U.S. Markets closed

EU and Canada Say They Will Fight US Sanctions on Cuba


The EU and Canada both said Wednesday they will use all available means to defend their interests in Cuba, including a possible challenge in the World Trade Organization, after the U.S. government announced it would allow lawsuits to go forward against companies using property confiscated by the Cuban government after the 1959 Cuban Revolution.

The U.S. announced that it would not renew a waiver that exempted European and other companies from the effects of measures designed to deter companies from doing business in Cuba. The US administration has applied the waiver, which is related to the 1996 Helms-Burton act, for over twenty years.

“The EU will consider all options at its disposal to protect its legitimate interests, including in relation to its WTO rights and through the use of the EU Blocking Statute,” the European Commission, which is responsible for the EU's international trade policy, said in a statement.

The Blocking Statute prohibits the enforcement of U.S. court judgements relating to Title III of the Helms-Burton Act within the EU, and allows EU companies sued in the U.S. to recover damages through legal proceedings against U.S. claimants before EU courts.

Canadian Foreign Minister Chrystia Freeland said in a statement that Canada would also seek to use the WTO dispute-resolution process to protect Canadian companies.

"The EU and Canada consider the extraterritorial application of unilateral Cuba-related measures contrary to international law," the two countries said in a joint statement.

The Helms-Burton Act was designed to help former owners of property in Cuba whose assets were seized by the Communist government. It also was designed to deter foreign companies from investing in and doing business in Cuba because the ownership of assets would be uncertain.

The EU argued that Helms-Burton was illegal under World Trade Organization rules because it affected entities outside U.S. territory. Following negotiations with the EU, the U.S. agreed to a waiver to avoid the act affecting European businesses. In return, the EU dropped a challenge in the WTO to the US legislation. Since the signing of the Helm-Burton Act by President Bill Clinton, every U.S. President has extended the waiver -- until now.

U.S. officials said the move was made in part because of Cuba’s policies supporting the authoritarian Maduro government in Venezuela.

The waiver ends May 1 and the policy change to allow suits begins on May 2, Secretary of State Mike Pompeo said.

The EU is the largest foreign investor in Cuba and the country’s top export market.

One of the companies that could be affected by the U.S. decision to end the waiver is beverage company Pernod Ricard, which owns the Havana Club rum brand. The right to use the brand name is disputed by Bacardi, a Cuban family that left the country in the 1960s when the Communists took control and nationalized the rum-maker.

Another is the Spanish hotel chain Meliá Hotels International SA, which has made substantial investments in Cuba.

The U.S. decision not to renew the waiver comes amid worsening trade relations between the EU and the U.S. On Wednesday, the EU published a list of U.S. exports worth $20 billion year that could be hit with penalty tariffs in a dispute over government subsidies to Boeing. The WTO ruled last week that the U.S. should have removed the illegal tax breaks and other programs that favoured the U.S. aircraft maker.