On May 2, the Trump Administration ceased the suspension of Title III of the Cuban Liberty and Democratic Solidarity (LIBERTAD) Act (“Helms-Burton Act”), effectively authorizing U.S. nationals to bring claims regarding property expropriated by the Cuban government after the communist revolution. Although in force since 1996, previous administrations had waived Title III. Enforcement of Title III is a significant shift in U.S. policy toward Cuba, and has already resulted in new claims being brought under the statute.
The enforcement of Title III has created significant potential liability for entities, both U.S. and foreign, that deal with property in Cuba. Title III creates a civil cause of action against any individual or entity that “traffics” in property expropriated by the Cuban government after January 1, 1959. The statute defines “ trafficking” to include direct dealings in the property, including by selling or transferring the property, but also to indirect benefits derived from the property, such as engaging in business activities that use or otherwise benefit from the confiscated property. Therefore, it is theoretically possible that a company profiting from business with Cuba, even if that business primarily occurs outside of Cuba, could be vulnerable to a claim under Title III. Although most of the public statements regarding Title III focused on more direct cases of expropriation, the breadth of Title III’s language, along with its lack of precedent caused by its suspension, it is difficult to predict how courts may interpret and apply Title III.
Practical considerations add to the complications created by the potentially expansive and unpredictable jurisdiction. Specifically, many non-U.S. countries have engaged in significant Cuba-related commerce since 1959, and entities from those countries are now vulnerable to Title III claims. The EU has already suggested that it could retaliate against Title III judgments against its entities by invoking its “blocking statute,” which both prohibits EU compliance with extraterritorial U.S. economic sanctions, and allows EU entities to recover any damages suffered based on U.S. enforcement of those sanctions. Monitoring how U.S. courts adjudicate these claims – and how the EU, and other jurisdictions with blocking statutes react – will help calibrate risk created by the enforcement of Title III.