Cuba Update: Helms Burton Title III Activated

On April 17, 2019, the United States made the historic decision to cease suspension of Title III of the Cuba Liberty and Democratic Solidarity (LIBERTAD) Act of 1996 (commonly called the "Helms-Burton Act").1

Title III is the portion of the Helms-Burton Act which allows parties whose property was confiscated by the Cuban Government in 1959 to sue in U.S. courts companies and individuals who "traffic" in the property in question. The Act contains a broad definition of "traffic" and encompasses anyone who derives an economic benefit from confiscated property. Since 1996, each successive U.S. President has suspended this section of the Helms-Burton Act, making the decision to "cease suspension" particularly significant.

This note provides a brief review of the Helms-Burton Act itself and outlines the potential impacts of Title III on Canadian and other foreign companies currently operating in Cuba.

About the Helms-Burton Act

The Helms-Burton Act is the legal foundation of The United States' embargo on Cuba. The stated purpose of the Helms-Burton Act is "to seek international sanctions against the Castro government leading to a democratically elected government in Cuba, and for other purposes".2 The Helms-Burton Act is extra-territorial in nature. It aims to prevent individuals and companies from engaging in international trade with Cuba by subjecting foreign nationals to travel restrictions and financial liabilities in the United States.

Title III of Helms-Burton Act creates a private cause of action that allows Americans to sue anyone who, as of November 1, 1996, "traffics" or has "trafficked" in property confiscated from U.S. nationals by the Cuban State. The Act categorizes potential plaintiffs into two groups of property claimants: (i) "certified" claimants, or persons who were U.S. nationals at the time of expropriation; and (ii) "non-certified" claimants, or persons who were Cuban nationals at the time of expropriation but later became U.S. nationals.

The definition of "traffic" under the Helms-Burton Act is broad. A person "traffics" confiscated property if, among other things, that person knowingly and intentionally sells, transfers, distributes, conducts financial operations, or disposes in any manner of confiscated property or purchases, receives, holds, controls, manages or holds an interest in confiscated property and engages in a commercial activity using or otherwise benefiting from confiscated property. Notably, this definition could...