Helms-Burton Poses Litigation Risk For Canadian Businesses With Ties To Cuba

On April 17, 2019, the U.S. administration announced that it would no longer continue the suspension of Title III of the Cuban Liberty and Solidarity Act of 1996 (commonly known as Helms-Burton). The previous suspension is expected to expire effective May 2, 2019.

Title III of Helms-Burton creates a cause of action and allows for up to treble-damage claims to be brought against persons (including non-U.S. persons) engaged in “trafficking” in property confiscated in Cuba. Specifically, it provides U.S. nationals (including those who were at that relevant time Cuban nationals and since then have become U.S. nationals), who have a claim to property that was confiscated by the revolutionary Cuban Government on or after January 1, 1959, the private right to sue, in U.S. Federal courts, persons who “traffic” in that property.

The definition of “traffic” in Helms-Burton is extremely broad, with limited exceptions. As set out in Title III of Helms-Burton:

a person “traffics” in confiscated property if that person knowingly and intentionally--

(i) sells, transfers, distributes, dispenses, brokers, manages, or otherwise disposes of confiscated property, or purchases, leases, receives, possesses, obtains control of, manages, uses, or otherwise acquires or holds an interest in confiscated property,

(ii) engages in a commercial activity using or otherwise benefiting from confiscated property, or

(iii) causes, directs, participates in, or profits from, trafficking (as described in clause (i) or (ii)) by another person, or otherwise engages in trafficking (as described in clause (i) or (ii)) through another person,

without the authorization of any United States national who holds a claim to the property.

Helms-Burton was enacted by the U.S. Congress in 1996 following the downing by Cuban fighter jets of two private U.S. airplanes belonging to a Miami organization opposed to the Cuban regime. However, Title III was from the very outset suspended for six months at a time (as permitted by Helms-Burton) and has remained suspended through every U.S. administration since its enactment, until now. U.S. Secretary of State Mike Pompeo announced on January 16, 2019, that the Trump administration would be suspending Title III for only 45 days, instead of the usual maximum permitted period of six months, in order to conduct a review of the Title III right to bring an action. On April 17, the administration announced the results of that review, stating that the...