Clinton’s decision on Cuba keeps pressure on EU firms

Date: 18/07/1996

By Elizabeth Wise

ALTHOUGH European firms with business in Cuba have won six months' grace before they may be sued for property rights by American citizens, the pressure is still on.

In the same breath as he announced that he would delay the application of Title III of the Helms-Burton law by half a year, US President Bill Clinton said this week that Americans would be watching the companies' activities, and lawsuits could be lodged at the end of this period.

European responses were almost as bellicose. Most EU governments qualified their statements welcoming Clinton's decision with promises to carry on fighting the law and threats of retaliation if US immigration officials continued barring Europeans from entering the US.

The Cuban Liberty and Democratic Solidarity (Libertad) Act has two sections - one, called Title III, allows Americans to sue foreign companies or people who 'traffic' in property seized from them by Cuban leader Fidel Castro in 1959.

The second - which Clinton had no power to suspend - restricts entry into the US of executives or shareholders of such firms and their families.

Two Britons have already been targeted, including former deputy governor of the Bank of England Rupert Pennant-Rea, for their ties with Canadian mining company Sherritt International Corporation.

Italy's Stet telecoms firm is expected to be the next target, with the Mallorca-based Sol Melia hotel chain not far behind. The Dutch bank ING and French distillers Pernod-Ricard are also mentioned when analysts speculate on who will receive warning letters from the US State Department.

EU governments have their battle plan ready. Before Clinton made his announcement, foreign ministers had already agreed on possible retaliatory measures, including compiling a “watch list” of US companies which take legal action against European firms, legislation in European courts to counter-sue those US companies, restricting entry visas for Americans coming into Europe, and taking the US to a dispute settlement panel at the World Trade Organisation in Geneva.

EU ambassadors will discuss the matter today (18 July). The Union refuses to accept the US notion that it may apply its laws beyond its borders, but will do what it can to make sure the spat does not escalate into a trade war.