Cruise line ordered to pay more than $400 million for ‘trafficking’ of property confiscated in Cuba

An American cruise ship docks at the port in Old Havana, Cuba, in November 2018.

An American cruise ship docks at the port in Old Havana, Cuba, in November 2018.

miami herald

A federal judge ordered four Florida-based cruise lines bound for Cuba to pay more than $400 million in damages to the U.S. company that owns concessions to parts of Havana’s port terminals that were lost to Fidel in 1960. Castro’s illegal expropriation, the first ruling of its kind under a law that punishes “trafficking in stolen property” in Cuba.

U.S. District Judge Beth Bloom’s much-anticipated decision on Friday follows a corresponding ruling in March in which she concluded that Carnival, MSC SA, Royal Caribbean and The four Norwegian companies engaged in “trafficking” and “prohibited tourism” to bring American travelers to Cuba and use the Havana port facilities confiscated by Castro.

The Cuban government has never compensated the Havana Terminal Company, the American company that owns the legal title to the facilities and whose property claims have been certified by the U.S. Department of Justice’s Foreign Claims Settlement Board.

According to the ruling, the four cruise lines, which are registered outside the United States but have their principal place of business in Florida, will have to pay Havana Marina a total of $439 million, plus attorneys’ fees and costs. Each company was ordered to pay the amount of the original property claim plus decades of simple interest.

But the figure is even higher because in Cuba the law that punishes the use of confiscation of property, the 1996 Helms-Burton Act or the Freedom Act, allows courts to triple the amount of damages awarded.

“Defendants have been convicted of crimes in these cases, and the courts have found that the defendants derived substantial revenues from their illicit trafficking activities — billions of dollars each — to the detriment of plaintiffs,” the judge wrote. A low award would not be effective as a deterrent, as the lower award would conceivably be seen only as a cost of doing business.”

A key provision of the Helms-Burton Act that allows for the prosecution of those using illegally confiscated property in Cuba, known as Title III, has been suspended by every president since Bill Clinton signed it until Donald Trump Pu took office. Breaking with tradition, Trump enacted the law in 2019, opening the door to a flurry of lawsuits.

Still, skepticism remains as to whether the claimants, primarily Cuban and American heirs of expropriated companies in the 1960s, will be able to navigate all the legal hurdles involved in these complex cases and gain a sympathetic ear in court.

While Friday’s decision is likely to be appealed, it proves that at least some of the Helms-Burton lawsuit can be won and ultimately a multimillion-dollar judgment for Americans, especially Cuban-American families, who have hoped for years Bring hope for reparations for Castro’s actions. Meanwhile, the multimillion-dollar fine sends another chilling message to potential investors and those looking to do business with the Cuban government over properties whose ownership is contested.

“This is a very important ruling by Judge Bloom,” said Bob Martinez, head of the Havana Marina legal defense team and a partner at the law firm Scholson Hicks & Adelson in Coral Gables. “Commercial use of confiscated property in violation of U.S. law in Cuba has detailed, well-known, and publicized legal consequences. After decades of pursuing its legal rights, Havana Docks is one step closer to justice. Havana Docks thanks Judge Bloom A thorough and careful examination of the facts and the law.”

The case is also closely watched because it sets a precedent for dealing with travel suppliers such as cruise ships and airlines. The companies tried to argue in court that they had been authorized by the Barack Obama administration to do business with Cuba and that their transactions fell under the “lawful travel” exception to the embargo rules.

But the judge rejected that defense because lawyers at the Havana marina presented evidence that cruise lines offered passengers tours, often through hired Cuban government tourism agencies.

While some sanctions were eased during the brief detente with Cuba under Obama, travel to Cuba was banned then and remains so. The cruise to Cuba started in 2015 and ended in June 2019.

“The fact that the Treasury Department issued travel permits and Executive Branch officials, including the President, encouraged defendants to do so does not automatically absolve defendants from liability if they engage in statutory prohibited travel,” the judge wrote in March.

Hundreds of court documents reviewed by The Herald show that cruise lines offer excursions to the beach, Havana’s Tropicana cabaret show, and cocktail-making classes to learn how to make a mojito, among other trips that don’t quite qualify as “educational.” to encourage “person-to-person” contact, which cruise lines cite as a legal category of travel for Americans to Cuba.

According to records, these companies earned at least $1.1 billion in revenue and paid $138 million to Cuban government entities.

A Carnival spokesman told the Herald the company did not believe its actions were wrong.

“Carnival Corporation engages in legal travel, expressly licensed, authorized and encouraged by the United States Government,” said Jody Venturoni. “We strongly disagree with the ruling and judgment and plan to appeal these decisions.”

The two sides have waged a bitter lawsuit for more than two years over whether cruise lines docked in the port of Havana were “trafficking” confiscated property. Havana Docks holds a U.S. government-certified property damage claim and a concession dating back to 1934 to operate three piers in the Port of Havana that were used decades later as cruise terminals to welcome U.S. tourists.

Norwegian, MSC SA and Royal Caribbean did not immediately respond to emails seeking comment.

This story was originally published on December 30, 2022 at 8:53 pm.

Nora Gámez Torres' profile picture

Nora Gámez Torres is the Cuba/U.S.-Latin America policy reporter for the New Herald and the Miami Herald. She studied Journalism and Media and Communication in Havana and London. She has a Ph.D. Urban Sociology, University of London. Her work has received awards from the Florida Society of News Editors and the Association of Professional Journalists. //Nora Gámez Torres estudió periodismo y comunicación en La Habana y Londres. Tiene un doctorado en sociología y desde el 2014 cube temas cubanos para el Nuevo Herald y el Miami Herald. También reporta sobre la política de Estados Unidos hacia América Latina. Su trabajo ha sido reconocido con premios de Florida Society of News Editors y Society for Professional Journalists.