By Edward Alden. Financial
Times. Published: March 14 2001 18:37GMT.
Nicolás Gutiérrez, the Miami-based lawyer for the Sanchez
family of Cuba, can scarcely contain his enthusiasm for the administration of
George W. Bush.
Mr Gutiérrez says he has reason to believe that, after years of
stalling by former President Bill Clinton, the Bush administration is prepared
to take action under the controversial Helms-Burton law, which allows for
penalties against foreign companies operating on Cuban land confiscated by the
Castro regime.
The Sanchez clan owned 100,000 acres of Cuban sugar land that was
expropriated by Fidel Castro after the 1959 revolution. Today, a small,
beachfront piece of that property is used for a resort hotel by Sol Meliá,
the Spanish hotel chain. The Sanchez family is demanding millions of dollars in
compensation.
Mr Gutiérrez thinks the State Department will move soon to deliver a
formal warning to Sol Meliá that the company is in violation of the act.
That would trigger a 45-day period in which the company must either disprove the
charge or abandon its investment. Under the act, failure to do so would result
in executives, top shareholders and their families being barred from the US.
The move would prompt similar warnings to other companies, including LTI
International Hotels, a German resort chain, Mr Gutiérrez believes.
A State Department official would not confirm what action was being
contemplated, and most observers believe the administration will not act until
more senior appointments are in place. Colin Powell, secretary of state, has
also expressed scepticism over using sanctions as a foreign policy tool.
Mr Gutiérrez's optimism, however, highlights the growing likelihood
of a significant shift in US policy toward Cuba following the narrow election of
Mr Bush - particularly the few hundred votes that handed him victory in Florida.
Amid the Clinton administration's urging, Congress last year poked the first
hole in the 40-year-old US trade embargo of Cuba by authorising limited sales of
food and medicine. The Democratic administration also issued repeated waivers of
the Helms-Burton act, preventing Cuban exiles from using the law to go after
foreign companies operating in Cuba.
But the new administration has already signalled plans to take a much harder
line on Cuba. Robert Zoellick, the US trade representative, last week rejected
any further trade opening to Cuba, saying that easing the embargo would only
shore up the Castro dictatorship.
Cuban-Americans who overwhelmingly oppose Castro were an important part of
Mr Bush's slim Florida victory, and the administration clearly wants to shore up
that support.
Implementing Helms-Burton, however, would be a far more provocative step.
The 1996 law allows Cuban exiles to sue in US courts for compensation for their
properties in Cuba. It also allows the US to bar entry to executives of
companies found to be "trafficking" in confiscated Cuban properties.
But pressure has been building steadily to end the waivers. Mr Helms blasted
the Clinton administration in a strongly worded letter last November for failing
to act against Sol Meliá, despite findings by the State Department that
the company was trafficking in confiscated property.
The Bush administration is also expected to announce shortly the appointment
of Otto Reich, a former Reagan administration official, to the key post of
assistant secretary in charge of Latin American affairs. The Cuban-born Mr
Reich, whose nomination was pushed by Florida Governor Jeb Bush, the brother of
the president, is a long-time advocate of tougher sanctions on Cuba.
"Obviously Otto Reich will be a strong reinforcement of our position,"
said Mr Gutierrez.
The growing pressure has put Sol Melia, one of the world's top 10 hotel
groups, in an increasingly awkward position. The company last year entered into
negotiations with the Sanchez family, but says the compensation demands are far
in excess of the value of the property.
Michael Bradfield, the hotel group's Washington lawyer, said the property
was valued at about $3,000 in 1962, but the Sanchez family has demanded
compensation of about $10m. The State Department, he says, has failed to prevent
the Helms-Burton law from being used as "an extortion game" by the
claimants.
The company is also in a legal box, because of an EU law that forbids
European companies from negotiating with the State Department in a Helms-Burton
action.
Sol Meliá is hoping that EU pressure will be sufficient to stave off
action by the US.
The EU Commission has already made it clear to the new administration that
action against the company would trigger a new trade dispute at a time when
US-EU trade relations are already littered with conflicts. | 