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Tuesday, April 7, 2020
WASHINGTON, Jul 16 1996 (IPS) - Caught by conflicting political and diplomatic pressures, U.S. President Bill Clinton Tuesday announced he will suspend key provisions of a controversial law designed to discourage foreign investment in Cuba.
Those provisions, included under Title III of the “Helms- Burton” bill, permit former U.S. owners of commercial property expropriated by President Fidel Castro’s government to claim damages in U.S. courts against foreign companies accused of “trafficking” in that property as of Nov 1.
Under Clinton’s orders issued Tuesday, U.S. claimants may hire lawyers and prepare cases to bring under Title III from now until February 1, 1997 at which time Clinton could issue another suspension in the right to initiate an actual lawsuit under the act, according to Top officials who briefed the press at the White House.
At the same time, however, Clinton declined to “waive” Title III altogether, a course strongly urged on him by his foreign policy and trade advisers who are worried about retaliation by the European Union (EU), Canada, and other Cuban trading partners.
By failing to “waive” Title III, Clinton is recognising that U.S. claimants have an irrevocable right of action against foreign “traffickers” in almost 6,000 commercial properties in Cuba, according to Deputy National Security Adviser Sandy Berger. “The threat of liability is real,” he said.
“The president’s approach uses Title III not as a sledgehammer but as a lever to promote democracy in Cuba,” he added.
Tuesday’s move came amid unprecedented pressure by Canada, the EU, and other friendly nations which had threatened to retaliate against the United States if Clinton fully implemented the bill.
They argued that the extension of U.S. jurisdiction over foreign companies doing business in a third country violated international law. The European Union (EU) this week repeated previous threats to take Washingtonto the World Trade Organisation (WTO) over the matter and warned that it might establish a blacklist of U.S. companies which try to take advantage of Title III and give European firms the right to retaliate in European courts.
Clinton’s decision appeared designed to mollify both Washington’s allies and supporters of the Helms-Burton law. “He’s trying to have his cake and eat it, too,” noted Jeff Thale, a Cuba analyst at the Washington Office on Latin America (WOLA).
Until this week, most political analysts predicted that he would not waive the act for fear of alienating the politically potent Cuban-American communities in New Jersey and Florida in advance of November’s presidential elections.
Both states carry substantial electoral weight and are considered up for grabs in the elections, although Clinton currently leads his Republican opponent, Sen. Robert Dole, by up to 30 percentage points in public-opinion surveys in New Jersey. Dole was a sponsor and steadfast proponent of the Helms-Burton legislation.
Whether Tuesday’s gambit succeeds in appeasing both foreign allies and Helms-Burton backers is doubtful, however. Initial reaction on both sides was less than enthusiastic.
“By delaying this for six months, (Clinton) is giving aid and comfort to Fidel Castro,” Burton told a CNN newscast after the announcement.
Canadian Amb. Raymond Chretien, who has strongly criticised Helms-Burton, told the same interviewer that, while pleased over the lawsuit suspension, “we hope Clinton will take the decision forever.”
Chretien also reiterated Canada’s very strong objections to Title IV of the bill which denies visas to foreign executives and their families with investments in Cuba. Last week, Washington sent notices to executives of Sherritt International, a Canadian mining company, that they will not be permitted to come to the United States under Title IV.
The law, named after the ultra-rightist chairman of the Senate Foreign Relations Committee, North Carolina Republican Jesse Helms, and Dan Burton, chairman of the Western Hemisphere Subcommittee in the House of Representatives, swept through Congress in February, less than a week after Cuban warplanes shot down two U.S. civilian aircraft piloted by a Miami-based, anti- Castro group just shy of Cuba’s airspace. Four U.S. crewmembers were killed.
Outrage in the Cuban-American community in Florida was fierce, and, yielding to the political heat, Clinton quickly signed the bill into law. Clinton signed “the law because it was going to pass (Congress), there was no point in suggesting otherwise, and Congress would have clearly overridden any veto by the president,” White House spokesman Mike McCurry explained Monday.
Before the shoot-down, Clinton had said he could support the bill on the condition that Title III was omitted. The administration argued at the time that the provisions would spur tens of thousands of lawsuits and paralyze much of the federal court system. It also warned that the bill would unduly provoke U.S. allies by extending U.S. jurisdiction over foreign companies far beyond its shores.
Such “extraterritorial” measures are anathema to believers in free trade, and the EU, in particular, is concerned that the Cuba precedent may soon be followed by other U.S. laws threatening foreign companies which invest in Iran and Libya.
Already in March, the EU warned in a letter to House Speaker Newt Gingrich that “the collective effects of these provisions have the potential to cause grave and damaging effects to bilateral EU-US relations.”
Europe is not alone in its anger. Canada and Mexico, Washington’s partners in the North America Free Trade Agreement (NAFTA), have also strongly denounced the Helms-Burton law, giving notice that they will launch formal consultations on the matter under the two-year-old trade pact. The Canadian parliament is also considering retaliatory measures.
The law was also denounced in no uncertain terms by the Organisation of American States (OAS) at its annual general meeting in Panama last month. The foreign ministers to ask the Inter-American Juridical Committee to determine whether the measure violates international law.
Berger said the administration will use the next months between now and Nov. 1 to press foreign allies and companies to disinvest from Cuba and to better coordinate policies designed to bring about Castro’s downfall. Clinton is to appoint a special envoy to communicate with the allies.
Companies with disputed Cuban holdings can only be sued for “trafficking” after Nov 1. If they divest their holdings before then, they will avoid liability.
In the period between now and Feb. 1, when Clinton must decide whether to end his suspension of the right to sue, Washington wants its allies to join it it “putting pressure on the regime with respect to human rights and provide the Cuban people with more economic and political freedom.” It will also ask the EU and others to withhold non-humanitarian aid and trading benefits to Cuba.
At the end of the six-month period, Clinton must consider whether “progress” towards “a more activist approach towards supporting democracy” has been made in Cuba. If so, he will continue the suspension. If not, he may lift it, said Berger.
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