[Federal Register Volume 61, Number 97 (Friday, May 17, 1996)]
[Notices]
[Pages 24955-24957]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-12407]



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DEPARTMENT OF JUSTICE

[AG Order No. 2029-96]


Summary of the Provisions of Title III of the Cuban Liberty and 
Democratic Solidarity (LIBERTAD) Act of 1996

AGENCY: Department of Justice.

ACTION: Notice.

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SUMMARY: In accordance with the requirement of section 302(a)(8) of the 
Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of 1996, The 
United States Department of Justice is publishing this notice 
summarizing the provisions of Title III of the Act. Title III makes 
persons who knowingly and intentionally ``traffic'' in confiscated 
properties, as defined in the Act, subject to private civil damage 
suits in Federal district court.

EFFECTIVE DATE: This notice is effective May 17, 1996.

FOR FURTHER INFORMATION CONTACT:
David E. Bradley, Chief Counsel, Foreign Claims Settlement Commission, 
Department of Justice, Washington DC 20579, (202) 616-6975.

SUPPLEMENTARY INFORMATION: On March 12, 1996, President Clinton signed 
into law the Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of 
1996, P.L. 104-114 (also known as the ``Helms-Burton Act''). Title III 
of the Act discourages foreign investment in properties that were 
expropriated by the Cuban Government on or after January 1, 1959, 
without compensation, from persons who are now Untied States nationals. 
Title III makes persons who knowingly and intentionally ``traffic'' in 
such confiscated properties subject to private civil damage suits in 
Federal district court.
    The Act defines ``trafficking'' broadly, with several exceptions, 
as set forth below. A trafficker may be liable to the U.S. claimant for 
the value of the claim, plus interest, reasonable attorney's fees and 
court costs. In addition, under certain circumstances described below, 
a person who trafficks in U.S. claimed property may be liable to the 
claimant for triple the amount of the value of the claim, excluding 
interest, fees and court costs.
    Title III is scheduled to take effect on August 1, 1996. However, 
the law does not immediately permit U.S. claimants to bring suit to 
recover from traffickers. First, traffickers will have a three month 
``grace period'' beginning on the effective date during which they may 
dispose of their interest in the claimed property and avoid liability 
under Title III. Under the scheduled effective date, therefore, 
traffickers who dispose of their interests in confiscated property 
before November 1, 1996, will not be subject to liability to the owner 
of the claim. Second, until March 13, 1998, only those persons with 
claims that were certified by the Foreign Claims Settlement Commission 
(``FCSC'') may bring a Title III lawsuit. Third, the Act provides the 
President with the authority to suspend the effective date for six 
months, and for additional six month periods, if he determines 
suspension is necessary to the national interests of the United States 
and will expedite a transition to democracy in Cuba. Additional 
requirements and conditions are described below.
    Section 302(a)(8) of the Act requires the Attorney General to 
publish in the Federal Register not later than sixty days after 
enactment ``a concise summary of the provisions of this title, 
including a statement of the liability under this title of a person 
trafficking in confiscated property, and the remedies available to 
United States nationals under this title.'' This notice and the 
accompanying Summary of the provisions of Title III fulfill the 
Attorney General's obligations under this section. The Department has 
coordinated the issuance of this Summary with the Department of State.
    Interested persons should refer to the text of the Act itself or 
consult a private attorney for further information and clarification.
    For the reasons set forth in the preamble, and by the authority 
vested in me as Attorney general, I hereby issue the following Summary 
of the Provisions of Title III of the Cuban Liberty and Democratic 
Solidarity (LIBERTAD) Act of 1996:

Summary of the Provisions of Title III of the Cuban Liberty and 
Democratic Solidarity (LIBERTAD) Act of 1996

1. Liability Under Title III

    (a) Under section 302(a)(1) of Title III of the Cuban Liberty and 
Democratic Solidarity (LIBERTAF) Act of 1996 (hereinafter ``Title 
III'') subject to certain requirements, conditions, and possible 
suspensions, a United States national with a claim to property 
expropriated by the Government of Cuba on or after January 1, 1959, may 
bring a private lawsuit in U.S. federal district court against a person 
who trafficks in that property beginning three months after Title III's 
effective date. The scheduled effective date is August 1, 1996, subject 
to the President's authority to suspend Title III.
    (b) Section 4(13) of the Act defines a trafficker as a person who 
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 in confiscated property;
    (ii) Engages in a commercial activity using or otherwise benefiting 
from confiscated property; or
    (iii) Causes, directs, participates in, or profits from trafficking 
by another person, or otherwise engages in trafficking through another 
person, without the authorization of any United States national who 
holds a claim to the property.
    (c) Trafficking under section 4(13) does not include:
    (i) The delivery of international telecommunication signals to 
Cuba;
    (ii) The trading or holding of securities publicly traded or held, 
unless the trading is with or by a person determined by the Secretary 
of the Treasury to be a specially designated national;
    (iii) Transactions and uses of property incident to lawful travel 
to Cuba, to the extent that such transactions and uses of property are 
necessary to the conduct of such travel; or
    (iv) Transactions and uses of property by a person who is both a 
citizen and a resident of Cuba, and who is not an official of the Cuban 
Government or the ruling political party in Cuba.
    (d) Section 4(11) defines ``person'' for purposes of the Libertad 
Act as any person or entity, including any agency or instrumentality of 
a foreign state.
    (e) For purposes of Title III, ``United States national'' is 
defined under

[[Page 24956]]

section 4(15) to mean (i) any United States citizen, or (ii) any other 
legal entity which is organized under the laws of the United States, or 
of any state, the District of Columbia, or any commonwealth, territory, 
or possession of the United States, and which has its principal place 
of business in the United States.

2. Remedies Available Under Title III

    (a) Section 302(a)(1)(A) provides that, in addition to attorney's 
fees and court costs, a trafficker will be liable for money damages to 
the U.S. national who owns the claim to property being trafficked in 
the greater of the following amounts:
    (i) The amount certified by the Foreign Claims Settlement 
Commission (``FCSC'') plus interest;
    (ii) If the claim has not been certified by the FCSC, the amount 
determined by the court in the course of a Title III action, plus 
interest; or
    (iii) The fair market value of the property calculated according to 
either the current value of the property or the value of the property 
when confiscated plus interest, whichever is greater.
    Interest is to be calculated from the date of confiscation of the 
property involved to the date on which the action is brought.
    (b) Section 302(a)(2) establishes a presumption that the amount for 
which a person is liable to a U.S. national owning a claim certified by 
the FCSC is the amount so certified. This presumption will be 
rebuttable by clear and convincing evidence that one of the other 
measures of liability under section 302(a)(1)(A) is appropriate.
    (c) Under section 302(a)(3), a person who trafficks in property 
which either serves as the basis for a claim certified by the FCSC or 
is the subject of written notice at least thirty days before the 
initiation of an action will be subject to treble damages. Such 
person's liability, in addition to court costs and reasonable 
attorney's fees, will thus be triple the amount determined under 
section 302(a)(1)(A). The notice required under section 302(a)(3) must 
be in writing and be posted by certified mail or personally delivered. 
It must contain a statement of intention to commence a Title III action 
or to join the person as a defendant, the reasons for such action, a 
demand that the trafficking cease immediately, and a copy of this 
summary.
    (d) Under section 302(a)(7), a Title III action may be settled and 
a judgment enforced without obtaining any license or permission of an 
agency of the U.S. Government. This section does not apply to assets 
blocked pursuant to authorities under section 5(b) of the Trading With 
the Enemy Act that were being exercised on July 1, 1977. In addition, 
no claim against the Cuban Government will be considered a property 
interest the transfer of which requires a license or permission of an 
agency of the United States.

3. Requirements and Conditions for a Title III Action

    (a) Under section 302(a)(4), if the property was confiscated before 
March 12, 1996, the U.S. national bringing the claim must have owned 
the claim before March 12, 1996. If the property was confiscated on or 
after March 12, 1996, a U.S. national who acquires ownership of a claim 
to the property after its confiscation by assignment for value may not 
bring a lawsuit under Title III.
    (b) Under section 302(a)(5), a U.S. national who was eligible to 
file a claim with the FCSC but did not do so may not bring an action 
under this title. Where the FCSC denied a U.S. national's claim that 
now serves as the basis for a Title III action, the court hearing the 
action will accept the FCSC's findings as conclusive. A U.S. national 
bringing an action on the basis of a claim that was not certified by 
the FCSC may not file a Title III lawsuit until March 13, 1998. Any 
person bringing an action under Title III whose claim has not been 
certified by the FCSC has the burden of proving to the court that the 
interest in the property that is the subject of the claim is not the 
subject of a claim so certified.
    (c) Section 302(b) establishes that, in order for an action to be 
brought under Title III, the amount in controversy must exceed $50,000, 
not including interest, costs, and attorneys fees. This amount is 
exclusive of the increased liability damages under section 302(a)(3).
    (d) Under section 302(c), title 28 of the United States Code and 
the rules of court generally applicable to actions brought under 
section 1331 of title 28 govern the procedure to be followed in Title 
III actions. Service of process on an agency or instrumentality of a 
foreign state in the court of a commercial activity or against 
individuals acting under color of law shall be made in accordance with 
section 1608 of title 28 of the United States Code.
    (e) Under section 302(d), any judgment entered under Title III 
shall not be enforceable against an agency or instrumentality of either 
a transition government in Cuba or a democratically elected government 
in Cuba.
    (f) Section 302(e) amends section 1611 of title 28 of the United 
States Code by adding a new section, which states that the property of 
a foreign state shall be immune from attachment and from execution in 
an action brought under section 302 to the extent that the property is 
a facility or installation used by an accredited diplomatic mission for 
official purposes.
    (g) Under section 302(f)(1), a U.S. national who brings an action 
under Title III may not bring any other action seeking monetary or 
nonmonetary compensation by reason of the same subject matter.
    (h) Section 302(f)(2)(A) establishes limits on further recovery by 
a U.S. national with a FCSC-certified claim depending on whether such 
Title III action leads to a recovery of a greater, equal or lesser 
amount than certified by the FCSC. If the claimant's recovery under 
Title III is equal to or greater than the amount certified by the FCSC, 
the U.S. national may not recover any payment on the claim under any 
claims settlement agreement between the United States and Cuba. If the 
U.S. national in a Title III action recovers less than the amount 
certified by the FCSC, the U.S. national may only receive payment in 
any claims settlement agreement between the United States and Cuba to 
the extent of the difference between the certified claim and the 
recovery. If there is no recovery, the U.S. national may still receive 
payment in a claims settlement agreement between the United States and 
Cuba and will be treated as any other certified claimant who does not 
bring an action under Title III.
    (i) Section 302(f)(2)(B) provides that in the event some or all 
Title III actions are consolidated by judicial or other action so as to 
create a pool of assets available to satisfy such claims, FCSC-
certified claims will be entitled to payment in full from such pool 
before any payment is made from such pool with respect to any claim not 
so certified.
    (j) Under section 302(g), if the United States and the Government 
of Cuba reach a claims settlement agreement settling FCSC-certified 
claims, any amount paid by Cuba in such an agreement in excess of the 
payments made under section 302(f)(2) shall be deposited in the U.S. 
Treasury.
    (k) Under section 302(h), the rights created pursuant to Title III 
may be suspended upon a presidential determination under section 203 
that a transition government in Cuba is in place and may be terminated 
upon a presidential determination that a democratically elected 
government in Cuba is in power. Neither of these actions shall affect 
suits commenced before the dates of suspension or termination. While 
pending suits may proceed to judgment, such judgments

[[Page 24957]]

will not be enforceable against a transition or democratically elected 
government in Cuba under section 302(d).
    (l) Claimants bringing an action under Title III will be required 
to pay a uniform filing fee, to be established by the Judicial 
Conference of the United States, pursuant to section 302(i).
    (m) Section 302(a)(6) provides that no court of the United States 
shall decline, based upon the act of state doctrine, to make a 
determination on the merits in an action brought under Title III.
    (n) Section 305 provides that actions under section 302 may not be 
brought more than two years after the trafficking giving rise to the 
action has ceased to occur.

4. Proof of Ownership of a Claim to Confiscated Property

    (a) Section 303(a) provides that certification of a claim by the 
FCSC is conclusive proof of ownership. In all other cases, the court 
has the discretion to appoint a special master, including the FCSC, to 
make determinations of the amount and ownership of the claim. 
Determinations made by administrative agencies or courts of a foreign 
government or international organization shall not be conclusive unless 
made pursuant to binding international arbitration to which the United 
States or the claimant submitted the claim.
    (b) Section 303(b) amends the International Claims Settlement Act 
of 1949 by authorizing a U.S. district court to refer to the FCSC 
factual questions under Title III involving the amount and ownership by 
a U.S. national of a claim to confiscated property in Cuba.

5. Consistency With International Claims Practice

    (a) Section 303(c) emphasizes that nothing in the LIBERTAD Act 
shall be construed to require or otherwise authorize the claims of 
Cuban nationals who became U.S. citizens after their property was 
confiscated to be included in a future negotiation and espousal of U.S. 
claims with a friendly government in Cuba when diplomatic relations are 
restored. Section 303(c) also states that the LIBERTAD Act shall not be 
construed as superseding, amending, or otherwise altering 
certifications that have been made under the FCSC's Cuba Claims 
Program.
    (b) Section 304 amends the International Claims Settlement Act of 
1949 to state that no person other than a certified claimant shall have 
a claim to, participate in, or otherwise have an interest in the 
compensation proceeds paid to a U.S. national by virtue of a certified 
claim.

6. Presidential Suspension Authority

    (a) Section 306(a) provides that, subject to the President's 
suspension authority, Title III takes effect on August 1, 1996.
    (b) Section 306(b) provides the President with the authority to 
suspend the effective date of Title III beyond August 1, 1996, for up 
to six months, and for additional extensions up to six months, upon a 
determination and report to the appropriate congressional committees 
that a suspension is necessary to the national interests of the United 
States and will expedite a transition to democracy in Cuba. An initial 
determination and report must be submitted to the appropriate 
congressional committees at least 15 days before August 1, 1996. 
Additional suspensions or extensions are subject to the same reporting 
and determination requirements.
    (c) Section 306(c) provides the President with the authority to 
suspend the right to bring an action under Title III after its 
effective date for up to six months, and for additional extensions up 
to six months, upon a determination and report that a suspension is 
necessary to the national interests of the United States and will 
expedite a transition to democracy in Cuba. Section 306(c) also 
emphasizes that after the effective date no persons may acquire a 
property interest in any potential or pending Title III action, nor 
shall pending actions commenced before the date of suspension be 
affected by a suspension.
    (d) Section 306(d) provides that the President may rescind any 
suspension made under section 306(b) or section 306(c) upon reporting 
to the appropriate congressional committees that doing so will expedite 
a transition to democracy in Cuba.

    Dated: May 11, 1996.
Janet Reno,
Attorney General.
[FR Doc. 96-12407 Filed 5-16-96; 8:45 am]
BILLING CODE 4410-01-M