THE WHITE HOUSE

Office of the Press Secretary

FACT SHEET ON PRESIDENT'S DECISION

What is Title III

• Title III creates a right of action allowing U.S. persons whose property was confiscated by the Cuban government to sue in U.S. courts either Cuban government entities or foreign persons who engage in transactions involving those properties.
• Congress provided that Title III would come into effect on August 1, 1996, unless the President chose to suspend the effective date.
• The President has the authority to suspend the effective date for renewable periods of up to six months.
• Congress also gave the President the authority to suspend the right to file lawsuits for renewable periods of up to six months once Title III came into effect.
• Suspension requires the President to certify that it is necessary to the national interests and will expedite a transition to democracy in Cuba.

The President's Decision

The President decided to allow Title III to come into force. To use the leverage of Title III in the most effective manner, he also decided to suspend the right to file lawsuits for a period of six months. The President has determined this suspension is necessary to the national interests and will expedite a transition to democracy in Cuba.

Allowing Title III to come into force:

• Liability will be established for any act of trafficking in American expropriated property that takes place after November 1, 1996.
• Once liability attaches for activities taking place after November 1, 1996, it cannot be extinguished -- even if the person subsequently ceases all trafficking in expropriated property.
• Traffickers will be liable for the market value of their expropriated property, treble damages if they continue to traffic after having received notice of a lawsuit.
• Minimum amount in controversy requirement is $50,000.

Suspending the right to bring causes of action:

• Lawsuits cannot be brought over the next six months.
• During 6 months, we will work with allies and companies to reach common ground on efforts to promote democracy in Cuba. Specifically, we will work together on following steps:

Putting pressure on the regime to respect human rights and provide the Cuban people with more economic and political freedoms. Pressure and condemnation of Cuba's practices should be exercised both bilaterally and in multilateral settings such as the United Nations.

     Coordinating with us on ways to provide assistance to forces
     of change within Cuba -- human rights groups, dissidents,
     independent journalists -- such as our $500,000 grant to
     Freedom House to assist human rights activists in Cuba is
     one example, but there are many more.  
     
     Withholding external non-humanitarian assistance and
     preferential trading access until Cuba engages in meaningful
     political and economic reform.  
     
     Channeling humanitarian assistance to legitimate,
     independent groups in Cuba rather than through/to the Cuban
     government.
     
     Promoting business practices consistent with basic workers'
     rights, as was done with the Sullivan principles in South
     Africa -- the right to organize, to express oneself in the
     workplace, to non-discriminatory hiring practices.
     Countries should place this at the center of their demands,
     and companies operating joint ventures in Cuba should seek
     to implement these practices at the workplace.

• At end of period, and based on assessment of progress in building a broad international consensus for democracy, President will decide whether and to what extent to renew the suspension.
• Suspension can be ended at any time; President can decide not to renew at end of any 6-month period.

Effect of allowing Title III come into force and suspending right to bring causes of action

• Increases leverage on allies and foreign companies: Liability will be established irreversibly, and companies will not be able to prevent lawsuits if suspension lifted or not renewed at any later time.
• Will deter trafficking in expropriated property because threat of possible future lawsuits is real.
• Offers six-month opportunity for U.S., its allies, and foreign corporations to reach common ground on policy to pressure Cuba to change.

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