Reconciling U.S Property Claims in Cuba

onds through direct talks with bondholders; and that the United States would seek authority from
its legislature to accord Most-Favored Nation (MFN) treatment to Hungary, subject to separate negotiations.
75 In a grand bargain, the United States could offer to work with Cuba and other creditors
to renegotiate Cuba’s outstanding official (Paris Club) and commercial (London Club) debts on
terms that take into account Cuba’s capacity to pay. 76 The U.S. government continues to carry on its
books $36.3 million of Cuban obligations to the U.S. Export-Import Bank (Ex-Im Bank), which could
be addressed within the Paris Club framework. 77 The United States could also agree to reconsider
remaining trade and investment restrictions.
At this stage, it would be too much to expect agreement on a detailed development strategy for
Cuba. But a process could be put in place whereby Cuba would work with its many international
partners, including the United States, to forge a twenty-first century development model that preserves
the social gains of the revolution but that also raises labor productivity and living standards.
Under President Raúl Castro, Cuba has initiated economic reform and the international community
can accompany it by adding its expertise and resources. It would not be too much for the claims
settlement talks, if they agree on a two-tiered strategy, to include a discussion of the business climate,
and what additional steps Cuba needs to take to attract badly needed foreign investment. As
strict socialist property relations are gradually replaced by a more hybrid economic system, Cuba
will need to design and implement new property regimes that promote individual initiative but that
also encompass land-use, housing, natural resources and other regulatory oversight protective of
the public interest and consistent with sustainable and equitable growth.
The strategic goals in a massive claims resolution process must be political: to heal the deep wounds
of past conflicts, to lay foundations for peaceful coexistence and the non-violent resolution of disputes,
to avoid jeopardizing fiscal balances and crippling debt burdens, to build investor confidence and international
reputation, and to help render the Cuban economy more open and competitive. These vital
goals will not always be fully convergent with the more traditional, legal objective focused narrowly on
the rights of property claimants. In designing and implementing solutions, as claimants bang on doors
and demand attention, policy makers should not lose sight of their overriding purposes. In the interests
of both Cuba and the United States, the twentieth-century trauma of massive property seizures should
be transformed into a twenty-first century economic development opportunity.
75
State Department Digest 1973, p.337.
76
Cuba and the Paris Club creditor governments have agreed to renegotiate debts of $15 billion, which include
accumulated principal and interest. Cuba has already restructured its debt with Japanese commercial creditors,
Mexico and Russia, each time obtaining reductions of 70 percent to 90 percent in what was owed in exchange for
extended payment plans. Marc Frank, “Cuba and Paris Club members agree on debt total: $15 bln,” Reuters, June
8, 2015, http://www.dailymail.co.uk/wires/reuters/article-3115888/Cuba-Paris-Club-members-agree-debt-total--15-bln.
html#ixzz3cV1cQuoz.
77
U.S. Department of the Treasury Foreign Credit Reporting System, “Table 5: FCE to Sovereign and other Foreign Official
Obligors by Region and Country,” available at. https://fcrs.treas.gov/FCRS_PublicSite/.
Reconciling U.S. Property Claims in Cuba: Transforming Trauma into Opportunity
Latin America Initiative at Brookings
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