The Helms-Burton Act

Articles from the Miami Herald on the SuperClubs-Cuba Issue

Thu, Jun. 17, 2004

U.S. & CUBA Page 1A
U.S. law curtails resort's deals in Cuba
The Bush administration invoked a law regarding seized property, leading a Jamaican resort to curtail operations in Cuba.
BY CHRISTINA HOAG
choag@herald.com

Jamaica's SuperClubs Super-Inclusive Resorts has pulled out of two hotel contracts in Cuba after the State Department threatened to cancel top executives' U.S. visas because the company is ''trafficking'' in property confiscated from Cuban Americans.

The move marks the first time the Bush administration has applied the controversial Helms-Burton law, which was invoked several times under the Clinton administration, according to the State Department.

The action comes as the White House is also tightening rules on travel to Cuba and remittances sent to the island. Last week, the two organizers of a regatta between Key West and Cuba were indicted on charges of running the unauthorized race.

The 1996 Helms-Burton law allows the U.S. government to sanction investors who make use of land that the communist regime confiscated from private citizens and U.S. companies in the wake of the 1959 Cuban revolution. Almost 6,000 claims have been filed over seized properties.

This case involves a claim by the Sánchez-Hill family to the land where the Breezes Costa Verde, a 480-room hotel, is located in Holguín province east of Havana.

Kingston-based SuperClubs has had the all-inclusive resort under contract to the Cuban government's tourism arm, Gaviota, for three years, said Zein Issa, SuperClubs' vice president of marketing.

`CAUGHT IN MIDDLE'

After receiving the May 6 letter from the State Department, which stated that managers and their families would lose their U.S. visas if they continued with Breezes Costa Verde, the company decided to cancel its contract, she said.

''We were caught in the middle of an international political struggle and we were the victims,'' said Issa, the daughter of SuperClubs President John Issa.

The other hotel that SuperClubs is relinquishing, the 436-room Grand Lido Varadero, which opened about a month ago, is not involved in a property claim dispute.

Issa would not elaborate. But a source close to the situation who did not want to be identified said it was pulled by the Cuban government in retaliation for the Breezes Costa Verde cancellation. SuperClubs still operates two resorts in Cuba, as well as others throughout the Caribbean and Brazil.

''This is a significant victory for us,'' said Nicholas J. Gutiérrez Jr., the Miami lawyer representing the Sánchez-Hill family and other Cuban-American claimants.

Gutiérrez said the Sánchez-Hills, now U.S. citizens who reside in Florida, New York and Venezuela, have been lobbying Washington for five years to take action on their former Santa Lucía sugar plantation.

The 100,000 acres of waterfront land, which the family had owned since 1857, is now occupied by nine hotels, run by Spanish, French, German and Canadian companies, as well as the SuperClubs property, he said.

The farm's sugar mill is now a museum, he added.

Gutiérrez said that the family had been in negotiations with SuperClubs over compensation for use of the land, but no deal was reached.

''They approached us to make a deal, but they didn't offer us anywhere near what was adequate,'' he said.

Similarly, Sol Meliá has offered the family ''a seven-figure sum'' in compensation for the Spanish tourism giant's four hotels on the old plantation, Gutiérrez said, but the family did not accept.

ELECTION YEAR

Analysts said it was no accident that the action came in an election year in which President Bush will need to court Cuban Americans to win a tight race in Florida.

It's also no accident that the administration targeted a Jamaican company, said Daniel Erikson, director of Caribbean programs at the Inter-American Dialogue in Washington.

''It's part of a trend of hardening some aspects of Cuba policy,'' Erikson said. ``But let's face it, Jamaica is small potatoes. Jamaica doesn't have significant investment in the U.S. or is in a strategic position.''

Tangling with European or Canadian companies would have opened a Pandora's box for Bush at a time when U.S.-European relations are sensitive over Iraq, and European-Cuban ties are tense over dissident issues, Erikson said.

''The U.S. doesn't want to direct ire to Washington,'' he said.

Nevertheless, the move could serve to dissuade investors who are thinking about delving into Cuba's burgeoning tourism industry, although it's unlikely to scare off those who have already sunk money into the island, other experts said.

''Clearly, this is an attempt to put a little more bite into Cuba policies,'' said Mark Falcoff of the American Enterprise Institute. ``This type of gesture inevitably discourages new investment.''

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Sat, Jun. 26, 2004

LATIN AMERICA ADVISOR
U.S. threat sways Jamaican firm in Cuba, but what of Europeans?

Question: A Jamaican resort company, SuperClubs, has reportedly been canceling some of its hotel management contracts with the Cuban government after being warned of sanctions by the U.S. government under the 1996 Helms-Burton Act for ''trafficking'' in expropriated property. Does the U.S. move signal a more aggressive approach to deterring foreign investment in Cuba? Will European firms also face sanctions?

Answer from Dan Erikson, director for Caribbean projects at the Inter-American Dialogue: Don't the Jamaicans know better than to invest in Cuba during a U.S. presidential election year? The Jamaican company was unwittingly caught up in the wider movement by the Bush administration to tighten up some aspects of U.S.-Cuba policy in an effort to win the Cuban-American vote -- and thus, Florida -- in the 2004 elections. This incident marks the first time that the Bush White House has implemented the Helms-Burton measures that allow the U.S. to deny visas to foreign nationals for investing in disputed Cuban properties. But Jamaica is a minor player. A far more interesting question is whether the U.S. will lower the boom on Spanish companies invested in Cuba. If so, that will demonstrate that U.S. policy has really taken off the gloves.

From William Rogers, a senior partner at Arnold & Porter and a former assistant secretary of state for Inter-American affairs: The administration sent that signal to the voters in Florida in its 423-page May report, Assistance to a Free Cuba. In fact, the report wants to punish Cubans who are unfree. Its proposals will hurt the Cuban people more than the regime. For example, it includes another cutback in the pitiful parcels Cubans here can legally send to their relatives in Cuba. Whether the administration will also go after Europe is less clear. Threatening a Jamaican firm with Helms-Burton Title IV sanctions is one thing. Denying visas to European business leaders under Title IV would be quite another. Europe is bristling with anti-Helms-Burton laws, blocking compliance with the U.S. sanctions. And European governments might well react with a WTO complaint against the U.S.

From Dennis Hays, managing director of the Global and Government Affairs Practice at Tew Cardenas LLP: The Castro regime has for years sought to encourage foreign companies to invest in properties that were confiscated without compensation in the early years of the revolution. Such expropriations were and are illegal under international law, and companies that knowingly chose to invest in them effectively become co-conspirators with the regime. This is significant, among other reasons, because such investments will greatly complicate the task of reestablishing property rights in a post-Castro Cuba -- a key component for economic recovery. By acting now to enforce Title IV of the Helms-Burton Act, the Bush administration is upholding international law and working to facilitate the inevitable reform process that will occur under a democratic government.

From Terry McCoy, director of the Latin America Business Environment Program at the University of Florida: There is no question that the Bush administration has escalated efforts to unseat Fidel Castro. The effects of these apparently election-year-motivated moves remain to be seen, however. The Jamaican resort company did pull back when threatened with Helms-Burton sanctions, but European and Canadian firms may not. Further, there is growing opposition in Florida's Cuban-American community to restricting visits and remittances.

Tue, Jun. 29, 2004

Jamaica encourages business ties with Cuba despite U.S. pressure

ANDREA RODRIGUEZ
Associated Press

HAVANA - The Jamaican government said Tuesday it will continue to encourage business relations with Cuba, despite ongoing pressure by the United States to discourage investment by foreign companies in the communist nation.

Jamaica regards Cuba as a "close and valued neighbor" as well as a "member of the Caribbean family" and hopes to further strengthen the two countries' trade and economic links, Foreign Minister Keith Desmond Knight told reporters Tuesday during a two-day visit to Cuba.

The visit by Knight, who is also foreign trade minister, came two weeks after Jamaican hotel chain SuperClubs announced it pulled out of two Cuban resort properties after threats from the U.S. government that company executives would not be allowed into the United States.

According to SuperClubs, in letters last month U.S. officials said they were taking the measure because one of the company's resorts in Cuba was on property confiscated from Americans.

U.S. officials notified executives that visas would be denied to top officers, shareholders and their direct relatives within 45 days if it didn't divest itself from a 500-room resort in Holguin, in eastern Cuba.

The Kingston-based chain "removed any connection" with two of its four properties in Cuba and claimed to be the victim of a political spat, SuperClubs owner and chairman John Issa told the Associated Press earlier this month.

The other two properties in Cuba continue operating.

Despite the SuperClubs incident, a business representative of the Jamaican government also in Havana said he believed most private companies in Jamaica would resist any future U.S. pressure.

"One or two companies will feel intimidated, but the majority of businesses in Jamaica are disposed to doing business with Cuba," said Victor Salazar, the regional manager of Jamaica Promotions Corporation, a state agency.

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Wed, Jun. 30, 2004

CUBAN AMERICANS
Torn by new travel, remittances rules

BY MICHAEL PUTNEY
mputney@local10.com

For Cuban Americans with family still on the island, this is D-day. That's ''D'' as in deadline -- also as in debacle, devastating and dumb. Take your pick, they all apply.

Today is when a whole raft of mean-spirited rules and regulations take effect restricting travel and cash remittances to Cuba. The results will not be pretty, except for President Bush -- or so he hopes.

Decision will backfire

Bush has promulgated these rules to shore up support and guarantee votes from hard-line, first-wave Cuban Americans in South Florida, most of whom were going to vote for him anyway. Most of whom no longer have close family members in Cuba and don't care if their post-Mariel fellow Cubans now face severe limitations on how often they can visit the island, the amount and kind of gifts they can take or send and the amount of money they'll be able to spend if they get a license to travel there.

The new rules and regulations are part of the Bush administration's carrot-and-stick approach to promote a free and civil society in Cuba, but they're mostly stick. They may also backfire politically. You'd expect a left-leaning firebrand such as radio commentator and Cuba-travel magnate Francisco Aruca to be angry about them and, boy, is he ever. But when a moderate Cuban-American business leader such as Carlos Saladrigas, a member of the high-powered Cuba Study Group, says that he's incensed and undecided about for whom to vote in November, then you know that the Bush administration may have misfigured -- big time, as Dick Cheney would say.

One trip every three years

What's the hullabaloo all about?

For decades, all Cuban Americans had to do to legally visit family members (a term loosely defined and rarely examined) on the island was to sign an affidavit that allowed one trip per year under a general license. Starting tomorrow, they'll be allowed one trip every three years and to visit only an immediate family member and only after obtaining a specific license from the Office of Foreign Assets Control, part of Treasury.

It's anyone's guess how efficient OFAC will be at issuing such licenses. This is the same agency, not incidentally, that is supposed to track down and block terrorists from hiding their assets. According to Money Laundering Alert, OFAC has 21 staffers devoted to the Cuban embargo; just two are assigned to Osama Bin Laden's finances. Talk about misplaced priorities.

The goal of the new travel crackdown is to deny the Castro regime a financial windfall from tourism. Nothing wrong with that, except that many Cuban exiles traveling to the island don't stay at hotels or eat in state-run restaurants. They stay with family members and eat in their homes or paladares (privately owned dining rooms).

There's also nothing wrong with cracking down on Americans who take part in ''cultural'' tours or sailboat races to hang out in Havana or at the Hemingway Marina, spending dollars that wind up in Fidel Castro's treasury.

'Fully hosted' by Castro

I've visited the cushy marina outside Havana, which is home away from home for U.S. yachtsmen who take part in the Key West-to-Cuba sailboat races. The Castro government has skirted the travel ban by saying that the yachtsmen are ''fully hosted'' -- that is, guests of the Cuban government and therefore not subject to U.S.-imposed spending limits ($160 per day until today, when it goes down to $50). Previous U.S. administrations were willing to accept this fiction; the Bush administration is not but waited until six months before the election to say so.

The administration also just threatened for the first time to invoke Helms-Burton, telling principals of SuperClubs, the Jamaican all-inclusive resort company, that they wouldn't get U.S. visas if they did business with Cuba. SuperClubs was negotiating with the Castro regime to run a 480-room hotel in Holguín province on land confiscated from a U.S. company. The Jamaicans backed out of the deal. Good.

What's not so good are the travel and cash rules published last week in the Federal Register. Among other things, they forbid U.S. residents from sending clothing, personal-hygiene items, fishing gear, etc. Even garden seeds and fish hooks are banned. How petty. How banal. How wrong. Is this really going to advance the cause of freedom in Cuba? Of course not.

Is Tía María family?

While the amount of cash remittances that can be sent to Cuba remains the same -- $300 every three months per household -- the money henceforth can no longer be sent to extended family members.

Isn't it ironic that an administration that prides itself on family values is dictating to Cuban exiles who their family members are? This is truly mean-spirited stuff. You'd expect it from the Castro regime. It's embarrassing coming from Washington.

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Fri, Jul. 09, 2004

COURTS
Club Med sued in Miami over use of land in Cuba
A Miami woman and her son have sued Club Med, saying the resort firm illegally profited by using property in Cuba that was owned by the family before the revolution.
BY AMY DRISCOLL
adriscoll@herald.com

A 95-year-old Cuban-American woman and her son filed suit Thursday in Miami federal court against Paris-based Club Med, accusing the resort chain of unjustly profiting from a five-star hotel it built on land the family owned in pre-revolution Cuba.

Elvira de la Vega Glen, of Miami, says she and her son, Robert, are entitled to compensation for a Club Med built in 1997 on a stretch of Varadero Beach the Glen family owned for generations. The land, now part of a valuable tourism area, was seized by the Cuban government after the Fidel Castro revolution.

The suit charges the resort company with violating the U.S. Trading With the Enemy Act by working with the Cuban government to develop the Varadero resort.

Club Med, which sold the property about a year ago to Grupo Pinero, a Spanish hotel firm, said in a statement issued Wednesday that it has violated no laws and will defend itself ``vigorously.''

''I'm bringing this case because the people who are there have no business being there,'' Glen said Thursday.

She remembered the property, where she had a beach bungalow, as an idyllic family retreat, she said.

''It was the most beautiful beach in the world, oh, the most beautiful beach,'' she said. ``And I loved it.''

Lawyer Stuart Newberger, of the Washington firm of Crowell & Moring, said the suit was filed in Florida because Club Med has substantial business interests in the state, including a resort in Port St. Lucie. He did not attach a monetary figure to the claim.

He said the State Department is investigating whether Club Med violated a portion of the Helms-Burton Act that prohibits ''trafficking'' in property confiscated from Cuban Americans. The State Department declined comment.

''They cannot do business in Florida in a substantial way and do business with the communist regime in Cuba,'' Newberger said. ``It's illegal, it's immoral and it's bad business.''