(Larson urges implementation)
Washington -- Alan Larson, U.S. assistant secretary of state, has called for strengthening international cooperation to ban foreign investment in property expropriated by Cuba's communist government.
Specifically, Larson said the time has arrived to implement the May 1998 U.S. understanding with the European Union (EU) for deterring foreign investment in expropriated property in Cuba. Members of Congress have stated opposition to the understanding.
In a speech to the U.S.-Cuba Business Council in Coral Gables, Florida, March 9, Larson said punishing the Cuban government for violations of private property would further the cause of human rights in the communist-ruled island. A copy of the speech was made available in Washington.
"Property rights are not safe in a country that blatantly violates human rights, nor are human rights safe in a country that blatantly disregards property rights," Larson said. "Cuba, of course, is a country that has utterly failed to respect property rights or to honor international law standards on expropriation."
While acknowledging that the EU opposes a U.S. law that calls for sanctions on foreign companies that do business with Cuba, Larson praised the EU-U.S. Understanding.
Larson said the understanding means no government loans, grants, subsidies, fiscal advantages, political risk insurance, equity participation, ;commercial advocacyor diplomatic support for Cuba.
Following are acronyms and terms used in the text:
-- OECD: Organization for Economic Cooperation and Development.
-- Libertad Act: also known as the Helms-Burton Act.
-- Billion: 1,000 million.
-- IMF: International Monetary Fund.
Following is the text of the Larson speech:
(begin text)
ADVANCING HUMAN RIGHTS AND PROPERTY RIGHTS IN CUBA:
THE ROLE OF MULTILATERAL COALITIIONS
Remarks by Alan P. Larson,
Assistant Secretary of State for
Economic and Business Affairs.
U.S.-Cuba Business Council Conference
Coral Gables, Florida
May 9, 1999
Good afternoon. It is a pleasure to be with the U.S.-Cuba Business Council. I would like to speak about how multilateral support can contribute to a peaceful and democratic transition in Cuba.
To begin, I'd like to share an experience I had as the American Ambassador to the OECD, the organization that grew out of the Marshall Plan to become the economic counterpart to NATO. At the initiative of the United States, the OECD reached out in 1991 to the ex-Communist countries of Central Europe. Three of them -- Poland, Hungary and the Czech Republic -- became full members of the OECD. After German unification, eastern Germany also became part of the OECD family.
In July of 1992, OECD Ambassadors traveled to Eastern Germany to assess efforts to shake off the legacy of Communism. We met with a brave Lutheran pastor who had struggled to resist being compromised by Communist authorities. We saw the devastation the Communist system had inflicted on the economy, a sad contrast to the free economy that thrived a few miles to the West. We heard of how hope had been sustained by television shows from Western Germany.
On the Fourth of July we had lunch with the city authorities of Potsdam, in the very hotel where Truman, Churchill and Stalin negotiated the shape of Europe after World War II.
I was reminded of the fact that two hundred and sixteen years earlier to the day Thomas Jefferson had set forth in the Declaration of Independence an American creed that became a universal dream -- that all men and women are created equal and that they are endowed by their Creator with certain unalienable rights and that among those rights are life, liberty and the pursuit of happiness. I also recalled that some eighty seven years later, at a time when our country -- like post-war Germany -- was divided, another great American had delivered a short speech at a battleground cemetery. Despite the dark prospects of that moment, Abraham Lincoln expressed unshakeable determination that his Nation would one day enjoy a "new birth of freedom."
I felt privileged to see with my own eyes, a new birth of freedom in Eastern Germany.
Like you, I hope that the day is not far off when you and I may be privileged to see with our own eyes a rebirth of freedom in Cuba.
In that regard, I must say a word about the so-called trial of the dissident working group leaders that was held in Havana last week. The United States strongly condemns the Cuban government's treatment of these four courageous individuals -- Martha Beatriz Roque, Vladimiro Roca, Felix Bonne, and Rene Gomez Manzano. For 19 months they have been held in cells with common criminals, denied adequate medical care. The government charged them with sedition merely because they exercised their right to free speech by criticizing Cuba's one-party system and calling for democratic change.
The Cuban government went to extraordinary lengths to avoid public scrutiny of its justice system. It barred the foreign media and diplomatic representatives from the trial, and it detained dozens of dissidents to prevent a public show of support for the four outside the courthouse. We call on the Cuban authorities to immediately release the Dissident Working Group leaders.
Our policy is to promote a peaceful transition to democracy and respect for human rights in Cuba in four ways: (1) pressure on the government through economic sanctions and the measures delineated in the 1996 Libertad Act; (2) reaching out to and supporting the Cuban people to encourage development of independent civil society; (3) cooperation with the Cuban government on interests of direct concern, particularly to maintain migration in safe orderly and legal channels; and (4) forging a multilateral effort to press for democratic change, respect for human rights, and development of independent civil society. This multilateral approach has become a central pillar of U.S. policy and is the issue on which I wish to concentrate today.
In 1996, the Administration launched an effort to develop a multinational approach to promote democracy in Cuba. This initiative has changed the terms of discussion about Cuba. While our allies and major trading partners may disagree with our embargo and oppose certain provisions of the Libertad Act, they do now agree with us on the key goal of encouraging democracy and human rights in Cuba. The European Union adopted its "Common Position" that links cooperation with Cuba to improvements in human rights and political freedom. The EU has also created a Working Group on Human Rights among its embassies in Havana.
We have encouraged other nations to take specific, concrete steps to express their commitment to human rights and democracy in Cuba. The result has been new international attention to the plight of the Cuban people. In January President Clinton noted an important pattern that has emerged in recent months. Delegations from Spain, the UK, Belgium, Japan, Brazil, and elsewhere have pressed Cuban government officials about human rights and democracy, have spoken out publicly for human rights, and have met with dissidents. As a result, Cuban authorities are hearing a concerted message on the need for fundamental, democratic, systemic change.
Ten days ago my colleague, Harold Koh, painted an unsparing portrait of Cuban human rights abuses when he submitted the Administration's annual Human Rights Report. And in a few weeks in Geneva, the United States, working with like-minded countries, will shine a multilateral spotlight on Cuba at the United Nations Human Rights Commission.
While Harold and I have different day-to-day responsibilities at the State Department, we share a common belief that political and economic freedom are truly inseparable. Property rights are not safe in a country that blatantly violates human rights, nor are human rights safe in a country that blatantly disregards property rights.
Cuba, of course, is a country that has utterly failed to respect property rights or to honor international law standards on expropriation. The Castro regime has refused to treat American claimants fairly and in accordance with international law.
With the passage of the Libertad Act, Congress and the Administration joined together to use a new tool to discourage investments in illegally expropriated properties. Under Title IV of the Libertad Act, the State Department investigates persons who may be trafficking in confiscated properties in Cuba. When the evidence warrants, we exclude these individuals from entry into the United States.
There have been three determinations of "trafficking" under Title IV and fifteen executives and family members have been denied entry into the United States. Following informal consultations with the State Department, nineteen companies have withdrawn or altered their plans in Cuba in order to avoid determinations of trafficking. In sum, it is clear that the Libertad Act has discouraged some foreign investment in Cuba.
I believe, however, that with multilateral cooperation, we can do an even better job of preventing investment in expropriated property and of pressuring Castro to change his policies.
The European Union, as you know, has strenuously objected to aspects of Helms-Burton. They viewed it as extraterritorial application of U.S. law targeting their firms. This dispute unfortunately distracted attention from the atrocious record of the Castro regime and engendered a European policy of active resistance to Helms-Burton. In close consultation with the Congress, the Administration embarked in 1997 on a negotiation designed to develop a multilateral approach to inhibit and deter investment in illegally expropriated property.
I spent over a year in difficult negotiations, much of which was devoted to explaining to our European friends Cuba's atrocious record on property rights. Finally, the United States and the European Union concluded an Understanding last May 18 at the U.S.-EU Summit in London.
This Understanding represents an historic breakthrough. It builds on the Libertad Act and affords greater protection to the property rights of U.S. investors abroad, including in Cuba. It is firmly grounded in the core idea underlying the Libertad Act: that it is wrong to invest in stolen properties. It sends a strong warning to investors to keep their "hands off" such properties.
No less an authority than Castro himself signaled the importance of the Understanding. On the day after its signing, he vehemently denounced it before the World Trade Organization. He has bitterly criticized it as internationalization of the core principles of the Libertad Act. In this, he is right and that is one important reason why we should implement this Understanding.
Castro recognizes that the Understanding can throttle investment in Cuba. Cuban authorities appear to believe that a fire sale of expropriated U.S. property is their last hope to salvage the mismanaged Cuban economy. That is why Castro continues to campaign relentlessly against the Understanding. The Cuban government has worked overtime to drive a wedge between the EU and the U.S. and to prevent the disciplines from going into effect. Castro desperately wants to prevent U.S.-European implementation on what fairly can be called a multilateral rebuke of Cuba and a multilateral program of targeted sanctions on Cuba. We cannot let him win.
I recognize that some of you may have questions or doubts, so let me outline the key elements of the Understanding.
For property expropriated in contravention of international law after the effective date of the Understanding, the Understanding calls for an investment ban.
And for all illegally expropriated property, no matter when the expropriation occurred, there will be a mutually reinforcing set of measures to inhibit and deter investment. For example, no government support or commercial assistance would be allowed for investment in such property. This means:
--no government loans;
--no government grants;
--no government subsidies;
--no government fiscal advantages;
--no government political risk insurance;
--no government equity participation;
--no government commercial advocacy; and
--no diplomatic support.
In states like Cuba which have a record of repeated expropriations in contravention of international law, the Understanding establishes a special filter to ensure that no commercial assistance or support is provided for investment in property that may have been illegally expropriated. Once we inform the EU that such a record exists, as we have in the case of Cuba, they will apply this special filter and must consult closely with us as they do.
Whenever expropriated property is involved, government support or assistance will be denied and the property will be added to the published list of illegally expropriated properties. Of equal importance, no government support or advocacy, through embassies, or commercial, foreign and trade ministries will be available to assist investors in such properties.
A Registry of Claims of Illegal Expropriations will be established to warn investors and assistance agencies that a property has a troubled past. It will be open to any claimant who alleges that his property was expropriated in contravention of international law, including naturalized Cuban-American claimants.
It was evident from the beginning of our negotiations that the EU would not support disinvestment. In order words, they would not agree to any stringent disciplines if those disciplines extended without qualification to properties in which European firms had already invested.
Our best information, however, and our experience in implementing Title IV suggest that there are, for the moment, relatively few cases where European companies have already made investments in expropriated property. But even in those cases, the disciplines I have described will apply to transactions that involve the acquisitions of new rights, including the renewal of leases or management contracts, or the acquisition of new mineral rights. This will fence off any existing investments and severely limit new transactions by those investors. Furthermore, U.S. claimants will continue to retain all of their existing rights under U.S. and international law. Let me be clear: when it comes to investment in illegally expropriated property, we will continue to oppose all such investments, including those investments that already have been made.
The Understanding includes an acknowledgment by the Vice President of the European Commission that one of the principal decrees used to expropriate U.S. citizens' property in Cuba appears to violate international law. To my knowledge, this is the first time that the EU has ever publicly acknowledged the illegality of Castro's expropriations.
EU Foreign Ministers have committed their countries to implement the Understanding. Sir Leon Brittan has stated that "The European Union stands ready to implement these agreements, including the disciplines on future investment in property which has been illegally expropriated, when Congress authorizes the President to grant a waiver to the European Union under Title IV of the Helms-Burton Act, and when that waiver is granted."
Now it is time for us to put the Understanding into operation. We are working closely with the Congress to seek action on legislation that will authorize the President to waive, on a provisional basis, application of Title IV with respect to the countries implementing the disciplines. This is not the abolition of Helms-Burton; it is the internationalization of Helms-Burton.
The waiver authority we seek would require the Administration to revoke the waivers if a participant failed to live up to the Understanding. And let me assure you, the Administration will not hesitate to withdraw a waiver if the EU fails to implement faithfully the disciplines of the Understanding. Furthermore, such a waiver should benefit only the countries implementing the Understanding; Title IV would remain in effect for others.
Ladies and gentlemen, we all remember the time John Kennedy declared himself a Berliner, expressing the solidarity of all free people with the people of Berlin. We all recall the time Ronald Reagan stood before Brandenburg Gate and, speaking for all free people, challenged Gorbachev to tear down that wall. Today our challenge is to mobilize all free people to declare their solidarity with the people of Cuba and to call on Castro to free political prisoners, to respect both human rights and property rights and to give back the property he stole thirty-seven years ago.
When democracy and the free market do return to Cuba, the U.S. business community will have an important role to play in the transition. In January 1997 the State Department estimated that Cuba would receive some $4-8 billion in external financial assistance from private and public sources during the first six years of the transition. Cuba will likely receive generous funding after it rejoins multilateral institutions like the IMF, World Bank, and Interamerican Development Bank. But the experience of other Latin American countries -- and of post-Communist countries of Eastern Europe -- has taught us that private investment is crucial to sustained development and economic growth.
We expect the American business community will find Cuba attractive for several reasons. Besides its proximity to the US, the country is rich in physical and human resources. In addition, the pent-up demand for US tourism to the island offers opportunities for growth.
There will be additional opportunities in rebuilding Cuba's decaying infrastructure. After forty years of neglect, the island's highways, railroads, and ports will need millions of dollars in repairs and improvements. But it will not be possible to promote foreign investment in a free Cuba if property rights are clouded by disputes with other major sources of foreign investment. That is one more reason why we must implement the U.S.-EU Understanding now.
For too long Castro has gotten a free ride. He was able to take comfort in the fact that many Europeans seemed to look past or willfully disregard his misdeeds. He took comfort in the transatlantic quarrels over America's Cuba policy. To his ears -- and to those of the Cuban people -- American policy on Cuba sometimes sounded like the clear but solitary note of one lone trumpet.
Now it can be different. If we only try, we can create a more united transatlantic message on Cuba, just as Europe and America did on Berlin during the Cold War. Because of the Administration's hard work to build stronger international understanding and support for our Cuba policy, we have better prospects now that others will speak out as well. With your support, and with Congressional action that allows the United States to put the May 18 Understanding into effect, we can give heart to the Cuban people and protection to those Castro has deprived of property and human rights. And we can hasten the day when business is able to help rebuild a free and democratic Cuba.
(end text)
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