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Trump Ends Suspension Of The Helms-Burton Act

The purpose of the Cuban Liberty and Democratic Solidarity Act (Libertad) Act (the “Helms-Burton Act” or the “Act”), passed in 1996, is to “protect United States nationals, i.e., U.S. citizens, against confiscatory takings and the wrongful trafficking in property confiscated by the Castro regime.”

Importantly, Title III of the Act provides a private cause of action for U.S. nationals against any person or entity that knowingly “traffics” in property expropriated by the Cuban government. The Act also provides exclusive jurisdiction for these claims in U.S. federal courts. 

Every president since Bill Clinton has suspended Title III due to strong opposition from U.S. allies in Europe whose corporate citizens would likely be target defendants.

On April 17, 2019, U.S. Secretary of State Mike Pompeo announced the Trump administration will no longer suspend Title III: “Effective May 2nd, the right to bring an action under Title III of the Libertad Act will be implemented in full.” Secretary Pompeo went on to warn: “Those doing business in Cuba should fully investigate whether they are connected to property stolen in service of a failed communist experiment.”

Accordingly, it is of the utmost importance for U.S. and foreign companies, particularly those in the tourism, travel, transportation, telecom, mining, and manufacturing sectors, to examine their past and current dealings in Cuba. For some, it may result in the realization of a potential claim. For others, closer study may reveal potential exposure. 

TITLE III BASICS

Title III creates civil liability for any individual or entity that traffics in property that was confiscated by the Cuban government on or after January 1, 1959. The Act authorizes claims by persons who were U.S. nationals at the time of expropriation and by persons who were Cuban nationals at the time but later became U.S. nationals. The State Department has estimated that the claims of these individuals could be worth billions of dollars.

Title III defines “trafficking” broadly by imposing liability on a person or entity that knowingly and intentionally sells, transfers, distributes, brokers, manages, or otherwise disposes of confiscated property, or that purchases, receives, holds, controls, manages, or holds an interest in confiscated property. Trafficking also includes engaging in a commercial activity using, or otherwise benefiting from, confiscated property.

The economic consequences following a determination of liability under the Act are significant. The award of damages could be based on the current market value of the property at issue rather than actual damages based on the trafficking conduct. Further, a successful Title III claimant is entitled to an award of attorneys’ fees and costs as well as treble damages if certain conditions are met.

CONCLUSION

Because Title III has yet to be litigated, there is virtually no precedent to provide potential parties with a predictable framework for liability under the Act. It is also difficult to predict whether the change in policy will result in an onslaught of litigation or whether most claimants will be dissuaded by personal jurisdiction issues or other obstacles, including how and where to enforce a potential judgment.

Regardless, it is likely any potential litigation will be initiated in federal court in the Southern District of Florida. Jones Walker’s Miami-based litigation team has decades of experience handling complex matters before federal courts that involve Latin America and the Caribbean and cases of national concern.

© 2019 Jones Walker LLP

TRENDING LEGAL ANALYSIS


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George Fowler Maritime Litigation Attorney
Partner

George J. Fowler, III, is a partner in the Maritime Practice Group, where he focuses on litigation, arbitration, and dispute resolution.


George Fowler is an internationally recognized trial lawyer known for his successful record trying hundreds of cases to juries and judges, including numerous high-profile matters, complex litigation, and cases of national concern.

George has written and lectured extensively on private international law and world trade and is active in promoting trade and investment for the City of New Orleans. He speaks frequently and has...

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Luis Llamas Commercial Litigation Attorney
Partner

Luis Llamas is a partner in the Litigation Practice Group. He concentrates his practice on admiralty disputes, complex commercial litigation, employment law, and international law, and advises clients on corporate transactions.


Luis is a highly respected litigator who practices out of Jones Walker’s New Orleans and Miami offices. In addition to helping clients resolve a broad range of commercial disputes, he also devotes part of his practice to domestic and international business matters and transactions, including acquisitions, joint ventures, and general corporate issues. 

Luis has handled cases across the United States and Latin America involving marine casualties, products liability, unfair trade practices, breach of contract, transportation law, and alleged violations of the Foreign Corrupt Practices Act (FCPA), among other disputes. He has litigated cases before state and federal courts as well as in arbitrations before the International Chamber of Commerce (ICC) and the International Centre for Settlement of Investment Disputes (ICSID).  

In his employment litigation practice, Luis regularly prosecutes and defends covenants not to compete and unfair competition claims, and obtains injunctions to prevent breach of non-compete agreements, employee raiding, unfair competition, and the use or disclosure of trade secrets. He provides strategic advice to clients on matters involving the recruitment and hiring of executives and other key personnel, and also counsels management on the use and structuring of enforceable restrictive covenants and other tools that help employers retain employees and prevent the loss of proprietary information.

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Luis Enrique Cuervo Energy Litigation Attorney
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Luis Enrique Cuervo is a partner in the Litigation Practice Group, where he focuses primarily in the areas of oil and gas, energy, and natural resources.


Luis advises US and Europe-based clients on their complex international transactional and litigation needs, including white collar crime, assistance before foreign courts, and in international commercial and investment arbitrations.

Luis counsels investors and multinational companies engaged in international business, including in Latin America, among other oil and gas, mining, admiralty, insurance, and...

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