Challenge to the Legality of Title III of LIBERTAD and an International Response, A


A CHALLENGE TO THE LEGALITY OF TITLE III OF
LIBERTAD AND AN INTERNATIONAL RESPONSE

INTRODUCTION

On February 24, 1996, two unarmed United States (U.S.) civilian
aircraft were tragically shot down by the Cuban military in international
airspace with no jurisdictional justification for the outrageous act.' Prior to
this incident, President Clinton opposed the proposed Helms-Burton Act2

which among other things, contained a provision giving U.S. nationals the
right to sue foreigners who "traffic" in property confiscated by the Cuban
government on or after January 1, 1959, for monetary damages.' However,
in response to the tragedy, President Clinton signed into law on March 6,
1996, the legislation creating harsh sanctions on those not conforming to
U.S. policy against Cuba As a result, the United States currently stands in
the face of worldwide criticism on the grounds that the Helms-Burton Act is
a violation of international law and oversteps U.S. jurisdictional boundaries.5

Proponents of the Helms-Burton legislation support its legality and
jurisdictional basis on the grounds that U.S. properties were illegally
expropriated by the Cuban government and, thereafter, U.S. nationals were
never fairly compensated for their property interests. As a result, the United
States recognizes $15 billion dollars in outstanding claims, including
compounded interest.6 According to the United States, the effects of these
property claims that U.S. nationals hold against the Cuban government
permit jurisdiction under Tide III; therefore, justifying its international
legality. 7 If however;

1. Peter Tarnoff, Transcript of White House Briefing on ICAO Report, (June 20,
1996), reprinted in U.S. NEWSWIRE, June 21, 1996.

2. See Steven Greenhouse, Bill to Tighten Economic Embargo on Cuba is Passed with
Strong Support on the House, N.Y. TIMES, Sept. 22, 1995, at A8 (Secretary of State Warren
Christopher indicating that President Clinton would veto the legislation).

3. Cuban Liberty and Democratic Solidarity Act of 1996, 22 U.S.C.A. § 6021-6091
(West Supp. 1997) [hereinafter LIBERTAD].

4. Background on the Helms-Burton Bill (visited Sept. 28, 1996) < http://www.usis-
canada.usia. gov/helms.htm>.

- 5. Teresa Gutierrez, U.S. v. Cuba, Helms Burton Act Arouses Worldwide Anger
(visited Sept. 28, 1996) <http://www.workers.org/cuba/helms.html>; See also U.S. Allies
Give Good Advice on Cuba, CHI. TRIB., June 10, 1996, at 14; Europeans Try to Unify
Against U.S. Actions, THE COM. APPEAL, Sept. 10, 1996, at 8B.

6. Quid Pro Quo, THE ECONOMIST, Nov. 16, 1996, at 8. [hereinafter Quid Pro].
7. Monroe Leigh, Prepared Statement Before the Senate Foreign Relations Western

Hemisphere Subcommittee, (July 30, 1996) reprinted in FED. NEWS SERVICE, July 30, 1996.



IND. INT'L & COMP. L. REv.

the United States truly endorses its own logic [in justifying these
claims under Title III], it has no excuse but to allow a claim
against itself for the properties seized during and after its own
revolutionary war. Some 50,000-60,000 British loyalists fled the
13 states for Canada, leaving behind property
compound[ing] this at a modest 8% and the United States owes
$6.3 trillion. [Thus] maybe Canada and Britain should endorse
Helms-Burton, let the Americans make sweeping, legal
pontifications supporting it and then hold them to their word,
agreeing to pay their claim when they pay ours.8

This note discusses the legality of Title III under the recently enacted
Cuban Liberty and Democratic Solidarity Act (LIBERTAD), otherwise
referred to as the Helms-Burton Act, giving U.S. nationals the right to sue
foreigners who traffic in property confiscated from them by the Cuban
government. First, a brief history leading up to the enactment of
LIBERTAD including a synopsis of the relations between the United States
and Cuba will be presented. However, the main focus of the note will be
directed at the legality of Title III of the Act in the international scheme.
Specifically, it will be suggested that Title III is inconsistent with
international law, constitutionally unsound, and not in furtherance of U.S.
policy.

Because no jurisdictional grounds exist for U.S. courts to adjudicate
claims against Cuba for activities taking place in Cuba by the Cuban
government, Title III is a violation of international law. In addition, the Act
of State Doctrine precludes U.S. courts from sitting in judgment on the
activities of the Cuban government conducted within its own territory.
Moreover, Title III violates the U.S. Constitution by its provision barring
U.S. courts from applying the Act of State Doctrine because of the
constitutional encroachment of power into the Executive and Legislative
branches of government resulting from the Judicial branch deciding issues
of foreign affairs.

Furthermore, even if it is possible that the United States has not
encroached upon international law, policy reasons suggest that enforcement
of the Act is not in the interest of the United States. This is because the
actual effects of Title III operate to create a loophole for the U.S. Trade
Embargo with Cuba for certain U.S. claimants. In addition, the original
purpose of the Act, to promote political reforms in Cuba, will not be
accomplished by Title III. Finally, negative policy implications of Title III
are apparent through proposed counter-measures the U.S.'s major allies are
in the process of instituting.

8. Quid Pro Quo, supra note 6, at 8.

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I. DESCRIPTION OF TITLE III

Title III of LIBERTAD provides a cause of action for U.S. nationals
whose property was confiscated in Cuba by the Cuban government. The law
states that "any person that, after the end of the 3-month period beginning
on the effective date of this title, traffics in property which was confiscated
by the Cuban Government on or after January 1, 1959, shall be liable to any
U.S. national who owns the claim to such property for money damages." 9

As well as attempting to protect U.S. nationals' property rights wrongly
taken by the Cuban government, the law extends to protect property rights
of American nationals who were Cuban nationals at the time their property
was confiscated. 10

LIBERTAD was enacted primarily to promote the transition from a
communistic Cuba to a democratic regime." Accordingly, Title III furthers

9. 22 U.S.C.A. § 6082(1)(A) (West Supp. 1997). 22 U.S.C.A. § 6023(12)(A) & (B)
(West Supp. 1997) define property as:

any property (including patents, copyrights, trademarks, and any other form of
intellectual property), whether real, personal, or mixed, and any present,
future, or contingent right, security, or other interest therein, including any
leasehold interest .... [Tihe term 'property' does not include real property for
residential purposes unless, as of the date of the enactment of this Act ... (i)
the claim to the property is held by a United States national and the claim has
been certified under Title V of the International Claims Settlement Act of 1949;
or (ii) the property is occupied by an official of the Cuban Government or the
ruling political party in Cuba.

A person "traffics" in confiscated property if:
that person knowingly and intentionally-- (i) sells, transfers, distributes,
dispenses, brokers, manages, or otherwise disposes of confiscated property, or
purchases, leases, receives, possesses, obtains control of, manages, uses, or
otherwise acquires or holds an interest inconfiscated property, (ii) engages in
a commercial activity using or otherwise benefiting from confiscated property,
or (iii) causes, directs, participates in, or profits from, trafficking (as described
in clause (i) or (ii)) by another person, or otherwise engages in trafficking (as
described in clause (i) or (ii)) through another person, without the authorization
of any United States national who holds a claim to the property.

22 U.S.C.A. § 6023(13)(A) (West Supp. 1997). See 22 U.S.C.A. § 6023(B) (West Supp.
1997) for a description of activities that do not constitute trafficking.

10. 22 U.S.C.A. § 16431 (West Supp. 1997) provides that in interpreting Title III of the
Act, a U.S. District Court may determine a claim resulting from the confiscation of property
by the Cuban government "whether or not the U.S. national qualified as a national of the
United States... at the time of the action by the Government of Cuba."

11. H.R. REP. No. 104-468, sec. 3, at 3 (1996). In addition, the congressional record
indicates that the purposes of LIBERTAD include:

[1] to assist the Cuban people in regaining their freedom and prosperity ... in
joining the community of democratic countries . . . ; [2] to strengthen
international sanctions against the Castro government; [3] to provide for the

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IND. INT'L & COMP. L. REV.

this objective by isolating foreign investment in Cuba and, thereby, applying
economic pressure on the country. Thus, by creating the opportunity for
property claimants to sue in U.S. courts under Title HI, the United States
accomplishes two objectives. First, it provides an opportunity for restitution
to U.S. nationals whose property was "wrongly" confiscated. But more
importantly, by doing so it also provides a jurisdictional means to impose a
secondary boycott on foreign countries, forcing them to partake in U.S.
isolationist foreign policy regarding Cuba or face U.S. sanctions.

II. HISTORY OF POLITICAL RELATIONS BETWEEN THE UNITED STATES AND
CUBA

The beginning of unstable U.S. relations with Cuba surfaced following
Castro's rise to power in 1959 after the fall of the Batista regime. 2 With
Castro's rise to power came a shift from a capitalist regime to one of
communism resulting in a decrease in U.S. involvement with Cuba in the
years to follow. 3 As part of the restructuring of the Cuban government after
Castro took power, the Fundamental Law of the Republic was adopted
providing a legal basis for Cuban confiscatory decrees. ' 4 Subsequently, the
Agrarian Reform Law was passed affecting foreign property owners by a
redistribution of land ownership in Cuba which provided compensation for
victimized land owners but was found compensatorily insufficient by the
United States.' 5 Additionally, in 1959 a mineral law requiring the re-
registration of mining claims and a petroleum law were adopted in Cuba.' 6

These enactments along with the increased trading relations between Cuba

continued national security of the United States in the face of continuing threats
from the Castro government of terrorism, theft of property from United States
nationals by the Castro government... ; [4] to encourage the holding of free
and fair democratic elections in Cuba . . ; [5] to provide a framework for
United States support to the Cuban people in response to the formation of a
transition government or a democratically elected government in Cuba; and [6]
to protect the Untied States nationals against confiscatory takings ... [of]
property... by the Castro regime.

Id.
12. ROBERT QUIRK, FIDEL CASTRO 209 (1993).
13. LOUIS PEREZ, JR., CUBA AND THE UNITED STATES: TIES OF SINGULAR INTIMACY

239-40 (1990). A reduction in U.S. imports occurred from $543 million in 1959 to $224
million in 1960. Id. at 240 (citing SUSAN SCHROEDER, CUBA: A HANDBOOK OF HISTORICAL
STATISTICS 433 (1982)).

14. Jonathon R. Ratchik, Cuban Liberty and the Democratic Solidarity Act of 1995, 11
AM. U. J. INT'L L. & POL'Y 343, 344 (1996).

15. Id. at 344-45.
16. Id. at 345

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and the Soviet Union led to increased tensions between Cuba and the United
States. 

17

In response to these rising tensions, the United States began reducing
its sugar quota from Cuba, and finally in 1960, Congress passed the
American Sugar Bill which totally eliminated the U.S. sugar quota.'"
Subsequently, the beginning of Cuban confiscation of U.S property began,
and Congress responded with the Foreign Assistance Act of 1961 which
authorized the President of the United States to impose an economic embargo
against Cuba.1 9 Thereafter, in 1962 President Kennedy, acting in accord
with the Foreign Assistance Act and the Trading with the Enemy Act,2'
instituted a complete trade embargo against Cuba. 21

In order to validate and certify property claims held by U.S. nationals
whose property had been wrongly confiscated by the Castro regime, the
United States amended the International Claims Settlement Act of 1948 to
provide a mechanism for U.S. nationals to file claims against the Cuban
government.' Despite this measure by the United States, Cuba failed to
satisfy any of these claims.2

17. Id. See also QUIRK, supra note 12, at 316-19 (The Soviet Union was providing
many economic benefits to Cuba.).

18. QuIRK, supra note 12, at 319.
19. Foreign Assistance Act of 1961, 22 U.S.C.A. § 2370(a)(1) (West Supp. 1997).
20. Jerry W. Cain, Jr., Extraterritorial Application of the United States' Trade Embargo

Against Cuba: The United Nations General Assembly's Call for an End to the U.S. Trade
Embargo, 24 GA. J. INT'L& COMP. L. 379, 381 (1994). The Trading with the Enemy Act
authorizes the President of the United States to impose sanctions against any country in time
of crisis. President Truman in 1950, pursuant to the Trading with the Enemy Act, "declared
a national emergency caused by what he perceived as a growing Communist threat." Id.
Then following the Foreign Assistance Act, President Kennedy in 1962 passed the economic
embargo with Cuba based on "the Truman proclamation of a national emergency." Id.

21. Proclamation [No.] 3447, 27 Fed. Reg. 1,085 (1962), reprinted in 31 C.F.R. § 515
(1996).

22. 22 U.S.C.A. § 1643 (West Supp. 1997). The statute defines U.S. nationals as "any
United States citizen; or (B) any other legal entity which is organized under the laws of the
United States. . . ." 22 U.S.C.A. § 6023(15)(A) & (B) (West Supp. 1997). However, under
Title III U.S. nationals, who at the time of confiscations of their properties were not U.S.
nationals are entitled to bring suit. 22 U.S.C.A. § 6083(c)(1) (West Supp. 1997).

23. Supporting Democracy in Cuba: Hearings on S. 381 and H.R. 927 before the Senate
Comm. on Foreign Relations, 104th Cong. (1995) (statement of Ignacio E. Sanchez, Atty.,
Kelley Drye & Warren) available in WESTLAW, 1995 WL 357720 [hereinafter Sanchez].
Total number of Cuban claims validated was 5911 at a total of 1.8 billion dollars. MICHAEL
W. GORDON, THE CUBAN NATIONALIZATIONS: THE DEMISE OF FOREIGN PRIVATE PROPERTY

153 (1976).

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IND. INT'L & COMP. L. REV.

III. ANALYSIS OF TITLE III AND ITS LEGALITY

A. Jurisdiction under Title III

International challenge to the legality of Title III (Act) has been
primarily based upon the theory that the United States does not have the
jurisdictional authority to prescribe law to those outside its borders.24 Title
M's paramount problem with respect to international law is that there are no
grounds for the U.S. courts to assert jurisdiction over U.S. nationals' claims
to expropriated property by the Cuban government with respect to the
statute. It is accepted doctrine that:

a state has jurisdiction to prescribe law with respect to:
(1) (a) conduct that, wholly or in substantial part, takes place

within its territory;
(b) the status of persons, or interests in things, present
within its territory ["territoriality principle"];
(c) conduct outside its territory that has or is intended to
have substantial effect within its territory ["effects
doctrine"];

(2) the activities, interests, status, or relations of its nationals
outside as well as within its territory ["passive personality
doctrine"]; and
(3) certain conduct outside its territory by persons not its
nationals that is directed against the security of the state or
against a limited class of other state interests ["protective
principle"].25

Since expropriation of property within Cuba clearly does not take place
in the United States, there can be no basis for jurisdiction under subsection
(1)(a) or (b). While the majority of those who support the Act assert the
existence of jurisdiction under subsection (c), the effects doctrine, it will be
suggested that even though effects within the United States may exist, those

24. David Fox, Washington Faces Renewed EU Attack Over Cuba, REUTERS FIN.
SERVICES, May 30, 1996. See also, Ratchik, supra note 14, at 364 n. 119 (citing Letter from
Wendy R. Sherman, Assistant Secretary of Legislative Affairs to Benjamin A. Gilman
Chairman, House Comm. on Int'l Relations (Apr. 28, 1995) reprinted in CUBA POLICY OR
CUBA FOLLY?: FACTS ABOUT THE HELMS-BURTON LEGISLATION TO TIGHTEN THE EMBARGO
AGAINST CUBA 5 (United States-Cuba Foundation & Cuban Committee for Democracy ed.,
1995) stating "LIBERTAD'S extraterritorial application would be difficult because it
transcends accepted international procedures and would be difficult to defend under
international law."

25. RESTATEMENT (THIRD) OF FOREIGN RELATIONS LAW § 402 (1987) [hereinafter
RESTATEMENT].

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CHALLENGING TITLE III oF LIBERTAD

effects are not reasonable, as required by internationally accepted doctrine
in order to prescribe jurisdiction. Furthermore, it will also be shown that the
doctrines of passive personality and protective principle are also
inappropriate means for asserting jurisdiction under Title III.

While it is accepted international doctrine that a state has jurisdiction
to prescribe law with respect to conduct or activities that have a substantial
effect within its territory,' that effect must be reasonable." However, even
when it may be reasonable for a state to exercise jurisdiction over a person
or activity "but the prescriptions by the two states are in conflict, each state
has an obligation to evaluate its own as well as the other state's interest in
exercising jurisdiction. "I If the other state's interest is greater than the state
considering exercising jurisdiction, then it should defer to that state.29

Some proponents of the Act claim that Title III's exercise of
jurisdiction does not violate international law because "the actual
implementation of the Act operates within the territorial boundaries of the
United States .... That is, Title I of the Act allows lawsuits only against
those traffickers who enter or operate within the U.S ...... 1 A careful
reading of the Act prescribes no such restrictions. Lawsuits are permitted
against "any person that ... traffics in property which was confiscated by
the Cuban Government."31 No language within the Act states that lawsuits

26. Id.
27. Reasonableness is defined by evaluating the following relevant factors:

(a) the link of the activity to the territory of the regulating state, i.e., the extent
to which the activity takes place within the territory, or has substantial, direct,
and foreseeable effect upon or in the territory;
(b) the connections, such as nationality, residence, or economic activity,
between the regulating state and the person principally responsible for the
activity to be regulated, or between the state and those whom the regulation is
designed to protect;
(c) the character of the activity to be regulated, the importance of regulation to
the regulating state . . and the degree to which the desirability of such
regulation is generally accepted;
(d) the existence of justified expectations that might be protected or hurt by the
regulation;
(e) the importance of the regulation to the international political, legal, or
economic system;
(f) the extent to which the regulation is consistent with the traditions of the
international system;
(g) the extent to which another state may have an interest in regulating the
activity; and
(h) the likelihood of conflict with regulation by another state.

Id. § 403(2).
28. Id. § 403(3)
29. Id.
30. Leigh, supra note 7.
31. 22 U.S.C.A. § 6082(l)(A) (West Supp. 1997).

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IND. INT'L & COMP. L. REv.

are allowed only against traffickers who enter or operate within the United
States.32 The Act states that U.S. courts have jurisdiction to preside over
U.S. nationals who have causes of action against any foreigners who are
trafficking in confiscated U.S. property, regardless of whether those alleged
traffickers are entering or operating within the United States.33

The other justification for jurisdiction over U.S. nationals' causes of
action under the Act is that the acts of foreigners trafficking in the
confiscated property have "substantial effects" within the United States. 34

These effects within the United States include economic effects from the
U.S. citizens injured as a result of the Cuban takings and subsequent
trafficking of taken property, the complication of potential future return of
these properties, and the undermining of U.S. foreign policy relating to free
commerce.35 While admittedly, there may be effects within the United States
from Cuban confiscation of U.S. citizens' property, this admission does not
automatically provide the United States with jurisdiction to intervene in
settling disputes with U.S. nationals and foreigners who are "trafficking" in
such property. The exercise of jurisdiction must additionally be reasonable
and if conflicting interests exist between the two states, the state with the
least interest should defer to the other state. 36

Because exercise of jurisdiction by the United States is not reasonable,
the United States should not review property claims in Cuba against
foreigners trafficking in such properties. First, such jurisdiction is not
reasonable because it prescribes law to territories outside its borders. The
"trafficking" by foreign nationals referred to in Title III occurs entirely
outside the borders of the United States. Secondly, such jurisdiction
prevents Cuba from developing and providing its own definition of
property.3 7 While the United States claims that it has a reasonable interest
in exercising jurisdiction in order to provide remedies to its nationals who
have been damaged by the trafficking,38 the purposes of the Act suggest that

32. id.
33. See Pascal Fletcher, Sherrit Snubs US and Sends its Men to Havana, FIN. TIMES,

Sept. 12, 1996, at 28 for an example of a Canadian mining group who has over 200m
(1 128.2m) dollars invested in Cuba in mining, oil, exploration, agriculture, and tourism and
has become the target of U.S. sanctions under the Act with no reference to whether the
Canadian company enters or operates within the United States.

34. See RESTATEMENT § 402(l)(c).
35. Leigh, supra note 7. See also Brice M.Clagett, Title III of the Helms-Burton Act is

Consistent with International Law, 90 AM. J. INT'L L. 434, 435-38 (1996).
36. RESTATEMENT § 403(3).
37. Ratchik, supra note 14, at 363. The Cuban Constitution provides that all property

belongs to the state. Sanchez, supra note 23 (citing ALBERT P. BLAUSTEIN & GISBERT H.
FRANZ, CONSTITUTIONS OF THE COUNTRIES OF THE WORLD: CUBA 9 (Pamela S. Falk ed. &
trans., 1993)).

38. See generally 22 U.S.C.A. § 6022(6) (West Supp. 1997).

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CHALLENGING TITLE III OF LIBERTAD

the real goal of the passage of the Act was to deprive the Cuban government
of foreign investment in an effort to force Cuba to return to a democratic
regime39 while incidentally providing relief to property claimants. This is
further evidenced by the fact that the law contains a provision to nullify all
U.S. claims in the event that Cuba begins actions to reverse its governmental
structure to a democracy.4 Congress, in offering the bill to the President to
sign, even acknowledged that jurisdiction under Title III was controversial
with respect to whether valid jurisdictional grounds existed and as a result,
offered the President discretion with regard to the implementation of its
provisions. 4' President Clinton has in fact delayed the implementation of
Title HI for six months and is likely to make further delays.42 Furthermore,
exercise of jurisdiction is not reasonable when taken in connection with
foreign allies who have an economic and trade interest in Cuba. Because of
Title HI's passage, worldwide criticism has evolved, and some of our closest
allies have even adopted counter-measures to rebut Title III's effect while
others continue to enact similar counter-measures believing that the
legislation is a violation of international law.43 Thus, it is not reasonable for
the United States to risk its foreign trade and economic relations with its
closest allies over a property issue unsettled as to its legality.

Additionally, the United Nations Charter suggests that it would be
unreasonable for the United States to exercise jurisdiction under Title III by
its firm position on abstaining from an activity that may have the effect of
impinging upon another state's sovereignty. For example article 1,
paragraph 2 of the United Nations Charter asserts that signatory nations are
held to "principles of non-intervention and both expressly and implicitly
forbid extraterritorial application of laws which would thereby violate
another country's sovereignty."" Furthermore, the United Nations Charter
commands that all members respect the sovereignty of all other signatory
nations.45 Such a strong position by the United Nations demonstrates, in an
international sense, that any overstepping of territorial jurisdiction will not
be tolerated.

While arguably the effects felt within the United States of Cuban
expropriation claims are to some degree existent, justification that an

39. 22 U.S.C.A. § 6022 (West Supp. 1997).
40. 22 U.S.C.A. § 6082(h)(1)(B) (West Supp. 1997).
4 1. European Commission President Jacques Santer Underlines EU's Deep Concern with

Helms-Burton Legislation to President Bill Clinton, EUR. UNION NEws (visited July 12, 1996)
< http://www.eurunion.org/eulnews/press/pr4l-96.htm >.

42. Jonathan Freedland, Clinton Likely to Hold Fire on Cuba, THE GUARDIAN, Nov. 12,
1996, at 12.

43. See Antidote Law Introduced to Combat Anti-Cuban Legislation, NEWS WAVES,
(visited Sept. 28, 1996) < http://www.southam.con/nmc/waves/depth/trade/cubamenu.html>.

44. Cain, supra note 20, at 386.
45. U.N. CHARTER art. 2, para 1.

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IND. INT'L & COMP. L. REV.

assertion of jurisdiction by the United States is reasonable is not strong
enough. A balancing test may be performed to weigh which sovereign may
more reasonably assert jurisdiction. In a narrow view, it may seem logical
that the reasonableness for asserting jurisdiction based on legitimate property
interests favor the United States;46 but, viewed in a broader international
scheme, that evaluation fails. It fails not only based upon the application of
strict adherence to the international view against extraterritorial jurisdiction,
but more importantly because of policy interests of both the United States
and third countries. The United States assertion of jurisdiction under Title
III affects worldwide trading partners with the United States as well as Cuba.
The position that Title II claims impose upon countries, especially those who
rely heavily on trade with Cuba, is unreasonable. These countries are
effectively being forced to not invest in Cuba or face sanctions imposed by
U.S. suits under Title III. Third countries that trade with Cuba are put in a
position of uncertainty and hesitation when considering purchasing Cuban
assets because the wrong purchase may subject them to a Title III suit. 47

More importantly, however, is the position in which the United States puts
itself while allowing such claims to proceed. No major ally of the United
States supports such action under Title III and furthermore, they vehemently
object to it.48 Not only is this opposition voiced by countries worldwide, but
some have instituted counter-measures to rebut the effect of Title III on their
respective nationals who stand to suffer under the legislation.49 These
countries assert that along with the exercise of extraterritorial jurisdiction,
Title III is also a restraint on free trade. These Title III effects on U.S.
relations with its major allies provide the strongest support that such an
assertion of jurisdiction by the United States under Title III is unreasonable.

Finally, U.S. Title III jurisdiction cannot be justified either under the
"passive personality" or "protective" principles. First, the passive
personality principle for asserting jurisdiction provides that "a state may
apply law-particularly criminal law-to an act committed outside its
territory by a person not its national where the victim of the act was its
national."50 Because this principle for jurisdiction has been increasingly

46. Clagett, supra note 35, at 436 (asserting that the balancing test results favor the
United States' assertion of jurisdiction over such claims).

47. ROBERT C. HELANDER, CREDITOR'S RIGHT: CLAIMS AGAINST CUBAN CONFISCATED
ASSETS IN INVESTING IN CUBA: PROBLEMS AND PROSPECTS 37, 42 (1994).

48. See Maria Sanz, U.S. Increasingly Isolated Over Cuba Policy, AGENCE FRANCE
PRESSE, Nov. 13, 1996; David Fox, Washington Faces Renewed EU Attack Over Cuba,
REUTERS FIN. SERVICE, May 30, 1996.

49. See Teresa Gutierrez, U.S. v. Cuba, Helms-Burton Act Arouses Worldwide Anger
(reprinted from July 25, 1996) < http://www.workers.org/cuba/helms.html >; Euro MPs Call
for Retaliatory Measures on Helms-Burton and Iran-Libya Sanctions, PR NEWSWIRE, July 10,
1996.

50. RESTATEMENT § 402 cmt. g.

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CHALLENGING TITLE III OF LIBERTAD

recognized in cases of terrorism and other types of organized attacks but not
in ordinary torts or crimes,"1 it is not applicable for justifying jurisdiction for
property claims of U.S. nationals.

Secondly, the protective principle is also an inapplicable basis of
jurisdiction under Title III. Under this principle of jurisdiction, the United
States can assert jurisdiction over those who are not its nationals but commit
offenses outside its territory when the offenses are "directed against the
security of the state" or threaten "the integrity of governmental functions that
are generally recognized as crimes by developed legal systems."52
Proponents of Title III argue that "Cuba-as a potential nuclear platform, a
source of terrorism and illegal immigration, and a scene of human rights
abuses" is a security threat to the United States.53 If the cause of action
under Title III was directed at specifically punishing activities by the Cuban
government relating to potential nuclear activities or acts of terrorism that
had occurred, jurisdiction may be justified. Title III, however, merely
provides a cause of action for U.S. nationals who were wronged by the
Cuban government through the confiscation of their property in Cuba.
Expropriating U.S. property in Cuba, while seemingly a wrong act, does not
directly threaten the security of the United States as would an act of
terrorism or potential nuclear activity. Note that the actual offense under
Title III is wrongfully expropriating U.S. property by the Cuban
government. The protective principle has traditionally been aimed at
offenses such as "espionage" that directly threaten U.S. security.54 Thus,
Cuba's nationalization of property does not rise to the level of an offense
that could create a national security threat to the United States necessary to
invoke the protective principle of jurisdiction.

Because none of the internationally recognized bases of jurisdiction
exist for adjudicating claims under Title III, application of the legislation is
a violation of international law. The only theory that arguably could apply
for justifying jurisdiction under Title III would be that the confiscation of
U.S. property had "effects" within the United States. However, these effects
are not substantial. More importantly, even though effects exist, assertion
of jurisdiction would not be reasonable primarily because of the
aforementioned policy reasons. Therefore, there is no jurisdictional grounds
for Title III, and thus, Title III constitutes a violation of international law on
the grounds of its extraterritorial application.

51. Id. Section 1202 of the Omnibus Diplomatic Security and Antiterrorism Act of
1986, 18 U.S.C. § 2231 (1994) illustrates how the United States has applied this jurisdictional
doctrine in the severe circumstances of terrorism. This particular Act makes it a crime to kill,
or attempt to conspire to kill a national of the United States outside U.S. territory.

52. RESTATEMENT § 402 cmt. f.
53. Leigh, supra note 7.
54. RESTATEMENT § 402 cmt. f.

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IND. INT'L & COMP. L. REV.

B. Act of State Doctrine and Constitutionality of Title III

In addition to the lack of a jurisdictional basis for adjudicating claims,
Title III is in direct conflict with the Act of State Doctrine which requires
every state to respect the independence of every other sovereign state.55

While proponents of the statute rely on the Hickenlooper Amendment56 to
demonstrate the inapplicability of the Act of State Doctrine in respect to U.S.
nationals' claims against the Cuban government for expropriated property,
questions remain unanswered as to how narrowly the Hickenlooper
Amendment was intended to be construed. Regardless, even if the
Hickenlooper Amendment does require holding the Act of State Doctrine
inapplicable to the claims addressed by Title III, the statute remains
unconstitutional due to the provision that mandates the Act of State Doctrine
to be inapplicable. This is because such provisions encroach upon authority
of the Executive and Legislative branches in foreign affairs. 7 Thus, it will
be suggested that Title III is inconsistent with the Act of State Doctrine as
well as the subject of "constitutional underpinnings."

The Act of State Doctrine (Doctrine) is a federal choice of law rule that
has the effect of precluding the application of U.S. law in favor of the
foreign law. 8 While the Doctrine has been recognized as early as 1674 in
England,59 the major modem U.S. case ruling upon the effect of the Doctrine
was Banco Nacional de Cuba v. Sabbatino. In Sabbatino, the Cuban
government, acting pursuant to Cuban Law 851 in issuing Executive Power
Resolution No. 1, expropriated all "property and enterprises, and ... rights
and interests arising therefrom, of certain listed companies," including a
company (C.A.V.) organized under Cuban law whose capital stock was

55. See Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398, 401 (1964).
56. 22 U.S.C.A. § 2370(e) (West Supp. 1997).
57. See U.S. CONST. art. II, § 1; U.S. CONST. art If, § 2
58. Frederic L. Kirgis Jr., Understanding the Act of State Doctrine's Effect, 82 AM. J.

INT'L L. 58, 58 (1988) (citing Louis Henkin, Act of State Today: Recollections in Tranquility,
6 COLUM. J. TRANSNAT'L L. 175 (1967)). See also Sabbatino, 376 U.S at 418 (citing Oetjen
v. Central Leather Co., 246 U.S. 297, 309 (1918))(stating the Act of State Doctrine:

does not deprive the courts of jurisdiction once acquired over a case. It requires
only that when it is made to appear that the foreign government has acted in a
given way on the subject-matter of the litigation, the details of such action or
the merit of the result cannot be questioned but must be accepted by our courts
.... To accept a ruling authority and to decide accordingly is not a surrender
or abandonment of jurisdiction but is an exercise of it.).

59. Donald T. Kramer, LL.B., Annotation, Modem State of the Act of State Doctrine,
12 A.L.R. FED. 707, 715 (citing Blad v. Bamfield (1674) 3 Swanst. 604, 36 Eng. Reprint
992).

60. Sabbatino, 376 U.S. at 398.

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CHALLENGING TITLE III OF LIBERTAD

owned principally by U.S. residents.6 C.A.V. was in the process of
shipping an order of sugar, placed by a U.S. broker, Farr Whitlock & Co.
(Farr), in the United States. The expropriation of the ship and its contents
occurred prior to its sailing from Cuba. After the expropriation the Cuban
government insisted that Farr re-contract with it for the sale of the sugar.
Following the sale of the sugar by the Cuban Government to Farr, C.A.V.,
the original owner, contacted Farr claiming it was entitled to the proceeds.
C.A.V. then proposed a deal whereby Farr would turn over the proceeds
from the sale to the rightful recipient, and in turn C.A.V. would reimburse
Farr for any expense as well as provide them with ten percent of the
proceeds as a bonus for cooperating. After refusing to turn over the
proceeds of the sale to the Cuban bank, a lawsuit in U.S. district court was
filed against Farr for return of the proceeds.

The district court, although recognizing the continuing vitality of the
Act of State Doctrine, found it inapplicable in the instant case because it
dealt with an alleged violation of international law.62 Subsequently, the
Court of Appeals for the Second Circuit affirmed the district court's ruling.63

Additionally, it held that the Bernstein exception, which provides for the
inapplicability of the Act of State Doctrine in instances where the Executive
branch clearly indicates that it does not object to a court's review of the
validity of a foreign state's act, was applicable.64 The Court cited two state
department letters that demonstrated the U.S. government had no objection
to the U.S. courts deciding the effectiveness of the Cuban expropriation
decrees. After reversing the decision of the court of appeals, the Supreme
Court applied the Act of State Doctrine and held that the validity of the
expropriation decrees could not be challenged by U.S. courts and must be
presumed valid.' In holding the Act of State Doctrine controlling, the Court
stated the famous words iterated in Underhill v. Hernandez that:

Every sovereign state is bound to respect the independence of
every other sovereign state, and the courts of one country will

61. Id. at 400-03. Because the Cuban government found the passing of the American
Sugar Act of 1948 which allowed the President of the United States to direct a reduction in the
sugar quota to be an act of aggression, the Cuban government adopted Law No. 851 that
authorized the Cuban President and Prime Minister to take counter-measures against the
United States. Pursuant to such authority, Executive Power Resolution No. 1 was issued
providing for the compulsory expropriation of certain U.S. property interests. Id. at 403 n.3.

62. Id. at 406.
63. Id. at 407.
64. Id. Bernstein letters are letters from the Department of State stating that a judicial

review of a foreign state's act would not disrupt foreign affairs or relations of the country.
The Bernstein Exception to the Act of state doctrine was first recognized in Bernstein v. Van
Heyghen Frerer, 163 F.2d 246, cert. den., 332 U.S. 772 (1947).

65. Sabbatino, 376 U.S. at 428.

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IND. INT'L & COMP. L. REv.

not sit in judgment on the acts of the government of another,
done within its own territory. Redress of grievances by reason
of such acts must be obtained through the means open to be
availed of by sovereign powers as between themselves. 66

The Court further explained that the underlying purpose of the
Doctrine is to avoid possible danger of destroying amicable relations and
peace between nations by disallowing one sovereign state to review and
perhaps condemn the actions of another state.67 In addition, the court
recognized that the Act of State Doctrine, while not required by international
law, does not forbid application of the Doctrine where the act in question
violated international law.68

Finally, it was acknowledged that while the Act of State Doctrine is not
required by the Constitution of the United States, it does have "constitutional
underpinnings. "I These constitutional underpinnings arise from the federal
separation of powers issue inherent in the nonapplication of the Doctrine and
the danger of different branches of government making decisions regarding
foreign affairs.' Historically, the Doctrine has expressed the "strong sense
of the Judicial Branch that its engagement in the task of passing on the
validity of foreign acts of state may hinder rather than further this country's
pursuit of goals both for itself and for the community of nations as a
whole." 7' Thus, it would be dangerous for the Judicial branch to make
decisions regarding the actions of other sovereign states since such decisions
may impede upon the power of the Executive branch in conducting foreign
affairs. For example, decisions made by the Judiciary could "interfere with
negotiations being carried on by the Executive Branch and might prevent or
render less favorable the terms of an agreement that could otherwise be
reached. "I

Although the Supreme Court's holding in Sabbatino contradicts the
effects of Title III, advocates of the law find support for its legality in the

66. Id. at 416 (quoting Underhill v. Hernandez, 168 U.S. 250, 252 (1897)).
67. Id. at 417-18 (citing Oetjen, 246 U.S. at 303-04).
68. Id. at 422.
69. Id.
70. Id.
71. Id. at 423.
72. Id. at 432. Such danger of interfering with the powers of the Executive branch could

arise where
the Executive branch has undertaken negotiations with an expropriating country,
but has refrained from claims of violation of the law of nations, a determination
to that effect by a court might be regarded as a serious insult, while a finding
of compliance with international law would greatly strengthen the bargaining
hand of the other state with consequent detriment to American interests.

[Vol. 7:2



CHALLENGING TITLE III OF LIBERTAD

Hickenlooper Amendment passed shortly after the decision in Sabbatino.7Y
The Hickenlooper Amendment to the Foreign Assistance Act of 1964
(Amendment) provides that:

no court in the United States shall decline on the ground of the
federal act of state doctrine to make a determination on the
merits giving effect to the principles of international law in a
case in which a claim of title or other right to property is
asserted by any party including a foreign state based upon a
confiscation or other taking after January 1, 1959, by an act of
that state in violation of the principles of international law .... I

In addition, the Amendment also provides that these provisions for
barring the Act of State Doctrine, however, are not applicable in any case
where the "President determines that application of the act of state doctrine
is required in that particular case by the foreign policy interests of the United
States and a suggestion to this effect is filed on his behalf . . . with the
court."I5 Thus, the Hickenlooper Amendment essentially only codified the
Bernstein exception to the Act of State Doctrine.

Despite the Hickenlooper Amendment, Title III is still in conflict with
the Act of State Doctrine and contains constitutional problems. It is
noteworthy that the purpose of the Hickenlooper Amendment was to
"reverse in part the recent decision of the Supreme Court in Banco de
National de Cuba v. Sabbatino."76 Thus, as a result, the Amendment was
intended to carry with it specific limitations. For example, the Amendment
is inapplicable where there is no violation of international law or where the
President declares his objection to its application in the interest of foreign
affairs.'7

First, Title III grants U.S. nationals who were Cuban nationals at the
time of the confiscation standing to bring suit as a U.S. citizen injured by the
Cuban expropriations.78 This provision in Title III, however, makes the
Hickenlooper Amendment inapplicable to these claims because Castro's
expropriations of Cuban nationals' property would not constitute a violation
of international law. It is an accepted doctrine that any acts of a sovereign
state "against its own nationals do not give rise to . .. [violations] of

73. Leigh, supra note 7.
74. 22 U.S.C.A. § 2370(e)(2) (West Supp. 1997).
75. Id.
76. S. REP. (Foreign Relations Committee) No. 1188 (1964).
77. 22 U.S.C.A. § 2370(e)(2) (West Supp. 1997).
78. 22 U.S.C.A. § 16431 (West Supp. 1997).

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IND. INT'L & COMP. L. REv.

international law."79 Thus, the Hickenlooper Amendment would be
inapplicable in such circumstances"0 and the Act of State Doctrine would
remain in full effect. Therefore, U. S. courts adjudicating these specific
types of claims under Title III would do so contrary to the Sabbatino decision
reached by the Supreme Court.

Secondly, while the Hickenlooper Amendment seems to overcome the
effect of the Act of State Doctrine, and thus quash arguments that U.S.
courts should decline to review actions based upon U.S. nationals' losses
from Cuban expropriated property, some authority suggests that the effect
of the Hickenlooper Amendment was intended to be much narrower.,
Specifically, it has been asserted that the Amendment (in reversing the
decision in Sabbatino) was limited to claims of title to American-owned the
property nationalized by foreign governments in violation of international
law when property or its proceeds are subsequently located in the United
States. For example, in Compania de Gas De Nuevo Laredo v. Entrex Inc.,
the court held that "the Hickenlooper Amendment is inapplicable because
neither the nationalized property nor its proceeds are located in the United
States." 2  This holding directly supports the proposition that the
Hickenlooper Amendment was intended solely to reverse Sabbatino because
Sabbatino specifically dealt with proceeds from a sugar sale that were in the
United States. Thus, authority supports the narrower interpretation of the
Hickenlooper Amendment. Because Title III claims do not require the
property or proceeds of the Cuban expropriations to be in the United States,

79. F. Palicio y Compania, S. A. v. Brush, 256 F. Supp. 481, 487 (S.D.N.Y. 1966);
see also Banco Nacional de Cuba v. Sabbatino, 307 F.2d 845, 861 (2d Cir. 1962) (stating that
"[aicts of a state directed against its own nationals do not give rise to questions of international
law."); United States v. Belmont, 301 U.S. 324, 332; Pons v. Republic of Cuba, 294 F.2d
925 (1961), cert. den., 368 U.S. 960 (1962). As a sovereign state, a government has a right
to appropriate private property for public property uses when there is a need for the public
welfare. The Navemar, 90 F.2d 673 (1937).

80. See 22 U.S.C.A. § 2370(e)(2) (West Supp. 1997).
81. See supra text accompanying note 82. See also Occidental v. Buttes Gas & Oil Co.,

331 F. Supp. 92, 112, aff'd, 461 F.2d 1261 (stating that the Act of State Doctrine exception
is "by its terms extremely narrow, and in all other cases the act of state doctrine remains the
law of the land").

82. 686 F.2d 322, 327 (5th Cir. 1982). The court in that case, analyzing the history of
the Hickenlooper Amendment, recalled the decision in Banco de National de Cuba v. First
National City Bank of New York, 431 F.2d 394, 399-402 (2d Cir. 1970), when Chief Judge
Lumbard, commenting on the legislative history of the Amendment, stated that "Congress
intended it to be limited to cases involving claims of title with respect to American owned
property nationalized by a foreign government in violation of international law, when the
property or its assets were subsequently located in the United States." Id. at 327 (emphasis
added). See also Menendez v. Saks and Co., 485 F.2d 1355, 1372 (2d Cir. 1973), rev'd on
other grounds sub nom.; United Mexican States Relator v. Ashley, 556 S.W.2d 784 (Tex.
1977).

[Vol. 7:2



CHALLENGING TITLE III OF LIBERTAD

the applicability of the Act of State Doctrine as enumerated by the Supreme
Court in Sabbatino is warranted; thereby, U.S. courts are barred from
judging the validity of such Cuban expropriation decrees.

Thirdly, and most importantly, the major issue confronting the validity
of Title III in relation to the Act of State Doctrine is its "constitutional
underpinnings." Because Title III mandates the inapplicability of the Act of
State Doctrine, it is unconstitutional due to conflicts with the separation of
powers of the U.S. federal government as proscribed in the U.S.
Constitution. Title III states that "[n]o court of the United States shall
decline, based upon the act of state doctrine, to make a determination on the
merits in an action."83 This provision is in direct conflict with the
Constitution of the United States because it puts the Judicial branch in a
position to directly encroach upon the Executive's constitutional power to
conduct foreign affairs. 4

The Supreme Court in Sabbatino found the Act of State Doctrine to
provide protection from the threat of "constitutional underpinnings" that
could arise between branches of government in a system of separation of
powers. 5 The Supreme Court stated that "the President alone has the power
to speak or listen as a representative of the nation. "86 This power reserved
to the President allows for one voice to represent the nation on the issue of
foreign affairs in an effort to provide a more effective and efficient method
for dealing with foreign states.87 The Court in Sabbatino was concerned
about the affect of dissimilar institutions [making and implementing]
particular kinds of decisions in the area of international relations.
Specifically, the concern lies in the Judicial branch passing upon decisions
of foreign acts that may "hinder rather than further this country's pursuit of
goals both for itself and for the community of nations" 8 The passing of
judgment on the acts of foreign states might interfere or worse yet embarrass
the President in his conducting of foreign affairs. Such a judgment by the
judiciary might occur when "such an impact would be contrary to our
national interest."89 For example, the President in negotiating for reform of

83. 22 U.S.C.A. § 6082(a)(6) (West Supp. 1997).
84. See U.S. CONST. art. II.
85. Sabbatino, 376 U.S. at 423.
86. United States v. Curtiss-Wright Export Corp., 299 U.S. 304, 319 (1936). See also

Oetjen v. Central Leather Co., 246 U.S. 297, 302 (1918) (stating that the "foreign relations
of our government is committed by the Constitution to the executive and legislative-'the
political'-departments of the government, and the propriety of what may be done in the
exercise of this political power is not subject to judicial inquiry."); Banco de Cuba v. Farr,
243 F. Supp. 957, 997 (S.D.N.Y. 1965) (referring to the Constitution's entrustment of foreign
affairs to the executive and legislative branches).

87. See Curtiss-Wright Export Corp., 299 U.S. at 319.
88. Sabbatino, 376 U.S. at 423.
89. Id. at 432

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IND. INT'L & COMP. L. REv.

the Cuban government may decide to suspend all existing claims.9° Clearly,
a judicial decision during such time would be contradictory to the exercise
of Executive authority in suspending such claims as well as serving as an
embarrassment and a possibly offensive act towards the expropriating
country.

The concern of Judicial encroachment upon the Executive branch is
also apparent in the Hickenlooper Amendment. At the same time the
Hickenlooper Amendment provided for the inapplicability of the Act of State
Doctrine, it also provided for an exception to this inapplicability by giving
the President final say in whether the courts would apply the Act of State
Doctrine in a given situation.9' This fallout provision provided a safeguard
to constitutional concerns of the judicial branch deciding on activities related
to foreign affairs by allowing the Executive to intervene and require the
Judicial branch to apply the Act of State Doctrine in times where there could
be national embarrassment because of dual policy. The problem with
LIBERTAD is that it does not provide such a fallout provision to ensure the
Executive has the final say as to foreign affairs decisions. Thus Title III, by
totally barring the application of the Act of State Doctrine could be
characterized as an unconstitutional prohibition upon the courts because it
violates the separation of powers doctrine.92

IV. PRACTICAL AND POLICY EFFECTS OF TITLE III

While Part II of this note suggests that no internationally recognized
grounds exist to assert jurisdiction under Title III, that the Act of State
Doctrine precludes adjudicating such claims, and that Title III is in violation
of the U.S Constitution, additional grounds dictate against implementation
of the Act. These grounds include the practical effects resulting from Title
III's implementation, including a loophole in the current trade embargo with
Cuba for certain claimants as well as promoting our own policy interests in
leading Cuba to a democratic political system. Additionally, policy concerns
exist regarding our relations with our major allies such as the European
Union, Canada, and Mexico.

90. See Dames & Moore v. Regan, 453 U.S. 654 (1981), where President Carter, as part
of the settlement of the hostage situation in Iran, took a number of actions affecting the claims
of American creditors against Iran including suspending all contractual claims pending in
American courts. The Supreme Court in that case held that the suspension of claims was
within the President's constitutional authority. Id.

91. 22 U.S.C.A. § 2370(e)(2) (West Supp. 1997) states that the Act of State Doctrine
would be applicable when the "President determines that application of the act of state doctrine
is required in that particular case by the foreign policy interests of the United States."

92. Banco National de Cuba v. Farr, 383 F.2d 166, 181(2d Cir. 1967).

[Vol. 7:2



CHALLENGING TITLE III OF LIBERTAD

A. Creation of a Loophole to U.S. Trade Embargo with Cuba

LIBTERTAD is not the appropriate mechanism for promoting a
democratic regime in Cuba. Proponents of the law stand firm on the theory
that tough sanctions imposed on foreigners trafficking in Cuba will serve as
a deterrent for international investment in Cuba, thereby isolating Cuba and
creating economic pressures.93 Such isolation and economic pressures,
proponents maintain, will further push Cuba towards a democratic
government. 4 However, Title III will far from have this effect and will
instead only play into the hands of Castro "by creating an expansive loophole
for property claimants, especially wealthy Cuban Americans, to circumvent
the embargo. "I

First, it is noteworthy to recognize that certain attorneys who represent
U.S. companies with major claims under Title M, such as the attorneys for
both the National Association of Sugar Mill Owners of Cuba, the Cuban
Association for the Tobacco Industry, and Bacardi rum company, were
instrumental in advising the drafters of LIBERTAD. 9  These advising
attorneys, whose present clients were victims of the Cuban government's
confiscation of U.S. nationals' property, intend to assert claims against their
respective traffickers. 97 While under Title Ill these attorneys are able to file
suit in US. district court on behalf of their clients against their foreign
traffickers, it is more likely that these parties will reach out-of-court
settlements. 9 The advantages of these settlements would include the

93. Clagett, supra note 35, at 435-36.
94. H.R. CONF. REP. No. 104-142, at E308-309 (1996) (statement of the Honorable

Jack Reed of Rhode Island in the House of Representatives) [hereinafter Reed Statement]. The
purpose of the legislation has been described as an effort to "discourage foreign business
investment in Cuba, thus undermining the island's financial recovery which, the bill's
supporters naively hope, will result in a collapse of the Castro regime." Id. at E309 (quoting
Louis F. Desloge, The Great Cuban Embargo Scam- A Little- Known Loophole Will Allow the
Richest Exiles to Cash In, WASH. POST, Mar. 3, 1996, at N07).

95. H.R. CONF. REP. No. 104-142, at E271-72 (1996) (statement of the Honorable
Doug Bereuter of Nebraska in the House of Representatives) [hereinafter Bereuter Statement]
(quoting Desloge, supra note 94, at N07).

96. Id. at E272.
97. Id. Gutierrez, one of the representative attorneys, had been quoted as saying that

he and his clients "are eyeing a Kentucky subsidiary of British-American Tobacco (B.A.T.)
that produces Lucky Strike cigarettes. B.A.T. has a Cuban joint venture with the Brazilian
firm Souza Cruz to produce tobacco on land confiscated from his clients." Id. In addition,
"Bacardi would be able to sue Pernod Ricard, the French spirits distributor, currently
marketing Havana Club rum worldwide. Bacardi claims that Pernod Ricard's rum is being
produced in the old Bacardi distillery in the city of Santiago de Cuba." id.

98. The Act permits settlements without the approval from the Unites States by
providing that "an action... may be brought and may be settled ... without obtaining any
license or other permission from an agency of the United States." H.R. 927 § 302(a)(7).
Thus, "[t]hese agreements do not need the blessing of the U.S. government. This is the

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IND. INT'L & COMP. L. REv.

opportunity for both parties to avoid prolonged litigation time and cost.
However, a likely result of these settlements would be to provide a profit
sharing agreement whereby the U.S. national would take a percentage of the
profits produced from the foreign national doing business in Cuba. 99

Therefore, the U.S. trade embargo would be circumvented by these
"certain" claimants that choose to take a portion of the profits of these
trafficking foreign investors rather than pursue full-scale litigation against
them in U.S. district court. Thus, a loophole to the U.S. trade embargo
against Cuba is created in Title III.1°° In addition, the legislation could

encourage a massive influx of new foreign investment in Cuba.
Armed with the extortionist powers conferred by the legislation,
former property holders could shop around the world for
prospective investors in Cuba and offer them a full release on
their property claim in exchange for a 'sweetheart' lawsuit
settlement entitling them to a piece of the economic action. Thus,
the embargo is legally bypassed and everyone laughs all the way
to the bank. 101

B. Not in Furtherance of Policy of the Embargo

Aside from the practical effects of creating a loophole for avoiding the
trade embargo with Cuba, Title III does not further the policy articulated in
LIBERTAD of leading Cuba to a democratic regime."°2 As stated in the
congressional record, the purpose of the act is to "take proactive steps to
encourage an early end to the Castro regime. " 1 The President's support for
LIBERTAD has been practically non-existent, until the unarmed civilian
aircraft was shot down.10' However in response to such a tragedy in an
election year, the President was persuaded to sign into law the Act which
includes, among other things, authorizing lawsuits against foreigners

million dollar loophole in Helms-Burton." Bereuter Statement, supra note 95, at E272.
99. Bereuter Statement, supra note 95, at E271-72.

100. Id.
The bottom line is that Clinton, in the name of getting tough with Castro, has
endorsed a bill that allows the embargo to be evaded and protects Cuban
Americans who want to legally cut deals to exploit their former properties in
Cuba while the rest of the American business community must watch from the
sidelines.

Id. at E272.
101. Reed Statement, supra note 94, at E309 (emphasis added).
102. H.R. REP. No. 104-202, at 22 (1995).
103. Id.
104. Greenhouse, supra note 2, at A8.

[Vol. 7:2



CHALLENGING TITLE III OF LIBERTAD

investing within Cuba. 5 As a result, "[tihe President has properly sought
and won international condemnation for an act that flouts international law
and norms," 06 thus strengthening his political support by those Americans
enraged by the hostile act as well as those Cuban Americans standing to vote
in the United States."7

Defenders of Title III look towards the protection of property interests
of U.S. nationals; however, a realistic look at the legislative intent of
LIBERTAD and the timing of its signing by the President suggest that the
real goal of Title III was not only to provide relief to property claimants
injured by the confiscation of their property in Cuba, but primarily to
institute an affirmative measure to economically isolate Cuba in pursuit of
leading it to a democratic system. 10 Such policy, however, does not justify
the United States' acquisition of jurisdiction over Title III claims illegally or
creation of an economic boycott restricting investment by foreigners in Cuba.
Proponents of Title III intend to accomplish their objective of leading Cuba
out of its communist regime and restoring fundamental human rights to its
people by economically isolating Cuba from its trading partners that replaced
the economic support the Soviet Union left behind when it overthew the
communish government. After articulating the effect property confiscation
had on its victims, Brice Clagett, a specialist in international law, articulates
the real motive of Title III:

[B]ecause of the proximity of Cuba to the United States and the
history of relations between the two countries, Cuba's
persistence in suppressing democracy, violating human rights
and refusing to satisfy international law claims against it has
substantial impact on the United States in a variety of ways ....
It [the United States] has reasonably concluded that discouraging
foreign investment in tainted Cuban property is an appropriate
and proportionate means toward that goal. 'I

To the contrary, evidence suggests that the effects of this isolation will
not have the intended effect and not further the legislative intent of the

105. David Fox, EU Counters Helms-Burton Act, REUTERS WORLD SERVICE, Oct. 28,
1996 (EU diplomats believe that Clinton signed the bill in order to retain the Presidency in
an election year and that it was a good probability that he will further suspend theAct in the
new year.).

106. H.R. REP. No. 104-142. at H1298 (1996) (statement of Mr. Skaggs-Illegal Cuban
Shootdown Warrants Punishment of Castro, But Not Despite Long-Term United States
Interests).

107. EU/US: EU Hopes Clinton Re-Election Will Smooth Relations, EUR. REPORT, Nov.
9, 1996.

108. Clagett, supra note 35, at 435-36.
109. Id.

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IND. INT'L & COMP. L. REv.

Act. 10 For example, Congressman Joe Moakley visited Cuba before the
enactment of LIBERTAD for the purpose of: (1) trying to find ways to
improve relations between the U.S. and Cuba; and (2) trying to seek out
ways to help and support the Cuban people and promote human rights."1

After meeting with a variety of people in Cuba, including Castro, top
government officials, church leaders, dissidents, foreign diplomats, U.S.
officials, and ordinary Cuban citizens, Moakley reported that "[t]he bill
[LIBERTAD] will not help Cuba's transition to a market economy and could
only retard the very forces of freedom and openness the United States wishes
to encourage"" 2

Furthermore, none of the U.S.'s major trading partners share the view
that "strangling the Cuban economy is the best way to promote democracy"
in
Cuba." 3 The general view among countries is that the effects of Title III
actually do not lead Cuba to democratic and economic reforms, but rather,
have an opposite effect by a "prompted wave of sympathy for Havana. ""14

The true consequences of Title III are to make "the Cuban dictator such [a]
welcome guest (around the world) [by] the US policy of blackballing him."" 5

In addition, Pope John Paul II, who helped defeat communism in his native
Poland and who has made efforts to help facilitate reforms in the Cuban
regime by increased dialogues, has publicly attacked Title III as a means of
thwarting these desired results."' Specifically, Pope John Paul II is
"convinced that a safe political climate must be created to ensure a peaceful
power transition to democracy in Havana, whenever it occurs, applying the
same successful philosophy and diplomacy he used with Moscow and Eastern

110. S. REP. No. 104-142, at S3408-3409 (1996) (statement of Mr. Simon).
111. H.R. REP. No. 104-142, at H877 (1996) (statement by Congressman Joe Moakley)

[hereinafter Moakley Statement].
112. Id. at H878.
113. EU Plans to Hit Back at US Over Cuba Laws on Point of Collapse, AGENCE FRANCE

PRESSE, Oct. 28, 1996. See also Marjorie Olster, U.S. and Spain Air Differences on Cuba,
THE REUTER EUR. Bus. REPORT, Nov. 17, 1996 (Spain, vehemently rejecting Title III
sanctions, also does not believe economic trade embargo and isolationist policies are way to
achieve political reform goals.).

114. Sanz, supra note 48; "We Exhort the Government of the United States of America
to Reconsider the Application of the Law," AGENCE FRANCE PRESSE, Nov. 12, 1996 (Spanish
Prime Minister, Jose Maria Aznar, stating his belief that the actual effect of Title III will be
the opposite of the effect the U.S. intends).

115. Sanz, supra note 48.
116. CNN World Today (CABLE NEws NETwoRK BROADCAST, Nov. 16, 1996). See also

Italy Says Castro is "Open to Dialogue" on Reforms, REUTERS FIN. SERVICES, Nov. 18, 1996
(Italian Foreign Minster Lamberto Dini also has been cited as saying that he has found Castro
open to dialogue regarding political reforms and human rights.).

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CHALLENGING TITLE III OF LIBERTAD

Europe.""I7 The only real effect of Title III will be to anger our closest allies
to the point that they institute countermeasures to rebut the effects of the
legislation and in the long run hurt U.S. interests. " 8

As the situation stands now, the restrictive policies against Cuba leave
the U.S. completely out of the picture as far as getting "serious about
improving relations [with Cuba]."119 Long-term economic opening and
continued engagement with Cuba by countries such as Canada and those in
the European Union and Latin America have led to positive political
developments such as: (1) "authorization of free trade zones" (allowing
some firms to contract their own labor rather than relying on the Cuban
government to supply it); (2) "the loss of full state control over the economy
and flourishing illegal markets;" and (3) "the government's authorization of
some self-employment and farmers' markets." 120 These advancements
evidence Castro's desire to "allow an economic policy shift despite his
distaste for capitalism."'"2 Thus, tightened economic policies may reverse
and certainly will not encourage any advancement on the part of the Cuban
government towards positive political developments.

In addition, the legislation has provided Castro with a tool to "rally
nationalist support," even from Cubans who otherwise oppose the
government's policies. More importantly, LIBERTAD has essentially sent

117. Tad Szulc, Clinton's Cuba Problem, INT'L HERALD TRIB., Nov. 12, 1996. Pope
John Paul H has begun an increased dialogue with Castro and strongly believes that the
Catholic Church is achieving more success towards political reform in Cuba than the U. S.
through all its economic sanctions. Id.

118. H.R. REP. No. 104-142, at E1247 (1996) (statement of the Honorable Lee Hamilton
of Indiana in the House of Representatives) [hereinafter Hamilton Statement]. Title III has
enraged the EU and major trading partners of the United States. In the United Nations
Assembly on Nov. 12, 1996, an overwhelming majority of countries present (137 countries)
voted against the 30-year economic embargo against Cuba and called for its lifting while only
three countries, including the United States, voted for the resolution. The results evidence the
strong opposition to isolationists polices against Cuba. UN General Assembly Condemns US.
Embargo Against Cuba, DEUTSCHE PRESSE-AGENTUR, Nov. 12, 1996.

119. Moakley Statement, supra note 111, at H878. Moakley even commented on how
the dissident groups in Cuba oppose LIBERTAD and stressed that the difficulties in Cuba run
much deeper than economic hardships. Id.

120. Hamilton Statement, supra note 118, at E1248.
121. Id. For example, see the Moakley Statement, supra note 111, at H877, noting

observations from his trip to Cuba that an explosion of independent enterprenuerships has
occurred in Cuba with roughly 208,000 independent family businesses operating in Cuba.
Thus, encouraging isolation not only from the United States but from other countries around
the world clearly could not be in the best interests of promoting the success of these newly
started independent businesses. Implication of such new entruenpenerships is clear because
people who are no longer dependent on the government for their jobs are free from economic
coercion. Moakley stated he sensed that the Cuban government recognizes that these small
businesses are necessary for the country's economic viability and are accepting the political
space they create. Id.

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IND. INT'L & COMP. L. REV.

the message to Cuba's government that "it could repress as it pleased
because there is no chance left of improving its relations with the United
States. "1 As a result, the Cuban government has no incentive to stop any
repressive treatment of its citizens that preceded the enactment of
LIBERTAD. 2 Therefore, the targeted economic effects of isolation that the
United States hoped to achieve in Cuba by imposing the threat of Title In
lawsuits on foreign companies will not be a catalyst to democracy. Rather,
results of Title III will be felt in the United States by an increased number of
lawsuits flooding our court system. 24

More important than not satisfying the policy goals of the Act,
LIBERTAD is "viewed by every major country as detrimental to its relations
with the United States."1'- Implementation of Title I will severely penalize
foreign companies for commercial conduct geared toward a third country and
in the process, will provoke trade conflicts with U.S. allies as well as
mandate secondary boycotts on other nations in violation of U.S. legislation
and policy. 26 Additionally, as will be discussed in the final section of this
note, Title III has led to the implementation of countermeasures by our
closest allies in an effort to reduce the effects of Title III lawsuits on their
nationals. 127

Despite U.S. efforts to economically isolate Cuba in passing
LIBERTAD, interest in Cuban investment and trade is on the rise. 12

1

Practically speaking, Title III will result in more harm than good to the
United States. As Foreign Investment Minister Ibrahim Ferradaz
commented, "US businessmen are the ones who are the first victims of the
law which stops them from investing in Cuba. They are the ones who have
to stand by and watch as others come in and do business, gain market shares
and go home with profits."' 29 Furthermore, LIBERTAD separates firms that
will engage in trade with Cuba by their size. "Large international

122. Hamilton Statement, supra note 118, at E1248.
123. Id. "Within ten days of President Clinton signing the Helms-Burton Act, General

Raul Castro launched attacks on various Cuban academic institutions and intellectuals, further
chilling public expression and curtailing academic freedom." d.

124. Id.
125. Id.
126. Id. at E1247-48.
127. Richard W. Stevenson, Canada, Backed by Mexico, Protests to US. On Cuba

Sanctions, N.Y. TIMES SERVICE (visited Sept. 28, 1996) < http://www.latinolink.com/news/
0313cuba.html >.

128. Cuba Thumbs Nose at US Sanctions with Bustling International Trade Fair, AGENCE
FRANCE PRESSE, Nov. 4, 1996. The Hectare-plus Havana International Trade Fair with
Castro and 336 Cuban companies at hand had around 1500 international companies open
booths at a trade fair in Cuba. By investing heavily in Cuba and taking an economic stake in
the country, foreign nations believe, "they have more of a chance to influence Castro on
change." Id.

129. Id.

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CHALLENGING TITLE III oF LIBERTAD

firms-because they are likely to do business with the United States-[may
be] discouraged from trading or investing in Cuba. But [the] smaller firms
that do not operate in the U.S. market arc not exposed to Helms-Burton
retaliation." 3' Thus, these smaller firms will find investment in Cuba
extremely attractive.

Supporting the proposition that Title III is contrary to U.S. policy
interests is strongly evidenced by a July, 1, 1996, letter written by the U.S.
Council for International Business' to the President of the United States
urging him to suspend the provision.3 2 The letter articulates the view of a
broad cross section of the business community including companies who
stand to acquire the legal right to sue under Title III. In expressing
opposition to Title III, the group addresses its position to the President by
stating:

Many of our member companies had property in Cuba that was
expropriated by the Castro regime. Yet, many of these
companies, constituting some of the largest certified claimants,
do not believe that Title III brings them closer to a resolution of
these claims. To the contrary, Title III complicates the prospect
of recovery and threatens to deluge the federal judiciary with
hundreds of thousands of lawsuit. These companies, Title III's
intended beneficiaries, support our view that Title III should be
suspended . . . . Finally, we believe that if Title III were to
become effective, it would drive a wedge between the United
States and our democratic allies that would significantly hinder
any future multilateral efforts to encourage democracy in Cuba

133

It is evident that the U.S. business community condemns Title III due
to concerns that the provision will "poison" the United States' trading
relations around the world.' Likewise, the U.S. Chamber of Commerce
has sharply criticized the use of trade sanctions to achieve foreign policy
objectives and believes the primary focus should be determining the cost to

130. Hamilton Statement, supra note 118, at E1248.
131. Others behind the letter include the National Foreign Trade Council, Organization

for International Investment, U.S. Chamber of Commerce, and the European-American
Chamber of Commerce. Hamilton Statement, supra note 118, at E1247-48.

132. H.R. REP. No. 142, at E1247-48 (1996) (The National Foreign Trade Council
letter).

133. Id. at E1248.
134. EU/US: Businessmen Forge Breakthrough on Testing, EUR. REP., Nov. 13,

1996.

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IND. INT'L & COMP. L. REv.

the U.S. economy.," Thus, U.S. policy interests with respect to protection
of property claims cannot be justified if beneficiaries of the legislation
denounce the legal measure intended to protect their interests. Aside from
certain claimants that have intentions of avoiding the trade embargo and
benefiting from settlement agreements with foreign nationals in Cuba
discussed later, support by potential claimants under Title III has not been
substantial as demonstrated by the U.S. Council for International Business
letter cited above. Thus, this letter suggest that U.S. nationals with property
claims in Cuba large enough to sue under Title III (greater than $75,0000 to
satisfy traditional federal diversity jurisdiction), do not maintain the belief
that threatening their foreign business partners with lawsuits is worth
destroying business relations with them in the long run. This letter,
combined with the legislative intent, provide support that U.S. policy interest
in compensating victims of Cuban property confiscations is secondary to the
U.S. policy interest of forcing Cuba to reform its government. Additionally,
"secondary boycotts to enforce policy goals . . . [through] unilateral
extraterritorial legislation does not promote international cooperation" '36 or
satisfy international legal principles. Solutions are only possible when
international legal principles are upheld.'37 Thus, policy interests, if entirely
based on Title III as a measure to lead Cuba to a democratic regime,
certainly do not justify jurisdictional and legal grounds for authorizing such
suits under Title III.

B. International Reaction to Title III and Prospective Enactment of
Countermeasures

While the U.S. supporters of LIBERTAD have attempted to defend the
legislation as not violative of international law, 3' allies of the United States
continue to protest the enactment of the law. Three major protesters of
LIBERTAD that vehemently assert opposition are Mexico, Canada, and the
European Union. The view taken by all those opposing the legislation is
well-represented by a statement from the European Union alleging that
enactment of the U.S. legislation would "represent the extraterritorial
application of U.S. jurisdiction and would restrict EU [European Union]
trade in goods and services with Cuba." 3 9

Since President Clinton signed LIBERTAD, anticipation has mounted
as to whether U.S. allies would officially enact counter-measures to combat

135. US Sanctions Laws Condemned, FIN. TIMES, Nov. 14, 1996.
136. European Business Concerned Over Helms-Burton Row, EUR. REP., Nov. 1, 1996.
137. Id.
138. See, e.g., Clagett, supra note 35, at 438.
139. Stevenson, supra note 127.

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CHALLENGING TITLE III OF LIBERTAD

Title III lawsuits against their nationals."4 Despite President Clinton's six-
month delay in instituting Title III lawsuits against foreign investors in Cuba
in order to persuade them to side with U.S. law, Canada has announced a
retaliatory measure to combat the effects of Title III. After announcing that
"the Helms-Burton law flies in the face of international legal principles," Art
Eggleton, the Canadian Minister of International Trade avowed to institute
an amendment to Canada's Foreign Extraterritorial Measures Act (FEMA)
to counter the effects of the Helms-Burton on Canadian companies. 1 ' The
amendment would in essence provide Canadian companies with more legal
authority to combat U. S. claims against it for its investment relations with
Cuba.

Specifically, the amendments to FEMA would give "Canada's
Attorney General the authority to forbid compliance in Canada with
extraterritorial measures that, in his view, infringe Canadian sovereignty. " "
Thus, the Canadian Attorney General could declare a judgment in a U.S.
court against a Canadian company as void and refuse to enforce the U.S.
judgment. In addition, the Canadian company who has a judgment and
award rendered against it in a U.S. court would also have a retaliatory action
to recover its loss from that award in the U.S. as well as court costs. 143

Lastly, FEMA penalties provided for in the amendment will also serve as a
deterrent for Canadian countries to abide by such foreign legislation as Title
III of LIBERTAD.

Other than government propositions to combat the causes of action
created under Title I, Canada is taking additional boycott measures against
the United States by discouraging holidays in Florida, a major revenue-

140. Europeans Try To Unify Against U.S. Actions, THE COM. APPEAL,
Sept. 10, 1996, at 8B.

141. FEMA was originally enacted in 1985 to protect Canadian interests against
extraterritorial measures. Canada Announces Measures to Combat Helms-Burton Act,
LATIN AM. LAW AND Bus. REP., July 31, 1996.

142. Id.
143. Hypothetically, the following is how the counterclaims would be instituted by

Canadian companies who have judgments rendered against them in U.S. courts:
(1) U.S. national X might win a suit against a Canadian, Y, in a U.S. court
under the Helms-Burton act.
(2) If the Canadian has no assets in the United States, the U.S. national would
have to ask a Canadian court to enforce the judgment. The Attorney General
of Canada could issue an order blocking this process.

The Canadian, Y, could choose to sue X in Canadian courts to recoup
the full amount of the award that X had won in the foreign court. This amount
plus courts costs in both countries would be applied against X's assets in
Canada. Thus, the Canadian proposed countermeasures would only be effective
as a remedy if the U.S. claimant has assets in Canada.

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IND. INT'L & COMP. L. REv.

producing industry in the United States.'" Thus, Canada is so enraged over
Title III that it is pursing any means necessary to send a signal to the United
States that it will not remain silent and tolerate what it considers a flagrant
extraterritorial assertion of jurisdiction by the United States. Recognizing
the harm imposed by Title III of LIBERTAD on its nationals, Canada's
response to the legislation has resulted in proactive measures against it.

European reaction to Title III, like Canada, has not been supportive.
The European Union, like the United States, maintains policy to promote
democracy and human rights in Cuba; however, it does not believe that suits
under the U.S. legislation will further that policy. Rather, the European
Union feels LIBERTAD will only have the effect of hurting European
businesses. 45 Based on its belief that suits under Title III are in violation of
international law as well as the interests of its businesses, the European
Union on October 28, 1996, reached political agreement on a draft of
legislation to "make it illegal for Europeans to obey Washington's anti-
Cuban Helms-Burton Act.'14 6 The Trade Commissioner for the European
Union, Sir Leon Brittan, declared that the decision was "an historic
breakthrough which shows we have the will and capacity to defend our
interests." 14 7 The agreement was solidified after much negotiation with
Denmark, who originally opposed it, but finally came to agreement when
convinced the counter-measures did not compromise national sovereignty. 14 8

The agreed upon legislation in the European Union has been
characterized as a "defensive law" rather than an "offensive law" 49 which
seeks to block the statute and protect against the "effects of application of the
extraterritorial legislation adopted by a third country.""' ° The legislation
offers European firms or individuals the opportunity to go in front of

144. David Ott, Flexing the Muscle to Defend a Stake in Treasure Island, THE
SCOTSMAN, July 16, 1996, at 12.

145. European Commission President Jacques Santer Underlines EU 's Deep Concern
With Helms-Burton Legislation to President Bill Clinton, EUR. UNION NEWS, (visited July 12,
1996) <http://www.eurunion.orgleu/news/press/pr4l-96.htm>.

146. Fox, supra note 105. The European Union has also filed a complaint as of October
29, 1996, with the World Trade Organizations, and an arbitration panel is scheduled to
convene on the matter on November 20, 1996. EU Response to US. Anti-Cuba Law, XINHUA
NEws AGENCY, Oct. 29, 1996.

147. Fox, supra note 105. Note that in response to the EU's actions, the United States
has commented that the "Europeans should pay more attention to human rights in Cuba rather
than taking retaliatory measures against the Helms-Burton Law." EU/US: Overcomes Danish
Reserve to Agree Cuba Retaliatory Measures, EUR. REP., Oct. 30, 1996.

148. EU Agrees Law to Counter U.S. Anti-Cuba Moves, THE REUTER EUR. Bus. REP.,
Oct. 28, 1996.

149. EU Response to Helms Burton Called "Defensive," THE REUTER EUR. Bus. REP.,
Oct. 29, 1996.

150. Conclusions of Oct. 28-29 General Affairs Council, THE REUTER EUR. COMMUNITY

REP., Oct. 30, 1996.

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CHALLENGING TITLE III OF LIBERTAD

European Union courts and make complaints against U.S. nationals who
have sued them over Cuban property claims. Such an opportunity provides
a means for the European companies to recoup the damages that U.S.
companies inflicted upon them acting pursuant to Title Mn. 51 In addition, the
European Union regulation allows for European companies to "launch
'clawback' counter-suits against the European subsidiaries of any companies
which seek to make use of the Act."5 2 Furthermore, the legislation forbids
cooperation by European companies with any court proceedings with regard
to Title III.13

Although the European Union and Canada have led the race among
other nations and have begun drafting legislation to combat the effects of
Title II, other nations are sure to follow due to their strong opposition to the
legislation and their support of those who have already begun instituting such
measures.

V. CONCLUSION

While the destruction of two U.S. unarmed civilian aircraft in an
international fly zone was an inexcusable act of the Cuban government, such
an act should not be the motive for enacting legislation that hurts major U.S.
allies and trading partners. Title III of LIBERTAD is a violation of
international law and, in light of policy considerations, is not in the interest
of the United States. First, there are no legal grounds for asserting
jurisdiction under the law: none of the internationally recognized forms of
asserting jurisdiction over territorial borders is applicable under Title III.
Doing so is a violation of extraterritorial jurisdiction as pronounced by our
closest allies. While the confiscation of U.S. property in Cuba may arguably
have some "effects" within the United States territory, those effects do not
rise to the level of reasonableness to justify asserting jurisdiction. Secondly,
the Act of State Doctrine, promulgated by the United States Supreme Court
forbids U.S. district courts from sitting in judgment on activities committed
by sovereign states. Even though the passage of the Hickenlooper
Amendment shortly after the decision in Sabbatino provided that U.S. courts
could hear property claims of U.S. citizens whose property was confiscated
by the Cuban government, some authority suggests that the Amendment was
to be interpreted narrowly. Thus, the Amendment was intended solely to
reverse the decision in Sabbatino where proceeds from the Cuban
confiscation were brought into the United States.

151. EU Response to Helms-Burton Called "Defensive", supra note 149.
152. US Hits back at Opposition to Anti-Castro Legislation, AGENCE FRANCE PRESSE,

Oct. 29, 1996.
153. Id.

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IND. INT'L & COMP. L. REv.

Regardless, Title III still presents constitutional problems since it
expressly requires U.S. courts to disregard the Act of State Doctrine. Such
a provision runs in the face of the U.S. Constitution's framework regarding
separation of powers and the power of the Executive and Legislative branch
to have final say regarding foreign affairs.

Aside from the blatant illegality of Title III, it does not achieve its
practical and policy objectives. By enabling claimants to settle with foreign
traffickers without a license from the U.S. government, a loophole is created
for certain property claimants to avoid the over three decade long U.S. trade
embargo imposed on Cuba. In addition, Title III will not achieve its policy
objectives of returning Cuba to a democratic regime. Economically isolating
Cuba, while angering U.S. allies and trading partners in the process, will not
promote human rights or further relations with our allies. Furthermore, such
policy objectives do not justify asserting extraterritorial jurisdiction on third
country defendants and placing a secondary boycott on our allies in order to
force U.S. policy on them.

By maintaining such a tough position against its allies as a result of the
legislation, the United States must now prepare to deal with anti-boycott and
counter-measure legislation from allied countries in opposition to Title III
who say it is a flagrant violation of international law. The United States will
also find itself defending its legislation in front of the World Trade
Organization pursuant to claims that have been filed against it for violation
of trade agreements.

Moreover, even if the United States can defend Title III, politically it
is not worth angering our closest trading partners to the extent that they go
to such extremes to implement measures to counter the effects of Title III
suits. The real issue that should be brought to bear upon Title III of
LIBERTAD is how it is affecting the United States' long-term relations with
important trading partners and world allies as well as the internal economic
ramifications that may result from Title III claims. Then the United States
must ask itself whether Cuba is really worth the inevitable political
ramifications that will erupt as a consequence of permitting Title III suits to
commence. Furthermore, history has indicated that thirty-nine years of trade
embargo and isolationist policy in Cuba has failed to produce the political
reforms sought. Aside from risking worldwide political condemnation for
implementation of Title III, the United States is unlikely to meet its objective
of political reform in Cuba by further isolationist policies.

Susan I. Long*

* J.D. candidate, 1998, Indiana University School of Law-Indianapolis.

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