Missing the Target: The Failure of the Helms‐​Burton Act

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One of the most ill-advised policies of the United States towardCuba is embodied in the Cuban Liberty and Democratic SolidarityAct, signed into law in March 1996. Popularly known as theHelms-Burton or Libertad Act, this legislation not only targetsCuba but also punishes U.S. allies who trade with and
invest in Cuba.

The bill tightens the four-decade-old economic embargo againstCuba and seeks, in Title III, to punish foreign-owned companiesthat engage in the"wrongful trafficking in propertyconfiscated
by the Castro regime."

The Helms-Burton law is legally and practically flawed. First,because we have no formal diplomatic relations with Cuba, theUnited States remains the one country with which Cuba has notsettled claims. Second, Helms-Burton establishes a dangerousprecedent by allowing U.S. courts to rule on actions of parties whowere not US citizens when the offending action took place. Third,Helms-Burton will actually make it more difficult to settleproperty claims by dramatically raising the number and value of USproperty claims against Cuba from their current total of about $6billion to as much as $100 billion.

The United States claims that Helms-Burton is allowable underthe national security exemption to our World Trade Organizationcommitments, but it is difficult to argue that sanctions againstCuba and its foreign investors serve any genuine national securityinterest.

Helms-Burton has failed to promote democracy in Cuba and hasstrengthened the hand of the Castro regime by providing an excusefor its own failed economic system. This summer President Bush willhave the opportunity to remove a painful thorn from the side ofU.S.-Canadian and U.S.-European bilateral relations. He can do soby urging Congress to repeal the Helms-Burton Act. At a minimum,Bush should continue to waive implementation and enforcement of themost egregious provisions stipulated in Title III of the act.

Mark A. Groombridge

Mark Groombridge is a research fellow at the Center for Trade Policy Studies at the Cato Institute.