Resolving Property Claims in a Post-Socialist Cuba

Fundamental disputes over major issues have plagued relations between the United States and Cuba since Fidel Castro's revolutionary government took power in 1959. The U.S. government has maintained a trade embargo against Cuba since 1962(1) and will not grant diplomatic recognition(2) until the Cuban government adopts meaningful political reforms, liberalizes its economy, and compensates expropriated U.S. entities and individuals who owned property in Cuba.(3) In recent years, due to the dramatic reduction in Russian financial support and the failure of many Cuban economic policies, the Cuban government has adopted certain limited economic reforms to attract foreign investment and promote economic growth.(4) During the summer of 1994, nearly forty thousand Cuban refugees fled Cuba and arrived in southern Florida.(5) As a result, the United States and Cuba undertook secret negotiations that produced an agreement to end the crisis.(6) More recently, the countries secretly negotiated an agreement that allowed nearly 21,000 Cuban refugees at the U.S. naval base in Guantanamo Bay to migrate to the United States and required the U.S. government to repatriate all future Cuban refugees who attempt to enter the United States illegally by sea.(7) By entering into this agreement, the U.S. government reversed a long-standing policy of providing political asylum to all Cuban refugees who fled Cuba.(8) Although the United States disavows any intention to grant diplomatic recognition to Cuba, these recent agreements portend a new and higher degree of cooperation between the two countries in resolving other festering issues.(9) Moreover, as Cuban economic and social conditions continue to deteriorate, the Cuban government has shown a willingness to adopt certain political reforms, should the United States end its trade embargo. These occurrences suggest that a major political transformation may occur in the near future.(10) As part of completing its transition into a post-socialist market economy, a future Cuban government must adopt a policy that, in some way, will address claims for expropriated property arising out of the 1959 revolution. In setting out a course of action to achieve this objective, the issues and problems that have confronted other post-socialist governments provide critical reference points. Some post-socialist states have enacted compensation laws that may violate international law by prohibiting specified groups of foreigners from asserting property, claims.(11) Some post-socialist states have enacted laws favoring restitution as opposed to compensation as a remedy for expropriated claimants, resulting in considerable confusion over who owns what property.(12) Based on these experiences, this Article assumes that a future Cuban government will provide some form of remedy - either restitution in kind or compensation - to expropriated property owners. In designing a program to reprivatize expropriated property, the relevant laws of the Cuban legal system and the rules of international law governing expropriation and compensation will be important for determining the degree to which, if at all, compensation or property is to be awarded to expropriated claimants.(13) In the event that a future Cuban government falls to comply with international law, it is reasonable to surmise that unsettled property claims will deter foreign investors from investing in Cuba, thereby causing the Cuban economy to suffer. This Article analyzes some of the major Cuban and international legal issues confronting U.S. and Cuban claimants whose property was expropriated by the Cuban government. Part II reviews the history of the Cuban nationalizations and examines the historical development of the property protection provisions of the Cuban Constitution. Part III analyzes the implications of deciding which Cuban legal system should apply to the claims of expropriated property owners. Part IV discusses the legal and procedural barriers to recovering expropriated property, focusing upon international law of claimant eligibility, abandonment of property, and compensation to expropriated investors. …