NOTE: HELMS-BURTON ACT DEVELOPMENTS
By:
Preston Brown
David Baron
Washington, D.C.
On July 16, 1997, President Clinton again exercised his authority to suspend, for another six-month period through January 1998, the right of action created under Title III of the Helms-Burton Act against persons "trafficking" in property confiscated by the Cuban Government. As required by the Act, the President certified to Congress that suspension was necessary to the national interests of the United States and would expedite a transition to democracy in Cuba.
The President's action was consistent with his earlier commitment to continue to suspend the right of action and with the April 11, 1997 understanding with the European Union. As a consequence of that understanding, the EU suspended its challenge against Helms-Burton in the World Trade Organization and the United States, in the context of agreeing to develop international disciplines to inhibit and deter the acquisition of or dealings in confiscated properties, essentially agreed (i) not to press the implementation of Helms-Burton and (ii) to seek Congressional action granting the President authority to waive Title IV (requiring the Administration to deny entrance into the U.S. to directors of foreign firms "trafficking" in confiscated properties).
Republican reaction to the President's action was critical and, along with other proposed legislation which would further tighten Helms-Burton, it was proposed that the President's authority to further suspend the right of action under Title III be revoked. At this point, it is unclear how the legislation or its implementation will be affected or these conflicts resolved.
In another recent development, on July 23, 1997, ITT Corporation and STET International, an Italian telecommunications company, announced an agreement under which STET received a 10-year promise of immunity from liability under Title III of the Helms-Burton Act in exchange for a payment that is reported to have been between $20 and $30 million. Title III of Helms-Burton permits U.S. claimants to sue non-U.S. companies and individuals who "traffic" in property that was confiscated by the Cuban government. The Helms-Burton Act, nonetheless, permits a party to "traffic" in confiscated property so long as such party has received "the authorization of any United States national who holds a claim to the property." The Treasury Department Office of Foreign Assets Control reportedly issued a license to ITT authorizing it (under the Cuban Assets Control Regulations) to implement the agreement.
The U.S. State Department has indicated that the agreement is sufficient to terminate the State Department's investigation of STET with respect to Title IV of Helms-Burton. While Title IV prohibits entry into the United States to specific company officials and other individuals (and their immediate families) who "traffic" in confiscated property, the definition of trafficking in that Title contains the same authorization clause.
