U.S. allows lawsuits against foreign companies in Cuba, imperilling Canada
April 17, 2019
April 17, 2019
OTTAWA – The Trump administration says it will now allow lawsuits against foreign companies connected to properties seized from American firms during the Cuban revolution – including Canadian businesses.
The landmark tightening of the U.S. trade embargo on Cuba’s communist government represents a major shift in U.S. foreign policy – one that now could place Canadian mining, tourism and financial services companies at risk in American courts.
U.S. Secretary of State Mike Pompeo says the decision, to take effect early next month, is rooted in Cuba’s ongoing support of Nicolas Maduro’s socialist government in Venezuela.
“Cuba’s behaviour in the Western Hemisphere undermines security and stability of countries throughout the region, which directly threatens United States national security interests,” said Pompeo, adding that Cuban military intelligence and state security services today keep Maduro in power.
“Sadly, Cuba’s most prominent export these days is not cigars or rum, it’s oppression. Detente with the regime has failed.”
Canada, its Lima Group allies and the U.S. have all called for Maduro’s ouster and recognize opposition leader Juan Guaido as the interim leader of the beleaguered South American country, which has been engulfed in economic and political turmoil, sparking a refugee crisis.
But Canada and its European allies have pushed the Trump administration to continue to suspend use of the dormant Title III section of the 1996 Helms Burton Act, which allows Americans to sue foreign companies linked to Cuban properties that were confiscated after the revolution in 1959.
About one million Canadians annually vacation in Cuba and Toronto-based resource company Sherritt International is long established there, while countries such as Britain, France and Spain have companies active in rum, cigars and tourism.
The federal government had no immediate comment.
During a recent trip to Washington, Foreign Affairs Minister Chrystia Freeland met with Pompeo to discuss the possible negative consequences for Canadian companies if the U.S. were to resurrect Title III, officials said.
A European Commission spokesman said today the EU will protect firms from the continent doing business in Cuba, and said the U.S. action is contrary to international law.
The Canadian Chamber of Commerce said recently it was concerned about the potential impact on Canadian companies with operations in Cuba, particularly those in the mining, financial services and tourism sectors.
When the U.S. law came went into force in 1996, then-president Bill Clinton postponed the implementation of Title III; until now, every subsequent president has followed suit, renewing the exemption every six months.
President Donald Trump changed that practice. Last month, the U.S. State Department extended the Title III exemption by only 30 days.