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politics

The other shoe drops on Cuba

In a previous post I worried about the ramifications of a shift backwards in US policy towards Cuba and how it could affect Canadian businesses.

Essentially the unwinding of Obama era shifts meant than Canadian (and other nations’) businesses could be sued if they did any business with any Cuban entity associated with the Cuban military. And that covers more business than you’d think – most of the hotels for instance. An additional complication is a Canadian law, Foreign Extraterritorial Measures (United States) Order, which ” bars Canadian companies from complying with any U.S. law that seeks to limit their business dealings with Cuba.” And the Canadian business person could face prison time.

In 1996 the Helms–Burton Act was passed. Title III allowed Americans to sue companies from other countries that operate out of properties and facilities that the Castro government seized (nationalized) after the revolution. This was originally intended to target European companies but every president since has chosen not to enforce Title III so as to keep trade between the US and others unencumbered and unaffected by the legal morass that would happen if the law were enforced.

Well the current president has decided it is time to take that step . . . and as unpredictable as he may be the reactions to this are predictable. Canada and others are pushing back.

But how effective that might be is another matter – lawsuits in US courts against non-US entities are possible. Let’s say a Cuban exile family sues a Canadian company doing business, and making a profit, with an arm of the Cuban military that operates an economic entity that was nationalized by Castro. Canada will take any judgement US courts levy out of the assets of US interests in Canada . . . but if the entity bringing suit (a family) has no assets in Canada then what else can Canada do? As I point out in my previous post how bad it could get would be whatever US courts decide to do. Impound expensive airliners until a payment is made? Seize property and other assets for forfeiture sale? Could happen if things get moving along this direction.

So where does that leave the ‘best friends’ relationship Canada and the USA have enjoyed?