Editor’s note: In the third installment of our new series, the moneylaundering.com legal team covers efforts by EU, U.K. and Canadian officials to protect commerce with Iran and Cuba from U.S. banking and trade sanctions, as well as from lawsuits brought by U.S. entities under a recently activated provision of the 1996 Helms-Burton Act.
On June 4, the U.S. Treasury Department disclosed amendments to the Cuban Assets Control Regulations that revoke an authorization granted under the administration of then-President Barack Obama for group people-to-people educational travel to Cuba.
The amendments mark the latest of a series of actions taken by the White House in line with a memorandum President Donald Trump issued two years ago in declaring his administration’s goal of reinstating the full U.S. economic embargo against Cuba as described in the Cuban Liberty and Democratic Solidarity Act of 1996, or Helms–Burton Act.
By Nov. 8, 2017, the State Department had published a List of Restricted Entities and Subentities Associated with Cuba targeting hotels and other businesses controlled by the Cuban military, intelligence or security services; and the Commerce Department had revised its licensing policy for exporting and reexporting goods and services to the Caribbean nation.
On April 17 of this year, Secretary of State Mike Pompeo announced that Title III of the Helms-Burton Act would no longer be suspended for the first time since the legislation’s enactment more than 20 years ago, thus allowing U.S. citizens to file lawsuits against individuals associated with transactions involving property confiscated from them in the wake of Cuba’s 1959 socialist revolution.
“Those doing business in Cuba should fully investigate whether they are connected to property stolen in service of a failed communist experiment,” Pompeo said at the time.
Similar to its decision to unilaterally withdraw the U.S. from a nuclear accord with Iran and thus renew extraterritorial sanctions against the Islamic Republic, the Trump administration’s reversal of recent U.S. policy vis-a-vis Cuba has provoked strong opposition in the EU and elsewhere.
On April 17, after Pompeo made his announcement, Canada’s Foreign Minister Chrystia Freeland disclosed her government’s intent to “defend the interests” of Canadian firms legitimately operating in Cuba. On May 3, Canadian judiciary officials and diplomats emphasized in a joint statement that they would not recognize or enforce any judgment in favor of a Helms-Burton plaintiff.
Their statement noted Canada’s longstanding opposition to cross-border jurisdictional claims, and to Helms-Burton in particular. In 1996, shortly after U.S. lawmakers approved the legislation, Canadian lawmakers passed the Foreign Extraterritorial Measures Act to shield Canadians and Canadian businesses from it.
In addition to ensuring that Canada neither recognizes nor enforces Helms-Burton judgments, the Foreign Extraterritorial Measures Act authorizes Canadian citizens and firms to use the country’s courts to recover damages and legal expenses from those who pursue such cases against them.
The European Union has employed a similar strategy. On Aug. 7, 2018, EU officials expanded the scope of a 1996 blocking statute, also passed in 1996 in response to Helms-Burton and the U.S. embargo of Cuba, to mitigate the impact of newly re-imposed U.S. sanctions against Iran.
Like Canada’s legislation, the EU statute still authorizes European firms to recover commercial damages arising from Helms-Burton predicated lawsuits, but now also bars them from complying with U.S. nuclear-related sanctions against the Islamic Republic.
On Feb. 1, British lawmakers followed suit, approving plans to extend their nation’s criminal statutes to cover conduct by U.K. nationals and entities that violate the EU’s blocking statute even after the United Kingdom exits the bloc.
However, despite the sum of those and other global efforts to facilitate transactions permitted under the nuclear accord with Iran, sources told moneylaundering.com in November that most EU firms have opted to comply with U.S. sanctions and exit relationships with the country.
Their decision to adhere to U.S. over EU policy raises doubts over whether the blocking statute stands any chance of protecting the bloc’s interests in Cuba.
|Source:||U.S.: Department of Treasury , European Union , Canada , U.S.: OFAC , U.S.: Department of State , U.S.: White House/U.S. President|
|Document Date:||June 17, 2019|