Monday, January 29, 2007

Frozen Cuban funds running out

Posted on Mon, Jan. 29, 2007

Frozen Cuban funds running out
Havana is reportedly alarmed at the rapid depletion of funds held in
U.S. accounts and being doled out as compensation to claimants in U.S.
El Nuevo Herald

U.S. lawsuits seeking monetary compensation from Cuba face discouraging
prospects: The Cuban funds frozen in U.S. accounts now are estimated at
only around $70 million and are expected to run out soon.

The depletion of the Cuban assets held in U.S. banks has alarmed Havana,
which has accused the U.S. government of stealing $170.2 million of its
money over the past five years.

Cuba's accusation was contained in a note from the Ministry of Foreign
Relations earlier this month, after a court ruling in Miami awarded $400
million to the survivors of Robert Fuller, a U.S. citizen executed by
firing squad in Cuba in 1960. The compensation in that case has not been

''Cuba will never renounce its right to demand that the U.S. government
take full responsibility for the theft of the funds that are
legitimately ours, to the last cent,'' the ministry's note said.

In reprisal for the first disbursement -- a $96 million award to the
survivors of the Brothers to the Rescue members killed over the Straits
of Florida -- Havana cut off direct U.S.-Cuba telephone communications
in 2000. But Cuba analysts believe the current complaint has a different
purpose because Raúl Castro has ''temporarily'' replaced his brother
Fidel as the island's leader.

''These funds could be a subject for negotiation with Washington,'' said
Jaime Suchlicki, director of the Center for Cuban and Cuban-American
Studies at the University of Miami. ``The new clique of Raúl Castro,
[Central Bank President] Francisco Soberón and company, is interested in
those accounts, with a pragmatic vision.''

Cuba faces 5,911 claims from corporations and individuals for the
confiscation of their properties and other assets on the island after
Fidel Castro seized power in 1959. But it was not until the U.S.
Congress passed a law in 2000 that claimants in U.S. courts could hope
to collect any court awards from the frozen Cuban funds.

Although the amount of Cuban money frozen in U.S. accounts is inexact
and ever-changing, an article that appeared in the Granma newspaper
after the foreign ministry complaint said that barely $76 million
remain, and that two of its accounts at the JPMorgan Chase bank ran out
after an award granted by a New York judge in November 2006.

That award, totaling almost $91 million, benefited the survivors of
Howard Anderson ($67 million) and Thomas Willard Ray ($23.9 million),
U.S. citizens who participated in the Bay of Pigs invasion and were
captured and executed in Cuba in 1961. The ministry maintained that only
$72.1 million of that amount could be transferred to the plaintiffs
before those accounts ran out.

The assets blocked by the Cuban Assets Control Regulations established
in 1963 consist of three major accounts in the JPMorgan Chase bank: one
belonging to the National Bank of Cuba (BNC) and two belonging to the
Telecommunications Company of Cuba (EMTELCUBA). A significant percentage
of the accumulated funds consists of long-distance telephone charges due
to Cuba.

According to the Granma report, the BNC account and one of the EMTELCUBA
accounts are already depleted. The second EMTELCUBA account contains
only $6 million. About $58 million belonging to individual citizens and
about $12 million in small accounts belonging to private and public
institutions is all that remains of the frozen funds.

The latest U.S. Treasury Department report on the frozen assets of
terrorism-linked nations placed the Cuban amount by the end of 2005 at
$268.3 million. Treasury's Office of Foreign Assets Control (OFAC)
declined to comment on the Cuban government's $76 million figure but did
not challenge it.

''Because we do not physically possess the assets, our information
depends on the figures given to us by the financial institutions,'' said
spokeswoman Molly Millerwise. ``There are several requirements the
financial institutions must meet when they report the frozen assets, and
these [requirements] change frequently, making it impossible to get
precise figures.''

Claimants also have had problems locating the frozen money because the
U.S. banks refuse to reveal information, so as to prevent claims on
their funds.

''A fundamental problem that emerged from the beginning in the quest to
receive awards from the frozen funds was that there was no mechanism to
collect the awards, even after a judge ruled favorably,'' said attorney
Frank Angones, who represented the relatives of the Brothers to the
Rescue victims in their 1997 claim for Cuban assets.

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