News

Attorneys who this week sued Societe Generale for $800 million under a newly implemented U.S. sanctions law against Cuba plan to take similar legal action against three other banks, they told ACAMS moneylaundering.com.

On Wednesday, 14 grandchildren of Carlos and Pura Nunez, who once owned Banco Nunez, filed a federal complaint in Miami seeking damages from Societe Generale for transacting with Banco Nacional de Cuba, the country’s central bank, which nationalized their family’s financial institution and other lenders in 1960.

The complaint is the first brought against a financial institution since the White House activated a provision of the Helms-Burton Act that allows U.S. nationals who fled Cuba on or after Jan. 1, 1959, near the end of the nation’s five-year civil war, to pursue legal action against firms “trafficking” in properties subsequently seized from them by the communist government.

Javier Lopez, an attorney with Kozyak Tropin & Throckmorton in Miami representing the Nunez family, told moneylaundering.com his firm is preparing a lawsuit against a second bank on behalf of the grandchildren, as well as lawsuits for a separate, unrelated party against two other financial institutions doing business with Banco Nacional de Cuba, or BNC.

“It should not come as a surprise that they are being accused of trafficking [in confiscated property], given that the entire banking industry was confiscated by the communist regime,” he said. “They took that chance, now it’s time to pay the piper.”

In November, the French lender, or SocGen, agreed to pay $1.3 billion and enter a deferred prosecution agreement to settle U.S. federal and state charges that it handled billions of dollars of transactions related to Cuba and other countries under U.S. sanctions.

SocGen allegedly provided “credit facilities” to BNC from 2004 and 2010 and is thus liable for “trafficking” under Helms-Burton, according to the Nunez family’s complaint, which further accuses the lender of continuing to provide euro-denominated credit as part of its alleged ongoing relationship with the central bank.

A second attorney declined to name the three other financial institutions their clients plan to sue, but claimed in an email that all of them still provide credit facilities to BNC.

“Each structures their facilities somewhat differently, so there are arguably dissimilar facts to the SocGen complaint, as well as very similar facts,” the attorney, Evan Stroman, told moneylaundering.com. “It will eventually be a strategic decision whether to add them as defendants to the SocGen complaint or to file against them separately.”

A successful claim against SocGen could have far-reaching implications for other financial institutions that maintained ties with Cuba’s central bank in the past two years—the length of the statute of limitation prescribed by Helms-Burton.

“It would be a very big deal if this is held up in court, because it would allow for a really expansive definition of what constitutes trafficking,” Jason Rhoades, a former sanctions compliance and evaluation officer with the Treasury Department’s Office of Foreign Assets Control, or OFAC, said.

Helms-Burton

 As part of a deal between the U.S. and EU, the legal authority to a file suit against foreign banks and other firms under Title III of the Helms-Burton Act remained suspended ever since then-President Bill Clinton signed the legislation into law in 1996.

The Trump administration’s decision to lift the suspension in May prompted a vow from EU officials to use “all appropriate measures” to protect European firms operating in Cuba from such claims, including a blocking statute the bloc adopted shortly after Helms-Burton’s enactment.

The EU instrument bars European firms from complying with U.S. sanctions and other actions predicated on Helms-Burton and prohibits EU national governments from enforcing judgments based it. Firms with assets seized in the U.S. as a result of the measure can recover damages and legal costs from Helms-Burton plaintiffs by confiscating and selling any assets they have in Europe.

But the blocking regulation may not offer much protection to European firms with a sizeable footprint in the United States against plaintiffs without any assets in the EU.

Jeremy Paner, a former sanctions investigator with the U.S. Office of Foreign Assets Control, told moneylaundering.com that European banks in particular are “definitely concerned” about their exposure to potential lawsuits under Helms Burton.

“The claimants’ theory [against SocGen] is that if you’re dealing with BNC you’re trafficking in the property of banks that were confiscated in the past,” said Paner, now counsel with Ferrari & Associates in Washington, D.C. “All banks dealing with Cuba should be paying close attention to this case.”

A handful of Helms-Burton claims have been filed since May, one of which targets Miami-based Carnival Cruise Lines for using buildings and docks seized shortly after the Cuban Revolution.

Lopez and his law firm are considering pursuing separate Helms-Burton cases in response to the Cuban government’s confiscation of a sugar plantation, a tobacco company, an agricultural manufacturing facility and a cement company, he said.

A spokesperson for SocGen declined to comment.

Contact Koos Couvée at kcouvee@acams.org