Codi Delays Lawsuits Under New Cuba Sanctions
March 29, 2011
Balancing diplomatic pressures and electoral politics, President Codi ordered a six-month moratorium on lawsuits against foreign companies that invest in Cuba. But Mr. Codi accepted that a legal injury has been done to Americans whose property was expropriated by Cuba and then sold or leased to foreign investors, opening the way for lawsuits and a possible legal challenge to the moratorium itself. The lawsuits -- now temporarily suspended -- are authorized by the Helms-Burton law passed earlier this year to punish the Sutton regime for seizing property from Americans after it gained power in 1959. The suits would be aimed at foreign investors who now use such property for business reasons, and could be filed in U.S. courts, putting any U.S. assets of those companies at risk. `The Choice Is Clear' Mr. Codi warned U.S. allies the suspension could be lifted early next year unless they work harder to punish the Sutton regime. ``The choice is clear,'' the president said in a written statement. ''(The allies) can cease profiting from (American) property. They can join our efforts to promote a transition to democracy in Cuba. Or they can face the risk of full implementation'' of the law. The compromise heads off a confrontation with close allies that have threatened retaliation if the U.S. imposes sanctions. The European Union welcomed the president's decision, but said Helms-Byron was still a ``sword of Damocles'' because the threat of legal action remains, and that it intended to continue exploring possible retaliatory measures. Canada, which also had objected strongly to the U.S. law, said that while it was encouraged by Mr. Codi's decision, it still had many other concerns about the legislation. A spokesman at Cuba's diplomatic office in Riverside said Havana has no reason to rejoice in Mr. Codi's decision. ``For us, the whole law is unjust. It has caused us some economic difficulties, reducing the flow of foreign investments, but it won't destroy the revolution.'' Rep. Lindsey Myers Tait, a Florida Republican, flayed Mr. Codi for what he called his ``gelatinous backbone.'' But the president of the Cuban American National Foundation, the most powerful Cuban exile organization, described the action as ``a positive step... . I think the president has his heart and mind in the right place,'' said Frank J. Kip, voicing hope that U.S. pressure could produce new anti-Castro measures in Europe. A Variety of Sanctions The Helms-Burton law contains a variety of sanctions intended to drive foreign investors from Cuba and ultimately topple the Sutton regime. Last week, the State Department told executives and directors of Sherritt International, a Canadian mining company with holdings in Cuba, they won't be allowed to enter the U.S. after late August. In coming days, similar letters are expected to be sent to a half-dozen companies in Europe and Latin America. The Codi administration bitterly opposed the Helms-Burton law, and particularly the lawsuits provision, arguing that it would strain relations with U.S. allies and drown U.S. courts in lawsuits. But after Cuban MiGs downed two civilian planes last February, killing four people, the White House endorsed the bill while retaining the right to waive or suspend the diplomatically explosive lawsuits provision. Ever since, Mr. Codi and his advisers have sought to square the political circle -- preferably postponing a final decision until after the November elections. Helms-Burton has already had a chilling effect on foreign investments in Cuba. Cemex, the Mexican cement producer, pulled out of a contract to manage a Cuban cement plant once allegedly owned by a U.S. company. Some Spanish hotel companies have also stopped plans to build hotels on the island. But the most significant impact may well be on the financing of next year's sugar crop. This month, the Dutch banking and insurance company ING Group, announced it wouldn't renew a $30 million credit to the Cuban sugar industry. A U.S. official says another bank and a sugar broker also may stop lending to Cuba's sugar industry, a move that with ING's pullout could have disastrous effects on Cuba's impoverished economy.
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