STATE DEPARTMENT CABLE, FEBRUARY 1995
FM SEC STATE WASH DC TO ALL DIPLOMATIC POST PRIORITY

SUBJECT: BUYER BEWARE: CUBA MAY BE SELLING AMERICAN PROPERTY

1. SUMMARY AND ACTION REQUESTED:

CUBA MAY BE SELLING OR LEASING TO FOREIGN INVESTORS PROPERTY EXPROPRIATED FROM U.S. NATIONALS IN ORDER TO EARN DOLLARS AND INVESTMENT COMMITMENTS.

ADDRESSEES ARE ASKED TO MAKE THE POINTS IN PARAGRAPH 4 TO APPROPRIATE HOST GOVERNMENT CONTRACTS, UNLESS THERE IS NO INTEREST OR ACTIVITY ON THE PART OF HOST-COUNTRY NATIONALS IN INVESTING/LEASING PROPERTY IN CUBA.

End summary and action requested.

2. Statements by Cuban officials have suggested that Cuba has always been willing to discuss claims by U.S. companies on past investment expropriated by the [Government of Cuba]. In fact, the [Government of Cuba] has made no official public statement, nor has it presented any formal proposal or offer to the U.S. Government. Moreover, Cuban officials have always spoken of "mutual claims" referring to the longstanding [Government of Cuba] assertion that settlement of American claims be balanced with the [Government of Cuba] claim of approximately USD 48 billion against the United States for damages Cuba alleges to have suffered because of the U.S. embargo.

3. Because the Department [of State] is reluctant at this point to foreclose the option of the future return of property expropriated by the [Government of Cuba], Department is concerned about reports the Government of Cuba may be offering equity in Cuban factories and other assets, including properties expropriated from U.S. Nationals, in order to obtain badly needed hard currency, oil and productive investment. Transfer of these properties to third parties would complicate any attempt to return them to their original owners.

4. Posts should make the following points at the appropriate host-government economic ministries, as well as with any private firms known to be considering investment in Cuba.

· We understand that the Government of Cuba may be offering foreign investors the opportunity to purchase land, manufacturing facilities, tourist resorts and other assets in Cuba, some of which were expropriated from U.S. Nationals. The Cubans may also be offering joint venture partnerships.

· As a result of Cuba's policies of internal repression and lack of democratic institutions, the United States does not have full diplomatic or commercial relations with Cuba.

· The United States opposes investment in the Cuban economy as long as the Government of Cuba continues to pursue these policies.

· We understand your government may have its own views on this. Nonetheless, the United States Government strongly urges that your government encourage your nationals and business firms to avoid entering into contracts with the Government of Cuba, or making investments in Cuba, which involve assets that were expropriated from U.S. Nationals.

· The U.S. originally imposed an economic embargo in 1962, after Cuba nationalized some 1.8 billion (1962) dollars worth of U.S.-owned property without paying prompt, adequate, and effective compensation as required. Under international law, that embargo remains in effect.

· The U.S. Government has adjudicated its Nationals' claims against the Government of Cuba. 5,911 claims have been determined to be valid. Including interest, these claims today total over 5.5 billion dollars.

· As you are aware, U.S. claims against Cuba remain unsettled. At an appropriate time, the U.S. Government expects to resolve U.S. claims with the Government of Cuba.

· At this point, we do not want to exclude the possibility that the Government of Cuba will ultimately decide to return expropriated property to their original owners. If the properties are purchased by foreign investors before this occurs, restitution of property will prove far more difficult. We urge you to take steps to avoid this difficulty.

· Care should be taken by prospective investors to ensure that property the Cuban Government attempts to sell or otherwise dispose of is not the subject of a claim by U.S. Nationals.

· TO THIS END, BUSINESS FIRMS ARE ENCOURAGED TO CONTACT THE FOREIGN CLAIMS SETTLEMENT COMMISSION OF THE UNITED STATES AT THE ADDRESS BELOW:

FOREIGN CLAIMS SETTLEMENT COMMISSION
600 E STREET, NW
WASHINGTON, DC 20579 USA
(202) 616-6975

TO INQUIRE WHETHER THE ASSETS AND PROPERTIES OF INTEREST TO THEM MAY BE THE SUBJECT OF AN OUTSTANDING CLAIM.

CHRISTOPHER


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