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EU threatens US firms with asset seizures over any Cuba claims

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The European Union warned US companies they risk having their assets seized if they pursue claims over the bloc's dealings with Cuba, adding to the friction in transatlantic ties.

[BRUSSELS] The European Union warned US companies they risk having their assets seized if they pursue claims over the bloc's dealings with Cuba, adding to the friction in transatlantic ties.

Earlier this month, President Donald Trump decided to let US citizens file lawsuits over property confiscated in Cuba during the 1959 revolution, meaning claimants can sue companies that have used their former property on the island.

The EU, which is the biggest foreign investor in Cuba, has said Mr Trump's decision to activate the controversial provision in the Helms-Burton Act could result in a flood of litigation against foreign firms. In a letter sent to the US Chamber of Commerce, the European Commission threatened to retaliate against any claims targeting EU companies.

"Initiating a court case in the US will likely start a protracted legal process in which those companies might win compensation in US courts only to have the same amount seized from their EU operation," the bloc's executive arm said in the letter addressed to John G Murphy, senior vice president at the US Chamber of Commerce in Washington.

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EU law allows "companies sued in the US to recover any damage through legal proceedings against US claimants before EU courts," the commission says in the letter seen by Bloomberg. "Such damages could be recovered through the seizure of assets in the EU held by US claimants, persons acting on their behalf or their intermediaries, including shares they may hold in EU companies."

The row over Cuba adds to a series of disputes ranging from Middle-East policy, to trade and climate change, which have strained the world's most powerful political alliance. Earlier this month, the Trump administration escalated its battle with its Germany, France and the UK over the Iran nuclear accord, threatening penalties against a financial body they created to shield trade companies from US sanctions.

BLOOMBERG