On Wednesday, March 5, 2008, the U.S. Department of Justice issued a notice generated by inquiries to the Justice Department related to the transfer of claims against the Government of Cuba. The Department is encouraging anyone considering the transfer or purchase of a certified U.S./Cuba claim to contact his or her attorney.
What are Certified U.S./Cuba Claims?
The United States has had two programs for the adjudication of claims against the Government of Cuba. The first claims program was completed July 6, 1972 by the Foreign Claims Settlement Commission of the Department of Justice (“the Commission”). The Commission certified 5,911 claims to the U.S. Department of State as valid claims. These claims were settled pursuant to Title V of the International Claims Settlement Act of 1949.
In August 2006, the Commission completed the administration of a second Cuban claims program, evaluating previously un-adjudicated claims of U.S. citizens or corporations against the Government of Cuba for losses of real and personal property taken after May 1, 1967. These claims were reviewed pursuant to 22 U.S.C. 1623(a)(1)(C) that allows the Commission to evaluate categories of claims referred to the Commission by the Secretary of State.
During the Second Cuban Claims Program, the Commission received a total of five claims, and certified two of those claims as valid: the Claim of STARWOOD HOTELS & RESORTS WORLDWIDE, INC., Claim No. CU-2-001, Decision No. CU-2-001, in the total principal amount of $51,128,926.95 (plus 6 percent simple annual interest); and the Claim of IRAIDA R. MENDEZ, Claim No. CU-2-002, Decision No. CU-2-004, in the principal amount of $16,000 (plus 6 percent simple annual interest). These two claims will be added to the claims already certified in the previous program.
Recent Announcement by the Department of Justice, Foreign Claims Settlement Commission
Earlier this week, the Commission issued a notice that Title 22, Chapter 21, Subchapter V, of the U.S. Code contains a limitation on the transferability of certified Cuban claims, codified at 22 U.S.C. § 1643f (b): “The amount determined to be due on any claim of an assignee who acquires the same by purchase shall not exceed (or, in the case of any such acquisition subsequent to the date of the determination, shall not be deemed to have exceeded) the amount of the actual consideration paid by such assignee, or in case of successive assignments of a claim by any assignee.”
The Department notice states that the aforementioned provision “may also apply to the transfer of interests in certain entities that own certified Cuban claims. Furthermore, regulations issued by the Office of Foreign Assets Control (“OFAC”) of the Department of Treasury may also govern the transfer of certified Cuban claims.” The notice concluded, “The Commission is not aware of any plans for, or any indications of, a settlement between the Untied States and Cuba, nor is the Commission aware of any bilateral negotiations between the United States and Cuban governments regarding these claims.”
No funds are currently available to make payment on any U.S. claims against the Government of Cuba. The aforementioned certification will serve as a basis for the future negotiation of a claims settlement with the Government of Cuba.
The total value of certified claims by U.S. nationals against the Government of Cuba is approximately US$8.0 billion