Monday, December 22, 2014

Pay up, Castro boys

Hanging over the possible Obama deal to open relations with Cuba - claims by American companies who lost assets when Fidel Castro took power in 1959.
The federal government has a whole outfit, the Foreign Claims Settlement Commission, tasked with overseeing these claims. When a foreign country expropriates (or nationalizes) a U.S. company's assets, as happened in Cuba but has also occurred in China, Vietnam and elsewhere, the companies file a claim with the commission. It then examines its validity and, if it checks out, the claim is officially certified. It is then up to either the companies individually to negotiate a settlement with the foreign government or for the federal government to negotiate on behalf of the companies with claims as a whole.
In Cuba, American corporations have 5,913 claims that were worth $1.9 billion when they were certified in the 1960s. Those claims have been accruing interest for the last half century, at a 6 percent simple rate, meaning that they are worth upwards of $7.5 billion in 2014. Because of the U.S. embargo of Cuba and lack of any formal diplomatic relations between the United States and Cuba, the claims have never been resolved.
Somebody needs to pay these claims.
Think of the good things our country could have had with that money available for investment.

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