· Date of approval by the Senate: March 5, 1996 (74 to 22 with 4)

· Date of approval by the House: March 6, 1996 (336 to 86 with 11)

· Sponsors: Senate: Jesse Helms (Republican - North Carolina)

House of Representatives: Dan Burton (Republican - Indiana)

BACKGROUND

Due to electoral pressures by the then Presidential Candidate William Clinton, on October 23, 1992, President Bush signed the "Cuban Democracy Act" or "Torricelli" Act, which added further restrictions to the U.S. blockade against Cuba in place since 1961. This legislation banned all trade by subsidiaries of American companies with Cuba and refused entry to American ports to those vessels which had previously called on Cuban ports, in times of euphoria because of the collapse of socialism in Eastern Europe and the belief of the fall of the Cuban Revolution.

In the face of the continuity of the revolutionary process and of the symptoms of economic recovery, the Cuban-American right wing from Miami and the most conservative U.S. political sectors increased their pressures to take more effective measures, primarily against foreign investments in Cuba. The "Helms-Burton" Bill emerged from such interest, which is the blend of several legislations introduced in Congress between 1994 and 1995, mainly by Cuban-American Representatives Ileana Ross, Lincoln Díaz-Balart and Robert Menéndez.

The Act shows, clearer than ever before, the real objectives of such hostile policy since 1959 and that such policy responds to the interests of the Batista high bourgeoisie, who felt affected by a Revolution committed to national independence and social justice.

PURPOSES

Their promoters have intended, from the POLITICAL standpoint, to perpetuate the climate of hostility of U.S policy against Cuba, to forcefully destroy the Cuban Revolution. From the ECONOMIC standpoint, their purpose is to intimidate foreign businessmen by every possible means with a view to prevent investments and international trade with Cuba.

STRUCTURE

Title I: Strengthening International Sanctions against the Castro Government

It establishes 16 of the most aggressive political positions against Cuba, among them: to seek within the U.N. Security Council a "mandatory international embargo", the opposition to Cuban membership in international financial institutions and the OAS, U.S. sanctions against the Eastern European countries and the independent states of the former Soviet Union providing any assistance or cooperation to the Juraguá Nuclear Plant and the support to individuals and independent NGO´s in Cuba.

Under the title "Codification of Economic Embargo", it subordinates all dispositions of the blockade to Congress. This means that the sitting President and any future President has surrendered to the Congress

his power to conduct foreign policy, an action that violates the traditional practice in U.S. policy and limits the President in his capacity to make any change to the policy towards Cuba.

Title II: Assistance to a Free and Independent Cuba.

It establishes 28 requirements aimed at legislating from the United States the way of government, the social and political organizations and the institutions Cuba should have, so that it can be considered a "Democratically Elected Government". It subordinates the restoration of diplomatic ties, the lifting of the embargo and the initiation of negotiations leading to the return the territory occupied by Guantánamo Naval Base to the fulfillment of these requirements. It also establishes the presence in Cuba of a Pro-Consul to supervise the full observance of the American law.

In addition to the requirements of the disappearance of the Cuban institutions, leaders and the current political organization and the economic reforms leading the country to a full-fledged market economy according to the American desire, the law establishes that all properties nationalized from January 1st, 1959 have to be RETURNED, or their former owners indemnified as per the U.S. criteria, without any margin for negotiations. The main beneficiaries and promoters of such provision are the embezzlers and henchmen from the Batista dictatorship, whose properties were nationalized at that time, what shows the real interests behind the drafting of this act.

Title III: Protection of Property Rights of U.S. Nationals.

Contravening international law, this act sets forth the right of American citizens to file lawsuits in U.S. courts against any foreign citizen "trafficking" with "U.S. properties" in Cuba, which could triple the value of their property. The law defines as "U.S. properties" those properties nationalized by the Cuban government after January 1st, 1959. The term "traffic" includes investments made on those properties and, even, their expansion thereafter, as well as "benefiting" from that property. Moreover, it prohibits to any U.S. court to make a determination on the merits of that action based on the "Act of State Doctrine", an internationally recognized principle that legitimates the Cuban nationalization process.

The Act gives the President the authority to waive the effective date of this title and the rights of action it establishes for 6 months, reporting to Congress that it is in favor of democracy in Cuba and that it is in the national security interest of the U.S . Either of the two suspensions can be indefinitely implemented for additional periods of six months each.

Title VI: Exclusion of Certain Aliens.

It gives permission to the Secretary of State and the Attorney General to deny a visa or to exclude from the U.S. territory those who "traffic" in "U.S. properties", as well as their spouse, minor child or agent, as stated in Title III.

IMPLEMENTATION

The implementation of this Act started on the date of its enactment on March 12, 1996; except for Title III, which came into force on August 8, 1996. On July 16th, 1996, Clinton applied the waiver established by the Act, which postpones rights of action in Title III for six months, as a result of the strong rejection by the international community (especially Canada, Mexico, the European Union) and even the American business sector itself, in the face of the extraterritorial nature of Titles III and IV and the damage they pose for their nationals. Since then, waivers have been applied every six months.

In turn, Clinton asked his allies to coordinate a "common policy" towards Cuba to bring about what he has called a "peaceful transition to democracy", subordinating to its success all future waiver. Aside from providing him with an argument before Congress and the right wing for his decision, this strategy tries to shift international attention from the illegal and extraterritorial nature of this act to the so-called "Cuban problem".

After reaching an understanding with the European Union in April 1997, the Us governmente has tried to impose so-called "investment disciplines" to Europe with the purpose of discouraging investmentes in Cuba. The US has presented these disciplines as a prerequisite for the Multilateral Investment Agreement which is currently being negotiated in the OECD.

Moreover, Title IV has been implemented selectively, following the strategy of pressuring some big companies and intimidating the rest of foreign enterprises. To this day, only Canadian SHERRIT INTERNATIONAL, involved in mining, agriculture and tourism, and the Mexican Group DOMOS, in communications, have been affected or singled out. Letters of warning have been sent to other foreign companies.

CONSTRAINTS

Regardless of the violation of international law represented by the Act and the extraterritoriality it implies for Cuba and the rest of the nations, Title III of the law is not applicable to all cases. Among the main limitations that can be mentioned are the following:

- Only nationalized properties with possibilities of being claimed from the U.S. are included, and neither those valued in less than 50 thousand dollars, nor diplomatic facilities, nor any case of residence are included (only for the actions of Title III).

- Neither the general trade of goods that are not linked to those properties, nor general bilateral financing of Cuban economy are directly sanctioned.

- The U.S. law establishes that the jurisdiction of the courts is only applicable to those enterprises present in U.S. economy, with a representation sufficiently strong and stable as to take retaliatory measures in case of a court decision against it.

THE NATIONALIZATION OF U.S COMPANIES

One of the major arguments of the Act is the alleged illegitimate nature of the nationalization made of US properties by the Cuban Government at the triumph of the Revolution, considering the fact that the former owners were never compensated. Instead, it attempts to overlook the fact that it has been the U.S. government's persistent political position to maintain the hostility against the Cuba, what has made it impossible to arrange compensations for these properties.

The Cuban nationalization process, in addition to having been enacted in accordance with international law, took place under the provision of Article 24 of the Cuban Constitution of 1940 --in force at the time--, and in accordance with the "Fundamental Law" of February 7, 1959. The former property owners of other nationalities, equally affected by the 1960's nationalization, have been compensated thanks to the efforts and concerns of their respective governments.

Consequently, compensation agreements were signed with Switzerland (March 2, 1967), France March 16, 1967), the United Kingdom (October 18, 1978), Canada (November 7, 1980) and Spain (January 26, 1988). In the first four cases, the agreements were thoroughly honored in full in correspondence with the contents of the agreements. The agreement with Spain provides for its full implementation over a period of 20 years. There were similar agreements with Mexico and Italy. The method used in all cases was a "Lump Sum Agreement", widely recognized by international law for the settlement of these conflicts, through diplomatic negotiations between the governments of both States.

On the basis of Law 851 of July 6, 1960, the Cuban government also proposed the U.S. government a compensation agreement, strictly based on the practices and principles of international law in this field. This legislation established the procedure of payment for nationalized properties, based on stable trade relations between Cuba and the United States. The Cuban government has even reiterated on several occasions its willingness to negotiate with the U.S. the terms provided for in the above-mentioned Law. However, the U.S. Government unilaterally decided to grant right of action to 5'911 companies, with a lump sum of $ 1 851.197'358, which with an annual interest rate of 6% has allegedly amounted to more than 5'600 million dollars today.

Against international law, the Act grants the same possibilities of establishing legal proceedings to those Cubans who were expropriated since January 1, 1959 and became U.S. citizens later on. According to estimates of the State Department, with this, the allowed claims will grow between 75 000 and 200 000, which will make more complicated the solution to the problem of Cuban nationalization.

MAIN VIOLATIONS OF INTERNATIONAL LAW

The Act violates basic norms and principles of international law widely recognized in the U.N. Charter, such as the right to self-determination, sovereignty and independence, freedom of trade, non interference in the internal affairs of other States, peaceful coexistance among nations and the right of nationalization.

Other principles violated are: the freedom of financing and investing, the compliance of subsidiaries with the laws of the host country, the recognition of ownership of real property according to the laws of the country where the subsidiary is based and the lack of jurisdiction of third-party courts on the confiscation made by a sovereign country to their nationals.

It also violates rules and agreements of international organizations such as: the IMF, the World Bank, the International Development Association, the Inter-American Bank, etc., which prohibit restrictions and moratoria of any nature against their shares and properties, let alone on the grounds of political reasons, as it is established in the Act. Also, the General Agreements on the free movement of people in trade, of the GATT and the GATS (now the World Trade Organization) are violated.

Likewise, it violates the U.S. national laws, which explicitly recognize those principles and the responsibility to the international agreements they have signed.

MAIN INTERNATIONAL STATEMENTS AGAINST IT

- United Nations General Assembly Resolutions (November /96, 97).

- Statement by the Council of Goods (March /96) and the General Council of the World Trade Organization (April /96).

- Statement of the Coordination Bureau of the Non-Aligned Movement (March /96).

- Note from the Presidency of the European Union to the U.S. State Department (March /96), from the European Parliament (May /96) and from the Council for General Affairs of the European Commission (October /96).

- Resolution of the General Assembly of the Organization of American States (June /96) and a Statement of the Inter American Juridical Committee (August /96).

- Final Declarations of the 6th and 7th Ibero-American Summits (November /96, 97).

- Declaration of the 10th Summit of the Rio Group (September /96).

- Resolution of Central American and Latin American Parliaments (July /96).

- Declaration of the CARICOM and the Association of Caribbean States (May /96).