Saturday, July 30, 2016

U.S. and Cuba Take Steps to Expedite Claims Process

U.S. and Cuba Take Steps to Expedite Claims Process
More talks are planned over hundreds of billions of dollars in claims
s made against each other over the past 60 years. PHOTO: REUTERS
July 29, 2016 1:51 p.m. ET

WASHINGTON—Cuba and the U.S. are accelerating discussions to try to
settle hundreds of billions of dollars in claims made against each other
over the past six decades, according to U.S. and Cuban officials.

A second official round of talks was concluded Thursday in Washington,
according to a senior State Department official. But more regularized
meetings are expected to occur in the coming months after the
normalization of relations between Washington and Havana earlier this year.

The Castro government is seeking hundreds of billions in claims for what
Cuban officials said were the economic and humanitarian costs of the
U.S. trade embargo on Cuba.

Nearly 6,000 certified U.S. claimants, meanwhile, are seeking
compensation for assets nationalized following the 1959 Cuban
revolution. This amount is estimated to be around $8 billion, according
to U.S. officials.

"The U.S. delegation expressed its desire to resolve the claims as
quickly as possible, and we indicated that we were willing to dedicate a
substantial amount of time and energy towards trying to get to
resolution," said a senior State Department official involved in the
negotiations this week.

Cuba's Foreign Ministry said in a statement that it and the State
Department would continue sharing information "with the aim of preparing
the process of negotiation."

The U.S. official said the talks have been focused on trying to find a
more defined process for how to settle the claims. The diplomat said the
U.S. and Cuba could try to agree on a "lump sum" payment or define
specific categories for resolving the disputes.

"We all recognize that the complexity and the scope of the claims that
we bring to the table will have to allow us to draw on all those
examples, but that we'll probably have to figure out something that is
unique to this particular claims matter," said the U.S. official.

Cuban courts have defined two specific payments the U.S. should pay in
compensation for the trade embargo. This includes $121 billion for
economic costs and an additional $181 billion for humanitarian damages.

Many of the U.S. claims have been lodged by Fortune 500 companies,
including Coca-Cola Co., Exxon Mobil Corp., Starwood Hotels & Resorts
Worldwide Inc. and Colgate-Palmolive Co.

Office Depot Inc. holds the largest claim, which is now valued at more
than $1 billion. That claim, originally made by Cuban Electric Co., has
changed hands several times over the years through mergers and
acquisitions. Many of the companies nationalized by the Cuban government
no longer exist and claims have been passed down. Individuals also have
pressed claims.

There are also several judgments by U.S. state and federal courts valued
at about $2 billion. The U.S. government has claims valued in the
hundreds of millions of dollars tied to mining projects that were
nationalized by the Castro government.

In a study released last year year by the Brookings Institution, Richard
Feinberg, a former National Security Council and Treasury official,
suggested a two-tier approach to resolving the U.S. claims.

In one tier, about 5,000 individual claims out of the nearly 6,000 could
be cleared for about $230 million, excluding interest, the report
contends. The remaining corporate claims could be resolved through "a
menu of options," such as allowing companies to re-enter the Cuban market.

Write to Jay Solomon at

Source: U.S. and Cuba Take Steps to Expedite Claims Process - WSJ -

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