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US, Cuba to negotiate billions in claims against each other
[HAVANA] Cuban and US officials on Tuesday will begin to untangle one of the most complex obstacles to normalisation of relations between the two countries: the claims of Americans whose property was nationalized after the 1959 revolution and Cuban counterclaims for damages caused by the US trade embargo.
The talks in Havana are the latest in a series of bilateral meetings since the two former Cold War adversaries restored diplomatic ties in July this year.
Some 5,913 US corporations and individuals have been awarded US$1.9 billion worth of claims for factories, farms, homes and other assets that were nationalized in Cuba after Fidel Castro's rebels came to power on Jan 1, 1959.
Those claims, registered with the US Justice Department's Foreign Claims Settlement Commission, are now worth roughly US$8 billion when including 6.0 percent annual interest.
Cuban law ties the settlement of the claims to US reparations for damages resulting from the embargo and other acts of US aggression against Cuba. Cuban estimates of that damage range from US$121 billion to more than US$300 billion.
Neither side is eager to pay the full value, setting up a negotiation. "The meeting is the first step in what we expect to be a long and complex process, but the United States views the resolution of outstanding claims as a top priority for normalisation," the US State Department said in a statement on Monday.
Cuba nationalised all foreign businesses and reached settlements with owners from other countries.
The government recognises the US claims but it cut off negotiations in response to the decision by former President Dwight Eisenhower to suspend Cuba's sugar quota in 1960.
The claims sat dormant for half a century as a result of the US-Cuba estrangement, which ended a year a ago when US President Barack Obama and Cuban President Raul Castro announced detente.
Many of the nationalised companies no longer exist and individual claims have been passed to heirs.
The largest claim, by the Cuban Electric Company for more than US$267 million, has changed hands several times due to mergers and acquisitions and is held by Office Depot, itself a takeover target of Staples Inc pending antitrust review.
With interest that claim is now worth more than US$1 billion.
Other major claimants include Starwood Hotels, Coca-Cola, the former International Telephone & Telegraph Co, now ITT Corp, and various oil, sugar and financial interests.