Text
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STATE LEG AFF.
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CONFERENCE REPORT ON HELMS-BURTON
Although it is unclear whether the draft Conference Report on
Helms-Burton legislation accurately reflects what the
Conference will ultimately decide, the draft report adopts
significant portions of the more radical House bill.
It will
closely resemble the bill that Secretary Christopher has
recommended that the President veto.
In all but two or three
areas in which there is a substantive difference between the
House and Senate versions, the Conference Report adopts the
version that is more objectionable to the Administration.
Iitle III
While the number of lawsuits likely to be brought under Title
III has been reduced as a result of Conference changes, these
changes to do address our underlying principled objections.
The impact of Title III on our relations with allies, prospects
for settling certified claims, our broader international claims
practice, and for Cuba's transition would still be extremely
negative.
Our international law objections remain applicable.
(See separate description of the revised Title III.)
Title IV (Visa Ineligibility for ''Traffickers"}
It appears certain that Conferees will include some version of
the House provision, global in scope, barring entry into the
U.S. by "traffickers" in expropriated property.
It is
possible, however, that the language may be softened to allow
that Administration flexibility in determining when to apply
the exclusion.
In either case, implementation would be
problematic and would create serious friction with our allies.
Re~uirements
for
Transition and
Democratic
Governments
Conferees will adopt the strict requirements, closer to the
House version, for both a transition and a democratic Cuban
Government. Among the requirements for a transition government
are that it dissolve the Department of State Security and that
Fidel or Raul Castro not be included in such a government
(regardless of whether they had agreed to elections and other
democratic reforms.)
IFI
Programs during a TransitLQ.D
While conferees will adopt Senate language allowing U.S.
support for IFI loans during a transition in Cuba, the
requirement to oppose Cuban memberships in IFis until a
democratic government is in power could -- depending on the
rules of the applicable IFI
make it effectively impossible
to approve loans.
Assistance Plan tor Cuba Under Transitipn/Pemocratic
Governments
The draft report indicates the Conference will adopt the House
version of the provisions concerning assistance to Cuba under
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2 -
future governments. Although the House version contains a
provision which appears to permit planning for assistance
determined to be 11 essential to the successful completion of the
transition to democracy," which could cover democracy-building
and other types of assistance beyond humanitarian aid, the
provision is so badly drafted as to create considerable
ambiguity about its scope. The House version still would
require additional authorizing legislation before the USG could
provide any assistance. This latter element would reduce the
attractiveness of Title I I as a "carrot'' for change in Cuba.
Remittances
The Conferees will adopt the Senate's sense of Congress
provision concerning circumstances under which the USG should
generally license remittances or travel-related transactions.
There is no indication, however, that the Conferees will delete
the House language which appears to prohibit~ remittances
until there is a transition government in Cuba.
li.ews Bureaus
The authorization for news bureaus stipulates that the
authorization is available only if, among other things, Radio
and TV Marti journalists are allowed to gather news in Cuba
without interference before any news bureaus are established.
This would essentially contradict our statements to both the
public and the Cuban Government regarding implementation of the
President's October 6 measures. Although we may, as a
technical legal matter, be able to proceed with the President's
news bureaus decision on the basis of separate statutory
authority, the inclusion of the purported requirements could
create a significant political difficulties for our news
bureaus policy.
support for the Cuban People
Language will be included authorizing U.S. assistance to
support democratic groups in Cuba, but with a requirement that
"no funds or assistance be provided to the Cuban Government."
Since the GOC or its entities (such as state-run hotels) could
derive limited, indirect financial benefit from assistance,
this language could interfere with our grant to Freedom House
or other projects.
Russian Aid
Conferees will adopt Senate version of the restrictions (which
are broader in scope than those in the House version) on
assistance to NIS states for involvement with SIGINT facilities
in Cuba and will include the House provisions restricting
assistance to countries or entities that assist in the
completion of a nuclear power plant in Cuba. The Conferees
will preserve the waiver/carve-out provisions which make these
provisions less problematic.
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- 3 -
Sugar/Trade
The mild Senate version of the provision concerning trade with
countries which import Cuba sugar, which simply exhorts the
Administration to enforce current law, will be adopted.
Civil Penalties
The Conference report would preserve the Senate language
authorizing the Administration to make use of civil penalties
in enforcing embargo regulations on educational, religious and
other travel. This would be useful.
11/27 /95
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STATE LEG AFF.
Helms-Burton Title III - conference version
The revised version of Helms-Burton Title III likely to be
approved by House-Senate conferees includes several significant
changes.
While these changes will reduce in practical terms
the scope of problems the bill would cause by either limiting
the numbers or delaying the filing of lawsuits, they do not
address the central objections the Administration has expressed.
Signifi~ant
o
Changes
During the first two years after enactment, only certified
claimants could file suit against "traffickers.'' Cuban
Americans with claims could file them after that time.
This change would for a time significantly reduce the
potential number of Title III suits filed.
o
Court judgments against the Cuban Government and its agents
and instrumentalities would not be enforceable against
transition or democratic governments.
(Because of
ambiguities in the language, courts might rule that
judgments against Cuban governmental agencies and
instrumentalities could be enforced against those entities
but not the government itself -- even after a transition.
This change would address to some extent our concerns
that such judgments would burden future governments
while they are trying to resolve property issues and
begin Cuba's economic reconstruction.
It would also
discourage suits against the current Cuban Government,
since there would be little possibility of recovering
damages.
o
A filing fee would be established to defray the costs of
processing cases in federal courts.
While it is not clear that such a filing fee would
cover all costs nor eliminate all the administrative
problems the suits, this change will allow proponents
to argue that Title III will be "budget neutral."
o
The "threshold" property value requirements for a Title III
is $50,000, not including interest,
Our reading of the
bill suggests that a suit could be filed if EITHER the
value of the property at the time of the taking of property
OR its current "fair market value" exceeds $50,000.
While this new threshold may reduce the number of
eligible claimants somewhat, there would still be a
large pool of eligible plaintiffs.
The Foreign Claims
Settlement Commission certified 259 claims with a
principal value over $50,000.
The value of many
properties on which other certified claims are based
will likely have appreciated to more than $50,000
since then.
We have no record of how many properties
now claimed by Cuban-Americans would be valued at more
than $50,000.
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647 9667
STATE LEG AFF.
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2 -
o
Several changes to the bill would in effect allow almost
all claimants, particularly certified claimants, to seek
treble damages.
o
The authority of the President to suspend Title I I I suits
after a transition government is in power is clearer now.
Any exercise of this authority by the President would
be extremely difficult in practical terms, and could
give rise to takings litigation against the U.S.
o
Certified claimants would get first priority if a pool is
established, e.g. a class action settlement fund, to pay
Title III lawsuits.
This change attempts to address the concerns of
certified claimants.
o
The bill now sets a two year statute of limitations period,
such that suits may not be brought more than two years
after trafficking occurs.
While this could preclude some old cases, the broad
definition of utrafficking" to include 11 use" of
property means that ongoing trafficking, even if it
began more than two years ago could still serve as the
basis for a lawsuit.
Central Administration Concerns that Remain
o
The right of action, no matter how limited, still will be
challenged by our allies as an improper extra-territorial
application of U.S. law. We would strenuously object if
other countries sought to deter U.S. investment in Germany
or China in this fashion.
o
Even a more limited number of suits will still constitute a
dangerous precedent that, if followed by other countries,
would increase the litigation risks of U.S. businesses
abroad.
o
In current form, the bill would in fact permit lawsuits
against U.S. companies investing in u.s.-claimed properties
in Cuba after a transition government is in power.
o
Title III still circumvents, and so undermines, the
internationally recognized and accepted claims resolution
process.
It will still complicate USG efforts to seek
compensation for certified claimants.
14] 006/011
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STATE LEG AFF.
-
3 -
o
The new version of Title III still damages prospects for a
transition to democracy.
It will allow the Cuban
Government to depict the U.S. -- and particularly Cuban
Americans -- as poised to take away homes and schools.
It
sends the wrong signal to the Cuban people about how the
U.S. intends to seek resolution of claims, and what role
the U.S. is prepared to play during a transition.
o
Title I I I might still generate a large number of lawsuits
in U.S. federal courts. Fees might not fully cover added
costs, and the administrative burden will still likely be
onerous.
o
Title I I I still permits suits against agencies and
instrumentalities of foreign states -- and perhaps foreign
states themselves, in a manner which is not supported under
international law.
f4J 007 /0ll
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STATE LEG AFF.
Talking Points on Revised Title III
o
The right of action, even if limited, is an improper use of
federal courts and an improper extra-territorial
application of U.S. law. Our allies will still strongly
object to this version of Title III. N.!a would strenuously
object if other countries sought to deter U.S. investment
in other countries in the world in this fashion.
o
The bill will still constitute a dangerous precedent that,
if followed by other countries, would increase the
litigation risks of U.S. businesses abroad.
o
Title III still circumvents, and so undermines, the
internationally recognized and accepted claims resolution
process.
The U.S. Government has been very successful in
obtaining compensation for U.S. claimants in other
countries under this process.
o
Title III will still complicate USG efforts to seek
compensation for certified claimants.
It will be difficult
and time-consuming to sort out which claimants have
received damages under Title III, which have not, which
cases are still pending, etc. These delays will hurt both
U.S. claimants and Cuban efforts to privatize assets.
o
Among the primary targets of lawsuits could be U.S.
businesses investing in Cuba after a transition government
is in power.
o
The new version of Title III still damages prospects for a
transition to democracy.
It will allow the Cuban
Government to depict the U.S. -- and particularly Cuban
Americans -- as poised to take away homes and schools on
the island.
The bill sends the wrong signal to the Cuban people
about how the U.S. intends to seek resolution of
claims, and what role the U.S. is prepared to play
during a transition.
o
Title III might still generate a large number of lawsuits
in U.S. federal courts. Fees might not fully cover added
costs, and the administrative burden will still likely be
onerous.
14] 008/011
11/2i/95
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STATE LEG AFF.
What's Wrong with Helms/Burton?
Administration Talking Points
0
:the Belms bill would not promote a peaceful transition in
Cuba.
New sanctions against foreign investors
("traffickers") would p:r:ovide a rallying point for Castro
_inside Cuba, and allow him to keep the focus on "U.S.
aggression" rather than on the need for reforms.
0
The bill's attempts to increase existing pressure on the
Cuban government would likely be counterproductive, and
could be more damaging to
interests than to ~astro.
u.s.
0
The bill would create serious fricticns with our allies at
a time when they are becoming more active and helpful in
promoting human rights in Cuba. Because of its
extra-territorial reach, the Helms bill will focus allies'
attention on opposing U.S. policy, rather than on pressing
for democracy in Cuba.
0
While U.S. policy is to discourage foreign investment in
Cuba, particularly when it would involve expropriated U.S.
properties, our efforts to deter it should not prompt us to
sacrifice our broader inte~est~ or undermine valuable
principles of international law.
0
Title III of the bill, which would allow U.S. nationals
with e~propriation claims against Cuba to sue in U.S.
courts third country nationals who invest ("traffic") in
those properties, is a bad iooa.
It could clog up u,s, courts with a flood of lawsuits,
filed mainly by Cuban-Americans.
It would complicate prospects for resolving the claims
of certified U.S. claimants (and hamper future Cuban
privatization efforts) by tying up properties in
court.
Certified U.S. claimants oppose this bill.
It would create a dan9erous precedent that, if
followed by other countries, ~o~ld ex~ose U.S.
investors in Eastern Europe, China or elsewhere .t.o.
lawsuits in third countries anywhere in the world
brought by disgruntled property claimants.
It would be extremely difficult to justify under
international law and has already drawn harsh
criticism from our allies.
o
The u.s. expects to negotiate successful resolution o±
certified claims with a future Cuban Government under
existing international law, and assist other U.S. claimants
as well.
o
The
already has in place against Cuba its toughest and
most comprehensive ecQnQrnic embargo.
The embargo has
helped to force the limited but positive economic changes.
o
Let's keep international pressure on Castro, not focus it
on ourselves.
u.s.
[4J 009/011
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STATE LEG AFF.
'6'202 647 9667
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE
Qj:
MANAGE.MEW ANO BUOCil:T
WASHINGTON, D.C. 2'06Q3
September 2 o,
199 5 ( SENT)
(House)
STATEMENT OF ADMINISTRATION POLICY
H.R. ~22 - Cuban Liberty ang Democr~tic solid~rjty Act
(Burton (R) IN and 43 co•ponsors)
The Aciminis~ration suppo~ts tha central objective ot H.R. 927,
i.e., to promote a peaceful transition to democracy in cuba.
However, H.R. 927 contains a number o! aeriously objectionable
provisions that would not advance U.S. interests in Cuba and
would damage other U.S. interests. Therefore, the President•s
senior advisers would recommend that H.R. 927 be vetoad unless
the follo~ing ~revisions are deleted or amended:
The bill would encroach upon the President's exclusive
authori~y under the Constitution to conduct tor~ign
affairs, or otherwise unduly limit th& President's
!lexioility, by purporting to require the President or the
Executive branch to pursue certain courses o! ac~ion
regarding Cuba.
Mandatory provisions should be replaced
with pr~eatory language in the !ollowing sections: l02(b);
1 o4 (a) ;
11 o (b) ;
112 ; 2 o1 ; 2 o2 ( e) ;
2 a 3 ( c) ( l) ; and 2 a J ( c) ( J) .
The e~emption in section l02(d} from civil penalty
auehority for activities relatQd to research, education and
certain oth~r purpo5es, and the burdensome requirement for
an agency hearing for civil penalties in other oases,
greatly limits the effactivQnQSS or civil penalties as~
tool for improving embargo enforcement. Section 102(d)
should be amended to address this shortcoming.
Section 103 should be amended to make the prohibition of
certain rinancing transactions subject to the discretion of
the President.
section 104{a) should be amended to urge U.S. opposition to
Cuban membership or participation in Intornational
Financial Institutions (IFis) only until a transition
government is in power to enable the lFis to support a
rapid transition to democracy in CUba. Section 104(b),
which would require withholding U.S. payments to IFis,
could place the U.S. in violation of international
commitments and undermine their ef!ective tunctioning.
This ~ection should be deleted.
sections 106 and llO(b), ~hich would dony foreign
asei~tance to countries, i ! they, or in tho c~se ot
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STATE LEG AFF.
[4J 011/011
2
section llO(b), private entities 1n these countries,
provide certain support to Cuba, should be deleted.
Section 106 would undermine i~portant U.S. support for
reform in Russia. Section llO(b) is cast .so broadly ae to
have a profoundly adverse affect on a ~ida range of U.S.
Government activities.
Section 202(b) (2) (iii), which would bar transactions
related to family travel and remittances from relatives of
Cubans in the United States until a transition government
is in power, is too inflexible and should be delQted.
Sec~ions 205 and 206 would establish overly-rigid
requirements for tr~nsition and democratic governments in
Cuba that could lGave the United States on the sidelines,
unable to support clearly positive developments in Cuba
when such support might be essential. The criteria ahould
be "factors to be considered" ra'thCilr than requirements.
By failing to provide stand-alone authority for assistance
to a transition or democratic goverrunent in Cuba, Title II
signale a lack of U.S. resolve to support a transition to
democracy in Cuba.
Title III, which would create a private cause of action !or
u.s. na~ionals to sue foreigners who invest in property
located entirely outside the United states, should ge
deleted. Applying U.S. law extra-territorially in this
fashion would create friction with our allies, be difficult
to defend under international law, and would create a
precedent that would increase litigation risks tor U.S.
companies abroad. It would also diminish the prospects of
settlement o! the claims ot the nearly 6,000 U.S. nationals
whose claims have been certified by the Foreign Claims
Settlement Commission. Secause U.S. as well as foreign
persons may De suQd under section 302, this provision could
create a major l8gal barrier to th• participation of U.S.
businesses in the rebuilding o! Cuba onca a transition
.begins.
Title IV, which would require the Federal Government to
exclude from the UnitQd States any parson who has
confiscated, or 11 traffics 11 in, property to which a u.s.
citizen h~s a claim, should be deleted. It would apply not
only to Cuba, but wcrld-vide, and would apply to foreign
nationals who are not themselves responsible tor any
illegal expropriation of property, and thus would create
friction with our allies. It would rQquire tha State
Department to make difficult and burdensome determinations
about property claims and investment in property 4broad
which are outside the Department'9 traditional area of
expertise.
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STATE LEG AFF.
14] 002/011
CONFERENCE REPORT ON HELMS-BURTON
Although it is unclear whether the draft Conference Report on
Helms-Burton legislation accurately reflects what the
Conference will ultimately decide, the draft report adopts
significant portions of the more radical House bill.
It will
closely resemble the bill that Secretary Christopher has
recommended that the President veto.
In all but two or three
areas in which there is a substantive difference between the
House and Senate versions, the Conference Report adopts the
version that is more objectionable to the Administration.
Iitle III
While the number of lawsuits likely to be brought under Title
III has been reduced as a result of Conference changes, these
changes to do address our underlying principled objections.
The impact of Title III on our relations with allies, prospects
for settling certified claims, our broader international claims
practice, and for Cuba's transition would still be extremely
negative.
Our international law objections remain applicable.
(See separate description of the revised Title III.)
Title IV (Visa Ineligibility for ''Traffickers"}
It appears certain that Conferees will include some version of
the House provision, global in scope, barring entry into the
U.S. by "traffickers" in expropriated property.
It is
possible, however, that the language may be softened to allow
that Administration flexibility in determining when to apply
the exclusion.
In either case, implementation would be
problematic and would create serious friction with our allies.
Re~uirements
for
Transition and
Democratic
Governments
Conferees will adopt the strict requirements, closer to the
House version, for both a transition and a democratic Cuban
Government. Among the requirements for a transition government
are that it dissolve the Department of State Security and that
Fidel or Raul Castro not be included in such a government
(regardless of whether they had agreed to elections and other
democratic reforms.)
IFI
Programs during a TransitLQ.D
While conferees will adopt Senate language allowing U.S.
support for IFI loans during a transition in Cuba, the
requirement to oppose Cuban memberships in IFis until a
democratic government is in power could -- depending on the
rules of the applicable IFI
make it effectively impossible
to approve loans.
Assistance Plan tor Cuba Under Transitipn/Pemocratic
Governments
The draft report indicates the Conference will adopt the House
version of the provisions concerning assistance to Cuba under
11/27 /95
18:21
'6'202 647 9667
STATE LEG AFF.
-
fa] 003/011
2 -
future governments. Although the House version contains a
provision which appears to permit planning for assistance
determined to be 11 essential to the successful completion of the
transition to democracy," which could cover democracy-building
and other types of assistance beyond humanitarian aid, the
provision is so badly drafted as to create considerable
ambiguity about its scope. The House version still would
require additional authorizing legislation before the USG could
provide any assistance. This latter element would reduce the
attractiveness of Title I I as a "carrot'' for change in Cuba.
Remittances
The Conferees will adopt the Senate's sense of Congress
provision concerning circumstances under which the USG should
generally license remittances or travel-related transactions.
There is no indication, however, that the Conferees will delete
the House language which appears to prohibit~ remittances
until there is a transition government in Cuba.
li.ews Bureaus
The authorization for news bureaus stipulates that the
authorization is available only if, among other things, Radio
and TV Marti journalists are allowed to gather news in Cuba
without interference before any news bureaus are established.
This would essentially contradict our statements to both the
public and the Cuban Government regarding implementation of the
President's October 6 measures. Although we may, as a
technical legal matter, be able to proceed with the President's
news bureaus decision on the basis of separate statutory
authority, the inclusion of the purported requirements could
create a significant political difficulties for our news
bureaus policy.
support for the Cuban People
Language will be included authorizing U.S. assistance to
support democratic groups in Cuba, but with a requirement that
"no funds or assistance be provided to the Cuban Government."
Since the GOC or its entities (such as state-run hotels) could
derive limited, indirect financial benefit from assistance,
this language could interfere with our grant to Freedom House
or other projects.
Russian Aid
Conferees will adopt Senate version of the restrictions (which
are broader in scope than those in the House version) on
assistance to NIS states for involvement with SIGINT facilities
in Cuba and will include the House provisions restricting
assistance to countries or entities that assist in the
completion of a nuclear power plant in Cuba. The Conferees
will preserve the waiver/carve-out provisions which make these
provisions less problematic.
11/27 /95
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STATE LEG AFF.
@ 004/011
- 3 -
Sugar/Trade
The mild Senate version of the provision concerning trade with
countries which import Cuba sugar, which simply exhorts the
Administration to enforce current law, will be adopted.
Civil Penalties
The Conference report would preserve the Senate language
authorizing the Administration to make use of civil penalties
in enforcing embargo regulations on educational, religious and
other travel. This would be useful.
11/27 /95
18:21
'6'202 647 9667
STATE LEG AFF.
Helms-Burton Title III - conference version
The revised version of Helms-Burton Title III likely to be
approved by House-Senate conferees includes several significant
changes.
While these changes will reduce in practical terms
the scope of problems the bill would cause by either limiting
the numbers or delaying the filing of lawsuits, they do not
address the central objections the Administration has expressed.
Signifi~ant
o
Changes
During the first two years after enactment, only certified
claimants could file suit against "traffickers.'' Cuban
Americans with claims could file them after that time.
This change would for a time significantly reduce the
potential number of Title III suits filed.
o
Court judgments against the Cuban Government and its agents
and instrumentalities would not be enforceable against
transition or democratic governments.
(Because of
ambiguities in the language, courts might rule that
judgments against Cuban governmental agencies and
instrumentalities could be enforced against those entities
but not the government itself -- even after a transition.
This change would address to some extent our concerns
that such judgments would burden future governments
while they are trying to resolve property issues and
begin Cuba's economic reconstruction.
It would also
discourage suits against the current Cuban Government,
since there would be little possibility of recovering
damages.
o
A filing fee would be established to defray the costs of
processing cases in federal courts.
While it is not clear that such a filing fee would
cover all costs nor eliminate all the administrative
problems the suits, this change will allow proponents
to argue that Title III will be "budget neutral."
o
The "threshold" property value requirements for a Title III
is $50,000, not including interest,
Our reading of the
bill suggests that a suit could be filed if EITHER the
value of the property at the time of the taking of property
OR its current "fair market value" exceeds $50,000.
While this new threshold may reduce the number of
eligible claimants somewhat, there would still be a
large pool of eligible plaintiffs.
The Foreign Claims
Settlement Commission certified 259 claims with a
principal value over $50,000.
The value of many
properties on which other certified claims are based
will likely have appreciated to more than $50,000
since then.
We have no record of how many properties
now claimed by Cuban-Americans would be valued at more
than $50,000.
l4J 005/011
11/27 /95
18:22
- -'5'202
-
647 9667
STATE LEG AFF.
-
2 -
o
Several changes to the bill would in effect allow almost
all claimants, particularly certified claimants, to seek
treble damages.
o
The authority of the President to suspend Title I I I suits
after a transition government is in power is clearer now.
Any exercise of this authority by the President would
be extremely difficult in practical terms, and could
give rise to takings litigation against the U.S.
o
Certified claimants would get first priority if a pool is
established, e.g. a class action settlement fund, to pay
Title III lawsuits.
This change attempts to address the concerns of
certified claimants.
o
The bill now sets a two year statute of limitations period,
such that suits may not be brought more than two years
after trafficking occurs.
While this could preclude some old cases, the broad
definition of utrafficking" to include 11 use" of
property means that ongoing trafficking, even if it
began more than two years ago could still serve as the
basis for a lawsuit.
Central Administration Concerns that Remain
o
The right of action, no matter how limited, still will be
challenged by our allies as an improper extra-territorial
application of U.S. law. We would strenuously object if
other countries sought to deter U.S. investment in Germany
or China in this fashion.
o
Even a more limited number of suits will still constitute a
dangerous precedent that, if followed by other countries,
would increase the litigation risks of U.S. businesses
abroad.
o
In current form, the bill would in fact permit lawsuits
against U.S. companies investing in u.s.-claimed properties
in Cuba after a transition government is in power.
o
Title III still circumvents, and so undermines, the
internationally recognized and accepted claims resolution
process.
It will still complicate USG efforts to seek
compensation for certified claimants.
14] 006/011
11/27 /95
18: 22
'5'202 647 9667
STATE LEG AFF.
-
3 -
o
The new version of Title III still damages prospects for a
transition to democracy.
It will allow the Cuban
Government to depict the U.S. -- and particularly Cuban
Americans -- as poised to take away homes and schools.
It
sends the wrong signal to the Cuban people about how the
U.S. intends to seek resolution of claims, and what role
the U.S. is prepared to play during a transition.
o
Title I I I might still generate a large number of lawsuits
in U.S. federal courts. Fees might not fully cover added
costs, and the administrative burden will still likely be
onerous.
o
Title I I I still permits suits against agencies and
instrumentalities of foreign states -- and perhaps foreign
states themselves, in a manner which is not supported under
international law.
f4J 007 /0ll
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STATE LEG AFF.
Talking Points on Revised Title III
o
The right of action, even if limited, is an improper use of
federal courts and an improper extra-territorial
application of U.S. law. Our allies will still strongly
object to this version of Title III. N.!a would strenuously
object if other countries sought to deter U.S. investment
in other countries in the world in this fashion.
o
The bill will still constitute a dangerous precedent that,
if followed by other countries, would increase the
litigation risks of U.S. businesses abroad.
o
Title III still circumvents, and so undermines, the
internationally recognized and accepted claims resolution
process.
The U.S. Government has been very successful in
obtaining compensation for U.S. claimants in other
countries under this process.
o
Title III will still complicate USG efforts to seek
compensation for certified claimants.
It will be difficult
and time-consuming to sort out which claimants have
received damages under Title III, which have not, which
cases are still pending, etc. These delays will hurt both
U.S. claimants and Cuban efforts to privatize assets.
o
Among the primary targets of lawsuits could be U.S.
businesses investing in Cuba after a transition government
is in power.
o
The new version of Title III still damages prospects for a
transition to democracy.
It will allow the Cuban
Government to depict the U.S. -- and particularly Cuban
Americans -- as poised to take away homes and schools on
the island.
The bill sends the wrong signal to the Cuban people
about how the U.S. intends to seek resolution of
claims, and what role the U.S. is prepared to play
during a transition.
o
Title III might still generate a large number of lawsuits
in U.S. federal courts. Fees might not fully cover added
costs, and the administrative burden will still likely be
onerous.
14] 008/011
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STATE LEG AFF.
What's Wrong with Helms/Burton?
Administration Talking Points
0
:the Belms bill would not promote a peaceful transition in
Cuba.
New sanctions against foreign investors
("traffickers") would p:r:ovide a rallying point for Castro
_inside Cuba, and allow him to keep the focus on "U.S.
aggression" rather than on the need for reforms.
0
The bill's attempts to increase existing pressure on the
Cuban government would likely be counterproductive, and
could be more damaging to
interests than to ~astro.
u.s.
0
The bill would create serious fricticns with our allies at
a time when they are becoming more active and helpful in
promoting human rights in Cuba. Because of its
extra-territorial reach, the Helms bill will focus allies'
attention on opposing U.S. policy, rather than on pressing
for democracy in Cuba.
0
While U.S. policy is to discourage foreign investment in
Cuba, particularly when it would involve expropriated U.S.
properties, our efforts to deter it should not prompt us to
sacrifice our broader inte~est~ or undermine valuable
principles of international law.
0
Title III of the bill, which would allow U.S. nationals
with e~propriation claims against Cuba to sue in U.S.
courts third country nationals who invest ("traffic") in
those properties, is a bad iooa.
It could clog up u,s, courts with a flood of lawsuits,
filed mainly by Cuban-Americans.
It would complicate prospects for resolving the claims
of certified U.S. claimants (and hamper future Cuban
privatization efforts) by tying up properties in
court.
Certified U.S. claimants oppose this bill.
It would create a dan9erous precedent that, if
followed by other countries, ~o~ld ex~ose U.S.
investors in Eastern Europe, China or elsewhere .t.o.
lawsuits in third countries anywhere in the world
brought by disgruntled property claimants.
It would be extremely difficult to justify under
international law and has already drawn harsh
criticism from our allies.
o
The u.s. expects to negotiate successful resolution o±
certified claims with a future Cuban Government under
existing international law, and assist other U.S. claimants
as well.
o
The
already has in place against Cuba its toughest and
most comprehensive ecQnQrnic embargo.
The embargo has
helped to force the limited but positive economic changes.
o
Let's keep international pressure on Castro, not focus it
on ourselves.
u.s.
[4J 009/011
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14] 010/011
STATE LEG AFF.
'6'202 647 9667
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE
Qj:
MANAGE.MEW ANO BUOCil:T
WASHINGTON, D.C. 2'06Q3
September 2 o,
199 5 ( SENT)
(House)
STATEMENT OF ADMINISTRATION POLICY
H.R. ~22 - Cuban Liberty ang Democr~tic solid~rjty Act
(Burton (R) IN and 43 co•ponsors)
The Aciminis~ration suppo~ts tha central objective ot H.R. 927,
i.e., to promote a peaceful transition to democracy in cuba.
However, H.R. 927 contains a number o! aeriously objectionable
provisions that would not advance U.S. interests in Cuba and
would damage other U.S. interests. Therefore, the President•s
senior advisers would recommend that H.R. 927 be vetoad unless
the follo~ing ~revisions are deleted or amended:
The bill would encroach upon the President's exclusive
authori~y under the Constitution to conduct tor~ign
affairs, or otherwise unduly limit th& President's
!lexioility, by purporting to require the President or the
Executive branch to pursue certain courses o! ac~ion
regarding Cuba.
Mandatory provisions should be replaced
with pr~eatory language in the !ollowing sections: l02(b);
1 o4 (a) ;
11 o (b) ;
112 ; 2 o1 ; 2 o2 ( e) ;
2 a 3 ( c) ( l) ; and 2 a J ( c) ( J) .
The e~emption in section l02(d} from civil penalty
auehority for activities relatQd to research, education and
certain oth~r purpo5es, and the burdensome requirement for
an agency hearing for civil penalties in other oases,
greatly limits the effactivQnQSS or civil penalties as~
tool for improving embargo enforcement. Section 102(d)
should be amended to address this shortcoming.
Section 103 should be amended to make the prohibition of
certain rinancing transactions subject to the discretion of
the President.
section 104{a) should be amended to urge U.S. opposition to
Cuban membership or participation in Intornational
Financial Institutions (IFis) only until a transition
government is in power to enable the lFis to support a
rapid transition to democracy in CUba. Section 104(b),
which would require withholding U.S. payments to IFis,
could place the U.S. in violation of international
commitments and undermine their ef!ective tunctioning.
This ~ection should be deleted.
sections 106 and llO(b), ~hich would dony foreign
asei~tance to countries, i ! they, or in tho c~se ot
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STATE LEG AFF.
[4J 011/011
2
section llO(b), private entities 1n these countries,
provide certain support to Cuba, should be deleted.
Section 106 would undermine i~portant U.S. support for
reform in Russia. Section llO(b) is cast .so broadly ae to
have a profoundly adverse affect on a ~ida range of U.S.
Government activities.
Section 202(b) (2) (iii), which would bar transactions
related to family travel and remittances from relatives of
Cubans in the United States until a transition government
is in power, is too inflexible and should be delQted.
Sec~ions 205 and 206 would establish overly-rigid
requirements for tr~nsition and democratic governments in
Cuba that could lGave the United States on the sidelines,
unable to support clearly positive developments in Cuba
when such support might be essential. The criteria ahould
be "factors to be considered" ra'thCilr than requirements.
By failing to provide stand-alone authority for assistance
to a transition or democratic goverrunent in Cuba, Title II
signale a lack of U.S. resolve to support a transition to
democracy in Cuba.
Title III, which would create a private cause of action !or
u.s. na~ionals to sue foreigners who invest in property
located entirely outside the United states, should ge
deleted. Applying U.S. law extra-territorially in this
fashion would create friction with our allies, be difficult
to defend under international law, and would create a
precedent that would increase litigation risks tor U.S.
companies abroad. It would also diminish the prospects of
settlement o! the claims ot the nearly 6,000 U.S. nationals
whose claims have been certified by the Foreign Claims
Settlement Commission. Secause U.S. as well as foreign
persons may De suQd under section 302, this provision could
create a major l8gal barrier to th• participation of U.S.
businesses in the rebuilding o! Cuba onca a transition
.begins.
Title IV, which would require the Federal Government to
exclude from the UnitQd States any parson who has
confiscated, or 11 traffics 11 in, property to which a u.s.
citizen h~s a claim, should be deleted. It would apply not
only to Cuba, but wcrld-vide, and would apply to foreign
nationals who are not themselves responsible tor any
illegal expropriation of property, and thus would create
friction with our allies. It would rQquire tha State
Department to make difficult and burdensome determinations
about property claims and investment in property 4broad
which are outside the Department'9 traditional area of
expertise.