U.S. shifts Cuba policy to allow lawsuits against foreign companies — and that includes Canadian firms

OTTAWA — Canada and the European Union hit back Wednesday at the Trump administration’s decision to allow lawsuits against foreign companies connected to properties seized from American firms during the Cuban revolution, vowing to protect their businesses.

Canada and the EU pledged to work together in the World Trade Organization and ban the enforcement or recognition of American court orders against Canadian or European companies.

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 could place Canadian mining, tourism and financial services companies at risk in American courts.

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.

Foreign Affairs Minister Chrystia Freeland said Canada is “deeply disappointed” and reviewing options with the EU.

“The EU and Canada consider the extraterritorial application of unilateral Cuba-related measures contrary to international law,” Freeland, her European Union counterpart Federica Mogherini and EU Trade Commissioner Cecilia Malmstrom said in a joint statement Wednesday.

Canada and the European Union hit back Wednesday at the Trump administration’s decision to allow lawsuits against foreign companies connected to properties seized from American firms during the Cuban revolution, vowing to protect their businesses.

 

“Our respective laws allow any U.S. claims to be followed by counter-claims in European and Canadian courts, so the U.S. decision to allow suits against foreign companies can only lead to an unnecessary spiral of legal actions.”

Freeland said the government regularly met with the U.S. officials since January, when the issue first surfaced, to raise concerns about “the possible negative consequences for Canadians — concerns that are long-standing and well known to our U.S. partners.”

During a recent trip to Washington, Freeland met with U.S. Secretary of State Mike Pompeo to discuss the effect on Canadian companies if the U.S. were to resurrect Title III of the Helms-Burton Act.

Canada and its European allies have pushed the Trump administration to continue to suspend use of the dormant section of the law that allows Americans to sue foreign companies linked to Cuban properties confiscated after the 1959 revolution.

When the U.S. law came went into force in 1996, then-president Bill Clinton postponed the implementation of Title III. Subsequent presidents followed suit and renewed 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.

Canada’s Foreign Extraterritorial Measures Act was amended in January 1997 to provide that any judgment under the Helms-Burton Act will not be recognized or enforceable in any manner in Canada. Other countries implemented similar ”blocking statutes” at the time.

On Wednesday, Pompeo said the end of the Title III exemption is rooted in Cuba’s ongoing support of Nicolas Maduro’s socialist government in Venezuela, and it would take effect early next month.

“Cuba’s behaviour in the Western Hemisphere undermines security and stability of countries throughout the region, which directly threatens United States national security interests,” he said, 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 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.

The Canadian Chamber of Commerce said recently it was concerned about the potential impact on Canadian companies with operations in Cuba.

— with files from Ian Bickis

Published at Wed, 17 Apr 2019 16:15:09 +0000