FILE PHOTO: Cutouts depicting images of oil operations are seen outside a building of Venezuela’s state oil company PDVSA in Caracas, Venezuela January 28, 2019. REUTERS/Carlos Garcia Rawlins/File Photo/File Photo
April 24, 2019
By Mayela Armas
CARACAS (Reuters) – Venezuela’s opposition-controlled National Assembly on Wednesday took a key step toward authorizing a $71 million interest payment on state-owned oil company PDVSA’s 2020 bond, which is backed by shares in its crown jewel asset, U.S. refiner Citgo.
The assembly’s finance committee backed the payment, clearing the way for a full parliament vote expected next week.
Failure to make the payment could pave the way for creditors to attempt to seize up to half of Citgo’s shares as compensation.
President Nicolas Maduro’s cash-strapped government has remained current on the PDVSA 2020 bond payments even as it defaulted on some $8 billion in other debt.
But recent U.S. sanctions on PDVSA, intended to force Maduro to resign to allow opposition leader Juan Guaido to call elections, could prevent any Maduro-linked entity from making the payment.
The National Assembly, led by Guaido and recognized by the United States as Venezuela’s legitimate democratic body, authorized a parallel ad-hoc PDVSA board to negotiate the company’s debt earlier this month. It was unclear what funds the board planned to use to make payments.
Some $1.7 billion remains outstanding on the bond, issued in 2016 at an 8.5 percent coupon. It last traded at 87.5 cents on the dollar, more than triple the value of other bonds issued by PDVSA. The interest payment is due on April 27, but there is a 30-day grace period.
The payment would likely take place during that period, opposition lawmaker Juan Andres Mejia said, adding that the transaction would require a waiver from the U.S. Treasury, which enforces sanctions.
“We want to preserve the asset,” Mejia told reporters, referring to Citgo. “Maduro should not be making these payments. He does not have legitimacy.”
It would mark the first payment undertaken by Guaido’s interim government, a symbolic victory given that Maduro still controls the day-to-day business of government within Venezuela.
Guaido in January invoked the country’s constitution to assume an interim presidency, arguing Maduro’s 2018 re-election was illegitimate.
Maduro calls him a U.S. puppet seeking to oust him in a coup and has accused the opposition of trying to “steal” Citgo.
PDVSA did not respond to a request for comment.
(Reporting by Mayela Armas; Writing by Luc Cohen; Editing by Sonya Hepinstall)
Mexico’s Foreign Affairs Minister Marcelo Ebrard makes declarations to the media after a meeting of European and Latin American leaders in Montevideo to discuss “good faith” plan for Venezuela, Uruguay February 7, 2019. REUTERS/Andres Stapff
April 23, 2019
MEXICO CITY (Reuters) – Mexico’s foreign relations minister said on Monday he had spoken to northern border states to demonstrate to Washington the “cost and uselessness” of holding up traffic at the border due to delays following a row over migration.
A slowdown along the U.S.-Mexico border began late last month after U.S. border agents were moved to handle an influx of migrants, holding up the flow of both goods and people. The severe staffing shortages came shortly after President Donald Trump threatened to close the border if Mexico did not halt a surge of people seeking asylum in the United States.
Mexico’s foreign minister, Marcelo Ebrard, spoke with the states of Baja California, Sonora, Chihuahua, Coahuila, Nuevo Leon and Tamaulipas, he said on Twitter.
“Just today, we were in touch … to be able to demonstrate to the U.S. the cost and uselessness of the slowdown at the ports of entry along the border between both countries,” Ebrard said.
A spokesman said the ministry would soon provide further details, without specifying when.
The collective losses for companies that rely on cross-border supply chains have reached into the millions. Nearly 30 companies in Ciudad Juarez, on the opposite side of the border from El Paso, Texas, reported losses of $15 million in a single week in early April.
Ebrard previously said that U.S. officials pledged to help improve the flow of commercial traffic.
(Reporting by Daina Beth Solomon and Lizbeth Diaz; Editing by Leslie Adler)
FILE PHOTO: An oil pump jack pumps oil in a field near Calgary, Alberta, Canada, July 21, 2014. REUTERS/Todd Korol/File Photo
April 22, 2019
By Henning Gloystein
SINGAPORE (Reuters) – Oil prices rose early on Monday, with Brent hitting its highest level since November, driven up by a decline in U.S. drilling activity and ongoing supply cuts led by producer club OPEC.
Brent crude futures were at a November 2018 high of $72.58 per barrel at 0028 GMT, up 0.8 percent from their last close.
U.S. West Texas Intermediate (WTI) crude futures were at $64.55 per barrel, up 0.9 percent from their previous settlement.
“The path of least resistance remains higher (for oil prices),” said Stephen Innes, head of trading at SPI Asset Management, pointing to Saudi supply cuts, a decline in the U.S. rig count and supply disruptions from Libya to Venezuela as reasons for a tight market.
U.S. energy firms last week reduced the number of oil rigs operating by two, to 825, General Electric Co’s Baker Hughes energy services firm said in its weekly report on Thursday.
Outside the United States, the Organization of the Petroleum Exporting Countries (OPEC) has led supply cuts since the start of the year aimed at tightening global oil markets and to propping up crude prices.
Brent prices have risen by more than a third this year, while WTI has climbed more than 40 percent over the same period.
(Reporting by Henning Gloystein; Editing by Joseph Radford)
FILE PHOTO – People walk on a street in downtown Havana December 29, 2015. REUTERS/Alexandre Meneghini
April 21, 2019
By Marc Frank
HAVANA (Reuters) – The Cuban government has ordered its state-run power system to further reduce electricity generation in the latest sign that a cash crunch exacerbated by new U.S. sanctions is taking an economic and human toll, a newspaper reported on Sunday.
Ciego de Avila’s provincial Communist Party newspaper, Invasor, reported that local generation would be cut 10 percent to save fuel as part of a nation-wide reduction ordered on April 18.
The report said cuts in fuel allocation for power generation begun in 2016 had so far spared the residential sector and essential services from blackouts but warned that could change.
More than 95 percent of the country’s electricity is generated by oil-fired plants.
Most business and infrastructure are state owned.
“We are at a critical point, according to the electric union, and if at certain times of the day the fuel allocated for the day runs out, we will have to shut down some circuits,” the paper said, adding that for now no programmed blackouts were planned.
Last month the United States began sanctioning ships and companies carrying Venezuelan fuel to Cuba. Cuba barters medical and other assistance for the oil and will be hard pressed to find an alternative given the cash crunch.
Communist Party leader Raul Castro and President Miguel Diaz-Canel have both told the National Assembly that the country should prepare for hard times, but a more diversified economy meant it would not be as harsh as the 1990s.
Cubans suffered through years of daily blackouts in the 1990s after the fall of former benefactor the Soviet Union.
Cuba’s foreign exchange earnings used to purchase abroad more than 50 percent of the fuel it consumes, food, animal feed and much more, have steadily fallen since 2015 when strategic ally and oil supplier Venezuela began to implode.
Declines in key exports nickel and sugar, and cancellation of a health services for cash deal with Brazil, have worsened matters.
Foreign trade fell 25 percent from 2013 through 2017, with imports dropping to $11.3 billion from $15.6 billion.
(Reporting by Marc Frank; Editing by Susan Thomas)
Pope Francis is seen after reading his “Urbi et Orbi” (“To the City and the World”) message from the balcony overlooking St. Peter’s Square at the Vatican April 21, 2019. REUTERS/Yara Nardi
April 21, 2019
By Philip Pullella
VATICAN CITY (Reuters) – Pope Francis, in his Easter Sunday address, condemned as “such cruel violence” the bombings in Sri Lanka that killed more than 100 people and were timed to coincide with the most important day in the Christian liturgical calendar.
Francis, speaking to a crowd of about 70,000 people in St. Peter’s Square, also urged politicians to shun a new arms race that was budding and to welcome refugees fleeing hunger and human rights violations.
The blasts in Sri Lanka, which hospital and police officials said killed at least 138 people and wounded more than 400 people, followed a lull in major attacks since the end of the civil war 10 years ago.
“I learned with sadness and pain of the news of the grave attacks, that precisely today, Easter, brought mourning and pain to churches and other places where people were gathered in Sri Lanka,” Francis said in his traditional Easter Sunday “Urbi et Orbi” (to the city and the world) message.
“I wish to express my affectionate closeness to the Christian community, hit while it was gathered in prayer, and to all the victims of such cruel violence,” the pope, who visited Sri Lanka in 2015, said.
Speaking from the central balcony of St. Peter’s Basilica, he appealed for peace in conflict areas.
“Before the many sufferings of our time, may the Lord of life not find us cold and indifferent,” he said, speaking in Italian after celebrating a Mass in the square.
“May he make us builders of bridges, not walls. May the One who gives us his peace end the roar of arms, both in areas of conflict and in our cities, and inspire the leaders of nations to work for an end to the arms race and the troubling spread of weaponry, especially in the economically more advanced countries,” he said.
Francis has made defense of migrants a key feature of his pontificate and has clashed over the immigration with politicians such as U.S. President Donald Trump and Italy’s Interior Minister Matteo Salvini who leads the anti-immigrant League party and has closed Italy’s ports to rescue ships operated by charities.
Easter commemorates the day Christians believe Jesus rose from the dead.
“May the Risen Christ, who flung open the doors of the tomb, open our hearts to the needs of the disadvantaged, the vulnerable, the poor, the unemployed, the marginalized, and all those who knock at our door in search of bread, refuge, and the recognition of their dignity,” Francis said.
He called for a solution to the conflict in Syria that responds to “people’s legitimate hopes for freedom, peace and justice” and favors the return of refugees.
Francis urged dialogue in order to end fighting in Libya, appealing to both sides to “choose dialogue over force and to avoid reopening wounds left by a decade of conflicts and political instability”.
He called for politicians in Venezuela “to end social injustices, abuses and acts of violence, and take the concrete
steps needed to heal divisions and offer the population the help they need”.
Francis encouraged the fragile peace process in mostly Christian South Sudan, whose leaders attended an unprecedented spiritual retreat earlier this month at the Vatican where he begged them to avoid returning to a civil war.
(Reporting by Philip Pullella; Editing by Susan Fenton)
The corner stone on the Federal Reserve Bank of New York in the financial district in New York City, U.S., March 4, 2019. REUTERS/Brendan McDermid
April 19, 2019
By Luc Cohen and Corina Pons
CARACAS (Reuters) – U.S. sanctions on Venezuela have led the New York Federal Reserve to crack down on Puerto Rico’s $50 billion offshore banking industry, according to four sources and a document seen by Reuters.
The development will prevent the island’s offshore banks, several of which are owned by citizens of crisis-stricken Venezuela, from opening accounts with the Fed that give them direct access to the U.S. financial system.
Offshore banks in Puerto Rico are able to open accounts with the Fed since the island is a U.S. territory. That gives them a competitive advantage over other offshore banking jurisdictions like the British Virgin Islands, which have to access the U.S. financial system through expensive third-party correspondent banks.
But in a previously unreported Feb. 27 letter, the New York Fed said it had halted approval of new accounts for Puerto Rican offshore banks and other financial institutions “in light of recent events, including the expansion of U.S. economic sanctions relating to Venezuela.”
It plans stricter requirements for the opening of such accounts in the future, it said.
It did not give further details on why it was taking that step. But the move follows two Puerto Rican offshore banks that have accounts open with the New York Fed being mentioned in federal investigations into money laundering and sanctions evasion related to Venezuela.
“The Fed worries about its reputational exposure, just like anybody else does,” said David Murray, a vice president at the Washington-based Financial Integrity Network and a former Treasury Department official.
A spokeswoman for the New York Fed did not respond to requests for comment.
The decision will only affect Puerto Rican banks that had pending applications with the Fed and will not affect the 17 of Puerto Rico’s 80 offshore banks that the Fed’s website shows already have Fedwire accounts. Reuters was unable to determine how many banks were awaiting responses on their applications to open accounts.
The move to suspend account approvals shows how U.S. sanctions on Venezuela, which are meant to force socialist President Nicolas Maduro from office amid a political crisis and an economic meltdown, are having a ripple effect in other parts of the global financial system.
It could deal a blow to Puerto Rico, which has been using the offshore sector as an economic development strategy as it struggles with a crushing debt load and the impact of natural disasters such as 2017’s Hurricane Maria.
The island has for years nurtured its offshore banking sector by offering tax incentives to bank owners and promoting direct access to the U.S. financial system through the Fed rather than correspondent banks, which charge for their services and can end the relationship at a moment’s notice.
Offshore banking lets individuals and companies deposit money outside their countries of residence in order to legally lower tax bills, but criminal investigations and multilateral organizations have alleged it is also used for tax evasion and money laundering.
The notice also applies to U.S. Virgin Islands offshore banks. Both territories fall under the jurisdiction of the Fed’s New York branch.
‘WE SHARE IT ALL’
George Joyner, the commissioner of Puerto Rico’s banking regulator, declined to say how many of the territory’s offshore banks had applications pending with the Fed. He said the island regulator used the same standards as federal authorities including the Fed to supervise financial institutions, and that anti-money laundering was a “high focus.”
“Our office fully shares everything that we find in our examinations, and we share it with all the federal agencies,” Joyner said in a telephone interview.
He said “a number” of Puerto Rican offshore banks had been created with Venezuelan capital, without elaborating.
The Virgin Islands’ director of banking and insurance did not respond to requests for comment.
Sixteen of Puerto Rico’s 80 offshore banking and financial services firms are owned by Venezuelan individuals or companies, according to a Reuters review of their websites, corporate registry records, and directors’ LinkedIn pages and personal websites.
Several marketed directly to Venezuelan clients, or had past deals with the Venezuelan government, while twelve of the sixteen had Fedwire accounts, according to the Federal Reserve’s website.
Fedwire, a funds transfer system controlled by the Fed, allows banks, businesses and government agencies to send and receive payments in real time.
In recent years, U.S. prosecutors have examined the role Puerto Rico’s offshore banks have played in efforts to launder Venezuelan funds through the United States. It was not clear if the two cases in question contributed to the New York Fed’s decision to halt the opening of new accounts, but one source at a Puerto Rican bank and industry consultant David Nissman said they were likely an important factor. Joyner said they “certainly didn’t help.”
Federal prosecutors in a sprawling corruption probe unsealed in July of 2018 charged Uruguayan national Marcelo Gutierrez with allegedly conspiring to launder funds embezzled from Venezuelan state oil company PDVSA through a “bank in Puerto Rico” that he owned, according to criminal investigation filings in Florida federal court.
The prosecutors’ complaint does not identify the bank and says the transaction never took place.
Gutierrez’s LinkedIn profile lists him as a director at Vestin Bank International, which Puerto Rico banking regulator records show received a license to operate as an offshore operation on the island in 2015.
Vestin has since been acquired by Asia-focused Standard International Bank and Gutierrez has not been a shareholder since August of 2018, Standard said in a statement, adding that it had no links to Vestin’s prior business, no ties to Venezuela and no plans to enter the Venezuelan market.
Bruce Udolf, a Florida-based defense attorney for Gutierrez, said, “We expect to respond with a vigorous defense to those charges. We are hopeful that he will be vindicated at trial.”
In February, the FBI raided Puerto Rican offshore bank Banco San Juan International (BSJI) as part of a probe of money laundering and evasion of Venezuela-related sanctions, special agent Douglas Leff told reporters at the time. A spokesman for the FBI San Juan field office declined to provide further details.
In 2016, BSJI reached a $300 million credit agreement with PDVSA, according to PDVSA’s financial statements from that year.
BSJI also has an account with the Fed, according to Fed records.
In a statement, BSJI said it had complied with all U.S. sanctions and was cooperating with the FBI investigation.
The source at the bank in Puerto Rico, along with Joyner and Nissman, said most of the island’s offshore banks applied strict scrutiny on customers, and that the decision would punish an entire sector for the actions of a few bad actors.
“It just shuts your businesses down, and what did they do?” said Nissman, a former U.S. attorney for the U.S. Virgin Islands who drafted the territory’s offshore banking law, and now a Puerto Rico-based consultant. He said the Fed should evaluate applications on a “case-by-case basis.”
(Reporting by Luc Cohen and Corina Pons, Editing by Brian Ellsworth and Rosalba O’Brien)
FILE PHOTO – A view shows a helmet with the logo of Rosneft company in Vung Tau, Vietnam April 27, 2018. Picture taken April 27, 2018. REUTERS/Maxim Shemetov
April 18, 2019
By Marianna Parraga
MEXICO CITY (Reuters) – President Nicolas Maduro is funneling cashflow from Venezuelan oil sales through Russian state energy giant Rosneft as he seeks to evade U.S. sanctions designed to oust him from power, according to sources and documents reviewed by Reuters.
The sales are the latest sign of the growing dependence of Venezuela’s cash-strapped government on Russia as the United States tightens a financial noose around Maduro, who it describes as a dictator.
With its economy reeling from years of recession and a sharp decline in oil production, Venezuela was already struggling to finance imports and government spending before Washington imposed tough restrictions on state oil company PDVSA in January.
Oil accounts for more than 90 percent of exports from the OPEC nation and the lion’s share of government revenues. Maduro has accused U.S. President Donald Trump of waging economic war against Venezuela.
Since January, Maduro’s administration has been in talks with allies in Moscow about ways to circumvent a ban on clients paying PDVSA in dollars, the sources said. Russia has publicly said the U.S. sanctions are illegal and it would work with Venezuela to weather them.
Under the scheme uncovered by Reuters, Venezuelan state oil company PDVSA has started passing invoices from its oil sales to Rosneft.
The Russian energy giant pays PDVSA immediately at a discount to the sale price – avoiding the usual 30-to-90 day timeframe for completing oil transactions – and collects the full amount later from the buyer, according to the documents and sources.
“PDVSA is delivering its accounts receivable to Rosneft,” said a source at the Venezuelan state firm with knowledge of the deals, who spoke on condition of anonymity for fear of retaliation.
Major energy companies such as India’s Reliance Industries Ltd – PDVSA’s largest cash-paying client – have been asked to participate in the scheme by paying Rosneft for Venezuelan oil, the documents show.
Rosneft, which has heavily invested in Venezuela under President Vladimir Putin, did not immediately respond to a request for comment.
Venezuela’s oil ministry, its information ministry, which handles media for the government, and PDVSA did not respond to questions.
Asked about the transactions, a spokesperson for Reliance said it had made payments to Russia and Chinese companies for Venezuelan oil. The spokesperson said the payments were deducted from money owed by Venezuela to those countries, but did not provide further details.
“We are in active dialogue with the U.S. Department of State on our dealings on Venezuelan oil to remain compliant with U.S. sanctions,” the spokesperson said.
(Reporting by Marianna Parraga in Mexico City; Additional reporting by Luc Cohen in Caracas, Nidhi Verma in New Delhi, Julia Payne in London; Editing by Daniel Flynn, Simon Webb,David Gaffen and Marguerita Choy)
FILE PHOTO: Venezuela’s President Nicolas Maduro speaks next to Cuba’s President Miguel Diaz-Canel, wearing a Venezuelan flag sash, during their meeting at the Miraflores Palace in Caracas, Venezuela May 30, 2018. REUTERS/Marco Bello
April 17, 2019
By Zachary Fagenson, Matt Spetalnick and Lesley Wroughton
MIAMI/WASHINGTON (Reuters) – The Trump administration on Wednesday imposed new sanctions and other punitive measures on Cuba and Venezuela, seeking to ratchet up U.S. pressure on Havana to end its support for Venezuela’s socialist president, Nicolas Maduro.
Speaking to a Cuban exile group in Miami, U.S. national security adviser John Bolton said the United States was targeting Cuba’s military and intelligence services, including a military-owned airline, for additional sanctions and was tightening travel and trade restrictions against the island.
Bolton’s speech followed the State Department’s announcement on Wednesday that it was lifting a long-standing ban against U.S. citizens filing lawsuits against foreign companies that use properties seized by Cuba’s Communist government since Fidel Castro’s 1959 revolution.
President Donald Trump’s decision, which the State Department said could unleash hundreds of thousands of legal claims worth tens of billions of dollars, drew swift criticism from European and Canadian allies, whose companies have significant interests in Cuba.
The Cuban government, which could be hindered in attracting new foreign investment, denounced it as “an attack on international law.”
Taking aim at Venezuela, Bolton said the United States was also imposing sanctions on the country’s central bank to prohibit access to dollars by an institution he described as crucial to keeping Maduro in power. Bolton also announced new sanctions on Nicaragua.
In a state television address, Maduro called the sanctions “totally illegal.”
“Central banks around the world are sacred, all countries respect them,” Maduro said, adding that the central bank would “confront and defeat” the sanctions. “To me the empire looks crazy, desperate.”
While accusing Cuba of propping up Maduro with thousands of security force members in the country, Bolton also warned “all external actors, including Russia,” against deploying military assets to support the Venezuelan leader.
“The United States will consider such provocative actions a threat to international peace and security in the region,” Bolton said, noting that Moscow recently sent in military flights carrying 35 tons of cargo and a hundred personnel.
However, Cuba appears unlikely to be budged by demands to dump Maduro, a longtime ally of Havana, and Maduro has also shown little sign of losing the loyalty of his military despite tough oil-related U.S. sanctions on the OPEC nation.
Cuban President Miguel Diaz-Canel responded defiantly. “No one will rip the (fatherland) away from us, neither by seduction nor by force,” he said on Twitter. “We Cubans do not surrender.”
ROLLING BACK OBAMA-ERA DETENTE
Amid Venezuela’s political and economic crisis, opposition leader Juan Guaido invoked the constitution in January to assume the interim presidency. The United States and most Western countries have backed Guaido as head of state. Maduro, backed by Cuba, Russia and China, has denounced Guaido as a U.S. puppet.
Bolton, a longtime Cuba hardliner, was frequently interrupted by applause in his address to veterans of the U.S.-backed Bay of Pigs invasion on the 58th anniversary of the failed operation to overthrow Castro. His speech was a sequel to one late last year branding Cuba, Venezuela and Nicaragua a “troika of tyranny.”
Bolton’s announcements included further measures to roll back parts of the historic opening to Cuba, an old Cold War foe, under his predecessor, Barack Obama.
The Obama administration’s approach, he said, “provided the Cuban regime with the necessary political cover to expand its malign influence.”
Among the Cuba measures announced by Bolton was reinstatement of limits on U.S. citizens sending remittances to Cuba at $1,000 per person per quarter. Remittances have surged since Obama started easing restrictions, becoming an important part of the economy and fueling growth of the private sector.
“Restricting remittances that can be sent to Cubans will directly hurt the Cuban people,” said Ben Rhodes, a former Obama adviser who negotiated the 2014 diplomatic breakthrough with Havana. “This is a shameful and mean-spirited policy.”
Bolton said the United States would also further restrict “non-family” travel to Cuba and cited military-owned Cuban airline Aerogaviota among five entities being added to the U.S. sanctions blacklist.
The Trump administration has previously sought to curtail Venezuela’s subsidized oil shipments to Cuba.
Also on Wednesday, Bolton announced sanctions on Nicaragua’s Bancorp, which he called a “slush fund,” and on Laureano Ortega, a son of President Daniel Ortega for what he described as “vast corruption.”
Trump’s toughened stance on Cuba as well as Venezuela and Nicaragua has gone down well among Cuban Americans in south Florida, an important voting bloc in a political swing state as he looks toward his re-election campaign in 2020.
Trump has added Cuba hawks to top posts. Bolton brought in Mauricio Claver-Carone, known as staunchly anti-Castro and an outspoken critic of Obama’s rapprochement with Havana, as his top Latin America adviser.
However, the risk, some former U.S. officials say, is that Trump’s team will overdo the targeting of Cuba in their anti-Maduro campaign and alienate some European and Latin American allies who have good relations with Havana but are also needed by Washington to maintain pressure on Venezuela.
Over the objections of key allies, Trump decided to allow a law that has been suspended since its creation in 1996 to be fully activated, permitting Cuban-Americans and other U.S. citizens to sue companies doing business in Cuba over property seized in decades past by the Cuban government.
Until now, Title III of the Helms-Burton Act had been fully waived by every president over the past 23 years.
Among the foreign companies heavily invested in Cuba are Canadian mining firm Sherritt International Corp and Spain’s Melia Hotels International SA. U.S. companies, including airlines and cruise companies, have forged business deals in Cuba since the easing of restrictions under Obama.
Toronto-based Sherritt said it would not be materially impacted by the Trump administration’s Helms-Burton decision and would continue to operate as usual focusing on meeting its nickel/cobalt production targets.
It was unclear, however, how Cuba property claims, some of which involve complex legal matters, will fare in U.S. courts.
The European Union said it will “consider all options at its disposal to protect its legitimate interests.”
Chrystia Freeland, minister of foreign affairs for Canada, which has coordinated with Washington on Venezuela, said: “Canada is deeply disappointed with today’s (U.S.) announcement.”
Kim Breier, U.S. assistant secretary of state for Western Hemisphere affairs, said a U.S. government commission has certified nearly 6,000 claims for property confiscated in Cuba with a current value of about $8 billion and that there could be up to 200,000 uncertified claims worth tens of billions of dollars if pursued.
(Reporting by Zachary Fagenson in Miami and Matt Spetalnick and Lesley Wroughton in Washington; Additional reporting by Makini Brice, David Alexander and Doina Chiacu in Washington; Sarah Marsh and Marc Frank in Havana; Philip Blenkinsop and Jan Strupczewski in Brussels; Julie Gordon in Ottawa; Deisy Buitrago and Luc Cohen in Caracas; writing by Matt Spetalnick; editing by Mary Milliken and Lisa Shumaker)
FILE PHOTO: U.S. Secretary of State Mike Pompeo testifies before a Senate foreign Relations Committee hearing on the State Department budget request in Washington, U.S. April 10, 2019. REUTERS/Erin Scott/File Photo
April 17, 2019
By Lesley Wroughton and Matt Spetalnick
WASHINGTON (Reuters) – The Trump administration is lifting a long-standing ban against U.S. citizens filing lawsuits against foreign companies that use properties seized by Cuba’s Communist government since Fidel Castro’s 1959 revolution, Secretary of State Mike Pompeo said on Wednesday.
The major policy shift, which the State Department said could draw hundreds of thousands of legal claims worth tens of billion of dollars, is intended to intensify pressure on Havana at a time Washington is demanding an end to Cuban support for Venezuela’s socialist president, Nicolas Maduro.
But President Donald Trump’s decision, which was quickly denounced by Cuba as “an attack on international law,” could also further strain economic relations with U.S. allies in Europe and Canada, whose companies have significant interests on the island.
“Any person or company doing business in Cuba should heed this announcement,” Pompeo said at a news conference.
“Cuba’s behavior in the Western Hemisphere undermines the security and stability of countries throughout the region, which directly threatens United States national security interests,” he said.
Trump’s national security adviser, John Bolton, will discuss the administration’s decision in a speech on Wednesday in Miami, where he will also announce new sanctions on Cuba, Venezuela and Nicaragua, countries he has branded a “troika of tyranny,” a senior U.S. official said, speaking on condition of anonymity.
Trump decided to allow a law that has been suspended since its creation in 1996 to be fully activated, permitting Cuban-Americans and other U.S. citizens to sue foreign companies doing business in Cuba over property seized in decades past by the Cuban government.
Title III of the Helms-Burton Act had been fully waived by every president over the past 23 years due to opposition from the international community and fears it could create chaos in the U.S. court system with a flood of lawsuits.
“I strongly reject the announcement of State Secretary Pompeo,” Cuba’s Foreign Minister Bruno Rodriguez said in a message on Twitter. “This is an attack on international law and the sovereignty of Cuba and third states. Aggressive escalation of #USA against #Cuba will fail.”
The move, which could deal a blow to the Cuban government’s efforts to attract foreign investment, marks a further step by Trump to roll back parts of the historic opening to Cuba, an old Cold War foe, under his predecessor, Barack Obama.
Pompeo said the Obama administration had played “a game of footsie with the Castros’ junta” and accused the Cuban government of widespread human rights abuses. “Detente with the regime has failed,” he told reporters.
PUSHBACK FROM EU, CANADA
Among the foreign companies heavily invested in Cuba are Canadian mining firm Sherritt International Corp and Spain’s Melia Hotels International SA. U.S. companies, including airlines and cruise companies, have forged business deals in Cuba since the easing of restrictions under Obama.
It was unclear, however, how such property claims, some of which involve complex legal matters, will fare in U.S. courts.
“The EU will consider all options at its disposal to protect its legitimate interests, including in relation to its WTO rights and through the use of the EU Blocking Statute,” EU foreign policy chief Federica Mogherini and EU Trade Commissioner Cecilia Malmstrom said in a joint statement.
A joint EU-Canada statement said the U.S. move was “regrettable” and will have an “important impact on legitimate EU and Canadian economic operators in Cuba.”Kim Breier, U.S. assistant secretary of state for Western Hemisphere affairs, said the administration had been in close contact with allies in Europe and elsewhere before the Cuba decision and that a “vast number” of European firms operating there would not have any problems.
She said, however, that a U.S. government commission has certified nearly 6,000 claims for property confiscated in Cuba with a current value, including interest, of about $8 billion.
“There could be up to 200,000 uncertified claims … and that value could very easily be in the tens of billions of dollars,” Breier added. “It will depend on whether claimants decide to pursue legal cases or not.”
U.S. officials left no doubt that the Helms-Burton decision, which takes effect on May 2, is part of the Trump administration’s effort to force Cuba to abandon Maduro, something Havana has insisted it will not do.
Washington says Havana’s security and intelligence support is critical to Maduro’s grip on power amid Venezuela’s economic and political crisis.
Venezuelan opposition leader Juan Guaido invoked the constitution in January to assume the interim presidency.
The United States and most Western countries have backed Guaido as head of state. Maduro, backed by Cuba, Russia, China and the Venezuela military, has denounced Guaido as a U.S. puppet who is seeking to foment a coup.
Trump’s toughened stance on Cuba as well as Venezuela has gone down well in the large Cuban-American community in south Florida, an important voting bloc in a political swing state as he looks toward his re-election campaign in 2020.
(Additional reporting by Makini Brice and Doina Chiacu in Washington, Sarah Marsh in Havana,Philip Blenkinsop and Jan Strupczewski in Brussels, Editing by Meredith Mazzilli and Tom Brown)