http://docs.house.gov/meetings/FA/FA07/201506...150618.pdf
U.S. PROPERTY CLAIMS AGAINST CUBA
Statement by David Bradley
Before the House Committee on Foreign Affairs, Subcommittee on the Western
Hemisphere
“The Future of Property Rights in Cuba,” Thursday, June 18, 2015
I am David Bradley. I retired from Federal service in 2008 after twenty years as
Chief Counsel of the Foreign Claims Settlement Commission, a small independent
component of the Department of Justice. I am pleased to have been invited here today
to say some words about the Commission’s evaluation and certification of U.S. citizens’
claims for expropriation and other taking of property by the Castro regime in
Cuba.
Following the overthrow of the Batista regime in Cuba and Fidel Castro's takeover
on January 1, 1959, the Castro regime began a comprehensive drive to seize business
enterprises, assets and other private property on the island. Given the extensive
American involvement in Cuba's economy at the time, American companies and individuals
were particularly affected by these actions.
Some of these takings were overt, such as the outright nationalization of certain
industries under Law 1076 of December 5, 1962, and the expropriations under
Law 851 of July, 6, 1960, which were directed toward Cuban concerns in which
Americans held majority interests. In addition, all properties of persons who had left
Cuba were confiscated under Law 989 of December 6, 1961. Other takings were
more subtle, such as the administrative requirements placed upon mining and oil
concession holders to reregister their concessions under circumstances that made
compliance impossible. Pending applications for further exploration were cancelled
arbitrarily and new applications were ignored or refused under Law No. 635 of November
23, 1959.
Another method of effecting takings was through Cuba's foreign exchange
laws. While foreign exchange regulations are recognized as being within a state's
sovereign power to impose, Cuba's requirements for the export of currency were so
restrictive that they effectively prevented any payments from being made to creditors
outside Cuba.
One of the first U.S. responses to these actions was an effort by Senator
Bourke Hickenlooper to amend the Foreign Assistance Act of 1961 to impose a trade
embargo on Cuba and to prohibit the furnishing of foreign assistance to the "present
government of Cuba.” However, the amendment was not enacted, and the Department
of the Treasury did not move to block, or freeze, Cuban assets in the United
States until July 1963. Consequently, most of those assets--possibly as much as
$500 million--had already been transferred out of the country, primarily to Canada,
by the time the blocking took place.
In October 1964, Congress passed House of Representatives bill H.R. 12259,
which became Public Law 88-666 and is codified as Title V of the International
Claims Settlement Act of 1949, as amended (22 U.S.C. 1643). The statute authorized
and directed the Foreign Claims Settlement Commission to determine the validity
and amount of U.S. nationals’ claims against Cuba for expropriation and other
taking of American property and other assets effected on or after January 1, 1959,
and to certify its findings of the amounts of the losses sustained by claimants to the
Secretary of State. In addition, the Commission was authorized and directed to determine
the validity and amounts of claims against Cuba for disability or death of
U.S. citizens resulting from actions taken by or under the authority of the Cuban
government. The purpose of the adjudication process was to compile a record of the
claims which could eventually serve as the basis for a lump-sum settlement agreement
with a future Cuban government.
As I mentioned earlier, the Foreign Claims Settlement Commission is a small,
independent agency within the U.S. Department of Justice. The Commission consists
of its Chairman and two Commissioners, who are appointed by the President
and confirmed by the Senate, and it also has a legal staff who advise and make recommendations
to the Chairman and Commissioners on how the claims should be
evaluated and determined.
The Commission has been in existence since 1954, when it took over the
functions of two predecessor agencies, the War Claims Commission and the International
Claims Commission. In the years since then the Foreign Claims Settlement
Commission has conducted claims adjudication programs involving Bulgaria, Rumania,
Hungary, Yugoslavia, the Soviet Union, Czechoslovakia, Poland, China, the
German Democratic Republic (East Germany), Vietnam, Ethiopia, Iran, the Federal
Republic of Germany, Albania, Libya, and Iraq.
Returning to the subject of claims against Cuba, the period for filing claims
with the Commission officially commenced on November 1, 1965, and was to end
on May 1, 1967. By law the program was to be completed as of May 1, 1970.
However, due to budget cuts for fiscal year 1969, the program could not be completed
by the statutory time, and further legislation was finally obtained which extended
it to July 6, 1972.
A total of 8,816 claims were evaluated in the course of the program. Of
those, 5,911 were certified as valid, with a total value of over $1.8 billion, not including
interest. If one adds the interest component, which the Commission fixed at
six percent per annum, the total comes to over $7.6 billion.
The claims cover a wide spectrum of losses, ranging from small bank accounts,
household personal property, and disability or death of individuals, to Cuban
branches of U.S. banks, mining and oil concessions, and other corporate assets with
values in the millions of dollars. Of the $1.8 billion certified amount, over $1.6 billion
was certified in the names of 898 American corporations, and 5,013 claims totaling
over $221 million were certified in the names of individuals. There were 131
certifications in excess of $1 million, with the largest single certification in favor of
the Cuban Electric Company in the amount of over $267.5 million. Other large certifications
were in the names of companies including International, Telephone &
Telegraph, North American Sugar, Standard Oil, and Texaco.
This concludes my statement. I will do my best to answer any questions you
may have.
U.S. PROPERTY CLAIMS AGAINST CUBA
Statement by David Bradley
Before the House Committee on Foreign Affairs, Subcommittee on the Western
Hemisphere
“The Future of Property Rights in Cuba,” Thursday, June 18, 2015
I am David Bradley. I retired from Federal service in 2008 after twenty years as
Chief Counsel of the Foreign Claims Settlement Commission, a small independent
component of the Department of Justice. I am pleased to have been invited here today
to say some words about the Commission’s evaluation and certification of U.S. citizens’
claims for expropriation and other taking of property by the Castro regime in
Cuba.
Following the overthrow of the Batista regime in Cuba and Fidel Castro's takeover
on January 1, 1959, the Castro regime began a comprehensive drive to seize business
enterprises, assets and other private property on the island. Given the extensive
American involvement in Cuba's economy at the time, American companies and individuals
were particularly affected by these actions.
Some of these takings were overt, such as the outright nationalization of certain
industries under Law 1076 of December 5, 1962, and the expropriations under
Law 851 of July, 6, 1960, which were directed toward Cuban concerns in which
Americans held majority interests. In addition, all properties of persons who had left
Cuba were confiscated under Law 989 of December 6, 1961. Other takings were
more subtle, such as the administrative requirements placed upon mining and oil
concession holders to reregister their concessions under circumstances that made
compliance impossible. Pending applications for further exploration were cancelled
arbitrarily and new applications were ignored or refused under Law No. 635 of November
23, 1959.
Another method of effecting takings was through Cuba's foreign exchange
laws. While foreign exchange regulations are recognized as being within a state's
sovereign power to impose, Cuba's requirements for the export of currency were so
restrictive that they effectively prevented any payments from being made to creditors
outside Cuba.
One of the first U.S. responses to these actions was an effort by Senator
Bourke Hickenlooper to amend the Foreign Assistance Act of 1961 to impose a trade
embargo on Cuba and to prohibit the furnishing of foreign assistance to the "present
government of Cuba.” However, the amendment was not enacted, and the Department
of the Treasury did not move to block, or freeze, Cuban assets in the United
States until July 1963. Consequently, most of those assets--possibly as much as
$500 million--had already been transferred out of the country, primarily to Canada,
by the time the blocking took place.
In October 1964, Congress passed House of Representatives bill H.R. 12259,
which became Public Law 88-666 and is codified as Title V of the International
Claims Settlement Act of 1949, as amended (22 U.S.C. 1643). The statute authorized
and directed the Foreign Claims Settlement Commission to determine the validity
and amount of U.S. nationals’ claims against Cuba for expropriation and other
taking of American property and other assets effected on or after January 1, 1959,
and to certify its findings of the amounts of the losses sustained by claimants to the
Secretary of State. In addition, the Commission was authorized and directed to determine
the validity and amounts of claims against Cuba for disability or death of
U.S. citizens resulting from actions taken by or under the authority of the Cuban
government. The purpose of the adjudication process was to compile a record of the
claims which could eventually serve as the basis for a lump-sum settlement agreement
with a future Cuban government.
As I mentioned earlier, the Foreign Claims Settlement Commission is a small,
independent agency within the U.S. Department of Justice. The Commission consists
of its Chairman and two Commissioners, who are appointed by the President
and confirmed by the Senate, and it also has a legal staff who advise and make recommendations
to the Chairman and Commissioners on how the claims should be
evaluated and determined.
The Commission has been in existence since 1954, when it took over the
functions of two predecessor agencies, the War Claims Commission and the International
Claims Commission. In the years since then the Foreign Claims Settlement
Commission has conducted claims adjudication programs involving Bulgaria, Rumania,
Hungary, Yugoslavia, the Soviet Union, Czechoslovakia, Poland, China, the
German Democratic Republic (East Germany), Vietnam, Ethiopia, Iran, the Federal
Republic of Germany, Albania, Libya, and Iraq.
Returning to the subject of claims against Cuba, the period for filing claims
with the Commission officially commenced on November 1, 1965, and was to end
on May 1, 1967. By law the program was to be completed as of May 1, 1970.
However, due to budget cuts for fiscal year 1969, the program could not be completed
by the statutory time, and further legislation was finally obtained which extended
it to July 6, 1972.
A total of 8,816 claims were evaluated in the course of the program. Of
those, 5,911 were certified as valid, with a total value of over $1.8 billion, not including
interest. If one adds the interest component, which the Commission fixed at
six percent per annum, the total comes to over $7.6 billion.
The claims cover a wide spectrum of losses, ranging from small bank accounts,
household personal property, and disability or death of individuals, to Cuban
branches of U.S. banks, mining and oil concessions, and other corporate assets with
values in the millions of dollars. Of the $1.8 billion certified amount, over $1.6 billion
was certified in the names of 898 American corporations, and 5,013 claims totaling
over $221 million were certified in the names of individuals. There were 131
certifications in excess of $1 million, with the largest single certification in favor of
the Cuban Electric Company in the amount of over $267.5 million. Other large certifications
were in the names of companies including International, Telephone &
Telegraph, North American Sugar, Standard Oil, and Texaco.
This concludes my statement. I will do my best to answer any questions you
may have.
