US court orders cruise lines to pay over $400 million for sailing to Cuba

On Friday 30 December, the South Florida U.S. District Judge Beth Bloom, ordered four Florida-based cruise companies (Carnival, MSC SA, Royal Caribbean and Norwegian) to pay more than US$100 million each in ‘damages’ to Havana Docks. The latter, a US company, had owned a 1934 concession to several piers in Havana harbour, which was expropriated in 1960 by the Cuban Revolution. This decision, the first successful application of Title III of the Helms-Burton Act, is capable of having a devastating impact on the Cuban economy and should be strongly rejected as an illegal act of imperialist bullying.

The decision follows an earlier ruling in March 2022. At that time, the same judge ruled that the companies, which are not US registered but have their main place of business in Florida, had committed “trafficking acts” and engaged in “prohibited tourism” by sailing to Cuba and using facilities in Havana, which over 60 years ago had belonged to the US-based company.

The ruling is based on the Helms-Burton Act, initiated by Republican representatives and signed by Bill Clinton in 1996. The Act makes the illegal imperialist US blockade on Cuba extraterritorial, by giving US courts the power to prosecute non-US companies if they trade or invest in Cuban assets expropriated by the revolution after 1959.

The law was clearly designed to inflict maximum damage on the Cuban Revolution by threatening any potential foreign investors, at a time when the collapse of the Soviet Union had dealt a severe blow to the island, leaving it at the mercy of the world capitalist market.

Ever since the passing of the Helms-Burton Act, cynically known by reactionary Cuban exiles as the ‘Libertad Act’, the application of its Title III had been suspended, in a decision that has been renewed yearly. But on 2 May 2019, president Trump decided not to renew the suspension of Title III, thus bringing it into effect.

The Helms-Burton act gives US courts the power to prosecute non-US companies if they trade or invest in Cuban assets expropriated by the revolution after 1959 / Image: Public Domain

That means that any reactionary Cuban émigré whose property was expropriated without compensation by the Cuban Revolution can bring a case in a US court. They could do so against US or foreign companies that conduct business with Cuba, involving what US imperialism interprets as “wrongfully confiscated property”.

Let us go back to 1960 and the beginning of the US blockade against the Cuban Revolution. The actual sequence of events reveals that it was Washington that took the initiative in attacking Cuba, leading the Cuban Revolution to take defensive action by expropriating US property.

US-owned oil refineries refused to handle oil coming from the Soviet Union. The Cuban revolutionary government decided to put them under state intervention at the end of June 1960. The US responded by cutting the sugar cane quota it had agreed to purchase from Cuba. The Cuban Revolution responded to this act of economic aggression by expropriating all US-owned corporations on the island between July and October 1960. At this time, the US was already engaged in funding terrorist activities against the Cuban Revolution, although the latter (by their own admission) counted on the overwhelming support of the Cuban people.

It is also wrong to say that the nationalisations were carried out without compensation. In fact, the Cuban revolutionary government officially communicated to the US government that it was prepared to discuss “appropriate compensation”. The 6 July 1960 expropriations Law 851 includes a mechanism for compensating the former owners through 30-year Cuban state bonds. The US rejected this outright and continued to escalate its aggressive response to the sovereign decisions of Cuba, culminating in the failed CIA-organised Playa Girón (Bay of Pigs) invasion of 1961.

The injured party here was clearly the Cuban people, who were punished for the temerity of carrying out a revolution, which freed them from imperialist domination. The price they paid, and are still paying, is enormous. The Cuban government has calculated the price of the US blockade on Cuba to be US$130 billion in damages over six decades, an unbearable cost for the small Caribbean nation.

It ought to also be noted that all other countries affected by the nationalisations carried out by the Cuban revolution have already settled their claims with Cuba. This was the case with Switzerland and France (1967); Britain, Italy and Mexico (1978); Canada (1980) and Spain (1986). Companies from these countries have investments in Cuba from which they are profiting, but the US does not.

Up until now, most claims filed in US courts arising from the lifting of the suspension of Title III of the Helms Burton Act by Trump in 2019 had been dismissed on different grounds. The case against the four cruise companies is therefore the first successful implementation of this particularly vindictive piece of imperialist legislation.

Some of the details of the case are particularly scandalous. First of all, Havana Docks’ interest in the Havana Cruise Port Terminal is based on a concession it held before the 1959 Cuban revolution, a concession which was set to expire in 2004, that is, before the alleged “trafficking in expropriated property” took place!

US-based cruise ships only started serving Cuban destinations in 2016 as part of the Obama thaw, that is 12 full years after the expiration of the concession on which the Havana Docks claim is based. In fact, originally the District Judge dealing with the case dismissed it precisely on such grounds, only to later change her mind and allow it to go through.

The cruise companies pointed out that the Obama administration allowed US citizens to travel to Cuba under a ‘lawful travel’ exemption of the blockade regulations. Furthermore, the cruise companies had been licensed by the Treasury Department to sail to Cuba. None of this mattered to the judge who ruled in March 2022 that, “The fact that the Treasury Department issued travel licences and executive branch officials, including the president, encouraged Defendants to do so, does not automatically immunise Defendants from liability if they engaged in statutorily prohibited tourism.”

US-based cruise ships only started serving Cuban destinations in 2016 as part of the Obama thaw / Image: The White House

Here the argument was that the cruise companies, as well as providing travel to Cuba, which was legal at the time, had also offered their passengers additional tourist services in Cuban soil, which were illegal.

The amount awarded by the judge in the case, nearly US$440 million, plus attorney fees and costs, is so high because the Helms Burton Act allows the court to triple the damages awarded.

The cruise companies have already announced that they will appeal against the ruling, but the danger is that this first successful case of the application of Title III, after so many were previously dismissed, will set a precedent triggering a flood of other claims. This will have a chilling impact on third-country companies with investments in Cuba at a time when its economy has been severely hit by the impact of the COVID-19 pandemic on tourism as well as higher energy prices.

There is strong pressure amongst US capitalists for Biden to once more suspend the application of Title III, as many US companies stand to lose out from it, not only from successful claims against them, but also because of potential loss of business opportunities.

So far, Biden has only repealed two or three of Trump’s 243 separate measures to strengthen the blockade against the Cuban revolution. He is faced with two opposite pressures. On the one hand, there is the pressure of sections of the US ruling class to end a failed policy and adopt other methods to defeat the revolution (this was the meaning of Obama’s thaw). It would also be in the interest of some US businesses to be able to invest in and trade with Cuba. On the other hand, there is the pressure of the reactionary Cuban lobby in Florida, which is powerful and bipartisan, and is opposed to anything other than a policy of head-on confrontation with the Cuban Revolution. Florida is a crucial state in a presidential election, and there is therefore a strong incentive for Biden to appease the gusano lobby.

The whole of the US blockade against Cuba reveals imperialist arrogance and callousness. Washington thinks it has the right to interfere in other countries’ policies and determine which governments they are allowed to have (or not). When they do not comply, it resorts to military aggression, illegal meddling, promoting military coups and economic sanctions. The rationale behind such measures is “do as you are told or suffer the consequences”.

It is the duty – not only of revolutionary socialists but of all consistent democrats – to oppose US imperialist bullying against the Cuban Revolution.