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Office of the Press Secretary

For Immediate Release July 16, 1996
                           PRESS BRIEFING


The Briefing Room

1:42 P.M. EDT

MR. MCCURRY: Good afternoon, everybody. I think, as you know, I have an announcement from the President that I would like to make and that I would like to read part of his announcement.

"From the outset of my administration," the President writes, "I've been committed to a bipartisan policy that promotes a peaceful transition to democracy in Cuba. Consistent with the Cuban Democracy Act and with the efforts of my predecessors, I've maintained a tough economic embargo on the Cuban regime while supporting the Cuban people in their struggle for freedom and prosperity. Often, the United States has stood alone in that struggle because our allies and friends believed that pressuring Cuba to change was the wrong way to go.

Five months ago, the world was given a harsh lesson about why we needed more pressure on Cuba. In broad daylight and without justification, Cuban military jets shot down two unarmed American civilian aircraft over international waters, taking the lives of four American citizens and residents."

The President took immediate steps, as you know, in response to that tragedy. The Congress passed the Cuban Liberty and Democratic Solidarity Act, the Libertad Act. And now, the President says today, "The time has come for our allies and friends to do more to join us in taking concrete steps to promote democracy in Cuba." That's why today the President is announcing a course of action on Title III of the Libertad Act to encourage our allies to work with us and to accelerate change in Cuba.

The President has decided today to use the authority provided by Congress to maximize Title III's effectiveness in encouraging our allies to work with us and to promote democracy in Cuba. He will allow Title III to come into force. At the same time, he will suspend the right to file suit for six months. And during that period, the Clinton administration will work to build support from the international community on a series of steps to promote democracy in Cuba.

To answer your questions about this, to walk through the President's decision and its applicability, I've asked two briefers here today -- the first, our Deputy National Security Advisor, Sandy Berger and also with him the Under Secretary of State for Political Affairs, Peter Tarnoff.

Sandy and Peter, welcome and thank you for being here.

MR. BERGER: Thank you, Mike. The purpose of the President's decisions that Mike has just announced is to use the leverage provided by Title III of the Libertad Act in a most effective manner to promote democracy and political change in Cuba. That is the fundamental purpose of the provision, and we believe and the President believes that the steps that he has announced today is the most effective way to accomplish those objectives. In a sense, the President's approach uses Title III not as a sledge hammer, but as a lever to promote democracy in Cuba.

There are three aspects to the President's decision. First, the President has decided to allow Title III to come into effect. Liability for those who traffick in or profit from confiscated property in Cuba will arise on November 1st as provided under the law that liability is not extinguishable.

Second, the same time the President will use the other suspension authority provided under Title III to suspend for a six- month period the right to file individual suits. During that six months, we will work vigorously with allies and with foreign companies to build support for a series of steps to promote democracy in Cuba. We will make a serious good-faith effort with the allies. We will see whether they will make a serious effort with us. And they know that as they make that serious effort, liability is accruing under the first provision that I talked about.

At the end of this six months, the third aspect of this, based on the progress that has been made during this period, the President will decide whether or not to renew the suspension on filing suits either in whole or in part based upon progress that has been made and steps that have been taken by companies and countries to join in helping to promote democracy in Cuba.

Now, let me take each piece of this. By allowing Title III to go into effect, the President substantially enhances our credibility and leverage with our allies and foreign business partners to get them to join us to build a broader coalition for democracy in Cuba. That is true because liability is accruing during this period. The threat of liability is real. In a sense the clock is ticking. Liability will be accrued for any trafficking, any use of confiscated property that takes place after November 1st.

Second, we encouraged by doing this foreign companies to cease trafficking in expropriated properties since they will live under the constant threat of future lawsuits. The only way in which they will be assured that the suspension would not end is by ceasing to invest and to traffick in confiscated property.

At the same time, by suspending the right to bring individual lawsuits during this six-month period, we gave our allies and foreign companies a real opportunity to join our effort to promote democracy and to build a broader coalition -- a broader coalition for a democracy in Cuba.

It helps us pursue what has been a consistent bipartisan objective to broaden the coalition of countries that will pressure Cuba to change. It will increase the forces of change on the island, and that will encourage foreign companies from trafficking expropriated property.

Now, what is it that we will seek from foreign companies and foreign countries during this six-month period? We will, during this period, engage in an active effort with our allies and with others to join in a more activist effort to accelerate the transition of democracy to Cuba.

We'll work together on steps that would promote this goal. These would include such things as putting pressure on the regime to respect human rights and provide the Cuban people with more economic and political freedom both bilaterally and through multilateral efforts -- coordinating with us ways to provide assistance to groups that are promoting change within Cuba -- human rights groups, dissidents, independent journalists.

Recently we gave a $500,000 grant, for example, to Freedom House to assist human rights activists in Cuba. That's one example of the kinds of efforts that other governments could engage in. Withholding external assistance, nonhumanitarian assistance and trading benefits to the Cuban government until it engages in meaningful change. Channelling humanitarian assistance to independent groups rather than through the government. Promoting business practices such as the Sullivan Principles in South Africa, there are similar principles that various groups have promulgated in Cuba that relate to the right to organize and the right to express oneself in the workplace; nondiscretionary hiring practices. All of these measures that companies can take to promote democracy in Cuba.

So, during this period liability will continue to accrue, the meter will be ticking, but we will be working very aggressively with our allies, with companies to try to get them to join with us in bringing Cuba into the family of democracies and to taking a more activist, concerted approach with the United States to foster a change in the nature of democracy and the nature of the regime in Cuba.

In a sense, this basically has three objectives. This approach will discourage further investment in Cuba. It will enable us for this period to cooperate with our allies in an effort to intensify the pressures on Cuba to change and will avoid a cycle of retaliation and counter-retaliation during this period among us and our allies, which will divert attention from Cuba and will simply focus attention on our dispute with our allies.

Again, at the end of this six-month period if, in the President's judgment, companies and countries have not made progress towards a more activist approach towards promoting democracy in Cuba then the President would seriously consider lifting the suspension at that time.

Peter, do you want to --

MR. TARNOFF: Let me just add a few words on the question of how the President's decision increases our leverage and the opportunities for cooperation with friends and allies around the world to promote democracy in Cuba.

To promote change in Cuba it is, of course, desirable to have the support of our friends and allies in governments around the world. The European Union and its members, as well as other democratic governments, have long been critical of the Cuban government's systematic abuse of human rights on the island and its refusal to adopt democratic reforms, its slowness to abandon the obsolete economic system that dooms the Cuban people to scarcity and hardship.

We have had some recent successes; not enough, but some recent successes in deepening our cooperation with allies in this effort. For example, in the last several months, the European Union has taken a particularly tough stand with the Cuban government, insisting that it show progress on political and economic reform before moving ahead with the planned cooperation agreement.

We believe that both this kind of concerted international pressure will be effective in promoting change in Cuba, and that more can be done in this area particularly if the European Union and the United States cooperate closely.

Recent disagreements between the U.S. and our allies over Title III have diverted attention away from the situation in Cuba and overshadowed our shared goals. And these disagreements had the potential to prevent any real cooperation between ourselves and major countries around the world on the question of bringing about democratic reform to Cuba.

With the President's six-month suspension of the right to file suit under Title III, we believe we have an excellent opportunity to work with our allies in new ways to combine and increase our collective ability to promote change on the island.

Moreover, the President has decided that he will soon appoint a special envoy to spearhead this effort, a person of stature and credibility in the United States and internationally, and we expect a decision shortly on who that person will be.

Closer cooperation with allies will also help us use the leverage of international fora in pressing for change in Cuba. For example, we can anticipate more support for resolutions at the United Nations and at the U.N. Human Rights Commission, calling on Castro to account for human rights violations and for the brutal shootdown in February of the unarmed U.S. civilian aircraft based on the report prepared by the ICAO last month.

The suspension of Title III will help us achieve all of these objectives.

Q What are we trying to do, starve out the Cubans, break them down economically?

MR. TARNOFF: I think that the person who has the greatest capacity to end the suffering of the Cuban people, Helen, is the President of Cuba, Fidel Castro. For many years, it's been within his capacity to change the equation in Cuba and to allow Cuba to enjoy the benefits of being part of the international community with all of the other democracies in the hemisphere. So I would say that the well-being of the Cuban people lies in the hands of Castro.

The purpose of this is to use this provision in an effective way, not in a sledge hammer way, but in an effective way to try to get the Europeans' attention and use that attention to try to get them to join us in helping to bring the 35th country in this hemisphere into the fold of democracy with the other 34.

Q It says, "liability will be established for any act of trafficking that takes place after November 1st."


Q Now, what happens to the 5900 outstanding claims already filed? Do those kick in on November 1st, or how does that work?

MR. BERGER: This is a little confusing, and let me just walk through it. I didn't write this statute, but we're working within it. Under Title III, because the President did not waive the entry into force, then the actual rite of action, the cause of action becomes real, becomes alive on August 1st, but there is a three-month grace period built into Title III for the purpose of allowing companies to disinvest between August 1 and November 1. That's, in a sense, the purpose of Title III. So if they disinvest between August 1 and November 1, there's no liability. And in fact, the very fact that the President has let Title III come into effect will cause, I believe, companies to consider whether that's the best option for them.

After November 1, that liability comes in effect. That liability becomes real. And there is -- that liability accrues. It can't be extinguished. It can't be extinguished subsequently. Now, the second suspension authority that was provided by Congress in Helms-Burton, enabled the President to suspend the right of individuals to file under that right of action for six-month periods. And that's what the President has done to give us this six-month period. Now that the Europeans and these companies know that the meter is running, that in fact liability is accruing, and therefore we ought to talk seriously about how we can work together towards the objective of promoting democracy, during that six-month period there won't be lawsuits, but there will be liability accruing.

Now, the last thing you asked about was the class of so-called plaintiffs, the class of claimants, just to add another layer of complication here. Again, this is under Title III as written by the Congress. There is a first wave, let's say, of claimants under Title III of those whose claims were certified by a preexisting federal certification process that goes back to the '60s and which involves people who were U.S. nationals at the time that their property was confiscated in the late 1950s. So they would, in a sense, have the first right to sue under this. With respect to people who became U.S. citizens subsequent to that, their right to sue does not ripen until 1998.

Q Sandy, some of the supporters of Helms-Burton say that what you've taken is exactly the worst alternative by giving them the right of action, giving the ability to start preparing their case and then not letting them file the cases, that it's the worst of all alternatives. And Senator Dole today complained that the President has waffled right up to the last minute on this.

MR. BERGER: I don't think it's the worst alternative, I think it's the best alternative. I think it's the smartest alternative. One alternative would have been to simply let title --let this come into effect. We would have then had -- without the benefit of a serious, intense dialogue with the Europeans, we would have had a cycle of action-reaction with our European allies and with others in which there would have been, I am sure, retaliation and counter-retaliation without an opportunity for six months, as we have now, to see whether or not we can negotiate a more serious program with them.

Conversely, the President could have simply waived this entirely and not let the right of action come into effect. I think by doing that, he has the attention of the Europeans and others who realize that this is a real liability. It's simply like any liability that you or I would incur. Once we know that liability is building up and that liability is real, obviously, one's attention tends to be focused more sharply.

So, I think that this is the best option. It is an option that is consistent with Title III, consistent with the Helms-Burton Act, but seeks to use -- and let me go -- final point -- seeks to use it for its purpose. I believe the purpose of Title III and the purpose of Helms-Burton was to promote democracy in Cuba. We are better promoting democracy in Cuba if we can do it with added impetus from our allies and others than if we are simply acting alone, and that's what we'll try to do over the next six months.

Q Two questions. First, since there is a continuation of liability, does this mean that all of a sudden the allies are going to drop their complaints on Title III and their threats of retaliatory measures? My second question is, the liability -- does it extend only to companies that continue to traffick after August 1st or new companies who get into new joint ventures in Cuba after August 1, or does it go back to companies that have been --

MR. BERGER: Liability would adhere to any company that trafficks after November 1st.

Q But not before that. Not all the companies --

MR. BERGER: That's correct.

Q -- before that?

MR. BERGER: But trafficking is defined very broadly under the statute to include use of property, ownership of property so that -- the only way that you could really avoid trafficking after November 1, even if your ownership goes back is to disinvest.

Q Sandy, you said the reason that you allowed -- that you did not allow the legislation to go fully into effect now is you wanted to start this discussion with the Europeans and other allies. But, of course, the bill was signed in March. Isn't that right? Why have you not engaged in this serious, long discussion between March and today so that you would be able to today to either allow the provisions of the bill to go into effect or to waive them?

MR. BERGER: There are a number of things that we have done since the bill was signed.

Number one, Title IV has come into effect. And as you know, Title IV prohibits or requires us to not permit visas for individuals whose companies are engaged in trafficking in confiscated Cuban property. We have enforced -- are enforcing Title IV very vigorously. A number of companies have received notices indicating that their executives and officers will not receive visas to the United States.

Number two, we have pursued very vigorously in the United Nations and with the International Aviation Agency international condemnation of the Cuban act of shooting down American planes on February 24. And I think, finally, David, the fact of letting the Act come into effect, letting the entry into force of the cause of action will give our discussions with the Europeans, I think, an intensity and seriousness that probably would not have existed before.

Q Sandy, are there concrete steps that the European allies have to take, like they have to impose sanctions or they have to -- are there actual things they have to do or is it just that at the end of six months President Clinton can kind of make an assessment and think, yes, I think they're leaning more in our direction?

MR. BERGER: Well, I went through a number of steps. And what we will in the course of our discussions with the allies and others who invest will be very specific with them about the kinds of steps that we would hope to see them take and hope to see their companies take. And if at the end of that time, at the end of the six months the President and his advisors, Secretary of the State and others, will have to make a judgment as to whether or not substantial progress is being made such as to justify a continued suspension.

Q You're not putting at the top of your list disinvestment, or divestiture.

MR. BERGER: No, I said that in my prepared remarks. I said that the very fact that Title III comes into effect undoubtedly has the effect of deterring further investment in Cuba.

Q My question is, how much divestiture or disinvestment has there been since this law was signed, and do you expect that to accelerate?

MR. BERGER: There are a number of companies that have announced that they have disinvested in Cuba and a number of other companies that have indicated --

Q So is there a percentage of total holdings? I mean, can you give us an idea --

MR. BERGER: I don't have those numbers, but I know that there are a half a dozen or more companies that have indicated that they are disinvesting in Cuba.

Q To postpone this for six months, doesn't the President have to explain some reason of national interest or national security? And also, has there been a quid pro quo with the European allies in the sense that if we do this, you guys are going to do something else?

MR. BERGER: The answer to your second question is that while we have had discussions with the allies over the last several weeks about their concerns about this legislation, there has been no quid pro quo or no negotiation with them over the terms of this. I'm sorry, the first part of your question?

Q The first question is, to postpone it, does the President have to --

MR. BERGER: Each of these suspensions -- I would note that both of these suspensions are included in Title III. After the shootdown, the President, who had some concerns about Title III and had expressed them, said he would sign Helms-Burton if some changes were made, and over the ensuing several days, there were negotiations with the leadership at the heart of which was to place these authorities with the President, these suspension authorities, so that the President had the ability to use Title III in a more nuanced and a more sophisticated and a more targeted, that's I think better way.

The two criteria for both of these suspensions are whether it is essential to the national interest and whether it will promote democracy in Cuba. In the President's judgment, this approach, letting the cause of action, letting Title III come into effect, letting the cause of action ripen, so to speak, but suspending for this six-month period suits while we negotiate with other countries and other companies will both serve our national interest and will be the best way to promote democracy in Cuba.

Q Sandy, the President held meetings last night, held meetings this morning; when were the European allies, Mexico and Canada, notified, or are they learning about it right now as we are?

MR. BERGER: There have been contacts with our allies that are taking place today. I mean, there have been -- let me say this, there have been contacts with our allies, members of the Hill and others, for the past several months. There were a number of --

Q When was the final decision taken?

MR. BERGER: The President made a final decision this morning.

Q Sandy, can the President continue to issue these six-month suspensions indefinitely? And at some point, does he still reserve the right to issue a waiver?

MR. BERGER: Under Title III, the President must act every six months.

Q But he can do that indefinitely? He can kick that down the road?

MR. BERGER: He cannot. He cannot once Title III -- by virtue of the action taken today to let Title III come into effect, he cannot vitiate that. Title III has now come into effect.

Q The liability accrues, but he can continue to --

MR. BERGER: The liability accrues. And in 1997 or 1998 or 1999, he cannot simply then say the liability no longer accrues. With respect to the suspension authority, he is required, every six months to make a judgment about whether that suspension continues in whole or in part. He could continue that suspension with respect to all suits, he could continue that suspension with respect to certain countries or certain companies.

Q And by virtue of the decision today, he's precluded from ever issuing this waiver?

MR. BERGER: That's correct.

Q Sandy, can you tell us more about the special envoy? I know you can't name names, but their job responsibility --will they be forming panels with our allies to come up with a wish list or some sort of pass-fail criteria?

MR. TARNOFF: I think what the President wanted when he decided this morning to name a special envoy -- but he has not made a decision about who this would be -- would be to have someone of sufficient standing internationally, someone who is well-known in this country as well, somebody with familiarity with some of the issues involved, who could go in the next weeks and months to major capitals around the world and talk to them as the President and the Secretary's personal representative about these issues. And we feel that having a person of that stature will emphasize to the allies not only the seriousness of the President's intent, but his commitment to engage with them directly at a high political level on these issues.

Q What sort of negotiating authority do they have, though, to determine whether an ally's offer will pass or fail your test?

MR. TARNOFF: Well ultimately, as Sandy indicated, this will have to be a decision the President will make in a six-month period. But we've already given you some indications of some of the criteria that we will be looking at. But the point is to engage on a meaningful -- in a meaningful dialogue with allies who are deeply interested in this issue. And we think the opportunity is here.

The President's decision to waive the right of action does provide this window and I think we have reason to believe that governments will respond in a way that will indicate a willingness to dialogue with us.

Q This would seem to some a confusing signal, though, to Cuban American community or businesses who want to sue because they can prepare and spend a lot of time and money, right, but at the end of six months they might not be able to sue at that point.

MR. BERGER: Let me go back to the fundamental purpose of Title III, the fundamental purpose of Helms-Burton, the fundamental purpose of administration policy is to promote the transition of democracy to Cuba. It has not happened since 1957 so the next six months is a time we ought to use wisely but I think it doesn't suggest that everything has to happen in six months.

My point is this: I think what the President has done here is -- Congress gave him a tool, Title III. He could have simply said put it into effect no holds barred, let it go forward; we won't even talk to the allies and let's just go forward. Under those circumstances I believe we would have spent the next six months in intense battles with the allies in which the Cubans would have stood on the sidelines watching us fight with the allies, and the focus of attention will be off of Castro and on to the fights with the allies. That was one choice. Another choice would have been to say, forget about Title III, I'm just going to push it aside, it doesn't mean anything. The President chose not to do that as well. He said I believe Congress acted. I signed this law. Title III can be -- I believe can be an effective tool, and let's at least find out whether it can be.

And so he let Title III come into effect. He thereby created a credibility and leverage with our allies to talk to us in real terms. And we will see during that six-month period whether or not and the extent to which -- and it may not be all or nothing. We can get other countries to do more than they have done with respect to the remaining non-democracy in our hemisphere. And if, in fact, at the end of the six months, some or all of our allies join us in pressing Castro harder to change, then we will have used Title III effectively. If it does not, I would submit that the people who have been waiting since 1957 with their claims are not terribly prejudiced if at the end of six months the President decides that this effort to try to work with our allies to bring concerted pressure on Cuba does not work.

Q So you're essentially giving the allies more operating room than was originally envisioned. I mean, they have other options now. They don't just have to pull out; they might be able to --

MR. BERGER: Well, if you're a company in Cuba, you have -- or a country doing business in Cuba, you can either disinvest, because that is the only way now that Title III has come into effect, that you can be sure that you will not be sued, or you can join with other companies and join with your country in working with us to promote a transition to democracy in Cuba. And you can do that through what you do on the ground, the Sullivan principles in South Africa were very effective, there are similar things that companies could adopt in Cuba with respect to fair labor practices, with respect to other activities, and countries also have the same opportunity to take a different approach, a more activist approach towards the transition of democracy in Cuba, we will give that a try.

Q Sandy, how many companies --

MR. BERGER: Let's do this, and then we'll come back to Ann.

Q We've talked about some or all countries being applied to in a further renewal of the suspension. Does that mean that, for example, if France really is very active in a way that you hope that people would not be able to sue French companies, but if Canada is a bit laggardly, they would be able to sue Canadian companies? How do you see this working?

MR. BERGER: Certainly, I think that authority would exist after January if the President chose to use it in that fashion.

Q How many companies under Title IV have been told your executives can't come into the U.S.? And the President says a significant number of companies have already gotten out of Cuba. Can you give us any names or documentation on it?

MR. BERGER: How many companies -- do you know how many companies have been notified under Title IV? One company has actually received notice, but there are a number of companies --

Q What number? I mean, 10, 20, 30?

MR. BERGER: I think around 10 or so companies that are being worked through the system.

Q Could we get some lists, if that's public information?

MR. BERGER: I don't know that is public information.

MR. MCCURRY: State has briefed on that, I think.

MR. BERGER: State will know that better than --

Q So far, only one company has been told you can't come in.

MR. BERGER: One company has received a notice and there are other companies that are in the process. Obviously there is -- you have to establish the predicate of that before you --

Q And the President says a significant number of companies have already chosen to leave Cuba.

MR. BERGER: We know of two or three companies that have publicly announced that they are leaving Cuba.

Q I don't know what "significant" number means. One or two?

MR. BERGER: I believe there are about a half a dozen companies or so.

Q Have you been able to verify that they have indeed ceased their operations in Cuba?

MR. BERGER: I know that a few companies -- Rob help me out here in terms of --

MR. MALLEY: four companies have publicly announced.

Q Right, but have you verified that Redpath or ING or any of the ones who have announced have actually quit their operations?

MR. BERGER: The four companies that are listed that have made statements with respect to disinvesting are Paradors, Nacionale from Spain, Cemex from Mexico, Redpath from Canada and ING from the Netherlands. I can't tell you what -- where they are in that process. When you leave -- when you disinvest that doesn't happen overnight obviously.

Q Can I ask a question on liability, please? I'm a little unclear on that.

MR. BERGER: You're only a little unclear, then I've been a little successful. (Laughter.)

Q Well, in allowing Title III to take effect, is the President essentially making it a crime for anyone to traffic in stolen property in Cuba on the U.S. law books?

MR. BERGER: They are subject to a civil liability. They can be sued -- as Title III comes into effect, if the suspension were ended, then an eligible plaintiff -- I'll refer to my previous legal life -- an eligible plaintiff in the first pool are those who have been certified as being claimants under this whole procedure -- could file an action in Federal District Court in the United States against assets of a U.S. subsidiary of that company and could seek not only the fair market value of that property but treble the fair market value of that property. So it's a civil remedy.

Q Could I get clear on what President Clinton hopes his goal is? Is it his hope that in six months either he or his successor, if not him, would be able to once again --

MR. BERGER: He hopes that there will not be a successor. That's his first -- (laughter) --

Q Right. But the hope, I take it is that, he would then be able to say, look there's been progress made in aligning support with allies and, therefore, we will once again not allow the lawsuits to be filed? Is that the goal?

MR. BERGER: Again, let's go back -- I think if you go back to the fundamental purpose here. The fundamental purpose is to encourage a transition to democracy in Cuba.

Q What would constitute success? No lawsuits, right?

MR. BERGER: Let me -- give me a second, okay? We can promote that objective unilaterally, as we have for a long time through the embargo, through track two of the Cuban Democracy Act in which we have aided non-governmental groups. We've aided -- tried to build other relationships in Cuba through telephone links and others that build up kind of civil society in Cuba. We can do that by ourselves.

It obviously will be more effective if others joined us in a more robust way than they have up until now in trying to promote that transition. So I think the President would feel this was successful if -- to the extent that other companies and other countries joined us in a more robust effort to try to bring about a transition to democracy in Cuba.

Q That's the carrot, though. If they do join you in that more robust effort, no lawsuits, right?

MR. BERGER: The President would have to determine, at the end of the six months, if maintaining the suspension either wholely or partially would continue to promote that objective.

Q And somebody who has all this liability that's collecting their grievances are authorized under U.S. law but they can't collect on that grievance?

MR. BERGER: Well, that liability is accruing and as I indicated I think the purpose of Title III, the purpose of the drafters was to promote democracy in Cuba. If, as a result of the way in which this approach the pressure is intensified on Castro and there are changes being made or faster changes being made, then that would be to the good.

Q Sandy, two questions, one of them from your legal training. If this liability is accruing, can these companies perhaps challenge the suspension saying what right does the U.S. government have to stop me from seeking redress if an injury's already been done to me? That's my first question.

My second question is about track two and something that was an essential goal of your administration until the shootdown which was promoting human rights groups and helping promote civil democracy on the ground in Cuba. How much of that $500,000 has actually been dispersed by Freedom House and has Castro been effective in basically blocking them from sending any money or any help to civil democrats in Cuba?

MR. BERGER: Let me ask Peter to talk about track two. I don't know the answer quite honestly, Carla, to the legal question. You might check with Allen who not only is a lapsed lawyer, but actually is a functioning lawyer.

MR. TARNOFF: On the grant to Freedom House, I'll just have to see how much has actually been dispensed. It is true that this was a landmark grant for the U.S. government to make to a private organization for the purpose, again, of advancing democracy in Cuba.

It is true that in the past six months that across the board the Cubans have been a lot tighter, a lot more restrictive on these kinds of activities and that's why we think that the leverage we have with the Europeans, many of whom are beginning to understand what it means to have -- to work with a society where these freedoms are limited, to work with them to try to use our collective influence. But the ability of these groups, the function over the past six or eight months has been cut back substantially by the Cubans.

Q I just wanted to know if you have -- if you feel that the understanding of the Europeans of this new course of action from the administration would be that this is a kind of paternalistic approach, are you going to monitor if the Europeans are enough democratic in the way they behave with regards to Cuba --

MR. TARNOFF: I don't think it's a paternalistic approach. I think it is encouraging our partners, who certainly subscribed to our commitment to democracy, to join us in a more activist way with respect to the only non-democratic country in the hemisphere. I don't think that is paternalistic. Democracy is not uniquely an American value. It is one that we share with our allies. We work together with them to promote that democracy around the world. And we would like to work together with them to promote that goal here.

Q But they could say that we are doing the same in Cuba as the U.S. is doing with China.

MR. BERGER: Well, I think there are a number of differences between China and Cuba. We have had an historic situation here in this hemisphere where there has been an enormous tide toward democracy, with one recalcitrant, intransigent exception. And I believe that if we continue to maintain the pressure on the Castro regime, and if we have support from our allies, that we can advance that objective.

Q You say if you have support from the allies. Have you gotten any promises, let's say from the Canadians, that they will delay their legislative sanctions that have been proposed?

MR. BERGER: I would hope that during this six-month period that we would focus on what we could do together to promote democracy in Cuba and not what we could do to divide ourselves through recriminations. That is in many ways part of the underlying rationale of taking this six-month period -- that is a six-month period in which, hopefully, we're on the same side of the table working together to see whether we can fashion a more concerted approach.

Q But I don't hear that you've actually gotten such a promise. That's just -- that's what you would like to have.

MR. BERGER: That's what we would like to happen, and we will engage our European allies in conversations. I don't presume to talk for them.

Q Are you essentially redefining Title III, though? I mean, wasn't it specifically about companies divesting?

MR. BERGER: Title III has got all of its parts -- arms and legs and ears and noses. One of its parts is the suspension and waiver provisions. They were placed in Title III as part of a discussion that we had at the time that we signed on from our perspective for the purpose of at least giving the President the opportunity to fashion a more targeted approach. And we will pursue that aggressively and vigorously. And we will reevaluate after six months.

Q Dr. Berger, some of us just might be tempted to put --

MR. BERGER: I'm not a doctor.

Q -- put political attachment to the action today. How's does the President expect this to go down in Cuban-American community?

MR. BERGER: I don't know that -- I defy anybody to try to unravel the politics of this. I suspect that there will -- some will be dissatisfied in various sides of this, both Europeans and others. But I think what the President ultimately decided is what is the best course of action to use this in the most effective way? And that's what I believe he's done.

Q Sandy, can I just clarify something you said?


Q Can you just still go ahead and send letters to companies as you've been doing telling them that you'll bring action? This still --

MR. BERGER: Title IV goes ahead regardless.

Q So you can go ahead and send those letters?

MR. BERGER: We not only can, but we will.

Q And more specifically, is there a company called Solmedia, which is a Spanish hotel group that's not one of the ones that you mentioned? Have you contacted them?

MR. BERGER: I don't know. I would refer you to -- the State Department is administering Title IV, and I would refer you to them on specific questions.

Q I have a technical question. If a company wishes to divest, to whom do they divest? If they disinvest, as you call it, doesn't somebody else have to invest? Don't you start that process all over again, or do they just walk away from their investment and leave it sit?

MR. BERGER: Well, I am sure that they -- each of these companies will have ample lawyers who will help them figure out how they can comply with this provision in a way that does not require them -- does not have surviving liability.

Q Is the trafficking defined so broadly that if you even trade with entity in Cuba you might accrue some liability?

MR. BERGER: Trafficking is defined extraordinarily broadly under Title III to not only include owning and profiting but using, conceivably trading with. Some have argued that it includes being a supplier to a company and during the six month period, I think, is also an opportunity for us to look at those kinds of trafficking that are most contributing to the promotion of the Cuban regime. But it is a very broad concept.

Q Sandy, what is the message here to Castro? Are you saying six months of breathing room; keep throwing people in jail and we'll talk later on, or what exactly is the message here?

MR. BERGER: I think the message to Castro is that there is a bipartisan consensus in this country for stronger action against the Castro regime until there is a transition to democracy. That we will use every instrument in our power effectively to achieve that, but we will do so in a way that we think is effective and smart and not simply in ways that are spasmodic and not thoughtful. But I think the message to him is until there is a transition to democracy in Cuba, the United States will continue to be unrelenting in our commitment to that objective and we will work assiduously with our allies to try to get others to join us in that effort.

THE PRESS: Thank you.

END 2:30 P.M. EDT