outside Havana.

“If you think about it, the Castro brothers have done the biggest heist in history,” Mrs. Leeder said.

Her father’s land was worth $3.9 million in 1959, and the family’s claim is now valued at $16 million.

“Overnight if you were American and had a bank account, it was closed; you had no money,” she said. “Eventually Castro did allow you to get some money, only about $1,000. Castro said nobody needed more than that.”