Potential End of Suspension of Title III of the Helms-Burton Act:

Authorization of Claims Under U.S. Law for “Trafficking” in Certain Cuban Properties

February 26, 2019

On January 16, 2019, U.S. Secretary of State Mike Pompeo announced that the administration would issue a limited, 45 day extension of the suspension of Title III of the Cuban Liberty and Democratic Solidarity (Libertad) Act of 1996 (known as the “Helms Burton Act”).

If this limited suspension is not renewed on or before March 17, 2019, it will be possible for plaintiffs to assert the cause of action authorized by Title III of the Helms Burton Act. That cause of action has been suspended for successive six month periods by every presidential administration since the law was enacted in 1996.

Title III of the Helms Burton Act recognizes a cause of action under U.S. federal law pursuant to which U.S. nationals may sue any person who “traffics” in property that was expropriated by the Cuban Government on or after January 1, 1959. As described more fully below, the relevant cause of action is extremely broad and ill-defined, reaching both direct and indirect economic transactions touching expropriated property interests. Title III provides for claims against “traffickers” for the full value of expropriated property, along with the possibility of treble damages, irrespective of the amount of economic benefit derived by the person transacting with the relevant Cuban property.

It is uncertain whether the administration will in fact allow the current suspension of Title III to expire. There are compelling considerations that would cut against such a decision, including the significant risk of resurrecting trade disputes with major U.S. trading partners, such as the European Union, Canada and Mexico, and potentially reducing the willingness of such partners to support important policy objectives of the administration. Historically, such risks, which remain real and relevant today, have led successive presidential administrations, including the current administration, to conclude that the suspension of Title III should continue. However, the risk that the Trump Administration will allow the suspension to lapse, as it is threatening to do, cannot be ruled out. Were the suspension of Title III to lapse, the consequences for companies engaged in trade with the Cuban economy, directly or indirectly, could be significant.

This memorandum provides an overview of Title III of the Helms Burton Act and suggests steps that companies engaged in direct trade with Cuba, or that have economic relationships related to the Cuban activities of third parties, may wish to begin to consider in view of the risk of a potential revival of Title III. The memorandum also highlights some of the legal challenges that may be faced by claimants pursuing litigation under Title III were the suspension to be lifted.