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Trump lifts ban on U.S. lawsuits against foreign firms in Cuba

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.

FILE PHOTO: A Cuban flag hangs outside a hotel in Havana, Cuba, April 20, 2018. REUTERS/Alexandre Meneghini/File Photo

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.

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

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

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