WASHINGTON — The Trump administration is expected to act as early as Monday to allow unprecedented lawsuits in American courts against some foreign companies doing business in Cuba, U.S. officials and others familiar with the move tell NBC News.
The move threatens to discourage more of the foreign investment in Cuba that provides the island's economy with a key lifeline. It could also play into the Trump administration's efforts to ostracize Venezuelan leader Nicolas Maduro, who is closely aligned with Cuba and whose country has been labeled by national security adviser John Bolton as part of a "Troika of Tyranny," alongside Cuba and Nicaragua.
Ever since 1996, when a law known as the Helms-Burton Act or Libertad Actwent into effect, every U.S. president has waived a key portion of it called Title III that allows U.S. citizens, including Cuban-Americans, to sue people or companies that do business in Cuba using property seized in the 1959 revolution. Waiving that section prevented it from going into effect and averted lawsuits targeting major hotel chains, airlines and even mining companies that operate in Cuba, often in joint partnerships with government entities.
Trump administration officials have discussed several possibilities for whether to allow the law to go into effect fully or only partially, with the final decision being left to the very end. But the administration is likely to sign a "partial waiver" that protects U.S. businesses and those from allied nations from litigation, but allows lawsuits against businesses from "unfriendly" nations such as Russia and China, according to U.S. officials, congressional aides from both parties and other individuals briefed on the Trump administration's deliberations.
According to research from the U.S. Cuba Trade & Economic Council, a nonprofit that promotes trade with Cuba, companies in 20 countries could face lawsuits from owners who have certified claims to confiscated property. The list includes numerous U.S. and European airlines and cruise lines, and major hotel chains such as Spain's NH Hotel Group and Melia Hotels International. There are also concerns that both the major port in Havana and the international airport are built at least partially on land owned before the revolution by Cubans who later emigrated to the U.S.
Exempting companies in the U.S. and allied countries could help prevent a backlash from companies like Marriott International, which has started expanding into Cuba since the two countries restored relations under former President Obama. It could also avert a new tension point with Europe, where countries are still bristling from the Trump administration's threats to sanction companies that maintain business in Iran.
Ambassador David O'Sullivan, the European Union's envoy to the U.S., warned last month against violating what he said was an understanding between the U.S. and Europe that the Helms-Burton law wouldn't be used to harm European interests in Cuba.
"We would find it deeply regrettable if this understanding were now to be breached and this will certainly be a new source of conflict between us we hope will not arise," O'Sullivan said.
Any move to allow even some lawsuits under Title III would unleash a torrent of litigation — not only lawsuits over confiscated property but also legal challenges over the validity of the Helms-Burton law itself and the way the Trump administration is applying it.
Angela Mariana Freyre, a former special adviser on Cuba in the White House National Security Council now at the law firm Squire Patton Boggs, said the statute on its face isn't clear about whether the administration can waive it for some countries but not others.
"Since Title III has been waived by every administration, both Republican and Democrat, since 1996, it has actually never been tested," said Freyre, who was born in Cuba. "We don't know what a court would do or how it would interpret a limited waiver or a partial waiver of the statute."
The Trump administration has long sought ways to toughen the U.S. economic embargo on Communist-run Cuba and has previously rolled back some of the measures enacted by the Obama administration to expand ties between the countries.
The first indication that the administration was considering Title III as the next step to pressure Cuba came in January when the waiver was last up for renewal. Rather than renewing it for the full six months, as had been done in the past, the administration waived it for only 45 days while announcing it would conduct a "careful review" of policy going forward. The administration cited U.S. national interests, human rights concerns in Cuba and efforts to "expedite a transition to democracy."
Sen. Marco Rubio, R-Fla., an advocate for harsher Cuba policies who has significant influence in the Trump administration, called the 45-day waiver "a strong indication of what comes next." He warned on Twitter at the time that "If you are trafficking in stolen property in #Cuba, now would be a good time to get out."
The 45-day waiver expires in mid-March. But Secretary of State Mike Pompeo is required to inform Congress of any intent to sign another waiver at least 15 days in advance.
A State Department spokesperson said no final decision has been made on whether to issue an additional waiver. Individuals briefed on the administration's deliberations said one possibility was that the U.S. would sign a partial waiver, exempting the U.S. and allies, but make it valid for only 45 days or another short-term period. The administration would then use that time to keep monitoring Cuba's behavior and decide whether to make it permanent.
But international business attorneys said that even a brief window would allow enough time for plaintiffs to file lawsuits before the administration could change its mind.
The Cuban Embassy in Washington didn't respond to requests for comment. But after the administration announced the review in January, Cuban Foreign Minister Bruno Rodriguez called it "political blackmail and irresponsible hostility" that he said amounted to a brutal attack against international law.
Past presidents have suspended the law out of concern over the effects it would have on the international court system, the World Trade Organization and U.S. relations with European countries, said John Kavulich of the U.S. Cuba Trade & Economic Council.
Collin Laverty, who runs the group Cuba Educational Travel, which promotes U.S. visits to the island, said major companies that have already invested heavily in Cuba are unlikely to pull out even if they're sued. But he predicted that other companies that have been considering business in Cuba are likely to hold off while other legal cases play out.
"You could see the impact scaring off foreign investment, where companies take a wait-and-see approach," Laverty said.
Another company that could be affected is Airbnb, whose operations in Cuba have been praised by Rubio as helping average Cubans to benefit from tourism without sending revenue to the Cuban government. The law exempts residential property used solely for residential purposes from legal action, but it's unclear how judges might apply that to those benefiting commercially from renting out their homes.
Ever since recognizing Venezuelan opposition leader Juan Guaido in January as the country's legitimate leader, President Trump has been seeking further ways to pressure Maduro out of office, but is running out of options. The administration has hit Venezuela with oil sanctions and has slapped sanctions on top Venezuelan officials, but so far Maduro is refusing to leave power.
Ramping up economic and diplomatic pressure on Cuba serves as one way for the Trump administration to try to deplete support for Maduro. Cuba's government is one of the only remaining countries in Latin America still backing Maduro, and in recent days the Trump administration has increasingly taken aim at Cuba for allegedly propping him up.
"For years, Cuban security and intelligence thugs, invited into Venezuela by Maduro himself and those around him, have sustained this illegitimate rule," Pompeo told the U.N. Security Council in January. "Let's be crystal clear: The foreign power meddling in Venezuela today is Cuba."
Cuba has adamantly denied that claim, with Rodriguez, the foreign minister, challenging the United States to provide proof. He said the roughly 20,000 Cubans in Venezuela are all civilians.
"Our government categorically and energetically rejects this slander," Rodriguez told reporters in Havana. He said the crisis in Venezuela was a "failed imperialist coup" that had been concocted by the U.S.