WRITTEN QUESTION E-2166/98

by Jesús Cabezón Alonso (PSE) to the Commission

(13 July 1998)

Subject: Aid to European businesses investing in Cuba

May one deduce from the agreement concluded between the European Union and the United States to solve the problem of the extraterritorial applicability of US laws (the Helms-Burton law) that European businesses investing in Cuba will not be sanctioned by the United States but that, on the other hand, they will not be able to obtain any kind of aid, co-financing or loan from the European Union?

Answer given by Sir Leon Brittan on behalf of the Commission

(4 September 1998)

The Commission would refer the Honourable Member to its joint answer to written questions E-1343/98 and E-1344/98 by Mr Sanchez-Neyra(1), to the replies it gave to oral questions H-0573/98 by Mr Marset Campos during question time at Parliament's June 1998 part-session(2) and to its reply to oral question H-0664/98 by Mr Lannoye during question time at Parliament's July 1998 part session(3) for a detailed explanation of the main elements of the agreement reached between the Community and the United States at the summit in London on 18 May 1998.

The Commission's objective in its contacts with the United States leading to both this understanding and that of April 1997 was to ensure that Community companies are not subject to the extraterritorial provisions of the Helms-Burton Act. The Commission has always made clear that any application of those provisions of the Act would lead to a resumption of WTO dispute settlement proceedings.

Regarding the understanding with respect to disciplines for the strengthening of investment protection, its objective is to inhibit and deter future investment in property illegally expropriated by a third country, by means of a set of investment disciplines.

It is clear that legal certainty concerning the illegality of the expropriation is the key element for these disciplines to be applied. That is why the specific disciplines enumerated in the understanding will only apply to investment in specific properties if either an international arbitral tribunal or a local court of the expropriating state, in a final decision, have ruled that an expropriation has been in contravention of international law; or in cases where an expropriating state does not offer any legal remedy, it has been concluded that there is a claim well-founded in law and fact that the expropriation was illegal under international law; or in case of mass expropriations, a participant comes to the view that an individual property for which an investor has applied for government commercial assistance was expropriated in contravention of international law.

Only under these circumstances is it envisaged that the participating governments will make joint or co-ordinated diplomatic representations to the expropriating state; deny government support for covered transactions in illegally expropriated properties; deny governmental assistance for covered transactions in illegally expropriated properties; and publish an enumeration of illegally expropriated properties and make public statements discouraging covered transactions in the properties enumerated. Investments made before 18 May 1998 will not be affected by the agreed disciplines.

The full implementation of this understanding depends, inter alia, on the support of the American Congress. The Community and Member States as well as the United States will, however, implement the deal once the presidential waiver authority under Title IV of the Helms-Burton Act is adopted and exercised allowing European companies to operate without the threat of sanctions under the Helms-Burton Act.

(1) OJ C 386, 11.12.1998.

(2) Debates of Parliament (June 1998).

(3) Debates of the Parliament (July 1998).