The Helms-Burton Act of 1996 codified the economic measures that had been directed against Cuba since the Kennedy administration. The measures seek to suffocate the Cuban Revolution and to effect political change in Cuba. The Law allows the termination of these coercive economic measures when Cuba becomes democratic, granting the U.S. government the right to determine whether or not democracy exists in Cuba.
The Helms-Burton Act is widely interpreted as a violation of the UN Charter on two grounds. First, the UN Charter prohibits coercive economic measures against nations in order to attain political ends. Secondly, the Charter affirms the principle of the sovereignty of nations, and it does not allow for one nation to be the ultimate authority on the legitimacy of the political system of another.
Title III of the Helms-Burton Act permits any U.S. citizen or entity, whose property was expropriated by the government of Cuba, to file suit in U.S. courts against companies engaging in commercial activities related to the expropriated property. The Act has an extraterritorial character, in that it allows the filing of suits against foreign companies. In reaction, the European Union, the United Kingdom, Mexico, Canada, and Cuba have adopted resolutions and laws that are designed to counter Helms-Burton.
The Act gives the President the authority to suspend the implementation of Title III for up to six months, if would be in the national interest. All presidents from Clinton to Obama have suspended the implementation of Title III on a continuous basis, concerned with backlash from trading partners and allies that do business in Cuba. The Trump administration, however, recently has changed the implementation policy of more than two decades. The full implementation of Title III has been in effect since May 2, 2019.
The Helms-Burton Act refers to Cuban “confiscations,” thus obscuring important legal and moral distinctions. In the first place, there is the distinction between confiscation and nationalization. Confiscation refers the seizing of assets by the state, without compensation, because the owner had obtained the property illegally or had been found guilty of some other criminal behavior. On the other hand, nationalization refers to appropriation with compensation, undertaken for reasons of social utility or public benefit. In addition, there is the distinction between foreign properties and properties held by nationals, which have entirely different political, moral, and legal contexts.
On the basis of these distinctions, we can discern three types of property appropriations in Cuba from 1959 to 1962. (1) The first appropriations of property in 1959 were confiscations in response to criminal behavior. From 1902 to 1959, corruption was rampant in Cuba, as government officials used their positions to enrich themselves. Presidential candidates who promised reform were elected, but the administrations of the “reformist” presidents were notorious for their rampant corruption. With the Batista coup d’état of March 10, 1952, political repression was added to the historic pattern of corruption. Leaders of workers, students, and political organizations were arrested and tortured; and in the rural areas, peasants were subjected to brutal and repressive treatment by the army. The Batista dictatorship enlisted the support of political parties and politicians in serving in the legislative and executive branches, who thus gave legitimacy to corruption, repression, and brutality.
Following the triumph of the Revolution on January 1, 1959, the Revolutionary Government responded to the popular outcry for justice by developing Revolutionary Tribunals and confiscating properties. With respect to the latter, the Revolutionary Government on February 28, 1959 approved a law proposed by the Minister of the newly created Ministry for the Recuperation of Embezzled Public Funds. The Law authorized the confiscation of the property of certain persons, all of whom were Cuban nationals: Batista and his collaborators; officers of the armed forces who had participated directly in the coup d’état of March 10, 1952; ministers of the Batista government during the period 1952-1958; members of the spurious congress of 1954-58; and candidates in the sham elections of 1958. The revolutionary leadership believed that the corruption prior to the Batista dictatorship with justice could be addressed, but doing so would cast an impractically wide net, and the focus on the corruption and brutality of the Batista regime would be sufficient to satisfy the popular demand. In accordance with the Law, the Ministry for the Recuperation of Embezzled Public Funds carried out confiscations, and it turned the properties over to appropriate state institutions, such as the National Institute of Agrarian Reform.
Article 24 of Law 851 of July 6, 1960 superseded and expanded the February 28 law by including counterrevolutionary crimes and activities, which were activities that today would be described as terrorism, inasmuch as they included violence against civilians and sabotage, for the most part carried out with the support of the U.S. government. Law 851 authorized confiscation with respect to real estate owned by: Batista and his collaborators; persons who had committed crimes against the national economy or the public treasury, or who had used a public office to enrich themselves illicitly; and persons who had committed counterrevolutionary crimes (as defined by law), had abandoned the country in order to escape punitive action by the Revolutionary Tribunals, or had abandoned the country in order to carry out conspiracies against the Revolutionary Government.
The confiscated properties have been used as public buildings, such as primary schools, day care centers, medical clinics, multiple housing units, and embassies. Members of the Council of Ministers did not personally benefit from the confiscations.
(2) The second type of appropriation was the nationalizations of foreign properties in Cuba. Nationalization of foreign property was a necessary precondition for Cuban attainment of true sovereignty. Cuba at that time faced a situation in which most agricultural land was in foreign hands, and there was high concentration of land ownership. Addressing this structural problem in the Cuban economy, the Revolutionary Government on May 17, 1959 emitted an Agrarian Reform Law that nationalized large-scale agricultural lands, making no distinction between foreign and national ownership, and providing for compensation in the form of “Agrarian Reform Bonds” that were to mature in twenty years.
In addition, banks, electricity and telephone companies, gasoline refineries, mining companies, and importing companies were under foreign ownership. In response, the Revolutionary Government on July 6, 1960 emitted Law 851, authorizing nationalization of U.S. properties. The Law established compensation through government bonds, and it required the Cuban government to contribute to a compensation fund through bank deposits equal to 25% of the value of the U.S. purchase of Cuban sugar in excess of the sugar quota. On the basis of Law 851, the Revolutionary Government emitted three resolutions on August 6, September 17, and October 24, 1960, nationalizing all 197 U.S. companies in Cuba. These decisive steps struck at the heart of the Cuban neocolonial condition. They intended not the severing of relations with the United States but transformation of the Cuba-USA political-economic relation from exploitation and domination to cooperation and mutual respect.
The U.S. government, however, refused to cooperate with the Cuban quest for sovereignty. Rather than financing compensation through an increase in the U.S.-Cuba sugar trade, the U.S. government reduced sugar purchases to a level below the sugar quota. At the same time, the U.S. government refused to negotiate with the Cuban government a mutually satisfactory agreement with respect to compensation for U.S. proprietors who were adversely affected by the Cuban nationalizations. The U.S. government stood out in this regard, inasmuch as the governments of France, Switzerland, the United Kingdom, Canada, and Spain negotiated agreements with the government of Cuba with respect to demands of their citizens resulting from the Cuban nationalizations. The USA was not interested in negotiating reasonable compensation; its political agenda was regime change, which it sought to attain through what Cuba has described as terrorist activities and economic aggression.
In 1974, the General Assembly of the United Nations affirmed the right of states to nationalize properties, declaring that nationalization is an indispensable precondition for national sovereignty over natural resources. It further declared that no state should be subjected to coercion in response to its exercising this right of nationalization. The “Declaration on the Establishment of a New International Economic Order” affirmed the:
Full permanent sovereignty of every State over its natural resources and all economic activities. In order to safeguard these resources, each State is entitled to exercise effective control over them and their exploitation with means suitable to its own situation, including the right to nationalization or transfer of ownership to its nationals, this right being an expression of the full permanent sovereignty of the State. No State may be subjected to economic, political or any other type of coercion to prevent the free and full exercise of this inalienable right.
However, the Cuban industrial bourgeoise was unable to transform itself from a figurehead bourgeoisie effectively directed by U.S. capital to an independent national bourgeoisie allied with a popular revolutionary project. The members of national industrial bourgeoisie increasingly emigrated, abandoned management of their companies, sabotaged production, and/or participated in criminal counterrevolutionary activities. In response, the Revolutionary Government took measures that the circumstances required. On October 13 and October 14, 1960, more than twenty-one months after the triumph of the Revolution, the government authorized the nationalization, with compensation, of Cuban-owned properties in big industry, commerce, banking, and housing. By mid-1961, virtually all of the big industrialists had left the country. Further nationalizations were implemented from June 30, 1961 to July 27, 1962, thus completing the liquidation of the national bourgeoisie as a class and the incorporation of big industry and commerce into the structures of the state.
The nationalization of Cuban big industry and commerce was not the initial plan of the Cuban Revolution. It was an adaptation to the reaction of the Cuban national bourgeoisie, which found itself politically and ideologically incapable of finding common cause with the revolutionary project in a quest for autonomous economic development.
For further discussion on the Cuban nationalizations, please see my articles recently published in Counterpunch: “The Cuban Nationalization of US Property in 1960: The Historical and Global Context” and “The Cuban Revolution and the National Bourgeoisie.”