Senior State Department Official on Cuba Claims Discussions

Special Briefing
Via Teleconference
July 29, 2016

MODERATOR: Good morning, everyone. Thank you for joining our background call on the U.S.-Cuba claims discussion which took place here in Washington, D.C. yesterday. Today we’re going to have a briefing by [name and title withheld], who from this point forward will be known as a senior State Department official. As a reminder, I just want to note that today’s call is on background, attributable to our senior State Department official.

Without further ado, I’ll go ahead and turn it over to our official, who will make brief remarks and then turn it over to you for questions.

SENIOR STATE DEPARTMENT OFFICIAL: Good morning. As you – most of you probably know, we began our bilateral claims dialogue with Cuba last December in Havana. We noted after that first round that the reestablishment of diplomatic relations allowed us to more effectively represent U.S. interests in Cuba, and to have a more concerted dialogue with the Cuban Government on a variety of topics that are of importance to the United States. That very much continues to be the case as regards the matter of outstanding claims of the United States and U.S. nationals against Cuba. Yesterday, we concluded a second meeting with the Cuban Government on claims. That meeting occurred in Washington. While at the first meeting the two sides exchanged information on the various claims each side was bringing to the table, the second meeting was more substantive in nature, both in exploring more of the details about the claims that need to be resolved, but also in reviewing the practices of both countries in resolving claims with other countries and how those practices could provide options for resolving these claims that we’re discussing now.

The claims being discussed include claims of U.S. nationals that were certified by the Foreign Claims Settlement Commission many years ago, claims related to unsatisfied U.S. court judgments against Cuba, and claims of the U.S. Government. The Government of Cuba also provided further details about claims that it has against the United States. They relate to the embargo and to human damages that have been adjudicated by its courts.

And with that introduction, I’d be happy to take questions.

OPERATOR: And if you have a question at this time, please press * followed by 1. And we have a question from Arshad Mohammed with Reuters. Please go ahead.

QUESTION: Good morning. Just a couple of quick practical matters. When do you expect the next round of negotiations to take place and will they be in Havana? Is there any way of characterizing such progress, to the extent that there has been any, that you’ve made in these first two rounds of talks? And are there any particular paradigms, ways in which Cuba has settled claims with other nations or ways – or specific countries with whom the United States has previously settled claims, that you think will be useful to resolving these claims, if indeed they can be resolved?

SENIOR STATE DEPARTMENT OFFICIAL: Let me begin by noting that we do not currently have a scheduled meeting for the next round. The U.S. delegation expressed its desire to resolve the claims as quickly as possible, and we indicated that we were willing to dedicate a substantial amount of time and energy towards trying to get to resolution. I think both sides agreed that we would have more regular meetings and that we would continue to pursue this matter in the established diplomatic channels.

That said, I think we’re just – it will just be a matter of trying to schedule the next meeting according to available time. The meeting will occur in Havana. Our normal practice is to alternate between capitals. So we began in Havana, we had this last meeting in Washington, and we would expect to go to Havana for the next meeting.

In terms of prior settlements that the two governments have entered into, we know that – and Cuba provided some background on this – we know that Cuba has resolved outstanding expropriation claims with several countries in the last two decades, and we note, though, however, that they were much, much smaller in scope than what we have here. We certainly also have lots of practice in claims settlement involving expropriation claims, involving outstanding court judgments and government-to-government claims. I think the – we all recognize that the complexity and the scope of the claims that we bring to the table will have to allow us to draw on all those examples, but that we’ll probably have to figure out something that is unique to this particular claims matter.

OPERATOR: Okay. And our next question comes from the line of Karen DeYoung, Washington Post. Please go ahead.

QUESTION: Yes, thank you. I wonder if you could give us the total amounts in each of the categories that you outlined – the, I guess, three or four categories of U.S. claims and the two categories of Cuban claims.

SENIOR STATE DEPARTMENT OFFICIAL: For the U.S. claims, there are claims of U.S. nationals relating to expropriations that date back to the late 1950s and 1960s. Those were adjudicated by the Foreign Claims Settlement Commission in two separate programs, and the total principal of what they negotiated was $1.9 billion. And the commission then also awarded 6 percent interest on that. So we have indicated that obviously that’s part of it. We also know that in terms of U.S. court judgments, there are approximately $2.2 billion of judgments outstanding against Cuba. That include – that’s compensatory damages and a number punitive damages have been awarded as well. In terms of the U.S. Government claims, these are in the hundred to couple hundred millions of dollars and relate to interests that the U.S. Government had in mining interests in Cuba back in the ’50s.

And from the perspective of Cuba, what we understand, their embargo claims and their human damages claims relate to two judgments, outstanding judgments that they described against the United States rendered by Cuban courts. The human damages claim – the judgment was for $181 billion. We understand that that number could be higher. And for the economic damages judgment, we understand that that judgment was for $121 billion, but again, that number might be higher. Those are essentially – Cuba also has a claim for blocked assets, but there hasn’t really been, from what I would say, a solid number that’s been discussed with respect to that, because the amount of blocked assets has fluctuated over time.

OPERATOR: And next we have the line of Nora Gamez with El Nuevo Herald. Please go ahead.

QUESTION: Hi, hello. Thank you for doing this. Could you comment on which are the kind of model for negotiation or resolving these claims that the U.S. is putting onto the table, if this was discussed in this meeting?

SENIOR STATE DEPARTMENT OFFICIAL: The – I would just say at the outset that these negotiations or discussions on claims are very much along the lines of what we have experienced in the past. We have – as I mentioned in my opening, we have gotten to a more substantive discussion now that we know what’s on the table. In looking at the past claims settlements that both sides have embarked on, the most traditional type of claim settlement in – for claims of this nature would be a bilateral agreement that sets out the scope of the claims that are to be resolved with releases for those claims from the other government. Sometimes a lump sum of money is then provided in settlement of the claims.

Here, both claim – both governments have claims that they’ve put on the table, and so that would all have to be worked out. We know that in the past, some of Cuba’s claim settlements have related to perhaps not payment of a lump sum of money, but sometimes the liquidation of various products that are provided or bonds that are provided. But we’re looking at everything at this point and trying to figure out what might be the most appropriate way forward in light of, again, the large numbers of types of claims and the complexities that some of these claims raise.

OPERATOR: And ladies and gentlemen, as a reminder, if you have a question, please press * then 1. Once again, for any questions or comments, press * then 1. And we have Serena Marshall with ABC News. Please go ahead.

QUESTION: Sorry, I was muted there. Thank you for doing this call. I was just wondering, with respect to the Cuba claims, how the issue of the embargo would play into that. Because even if this gets resolved, the embargo still remains in effect, and obviously, that plays into the Cuba claims’ numbers.

SENIOR STATE DEPARTMENT OFFICIAL: I don’t think we’re really in a position to address that kind of question at this point. Again, while we are into a much more substantive discussion, at this point, we haven’t really penetrated how things would play out because we’re not just there yet. We are just looking at what kinds of framework, what kinds of options there are for looking at all of these claims, whether we can try to resolve some subset of claims, whether it would be easier to do that at the outset, whether we want to follow the full traditional model of a full lump sum settlement of everything.

But we know that there are kind of pros and cons on both sides, but in terms of factoring in how Cuba’s claims – and particularly with regard to the embargo – would play into all this, I think it’s very premature to say at this point.

OPERATOR: And next we have Luis Alonso with AP. Please go ahead. You’re open.

QUESTION: Thank you – good morning – for doing this. I would like to ask whether there has been previous claims that U.S. has received in the same dollar amount order. If I understood correctly, Cuba’s claims amount to at least 200 billion. Are there similar examples in the past? And if you could please talk about it. Thanks.

SENIOR STATE DEPARTMENT OFFICIAL: There – I don’t know that there’s anything exactly comparable to this particular situation regarding Cuba’s claims. It’s fair to say that traditionally, claims come up in normalization. And obviously, as part of normalization, there are frictions or claims that accrue on both sides. Where there has been a blocking of assets, there have traditionally been claims for actions by the United States to block assets and take those kinds of measures and those kinds of issues have been dealt with in prior claims settlements. But again, it’s much more related to the blocking of assets.

OPERATOR: And next we have the line of Patrick Oppmann, CNN Havana. Please go ahead.

QUESTION: Yeah, hi, good morning. I was wondering if Cuban officials detailed how they got to those numbers, if they sort of broke down the damages and how they reached those sums. And as well, if there’s any precedent of the U.S. ever paying a country back, compensating a country that the U.S. had an economic embargo against.

SENIOR STATE DEPARTMENT OFFICIAL: In terms of Cuba’s breakdown, I think what we heard this time in terms of more substance was that – the claims were raised in December. But what we did hear was an explication about the way these judgments came into place, the Cuban laws that gave rise to the jurisdiction for the courts to hear these kinds of claims. There was a general description of the types of elements that went into the economic damages or the human damages types of claims. But we didn’t hear any specific breakouts of numbers on those categories. It was more a broad-brush description of that.

I think that with regard to the Cuban embargo, this is kind of a unique situation or an unprecedented set of issues with regard to our relations with Cuba over all these years. So it’s not clear to me that there is an absolutely comparable situation that we can point to.

OPERATOR: And next we have the line of Lucia Leal with EFE. Please go ahead.

QUESTION: Hi, good morning. Do you know if you can give an estimate of how long do you expect this process to last? Could it take years? Because you’re mentioning very complex negotiations. And do the Cubans accept this idea of having, in the end, a bilateral agreement to settle this all.

SENIOR STATE DEPARTMENT OFFICIAL: I’m smiling as I hear this question because on every – whenever we embark on a claims settlement negotiation process, the question is always, “How much time do you expect this will take?” And it’s very, very difficult to say. What I can – because we just can’t predict what kind of turns the discussion will take. And even when it takes those turns, those elements of the discussion can be very constructive in reaching an overall resolution, and my experience has been that it is worth taking the time to have that discussion so that one can eventually reach a mutually satisfactory resolution.

That said, I would – from right now, I think there’s nothing about this negotiation that is any different from our experiences in dealing with claims with other countries. We seem to be – there may have been a little bit more of a gap in time between our first and second meeting, but one, we’re already at the second meeting. We are having very substantive discussions. Two, both sides seem to agree that we need to have more regular meetings. And we’re – three, I think both sides are committed to try to resolve this in a mutually satisfactory manner, drawing on the experiences of claims resolution by both governments.

MODERATOR: Okay, ladies and gentlemen. I think after this we’ve got time for maybe two more questions.

OPERATOR: Next is Frances Robles, New York Times. Please go ahead.

QUESTION: Hi, good morning. I wanted to know – and maybe you sort of touched on this in your last answer, but do they seem at all inclined to make a real settlement in their claims given how far the two sides are?

SENIOR STATE DEPARTMENT OFFICIAL: Again, I would say that we certainly have not heard anything that there is an unwillingness to settle claims. And in the substantive discussion that we’ve had, we’ve heard some very – very kind of helpful questions seeking additional clarifications and on substance and about what the U.S. practice has been. And I would think that’s a positive element of these discussions and that would indicate that they on their side as well as on our side are processing what we’ve got on the table together, what our practices have been, and how we might be able to rely on that practice for considering realistic options for coming to some resolution.

OPERATOR: And our final question will come from the line of David Adams, Univision. Please go ahead.

QUESTION: Hello, thanks very much. You mentioned that one possible solution is lump sum payment. Given the extraordinary difference in the size of the claims by both countries, how do you see a lump sum – it would appear to be that the Cubans have rather a large advantage in terms of the amount of money being claimed.

And secondly, just could you tell us a little bit about what other negotiations you’ve been involved in on behalf of the United States – say, perhaps ongoing and in the recent past?

SENIOR STATE DEPARTMENT OFFICIAL: So on the first question, again, if you look at prior settlements with Vietnam or China that involved – there was some blocking of assets, there was expropriations, and there was normalization, and there were adjudications of claims by the Foreign Claims Settlement Commission – those were resolved then finally in a bilateral agreement providing for a lump sum payment. There are different ways in which the payments can be made. They can be made in one lump sum, blocked assets can be factored into that, and payments can be made over time in installments.

So those are the kind of practices that were the examples – the historical examples that we have. I think that we’ll – I think it’s still premature to understand how that element of it might play out at the end, and if we even go to some kind of overall lump sum settlement. We’re, again, at the very early stages of this. We’ve provided some ideas to the Cuban Government based – drawing on our practice. And they had no immediate response, but again, it was I think a fair amount to digest and they have indicated that they will get back to us.

The other question – let’s see, I forget now.

PARTICIPANT: How many things have you worked on.

SENIOR STATE DEPARTMENT OFFICIAL: Oh, how many other things. So I’ve been doing claims for most of my career, and have been involved in – there was a settlement of judgment claims with the Libyan Government in 2008, I believe it was – I was involved in that; the settlement with Iraq in 2009; and most recently, we reached an agreement with France in December of 2014 on claims. And there are a number of other things over the course of my career, but those are probably the most recent.

PARTICIPANT: How many years.

MODERATOR: Okay, everyone. I want to thank our senior state Department official for joining us today, and thank you for joining our call. And right now we’ll go ahead and conclude. Everybody have a great day.