Analysis: Cuba claims, Part 1 — to advise or not to advise?

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By José M. Pallí, esq.

The first time I was approached by someone eager to get my advice on what to do in order to be better prepared ­cuando llegue el momento — when the time comes — to re-claim those properties their family owned in Cuba at the dawn of the Cuban Revolution was in the late 1980s. This was mainly about real estate, since my job back then was to give people, Americans mostly, a sense of comfort when they bought real property in a foreign country.

I point this out because I often ask myself whether my response to that first query might have been different had I already been a lawyer facing the same question, say, in the mid 1960s, or even in the 1970s. But back in the late 1980s (the late Reagan years), and despite the imminent crumbling of the Berlin Wall and of Cuba’s Soviet support, my answer was conditioned by two elements that are still, in my humble opinion, key in this equation: The time passed since the expropriations or confiscations of the property in question, and the fact that it was impossible, as I saw it (and still see it) to foretell under what legal rules those claims will be resolved. Under those circumstances, my response was that I could not give the advice sought by the prospective client and charge for something that I recognized would have been sheer speculation. This has since been my response every time, in a long and ever growing list of similar queries.

I told the prospective client that there were a small number of things that could perhaps be tried to improve the future claimant’s chances of success (though with little or no guarantees), but that those things should be done in Cuba, with the help and advice of a Cuban lawyer and in compliance with Cuban laws. Soon after that first encounter with the dilemma — to advise or not to advise on claims — both American and Cuban laws changed dramatically. The new absurd laws made even my retaining a Cuban colleague to procure documents that I hoped would still be available at Cuba’s land title recording system punishable by both sides.

Since I first confronted the question — at a time when close to 30 years had gone by since real property assets had been taken over by the state — I have always felt that, as a lawyer, I have some degree of responsibility not to feed the often illusory or, at the very least, exaggerated expectations of many of those who approach me with a future claim in mind. This is about a sense of responsibility both towards those who consult with me, as well as towards the Cuban people at large. From my perspective, it would be dangerous and unfair to expect present and future generations of Cubans to carry the dead weight of the consequences of these claims for years to come, thus impairing any chances the Cuban economy may have to grow and develop. That is why this is one of two Cuba-related topics I have never written anything about ­other than commenting on it on an aside or footnote in one or another essay — until today.

The other topic I refuse to write about is that of the rules that restrain Americans from freely interacting with Cuba. The so-called OFAC rules often make no sense to me, ­to the extent I can even read and understand them, and because, frankly, I did not become a lawyer to spend my time musing over what I see as little more than the result of an accumulation of childish tantrums.

But I do recognize the importance of this issue of what to do with the expectations of those who rightfully feel entitled to, eventually, present their claims and have them resolved, one way or another. I have come to realize that turning my back to it is not enough when it comes to fulfilling that responsibility I mention above (and it is not as if I expect my views on the issue will have any bearing on its resolution; I do not see myself as an ‘expert’ ­— God forbid — on this or any other issue, and fulfilling the responsibility I refer to is, mainly, something I feel I owe to myself, more than anything else), so I am going to give it a try in a series of entries to follow this one.

In this one, I will try to answer the question from the standpoint of what I believe are the only laws that, today, can give us any sensible guidelines as to how to go about if a prospective claimant wants to improve his or her chances of success: the laws presently in force in Cuba. Those laws date back to the early years of the Revolution — an era when I doubt anybody, including the most enthusiastic among revolutionaries, even dreamt the laws in question would have a shelf life of over half a century.

It is important to distinguish between two forms of taking property from its private owners (although the properties taken through both methods ended up ‘nationalized’, that is as the property of the Cuban Socialist State, and, eventually, as one or another of the forms of property rights that Cuba’s constitution recognizes and regulates). The first and most common form of taking is known as the nationalization by expropriation of certain properties through a mechanism contemplated in Cuba’s constitution (as it is in the constitutions of many other countries, including the United States). In the early stages of its revolution, Cuba undertook a number of forced judicial and, in some cases, plainly administrative expropriations (the less favored procedure, from a ‘legalist’ standpoint, in my opinion).

An expropriation entails the indemnification (indemnización) or compensation of those whose property rights are taken. One of the enduring myths of anti-Castro lore has it that Cuba has always refused to indemnify those Americans whose properties were nationalized. This is simply not true. Cuba has historically stated and demonstrated its disposition to indemnify, and has made a large number of moves aimed at negotiating the details about how to proceed in this regard. If anything, it is the U.S. policies ­—driven by the same anti-Castro interests from which myths and faulty, inferior propaganda arise (‘inferior’ vis-a-vis Cuban propaganda, which is why we are as isolated as we are) — that have systematically opposed such negotiations. This even included inducing ­— to put it mildly — individual entities whose properties were taken by Cuba to desist from one-on-one negotiations with the Cuban authorities.

The second form of taking is called confiscation. Due to its punitive nature (it is aimed at sanctioning certain conducts that are typified as punishable by a given state’s laws), nationalization by confiscation does not require any compensation. Under Cuba’s Ley No. 989 of 1961, one such punishable conduct is leaving Cuba for good (abandono definitivo del país), a behavior that causes a Cuban person to lose to the state all assets and rights (even causes of action) over things owned in Cuba.

The procedure whereby confiscation is applied is found in a joint resolution issued by the Housing, Interior and Justice Ministries on August 22, 1995 (Sobre la ejecución de las diligencias para dar cumplimiento a la Ley No. 989), which applies to all Cuban emigrants, including those who are initially authorized to live abroad but then exceed the time allowed in their leave of absence from Cuba (this is called, in Cuba’s often Kafkaesque legal parlance, negativas de regreso), as well as those who leave the island by illegal or surreptitious means.

This joint resolution of 1995 includes a four year claw-back provision of sorts that says all conveyances made by those who leave Cuba for good during the four years prior to their ‘abandonment’ of the island are essentially invalid, because they are presumed to be made in order to avoid the effects of Ley No. 989. A more adequate way to describe the situation is to say they are valid, but subject to a condition that would make them defeasible: If the grantor, donor, or party in an exchange (permuta), were to leave the country for good within the next four years. In fact, when you read a notarial deed from a Cuban notary public, you find such a notice (advertencia) in the body of the public instrument of conveyance, which is then further publicized by its recording at the Registro de la Propiedad.

The good news is that all these laws and regulations seem to be presently in a state of flux, since leaving Cuba for good is no longer typefied as grounds for confiscation (at least with regard to housing units or viviendas) under the recent ‘cosmetic’ changes undertaken by the Cuban government (this one, at least, qualifies as a king-size lipstick tube), and even illegal immigrants are welcomed back after three years of breaking Cuban migratory laws, a set of laws that have also undergone heavy doses of eyeliner, as you may have heard (they are beginning to look like Alicia Alonso, this said with the enormous respect due to a great artist I deeply admire, even if I may disagree with some of her ideological preferences).

To be continued, I promise.

José Manuel Pallí is president of Miami-based World Wide Title. He can be reached a jpalli@wwti.net.

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