Property Rights in Cuba, A Lurking Legal Nightmare

October 5, 2016

The year is 1959. Imagine you are an American tourist. During your stay, you withdraw money from an American-owned bank, use American-owned electricity, smoke American-grown tobacco, use American-owned phone lines, buy beachwear at an American-owned store, and sleep at an American-owned hotel. Where would you guess you are vacationing?

If your guess is somewhere in the United States––Florida, perhaps––you’re within 200 miles of being correct.

What was once called America’s playground (or for some, the whorehouse of the Caribbean) has reopened its doors to the United States after 54 years of a two-way cold shoulder.

The United States and Cuba may have warmed diplomatic relations, but the normalization process between the two countries is still years before realization. After all, the two countries have quite a history––a history that both countries won’t likely forget.

Before the Cuban Revolution in 1959, U.S. businesses in Cuba owned an amount greater than any Latin American country except for Venezuela; the value of U.S. enterprises in Cuba were over three times that of Latin America as a whole; so not surprisingly, the U.S. invested more in Cuba than any other Latin American country. But the enormous involvement of the U.S. in the Cuba economy had (as Fidel Castro declared in his July 26th Manifesto, “History Will Absolve Me”) adverse effects on the Cuban population.

In 1956, the U.S. owned over 90 percent of telephone and electric services; about 50 percent of public service railways; about 40 percent of raw sugar production; and almost a fourth of all bank deposits in Cuba.[1] (I can’t imagine what would the U.S. government think if these statistics were the other way around.)

Fidel Castro, joined by Che Guevara and nationalist sympathizers, Castro called for the overthrow of Cuban president Fulgencio Batista, who welcomed U.S. business in the Cuban economy, and a revolution for the Cuban people, 700,000 of whom did not have jobs. Unemployment was only one facet of Castro’s agenda: He wanted to address the lack of public health, low levels of education, extremely high housing rent, etc. He also famously addresses government corruption in the following excerpt of “History Will Absolve Me:”

…The insured have money to hire lawyers and bribe judges. You imprison the poor wretch who steals  because he is hungry; but none of the hundreds who steal millions from the Government has ever spent a  night in jail. You dine with them at the end of the year in some elegant club and they enjoy your respect. [2]

Castro called for an end of North American exploitation of the Cuban people. After Castro gained control of the government in 1959, “overseers” were installed in large U.S.-owned companies, such as the Cuban Telephone Company; as a result, telephone and electricity rates were lowered to what Castro believed were more reasonable levels. New petroleum and mining laws passed by the Cuban government cancelled most existing claims by companies and individuals. The Agrarian Reform Law enabled the government to seize, rice, and coffee-producing lands owned by Americans and Cubans. (In return for seized lands, Cuba offered 20-year 4.5 percent bonds in payment; previous owners of these lands and the U.S. government did not accept these conditions, as they believed them inadequate.)

By August 1960, Cuba had expropriated the telephone, electric, and oil industries, and seized all U.S.-owned sugar mills, which altogether was valued at $750 million in 1960. 

After the revolution, U.S. property owners registered $1.8 billion with the Foreign Claims Settlement Commission. In all, the properties seized by the Castro regime may be worth more than $100 billion.[3]

However Cubans owned the majority of the property seized by the Cuban government: It is estimated that nearly two million people in Cuba or in exile have the right, as owners or heirs, to reclaim property or receive compensation.[4] For the last 25 years, Nicolás J. Gutiérrez, a Cuban-American Miami-based consultant, has been helping Cuban-Americans (who fled the Castro regime but were not yet U.S. citizens when they left Cuba) to compile the paperwork on their property claims back in Cuba. They have not been permitted to register those losses through the Foreign Claims Settlement Commission.[5]

Property rights are a complex issue with Cubans still on the island, as well: Cuban citizens and permanent residents have only been able to buy and sell their own homes since 2011. Under Fidel’s rule, Cuban government owned all Cuban homes; the government also assigned a house to each citizen. However the 2011 law that privatized real estate did not address real estate confiscated from Cubans early in the Cuban revolution (1959-1960).[6]

If and when these property claims will be rectified remains unknown. Gutiérrez believes that “Serious investment is not going to go into Cuba unless and until Cuba rectifies the takings of Cuban-Americans and other Cubans in Cuba. Who’s going to trust that their investment was treated any better than ours was back then?”

[1] Johnson, Leland L. “U.S. Business Interests in Cuba and the Rise of Castro.”

[2] Castro, Fidel. “History Will Absolve Me.”

[3] Fisher, Daniel. “Cuba Opening Could Reopen Fight Over Billions In Seized Property.”

[4] Williams, Carol J. “Ownership in Cuba Becomes Hot Issue.”

[5] Taylor, Marisa. “US property claims in Cuba: The next hurdle for normalized relations.”

[6] Cave, Damien. “Cuba to Allow Buying and Selling of Property, With Few Restrictions.”

[7] Williams, Carol J. “Ownership in Cuba Becomes Hot Issue.”

[8] Schwartz, Felicia. “Embassies Reopen as U.S., Cuba Restore Ties.”

About Author(s)

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Susan Wiedel
Susan Wiedel is a senior at the University of Pittsburgh studying English Nonfiction Writing and Latin American Studies. In the summer of 2014, Susan participated in the Center for Latin American Studies' Seminar/Field Trip to Cochabamba, Bolivia, where she conducted a research project on the quality and attendance rates of public secondary schools in the city. The unique experience led her to become more involved in the Center by becoming a certificate student and writer for Panoramas.